Court Opinion

ID: 9392035
Source: CourtListenerOpinion
Date Created: 2023-05-03 20:00:39.560495+00
Date Added: 2024-06-11T17:18:29.689752
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 21-3075
ASTELLAS US HOLDING, INC. and
ASTELLAS PHARMA US, INC.,
                                                Plaintiffs-Appellees,

                                v.

FEDERAL INSURANCE COMPANY,
                                              Defendant-Appellant.
                    ____________________

        Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
        No. 1:17-cv-08220 — Franklin U. Valderrama, Judge.
                    ____________________

     ARGUED SEPTEMBER 9, 2022 — DECIDED MAY 3, 2023
                 ____________________

   Before ROVNER, HAMILTON, and SCUDDER, Circuit Judges.
    HAMILTON, Circuit Judge. Plaintiﬀs Astellas US Holding,
Inc. and Astellas Pharma US, Inc. (we can treat them here as
one entity, Astellas) paid the federal government $100 million
to settle potential claims for violations of the federal Anti-
Kickback Statute and the federal False Claims Act. The poten-
tial claims stemmed from Astellas’ contributions to so-called
“patient assistance plans” to cover the costs of treatment with
2                                                   No. 21-3075

an expensive new cancer drug. Astellas had a $10 million di-
rectors-and-oﬃcers liability insurance policy with defendant
Federal Insurance Company. The many questions raised in
this appeal boil down to whether Illinois public policy forbids
the liability insurer from covering part of its insured’s pay-
ment to settle the federal government’s potential claims. The
district court granted summary judgment for the insured,
concluding that Illinois public policy does not forbid coverage
of the settlement. In a thorough opinion, the court held that
Federal owes Astellas the policy limit of $10 million. Astellas
US Holding, Inc. v. Starr Indem. & Liab. Co., 566 F. Supp. 3d 879
(N.D. Ill. 2021).
     We aﬃrm. Under Illinois law, a party may not obtain lia-
bility insurance for genuine restitution it owes the victim of
its intentional wrongdoing, but a party may obtain insurance
for compensatory damages it may owe. Further, in cases of
ambiguity and uncertainty, Illinois favors settlements and
freedom of contract, and Federal wrote its insurance policy to
try to extend insurance coverage to the very limit of what Illi-
nois law would allow in such cases. Federal bears the burden
of showing that the portion of the settlement payment for
which Astellas seeks coverage is uninsurable restitution. Fed-
eral has not carried that burden with evidence that would al-
low a reasonable jury to decide in its favor.
I. Facts for Summary Judgment & Procedural History
    A. Patient Assistance Plans
   To frame the controlling issue of Illinois insurance law, we
must ﬁrst provide some background about the insured’s dis-
pute with the federal government. Drug manufacturers spon-
sor “patient assistance plans” to help patients obtain needed
No. 21-3075                                                    3

medicines at aﬀordable prices. In 2005, Congress amended
the Medicare program to oﬀer prescription drug coverage. In
planning to implement the new legislation, the government
raised concerns that patient assistance plans could be oper-
ated in ways that could violate the federal Anti-Kickback Stat-
ute, 42 U.S.C. § 1320a-7b, and the False Claims Act, 31 U.S.C.
§ 3729, by eﬀectively rewarding doctors and patients for
choosing to use particular drugs. See Special Advisory Bulletin:
Patient Assistance Programs for Medicare Part D Enrollees, 70
Fed. Reg. 70623-03 (Nov. 22, 2005). The government cautioned
that patient assistance plans would need to be “properly
structured” to avoid illegally channeling contributions by
drug makers to patients and impermissibly inﬂuencing their
drug choices. Id. at 70626, 70627.
   B. Astellas’ Contributions to Patient Assistance Programs
    In 2012 plaintiﬀ Astellas launched Xtandi, a so-called “an-
drogen receptor inhibitor” used to treat metastatic prostate
cancer that has not responded to surgery. Initially priced at
$7,800 per month, Xtandi prescriptions were to be covered by
Medicare up to about $6,000 per month, leaving patients with
a steep monthly co-pay of about $1,800.
    When it launched Xtandi, Astellas began making contri-
butions to a patient assistance plan run by the Chronic Dis-
ease Fund. A few months later, Astellas also started contrib-
uting to another plan run by the Patient Network Foundation.
Apparently, these two funds kept running out of money. In
May 2013, an Astellas marketing executive encouraged both
the Chronic Disease Fund and the Patient Network Founda-
tion to create special funds that would provide co-pay assis-
tance for only androgen receptor inhibitors like Xtandi and
just a few other medications.
4                                                   No. 21-3075

   In-house lawyers at Astellas and the two patient assistance
plans and several outside law ﬁrms considered the govern-
ment’s November 2005 regulatory guidance. The lawyers
blessed the plan for such narrowly targeted funds. The
Chronic Disease Fund and the Patient Network Foundation
then set up funds limited to helping patients who needed an-
drogen receptor inhibitors. In July 2013, Astellas began mak-
ing donations to these funds. Astellas stopped contributing to
them after a few months, at the end of 2013. During those
months, Astellas contributed about $27 million to the two
funds. Astellas continued contributing to broader prostate-
cancer funds until 2016. Astellas contributed a total just shy of
$130 million to the targeted and broader funds.
    C. The Department of Justice Investigation and the Settlement
   The United States Department of Justice began investigat-
ing Astellas’ contributions to patient assistance plans for po-
tential health care oﬀenses. In April 2017, the Astellas market-
ing executive at the center of the inquiry made a “proﬀer” to
the Department. He acknowledged that he had “hoped” and
“expected” that the contributions would produce ﬁnancial
beneﬁts for Astellas. But he maintained that the “primary pur-
pose of the donations … was charitable,” and he asserted that
Astellas had made no eﬀorts to calculate “a return on invest-
ment.”
     In September 2017 the Department of Justice issued a more
speciﬁc and detailed Civil Investigative Demand to the same
executive. One month later, Astellas agreed with the govern-
ment to toll the relevant statutes of limitations for potential
litigation relating to Astellas’ possible violations of the False
Claims Act, the Anti-Kickback Statute, and the criminal health
No. 21-3075                                                           5

care fraud provision of the Health Insurance Portability and
Accountability Act, 18 U.S.C. § 1347.
    Early in 2018, Astellas authorized its outside counsel to
begin settlement negotiations. The government initially esti-
mated its damages at approximately $460 million. As negoti-
ations continued, the government narrowed its focus to Med-
icare losses attributable to Astellas’ contributions to only the
narrowly focused androgen receptor inhibitor funds. The
government disclosed a new, narrower damages estimate of
$82 million. Applying a standard multiplier, the government
sought approximately $164 million. In April 2019, Astellas set-
tled with the government for $100 million, $50 million of
which was labeled as “restitution to the United States” for tax
reasons discussed below.
    D. The Federal Insurance Policy and the Coverage Dispute
    After agreeing to the settlement, Astellas turned to several
liability insurers, including Federal, to help cover portions of
the $100 million settlement payment. Astellas’ directors-and-
oﬃcers excess liability insurance policy with Federal had a
policy limit of $10 million. Astellas demanded the policy limit
from Federal. Federal and the other insurers denied coverage.
    Astellas then ﬁled this suit for breach of the insurance con-
tracts. Settlements with other insurers left only Federal as a
defendant. On cross-motions for summary judgment, the dis-
trict court ruled in favor of Astellas, concluding that Illinois
law and public policy did not prohibit insurance coverage of
at least $10 million of the settlement payment. 1

    1In the district court, Astellas waived seeking defense costs in ex-
change for Federal waiving an unspecified defense relating to coverage.
6                                                    No. 21-3075

II. Analysis
    A. Legal Standard
    The parties agree that Illinois law governs Astellas’ claim
for breach of contract. “Our task is to decide a question of
state law ‘as it either has been determined by the highest court
of the state or as it would be by that court if the present case
were before it now.’” Sun Life Assurance Co. of Canada v. Wells
Fargo Bank, N.A., 44 F.4th 1024, 1031 (7th Cir. 2022), quoting
H.A.L. NY Holdings, LLC v. Guinan, 958 F.3d 627, 632 (7th Cir.
2020), and citing 28 U.S.C. § 1652 and Erie Railroad Co. v. Tomp-
kins, 304 U.S. 64, 79 (1938) (“[T]he voice adopted by the State
… should utter the last word.”). Since the district court
granted Astellas’ motion for summary judgment, we give
Federal the beneﬁt of conﬂicting evidence and reasonable in-
ferences from the evidence. BASF AG v. Great American Assur-
ance Co., 522 F.3d 813, 818 (7th Cir. 2008).
    In Illinois, as in most states, insurance policies are con-
strued according to the same principles that govern other
types of contracts. Windridge of Naperville Condominium Ass’n
v. Philadelphia Indem. Ins. Co., 932 F.3d 1035, 1039 (7th Cir.
2019), quoting Hobbs v. Hartford Ins. Co. of the Midwest, 214 Ill.
2d 11, 291 Ill. Dec. 269, 823 N.E.2d 561, 564 (2005). Our “pri-
mary objective in construing the language of an insurance
policy is to ascertain and give eﬀect to the intentions of the
parties as expressed by the language of the policy.” BASF AG,
522 F.3d at 819, quoting Valley Forge Ins. Co. v. Swiderski Elec-
tronics, Inc., 223 Ill. 2d 352, 307 Ill. Dec. 653, 860 N.E.2d 307,
314 (2006).
   Illinois law places the initial burden on the insured to
show that a loss is covered. Crescent Plaza Hotel Owner, L.P. v.
No. 21-3075                                                      7

