The Eleventh Circuit recently held that the Eighth Amendment’s prohibition on excessive fines applies to monetary awards in non-intervened FCA actions—the first federal court of appeals directly to address the application of this constitutional protection in non-intervened cases. See Yates v. Pinellas, No. 20-10276 (11th Cir.). However, the panel concluded that while the amount of the fine in this case was “very harsh,” it was not unconstitutionally excessive.
In Yates v. Pinellas, following the government’s declination, the district court imposed a total monetary award of $1,179,266.62 under the FCA based on the defendant’s submission of laboratory test claims to Medicare without a proper CLIA certificate. Specifically, the jury found that the defendant violated the FCA on 214 occasions and that the United States had incurred $755.54 in damages. The court then imposed treble damages of $2,266.62 and statutory minimum penalties of $5,500 for each of the 214 violations, or $1,177,000, for a grand total of $1,179,266.62. The defendant moved for remittitur, arguing that this amount constituted an excessive fine in violation of the Eighth Amendment. The district court rejected the argument. (more…)
The 2015 Balanced Budget Act (BBA) requires that federal agencies make inflationary adjustments to civil monetary penalties on a yearly basis to account for inflation using calculations based on the Bureau of Labor Statistics’ Consumer Price Index. In recent years, these increases have occurred less frequently. But on December 13, 2021 the Department of Justice published a final rule that increases the civil penalties in False Claims Act actions for violations that that occurred after November 2, 2015, the date the BBA was enacted. (more…)
The 2015 Balanced Budget Act (BBA) requires that federal agencies make inflationary adjustments to civil monetary penalties on a yearly basis to account for inflation using calculations based on the Bureau of Labor Statistics’ Consumer Price Index. On June 19, 2020, DOJ issued a final rule that will increase the civil penalties in FCA actions for penalties assessed after this date. The prior minimum False Claims Act penalty of $11,181 will be increased to $11,665 per claim. The maximum penalty will also increase from $22,363 to $23,331 per claim. The revised civil penalties, once adopted, will apply to all assessments of FCA civil penalties after the effective date, including penalties associated with violation predating the adjustment, but assessed on or after the date that the increases go into effect.
On June 14, 2018, at the ABA’s National Institute on the Civil False Claims Act and Qui Tam Enforcement, Acting Associate General, Jesse Panuccio, delivered wide-ranging remarks on the False Claims Act. Of particular interest, AAG Panuccio discussed several recent high profile enforcement priorities of the Trump Administration. (more…)
Today, DOJ announced that already-onerous FCA civil penalties will be increasing again effective immediately. Pursuant to the 2015 budget bill which required annual re-indexing of FCA penalties for inflation (discussed here), the minimum per-claim penalty, which jumped last year from $5,500 to $10,781, increases to $10,957. The maximum per-claim penalty, which rose from $11,000 to $21,563 last year, increases to $21,916. The penalties will continue to be adjusted each year to reflect changes in the inflation rate. (more…)
As we previously reported, federal FCA civil penalties were effectively doubled recently due to federal legislation requiring regular re-indexing of penalties to inflation. Now, CMS is prodding the states to amend their own FCAs to take similar action.
DOJ and HHS-OIG are charged with regularly reviewing state FCAs to determine whether they are at least as effective as the federal FCA in rewarding and facilitating qui tam actions. States that are deemed compliant receive an extra 10 percent in their share of recoveries in Medicaid fraud cases. Earlier this week, CMS announced that states will be expected to amend their FCAs to reflect the increased civil penalties now available under federal law. States will be given two years to bring their FCAs into compliance.
As we reported here, DOJ recently implemented steep increases to FCA penalties as required by the Bipartisan Budget Act of 2015, effectively doubling the prior rates. Constitutional challenges to FCA penalties under the Excessive Fines and Due Process clauses have traditionally not fared well. Supreme Court case law calls on courts to examine the ratio between punitive and compensatory damages when assessing such challenges, and the steep hikes in penalties may alter how courts adjudicate these claims. In an article available here, we discuss the future of constitutional challenges to FCA judgments in light of the starkly higher penalty range.
As we reported here, the Bipartisan Budget Act of 2015 (“the Act”) required all federal agencies to increase the civil monetary penalties within their purview. While the adjustment is painted as a “cost-of-living adjustment,” the first step up is a jarring one: agencies must take penalties as they were last adjusted by law (other than under the Inflation Adjustment Act), and increase each penalty by the change in the Consumer Price Index (“CPI”) since that time. The Act requires agencies to make adjustments effective no later than August 1, 2016. Yesterday DOJ released an interim final rule (available here), announcing adjustments to the penalties it enforces, including penalties under the FCA.
Last year, we reported about a provision buried in the budget bill that called for all federal agencies to issue regulations by July 1, 2016 proposing increases to civil penalties in FCA cases under their jurisdiction. The first of those regulations has just been published, and it confirms that the range of civil penalties is set to almost double this year – with further increases to come in subsequent years.
Buried in the budget legislation recently signed into law by President Obama is a provision that will increase FCA civil penalties significantly. The FCA’s civil penalties were last increased by 10%, to their current levels of $5,500-$11,000, in 1999. However, the budget law requires DOJ to issue new regulations by July 1, 2016 to increase those penalties. The law also requires that the penalties be automatically adjusted each year thereafter