Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

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Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

Tina D. Reynolds

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

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Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

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Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

J. Alex Ward

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Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

Brad is a partner in Morrison Foerster’s Litigation Department, Managing Partner of the Austin office, and Chair of the firm’s Israel practice. He is the former Co-Chair of the firm’s Global Litigation Practice and the Government Contracts + Public Procurement Practice.

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On Tuesday, April 18, 2023, the Supreme Court heard argument in the consolidated cases of United States ex rel. Schutte v. SuperValu, Inc., and United States ex rel. Proctor v. Safeway, Inc., to consider whether subjective knowledge about the falsity of a claim can establish liability under the False Claims Act (“FCA”). 

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Supreme Court Weighs in on the Role of Subjective Intent Under the False Claims Act | Government Contracts Insights

Krista A. Nunez

On Tuesday, April 18, 2023, the Supreme Court heard argument in the consolidated cases of United States ex rel. Schutte v. SuperValu, Inc., and United States ex rel. Proctor v. Safeway, Inc., to consider whether subjective knowledge about the falsity of a claim can establish liability under the False Claims Act (“FCA”).  These cases both concern whistleblower allegations that pharmacies submitted false claims to the government by knowingly overbilling for prescription drugs.  Several of the Justices’ commentary and lines of questions suggest the Court might rule that the Seventh Circuit incorrectly held that evidence of subjective intent is irrelevant in assessing scienter in an FCA case. The Justices seemed particularly interested in the FCA’s definition of “knowingly,” and possibly also in Congressional intent concerning the importance of subjective knowledge.As we <a href="https://govcon.mofo.com/topics/supreme-court-to-consider-the-false-claims-act-s-intent-standard" target="_blank">previously discussed</a>, the FCA imposes liability on any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment” to the government, or who “knowingly makes, uses, or causes to be made or used” a “false statement” material to such a claim.  31 U.S.C. § 3729(a)(1)(A) and (B). The Act defines “knowingly” to mean that a person (i) “has actual knowledge of the information”; (ii) “acts in deliberate ignorance of the truth or falsity of the information”; or (iii) “acts in reckless disregard of the truth or falsity of the information.” 31 U.S.C. § 3729(b)(1)(A). During argument, the Court posed hypothetical questions to delineate between these different categories of knowledge, both with respect to the cases presently before the Court and in future cases. Several Justices focused on how to determine whether a company should be liable for taking incorrect legal—as opposed to factual—positions, for example where the company took a legal position that, although plausible or defensible, would probably lose in court. The Court seemed to agree that the FCA’s text suggests subjective factors demonstrating knowledge should be considered. However, some Justices recognized the difficulties inherent in that calculus given that companies are often faced with difficult questions of legal interpretation.During oral argument, Tejinder Singh, counsel for the whistleblowers, and Deputy Solicitor General Malcolm Stewart contended that the pharmacies knowingly defrauded the government by overcharging for prescription drugs based on evidence, such as email communications, showing that they knew their interpretation of the term “usual and customary” price was unfounded. Carter Phillips, counsel for the pharmacies, asserted that the pertinent regulation was ambiguous, and that there was no clear guidance prohibiting the pharmacies’ interpretation of that term.  He argued that imposing FCA liability based on subjective intent could put companies in an untenable position, forcing them to choose whether to waive the attorney-client privilege in order to assert that they had a reasonable basis for the legal position they took at the time of a claim for payment.In an interesting confluence of unlikely allies, Justice Gorsuch and Justice Jackson—and possibly also some of the other Justices—signaled they may agree with whistleblowers that the 7th Circuit incorrectly held that evidence of subjective intent is irrelevant to assessing scienter in an FCA case. A majority of the Court did not seem to be swayed by the practical implications of considering subjective intent–-for example, how to assess subjective knowledge about a debatable legal interpretation, and whether considering subjective knowledge will always require questions about scienter in FCA cases to go to trial. However, several Justices seemed leery of imposing FCA liability on a company that takes a plausible but ultimately incorrect legal position.Given that most of the Justices kept their cards close to their vests, it remains possible that the Court could either affirm the 7th Circuit or reach a middle ground where the Safeco objective standard applies with some limitations—such as only to legal interpretations but not factual issues. If the Court does reverse the 7th Circuit, it may lead to difficult questions about what qualifies as a subjectively unreasonable legal interpretation. The 7th Circuit’s position has the virtue of clarity: if a company’s legal interpretation is objectively reasonable, courts need not consider what the company’s various employees, managers, and lawyers thought about it at the time. Given the complex and often ambiguous landscape of statutes and regulations facing government contractors, litigating what qualifies as a subjectively reasonable or unreasonable belief would be extremely complicated.This was the second FCA case before the Court this term.  As we <a href="https://govcon.mofo.com/topics/supreme-court-to-consider-whether-the-government-can-dismiss-a-false-claims-act-suit-if-it-opted-not-to-intervene-at-the-outset" target="_blank">previously discussed</a>, the first case, United States ex rel. Polansky v. Executive Health Resources, Inc., should resolve a circuit split over whether and under what circumstances the government can invoke its authority to dismiss qui tam cases. The Court’s decision in SuperValu will likely hold even greater significance, shaping the FCA’s knowledge requirement in ways that have lasting implications for whistleblowers and government contractors alike.*Law Clerks Thomas Lee and Cody Fisher contributed to this blog post

Supreme Court Weighs in on the Role of Subjective Intent Under the False Claims Act

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