Reply Brief — United States v. Halper

In the Supreme Court of the United States

OcToser Term, 1988

UNITED STATES OF AMERICA, APPELLANT

Vv.

IRWIN HALPER

ON APPEAL FROM THE UNITED STATES DISTRICT COURT :

FOR THE SOUTHERN DISTRICT OF NEW YORK :

REPLY BRIEF FOR THE UNITED STATES

CHARLES FRIED

Solicuor General

Deparimeni of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Cases: Page

Albernaz +. United States, 450 U.S. 333 (1981) ?

Breed vy. Jones, 421 U.S. S19(1975). 29

Browning-Ferris Industries ¥. Kelco Disposal, Inc, cor

granted, No. 88-556 (Dec. $, 1988) 17

Coffey v. United States, 116 U.S. 436 (1886) 6

Flemming v. Nestor, 363 U.S. 603 (1960) 7

Garrett ». United States, 471 U.S. 773 (1985) ?

Green v. United States, 385 U.S. 184 (1957) 3

Helvering ¥. Michell, 903 U.S. 991 (1938) 12.3,4.6

Kennedy v. Mendova-Martinez, 372 U.S. 144 (1963) 14

Missouri v. Hunter, 499 U.S. 3991983) ?

One Lot Emerald Cut Stones +. Untied States, 08 US.

Ee ee ;

Rainwater v. United States, 356 US. 990 (1958) 14-15

Rex Trailer Co. v. United States, 950 U.S. 148 (1956) 3, 4,

12, 13, 6

Tull v. United States, No. 85-1259 (Apr. 28, 1987) 9

United States ». Bornstein, 423 US. 303 (1976) 14

United States ». Chouteau, 102 U.S. 603 (1881) 6

United States v. La Franca, 232 US. S68 (1931). 4.6

United States v. Neifert-White Co., 990 U.S. 228 (1968) 14

United States v. One Assortment of 89 Firearms, 465 US.

EN ate ce keds cade 2, 6,

United States ¥. Ward, 448 US. 242 (1980) 29

United States v. Wilson, 420 U.S. 332 (1975) ;

United States ex rel. Marcus ». Hess, MIT US. S37

(194)) | na aS .... 4 4,6, 10, 11, 1S, 16

Constitution and statutes:

U.S. Const. Amend. V (Double Jeopardy Clause) pussemn

Act of Mar 2, 1863, ch. 67, § 3, 12 Stat. 698 7, 1S

False Claims Act, 31 U.S.C. 3729 ef seg. 2, 7,

8, 10, 12, 14, 18, 16

isusc. is ?

NUSC. U9 ed)} 6

NUSC (Supp IV) dhe) LU)

Mis cilaneous

Cong. Globe, 37th Cong., 3d Sess. (1863):

pp. 1322-1323 ,eecesonnnaee

1B J. Moore, J. Lucas & T. Currier, “Moore's Federal

Praction 26 o8. UOGED « .... . «5. onc nnnscccceccsceses

J. Sigler, Double Jeopardy (1969) ,ececesesnasssaneeel

Westen, The Three Faces of Double Jeopardy Reflections

on Government Appeals of Crumnal Sentences, 7%

Ritch, 0. Row. SEBS GOGBED ... oon ccccccccccccscccses

18 C. Wright, A. Miller & E. Cooper, Federal Practice end

Procedure (1981)

Jn the Supreme Court of the United States

OCTOBER TERM, 1988

No. 87-1383

UNITED STATES OF AMERICA, APPELLANT

V.

IRWIN HALPER

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

REPLY BRIEF FOR THE UNITED STATES

As the Court, speaking through Justice Brandeis, wrote

50 years ago, “Congress may impose both a criminal and a

civil sanction in regard to the same act or omission * * *.”

Helvering v. Mitchell, 303 U.S. 391, 399 (1938). Whenever

the defendant in an ostensibly civil action seeks to set up

luis prior criminal prosecution as a bar to the proceeding,

“{t}he question for decision is thus whether [the statute ap-

plied in the second action] imposes a criminal sanction”

(ibid.). That question, which “is one of statutory construc-

tion” (ibid.), is the issue we addressed in our opening briet,

just as it is the issue that the district court resolved in favor

of appellee (see J.S. App. Sa (“the $130,000 penalty sought

in this case amounts to a criminal penalty”)).' Neverthe-

less, the amicus curiae invited by this Court to brief and

' Ct. Amicus Br. 14 (claiming that “[i}he ruling below was much

narrower than the siraw man the government attacks”).

