U.S. Supreme Court is considering whether a defendant’s subjective beliefs about the meaning of a statute or regulation are relevant under the False Claims Act if the defendant’s claim was supported by an objectively reasonable interpretation
During oral argument, the justices questioned whether subjective intent should always be irrelevant to the knowledge standard of the False Claims Act
The justices’ questions focused on the scope of the decision required in this case
On April 17, 2023, the U.S. Supreme Court heard oral argument in the consolidated cases of United States ex rel. Schutte v. SuperValu Inc. and United States ex rel. Proctor v. Safeway, Inc. The dispute concerns the relevance of an actor’s subjective knowledge under the False Claims Act (FCA) when the actor adopts an incorrect but nevertheless “objectively reasonable” interpretation of a statute or regulation.
The Court’s decision will have a significant impact on a number of industries and, in particular, companies in the healthcare space due to the complicated and often ambiguous nature of statutory and regulatory requirements under federal healthcare programs.
Petitioners — qui tam whistleblowers — allege respondents — nationwide grocery chains with retail drug pharmacies — knowingly submitted false claims to federal healthcare programs for prescription drugs. In particular, federal law requires pharmacies to report to the government the “usual and customary” prices of their drugs, and...
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