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Paul D. Werner Offers Insight to Law360 About Potential Outcomes Following SCOTUS Hearing Of False Claims Act Matters

Following the April 18, 2023 oral arguments about False Claims Act matters (U.S. ex rel. Proctor v. Safeway Inc., case number 22-111, and U.S. ex rel. Schutte et al. v. SuperValu Inc. et al., case number 21-1326) the U.S. Supreme Court foreshadowed an outcome that may be narrow, but also favorable to the U.S. Department of Justice and whistleblowers regarding the anti-fraud law’s standard for scienter, or knowledge of wrongdoing. Law360 sought comment about the hearing from Buttaci Leardi & Werner Member Paul D. Werner, who focuses his practice on the defense of complex insurance fraud and False Claims Act investigations and appeals of Medicare audits presented to the Office of Medicare Hearings and Appeals. 

As Law360 reporters Jeff Overley and Daniel Wilson wrote in their April 19 article Landmark FCA Showdown Looking Like Defense Bar Letdown, “Prior to Tuesday, lawyers and interest groups on each side of the case floated dire predictions about the implications if their side were to lose. Whistleblower advocates fretted about companies fleecing taxpayers with impunity by exploiting ambiguous legal language, and business organizations worried about gotcha-style FCA suits brought by whistleblowers deliberately searching for ambiguous laws and then accusing companies of noncompliance.”

Werner believes it was very clear during oral argument that attorneys for both sides were intent on convincing the court to issue an expansive ruling far beyond the four corners of the question presented, and it was equally clear within the first few minutes of questioning that the justices had no intention of doing so. While the court’s ruling – whichever way it comes down – is not likely to have a drastic impact on the number of FCA cases filed, Werner thinks that the colloquy between the court and the attorneys does provide important insight for providers vis-à-vis how courts can/should view knowledge and intent – whether looked at subjectively or objectively – in the future context of these cases.  Specifically, Werner offers that it is a pointed reminder that those who contract with the government, particularly health care providers, need to give more thought to their interactions with the government than ever before.

Following the oral argument, Law360 asked Werner about an outcome that will require companies to have a compliance roadmap, and Werner stated that it could lead to in-house counsel “quickly putting together checklists” and adding “more written legal opinions” to their internal files. 

Werner also told Law360, “This had the potential to be [a] landmark case, with a huge ruling that was going to either shut the door on things or blow things wide open. The justices made it pretty clear that they were not inclined to take things beyond the limited scope of the question presented. They routinely kept asking the lawyers … why are we making this difficult? Why are we making this easy case difficult?”

Read the full article here: Landmark FCA Showdown Looking Like Defense Bar Letdown (subscription may be required).

  • Posted on: Apr 20 2023