good morning everyone i'm so sorry that you all had to come out o ex romain versus oakland city university as in maine the relator here alleges that a for profit education appropriation process to comply with various requirements for receiving federal funds under title four of the higher education act including a prohibition on paying incentive compensation to student recruiters and then knowingly violated those requirements and thus obtained federal student aid funds to which it was not entitled in maine this court reversed the dismissal of virtually identical claims against a for profit college explaining that a university uses surveys when one promises of comply with title for funding requirements when it's admits or causes others to submit phase two claims for federal funds main compels a reversal of the just a court decision in this case which rests on at least two erroneous legal premises first that the funding requirements at issue here and allegedly violated were not conditions of payment and second that a school is not liable under the false claims act in less its initial promises of ongoing compliance with applicable funding requirements were false at the time they were made and in addition we believe the district court committed a third  rejecting the implied certification theory of liability that many circuits have adopted which rests on the common sense principle that a person who knowingly bills the government for goods or services that do not satisfy a condition of payment makes a false or fraudulent claim even if he's clever enough to avoid making any expressed false representations on the claim itself let me ask you this and i have one test a see milwaukee has been accredited and found that over four eligible how is it using the promises of compliance from the p p a's each time it receives payment from the government  entered with with all those promises made in the p p a you can't be receiving federal funds and i think that the very actually the holding of maine is i'm going to quote from maine is that a school quote uses its phase one application and the resulting certification of eligibility when it makes or causes the student to make or use a phase two application for payment so in other words every time they are sending in a request for money to the department of education they don't you're on it's right they don't staple you know the program participation agreement back to the claim but you're clearly relying upon all those antecedent promises and education is relying upon the fact that you know when you came into the program you represented that you were going to do all of these things and so that's the problem here that and that's that's something that's recognized in a variety of different ways one is you can relate back to you know the false statement which at the time you know you may have had perfectly good intentions or it may have been different people that entered into that program participation agreement at the beginning but then he may have said you know what this is really hard to do all these things and we're going to violate this and we're going to knowingly violate this and so it's at the time the the relevant inquiry as as we've tried to explain in our brief is at the time you are going in well that's the way they establish their eligibility correct but they it's of course the statute i want to make clear that what the the representation is they make go to their initial and continuing eligibility that's quoting from twenty u s c section ten ninety four and it's clear in the regs and in the program participation agreement this is sort of an ongoing thing this is a promise that is a forward looking thing it's a statement about what you're going to do on a forward looking basis so when you actually seeking money from the government and this is happening you know there are lots and lots of requests that these schools make on an ongoing basis they get a you know title for eligible student and they tend to make these requests to electronic funds transfer that are very summery they basically just say we have you know one hundred pell eligible students and we want to be paid for this month and they say you know and so give us this money and so there is no express fault statement there but education is clearly relying upon the initial representations and the fact that they are in compliance  government attaches lots of strings to this money and the government is entitled to do that when they're paying out you know a hundred fifty billion dollars i believe was the figure from two thousand and thirteen is paid on in these so there's lots of strings attached i guess your honest question goes to you know if there is a sort of a  small breach up you know there's lots of things that they have to comply with that goes to the question to reality it may go to knowledge the courts that have addressed this issue and have been worried about sort of expansive theories of false claims act liability particularly the d c circuit  a i c decision and the first circuit in the hutchison decision said basically yes the government can tell attach lots of strings to its money and that may seem onerous but the way that you ensure that there is not overly expansive false claims  is by application of the knowledge requirement they may not know that they're in violation or it may be a non material violation but when you're talking about you know the fact that there could be a non material you know small scale violation doesn't exempt them doesn't allow them to make the very big violations that are alleged in this case systemic violations in which you know you were just ignoring the obligation not to pay recruiters incentive compensation which is a very important requirement it was the core thing that was an issue in maine it's one of the core things that's at issue here and it goes to the very essence of these programs because when you recruit students who are poorly qualified you know you basically have an incentive to bring in as many heads you can fill as many seats as you can because your pay depends upon bringing as many programs but at the same time the government gets stuck with the tab on these students default