Stephen A. Wood is a Partner with Chuhak & Tecson, P.C. in Chicago, IL.


Recently, the United States Court of Appeals for the Eleventh Circuit issued an opinion in Yates v. Pinellas Hematology & Oncology, P.A., 21 F.4th 1288 (11th Cir. 2021), a largely unremarkable False Claims Act case, affirming a district court judgment awarding treble damages as well as per claim penalties to a qui tam relator.  Neither the sums involved nor the conduct at issue are particularly noteworthy.  Yet, the opinion inclusive of footnotes runs 55 pages and includes an opinion of two judges writing in concurrence and the third judge concurring and dissenting, in part.  The predominant issue occupying most of the panel’s attention was the appropriate analysis to be applied to the district court’s decision to impose statutory penalties under the False Claims Act.  The penalty imposed in the case was more than one-thousand five hundred times the amount of damages trebled, even though the district court applied the lowest per claim penalty then permitted under the statute.

The defendant-appellant challenged the penalty part of the award under the Excessive Fines Clause of the Eighth Amendment.  Although the appellate court affirmed the judgment, the judges were clearly troubled by the lack of case law precedent on the issue of statutory penalties and the lack of guidance in the statute itself.  Resorting to English common law and legal commentary on fines dating back to the Magna Carta, the judges raised several considerations in their opinion that illustrate, once again, a problem in the text of a complex law that has spawned multiple Supreme Court decisions and countless other lower court rulings endeavoring to either fill in the gaps left by Congress or restore clarity and balance to a fraught statutory scheme.  The questions raised in this opinion are worthy of further discussion among judges and commentators, and, ultimately, should lead to legislative efforts intended to aid courts in applying the penalty provisions of the law.

Yates v. Pinellas Hematology & Oncology – The Facts

The defendant in the case was a medical practice located in Saint Petersburg, Florida.  At this location, defendant maintained a clinical laboratory used to run laboratory tests on patient blood samples.  The defendant sought Medicare reimbursement for tests performed on patients covered under that federal program.  Later, in 2015, the defendant purchased an oncology practice that was also located in Saint Petersburg.  This practice also maintained its own clinical laboratory.  Under the Clinical Laboratory Improvement Amendments of 1988 and its regulations, no laboratory can conduct tests on materials derived from the human body unless it has the proper CLIA certificate. See 42 U.S.C. § 263a(b); 42 C.F.R. §§ 493.1, .3(a), .15, .43–49; Center for Medicare and Medicaid Services, Medicare Claims Processing Manual, § 70.1 (2020).  The oncology certificate did not transfer to the defendant as part of the acquisition, necessitating a new application for a CLIA certificate for the oncology practice.

For a period of about one year, the defendant lacked a proper CLIA certificate for the acquired oncology practice’s lab.  Despite this, defendant submitted reimbursement claims to Medicare for tests performed at this lab during that time period.  When Medicare initially rejected these claims, defendant altered the information on the claims, initially, to add the certificate number of its original lab and, later, to add that lab’s address to the claims so that it would match the certificate number, despite the tests having been performed at the lab of the oncology practice.  The defendant’s billing manager filed a qui tam action under seal alleging that the reimbursement claims were false under the False Claims Act and that defendant further violated the law when it retaliated against her for reporting these violations.

At trial, the jury found the defendant liable for having knowingly submitted 214 materially false claims to Medicare, thereby violating the False Claims Act.  The jury also found that the United States had suffered a grand total of $755.54 in damages.  The district court rejected defendant’s post-trial motions and trebled the damages verdict as required under the FCA, yielding $2,266.62 in total damages.  Under the version of the statute then prevailing, penalties were to be imposed per false claim in a range between $5,500 and $11,000 per claim.  Selecting the lowest amount, which the district court nonetheless considered “very harsh,” the court imposed a penalty of $5,500 for each of the 214 claims totaling $1,177,000.  The district court rejected the defendant’s Eighth  Amendment excessive fines argument.

Excessive Fines Clause Background and Existing Precedent

The Supreme Court has held that the Excessive Fines Clause applies only to payments imposed by the United States (or the States) and payable to it (or them).  See Austin v. United States, 509 U.S. 602, 609-10 (1992).  Furthermore, it applies to “fines” defined as “payment to a sovereign as punishment for some offense.”  United States v. Bajakajian, 524 U.S. 321, 336 (1998).  To answer the question whether the Eighth Amendment applied in this case, the appellate court had to determine whether, in a non-intervened FCA case, the fine was “imposed by the United States.”  Since the Amendment acts as a limit on the power of the government, whether a private citizen suing on behalf of the government implicates the Eighth Amendment was a threshold question never squarely addressed by other courts of appeals.

