Tag Archives: Supreme Court

Supreme Court Rejects “Objectively Reasonable” Defense to False Claims Act Liability

Key Takeaways:

  • On June 1, 2023, in United States ex rel. Schutte v. SuperValu Inc., the U.S. Supreme Court unanimously held that defendants cannot avoid liability under the False Claims Act (FCA) by demonstrating that their conduct was consistent with an “objectively reasonable” interpretation of an ambiguous legal requirement.
  • The Court’s decision clarifies that FCA liability turns on the subjective standard of whether a defendant,…

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The Supreme Court Unanimously Rejects Broad Interpretation of Wire Fraud Statute

Key Takeaways

  • Courts are showing continued skepticism of broad use of federal fraud statutes.  Last week, two decisions repudiated creative government interpretations of wire fraud’s “property” requirement.
  • In United States v. Ciminelli, the Supreme Court unanimously rejected the “right to control” theory, holding that only “traditional property interests” can support a federal wire fraud conviction, and the right to accurate information to make an informed economic decision is not such an interest.…

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Supreme Court Revives False Claims Act Suit by Applying “Government Knowledge” Statute of Limitations

The Supreme Court, in a unanimous decision authored by Justice Thomas, agreed with the Eleventh Circuit that the False Claims Act’s “government knowledge” statute of limitations applies regardless of whether the government chooses to intervene in a qui tam suit.

Under the False Claims Act, a civil action must be filed by the later of 1) six years after the statutory violation, or  2) three years after the relevant facts are “known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances.”  The Act also bars all claims brought more than ten years after the violation. … More

Supreme Court Extends Securities Fraud Liability to Knowing Dissemination of False Statements Made By Others

Recently, in Lorenzo v. Securities and Exchange Commission, No. 17-1077, the Supreme Court held that an investment banker had committed securities fraud by copying and pasting false statements prepared by his supervisor into emails to prospective investors, even though he was not on the hook for making the statements himself.

The decision focuses on Rule 10b-5 of the Securities and Exchange Commission,… More