Supreme Court Grants ‘Major Victory’ to Whistleblowers in False Claims Act Case
- posted: Sep. 07, 2023
- Whistleblower Litigation, Fraud
The U.S. Supreme Court recently issued a unanimous decision in U.S. ex rel. Schutte v. SuperValu Inc., which granted a “major victory” to whistleblowers reporting fraud against taxpayers. The decision overturned U.S. Court of Appeals rulings which previously allowed a liability loophole for fraudulent companies.
U.S. ex rel. Schutte v. SuperValu Inc.
Before the decision in Schutte was handed down, companies accused of overbilling Medicare and Medicaid could escape legal liability under the False Claims Act (FCA), if they argued their actions were based on a “reasonable interpretation of the law”—whether or not they intended to commit fraud.
The Supreme Court ruled in Schutte that subjective intent to commit fraud is indeed relevant to claims. While the Appeals courts had previously failed to consider whether the defendant intended to submit a false claim, the high court determined that state of mind should be a factor in fraud investigations and lawsuits.
Whistleblowers and the False Claims Act
The False Claims Act aims to combat fraud against the government. It has undergone several amendments over the years to strengthen its provisions. The primary objective of the FCA is to encourage individuals with knowledge of fraud committed against the government to come forward and report such fraudulent activities.
One of the most significant aspects of the FCA is its qui tam provision, which allows private individuals to file lawsuits on behalf of the government when they have evidence of fraud involving federal funds. These whistleblowers can receive a portion of any financial recovery obtained through the lawsuit.
After a whistleblower files a qui tam lawsuit, the government has the option to intervene and take over the case. If the government successfully recovers funds as a result of the lawsuit, the whistleblower is entitled to receive a portion of the recovered amount as a reward. The FCA also contains provisions to protect whistleblowers from retaliation by their employers or other parties for reporting fraudulent activities.
If you’re ready to blow the whistle on fraud against the government, contact a trusted whistleblower attorney at Kardell Law Group today.
