Seventh Circuit Creates Circuit Split On Whether E-Rate Program Is Subject To The FCA

Earlier this month, the Seventh Circuit in United States ex rel. Heath v. Wisconsin Bell Inc. awakened a decade-old False Claims Act (FCA) case in which the relator alleged that Wisconsin Bell, a telecommunications provider, charged schools and libraries more than was allowed under the federal Education Rate Program (the E-Rate Program). No. 2:08-cv-00724-LA, 2023 WL 4921534 (7th Cir. 2023). The decision is significant for a number of reasons, including that it is the first time the Seventh Circuit has weighed in on scienter post-Schutte. (The Supreme Court in Schutte, of course, rejected the Seventh Circuit's "objective reasonableness" scienter standard; read our analysis here.) Where Heath breaks entirely new ground, however, is on an issue to which the court devoted only a single paragraph: whether requests for reimbursement under the E-Rate Program are "claims" under the FCA. The Fifth Circuit previously held in United States ex rel. Shupe v. Cisco Systems Inc.,