Justices Appear Open to Whistleblowers’ Drug Fraud Arguments

Alex Ward spoke to Bloomberg Law about the U.S. Supreme Court during oral arguments struggling to get a clearer understanding of whether a proper interpretation of the False Claims Act (FCA) requires reviving drug price fraud claims against SuperValu Inc. and Safeway Inc.

“Justice Gorsuch and Justice Brown seemed to agree that the Seventh Circuit incorrectly held that evidence of subjective intent is irrelevant to assessing scienter in an FCA case,” Alex said. “Most of the other Justices kept their cards close to their vests, so it’s possible the court could affirm the Seventh Circuit. But if Justices Gorsuch and Brown are indeed in agreement that the Seventh Circuit was wrong, that does not bode well [for the companies].”

He added that reversing the Seventh Circuit decision could lead to difficult questions about what qualifies as a subjectively unreasonable legal interpretation.

“Particularly given the complex landscape of statutes and regulations facing government contractors, litigating what qualifies as a subjectively reasonable or unreasonable belief would be extremely complicated,” Alex said.

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