BP BHEAD INT S

AN ACT Relating to false claims against the government; reenacting and amending RCW 42.17.310; adding a new chapter to Title 4 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. This chapter may be known and cited as the "Washington state false claims act."

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Government" means the executive, judicial, or legislative branch, and an employee of a branch, including appointed and elected officers.

(2) "Knowing" and "knowingly" mean that a person, with respect to information, and with or without specific intent to defraud:

(a) Has actual knowledge of the information;

(b) Acts in deliberate ignorance of the truth or falsity of the information; or

(3) "Claim" means a request or demand, whether under contract or otherwise, for money or property that is made to a contractor, grantee, or other recipient if the government provides a portion of the money or property that is requested or demanded, or if the government will reimburse the contractor, grantee, or other recipient for a portion of the money or property that is requested or demanded.

NEW SECTION. Sec. 3. (1) Except for subsection (2) of this section, a person is liable to the government for a civil penalty of at least five thousand dollars and not more than ten thousand dollars, plus three times the amount of damages caused, if the person:

(a) Knowingly presents or causes to be presented to an officer or employee of the government a false claim or fraudulent claim for payment or approval;

(b) Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government;

(d) Has possession, custody, or control of property or money used, or to be used, by the government and, intending to defraud the government or willfully conceal the property, 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 government and, intending to defraud the government, makes or delivers the receipt without completely knowing that the information on the receipt is true;

(f) Knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, who lawfully may not sell or pledge the property; or

(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 government.

(2) For violations of subsection (1) of this section, a court may assess not less than two times the amount of damages that the government sustains because of the act of the person if the court finds that:

(a) The person committing the violation of this section furnished officials of the government responsible for investigating false claims violations with all information known to the person about the violation within thirty days after the date that the defendant first obtained the information;

(b) The person fully cooperated with a government investigation of the violation; and

(c) At the time the person furnished the government with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this chapter with respect to the violation, and the person did not have actual knowledge of the existence of an investigation into the violation.

(3) A person violating this section is liable to the government for the costs of a civil action brought to recover a penalty or damages.

NEW SECTION. Sec. 4. The attorney general shall diligently investigate a violation under section 3 of this act. If the attorney general finds that a person has violated or is violating section 3 of this act, the attorney general may bring a civil action against the person.

NEW SECTION. Sec. 5. (1) A person may bring a civil action for a violation of section 3 of this act for the person and for the state. The action is brought in the name of the state. The action may be dismissed only if the court and the attorney general give written consent to 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 under this title. The complaint shall be filed in camera, remain under seal for at least sixty days, and not be served on the defendant until the court orders. The state may elect to intervene and proceed with the action within sixty 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 subsection (2) of this section. A motion may be supported by affidavits or other submissions in camera. The defendant is not required to respond to a complaint filed under this section until twenty days after the complaint is unsealed and served upon the defendant under this title.

(4) Before the expiration of the sixty-day period or extensions

obtained under subsection (3) of this section, the state shall:

(a) Proceed with the action, in which case the action is conducted by the government; or

(b) Notify the court that it declines to take over the action, in which case the person bringing the action has the right to conduct the action.

(5) If a person brings an action under this section, no person other than the state may intervene or bring a related action based on the facts underlying the pending action.

NEW SECTION. Sec. 6. (1) If the government proceeds with an action under section 5 of this act, it has the primary responsibility for prosecuting the action and is not bound by an act of the person bringing the action. The person has the right to continue as a party to the action, subject to the limitations set forth in subsection (2) of this section.

(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.

(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 the circumstances. Upon a showing of good cause, the hearing may be held in camera.

(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:

(i) Limiting the number of witnesses the person may call;

(ii) Limiting the length of the testimony of the witnesses;

(iii) Limiting the person's cross-examination of witnesses; or

(iv) Otherwise limiting the participation by the person in the litigation.

