BILL REQ. #: S-0809.1
State of Washington | 62nd Legislature | 2011 Regular Session |
Read first time 01/21/11. Referred to Committee on Judiciary.
AN ACT Relating to identifying and incentivizing taxpayer savings and efficient delivery of government services; adding a new section to chapter 42.52 RCW; 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 Unless the context clearly requires
otherwise, the definitions in this section apply throughout this
chapter.
(1) "Claim" means a request or demand, whether under a contract or
otherwise, for money or property which is made to a government employee
or official, contractor, grantee, or other recipient if a governmental
entity provides any portion of the money or property which is requested
or demanded, or if a governmental entity will reimburse such employee,
official, contractor, grantee, or other recipient for any portion of
the money or property which is requested or demanded.
(2) "False claim" means any claim that contains or is based upon a
materially incorrect fact, statement, representation, or record.
(3) "Governmental entity" means the state of Washington and any
political subdivision thereof. A governmental entity includes its
officials and employees, acting in such capacities.
(4) "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; or
(b) Acts in deliberate ignorance of or in reckless disregard of the
truth or falsity of the information.
(5) "Public attorney" means any person that is authorized by a
governmental entity to initiate legal actions or claims on the
governmental entity's behalf.
(6) "Recovery" means any money paid or to be paid pursuant to
section 3 of this act as a civil penalty or damages, including enhanced
damages pursuant to section 3 (1) or (2) of this act, as a result of
the initiation of a civil action under section 5 of this act, whether
resulting from an award of the court, from a settlement of the parties,
or from an alternative remedy pursuant to section 6(5) of this act, but
"recovery" shall not include costs including or not including
attorneys' fees.
NEW SECTION. Sec. 2 A person commits a "wrongful act" under this
chapter if that person:
(1) Knowingly presents or causes to be presented to a governmental
entity a false claim for payment or approval;
(2) Knowingly makes, uses, or causes to be made or used, a false
record or statement to get a false claim paid or approved;
(3) Conspires to get a false claim allowed or paid;
(4) Has possession, custody, or control of property or money used,
or to be used, by a governmental entity and knowingly delivers, or
causes to be delivered, less property than the amount for which the
person receives a certificate or receipt;
(5) Is authorized to make or deliver a document certifying receipt
of property used, or to be used, by a governmental entity and makes or
delivers the receipt knowing that material information on the receipt
is false;
(6) Knowingly buys, or receives as security for an obligation or
debt, public property from an officer or employee of a governmental
entity, who lawfully may not sell or pledge the property; or
(7) 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 property to a governmental entity.
NEW SECTION. Sec. 3 (1) Except as provided in subsection (2) of
this section, a person who commits a wrongful act against a
governmental entity is liable to the governmental entity for (a) a
civil penalty of not less than five thousand dollars and not more than
ten thousand dollars; (b) an amount equal to three times the damages
sustained by the governmental entity as a result of the wrongful act;
and (c) all costs incurred by the governmental entity in maintaining a
civil action hereunder, including attorneys' fees.
(2) Notwithstanding subsection (1) of this section, a court may
assess against a person who commits a wrongful act an amount equal to
two times the damages sustained by the governmental entity as a result
of the wrongful act plus all costs incurred by the governmental entity
in collecting such amount, including attorneys' fees, if the court
finds all of the following:
(a) The person committing the wrongful act furnished to a public
attorney responsible for investigating false claims all information
known to the person about the wrongful act within thirty days after the
person first obtained the information;
(b) The person fully cooperated with the governmental entity's
investigation of the wrongful act; and
(c) At the time the person furnished the governmental entity with
the information about the wrongful act, 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 wrongful act.
(3) This chapter does not apply to any controversy that results in
damages to a governmental entity that have a total value of less than
one thousand dollars. For the purpose of this subsection,
"controversy" means any one or more wrongful acts committed by the same
person.
(4) This chapter does not apply to persons subject to the
jurisdiction of chapter 42.52 RCW.
NEW SECTION. Sec. 4 A public attorney shall diligently
investigate a wrongful act. If the public attorney finds that a person
has committed or is committing a wrongful act, the public attorney may
bring a civil action against the person.
NEW SECTION. Sec. 5 (1) A person may bring a civil action for
the commission of a wrongful act in the name of the person and the
governmental entity. The action may be dismissed only if the court and
the public attorney 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 governmental entity under this chapter. The complaint
shall be filed in camera, remain under seal for at least ninety days,
and not be served on the defendant until the court orders. The
governmental entity may elect to intervene and proceed with the action
within ninety days after it receives both the complaint and the
material evidence and information.
(3) The governmental entity 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 chapter.
(4) Before the expiration of the ninety-day period or extensions
obtained under subsection (3) of this section, the governmental entity
shall:
(a) Proceed with the action, in which case the action is conducted
by the governmental entity; 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 governmental entity may intervene or bring a related
action based on the facts underlying the pending action.
NEW SECTION. Sec. 6 (1) If a governmental entity 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) A governmental entity may dismiss the action notwithstanding
the objections of the person initiating the action if the person has
been served with a copy of the motion for dismissal in a manner
provided by law and the court has provided the person with an
opportunity for a hearing on the motion.
(b) A governmental entity may settle an action with a 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 and following the provision of notice of the hearing to
all parties, the hearing may be held in camera.
