“Without a doubt, it’s potentially a game-changing case,” Paul D. Werner tells Law360 about SCOTUS Review of False Claims Act Matters

In advance of the U.S. Supreme Court arguments on April 18, 2023, 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), regarding the anti-fraud law’s standard for scienter, or knowledge of wrongdoing, Law360 spoke with Buttaci Leardi & Werner Member Paul D. Werner, for his insight on the outcome of the case. In his civil litigation practice, Paul focuses 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. 

The SCOTUS arguments will focus on this question: Whether and when a defendant’s contemporaneous subjective understanding or beliefs about the lawfulness of its conduct are relevant to whether it “knowingly” violated the False Claims Act.

As Law360 reporter Jeff Overley explains, FCA punishment only covers improper billing of Uncle Sam that occurs “knowingly,” defined as “actual knowledge,” “deliberate ignorance” or “reckless disregard.” For billing that reflects incorrect yet reasonable interpretations of ambiguous policies, the Supreme Court is examining whether it matters if someone never believed their interpretations were correct. The examination is happening in the context of whistleblower-led cases accusing supermarket retailers SuperValu and Safeway of overcharging taxpayers for generic drugs.

Werner, who represents FCA defendants, stated, “Without a doubt, it’s potentially a game-changing case,” and added that a whistleblower win would be “like the final nail in the coffin” because “the False Claims Act is already such a wildly draconian law.” Werner also said, “To give extra teeth to that — more enforcement, wider enforcement power to the government — almost seems unfathomable to people that work in this space on the defense side.”

Read the full article here: FCA Bar Jittery As ‘Game-Changing Case’ Goes To Justices (subscription may be required).

• Posted on: Apr 17 2023