UNITED STATES OF AMERICA, APPELLANT V. IRWIN HALPER

   No. 87-1383

   In the Supreme Court of the United States

   October Term, 1987

   On Appeal From the United States District Court for the Southern
District of New York

   Jurisdictional Statement

                       PARTIES TO THE PROCEEDING

   In addition to the parties named in the caption, Morris Halper,
M.D., was named as a defendant in the government's complaint in the
district court, but the complaint was dismissed as against him
pursuant to a stipulation.

            TABLE OF CONTENTS
   Question presented
   Parties to the proceeding
   Opinions below
   Jurisdiction
   Constitutional and statutory provisions involved
   Statement
   The question is substantial
   Conclusion

                            OPINIONS BELOW

   The opinion of the district court declaring the statute
unconstitutional as applied (App., infra, 1a-5a) is reported at 664 F.
Supp. 852.  A prior, superseded opinion of the district court (App.,
infra, 6a-11a) is reported at 660 F. Supp. 531.

                             JURISDICTION

   The judgment of the district court (App., infra, 12a) was filed on
October 21, 1987.  /1/ A notice of appeal to this Court (App., infra,
13a-14a) was filed on November 19, 1987.  On January 13, 1988, Justice
Marshall extended the time within which to docket this appeal to and
including February 17, 1988.  The jurisdiction of this Court is
invoked under 28 U.S.C. 1252.  /2/

           CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED

   The Double Jeopardy Clause of the Fifth Amendment provides:  "nor
shall any person be subject for the same offence to be twice put in
jeopardy of life or limb."

   31 U.S.C. 3729, before its amendment in 1986, provided in pertinent
part:

         A person not a member of an armed force of the United States
      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, if the person --

         (1) knowingly presents, or causes to be presented, to an
      officer or employee of the Government or a member of an armed
      force a false or fraudulent claim for payment or approval;  (or)

         (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;  (or)

         (3) conspires to defraud the Government by getting a false or
      fraudulent claim allowed or paid * * *.

   31 U.S.C. 3729, as amended by Section 2 of the False Claims
Amendments Act of 1986, Pub. L. No. 99-562, 100 Stat. 3153, 3153-3154,
provides in pertinent part:

         (a) * * * Any person who --

         (1) knowingly presents, or causes to be presented, to an
      officer or employee of the United States Government or a member
      of the Armed Forces of the United States a false or fraudulent
      claim for payment or approval;  (or)

         (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 by the Government;  (or)

         (3) conspires to defraud the Government by getting a false or
      fraudulent claim allowed or paid * * *

         is liable to the United States Government for a civil penalty
      of not less than $5,000 and not more than $10,000, plus 3 times
      the amount of damages which the Government sustains because of
      the act of that person * * *.

                      *  *  *  *  *

         * * * A person violating this subsection shall also be liable
      to the United States Government for the costs of a civil action
      brought to recover any such penalty or damages.

                          QUESTION PRESENTED

   Whether the $2000-per-false-claim penalty prescribed by the civil
False Claims Act, 31 U.S.C. 3729-3731, when applied to a defendant who
has already been convicted and punished under the criminal false
claims statute (18 U.S.C. 287) for 65 false claims of $9 each, is in
effect a criminal penalty prohibited by the Double Jeopardy Clause.

                               STATEMENT

   1. The civil False Claims Act, 31 U.S.C. 3729-3731, was first
enacted in 1863 and signed into law by President Lincoln in an effort
to "stop() the massive frauds perpetrated (against the Union Army) by
large (defense) contractors during the Civil War." United States v.
Bornstein, 423 U.S. 303, 305 n.1, 309 (1976).  It is "the Government's
primary litigative tool for combatting fraud" (S. Rep. 99-345, 99th
Cong., 2d Sess. 2 (1986);  see H.R. Rep. 99-660, 99th Cong., 2d Sess.
18 (1986)).  "(T)his statute has been used more than any other in
defending the Federal treasury against (fraud)" (S. Rep. 99-345,
supra, at 4).

