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David Fischer is special counsel in the Governmental Practice in the firm's Washington, D.C. office and a leader of its Organizational Integrity Group.

In the high-stakes realm of False Claims Act (FCA) litigation per-claim penalties can reach daunting levels that dwarf even treble damages. A recent ruling from the Eighth Circuit Court provides valuable guidance on the limits of penalties under the Constitution’s Excessive Fines Clause (Clause). In Grant ex rel. United States v. Zorn the Eighth Circuit provides clarity applying the Clause in FCA litigation, specifically identifying when a penalty for purely economic loss offenses might be considered excessive. Of relevance, the Court held that:Continue Reading There Are Limits! Reining In FCA Penalties Pursuant to the Excessive Fines Clause

On June 1, 2023, the Supreme Court issued a unanimous decision holding that the scienter element of the False Claims Act (“FCA”) is met if a defendant subjectively knew his or her claims were false and submitted them anyway. See United States ex rel. Schutte v. SuperValu Inc. and United States ex rel. Proctor v. Safeway. The Court’s ruling was narrow and avoided the more challenging—and common—issues raised during oral argument (which we blogged about previously).Continue Reading Supreme Court Clarifies that Subjective (Not Objective) Knowledge of Falsity of Claim Dictates False Claims Act Liability

Companies regularly are required to interpret ambiguous and vague regulatory provisions. Today, the United States Supreme Court heard oral arguments in a pair of consolidated cases to determine whether a defendant’s subjective interpretation of an ambiguous regulation is relevant to determining the knowledge (or scienter) element of the False Claims Act or, as the Seventh Circuit held in the case below, that once a defendant can articulate an objectively reasonable interpretation its contemporaneously held subjective belief is irrelevant to the knowledge inquiry. The issue is a significant one for both the government and relators on one side, and potential defendants on the other, as False Claims Act (FCA) liability imposes treble damages and penalties exceeding $20,000 per claim as well as relators’ attorneys’ fees and costs.Continue Reading Supreme Court Hears Arguments on False Claims Act Scienter Standard