Chapter
311
2013 -- H 5493 AS AMENDED
Enacted 07/15/13
A N A C T
RELATING TO
COURTS AND CIVIL PROCEDURE - THE STATE FALSE CLAIM ACT
Introduced By: Representatives Hearn, Marcello, Tanzi, Ruggiero, and Craven
Date Introduced: February 14, 2013
It is enacted by the
General Assembly as follows:
SECTION 1. Sections 9-1.1-3, 9-1.1-4 and 9-1.1-5 of the
General Laws in Chapter 9-1.1
entitled "The State False Claim Act" are hereby
amended to read as follows:
9-1.1-3. Liability
for certain acts. -- (a) Any person who:
(1) Knowingly presents,
or causes to be presented, to an officer or employee of the state
or a member of the guard a false or fraudulent claim for payment or approval;
(2) Knowingly makes,
uses, or causes to be made or used, a false record or statement to
get a material
to a false or fraudulent claim paid or approved by the state;
(3) Conspires to defraud
the state by getting a false or fraudulent claim allowed or paid
commit a violation of subdivisions 9-1.1-3 (1), (2), (3),
(4), (5), (6) or (7);
(4) Has possession,
custody, or control of property or money used, or to be used, by the
state and, intending to defraud the state or willfully
to conceal the property, knowingly delivers,
or causes to be delivered, less property than all of
that money or property the amount for which
the person receives a certificate or receipt;
(5) Is Authorized
authorized to make or deliver a document
certifying receipt of property
used, or to be used, by the state and, intending to
defraud the state, makes or delivers the receipt
without completely knowing that the information on the
receipt is true;
(6) Knowingly buys, or
receives as a pledge of an obligation or debt, public property
from an officer or employee of the state, or a member of
the guard, who lawfully may not sell or
pledge the property; or
(7) Knowingly makes,
uses, or causes to be made or used, a false record or statement
material to conceal, avoid or decrease an obligation to
pay or transmit money or property to the
state, or knowingly conceals or knowingly and improperly
avoids or decreases an obligation to
pay or transmit money or property to the state; is liable to the state for a civil penalty of not
less
than five thousand dollars ($5,000) five
thousand five hundred dollars ($5,500) and not more
than ten thousand dollars ($10,000) eleven
thousand dollars ($11,000), plus three (3) times the
amount of damages which the state sustains because of the
act of that person. A person violating
this subsection (a) shall also be liable to the state for
the costs of a civil action brought to recover
any such penalty or damages.
(b) Knowing and
knowingly defined. As used in this section, the terms "knowing" and
"knowingly" mean
that a person, with respect to information:
(b) Definitions. –
For purposes of this section:
(1) “Knowing” and
“knowingly” means that a person with respect to information:
(i)(1) Has actual
knowledge of the information;
(ii)(2)
Acts in deliberate ignorance of the truth or falsity of the information; or
(iii)(3)
Acts in reckless disregard of the truth or falsity of the information; and
no proof of
specific intent to defraud is required.
(iv)
Requires no proof of specific intent to defraud.
(c) Claim defined. -
As used in this section, "claim" includes any request or demand,
whether under a contract or otherwise, for money or property
which is made to a contractor,
grantee, or other recipient if the state provides any portion
of the money or property which is
requested or demanded, or if the state will reimburse such
contractor, grantee, or other recipient
for any portion of the money or property which is
requested or demanded.
(2) “Claim” means any
request or demand, whether under a contract or otherwise, for
money or property and whether or not the state has title to
the money or property, that:
(i)
Is presented to an officer, employee, or agent of the state; or
(ii) Is made to a
contractor, grantee, or other recipient, if the money or property is to be
spent or used on the state’s behalf or advance a state
program or interest, and if the state:
(A) Provides or has
provided any portion of the money or property requested or
demanded; or
(B) Will reimburse such
contractor, grantee, or other recipient for any portion of the
money or property which is requested or demanded; and
(iii) Does not
include requests or demands for money or property that the state has paid to
an individual as compensation for state employment or as
an income subsidy with no restrictions
on that individual’s use of the money or property;
(3) “Obligation”
means an established duty, whether or not fixed, arising from an express
or implied contractual, grantor-grantee, or licensor-licensee
relationship, from a fee-based or
similar relationship, from statute or regulation, or from the
retention of any overpayment; and
(4) “Material” means
having a natural tendency to influence, or be capable of
influencing, the payment or receipt of money or property.
