Another District Court Finds FCA Civil Penalties Unconstitutionally Excessive
Last year, we reported on a rare district court decision from Minnesota finding application of the FCA’s civil penalties unconstitutionally excessive. Last week, a judge in the Northern District of Texas determined that even the minimum amount in FCA penalties, as applied, would have violated the Eighth Amendment’s Excessive Fines Clause. Based on the number of false claims for which the jury found the defendant liable, the minimum penalty mandated by the statute was nearly $300 million—around one hundred times the actual damages. The court instead imposed a reduced penalty of roughly $8 million, about three times the actual single damages, equating to a per-claim civil penalty of approximately $378.18.
Court Cuts False Claims Act Jury Verdict in Half in Rare Constitutional Decision
On Thursday, a Minnesota district court judge more than halved a $490 million False Claims Act jury verdict against an ophthalmology distributor and its founder for Anti-Kickback Statute (“AKS”) violations, to $217 million, holding the damages were “notably severe” and “grossly disproportional” to the offense, and thus improper under the Excessive Fines Clause.
D.C. Circuit Holds Defendants Are Entitled To Offset Damages By Amounts Paid By Other Settling Defendants
The D.C. Circuit recently issued an important opinion on an issue of first impression: under what circumstances is an FCA defendant entitled to offset damages by amounts the government or relator has received in settlement from other defendants involving the same claims. The opinion is available here.
