Supreme Court Holds That False Claims Act Requires Subjective Inquiry

On June 1, 2023, the Supreme Court decided a pair of closely watched False Claims Act (FCA) cases, U.S. ex rel. Schutte v. SuperValu Inc., No. 21-1326, and U.S. ex rel. Proctor v. Safeway, Inc., No. 22-111. The decision resolves a narrow but important question: Is subjective intent relevant to FCA claims involving so-called "legal falsity" in which the defendant is alleged to have knowingly misrepresented its compliance with a legal requirement in connection with a claim for payment from the government? The Court answered yes, holding that in such cases FCA liability turns on what the defendant actually believed about the truth or falsity of its representations, not on what an objectively reasonable person may have believed.