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Supreme Court Clarifies the False Claims Act’s Knowledge Requirement, Eliminating a Potential Defense for Government Contractors and Healthcare Providers Accused of Fraud

By Michael J. Podberesky, Edwin O. Childs, Gretchen Heinze Townshend, Brett Barnett & Jonathan Ellis on June 9, 2023
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On June 1, the Supreme Court unanimously ruled in favor of whistleblower plaintiffs in consolidated False Claims Act cases in a decision that clarified the application of the FCA’s knowledge requirement. In United States ex rel. Schutte v. SuperValu Inc., the court held that the FCA reaches defendants who knew the claims they submitted were fraudulent, even if they subsequently offered an “objectively reasonable” interpretation of an ambiguous legal or contractual requirement material to the government’s payment decision. 

Read on for analysis of this case and implications for government contractors, healthcare providers and others accused of fraud.

Photo of Michael J. Podberesky Michael J. Podberesky

Michael Podberesky, a former federal prosecutor in the U.S. Department of Justice’s Civil Fraud Section, is a partner in the firm’s nationally recognized Government Investigations and White Collar Litigation Department and co-leader of the firm’s Healthcare Litigation and Enforcement Practice Group. Employing his…

Michael Podberesky, a former federal prosecutor in the U.S. Department of Justice’s Civil Fraud Section, is a partner in the firm’s nationally recognized Government Investigations and White Collar Litigation Department and co-leader of the firm’s Healthcare Litigation and Enforcement Practice Group. Employing his extensive experience with False Claims Act cases in the healthcare and defense sectors, Michael represents clients confronting high-stakes government investigations and litigation arising from allegations of healthcare and procurement fraud and also counsels clients regarding compliance issues.

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Photo of Edwin O. Childs Edwin O. Childs

As a leader of the firm’s Defense, National Security and Government Contracting industry team, Ned Childs is a government contract and investigations and enforcement attorney who represents companies across a wide range of sectors, including the defense, services, technology, and aerospace industries. His…

As a leader of the firm’s Defense, National Security and Government Contracting industry team, Ned Childs is a government contract and investigations and enforcement attorney who represents companies across a wide range of sectors, including the defense, services, technology, and aerospace industries. His practice, spanning more than a decade in Washington, encompasses a broad array of legal services, including government contract investigations, disclosures, and regulatory enforcement actions; bid protests and government contract disputes; government contract counseling; export licensing and enforcement; prime contractor-subcontractor disputes; corporate ownership and acquisition issues; and election law investigations and enforcement matters.

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Photo of Gretchen Heinze Townshend Gretchen Heinze Townshend

Gretchen’s practice focuses on corporate healthcare transactional work and regulatory matters. Her experience includes representation of various types of healthcare providers including hospitals, health systems, dialysis facilities, multi and single specialty medical practices, specialty hospitals, ambulatory surgery centers, and a variety of healthcare…

Gretchen’s practice focuses on corporate healthcare transactional work and regulatory matters. Her experience includes representation of various types of healthcare providers including hospitals, health systems, dialysis facilities, multi and single specialty medical practices, specialty hospitals, ambulatory surgery centers, and a variety of healthcare industry entrepreneurs, in sales and acquisitions, joint ventures, general corporate matters, contracting, securities, and regulatory matters.

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Photo of Brett Barnett Brett Barnett

Brett is the co-leader of McGuireWoods’ False Claims Act Investigations & Litigation Practice Group. He focuses his practice on representing clients in high-stakes False Claims Act matters, healthcare fraud and abuse investigations, and complex commercial litigation across the country. Brett routinely leads internal…

Brett is the co-leader of McGuireWoods’ False Claims Act Investigations & Litigation Practice Group. He focuses his practice on representing clients in high-stakes False Claims Act matters, healthcare fraud and abuse investigations, and complex commercial litigation across the country. Brett routinely leads internal and government-facing investigations involving the U.S. Department of Justice and other federal and state agencies, and defends clients in civil FCA litigation, often involving parallel proceedings and regulatory scrutiny.

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  • Posted in:
    Business and Commercial, Health Care and Life Sciences
  • Blog:
    The FCA Insider
  • Organization:
    McGuireWoods LLP
  • Article: View Original Source

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