United States of America ex rel. Uri Bassan v. Omnicare, Inc.
1:15-cv-04179
S.D.N.Y.Jul 7, 2025Background
- Omnicare, Inc. was found by a jury to have submitted 3,342,032 false claims causing $135,592,814.70 in damages to the U.S. government from 2010 to 2018.
- CVS Health Corp. (CVSHC) acquired Omnicare in August 2015; the jury found CVSHC caused the submission of 1,016,039 of the false claims but awarded no monetary damages against CVS itself.
- The government sought statutory penalties under the False Claims Act (FCA), which, at the statutory minimum, would total almost $27 billion, but instead requested $542 million against Omnicare and $164.8 million against CVS.
- Defendants argued penalties should be limited to the amount of actual damages (1:1 ratio) or, at most, a 4:1 ratio, and that no penalty should be assessed against CVS, since no damages were found against it.
- The case also raised constitutional questions under the Eighth Amendment’s Excessive Fines Clause and compared the proportionality of penalties to actual harm.
- The court imposed $542 million in penalties on Omnicare (4:1 ratio), with joint and several liability for $164.8 million assigned to both Omnicare and CVSHC, and trebled the damages as required under statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FCA statutory penalties violate Eighth Amendment | Penalties sought are appropriate and below statutory max | Penalties above 1:1 ratio with damages are excessive | Penalty of $542M (4:1 ratio) upheld as constitutional |
| Can penalties be imposed where no damages were found? | Penalty applies per violation, not tied to actual damages | No penalties if no damages found against the defendant | $164.8M penalty on CVSHC proper; joint liability |
| Should a cap apply based on punitive damages precedent? | Excessive Fines, not Due Process, is the correct standard | State Farm suggests single-digit or lower ratios | Due Process precedent not controlling; FCA standard used |
| Proportionality in penalty calculation | Proposed penalties are proportional to gravity of offense | Penalties grossly disproportionate to harm | Penalties are below statutory range and proportional |
Key Cases Cited
- United States v. Bajakajian, 524 U.S. 321 (Eighth Amendment test for "grossly disproportional" fines)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (Due process limits on punitive damages ratios)
- Cook County v. U.S. ex rel. Chandler, 538 U.S. 119 (Purpose of treble damages under the FCA)
- United States v. Viloski, 814 F.3d 104 (Four-factor test for Excessive Fines Clause analysis)
- United States v. Mackby, 339 F.3d 1013 (Harm to the government includes administrative harm beyond monetary loss)