In 2022, False Claims Act (FCA) settlements and judgments totaled US$2.2 billion.1 Although this was one of the lowest annual recovery totals in years, there is no indication that the Department of Justice (DOJ) is slowing its FCA enforcement activity – quite the contrary.
Though perhaps not a banner year as measured by dollars recovered, 2022 was a noteworthy year in FCA jurisprudence. Significantly, the Supreme Court is currently set to decide two key FCA cases that will resolve critical circuit splits. First, the Court will determine the appropriate scienter standard – whether objectively reasonable interpretations of complex legal requirements, regardless of subjective intent, carry the day. And second, the Court will decide the appropriate standard for DOJ’s qui tam dismissal power, though that decision will come among growing DOJ reluctance to exercise that power. Meanwhile, the Supreme Court declined to weigh in on another circuit split, leaving differing interpretations of Rule 9(b)’s dismissal standard applicable to FCA cases in place. In addition, the Eighth Circuit created a new circuit split with its textual reading of the Anti-Kickback Statute, setting a stringent standard for DOJ and qui tam relators. And finally, courts continue to grapple with the materiality standard post-Escobar – when the appropriate threshold has been met, and when it has not such that dismissal is warranted. We hope this guide provides a useful review of 2022’s most noteworthy FCA developments, and a preview of potential FCA developments to come in 2023.
References
1 Department of Justice press release, “False Claims Act Settlements and Judgements Exceed $2 Billion in Fiscal Year 2022,” (7 February 2023) available here.