think about the balance that the department of education set when it decided some fifteen years ago to treat violations of the i c b as a regular issue of regulatory noncompliance and not as an issue of fraud or a basis to seek a return of money or to consistently refuse claims for payment of money or any other factors or numerator by escobar and since the partner has decided not to withhold payment from any school based upon i see noncompliance cut to the proverbial chase is the success of the school does make a certification when it requests funds that's in the record i believe it when eighty three sorts of record one eighty three certifications are that students eligible is a citizen has progressed adequately under another regulation called satisfactory academic progress to a point where the funds that are being requested are legitimately irked there's nothing about i c b noncompliance if that were the case that would render those certifications false under the supreme court's test and i think the kelly case and campion in this court applied to two part test two implied certification claims  two either kelly or can be address on the is on the issue of implied fault certification correctly and distinguish it they don't your honor but they clearly escobar test and they apply that two part test and as i've indicated when you look at the well it was you know if that was even raised to kid to the kalyan cam the courts to harass or not i don't believe it was and it probably didn't have to be because a two part test set forth by asking more is the test that was well i don't know are that's why i ask is that begin with you cite this kalyan campy for the proposition that this escobar test is the only way to prove however when we got the e b s did we answer a broader question i thought left open in escobar we said implied faults certification occurs when an entity has previously undertaken to express we comply with the law rule or regulation and that  claim for payment even though a certification of compliance is not required well your honor i think the way you reckon it's a great question it's put in that sort i mean the bottom line is i'm i'm i'm searching through this and frankly you put me into something i had no idea about i mean i've never thought about the false claims act in this way before so now i'm just trying to partial portion my way if you will through escobar and say did it really throw e b it out and i didn't find anything in escobar that said it in fact escobar says i need not language stating that the escobar to park implied false but cation test is the only basis for your i believe that test is at least a minimal test and i think there's a reason i would have what did you just say i believe it's at least a minimal threshold where does it say that an eskimo are does it says at least where you show these two factors at least stated as i said this situation as and as of this situation which confronts us in this case we're not trying to make a big wholesale argument about this or put down a wholesale plan we're just saying for this limited situation we needed to part hast now i said to myself ok if only for that they didn't get rid of what we did in the bid where do we get rid of what we did in the viewed i didn't find that in cali and i didn't find it in kampi so i'm still stuck with the b and in my view give me the real reason why i am wrong judge i think you're wrong in this case because certifications are made just like they were in the escobar case and the alleged noncompliance regulatory noncompliance here those not make those certifications at all false at all so you have a situation like kelly like campy and like escobar the ninth circuit panel in cali didn't say that he bid is still good law it announced the t they didn't say it but it applied it to assert to a case where certifications were made that weren't rendered false by the alleged noncompliance and there's reason to apply it dovetails into my materiality argument i'll i'll concede but there's reasons there should be a discerning limiting principle to this the noncompliance in this case as we've argued i don't think there's going to be any dispute that the government has never terminated access to title four funds has never asked for a return of title for funds in the form of a liability and the fact that you're not terminating it at the d's ability to continue to make claims for payment for students that are eligible and earn that money speaks louder then the regulation statute and contract other one as well as i understand the district courts second opinion in this case as the material yes think the court says well leaving aside everything else in this case care is at least an issue of fact i'm materiality that precludes summary judgment and so i'm going to ask you a question similar to the one i asked just on the previous case where  if that is correct if there is an issue of fact then the district courts bottom a lion was correct and do we even have to consider all the other complicated alternative well i believe in this case stronger that that is a matter of law for this reason the what is a matter of law the determination materiality on the record when i'm asking a different question and you can get to the point i understand you  concede it i'm asking you in theory if the district court is correct that there is a question a question of fact and i know you don't concede assume with me that there is do we have to reach any other issues in yes because the other issues within the case and the district court's findings of fact as on the materiality issue rests on the fact that it's not a finding of fact he says there is an issue of fact precluding summary judge it's not an issue of fact for a jury in this case your honor because there is no evidence that would support a materiality finding there is that all that you have in this record is the language of the statute the language of the regulation and the fact that it is in the program participation agreement if that is enough then every requirement under title four which is incorporated that p p s would go to a jury on an issue a materiality and that's not what the supreme court decided substantially changed the landscape by saying the government actions at the forefront of this analysis and where the government doesn't treat something in a way that makes it material into the test consistently refuse payment of claims  eligibility to make claims then then you're there's no issue for a finder of fact a jury would be left to rot speculation in this case on the basis of the record before you which is why we think you can decide it here today so in your view materiality is all or nothing to terminate no not in a lot of instances it may not be your honor for example let me give you one from the program participation agreement the cold war default ra provision as an act it by congress and the deal we provides for a terminations of eligibility if you violate that regulation now if you