Zurich American Ins. Co., 20 F.4th 303, 308–09 (7th Cir. 2021),
citing Addison Ins. Co. v. Fay, 232 Ill. 2d 446, 328 Ill. Dec. 858,
905 N.E.2d 747, 752 (2009). If the insured makes that showing,
“the burden shifts to the insurer to establish that an exclusion
applies.” Id. at 309. “Exclusions are read narrowly and apply
only if their application is ‘clear and free from doubt.’” Id.,
quoting National Fire Ins. of Hartford v. Walsh Constr. Co., 392
Ill. App. 3d 312, 330 Ill. Dec. 572, 909 N.E.2d 285, 288 (2009);
accord, American Bankers Ins. Co. of Florida v. Shockley, 3 F.4th
322, 330 (7th Cir. 2021), citing Pekin Ins. Co. v. Miller, 367 Ill.
App. 3d 263, 305 Ill. Dec. 101, 854 N.E.2d 693, 697 (2006).
   B. Coverage Under the Federal Policy
   When we work through the terms of Astellas’ policy with
Federal, the $10 million question in this case does not depend
on any linguistic nuances in the policy. The key provisions in
essence delegate the limits of coverage to Illinois case law
drawing public policy boundaries between liabilities that are
insurable and those that are not.
    To explain, we start with the insuring clause: “The Insurer
shall pay on behalf of the Company the Loss arising from a
Claim … against the Company for any Wrongful Act.” A
“Wrongful Act” is “any actual or alleged breach of duty, ne-
glect, error, misstatement, misleading statement, omission or
act by the Company.” That deﬁnition clearly includes poten-
tial violations of the Anti-Kickback Statute and the False
Claims Act by Astellas in funding unduly narrow patient as-
sistance plans for use in paying for Astellas’ own products,
for which Astellas ultimately obtained payment from Medi-
care. Under the policy, a “Claim” includes a “written request
to toll or waive the applicable statute of limitations relating to
8                                                 No. 21-3075

a potential Claim against an Insured for a Wrongful Act.” The
government made such a request of Astellas in October 2017.
    The critical language in the policy concerns the term
“Loss,” which includes “damages, settlements or judgments”
and “punitive, exemplary or the multiplied portion of any
multiple damages awards, but only to the extent that such
damages are insurable under the applicable law.” The sepa-
rate deﬁnition of “Loss” also excludes coverage for “matters
which may be deemed uninsurable under applicable law.”
We agree with the district court that these two mirror-image
references to insurability under applicable law function as ex-
clusions and should be construed as such even though they
are not in the policy’s list of exclusions. See Astellas, 566
F. Supp. 3d at 897.
   The parties’ briefs also address two “ﬁnal adjudication”
exclusions in the Policy:
      This policy shall not cover any Loss in connec-
      tion with any Claim:
      (a) arising out of, based upon or attributable to
          the gaining of any proﬁt or advantage or im-
          proper or illegal remuneration if a ﬁnal non-
          appealable adjudication in an action or pro-
          ceeding other than an action or proceeding
          initiated by the Insurer to determine cover-
          age under the policy establishes that such re-
          muneration was improper or illegal;
      (b) arising out of, based upon or attributable to
          any deliberate fraudulent act or any willful
          violation of law by an Insured if a ﬁnal non-
          appealable adjudication in an action or
No. 21-3075                                                   9

          proceeding other than an action or proceed-
          ing initiated by the Insurer to determine cov-
          erage under the policy establishes that such
          act or violation occurred ….
    By their terms, these “ﬁnal adjudication” exclusions do
not apply to the facts of this case. There was never a “ﬁnal
adjudication” of the government’s allegations against Astel-
las, so Federal could not—and does not—rely on these exclu-
sions to deny coverage. But these exclusions may tell us some-
thing about the scope of the policy. Because the “ﬁnal adjudi-
cation” exclusions do not preclude coverage where wrongdo-
ing is merely alleged—so Astellas argues—Federal and Astel-
las had contemplated coverage of a settlement payment like
the one here.
    The district court agreed with Astellas that the “ﬁnal adju-
dication” exclusions “inform the analysis about the parties’
intent.” Astellas, 566 F. Supp. 3d at 907. We agree that the “ﬁ-
nal adjudication” exclusions help us “to ascertain and give ef-
fect to the intentions of the parties as expressed by the lan-
guage of the policy.” See BASF AG, 522 F.3d at 819, quoting
Valley Forge Ins. Co., 860 N.E.2d at 314. Together with the pol-
icy’s inclusion of “settlements” in its deﬁnition of “Loss,”
these “ﬁnal adjudication” exclusions conﬁrm that the parties
intended to cover even settlement payments to resolve allega-
tions of illegal remuneration, deliberate fraudulent acts, and
willful violations of law. In essence, the “ﬁnal adjudication”
exclusions show that Federal wrote the policy to extend cov-
erage to the limits of applicable law and public policy. Federal
was willing to extend coverage, if permissible, to settlements
10                                                             No. 21-3075

even for claims for deliberate fraud and willful violations of
the law, so long as there was no ﬁnal adjudication. 2
     C. Policy Exclusions & Public Policy
     The policy’s more general and mirror-image exclusions
based on whether a loss is properly insurable direct us to case
law applying Illinois law. Illinois “forbids certain types of in-
surance as being against public policy because of the acute
moral hazard that the insurance creates.” Mortenson v. Na-
tional Union Fire Ins. Co. of Pittsburgh, 249 F.3d 667, 669, 672
(7th Cir. 2001) (barring liability insurance for tax penalties for
employer’s “willful” failure to pay payroll taxes). For exam-
ple, one may not insure against criminal ﬁnes or punitive
damages. Id. at 672, citing Beaver v. Country Mut. Ins. Co., 95
Ill. App. 3d 1122, 51 Ill. Dec. 500, 420 N.E.2d 1058, 1060 (1981),
and Bernier v. Burris, 113 Ill. 2d 219, 100 Ill. Dec. 585, 497
N.E.2d 763, 776 (1986).
    Turning to the speciﬁc issue here, Illinois similarly prohib-
its insurance coverage for losses incurred from settlement
payments that are “restitutionary in character.” Level 3 Com-
munications, Inc. v. Federal Ins. Co., 272 F.3d 908, 910–11 (7th
Cir. 2001) (payment to settle shareholders’ claims that insured
defrauded them into selling their shares for too little money

     2We are not suggesting that the “final adjudication” exclusions over-
ride public policy. In applying Illinois law of insurability, we have said
there is no “line [that] runs between judgments and settlements.” Level 3
Communications, Inc. v. Federal Ins. Co., 272 F.3d 908, 911 (7th Cir. 2001). As
a matter of public policy, just because a “case is settled before entry of
judgment” does not mean that “the insured is covered regardless of the
nature of the claim against it.” Id. Nevertheless, the “final adjudication”
exclusions show that Federal wrote the policy to extend coverage as far as
Illinois law and public policy would allow.
No. 21-3075                                                     11

was restitutionary and not insurable). Accord, e.g., Illinois
Municipal League Risk Mgmt. Ass’n v. City of Genoa, 2016 IL App
(4th) 150550, 402 Ill. Dec. 381, 51 N.E.3d 1133, 1134–35, 1137–
38 (2016) (insurer had duty to defend city on claim by regional
transit authority for allegedly depriving transit authority of
sales tax revenue by agreeing to kickback scheme to persuade
business to relocate in city; transit authority sought compen-
sation, not restitution); Rosalind Franklin University of Medicine
& Science v. Lexington Ins. Co., 2014 IL App (1st) 113755, 380 Ill.
Dec. 89, 8 N.E.3d 20, 37 (2014) (payment to settle claims of pa-
tients in experimental cancer treatment program was not res-
titutionary and thus was insurable); Local 705 Int’l Bhd. of
Teamsters Health & Welfare Fund v. Five Star Managers, L.L.C.,
316 Ill. App. 3d 391, 249 Ill. Dec. 75, 735 N.E.2d 679, 683–84
(2000) (payment by union to settle claim by aﬃliated pension
fund deemed restitutionary and not insurable); Ryerson Inc. v.
Federal Ins. Co., 676 F.3d 610, 612–13 (7th Cir. 2012) (payment
by company to purchaser of subsidiary to settle allegations
that seller concealed bad news about subsidiary, leading to
inﬂated purchase price, was partial refund of purchase price
and thus uninsurable restitution). Before we address whether
the settlement payment here was entirely uninsurable, the
concept of “restitution” needs some explaining.
       1. Compensation v. Restitution
   Illinois cases draw a line between “compensatory” pay-
ments, which are insurable, and “restitutionary” payments,
which are not. Where a payment compensates a victim or
plaintiﬀ for a loss, the payment takes on the character of com-
pensatory damages. See Raintree Homes, Inc. v. Village of Long
Grove, 209 Ill. 2d 248, 282 Ill. Dec. 815, 807 N.E.2d 439, 445
(2004). Such payments are insurable in Illinois. Standard Mut.
12                                                  No. 21-3075