   In pertinent part, the statute gives the United States (31 U.S.C.
3730(a)) a civil cause of action against defined classes of persons
who seek the payment of false claims by the federal government (see 31
U.S.C. 3729).  The version of the statute that was in effect at the
time of the false claims in this case provides that, if a defendant is
determined to have committed a false claim violation within the
meaning of the Act, the government is entitled to recover a civil
penalty of $2000 plus double damages and costs.  31 U.S.C. 3729.  The
$2000-per-claim penalty remained in the statute, unchanged, from 1863
to 1986 (H.R. Rep. 99-660, supra, at 17).  /3/

   2. Appellee was the manager of New City Medical Laboratories, Inc.
(New City), which provided medical services for patients eligible for
benefits under the federal Medicare program (App., infra, 6a).
Providers under that program are entitled to federal reimbursement, at
specified rates, for services rendered to Medicare recipients.  From
about January 1982 to December 1983, appellee submitted 65 different
false claims for reimbursement to Blue Cross and Blue Shield of
Greater New York (Blue Cross), a fiscal intermediary of the Department
of Health and Human Services, which administers the Medicare program
(id. at 7a).  /4/ Each of the 65 claims demanded payment of $12 for a
service whose performance was actually reimbursable for only three
dollars (id. at 7a-8a).  Blue Cross was unaware of the
misrepresentations, and it paid New City the full amount that it
requested (ibid.).  New City was thus overpaid by a total of $585.

   When the government became aware of his fraud, appellee was
indicted on 65 counts under the criminal false claims statute (18
U.S.C. (1982 ed.) 287), which makes it a crime to "make() or present()
* * * any claim upon or against the United States, or any department
or agency thereof, knowing such claim to be false, fictitious, or
fraudulent." /5/ On July 9, 1985, appellee was convicted on all 65
counts as well as 16 counts of mail fraud.  He was fined $5000 and
sentenced to two years' imprisonment.  App., infra, 8a.

   3. On April 11, 1986, the government commenced this civil action
against appellee under the civil False Claims Act, 31 U.S.C.
3729-3731.  At the time the action was instituted, that Act provided
in pertinent part that a person who "knowingly presents, or causes to
be presented (to the government) a false or fraudulent claim for
payment or approval," or who "knowingly makes * * * a false * * *
statement to get a false or fraudulent claim approved," "is liable to
the United States Government for civil penalty of $2,000, an amount
equal to 2 times the amount of damages the Government sustains * * *
and costs of the civil action" (31 U.S.C. 3729(1), (2)).  Because the
statute provided for a civil penalty of $2000, the government sought a
total civil penalty of $130,000, i.e., $2000 for each of appellee's 65
violations.  /6/ The government also sought double damages ($1170) and
costs.

   In an initial opinion filed on April 29, 1987, the district court
granted summary judgment for the government on the question of
appellee's liability (App., infra, 6a).  Noting that appellee's
conviction under the criminal false claims statute "necessarily
determined" (id. at 8a) that he had knowingly submitted false claims,
the court ruled that appellee was collaterally estopped from denying
liability in this civil action (id. at 9a).  /7/

   The court, however, declined to impose the civil penalty of
$130,000 that the government had requested.  Stating that "the amount
by which the 65 claims were inflated was $9.00 for each claim, or (a
total of) $585" (App., infra, 10a), the court declared that "the total
amount necessary to make the Government whole bears no rational
relation to the $130,000 penalty the Government seeks "(ibid.).  The
court regarded a civil penalty of $130,000 as disproportionate to
appellee's total overbillings, and it suggested that such a penalty
would constitute, in effect, a "criminal" punishment (id. at 9a, 10a).
 Because appellee had already been criminally convicted and sentenced
for his commission of the acts on which this civil action is based,
the court stated that appellee "would have a valid double jeopardy
defense" (id. at 10a) if a penalty of $130,000 were imposed in this
case.

   Apparently because of its double jeopardy concerns, the court
construed the statute to mean that "the imposition of a civil penalty
of $2000 for each false claim (is not) mandatory" (App., infra, 10a).
The court then determined that "a civil penalty of $2,000 on 8 of the
65 claims, or $16,000, will reasonably compensate the Government for
actual damages as well as expenses incurred in investigating and
prosecuting this action" (ibid.).  Accordingly, the court imposed on
appellee a $16,000 civil penalty (id. at 11a).

   4. The government moved for reconsideration of the district court's
decision pursuant to Fed. R. Civ. P. 59(e).  The government argued
that it was well established that the statute requires a separate
civil penalty of $2000 for each false claim and that the court
therefore lacked the discretion to award a penalty of less than
$130,000 in this case.  The court thereupon issued a new opinion and
judgment (App., infra, 1a-5a, 12a), agreeing with the government's
statutory interpretation but holding the statute unconstitutional as
applied.

