Court Opinion

ID: 1038211
Source: CourtListenerOpinion
Date Created: 2013-08-23 00:00:56.047146+00
Date Added: 2024-06-11T15:27:28.996697
License: Public Domain

REVISED AUGUST 21, 2013

       IN THE UNITED STATES COURT OF APPEALS
                FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                                  Fifth Circuit

                                                                  FILED
                                                             August 20, 2013
                                No. 12-20314
                                                             Lyle W. Cayce
                                                                  Clerk

UNITED STATES OF AMERICA, ex rel., LESLIE STEURY,

                                          Plaintiff - Appellant

v.

CARDINAL HEALTH, INCORPORATED, formerly known as
Alaris Medical Systems, Incorporated;
CARDINAL HEALTH 303, INCORPORATED, formerly known as
Alaris Medical Systems, Incorporated;
CARDINAL HEALTH SOLUTIONS, INCORPORATED,

                                          Defendants - Appellees

                Appeal from the United States District Court
                     for the Southern District of Texas

Before JONES, DENNIS, and HIGGINSON, Circuit Judges.
PER CURIAM:
      Two questions are posed in this appeal. The first is whether relator
Steury’s third amended complaint states a claim under the False Claims Act
(“FCA”) based solely on an implied false certification of “merchantability” by
defendants, Cardinal Health, Inc.; Cardinal Health 303, Inc.; and Cardinal
Health Solutions, Inc., successors in interest to Alaris Medical Systems, Inc.
(collectively, “Cardinal”) to the United States Department of Veterans Affairs
                                     No. 12-20314

(“VA”) in connection with the sales of Cardinal’s Signature Edition Infusion
Device (“Signature pump”). Related to this issue is the sufficiency of Steury’s
pleading to allege this theory of liability. The second issue is the viability of a
worthless goods claim. Because Steury’s third amended complaint still fails to
plead her claims with sufficient particularity, we AFFIRM the district court.
       This is the second time this matter has been before this court. See U.S. ex
rel. Steury v. Cardinal Health, Inc., 625 F.3d 262 (5th Cir. 2010) (“Steury I”).
                                    I. Background
       Steury marketed Cardinal’s Signature pump to various hospitals,
including VA hospitals, from 1996 until she was terminated in 2001. The
Signature pump regulates the rate at which intravenous fluids flow into
patients. Steury alleges that a design flaw in the Signature pumps allowed air
bubbles to accumulate and be released into a patient’s intravenous line,
potentially causing death on entering the patient’s bloodstream. Steury alleges
that Cardinal sold Signature pumps to the VA from 1997 until it suspended
production and sales for a separate problem in 2006.
       Steury became aware of the defect in late 2000 and discussed it with an
area manager in early 2001. In mid-2001, Cardinal suspended shipment of
Signature pumps for three months while it reviewed the defect.                      Steury
continued to market the Signature pumps during this period. Cardinal fired
Steury at the end of the three-month review period. According to Steury, she
was scheduled to fill a major order of Signature pumps with a VA hospital in
Ohio only five days later and by that time a number of Cardinal employees were
aware of the defect.
       Steury sued Cardinal in 2007 for alleged violations of the FCA and several
state statutes. The government declined to intervene.1 Cardinal moved to

       1
         The government submitted a brief as amicus curiae and participated in oral argument
on this appeal.

                                             2
                                  No. 12-20314

dismiss after Steury filed an amended complaint. The district court adopted the
magistrate judge’s report and recommendation and dismissed Steury’s complaint
for failure to satisfy the heightened pleading standards of Rule 9(b).
      We largely affirmed the district court on appeal but remanded to allow
Steury an opportunity to amend her complaint. Steury I, 625 F.3d 262. On
remand, Steury filed a second amended complaint, which the district court again
dismissed. Steury filed a third amended complaint, and Cardinal moved to
dismiss under Rules 12(b)(6) and 9(b) for failure to state a claim and for failure
to plead a claim alleging fraud with sufficient particularity. The magistrate
judge recommended dismissal, and the district court adopted                     that
recommendation in full. Steury timely appealed.
                           II. Standard of Review
      “[C]laims brought under the FCA must comply with the particularity
requirements of Rule 9(b)” for claims of fraud. Steury I, 625 F.3d at 266 (citation
omitted). Rule 9(b) provides: “In alleging fraud . . . a party must state with
particularity the circumstances constituting fraud.” Fed. R. Civ. P. 9(b). Thus,
“Rule 9(b) requires, at a minimum, that a plaintiff set forth the who, what,
when, where, and how of the alleged fraud.” Steury I, 625 F.3d at 266 (citations
and internal quotation marks omitted). “A dismissal for failure to plead fraud
with particularity under Rule 9(b) is treated as a dismissal for failure to state
a claim under Rule 12(b)(6).” United States ex rel. Grubbs v. Kanneganti,
565 F.3d 180, 185 n.8 (5th Cir. 2009) (citation and internal quotation marks
omitted).
      We review “de novo a district court’s ruling on a Rule 12(b)(6) motion[,] . . .
interpret[ing] the complaint in the light most favorable to the plaintiff.” Steury
I, 625 F.3d at 266 (citing U.S. ex rel. Willard v. Humana Health Plan of Tex. Inc.,
336 F.3d 375, 379 (5th Cir. 2003)). “The plaintiff’s factual allegations must
support a claim to relief that is plausible on its face and rises above mere