Ins. Co. v. Lay, 2014 IL App (4th) 110527-B, 377 Ill. Dec. 972, 2
N.E.3d 1253, 1258 (2014) (contrasting “actual compensation
for injury caused” with uninsurable punitive damages);
Ryerson, 676 F.3d at 613 (distinguishing a claim for “‘damages’
in the proper sense of the word” from uninsurable restitu-
tion).
    On the other hand, where a payment restores to a victim
or plaintiﬀ what has been taken from it or forces the perpetra-
tor or defendant to disgorge fraudulently obtained proﬁts, the
payment is deemed restitutionary. Raintree Homes, 807 N.E.2d
at 445 (“restitution is measured by the defendant’s unjust
gain”), quoting 1 D. Dobbs, Remedies § 3.1, at 278 (2d ed.
1993). See also Black’s Law Dictionary 1571 (11th ed. 2019)
(deﬁning restitution as the “set of remedies … in which the
measure of recovery is usu[ally] based not on the plaintiﬀ’s
loss, but on the defendant’s gain” as well as the “[r]eturn or
restoration of some speciﬁc thing to its rightful owner or sta-
tus”).
    These can be tricky concepts to discern from case law, es-
pecially because “sometimes courts use the term damages
when they mean restitution.” Raintree Homes, 807 N.E.2d at
444, quoting Remedies § 3.1, at 280; see generally Colleen P.
Murphy, Misclassifying Monetary Restitution, 55 SMU L. Rev.
1577 (2002) (reviewing disagreements and inconsistencies in
legislative, judicial, and scholarly treatment of “restitution”
for various purposes). And “restitution” itself is “an ambigu-
ous term, sometimes referring to the disgorging of something
which has been taken and at times referring to compensation
for injury done.” Black’s Law Dictionary 1571 (11th ed. 2019),
quoting John D. Calamari & Joseph M. Perillo, The Law of Con-
tracts § 9-23, at 376 (3d ed. 1987). “Restitution” can therefore
No. 21-3075                                                     13

encompass both disgorgement and “compensation.” And
“damages” can demand “restitution” if “the defendant has
been unjustly enriched at the plaintiﬀ’s expense.” Restitution
damages, Black’s Law Dictionary 491 (11th ed. 2019). In other
words, we cannot always trust the labels applied in case law.
    While the words themselves (“restitution,” “compensa-
tion,” and “damages”) can be both misused and misunder-
stood, cases applying Illinois law teach that a payment is res-
titutionary in character under two broad sets of circum-
stances. First, a settlement payment is restitutionary if the
payment disgorges “something that belongs of right not to
[the defendant] but to the plaintiﬀ.” Ryerson, 676 F.3d at 613,
citing Tull v. United States, 481 U.S. 412, 424 (1987) (“Restitu-
tion is limited to ‘restoring the status quo and ordering the
return of that which rightfully belongs’” to someone else),
quoting Porter v. Warner Holding Co., 328 U.S. 395, 402 (1946).
If a car thief steals a car, for example, the victim has lost a car
and the thief has gained a car. Under these circumstances, the
plaintiﬀ’s “loss and the defendant’s gain coincide.” Black’s
Law Dictionary 1571 (11th ed. 2019), quoting Calamari & Per-
illo, The Law of Contracts § 9-23, at 376. Where that is the case,
a settlement payment marks the “restoration” to the plaintiﬀ
of the defendant’s “ill-gotten gain,” Level 3, 272 F.3d at 910,
citing Local 705, 735 N.E.2d at 683, and that “gain” just hap-
pens to equal the suﬀered “loss.” The return of the car to the
victim is therefore both “compensation” and “restitution.”
Because any alleged “loss” the thief suﬀered in having to re-
turn the car is just as much restitution as it is compensation,
the thief cannot insure against liability for that “loss” as a mat-
ter of public policy.
14                                                            No. 21-3075

    Second, a settlement payment is restitutionary if the pay-
ment “seeks to deprive the defendant of the net beneﬁt of the
unlawful act.” Level 3, 272 F.3d at 911. This form of restitution
certainly encompasses the thief’s return of the car since the
stolen car was his “net beneﬁt.” But it also means that an in-
sured may not “retain the proﬁt it had made from a fraud.”
Id. See also Ryerson, 676 F.3d at 613 (“[T]here is no insurable
interest in the proceeds of a fraud.”). To treat this form of pay-
ment as restitution, there must be not only fraud, but also
proﬁt. 3
    The settlement payment here could be deemed uninsura-
ble restitution if Federal could show that the payment dis-
gorged either “something that belong[ed] of right not to” As-
tellas but to the federal government, Ryerson, 676 F.3d at 613,
or proﬁt that Astellas made from the alleged scheme. Level 3,
272 F.3d at 911. Federal argues that the settlement payment
here both compensated the government for its losses and dis-
gorged at least some of Astellas’ fraudulent gains. Federal
contends that, while the proceeds of Astellas’ fraud may have
been greater than the government’s losses, the settlement pay-
ment constituted at least a “subset” of Astellas’ gains. Accord-
ing to Federal, this “overlap” between Astellas’ gains and the
government’s losses renders the $100 million settlement pay-
ment wholly restitutionary so that not even $10 million would
be insurable.

     3One example of fraud without profit would be “a fraudulent state-
ment by a corporate officer that inflated the price of the corporation’s stock
without conferring any measurable benefit on the corporation.” Level 3,
272 F.3d at 911.
No. 21-3075                                                     15

       2. “Primary Focus”
    Here, the settlement agreement did not make explicit that
the payment constituted restitution either for funds obtained
fraudulently from the United States by Astellas or for proﬁts
Astellas might have made along the way. To be sure, the set-
tlement labels half of the $100 million payment as “restitution
to the United States.” But as discussed below, that “restitu-
tion” label was applied for tax purposes. Even if the label were
accurate, it would apply to only half of the payment, leaving
another half for Federal to cover in part. We have also said
that the parties’ “label isn’t important” in deciding whether a
settlement payment is restitutionary. See Ryerson, 676 F.3d at
613.
    So what do courts do with imprecise language and these
conﬂicting signals in the case law? Where it is not obvious
whether a settlement payment was restitutionary or compen-
satory, we and the Illinois courts have developed an analytic
framework that can often resolve the uncertainty. This frame-
work tries to balance two competing concerns implicated by
settlement agreements.
    On one hand, we worry “that the settlement was entered
into in order to obtain insurance coverage for an otherwise
uninsurable” liability. United States Gypsum Co. v. Admiral Ins.
Co., 268 Ill. App. 3d 598, 205 Ill. Dec. 619, 643 N.E.2d 1226, 1244
(1994). On the other hand, we worry “that an insured will be
deterred from entering into a settlement agreement” if it can
obtain coverage only by proving its own liability. Id.
   We are dealing here with a sizable settlement to resolve
potential high-dollar claims in a complex area of federal
health care law. The law generally favors the settlement of
16                                                    No. 21-3075

claims, and Illinois courts do not apply public policy in a way
that discourages them. Settlements, of course, aﬀord certain
“advantages to the insured.” Id., quoting Uniroyal, Inc. v. Home
Ins. Co., 707 F. Supp. 1368, 1378 (E.D.N.Y. 1988). For all parties,
settlements eliminate the “uncertainties of outcome in litiga-
tion,” and promote “the avoidance of wasteful litigation and
expense.” Airline Stewards & Stewardesses Ass’n v. American
Airlines, Inc., 573 F.2d 960, 963 (7th Cir. 1978), quoting Florida
Trailer & Equip. Co. v. Deal, 284 F.2d 567, 571 (5th Cir. 1960).
Beneﬁts accrue to courts as well, so “the law generally favors
the encouragement of settlements.” Id. See also Delta Air Lines,
Inc. v. August, 450 U.S. 346, 363 (1981) (Powell, J., concurring
in judgment) (“[P]arties to litigation and the public as a whole
have an interest—often an overriding one—in settlement ra-
ther than exhaustion of protracted court proceedings.”).
     “In cases where an insured enters into a settlement that
disposes of both covered and non-covered claims, the in-
surer’s duty to indemnify encompasses the entire settlement
if the covered claims were ‘a primary focus of the litigation.’”
Rosalind Franklin University, 8 N.E.3d at 39, quoting Common-
wealth Edison Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 323
Ill. App. 3d 970, 256 Ill. Dec. 675, 752 N.E.2d 555, 565 (2001);
see also Federal Ins. Co. v. Binney & Smith, Inc., 393 Ill. App. 3d
277, 332 Ill. Dec. 448, 913 N.E.2d 43, 53–54 (2009). On the other
hand, “if the ‘primary focus’ of the claims that were settled is
not a covered loss, then the insurer is not required to reim-
burse the settlement.” Rosalind Franklin University, 8 N.E.3d at
40, citing Santa’s Best Craft, LLC v. St. Paul Fire & Marine Ins.
Co., 611 F.3d 339, 352 (7th Cir. 2010). Put another way, if Fed-
eral could show that the settlement payment was “not even
potentially covered,” then it would not need to cover Astellas’
settlement. See Santa’s Best, 611 F.3d at 352.
No. 21-3075                                                     17

