The False Claims Act (FCA) is seeing quite a bit of action at the Supreme Court this term, with multiple cases under consideration. This is the second installment in PilieroMazza’s blog series on “The FCA at the Supreme Court,” where we will examine active cases, comment on decisions once they are issued, and discuss ways defendants can protect themselves in FCA litigation. Part 1 of the series is available here.
On January 13, 2023, the Supreme Court agreed to consider two consolidated cases: United States ex rel. Schutte v. SuperValu Inc. and United States ex rel. Proctor v. Safeway, Inc. These cases raise an issue that has fostered serious debate over the last decade: whether a defendant is protected from FCA liability where they acted based on an objectively reasonable (but incorrect) interpretation of an ambiguous law or regulation. The forthcoming decision could be one of the most impactful FCA rulings in recent history.
For a defendant to be liable under the FCA, they must act with scienter, i.e., they must “knowingly” submit a false claim or false statement about a claim. The FCA defines a knowing violation of the statute as one made with actual knowledge that a submitted claim or statement was false or the defendant acted with reckless disregard or deliberate ignorance of the truth or falsity of the submitted claim. Often over the last decade, FCA defendants have invoked the Supreme Court’s decision in Safeco Insurance Company of America v. Burr, 551 U.S. 47...
stage at the Ninth Circuit, where pharmaceutical companies say a momentous new ruling "illustrates perfectly" the constitutional concerns of U. S. Supreme Court justices regarding FCA enforcement. ...