Bill Text: NC S378 | 2017-2018 | Regular Session | Amended

North Carolina Senate Bill 378 (Prior Session Legislation)

Bill Title: Update NC False Claims Act.-AB

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced - Dead) 2017-04-25 - Re-ref Com On Rules and Operations of the Senate [S378 Detail]

Download: North_Carolina-2017-S378-Amended.html

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2017

S 1

SENATE BILL 378

Short Title: Update NC False Claims Act.-AB		(Public)
Sponsors:	Senators Hise, Pate, and Krawiec (Primary Sponsors).
Referred to:	Rules and Operations of the Senate

March 27, 2017

A BILL TO BE ENTITLED

AN ACT to align the north carolina false claims act with the federal false claims act.

The General Assembly of North Carolina enacts:

SECTION 1. G.S. 1‑606(7) is repealed.

SECTION 2. G.S. 1‑607(a) reads as rewritten:

"§ 1‑607. False claims; acts subjecting persons to liability for treble damages; costs and civil penalties; exceptions.

(a) Liability. � Any person who commits any of the following acts shall be liable to the State for three times the amount of damages that the State sustains because of the act of that person. A person who commits any of the following acts also shall 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) and not more than eleven thousand dollars ~~($11,000)~~ ($11,000), as may be adjusted by Section 5 of the Federal Civil Penalties Inflation Adjustment Act of 1990, P.L. 101‑410, as amended, for each violation:

�."

SECTION 3. G.S. 1‑608(b) reads as rewritten:

"(b) Actions by Private Persons. � A person may bring a civil action for a violation of G.S. 1‑607 for the person and for the State, as follows:

(1) The action shall be brought in the name of the State, and the person bringing the action shall be referred to as the qui tam plaintiff. ~~Once filed, the~~ The action may be dismissed ~~voluntarily by the person bringing the action~~ only if the court and Attorney General have given written consent to the ~~dismissal.~~dismissal and the 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 Attorney General pursuant to applicable rules of the North Carolina Rules of Civil Procedure. The complaint shall be filed in camera, shall remain under seal for at least 120 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 120 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 subdivision (2) of this subsection. 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 30 days after the complaint is unsealed and served upon the defendant pursuant to the North Carolina Rules of Civil Procedure.

(4) Before the expiration of the 120‑day period or any extensions obtained under subdivision (3) of this subsection, the State shall:

a. Proceed with the action, in which case the action shall be conducted by the State; or

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, the federal False Claims Act, 31 U.S.C. § 3729 et seq., or any similar provision of law in any other state, no person other than the State may intervene or bring a related action based on the facts underlying the pending action; provided, however, that nothing in this subdivision prohibits a person from amending a pending action in another jurisdiction to allege a claim under this subsection.

When a person brings an 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."

SECTION 4. G.S. 1‑610(b) reads as rewritten:

"(b) Where the action is one which the court finds to be based primarily on disclosures of specific information, other than information provided by the qui tam plaintiff, relating to allegations or transactions (i) in a State criminal, civil, or administrative ~~hearing at the State or federal level,~~ hearing, (ii) in a ~~congressional,~~ State legislative, ~~administrative, General Accounting Office, or~~ Office of the State ~~Auditor's~~ Auditor, or other State report, hearing, audit, or investigation, or (iii) 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 qui tam plaintiff in advancing the case to litigation."

SECTION 5. G.S. 1‑611 reads as rewritten:

"§ 1‑611. Certain actions barred.

(a) No court shall have jurisdiction over an action brought under G.S. 1‑608(b) against a member of the General Assembly, a member of the judiciary, or a senior executive branch official acting in their official capacity if the action is based on evidence or information known to the State when the action was brought.

(b) In no event may a person bring an action under G.S. 1‑608(b) that is based upon allegations or transactions that are the subject of a civil suit or an administrative civil money penalty proceeding in which the State is already a party.

~~(c)~~ ~~No civil action may be brought under this Article by a person who is or was a public employee or public official if the allegations of such action are based substantially upon either of the following:~~

~~(1)~~ ~~Allegations of wrongdoing or misconduct which such person had a duty or obligation to report or investigate within the scope of his or her public employment or office.~~

~~(2)~~ ~~Information or records to which the person had access as a result of his or her public employment or office.~~

~~(d)~~ No court shall have jurisdiction over an action under G.S. 1‑608(b) based upon the public disclosure of allegations or transactions (i) in a criminal, civil, or administrative hearing at the State or federal level, (ii) in a congressional, legislative, administrative, General Accounting Office, or State Auditor's report, hearing, audit, or investigation, or (iii) 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. For purposes of this section, "original source" means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the State before filing an action under G.S. 1‑608(b) that is based on the information.

(e) Unless opposed by the State, the court shall dismiss an action or claim under this Article if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed by any of the following:

(1) A State criminal, civil, or administrative hearing in which the State or its agent is a party.

(2) A State legislative, Office of the State Auditor, or other State report, hearing, audit, or investigation.

(3) The news media.

This subsection shall not apply to any action brought by the Attorney General or when the person bringing the action is an original source of the information.

(f) For the purposes of this section, the term "original source" means an individual who meets one of the following descriptions:

(1) Prior to public disclosure under subsection (e) of this section, the individual has voluntarily disclosed to the State the information on which allegations or transactions in a claim are based.

(2) The individual (i) has knowledge that is independent of, and materially adds to, the publicly disclosed allegations or transactions and (ii) has voluntarily provided the information to the State before filing an action under this Article."

SECTION 6. G.S. 1‑613 reads as rewritten:

"§ 1‑613. Private action for retaliation action.

Any employee, contractor, or agent who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, ~~or agent on behalf of the employee, contractor, or agent or~~ agent, or associated others in furtherance of an action under this ~~Article, or in furtherance of~~ Article or other efforts to stop one or more violations of ~~G.S. 1‑607, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this Article,~~ G.S. 1‑607 shall be entitled to all relief necessary to make the ~~employee~~ employee, contractor, or agent whole. Such relief shall include reinstatement with the same seniority status the employee, contractor, or agent would have had but for the discrimination, two 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, or agent may bring an~~ action may be brought in North Carolina superior court for the relief provided in this section. A civil action under this section may not be brought more than three years after the date when the retaliation occurred."