or they don't get a proper education and it's quite clear that you know the incentive compensation band is there for a reason and it's an important requirement here and you know when you are systemically not  you're violating and knowingly violating a core requirement of a statute or reg and then a contract that you were forced to enter you were committing fraud when you would then go to the government say pay me even if you don't say reiterate when you say pay me mean here what here we have summary judgment so what evidence is there that any of the relevant p p s were filed with an intent to fraud we are i think that's that's the point here is that we don't think that the p p a is how to be the promises in the p p s had to be felt at the time that they were made with the intent to defraud the point you may have had perfectly you may have thought ok maybe different people making the problems in fact it was different people making the promises earlier in time but then when you get to actually you know getting the claims you have people and substantial evidence in the case that people were were being paid incentive compensation in violation of that keeping and simply breaking a promise after the fast to write breaking a promise after the fact is a breach of contract not fraud with that in mind how can we  in and it goes to the heart of this case the question is not sort of at the initial phase the question is at the time you're asking for money and just calling it a mere breach of contract that's a term that the other side uses and defendants in these cases often use here breach of contract just by putting it in terms of a contract violation doesn't exempt from also being fraud keep in mind the false claims act was enacted in one thousand nine hundred sixty three to prevent exactly this sort of contract fraud basically a military contractors putting you know giving  sawdust instead of gunpowder or lame mules if the the key that makes it fraud is when you know as the contractor that you are not giving the government what it bargained for and that's exactly the situation that we have here and it doesn't matter that you you know may have intended at the beginning to do things in good faith once you know that you're not complying you're committing fraud thank you thank you your honor this your cast r thank you your honor jim carrey for the later brant nelson in the briefs from the defense they call these promises forward looking promises that are made at the time the p p s signed specifically with respect to the issue of materiality in paragraph twenty two of the p p a this institution promises not to pay incentive compensation either directly or indirectly based upon admissions or financial that's right in the contract so that for example the power points which are part of the evidence in effect are part of the a motion before this panel to seal there's a powerpoint like the powerpoint that my client saw which promises the director of admissions three to five thousand dollars additional money in bonus if two additional students are saved did the director of admissions or at the director of financial aid testify as to p sleep what it meant to get this paid for x x c starts and packaging it ninety five percent are there well they provided declarations your honor that in terms of exceeding starts they say we don't have evidence we don't have evidence that starts equals in romans and i soon and it's fair to say that romans equals and start equals in the role he who actually starts and there is no other explanation for the bonus and exceed starts by ten percent means he cedes the starts from the prior year by ten percent packaging at ninety five percent they say there's no real contrary evidence they say that that doesn't mean financial aid or they ask this court to find that the director of admissions does not supervise people in admissions because we don't have a direct admission that he does of the year well in terms of names david kagan was the director of admissions carol massey was the director of financial aid in terms of the names of individual students every document that was produced in this case didn't have names of students on them the law protects the names of those students so in terms of verifying students and here's the names it does your honor every name is excised from every document we have in the case the law protects i don't i'm not an expert in that particular law but students names were not used in discovery so there is but but but there is testimony in the record from student grades or attendance records were altered there isn't testimony from particular students there's testimony there are there's twelve different teachers who have provided declarations or testimony that they were pressured or threatened or demoted if they didn't pass students who didn't deserve to pass there's the president of the school testified that he came across a student who could not read this was the president's testimony who could not read and that student he found out was getting an a in the class beyond the question of how the student even got into the school the attendance records one of the teachers most of the testimony came from teachers who came forward and provided declarations and or  deposition testimony and that one of the teachers joe keller gilbert testified that about half of the student population showed up about twenty percent of the time in order to have attendance that meets these accreditation standards you have to be above sixty percent and these students weren't showing up they say we have direct testimony about people falsifying attendance records to meet the title for standards so the title for monies did not have to be returned grades that were changed we have testimony from just from teachers who said they know that they failed a student who then they saw in the next class who couldn't get into the next class unless they passed we have testimony that they saw people at the registrar testified in this case that she witnessed someone falsifying a student signature on attendance records because teachers were being paid on attendance and when it tends to when people didn't show up for classes the title for