United States of America ex rel. Uri Bassan v. Omnicare, Inc.

Background

The case concerns alleged violations of the False Claims Act, a federal law that allows the government to recover money for false claims submitted to government programs. On April 29, 2025, a jury found that Omnicare submitted false claims during an eight-year period and that its conduct caused the government $135,592,814.70 in damages. The jury also found that CVS Health Corporation caused Omnicare to submit 1,016,039 of those false claims after CVS Health acquired Omnicare, but found that CVS Health’s conduct caused no additional damages.

The False Claims Act provides for treble damages and civil penalties for each false claim. Applying the statutory penalty ranges to all claims would have produced penalties of approximately $26.9 billion. The government instead requested $542 million in penalties against Omnicare and $164.8 million against CVS Health. The defendants argued that the proposed penalties violated the Eighth Amendment’s Excessive Fines Clause. Omnicare also argued that its penalties should be limited to approximately $135.6 million, while CVS Health argued that no penalty should be imposed because the jury found no damages caused by its conduct.

Court’s analysis

The court held that the $406,778,444.10 in trebled damages against Omnicare was not itself a fine. Although treble damages can serve partly punitive and partly remedial purposes, the court reasoned that Congress authorized both treble damages and civil penalties under the False Claims Act.

The court rejected the defendants’ reliance on a constitutional rule limiting punitive damages to a particular ratio of punitive to compensatory damages. It explained that this case involved statutory penalties reviewed under the Excessive Fines Clause, not a discretionary jury award of punitive damages reviewed under due process principles. The court stated that a 4:1 penalty-to-actual-damages ratio was probably near the constitutional outer limit in a case involving substantial actual damages, but concluded that the government’s proposed penalty was constitutional here.

Under the Excessive Fines Clause, a penalty is unconstitutional if it is grossly disproportionate to the seriousness of the offense. The court considered the nature of the alleged fraud, the harm to the administration and integrity of Medicare and other government health programs, the government’s investigative costs, the duration and deliberate nature of Omnicare’s conduct, and the fact that the proposed penalties were well below the statutory range. The court also found that penalties could be imposed against CVS Health even though the jury found no separate damages caused by CVS Health. Because the jury found that CVS Health participated in 30.4% of the false claims, the court held CVS Health jointly and severally liable for 30.4% of Omnicare’s penalty.

Disposition

The court imposed $542 million in statutory penalties against Omnicare. CVS Health was made jointly and severally liable for $164.8 million of that amount. The court also trebled the $135,592,814.70 in damages against Omnicare, resulting in $406,778,444.10 in trebled damages. The opinion states that the defendants had moved for judgment as a matter of law and for a new trial, and that the ultimate imposition of penalties would be subject to the court’s decisions on those motions.