The US Supreme Court’s holding in United States ex rel. Schutte v. SuperValu Inc. makes clear that a party shouldn’t submit claims to the government where it’s aware there is a “substantial and unjustifiable risk” that the claims are false, but provides little guidance as to what this standard means in practice.
The court’s unanimous ruling in the most-watched False Claims Act ruling of the year leaves open many questions about scienter and will likely cause more protracted litigation for defendants.
On June 1, the high court held in SuperValu Inc. that scienter under the FCA turns on a person’s subjective beliefs, not what an objectively reasonable person may have believed—rejecting a standard set by the US Court of Appeals for the Seventh Circuit and embraced by four other circuits.
The FCA provides that any person who knowingly presents a false claim to the government for payment is liable for treble damages and civil penalties for each claim.
The whistleblowers here alleged that the pharmacy chains violated the FCA by overcharging the government for prescription drugs because they failed to incorporate discount programs when reporting their “usual and customary” prices to Medicare and Medicaid.
In both cases, the district...
Police are investigating Park Chulmin, 36, a former member of the Seongnam International Mafia Group, who raised allegations about President Lee Jae Myung’s alleged ties to organized crime during ...