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Defendant’s Reasonable Interpretation of Ambiguous Regulation Negates FCA Liability

Dec.01.2015

The D.C. Circuit overturned a jury verdict against MWI Corp., represented by C&M, in a long-running civil FCA suit in which the government asserted claims for approximately $225 million in trebled damages (plus additional civil penalties), alleging that false claims and statements were submitted to the Export-Import Bank in connection with eight loans to Nigeria for the purchase of MWI's water pumps. The court held that there was no evidence that the government "had officially warned MWI away from its otherwise facially reasonable interpretation of [an] undefined and ambiguous [regulatory] term" and ruled that, in such a situation, the FCA's knowledge/scienter element cannot be established.


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Richard L. Beizer
Partner – Washington, D.C.
Phone: +1 202.624.2590
Email: rbeizer@crowell.com
Brian Tully McLaughlin
Partner – Washington, D.C.
Phone: +1 202.624.2628
Email: bmclaughlin@crowell.com
Charlotte Gillingham
Counsel – Washington, D.C.
Phone: +1 202.624.2948
Email: cgillingham@crowell.com