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2023 is shaping up to be a major year in False Claims Act (“FCA”) practice, with the Supreme Court weighing in on both FCA scienter (in&nbsp;SuperValu)&nbsp;and the reach of the government’s dismissal authority (in&nbsp;Polansky), and the government focusing its enforcement efforts around antitrust, cyber, and national security. We focus today on the&nbsp;United States ex rel. Schutte v. SuperValu, Inc.&nbsp;decision, in which the Supreme Court held that a contractor’s subjective belief about its compliance at the time it submitted claims for payment is relevant to whether it had the requisite scienter for FCA liability. Much has been written on this case, with most articles exploring esoteric concepts like “scienter,” “falsity,” and the “objectively reasonable person.” But assuming—as we do—that the decision will reduce the prospect of successful early dispositive motions, what practical steps can contractors take to reduce their False Claims Act exposure and avoid litigation in the first place? We offer three suggestions.

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We begin with a basic refresher on the issue presented in&nbsp;SuperValu. A defendant is not liable under the False Claims Act unless it “knowingly” (including acting with “reckless disregard”) submits a false claim to the government. The “knowing” scienter element—particularly around reckless disregard—can be difficult to prove in the world of complex and often ambiguous laws and regulations that govern contractors’ compliance. The federal circuits had split on the issue of whether a defendant’s&nbsp;subjective&nbsp;interpretation&nbsp;at the time it submitted claims for payment to the government was relevant to determining FCA “knowledge” if the defendant could later show that the underlying rule was ambiguous and its conduct (regardless of its contemporaneous understanding or belief) was consistent with&nbsp;an objective, reasonable interpretation&nbsp;of the unsettled requirement.&nbsp;SuperValu&nbsp;resolved the debate by holding that whether a defendant knowingly violated the FCA—and satisfied the scienter element—must consider the defendant’s real-time “knowledge and subjective beliefs.”&nbsp;United States ex rel. Schutte v. SuperValu, Inc., 143 S. Ct. 1391 (2023).

To read the full post, please visit our&nbsp;<a href="https://governmentcontractsnavigator.com/2023/08/23/3-tips-to-reduce-false-claims-act-exposure-in-the-wake-of-united-states-ex-rel-schutte-v-supervalu-inc/">Government Contracts Navigator</a>&nbsp;blog.

Justin A. Chiarodo

Jennifer A. Short

Stephanie M. Harden

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3 Tips to Reduce False Claims Act Exposure in the Wake of United States ex rel. Schutte v. SuperValu, Inc.

3 Tips to Reduce False Claims Act Exposure in the Wake of United States ex rel. Schutte v. SuperValu, Inc.

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3 Tips to Reduce False Claims Act Exposure in the Wake of United States ex rel. Schutte v. SuperValu, Inc.

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