issue what is sufficient evidence to raise a fact issue under the one purpose rule and establishing intent under the ha us second did the district court apply the correct legal standard for scienter or mens rea under the a t s and coming to his decision we would offer up to the court that the correct legal standard is in fact similar to but not what the court applied as we outlined in our briefing the court applied the davis holding which defines scienter and in particular willfulness and willful as bad purpose now the court does two things one it considers whether or not there is a heightened legal standard for finding willfulness under the age chaos and court raises the issue but never decides and then to the court applies wh had been until that time the traditional standard or definition for willfulness typically associated with the pattern jury charges for criminal prosecution and to that extent the court  an act that's committed voluntarily and purposely with a specific intent to do something the law forbids that is to say with bad purpose you have to disobey or disregard the law not that definition includes specific in known void or nonexistent so the fact it says specific intent and it requires a showing bad purpose is not actually the law it would be our position that first that the district court erred in applying that standard and you see it throughout his opinion for instance in discussing shoreline the court and knowledges that looking at the evidence of intent the e mails where on the care employees are internally discussing giving credits and discounts and at the same time to the trying to renew contracts which is a clear violation of that act that kicks back statute he acknowledges that they are doing that type of activity but he says he can't see that bad purpose that heightened standard that is required is our position that he was applying the just said there's some up where he is i don't see anything in this case that ordinarily wouldn't occur in mutual business transactions so i mean it was not a matter of bad you see the court routinely saying this looks to me like common business practices and he makes the statement in his opinion that the collection activities are very similar to what his law firm what you've done or what is the most egregious or just to throw them all in order to keep a clock that's on your business practice that really doesn't have any kind of scientific name to violate the law but to keep a client so where do you cross the line in this case where the facts of course align in wanting to first there's a fundamental distinction between collecting past due debt in the private sector and collecting it when you're working in it regulate health care environment and the statutes and case law in the team the point this out why is that if a law firm decides to give two hundred thousand dollars credit to a client to induce them to come back but what i've asked you if you could is to tell me in this case i mean let's put it down rather than the say what the little goatskin needed here so i understand not the theory and i understand the application of it in this i think you've got the briefing and each party going sniff by sniff so let me approach it this way i think the most egregious fact is  three of those harborside five star fundamental total between three point three million and three point five million now why are its total value contractors alleged three and a half million each sniff has a number of nursing homes underneath it so each contract is different if you're talking about total damages and they're tied to anything that stand by kickback would be around two hundred million dollars if you're talking about the actual credit on that one as relates to two hundred million three point five million dollars in credit given to these snus that we're going to need at the damages which is not for the court than the actual damages which would be they give credits on medicare part of it and then they get the medicare part d business that is where the money goes and then it's and that prop payment discounts is not unusual i mean  looked at this issue and said that pay discounts depending on the facts and circumstances can in fact be a violation they cast i understand that but i'm asking you to give it to me and this case the specific issue if you look at what the need care d compared to that i y g opinion they did not offer promptly discounts in the context of billing or collection now though i do says yes it's ok to do pompei discounts if you're talking about collecting or billings but when you cross that line and do it to induce patient referrals that's we have a violation of a chaos that's precisely what we have here if you look at the issue of the five saying this discount was totally divorced from collection and bill i think that was how on the cure did business they would simultaneously give credits and debits and not collect and pass today are wildly new in contrast so if you look at life care they interesting thing about life here is the fact that there is a settlement agreement on that think a very key thing here that really you haven't touched on in any degree is what evidence under ask the bar is definition materiality is there that the government would do anything different if they knew for example let's say they knew about the harbourside deal we're giving you a credit against you know payments every month of thirty seven thousand dollars where the number was if they knew about that deal what evidence is there that the government would not have paid to reimburse on the on the medicines that were being prescribed and so on use escobar as example the evidence would be the mind run of cases where the government has consistently held that a violation of the a k a s makes you an eligible for payment on the  and this case in the record do we have evidence of the government treating this kind of situation not just anything somebody says isn't a violation but this kind of situation is specifically i was using harborside because the district courts are that was the closest case so using what happened in harborside taking your spin on it where is there evidence in the record that the government wouldn't pay had they known about th that question is answered decisively in the government statement of interest they filed with the court and that's our way to one eighty five dash two or six that's the statement of interest that deals with a motion to dismiss with a very clear that there is a finding of a violation that they would not pay the court now