Date: April 19, 2023

False Claims Act lawyers are waiting with bated breath to hear the Supreme Court's opinion on the relevancy of "subjective intent" in FCA cases. Law360 spoke with TELG's Scott Oswald to hear his thoughts on the debate, which arose from the cases U.S. ex rel. Proctor v. Safeway Inc. and U.S. ex rel. Schutte et al. v. SuperValu Inc., et al.

"I thought this was going to be a much closer call for the justices than it ultimately came out to be."

R. Scott Oswald

» View on Law360 (Site requires registration.)


Landmark FCA Showdown Looking Like Defense Bar Letdown

Law360 (April 19, 2023, 12:20 AM EDT) — After months of anticipation that the U.S. Supreme Court might strengthen corporate America’s hand in False Claims Act litigation, the high court on Tuesday abruptly deflated defense bar buoyancy by foreshadowing an outcome that’s not only narrow but also largely favorable to whistleblowers and the U.S. Department of Justice.

The sudden shattering of hopes occurred at oral arguments over the need for FCA cases to prove scienter, or “knowingly” fraudulent billing of Uncle Sam. The justices were specifically examining whether it matters if someone suspected they were flouting compliance obligations — and really was noncompliant — while technically adhering to reasonable views of those obligations.

Ever since the high court in January agreed to examine the Seventh Circuit’s conclusion that “subjective intent” isn’t relevant in such situations, many defense lawyers had voiced cautious optimism and had even begun touting the conclusion to discourage the DOJ from joining whistleblower-led FCA cases premised on compliance lapses. But on Tuesday, the outlook quickly went from cheery to dreary as one justice after another recoiled at the idea of ignoring someone’s intentions.

“I don’t think the court is going to come out with a decision that’s going to make the defense bar do cartwheels and back-handsprings,” Nichols Liu LLP partner Bob Rhoad told Law360 in a Tuesday afternoon interview.

Scott Oswald, managing principal of The Employment Law Group PC, echoed that prediction and also channeled the relief felt by many of his fellow whistleblower attorneys on Tuesday.

“I thought this was going to be a much closer call for the justices than it ultimately came out to be,” Oswald said in an interview.

» View on Law360 (Site requires registration.)