(1)

2

argue this case in support of the judgment below insists

(Br. 7) that “[t}he government * * * asks the wrong ques-

tion,” and that the real question is not whether the statute

requiring the monetary judgment sought against appellee

imposes a criminal sanction. According to amicus, the

Court should affirm the judgment below if it determines

that the relief sought by the government under the False

Claims Act in this case was “punishment,” whether or not

that recovery was civil in nature (ibid.).

Amicus’s position cannot be squared with numerous

decisions of this Court and should be rejected once again.

Contrary to amicus’s position, if the Court determines that

the proceeding for civil penalties against appellee was civil

rather than criminal in nature, then the Double Jeopardy

Clause has no role to play in this case. And, as our open-

ing brief demonstrated, that proceeding was indeed civil.

1. The basic principle established in Helvering v. Mit-

chell, supra—that only “criminal” penalties give rise to

double jeopardy problems —has been reaffirmed by this

Court many times. See United States v. One Assortment

of 89 Firearms, 465 U.S. 354, 359-360, 365 (1984) (quoting

Helvering v. Mitchell, supra); 465 U.S. at 360 (double

jeopardy “inapposite” when remedy is “a civil, not a crim-

inal, sanction”); id. at 362 (“Unless the forfeiture sanction

was intended as punishment, so that the proceeding is

essentially criminal in character, the Double Jeopardy

Clause is not applicable.”) (emphasis added); United

States v. Ward, 448 U.S. 242, 248 (1980) (“The distinction

between a civil penalty and a criminal penalty is of some

constitutional import. * * * See, e. g., Helvering v. Mit-

chell, 303 U.S. 391, 399 (1938) (Double Jeopardy Clause

protects only against two criminal punishments) * * *.”);

Breed v. Jones, 421 U.S. 519, §28 (1975) ("[W]e have held

that the risk to which the [Double Jeopardy] Clause refers

is not presemt in proceedings that are not ‘essentially

3

criminal.’”) (quoting Helvering v. Mitchell, supra);

United States v. Wilson, 420 U.S. 332, 344 n.13 (1975)

(“On a number of occasions, the Court has observed that

the Double Jeopardy Clause ‘prohibits merely punishing

twice, Or attempting a second time to punish criminally,

for the same offense.’ ”) (quoting Helvering v. Mitchell,

supra), One Lot Emerald Cut Stones v. United States, 409

U.S. 232, 235-236 (1972) (quoting Helvering v. Mitchell,

supra), Rex Trailer Co. v. United States, 350 U.S. 148,

150-151 (1956) (quoting Helvering v. Mitchell, supra);

United States ex rel. Marcus v. Hess, 317 U.S. $37, 549

(1943) (quoting Helvering v. Mitchell, supra).*

As these’amply demonstrate, Helvering v. Mitchell can-

not be distinguished, as amicus suggests (Br. 11-13), on the

ground that the defendant in that case had been acquitted

in the criminal prosecution. Indeed, prior convictions

followed by civil actions for penalties are precisely what

gave rise to the cases on which we principally relied in our

opening brief.

* See also 18 C. Wright, A. Miller & E. Cooper, Federal Practice

and Procedure § 4474, at 749 (1981) (“Problems arise only when it is

asseried that a nominally civil action brought by the government in-

volves an element of punishment that runs afoul of double jeopardy

principles. Although no clear principle has emerged for distinguishing

remedial from punitive actions, most decisions have permitted

criminal prosecutions to be followed by civil actions for injunction,

forfeiture, monetary penalties, or double damages.”) (footnote omit-

ted); 1B J. Moore, J. Lucas & T. Currier, Moore's Federal Practice

{ 0.418[2), at 564 (2d ed. 1988) (“The protection against double

jeopardy is afforded only to a defendant in a criminal case. "); ad

4 0.418[3], at 585-586 (discussing Helvering v. Mitchell, supra); ud

§ 0.418[3), at $90-592 (discussing One Lot Emerald Cut Stones \

United States, supra), J. Sigler, Double Jeopardy 60 & 1.93 (1969)