if your specific question to me is in terms of materiality do we need additional evidence in the record to show that the government would not pay i don't think we do i think the fact that the min super obvious you know neon lights versus something that's very technical and convoluted whatever which is some of what you're arguing here some what you're arguing here even taking all your stuff is a hyper technical violation and so are we to assume that the government just because we can put it to slap an excuse label on it now they're not going to pay no i don't think we should go quite that far although there is not a single case that we've been able to locate in the two more minutes to please so are we looking into we have to find like a case book case or are we looking for evidence of what the government dies i think we're looking for evidence of intent number one kind of health care entity gives unearned credits unwarranted discounts or fails to collect on past today are to get patient referrals that you know that of a self sufficient happening in a harbourside as i understand the given  credit and the problem as you see it is to give a credit i have to be having money come in the other way i can't credit you something if there's not money coming the other way right the way the harbo a misunderstanding about i mean there are several issues one harvest in harborside they negotiate a settlement of their debt or they agree to pay and then renewed contract three seven thousand five hundred dollars and that is per month right and they have to continue paying that unless the contract ends that is a quid pro quo if you pay us money we'll give you that credit if you decide to resign with us and will then send us more patients we will give you thirty seven five hundred dollars per month defendant macare may not understand your theory the entire false claim is that it's based on a false certification where is the certification that you rely on that claims we don't need one to find liability ok so they made none now answer my question then i if you will please answer they may none directly however the part of the work that you rely on the part d plan providers are agents of the government and by the party plan under the case law and we've cited in our brief the party plan provides have made those certifications to the government beat and they require their subcontractors care to also comply with off federal laws that's what we're relying on and we've cited period where there was the one that works is that issue in this case or others so they developed a compliance program to cover the a k a s the testimony in this case is from paki and richard wright col and they say very clearly that they trained all their employees that if you summary judgment had the burden to establish every element of her claim under the false claims act and she failed in at least three separate elements and let me just run through them quickly and then we can talk about each of them more detail first of course she had to prove that i'm a care violated the and i kick back statute by forgiving debt as a willful kickback for patient referrals and we can talk in a minute about what willful means but there was no evidence of any such kickback being paid as opposed to resolution of billing disputes based on audits slow paying customers not a corrupt agreement made with criminal intent second because there's no civil cause of action under the n i kickback statute there later also had to prove each element of a false claims act cause of action because the a k a s violations supposedly translated into a false claim presented to the government but the evidence didn't support that either for multiple reasons relator couldn't prove that on the care was responsible for any false statements to the government and yes she still has to prove that even after asking for a thought about that moment and second relator had no evidence tying any claim to the government or a claim for government funds any claim whatsoever last element i'd like to talk about is that related had to prove that someone at the care acted with c enter both under the  kickback statute and under the false claims act and the district court correctly found that the relator had no evidence that anyone any individual anomic there had such a couple mental slate the word is materiality when materiality it is certainly an element of a false claims that case and i would agree with you your honor that there was no evidence presented below that in the wake of escobar would satisfy him materiality shannon  as they say the government has said man if there isn't a chaos violation we're out of here and that's kind of an easy thing to say like we don't want violations of the law i feel like escobar is looking for a bit more than just kind of the boy scout oath here and so what  we expect there to be what evidence should be if we were to remember this for evidence of materiality what would we be look at what would the core people looking for well i hope the court won't reminded because there are so many other reasons separate and apart from materiality but i think the just to talk about escobar i think what it's getting at is that you need actual factual evidence to show whether the government would consider it important in deciding whether to pay a claim so has the government paid similar claims before they rejected similar claims networker they don't have that evidence your how would they get that well they would have had to find it in discovery there from the government or from other parties who have been engaged with the government in claims like that or from the public record but they didn't make any materiality is a requirement is that i'm i'm it's not one that's been briefed and i don't think it's necessary for the court to rely on materiality for instance in that of course i do think that it's an adequate ground to affirm in and of itself i don't think the court he needs to get to materiality because there's no false statement to begin with and as long as we're talking i was going to talk about the a k a s first but let me come back to that let me talk about escobar first because the the supreme court's decision i think changes the landscape a little bit on this issue but the result is really the same i don't think it makes any change certainly that helps the relator because in the time period relevance of this case it and i kicked back statute violation does not automatically make the claim false so put aside materiality for a second and start with falsity which comes