The qui tam relator argued the Amendment was inapplicable because the United States is not a party to a non-intervened case, and thus the fine was not imposed by it.  This argument, however, misses the point that the penalties are imposed by operation of a federal statute.  The enactment of that law which mandates penalties in all FCA cases, intervened or not, established that the fines were imposed by the United States.  What’s more, whether the government intervenes or not, a qui tam relator is considered, at least in part, a government actor insofar as the relator seeks to vindicate a government right, not a personal one, predicated on an injury to the government, not to the relator.  Yates, 21 F.4th at 1310 (“The FCA’s qui tam provisions merely grant the United States the flexibility to [protect the public fisc] effectively through an avatar in litigation.”).  In addition, the government retains significant control over the conduct of FCA litigation even in non-intervened cases.  It investigates the claims, it may conduct discovery pre-intervention, it may monitor the proceedings, it may request service of depositions, it has to approve any settlement with relator, and the government may settle the litigation with the defendant over the relator’s objection.  Most importantly, perhaps, the United States remains the real party in interest in non-intervened cases and has the right to intervene at any time after having declined, upon a showing of good cause.  Based on its degree of control over non-intervened cases, therefore, the fine in this case can be considered imposed by the United States.

Having concluded that the Eighth Amendment applies to FCA penalties even in non-intervened cases, the Court of Appeals turned to the question of what fine is excessive.  The court identified some “non-exhaustive” factors that are relevant to the determination: (i) whether the defendant is in the class of persons at whom the statute was principally directed; (ii) how the imposed penalties compare to other penalties authorized by the legislature; and (iii) the harm caused by the defendant. Id. at 1314.  “‘Congress, as a representative body, can distill the monetary value society places on harmful conduct,’ and thus that ‘[penalties] falling below the maximum statutory fines for a given offense … receive a strong presumption of constitutionality.’” Id., quoting United States v. Chaplin’s, Inc., 646 F.3d 846, 852 (11th Cir. 2011).  Given that the penalty award in this case involved the lowest per claim penalty in the statutory range, the award carried a strong presumption of constitutionality.  Furthermore, applying a rather uncomplicated analysis of the above-stated factors, the court rejected the defendant’s attempt to rebut the strong presumption of constitutionality.

Toward a More Complete and Fair Excessive Fines Analysis

It was at this point of the Eighth Amendment discussion in Yates that things got more interesting.  In a concurring opinion, Judge Newsom questioned the rationale for deferring to Congressional judgments on excessiveness, something he called “a bit like letting the driver set the speed limit.”  Yates, 21 F.4th at 1318.  Regarding the matter of deference to Congress, the court took stock of the several considerations that lay behind the policy.  Quoting Graham v. Florida, 560 U.S. 48, 120 (2010), the court noted: “The question of what acts are ‘deserving’ of what punishments is bound so tightly with questions of morality and social conditions as to make it, almost by definition, a question for legislative resolution.”  Yates, 21 F.4th at 1319.  Furthermore, “because Congress represents the American people, ‘its pronouncements regarding the appropriate range of fines for a crime represent the collective opinion of the American people as to what is and is not excessive.’” Id.

If the determination were “inherently subjective,” deferring might be appropriate.  Yet, the history behind the Excessive Fines Clause suggests two other factors that ought to be considered: (1) the relationship between the fine and the offense, and (2) the offender’s ability to pay.  These may not be so subjective.  Up to now, much of the guidance on applying the Excessive Fines Clause comes from United States v. Bajakajian, 524 U.S. 321 (1998), a criminal case in which the Supreme Court placed great emphasis on proportionality, i.e., that the punishment must be proportional to the offense.  Relying largely on its Cruel and Unusual Punishments Clause case law, the Supreme Court adopted the same “grossly disproportional” standard for unconstitutionality of fines.

The Bajakajian analysis suggests that “excessiveness is determined in relation to the characteristics of the offense, not . . . the offender.”  Yates, 21 F.4th at 1320.  Tracing the roots of the Excessive Fines Clause, Judge Newsom questioned whether (a) the offender’s ability to pay or, put differently, (b) the fine’s potential to deprive the offender of his livelihood should not be part of the court’s Eighth Amendment calculus.  Consulting several historical legal authorities including the Magna Carta, Blackstone, and William Penn, Judge Newsom concludes that this precedent is in accord with the principle that fines should not be so onerous as to deprive the offender of his ability to earn a living.  See Yates, 21 F.4th at 1323.  Given the influence of these authorities on American law and the Constitution in particular, it seems appropriate to similarly cabin the Excessive Fines Clause.  Because the district court record did not inform this issue, there was nothing more for the Yates panel to consider.

Judge Tjoflat, in his own separate opinion, concurring in part and dissenting in part, begins where Judge Newsom left off, noting that the district court failed to provide any detail on how it assessed the particular per claim penalty it imposed.  Id. at 1324 (“a district court order without reasoning is arbitrary and therefore unreviewable . . . because we have no standards by which to evaluate it.”).  And because the False Claims Act itself provides no guidance on how to determine what fine to impose within the statutory range, Judge Tjoflat turned to the standards set forth in 18 U.S.C. § 3553(a) and § 3572, applicable to criminal fines.1 These are grounded in the policy underpinnings of the Sentencing Reform Act of 1984, which established sentencing guidelines for district courts.  Before the imposition of sentencing guidelines, appellate review of criminal sentences was quite limited, particularly if the district court stayed within statutory boundaries.  Similarly, the imposition of civil penalties under the FCA affords little opportunity for review on appeal due to the lack of standards in the statute.