    This case presents unusual diﬃculties in resolving the
“primary focus” inquiry, and those diﬃculties fall more heav-
ily on Federal, the party seeking to prove that a policy exclu-
sion applies. The Department of Justice investigated Astellas
but never even ﬁled a civil or criminal action. In all relevant
case law we have found, complaints had at least been ﬁled
and legal claims had been asserted before settlements were
reached. See, e.g., United States Gypsum, 643 N.E.2d at 1232,
1245 (seven of approximately 250 property damage cases set-
tled after discovery had commenced); Commonwealth Edison,
752 N.E.2d at 557–58 (settled after nearly two years of civil lit-
igation); Binney & Smith, 913 N.E.2d at 47–48 (class action set-
tled six months after action ﬁled); Santa’s Best, 611 F.3d at 343–
44 (settled after two years of civil litigation); Rosalind Franklin
University, 8 N.E.3d at 26–27 (settled after ﬁling of complaint
and hearing on motion for preliminary injunction); Selective
Ins. Co. of South Carolina v. Target Corp., 845 F.3d 263, 264 (7th
Cir. 2016) (settled after discovery had commenced).
     In this case, no claims ever became “a primary focus of the
litigation,” Rosalind Franklin University, 8 N.E.3d at 39, quoting
Commonwealth Edison, 752 N.E.2d at 565 (emphasis added), be-
cause there was no litigation. We have only potential claims
that the government investigated and then settled without
ever bringing any legal action. The potential claims included
violations of the False Claims Act, the Anti-Kickback Statute,
and the Program Fraud Civil Remedies Act, and “the com-
mon law theories of payment by mistake, unjust enrichment,
and fraud.” Virtually all of these relinquished claims sounded
in fraud.
   The problem is that “fraud” is a broad category and is not
per se uninsurable in Illinois. Public policy necessarily bars
18                                                  No. 21-3075

insurance coverage for only restitution of the proceeds of
proven fraud. Ryerson, 676 F.3d at 613. Here, we are concerned
with whether the settlement payment was restitutionary. The
fact that the potential claims sounded in fraud is not decisive.
In other words, the settlement agreement alone cannot do the
work that Federal needs.
    So how does a court decide whether a settlement was res-
titutionary rather than compensatory? In other cases, courts
have had much more than a settlement agreement to go on.
They have had complaints, answers, hearings, discovery, and
so on.
    When a complaint is ﬁled, it not only asserts claims but
also requests relief that may shed some light on the nature of
a later settlement payment. See United States Gypsum, 643
N.E.2d at 1230 (plaintiﬀs sought cost of removing asbestos
from structures and repairing damage that material caused);
Edison, 752 N.E.2d at 557–58 (estate sought compensatory and
punitive damages in wrongful death action); Binney & Smith,
913 N.E.2d at 47, 54 (class sought compensatory damages for
purchase price of crayons); Santa’s Best, 611 F.3d at 343 (plain-
tiﬀs sought compensatory damages, punitive damages, and
disgorgement of proﬁts); Rosalind Franklin University, 8
N.E.3d at 26 (plaintiﬀs sought compensatory damages and
disgorgement); Selective Insurance, 845 F.3d at 271–72 (plaintiﬀ
sought compensatory damages). To be sure, not all of these
cases were concerned, as we are, with the nature of the settle-
ment payment. In United States Gypsum, Commonwealth Edison,
and Selective Insurance, for example, the insurers were trying
to show that the insureds would not have been liable for phys-
ical property damage or personal injury if they had litigated.
United States Gypsum, 643 N.E.2d at 1237–38; Commonwealth
No. 21-3075                                                  19

Edison, 752 N.E.2d at 559, 564–65; Selective Insurance, 845 F.3d
at 271–72. In Binney & Smith, the insurer was trying to show
that the insured would not have been liable for an advertising
injury. 913 N.E.2d at 58.
    In cases where the nature of the settlement payment was
disputed, both the claims and the requested relief helped
courts determine whether the payments were covered. Most
notably, in Rosalind Franklin University, the Illinois Appellate
Court considered, as we do here, whether a settlement pay-
ment was uninsurable restitution. 8 N.E.3d at 36–39. Among
other things, the court considered the relief the “underlying
plaintiﬀs [had] sought,” which included both compensatory
damages and disgorgement of funds that the insured defend-
ant “never had the right to possess.” Id. at 37–39. Because the
underlying plaintiﬀs had pursued both forms of relief and the
settlement had “disposed of all the underlying plaintiﬀs’
claims,” the court concluded that it was “apparent that the
settlement did not represent” restitution. Id. at 39. In other
words, the court took the requested relief into account, but it
also gave the beneﬁt of the doubt to the insured, treating the
payment as entirely insurable even though a portion of it was
likely restitutionary. See also Santa’s Best, 611 F.3d at 350–52
(addressing apportionment of an undiﬀerentiated settlement
payment and remanding after clarifying legal standard so
that district court could determine whether “the primary fo-
cus of settlement was damages payments for a covered” claim
based on record evidence and allegations in complaint, which
requested “proﬁts, damages, costs, and punitive damages”).
   Here the government never requested any speciﬁc reme-
dies. The settlement agreement broadly released Astellas
from “any civil or administrative monetary claim the United
20                                                    No. 21-3075

States” might have under relevant statutes or the common
law. We have even less information than the Illinois court had
in Rosalind Franklin University. To assess the character of this
settlement payment, we can rely only on inferences drawn
from predictions about the claims the government likely
would have brought and the remedies the government likely
would have sought if it had proceeded beyond investigating
Astellas to litigating a civil (or criminal) action. This is not an
easy task because, well, the dispute was settled.
    The district court undertook this “primary focus” inquiry
and found that the government was primarily focused on pos-
sible violations of the False Claims Act with underlying Anti-
Kickback Statute violations. Astellas, 566 F. Supp. 3d at 904.
Federal now agrees. We accept that premise, but from it, Fed-
eral asks us to make an unwarranted leap. Federal argues that
the “primary focus” of the settlement must have been “based
on the uninsured and uninsurable proceeds of knowing fraud”
because the underlying Anti-Kickback Statute violation “re-
quired proof that the defendant acted ‘knowingly and will-
fully.’” See 42 U.S.C. § 1320a–7b(b).
    Broadly speaking, this argument overlooks the diﬀerence
between a potential claim for fraud and a remedy demanding
restitution for the proceeds of that fraud as distinct from com-
pensatory relief. See Level 3, 272 F.3d at 911 (discussing sce-
narios where remedy for fraud would not be restitutionary).
More fundamental, Federal’s argument confuses an (implied)
allegation of fraud with conclusive proof of such fraud.
No. 21-3075                                                                  21

             a. Whether Allegations of Fraud Under the False
                Claims Act and Anti-Kickback Statute Suﬃce to Bar
                Coverage
    An ultimate ﬁnding of liability under the False Claims Act
requires proof of knowing fraud. 31 U.S.C. § 3729(a)(1)(A) (re-
quiring “knowingly present[ing] … a false or fraudulent
claim”). The Anti-Kickback Statute requires proof of a know-
ing and willful “false statement or representation of a material
fact.” 42 U.S.C. § 1320a-7b(a). The fact that these statutes, op-
erating together, require intentional, knowing, and willful
fraud does not mean that any party accused of violating them
who settles a civil claim against it must have acted with fraud-
ulent scienter. The claim or charge cannot alone prove the (in-
surer’s) case.
    Beyond this general point, we are particularly wary of
Federal’s scienter argument in the context of the False Claims
Act. Regardless of the scienter needed to prove an underlying
violation of the Anti-Kickback Statute, the False Claims Act’s
scienter standard is broad. It reaches reckless conduct. More-
over, the line between reckless conduct and merely negligent
conduct can be fuzzy, especially where inferences from cir-
cumstantial evidence are often critical.
   Civil liability under the False Claims Act requires proof
that the defendant “knowingly presents, or causes to be pre-
sented, a false or fraudulent claim for payment or approval.”
31 U.S.C. § 3729(a)(1)(A). 4 As amended in 1986, the False