(c)(d)
Exclusion. - This section does not apply to claims, records, or statements made
under the
44-30.
9-1.1-4. Civil actions for false claims. -- (a)
Responsibilities of the attorney general and
solicitor. - The attorney general or solicitor diligently shall
investigate a violation under section 9-
1.1-3 of this section. If under this section the
attorney general or solicitor finds that a person has
violated or is violating section 9-1.1-3 the attorney general
or solicitor may bring a civil action
under this section against the person.
(b) Actions by private
persons.
(1) A person may bring a
civil action for a violation of section 9-1.1-3 for the person and
for the state. The action shall be brought in the name of
the state. The action may be dismissed
only if the court and the attorney general give written
consent to the dismissal and their reasons
for consenting.
(2) A copy of the
complaint and written disclosure of substantially all material evidence
and information the person possesses shall be served on
the state upon the attorney general. The
complaint shall be filed in camera, shall remain under seal for
at least sixty (60) days, and shall
not be served on the defendant until the court so orders.
The state may elect to intervene and
proceed with the action within sixty (60) days after it
receives both the complaint and the material
evidence and information.
(3) The state may, for
good cause shown, move the court for extensions of the time
during which the complaint remains under seal under
paragraph (2). Any such motions may be
supported by affidavits or other submissions in camera. The
defendant shall not be required to
respond to any complaint filed under this section until
twenty (20) days after the complaint is
unsealed and served upon the defendant.
(4) Before the
expiration of the sixty (60) day period or any extensions obtained under
paragraph (3), the state shall:
(i)(A) Proceed with the action, in which
case the action shall be conducted by the state; or
(ii)(B)
Notify the court that it declines to take over the action, in which case the
person
bringing the action shall have the right to conduct the
action.
(5) When a person brings
an action under this subsection (b), no person other than the
state may intervene or bring a related action based on the
facts underlying the pending action.
(c) Rights of the
parties to Qui Tam actions.
(1) If the state
proceeds with the action, it shall have the primary responsibility for
prosecuting the action, and shall not be bound by an act of the
person bringing the action. Such
person shall have the right to continue as a party to the
action, subject to the limitations set forth
in paragraph (2).
(2) (A) The state may dismiss the action notwithstanding the
objections of the person
initiating the action if the person has been notified by the state
of the filing of the motion and the
court has provided the person with an opportunity for a
hearing on the motion.
(i)(B) The state may settle the action with
the defendant notwithstanding the objections of
the person initiating the action if the court determines,
after a hearing, that the proposed
settlement is fair, adequate, and reasonable under all the
circumstances. Upon a showing of good
cause, such hearing may be held in camera.
(ii)(C)
Upon a showing by the state that unrestricted participation during the course
of the
litigation by the person initiating the action would interfere
with or unduly delay the state's
prosecution of the case, or would be repetitious, irrelevant, or
for purposes of harassment, the
court may, in its discretion, impose limitations on the
person's participation, such as:
(A)(i) Limiting the number of witnesses the person may
call:
(B)(ii)
Limiting the length of the testimony of such witnesses;
(C)(iii)
Limiting the person's cross-examination of witnesses; or
(D)(iv) Otherwise limiting the participation by the
person in the litigation.
(iii)(D)
Upon a showing by the defendant that unrestricted participation during the
course
of the litigation by the person initiating the action
would be for purposes of harassment or would
cause the defendant undue burden or unnecessary expense,
the court may limit the participation
by the person in the litigation.
(3) If the state elects
not to proceed with the action, the person who initiated the action
shall have the right to conduct the action. If the state so
requests, it shall be served with copies of
all pleadings filed in the action and shall be supplied
with copies of all deposition transcripts (at
the state's expense). When a person proceeds with the
action, the court, without limiting the status
and rights of the person initiating the action, may
nevertheless permit the State to intervene at a
later date upon a showing of good cause.
(4) Whether or not the
state proceeds with the action, upon a showing by the state that
certain actions of discovery by the person initiating the
action would interfere with the state's
investigation or prosecution of a criminal or civil matter arising
out of the same facts, the court
may stay such discovery for a period of not more than
sixty (60) days. Such a showing shall be
conducted in camera. The court may extend the sixty (60) day
period upon a further showing in
camera that the state has pursued the criminal or civil investigation
or proceedings with
reasonable diligence and any proposed discovery in the civil
action will interfere with the
ongoing criminal or civil investigation or proceedings.
