It is often said that no news is good news. In that sense, relators can take comfort in the recent opinions issued by the Supreme Court relating to False Claims Act (“FCA”) matters (United States ex rel. Schutte v. SuperValu Inc. (“Schutte”) and United States ex rel. Polansky v. Executive Health Resources, Inc. (“Polansky”)). Though the effects of these opinions obviously remain to be seen, it is unlikely they will materially alter the challenges relators face, while foreclosing a potentially devastating defense to FCA claims.
The good news: The Schutte opinion rejects a defendant’s ability to abstract away knowing conduct.
In Schutte, the Court assessed whether a defendant can be determined to have acted knowingly (i.e., with scienter) if any objectively reasonable determination could have been made that a defendant’s claims were not false. The defendants in the matter sought to argue that the existence of an objectively reasonable interpretation that would render their claims not false precluded any finding that they were knowingly false. The Court rejected this theoretical endeavor, unanimously concluding that “[w]hat matters for an FCA case is whether the defendant knew the claim was false.”[i] In short, a relator who offers evidence that a defendant knew its conduct was false need not pre-empt theoretical justifications for the claims.
From a relator’s perspective, the Schutte case appears to be a helpful prophylactic; its clarification that scienter is assessed at...
Police chief says security concerns and misrepresentations led to unanimous reversal less than 24 hours after approval OSHKOSH, Wis. (WBAY) - The Oshkosh City Council voted unanimously to rescind i...