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FCA Damages and Penalties: “Recent Developments and Recurring Themes”, ABA 5th Annual National Institute on the Civil False Claims Act and Qui Tam Enforcement

According to the Department of Justice, the United States government recovered more than $2.1 billion from October 1, 2002 through September 30, 2003 in cases brought under the False Claims Act (FCA).1 This was the highest total ever for a oneyear period. More than $12 billion has been recovered from 1986 to October 2003. 2 This steady stream of revenue flowing into the government’s coffers is likely to continue apace as qui tam actions flourish and the False Claims Act’s reach continues to expand beyond its origins as a weapon against military procurement fraud.3 The remarkable recoveries generated by the False Claims Act are attributable in part to its somewhat unique damages and penalties provisions. These provisions can yield forfeitures vastly out of proportion to the alleged violation and, because of this heightened litigation risk, tend also to force settlements in cases that defendants might otherwise litigate and win. Much of the FCA’s power therefore derives from its potential for quasi-criminal sanctions that have less to do with remediation than with simple punishment. Because of the potential for draconian sanctions under the FCA, its damages and penalties provisions are often vigorously contested. This paper surveys the evolving state of the law as courts struggle to interpret and apply these provisions to an everbroadening range of conduct.

Co-Authors: Brian C. Elmer, Andy Liu.

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