money was supposed to go back to the government fifty one million dollars between december of two thousand and seven and december of two thousand and ten went to the this small school that was open for a total of eight years we focused on three years with this i'm sure there were your honor i'm sure there are examples of some students who despite all of the rest of this stuff that was going on were successful but i think that the evidence in the case is that people in the workplace the people in milwaukee and that one of the reasons why the school closed was they falsified the placement rates for two thousand and nine and two thousand and ten there's really no dispute about that two thousand and nine they reported seventy nine percent the placement rates were actually forty eight as they corrected it after an investigation and then for the next year they corrected it again from seventy nine to twenty six percent well below any standard for placement where their students in the twenty six percent of got a job well maybe but they counted a job placed if somebody was in the law enforcement program where you spent thirty to forty thousand dollars if you got a security job afterwards for minimum wage that was counted as a success for the school that's in the twenty six percent that's what brant nelson saw brant nelson is exactly the person that the false claims act in visions bringing such a claim he is the corporate insider the close  allegations that have been made publicly well your honor that goes to the issue that relates to the subject matter jurisdiction of the court and so if i may  choose to making an extraordinary concession i'd like to read from the brief where we made this where it's alleged that we made this extraordinary concession for purposes of this motion only nelson concedes that the allegations have been publicly disclosed pursuant to thirty one u s c three seven three zero four however to trigger the public disclosure of bar the false claims act related allegations must be based upon those public disclosures citing to the ballots our case in the seventh circuit the phrase based upon a public disclosure means that it is substantially similar to publicly disclosed allegations separate citing then the levis key case which was then a very recent case from the circuit because the first amended complaint is not based upon prior public disclosures nelson's claims are not barred this is the context we're accused of call in our case by way of concession to become a shadow of its former self this is the paragraph where that alleged concession was made i would ask that if someone says that we waive the substantial part of our claim that the entire context of what we said we read i think it's only fair in terms of what the evidence is there is no dispute your honor that as to this timeframe and this school and these people that there was nothing in prior disclosures that related to david kagan and carol massey and the implementation of this compensation plan nothing said as i got that you know you're telling us that they you are able to specify which  your allegations had not been publicly disclosed at that time filed here fifteen pages of this brief goes on to describe in detail why they had not been prior and really your honor followed this alleged concession the teachings are that you don't look at the allegations at ten thousand feet you look at them on a granular level you look at the specific allegations it's not a question of i'm sorry your honor endorsed stad in terms of how he narrowed the scope of what would be relevant evidence but in terms of the time frame your honor that relates to another alleged concession that we made that is that we said that  elsom did not have a direct and independent knowledge of things on information and belief and asked to as we explained in detail in our reply brief your honor in what he said and the pinpointed thing that's reviewed is that he said he didn't have any but information and belief knowledge of the submission of the false claims the paperwork he wasn't involved in the submission of these iris forms that went to the government every time that they were seeking money after the p p a was signed he doesn't have to have knowledge of that he had knowledge of the fraud and that's all that's necessary he had knowledge of the falsified records he witnessed that instead of compensation as he testified he lived it he understood these power points that were given that she say if you so many students go into the school you'll make this much more money that's a direct violation as to knowledge that's a direct violation of one of the specific terms the court made reference to the fact that these laws are sometimes grouped together in a paragraph and they promise to comply with everything paragraph twenty two sets up part the incentive compensation separately there is no question that's material they specifically agreed not to directly or indirectly pay people this way and then they went ahead and did it and that the court in the motions to dismiss one possibility we had a rule twelve motion and the trial court said this citing with approval just east just judge eastern brooks language in oakland city the u uses its phase one application when it makes o causes a student to make a phase two application it's when you're seeking the money that these promises as they said in their brief these are forward looking promises of course they are of course your reaffirming the promise when you ask for said it's not essential for this case to succeed because it's makes a it's when it's presented under a one or used under eighty two and the issue that ended up causing the trial court to dismiss this was the conditions of payment the court said these were not conditions of payment they were conditions of participation so we succeed under a one or eight to a one is implied certification theory now every circuit that we've seen your honor and i understand this morning just this morning the four circuit has approved but the second force i have a list here of all the circuits we couldn't find a circuit where implied certification wasn't approve it was now well there are some that haven't position