                                         3
                                       No. 12-20314

speculation.” Id. (citation omitted); accord Ashcroft v. Iqbal, 556 U.S. 662,
678–79 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). We
view all well pleaded facts in the light most favorable to the plaintiff. Jebaco,
Inc. v. Harrah’s Operating Co., Inc., 587 F.3d 314, 318 (5th Cir. 2009) (internal
citations omitted).
                                     III. Discussion
       A claim under the FCA requires presentation of a knowingly false claim
to the government for payment; i.e., the requirements are a knowing conduct,
falsity, and materiality. 31 U.S.C. § 3729(a)(1)(B) (2009). Again, because a
claim under the FCA falls under Rule 9(b), it is necessary to plead with
particularity the who, what, when, where, and how of the falsity. Steury I,
625 F.3d at 266 (citations omitted).2

                           A. Implied False Certification
       Although the Steury I court expressly stated that the Fifth Circuit has not
yet adopted the implied false certification theory of FCA liability, we also noted
that any such claim (whether express or implied) must assert that a certification
was a “prerequisite” to the payment sought:

       2
          Cardinal contends that Steury waived or forfeited her implied false certification claim
by not objecting to the magistrate judge’s report and recommendation and waived or forfeited
her worthless goods claim by abandoning it in her third amended complaint. This court has
held that plain error review applies when a party did not object to a magistrate judge’s findings
of fact, conclusions of law, or recommendation to the district court, so long as the party was
served with notice of the consequences of failing to object. Douglass v. United Servs. Auto.
Ass’n, 79 F.3d 1415, 1428–29 (5th Cir. 1996) (en banc). Steury, however, objected thoroughly
to each of the relevant portions of the magistrate judge’s report. Nor did Steury abandon her
worthless goods claim. Her third amended complaint alleges facts evidently intended to
establish such a claim. 3d Am. Cmplt. ¶ 36 (“An infusion pump that kills patients when used
as intended is of no value to the hospital that is using it. Instead, the infusion pump actually
has a negative value because it will create tort liability for the hospital given its defective
condition.”) (emphasis added).

                                               4
                                 No. 12-20314

             The FCA is not a general “enforcement device” for federal
      statutes, regulations, and contract. Thompson, 125 F.3d at 902; see
      also Mikes, 274 F.3d at 699 (observing that FCA “was not designed
      for use as a blunt instrument to enforce compliance”). Not every
      breach of a federal contract is an FCA problem. We have thus
      repeatedly upheld the dismissal of false-certification claims (implied
      or express) when a contractor’s compliance with federal statutes,
      regulations, or contract provisions was not a “condition” or
      “prerequisite” for payment under a contract. See, e.g., Marcy,
      520 F.3d at 389–90 (upholding dismissal); Willard, 336 F.3d at 381
      (same); see also Thompson, 125 F.3d at 902–03 (remanding for fact
      determination as to whether payment was “conditioned” on
      certification). This prerequisite requirement seeks to maintain a
      “crucial distinction” between punitive FCA liability and ordinary
      breaches of contract. United States v. Southland Mgmt. Corp.,
      326 F.3d 669, 680 (5th Cir. 2003) (en banc) (Jones, J., specially
      concurring). The prerequisite requirement recognizes that unless
      the Government conditions payment on a certification of compliance,
      a contractor’s mere request for payment does not fairly imply such
      certification. See Mikes, 274 F.3d at 700 (observing that a mere
      claim for payment does not suggest fraud unless it can be said that
      the defendant submitted the claim “while knowing . . . that payment
      expressly is precluded because of some noncompliance by the
      defendant”); United States ex rel. Siewick v. Jamieson Sci. & Eng’g,
      Inc., 214 F.3d 1372, 1376 (D.C. Cir. 2000) (“Courts have been ready
      to infer certification from silence, but only where certification was
      a prerequisite to the government action sought.”).

