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 “Landmark FCA Showdown Looking Like Defense Bar Letdown,” by Jeff Overley and Daniel Wilson. (Read the full version – subscription required.)
Following is an excerpt:
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. …
With lawyers largely in agreement Tuesday that the Supreme Court is likely to deem subjective intent relevant in some circumstances, speculation turned to whether the high court would offer any other guidelines, or instead rule as narrowly as possible. A narrow ruling might simply seek to prevent companies from devising after-the-fact, made-for-litigation interpretations aimed at portraying their compliance efforts as reasonable.
"The tenor of the argument today suggests that the [Supreme] Court may determine that the lower court should have considered the defendants' contemporaneous subjective understanding," George B. Breen, an FCA defense lawyer at Epstein Becker Green, said Tuesday.
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