   The court acknowledged that it had erred in interpreting the
statute to allow less than a total civil penalty of $2000 for each
statutory infraction (App., infra, 2a).  /8/ The court therefore
revisited the double jeopardy concerns expressed in its previous
opinion.  It recognized (App., infra, 3a-4a, 9a) that in United States
ex rel. Marcus v. Hess, 317 U.S. 537 (1943), this Court had held that
the False Claims Act's $2000 penalty provision was civil, not
criminal, and therefore did not implicate the Double Jeopardy clause.
The court nevertheless found this case distinguishable on its facts
from Hess, because "(t)he penalty imposed in Hess was approximately
equal to the actual loss sustained by the government" (App., infra, at
4a).  Focusing on a perceived "tremendous disparity between actual
damage and the 'civil penalty' in this case" (ibid.), the court
repeated its earlier statement that a penalty of $130,000 in this case
would "bear() to rational relation to the Government's loss" (id. at
5a).  The court concluded (ibid.):

         (T)he $130,000 penalty sought in this case amounts to a
      criminal penalty for violations for which Halper has already
      been punished.

         Judgment in this amount would violate the Double Jeopardy
      Clause.  The statute, therefore, is unconstitutional as applied
      to Halper, and the sought-after relief of $130,000 must be
      denied.

   The court limited the government's recovery to double damages
($1170) and costs, with no civil penalty at all (App., infra, 5a).

                      THE QUESTION IS SUBSTANTIAL

   The district court in this case has struck down as unconstitutional
the statute "that has been used more than any other in defending the
Federal treasury against (fraud)" (S. Rep. 99-345, supra, at 4).  The
district court's holding -- that the False Claims Act's civil penalty
provision is really a "criminal" penalty provision in the
circumstances of this case and therefore violates the Double Jeopardy
Clause -- is at odds with United States ex rel. Marcus v. Hess, supra,
and Rex Trailer Co. v. United States, 350 U.S. 148 (1956), in which
this Court rejected the double jeopardy analysis that the district
court adopted here.

   The error in the district court's decision is not limited to its
inconsistency with this court's decisions in Hess and Rex Trailer.
The district court's ruling also disregards Congress's recent
amendments of the False Claims Act.  Although the views of a
subsequent Congress are, of course, not controlling with regard to the
meaning of a prior enactment, they are nevertheless instructive.  In
amending this statute in 1986, Congress increased the civil penalties
for false claims and explicitly reaffirmed that the statute's "civil
penalties" are indeed civil, not criminal, for double jeopardy and
other purposes.  The district court's view that the civil penalty in
this case is disproportionately harsh cannot be squared with
Congress's view that even more severe penalties are appropriate.  By
characterizing the False Claims Act's civil penalties as "civil" in
some cases and "criminal" in other cases, depending on the court's
view of whether the penalty is proportionate to the magnitude of the
defendant's fraud in the particular case, the theory embraced by the
district court also threatens serious disruption of a statutory
enforcement scheme that Congress recently reaffirmed in "the
Government's primary litigative tool for combatting fraud" (S. Rep.
99-345, supra, at 2).  /9/

   1. The district court's decision is inconsistent with this Court's
decision in United States ex rel. Marcus v. Hess, supra.  In Hess,
various electrical contractors had engaged in a collusive bidding
scheme on a federally funded public works project.  They were
convicted under the criminal false claims statute and fined $54,000
(317 U.S. at 545).  An action was then brought against the same
contractors under the civil False Claims Act.  /10/ The complaint
sought the imposition of 56 civil penalties of $2000 each, for a total
civil penalty of $112,000 (317 U.S. at 540).  The defendants asserted
that the civil suit was barred by the Double Jeopardy Clause on the
ground that imposition of a civil penalty of $112,000 over and above
the previous criminal fine would constitute a second criminal
punishment for the same conduct (id. at 548).

   This Court rejected the defendants' argument.  The Court began with
the premise that double jeopardy attaches only in a criminal
proceeding (317 U.S. at 549 (quoting Helvering v. Mitchell, 303 U.S.
391, 399 (1938))):

      Congress may impose both a criminal and a civil sanction in
      respect to the same act or omission;  for the double jeopardy
      clause prohibits merely punishing twice, or attempting a second
      time to punish criminally, for the same offense.  The question
      for decision is thus whether (the statute in question) imposes a
      criminal sanction.

   The Court then explained that, unlike the purpose of the criminal
false claims statute, which is to punish wrongdoers and "to vindicate
public justice" (Hess, 317 U.S. at 548-549), "the chief purpose of the
(civil False Claims Act) was to provide for restitution to the
government of money taken from it by fraud" (id. at 551).