Steury I, 625 F.3d at 268–69.
      The gist of our holding in Steury I was that Cardinal “did not make an
implied certification [within the warranty of merchantability] simply because the
Government’s standard commercial-acquisition contract [under Federal
Acquisition Regulations] includes a warranty of merchantability.” Steury I,
625 F.3d at 270. Instead, this court held that a “knowing delivery of defective
goods” might be actionable under the FCA if, for instance, a particular
government contract specifically conditioned payment on a certification of
compliance with the warranty of merchantability, or by the knowing provision

                                        5
                                  No. 12-20314

of “worthless goods” to the government. Id. We vacated the dismissal and
authorized a remand so that Steury could attempt to comply with these
requirements.
      On remand, Steury changed her complaint somewhat, and she now alleges
that her FCA claim is based solely on an implied false certification theory (in
addition to a worthless goods theory based on the same facts). In particular, she
now alleges that Cardinal “expressly warranted that the [Signature pumps] were
‘merchantable,’” that Cardinal’s “contract with the VA specifically required that
the [Signature pumps] be merchantable,” that Cardinal’s “contract with the VA
required it to implicitly certify that the [Signature pumps] were merchantable,”
and that “[t]he requirement that the [Signature pumps] be merchantable was a
material contractual requirement.” 3d Am. Compl. ¶¶ 28, 31, 41, and 42. The
district court concluded that these pleadings were insufficient both because the
Fifth Circuit has rejected implied false certification claims and because Steury
still failed to allege that “the Government conditioned payment for the Signature
pumps on a certification that the Signature pumps complied with the warranty
of merchantability.” Steury I, 625 F.3d at 269. The district court erred in its
first determination—Steury I did not reject the implied false certification theory
of FCA liability. The sufficiency of Steury’s allegations, however, gives us pause
and forms the basis for our decision.
      In Steury I we held that “a false certification of compliance, without more,
does not give rise to a false claim for payment unless payment is conditioned on
compliance.” Steury I, 625 F.3d at 269. In a footnote, we explained that this fact
about the contract’s conditions will “depend on the specific statutes, regulations,
and contracts at issue in a particular case.” Id. at 269 n.4 (citing U.S. ex rel.
Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 902–03 (5th Cir.
1997)).

                                        6
                                  No. 12-20314

      Steury’s new allegations that merchantability was a “standard condition,”
or material condition, of Cardinal’s contracts with the VA, or that the VA would
not have paid for the Signature pumps had it known of the defect, are deficient
under Rule 9(b). These conclusory allegations do not identify the contractual
provisions regarding merchantability.        In this context, simply stating the
conclusion will not do. As we have noted, an FCA relator must clearly state the
substance of the fraud that has been committed; here, the essence of the
fraudulent activity of implied false certification of compliance cannot be gauged
unless Steury reveals how the Signature pumps deviated from the government’s
specifications. For example, in other implied false certification cases, the relator
has relied on express statutes or regulations, e.g., the Medicare Act, U.S. ex rel.
Mikes v. Straus, 274 F.3d 687, 699 (2d Cir. 2001); the Clean Water Act, U.S. ex
rel. Marcy v. Rowan Cos., Inc., 520 F.3d 384, 390 (5th Cir. 2008); and the
Medicare Anti-Kickback statute and Stark laws, Thompson, 125 F.3d at 901–02,
when pleading that the defendant’s payment request falsely and impliedly
certified compliance.    Indeed, Steury I analyzed the standard government
procurement regulations (i.e., the Financial Acquisition Regulations), on which
Steury relied at that time, and found them patently wanting because the
government may choose to override implied merchantability provisions with
express warranties. Further, Steury I noted, “That the government may accept
(and pay) for noncompliant commercial items under the [Financial Acquisition
Regulations] confirms that payment is not conditioned on compliance with the
warranty of merchantability.” Steury I, 625 F.3d at 270. At this point in the
litigation, Steury had to know that merely descriptive or conclusory allegations
about the Cardinal contracts were insufficient.
      Steury’s pleadings are ambiguous, but apparently Steury is also relying
on an implied warranty of merchantability, in which case she should have
articulated some court opinion or regulation that imports such warranties into