    4 A “claim” encompasses both “direct requests to the Government for
payment” and “reimbursement requests made to the recipients of federal
funds under federal benefits programs[ ]” like Medicare. Universal Health
Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176, 182 (2016). And the
“false or fraudulent claim” element may be satisfied by proving a
22                                                            No. 21-3075

Claims Act has a broad deﬁnition of “knowing.” The Act’s
“scienter requirement deﬁnes ‘knowing’ and ‘knowingly’ to
mean that a person has ‘actual knowledge of the information,’
‘acts in deliberate ignorance of the truth or falsity of the infor-
mation,’ or ‘acts in reckless disregard of the truth or falsity of
the information.’” Universal Health Servs., Inc. v. United States
ex rel. Escobar, 579 U.S. 176, 182 (2016), quoting 31 U.S.C.
§ 3729(b)(1)(A)(i)–(iii). A “speciﬁc intent to defraud” is not re-
quired. 31 U.S.C. § 3729(b)(1)(B).
    Complicating matters further for classifying a settlement
reached in 2019, the scienter standard under the False Claims
Act is a moving target. In light of a circuit split on that stand-
ard, the Supreme Court recently heard argument in two cases
from this circuit. See United States ex rel. Schutte v. SuperValu
Inc., 9 F.4th 455 (7th Cir. 2021), cert. granted, No. 21-1326 (Jan.
13, 2023); United States ex rel. Proctor v. Safeway, Inc., 30 F.4th
649 (7th Cir. 2022), cert. granted, No. 22-111 (Jan. 13, 2023).
    In short, the fact that a party has been accused of (let alone
just investigated for) violating the False Claims Act or the
Anti-Kickback Statute falls well short of establishing that its
payment to settle such an accusation or investigation is unin-
surable.

violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(g) (“In addi-
tion to the penalties provided for in this section or section 1320a-7a of this
title, a claim that includes items or services resulting from a violation of
this section constitutes a false or fraudulent claim for purposes of sub-
chapter III of chapter 37 of Title 31.”).
No. 21-3075                                                                23

            b. Whether the Evidence Supports a Reasonable Infer-
               ence of Fraud Without a Final Adjudication
    At best, for Federal, whether Astellas actually committed
fraud depends on the evidence. With no underlying litigation,
Federal’s burden is high. Illinois law does not allow an insurer
to try fully the merits of the settled claim to prove that the
insured’s loss is uninsurable. Indeed, “requiring that in-
sureds” litigate in an insurance action “the entire case which
was to be oﬀered against them” would likely “have a chilling
eﬀect on settlements.” United States Gypsum, 643 N.E.2d at
1239–42, 1244 (reviewing only the record from the underlying
action). Rather, Federal must rely solely on the existing record
evidence. See Commonwealth Edison, 752 N.E.2d at 563–65
(noting that “the nature of the pleadings, the pretrial discov-
ery, evidence and testimony presented during the trial prior
to settlement would be relevant to establish” whether the
claim would have likely been covered or not if it had pro-
ceeded to a ﬁnal adjudication), quoting United States Gypsum,
643 N.E.2d at 1244.
    Like the Illinois courts, therefore, we “must consider the
facts and circumstances” of the particular case to determine
whether a settlement payment violates public policy. See Gul-
liver’s East, Inc. v. California Union Ins. Co., 118 Ill. App. 3d 589,
74 Ill. Dec. 234, 455 N.E.2d 264, 265 (1983) (discussing whether
a contract clause, rather than a settlement payment, violated
public policy). This is an objective inquiry. 5

    5   Federal is correct that this objective inquiry does not depend on
whether the insured expressly admits liability. It would make little sense
if it did. All of the cases giving rise to the “primary focus” standard in-
volved an insured trying to prove that it reasonably thought it might be found
liable if the underlying action had resulted in a final judgment instead of a
24                                                            No. 21-3075

    When Illinois courts apply this “primary focus” test, they
may analyze the evidence upon which the claim could have
been adjudicated. See United States Gypsum, 643 N.E.2d at
1245–47 (reviewing physical evidence, deposition, trial, and
expert witness testimony, and reports and recommendations
by federal and state health and environmental agencies); Com-
monwealth Edison, 752 N.E.2d at 565 (considering allegations
in pleadings and evidence presented in both underlying and
coverage actions, including depositions, corroborating wit-
nesses, and party stipulations); Binney & Smith, 913 N.E.2d at
48–54 (accounting for factual allegations in underlying com-
plaint and aﬃdavits from parties and their counsel); Rosalind
Franklin University, 8 N.E.3d at 39–43 (reviewing underlying
complaint’s factual allegations and requests for relief irre-
spective of legal theories). 6
   Whether Federal can show that Astellas would have been
found liable for fraud under the False Claims Act and the
Anti-Kickback Statute if those claims had been litigated de-
pends “on the quality and quantity of proof” that would have

settlement. See United States Gypsum, 643 N.E.2d at 1244–47 (insured try-
ing to show that it reasonably anticipated liability for property damage);
Edison, 752 N.E.2d at 564–65 (same for wrongful death and related dam-
ages); Binney & Smith, 913 N.E.2d at 47–53 (same for deceptive trade prac-
tices and warranty breach); Santa’s Best, 611 F.3d at 348, 352 (same for “slo-
gan infringement”).
     6While we suggested in Santa’s Best that the district court could, on
remand, supplement the record evidence with further briefing or “an evi-
dentiary hearing,” 611 F.3d at 352, decisions of the courts of Illinois do not
invite such expansion of the record. Allowing such expansion would trend
more and more toward requiring that insureds litigate “the entire case”
that might have been offered against them. United States Gypsum, 643
N.E.2d at 1244.
No. 21-3075                                                  25

been “oﬀered against [Astellas] in the underlying action.” See
United States Gypsum, 643 N.E.2d at 1245.
    To avoid the need to show objective evidence of fraud,
Federal relies on our statement in Ryerson that if the insured
there could have obtained reimbursement from Federal, it
would “have gotten away with fraud,” for “if [the] claim that
[the insured] agreed to settle was not completely meritless,
some portion of the [settlement payment] was proceeds of
fraud.” 676 F.3d at 612. Federal tries to reframe this statement
as a binding command for all settlements paid after fraud is
alleged.
    We read that comment diﬀerently, as a case-speciﬁc obser-
vation grounded in the facts in that case. In Ryerson, we knew
from the underlying litigation—lasting more than three
years—that the adverse party in the underlying action had ac-
tively sought restitutionary relief based on fraudulent con-
cealment. 676 F.3d at 612. And we knew from the settlement
agreement itself that the insured had made partial restitution,
restoring to the other party funds that the insured had ob-
tained in the allegedly fraudulent transaction. Id. We did not
infer fraud from the fact of settlement, nor did we make any
ﬁnding of fraud. All we did in Ryerson was see that the settle-
ment payment there was clearly restitutionary in nature and
conﬁrm that it was uninsurable. In the portions of the opinion
upon which Federal relies, we were explaining the public pol-
icy justiﬁcations for treating restitution as uninsurable.
    Ryerson was a relatively straightforward case where we
saw restitution and called it restitution. This case is not as
straightforward. Here, Federal wants to support an inference
that the settlement was restitutionary by arguing that Astellas
would have been liable for fraud under the False Claims Act
26                                                   No. 21-3075

and Anti-Kickback Statute. That is, Federal tries to show that
Astellas settled the potential claims against it in “reasonable
anticipation of liability.” See United States Gypsum, 643 N.E.2d
at 1244. Federal must point to evidence in the record to sup-
port that inference. Federal’s evidence on this point is, how-
ever, too weak to avoid summary judgment. We summarize
Federal’s evidence and then the contrary evidence, and then
we explain why room for debate about Astellas’ actions does
not preclude summary judgment.
              (1) Federal’s Evidence of Reasonably Anticipated Li-
                  ability for Fraud
    Federal relies ﬁrst on declarations by Astellas’ lawyer han-
dling the investigation. He said that the government’s inves-
tigation “focused primarily on Medicare Part D payments”
for Xtandi. The Department of Justice believed that Astellas
was using patient assistance programs “as conduits to funnel
impermissible copay assistance to Xtandi patients in violation
of the Anti-Kickback Statute … , thereby causing Medicare
beneﬁciaries to submit false claims” in violation of the False
Claims Act.
   Second, Federal relies on the proﬀer made by the Astellas
marketing executive. The executive made clear that he “un-
derstood that the majority of patients prescribed Xtandi
would be covered by Medicare,” that a signiﬁcant number of
them would be unable to aﬀord their co-pays, and that oncol-
ogists had recommended contributing to patient assistance
programs to ensure broader access to Xtandi.
     Third, Federal describes how Astellas chose to structure
its contributions. In May 2013, the marketing executive talked
with the Chronic Disease Fund and the Patient Network
No. 21-3075                                                 27