   The Court acknowledged that, in any particular case, the civil
penalty of $2000 might exceed the amount of the fraud actually
perpetrated on the government.  But the Court emphasized that the
statute -- especially when considered in light of its criminal
counterpart (see 317 U.S. at 549) -- was clearly intended to provide a
civil remedy, and that "(t)his remedy does not lose the quality of a
civil action because more than the precise amount of so-called actual
damage is recovered." Id. at 550.  The Court concluded, therefore,
that there was no merit to the defendants' argument "that the $2,000
'forfeit and pay' provision is 'criminal' rather than 'civil'" (id. at
551).  /11/

   This Court's holding in Hess was reiterated 13 years later in Rex
Trailer Co. v. United States, supra.  In Rex Trailer, the defendant
was criminally convicted of using fraud in buying surplus was assets
from the government and was fined $25,000 (350 U.S. at 149).  After
the criminal conviction, the government filed a civil action under the
Surplus Property Act of 1944, 50 U.S.C. (1946 ed.) App. 1635, seeking
the imposition of five Civil penalties of $2000 each based on the same
five acts of fraud that gave rise to the criminal proceeding.  The
defendant asserted that the previous criminal conviction posed a
double jeopardy bar to the government's civil penalty proceeding (350
U.S. at 150).

   As in Hess, this Court rejected the defendant's argument.  "The
only question for * * * decision," the Court observed, "is whether
(the civil penalty provision) is civil or penal" (350 U.S. at 150).
Noting that the Surplus Property Act's civil penalty provision was
"virtually identical" (id. at 152 n.4) to the civil penalty provision
in the False Claims Act that was upheld in Hess, the Court followed
Hess and concluded that the $2000 civil penalty provision at issue was
civil, not criminal, and therefore did not implicate the Double
Jeopardy Clause (id. at 152).

   The defendant in Rex Trailer sought to bolster its argument by
using the same argument that the district court employed in the
present case:  that the penalty was disproportionate to the
government's actual loss under the circumstances of that case.
Indeed, in Rex Trailer the defendant's fraud had not been shown to
have resulted in any damages to the government (350 U.S. at 152).  The
Court rejected this effort to escape from Hess.  Repeating Hess's
admonition that "'(t)he inherent difficulty of choosing a proper
specific sum which would give full restitution was a problem for
Congress'" (ibid. (quoting Hess, 317 U.S. at 552)), the Court
explained that the $2000 civil penalty provision was essentially a
"liquidated-damage" provision (350 U.S. at 151, 153).  The fact that
the Civil penalty provision effectively served as a liquidated-damages
clause, to provide a rough, across-the-board measure of the
government's recovery, did not "transform() what was clearly intended
as a civil remedy into a criminal penalty" (id. at 154).

   The district court's approach in this case cannot be squared with
this Court's explicit rejection of the defendants' double jeopardy
arguments in Hess and Rex Trailer.  In characterizing the False Claims
Act's penalties as "criminal," the district court in this case has
adopted a position that this Court has already twice rejected.  See
Berdick v. United States, 612 F.2d 533, 538 (Ct. Cl. 1979) (citing
Hess;  "the forfeitures required by the False Claims Act are civil,
not criminal, * * * and the double jeopardy provisions of the Fifth
Amendment do not apply").

   The district court erred in its effort to distinguish Hess.
Although "(t)he penalty imposed in Hess was approximately equal to the
actual loss sustained by the government" (App., infra, 4a;  see Hess,
317 U.S. at 540), this Court's decision did not in any way turn on the
amount of damages inflicted on the government in that particular case.
 Indeed, Rex Trailer expressly rejected the defendant's double
jeopardy argument in the face of a contention that the government had
suffered no loss at all.

   Moreover, the district court's theory that a statute can be "civil"
in some cases and "criminal" in others, depending on whether it leads
(in the court's view) to a disproportionate sanction, would produce
bizarre consequences.  Consider two proceedings both brought under the
False Claims Act, one involving a $112,000 penalty for 56 false claims
costing the government $100,000 and the other involving a $130,000
penalty for 65 false claims costing the government $585.  If the first
proceeding is "civil" (following Hess) and the second is "criminal"
(under the decision below), then in the second case -- but not the
first -- the government would be required to prove its case beyond a
reasonable doubt.  Conversely, in the first case the defendant would
be entitled to take discovery under the liberal provisions of the
Federal Rules of Civil Procedure, but the more limited discovery
available in criminal cases.  Indeed, under the district court's
theory a case might proceed to trial as a "civil" case only later to
be held "criminal" (and to require more procedural safeguards) if the
evidence developed at trial led the district court to question the
"proportionality" of the civil penalty or if the court of appeals
disagreed with the district court's conclusion that the penalty was
not unduly disproportionate.

