Parties litigating False Claims Act (FCA) cases have long struggled with a thorny question around the essential element of scienter (the defendant’s intent, or state of mind): What/how much does a contractor need to know when submitting an invoice for payment for the related claim to be considered knowingly false when made? When that question arises in FCA litigation, a court’s determination of that essential element of scienter/knowledge often pivots on what the judge believes matters more:
(A) The defendant’s subjective belief at the time a claim is made; or
(B) An objective textual reading of what a person may have known or believed when a claim is made.
In last week’s resounding and unanimous decision, U.S. ex rel. Schutte v. SuperValu Inc., the U.S. Supreme Court definitively answered that question for trial courts that have struggled with this issue for many years. It’s (A). The Court explained that the FCA’s scienter element refers to a defendant’s personal knowledge and subjective beliefs at the time a claim is made, and not to what an objectively reasonable person may have known or believed. In other words, even an objectively reasonable interpretation of law or regulation is not sufficient to negate intent if there is evidence that the defendant knew or should have known that a claim was false (or was likely false) when made.
In this case, whistleblowers sued Safeway Inc. and SuperValu Inc. for allegedly offering prescription drugs at discounted prices to...
Pakistan on April 22, Thursday urged the United Nations to call upon India to restore full implementation of the Indus Waters Treaty (IWT), warning that New Delhi’s “illegal” decision to hold the ...