Foundation about setting up new funds to provide co-pay as-
sistance to patients being treated with androgen receptor in-
hibitors. Only Xtandi and a few other medications would be
covered. According to one Astellas lawyer helping with the
investigation, the Department of Justice thought Astellas
chose to make these charitable donations because doing so
might “generate revenue.”
    The Department of Justice theorized that the supposedly
charitable donations violated the Anti-Kickback Statute, in
part, due to the 2005 guidance issued by the Oﬃce of the In-
spector General. The guidance was “concerned that, in some
cases, charities may artiﬁcially deﬁne their disease categories
so narrowly that the earmarking eﬀectively results in the sub-
sidization of one (or a very few) of donor’s particular prod-
ucts.” 70 Fed. Reg. at 70627. Examples included deﬁning dis-
ease categories “by reference to speciﬁc symptoms, severity
of symptoms, or the method of administration of drugs, ra-
ther than by diagnoses or broadly recognized illnesses or dis-
eases.” Id. But Anti-Kickback Statute concerns would be at a
minimum where the patient assistance program does not
“function as a conduit for payments by the pharmaceutical
manufacturer to patients and [does] not impermissibly inﬂu-
ence beneﬁciaries’ drug choices.” Id. at 70626–27. Suspecting
that Astellas’ arrangement of and contributions to the andro-
gen receptor inhibitor funds ran contrary to this guidance, the
government investigated.
    On its own, this evidence shows what we already know—
the government suspected that Astellas might be in violation
of the False Claims Act and the Anti-Kickback Statute, and it
investigated Astellas based on those suspicions. This evidence
does not support the inference Federal asks us to accept.
28                                                  No. 21-3075

              (2) Astellas’ Evidence Against Reasonably Antici-
                  pated Liability for Fraud
    Even if Federal’s evidence were stronger, there are also
countervailing facts that further lessen the evidence’s proba-
tive value. For example, in his proﬀer, the Astellas executive
maintained that while he had “hoped” there would be a ﬁ-
nancial beneﬁt to Astellas, the “primary purpose of the dona-
tions … was charitable,” regardless of any “expected or antic-
ipated” proﬁts. To be sure, when the executive learned that
more patients were switching to Xtandi, he exclaimed in an e-
mail, “Hooray! The system is working as we promised!!” And
donations to the funds would remain high so long as Astellas’
“trend line is increasing.” But the executive was also clear that
Astellas made no eﬀorts to “quantify the number of
switches,” or to “calculate[ ] a return on investment.” He said
there were just too many “variables that made any ﬁnancial
beneﬁt uncertain.” Federal has not oﬀered evidence directly
disputing his testimony.
              (3) Why the Evidence Does Not Preclude Summary
                  Judgment.
    Counterbalanced by contrary evidence in the record, Fed-
eral’s evidence falls well short of proof of the requisite scien-
ter for the intentional, knowing, and willful fraud the False
Claims Act and Anti-Kickback Statute require. It cannot,
therefore, support an inference that Astellas would have been
liable if the government had litigated the potential claims.
Even if the funds were erroneously structured and Astellas’
donations to them were improper, to meet the False Claims
Act’s scienter standard as this court currently construes it, the
government would have had to show that Astellas’ approach
to providing subsidies was objectively unreasonable and
No. 21-3075                                                   29

contrary to the regulatory guidance. See SuperValu, 9 F.4th at
464 (establishing current circuit law), citing Safeco Ins. Co. of
America v. Burr, 551 U.S. 47, 70 (2007).
    In this case, undisputed evidence shows that, before the
funds were created or any donations were made, both patient
assistance plans consulted independent outside counsel.
Counsel for both foundations determined that the funds were
“appropriate” under the government’s guidance. Astellas’
counsel conferred with the foundations’ outside lawyers, who
had “each independently approved” the funds. And only af-
ter obtaining legal advice from regulatory experts at an out-
side law ﬁrm, who thought the funds would meet the require-
ments in the guidance, did Astellas’ in-house counsel give its
approval as well. Federal has not called into question Astellas’
good faith in seeking legal advice before proceeding with the
patient assistance program contributions. Given the absence
of stronger evidence of fraudulent scienter and the undis-
puted evidence of the legal advice Astellas, the Chronic Dis-
ease Fund and the Patient Network Foundation obtained in
structuring the funds and making the charitable donations,
Federal has not come forward with evidence that would allow
a reasonable jury to ﬁnd that Astellas acted with fraudulent
intent, let alone that the settlement of the potential claims was
entirely restitutionary.
   Nor is it clear that the arrangement was contrary to the
regulatory guidance. The Astellas executive’s “understanding
was that ‘a fund could not classify a disease area too nar-
rowly.’” That understanding accords with the guidance. The
guidance discussed many factors other than just narrow clas-
siﬁcation, but classiﬁcation was a critical factor. The guidance
was speciﬁcally concerned with “artiﬁcially” deﬁning
30                                                    No. 21-3075

“disease categories” too narrowly and included examples
that, importantly, did not include how the drug functions,
which is how the two foundations here deﬁned the androgen
receptor inhibitor funds. See 70 Fed. Reg. at 70627.
   In sum, it is far from clear from the record that Astellas’
conduct would meet the scienter requirements of both the
False Claims Act and the Anti-Kickback Statute if the Depart-
ment of Justice had elected to litigate rather than to settle. It is
one thing to suspect fraud. It is another thing to prove it.
    In this insurance dispute, we need not decide whether As-
tellas could have won a hypothetical motion for summary
judgment on False Claims Act and Anti-Kickback Statute
claims if the government had actually ﬁled any. Nor do we
need to decide whether the government could have won a
motion for summary judgment. The point here is that the par-
ties agreed to settle those potential claims rather than litigate
them to a ﬁnal judgment. Each side would have had some ev-
idence favoring its position, and each side preferred to agree
to the settlement rather than litigate. In this insurance dispute,
the burden is on Federal to show that the settlement was (en-
tirely) restitutionary in nature, and it has not oﬀered evidence
suﬃcient to show that.
    On this point, the Illinois Appellate Court’s decision in
Gulliver’s East, Inc. v. California Union Insurance is instructive.
In Gulliver’s East, the defendant insurer had issued a ﬁre in-
surance policy to an Illinois restaurant. 455 N.E.2d at 265. The
policy provided that the insurer could not raise arson as a de-
fense to coverage absent “an indictment and conviction” for
arson. Id. After the restaurant was destroyed by ﬁre, the in-
surer investigated and found that the ﬁre had been set inten-
tionally by someone acting on behalf of the restaurant. The
No. 21-3075                                                    31

insurer denied coverage. Gulliver’s East sued for a declara-
tory judgment that the indictment and conviction require-
ment was enforceable and not, as the insurer argued, contrary
to Illinois public policy. Id.
    The appellate court aﬃrmed the trial court’s decision to
enforce the exclusion’s requirement for indictment and con-
viction. The appellate court rejected the insurer’s argument
that the clause encouraged arson, reasoning that the “parties
did not agree to indemnify unconvicted arsonists, but rather
agreed in advance to the manner in which [the insurer] could
raise and establish the arson defense.” Id. While Illinois public
policy “discourage[ed] the intentional burning of property for
proﬁt,” the arson clause “delegate[d] the arson assessment to
a disinterested party, the prosecuting authorities.” Id. The in-
surer’s opinion that the ﬁre was the result of arson was not
suﬃcient to defeat coverage based on Illinois public policy. Id.
“Once there was a conviction,” however, not only could the
insurer contractually raise the defense of arson, but that de-
fense would align “with the public policy against arson and
the general policy of preventing wrongdoers from proﬁting
from their intentionally wrongful acts.” Id. at 266. Those
found guilty of arson would be prevented from unjustly prof-
iting from their crimes, id., but mere allegations or suspicions
would not suﬃce. Rejecting a lesser showing or suspicion was
not contrary to Illinois public policy.
    Just as the parties in Gulliver’s East agreed to “ﬁnal adjudi-
cation” exclusions and thereby “delegate[d] the arson assess-
ment to a disinterested party, the prosecuting authorities,”
455 N.E.2d at 265, so here Federal and Astellas agreed to the
“ﬁnal adjudication” exclusions discussed above. They dele-
gated assessment of possible “illegal remuneration,”
32                                                          No. 21-3075

“deliberate fraudulent act[s],” or “willful violation[s] of law”
to a third-party adjudicator in an action brought by a third
party. As in Gulliver’s East, where the insurer’s opinion re-
garding the insured’s culpability was insuﬃcient to deny cov-
erage under the contract, so here Federal’s belief that Astellas
committed fraud and proﬁted from it because Astellas was in-
vestigated for fraud and paid to settle potential claims is like-
wise insuﬃcient to deny coverage. See also USA Gymnastics
v. Liberty Ins. Underwriters, Inc., 27 F.4th 499, 520–22, 534 (7th
Cir. 2022) (applying Indiana law to similar “ﬁnal adjudica-
tion” exclusion in directors-and-oﬃcers policy, denying in-
surance coverage for 10 claims of criminal sexual conduct
where an insured had been adjudicated “formally guilty,” but
ordering coverage for 115 settled claims based on same type
of alleged criminal conduct). 7
    To reiterate, an insurance coverage dispute is not a forum
for trying the merits of the potential claims against the in-
sured. Demanding that insureds litigate “the entire case” that
might have been oﬀered against them would “have a chilling
eﬀect on settlements.” United States Gypsum, 643 N.E.2d at
1239–42, 1244.

