Bill Text: MS HB196 | 2014 | Regular Session | Introduced
Bill Title: Mississippi False Claims Act; create.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2014-02-04 - Died In Committee [HB196 Detail]
Download: Mississippi-2014-HB196-Introduced.html
MISSISSIPPI LEGISLATURE
2014 Regular Session
To: Judiciary A; Ways and Means
By: Representative Lane
House Bill 196
AN ACT TO CREATE THE MISSISSIPPI FALSE CLAIMS ACT; TO DEFINE CERTAIN TERMS; TO PROVIDE TREBLE DAMAGES FOR CERTAIN ACTS; TO PROVIDE FOR THE ASSESSMENT OF COSTS AND CIVIL PENALTIES; TO REQUIRE THE ATTORNEY GENERAL TO INVESTIGATE VIOLATIONS UNDER THIS ACT; TO AUTHORIZE THE ATTORNEY GENERAL TO BRING CIVIL ACTIONS UNDER THIS ACT; TO PROVIDE FOR CIVIL ACTIONS BY INDIVIDUALS AS QUI TAM PLAINTIFFS; TO PROVIDE FOR JURISDICTION UNDER THIS ACT; TO PROVIDE FOR LIMITATIONS OF ACTIONS; TO PROVIDE THAT REMEDIES UNDER THIS ACT ARE IN ADDITION TO OTHER REMEDIES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. For the purposes of this act:
(a) "Claim" means any request or demand, whether under contract or otherwise, for state money or property.
(b) "Knowing" and "knowingly" mean that a person, with respect to information, does any of the following:
(i) Has actual knowledge of the information;
(ii) Acts in deliberate ignorance of the truth or falsity of the information; or
(iii) Acts in reckless disregard of the truth or falsity of the information.
Proof of specific intent to defraud is not required.
(c) "Person" means any natural person, corporation, firm, association, organization, partnership, business or trust.
(d) "Employer" means any natural person, corporation, firm, association, organization, partnership, business, trust or state-affiliated entity involved in a nongovernmental function, including state universities and state hospitals.
(e) "State money or property" means:
(i) Money or property belonging to the State of Mississippi;
(ii) Money or property that the State of Mississippi government provided or has provided to a contractor, grantee, agent or other recipient, or for which the State of Mississippi will reimburse a contractor, grantee, agent or other recipient; or
(iii) Money or property that the State of Mississippi holds in trust or administers for any administrative beneficiary.
(f) "Administrative beneficiary" means any entity, including any State of Mississippi governmental or quasi-governmental entity, on whose behalf the State of Mississippi alone or with others, serves as custodian or trustee of money or property owned by that entity.
SECTION 2. (1) Any person who commits any of the following acts shall be liable to the state for three (3) times the amount of damages which the state sustains because of the act of that person. A person who commits any of the following acts shall also be liable to the state for the costs of a civil action brought to recover any of those penalties or damages, and shall be liable to the state for a civil penalty of not less than Five Thousand Five Hundred Dollars ($5,500.00) and not more than Eleven Thousand Dollars ($11,000.00) for each violation:
(a) Knowingly presents or causes to be presented for payment or approval a false or fraudulent claim for state money or property.
(b) Knowingly makes, uses or causes to be made or used, a false record or statement to get a false or fraudulent claim for state money or property paid or approved.
(c) Conspires to defraud the state by getting a false or fraudulent claim for state money or property allowed or paid, or conspires to defraud the state by knowingly making, using or causing to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the state.
(d) Has possession, custody or control of public property or money used or to be used by the state and knowingly delivers or causes to be delivered less property than the amount for which the person receives a certificate or receipt.
(e) Is authorized to make or deliver a document certifying receipt of property used or to be used by the state and knowingly makes or delivers a receipt that falsely represents the property used or to be used.
(f) Knowingly buys, or receives a pledge of an obligation or debt, public property from any person who lawfully may not sell or pledge the property.
(g) Knowingly makes, uses or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the state.