(c) Upon a showing by a governmental entity or a defendant that
unrestricted participation during the course of the litigation by the
person initiating the action would interfere with or unduly delay
prosecution of the case, or would be repetitious, irrelevant, or for
purposes of harassment, the court may, in its discretion, impose
reasonable limitations on the person's participation, including:
(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 a governmental entity elects not to proceed with the action,
the person who initiated the action has the right to conduct the
action. The governmental entity may request, and following such
request shall be served with, copies of all pleadings filed in the
action and supplied with copies of all deposition transcripts,
interrogatory answers, documents produced, test results, or other
discovery materials, at the governmental entity's expense for the cost
of reproducing the materials. 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 governmental entity
to intervene at a later date upon a showing of good cause.
(4) Whether or not the governmental entity proceeds with the
action, upon a showing by the governmental entity that certain actions
of discovery by the person initiating the action would interfere with
an 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 shall be made in camera. The
court may extend the sixty-day period upon a further showing in camera
that the governmental entity 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, a governmental entity
may elect to pursue a claim through an available alternate proceeding,
including an administrative proceeding. If an alternative proceeding
is undertaken, any civil actions shall be stayed and the person
initiating the civil action has the same rights in the alternative
proceeding, including any recovery under section 7 of this act, as the
person would have if the action had continued under this section. A
finding of fact or conclusion of law made in the alternative 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 a governmental entity proceeds with
an action brought by a person under section 5 of this act, the person
shall receive at least ten percent but not more than fifteen percent of
any recovery in an action, 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) in a criminal, civil, or administrative
hearing, (b) in a legislative, 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 recovery, 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 shall be made from the recovery. Any payment of
any portion of a recovery that is made shall be shared pro rata between
the person and the governmental entity. The person shall also receive
an amount for costs, including reasonable attorneys' fees, which the
court finds to have been necessarily incurred. All expenses, fees, and
costs are awarded against the defendant who is found to have committed
a wrongful act. Attorneys' fees and costs shall be paid prior to
disbursement of any recovery.
(2) If a governmental entity does not proceed with an action under
this section, the person bringing the action 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 recovery and is paid out of the
proceeds. The person shall also receive an amount for costs, including
reasonable attorneys' fees, that the court finds were necessarily
incurred. All expenses, fees, and costs are awarded against the
defendant who is found to have committed a wrongful act.
(3) Whether or not a governmental entity proceeds with an action,
if the court finds that the action was brought by a person who planned
and initiated the wrongful act upon which the action was brought, or
failed to take steps to stop, correct, or report the act, 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 wrongful act. If the person
bringing the action is convicted of criminal conduct arising from his
or her role in the commission of a wrongful act, that person is
dismissed from the civil action and shall receive no recovery or award.
The dismissal shall not prejudice the right of the governmental entity
to continue the action.
(4) If the governmental entity does not proceed with the action and
the person bringing the action conducts the action, the court may award
to the defendant costs, including reasonable attorneys' fees, 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 In no event may a person bring an action
under section 5 of this act which is based upon allegations or
transactions which are the subject of a civil suit or an administrative
proceeding in which the governmental entity is already a party.
NEW SECTION. Sec. 9 No governmental entity is liable for costs,
including attorneys' fees, that a person incurs in bringing an action
under section 5 of this act.
NEW SECTION. Sec. 10 (1) Any person who has been subjected to
work place reprisal or retaliation as a result of being a whistleblower
or an employer's belief that the person is a whistleblower has the
remedies provided under chapter 49.60 RCW. Such remedies are in
addition to any other remedies that the person may have under common
law or statute.
(2) For the purposes of this section:
(a) "Whistleblower" means a person who in good faith initiates,
furnishes information, or otherwise participates in an investigation
of, or a civil action with respect to, a wrongful act; and
(b) "Reprisal or retaliation" has the meaning given in RCW
42.40.050.
NEW SECTION. Sec. 11 A new section is added to chapter 42.52 RCW
to read as follows:
(1) No state officer or state employee may:
(a) Knowingly present or cause to be presented to an agency a false
claim for payment or approval;
(b) Knowingly make, use, or cause to be made or used, a false
record or statement to get a false claim paid or approved;
(c) Conspire to get a false claim allowed or paid;
(d) Have in their possession, custody, or control property or money
used, or to be used, by an agency and knowingly deliver, or cause to be
delivered, less property than the amount for which the person received
a certificate or receipt;
(e) Authorize to make or deliver a document certifying receipt of
property used, or to be used, by an agency and make or deliver the
receipt knowing that material information on the receipt is false;
(f) Knowingly buy, or receive as security for an obligation or
debt, public property from an officer or employee of an agency, who
lawfully may not sell or pledge the property; or
(g) Knowingly make, use, or cause to be made or used a false record
or statement to conceal, avoid, or decrease an obligation to pay or
transmit property to an agency.
(2) For the purposes of this section:
(a) "Claim" means a request or demand, whether under a contract or
otherwise, for money or property which is made to a government employee
or official, contractor, grantee, or other recipient if a governmental
entity provides any portion of the money or property which is requested
or demanded, or if a governmental entity will reimburse such employee,
official, contractor, grantee, or other recipient for any portion of
the money or property which is requested or demanded.
(b) "False claim" means any claim that contains or is based upon a
materially incorrect fact, statement, representation, or record.
(c) "Knowing" and "knowingly" mean that a person, with respect to
information, and with or without specific intent to defraud:
(i) Has actual knowledge of the information; or
(ii) Acts in deliberate ignorance of or in reckless disregard of
the truth or falsity of the information.
(3) As to state officers and employees, this section operates to
the exclusion of sections 1 through 10 of this act.
NEW SECTION. Sec. 12 Sections 1 through 10 of this act
constitute a new chapter in Title