No Ambiguity Here: Multiple Courts Reaffirm That Reasonable Interpretations of Ambiguous Statutes or Regulations Defeat Scienter
Companies operating in heavily regulated industries are subject to a morass of statutory, regulatory, and contractual requirements that, to be generous to the government drafters, are often less than clear. But ambiguity has never dissuaded relators from bringing FCA suits based on alleged noncompliance with the relators’ subjective view of the applicable law. Two recent decisions reaffirm an important protection for companies defending these types of suits—that reliance on a reasonable interpretation of an ambiguous statute or regulation generally precludes a finding of knowing or reckless conduct necessary to impose FCA liability.