themselves on this issue yet but i we couldn't find a circuit that had rejected the theory outright you why did this milwaukee closed in two thousand and thirteen your honor there was testimony in deposition on that issue it wasn't particularly pertinent to the issues in the case so i'm i'm not sure that i can recall exactly i can recall generally that the company concluded around that period of time and decided to close some number of the c campuses as a strategic business decision because they that they identified certain campuses that because of the market that they were in and for other business related reasons they didn't think that they could be profitable going forward i don't know that a specific explanation was given beyond that there were other schools closed or announced to have been closed at the same  is there any evidence that the government relies upon the p p s when the subsequent requests for payment are made the answer that question wasn't given completely there is no evidence that the government relies upon them there is an argument made by mr scarboro very eloquently that the government must rely upon there was no testimony from the government there was no evidence from the government mr caster opposing counsel did not take any depositions or do any discovery from the department of education to determine whether or not they in fact relied upon the p p s well is there evidence in the record that when s b c signed the p p s it it already failed to comply with certain title four regulations because well is there there is none your honor it was alleged originally to that was alleged originally and the case survive the twelve b six ninety testimony of mr nelson that he had no knowledge as to what the corporation state of mind was when it signed the documents and with wrists and i mean how could he wasn't there well that's true he wasn't biggs that's exactly exactly right he couldn't possibly know that and he agreed with that he agreed it would be impossible for him to know what they were thinking but furthermore i think the court the district court relied upon the particular attempt to  insufficient denial and it therefore deemed our allegation admitted our allegation our statement of undisputed fact that there was no evidence to the contrary that the company did intend to comply at the time it signed and that there was no evidence to the contrary it was deemed admitted at by the district court and there was no evidence to the contrary if the department of education actually conduct the yearly order it's to ensure compliance with the title or regulations your honor the way it happens is the department of education requires the institution to pay at its expense for an outside audit in company to audit for title for compliance much like a publicly traded company has the outside accounting firm audit them and so every year the school is audited by an outside auditing firm a detailed written report is prepared provided to the school and then provided to the department of education and it's very significant to note i believe what the standard is declared to be by the department of education the standard that must be met in that audit in order for eligibility teeth to continue and that is a standard and this is all set forth in the record here it is a standard of substantial compliance not perfect compliance the department of education does not say to the institution if you break one of these rules if you give one director one admissions rep presented if you my milk up a coffee and it don't you become ineligible or if you give him a gift card or if you pay him not talking about you know democrats coffee here we're not we're talking about millions of dollars we're talking about millions of dollars at the school received with that with respect to the incentive compensation issue however which i was specifically directing to there what we're talking about is an allegation essentially unsubstantiated and your hon focused on what i think is the key point in questioning mr caster that two employees one time were given a small bonus that is alleged to be improper and the reason it's alleged to be improper is based upon the language in the bonus document which talks about for the director of admissions starts and for the director a financial aid package you know where are those terms define the director of admissions did not give a deposition he was not asked what it  means no one at the school was asked what does that mean the director of financial aid was asked she gave a deposition carol massey and she was asked what is packaging mean and she said it doesn't mean delivering financial aid to students so it doesn't come within the incentive compensation band what packaging means as she understood it as the director of that department was but you have to do that that she has met the deadlines of completing paperwork on time and therefore her why do you think now since claim would still your honor if you allowed him to proceed under a theory of implied certification he's claim would still fail primarily because he still has to demonstrate that something was violated that is a condition of payment none of the regulations that my client is alleged to have violated all these things about grades keeping attendance records even the incentive compensation none of those things are identified anywhere as being conditions of payment that this court has held many times that a condition of payment means that it is a prerequisite to payment and in all of those sta regulations it doesn't say that any of those things are conditions of payment in fact if you look at part six sixty eight of thirty four c f r what you see is an elaborate and robust and very far reaching in forstmann scheme whereby the department of education if that if the department believes that we have violated that that the school has violated some of these regulations they have an elaborate process that they can follow they give notice they have a hearing and then if they find that you violated those things they have an escalating series of penalties that they can impose from always on if compliance with the title for regulation the penalty for noncompliance is as i was