BILL REQ. #: S-1492.2
State of Washington | 62nd Legislature | 2011 Regular Session |
READ FIRST TIME 02/17/11.
AN ACT Relating to false claims against the government; amending RCW 74.09.210; adding a new chapter to Title 4 RCW; prescribing penalties; and providing an effective date.
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)(a) "Claim" means any request or demand, whether under a
contract or otherwise, for money or property and whether or not a
government entity has title to the money or property, that:
(i) Is presented to an officer, employee, or agent of a government
entity; or
(ii) Is made to a contractor, grantee, or other recipient, if the
money or property is to be spent or used on the government entity's
behalf or to advance a government entity program or interest, and the
government entity:
(A) Provides or has provided any portion of the money or property
requested or demanded; or
(B) Will reimburse such contractor, grantee, or other recipient for
any portion of the money or property which is requested or demanded.
(b) A "claim" does not include requests or demands for money or
property that the government entity has paid to an individual as
compensation for employment or as an income subsidy with no
restrictions on that individual's use of the money or property.
(c) A "claim" does not include, in relation to any public works
contract, a request for payment or other submission which is
conditioned upon compliance with a contractual time requirement that
limits the contractor's ability to guarantee the accuracy of the
submission, provided that the contractor later amends the claim when
the claim overstated the actual cost.
(2) "Custodian" means the custodian, or any deputy custodian,
designated by the attorney general.
(3) "Documentary material" includes the original or any copy of any
book, record, report, memorandum, paper, communication, tabulation,
chart, or other document, or data compilations stored in or accessible
through computer or other information retrieval systems, together with
instructions and all other materials necessary to use or interpret the
data compilations, and any product of discovery.
(4) "False claims act investigation" means any inquiry conducted by
any false claims act investigator for the purpose of ascertaining
whether any person is or has been engaged in any violation of this
chapter.
(5) "False claims act investigator" means any attorney or
investigator employed by the state attorney general who is charged with
the duty of enforcing or carrying into effect any provision of this
chapter, or any officer or employee of the state of Washington acting
under the direction and supervision of the attorney or investigator in
connection with an investigation pursuant to this chapter.
(6) "Government entity" means all state government entities and all
local government entities. A "state government entity" includes every
state office, department, division, bureau, board, commission, or other
state agency. A "local government entity" includes every county,
city, town, municipal corporation, quasi-municipal corporation, or
special purpose district, or any office, department, division, bureau,
board, commission, or agency thereof, or other local public agency.
(7)(a) "Knowing" and "knowingly" mean that a person, with respect
to information:
(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.
(b) "Knowing" and "knowingly" do not require proof of specific
intent to defraud.
(8) "Material" means having a natural tendency to influence, or be
capable of influencing, the payment or receipt of money or property.
(9) "Obligation" means an established duty, whether or not fixed,
arising from an express or implied contractual, grantor-grantee, or
licensor-licensee relationship, from a fee-based or similar
relationship, from statute or rule, or from the retention of any
overpayment.
(10) "Official use" means any use that is consistent with the law,
and the rules and policies of the attorney general, including use in
connection with: Internal attorney general memoranda and reports;
communications between the attorney general and a federal, state, or
local government agency, or a contractor of a federal, state, or local
government agency, undertaken in furtherance of an investigation or
prosecution of a case; interviews of any qui tam relator or other
witness; oral examinations; depositions; preparation for and response
to civil discovery requests; introduction into the record of a case or
proceeding; applications, motions, memoranda, and briefs submitted to
a court or other tribunal; and communications with attorney general
investigators, auditors, consultants and experts, the counsel of other
parties, and arbitrators or mediators, concerning an investigation,
case, or proceeding.
(11) "Person" means any natural person, partnership, corporation,
association, or other legal entity, including any local or political
subdivision of a state. However, "person" does not include the state.
(12) "Product of discovery" includes:
(a) The original or duplicate of any deposition, interrogatory,
document, thing, result of the inspection of land or other property,
examination, or admission, which is obtained by any method of discovery
in any judicial or administrative proceeding of an adversarial nature;
(b) Any digest, analysis, selection, compilation, or derivation of
any item listed in (a) of this subsection; and
(c) Any index or other manner of access to any item listed in (a)
of this subsection.
(13) "Qui tam action" is an action brought by a person under
section 6 of this act.
(14) "Qui tam relator" or "relator" is a person who brings an
action under section 6 of this act.
