§ 9-1.1-4 - Civil actions for false claims.
SECTION 9-1.1-4
§ 9-1.1-4 Civil actions for false claims.– (a) Responsibilities of the attorney general. The attorney generaldiligently shall investigate a violation under § 9-1.1-3 of this section.If under this section the attorney general finds that a person has violated oris violating section 9-1.1-3 the attorney general may bring a civil actionunder this section against the person.
(1) A person may bring a civil action for a violation of§ 9-1.1-3 for the person and for the state. The action shall be brought inthe name of the state. The action may be dismissed only if the court and theattorney general give written consent to the dismissal and their reasons forconsenting.
(2) A copy of the complaint and written disclosure ofsubstantially all material evidence and information the person possesses shallbe served on the state upon the attorney general. The complaint shall be filedin camera, shall remain under seal for at least sixty (60) days, and shall notbe served on the defendant until the court so orders. The state may elect tointervene and proceed with the action within sixty (60) days after it receivesboth the complaint and the material evidence and information.
(3) The state may, for good cause shown, move the court forextensions of the time during which the complaint remains under seal underparagraph (2). Any such motions may be supported by affidavits or othersubmissions in camera. The defendant shall not be required to respond to anycomplaint filed under this section until twenty (20) days after the complaintis unsealed and served upon the defendant.
(4) Before the expiration of the sixty (60) day period or anyextensions obtained under paragraph (3), the state shall:
(A) Proceed with the action, in which case the action shallbe conducted by the state; or
(B) Notify the court that it declines to take over theaction, in which case the person bringing the action shall have the right toconduct 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 onthe 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 theprimary responsibility for prosecuting the action, and shall not be bound by anact of the person bringing the action. Such person shall have the right tocontinue as a party to the action, subject to the limitations set forth inparagraph (2).
(2) The state may dismiss the action notwithstanding theobjections of the person initiating the action if the person has been notifiedby the state of the filing of the motion and the court has provided the personwith an opportunity for a hearing on the motion.
(B) The state may settle the action with the defendantnotwithstanding the objections of the person initiating the action if the courtdetermines, after a hearing, that the proposed settlement is fair, adequate,and reasonable under all the circumstances. Upon a showing of good cause, suchhearing may be held in camera.
(C) Upon a showing by the state that unrestrictedparticipation during the course of the litigation by the person initiating theaction would interfere with or unduly delay the state's prosecution of thecase, or would be repetitious, irrelevant, or for purposes of harassment, thecourt may, in its discretion, impose limitations on the person's participation,such as:
(i) Limiting the number of witnesses the person may call:
(ii) Limiting the length of the testimony of such witnesses;
(iii) Limiting the person's cross-examination of witnesses; or
(iv) Otherwise limiting the participation by the person inthe litigation.
(D) Upon a showing by the defendant that unrestrictedparticipation during the course of the litigation by the person initiating theaction would be for purposes of harassment or would cause the defendant undueburden or unnecessary expense, the court may limit the participation by theperson in the litigation.
(3) If the state elects not to proceed with the action, theperson who initiated the action shall have the right to conduct the action. Ifthe state so requests, it shall be served with copies of all pleadings filed inthe action and shall be supplied with copies of all deposition transcripts (atthe state's expense). When a person proceeds with the action, the court,without limiting the status and rights of the person initiating the action, maynevertheless permit the State to intervene at a later date upon a showing ofgood cause.
(4) Whether or not the state proceeds with the action, upon ashowing by the state that certain actions of discovery by the person initiatingthe action would interfere with the state's investigation or prosecution of acriminal or civil matter arising out of the same facts, the court may stay suchdiscovery for a period of not more than sixty (60) days. Such a showing shallbe conducted in camera. The court may extend the sixty (60) day period upon afurther showing in camera that the state has pursued the criminal or civilinvestigation or proceedings with reasonable diligence and any proposeddiscovery in the civil action will interfere with the ongoing criminal or civilinvestigation or proceedings.
(5) Notwithstanding subsection (b), the state may elect topursue its claim through any alternate remedy available to the state, includingany administrative proceeding to determine a civil money penalty. If any suchalternate remedy is pursued in another proceeding, the person initiating theaction shall have the same rights in such proceeding as such person would havehad if the action had continued under this section. Any finding of fact orconclusion of law made in such other proceeding that has become final shall beconclusive on all parties to an action under this section. For purposes of thepreceding sentence, a finding or conclusion is final if it has been finallydetermined on appeal to the appropriate court, if all time for filing such anappeal with respect to the finding or conclusion has expired, or if the findingor conclusion is not subject to judicial review.
(d) Award to Qui Tam plaintiff.
