The pair were spotted having dinner and acting flirtatious Tuesday night at Soho House in New York City Tuesday, where they sat with friends who included Simpson pal, the hairstylist Ken Paves, according to the New York Post's Page Six.
But sources say the hullabaloo is probably over nothing.
A source tells PEOPLE: "They have a mutual friend in common, and they all went out to dinner together."
A source close to Butler, 39, adds: "I'm never surprised to hear that Gerard is with someone new. None of those relationships last. Certainly he's not planning on settling down with Jessica Simpson ... Gerard plays the field … and Jessica is lonely ... and she lost weight and is looking good."
The media tends to misinterpret Butler's ladies' man personality as something more serious, and that may again be the case with Simpson, 29, the source said.
"Every time you hear about him out with someone, he's flirting and 'cozy' with them and making googly eyes at them," the source said. "Maybe that's just what he does with everyone. Maybe that's just how he is."
Indeed, Butler has been spotted on so-called group dates with other women, including his costar in The Bounty, Jennifer Aniston.
Simpson, on the other hand, has been flirting with the idea of online dating.
Calls to Butler's rep were not immediately returned. Simpson's rep had no comment.
With reporting by K.C. BAKER
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