   This Court's decisions do not support any such case-by-case
analysis of whether a statute is "civil" or "criminal" in nature.  To
the contrary, once it is established that Congress intended to create
a "civil" penalty, this Court "inquire(s) * * * whether the statutory
scheme (i)s so punitive either in purpose or in effect as to negate
(Congress's) intention." United States v. Ward, 448 U.S. 242, 248-249
(1980) (emphasis added).  The question whether this statutory scheme
is so punitive as to be "criminal" was answered long ago in Hess and
Rex Trailer.  The district court's attempt to fashion a case-specific
exception to those decisions warrants review and reversal.  /12/

   2. In two respects, Congress's recent amendment of the statute
buttresses this Court's rulings in Hess and Rex Trailer that the False
Claims Act's civil penalty provision is indeed "civil" and does not
implicate double jeopardy concerns.  First, Congress has now raised
the civil penalty from $2000 per false claim to "not less than $5,000
and not more than $10,000" per false claim.  1986 Amendments Section
2, 100 Stat. 3154 (to be codified at 31 U.S.C. 3729(a)).  Congress's
substantial increase of the statutory penalty weighs against the
district court's suggestion that imposition of the smaller,
preexisting $2000 penalty in this case is excessive.  Second, in
amending the False Claims Act, Congress explicitly reaffirmed that the
civil penalty provision is intended to be a civil sanction.
Congress's own characterization of the penalty as civil is entitled to
great weight and militates against the district court's contrary
conclusion that the sanctions would be "criminal" in this case.

   a. Prompted by extensive findings that fraud "permeates generally
all Government programs" (S. Rep. 99-345, supra, at 2) -- particularly
health-care benefit programs (id. at 4) such as the Medicare program
involved in this case (id. at 21) -- Congress revised the False Claims
Act in 1986 "(i)n order to make the statute a more useful tool against
fraud in modern times" (id. at 2).  See also H.R. Rep. 99-660, supra,
at 21.  Congress determined that "(t)his growing pervasiveness of
fraud necessitates modernization of" the Act (S. Rep. 99-345, supra,
at 2) because "some of the provisions of the Act are outdated" (H.R.
Rep. 99-660, supra, at 17).  In particular (ibid.),

      the current law permits the United States to recover double
      damages plus $2,000 for each false or fraudulent claim.  This
      penalty has not been changed since 1863.  The Congressional
      Research Service has reported that, based on the Consumer Price
      Index, the buying power of $2,000 in 1863 would be close to
      $18,000, today.

   Thus, emphasizing that it shared "the apparrent belief of the act's
initial drafters that defrauding the Government is serious enough to
warrant an automatic forfeiture rather than leaving fine
determinations with district courts, possibly resulting in
discretionary nominal payments" (S. Rep. 99-345, supra, at 17),
Congress decided to strengthen the civil penalties that the government
is entitled to recover from those who "plunder() * * * the public
treasury" (United States v. McNinch, 356 U.S. 595, 599 (1958)) by
making false claims.

   The amended version of the statute increased the civil penalty per
false claim from $2000 to any amount in the $5000-to-$10,000 range and
imposed triple rather than double damages.  The legislative history of
the amendment makes it clear that Congress strengthened the
government's civil remedies because it determined that more severe
sanctions were needed in order to stem the tide of rampant fraud
inflicted on the government.  See H.R. Rep. 99-660, supra, at 18
(estimating government's loss to fraud at "hundreds of millions of
dollars to more than $50 billion per year");  S. Rep. 99-345, supra,
at 3 (giving larger estimates and noting that "(t)he cost of fraud
cannot always be measured in dollars and cents, however").  /13/ Given
Congress's substantial increase of the amount of the statutory civil
penalty, coupled with the legislative determination that the increased
amount was necessary to provide the government with an adequate weapon
against the "pervasive" fraud in government programs (S. Rep. 99-345,
supra, at 3), the district court erred by substituting its judgment
for that of Congress as to the excessiveness of the smaller, $2000
civil penalties sought in this case.  /14/

   b. Congress's recent amendments not only increased the amount of
the civil penalty to which the government is entitled, but in addition
reaffirmed that the statute's civil penalties are indeed "civil."
Referring to Congress's addition to the statute of a provision "to
make clear that in civil fraud actions, the Government is required to
prove all essential elements of the cause of action (only) by a
preponderance of the evidence" (S. Rep. 99-345, supra, at 30-31;  see
1986 Amendments Section 5, 100 Stat. 3158 (to be codified at 31 U.S.C.
3731(c))), the Senate Judiciary Committee took pains to explain that
False Claims Act proceedings are civil in nature (S. Rep. 99-345,
supra, at 31).  The Senate report makes explicit Congress's
repudiation of the notion that "the civil False Claims Act is penal in
nature" (ibid.), and highlights "(t)he Supreme Court's rejection of
(that) premise in (Hess)" (ibid.).