just describing your honor it doesn't have to be a condition of payment for the department to pursue proceedings under part six sixty yet if they find that you violated anything at all they can issue a letter to you they can notice up to hearing they can call you in there to explain what you've done and they can impose an escalating series of penalties on you all the way up to all the way up to in substantial compliance with title four regulations i will say this i represented enough title for institutions to be confident to be well to be confident almost to the point of certainty that there were some violations because title four i funding here is not well say this is not a student loan students don't borrow money to go to these schools or know that no some of it is loans and some of it is not there so there's two primary yes yes some of it is what's called pell grants which is money you don't have to pay back and some of it is federally guaranteed student loans or in the last two or three years they're direct student loans but back then at the time of this case they were either direct loans or painted a parade of horribles to you and with all due respect to him and i'm i'm not suggesting that there were disputed facts i believe there were no genuine issues of material fact even on the things that mr caster has presented to this court so the parade of horribles is a in fact a very short parade and it's not nearly as horrible as it sounds now there are that i wouldn't suggest that you comb through there that the you need to comb through the record to figure that out but let me give you a few times i think we're going to have to well i don't think you have to and let me let me give you one really good reason why you don't have to well we always look at the record well i know i know you did i didn't mean to suggest that but i meant to comb through all of the six hundred forty five statements of an material undisputed fact and figure out who who said what about what here's the here's what overrides all of that even if all of that is true even if all of that is true there still has to be a false claim that is directly connected to some violation of title for the court said in the very recent granade your opinion that a doesn't become false after the fact so that's not a basis for stablish in that the claims are false this court said in after just four months ago that it would be absurd to say that because there were some violations that the institution they're a nursing home becomes completely ineligible so they don't have either of those theories available to them to say that we were ineligible in the claims were false so what they have to do is they have to show that a particular claim for reimbursement on behalf of a particular student was false because that student apart because that's student had his grades improperly changed or his attendance records improperly changed and what the brit what the briefing before this court will show very clearly and very simply is not only is there no evidence of that there's not any evidence connecting student john let me tell you how that happened your honor they made extremely broad discovery requests of us which saw among many other things a specific student identification and information we object to that based upon the family educational rights and pot which says that we can't disclose student educational records which may indeed include things as elementary as their name and address we cannot disclose that without either the consent of the student or an order of the court we went through a long and drawn out confer process they had the right to seek a court order to compel us to produce all kinds of information redacted student names they did not do that at the end of the meeting confer process we reached an agreement with them and by the consent of the parties to the discovery the documents produced and the information produced did not include student names that was the agreement that was reached and they could have asked the judge stat mueller to order otherwise and they did not do so even putting all that aside you know students who came forward individual know it was in this or whether there was zero testimony from any student at the school absolutely none he says there's that this movie teacher there is some testimony from teachers a great deal of it your honor that was referred to by counsel is double triple quadruple hearsay and it is things like i believe or i felt it is speculative stuff all of that is addressed in the in the in the papers before the court and in the summary judgment papers below it was a fairly exhaustive process to go through all that but at the end of the day they still have to prove that some violation caused my client put that in the record since they're they're asking for a verse on that grounds i don't recall specifically but it didn't it did not address he did not address any of these issues about individual students it addressed only the potential additional but there's these three eligible conditions of eligibility participation and condition in the cases if you look at them all get a little bit muddled as to exactly what is what what is clear and what has been made very clear in this circuit is that there is something called a condition of payment and and that unless you violate it that you have not made a legally false claim to the government and that for it to be a condition of payment it has to be a prerequisite to payment and nothing that were alleged to have done is said to be a prerequisite of payment the grading issues the attendance issues none of those are a prerequisites to payment there are things which if the government comes and looks adamant and finds that they don't like what we've done can impose penalties upon us but nowhere does it say if you have poor attendance records or if you give somebody a grade they don't deserve you don't get paid i want to go back for a minute how would you have either the same day or a week or a week or so before it if you can close it it's close either on the same day or shortly before discovery was closed that was also the summary judgment deadline and that's the principal way in which we were