This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
The Court vacated the lower‑court judgments and remanded the cases to the Seventh Circuit for further proceedings consistent with this opinion.
Background and question before the Court
Justice Thomas asked whether, without guidance on what “usual and customary” means, a respondent could be accused of having made false statements.
Justice Jackson asked whether the allegations about the respondents’ subjective beliefs matter.
What each side argues
Respondents’ Position
According to Respondents, the facial ambiguity of the phrase “usual and customary” does not by itself preclude a finding of scienter under the FCA.
What happened at oral argument
Oral argument began at 11:57 a.m.
Justice Thomas asked whether, without guidance on what “usual and customary” means, a respondent could be accused of making false statements.
Justice Gorsuch asked whether the case is solely about whether the conduct is actionable.
Justice Jackson asked whether the allegations about the respondents’ subjective beliefs matter.
What the Court decided
The Court vacated the judgments below and remanded the cases to the Seventh Circuit for further proceedings consistent with this opinion.
The Court did not review the meaning of the phrase “usual and customary” or whether any of the respondents’ claims were false.
The Court emphasized that scienter focuses on the defendant’s state of mind at the time the false claim was submitted, not on any later beliefs.
The Court noted that the Seventh Circuit’s two‑step inquiry from Safeco requires assessing whether the defendant’s conduct was consistent with any objectively reasonable interpretation of the law that has not been definitively ruled out.
Why it matters
The decision clarifies that courts must evaluate scienter based on the defendant’s knowledge at the time of the alleged false claim, and that ambiguity in the phrase “usual and customary” does not itself defeat a finding of scienter under the FCA.
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- b1a4b37ac39672c94a8c-r1-703408db98d243c6.pdforal argument transcript
- db83faf333634bc62b64-r1-f61c8b24700a5622.pdfopinion
Guide generated September 29, 2026. Automated validation accepted this version.