NEW SECTION. Sec. 3 (1) Subject to subsection (2) of this
section, a person is liable to the government entity for a civil
penalty of not less than five thousand dollars and not more than ten
thousand dollars, plus three times the amount of damages which the
government entity sustains because of the act of that person, if the
person:
(a) Knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval;
(b) Knowingly makes, uses, or causes to be made or used, a false
record or statement material to a false or fraudulent claim;
(c) Conspires to commit one or more of the violations in this
subsection (1);
(d) Has possession, custody, or control of property or money used,
or to be used, by the government entity and knowingly delivers, or
causes to be delivered, less than all of that money or property;
(e) Is authorized to make or deliver a document certifying receipt
of property used, or to be used, by the government entity and,
intending to defraud the government entity, 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
entity who lawfully may not sell or pledge property; or
(g) Knowingly makes, uses, or causes to be made or used, a false
record or statement material to an obligation to pay or transmit money
or property to the government entity, or knowingly conceals or
knowingly and improperly avoids or decreases an obligation to pay or
transmit money or property to the government entity.
(2) The court may assess not less than two times the amount of
damages which the government entity sustains because of the act of a
person, if the court finds that:
(a) The person committing the violation of subsection (1) of this
section furnished the Washington state attorney general with all
information known to him or her about the violation within thirty days
after the date on which he or she first obtained the information;
(b) The person fully cooperated with any investigation by the
attorney general of the violation; and
(c) At the time the person furnished the attorney general with the
information about the violation, no criminal prosecution, civil action,
or administrative action had commenced under this title with respect to
the violation, and the person did not have actual knowledge of the
existence of an investigation into the violation.
NEW SECTION. Sec. 4 Any information furnished pursuant to this
chapter is exempt from disclosure under the public records act, chapter
42.56 RCW, until final disposition and all court ordered seals are
lifted.
NEW SECTION. Sec. 5 Subject to funds appropriated for this
purpose, the attorney general must diligently make a good faith effort
to 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
under this section against the person.
NEW SECTION. Sec. 6 (1) A person may bring a civil action for a
violation of section 3 of this act for the person and for the
government entity. The action may be known as a qui tam action and the
person bringing the action as a qui tam relator. The action must be
brought in the name of the government entity.
(2) A relator filing an action under this chapter must serve a copy
of the complaint and written disclosure of substantially all material
evidence and information the person possesses on the attorney general
in electronic format. The relator must file the complaint in camera.
The complaint must remain under seal for at least sixty days, and may
not be served on the defendant until the court so orders. The attorney
general 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 qui tam action may be dismissed by the court, however the
attorney general must be given notice and an opportunity to participate
in the hearing on the motion to dismiss.
(4) The attorney general 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. The motions may be
supported by affidavits or other submissions in camera. The defendant
may not be required to respond to any complaint filed under this
section until twenty days after the complaint is unsealed and served
upon the defendant.
(5) If the attorney general does not proceed with the action prior
to the expiration of the sixty-day period or any extensions obtained
under subsection (4) of this section, then the relator has the right to
conduct the action.
(6) When a person brings an action under this section, no person
other than the attorney general may intervene or bring a related action
based on the facts underlying the pending action.
NEW SECTION. Sec. 7 (1) If the attorney general proceeds with
the qui tam action, the attorney general shall have the primary
responsibility for prosecuting the action, and is not bound by an act
of the relator. The relator 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 attorney general may move to dismiss the qui tam action
notwithstanding the objections of the relator if the relator has been
notified by the attorney general of the filing of the motion and the
court has provided the relator with an opportunity for a hearing on the
motion.
(b) The attorney general may settle the action with the defendant
notwithstanding the objections of the relator if the court determines,
after a hearing, that the proposed settlement is fair, adequate, and
reasonable under all the circumstances. Upon a showing of good cause,
the hearing may be held in camera.
(c) Upon a showing by the attorney general that unrestricted
participation during the course of the litigation by the relator would
interfere with or unduly delay the attorney general'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
relator's participation, such as:
(i) Limiting the number of witnesses the relator may call;
(ii) Limiting the length of the testimony of the witnesses;
(iii) Limiting the relator's cross-examination of witnesses; or
(iv) Otherwise limiting the participation by the relator in the
litigation.
(d) Upon a showing by the defendant that unrestricted participation
during the course of the litigation by the relator would be for
purposes of harassment or would cause the defendant undue burden or
unnecessary expense, the court may limit the participation by the
relator in the litigation.
(3) If the attorney general elects not to proceed with the qui tam
action, the relator has the right to conduct the action. If the
attorney general so requests, the relator must serve on the attorney
general copies of all pleadings filed in the action and shall supply
copies of all deposition transcripts, at the relator's expense.
Additionally, the relator shall provide the attorney general with
notice and the details of all offers of settlement. When the relator
proceeds with the action, the court, without limiting the status and
rights of the relator, may nevertheless permit the attorney general to
intervene at a later date upon a showing of good cause.
(4) Whether or not the attorney general proceeds with the qui tam
action, upon a showing by the attorney general that certain actions of
discovery by the relator would interfere with the attorney general's
investigation or prosecution of a criminal or civil matter arising out
of the same facts, the court may stay such discovery for a period of
not more than sixty days. The showing must be conducted in camera.