prejudiced by the motion for leave to amend is that had the amendment granted my client c e c which had already been dismissed would have been denied the opportunity to to move for summary judgment under the scheduling order place for some reason i  may be wrong if i am i apologize i think there was expert deposition that would that that followed that but i i am unsure as i can be the fact discovery was was still within the allowable window for seeking to leave to a man but judge the the the dismissal c e c occurred in i believe the second half of november and and nelson waited six weeks until the very last day in which he didn't have the schedule didn't say you may  by january third it said you may file a motion for leave to a man by january third and that's what he did so he didn't have an absolute right under the scheduling order to a man he simply had the right to file a motion he filed that motion on the very last day and thereby deprive c of the right to conduct any discovery that it might want to conduct because discovery fact discovery again i am reasonably certain was closed most more importantly the fact discovery had to be closed because we had the summary judgment deadline was january third we would have been conducting fact discovery after filing summary judgment motions i think so my logic tells me that i believe it must have been even if discovery was still ongoing we had to file our summary judgment motion on behalf of any defendant including c e c if they became one again by january third which we were deprived of the right to do if they were allowed to be amended back into the case after january third and the court had set the case for trial in april the trial date that was court had no inclination or desire to continue and i might add my client didn't want the trial they postponed either my client did not want this sort of damocles hanging over their head any longer than was absolutely necessary and we were we were delighted to have an early trial setting and unless the case was disposed by summary judgment which it was we were planning on being ready to try to case in april and we didn't want that delayed simply because mr nelson chose to wait until the very last day to seek leave to amend and i might have the motion to dismiss c e c on nine b had been pending for two or three months before it was finally granted so if he really felt he needed to amend he had plenty of time he could have done it before the the court or now i obviously didn't want to because he didn't want to agree that our motion was well taken but he did so if i may address briefly the subject matter jurisdiction issues which the court brought up with mr castor i think his concession that he made in his brief below was very clear and i don't think it was a walk off for a moment or two when i saw it when it was originally filed i was a bit surprised but the more i thought about it i wasn't because we had demonstrated very clearly in the record that there was massive public disclosure of these allegations the public disclosures included such things as saying that these types of violations are occurring at all c d c schools all sanford brand campuses everywhere in the country so milwaukee was included with those kinds of things in fact among the public disclosures were articles it's very interesting if you really dig into it mr nelson produced some e mails that he sent to friends of yours sending them copies of articles from a magazine about some other school i don't remember the name of it saying read this article this is exactly what i saw at stanford br but so for perks so his admission is that for purposes of this motion only nelson concedes that he is allegations and that can only mean all of his allegations his allegations have been publicly disclosed now the case law says unmistak a complaint is based upon public disclosures if the allegations in the complaint are substantially similar to allegations already in the public domain well if all of his allegations are in the public domain and have this company maybe you're not one of the other million and the up of the of the one hundred or more disclosures that we identified the vast majority of them related to this company and its schools and many of those said these are things that are happening at every sanford brown campus and and some of those disclosures specifically mention no one so but when when i saw that that the relator had admitted those things my conclusion after thinking about it was that was a smart move he admitted it was a strategic decision he admitted those things which he saw we had beat him on and he decided to put all of his chips as it were on the original  should and i think must affirm the summary judgment and all of those reasons come from the opinions of this court within just the last four months the grenadier versus ukrainian village pharmacy case and after vs moments meadows first of all an f c a claim based on  allegedly false statement must fail unless the statement is proven to be false when made you question mr scarboro about that at length it's clear that the law says that the p p a doesn't become false after the fact as judge posner noted in the grenadier case just a month ago if they change their mind even for purposes of greed that doesn't make the original statement falls they may have breached their contract but it doesn't mean the original statement was false secondly there is no false claim of the underlying law or contract alleged to be violated is not a condition of payment these clearly are not conditions of payment thirdly false claims that case must fail unless they can t specific violation to a specific claim that was subsequently made not only did they not do that here they didn't even try to do that here and fourth and finally the relator theory which the government apparently doesn't endorse they haven't spoken to it i wish they had i'd like to know their position but their theory that by violating a few or a number or some number of title for regulations you become automatically ineligible to ever receive another title for dollars as your honor said in the after pinion that is observed and you have seventeen hundred violations alleged