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Whistleblowers Tee Up High Court Fight Over False Claims Intent

Bloomberg Law

A pair of supermarket pharmacists have won the chance to convince the Supreme Court that enforcement of the federal False Claims Act, intended to prevent businesses from bilking the US government, should consider subjective understanding or belief when considering if a defendant knowingly engaged in wrongdoing.

Safeway Inc. and SuperValu Inc. each stood accused by the whistleblowing pharmacists of over-charging Medicaid and Medicare for prescription drugs. Each successfully persuaded first a trial court judge, and then a federal appeals court, that the whistleblowers’ FCA suits must fail because the pricing arose from a reasonable regulatory interpretation.


If the government interprets a regulation in a certain way, it should make people aware of the interpretation so they can act accordingly, said Jennifer A. Short of Blank Rome LLP in Washington. “People should not have to guess at what the law or provision means, and they do not behave with ‘reckless disregard’ simply because they adopt a reasonable view that is to their advantage,” she said.

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"Whistleblowers Tee Up High Court Fight Over False Claims Intent," by Daniel Seiden was published in Bloomberg Law on January 20, 2023.