Sen. Chuck Grassley (R-Iowa) recently criticized “activist judges” for rewriting the text of the False Claims Act to achieve their own policy goals, revealing plans to reintroduce legislation that would correct “unduly restrictive” interpretations of the statute and expand liability for defendants.
Grassley — who delivered his remarks in a pre-recorded keynote speech at the Federal Bar Association’s annual Qui Tam Conference last week — took particular issue with two recent decisions from the Seventh Circuit that address what level of intent is needed to satisfy the FCA. These decisions state that defendants do not violate the FCA if they made “objectively reasonable” interpretations of otherwise ambiguous policies. According to Grassley, this decision is the “perfect example of activist judges performing mental gymnastics” to get the results they want.
“Such an absurd reading is a complete departure from both the text of the False Claims Act and over a hundred years of common-law fraud precedent,” he said. “It also ignores the importance of subjective intent, which every first-year law student is taught.”
Although Grassley remains hopeful the United States Supreme Court will “set the record straight” when it considers these cases later this year, he indicated a willingness to address the scienter standard via statute if the Supreme Court ultimately upholds the Seventh Circuit’s objective reasonableness standard.
Grassley is no stranger to introducing legislation that...
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