Judge Tjoflat criticized the application of Bajakajian to the FCA, but for slightly different reasons.  Bajakajian involved criminal forfeiture of property of the in personam variety.  The focus in that case was on whether the forfeiture was grossly disproportionate to the crime committed.  See Yates 21 F.4th at 1328.  In the FCA context, in contrast, “there is no natural limit to the fine extracted, like there is a natural limit to the property forfeited” based on the identified value of the property. Id.  Too, Judge Tjoflat criticized the court’s reliance on the presumption of constitutionality that arises when a forfeiture is below the statutory maximum.  Congress determines the relative degree of harm society places on criminal conduct.  The Sentencing Commission furthermore brings institutional expertise to bear in “monetiz[ing] culpability.”  Id. at 1330.  “But the strong presumption of constitutionality should only apply when Congress and/or the Sentencing Commission bring their expertise to bear.”  Id.  Although, according to the legislative history, the penalty regime under the FCA was driven by deterrence, what level of deterrence is appropriate for a particular false claim is unclear:

Of course, the commonality is that all False Claims Act cases involve—well —false claims. But the sheer permutations of false claims violations falling under the FCA precluded Congress from ‘distill[ing] the monetary value society places on harmful conduct’ or ‘monetiz[ing] culpability’ under the statutory fine scheme.  A solo doctor could submit 50 false claims in Medicare fraud that only cost the Government $500. A Government contractor could submit 50 false claims that cost the Government $5 million. In both cases, the statutory minimum and maximum fine range would be the same, even though the treble damages amounts would be vastly different and the cost to society would likely be much higher in the case of Government contractor fraud. My point is that the statutory fine ranges are not at all tethered to what will efficiently deter a particular defendant based on evidence, so the strong presumption of constitutionality is unwarranted in the FCA fine context.


With this backdrop, Judge Tjoflat, noting that the Eighth Amendment derives from the common law, proposed an Excessive Fines analysis that incorporates the common law approach to punishment, historically seeking general deterrence, specific deterrence (also called incapacitation), and retribution, at the same time imposing no greater sentence than necessary to achieve these purposes.  At common law, the inquiry into excessiveness focused on both the characteristics of the individual defendant as well as the offense at issue.  Thus, in Judge Tjoflat’s view, district courts should apply the factors set forth in 18 U.S.C. § 3553(a) and § 3572, which incorporate these concepts.  The defendant may present evidence at a hearing to demonstrate why the purposes of punishment would not be served by the government’s or relator’s proposed penalty.  And if the statutory minimum were too harsh or disproportionate in a particular case, deviation therefrom may be appropriate.  Resort to these statutory factors would also create a meaningful record for appellate review, unlike the standardless status quo.


The statutory penalties imposed by the district court in this case, although affirmed by the appellate court, exposed the disconnect between the damages and penalty provisions under the False Claims Act.  In this case, the trebled damages amounted to less than $3,000 while the minimum statutory penalty added up to well over $1 million.  This disproportionate outcome was likely sustainable on appeal because the amounts were neither shocking in absolute terms nor beyond the ability of the defendant to pay.  Had the minimum penalties imposed a substantially greater burden on the defendant, say $10 million or more, the district court likely would have felt pressure to invoke the Eighth Amendment to reject the penalties outright, or fashion some alternative remedy.  See, e.g., United States ex rel. Absher v. Momence Meadows Nursing Center, Inc., 764 F.3d 699, 705 (7th Cir. 2014) (district court vacated the jury’s $19 million penalty award as unconstitutional under the Eighth Amendment).

Not only does the structure of the FCA permit an absurd outcome, but, as the judges of the Yates court explained at some length, it provides no guidance whatsoever to district courts in determining what penalty is appropriate in a particular case.  As the penalty range increases, now between $11,803 and $23,607 for each false claim, guidelines become even more essential.  A set of standards, such as those set forth in 18 U.S.C. § 3553(a) and § 3572, are necessary to help district courts achieve a fair outcome in a case where FCA liability is established, true to the historical objectives of punishment.  It will aid litigants in advocating for or against a proposed penalty.  And, as emphasized by Judge Tjoflat in his separate opinion, a set of standards also provides the appellate court with a yardstick against which to measure the propriety of a particular penalty award.  This case presents, yet again, a need for Congress to take action to rectify previous legislative oversights in this complex statutory scheme.


  1. Section 3553(a) sets forth factors to be considered in imposing a criminal sentence generally, while section 3572 details factors to be considered in imposing a criminal fine.  The factors enumerated in § 3553(a) include, among other things, the nature and circumstances of the offense, characteristics of the defendant, the need for the sentence imposed to reflect the seriousness of the offense, promote respect for the law, and provide just punishment for the offense.  The statute further directs courts to consider adequate deterrence to criminal conduct and protection of the public from further crimes of the defendant.  See 18 U.S.C. § 3553(a).  Section 3572 looks to the defendant’s income, the burden the fine would impose on the defendant or his dependents, the harm caused by the defendant, how much restitution is made, the need to take away from the defendant illegal profit, and the costs to the government of the defendant’s misconduct.  See 18 U.S.C. § 3572.