If an interpretation of a law is objectively reasonable, a defendant’s actual state of mind is irrelevant. This is what the majority of a US Court of Appeals for the Fourth Circuit panel held when affirming dismissal of a relator’s False Claims Act (FCA) qui tam suit alleging Medicaid fraud in United States ex rel. Sheldon v. Allergan Sales, LLC.[1] With this decision, the Fourth Circuit joined five other appeals courts in applying the Supreme Court of the United States’ decision in Safeco Insurance Co. of America v. Burr [2] to FCA cases and holding that a defendant cannot act with the requisite state of mind, or scienter (which can be satisfied through showing knowledge, deliberate ignorance or recklessness), when the defendant is acting under an “objectively reasonable” reading of a statute and was “not warned away from that interpretation by authoritative guidance.” [3]
The ruling, and the similar rulings that preceded it, are important for subjects of FCA investigations and defendants in qui tam litigation who have operated under objectively reasonable interpretations of statutes and regulations. It has broad implications across an array of healthcare topics governed by laws that are ambiguous or subject to multiple reasonable interpretations, including topics discussed later in this report. For example, statutes and regulations aimed at responding to the COVID-19 pandemic are sure to be the source of enforcement activity and qui tam litigation for...
A front-page article with the byline of veteran New York Times opinion writer Nicholas Kristof is the latest poisonous example of what I call the NGO “halo effect.” Headlined “The Silence That Mee...