George B. Breen, Member of the Firm in the Health Care & Life Sciences and Litigation practices and Chair of the firm’s National Health Care & Life Sciences Practice Steering Committee, in the firm’s Washington, DC, office, was quoted in Law360, in “Justices Ignite FCA Debate: Fairness vs. 'Invitation to Fraud,'” by Jeff Overley and Daniel Wilson. (Read the full version – subscription required.)

Following is an excerpt:

A U.S. Supreme Court showdown over False Claims Act punishment for commonplace regulatory violations carries "great importance" for fraud enforcement and is likely to spark congressional and administrative responses if justices severely weaken the powerful law, attorneys say.

The showdown officially began when the high court on Friday accepted two petitions in cases accusing retailers SuperValu Inc. and Safeway Inc. of overcharging Medicare and Medicaid for generic drugs. In each case, the Seventh Circuit issued 2-1 decisions rejecting FCA liability because the supermarket giants had adopted incorrect yet "objectively reasonable" interpretations of ambiguous regulations, and they were not warned away by "authoritative guidance" to the contrary.

Oral arguments are likely to take place in April, and a Supreme Court ruling is expected by late June; the lead case is known as Schutte v. SuperValu, where the plaintiff's surname is pronounced "SHOO-tee."

After the case is decided, the vast realm of FCA litigation could be reshaped by new standards for scienter, or knowledge of wrongdoing. FCA liability only attaches to billing errors that occur knowingly — defined as "actual knowledge," "deliberate ignorance" or "reckless disregard" — and the existence of knowledge is frequently a pivotal issue in fraud cases. …

Defense Bar Bristles at 'Highly Complicated' Rules

For attorneys who represent FCA defendants, the central issue in the case is a matter of fairness. They recoil at the idea of FCA punishment — including triple damages and maximum penalties of roughly $25,000 for every individual instance of faulty billing — tied to reasonable readings of unclear compliance obligations.

"Many FCA cases are premised on highly complicated regulations," and a purported "violation of an ambiguous law or regulation is not the same as 'knowingly' committing fraud against the government," Epstein Becker Green member George B. Breen told Law360.

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.