                                         7
                                        No. 12-20314

the government’s contracts.           Again, however, an implied warranty can be
overridden by express warranty terms. Her claim is no better off for relying on
an implied rather than an express warranty. It becomes more out of kilter with
existing implied false certification case law because it asks this court to reckon
actionable as a knowingly false claim an implied certification of an implied
contract provision.
       Moreover, Steury still fails to allege, in more than an utterly conclusory
manner, that the contractual merchantability provision, whether express or
implied, was a condition without which the government would not have paid
Cardinal.     So, she alleges an implied certification of an implied contract
provision that is an implied prerequisite to payment. While this court has not
definitively ruled on the cognizability of implied false certification claims, Steury
I accepted the predominant view among circuit courts3 and clearly stated that
certifications must be a prerequisite of payment. As Steury I explained, “The
prerequisite requirement has to do with more than just the materiality of a false
certification; it ultimately has to do with whether it is fair to find a false
certification or false claim for payment in the first place.” Steury I, 625 F.3d at
269. Without this crucial allegation, in addition to the deficiencies in Steury’s
pleading of a contract violation, Steury’s third amended complaint fails to cross
the threshold of a cognizable implied false certification claim under the FCA.
                                   B. Worthless Goods
       In addition to her implied false certification argument, Steury also alleges
that Cardinal violated the FCA under a worthless goods theory. Specifically,
Steury alleges that the Signature pumps were worthless because the expected
cost due to tort liability from using the Signature pumps exceeded the expected

       3
         John T. Boese, 1 Civil False Claims and Qui Tam Actions § 2.02(B)(3) (4th ed. 2012)
(“[M]ost of the courts that have accepted the implied false certification theory have done so only
where the government expressly conditioned payment on compliance with the underlying
statute or regulation.”).

                                                8
                                  No. 12-20314

benefit of using them. We refused to examine the viability of a worthless goods
theory in this circuit in Steury I because “Steury has so far failed to allege this
type of claim with particularity.” 625 F.3d at 270. We again do not reach the
issue of whether an FCA claim may be viable under a worthless goods theory in
this circuit because Steury’s third amended complaint remains deficient. It fails
to plead a worthless goods theory with the requisite particularity because it fails
to allege that any Signature pump sold to the VA over nine years was ever found
to be deficient or worthless. It fails to allege that any patient was harmed due
to the use of the Signature pump at a VA hospital. It fails to allege that the VA
was ever sued due to injury caused by a malfunctioning Signature pump. There
is no who, what, when, where, or how on this claim to comply with Rule 9(b).
                                IV. Conclusion
      For these reasons, the judgment of the district court is AFFIRMED.

                                        9
                                   No. 12-20314

HIGGINSON, Circuit Judge, concurring:
      Courts have struggled with delimiting liability under the False Claims Act
(“FCA”). Among the issues wrestled with have been whether to distinguish
“factually false” from “legally false” claims, whether to recognize “express” and
“implied” certification theories of liability, and whether to limit liability under
those theories to cases where the government conditions payment on a
certification of compliance (the “prerequisite” requirement).
      “Courts have created these categories in an effort to clarify how different
behaviors can give rise to a false or fraudulent claim,” United States ex rel.
Hutcheson v. Blackstone Med., Inc., 647 F.3d 377, 385 (1st Cir. 2011), and to
maintain what we have deemed the “ ‘crucial distinction’ between punitive FCA
liability and ordinary breaches of contract,” United States ex rel. Steury v.
Cardinal Health, Inc. (“Steury I”), 625 F.3d 262, 268 (5th Cir. 2010). “Judicially-
created categories sometimes can help carry out a statute’s requirements, but
they can also create artificial barriers that obscure and distort those
requirements.” Hutcheson, 647 F.3d at 385.
      The majority opinion bases its holding that Steury failed to state a claim
under the FCA on its judgment that, even if this court were to adopt the implied
false certification theory of FCA liability, Steury’s third amended complaint did
not properly allege that “a certification was a ‘prerequisite’ to the payment
sought.” But “[t]he text of the FCA does not refer . . . . to ‘express certification’
or ‘implied certification.’ Indeed, it does not refer to ‘certification’ at all.”
Hutcheson, 647 F.3d at 385. Nor does the FCA contain the term “prerequisite.”
These are judicial constructs that, in my view and the view of another circuit
court, “do more to obscure than clarify the issues before us.” Id. at 385–86.
      I would redirect attention to the plain language of the statute. The FCA
subjects a person to liability for “knowingly present[ing] . . . a false or fraudulent
claim for payment.” 31 U.S.C. § 3729(a)(1)(A). Courts initially distinguished