even before material because this and the congress did amend the law in two thousand and ten to change that so today a k s violation  claim is submitted pursuant to an a k s violation that claim is a false claim but that this was not a retroactive amendment this court in the consolidator says for c s case held that and all of our claims here today predate the amendment so what we're under is this court's precedent in the thompson case which specifically held prior to the two thousand and ten amendment that and i kicked back statute violation does not automatically make claim presented false and that's because this court has long expressed concern with differentiating false claims act violations for word unary breaches of statutory duties and in a series of cases the court has held that a minimum have to show that the defendant made an actual promise to comply with the law and that includes when you have an eighty s violation that's what thompson holds so the thompson court required the plaintiff to show that the defendant had made a separate certification a promise that its claims were in compliance with the in a kickback statue and escobar did not change that on the contrary the supreme court specifically declined to rule that the mere act of making that cl certifies that the claimant has complied with all laws material or otherwise because it found in escobar they went through a long discussion because they weren't ready to go there at the court the supreme court went through a long discussion  about the fact that the statements that defendant in the escobar case made were accompanied by half truths there were claims that were that included codes statements that were made at the time of the claim that were its claims or at the time that the nursing homes presented their claims as the case may be about it and didn't say anything about debt forgiveness by the end of kickback statute anything at all no state now or later did a no no your honor and it's a good clarification because what i what i wanted to to say first of all there is there are statements in many cases of false claims act cases there are statements that are made at the time the claim is presented for government funds that's what escobar is about and that's what escobar requires a false or misleading statement when you ask for money ok what we're talking about here is certifications made a different time so that later in this case is alleged that on the care made certifications in advance promising that it would comply with the law who did it make those certifications to the only certifications in the records are made to state medicaid there is no certification in the record made to medicare if we go back to ask for bart and assume that he did not he let me make conditional payment is a condition false statement then this had nothing to do with the payment that was made to the nursing home so in other words any any certification that on the care of main was not material to the payment of the claimant issue that's certainly true because i'm a care didn't make any statements with regard to medicare part a that it should i talk about the three programs because i think there are three separate medicare medicaid program your argument you make your argument though i think it's responsive to your honor's question because there's three separate programs there's medicare part medicare part a and medicaid and each of them works a little differently with regard to certifications so for medicare part d i'm a care made no certification there's no record certification of any kind  i heard my adversary say that there are certifications made by the party plan sponsors that might be it's true there are regulations that suggest that that's supposed to happen but there's no evidence in the record that  so there's no evidence of that no certifications at all no certification for medicare part d of any kind regarding medicare part a these are the the cluster reports that the nursing facilities the sniffs are supposed to submit to medicare part that on the care doesn't submit those under care doesn't have any to correct dealings with medicare part a understand the record correctly that certifications are any other relationship the part in under part a yes and incorrect i think that's incorrect your honor you can ask my adversary whether they've stopped relying on that but i believe their claim is that cost reports that the sniffs not on the care but this but the nursing facilities submitted to medicare i don't think that's their argument but i can't i would hate to try to characterize there are great but i think that the point on medicare part a is that the only certifications that are alleged to have happened are made by the sniffs first of all those aren't in the record either with the exception of thirteen cost reports for twelve specific facilities for one snit and even as to those cost reports there is zero evidence that on the care had anything to do with them knew what they said knew what was in them had any anything to do with submitting so you can't hold a medicare liable for a false claim based on any certification to part d or part of a based on what's in the record so if you need you need some actual certification so then there's medicaid now medicaid is it would be claims that are presented to the states state medicaid agencies and there are medicaid agencies in in every state or virtually every state and on the care would make claims to medicaid for medicaid there were some certifications in the record as the district court found there are some promises far in advance of the claims that are made that auburn care made to medica medicaid state medicaid agencies each state medicaid agency medicaid agency made the paid medicaid agencies would make the payment on the claims right so so here though there was no evidence that on the care knew that those hope i have a chance to talk about that too she would still have to prove that the violation resulted in a false claim to medicaid and a claim of confusion with the a and a b issue and that is that the relator is arguing that ami care wasn't trying to induce part a referrals it's trying to induce part the referrals so that's i think the logic is how can there really be a part a violation based on that theory and you comment on that that's a fair question i think the relator serious i understand is that on the care was was essentially trading that that the facilities owed on part a claims in exchange for the ability to get part d patients again that's not a direct part and it's