In the United States v. Halper case in 1988, the Supreme Court ruled that a civil penalty could be considered "punishment" under the Double Jeopardy Clause of the Fifth Amendment if it was extremely disproportionate to actual damages caused by defendant's actions. The case involved Irwin Halper, who had submitted false Medicare claims and was convicted for his fraudulent activities. He was sentenced to two years imprisonment and fined $5,000 criminally; additionally he faced a civil suit where government sought recovery of $130,000 - an amount significantly higher than its losses ($585). The court held that such excessive fines violated double jeopardy clause as they were punitive rather than remedial in nature. This decision marked a significant shift from traditional understanding which viewed criminal and civil penalties as distinct entities for purposes of double jeopardy analysis.

In the dissenting opinion for United States v. Halper, Justice Anthony Kennedy argued that the majority's decision to label certain civil penalties as "punishment" under the Double Jeopardy Clause was a departure from established precedent and could potentially lead to confusion in future cases. He contended that this new approach would create uncertainty about what constitutes punishment and when double jeopardy protections apply. Furthermore, he expressed concern over how courts would determine whether a penalty is remedial or punitive, especially given that many penalties serve both purposes simultaneously. Instead of adopting this novel interpretation, Justice Kennedy suggested adhering to traditional understandings of punishment and double jeopardy which do not consider civil sanctions as punishments subject to constitutional restrictions against multiple prosecutions or punishments for the same offense.