Hospitals Urging SCOTUS to Limit False Claims Act Penalties


What do a moving company and a hospital association have in common? The False Claims Act (FCA).

The American Hospital Association along with the United States Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America recently submitted an amici curiae brief in support of petitioners, Gosselin World Wide Moving, urging the Supreme Court to bar excessive FCA penalties. Large penalties under the FCA are of concern to business that contract with the government as well as entities that participate in Federal Health Care Programs.

The FCA creates liability for treble damages plus a civil penalty of $5,000 to $11,000 for each false claim submitted. The question is whether the Fourth Circuit erred in finding that the FCA requires imposition of a separate penalty for each invoice submitted to the Government. The Fourth Circuit held that a $24 million FCA penalty was not excessive, although damages were not proven at trial and the government had paid $3.3 million for the services in question.

Amici argue that the FCA creates “irrationally large” penalties that do not fit the severity of the harm done to the Government and are instead a repercussion of how the Government’s invoicing process that is imposed on contracting parties. There is a division among lower courts regarding how to calculate FCA penalties.

With an increasing number of FCA cases being brought each year by relators and with a large number focused on the health care industry, hospitals and other health care providers will want to see whether the Supreme Court weighs in on this issue.

View This Blog


Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Foley & Lardner LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.