On December 19, 2013, in a highly anticipated decision, the Court of Appeals for the Fourth Circuit awarded $24 million in civil penalties under the False Claims Act (FCA), despite the fact that the whistleblower prosecuting the case did not prove at trial that the defendants’ conduct had caused a single penny of monetary injury to the government. This decision is part of a growing body of case law regarding the constitutional rights of defendants under the Excessive Fines Clause—rights that are becoming increasingly relevant as the Department of Justice, state attorneys general, and whistleblowers continue their aggressive pursuit of mandatory treble damages and draconian civil penalties under the FCA.

APPLICABILITY OF THE EXCESSIVE FINES CLAUSE TO CIVIL PENALTY AWARDS UNDER THE FCA -

The federal FCA and its state equivalents impose liability when false or fraudulent “claims for payment” are presented to the government. In addition to automatic treble damages, the federal FCA imposes a civil penalty of between $5,500 and $11,000, which courts typically impose for each and every false “claim for payment” that a defendant has allegedly submitted or caused to be submitted to the government.