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On June 27, 2024, the United States Supreme Court (the “Court”) affirmed the Fifth Circuit’s ruling in SEC v. Jarkesy and held that a defendant facing civil penalties in a securities fraud claim brought by the Securities and Exchange Commission (the “SEC”) has a right to a jury trial in a federal court.1 Specifically, the Court held that the SEC’s attempt to compel respondents to defend themselves before the agency, namely in an administrative proceeding before an Administrative Law Judge (“ALJ”) employed by the SEC, violates respondents’ Seventh Amendment right to a jury trial in cases where the SEC pursues civil penalties. Accordingly, this decision will likely limit the number of future SEC actions adjudicated by an ALJ in an administrative forum due to the restriction on the available remedies.Continue Reading SEC v. Jarkesy: A Divided Supreme Court Holds That the SEC Cannot Seek Civil Penalties through an Administrative Proceeding

On June 1, 2023 the U.S. Supreme Court vacated and remanded two Seventh Circuit decisions involving the False Claims Act (FCA), holding in a unanimous opinion that the FCA’s scienter element turns on a defendant’s subjective belief and intent, not by an after-the-fact analysis of whether the defendant’s actions were “objectively reasonable.”

The two cases at issue, United States et al. ex rel. Schutte et al. v. SuperValu Inc. et al. and United States et al. ex rel. Proctor v. Safeway Inc., alleged that respondents SuperValu and Safeway separately defrauded Medicaid and Medicare by offering discount programs to their customers while knowingly submitting claims for the higher retail prices exceeding the “usual and customary prices” customers paid. Ruling in favor of SuperValu and Safeway, the Seventh Circuit applied an “objectively reasonable” scienter standard, determining that SuperValu and Safeway would be liable for submitting false claims only if their respective interpretation of the FCA’s “usual and customary” language was not “objectively reasonable.”Continue Reading U.S. Supreme Court Clarifies Usage of Subjective Standard for FCA Scienter Element

BREAKING NEWS: On May 25, the U.S. Supreme Court ruled against the EPA in a wetlands regulation challenge, limiting federal power over wetlands and boosting personal property rights over clean water.

The case (Sackett v. Environmental Protection Agency, No. 21-454) stemmed from Chantell and Mike Sackett’s 2004 purchase of an undeveloped plot of…