On June 1, 2023, the U.S. Supreme Court issued its highly anticipated decision in the consolidated cases United States ex rel. Schutte v. SuperValu Inc. and United States ex rel. Proctor v. Safeway, Inc., Nos. 21-1326 & 22-111, on the scienter element of the False Claims Act (FCA). The Court ruled 9-0 that defendants in FCA cases cannot defeat a finding of scienter simply by arguing that the interpretation of the regulatory requirements they advanced in later litigation was objectively reasonable. The combined case involved allegations that defendant supermarket chains submitted false claims to federal health care programs by failing to disclose the chains’ “usual and customary” prices, as required by applicable regulations. Holding that the FCA’s scienter element refers to a defendant’s knowledge and subjective beliefs, the Court ruled that the defendants could be found to have acted with scienter so long as they correctly understood the applicable regulatory standard and believed that their claims were inaccurate.
Circuit court opinions previously adopted an objective standard in assessing scienter under the FCA. As an element of the FCA, the plaintiff (either the government or a private relator) must prove that the defendant acted with knowledge of the falsity of the claims at issue. That element may be satisfied by proof of actual knowledge, deliberate ignorance or reckless disregard of the truth or falsity of the claim.
Recent decisions of several...
The Nigerian National Petroleum Company Limited has denied claims that it is selling scrap materials from its refineries, warning the public to disregard such information and remain alert to fraud...