Document Type

Article

Publication Date

2023

Status

Accepted

Abstract

The Supreme Court issued two opinions in June 2023 that are set to alter the False Claims Act (“FCA”) landscape for years to come. In United States ex rel. Schutte v. SuperValu Inc., 143 S. Ct. 1391 (2023) the Court elevated the scienter element of the FCA in cases dealing with a defendant’s compliance with law or regulation, whereby no longer can a defendant point to an objective interpretation of an ambiguous law or regulation to the exclusion of a company’s subjective knowledge at the time of claim submission. In United States, ex rel. Polansky v. Exec. Health Res., Inc., 143 S. Ct. 1720 (2023) the Court affirmed the government’s near unfettered dismissal authority under Federal Rule of Civil Procedure (“FRCP”) 41(a), so long as the government has intervened at any point in the case.2 On one hand, FCA defendants will have a more difficult time obtaining summary judgment in legal falsity cases, while on the other hand, qui tam relators with marginal cases will be at the mercy of the government’s dismissal authority.

Although the two opinions are a mixed bag for FCA whistleblowers and defendants, both decisions can be considered a victory for the government. On one hand, the Supreme Court diluted a key defense in cases involving ambiguous statutes or regulations, while on the other hand, the Supreme Court blessed the government’s near unfettered dismissal authority—a victory for defendants hoping to curtail FCA litigation. As typical in FCA cases that reach the Supreme Court, the full impact of both matters will not be known until the FCA bar begins to litigate cases in the wake of these two decisions. For now, however, we can expect that the relevant stakeholders—i.e., government, whistleblowers, and defendants—are actively adapting to this new FCA landscape.

GW Paper Series

2024-17

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