(discussing cases supporting the criminal civil distinction and criticiz

ing carly cases that suggest a different view)

4

Thus, in Rex Trailer Co. v. United States, supra, the

defendant had been convicted, not acquitted, of fraud,

and the issue before the Court was whether the Double

Jeopardy Clause permitted the assessment of civil

penalties in a later proceeding. To answer that question,

the Court looked to the Helvering v. Mitchell test (350

U.S. at 150-151), not to some other test that supposedly

governs when the multiple-punishment aspect of the Dou-

ble Jeopardy Clause is at issue. The Court concluded its

opinion by observing that “[o}n this record it cannot be

said that the measure of recovery fixed by Congress in the

Act is so unreasonable or excessive that it transformed

what was clearly intended as a civil remedy info a criminal

penalty” (350 U.S. at 154 (emphasis added)). If amicus’s

position were the law, the Court’s concluding sentence

would have been pointless, for only the status of the civil

penalties as “punishment” vel non, not their status as

“criminal” or “civil” penalties, would matter.

Likewise, in United States ex rel. Marcus v. Hess,

supra, the defendant had been convicted, not acquitted,

under a general statute dealing with conspiracy to defraud

the government,’ and the Double Jeopardy Clause was put

at issue im precisely the same way that it is here. The Court

relied om the analysis of Helvering v. Mitchell, (317 U.S. at

$48), framed the issue as whether the action before it was

“criminal or remedial” (id. at 549), and based its judgment

on the proposition that the action “d[id} not lose the quali-

ty of a civil action” simply because more than actual

Our opening brief was in error in stating (at 11) that the cony chon

-as under the criminal false claims statute. However, the distinction

belween a prior conviction under that statute and a prior conviction

unde: the general fraud statute played no role in the Court's analysis.

There ts thus no basis for amicus’s remarke that our misstatement

ects “a rather eenificamt pomt” (Br. 1S 0.10)

ee

5

damages were recovered (id. at 550). Most devastating to

amicus’s position, the Court noted that “ ‘Punishment, in

a certain and very limited sense, may be the result of the

Statute before us so far as the wrong-doer is concerned,’

but this is not enough to label it a criminal statute” (ibid.

(citation omitted)). Every one of those statements would

have been beside the point if, as amicus contends, the

distinction between “criminal” and “civil” remedies is ir-

relevant in a multiple-punishment case.

Indeed, amicus’s proposition leads to the astounding

conclusion (Br. 35) that a defendant who is convicted in a

criminal case, but receives a suspended sentence or a fine

smaller than his prospective civil penalties, is better off

than a defendant who is acquitted of criminal charges, for

the former but not the latter would be able to claim the

protection of double jeopardy in a subsequent civil action

for “punitive” damages. The more sensible interpretation

of the Clause—and the one more consistent with this

Court’s cases—is that both a convicted and an acquitted

defendant can invoke the Clause to protect against subse-

quent criminal punishment for the same offense, but that

neither can complain that a subsequent proceeding for

civil penalties places him in “jeopardy” in the constitu-

tional sense.

Asserted against this overwhelming weight of authority

is amicus’s reading of United States v. La Franca, 282 U.S.

