Seventh Circuit Creates Circuit Split on Whether E-Rate Program is Subject to the FCA
Arnold & Porter – In United States ex rel. Heath v. Wisconsin Bell Inc. the Seventh Circuit awakened a decade-old 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 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. 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., that they are not; the Seventh Circuit has now held that they can be — but it ultimately is for the jury to decide.
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