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California False Claims Act

In 1987, the State of California adopted the California False Claims Act ("California FCA"), its own version of the federal False Claims Act ("FCA"). California was the first state to adopt its own False Claims Act.  The California FCA allows private individuals who know about fraud against California to bring a qui tam case on behalf of the State against a person or entity for submitting or causing the submission of false claims to California State or local governments.

California FCA and Federal FCA Similarities

Key provisions of the California FCA mirror the federal FCA, such as:

  • Liability attaches under the California FCA for, among other violations: submitting a false claim for payment to the State, making or using a false record or statement material to a false claim, conspiring to do either of these actions, failing to deliver all of the property owed to the State, creating or submitting a false receipt, making a false purchase, or making a reverse false claim.
  • A private citizen who knows about fraud against the State of California can bring a claim on behalf of the State. If the California Attorney General decides not to pursue the case, the citizen has the right to proceed with the litigation in Court.
  • Once an action is brought under the California FCA, it remains under seal for at least 60 days (the State can petition the Court to have the action remain under seal for longer than 60 days).
  • Employers are prohibited from retaliating against whistleblower employees. Retaliation includes firing, demoting, suspending, threatening, or harassing the employee. If the employer does retaliate, the employee is entitled to the reinstatement of their position, two times the amount of back pay, interest on the back pay, and compensation for any damages sustained because of the discrimination.

California FCA and Federal FCA Differences

While the California FCA and the federal FCA have numerous similarities, they also have several differences:

  • Unlike the federal FCA, the California FCA includes an "inadvertent false claims" provision. This provision states that if a party inadvertently submits a false claim, later realizes that the claim was false, and fails to disclose the false claim to the State or political subdivision within a reasonable time period after discovery of the false claim, that party can potentially be liable under the California FCA. There is no "inadvertent false claims" provision in the federal FCA.
  • While the California FCA and the federal FCA both offer financial awards to whistleblowers for bringing an action, the incentive amounts differ. Under the California FCA, if the State decides to intervene in a case, the whistleblower may receive 15-33% of the recovery. If the State does not intervene and the whistleblower pursues the case on their own, they may receive 25-50% of the recovery. Under the federal FCA, if the government decides to intervene in a case, the whistleblower may only receive 15-25% of the recovery. If the government does not intervene and the whistleblower pursues the case on their own, they may only receive 25-30% of the recovery.

Previous California False Claims Act Cases

Numerous qui tam cases have been prosecuted under the California FCA, recovering funds for both the state government and California taxpayers:

  • JM Eagle: A former engineer of JM Eagle filed a whistleblower suit against his employer for manufacturing and selling substandard PVC piping to the government. The case settle for $22.5 million in 2014; JM Eagle admitted no wrongdoing.
  • Fresenius: In August 2015, Fresenius Medical Care Holdings was faced with a whistleblower suit alleging that the company violated the federal FCA and the California FCA by paying nephrologists kickbacks to send Medicare and Medicaid patients to its dialysis clinics. This case is captioned Jean Diesto v. Fresenius Management Services Inc. et al, case number 2:15-cv-05957, filed in the U.S. District Court for the Central District of California.

For more information on the California False Claims Act or to speak with an attorney, please contact Shauna Itri at sitri@bm.net or 215-875-3049. To read more about what whistleblower clients can expect from our lawyers, click here.

One last thing…

For more than a decade, the Berger & Montague, P.C. Whistleblower, Qui Tam & False Claims Act Practice Group has represented whistleblowers in matters involving healthcare fraud, defense contracting fraud, IRS fraud, securities fraud, and commodities fraud. While the information on this blog is not legal advice, we would be more than happy to speak with you directly about your potential case. Any information you share with us will be treated with the highest level of confidentiality, and we will protect you every step of the way.

Do you need a Whistleblower Lawyer or want to know more information about Qui Tam Law and your rights under the False Claims Act?

There are three easy ways to contact our firm:

  1. Use the contact form on this page ("Inquire About Your Potential Case")
  2. Email info@bm.net
  3. Call (800) 424-6690

Your information will remain confidential and we will work to protect your rights.

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