Pratt’s Gov’t Contracting Law Report Publishes False Claims Act Article by Robert Salcido

"Multiple Appellate Courts Now Rule That Government and Relator Cannot Take Advantage of Ambiguous Law to File False Claims Act Lawsuit to Obtain Treble Damages and Civil Penalties," an article by Akin Gump health care and life sciences partner Robert Salcido, has been published by Pratt's Government Contracting Law Report.

The article discusses how, in recent developing case law, more than a half-dozen appellate courts based on U.S. Supreme Court precedent, have ruled that "when a defendant has a reasonable interpretation of an ambiguous statute, regulation or contract and there is no official governmental guidance to warn defendant away from its reasonable interpretation, there can be no False Claims Act liability."

In this article, Salcido discusses how, in the context of case law, then, companies can reduce their liability exposure by staying abreast of federal rules and regulations on payment. When those rules allow ambiguity, he writes, companies should adopt a reasonable interpretation of what the rules require and should document their deliberative process.

He uses the Fourth Circuit's ruling in U.S. ex rel. Sheldon v. Allergan Sales, LLC as an example of how multiple appellate courts are following the Supreme Court "reasonable interpretation" standard in the 2007 case Safeco Insurance Co. of America v. Burr and discusses how the Fourth Circuit in Sheldon joined six other appellate courts in ruling that reasonable interpretation of ambiguous law provides a dispositive False Claims Act defense.

Salcido closes by offering specific steps defendants can take to establish such a "reasonable interpretation" defense, noting some dissent to the appellate court determinations and concluding, "Collectively, these multiple appellate court rulings instruct that the government and relator can no longer seize upon legal ambiguities to bring FCA actions seeking treble damages and massive civil penalties and that if the government wants to bring an FCA action, rather than an overpayment or breach of contract action, it will need to write clear rules to guide industry's conduct.

To read the full article, click here.

The fourth edition of Robert Salcido's authoritative False Claims Act & The Health Care Industry: Counseling & Litigation was published last month. Learn more here.