not it's not a direct part i agree with that but that i think that's the confusion i think the relator is argument is that the the sniffs the facilities are claiming under par day and that they're lying about their compliance with the and i kickback statute but there's there's no evidence that i'm a care had anything to do with any any such lies or even knew about them and there was no way cast violation but getting back to the getting back to the point that she has to tie the violation to the certification to the claim we're talking about medicaid now related leaders briefs don't even mention this argument i think that's telling they don't explain how relator can satisfy even though this was part of the district court's reasoning in entering summary judgment because it's only a false claim if on the care is requesting payment from the government or of government funds for a really been address and maybe it's not relevant here but in in criminal cases involving doctors that sort of inflate their bills and whatever we we've seen some of those there is this notion of an offset for what you would have  to pay anyway i mean in other words this patient was going to need an x but didn't need x and y so why would be the only thing that would that you could really hold this doctor accountable for is there a feeling here that are  sentiment of that in this analysis and other words these patients are going to get medication and the government's going to pay for that for whatever portion of that it's responsible for under medicare part d whether ami care is the provider or some other pharmacies the provider is that part of this analysis at all well let me try to answer it this way i mean i'm not sure i have not tried put it exactly the way that your honor did but i would say that typically when the courts look at whether there has been an and i kickback violation to begin with they look at whether there was some overpayment usually if you're paying somebody for referrals you're paying them more than they would be entitled to for the actual services they would provide and so if you put that into the context of this case there is zero evidence that  even a penny more than it should have given or that that than any s n f was entitle to as a reasonable settlement of disputed debt after lots of audits after lots of disputes so if you're talking about taking it one step further is there any evidence the government paid more for anything then it would have but for this whole thing because it isn't that the bottom line of this whole thing is well is the government ending up paying more are being charged more at least that's certainly an important point that the government is not there's no evidence that the government has been harmed at all or that certainly any patient has been harmed at all i'm not sure that would be a defense to an end a kickback violation but it would be a defense potentially to a false claim if the falsity is based on is just that we're aware there may be a violation of a case it needs to be tired to the f d a in order for the relate is going to go actually right and just to finish up on that point so in order for a claim to be false on the facts of this case  there would have to be evidence that as a result of some agreement to trade debt forgiveness for referrals the nursing home sent federally insured patients to arm the care who services were then billed to the government other was there was no claim me for services that resulted from an in a kickback violation there is no evidence of that the relator had the burden to prove that and she didn't do it how could there in these people be private pay or what is the that's the argument that band show they weren't private pay that they were government you know the the argument is that there's no evidence that any there was any completed quid pro quo that actually led to an innocent enough significant trouble with this harborside thing i mean it does seem like they're not going to get the thirty seven thousand unless they feel fulfilled the two year deal happened your spin is well the kind of you can't give a credit without an offset put in now a little problematic why couldn't they just pay thirty seven thousand a month period you know just write a check if there's no deal if there's no offsetting amount think the point to be made is that there's no evidence of why that why the deal was structured that way there's no evidence that was being done as some sort of a corrupt bargain it was a settlement of reasonable amounts there's no evidence otherwise but by the way part of the reason that there is no evidence there's really two reasons there are no there's no evidence one way or the other of what the care or the sniff were thinking in making this deal the first reason is it occurred before the theoretically continued into the time period but the actual agreement took place before him and then the other reason there's no evidence in the records because they're related didn't depose the relevant people or didn't ask them the right the relevant questions there's no testimony in the record about what anyone was thinking and that gets back i think how much i mean people are some going to say yeah i took a bribe you know whatever i mean it isn't aren't all these e mails and the sort of facts themselves much at least to infer intent absolutely not you know and i think if you compare other and i kicked back cases where sufficient evidence was found you'll see a much much different scenario a switch you want me to look at where you can look at saying ok i'm going to i'm going to pay you a ten dollar commission this is a lot of the cases actually are commission payments i'm going to pay you ten dollars for every patient you referred to and by the way and so then that's that that's an  compliance prior to the cia they were still getting training so if training on the a k a s is enough to show intent and it was there during the relevant period i think i would not agree with your honor statement but maybe for a extremely complicated there are lawyers and thankfully for me i'm not one of them but there are many warriors around the country who do a task compliance and nothing but they make the career of it because it's extraordinarily difficult i mean it well i don't think so because i don't think it's extremely difficult to tell whether a particular event is a violation or not in many cases and so the a k a s therefore requires willful intent and cases all over the country including in this court hold that that means you need to know th