SuperValu Makes Trials More Likely for FCA Cases Turning on Scienter
In an analysis for Law360, Jeff Overley writes that Supreme Court’s ruling in Schutte v. SuperValu Inc. has set things up for more FCA cases—which are typically settled out of court—to go to a jury trial.
The high court rejected the premise that any “objectively reasonable” interpretation of regulations would be a valid defense against allegations of non-compliance, instead holding that what the defendant “subjectively believed” about their obligations was the question at hand. They could still present a reasonable interpretation that matches their conduct, but would also have to rebut any arguments about whether they actually believed it at the time. Overley comments, “Scrutinizing someone’s mindset often requires sorting through convoluted evidence, and judges might now be more inclined to leave that scrutiny to jurors.” He goes on to explore some of the first post-SuperValu decisions.
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