Source: http://supreme.nolo.com/us/317/537/case.html
Timestamp: 2019-04-21 06:51:21
Document Index: 534033736

Matched Legal Cases: ['§ 5438', '§ 3490', '§ 5438', '§ 88', '§ 3490', '§ 37', '§ 88', '§ 1']

UNITED STATES EX REL. MARCUS V. HESS, 317 U. S. 537 - Volume 317 - 1943 - Full Text - US Supreme Court Center - USSC Cases - Nolo
US Supreme Court Center > Volume 317 > UNITED STATES EX REL. MARCUS V. HESS, 317 U. S. 537 (1943) > Full Text
4. The first, second, and third clauses of R.S. § 5438, taken together, indicate a purpose to reach any person who knowingly assisted in causing the Government to pay claims which were grounded in fraud, without regard to whether the person had direct contractual relations with the Government. P. 317 U. S. 544.
Certiorari, post, p. 613, to review the reversal of a judgment, 41 F.Supp. 197, against the defendants in a qui tam action under R.S. §§ 3490-3493.
These sections, now distributed through the statutes, are parts of what was originally the Act of March 2, 1863, 12 Stat. 696. Section 5438 contains that portion of the original Act which makes certain efforts to defraud the government a crime punishable by fine and imprisonment. [Footnote 2]
First. The Court below, construing § 5438 with "utmost strictness" on the premise that qui tam or informer
We cannot accept either the interpretive approach or the actual decision of the court below. Qui tam suits have been frequently permitted by legislative action, [Footnote 4] and have not been without defense by the courts. [Footnote 5] Moreover, this interpretation of "utmost strictness" narrows
Third. As noted above, respondents had previously been indicted and fined for defrauding the government in connection with the same transactions for which they are now being sued. They contend that the present action should be barred because of the "double jeopardy" provision of the Fifth Amendment, which provides that no person shall "be subject for the same offense to be twice put in jeopardy of life or limb." The previous indictment was brought under a general statute dealing with conspiracy to defraud the government, 18 U.S.C. § 88, and is clearly criminal in nature. For violation of it, respondents were liable for a fine up to $10,000 or imprisonment for two years, or both. For failure to pay their fines, they could have been sentenced to prison. Ex parte Watkins, 7 Pet. 568. The punishment given in that action was not intended to compensate the government in any manner for damages it suffered as a result of successful execution of the conspiracy. Respondents' contention was overruled by the District Court, and was not considered in the Court of Appeals. It is now urged upon us as an independent ground of support for the judgment reached below. Cf. Helvering v. Gowran, 302 U. S. 238, 302 U. S. 245.
The application of the double jeopardy clause to particular cases has not been an easy task for the courts. The subject has recently been thoroughly explored in Helvering v. Mitchell, 303 U. S. 391, in which the Court analyzed the cases now pressed upon us and emphasized the line between civil, remedial actions brought primarily to protect the government from financial loss and actions intended to authorize criminal punishment to vindicate
Moore v. Illinois, 14 How. 13, 55 U. S. 19-20. Congress has "power to give an action for damages to an individual who suffers by breach of the law." Chattanooga Foundry v. Atlanta, 203 U. S. 390, 203 U. S. 396-397. And it has this same
Cotton v. United States, 11 How. 229, 52 U. S. 231.
Day v. Woodworth, 13 How. 363, 54 U. S. 371. This Court has noted the general practice in state statutes of allowing double, or treble, or even quadruple
damages. Missouri Pacific Ry. Co. v. Humes, 115 U. S. 512, 115 U. S. 523. Punitive or exemplary damages have been held recoverable under a statute like this, which combines provision for criminal punishment with others which afford a civil remedy to the individual injured. O'Sullivan v. Felix, 233 U. S. 318, 233 U. S. 324-325. The law can provide the same measure of damage for the government as it can for an individual.
