On June 1, the Supreme Court ruled that entities that submit false claims to the government can be liable if they subjectively believed the claims were false at the time of submission. The decision overruled cases that permitted defendants to evade liability by arguing that their interpretation of an ambiguous law or regulation was “objectively reasonable” despite their subjective belief.
The Supreme Court case – U.S. v. SuperValu Inc. – involved allegations that retail pharmacies overcharged the government for prescription drugs. Specifically, a whistleblower alleged that pharmacies were submitting prescription costs that were higher than what their “usual and customary” charges were in violation of Medicaid and Medicare requirements.
Under the False Claims Act, a defendant is liable when “knowingly” presenting “a false or fraudulent claim for payment” to the government and does so with “knowledge of the claim’s falsity.” A defendant’s conduct is “knowing” if it was done with “actual knowledge, deliberate ignorance, or recklessness” regarding the claim’s truth or falsity.
The appeals court had said the pharmacies were not liable under the FCA because they had acted “consistent with any objectively reasonable interpretation that had not been ruled out by definitive legal authority or guidance,” because the phrase “usual and customary” was vague and the defendants were able to articulate an interpretation that supported...
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...