High Court Opens Up Uncertainty on FCA Recklessness

Government Contracts attorney Megan Mocho was quoted in a Law360 article about new uncertainty regarding the False Claims Act’s (FCA) scienter requirement. In a unanimous U.S. Supreme Court decision, Justice Clarence Thomas said that proving FCA defendants acted with scienter, or knowledge of their alleged wrongdoing, requires an assessment of their subjective belief. Scienter includes not only "actual knowledge" of falsity, but also "deliberate ignorance" or "reckless disregard" of the truth, and Justice Thomas also said that acting with reckless disregard includes defendants "who are conscious of a substantial and unjustifiable risk that their claims are false but submit the claims anyway." The court, however, did not define what it considers to be a substantial and unjustifiable risk. Ms. Mocho commented on the ambiguity of the high court's opinion.

"The justices could have taken an opportunity to really clarify issues regarding falsity and what defendants should do when faced with truly ambiguous legal situations, and whether those could be addressed early procedurally in cases," she said. "But instead of going that route, they created a wider chasm when dealing with reckless disregard … There's going to be lots of interpretative decisions that come out [of courts]."

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