The Eighth Amendment to the United States Constitution guarantees the “freedom from excessive fines.” In 2018, the late Justice Ruth Bader Ginsberg held that this safeguard is “fundamental to our scheme of ordered liberty.” Timbs v. Indiana.
And yet, it is not uncommon for judgments under the federal False Claims Act (FCA) to result in eye-popping and constitutionally questionable penalty-to-damage ratios. The FCA provides that, in addition to treble damages, those found to have violated the FCA’s provisions are also liable for per-claim penalties. While the FCA itself provides for penalties of between $5,500 and $11,000, those figures have been adjusted for inflation pursuant to federal law and now stand at a whopping $14,308 to $28,619.
The FCA’s per-claim penalty scheme has resulted in monetary judgments that are orders of magnitude higher than actual – or even treble – damages. For example, in 2021, the Eleventh Circuit Court of Appeals upheld an FCA judgment in a case where the United States sustained $755 in actual damages but, with per-claim penalties, the total judgment was over $1.1 million (a ratio of nearly 1500:1!) Yates v. Pinellas Hematology & Oncology (11th Circuit 2021). In 2024, the Seventh Circuit Court of Appeals held that the Eighth Amendment did not invalidate a total FCA judgment of $6 million in a case where the actual damages were $700,000 (although this ratio of approximately 8:1 was significantly smaller than the one upheld in Yates). Stop Illinois Healthcare Fraud, LLC v. Sayeed (7th Cir. 2024).
In 2024, however, the Eighth Circuit Court of Appeals vacated an FCA judgment where the actual damages were $86,332 but the total judgment was $6.47 million after applying per-claim penalties (78 times the amount of actual damages). The Eighth Circuit held that in cases involving only economic loss (such as the typical FCA case), a single-digit ratio is required. Grant ex rel. United States v. Zorn (8th Circuit 2024).
Recently, a federal District Court in Texas cited the Eighth Amendment and refused to apply per claim penalties that would have resulted in a total judgment of nearly $300 million, where the damages were $2.7 million. Instead, the District Court imposed a 1:1 ratio between the civil penalties and the treble damages, resulting in a still-significant, but much lower, judgment of approximately $16 million. United States ex rel. Taylor v. Healthcare Associates of Texas (N.D. Tx. 2025). Last year, a federal District Court in Minnesota also applied the Eighth Amendment to reject a total FCA judgment of over $400 million where the actual damages were just over $87 million. The court ultimately applied a 4:1 ratio. U.S. ex rel. Fesenmaier v. Cameron-Ehlen Group (D. Minn. 2024).
The Grant case out of the Eighth Circuit is currently pending a petition for certiorari before the Supreme Court, giving the Court the opportunity to resolve this developing circuit split. Until it does, the contours of the Eighth Amendment’s “fundamental” safeguard against excessive fines will continue to vary depending on where one does business.
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The attorneys at Chilivis Grubman represent businesses and individuals in connection with False Claims Act investigations and litigation. If you need assistance with such a matter, contact us today.