We have previously reported on two district court decisions from Minnesota and Texas analyzing FCA damages and penalties under the Eighth Amendment Excessive Fines Clause, with both courts finding the amounts awarded exceeded the amount permitted by the U.S. Constitution. In U.S. ex rel. Behnke v. CVS Caremark Corp. et al., No. 14-cv-824 (E.D. Pa. Aug. 19, 2025), the court engaged in a similar analysis but came out the other way, rejecting the defendant’s constitutional argument and entering a final judgment of $289,873,500.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2025-09-04 12:52:382025-09-04 12:52:38Court Refuses to Reduce $290 Million FCA Judgment, Finding Damages and Penalties Assessed To Be Constitutionality Appropriate
DOJ announced that genetic testing company Illumina Inc. will pay $9.8 million to resolve allegations that it sold genomic sequencing systems with cybersecurity vulnerabilities to the various federal Departments and agencies in violation of the FCA. According to DOJ Civil Division Assistant Attorney General Brett A. Shumate, “This settlement underscores the importance of cybersecurity in handling genetic information and the Department’s commitment to ensuring that federal contractors adhere to requirements to protect sensitive information from cyber threats.”
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2025-08-04 09:02:232025-08-01 16:32:41DOJ Reaches $9.8 Million Settlement with Genetic Testing Company Illumina Inc. to Resolve FCA Allegations
The FCA’s qui tam provisions are intended to incentivize individuals who have legitimate information about fraud on the government that would otherwise go undetected to bring those issues forward. Increasingly, “whistleblowers” – including entities established for the sole purpose of seeking qui tam bounties – are filing lawsuits with sweeping but vague allegations and seeking to fill the gaps through discovery. Unfortunately, the Eleventh Circuit recently enabled this conduct in United States ex rel. Sedona Partners LLC v. Able Moving & Storage Inc., No. 22-13340 (11th Cir. July 25, 2025). There, the court reversed a dismissal of a qui tam complaint and held that relators can leverage discovery-based allegations to overcome Rule 9(b).
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2025-07-29 10:03:472025-07-29 10:07:12Eleventh Circuit Reverses Qui Tam Dismissal, Holds Facts Obtained in Discovery Can Be Used to Satisfy Rule 9(b)
Two recent settlements involving imports from the People’s Republic of China (“PRC”) illustrate the U.S. Department of Justice’s (“DOJ”) commitment to rapidly stepping up enforcement against tariff evasion and customs fraud through the False Claims Act (“FCA”). As we covered here, tariffs have been central to the administration’s trade strategy, and DOJ’s growing use of the FCA as an enforcement tool in this space is expected to drive a significant rise in both whistleblower allegations and recoveries.
Recently, the Southern District of New York issued a decision imposing FCA penalties that provides further guidance on the circumstances under which such penalties may violate the Eighth Amendment.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Scott D. Steinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngScott D. Stein2025-07-22 14:56:282025-07-22 15:02:35District Court Recognizes that Even Minimum FCA Civil Penalties Could Be Unconstitutional Under the Excessive Fines Clause
In U.S. ex rel. Flanagan v. Fresenius Med. Care Holdings, Inc., 23-1305 (1st Cir. June 27, 2025), the First Circuit recently affirmed dismissal of an FCA complaint because it failed to adequately plead that alleged kickbacks were the “but for” cause of claims submitted to the government. As we previously reported here, the First Circuit recently joined the growing majority of circuits requiring that for a claim to “result[] from” a kickback under the FCA, the kickback must be the “but-for” cause of the claim. In Flanagan, the First Circuit affirmed dismissal because the relator had not adequately alleged any referrals that would not have been made had the alleged kickback never been paid. (more…)
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Scott D. Steinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngScott D. Stein2025-07-08 09:04:262025-07-08 09:41:57First Circuit Affirms Dismissal of Qui Tam for Failing But-For Test Linking AKS Violations to FCA Liability
The Department of Justice has published the inflationary adjustments to the civil monetary penalties associated with False Claims Act violations. Under the Balanced Budget Act of 2015, annual inflationary adjustments of the penalties is required. Adjustments are to be based on the Bureau of Labor Statistics’ Consumer Price Index. For any False Claims Act violations that occurred after November 2, 2015, but for which penalties are assessed after July 3, 2025, the adjusted penalties will be applied. The minimum False Claims Act penalty now increases from $13,946 to $14,308 per claim, and the maximum penalty increases from $27,894 to $28,619 per claim.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Scott D. Steinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngScott D. Stein2025-07-07 10:09:332025-07-07 10:09:33Department of Justice Announces 2025 Inflationary Adjustments to FCA Penalties
On July 2, 2025, the U.S. Department of Justice (“DOJ”) announced the renewal of the DOJ-HHS False Claims Act Working Group, a partnership with the U.S. Department of Health and Human Services (“HHS”) that aims to strengthen use of the FCA to combat healthcare fraud. This is an initiative that was first announced during the first Trump administration, and follows the announcement of significant personnel changes at DOJ, as discussed here.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Kristin Graham Koehlerhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngKristin Graham Koehler2025-07-03 09:42:262025-07-03 09:51:07DOJ Announces Reinvigorated False Claims Act Cooperation with the Department of Health and Human Services
Court Refuses to Reduce $290 Million FCA Judgment, Finding Damages and Penalties Assessed To Be Constitutionality Appropriate
We have previously reported on two district court decisions from Minnesota and Texas analyzing FCA damages and penalties under the Eighth Amendment Excessive Fines Clause, with both courts finding the amounts awarded exceeded the amount permitted by the U.S. Constitution. In U.S. ex rel. Behnke v. CVS Caremark Corp. et al., No. 14-cv-824 (E.D. Pa. Aug. 19, 2025), the court engaged in a similar analysis but came out the other way, rejecting the defendant’s constitutional argument and entering a final judgment of $289,873,500.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Mariya Denisko
Chicago
mariya.denisenko@sidley.com
DOJ Reaches $9.8 Million Settlement with Genetic Testing Company Illumina Inc. to Resolve FCA Allegations
DOJ announced that genetic testing company Illumina Inc. will pay $9.8 million to resolve allegations that it sold genomic sequencing systems with cybersecurity vulnerabilities to the various federal Departments and agencies in violation of the FCA. According to DOJ Civil Division Assistant Attorney General Brett A. Shumate, “This settlement underscores the importance of cybersecurity in handling genetic information and the Department’s commitment to ensuring that federal contractors adhere to requirements to protect sensitive information from cyber threats.”
