In June 2023, the Supreme Court issued two major decisions concerning the U.S. False Claims Act (“FCA”). These decisions, which clarify the FCA’s scienter standard and certain procedures around the government intervening in FCA cases, have key implications for in-house counsel and compliance officers involved in litigating FCA actions and implementing FCA-related compliance programs. FCA compliance is a key issue for companies considering applying for, or taking part in, government grant and loan programs, given these programs often require applicants and participants to make both express and implied representations in connection with receiving federal funds.
I. Overview
While there are several different theories of liability under the FCA, at its core, the statute prohibits “knowingly” presenting a false claim for payment to the U.S. government, or “knowingly” causing such a claim to be made. See 31 U.S.C. § 3729. One unique procedural aspect of FCA actions is that the statute allows a private plaintiff, called a qui tam plaintiff or “relator,” to initially file suit on behalf of the federal government, after which the Department of Justice may “intervene” and proceed with the suit initially filed by the private plaintiff.
II. United States ex rel. Schutte v. SuperValu Inc.
In the first case, United States ex rel. Schutte v. SuperValu Inc., decided on June 1, the Court addressed how the FCA’s scienter standard is evaluated when the alleged false claim is based on a...
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