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- Prof. Josh Blackman, South Texas College of Law
Prof. Michael W. McConnell, Director of the Stanford Constitutional Law Center and Senior Fellow at the Hoover Institution, discusses the recent Supreme Court case of Zubik v. Burwell. The case dealt with whether religious institutions should be exempt from the “contraceptive mandate” of the Affordable Care Act, specifically due to the provisions of the Religious Freedom Restoration Act of 1993.
If you do business with the federal government, when does violating a statute, regulation, or contract provision become fraud? This question was answered by the U.S. Supreme Court on June 16 in Universal Health Services v. United States ex rel. Escobar, which examines the scope of the False Claims Act (FCA). The FCA provides for treble damages and civil fines for anyone submitting false claims for payment to the federal government. Violations of the FCA must involve a “false or fraudulent claim” or “a false record or statement material to a false or fraudulent claim.” Traditionally, the falsity element of an FCA claim required a “factual falsehood” (e.g., submitting a claim for payment for 10 computers when only 5 were delivered) or an express false certification (e.g., certifying to a lack of organizational conflicts of interest when such conflicts exist). Circuit Courts had split on this question, but the Supreme Court ruled today that a party can be held liable under the implied false certification theory when the party “fails to disclose noncompliance with material statutory, regulatory, or contractual requirements that make those representations misleading with respect to goods and services.” This decision has significant implications for anyone doing business with the federal government and could substantially increase contractors’ exposure to the FCA’s punishing statutory regime.
On May 16, 2016, the Supreme Court decided Zubik v. Burwell, the lead case in a consolidated series, with the other petitioners including Priests for Life, Southern Nazarene University, Geneva College, Roman Catholic Archbishop of Washington, East Texas Baptist University, and Little Sisters of the Poor Home for the Aged.
The Patient Protection and Affordable Care Act of 2010 (ACA) requires that group health plans and health insurance issuers provide coverage for women’s “preventative care,” or face financial penalties. Although the ACA does not define preventative care, the U.S. Department of Health and Human Services (HHS), relying on the Institute of Medicine, determined that the term encompassed, among other things, all FDA-approved contraceptive methods, including drugs and devices that could induce an abortion. Federal regulations require petitioners to cover these contraceptives as part of their health plans, unless petitioners submit a form either to their insurer or to the Federal Government, stating that they object on religious grounds to providing contraceptive coverage. Petitioners resisted, asserting that submitting the notice substantially burdened the exercise of their religion, in violation of the Religious Freedom Restoration Act of 1993. The ensuing litigation yielded different outcomes in different U.S. Courts of Appeals, and the Supreme Court granted certiorari. Following oral argument, the Court requested supplemental briefing from the parties addressing “whether contraceptive coverage could be provided to petitioners’ employees, through petitioners’ insurance companies, without any such notice from petitioners.”
After receiving the supplemental briefs the Supreme Court vacated the judgments of the Courts of Appeals by a vote of 8-0 and remanded the cases to the Third, Fifth, Tenth, and D.C. Circuits, respectively. The Court’s per curiam opinion explained that “‘the parties on remand should be afforded an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans ‘receive full and equal health coverage, including contraceptive coverage.’” Furthermore, the Court indicated it was expressing no view on the merits of the cases and stated that “nothing in this opinion, or in the opinions or orders of the courts below, is to affect the ability of the Government to ensure that women covered by petitioners’ health plans ‘obtain, without cost, the full range of FDA-approved contraceptives.’" At the same time, the Court noted, throughout this litigation, petitioners had made the Government aware of their view that they meet “the requirements for exemption from the contraceptive coverage requirement on religious grounds” and nothing in the Court’s opinion, or in the opinions or orders of the courts below, “precludes the Government from relying on this notice, to the extent it considers it necessary, to facilitate the provision of full contraceptive coverage going forward.” And because the Government may rely on this notice, the Court indicated, “the Government may not impose taxes or penalties on petitioners for failure to provide the relevant notice.”
Justice Sotomayor issued a concurring opinion, joined by Justice Ginsburg.
To discuss the case, we have Roger Severino, who is Director, DeVos Center for Religion and Civil Society, The Heritage Foundation.