   Congress's own characterization of the civil penalties as "civil"
-- in the pre-1986 statute as well as in the recent amendment -- is
highly probative.  This Court has made clear that when "Congress has
indicated an intention to establish a civil penalty" (United States v.
Ward, 448 U.S. at 248) as opposed to a criminal punishment, Congress's
intention is entitled to great weight and is controlling unless "the
statutory scheme (is) so punitive in purpose or effect as to negate
that intention" (id. at 248-249).  This Court has admonished,
moreover, that "(i)n regard to this latter inquiry, * * * 'only the
clearest proof could suffice to establish the unconstitutionality of a
statute on (the) ground (it is really a criminal and not a civil
provision)'" (id. at 249 (quoting Flemming v. Nestor, 363 U.S. 603,
617 (1960))).  Thus, when it is asserted that a statute that Congress
has clearly denoted as civil is in reality a criminal statute for one
purpose or another, the question is "whether Congress, despite its
manifest intention to establish a civil, remedial mechanism,
nevertheless provided for sanctions so punitive as to 'transform what
was clearly intended as a civil remedy into a criminal penalty'"
(Ward, 448 U.S. at 249 (quoting Rex Trailer, 350 U.S. at 154)).  See
United States v. One Assortment of 89 Firearms, 465 U.S. 354, 362-366
(1984) (holding forfeiture proceeding under 18 U.S.C. 924(d) "civil"
and rejecting double jeopardy clam);  One Lot Emerald Cut Stones & One
Ring v. United States, 409 U.S. 232, 235-237 (1972) (per curiam)
(holding forfeiture proceeding under 19 U.S.C. 1497 "civil" and
rejecting double jeopardy claim);  Chapman v. United States, 821 F.2d
523, 528-529 (10th Cir. 1987) (holding Civil Monetary Penalties Law,
42 U.S.C. 1320a-7a, "civil" and rejecting double jeopardy claim).

   Especially in light of this Court's decisions in Hess and Rex
Trailer, there is no basis in this case for countering the presumption
that a statute ordinarily is deemed civil if Congress says it is.
Indeed, the presumption in this case is particularly strong, not only
because Congress has expressly labeled the False Claims Act a "civil"
provision in the very language of the statute (31 U.S.C. 3729,
3730(a);  see 1986 Amendments Sections 2, 3, 100 Stat. 3153-3154, 3154
(to be codified at 31 U.S.C. 3729(a), 3730(a)), but also because
Congress has deliberately provided for a separate criminal analog to
the False Claims Act, in 18 U.S.C. 287.  "Congress labeled the
sanction * * * a 'civil penalty,' a label that takes on added
significance given its juxtaposition with the criminal penalties set
forth in (another, separate statutory provision)" (Ward, 448 U.S. at
249).  See Hess, 317 U.S. at 549 ("(t)he statutes on which this suit
rests make elaborate provision both for a criminal punishment and a
civil remedy");  Helvering v. Mitchell, 303 U.S. at 404 ("(t)he fact
that the (statutory scheme) contains two separate and distinct
provisions imposing sanctions (one civil and one criminal), and that
these appear in different parts of the statute, helps to make clear
the (civil) character of that here invoked").

   Thus, Congress's recent changes to the False Claims Act confirm
this Court's conclusion, in both Hess and Rex Trailer, that the Act's
"civil penalty" (31 U.S.C. 3729) scheme does not implicate the Double
Jeopardy Clause.  The district court sought to distinguish Hess on the
basis of the perceived disproportionality of the penalty in this case,
but the distinction is unavailing.  The government is entitled to
recover a full civil penalty even in cases in which no money is paid
out and there are no provable damages:  "The United States is entitled
to recover such forfeitures solely upon proof that false claims were
made, without proof of any damages." S. Rep. 99-345, supra, at 8;  see
United States v. Hughes, 585 F.2d 284, 286 n.1 (7th Cir. 1978) ("(a)
false claim is actionable under the (False Claims) Act even though the
United States has suffered no measurable damages from the claim").

   Given the endemic abuse that Congress has found to exist in
government programs such as Medicare, imposition of a civil penalty of
$2000 ($5000 to $10,000 under the new statute) against an individual
who defrauds the government is reasonable and is well within
Congress's legislative power.  Even when a defendant's false claim
nets him little or no gain, the defendant's fraudulent conduct imposes
on the government an "extremely costly" burden of investigation and
prosecution.  Mayers v. Department of Health & Human Services, 806
F.2d 995, 999 (11th Cir. 1986) (upholding administrative imposition of
civil penalty of close to two million dollars in Medicare fraud case
brought under the Civil Monetary Penalties Act), cert. denied, No.
86-1887 (Oct. 5, 1987);  cf. Hess, 317 U.S. at 552 (stressing "the
inherent difficulty of choosing a proper specific sum which would give
full restitution").  The civil penalty in this case is substantial not
because Congress has provided for an excessive sanction, but because
the defendant has defrauded the government 65 times.  The appellee
cheated the government many times does not transform the government's
civil remedy into a criminal punishment.

