In a 2-1 opinion issued on April 5, the Seventh Circuit Court of Appeals again held that an objectively reasonable interpretation of a relevant statute or regulation precludes the required finding of intent under the False Claims Act (FCA), so long as no sufficiently authoritative guidance warned to the contrary. This latest ruling follows the 7th Circuit’s prior holding to the same effect in Schutte v. SuperValu, and further bolsters a company-friendly trend allowing FCA defendants to defeat claims where they can show their challenged legal interpretation was objectively reasonable. 9 F.4th 455 (7th Cir. 2021).
In United States ex rel. Proctor v. Safeway Inc., the relator pharmacist alleged that Safeway was defrauding the government by giving cash-paying customers discounts for prescription drugs through competitor price matching and loyalty programs, but billing the government at the higher, non-discounted rate, citing that rate as the “usual and customary price.” No. 20-3425, 2022 WL 1012256 (7th Cir. Apr. 5, 2022). Safeway argued that federal regulations did not make clear whether the “usual and customary” price billed to the government should include lower prices offered through pharmacy discount programs.
The Seventh Circuit affirmed the district court’s grant of summary judgment to Safeway, finding the company’s interpretation of the law was reasonable and there was no authoritative guidance that should have warned it away from that interpretation. Even though the...
A front-page article with the byline of veteran New York Times opinion writer Nicholas Kristof is the latest poisonous example of what I call the NGO “halo effect.” Headlined “The Silence That Mee...