Highlights

• The U.S. Supreme Court recently ruled in U.S. ex rel. Schutte v. SuperValu Inc. that in terms of the False Claims Act (FCA), a defendant's own subjective belief is relevant to scienter and not what an "objectively reasonable" person may have concluded.
• A key SuperValu takeaway is that courts should look to an FCA defendant's subjective belief only at the time claims are submitted, not "post hoc interpretations that might have rendered their claims accurate."
• It is believed that this decision likely will impair the efforts of future defendants to obtain early dismissal of FCA cases on the basis of scienter.

The U.S. Supreme Court on June 1, 2023, unanimously settled a pivotal dispute over the subjective versus objective standard for scienter under the False Claims Act (FCA). In this case, U.S. ex rel. Schutte v. SuperValu Inc., the Supreme Court relied heavily on the plain text and common law roots of the FCA in holding that a defendant's own subjective belief is relevant to scienter, not what an "objectively reasonable" person may have concluded. Additional details are provided in a previous Holland & Knight blog.

The primary takeaway from the recent SuperValu decision is that courts should look to an FCA defendant's subjective belief only "at the time they submitted their claims," not "post hoc interpretations that might have rendered their claims accurate." Subsequently learned facts or analysis may be insufficient to save a then-subjectively...

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