568 (1931). La Franca, however, does not and cannot

stand for the broad proposition — contrary to numerous

later decisions —that any “punishment,” whether civil or

criminal, is barred by the Double Jeopardy Clause when

the defendant has already been criminally convicted for

the conduct that gives rise to the second proceeding. As

amicus recognizes (Br. 10-11 & n.7), the Double Jeopardy

Clause was addressed in La Franca only to the limited ex-

6

tent of suggesting that it would create constitutional

doubts if the statute at issue in that case were construed to

permit the imposition of civil penalties following a

ly as a matter of statutory interpretation: the Court con-

strued the word “prosecution” in 27 U.S.C. (1926 ed.) 3 to

include a civil action to recover penalties for an act

declared to be a crime (282 U.S. at 574-575). La Franca

therefore resolved no constitutional issues. Furthermore,

the constitutional doubts alluded to by the Court were laid

to rest just seven years later in Helvering v. Mitchell,

supra, and have not been revived since.~

Amicus’s attempt to resurrect the proposition that the

Double Jeopardy Clause applies to civil penalties that are

not in fact “criminal” is not only contrary to precedent,

but is also irreconcilable with the long understanding that

no double jeopardy concerns. It cannot be seriously sug-

* Some of the statements in La Franca, if taken to draw distinctions

of importance for purposes of the Double Jeopardy Clause, certainly

do not survive this Court's more recent decisions. Compare, e.g., La

France, 282 U.S. at $73 (“The worm ‘penalty’ involves the idea of

punishment, and its character is not changed by the mode in which it ts

inflicted, whether by a civil action or a criminal prosecution.”), with

One Assortment of 89 Firearms, 465 U.S. at 364 0.6 (“Mulcahey * * *

argules} that inclusion of the forfeiure provision in thie] section

[labeled “Penalties’) demonstrates Congress’ intention to create an ad-

ditional criminal sanction. This argument ts unavailing; both cruminal

and civil sanctions may be labeled ‘penalties." "), and Hess, 317 US.

at $51. Indeed, as early as 1943, in Mess, 317 US. at $54 (concurring

opmmon), Justice Frankfurter observed the need to “explain| | away

uncritical language in [three specified] earher cases,” among them a

France. The other two cases that Justice Frankfurter criticized were

Lnwed States \. Chowteeu, 102 U.S. 603 (1881), which amicus cites

(Br 7. 11) for essentially the same proposition as la France, and Co/-

fev» Unered States, 116 U.S 436 (1886), which this Court has since

expressly overruled in Unwed States +. One Assortment of 59

Firearms, supra

7

gested, for example, that a treble-damages action under 15

U.S.C. 15 following a defendant’s conviction for price fix-

ing is COnstitutionally impermissible unless it is somehow

established that the extra twofold damages do not con-

stitute “punishment.” Similarly, it cannot be maintained

that, under the aegis of the Double Jeopardy Clause, a

defendant successfully prosecuted for manufacturing a

product that kills innocent people would thereafter escape,

in“civil tort action, all punitive damages (which surely in-

clude an element of “punishment”).

More fundamentally, amicus never explains why it

makes sense to analyze this case under the “multiple

punishment” aspect of double jeopardy rather than the

“multiple prosecution” aspect. This Court's decisions

establish that the double jeopardy protection against

multiple punishment is essentially a protection against

punishment that the legislature has not authorized. “{T]}he

question of what punishments are constitutionally permis-

sible is not different from the question of what punish-

ments the Legislative Branch intended to be imposed.”

Albernaz v. United States, 480 U.S. 333, 344 (1981):

Missouri v. Hunter, 489 U.S. 359, 366 (1983): Gerrert v.

United States, 471 U.S. 773, 793 (1985). Congress plainly

authorized cumulative criminal and civil remedies under

the False Claims Act.’ Thus, the prohidition of multiple

* In the original False Claims Act, Congress underscored its intent

to make civil and crummal remedies cumulatively available by pro

viding that a person “who shall do or commit any of the [protibucd

acts} * * * shall forfeu and pay to the United States the sum of reo

thousand dollars, and. in addition, double the amount of damages

which the United States may have sustained * * * and every such per

von shall in addition thereto, on Conv tion in any Court of Competent

jurisdiction, be punished by imprisonment * * * oF by fine” (Act of

Mar. 2, 1863, ch. 67, § 3, 12 Stat. 698 (emphass added The 1986

revisions of the Act bhewne cupressty Contemplate that a ond action

8

punishment would not have barred the government from

seeking those remedies in a single proceeding, as amicus

appears to concede (Br. 8, 23 n.16, 34). It therefore is not

helpful to view the issue in this case as one of unconstitu-

tional “multiple punishment,” since appellee is not being

“punished” any more than Congress authorized, whether

the government achieves its remedies in one proceeding or

two.

