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Article Summary

In U.S. ex rel. Schutte v. SuperValu Inc., the Supreme Court delivered an unequivocal win for insiders who warn their employers about committing fraud against U.S. government programs such as Medicare: Executives' contemporaneous reaction to such whistleblower warnings, the court ruled unanimously, can be used against them in cases under the False Claims Act — and so can other evidence of decision makers' beliefs and intentions at the time of wrongdoing.

This expert analysis by TELG managing principal R. Scott Oswald was published by Law360 on June 2, 2023.

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No Easy Out For FCA Defendants After Justices’ Ruling

Yesterday's decision from the U.S. Supreme Court in U.S. ex rel. Schutte v. SuperValu Inc. is a stark warning against aggressive billing by Medicare providers and other federal contractors: The False Claims Act, which punishes fraud against the U.S. government, doesn't apply to honest mistakes — but internal debate about the propriety of certain billing practices, even where federal rules seem ambiguous, can count as evidence of FCA liability, according to the 9-0 opinion from Justice Clarence Thomas.