Astellas US Holding, Inc. v. Federal Insurance Company ( 2023 )


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  •                               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.