fraudulent lete for an falsify your records to make the rate that would be material because it would it would discontinue entitlement to to receive the money and we know from the head some memorandum and when this case was argued and i know your heart was on the handout panel we know that that memorandum was in fact the policy it was officially changed in twenty fifteen both the g a o and the zero i g confirm that the agency did not consider a violation of incentive comp i c b noncompliance as a matter of liability or fraud rather a regulatory noncompliance matter more appropriately dealt with under the arsenal and regulatory regime through the institution of a fine and that's in fact what they did so in your mind based a following on what you really telling me if i'm writing this decision back to the district court and i'm telling them what they are look at what's the level of analysis the analysis that escobar implies to require westmore requires that the government take some action and for two reasons it shows what the government's intent is your honor as to what could be in this case is hundreds of regulations that are incorporated into the s did the government intend those to relate to claims for payment and that's the focus of escobar and the the issue that the court has to grapple with is if the government never treats it in that manner can it ever rise to that level for materiality purposes what language and ask a bar tells me what you just said well escobar lays out a detailed number of factors i know what to eat and what they said ok what language would you point to that says exactly what you said your honor i would point to this fact that when you look at all of the factors that escobar said was the best evidence of materiality there are none that are satisfied in this case what you have in this case is an argument that existed some time ago and the handout case it might be fifteen years of litigating that issue subsequently turned into an automatic presumption of materiality because it was triple condition and you have that argument by my adversaries here congress legislative history is before you and was before the district court other courts upheld look the fact that the government deems something important isn't enough it has to treat that in a way that relates to claims for payment and the fact of the matter is it just simply does not did you want to save some about and i'm going to your honor i say i'm down to two minutes i'll reserve that it exactly right that there is nothing in escobar that changes the a b and ruling in escobar the supreme court indorsed the implied certification theory and confirm that claims may be faults under the false claims act if they information necessary to keep them from being misleading even if they have no express un troops in them and that was a place none the less i appreciate where you end and i was asking the question what i would like occur i hope a good cross examiner trying to lead  but the bottom line was can be does use mandatory language it says there's a two part task an ethical bar and we're applying it and there it is how my bound by that no your hon but as another three judge panel were bound by can't be even if it over what escobar requires that i didn't mean to suggest that you're not bound by prior pre judge panels obviously not it be it sets the standard here arguments would you tell me what are the specific representations about goods or services that were made here sure i mean again are threats i want to make clear a threshold argument is that there doesn't there is no specific represent necessary to at all but that's the worry that i have with the language of gandy that if i go your way and i think there's little confusion out there and some work aces do i need to go on to really resolve that i don't think so your honor and i think that the case is easily resolved by the plain language of escobar itself when it set forth the two part test that everyone you know they're saying is mandatory it says at least where two conditions are satisfied and it then went forward and said because i have specific representations materiality well no i was asking first about specific or specific reference and ok i'll get to materiality tonight what are the specific representations here sure first of all i think it's important understand means by specific representations is not talking about something that is expressly faults in the claim the whole point of the implied certification theory is that you are making your submitting a claim that has something that is misleading in the claim as a whole  based on says you know what you've left out in here what you've left out is very important noncompliance with the incentive compensation ban so in escobar you had spiffed specific representations that were essentially just medicaid billing codes they were eight digit codes that were submitted ok what are they here i'm asking about what they are right here and so the claim the sample claim form is it your one eighty three and it's the entire claim form essentially piggybacks on the program participation agreement that was the initial thing that all the schools had to sign in which they promised to comply with lots of things including the incentive compensation ban and they say in their claims in the sample claim here that they're an eligible program that they're eligible borrowers they talk about school codes they reference a school code they can only be obtained through having participated before and entered into this program participation agreement in other words they referenced the prior course of dealings and they take advantage of the fact that they made these prior promises that was what this court recognized in the handout case you know they they promise at the outset to comply with all these things and then when they don't comply when they knowingly violate something as important as the incentive compensation ban that takes me to materiality yes tell me about materiality shall as i read the district court second go round it has saying that at a minimum there is an issue of fact enough here to create a jury question as to material what is there to create the jury question sure well of the factors and it's not it's as if escobar announced a four factor test you sort of have to mine the decision for things that i thought important one of the things that it clearly thought was important is whether the thing is a prerequisite to payment i mean that was the essence of the handout decision was the yes we were going to you know not sort of hint hang our decision on this distinction between condition participation and conditions of payment because the incentive compensation ban is both escobar does not in any way repudiate that escobar says that remains highly relevant it just adds some additional things you look to one of the things you look to is whether it goes to the essence of the government's bargain here the incentive compensation ban is fundamental to