It is true that "[p]unishment, in a certain and very limited sense, may be the result of the statute before us so far as the wrongdoer is concerned," but this is not enough to label it as a criminal statute, Brady v. Daly, 175 U. S. 148, 175 U. S. 157. We think the chief purpose of the statutes here was to provide for restitution to the government of money taken from it by fraud, and that the device of double damages plus a specific sum was chosen to make
In support of the view of the court below, see Taft v. Stevens Lith. & Eng. Co., 38 F. 28; but cf. United States v. Griswold, 24 F. 361, 366, in which the Court, speaking of this section, says:
This is a qui tam action under R.S. § 3490 to recover a "forfeiture" and "double the amount of damages which the United States may have sustained" by reason of the same acts of fraud for which the respondents were previously indicted under § 37 of the Criminal Code, 18 U.S.C. § 88, and for which substantial fines were imposed upon them. The Fifth Amendment guarantees that no person shall "be subject for the same offense to be twice put in jeopardy of life or limb." The respondents invoke this provision as a bar to this suit, and, as I understand its holding, the Court rejects this plea of double jeopardy by treating the present action as one merely to make the United States whole for actual loss, and therefore without any punitive elements. The Court reaches this conclusion by applying the distinction taken in Helvering v. Mitchell, 303 U. S. 391, 303 U. S. 400, between "sanctions that are remedial and those that are punitive." The argument seems to run thus: double jeopardy means attempting to punish criminally twice; this is not an attempt to punish criminally, because it is a civil proceeding; it is a civil proceeding because, as a matter of "statutory construction," it is a "civil sanction" which is being enforced here, and the sanction is "civil" because it is "remedial," and not "punitive" in nature.
The protection against twice being punished for the same offense should hardly be made to depend upon the necessarily speculative judgment of a court whether a "forfeiture" and "double the amount of damages which the United States may have sustained" constitute an extra penalty, or merely an indemnity for loss suffered. If that is the issue on which the protection against double jeopardy turns, those who invoke the Constitution, as do the respondents here, ought to be allowed to prove that, as a matter of fact, the forfeiture and the double damages are punitive because they exceed any amount that could reasonably be regarded as the equivalent of compensation for the Government's loss. That, in civil actions, punitive damages are, as a matter of due process, sometimes allowed, see Shevlin-Carpenter Co. v. Minnesota, 218 U. S. 57, 218 U. S. 69-70, or that there may be distinct penal and remedial provisions for the same wrong, See O'Sullivan v. Felix, 233
U.S. 318, 233 U. S. 325, does not help solve our present problem, which arises when a second separate proceeding against the same persons for the same misconduct results in a plea based upon the double jeopardy clause. We must also put to one side the doctrine of res judicata. This is largely a judicial doctrine, though partly reflected in the Full Faith and Credit Clause, Article IV, § 1, and is aimed at avoiding the waste and vexation of relitigating issues already decided between the same parties. The doctrine of double jeopardy has a different history. It is part of the protection of the Constitution against pressures and penalties that offend civilized notions of justice.
This view commends itself to reason. It is confirmed by history. For legislation of this character, providing two sanctions for the same misconduct, enforceable in separate proceedings -- one a conventional criminal prosecution and the other a forfeiture proceeding or a civil action as upon a debt -- was quite common when the Fifth Amendment was framed by Congress. See, e.g., the materials
In this case, the Government investigated respondents, and, on November 3, 1939, indicted them for conspiracy to defraud. On January 5 and February 6, 1940, the defendants named in the indictment entered pleas of nolo contendere, and fines were imposed. While the criminal case was still pending, and on January 25, 1940, petitioner commenced his informer proceeding, the averments in his complaint being substantially a copy of the indictment. It is not shown that he had any original information, that he had added anything by investigations of his own, or that his recovery is based on any fact not disclosed by the Government itself. In the companion case [post, p. 317 U. S. 562], the Government indicted and pleas of nolo contendere were entered on January 15, 1940, and, two weeks thereafter, Ostrager filed his complaint alleging facts substantially identical with those in the indictment, some of the paragraphs being almost verbatim copies. We are informed that these cases have already stimulated a number of other private individuals to intervene with similar action after Government criminal proceedings had disclosed frauds.
It must be borne in mind that this is not a case where we are adhering to a construction of a statute which has been continuously applied over its long life. In such event, I should not unlikely join with my colleagues. This, however, is the case of a new construction upon an eighty-year-old statute, one so far-fetched that no member of the bar has ever before ventured to offer it in any reported case. [Footnote 2/2]
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