The only colorable double jeopardy claim here flows

from appellee’s desire to be free of a second proceeding,

after his criminal conviction has become final, in which

the government seeks to recover the civil aspect of the

False Claims Act remedy. The Double Jeopardy Clause

does protect some finality interests of criminal deferdants,

but the Court has made it abundantly plain that the pro-

tection is available only when the second proceeding seeks

to impose “criminal” penalties. See the cases cited at 2-3,

supra; cf. Westen, The Three Faces of Double Jeopardy:

Reflections on Government Appeals of Criminal

Sentences, 78 Mich. L. Rev. 1001, 1026-1033 (1980)

(distinguishing the purposes of the double jeopardy pro-

tections against multiple punishment and multiple pro-

ceedings). While it is plausible to ask whether the Double

Jeopardy Clause has a role to play in the division of the

False Claims Act remedies into separate criminal and civil

proceedings (and to answer that it does not), amicus offers

no explanation as to why the policies underlying that

Clause require that this case be resolved under a doctrine

may follow a criminal conviction by providing (31 U.S.C. (Supp. IV)

3731(d)) that a “final judgment rendered in favor of the United States

in any criminal proceeding charging fraud or false statements * * *

shall estop the defendant from denying the essential elements of the

offense in any action which involves the same transaction as in the

criminal proceeding and which ‘s brought under subsection (a) or (b)

of section 3730” of Title 31.

9

that asks only whether the two proceedings both involve

“punishment.” °

Amicus is therefore wrong to suggest that the dispositive

question in this case is whether the civil penalties the

government seeks against appellee are in some sense

“punishment.” Rather, amicus must shoulder the much

heavier burden of showing by “the clearest proof” (Flem-

ming v. Nestor, 363 U.S. 603, 617 (1960)) that “the statu-

tory scheme [is] so punitive either in purpose or effect as to

negate [Congress’s] intention” to establish a civil penalty.

° This Court has consistently expressed the values underpinning the

Double Jeopardy Clause in terms that reflect the specific risks of

criminal proceedings. “The underlying idea,” the Court has stated, “is

that [the government] with ail its resources and power should not be

allowed to make repeated attempts to convict an individual for an

alleged offense, thereby subjecting him to embarrassment, expense

and »rdeal and compelling him to live in a continuing state of anxiety

and insecurity, as well as enhancing the possibility that even though

innocent he may be found guilty.” Green v. United States, 355 U.S.

184, 187-188 (1957).

As we have observed, the risk to which the term jeopardy reters

is that traditionally associated with “actions intended to authorize

criminal punishment to vindicate public justice.” Because of its

purpose and potential consequences, and the nature and

resources of the State, such a proceeding imposes heavy pressures

and burdens — psychological, physical, and financial —on a per-

son charged. The purpose of the Double Jeopardy Clause is to re-

quire that he be subject to that experience only once “tor the same

offence.”

Breed v. Jones, 421 U.S. 519, 529-530 (1975) (citations omitted). The

Court has not suggested that civil actions pose comparable risks.

10

United States v. Ward, 448 U.S. 242, 248-249 (1980);

United States v. One Assortment of 89 Firearms, 465 U.S.

at 362-363 (same).’

2. Amicus, who denies (Br. 14) that he even must

undertake the effort prescribed by Ward, certainly has not

succeeded in that effort. In fact, to the extent that he

acknowledges the need to show that the statute in this case

imposes a “criminal” penalty, amicus nevertheless pro-

poses once again a test that differs considerably from the

one mandated by this Court’s decisions: amicus focuses

solely on whether the penalty is in some sease proportional

to the government’s loss in this particular case rather than

on whether the penalty is proportional to the harms that

statute was designed to remedy as a general matter. As we

showed in Our Opening brief (at 14-21, 30), it is the latter

inquiry that this Court has mandated.

This Court’s majority opinions in Hess and Rex Trailer

make . clear that a case-by-case assessment of propor-

tionality is inappropriate. Quite the contrary, the Hess

majority stated that “the device of double damages plus a

specific sum was chosen to make sure that the government

would be made completely whole,” and stressed that “[{t}he

inherent difficulty of choosing a proper specific sum

which would give full restitution was a problem for Con-

* That inquiry, and not an artificial “effort to find the one, true

purpose behind the sanctions” (Amicus Br. 24), is what controls this

case. One of the legitimate civil purposes of penalties under the civil

False Claims Act is to deter fraud, just as other civil remedies such as

punitive damages and treble damages serve a similar deterrent effect

(see U.S. Br. 19-20). This Court, however, could not possibly have

spoken more plainly in declaring that such a purpose, by itself, does

not convert a civil remedy into a criminal one (see Hess, 317 US al

550-551). See also Tull v. United States, No. 85-1259 (Apr. 28, 1987)

slip op. 9-10 (discussing common law history of actions for civil

penalties).

gress” (317 U.S. at 551-552). Amicus’s suggestion that the

courts may impose a ceiling on civil remedies in any par-

ticular case equal to what in the court’s view would con-

stitute full restitution is thus simply contrary to Hess, both

with respect to which branch of government should make

the decision concerning the appropriate remedy, and with

respect to the level of generality at which that decision can

permissibly be made.

