Publication Date
2025
Abstract
The False Claims Act (FCA) represents one of the most important sources, if not the most important source, of liability in the healthcare system and other industries that routinely provide goods and services to the federal government. Originally designed to police fraud during the Civil War, the FCA has become a general statute to enforce many other complex legal schemes. Because failure to comply with complicated statutes and regulations can lead to a reimbursement claim being defined as false under the FCA, the FCA serves as a blunt instrument to cudgel those who fail to comply with the minutiae of federal regulatory schemes. And because the FCA provides for treble damages and a civil monetary penalty of nearly $30,000 per claim and because individual relators can file suit on behalf of the United States and collect a bounty up to 30% of the recovery, the FCA has become a vehicle for pervasive and extremely large damages.
Using detailed data on over thirty years of all FCA cases filed in the United States, this Article demonstrates that FCA liability has come to rival that of medical malpractice liability in the healthcare system. It also shows that FCA liability generally has surpassed liability associated with blockbuster punitive damages awards. Between 1986 and 2018, FCA liability averaged over $1.3 billion per year. In some years, total FCA liability sometimes exceeds and is often in the same general range of total medical malpractice liability as well as total blockbuster punitive damages awards, which includes punitive awards of $100 million or more across all types of cases.
Based on the size and nature of liability under the FCA, this Article offers a new path to restraining these large awards under the Excessive Fines and Due Process Clauses. By carefully separating the compensatory and punitive aspects of FCA liability, this Article demonstrates the conditions under which the Excessive Fines and Due Process Clauses must apply to sanctions and damages under the FCA. Having done so, it provides specific recommendations on how to vindicate the underlying goals of both these constitutional clauses and ensure that defendants have adequate protection from extreme liability based on byzantine regulatory schemes.
Recommended Citation
Benjamin J. McMichael, Mackenzi Barrett & W. Kip Viscusi, A Constitutional False Claims Act, 102 WASH. U. L. REV. 677 (2025).