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Benjamin B. Correa
Washington, D.C.
bcorrea@sidley.com
Monica Kofron
Washington, D.C.
mkofron@sidley.com
Eleventh Circuit Reverses Qui Tam Dismissal, Holds Facts Obtained in Discovery Can Be Used to Satisfy Rule 9(b)
The FCA’s qui tam provisions are intended to incentivize individuals who have legitimate information about fraud on the government that would otherwise go undetected to bring those issues forward. Increasingly, “whistleblowers” – including entities established for the sole purpose of seeking qui tam bounties – are filing lawsuits with sweeping but vague allegations and seeking to fill the gaps through discovery. Unfortunately, the Eleventh Circuit recently enabled this conduct in United States ex rel. Sedona Partners LLC v. Able Moving & Storage Inc., No. 22-13340 (11th Cir. July 25, 2025). There, the court reversed a dismissal of a qui tam complaint and held that relators can leverage discovery-based allegations to overcome Rule 9(b).
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
DOJ’s New FCA Settlements Underscore Trump Administration’s Focus on Tariff and Customs Compliance
Two recent settlements involving imports from the People’s Republic of China (“PRC”) illustrate the U.S. Department of Justice’s (“DOJ”) commitment to rapidly stepping up enforcement against tariff evasion and customs fraud through the False Claims Act (“FCA”). As we covered here, tariffs have been central to the administration’s trade strategy, and DOJ’s growing use of the FCA as an enforcement tool in this space is expected to drive a significant rise in both whistleblower allegations and recoveries.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Lisa H. Miller
Washington, D.C.
lisa.miller@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Anna Carney
Washington, D.C.
acarney@sidley.com
District Court Recognizes that Even Minimum FCA Civil Penalties Could Be Unconstitutional Under the Excessive Fines Clause
Recently, the Southern District of New York issued a decision imposing FCA penalties that provides further guidance on the circumstances under which such penalties may violate the Eighth Amendment.
(more…)
Scott D. Stein
Chicago
sstein@sidley.com
Meredith Greene Jalali
Chicago
meredith.jalali@sidley.com
Kennedy Cribbs
Summer Associate
kennedy.cribbs@sidley.com
First Circuit Affirms Dismissal of Qui Tam for Failing But-For Test Linking AKS Violations to FCA Liability
In U.S. ex rel. Flanagan v. Fresenius Med. Care Holdings, Inc., 23-1305 (1st Cir. June 27, 2025), the First Circuit recently affirmed dismissal of an FCA complaint because it failed to adequately plead that alleged kickbacks were the “but for” cause of claims submitted to the government. As we previously reported here, the First Circuit recently joined the growing majority of circuits requiring that for a claim to “result[] from” a kickback under the FCA, the kickback must be the “but-for” cause of the claim. In Flanagan, the First Circuit affirmed dismissal because the relator had not adequately alleged any referrals that would not have been made had the alleged kickback never been paid. (more…)
Scott D. Stein
Chicago
sstein@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
Joseph S. Katz
Department of Justice Announces 2025 Inflationary Adjustments to FCA Penalties
The Department of Justice has published the inflationary adjustments to the civil monetary penalties associated with False Claims Act violations. Under the Balanced Budget Act of 2015, annual inflationary adjustments of the penalties is required. Adjustments are to be based on the Bureau of Labor Statistics’ Consumer Price Index. For any False Claims Act violations that occurred after November 2, 2015, but for which penalties are assessed after July 3, 2025, the adjusted penalties will be applied. The minimum False Claims Act penalty now increases from $13,946 to $14,308 per claim, and the maximum penalty increases from $27,894 to $28,619 per claim.
(more…)
Scott D. Stein
Chicago
sstein@sidley.com
Catherine Stewart
Chicago
catherine.stewart@sidley.com
DOJ Announces Reinvigorated False Claims Act Cooperation with the Department of Health and Human Services
On July 2, 2025, the U.S. Department of Justice (“DOJ”) announced the renewal of the DOJ-HHS False Claims Act Working Group, a partnership with the U.S. Department of Health and Human Services (“HHS”) that aims to strengthen use of the FCA to combat healthcare fraud. This is an initiative that was first announced during the first Trump administration, and follows the announcement of significant personnel changes at DOJ, as discussed here.
(more…)
Kristin Graham Koehler
Washington, D.C.
kkoehler@sidley.com
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
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