The exhortations from defense counsel are occurring behind the scenes when the DOJ is weighing whether to file suit or join sealed whistleblower cases against companies accused of compliance lapses and suspicious billing in taxpayer-funded programs.
It’s a trend that started emerging even before the Supreme Court recently agreed to assess the Seventh Circuit’s ruling that it “does not matter” whether someone intended to commit fraud, so long as billing reflected “objectively reasonable” views of ambiguous compliance duties and those views weren’t foreclosed by authoritative guidance.
FCA defense lawyers have been making the ambiguity argument more frequently at the investigative stage and early in litigation. To the extent that defense counsel can concentrate on nebulous legislative language and vague regulatory provisions and worry less about presenting evidence of good-faith compliance efforts, they might find it easier to derail FCA investigations and litigation.
The central issue at the Supreme Court is whether the FCA is covered by Safeco Insurance Co. v. Burr, a 2007 case in which the high court shielded erroneous yet reasonable compliance views involving the Fair Credit Reporting Act. Several circuit courts have analyzed Safeco in the FCA context, and that lengthy history raises the question of why defense lawyers are suddenly emphasizing ambiguity with greater gusto.
