New Regulation Results In Doubling Up False Claims Act Penalties

While many corporations in the federal contracting arena have been expecting regulations to further limit Federal False Claims Act (FCA) liability, those expectations have been called into question by a new federal regulation released last week aimed at doubling False Claims Act penalties. Raised by the obscure Railroad Retirement Board, which infrequently generates FCA cases involving fraudulent benefit claims, the board issued a ruling adjusting penalties.

Under the new rule, minimum per claim penalties would jump from $5,000 to $10,781, and maximum per-claim penalties would rise from $11,000 to $21,563. We can anticipate a similar increase from the U.S. Department of Justice, and other agencies, that are required to publish rules by July 1.
The Eighth Amendment prohibits the imposition of excessive fines, and thus these increases in penalties will also likely result in an increase in challenges to the fines as excessive. This situation will be most commonly seen in cases involving a significant number of fraudulent billing claims but only a small amount of actual damages per billing – resulting in penalties far exceeding the actual damage amount.

About the Author

Marisa-Bavand-Author Marisa Bavand
Marisa Bavand provides litigation services and counsel to construction industry and government  contract  clients.
LinkedIn BUtton

This blog is provided for general informational purposes only. Because Groff Murphy is a law firm and the authors of this blog’s content are attorneys, the information provided is often legal in nature. An attorney-client relationship is not established by reading this content. By using the blog, you agree that the information on this blog does not constitute legal or other professional advice, and no attorney-client or other relationship is created between you and the author(s), or Groff Murphy or any of its partners, associates or of-counsel. The information is not guaranteed to be correct, complete or up-to-date as information is subject to change and may not be reflected in prior content. The opinions expressed within the blog are the opinions of the author and may not reflect the opinions of Groff Murphy or any other individual attorney at Groff Murphy.

Outcomes: Every legal matter is different, case outcomes are affected by many different variables. No attorney and/or author can guarantee a result in any particular case nor can results be guaranteed based on prior outcomes. 

Categories: False Claims Act.