the why the department of education would be willing to pay you know allow schools to participate in this program because it's the way you ensure that you're getting think about him and now seems to me that had now we relied almost exclusively on the labeling decisions of the government we focused on the fact that i c b was among the prerequisites to p in the us receiving the funds asked the bar it seemed to re rejected this focus on labels i agree with you that escobar rejected a focus on labels i don't  that designation as a condition of payment remains relevant and highly probative i think what escobar says is you've got to do a little bit more work so i think what escobar suggests is that handles analysis is incomplete but then the no i want to do more i don't agree with irreconcilable i think that it's set suggest that it's incomplete and the district court did some additional analysis and i'm trying to walk through the additional step that the four things we set out in hand now are not the same as what in the statute the regulation in the p p a as a condition of payment you have to look to whether it goes to the essence of the bargain that's why i was trying to establish that you know this is a fundamental thing here you have to look at whether the violations were significant here the allegations are that these  recruiters repaid you know up to thirty thousand dollars to bring in students who were on qualified they devised a score card system in which they tried to sort of hide the fact that they were violating the incentive compensation ban all these sorts of things that are show serious violations these weren't sort of new regulatory infractions and then ask of our does also speak about the governmental action what the government has done in response to similar violations and the fact of the matter is the part of education hasn't always you know education rarely knows sort of up front you know schools don't come to the department of education and say hey we'd like to get title for funds but we're not going to comply with the incentive compensation back i think there's any evidence that the parent education would ever let a school into the program in that situation what you have is that apart of education settling cases settling you know cases like after they handle a case you know bringing actions to enforce and impose fines you have evidence at least  sufficient for a jury to conclude that the government cared about this and this was relevant to the payment decision so that's sort of the body of evidence that demonstrates materiality at least sufficient for a jury to conclude so if you convince me that i'm not going to look to the past and force on average generally i'm not trying to convince you not to look to them i'm just trying to get well it seems to me that you're saying i can't look to them soley i've just got to look to them generally that i look to them well i guess i'm trying to figure out it seems to me that what you're really suggesting is that i don't look to these past in force when efforts which i thought and now really focused on i can look to them as one of the characteristics if you will of what i what i might be thinking about but then i also have to to the facts of a given case is that what i have to do i'm not suggesting you can't look to that well all we're suggesting resisting is the notion that sort of the government failure the failure to identify a situation in the government you know where the government has withheld payment dispositive to the materiality inquiry that there are multiple factors here and the generally speaking that creates a fact question for the jury and we have factors that strongly favor a finding of material and i see what you're saying you're saying that the that why one does not decide this issue of materiality as a matter of law because of the mere fact that there is not evidence of revocation where the court likewise there sent a similar case i assume that's because there could be many reasons why the government didn't go after someone else it was too small or they didn't have the resources or any myriad number of reasons that it doesn't negate as a matter of law that it's material that's correct your honor and as a part of not in any way established the government action point is sort of the dispositive thing it says it's something that's in the mix and that's why my response to you on a handout is that it's it's an incomplete analysis now simply says condition is necessarily material and on the other hand that nothing that doesn't say condition can be material and what the escobar court says is no we don't you don't analyze the spectrum that way there are some things that are labeled conditions where it is clear from the record that the government acts with full knowledge in the court use the term actual knowledge that the violation has occurred and still pays anyway so kelly is a good example of that where there is a technical requirement in the regulation but not in the contract interestingly for a particular form of financial report and the government actually wants a different form and they ask for and get and accept a different form and the court says quite correctly and kelly that's not material violation because the government with full knowledge of what was going on asked you to do that instead of this ok on the other hand escobar says there are some things that aren't labeled conditions where it's clear that because of what the government does or because of the nature of the program that it's material it's called a condition it's automatically material hendo looks at the legislative history the fit between the logic of this i c b requirement and or i should prohibition and the title for funds being provided the regulatory history and the contract and says here this provision is sufficiently important as evidence by these factors that it's material and i think that's an undisputable there is not a single fact in the record that the government has ever authorised to school to violate the incentive compensation ban that this government has ever said to a school we understand that you're not going to comply with the i c b in the future but we're still going to pay you anyway these of all come up in the context of disputed allegations where the government has either settled or schools have gone away there is no if there was evidence if this was like kelly and the government come to a you and said you know we're ok with you paying thirty thousand dollars if someone hits their goal that's fine then i wouldn't have a case then i let me ask you let me ask you this in the district court seem to be doing potentially two different things and i'm trying to figure out which of those different things you think  's correct it seemed to me that there was both an assertion that there was some material issue of fact on materiality so that's sort of redundant and that it was material as a matter of law on this record which do you think the court was