Unable to find anything in the majority opinion in Hess

that compels a case-by-case proportionality inquiry in

order to determine whether a statute is “civil” or

“criminal,” amicus relies instead (Br. 17-18) on Justice

Frankfurter’s concurring opinion in Hess. Justice

Frankfurter suggested that under the majority’s approach

the defendants in any given case should be “allowed to

prove that, as a matter of fact, the forfeiture and the dou-

ble damages are punitive because they exceed any amount

that could reasonably be regarded as the equivalent of

compensation for the Government’s loss” (317 U.S. at

554). But the majority plainly intended no such thing.

Justice Frankfurter’s apparent purpose in this portion of

his opinion was to take the majority to task for not allow-

ing such a factual inquiry, even though Justice

Frankfurter regarded such an inquiry as a logical conse-

quence of the majority’s approach.°

Rex Trailer, decided 13 years «fter Hess, even more

clearly refutes the use of a simple proportionality inquiry

in determining whether civil sanctions can follow a convic-

* Justice Frankfurter would have held (317 U.S. at 555) instead that

“where two [separate] proceedings merely carry out the remedies

which Congress has prescribed in advance for a wrong, they do not

twice put a man in jeopardy for the same offense” — an approach that

would readily require reversal in this case.

12

tion, and, concomitantly, is even less susceptible than

Hess to the reading that amicus would give it (Amicus Br.

19-21). The government alleged and proved no specific

damages in Rex Trailer (see 350 U.S. at 152-153), and

there is thus no reason to believe that the penalty imposed

in Rex Trailer was any less than 220 times the govern-

ment’s direct loss from the defendant’s fraud (cf. Amicus

Br. 17 n.11), or eight times the government’s total cost of

investigation and prosecution (cf. id. at 6).? Thus, when

* The figures we use in text are those that amicus uses to describe

the result here, but we note that amicus takes considerable liberties in

repeatedly characterizing as a factual finding (Amicus Br. 4, 6, 18, 21,

29) the district court’s estimate (J.S. App. 10a) of $16,000 as the

amount necessary to compensate the government for its costs of in-

vestigation and prosecution. The district court resolved this case on

summary judgment (see id. at la, 6a) and thus was in no position to

make factual findings. The district court’s $16,000 figure is more ac-

curately characterized as a “guesstimate” than as a factual finding; in-

deed, the court itself acknowledged that its figure “is at best an ap-

proximation of the amount required to make the Government whole,

[since] the Government, in keeping with the relief it seeks, has submit-

ted no evidence of its expenses in this action” (id. at 11a). Though

amicus believes (Br. 29) that the government could easily “adduce

evidence” of its expenses in prosecuting appellee, there is no ready way

for the government to account for the myriad types of costs it incurs in

the investigation and prosecution of frauds, or to allocate such costs

to a particular case. The rule proposed by amicus would thus thwart

any real opportunity for the government to recoup the manifold costs

it incurs in its effort to root out fraud. Cf. Rex Trailer, 350 U.S. at 153

(a lump sum functions to provide recovery when damages “may be dif-

ficult or impossible to ascertain”). In any event, amicus’s desire to

elevate the district court’s estimate into a factual finding that the

government suffered a loss of $16,000 is ultimately perplexing, for it

suggests that the government's $130,000 recovery under the False

Claims Act would be only “eight times any reasonable notion of its

total loss” (Amicus Br. 7), not the “220 times actual damages” that

amicus elsewhere claims (id. at 17 n.11 (emphasis in original)).