(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 has the right to conduct the action. If the state requests, it shall be served with copies of all pleadings filed in the action and supplied with copies of all deposition transcripts, at the state's expense. If the 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 the discovery for a period of not more than sixty days. Such a showing is conducted in camera. The court may extend the sixty-day period upon a further showing in camera that the state has pursued the criminal or civil investigation or proceedings with reasonable diligence and the proposed discovery in the civil action would interfere with the ongoing criminal or civil investigation or proceedings.

(5) Notwithstanding section 5 of this act, the state may elect to pursue its claim through an alternate remedy available to the state, including an administrative proceeding to determine a civil money penalty. If an alternate remedy is pursued in another proceeding, the person initiating the action has the same rights in the proceeding as the person would have if the action had continued under this section. A finding of fact or conclusion of law made in the other proceeding that has become final is conclusive on all parties to an action under this section. For purposes of this subsection, 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 an appeal with respect to the finding or conclusion has expired, or if the finding or conclusion is not subject to judicial review.

NEW SECTION. Sec. 7. (1) If the state proceeds with an action brought by a person under section 5 of this act, the person shall receive at least fifteen percent but not more than twenty-five percent of the proceeds of the action or settlement of the claim, depending upon the extent the person substantially contributed to the prosecution of the action. If the action is one that the court finds is based primarily on disclosures of specific information, other than information provided by the person bringing the action, (a) relating to allegations or transactions in a criminal, civil, or administrative hearing, (b) in a congressional, administrative, or state accounting office report, hearing, audit, or investigation, or (c) from the news media, the court may award the sum it considers appropriate, but in no case more than ten percent 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. A payment to a person under this subsection is made from the proceeds. The 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 expenses, fees, and costs are 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 that the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than twenty-five percent and not more than thirty percent of the proceeds of the action or settlement and is paid out of the proceeds. The person shall also receive an amount for reasonable expenses that the court finds were necessarily incurred, plus reasonable attorneys' fees and costs. All expenses, fees, and costs are 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, under section 3 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 that the person would otherwise receive under subsection (1) or (2) of this section, taking into account the role of that person in advancing the case to litigation and 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 3 of this act, that person is dismissed from the civil action and shall not receive a share of the proceeds of the action. The dismissal shall not prejudice the right of the state to continue the action, represented by the attorney general.

(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 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.

NEW SECTION. Sec. 8. The state is not liable for expenses that a person incurs in bringing an action under section 5 of this act.

NEW SECTION. Sec. 9. An employee who is discharged, demoted, suspended, threatened, harassed, or in another 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 section 5 of this act, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under section 5 of this act, is entitled to all relief necessary to make the employee whole. The relief shall include reinstatement with the same seniority status that the employee would have had but for the discrimination, two times the amount of back pay, interest on the back pay, and compensation for special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees.

NEW SECTION. Sec. 10. Information furnished under this chapter is exempt from disclosure under RCW 42.17.310.

NEW SECTION. Sec. 11. Sections 1 through 10 of this act shall constitute a new chapter in Title 4 RCW.

Sec. 12. RCW 42.17.310 and 1992 c 139 s 5 and 1992 c 71 s 12 are each reenacted and amended to read as follows:

(1) The following are exempt from public inspection and copying:

(a) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, or welfare recipients.

(b) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy.

(c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would (i) be prohibited to such persons by RCW 82.32.330 or (ii) violate the taxpayer's right to privacy or result in unfair competitive disadvantage to the taxpayer.

(d) Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy.

(e) Information revealing the identity of persons who are witnesses to or victims of crime or who file complaints with investigative, law enforcement, or penology agencies, other than the public disclosure commission, if disclosure would endanger any person's life, physical safety, or property. If at the time a complaint is filed the complainant, victim or witness indicates a desire for disclosure or nondisclosure, such desire shall govern. However, all complaints filed with the public disclosure commission about any elected official or candidate for public office must be made in writing and signed by the complainant under oath.

