Healthcare Fraud Lawyer Blog
Many people are familiar with whistleblower lawsuits (often called qui tam actions) brought under the federal False Claims Act (31 USC §3729 et seq.) but many states have their own version of the law, as well. California has its own version and was one of the first states to promulgate a state false claims act.
California’s False Claims Act
The California False Claims Act (CFCA) was first enacted in 1987. Like its federal counterpart, it was put into place to encourage the public to help control fraud against the government. It does this by rewarding whistleblowers for coming forward and helping prosecute actions against companies or individuals who are defrauding the government by sharing any recovery with the complaining individual (who is called a relator). The two laws are quite similar, although there are important differences between them.
How Does the CFCA Work?
In simple terms, the CFCA is applied just like the federal law. A person or company violates the law when they file a false claim seeking to obtain payment from the California government. The relator (who can be one or more people or even a company), who has knowledge of this fraud, then files suit against the violator. Just like the federal law, the filing is sealed by the court and is not initially served upon the defendant. Instead, it is filed with the appropriate court and the State Attorney General. The Office of the Attorney General then investigates the claim. The State can then decide to intervene in the suit or allow the relator to continue to prosecute the claim on his or her own. The allegations made by the relator must be from an original source, meaning that the allegations cannot be already publicly disclosed and cannot already be the source of negotiations or an enforcement action with the government.
What are Some Key Differences Between the Federal Law and the CFCA?
There are several key differences between the two laws. First, the length of time to file the suit (known as the statute of limitations) is substantially different. The FFCA provides for a six-year statute of limitations, while the CFCA has a three-year limit from when the government knew or should have known of the fraud. Second, the CFCA prohibits a current or former government employee from filing suit based on information discovered during the course of their work unless they have first exhausted internal procedures to resolve and seek recovery and the government has failed to act on the information within a reasonable period of time. The amounts a relator may recover are also materially different. Under the CFCA, a relator may be awarded:
- Between 15 and 33% of the recovery if the state intervenes in the suit
- Between 25 and 50% of the proceeds if the state declines to intervene
- Between 0 and 33% if a current or former state employee is the relator and the state intervenes and
- Between 0 and 50% if a current or former state employee is the relator and the state declines to intervene
A relator in a qui tam action is doing a public service by making sure wrongdoers are held accountable for defrauding the government. The CFCA gives another option to whistleblowers to pursue justice in fraud cases against the government. If you are in the San Francisco, Oakland, or Santa Rosa area and you are considering a qui tam action utilizing the CFCA, you owe it to yourself to ensure that your rights are protected. Give the experienced legal professionals at Willoughby Brod LLP a call today at 800-427-7020 or click here to set up your initial consultation to see what they can do for you.
(image courtesy of Samson Duborg Rankin)