                              CONCLUSION

   Probable jurisdiction should be noted.

   Respectfully submitted.

   CHARLES FRIED

      Solicitor General

   RICHARD K. WILLARD

      Assistant Attorney General

   THOMAS W. MERRILL

      Deputy Solicitor General

   ROY T. ENGLERT, JR.

      Assistant to the Solicitor General

   MICHAEL JAY SINGER

   THOMAS M. BONDY

      Attorneys

   FEBRUARY 1988

   /1/ An earlier judgment was filed on May 1, 1987.  That judgment
was superseded when the district court issued a new opinion, altering
the relief awarded, in July 1987.  The October 21 judgment was entered
pursuant to the July 1987 opinion.  On October 28, 1987, the district
court on its own motion entered yet a third judgment (App., infra,
15a), which did not come to our attention until December 1987.  The
October 28 judgment, like the October 21 judgment, awards the United
States double damages of $1170 in accordance with the court's July
1987 opinion, but does not award the additional $130,000 to which the
United States is entitled under the $2000-per-false-claim penalty
prescribed by the False Claims Act.  The October 28 judgment differs
from the October 21 judgment only in that it explicitly awards costs
to the government.  The October 21 judgment, which was cited in our
notice of appeal (id. at 13a), constitutes the court's final judgment
in this case for purposes of appealing from the court's holding in its
July 1987 opinion that the statute is unconstitutional as applied.
See FCC v. League of Women Voters, 468 U.S. 364, 373-374 n.10 (1984);
FTC v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211-212
(1952).

   /2/ "(A) direct appeal (under 28 U.S.C. 1252) may be taken when, as
here, a federal statute has been held unconstitutional as applied to a
particular circumstance." United States v. Darusmont, 449 U.S. 292,
293 (1981) (per curiam);  see California v. Grace Brethren Church, 457
U.S. 393, 405 (1982) (citing Fleming v. Rhodes, 331 U.S. 100, 102-103
(1947)).

   /3/ On October 27, 1986, the President signed into law the False
Claims Amendments Act of 1986, Pub. L. No. 99-562, 100 Stat. 3153
(1986 Amendments).  The 1986 Amendments revise the civil False Claims
Act to provide in most instances for a civil penalty of from $5000 to
$10,000 plus triple damages and costs.  See 1986 Amendments Section 2,
100 Stat. 3153-3154.  It is the position of the United States that
(with limited exceptions) the 1986 Amendments are applicable to all
cases pending on their effective date, including cases in which the
false claims were made earlier.  See United States v. Hill, No. MCA
84-2144-RV (N.D. Fla. Nov. 12, 1987).  But see United States v.
Bekhrad, 672 F. Supp. 1529 (S.D. Iowa 1987).  The government did not
assert a demand for civil penalties under the amended version of the
statute in the present case, however, and accordingly the only
question before this Court concerns the constitutionality of the
pre-1986 version of the statute.

   /4/ As the district court noted (App., infra, 8a), the fact that
appellee submitted the false claims to an intermediary rather than
directly to the government does not in any way shield him from
liability under either the civil or the criminal false claims statute.
 Congress has now codified this rule.  See 1986 Amendments Section 2,
100 Stat. 3154 (to be codified at 31 U.S.C. 3729(c)).

   /5/ Appellee was charged, tried, and sentenced under the pre-1986
version of this statute.  Section 7 of the 1986 Amendments, 100 Stat.
3169, revised the wording of this statute but did not change the
substance of the offense.  See 18 U.S.C. (Supp. IV) 287.

   /6/ When a defendant submits several fraudulent demands for
payment, in general each individual false payment demand gives rise to
a separate false claim violation for purposes of the False Claims Act.
 See United States v. Bornstein, 432 U.S. at 309 n.4;  S. Rep. 99-345,
supra, at 8, 9;  H.R. Rep. 99-660, supra, at 21.

   /7/ The new, amended version of the statute contains an explicit
collateral estoppel provision.  See 1986 Amendments Section 5, 100
Stat. 3158 (to be codified at 31 U.S.C. 3731(d)).