saying do you agree or was trying to do both and where do you think we should come around so if you're really practical answer that i actually agree with mr gumbos on this record the materiality is a question of law it's clearly material for all the reasons hand out says for the importance of the statute for the clear record and the reason that's important is the jury's got to get an instruction as to what to do and i don't know what the jury supposed to do with the report and deciding why they did or didn't settle certain cases why penalties were it's all just speculation or again have a two year trial where we call in witnesses from what happened twenty years ago in other schools of course not so there are going to be cases where it's a tribal issue of fact and i think that's going to tie largely to the severely of the violation you know if we're talking about a free cup of coffee once a year to somebody that's the kind of thing that escobar says is trivial that's the american stapler that is not going to be material but that's not what we're talking about here and our position is that on these facts in the in the facts of the record that the court found were you know tribal issues as a summary judgment but more importantly the nature of the i c b itself the central lety of this requirement did by congress and you know we address in the brief the hanssen memo on why that's not controlling but even with respect to the hanssen memo the government never said this is not an important requirement this is not kelly this is not the guardrails in the case that's escaping me the name of the third district this is like miller actually it's actually like miller this is a material requirement schools are not supposed to pay per head for students they recruit because when they do that it taints the process of providing student aid and it makes the government aid go to students who shouldn't be receiving it to enrich the school and not to help the students it's fundamental to this program and that is in our view as hendo said material as a matter of law there is nothing in escobar that's inconsistent with that night i disagree with my friend mr the escobar does not say the government's conduct is most important it does not shift the theory it simply says when you're looking at this spectrum there are going to be things that are called conditions the thout it you know for example they say the american state are trivial and there will be things that are important that are not called condition correct in looking at what the government did not help you pick which is which but it doesn't mean that you have to look at what the government didn't every case and in fact if it did that big a crazy situation because a new requirement could never be material for many of the elements of the offenses and there materiality requirement there is not and there is a materiality department requirement so how does the jury address that issue well i think the question here i mean to reality is really a legal question that's not a question for the jury because the question is whether the i guess let me split that there's a question as to whether the i c b itself is material right is that a material requirement that's a question i think for the court as i don't think i would you could possibly analyze that in this specific situation there's another question as to whether the size of the violation is  trivial violation or a minute or important violation so you know if a you can manage to prove that they did not in fact pay large amounts of money to people and that if we're talking about a starbucks gift card or something maybe they can convince a jury that's not a material violation it's a trivial violation that's different than whether the legal requirement not to pay recruiters on a per head basis is a material requirement of the law and it's not one of thousands and thousands of requirements this is a central requirement the court has to test the analyze it as the court didn't hand out nothing in escobar is inconsistent with that and this panel i think is as the the court recognized below still bound by hand on this point and even miller the eighth circuit in miller reaches the exact same conclusion with respect to the record keeping aspects of title four which are very closely it's not the same as the i c but it's a similarly important requirement even post  that they can violate the i c c with impunity and the court should ignore congressional intent and simply let a jury figure out whether they think thirty two settlements is enough with really no basis to do that frankly so i see i'd well exceeded my time if the panel has any questions i'd be happy to answer them i don't believe we have any further once i please not at the moment and thank you no let me let me start off with miller miller happen to be my case one distinction between miller and what i've argued today to the panel and what the record of i c be enforcement shows is that the miller court expressly found that the department of education had terminated participation to draw down funds based on those record keeping the records that were at issue in that case and i've already told the panel today that goes to the heart of the tunnel for program what was at issue their record keeping that related to claim submitted for funds based upon student eligibility and how far they advanced in their lives education endeavor i believe one one thing i'd like to mention about handout that is lost the government did did not and does not label c b compliance expressly as a condition of payment handout looked at that and made the determination that because it was a fundamental condition of participation it amounted to the same thing otherwise i believe the court held no  university would be accountable for violating core requirements in the p p yet but what is a core requirement of the i agree with my colleague is a matter of law and for materiality purposes i don't know how you can look at the hanson memo that's or record one o four and what is stated policy confirmed by the enforcement of deal we over some fifteen years and conclude that it's material to it's payment of claims and i think that the last point i would make is i think government now than government knowledge defense is one it's a defense to see enter it's also it's also consider with respect to materiality in this case i believe the third circuit in us x will space versus care analyze that in a way we would advocate that you do in this case which is the government is aware of the i c b requirement the government didn't act to enforce the i c b requirement in a manner that would be consistent with the stablish e f c a materiality as to the payment of claims it simply has not done that i believe the ninth circuit had the advantage of that record and i'd say when it issued hand out would have issued the same opinion it would have concluded it's not material there's any other questions i think we understand your position thank you