The court may extend the sixty-day period upon a further showing in
camera that the attorney general has pursued the criminal or civil
investigation or proceedings with reasonable diligence and any proposed
discovery in the civil action will interfere with the ongoing criminal
or civil investigation or proceedings.
(5) Notwithstanding section 6 of this act, the attorney general may
elect to pursue its claim through any alternate remedy available to the
attorney general, including any administrative proceeding to determine
a civil money penalty. If any alternate remedy is pursued in another
proceeding, the relator has the same rights in the proceeding as the
relator would have had if the action had continued under this section.
Any 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 of Washington, if all time for filing the 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. 8 (1)(a) Subject to (b) of this subsection, if
the attorney general proceeds with a qui tam action, the relator must
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 to which the relator substantially contributed to the
prosecution of the action.
(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 relator, relating to allegations or
transactions in a criminal, civil, or administrative hearing, in a
congressional, administrative, or general accounting office report,
hearing, audit, or investigation, or from the news media, the court may
award an amount 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 relator in advancing the case to
litigation.
(c) Any payment to a relator under (a) or (b) of this subsection
must be made from the proceeds. The relator must also receive an
amount for reasonable expenses which the court finds to have been
necessarily incurred, plus reasonable attorneys' fees and costs.
Additionally, the attorney general must receive reasonable attorneys'
fees and costs. All expenses, fees, and costs must be awarded against
the defendant.
(2) If the attorney general does not proceed with a qui tam action,
the relator shall receive an amount which the court decides is
reasonable for collecting the civil penalty and damages. The amount
may not be less than twenty-five percent and not more than thirty
percent of the proceeds of the action or settlement and must be paid
out of the proceeds. The relator must 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 must be awarded against the defendant.
(3) Whether or not the attorney general proceeds with the qui tam
action, if the court finds that the action was brought by a person who
planned and initiated the violation of 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
which 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 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 3 of
this act, that person must be dismissed from the civil action and may
not receive any share of the proceeds of the action. The dismissal may
not prejudice the right of the United States to continue the action,
represented by the department of justice.
(4) If the attorney general does not proceed with the qui tam
action and the relator conducts the action, the court may award to the
defendant reasonable attorneys' fees, costs, and expenses if the
defendant prevails in the action. Any fees, costs, and expenses
awarded by the court under this subsection must be awarded against the
realtor.
(5) The attorney general and a government entity are not liable for
expenses which a relator incurs in bringing an action under this
chapter.
(6) Any funds recovered that are ordered to be paid to the state
must be distributed as follows: Actual damages must be returned to the
government entity to which the false claim or claims were submitted and
the remainder to the false claims penalty account created under section
14 of this act.
NEW SECTION. Sec. 9 (1) In no event may a person bring a qui tam
action which is based upon allegations or transactions which are the
subject of a civil suit or an administrative civil money penalty
proceeding in which the attorney general is already a party.
(2)(a) The court must dismiss an action or claim under this
section, unless opposed by the attorney general, if substantially the
same allegations or transactions as alleged in the action or claim were
publicly disclosed:
(i) In a federal criminal, civil, or administrative hearing in
which the attorney general or other governmental entity is a party;
(ii) In a congressional, general accounting office report, or other
federal report, hearing, audit, or investigation; or
(iii) By the news media, unless the action is brought by the
attorney general or the relator is an original source of the
information.
(b) For purposes of this section, "original source" means an
individual who either (i) prior to a public disclosure under (a) of
this subsection, has voluntarily disclosed to the attorney general the
information on which allegations or transactions in a claim are based,
or (ii) has knowledge that is independent of, and materially adds to,
the publicly disclosed allegations or transactions, and who has
voluntarily provided the information to the attorney general before
filing an action under this section.
NEW SECTION. Sec. 10 (1) Any employee, contractor, or agent is
entitled to all relief necessary to make that employee, contractor, or
agent whole, if that employee, contractor, or agent 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 or associated
others in furtherance of an action under this section or other efforts
to stop one or more violations of this chapter.
(2) Relief under subsection (1) of this section must include
reinstatement with the same seniority status that 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, and any and all relief
available under RCW 49.60.030(2). An action under this subsection may
be brought in the appropriate superior court of the state of Washington
for the relief provided in this subsection.
(3) A civil action under this section may not be brought more than
three years after the date when the retaliation occurred.
NEW SECTION. Sec. 11 (1) A subpoena requiring the attendance of
a witness at a trial or hearing conducted under section 6 of this act
may be served at any place in the state of Washington.
(2) A civil action under section 6 of this act may be brought at
any time, without limitation after the date on which the violation of
section 3 of this act is committed.
(3) If the attorney general elects to intervene and proceed with a
qui tam action, the attorney general may file its own complaint or
amend the complaint of a relator to clarify or add detail to the claims
in which the attorney general is intervening and to add any additional
claims with respect to which the attorney general contends it is
entitled to relief.
