Jan 222024

2024 Inflationary Adjustments to FCA Penalties Announced

Scott D. Stein and Catherine Stewart

The Department of Commerce (“Commerce”) has published the inflationary adjustments to civil monetary penalties associated with False Claims Act violations that went effect January 15, 2024.  As we previously reported, the 2015 Balanced Budget Act provides for federal agencies to make inflationary adjustments to civil monetary each year to account for inflation using calculations based on the Bureau of Labor Statistics’ Consumer Price Index (“CPI”), which measures the change between the prices urban consumers pay for a market basket of consumer goods and services.  The 2024 civil monetary penalties adjustment was calculated using the percentage of change between the October 2022 CPI and the October 2023 CPI.  The adjusted penalties will be assessed for violations that occurred prior to the adjustment, but are assessed after January 15, 2024.  The minimum False Claims Act penalty has increased from $13,508 to $13,946 per claim and the maximum penalty has increased from $27,018 to $27,894 per claim.

Although technically the increases announced by Commerce only apply to FCA actions brought by or on behalf of Commerce, we expect that, as it has in years past, DOJ will soon issue a similar announcement that will apply the same increases to penalties associated with all FCA cases brought by DOJ.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Scott D. Stein

Chicago

sstein@sidley.com

Catherine Stewart

Chicago

cstewart@sidley.com

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