U.S. Supreme Court Unanimously Finds Subjective Intent Controls in Determining Scienter Under the False Claims Act
Highlights
U.S. Supreme Court rules that False Claims Act knowledge standard is based on defendant’s subjective belief at the time claims are submitted
The Court rejected several lower courts’ importation of the Safeco objective reasonableness standard to the False Claims Act
A post-hoc interpretation of law that is objectively reasonable can no longer serve to shield against a finding of scienter under the False Claims Act
On June 1, 2023, the U.S. Supreme Court issued a unanimous opinion in the consolidated cases of United States ex rel. Schutte v. SuperValu Inc. and United States ex rel. Proctor v. Safeway, Inc., holding that a defendant’s subjective belief is paramount when determining whether the scienter standard is satisfied under the False Claims Act. The Supreme Court’s decision revives the pair of lawsuits alleging the grocery store chains overcharged the government for certain prescription drugs, and is what many are calling a “game changer” in the world of False Claims Act enforcement.
Keep Up to Date in a Changing World
