In an opinion Monday, Judge McMahon imposed over $900 million in damages and statutory penalties under the False Claims Act on long-term care pharmacy services provider Omnicare after a jury verdict finding that Omnicare submitted claims to the government for medications that lacked valid prescriptions.
The actual damages to the government were approximately $136 million, but that amount was then statutorily trebled and coupled with statutory penalties. Omnicare argued that the Constitution limited the government to a one-to-one ratio of actual damages to penalties. It relied on State Farm Mut. Automobile Co. v. Campbell, 538 U.S. 408 (2003), which found a jury award of $145 million in punitive damages on top of $1 million in actual damages violated due process and which suggested that in some cases a one-to-one ratio might be the maximum allowable.
But Judge McMahon disagreed, finding that the case was governed by the Constitution’s “excessive fines” clause, not the due process clause implicated in State Farm:Continue Reading Judge McMahon Concludes That $900 Million In False Claims Act Damages and Penalties Is Not Constitutionally Excessive Because Amount Was “Serious” But Not “Surreal”