Reasonable Interpretation of Ambiguous Regulation May Not Preclude False Claims Act Liability

A recent ruling by the U.S. Court of Appeals for the Eleventh Circuit establishes that a defendant in a False Claims Act case cannot rely on a defense that there was no intent to defraud the government just because the defendant had a reasonable interpretation of an ambiguous government regulation. The ruling in a qui tam FCA lawsuit filed by former sales employees of a diabetic testing supplies distributor gives notice that, at least in the Eleventh Circuit, ambiguity alone will not provide an impenetrable shield against FCA liability for healthcare and other contractors responsible for ensuring the accuracy of claims they submit for reimbursement by the government.