     7 Nor can we, as Federal suggests, draw a reasonable inference against

Astellas simply because the company chose to settle with the government
for $100 million. This was not a mere nuisance settlement, cf. Level 3, 272
F.3d at 911–12, but $100 million was well below the government’s initial
damages estimate without statutory multipliers ($460 million) and much
less than the nearly $1.4 billion the government might have sought with
the False Claims Act’s damages multiplier.
No. 21-3075                                                  33

          c. Whether the Settlement Payment was Entirely Res-
             titutionary
    Even if Federal had oﬀered stronger evidence of scienter,
that would not be enough to show that the settlement pay-
ment was restitutionary. Proving fraud does not necessarily
prove restitution. Level 3, 272 F.3d at 911 (“We can imagine
situations in which there would be a covered loss” even
though the insured was found liable for fraudulent conduct.).
The critical question under Illinois public policy is whether
the payment was restitutionary. Federal has not shown that it
was, and certainly not that it was entirely restitutionary. See
Santa’s Best, 611 F.3d at 352 (“the proper inquiry is whether
the claims were not even potentially covered by the insurance
policy”) (emphasis in original). The False Claims Act does not
provide for restitutionary damages, and Federal has not of-
fered suﬃcient evidence to ﬁnd either fraud or disgorgement
of proﬁts.
              (1) The False Claims Act’s Remedies
     Federal might show that the settlement payment was res-
titutionary if it could show that violations of the False Claims
Act and Anti-Kickback Statute are necessarily remedied via
restitution rather than compensation. The district court found
the opposite: the False Claims Act “allows only for civil pen-
alties and compensatory damages, not for restitution.” Astel-
las, 566 F. Supp. 3d at 900. We agree.
     The False Claims Act provides that anyone who has vio-
lated the Act “is liable to the United States Government for a
civil penalty … plus 3 times the amount of damages which the
Government sustains” because of such violation. 31 U.S.C.
§ 3729(a)(1) (emphasis added). The Supreme Court “has
34                                                    No. 21-3075

explained many times over many years that, when the mean-
ing of the statute’s terms is plain, our job is at an end.” Bostock
v. Clayton County, 140 S. Ct. 1731, 1749 (2020). The False
Claims Act speaks in terms of “damages.”
    Still, as discussed above, labels cannot always be taken at
face value in this context of public policy and insurability. The
Supreme Court has also said that “the chief purpose” of the
False Claims Act’s civil penalties “was to provide for restitu-
tion to the government of money taken from it by fraud.”
United States v. Bornstein, 423 U.S. 303, 314 (1976), quoting
United States ex rel. Marcus v. Hess, 317 U.S. 537, 551 (1943)
(emphasis added). This observation might settle the matter
were it not for both the statutory text and the inconsistent use
of the word “restitution,” Raintree Homes, 807 N.E.2d at 444,
as well as the Court’s later statement in Bornstein “that the de-
vice of [multiplied] damages … was chosen to make sure that
the government would be made completely whole.” 423 U.S.
at 314, quoting Hess, 317 U.S. at 551–52. Making the govern-
ment whole is the language of compensatory damages. Born-
stein went on to discuss only compensatory damages and to
hold that “in computing the [multiplied] damages authorized
by the Act, the Government’s actual damages are to be [mul-
tiplied] before any subtractions are made for compensatory
payments previously received by the Government.” 423 U.S.
at 315–16. The Court’s passing use of the word “restitution”
in Bornstein, which addressed how to calculate damages un-
der the Act, did not address, let alone resolve, our inquiry
about the nature of Astellas’ settlement payment.
   Where a statutory term is undeﬁned, “we ask what that
term’s ‘ordinary, contemporary, common meaning’ was
when Congress enacted” the statute. Food Marketing Institute
No. 21-3075                                                   35

v. Argus Leader Media, 139 S. Ct. 2356, 2362 (2019), quoting
Perrin v. United States, 444 U.S. 37, 42 (1979). Toward that end,
it can sometimes be helpful to consider dictionary deﬁnitions
from the time of the statute’s enactment “because they are
evidence of what people at the time of a statute’s enactment
would have understood its words to mean.” Bostock, 140 S. Ct.
at 1766, citing John F. Manning, Textualism and the Equity of the
Statute, 101 Colum. L. Rev. 1, 109 (2001). But dictionaries oﬀer
many deﬁnitions, both broad and narrow, without reliable
guides for choosing among them for particular legal
purposes. See generally Jordan v. De George, 341 U.S. 223, 234
(1951) (Jackson, J., dissenting) (describing dictionaries as “the
last resort of the baﬄed judge”); Frank H. Easterbrook, Text,
History, and Structure in Statutory Interpretation, 17 Harv. J.L.
& Pub. Pol’y 61, 67 (1994) (“the choice among meanings [of
words in statutes] must have a footing more solid than a
dictionary—which is a museum of words, an historical
catalog rather than a means to decode the work of
legislatures”).
    When the False Claims Act was enacted in 1863, “dam-
ages” meant “[t]he value, estimated in money, of something
lost or withheld; the sum of money claimed or adjudged to be
paid in compensation for loss or injury sustained.” Damage, 4
The Oxford English Dictionary 224 (2d ed. 1989). That deﬁni-
tion aligns with the statute’s text, which speaks of “damages
which the Government sustains.” 31 U.S.C. § 3729(a)(1). Inju-
ries are sustained by victims. So are losses and damages. Prof-
its or proceeds for a wrongdoer are not. The context of the
word “damages” in the False Claims Act supports reading the
word according to its “ordinary, contemporary, [and] com-
mon meaning” in 1863. That is, “damages” points in the di-
rection of “compensation” rather than “restitution.”
36                                                    No. 21-3075

    As we have said, however, we have to be careful about the
slippery uses of words like “damages.” Raintree Homes, 807
N.E.2d at 444; Murphy, Misclassifying Monetary Restitution, 55
SMU L. Rev. 1577 (2002). But “where a statute expressly pro-
vides a particular remedy or remedies, a court must be chary
of reading others into it.” Transamerica Mortgage Advisors, Inc.
v. Lewis, 444 U.S. 11, 19 (1979); see also United States v. Science
Applications Int’l Corp., 626 F.3d 1257, 1270 (D.C. Cir. 2010)
(recognizing “the risks created by an excessively broad inter-
pretation” of False Claims Act).
     “The presumption that a remedy was deliberately omitted
from a statute is strongest when Congress has enacted a com-
prehensive legislative scheme including an integrated system
of procedures for enforcement.” Massachusetts Mut. Life Ins.
Co. v. Russell, 473 U.S. 134, 147 (1985), quoting Northwest Air-
lines, Inc. v. Transport Workers, 451 U.S. 77, 97 (1981); see also
Mortgages, Inc. v. United States Dist. Court, 934 F.2d 209, 213
(9th Cir. 1991) (declining to create “additional federal com-
mon law” because False Claims Act “includes comprehensive
procedures for enforcement”). “This approach is especially
appropriate in this case where the Government can pursue
other remedies (such as administrative proceedings and com-
mon law unjust enrichment claims) if it so chooses.” United
States ex rel. Taylor v. Gabelli, No. 03 CIV 8762(PAC), 2005 WL
2978921, at *8 (S.D.N.Y. Nov. 4, 2005) (thoroughly analyzing
availability of restitution under False Claims Act and ﬁnding
that only compensatory damages are available); see also Call
One Inc. v. Berkley Ins. Co., 587 F. Supp. 3d 706, 716–17 (N.D.
Ill. 2022) (canvassing cases on False Claims Act remedies to
ﬁnd that Illinois analogue “provides for compensatory dam-
ages or actual loss, not disgorgement, as a remedy”); United
States ex rel. Tyson v. Amerigroup Ill., Inc., 488 F. Supp. 2d 719,
No. 21-3075                                                  37

