Stacey Johnson, a family nurse practitioner, received a $50,000 loan repayment grant from the Department of Health and Human Services.  Johnson was unable to fulfill the terms of the grant without either violating the law and medical ethics or leaving her longtime home in Great Falls, Montana, where she is raising her family.  Thus, she tried to return the full $50,000 scholarship only ten days after it was transferred to her account.   In response, the Government intended to levy a punitive fine of greater than treble damages—3.6 times the grant principal itself.

Johnson sought review under the federal Administrative Procedure Act, arguing that the fine is unauthorized by statute and violates the U.S. Constitution's Excessive Fines Clause. After a federal district court denied HHS's motion for summary judgment, the agency agreed to drastically reduce the fine.