Supreme Court Weighs in on the Role of Subjective Intent Under the False Claims Act

On Tuesday, April 18, 2023, the Supreme Court heard argument in the consolidated cases of United States ex rel. Schutte v. SuperValu, Inc., and United States ex rel. Proctor v. Safeway, Inc., to consider whether subjective knowledge about the falsity of a claim can establish liability under the False Claims Act (“FCA”).  These cases both concern whistleblower allegations that pharmacies submitted false claims to the government by knowingly overbilling for prescription drugs.  Several of the Justices’ commentary and lines of questions suggest the Court might rule that the Seventh Circuit incorrectly held that evidence of subjective intent is irrelevant in assessing scienter in an FCA case. The Justices seemed particularly interested in the FCA’s definition of “knowingly,” and possibly also in Congressional intent concerning the importance of subjective knowledge.

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