(4) In any qui tam action brought under section 6 of this act, the
attorney general is required to prove all essential elements of the
cause of action, including damages, by a preponderance of the evidence.
(5) Notwithstanding any other provision of law or the rules for
superior court, a final judgment rendered in favor of the government
entity in any criminal proceeding charging fraud or false statements,
whether upon a verdict after trial or upon a plea of guilty or nolo
contendere, estops the defendant from denying the essential elements of
the offense in any action which involves the same transaction as in the
criminal proceeding and which is brought under section 5 or 6(1) of
this act.
NEW SECTION. Sec. 12 (1) Any action under section 5 or 6 of this
act may be brought in the superior court in any county in which the
defendant or, in the case of multiple defendants, any one defendant can
be found, resides, transacts business, or in which any act proscribed
by section 3 of this act occurred. The appropriate court must issue a
summons as required by the superior court civil rules and service must
occur at any place within the state of Washington.
(2) The superior courts have jurisdiction over any action brought
under the laws of any city or county for the recovery of funds paid by
a government entity if the action arises from the same transaction or
occurrence as an action brought under section 5 or 6 of this act.
(3) With respect to any local government that is named as a
coplaintiff with the state in an action brought under section 6 of this
act, a seal on the action ordered by the court under section 6 of this
act does not preclude the attorney general or the person bringing the
action from serving the complaint, any other pleadings, or the written
disclosure of substantially all material evidence and information
possessed by the person bringing the action on the law enforcement
authorities that are authorized under the law of the local government
to investigate and prosecute the action on behalf of the local
government, except that the seal applies to the law enforcement
authorities so served to the same extent as the seal applies to other
parties in the action.
NEW SECTION. Sec. 13 (1) Whenever the attorney general, or a
designee, for purposes of this section, has reason to believe that any
person may be in possession, custody, or control of any documentary
material or information relevant to a false claims act investigation,
the attorney general, or a designee, may, before commencing a civil
proceeding under section 6(1) of this act or making an election under
section 6(2) of this act, issue in writing and serve upon the person,
a civil investigative demand requiring the person:
(a) To produce the documentary material for inspection and copying;
(b) To answer in writing written interrogatories with respect to
the documentary material or information;
(c) To give oral testimony concerning the documentary material or
information; or
(d) To furnish any combination of such material, answers, or
testimony. The attorney general may delegate the authority to issue
civil investigative demands under this subsection (1). Whenever a
civil investigative demand is an express demand for any product of
discovery, the attorney general, the deputy attorney general, or an
assistant attorney general must serve, in any manner authorized by this
section, a copy of the demand upon the person from whom the discovery
was obtained and must notify the person to whom the demand is issued of
the date on which the copy was served. Any information obtained by the
attorney general or a designee of the attorney general under this
section may be shared with any qui tam relator if the attorney general
or designee determine it is necessary as part of any false claims act
investigation.
(2)(a) Each civil investigative demand issued under subsection (1)
of this section must state the nature of the conduct constituting the
alleged violation of this chapter which is under investigation, and the
applicable provision of law alleged to be violated.
(b) If the demand is for the production of documentary material,
the demand must:
(i) Describe each class of documentary material to be produced with
such definiteness and certainty as to permit the material to be fairly
identified;
(ii) Prescribe a return date for each class which will provide a
reasonable period of time within which the material so demanded may be
assembled and made available for inspection and copying; and
(iii) Identify the false claims act investigator to whom such
material must be made available.
(c) If the demand is for answers to written interrogatories, the
demand must:
(i) Set forth with specificity the written interrogatories to be
answered;
(ii) Prescribe dates at which time answers to written
interrogatories must be submitted; and
(iii) Identify the false claims law investigator to whom such
answers must be submitted.
(d) If the demand is for the giving of oral testimony, the demand
must:
(i) Prescribe a date, time, and place at which oral testimony must
be commenced;
(ii) Identify a false claims act investigator who must conduct the
examination and the custodian to whom the transcript of the examination
must be submitted;
(iii) Specify that the attendance and testimony are necessary to
the conduct of the investigation;
(iv) Notify the person receiving the demand of the right to be
accompanied by an attorney and any other representative; and
(v) Describe the general purpose for which the demand is being
issued and the general nature of the testimony, including the primary
areas of inquiry, which will be taken pursuant to the demand.
(e) Any civil investigative demand issued under this section which
is an express demand for any product of discovery is not due until
thirty days after a copy of the demand has been served upon the person
from whom the discovery was obtained.
(f) The date prescribed for the commencement of oral testimony
pursuant to a civil investigative demand issued under this section may
not be sooner than six days after the date on which demand is received,
unless the attorney general or an assistant attorney general designated
by the attorney general determines that exceptional circumstances are
present which warrant the commencement of the testimony sooner.