(5) Notwithstanding
subsection (b), the state may elect to pursue its claim through any
alternate remedy available to the state, including any
administrative proceeding to determine a
civil money penalty. If any such alternate remedy is
pursued in another proceeding, the person
initiating the action shall have the same rights in such
proceeding as such person would have had
if the action had continued under this section. Any
finding of fact or conclusion of law made in
such other proceeding that has become final shall be
conclusive on all parties to an action under
this section. For purposes of the preceding sentence, a
finding or conclusion is final if it has been
finally determined on appeal to the appropriate court, if all
time for filing such an appeal with
respect to the finding or conclusion has expired, or if the
finding or conclusion is not subject to
judicial review.
(d) Award to Qui Tam
plaintiff.
(1) If the State
proceeds with an action brought by a person under subsection 9-1.1-4(b),
such person shall, subject to the second sentence of this
paragraph, receive at least fifteen percent
(15%) but not more than twenty-five percent (25%) of
the proceeds of the action or settlement of
the claim, depending upon the extent to which the person
substantially contributed to the
prosecution of the action. Where the action is one which the
court finds to be based primarily on
disclosures of specific information (other than information
provided by the person bringing the
action) relating to allegations or transactions in a
criminal, civil, or administrative hearing, in a
legislative, administrative, or Auditor General's report,
hearing, audit, or investigation, or from
the news media, the court may award such sums as it
considers appropriate, but in no case more
than ten percent (10%) of the proceeds, taking into
account the significance of the information
and the role of the person bringing the action in
advancing the case to litigation. Any payment to
a person under the first or second sentence of this
paragraph (1) shall be made from the proceeds.
Any such person shall also receive an amount for
reasonable expenses which the court finds to
have been necessarily incurred, plus reasonable attorneys'
fees and costs. The state shall also
receive an amount for reasonable expenses which the court
finds to have been necessarily
incurred by the attorney general, including reasonable
attorneys' fees and costs, and the amount
received shall be deposited in the false claims act fund
created under this chapter. All such
expenses, fees, and costs shall be awarded against the
defendant.
(2) If the state does
not proceed with an action under this section, the person bringing the
action or settling the claim shall receive an amount which
the court decides is reasonable for
collecting the civil penalty and damages. The amount shall be
not less than twenty-five percent
(25%) and not more than thirty percent (30%) of the
proceeds of the action or settlement and shall
be paid out of such proceeds. Such person shall also
receive an amount for reasonable expenses
which the court finds to have been necessarily incurred,
plus reasonable attorneys' fees and costs.
All such expenses, fees, and costs shall be awarded
against the defendant.
(3) Whether or not the state
proceeds with the action, if the court finds that the action was
brought by a person who planned and initiated the violation
of section 9-1.1-3 upon which the
action was brought, then the court may, to the extent the
court considers appropriate, reduce the
share of the proceeds of the action which the person would
otherwise receive under paragraph (1)
or (2) of this subsection (d), taking into account the
role of that person in advancing the case to
litigation and any relevant circumstances pertaining to the
violation. If the person bringing the
action is convicted of criminal conduct arising from his or
her role in the violation of section 9-
1.1-3, that person shall be dismissed from the civil
action and shall not receive any share of the
proceeds of the action. Such dismissal shall not prejudice the
right of the state to continue the
action.
(4) If the state does
not proceed with the action and the person bringing the action
conducts the action, the court may award to the defendant its reasonable
attorneys' fees and
expenses if the defendant prevails in the action and the court
finds that the claim of the person
bringing the action was clearly frivolous, clearly vexatious,
or brought primarily for purposes of
harassment.
(e) Certain actions
barred.
(1) No court shall have
jurisdiction over an action brought by a former or present member
of the guard under subsection 9-1.1-4(b) (actions by
private persons) against a member of the
guard arising out of such person's service in the guard.
(2) No court shall have
jurisdiction over an action brought pursuant to subsection 9-1.1-
4(b) (actions by private persons) against the
governor, lieutenant governor, the attorney general,
members of the general assembly, a member of the judiciary,
the treasurer, secretary of state, the
auditor general, any director of a state agency, and any
other individual appointed to office by the
governor if the action is based on evidence or information
known to the state when the action was
brought.
