United States v. Halper

PETITIONER: United States
RESPONDENT: Halper
LOCATION: State University of New York Albany

DOCKET NO.: 87-1383
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT:

CITATION: 490 US 435 (1989)
ARGUED: Jan 17, 1989
DECIDED: May 15, 1989

ADVOCATES:
John G. Roberts, Jr. - for appellee
Michael R. Dreeben - Argued the cause for the United States

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?

Media for United States v. Halper

Audio Transcription for Oral Argument - January 17, 1989 in United States v. Halper

William H. Rehnquist:

We'll hear argument first this morning in No. 87-1383, United States v. Irwin Halper.

Mr. Dreeben, you may proceed whenever you're ready.

Michael R. Dreeben:

Thank you, Mr. Chief Justice, and may it please the Court:

This case concerns the application of the Double Jeopardy Clause of the Fifth Amendment to the civil False Claims Act, Title 31 U.S.C. 3729.

The district court invoked the Double Jeopardy Clause to bar a recovery by the government of penalties under the False Claims Act from Appellee who had previously been criminally convicted of making the same false claims.

And fined?

Michael R. Dreeben:

Yes, Your Honor, he had been fined.

Appellee knowingly made 65 separate false claims under the Medicare program, each of which overcharged the government by $9.

The False Claims Act provides a $2,000 mandatory penalty at the time that this action was brought for each such false claim.

The government accordingly sought a penalty of $130,000 in this case.

The district court focused on the fact that Appellee's overpayment by the government was $585 from his 65 false claims.

It compared the penalty to the loss and determined that in the factual setting of this case, the sanction amounted to a criminal penalty that could not be imposed in view of Appellee's previous criminal conviction and punishment.

It therefore held the False Claims Act unconstitutional as applied to Appellee in this case.

We believe that the district court's analysis and conclusions are incorrect.

The False Claims Act has been on the books for 125 years.

It has been upheld before by this Court against a double jeopardy challenge very similar to the one accepted by the court below.

A statute very similar to the False Claims Act was upheld after that case in a similar double jeopardy challenge.

In the False Claims Act, Congress has provided a reasonable lump sum recovery for every false claim made on the government.

It is designed to cover reasonably anticipated losses in the average case.

It is also designed to compensate the government for the costs of investigation and prosecution, which can be extremely heavy in ferreting out, detecting and bringing wrongdoers to justice.

Finally, it serves the purpose of deterring wrongdoers from committing false claims such as the kind that Appellee committed.

It is not a criminal statute.

William H. Rehnquist:

Isn't there some sort of a volume discount, though?

I mean, if there are 65 claims investigated, it wouldn't cost as much as to investigate just one.

Michael R. Dreeben:

It... it may be true that in some cases the costs of investigation do not rise as rapidly as the number of false claims, but Congress can anticipate that over the large majority of cases, when someone has cheated the government a large multiple of times, the costs of investigation do go up.

This case, although the facts surrounding the investigation are not in the record, does illustrate that there are very heavy costs involved in prosecuting Medicare fraud.

There was a substantial degree of investigation that was required, and Appellee's criminal trial consumed four days.

Harry A. Blackmun:

I'm just curious, counsel.

Is this amount collectible against this man?

Michael R. Dreeben:

The government has taken discovery from Mr. Halper in the civil action and has determined that he has substantial assets that were transferred out of his name into his wife's name and into his son's name.