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False Claims Act — treble damages

United States Court of Appeals For the Seventh Circuit

Civil

False Claims Act — treble damages

In calculating treble damages under the False Claims Act, the court should use the net trebling method, rather than the gross trebling method.

“The False Claims Act does not specify either a gross or a net trebling approach. Neither does it signal a departure from the norm—and the norm is net trebling. The Clayton Act, which created the first treble-damages action in federal law, 15 U.S.C. §15, has long been understood to use net trebling. The court finds the monopoly overcharge—the difference between the product’s actual price and the price that would have prevailed in competition— and trebles that difference. See, e.g., Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). A gross trebling approach, parallel to the one the district court used in this suit, would be to treble the monopolist’s price, then subtract the price that would have prevailed in competition. If there is a reason why the courts should use net trebling in antitrust suits and gross trebling in False Claims Act cases, it can’t be found in §3729—nor does the United States articulate one.”

Affirmed in part, and Reversed in part.

10-3122, 10-3342 & 10-3423 U.S. v. Anchor Mortgage Corp.

Appeals from the United States District Court for the Northern District of Illinois, Kennelly, J., Easterbrook, J.

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