                                         10
                                        No. 12-20314

false from fraudulent claims in the civil FCA context,1 but these concepts have
merged over time. See Claire M. Sylvia, THE FALSE CLAIMS ACT: FRAUD AGAINST
THE GOVERNMENT § 4:26 (2d ed. 2013) (“Courts do not always distinguish
between ‘false’ claims and ‘fraudulent’ claims, and often simply refer to ‘falsity’
or, as the statute’s title does, ‘false claims.’ ”).
       “As a walk through Title 18 and other titles of the United States Code
reveals, Congress has long honored the distinction [between falsity and fraud]
in criminalizing many types of conduct.” United States v. Kurlemann, 708 F.3d
722, 728 (6th Cir. 2013) (interpreting 18 U.S.C. § 1014). Criminal analogues of
the FCA make it a federal crime to present a claim to the government knowing
it to be “false, fictitious, or fraudulent,” 18 U.S.C. § 287, and to knowingly and
willfully make a “materially false, fictitious, or fraudulent statement or
representation” on a matter within the jurisdiction of the United States, 18
U.S.C. § 1001(a).         These statutes have proved workable without judicial
embellishment by employing traditional, common-sense understandings of what
it means for a statement or claim to be “false” and “fraudulent.”
       The two terms are not co-extensive. Kurlemann, 708 F.3d at 728 (“ ‘False’
and ‘fraudulent’ representations do not cover the same thing.”). Falsity requires
“a ‘factual assertion’ capable of confirmation or contradiction.” Id. (citing
Williams v. United States, 458 U.S. 279, 284 (1982)); see also United States v.
Shah, 44 F.3d 285, 294 n.16 (5th Cir. 1995) (“A statement is false if it was
untrue when made and then known to be untrue by the person making it”).

       1
         E.g., United States v. TDC Mgmt. Corp., 24 F.3d 292, 297 (D.C. Cir. 1994) (“In 1982,
Congress recodified the False Claims Act to substitute, ‘without substantive change, . . . simple
language . . . for awkward and obsolete terms.’ Before this recodification, the False Claims Act
forbade knowing presentation of a ‘false, fictitious, or fraudulent claim.’ In recodifying the Act,
Congress eliminated the word ‘fictitious’ but retained both ‘false’ and ‘fraudulent’ as part of the
statutory language. We infer from this that Congress distinguished ‘false’ from ‘fraudulent’
claims and presume the distinction to turn on whether the defendant acted with an intent to
deceive.”) (citations omitted).

                                               11
                                         No. 12-20314

       Fraud has long been understood to include a broader range of
       deceptive conduct. “The gist of the action,” in the Supreme Court’s
       words, “is fraudulently producing a false impression upon the mind
       of the other party; and, if this result is accomplished, it is
       unimportant whether the means of accomplishing it are words or
       acts of the defendant, or his concealment or suppression of material
       facts not equally within the knowledge or reach of the plaintiff.”
       Stewart v. Wyo. Cattle Ranche Co., 128 U.S. 383, 388, 9 S.Ct. 101, 32
       L.Ed. 439 (1888); see also Black’s Law Dictionary 731 (9th ed. 2009)
       (defining fraud as “[a] knowing misrepresentation of the truth or
       concealment of a material fact to induce another to act to his or her
       detriment”).
Kurlemann, 708 F.3d at 728–29.2
       I would favor restoring Congress’s statutory distinction between falsity
and fraud, and using traditional, common-sense understandings of those terms
to decide whether Steury and plaintiffs like her state a claim under the FCA.
Steury did not specifically allege in the operative complaint that Cardinal
Health knew of material product defects but, with the intent to deceive, sought
to collect payment from the government nonetheless—indeed, she stated that “no
specific intent to defraud the government is required” to prove a false claim. So
our focus must in this case be on whether Cardinal Health’s claim for payment
was a false one: whether it contained a falsifiable assertion that was untrue
when made.
       The Supreme Court has answered a conceptually similar question:
whether the deposit of a check without sufficient funds to support it constitutes
a false statement under 18 U.S.C. § 1014. See Williams, 458 U.S. at 284–87. The
government argued that a check not supported by sufficient funds contains an
implicit false statement or representation that the account contains sufficient

       2
          “[T]he terms ‘knowing’ and ‘knowingly,’ ” as used in the FCA, “require no proof of
specific intent to defraud”; rather, they “mean that a person, with respect to information -- (i)
has actual knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity
of the information; or (iii) acts in reckless disregard of the truth or falsity of the information.”
31 U.S.C. § 3729(b)(1)(A)–(B).

