Plaintiffs' Bar 'Salivating' at Fmr. AG Lynch's Rule Doubling False Claims Act Penalties

February 21, 2017

Former U.S. Attorney General Loretta Lynch signed a final rule before leaving office that would “effectively double penalties under the False Claims Act,” reports the Washington Free Beacon’s Joe Schoffstall.

The 2015 Bipartisan Budget Act required the Justice Department to make “annual inflation adjustments for civil penalties” as well as a “one-time aggregate penalty adjustment.” Typically, the government would “go back to the last instance amendments were made” to the False Claims Act, which was 2009. However, Lynch’s rule went all the way back to 1986, which was “the second-to-last time changes were made” to the Act.

"Trial lawyers who specialize in False Claims cases are undoubtedly salivating at the prospect of these vastly increased penalties," said Peter Hutt II, partner at Covington and Burling.  "A defendant that faced $1 million in penalties under the former regime would now face more than $2 million in penalties.  This will give another lever to qui tam plaintiffs and their lawyers to extract more money from defendants in settlement."

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