732 (N.D. Ill. 2007) (“Disgorgement of proﬁts is not a remedy
recoverable” under False Claims Act). As best we can tell, no
court has ever interpreted the False Claims Act as allowing
restitutionary remedies. See Taylor, 2005 WL 2978921, at *8
(surveying case law). We are not persuaded that we should be
the ﬁrst to treat “damages” under the False Claims Act as res-
titutionary rather than compensatory, particularly in the con-
text of a dispute over insurance coverage for claims that were
never even formally asserted.
              (2) Whether the Government Obtained Restitution
    Federal argues further that the settlement payment here is
restitutionary because it “both disgorges some of the proceeds
Astellas realized from its fraud scheme and uses the disgorge-
ment to return funds to the victim of the scheme.” That is,
Federal contends that the settlement payment “required As-
tellas to return a subset of its fraud proceeds to the govern-
ment in repayment for false” Medicare claims.
    Federal starts with the fact that the settlement agreement
itself labeled half of the payment as “restitution to the United
States.” Federal argues that this “restitution” label shows that
the settlement payment “expressly encompassed” the pro-
ceeds of fraud. We are not persuaded, for two reasons beyond
our skepticism about labels. See Ryerson, 676 F.3d at 613 (“the
label isn’t important”).
    First, we have undisputed evidence about the tax reasons
for that designation. Money paid to the government “in rela-
tion to … [an] investigation” by the government “into the po-
tential violation of any law” is not tax deductible unless the
amount “constitutes restitution” and “is identiﬁed as restitu-
tion” in a “settlement agreement.” 26 U.S.C. § 162(f), as
38                                                 No. 21-3075

amended by the Tax Cuts and Jobs Act of 2017; see also Astel-
las, 566 F. Supp. 3d at 898 (district court’s explanation of tax
reasons for settlement language).
     Astellas’ lead counsel in the government’s investigation
testiﬁed that, since the Tax Cuts and Jobs Act amended the tax
code in 2017, the Department of Justice has incorporated this
“restitution to the United States” language into all settlement
agreements. During settlement negotiations, the government
told the lawyer that “the purpose of identifying $50 million as
restitution to the United States was to comply” with the Tax
Cuts and Jobs Act. The lawyer had suggested that the settle-
ment agreement speciﬁcally acknowledge the tax purposes of
the “restitution” label, but the Department of Justice rejected
that proposal because of its “long-standing policy” against
modifying its standard settlement template. We are not per-
suaded that the label for federal tax purposes is probative of
Illinois public policy on moral hazard and insurability.
   Second, even if the restitution label were probative for our
question, the label applied to only half of the settlement. The
half that was not subject to that label far exceeded Federal’s
policy limit of $10 million. It is Federal’s burden to show that
the payment was “not even potentially covered.” Santa’s Best,
611 F.3d at 352. The label does not help Federal make this
showing.
              (3) Whether Alleged Proﬁts Require Restitutionary
                  Payment
   Federal also asserts that Astellas actually came into pos-
session of some “ill-gotten gain,” some form of fraudulent
proceeds, that it returned to the government in the settlement.
Federal asks us to assume that Astellas beneﬁted from the
No. 21-3075                                                   39

alleged scheme, but it has not oﬀered evidence that would al-
low a reasonable inference that Astellas actually beneﬁted
from the alleged scheme. Federal argues that any “kickback-
tainted payments for Xtandi” that Medicare paid out “neces-
sarily accrued to Astellas through the ordinary operation of
the pharmaceutical distribution and payment chain, generat-
ing revenues to which Astellas was not entitled.” But why
“necessarily”? Federal argues that this “kind of payment is
inherently restitutionary.” Why “inherently”? There must be
some evidence of proﬁt, beneﬁt, or proceeds for this argument
to work, and Federal has not oﬀered any.
    Federal points to the Astellas executive’s statements that
he “expected or anticipated” Astellas to beneﬁt ﬁnancially
from the charitable donations, that the donations would
“have a positive impact on business,” that Astellas would
keep donating while the “trend line is increasing,” and that
“it was ‘obvious’” that Astellas would lose revenue without
the donations. This evidence does not establish as undis-
puted, as Federal contends, that Astellas actually received
substantial proceeds from the scheme.
     As Federal points out, Astellas never calculated any prof-
its. More to the point, neither has Federal. Federal says this is
irrelevant. We disagree, at least to the extent that Federal is
trying to prove the settlement was restitutionary based on
supposed disgorgement of proﬁts. Federal asserts that “no-
body needs to know” Astellas’ total proﬁt to recognize that
the settlement forced Astellas “to return money it took by
fraud and never should have had in the ﬁrst place.” We disa-
gree. Without evidence, Federal asks us to assume both fraud-
ulent proceeds and disgorgement of those proceeds. We can-
not make that assumption. Recall again that Federal wrote a
40                                                           No. 21-3075

policy promising coverage to the limits of law and public pol-
icy. It has the burden of showing that a public policy exclu-
sion applies. 8
    On this point, Federal’s reliance on Level 3 and Ryerson is
misplaced. Federal asserts that, as in those cases, the settle-
ment payment here represented a return of part or maybe all
of the proﬁt that Astellas had obtained. See Ryerson, 676 F.3d
at 612; Level 3, 272 F.3d at 911. In both of those cases, however,
there were more speciﬁc reasons to think that the payments
were restitutionary. Unlike the primary underlying claim
here, which allows only for compensatory damages, the un-
derlying claim in Level 3 was for securities fraud, where the
“standard damages relief … is restitutionary in character.”
272 F.3d at 910. And in Ryerson, we knew that the settlement
payment partially refunded a purchase price that had been
inﬂated by the insured’s fraudulent concealment. 676 F.3d at
612.
    The False Claims Act is diﬀerent, as we have explained,
and the focus in litigation is on damages the government sus-
tained. Still, Federal insists that because a False Claims Act
violation that incorporates an Anti-Kickback Statute violation
requires that all of the government’s loss be paid back, Astel-
las’ gains were necessarily returned to the government. This
argument misconstrues the rationale for the False Claims

     8 To be clear, we do not mean to suggest that Federal’s theory that the
settlement was restitutionary required it to prove that Astellas profited in
a technical or accounting sense. We are saying that Federal needed to offer
some evidence that would allow a reasonable inference of benefits to As-
tellas that were returned to the government in the settlement, and that the
benefits were large enough such that any insurance coverage would
amount to coverage of restitution. Federal did not meet that burden.
No. 21-3075                                                  41

Act’s remedial measures. As we observed in United States v.
Rogan, through Medicare, the “government oﬀers a subsidy
… with conditions. When the conditions are not satisﬁed,
nothing is due[ ]” from the government, so when false claims
have been made, “the entire amount that” was paid out “must
be paid back.” 517 F.3d 449, 453 (7th Cir. 2008). Regardless of
whether a drug manufacturer like Astellas accrues proﬁts or
losses via false claims, the government will receive the same
amount in damages, its total potential losses, with the multi-
plier acting “to make sure that the government [is] made com-
pletely whole.” Bornstein, 423 U.S. at 314, quoting Hess, 317
U.S. at 551–52. Federal would have us infer from this legal ﬁc-
tion of “total compensation” that any proﬁts are necessarily
encompassed by the settlement payment.
    The opposite inference prevails. The False Claims Act’s re-
medial scheme does not depend at all on the defendant’s (po-
tential) proﬁts or losses. In the absence of any evidence of
proﬁts or proceeds, we must assume that the settlement pay-
ment was measured not against disgorgement of (not-yet-al-
leged) fraudulent gains but against making the government
“completely whole.” Bornstein, 423 U.S. at 314, quoting Hess,
317 U.S. at 552. In negotiations here, the government based its
damages estimates on the number of Medicare subsidies for
Xtandi that were paid on behalf of patients receiving assis-
tance from the androgen receptor inhibitor funds. That is, ac-
counting for neither Astellas’ potential proﬁts nor for the gov-
ernment’s actual losses, the government sought the undimin-
ished compensation available to it under the False Claims Act.
For all we know on the evidence before us, Astellas may have
lost money. Federal has the burden, ultimately to prove, but
on summary judgment to oﬀer evidence, that an exclusion ap-
plies. Again, this lack of evidence is decisive.
42                                                  No. 21-3075

     And again, even if we could ﬁnd that $50 million was
probably restitutionary, the other $50 million would remain
compensatory and insurable. In other words, Federal would
still have to show that the $10 million Astellas seeks to recover
under the insurance policy applies to an uninsurable portion
of the settlement payment. Even in cases where settlement
payments unquestionably included some restitution, Illinois
courts have given the beneﬁt of the doubt to the insureds. In
Rosalind Franklin University, the settlement “disposed of all of
the underlying plaintiﬀs’ claims, including” some claims that
clearly required disgorgement. 8 N.E.3d at 39. The Illinois Ap-
pellate Court found that the settlement payment as a whole
“did not represent disgorgement.” Id.
    In sum, we agree with the district court that the undis-
puted facts show that the settlement payment here was not
restitutionary, so insurance coverage is available. If the Illi-
nois courts disagree on the broader issues, they of course have
“the last word.” Erie Railroad Co., 304 U.S. at 79. The judgment
of the district court is AFFIRMED.