there and you said that doesn't make them automatically ineligible for everything they still have to say which patient pipe through to which claim and prove that there was a connection between them they haven't three crit quick points and i realize my time here is very limited the united states is here because of legal errors in this records analysis under the false claims act that have spillover effects to other cases not just in this case the first is this issue of whether something and a statement has to be false when made in order to be something that you know is actionable under the false claims act the statute the the provision for express false statement liability section thirty seven twenty nine a one b specifically speaks to this it talks about making or using a false statement material to a fault or project and claim to hold that it's only that you look at the time it is made reads the use clause out of the statute this is important to the government not just in this case but in in many many other situations in which companies make initial representations about their eligibility for instance in the section eight a program where you say i'm a small business and you can only get government funds or government contracts because you are a small business well that may be true at the time but that if that changes you have a duty to update that information you can't just keep on getting the government money that's exactly the same situation here a case that addresses that issue in the fifth circuit as cited  the long he case l o n g h i that's part of the reason why we are so concerned with the just records erroneous ruling about this it has to be false when made you know it the statement  its continuing validity obviously travel's continues on and is continuing to be relevant in these programs that leads to my second point which is there's been some discussion about whether there was evidence about whether the government relies on the statements initially made in the program participation agreements there doesn't have to be evidence materiality is a legal question this court made that very clear in the united states versus rogan case when rejected specifically the argument that is being made here that you needed to put on testimony from someone at the government agency that they wouldn't have paid this court said in rogan no you don't need testimony you look at the scheme you look at whether it could naturally have influenced the government's payment decision as the materiality standard this court has endors codified in the statute itself the third point i think close to the last is this issue about whether these requirements are conditions of payment the statute makes very clear that they are both conditions of participation and conditions of payment you can't be in the program you can't get any money in less you comply with these requirements and it is further clear that education can withhold funds ten u s c section ten ninety four c one g makes clear that they can withhold funds if you violation of the any kickback statute that is actually holding in that case that would have been sufficient to dispose of that case because if there's no predicate violation of course you don't need to say any of this stuff i hesitate to characterize what judge posner says about the  because it is in there it is actually precedes the analysis of the anti kickback violation however if there is no attempt to harmonize that with the language of the statute which i just quoted to your honor that talks about making or using a false statement material to a fall for tell you don't think we have to overrule our opinion of three or four weeks of killing granite you know i think that the more specific and controlling opinion here is is the the main decision and again to say that you know the if you had innocent intent at the beginning but then you can cop to your fraudulent scheme and you decide to keep on asking the government for money and you're clearly relying upon those fourth circuit it came down today this morning and it expressly joins the many others circuits that have adopted the implied certification theory and again that theory it's unfortunately term because really it doesn't talk about certifications at all it's just incensed idea that if you are violating something that the government cares about that is a requirement in order to be paid it doesn't matter whether you actually say something about that when you go to the government if you know you are violating it and you go to the government and you say pay me you are implicitly representing that you have complied with this requirement and that's why we think that fits this case to a t your honor asked about whether the court needs to get to implied certification i don't think you need to get to it if you agree with us that the express false statement of the p p a is sufficient for liability under section thirty seven twenty nine a one b however if you disagree with us i do think the implies unification theory has to be addressed and is fully in place and of course you could rule in both theories that provisions of the false claims act at issue here and the implied sort of case and theory flows from thirty seven twenty nine a one which does not require an expressed false statement but we have an express full statement here we have the express false statement in the program participation agreement which clearly was used throughout to get payment and that we that in itself is sufficient for liability if you think it's not for some reason that it has to be you know false at the time it was made contrary to the expressed language of the statute then you do need to address the impl theory because you still do have claims being made and they implicitly are representing in our view compliance with all applicable title for funding restrictions you can use when the what the again it's a start at the start it's this the statement in the program participation agreement that you agreed to comply with these things and one of the very important things is the incentive compensation whether or not you had intent your dream to comply well that's correct you're on to that with that's not i mean