13

the Rex Trailer Court suggested that “liquidated damages”

prescribed by statute must be “reasonable” (350 U.S. al

151) in order not to be deemed criminal in nature, it could

not possibly have meant that the reasonableness inquiry

must be conducted by dividing the liquidated damages by

the actual loss and deciding whether that number was too

large. Similarly, the paragraph in which the Court con-

cluded that the liquidated damages were not unreasonable

“fo}n this record” (id. at 154) contains no discussion of the

amount of the government’s injury, focusing only on the

fact of injury (see id. at 153). Here, it is undeniably true

that every one of appellee’s 65 frauds injured the govern-

ment, and Rex Trailer therefore cannot be distinguished

from this case.

There is another reason why amicus’s suggested case-by-

case approach is misguided. The protection against double

jeopardy becomes relevant only when the punishment fac-

ing the defendant is essentially criminal. That determina-

tion can sensibly be made only by looking at specific

statutory remedies and procedures, and by assessing them

in light of the interests Congress sought to advance. If a

statute is intended to be civil and there is no showing that

“the measure of recovery fixed by Congress in the Act is so

unreasonable or excessive that it transformed what was

clearly intended as a civil remedy into a criminal penalty

(Rex Trailer, 350 U.S. at 154 (emphasis added)), an action

under that statute does not raise double jeopardy concerns

simply because the measure of recovery 1s asserted to work

“punishment” in one case. The line that the Constitution

draws between civil and criminal proceedings, in the Dou-

ble Jeopardy Clause as elsewhere, reflects an assessment

of the different kinds of risks that are present In each type

of proceeding (see note 6, supra). The imposition of

criminal penalties represents the moral condemnation of

the community and carries with it various collateral conse-

14

quences that are generally absent from civil proceedings,

even when those proceedings seek to impose a deterrent

remedy or “punitive” damages. Viewed on a case-by-case

basis, many “civil” proceedings brought after criminal

convictions, such as debarment from government con-

tracting or the loss of a professional license, may be view-

ed as imposing disproportionately harsh remedies, or

“punishment,” compared with the actual harm inflicted by

the individual. But such proceedings have never been held

lo raise double jeopardy problems. Despite their

significance to the persons involved, those kinds of pro-

ceedings, judged in light of the statutes that authorize

them, simply do not carry the kind of criminal overtones

that bring the Double Jeopardy Clause into play.'®

Likewise, the proceeding against appellee here was

brought under the civil False Claims Act, which this Court

has long understood to have remedial, not criminal, objec-

lives. United States v. Bornstein, 423 U.S. 303, 314 (1976)

(noting compensatory objective of the civil False Claims

Act); United States v. Neifert-White Co., 390 U.S. 228

233 (1968) (noting remedial nature of the civil False

Claims Act); Rainwater v. United States, 356 U.S. $90,

1 Of course, it is always open for an individual to try to show that

the legislature did in fact intend to establish a criminal remedy while

pur porting (to create only a civil one (Kennedy v. Mendoza-Martinet

3°72 US. 144, 168-169 (1963)), but amicus has made no real effort to

show that the civil False Claims Act falls into that category. Amicus

notes (Br. 24-25) that the double damages and $2000 payment provi-

sions Were part of a bill designed to “punish” frauds, but the legislative

history makes clear that those remedies were not regarded as criminal

Indeed, the original bill debated in the Senate was criticized precisely

because it lacked provision for criminal “punish{ment] by fine and im-

Prisonment™ and was therefore insu/ficiently severe. Cong. Globe

3°th Cong., 3d Sess. 954-955 (1863). The bill then passed the Senate

without criminal penalties (id. at 958), but the House added them as

an additional remedy (id. at 1307), and the Senate concurred in the

amendment without debate (id. at 1322-1323)

15

592 & n.8 (1958) (noting the creation of separate civil and

criminal sanctions in the original False Claims Act); Hess,

317 US. at 551-552 (noting purpose of providing restitu-

tion in the civil False Claims Act).'' Amicus’s objection to

the remedy in this case flows only from the fact that ap-

pellee defrauded the government 65 separate times and is

liable for a civil penalty for each such fraud under the

'} Amicus insists (Br. 25-26) that the designation of the remedies

under 31 U.S.C. 3729 as “civil penalt{ies]” is of little significance,

since that term appeared in the 1982 revisions that were not intended

to make substantive changes. However, it is more sensible to read the

“civil” designation as reflecting an understanding that those remedies

were always civil in nature, and history buttresses that understanding.

