by Ben Vernia | September 28th, 2010
On September 15, Vermont District Chief Judge William Sessions III granted relief under the 8th Amendment’s Excessive Fines clause to a False Claims Act defendant who essentially admitted cashing Section 8 housing assistance checks under false pretenses. The case, a qui tam in which the government declined to intervene, was brought by a former tenant of the defendant, who made small side payments which neither disclosed to the local housing authority which operated HUD’s Section 8 program in the area. The landlord – who represented himself in the case – admitted obtaining and cashing the checks despite his obligation to report the additional income. The tenant, however, was far from blameworthy, failing to disclose not only the side-payments, but the presence in the home of her husband, whose disability payments would have diminished the housing authority’s contribution to the relator’s rent.
After finding that all of the elements of the False Claims Act were met by the landlord’s actions, Chief Judge Sessions concluded that the government’s damages were 12 monthly payments of $69, totaling $828. He refused, however, to impose treble damages and fines in addition to the government’s damages, reasoning:
Such an award will violate the Excessive Fines Clause if it is grossly disproportional to the gravity of the offense. Id. A penalty that represents between 82 and 162 times the government’s actual damages in this case is grossly disproportional.
In addition, he roundly criticized the relator:
Moreover, extenuating circumstances favor confining the recovery in this case to the government’s actual damages. Stearns initiated the fraud; she induced Lane to commit the fraud by playing on his sympathies and trading on his friendship; and she committed a considerably larger fraud against the BHA, for which she has apparently escaped any penalty.
Chief Judge Sessions declined to award the relator either a share of the proceeds, expenses, fees, or costs.
