Paul Hastings – As we take stock of the Supreme Court’s 2023 term, two landmark decisions shift our understanding of scienter and government intervention as it relates to the False Claims Act.
On June 1, the Supreme Court unanimously held in United States ex rel. Schulte v. SuperValu Inc. that a defendant’s own subjective belief at the time of submitting a claim determines whether the defendant acted “knowingly,” even if an objectively reasonable interpretation to the contrary could be supported. Second, on June 16, the Supreme Court in an 8-1 decision held in United States ex rel. Polansky v. Executive Health Resources, Inc. that the federal government may move to dismiss an FCA lawsuit over objection from a relator so long as the government has intervened in the action. These decisions create new challenges and avenues for defendants.