(1) If the State proceeds with an action brought by a personunder subsection 9-1.1-4(b), such person shall, subject to the second sentenceof this paragraph, receive at least fifteen percent (15%) but not more thantwenty-five percent (25%) of the proceeds of the action or settlement of theclaim, depending upon the extent to which the person substantially contributedto the prosecution of the action. Where the action is one which the court findsto be based primarily on disclosures of specific information (other thaninformation provided by the person bringing the action) relating to allegationsor transactions in a criminal, civil, or administrative hearing, in alegislative, administrative, or Auditor General's report, hearing, audit, orinvestigation, or from the news media, the court may award such sums as itconsiders appropriate, but in no case more than ten percent (10%) of theproceeds, taking into account the significance of the information and the roleof the person bringing the action in advancing the case to litigation. Anypayment 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 amountfor reasonable expenses which the court finds to have been necessarilyincurred, plus reasonable attorneys' fees and costs. The state shall alsoreceive an amount for reasonable expenses which the court finds to have beennecessarily incurred by the attorney general, including reasonable attorneys'fees and costs, and the amount received shall be deposited in the false claimsact fund created under this chapter. All such expenses, fees, and costs shallbe awarded against the defendant.
(2) If the state does not proceed with an action under thissection, the person bringing the action or settling the claim shall receive anamount which the court decides is reasonable for collecting the civil penaltyand damages. The amount shall be not less than twenty-five percent (25%) andnot more than thirty percent (30%) of the proceeds of the action or settlementand shall be paid out of such proceeds. Such person shall also receive anamount for reasonable expenses which the court finds to have been necessarilyincurred, 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 thecourt finds that the action was brought by a person who planned and initiatedthe violation of § 9-1.1-3 upon which the action was brought, then thecourt may, to the extent the court considers appropriate, reduce the share ofthe proceeds of the action which the person would otherwise receive underparagraph (1) or (2) of this subsection (d), taking into account the role ofthat person in advancing the case to litigation and any relevant circumstancespertaining to the violation. If the person bringing the action is convicted ofcriminal conduct arising from his or her role in the violation of §9-1.1-3, that person shall be dismissed from the civil action and shall notreceive any share of the proceeds of the action. Such dismissal shall notprejudice the right of the state to continue the action.
(4) If the state does not proceed with the action and theperson bringing the action conducts the action, the court may award to thedefendant its reasonable attorneys' fees and expenses if the defendant prevailsin the action and the court finds that the claim of the person bringing theaction was clearly frivolous, clearly vexatious, or brought primarily forpurposes of harassment.
(e) Certain actions barred.
(1) No court shall have jurisdiction over an action broughtby a former or present member of the guard under subsection 9-1.1-4(b) (actionsby private persons) against a member of the guard arising out of such person'sservice in the guard.
(2) No court shall have jurisdiction over an action broughtpursuant to subsection 9-1.1-4(b) (actions by private persons) against thegovernor, lieutenant governor, the attorney general, members of the generalassembly, a member of the judiciary, the treasurer, secretary of state, theauditor general, any director of a state agency, and any other individualappointed to office by the governor if the action is based on evidence orinformation known to the state when the action was brought.
(3) In no event may a person bring an action under subsection9-1.1-4(b) which is based upon allegations or transactions which are thesubject of a civil suit or an administrative civil money penalty proceeding inwhich the state is already a party.
(4) No court shall have jurisdiction over an action underthis section based upon the public disclosure of allegations or transactions ina criminal, civil, or administrative hearing, in a legislative, administrative,or auditor general's report, hearing, audit, or investigation, or from the newsmedia, unless the action is brought by the attorney general or the personbringing the action is an original source of the information.
(B) For purposes of this exclusion, "original source" meansan individual who has direct and independent knowledge of the information onwhich the allegations are based and has voluntarily provided the information tothe state before filing an action under this section which is based on theinformation.
(f) State not liable for certain expenses. The stateis not liable for expenses which a person incurs in bringing an action underthis section.
(g) Any employee who is discharged, demoted, suspended,threatened, harassed, or in any other manner discriminated against in the termsand conditions of employment by his or her employer because of lawful acts doneby the employee on behalf of the employee or others in furtherance of an actionunder this section, including investigation for, initiation of, testimony for,or assistance in an action filed or to be filed under this section, shall beentitled to all relief necessary to make the employee whole. Such relief shallinclude reinstatement with the seniority status such employee would have hadbut for the discrimination, two (2) times the amount of back pay, interest onthe back pay, and compensation for any special damages sustained as a result ofthe discrimination, including litigation costs and reasonable attorneys' fees.An employee may bring an action in the appropriate superior court for therelief provided in this subsection 9-1.1-4(g).