(h) Is a beneficiary of an inadvertent submission of a false claim to any employee, officer or agent of the state, or to any contractor, grantee or other recipient of state funds, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the state within a reasonable time after discovery of the false claim.
(2) Notwithstanding subsection (1), the court may assess not less than two (2) times the amount of damages which the state sustains because of the act of the person described in that subdivision, and no civil penalty, if the court finds all of the following:
(a) The person committing the violation furnished officials of the state who are responsible for investigating false claims violations with all information known to that person about the violation within thirty (30) days after the date which the person first obtained the information.
(b) The person fully cooperated with any investigation by the state.
(c) At the time the person furnished the state with information about the violation, no criminal prosecution, civil action or administrative action had commenced with respect to the violation, and the person did not have actual knowledge of the existence of an investigation into the violation.
(3) This section does not apply to claims, records or statements made under Title 27, Mississippi Code of 1972.
SECTION 3. (1) The Attorney General shall investigate a violation under Section 2 of this act. If the Attorney General finds that a person has violated or is violating Section 2 of this act, the Attorney General may bring a civil action under this section against that person.
(2) (a) A person may bring a civil action for a violation of this act for the person and for the state in the name of the state. The person bringing the action shall be referred to as the qui tam plaintiff. Once filed, the action may be dismissed only with the written consent of the court, taking into account the best interest of the parties involved and the public purposes behind this act.
(b) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Attorney General pursuant to the Mississippi Rules of Civil Procedure. The complaint shall also 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 the information.
(c) The state may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (b). 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 after the complaint is unsealed and served upon the defendant pursuant to the Mississippi Rules of Civil Procedure.
(d) Before the expiration of the sixty-day period or any extensions obtained under paragraph (c), the state shall:
(i) Proceed with the action, and intervene, in which case the action shall be conducted by the state; or
(ii) 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.
(e) When a person brings a valid action under this subsection, no person other than the state may intervene or bring a related action based on the facts underlying the pending action.
(3) (a) 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 (b).
(b) (i) The state may seek to dismiss the action for good cause notwithstanding the objections of the qui tam plaintiff if the qui tam plaintiff has been notified by the state of the filing of the motions and the court has provided the qui tam plaintiff with an opportunity to oppose the motion and present evidence at a hearing.
(ii) The state may settle the action with the defendant notwithstanding the objections of the qui tam plaintiff if the court determines, after a hearing providing the qui tam plaintiff an opportunity to present evidence, that the proposed settlement is fair, adequate and reasonable under all of the circumstances.
(iii) 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:
1. Limiting the number of witnesses the person may call at trial;
2. Limiting the length of the testimony of such witnesses at trial;
3. Limiting the person's cross-examination of witnesses at trial; or
4. Otherwise limiting the participation by the person in the litigation.
(iv) 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, in cases where the state has intervened, the court may limit the participation by the person in the litigation.
(c) If the state elects not to intervene, 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 depositions 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.
(d) 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 of a criminal matter arising out of the same facts, the court may stay such discovery for a period of not more than sixty (60) days. The court may extend the sixty-day period upon a further showing in camera that the state has pursued the criminal investigation or proceeds with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal investigation or proceeding.
(e) Notwithstanding subsection (2), the state may elect to pursue its claim through any alternate remedy available to the state, including any administrative proceeding to determine a civil monetary 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 the purposes of the preceding sentence, a finding or conclusion is final if it has been finally determined on appeal to the appropriate court of the state, 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.
(4) (a) If the state intervenes in an action brought by a person under subsection (2), 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, which includes damages, civil penalties, payments for costs of compliance and any other economic benefit realized by the government as a result of the action, depending upon the extent to which the person and/or his counsel substantially contributed to the prosecution of the action. Whether the action is one which the court finds to be actually derived from disclosures of specific information (other than information provided by the person bringing the action) relating to allegations or transactions specifically in a criminal, civil, or administrative hearing, or in a legislative or administrative 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 shall be made from the proceeds. any such person shall also receive an amount for reasonable expenses which the appropriate state court judge finds to have been necessarily incurred, plus reasonable attorney's fees and costs. All such expenses, fees and costs shall be awarded against the defendant.