(g) The attorney general may not authorize the issuance under this
section of more than one civil investigative demand for oral testimony
by the same person unless the person requests otherwise or unless the
attorney general, after investigation, notifies that person in writing
that an additional demand for oral testimony is necessary.
(3) A civil investigative demand issued under subsection (1) or (2)
of this section may not require the production of any documentary
material, the submission of any answers to written interrogatories, or
the giving of any oral testimony if the material, answers, or testimony
would be protected from disclosure under:
(a) The standards applicable to subpoenas or subpoenas duces tecum
issued by a court to aid in a special inquiry investigation; or
(b) The standards applicable to discovery requests under the
superior court civil rules, to the extent that the application of these
standards to any demand is appropriate and consistent with the
provisions and purposes of this section.
(4) Any demand which is an express demand for any product of
discovery supersedes any inconsistent order, rule, or provision of law,
other than this section, preventing or restraining disclosure of the
product of discovery to any person. Disclosure of any product of
discovery pursuant to any express demand does not constitute a waiver
of any right or privilege which the person making such disclosure may
be entitled to invoke to resist discovery of trial preparation
materials.
(5) Any civil investigative demand issued under this section may be
served by a false claims act investigator, or by a commissioned law
enforcement official, at any place within the state of Washington.
(6) Service of any civil investigative demand issued under (a) of
this subsection or of any petition filed under subsection (25) of this
section may be made upon a partnership, corporation, association, or
other legal entity by:
(a) Delivering an executed copy of the demand or petition to any
partner, executive officer, managing agent, or general agent of the
partnership, corporation, association, or entity, or to any agent
authorized by appointment or by law to receive service of process on
behalf of such partnership, corporation, association, or entity;
(b) Delivering an executed copy of the demand or petition to the
principal office or place of business of the partnership, corporation,
association, or entity; or
(c) Depositing an executed copy of the demand or petition in the
United States mail by registered or certified mail, with a return
receipt requested, addressed to such partnership, corporation,
association, or entity at its principal office or place of business.
(7) Service of any demand or petition may be made upon any natural
person by:
(a) Delivering an executed copy of the demand or petition to the
person; or
(b) Depositing an executed copy of the demand or petition in the
United States mail by registered or certified mail, with a return
receipt requested, addressed to the person at the person's residence or
principal office or place of business.
(8) A verified return by the individual serving any civil
investigative demand issued under subsection (1) or (2) of this section
or any petition filed under subsection (25) of this section setting
forth the manner of the service constitutes proof of the service. In
the case of service by registered or certified mail, the return must be
accompanied by the return post office receipt of delivery of the
demand.
(9) The production of documentary material in response to a civil
investigative demand served under this section must be made under a
sworn certificate, in the form as the demand designates, by:
(a) In the case of a natural person, the person to whom the demand
is directed; or
(b) In the case of a person other than a natural person, a person
having knowledge of the facts and circumstances relating to the
production and authorized to act on behalf of the person. The
certificate must state that all of the documentary material required by
the demand and in the possession, custody, or control of the person to
whom the demand is directed has been produced and made available to the
false claims act investigator identified in the demand.
(10) Any person upon whom any civil investigative demand for the
production of documentary material has been served under this section
shall make such material available for inspection and copying to the
false claims act investigator identified in the demand at the principal
place of business of the person, or at another place as the false
claims act investigator and the person thereafter may agree and
prescribe in writing, or as the court may direct under subsection (25)
of this section. The material must be made available on the return
date specified in the demand, or on a later date as the false claims
act investigator may prescribe in writing. The person may, upon
written agreement between the person and the false claims act
investigator, substitute copies for originals of all or any part of the
material.
(11) Each interrogatory in a civil investigative demand served
under this section must be answered separately and fully in writing
under oath and must be submitted under a sworn certificate, in the form
as the demand designates, by:
(a) In the case of a natural person, the person to whom the demand
is directed; or
(b)(i) In the case of a person other than a natural person, the
person or persons responsible for answering each interrogatory.
(ii) If any interrogatory is objected to, the reasons for the
objection must be stated in the certificate instead of an answer. The
certificate must state that all information required by the demand and
in the possession, custody, control, or knowledge of the person to whom
the demand is directed has been submitted. To the extent that any
information is not furnished, the information must be identified and
reasons set forth with particularity regarding the reasons why the
information was not furnished.
(12) The examination of any person pursuant to a civil
investigative demand for oral testimony served under this section must
be taken before an officer authorized to administer oaths and
affirmations by the laws of the state of Washington or of the place
where the examination is held. The officer before whom the testimony
is to be taken must put the witness on oath or affirmation and must,
personally or by someone acting under the direction of the officer and
in the officer's presence, record the testimony of the witness. The
testimony must be recorded and transcribed. When the testimony is
fully transcribed, the officer before whom the testimony is taken shall
promptly transmit a copy of the transcript of the testimony to the
custodian. This subsection does not preclude the taking of testimony
by any means authorized by, and in a manner consistent with, the
superior court civil rules.