(3) In no event may a
person bring an action under subsection 9-1.1-4(b) which is based
upon allegations or transactions which are the subject of
a civil suit or an administrative civil
money penalty proceeding in which the state is already a party.
(4) (A) No The court shall have jurisdiction over dismiss
an action or claim under this
section, unless opposed by the state, if substantially the
same allegations or transactions as
alleged in the action or claim where publically disclosed: based upon the public disclosure of
allegations or transactions
(i)
in In a state
criminal, civil, or administrative hearing, in which the state or its agents
is
a party;
(ii) in In a legislative,
administrative, or auditor general's or other state of
report, hearing, audit, or investigation,; or
(iii) from From the news
media, unless the action is brought by the attorney general or
the person bringing the action is an original source of
the information.
(B) For purposes of this
exclusion paragraph, "original source" means an
individual who
either: (i) Prior to the public
disclosure under subparagraph 9-1.4-4(e)(4)(A), has voluntarily
disclosed to the state
has direct and independent knowledge of the information on which the
allegations or transactions in a claim are based; or
(ii) Who has knowledge that is independent of
and materially adds to the publicly disclosed allegations
or transaction, and who has
voluntarily
provided the information to the state before filing an action
under this section which is based on
the information.
(f) State not liable for
certain expenses. - The state is not liable for expenses which a
person incurs in bringing an action under this section.
(g) Any employee,
contractor, agent, or associated others who is discharged, demoted,
suspended, threatened, harassed, or in any other manner
discriminated against in the terms and
conditions of employment by his or her employer because
of lawful acts done by the employee,
contractor, agent or associated others on behalf of the employee or others in
furtherance of an
action under this section, or other efforts to stop one
or more violations of this subsection
including investigation for, initiation of, testimony for, or
assistance in an action filed or to be
filed under this section, shall be entitled to all relief
necessary to make the employee, contractor,
agent or associated others whole. Such relief shall include reinstatement with
the same seniority
status such employee, contractor, agent or associated
others would have had but for the
discrimination, two (2) times the amount of back pay, interest on
the back pay, and compensation
for any special damages sustained as a result of the discrimination,
including litigation costs and
reasonable attorneys' fees. An employee, contractor, agent or
associated others may bring an
action in the appropriate superior court for the relief
provided in this subsection 9-1.1-4(g).
(h) Limitation on
bringing civil action.- A civil action under
subsection (g) may not be
brought more than three (3) years after the date when the
retaliation occurred.
9-1.1-5. False
claims procedure. -- (a) A subpoena requiring the attendance of a
witness
at a trial or hearing conducted under section 9-1.1-4,
may be served at any place in the state.
(b) A civil action under
section 9-1.1-4 may not be brought:
(1) More than 6 years
after the date on which the violation of section 9-1.1-3 is
committed, or
(2) More than three (3)
years after the date when facts material to the right of action are
known or reasonably should have been known by the official
of the state charged with
responsibility to act in the circumstances, but in no event more than
ten (10) years after the date
on which the violation is committed, whichever occurs
last.
(c) If the state
elects to intervene and proceed with an action brought under subsection 9-
1.1-4(i), the state may file
its own complaint or amend the complaint of a person who has brought
an action under section 9-1.1-4 to clarify or add detail
to the claims in which the state is
intervening and to add any additional claims with respect to
which the state contends it is entitled
to relief. For statute of limitations purposes, any such
state pleading shall relate back to the filing
date of the complaint of the person who originally brought
the action, to the extent that the claim
of the state arises out of the conduct, transactions, or
occurrences set forth, or attempted to be set
forth, in the prior complaint of that person.
(d)(c) In
any action brought under section 9-1.1-4, the state shall be required to prove
all
essential elements of the cause of action, including damages,
by a preponderance of the evidence.
(e)(d)
Notwithstanding any other provision of law, a final judgment rendered in favor
of
the state in any criminal proceeding charging fraud or
false statements, whether upon a verdict
after trial or upon a plea of guilty or nolo contendere, shall stop
the defendant from denying the
essential elements of the offense in any action which involves
the same transaction as in the
criminal proceeding and which is brought under subsections
9-1.1-4(a) or 9-1.1-4(b).
SECTION 2. This act shall take effect upon passage.
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LC00967
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