(b) If the state does not intervene in an action under the 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, which includes damages, civil penalties, payments for costs of compliance and any other economic benefit realized by the government as a result of the action. Such person shall also receive an amount for reasonable expenses which the appropriate state court judge finds to have been necessarily incurred, plus reasonable attorney's fees and costs. All such expenses, fees and costs shall be awarded against the defendant.
(c) Whether or not the state intervenes, if the court finds that the action was brought by a person who planned and initiated the violation of Section 2 of this act 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 (a) or (b) of this subsection, 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 2 of this act, upon motion of the Attorney General, 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 or proceed with the action.
(d) If the state does intervene and the person bringing the action conducts the action, the court may award to the defendant its reasonable attorney's 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 harassing the defendant.
(5) (a) No court shall have jurisdiction over an action brought under subsection (2) against a member of the legislative branch, a member of the judiciary or a senior executive agency official if the action is based on evidence or information known to the state when the action was brought. Upon motion of the Attorney General, the court shall dismiss such an action without prejudice to the state.
(b) In no event may a person bring an action under subsection (2) if the allegations or transactions which form the basis of the qui tam plaintiff's claim were actually derived from a civil suit or an administrative civil money penalty proceeding in which the state is already a party. Upon motion of the Attorney General, the court shall dismiss such an action without prejudice to the state.
(c) Upon motion of the Attorney General, the court may, in consideration of all the equities, dismiss a qui tam plaintiff if the elements of the actionable false claims alleged in the qui tam complaint are actually derived from information publically disclosed in the news media or in a publically disseminated governmental report, in existence at the time the complaint is filed.
(6) The state is not liable for expenses that a person incurs in bringing or defending an action under this section.
(7) Any employee 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 on behalf of the employee or others in furtherance of an action under this section, 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 whole. Such relief shall include reinstatement with the same seniority status such employee 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 attorney's fees. An employee may bring an action in the appropriate court of the state for the relief provided in this subsection regardless of whether he brings or files a qui tam on behalf of himself and the state as provided for in this section.
SECTION 4. (1) A civil action under Section 3 of this act may not be brought more than eight (8) years after the date on which the violation of Section 2 of this act was committed.
(2) A civil action under Section 3 of this act may be brought for activity that occurred prior to the effective date of this act if the limitations period set forth above has not lapsed.
(3) In any action brought under Section 3 of this act, the state or the qui tam plaintiff shall be required to prove all essential elements of the cause of action, including damages, by a preponderance of the evidence.
(4) Notwithstanding any other provision of law, a guilty verdict rendered in a criminal proceeding charging false statements or fraud on the state, whether upon a verdict after trial or upon a plea of guilty, shall estop the defendant from denying the essential elements of the offense in any action which involves the same transactions or occurrences as in the criminal proceeding and which is brought under subsection (1), (2) or (3) of Section 3 of this act.
SECTION 5. (1) The provisions of this act are not exclusive, and the remedies provided in this act shall be in addition to any other remedies provided for in any other law or available under common law.
(2) If the provision of this act or the application thereof to any person or circumstance is held to be unconstitutional, the remainder of the act and the application of the provision to other persons or circumstances shall not be affected thereby.
(3) The Attorney General shall have access to the same investigative demand procedures available under the federal False Claims Act to the extent those procedures are compliant with the Mississippi Constitution of 1890, and not otherwise prohibited by law.
(4) This act shall be liberally construed and applied to promote the public interest. This act also adopts the congressional intent behind the federal False Claims Act, 31 USCS Sections 3729-3733, including the legislative history underlying the 1986 amendments to the federal False Claims Act, and upon subsequent adoption by the Legislature, any other amendments to the federal False Claims Act.
(5) Liability under this act is a statutory cause of action all elements of which are set forth in this act. No proof of any additional element of common law fraud or other cause of action is implied or required for liability to exist for a violation of this act.
SECTION 6. This act shall take effect and be in force from and after its passage.
