Fourth Circuit Limits Who Can Act “Knowingly” Under False Claims Act
In United States ex rel. Sheldon v. Allergan Sales, LLC, the Fourth Circuit held that a defendant cannot be liable under the FCA if its conduct comports with an objectively reasonable interpretation of the applicable law, and if it has not been warned away from that interpretation by authoritative guidance. Notably, the Fourth Circuit enforced this principle to affirm the dismissal of an FCA complaint on the pleadings. It has now joined five other circuits in applying this standard to the FCA, strengthening defendants’ arguments for dismissal of FCA lawsuits, but recent dissents in these cases suggest that the issue is not yet settled.
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