On January 13, 2023, the Supreme Court granted certiorari in two consolidated cases from the Seventh Circuit to consider whether a defendant relying on an objectively reasonable interpretation of an ambiguous law acts “knowingly” in violation of the False Claims Act (“FCA”). In the two cases, United States ex rel. Schutte v. SuperValu Inc. and United States ex rel. Proctor v. Safeway, Inc., the Seventh Circuit panel shielded the food-and-pharmacy chains SuperValu Inc. and Safeway, Inc. from FCA liability for fraudulent billing practices related to the usual and customary pricing of pharmaceutical drugs.1 The Court’s decision to hear these two FCA cases is a significant development for FCA jurisprudence and could result in one of the most consequential FCA decisions since the FCA was amended in 1986.
The FCA was enacted in 1863 to redress defense contractor fraud during the Civil War. Today, the FCA has become a powerful tool for the government to seek substantial damages and penalties when the government does not get the benefit of its bargain or is somehow defrauded. The FCA’s current provisions also allow private persons (also known as whistleblowers) to bring qui tam lawsuits on the federal government’s behalf, with the promise of a potential reward of a portion of any monetary recovery. Under the FCA, entities that directly or indirectly receive federal government funds can be defendants in such qui tam lawsuits.
To be liable under...
Patricia White, 70, of Old Greenwich, received a nine-month prison sentence for submitting false claims for unclaimed properties to around 30 state treasuries. HARRISBURG, Pa. — Months after her br...