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UNITED STATES v. HALPER

decided: May 15, 1989.

UNITED STATES
v.
HALPER



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.

Blackmun, J., delivered the opinion for a unanimous Court. Kennedy, J., filed a concurring opinion, post, p. 452.

Author: Blackmun

[ 490 U.S. Page 436]

 JUSTICE BLACKMUN delivered the opinion of the Court.

In this case, we consider whether and under what circumstances a civil penalty may constitute "punishment" for the purposes of double jeopardy analysis.*fn1

[ 490 U.S. Page 437]

     I

Respondent Irwin Halper worked as manager of New City Medical Laboratories, Inc., a company which provided medical service in New York City for patients eligible for benefits under the federal Medicare program. In that capacity, Halper submitted to Blue Cross and Blue Shield of Greater New York, a fiscal intermediary for Medicare, 65 separate false claims for reimbursement for service rendered. Specifically, on 65 occasions during 1982 and 1983, Halper mischaracterized the medical service performed by New City, demanding reimbursement at the rate of $12 per claim when the actual service rendered entitled New City to only $3 per claim. Duped by these misrepresentations, Blue Cross overpaid New City a total of $585; Blue Cross passed these overcharges along to the Federal Government.*fn2

The Government became aware of Halper's actions and in April 1985 it indicted him on 65 counts of violating the criminal false-claims statute, 18 U. S. C. § 287, which prohibits "mak[ing] or present[ing] . . . any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent." Halper was convicted on all 65 counts, as well as on 16 counts of mail fraud. He was sentenced in July 1985 to imprisonment for two years and fined $5,000.

[ 490 U.S. Page 438]

     The Government then brought the present action in the United States District Court for the Southern District of New York against Halper and another, who later was dismissed from the case, see App. 21, 36, under the civil False Claims Act, 31 U. S. C. §§ 3729-3731. That Act was violated when "[a] person not a member of an armed force of the United States . . . (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved." § 3729. Based on facts established by Halper's criminal conviction and incorporated in the civil suit, the District Court granted summary judgment for the Government on the issue of liability. 660 F. Supp. 531, 532-533 (1987).

The court then turned its attention to the remedy for Halper's multiple violations. The remedial provision of the Act stated that a person in violation is "liable to the United States Government for a civil penalty of $2,000, an amount equal to 2 times the amount of damages the Government sustains because of the act of that person, and costs of the civil action." 31 U. S. C. § 3729 (1982 ed., Supp. II).*fn3 Having violated the Act 65 separate times, Halper thus appeared to be subject to a statutory penalty of more than $130,000.

The District Court, however, concluded that in light of Halper's previous criminal punishment, an additional penalty this large would violate the Double Jeopardy Clause. Although the court recognized that the statutory provisions for a civil sanction of $2,000 plus double damages for a claims violation was not in itself criminal punishment, it concluded that this civil remedy, designed to make the Government whole, would constitute a second punishment for double jeopardy

[ 490 U.S. Page 439]

     analysis if, in application, the amount of the penalty was "entirely unrelated" to the actual damages suffered and the expenses incurred by the Government. 660 F. Supp., at 533. In the District Court's view, the authorized recovery of more than $130,000 bore no "rational relation" to the sum of the Government's $585 actual loss plus its costs in investigating and prosecuting Halper's false claims. Ibid. The court therefore ruled that imposition of the full amount would violate the Double Jeopardy Clause by punishing Halper a second time for the same conduct. To avoid this constitutional proscription, the District Court read the $2,000-per-count statutory penalty as discretionary and, approximating the amount required to make the Government whole, imposed the full sanction for only 8 of the 65 counts. The court entered summary judgment for the Government in the amount of $16,000. Id., at 534.

The United States, pursuant to Federal Rule of Civil Procedure 59(e), moved for reconsideration. The motion was granted. On reconsideration, the court confessed error in ruling that the $2,000 penalty was not mandatory for each count. 664 F. Supp. 852, 853-854 (1987). It remained firm, however, in its conclusion that the $130,000 penalty could not be imposed because, in the circumstances before it, that amount would violate the Double Jeopardy Clause's prohibition of multiple punishments. Ibid. Looking to United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943), for guidance, the court concluded that, although a penalty that is more than the precise amount of actual damages is not necessarily punishment, a penalty becomes punishment when, quoting Justice Frankfurter's concurrence in Hess, id., at 554, it exceeds what "'could reasonably be regarded as the equivalent of compensation for the Government's loss.'" 664 F. Supp., at 854. Applying this principle, the District Court concluded that the statutorily authorized penalty of $130,000, an amount more than 220 times greater than the Government's measurable loss, qualified as punishment which, in

[ 490 U.S. Page 440]

     view of Halper's previous criminal conviction and sentence, was barred by the Double Jeopardy Clause. Because it considered the Act unconstitutional as applied to Halper, the District Court amended its judgment to limit the Government's recovery to double damages of $1,170 and the costs of the civil action. Id., at 855.

The United States, pursuant to 28 U. S. C. § 1252, took a direct appeal to this Court. We noted probable jurisdiction, 486 U.S. 1053 (1988), in order to determine the constitutionality of the remedial provisions of the civil False Claims Act as applied in Halper's case.

II

This Court many times has held that the Double Jeopardy Clause protects against three distinct abuses: a second prosecution for the same offense after acquittal; a second prosecution for the same offense after conviction; and multiple punishments for the same offense. See, e. g., North Carolina v. Pearce, 395 U.S. 711, 717 (1969). The third of these protections -- the one at issue here -- has deep roots in our history and jurisprudence. As early as 1641, the Colony of Massachusetts in its "Body of Liberties" stated: "No man shall be twise sentenced by Civil Justice for one and the same Crime, offence, or Trespasse." American Historical Documents 1000-1904, 43 Harvard Classics 66, 72 (C. Eliot ed. 1910). In drafting his initial version of what came to be our Double Jeopardy Clause, James Madison focused explicitly on the issue of multiple punishment: "No person shall be subject, except in cases of impeachment, to more than one punishment or one trial for the same offence." 1 Annals of Cong. 434 (1789-1791) (J. Gales ed. ...


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