AGG’s Government Investigations Team Insights provides periodic updates covering legal and regulatory topics. Our team, which includes former federal prosecutors, SEC enforcement attorneys, and federal agency attorneys, has successfully represented companies and individuals, including executives of public companies, in numerous civil and criminal investigations, including before the U.S. Department of Justice and U.S. Attorney’s Offices, the SEC, the EPA, the FDA, the FTC, and many other federal and state agencies.
In this edition, we discuss a Texas federal court ruling that a False Claims Act penalty violates the Eighth Amendment’s prohibition on excessive fines, a recent Seventh Circuit Court of Appeals case reversing the conviction in an Anti-Kickback Statute prosecution, and the potential effects of the Trump administration’s decision to disband the Department of Justice’s Consumer Protection Branch.
Featured Articles
A Constitutional Perspective on False Claims Act Penalties: District Court Finds That Penalties Conflict With Constitution’s Excessive Fine Clause
By Jason E. Bring, Aaron M. Danzig, & W. Jerad Rissler
In a potential watershed decision issued on February 26, 2025, the United States District Court for the Northern District of Texas ruled, in U.S. ex rel. Taylor v. Healthcare Associates of Texas, that the civil penalties under the False Claims Act (“FCA”) are subject to the U.S. Constitution’s Eighth Amendment’s prohibition against excessive fines. The court determined that the statutory penalties, when applied to the facts of the case, were unconstitutionally excessive and reduced them accordingly.
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Limitations to the Anti-Kickback Statute? Seventh Circuit Reverses Conviction Finding “Aggressive” Marketing Tactics Insufficient to Prove an AKS Violation Where Doctors Retain Independence in Their Medical Decisions
By Aaron M. Danzig & W. Jerad Rissler
On April 14, 2025, the United States Court of Appeals for the Seventh Circuit reversed the conviction of the owner of a durable medical equipment (“DME”) distributor, ruling that there was insufficient evidence to support a violation of the Anti-Kickback Statute (“AKS”). While referring to the defendant’s “aggressive” advertising campaign, the court found that his payments to advertisers and a manufacturer were not made for referring patients within the meaning of the AKS because the recipients of the payments were neither physicians nor other decisionmakers in positions to influence healthcare decisions. This decision is important in that the court attempts to mark boundaries between lawful marketing strategies and illegal kickbacks. A key point for the court was that the compensation arrangements at issue were with non-physicians and did not compromise physicians’ independent medical judgment.
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What the Dissolution of DOJ’s Consumer Protection Branch Means for Future Life Sciences and Consumer Protection Enforcement
By Gabriel H. Scannapieco
The Department of Justice’s decision to shutter the Consumer Protection Branch (“CPB”) by September 30, 2025, is sending shockwaves across multiple industries. Known for its unique dual mandate to pursue both civil and criminal enforcement of consumer protection laws, most notably the Food, Drug, and Cosmetic Act (“FDCA”), CPB’s rushed dismantling raises significant questions about how future DOJ enforcement actions will be prioritized, coordinated, and executed.
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