(13) The false claims act investigator conducting the examination
shall exclude from the place where the examination is held all persons
except the person giving the testimony, the attorney for and any other
representative of the person giving the testimony, the attorney
general, any person who may be agreed upon by the attorney for the
government and the person giving the testimony, the officer before whom
the testimony is to be taken, and any stenographer taking the
testimony.
(14) The oral testimony of any person taken pursuant to a civil
investigative demand served under this section must be taken in the
county within which such person resides, is found, or transacts
business, or in another place as may be agreed upon by the false claims
act investigator conducting the examination and the person.
(15) When the testimony is fully transcribed, the false claims act
investigator or the officer before whom the testimony is taken must
afford the witness, who may be accompanied by counsel, a reasonable
opportunity to examine and read the transcript, unless the examination
and reading are waived by the witness. Any changes in form or
substance which the witness desires to make must be entered and
identified upon the transcript by the officer or the false claims act
investigator, with a statement of the reasons given by the witness for
making the changes, and the original must be retained within the
transcript for purposes of comparison. The transcript must then be
signed by the witness, unless the witness in writing waives the
signing, is ill, cannot be found, or refuses to sign. If the
transcript is not signed by the witness within thirty days after being
afforded a reasonable opportunity to examine it, the officer or the
false claims act investigator must sign it and state on the record the
fact of the waiver, illness, absence of the witness, or the refusal to
sign, together with the reasons given.
(16) The officer before whom the testimony is taken must certify on
the transcript that the witness was sworn by the officer and that the
transcript is a true record of the testimony given by the witness, and
the officer or false claims act investigator must promptly deliver the
transcript, or send the transcript by registered or certified mail, to
the custodian.
(17) Upon payment of reasonable charges therefor, the false claims
act investigator must furnish a copy of the transcript to the witness
only, except that the attorney general, the deputy attorney general, or
an assistant attorney general may, for good cause, limit the witness to
inspection of the official transcript of the witness' testimony.
(18)(a) Any person compelled to appear for oral testimony under a
civil investigative demand issued under subsection (1) or (2) of this
section may be accompanied, represented, and advised by counsel.
Counsel may advise the person, in confidence, with respect to any
question asked of the person. The person or counsel may object on the
record to any question, in whole or in part, and must briefly state for
the record the reason for the objection. An objection may be made,
received, and entered upon the record when it is claimed that the
person is entitled to refuse to answer the question on the grounds of
any constitutional or other legal right or privilege, including the
privilege against self-incrimination. The person may not otherwise
object to or refuse to answer any question, and may not directly or
through counsel otherwise interrupt the oral examination. If the
person refuses to answer any question, a special injury proceeding
petition may be filed in the superior court under subsection (25) of
this section for an order compelling the person to answer the
question.
(b) If the person refuses to answer any question on the grounds of
the privilege against self-incrimination, the testimony of the person
may be compelled in accordance with the provisions of the superior
court civil rules.
(19) Any person appearing for oral testimony under a civil
investigative demand issued under subsection (1) or (2) of this section
is entitled to the same fees and allowances which are paid to witnesses
in the superior courts.
(20) The attorney general must designate a false claims act
investigator to serve as custodian of documentary material, answers to
interrogatories, and transcripts of oral testimony received under this
section, and must designate such additional false claims act
investigators as the attorney general determines from time to time to
be necessary to serve as deputies to the custodian.
(21)(a) A false claims act investigator who receives any
documentary material, answers to interrogatories, or transcripts of
oral testimony under this section must transmit them to the custodian.
The custodian shall take physical possession of the material, answers,
or transcripts and is responsible for the use made of them and for the
return of documentary material under subsection (23) of this section.
(b) The custodian may cause the preparation of the copies of the
documentary material, answers to interrogatories, or transcripts of
oral testimony as may be required for official use by any false claims
act investigator, or employee of the attorney general. The material,
answers, and transcripts may be used by any authorized false claims act
investigator or other officer or employee in connection with the taking
of oral testimony under this section.
(c)(i) Except as otherwise provided in this subsection (21), no
documentary material, answers to interrogatories, or transcripts of
oral testimony, or copies thereof, while in the possession of the
custodian, may be available for examination by any individual other
than a false claims act investigator or other officer or employee of
the attorney general authorized under (b) of this subsection.
(ii) The prohibition in (c)(i) of this subsection on the
availability of material, answers, or transcripts does not apply if
consent is given by the person who produced the material, answers, or
transcripts, or, in the case of any product of discovery produced
pursuant to an express demand for the material, consent is given by the
person from whom the discovery was obtained. Nothing in this
subsection (c)(ii) is intended to prevent disclosure to the
legislature, including any committee or subcommittee for use by such an
agency in furtherance of its statutory responsibilities.