   /8/ The court stated in its amended opinion that "(t)he Government
now has cited to compelling authority that, in the absence of
Government consent, the $2,000 penalty for each false claim is
mandatory" (App., infra, 1a-2a).  See, e.g., United States v. Hughes,
585 F.2d 284, 286 (7th Cir. 1978) ("This ($2000-per-false-claim)
forfeiture provision is mandatory;  it leaves the trial court without
discretion to alter the statutory amount.");  Brown v. United States,
524 F.2d 693, 705-706 (Ct. Cl. 1975);  United States v. Cato Bros.,
273 F.2d 153, 156 (4th Cir. 1959), cert. denied, 362 U.S. 927 (1960);
United States v. Jacobson, 467 F. Supp. 507, 508 (S.D.N.Y. 1979).  The
Senate Judiciary Committee has recently reconfirmed this understanding
of the pre-1986 statute (S. Rep. 99-345, supra, at 8 (emphasis
added)):

      In its present form, the False claims Act empowers the United
      States to recover double damages * * *.  In addition, the United
      States may recover one $2,000 forfeiture for each false claim
      submitted in support of a claim.  The imposition of this
      forfeiture is automatic and mandatory for each claim which is
      found to be false.  The United States is entitled to recover
      such forfeitures solely upon proof that false claims were made,
      without proof of any damages.

   /9/ The district court's theory, if followed, would hamper the
government's ongoing enforcement efforts not only under the False
Claims Act, but also under other, similar statutory schemes that
provide for civil penalties in addition to criminal sanctions.  See,
e.g., Chapman v. United States, 821 F.2d 523, 528-529 (10th Cir. 1987)
(holding Civil Monetary Penalties Act, 42 U.S.C. 1320a-7a, "civil" and
rejecting double jeopardy claim);  Mayers v. Department of Health &
Human Services, 806 F.2d 995, 999 (11th Cir. 1986) (holding same
statute "civil"), cert. denied, No. 86-1887 (Oct. 5, 1987).

   /10/ The civil action was brought by a private party, in the
government's name, pursuant to the False Claims Act's qui tam
provisions (31 U.S.C. 3730(b)).

   /11/ The phrase "forfeit and pay" came from the language of the
version of the civil False Claims Act then in effect, 31 U.S.C. (1940
ed.) 231, which provided that anyone who submits a false claim against
the government "shall forfeit and pay to the United States the sum of
two thousand dollars" plus double damages and costs.

   /12/ The civil penalty in this particular case is as large as it is
not because Congress has provided for an excessive penalty, but
because the defendant has defrauded the government 65 times.  See
United States ex rel. Fahner v. Alaska, 591 F. Supp. 794, 801-802
(N.D. Ill. 1984) (imposing civil penalty in excess of one million
dollars for defendant's commission of more than 500 False Claims Act
violations;  "(w)hile the total damage award in this action may appear
to be excessive, it reaches such proportions for the sole reason that
(the defendant) has been found to have submitted 551 separate false
claims").

   /13/ Congress acted in order to deter those who would defraud the
government as well as to compensate the government for its monetary
and nonmonetary losses caused directly and indirectly by false claims.
 See, e.g., H.R. Rep. 99-660, supra, at 18.  Such a purpose was well
within Congress's power in enacting civil remedies.  As this Court
wrote in Hess, 317 U.S. at 550-551 (citations and footnote omitted),

      Congress might have provided here as it did in the anti-trust
      laws for recovery of "threefold damages . . . sustained and the
      cost of suit, including a reasonable attorney's fee." Congress
      could remain fully in the common law tradition and still provide
      punitive damages.  "By the common as well as by statute law, men
      are often punished for aggravated misconduct or lawless acts by
      means of civil action and the damages inflicted by way of
      penalty or punishment given to the party injured." This Court
      has noted that the general practice in state statutes of
      allowing double or treble or even quadruple damages.  Punitive
      or exemplary damages have been held recoverable under a statute
      like this which combines provision for criminal punishment with
      others which afford a civil remedy to the individual injured.
      The law can provide the same measure of damage for the
      government as it can for an individual.

   /14/ It bears emphasis that, in raising the civil penalty from
$2000 per false claim to $5000 to $10,000 per false claim, Congress
was aware that the civil penalty would be substantial in cases in
which the defendant commits many violations.  The Senate report speaks
to this very situation (S. Rep. 99-345, supra, at 9):

      Each separate * * * "false payment demand" constitutes a
      separate claim for which a forfeiture shall be imposed * * *,
      and this is true although many such claims may be submitted to
      the Government at one time.  For example, a doctor who completes
      separate Medicare claims for each patient treated will be liable
      for a forfeiture for each form that contains false entries even
      though several such forms may be submitted to the fiscal
      intermediary at one time.

   See also H.R. Rep. 99-660, supra, at 21.

   APPENDIX