United States v. Halper

Syllabus After respondent, the manager of a company which provided medical services for patients eligible for federal Medicare benefits, was convicted, inter alia, of submitting 65 false claims for Government reimbursement in violation of the federal criminal false-claims statute, he was sentenced to prison and fined $5,000. Based solely on facts established by h § criminal conviction, the District Court then granted the Government summary judgment in its suit against him under the federal civil False Claims Act (Act). Under the strict terms of that Act's remedial provision, as it then existed, respondent would have been liable for a civil penalty of $2,000 on each of the 65 false claims, as well as for twice the amount of the Government's actual damages of $585 and the costs of the action. However, because the statutorily authorized recovery of more than $130,000 bore no "rational relation" to the sum of the Government's actual loss plus its costs in investigating and prosecuting the false claims, which the court approximated at no more than $16,000, the court held that imposition of the full statutory amount would violate the Double Jeopardy Clause of the Fifth Amendment by punishing respondent a second time for the same conduct for which he had been convicted. Since it considered the Act unconstitutional as applied to respondent, the court limited the Government's recovery to double damages and costs. The Government took a direct appeal to this Court. Held: The statutory penalty authorized by the Act, as applied to respondent, violates the Double Jeopardy Clause. Pp. 440-452. (a) Although Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917, United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443, and Rex Trailer Co. v. United States, 350 U.S. 148, 76 S.Ct. 219, 100 L.Ed. 149, establish that proceedings and penalties under the Act are civil in nature, and that a civil remedy does not constitute multiple punishment violative of the Clause merely because Congress provided for civil recovery in excess of the Government's actual damages, those cases did not consider and do not foreclose the possibility that in a particular case a civil penalty authorized by the Act may be so extreme and so divorced from the Government's actual damages and expenses as to constitute prohibited "punishment." Pp. 440-446. (b) In the rare case such as the present, where a prolific but small-gauge offender previously has sustained a criminal penalty, and the civil penalty sought in a subsequent proceeding bears no rational relation to the goal of compensating the Government for its loss, but rather appears to qualify as "punishment" in the plain meaning of the word, the defendant is entitled to an accounting of the Government's damages and costs in order to allow the trial court, in its discretion, to determine whether the penalty sought in fact constitutes a second punishment violative of the Clause and to set the size of the civil sanction the Government may receive without crossing the line between permissible remedy and prohibited punishment. Pp. 446-451. (c) While the District Court correctly found that the disparity between its approximation of the Government's costs and respondent's statutory liability is sufficiently disproportionate that the sanction provided by the Act constitutes a second punishment violative of double jeopardy, the case is remanded to permit the Government to demonstrate that that court's assessment of its injuries was erroneous, since it would be unfair to deprive the Government of an opportunity to present an accounting of its actual costs arising from respondent's fraud, to seek an adjustment of the court's approximation, and to recover demonstrated costs. P. 452. 664 F.Supp. 852 (S.D.N.Y.1987), vacated and remanded. BLACKMUN, J., delivered the opinion for a unanimous Court. KENNEDY, J., filed a concurring opinion, post, p.. Michael R. Dreeben, for appellant. John G. Roberts, Jr., Washington, D.C., for appellee. Justice BLACKMUN delivered the opinion of the Court.