On April 2, the United States District Court for the Eastern District of Virginia dismissed a whistleblower’s False Claims Act (FCA) action after the relator attempted to dismiss the government as a plaintiff-intervenor in the lawsuit.
Knowledge/Scienter
Impact of Trump Administration’s Executive Order on DEI Programs and FCA Liability
By Denise Barnes & Scott Gallisdorfer on
Posted in Civil Investigative Demands, Civil Monetary Penalties, Compliance, Damages, Enforcement, FCA Alert, Government Contracts, Government Knowledge, Healthcare Providers, Hospitals, Knowledge/Scienter, Legislation, Materiality, Medicare/Medicaid, Penalties, Public Disclosure Bar, Retaliation, Whistleblower
As federal contractors and grant recipients navigate the changing landscape of diversity, equity, and inclusion (DEI) programs, the Trump administration’s rescinding of Executive Order No. 11246 (EO) raises new concerns about potential False Claims Act (FCA) liability for non-compliance.Continue Reading Impact of Trump Administration’s Executive Order on DEI Programs and FCA Liability
False Claims Act Application in Nevada Worker Classification Fight Against Lyft
By Denise Barnes on
Posted in Knowledge/Scienter, State/Local FCA
I provided insight for a Bloomberg Law article on the False Claims Act allegations brought against Lyft in a worker classification suit. A recent Nevada lawsuit claims Lyft misclassified drivers as independent contractors and defrauded the government. Continue Reading False Claims Act Application in Nevada Worker Classification Fight Against Lyft
Second Circuit Clarifies Anti-Kickback Statute’s Scienter Requirement
By Charlotte Elam & Travis Lloyd on
On March 12, the U.S. Court of Appeals for the Second Circuit issued an important decision that sheds light on the test for determining scienter under the federal Anti-Kickback Statute (AKS).Continue Reading Second Circuit Clarifies Anti-Kickback Statute’s Scienter Requirement
Supreme Court Rejects Safeco, Holds that FCA Scienter Turns on Defendant’s Subjective Belief
By Brian Irving & Peter Rathmell on
On June 1, the U.S. Supreme Court unanimously refused to apply the Safeco objective knowledge standard to the False Claims Act (FCA), holding instead in U.S. ex rel. Schutte v. Supervalu Inc. that the FCA’s scienter element turns on a defendant’s “knowledge and subjective beliefs,” not on “what an objectively reasonable person may have known or believed.”Continue Reading Supreme Court Rejects Safeco, Holds that FCA Scienter Turns on Defendant’s Subjective Belief
Supreme Court Review of False Claims Act Scienter Standard
By Brian Irving on
Posted in Knowledge/Scienter, United States Supreme Court
I was quoted in a recent Law360 article examining the potential impact of the U.S. Supreme Court’s decision to hear a pair of False Claims Act cases about the proper standard for establishing scienter under the False Claims Act. Continue Reading Supreme Court Review of False Claims Act Scienter Standard
False Claims Act Fundamentals: Scienter
By Bass, Berry & Sims on
Posted in FCA Fundamentals, Knowledge/Scienter
Scienter is an element that the government or relator must prove to demonstrate a violation of the False Claims Act, 31 U.S.C. § 3729, et seq. Under the False Claims Act, the required scienter, or state of mind, is “knowledge.” In other words, the False Claims Act only penalizes defendants who knowingly submitted false claims, i.e., submitted the false claim with knowledge of the claim’s falsity.
Continue Reading False Claims Act Fundamentals: Scienter
False Claims Act Fundamentals: Elements of the False Claims Act
By Molly Ruberg on
The False Claims Act, 31 U.S.C. § 3729, et seq. is the federal government’s primary and most effective tool for fighting fraud. This post provides an overview of the elements that plaintiffs must satisfy to establish liability under the False Claims Act and common defenses related to the elements.
Continue Reading False Claims Act Fundamentals: Elements of the False Claims Act
Fourth Circuit Adopts Safeco’s Objective Reasonableness Standard for False Claims Act
By Brian Irving on
On January 25, in a 2-1 decision in U.S. ex rel. Sheldon v. Allergan Sales, LLC, 2022 WL 211172, the Fourth Circuit became the most recent federal appellate court to hold that the objective scienter standard in the Supreme Court’s Safeco decision applies to the False Claims Act (FCA). Under the Fourth Circuit’s decision, the FCA’s scienter element cannot be met if the defendant’s interpretation of applicable statutory or regulatory requirements was objectively reasonable and no authoritative guidance from a circuit court or government agency warned the defendant away from its interpretation.
Continue Reading Fourth Circuit Adopts Safeco’s Objective Reasonableness Standard for False Claims Act
Seventh Circuit Holds FCA Requires Objective Scienter Standard
By Molly Ruberg on
The U.S. Court of Appeals for the Seventh Circuit recently joined the ranks of every other circuit court of appeal to have considered the issue in holding that the False Claims Act (FCA) requires an objective scienter standard. Under this standard, defendants who act under an incorrect interpretation of the relevant statute or regulation do not act “knowingly” under the FCA if both of the following are true:
- The interpretation was objectively reasonable.
- “Authoritative guidance” did not warn the defendant away from their interpretation.
Background on Objective Scienter Standard
The FCA imposes liability on those who “knowingly” submit false claims to the government. The term “knowingly” is statutorily defined to cover defendants who act with “actual knowledge,” “deliberate ignorance,” or “reckless disregard.”
In construing the scienter requirement of the Fair Credit Reporting Act (FCRA) in Safeco Insurance Co. of Am. v. Burr, which punishes “willful” violations, the Supreme Court analyzed the common-law definition of that term and noted that willfulness as a statutory condition of civil liability has generally been understood to cover both knowing and reckless violations of a standard. The Court then held that a defendant interpreting an ambiguous statute or regulation did not act with “reckless disregard” where their interpretation was objectively reasonable and no authoritative guidance warned them away from their interpretation.Continue Reading Seventh Circuit Holds FCA Requires Objective Scienter Standard