(f) Test questions, scoring keys, and other examination data used to administer a license, employment, or academic examination.

(g) Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, but in no event shall disclosure be denied for more than three years after the appraisal.

(h) Valuable formulae, designs, drawings, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss.

(i) Preliminary drafts, notes, recommendations, and intra-agency memorandums in which opinions are expressed or policies formulated or recommended except that a specific record shall not be exempt when publicly cited by an agency in connection with any agency action.

(j) Records which are relevant to a controversy to which an agency is a party but which records would not be available to another party under the rules of pretrial discovery for causes pending in the superior courts.

(k) Records, maps, or other information identifying the location of archaeological sites in order to avoid the looting or depredation of such sites.

(l) Any library record, the primary purpose of which is to maintain control of library materials, or to gain access to information, which discloses or could be used to disclose the identity of a library user.

(m) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (a) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (b) highway construction or improvement as required by RCW 47.28.070.

(n) Railroad company contracts filed prior to July 28, 1991, with the utilities and transportation commission under RCW 81.34.070, except that the summaries of the contracts are open to public inspection and copying as otherwise provided by this chapter.

(o) Financial and commercial information and records supplied by private persons pertaining to export services provided pursuant to chapter 43.163 RCW and chapter 53.31 RCW.

(p) Financial disclosures filed by private vocational schools under chapter 28C.10 RCW.

(q) Records filed with the utilities and transportation commission or attorney general under RCW 80.04.095 that a court has determined are confidential under RCW 80.04.095.

(r) Financial and commercial information and records supplied by businesses during application for loans or program services provided by chapter 43.163 RCW and chapters 43.31, 43.63A, and 43.168 RCW.

(s) Membership lists or lists of members or owners of interests of units in timeshare projects, subdivisions, camping resorts, condominiums, land developments, or common-interest communities affiliated with such projects, regulated by the department of licensing, in the files or possession of the department.

(t) All applications for public employment, including the names of applicants, resumes, and other related materials submitted with respect to an applicant.

(u) The residential addresses and residential telephone numbers of employees or volunteers of a public agency which are held by the agency in personnel records, employment or volunteer rosters, or mailing lists of employees or volunteers.

(v) The residential addresses and residential telephone numbers of the customers of a public utility contained in the records or lists held by the public utility of which they are customers.

(w) Information obtained by the board of pharmacy as provided in RCW 69.45.090.

(x) Information obtained by the board of pharmacy or the department of health and its representatives as provided in RCW 69.41.044, 69.41.280, and 18.64.420.

(y) Financial information, business plans, examination reports, and any information produced or obtained in evaluating or examining a business and industrial development corporation organized or seeking certification under chapter 31.24 RCW.

(z) Financial and commercial information supplied to the state investment board by any person when the information relates to the investment of public trust or retirement funds and when disclosure would result in loss to such funds or in private loss to the providers of this information.

(aa) Financial and valuable trade information under RCW 51.36.120.

(bb) Client records maintained by an agency that is a domestic violence program as defined in RCW 70.123.020 or a rape crisis center as defined in RCW 70.125.030.

(cc) Information that identifies a person who, while an agency employee: (i) Seeks advice, under an informal process established by the employing agency, in order to ascertain his or her rights in connection with a possible unfair practice under chapter 49.60 RCW against the person; and (ii) requests his or her identity or any identifying information not be disclosed.

(dd) Business related information protected from public inspection and copying under RCW 15.86.110.

(ee) Information obtained under chapter 4.-- RCW (sections 1 through 10 of this act).

(2) Except for information described in subsection (1)(c)(i) of this section and confidential income data exempted from public inspection pursuant to RCW 84.40.020, the exemptions of this section are inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. No exemption may be construed to permit the nondisclosure of statistical information not descriptive of any readily identifiable person or persons.

(3) Inspection or copying of any specific records exempt under the provisions of this section may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.

(4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld.