U.S. ex rel. Sheldon v. Allergan Sales, LLC

Case Updates

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The Fourth Circuit affirmed dismissal of relator’s False Claims Act complaint alleging Medicaid fraud, holding that a defendant cannot act “knowingly” if it bases its actions on an objectively reasonable interpretation of the relevant statute and has not been warned away from that interpretation by authoritative guidance. This objective standard precludes inquiry into a defendant’s subjective intent and ensures that defendants must be put on notice before facing liability for allegedly violating complex legal requirements.

The coalition amicus brief, filed jointly with Pharmaceutical Research and Manufacturers of America, urges the Fourth Circuit to hold that as a matter of law, a plaintiff cannot state a claim under the False Claims Act against a drug manufacturer that rests on the defendant’s objectively reasonable construction of an ambiguous statute; such a claim does not satisfy the falsity and scienter requirements of the Act.

John C. O'Quinn, Matthew S. Owen, Matthew D. Rowen, and Andrea R. Butler of Kirkland & Ellis LLP and the U.S. Chamber's Litigation Center served as co-counsel for the U.S. Chamber.