                                                12
                                  No. 12-20314

funds to cover it. Id. at 285–86.       The Supreme Court granted that the
government’s implied certification theory was a plausible, functional
understanding of how checks work, but expressed “reluctan[ce] to base an
expansive reading [of the statute] on inferences drawn from subjective and
variable ‘understandings.’ ” Id. at 286. “[T]echnically speaking,” the Court
reasoned,
      a check is not a factual assertion at all, and therefore cannot be
      characterized as “true” or “false.” Petitioner’s bank checks served
      only to direct the drawee banks to pay the face amounts to the
      bearer, while committing petitioner to make good the obligations if
      the banks dishonored the drafts. Each check did not, in terms, make
      any representation as to the state of petitioner’s bank balance.
Id. at 284–85.
      Just as an insufficient funds check alone makes no falsifiable assertion,
neither does an unadorned invoice contain a false claim. Steury did not allege
in the operative complaint that the invoice presented by Cardinal Health
contained, on its face, a factual assertion capable of confirmation or contradiction
that was untrue when made, so the claim is not “false” under the FCA. It may
be true, as the appellant and government reason, that by presenting a claim for
payment, Cardinal Health “implicitly certified” that the infusion pumps were
“merchantable”; that is one plausible, functional understanding of how invoices
work. Not surprisingly, the Supreme Court has cautioned that this “ ‘common
understanding’ [is] a particularly fragile foundation” upon which to base an
interpretation of a federal statute with severe penalties. Id. at 286 n.7.
      Not only does it depart from the plain meaning of the FCA, “the implied
certification theory is prone to abuse by the government and qui tam relators
who, seeking to take advantage of the FCA’s generous remedial scheme, may
attempt to turn the violation of minor contractual provisions into an FCA

                                        13
                                        No. 12-20314

action.”3 United States v. Sci. Applications Int’l Corp., 626 F.3d 1257, 1270 (D.C.
Cir. 2010). To cabin liability under the implied certification theory, many courts
have limited its application to situations in which the defendant makes an
implied certification of compliance with the material terms of the contract
between the parties, a prior express certification, or the statutes or regulations
governing the government program at issue. See Susan C. Levy, Daniel J.
Winters, & John R. Richard, The Implied Certification Theory: When Should The
False Claims Act Reach Statements Never Spoken Or Communicated, But Only
Implied?, 38 PUB. CONT. L.J. 131, 131–52 (2008) (collecting cases). In so doing,
however, some courts have “adopt[ed] a circumscribed view of what it means for
a claim to be false or fraudulent.” Sci. Applications Int’l Corp., 626 F.3d at 1270.
“[T]o avoid foreclos[ing] FCA liability in situations that Congress intended to fall
within the Act’s scope,” United States ex rel. Jones v. Brigham & Women’s Hosp.,
678 F.3d 72, 85 (1st Cir. 2012) (quoting Hutcheson, 647 F.3d at 387), I would
favor instead restoring Congress’s statutory distinction between falsity and
fraud, and using traditional, common-sense understandings of those terms, in
combination with “strict enforcement of the Act’s materiality and scienter
requirements,” id. (quoting Sci. Applications Int’l Corp., 626 F.3d at 1280), to
maintain the “ ‘crucial distinction’ between punitive FCA liability and ordinary
breaches of contract,” Steury I, 625 F.3d at 268.
       I respectfully concur.

       3
         In many cases, including this one, it is difficult to discern what implied certifications
are even at issue. Steury alleged in her initial and amended complaints that Cardinal Health
implicitly certified that its products were “safe and reliable”; she alleged in her second amended
complaint that the implicit certification was that the products were “free from defects,” “fit for
the purposes for which they were designed to be used,” and “fit for the particular purpose for
which they were being sold”; she alleged in her third amended complaint that the implicit
certification was that the products were “merchantable,” which it defined as “reasonably fit for
the ordinary purposes for which such item is used,” “at least average, fair, or medium-grade
quality,” and not “unreasonably dangerous.”

                                               14