Companies regularly are required to interpret ambiguous and vague regulatory provisions. Today, the United States Supreme Court heard oral arguments in a pair of consolidated cases to determine whether a defendant's subjective interpretation of an ambiguous regulation is relevant to determining the knowledge (or scienter) element of the False Claims Act or, as the Seventh Circuit held in the case below, that once a defendant can articulate an objectively reasonable interpretation its contemporaneously held subjective belief is irrelevant to the knowledge inquiry. The issue is a significant one for both the government and relators on one side, and potential defendants on the other, as False Claims Act (FCA) liability imposes treble damages and penalties exceeding $20,000 per claim as well as relators' attorneys' fees and costs.
The Seventh Circuit case below turned on the FCA's knowledge element, which reaches claims that are "knowingly" false which includes (1) actual knowledge, (2) deliberate ignorance of the truth or falsity of the information, or (3) reckless disregard of the truth or falsity of the information.
The Court's questioning did not signal the likely decision. All of the Justice asked questions, allowing both Relators and the government (collectively, Petitioners) and Defendants (Respondents) to exceed the established time limits. Three lines of arguments and questioning stood out, however. First, both sides were candid that they were...
A slew of NYPD officers recounted on Sunday horror stories from their careers in which they say they were falsely accused of sexual misconduct and, despite being exonerated, had the allegations sh...