Facts of the Case

Irwin Halper, the manager of a company that provided medical services to patients eligible for Medicare benefits, was charged and convicted in criminal court of submitting 65 separate false Medicare claims. He was sentenced to two years in prison and fined $5,000.

The United States then brought additional civil charges under the False Claims Act, which authorized it to collect $2000 for each offense in addition to attorney's fees and twice the damages sustained. In this case the actual damages were just $585, but because of the number of offenses the total penalty was more than $130,000. The District Court, however, ruled that the penalty was "entirely unrelated" to the government's actual damages and would therefore be a second punishment for the same offense, violating the Double Jeopardy Clause of the Fifth Amendment. The penalty was therefore limited to double the amount of actual damages and attorney's fees. The government appealed the decision directly to the U.S. Supreme Court.

Question

Where the penalty authorized under the False Claims Act is "entirely unrelated" to the damages actually suffered by the government, does imposition of the penalty amount to a "punishment" governed by the Double Jeopardy Clause of the 5th Amendment?

Conclusion

Yes. Justice Harry Blackmun, on behalf of a unanimous Supreme Court, wrote that while previous cases had held penalties under the Act to be civil in nature, that did not foreclose the possibility of the penalty being so extreme and so unrelated to the actual damages as to constitute "punishment." Because Halper had already been jailed and fined, additional punishment in a separate proceeding would violate the Double Jeopardy Clause of the Fifth Amendment. The Court remanded the case to the District Court so that the government could challenge the original assessment of its attorney's fees.