By Shauna Itri
The Montana False Claims Act is modeled after the federal False Claims Act and allows individuals with information related to fraud, waste, and abuse being perpetrated on the Montana government to file a lawsuit on behalf of the government.
Montana False Claims Act Liability
Under the Montana False Claims Act, similar to the federal False Claims Act, any person can be liable who:
(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 a violation of this subsection (1);
(d) has possession, custody, or control of public property or money used or to be used by the governmental entity and knowingly delivers or causes to be delivered less than all of the property or money;
(e) is authorized to make or deliver a document certifying receipt of property used or to be used by the governmental entity and, with the intent to defraud the governmental entity or to willfully conceal the property, makes or delivers a 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 of the governmental entity from any person who may not lawfully sell or pledge the property;
(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 a governmental entity or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to a governmental entity; or
(h) as a beneficiary of an inadvertent submission of a false or fraudulent claim to the governmental entity, subsequently discovers the falsity of the claim or that the claim is fraudulent and fails to disclose the false or fraudulent claim to the governmental entity within a reasonable time after discovery of the false or fraudulent claim.
Montana False Claims Act, § 17-8-403(1).
Montana False Claims Act Damages
If the person is found liable, he/she is liable to Montana for a civil penalty of at least $5,500 and no more than $11,000, plus three times the amount of damages which the state sustains because of that person’s actions. A person violating this subsection (a) shall also be liable to the state for the costs of a civil action brought to recover any such penalty or damages. Montana False Claims Act, § 17-8-403(1).
Montana False Claims Act Procedure
In order to bring a claim under the Montana False Claims Act, a person must bring an action in the name of the “governmental entity.” The action may only be dismissed if the Court and the Attorney General of the State give written consent to the dismissal and their reasons for consenting. Montana False Claims Act, § 17-8-406(1).
The person filing the civil action must serve a copy of the complaint and written disclosure of substantially all material evidence and information the person possesses on the government attorney. Id. § 17-8-406(2). Once the complaint is filed and served, the complaint shall remain under seal for a period of 60 days. Id. The government attorney, for good cause, can move the Court to extend the seal. Id. §17-8-406(3).
Before the seal or extension expires, the government attorney can proceed with the action or notify the Court that it declines to take over the action. If the government declines to intervene in the action, the whistleblower has the right to conduct the action. Id. § 17-8-406(2).
Montana False Claims Act Distinction
Unlike the federal False Claims Act, the Montana False Claims Act states:
“If a governmental entity does not intervene, the person who initiated the action has the same right to conduct the action as the government attorney would have had if the governmental entity had intervened, including the right to inspect government records and interview officers and employees of the governmental entity.”
Montana False Claims Act, § 17-8-403(9) (emphasis added).
The federal False Claims Act does not allow whistleblowers to inspect government records or interview government employees.
Montana False Claims Act Award
If the government attorney proceeds with the action and obtains a recovery, the whistleblower shall receive 15-25% of the proceeds of the action or settlement of the claim. Montana False Claims Act, § 17-8-410(1). If the government attorney declines to proceed with the action, the whistleblower shall receive 25-30% of the proceeds of the action or settlement of the claim, depending on how much the whistleblower contributed to the case. Id. § 17-8-410(4).
The governmental entity is entitled to any damages and civil penalty not awarded to the whistleblower, and the damages and civil penalty must be deposited in the governmental entity’s general fund. However, if the governmental entity’s trust fund suffered a loss as a result of the defendant’s actions, the trust fund must first be fully reimbursed for the loss before the remainder of the damages and civil penalty are deposited in a general fund. Id. § 17-8-410(6).
The governmental entity that filed a civil action or intervened is entitled to reasonable costs and attorney fees if the action is settled favorably for the governmental entity or the governmental entity prevails. Id. § 17-8-411. In an action in which outside counsel is engaged by a government attorney, the costs and attorney fees awarded to that counsel must equal the outside counsel’s charges reasonably incurred for costs and attorney fees in prosecuting the action.
In any other actions in which costs and attorney fees are awarded to the governmental entity, they must be calculated by reference to the hourly rate charged by the department of justice agency legal services bureau for the provision of legal services to state agencies, multiplied by the number of attorney hours devoted to the prosecution of the action, plus the actual cost of any expenses reasonably incurred in the prosecution of the action. Id. A person who is a plaintiff or co-plaintiff is entitled to reasonable expenses that the court finds to have been necessarily incurred, plus reasonable costs and attorney fees, if the action is settled favorably for the governmental entity or the governmental entity prevails in the action. Id.
Contact a Berger Montague Whistleblower Attorney
If you believe someone is committing fraud against the Montana state government, contact a member of Berger Montague’s Whistleblower, Qui Tam, & False Claims Act Practice Group to schedule a free, confidential discussion about a potential case.