In what may lead to the biggest FCA opinion in recent history, the U.S. Supreme Court earlier this month agreed to consider two cases addressing the necessary state of mind (i.e., “scienter”) to violate the FCA.
The FCA prohibits defendants from knowingly submitting false claims. That scienter standard is broader than just actual knowledge. The statute defines “knowing” and “knowingly” with three alternative standards:
Whether a defendant has acted with the necessary scienter is often a hotly litigated issue. And that is particularly true when the alleged FCA violation stems from a violation of another statute or regulation that is subject to different interpretations.
Since the Supreme Court’s landmark 2016 decision in Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016), the most consequential development in FCA jurisprudence has been a series of decisions from circuit courts holding that a defendant acting under an objectively reasonable interpretation of a law or regulation did not act with the scienter necessary to violate the FCA. These decisions rely on a Supreme Court case, Safeco Insurance Co. v. Burr, 551 U.S. 47 (2007), that did not involve the FCA. Rather, Safeco...
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