On August 16, 2012, the California Assembly passed a bill (AB 2492) amending California’s False Claims Act, Cal. Gov’t Code §§ 12650-12656, which must be signed into law by Governor Jerry Brown. The amendments largely conform the California False Claims Act to the federal False Claims Act.
California False Claims Act
Key amendments to the California False Claims Act include an increase in penalties to $5,500 to $11,000 for each false claim similar to the Federal False Claims Act.
Another amendment to the California False Claims Act for California qui tam attorneys to note is that the definition of “claim” has been broadened to include claims submitted to a “contractor, grantee, or other recipient, if the money, property, or service is to be spent or used on a state or any political subdivision’s behalf or to advance a state or political subdivision’s program or interest . . . .”
Additionally, the California False Claims Act incorporates the federal False Claims Act’s definition of an “obligation.” An obligation includes retention of an overpayment, thereby giving rise to liability under the California False Claims Act for retention of an overpayment.
California Qui Tam Relators
Several of the amendments to the California False Claims Act are helpful to relators, which encourages more relators and California qui tam attorneys to bring suits under the California False Claims Act.
With these amendments, the California False Claims Act makes relators/whistleblowers eligible for an award even if they planned and initiated the violation upon which the California False Claims Act action was based; eliminate the requirement that a claim must have been presented to an officer, employee, or agent of the state; clarify that the California False Claims Act’s anti-retaliation provisions apply when whistleblowers are discriminated against for furthering an action under the California False Claims Act or for trying to stop a violation of the California False Claims Act (currently, these provisions apply only after a whistleblower and his/her California qui tam lawyer disclosed information about the false claim to the government); expand the anti-retaliation provisions of the California False Claims Act to include contractors and agents in addition to employees; and grant relief to qui tam relators/whistleblowers who are discriminated against, including reinstatement with the same seniority status, twice the amount of back pay plus interest, and compensation for special damages.
California False Claims Act Whistleblower
The amendments to the California False Claims Act permit the California Attorney General to prevent dismissal of a California False Claims Act claim based on publicly disclosed information by “opposing” dismissal. And a California False Claims Act action may not be dismissed if the whistleblower is the “original source” of the information.
California False Claims Act “Original Source” Broadens
The California False Claims Act definition of an “original source” has been broadened to include individuals who have voluntarily disclosed to the state the information upon which a claim is based, or have knowledge that is independent of, and “materially adds” to, publicly disclosed allegations of false claims.
False Claims Act Statute of Limitations in California
The California False Claims Act provides that, for statute of limitations purposes, if the California Attorney General files a complaint in intervention, it relates back to the filing date of the whistleblower’s complaint. The amendments also conform to the statue of limitations provisions in the federal False Claims Act.
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