Recently, the Seventh Circuit, in Proctor v. Safeway, Inc., clarified what it means to act with reckless disregard in respect to claims brought under the False Claims Act (“FCA”). __ F.4th __, No. 3:11-CV-3406, 2022 WL 1012256, (7th Cir. 2022). In doing so, the court stated that authoritative guidance must be truly authoritative in context and must come from an actual authority.
Background
In 2021, the Seventh Circuit Court, in United States ex. rel. Schutte v. SuperValu Inc., held that the scienter requirement articulated by the Supreme Court of the United States in Safeco Ins. Co. of America v. Burr was applicable to lawsuits brought under the False Claims Act. 9 F.4th 455 (7th Cir. 2021); 551 U.S. 47 (2007). In Safeco, the Court held that a defendant does not act with “reckless disregard” if (1) its interpretation of the applicable statute or regulation is objectively reasonable, and (2) there is no authoritative guidance contrary to the defendant’s interpretation. However, in adopting Safeco to FCA cases, the Seventh Circuit Court in SuperValu did not provide guidance as to what qualifies as authoritative guidance.
Guidance Must Be Truly Authoritative and Must Come from An Actual Authority
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