In the original version of the False Claims Act, Congress expressly

provided both for double damages and a $2000 payment and, “in ad-

dition thereto,” criminal penalties (Act of Mar. 2, 1863, ch. 67, § 3, 12

Stat. 698 (emphasis added)). Moreover, the remedy Congress provid-

ed is a civil money judgment enforceable just as any other civil judg-

ment would be. The Court underscored that fact in Hess, stating (317

U.S. at 551), that although the word “forfeit” in the original Act might

“under other circumstances be an appropriate word to suggest a fine

upon the failure to pay which an individual might be imprisoned, no

such punishment is provided here upon default in payment.” The text

of the Act was therefore “wholly consistent with a civil action for

damages” (ibid.).

16

False Claims Act, not because he is being subjected to an

action “intended to authorize criminal punishment to vin-

dicate public justice” (317 U.S. at 548-549). That latter

factor, however, is necessary to invoke the protections of

the Double Jeopardy Clause. !?

Amicus’s position is especially odd because it posits a

limitation on the power of Congress to prescribe remedies,

yet that limitation comes into effect only when the pro-

ceeding in which the “excessive” remedy is sought follows

an earlier, criminal proceeding.'* Thus, although amicus

'2 In the civil False Claims Act, Congress chose a reasonable fixed

sum of $2000 as a civil sanction ($5000 to $10,000 under the current

version of the Act) to compensate the government for each false claim

made and to deter such fraud in the first place. That measure of

recovery cannot be deemed to be “unreasonable or excessive” (Rex

Trailer, 350 U.S. at 154) in this case unless Congress must —as a mat-

ter of constitutional imperative — anticipate that there are “economies

of scale” involved in investigating and recovering damages for many

small frauds and must provide a measure of recovery specially devised

for that situation in order to avoid having its civil statutes become

criminal in a given setting. Considering the vast range of government

business and the diversity of contractors that the False Claims Act

covers, Congress can hardly be deemed to have inadvertently crossed

the threshold from a civil to a criminal sanction by adopting a stand-

ard measure of recovery to ensure full compensation to the govern-

ment and to discourage wrongdoers who might otherwise hope that

their frauds are too small to justify the time and effort of ap civil ac-

tion.

‘> Amicus’s suggestion (Br. 32) that this Court might somehow view

the False Claims Act $2000-per-claim payment provision as discre-

tionary is completely unfounded. The original language of the act pro-

vided that a person “who shall do or commit any of the [prohibited

acts] * * * shall forfeit and pay to the United States the sum of two

thousand dollars” (see note 5, supra (emphasis added)). That the pro-

vision is mandatory is confirmed by ample authority, cited in our

opening brief (at 17 n.12). The district court was therefore correct in

holding in its second opinion that it was compelled to award a separate

$2000 payment for each of the false claims made by appellee.

ae

17

poses hypothetical examples of extremely large penalties

for extremely small losses in an effort to paint the govern-

ment’s position as unreasonable (Br. 27-28), amicus would

have to concede that every one of the hypothetical

penalties he identifies is one that Congress could impose

and the Executive Branch could obtain so long as the

government forbears from first bringing a criminal prose-

cution. Indeed, amicus’s concessions appear to go further

and suggest that the government can, without any double

jeopardy problem, obtain in a single proceeding whatever

penalties Congress intends, no matter how large (see 7-8,

supra).'* What is at stake between amicus s position and

ours, therefore, is not the protection of defendants in civil

cases from excessive penalties, but a restructuring of the

way in which the government can obtain those penalties.

There is no sound basis to invoke the Double Jeopardy

Clause to compel such a drastic restructuring of the rela-

tionship between criminal and civil proceedings. .

For the foregoing reasons and the reasons stated in our

opening brief, the judgment of the district court should be

reversed.

Respectfully submitted. -

CHARLES FRIED

Solicitor General

DECEMBER 1988

'4 Depending on how this Court decides Browning-Ferris Industries

v. Kelco Disposal, Inc., cert. granted, No. 88-556 (Dec. 5, 1988), it is

conceivable that some of amicus’s hypothetical examples might raise

Eighth Amendment issues, but for present purposes it suf fices to note

that amicus’s position in this case would do nothing to aid defendants

faced with the large penalties that amicus hypothesizes, unless they

had been previously convicted.

- US GOVERNMENT PRINTING OFFICE 1986— 241.699 00038