Host Jonathan Porter welcomes back to the show Husch Blackwell attorney Tanner Cook to talk about the trial penalties associated with False Claims Act (FCA) litigation. The conversation begins with a short summary of how damages are tallied and awarded in the FCA context and how these can quickly accrue into an enormous sum of money. Jonathan and Tanner then dive into why FCA trials are the exception rather than the rule and the central role trial penalties play in the way most defendants assess risk. By statute, the FCA imposes treble damages and per-false claim damages, the latter of which government prosecutors rarely seek during pre-trial settlement negotiations, greatly reducing a defendant’s exposure to risk and making settlements the preferred vehicle for resolving disputes.

While FCA trial penalties can be large, the U.S. Constitution’s Excessive Fines Clause sometimes serves as a brake on penalties. As Tanner explains, constitutional arguments relying on the Excessive Fines Clause have gained some traction in various courts around the country, providing defendants with a means to combat the FCA’s statutory requirements.

Jonathan and Tanner then pivot to a recent FCA litigation (United States of America ex rel. Uri Bassan et al. v. Omnicare Inc.) that went to trial where the defendants lost and examine how trial penalties were handled by the court. Had the judge followed the letter of the law in the case under discussion, the resulting penalties would have equaled about $27 billion, roughly a third of the defendants’ market capitalization. Jonathan and Tanner discuss why the government declined to pursue the full damages and how the Excessive Fines Clause and the Due Process Clause figure into the way judges and counsel approached the matter.

Jonathan and Tanner conclude the discussion on how judges doing the math associated with total damages and the number of false claims are wildly inconsistent in the approaches they use, making it very difficult for defendants to assess risk prior to trial. Jonathan and Tanner then highlight some best practices for risk management in the FCA litigation context.

Jonathan Porter | Full Biography

Jonathan focuses on white collar criminal defense, federal investigations brought under the False Claims Act, and litigation against the government and whistleblowers, where he uses his experience as a former federal prosecutor to guide clients in sensitive and enterprise-threatening litigation. At the Department of Justice, Jonathan earned a reputation as a top white-collar prosecutor and trial lawyer and was a key member of multiple international healthcare fraud takedowns and high-profile financial crime prosecution teams. He serves as a vice chair of the American Health Law Association’s Fraud and Abuse Practice Group and teaches white collar crime as an adjunct professor of law at Mercer University School of Law.

Tanner Cook | Full Biography

Based in St, Louis, Tanner is a member of Husch Blackwell’s Commercial Litigation group and focuses on consumer class actions, antitrust litigation, and multidistrict litigation. Tanner frequently takes the lead in drafting critical pretrial briefs, including dispositive motions and evidentiary challenges. In addition to his commercial litigation practice, Tanner regularly assists on white collar defense matters, especially in the False Claims Act context. Tanner has significant experience defending companies from qui tam whistleblower suits at every stage of the litigation process, combining his deep substantive knowledge of the law with creative defense strategies. Tanner served as law clerk at the U.S. District Court, Eastern District of Missouri, for Judge Sarah E. Pitlyk.