A key element of False Claims Act (“FCA”) cases is a contractor’s knowledge that its claim is false, often referred to as the scienter requirement.[1] In many cases, the knowledge element is straightforward, such as a company falsely certifying it is small when it knows it is not. However, in a complex regulatory environment where there is often no authoritative guidance from statutes, regulations, or the courts, there may be several reasonable legal interpretations about what is permissible. In the absence of authoritative legal guidance, how should we understand the contractor’s “knowledge” of the falsity of its certification? This question was recently taken up by the Supreme Court in United States ex rel. Schutte v. SuperValu Inc.[2] In such contexts, the Court ruled, FCA analyses should not permit “facial ambiguity” in a statute or regulation to be a bad actor’s saving grace.
In Schutte, the Court considered whether Safeway and SuperValu—grocery stores with pharmacies that regularly submit claims to federal Medicare and Medicaid (“MM”) offices—submitted millions of dollars in false claims. The applicable regulations allow providers to submit claims that reflect a provider’s “usual and customary” drug prices; however, these stores provided steep discounts to prescribers and then passed on the higher, retail prices for reimbursement from the federal government. Additionally, and key to the knowledge element, the trial court proceedings revealed internal communications...
For months, President Donald Trump and his allies have vowed to destroy progressive nonprofits, falsely claiming that they fund and support political violence and terrorism in the U.S. But this we...