On June 1, 2023, the Supreme Court of the United States issued its decision in the most-watched False Claims Act ("FCA") case of the year. In United States ex rel. Schutte v. SuperValu Inc. (consolidated with United States ex rel. Proctor v. Safeway, Inc.),1 a unanimous Court held that the question of scienter under the FCA turns on a person's subjective beliefs, not what an objectively reasonable person may have believed-rejecting a standard that had been set by the Seventh Circuit and embraced by the Third, Eighth, Ninth and D.C. Circuits. In so doing, the Court-in an opinion drafted by Justice Thomas-made clear that a party should not submit claims to the government where it is aware that there is a "substantial and unjustifiable risk" that the claims are false, but provided little guidance as to what this standard means in practice. For now, stakeholders who do business with the federal government will need to consider how to incorporate the Court's framework into their legal and compliance operations and carefully consider the impact of the decision on the content of internal communications in all of their forms.
This issue before the Court arose from two consolidated cases, United States ex rel. Schutte v. SuperValu Inc. (No. 21-1326) and United States ex rel. Proctor v. Safeway, Inc. (No. 22-111), both brought by qui tam whistleblowers suing under the FCA on behalf of the government. Both cases stem from a retail pharmacy's obligation to report "usual and...
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