again that that's the ship is sort of sealed on that in the main decision i mean that that same arguments were made by defense counsel there's lots and lots of laws we have to comply with that's often the case the government is dispersing billions of dollars under these programs yes we we require compliance if there is innocent noncompliance if it's in the words of judge easterbrook from maine tripping up on a regulatory complexity that's not going to have the requisite knowledge it's not going to be material you're not going to result in your honor i would like to address the last point to the question about the two different provisions that are at work here is a presentment claim which relates to the implied certification and the use cl the idea that you use the record the p p a which is false at the time of its use when you seek the payments for students as they are in school the money then goes to the school it's dispersed to the student periodically even for such things as living expenses but that dispersement and that that seeking that money long after the p p a was signed is the use of the p p a which at the time of its use is a false record under that provision of the false claims act so that's and that's why you don't have to reach implied certification under that theory but there's two different theories there's the present  that you're presenting this form to the government and there is no precise false statement in the form and that is the idea the argument being made there on their implied survey cations that you're you're certifying these earlier promises that you made at the time that you presented even though the formants self doesn't contain those promises were you correct the credit mess that ever that's the time you seek to pay me for right right right so that's why i think under the use the separate provision for use when the produce when the p p a is used that you don't have to reach it under that theory anyway i have a few points i want to make here in my  there was reference made to the app sure case recent decision of the court it's important in terms of the myriad of regulations that might be at work in these kinds of circumstances and there are many but and in terms of that under the in the medicare context the court has expressed concern that a false claims act case in a medicare context might essentially violate federalism concerns that is that your sensually supplanting what might be a medical malpractise case for the individuals in the nursing home by allowing these somewhat in the myriad of regulations to become something that is the basis for a false claims we don't have any of that here there is been a significant difference in terms of how this court and other courts across the country have dealt with issues when they have dealt with incentive compensation violations and they may say they may offer a declaration or testimony from carol massey that says well packaging doesn't equal financial aid well it calls according to her the putting of the documents together which is essentially financial aid or that that there no evidence on this at all but starts does not equal in rowland's or admissions that's what they say or we don't have evidence we don't have to define every word in the english language especially when we have a corporate document that says if two more students are in the school the director of admission this is going to get three to five thousand dollars of additional bonus that's what the powerpoint says that's the corporate document that's the admission that clearly shows a violation of two paragraph twenty two of the of the p p a they issue their question about the closure of the school the school is closed in the school went on probation in may of two thousand and twelve immediately following its failure it's false placement rates from two thousand and nine two thousand and ten a c i c s which is the private entity that actually audits these things on an annual basis group of volunteers made up of  funded by schools like this who have raised questions beginning in two thousand and eleven that those questions regarding placement rates those placement rates were false for two thousand and nine and two thousand and ten one of the promises in the p p a is that advertise placement rates be truthful that's separately set out in the p p a because that's important to all the students to everybody who goes there in terms of there are some of them that are in the record your honor certainly the trail of events that starts in june of two thousand and eleven leads to the closure of the school i think there are documents back and forth from a c i c s certainly those are part of the record  s was the private agency that did the audits it's made up of volunteers who do these audits and with respect to c e c being in the can in the case or not how this happens so we can clarify c c was dismissed on motions to dismiss on lack of plausibility because according to the district court we had not shown that c e state had signed the p p a there was nothing in the record i didn't think a motion to dismiss would measure the evidence in the record but what we did was of course we met in conferred with the other side in the forty two days that elapsed between the time that they were dismissed and the time that they were sought to add them in we had to take a corporate deposition get c e c to admit they signed p p a which we thought was actually a magic meeting confer asked for their agreement and by the day that they agreed that we could move to a man to add parties the district court didn't set down schedule we ordered parties did we agreed to this date this was the date they agreed to and they objected on saying that they were prejudiced by the date that they agreed to and we were denied the right  yeah i understand your honor it's let me just close this there's a lot of issues in the briefing talking about a parade of horribles if one different small immaterial regulation could give rise to a false claim that's number we're talking about here that's not what we're talking about we're not talking about anything like that i would raise this parade of horribles what if this kind of use of government