(d) While in the possession of the custodian and under the
reasonable terms and conditions as the attorney general shall
prescribe:
(i) Documentary material and answers to interrogatories must be
available for examination by the person who produced the material or
answers, or by a representative of that person authorized by that
person to examine the material and answers; and
(ii) Transcripts of oral testimony must be available for
examination by the person who produced the testimony, or by a
representative of that person authorized by that person to examine the
transcripts.
(22) Whenever any official has been designated to appear before any
court, special inquiry judge, or state administrative judge in any case
or proceeding, the custodian of any documentary material, answers to
interrogatories, or transcripts of oral testimony received under this
section may deliver to the official the material, answers, or
transcripts for official use in connection with any case or proceeding
as the official determines to be required. Upon the completion of
such a case or proceeding, the official must return to the custodian
any material, answers, or transcripts so delivered which have not
passed into the control of any court, grand jury, or agency through
introduction into the record of such a case or proceeding.
(23) If any documentary material has been produced by any person in
the course of any false claims act investigation pursuant to a civil
investigative demand under this section, and:
(a) Any case or proceeding before the court or special inquiry
judge arising out of the investigation, or any proceeding before any
administrative judge involving the material, has been completed; or
(b) No case or proceeding in which the material may be used has
been commenced within a reasonable time after completion of the
examination and analysis of all documentary material and other
information assembled in the course of the investigation; then, the
custodian must, upon written request of the person who produced the
material, return to the person the material, other than copies
furnished to the false claims act investigator under subsection (10) of
this section or made for the attorney general under subsection (21)(b)
of this section which has not passed into the control of any court,
grand jury, or agency through introduction into the record of the case
or proceeding.
(24) In the event of the death, disability, or separation from
service of the attorney general of the custodian of any documentary
material, answers to interrogatories, or transcripts of oral testimony
produced pursuant to civil investigative demand under this section, or
in the event of the official relief of the custodian from
responsibility for the custody and control of the material, answers, or
transcripts, the attorney general must promptly:
(a) Designate another false claims act investigator to serve as
custodian of the material, answers, or transcripts; and
(b) Transmit in writing to the person who produced the material,
answers, or testimony notice of the identity and address of the
successor so designated. Any person who is designated to be a
successor under this subsection (24) has, with regard to the material,
answers, or transcripts, the same duties and responsibilities as were
imposed by this section upon that person's predecessor in office,
except that the successor may not be held responsible for any default
or dereliction which occurred before that designation.
(25) Whenever any person fails to comply with any civil
investigative demand issued under subsection (1) or (2) of this
section, or whenever satisfactory copying or reproduction of any
material requested in the demand cannot be done and the person refuses
to surrender the material, the attorney general may file, in any
superior court of the state of Washington for any county in which the
person resides, is found, or transacts business, and serve upon the
person a petition for an order of the court for the enforcement of the
civil investigative demand.
(26)(a) Any person who has received a civil investigative demand
issued under subsection (1) or (2) of this section may file, in the
superior court of the state of Washington for the county within which
the person resides, is found, or transacts business, and serve upon the
false claims act investigator identified in the demand a petition for
an order of the court to modify or set aside the demand. In the case
of a petition addressed to an express demand for any product of
discovery, a petition to modify or set aside the demand may be brought
only in the district court of the United States for the judicial
district in which the proceeding in which the discovery was obtained is
or was last pending. Any petition filed under this subsection (26)(a)
must be filed:
(i) Within thirty days after the date of service of the civil
investigative demand, or at any time before the return date specified
in the demand, whichever date is earlier; or
(ii) Within a longer period as may be prescribed in writing by any
false claims act investigator identified in the demand.
(b) The petition must specify each ground upon which the petitioner
relies in seeking relief under (a) of this subsection, and may be based
upon any failure of the demand to comply with the provisions of this
section or upon any constitutional or other legal right or privilege of
the person. During the pendency of the petition in the court, the
court may stay, as it deems proper, the running of the time allowed for
compliance with the demand, in whole or in part, except that the person
filing the petition must comply with any portions of the demand not
sought to be modified or set aside.
(27)(a) In the case of any civil investigative demand issued under
subsection (1) or (2) of this section which is an express demand for
any product of discovery, the person from whom the discovery was
obtained may file, in the superior court of the state of Washington for
the county in which the proceeding in which the discovery was obtained
is or was last pending, and serve upon any false claims act
investigator identified in the demand and upon the recipient of the
demand, a petition for an order of the court to modify or set aside
those portions of the demand requiring production of any product of
discovery. Any petition under this subsection (27)(a) must be filed:
(i) Within twenty days after the date of service of the civil
investigative demand, or at any time before the return date specified
in the demand, whichever date is earlier; or
(ii) Within a longer period as may be prescribed in writing by any
false claims act investigator identified in the demand.
