DOJ raises stakes in FCA suits, states may follow suit
January 31, 2000 less than 1 minute read
DOJ raises stakes in FCA suits, states may follow suit
The stakes for False Claims Act actions just got higher. "For those defendants in civil False Claims Act (FCA) cases who believe that the civil penalties provisions are excessive and extortionist, their concerns should increase," warns health care attorney John Boese of Fried, Frank, Harris, Shriver & Jacobson in Washington, DC.
In what he calls a "little known and virtually ignored announcement" last year, the U.S. Department of Justice (DOJ) increased FCA civil penalties by 10%, to a minimum of $5,500 and a maximum of $11,000 for each false claim. The rule is already in effect.
Under the Debt Collection Act, federal agencies are required to make inflationary adjustments up to 10% to civil monetary penalties within the agency's jurisdiction every four years. "Interestingly, DOJ did not publish these changes in the Federal Register for notice and comment before they became effective," notes Boese. He says the apparent reason is that the increases were mandated by Congress.
"While few, if any, FCA cases have yet been filed [under the new provisions], defendants are virtually certain to challenge the increase in penalty amounts when those cases do get litigated," he adds.
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