Senator Chuck Grassley (R-IA) told the Supreme Court in an amicus brief that a decision by the Seventh Circuit in a False Claims Act case has created “a gaping hole in the government’s primary fraud-fighting tool.” The case involves overcharges at pharmacies run by grocery giant SuperValu Inc., which the circuit court said reflect an “objectively reasonable” interpretation of regulations, so the company cannot be held liable under the FCA, even if it never actually believed the interpretation was correct. The court held that “authoritative guidance” to the contrary was needed for the company to be liable, which Grassley argued places “a nearly impossible burden” upon regulators to anticipate incorrect interpretations.
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