violating the law you don't need to know anything the training that was given wasn't specific enough to have created a concern about the way the strains actions were being structurally the only evidence of the training is that that the on the care employees knew that you can't buy referrals you can't trade for referrals that doesn't mean they knew but you can't and you can't have a reasonable settlement with your customer when you hope that the customer will give you business in the future that is not a violation and if it if it were to be if somehow a violation in this court were to find it then no one could know that and certainly i'm a care would have known that and you need willful conduct knowledge of the law you don't need to know that it's an a k s specifically in a case violation you do need to know it's a legal violation davis case the supreme court and brian the fifth circuit pattern jury instructions to the government in this case relate or in this case her summary judgment opposition papers pages nine ten can see that that's the standard she's waived  argument to the contrary saying genius does not hold otherwise no court has held it to mean otherwise when any of that the court in st julius found that the defendant knew that she had violated the a k a s making anything else counsel and also to clarify a few things first of all i think that it cannot be disputed that on the care made certifications with regard to the anti kickback statute if you look at our reply brief we list them out by state i think the best of cation to look at is georgia on the care promises that when it's accepting medicaid money they here by certify that they will not violate the anti kickback statute with respect to their performance under this agreement so to be clear on the care which remember is the largest long term care pharmacy in the entire country has been dealing in this industry since one thousand nine hundred eighty one has been repeatedly fined by the government for violating the false claims act and i enter kickbacks statutes such that they are under a compliance agreement to train every single employee if you look at their ten k s they notify their shareholders that if they violate and take kickbacks statute could result in them not receiving payment and being able to continue under the program the care during this time period and if you look at the template case even before the relevant time period was aware that they had to comply with false claims act and to kickback statute in order to receive taxpayer dollars under these health care programs so promises made is is really not the issue here and if you look at this escobar going to the materiality we do have evidence in the record that the government would not pay if they knew that only care was trading discounts and write offs for it the statement of interest issued by the district of the department of justice that to be evidence legal argument no and if we do need additional evidence you can go to the health and human services website it's public talking about the cost i want to go and find evidence for you no we cited we don't cite it but i'm not asking to go find evidence or honor it that's what a record is all about there has to be evidence in a record it's not up to the court of appeals to go find it on a website ok then we will go back to our statement of interest and i think it's important to note that when you're dealing with compliance with federal law the department of justice is the only department that can say it's ok for you to defraud the government health and human services can't continue to pay knowingly continue to pay somebody that they know is violating a federal law so our position is the department of justice by issuing and this specific case i ask where does it say that i mean escobar says we recognize the government could say but do they really not there and they're not looking to whether somebody can officially authorize a frogger look into what really happens on the street and i'm not sure some document by the government in the circumstance and i think it's not a stretch to say that the government would not pay for claims it's tainted by a bribery scheme so i don't think this specific case that's not the question what would be the question is  record faults claim it's got to be a false claim somewhere not what the government might do if such and such happened so if we're talking about why the claim is false the claim is false because of the anti kickback starchy violations that's what in this case would make it you know should protect this is not regular business this is a highly regulated industry and any time a discount is given let me give you an example the anti kickback statute is very broad it punishes all offers solicitations of acceptance of anything  value anything right it was so broad that almost every discount given by a company was prima facia a violation of the anti kickback statute so what the government did was they enacted to safe harbors the statutory safe harbor and the regulatory safe harbor that would help protect some discounts ahead mutual benefit for the government and for the companies so the government said discounts typically are broadly in violation of the anti kickback statute but they offer protection you'll note that only care is not tried to seek protection and there are any safe harbor if this if they were on notice which they were a few look at their ten case of the safe harbors and their ability to get protection from the government they clearly would have done so so it's not like this is a surprise to them and this is some technicality that they were not aware of on the care of this very sophisticated company was aware that discounts were they were questionable and they were suspect you can look at our g opinions you can look at the i g opinion specifically want to leave us with i want to hit you with the idea that this is a very sophisticated company they know about these certifications their executives have testified and it's in the record pack heat and everybody at the company knew that giving anything of value including discounts could run afoul of the anti kickback statute this is not a mom and pop operation this is a national corporation that deals with these regulations on a daily basis they knew that what they were doing could of the law and if you look at the record the harbourside example where they have it spelled out in a contract we will give you money in exchange for keeping your nursing home patients with our company that is like that is a quintessential