(b) The petition must specify each ground upon which the petitioner
relies in seeking relief under (a) of this subsection, and may be based
upon any failure of the portions of the demand from which relief is
sought to comply with the provisions of this section, or upon any
constitutional or other legal right or privilege of the petitioner.
During the pendency of the petition, the court may stay, as it deems
proper, compliance with the demand and the running of the time allowed
for compliance with the demand.
(28) At any time during which any custodian is in custody or
control of any documentary material or answers to interrogatories
produced, or transcripts of oral testimony given, by any person in
compliance with any civil investigative demand issued under subsection
(1) or (2) of this section, the person, and in the case of an express
demand for any product of discovery, the person from whom the discovery
was obtained, may file, in the superior court of the state of
Washington for the county within which the office of the custodian is
situated, and serve upon the custodian, a petition for an order of the
court to require the performance by the custodian of any duty imposed
upon the custodian by this section.
(29) Whenever any petition is filed in any superior court of the
state of Washington under this section, the court has jurisdiction to
hear and determine the matter so presented, and to enter an order or
orders as may be required to carry out the provisions of this section.
Any final order so entered is subject to appeal under the rules of
appellate procedure. Any disobedience of any final order entered under
this section by any court must be punished as a contempt of the court.
(30) The superior court civil rules apply to any petition under
this section, to the extent that the rules are not inconsistent with
the provisions of this section.
(31) Any documentary material, answers to written interrogatories,
or oral testimony provided under any civil investigative demand issued
under subsection (1) or (2) of this section are exempt from disclosure
under the public records act, chapter 42.56 RCW.
NEW SECTION. Sec. 14 The false claims penalty account is created
in the state treasury. All receipts from civil penalties collected
under RCW 74.09.210, all receipts received under settlements that
originated under a filing under the federal false claims act, and all
civil penalties and any other moneys received pursuant to an action
that originated under this chapter must be deposited into the account.
Moneys in the account may be spent only after appropriation and must be
distributed as follows:
(1) Moneys received from medicaid fraud-related actions must be
appropriated as follows: Fifty percent to the office of the attorney
general; up to thirty-three percent to the department of social and
health services; and the remainder to the general fund. The department
of social and health services and the office of the attorney general
may only expend funds appropriated from this account for medicaid fraud
enforcement activities.
(2) All other funds in the account must be appropriated as follows:
Up to fifty percent to the office of the attorney general and the
remainder to the general fund. The office of the attorney general may
only expend funds appropriated pursuant to this subsection for
investigation and prosecution of false claims act violations.
Sec. 15 RCW 74.09.210 and 1989 c 175 s 146 are each amended to
read as follows:
(1) No person, firm, corporation, partnership, association, agency,
institution, or other legal entity, but not including an individual
public assistance recipient of health care, ((shall)) may, on behalf of
himself, herself, or others, obtain or attempt to obtain benefits or
payments under this chapter in a greater amount than that to which
entitled by means of:
(a) A willful false statement;
(b) By willful misrepresentation, or by concealment of any material
facts; or
(c) By other fraudulent scheme or device, including, but not
limited to:
(i) Billing for services, drugs, supplies, or equipment that were
unfurnished, of lower quality, or a substitution or misrepresentation
of items billed; or
(ii) Repeated billing for purportedly covered items, which were not
in fact so covered.
(2) Any person or entity knowingly violating any of the provisions
of subsection (1) of this section ((shall be)) is liable for repayment
of any excess benefits or payments received, plus interest at the rate
and in the manner provided in RCW 43.20B.695. ((Such)) The person or
other entity ((shall further)), in addition to any other penalties
provided by law, ((be)) is subject to civil penalties. The secretary
may assess civil penalties in an amount not to exceed three times the
amount of such excess benefits or payments((: PROVIDED, That)).
However, these civil penalties ((shall)) do not apply to any acts or
omissions occurring prior to September 1, 1979. RCW 43.20A.215 governs
notice of a civil fine and provides the right to an adjudicative
proceeding.
(3) A criminal action need not be brought against a person for that
person to be civilly liable under this section.
(4) In all proceedings under this section, service, adjudicative
proceedings, and judicial review of such determinations shall be in
accordance with chapter 34.05 RCW, the administrative procedure act.
(5) Civil penalties ((shall)) must be deposited in the ((general
fund)) false claims penalty account created under section 14 of this
act upon ((their)) receipt.
NEW SECTION. Sec. 16 This chapter does not apply to any claim or
aggregated claims submitted to a city, by the same person, where the
total amount in controversy does not exceed fifty thousand dollars.
NEW SECTION. Sec. 17 Sections 1 through 14 and section 16 of
this act constitute a new chapter in Title
NEW SECTION. Sec. 18 This act takes effect July 1, 2012.