The Nevada False Claims Act (“Nevada FCA”) mirrors the federal False Claims Act (“FCA”) but operates at the state level. Enacted in 1999, the Nevada FCA penalizes people who defraud Nevada’s state or local governments. The Nevada FCA imposes civil liability on “[any] person who, with or without specific intent to defraud, does any of the following listed acts [affecting state or local government]”:
a. Knowingly presents or causes to be presented a false or fraudulent claim for payment or approval.
b. Knowingly makes or uses, or causes to be made or used, a false record or statement that is material to a false or fraudulent claim.
c. Commits any of seven other kinds of fraudulent acts.
See Nev. Rev. Stat. § 357.040 (1)(a)-(i) (2018).
What is a “Claim” Under the Nevada False Claims Act?
Under the Nevada FCA, a “claim” is “any request or demand, [made under a contract or otherwise], for money, property, or services” that is presented to a state or local government employee or government-funded contractor or grantee. Id. § 357.020.
For example, a subcontractor who misrepresents the cost of supplies and overcharges a construction company hired by the state to build a highway bridge could be liable under the Nevada FCA.
A person who commits any of these types of acts is liable to the state or local government for triple the amount of damages caused to the state or local government, the costs of a civil action to recover those damages, and a civil penalty between $5,500 and $11,000 (subject to adjustment under the Civil Penalties Inflation Act). Id. § 357.040 (2)(a)-(c).
How Do Nevada False Claims Act Lawsuits Proceed?
The Nevada Attorney General, a district attorney or city attorney designated by the Attorney General, or a private plaintiff may file a Nevada FCA lawsuit. Id. §§ 357.070-357.080. Nevada FCA actions filed by private plaintiffs are held under seal for at least 60 days or until the Attorney General or designee of the Attorney General decides whether to intervene. Id. § 357.080.
In the event that the Attorney General or designee opts not to intervene, the private plaintiff may continue the litigation. Id. § 357.130. If the Attorney General or designee intervenes, the private plaintiff receives between 15% and 20% of any recovery (according to the private plaintiff’s contribution to the lawsuit). Id. § 357.210. If the Attorney General or designee does not intervene, the private plaintiff receives between 25% and 30% of any recovery. Id.
Retaliation Protection Under the Nevada False Claims Act
The Nevada FCA also protects whistleblowers from retaliation by their employers for their contributions to any Nevada FCA action. Id. § 357.250. For example, an employee who is discharged or demoted due to his or her participation in a Nevada FCA action is entitled to reinstatement, twice the amount of any lost compensation, interest on that lost compensation, and special damages as appropriate. Id.
How Does the Nevada FCA Compare to the Federal FCA?
One difference between the Nevada FCA and the federal FCA is the higher ceiling for a private plaintiff’s share of the recovery in cases where the federal government intervenes. The FCA allows the private plaintiff to acquire between 15% and 25% of the recovery, which exceeds the Nevada FCA’s 15% to 20% range. See False Claims Act, 31 U.S.C. § 3730(d)(1) (2018).
Since the Nevada FCA was modeled on the FCA, courts look to the FCA for guidance in interpreting the Nevada FCA. See Int’l Game Tech., Inc. v. Second Judicial Dist. Court of Nevada, 127 P.3d 1088, 1101 (Nev. 2006). Both the Nevada FCA and the FCA impose liability for “reverse false claims,” which are misrepresentations used to conceal, avoid, or decrease obligations to pay the government. Id. at 1102.
While the FCA contains an express “tax bar” that excludes reverse false claims stemming from nonpayment of taxes, the Nevada FCA lacks a similar provision. Id. Tax fraud against Nevada state or local government can therefore provide a basis for Nevada FCA liability. See id. at 1104.
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