§ 190 — Civil actions for false claims

New York § 190

• Jurisdiction: New York
• Law STF: State Finance
• Art. 13: New York False Claims Act

Text

§ 190. Civil actions for false claims. 1. Civil enforcement actions.\nThe attorney general shall have the authority to investigate violations\nunder section one hundred eighty-nine of this article. If the attorney\ngeneral believes that a person has violated or is violating such\nsection, then the attorney general may bring a civil action on behalf of\nthe people of the state of New York or on behalf of a local government\nagainst such person. A local government also shall have the authority to\ninvestigate violations that may have resulted in damages to such local\ngovernment under section one hundred eighty-nine of this article, and\nmay bring a civil action on its own behalf, or on behalf of any\nsubdivision of such local government, to recover damages sustained by\nsuch local government as a result of such violations. No action may be\nfiled pursuant to this subdivision against the federal government, the\nstate or a local government, or any officer or employee thereof acting\nin his or her official capacity. The attorney general shall consult with\nthe office of medicaid inspector general prior to filing any action\nrelated to the medicaid program.\n 2. Qui tam civil actions. (a) Any person may bring a qui tam civil\naction for a violation of section one hundred eighty-nine of this\narticle on behalf of the person and the people of the state of New York\nor a local government. No action may be filed pursuant to this\nsubdivision against the federal government, the state or a local\ngovernment, or any officer or employee thereof acting in his or her\nofficial capacity.\n For purposes of subparagraphs (i) and (iv) of paragraph (a) of\nsubdivision eight of section seventy-three of the public officers law,\nany activity by a former government employee in connection with the\nsecuring of rights, protections or benefits related to preparing or\nfiling an action under this article shall not be deemed to be an\nappearance or practice before any agency.\n (b) A copy of the complaint and written disclosure of substantially\nall material evidence and information the person possesses shall be\nserved on the state pursuant to subdivision one of section three hundred\nseven of the civil practice law and rules. Any complaint filed in a\ncourt of the state of New York shall be filed in supreme court in\ncamera, shall remain under seal for at least sixty days, and shall not\nbe served on the defendant until the court so orders. The seal shall not\npreclude the attorney general, a local government, or the qui tam\nplaintiff from serving the complaint, any other pleadings, or the\nwritten disclosure of substantially all material evidence and\ninformation possessed by the person bringing the action, on relevant\nstate or local government agencies, or on law enforcement authorities of\nthe state, a local government, or other jurisdictions, so that the\nactions may be investigated or prosecuted, except that such seal applies\nto the agencies or authorities so served to the same extent as the seal\napplies to other parties in the action.\n If the allegations in the complaint allege a violation of section one\nhundred eighty-nine of this article involving damages to a local\ngovernment, then the attorney general may at any time provide a copy of\nsuch complaint and written disclosure to the attorney for such local\ngovernment; provided, however, that if the allegations in the complaint\ninvolve damages only to a city with a population of one million or more,\nor only to the state and such a city, then the attorney general shall\nprovide such complaint and written disclosure to the corporation counsel\nof such city within thirty days.\n The state may elect to supersede or intervene and proceed with the\naction, or to authorize a local government that may have sustained\ndamages to supersede or intervene, within sixty days after it receives\nboth the complaint and the material evidence and information; provided,\nhowever, that if the allegations in the complaint involve damages only\nto a city with a population of one million or more, then the attorney\ngeneral may not supersede or intervene in such action without the\nconsent of the corporation counsel of such city. The attorney general\nshall consult with the office of the medicaid inspector general prior to\nsuperseding or intervening in any action related to the medicaid\nprogram. The attorney general may, for good cause shown, move the court\nfor extensions of the time during which the complaint remains under seal\nunder this subdivision. Any such motions may be supported by affidavits\nor other submissions in camera.\n (c) Prior to the expiration of the sixty day period or any extensions\nobtained under paragraph (b) of this subdivision, the attorney general\nshall notify the court that he or she:\n (i) intends to file a complaint against the defendant on behalf of the\npeople of the state of New York or a local government, and thereby be\nsubstituted as the plaintiff in the action and convert the action in all\nrespects from a qui tam civil action brought by a private person into a\ncivil enforcement action by the attorney general under subdivision one\nof this section;\n (ii) intends to intervene in such action, as of right, so as to aid\nand assist the plaintiff in the action; or\n (iii) if the action involves damages sustained by a local government,\nintends to grant the local government permission to: (A) file and serve\na complaint against the defendant, and thereby be substituted as the\nplaintiff in the action and convert the action in all respects from a\nqui tam civil action brought by a private person into a civil\nenforcement action by the local government under subdivision one of this\nsection; or (B) intervene in such action, as of right, so as to aid and\nassist the plaintiff in the action.\n The attorney general shall provide the local government with a copy of\nany such notification at the same time the court is notified.\n (d) If the state notifies the court that it intends to file a\ncomplaint against the defendant and thereby be substituted as the\nplaintiff in the action, or to permit a local government to do so, such\ncomplaint, whether filed separately or as an amendment to the qui tam\nplaintiff's complaint, must be filed within thirty days after the\nnotification to the court. For statute of limitations purposes, any such\ncomplaint filed by the state or a local government shall relate back to\nthe filing date of the complaint of the qui tam plaintiff, to the extent\nthat the cause of action of the state or local government arises out of\nthe conduct, transactions, or occurrences set forth, or attempted to be\nset forth, in the complaint of the qui tam plaintiff.\n (e) If the state notifies the court that it intends to intervene in\nthe action, or to permit a local government to do so, then such motion\nto intervene, whether filed separately or as an amendment to the qui tam\nplaintiff's complaint, shall be filed within thirty days after the\nnotification to the court. For statute of limitations purposes, any\ncomplaint filed by the state or a local government, whether filed\nseparately or as an amendment to the qui tam plaintiff's complaint,\nshall relate back to the filing date of the complaint of the qui tam\nplaintiff, to the extent that the cause of action of the state or local\ngovernment arises out of the conduct, transactions, or occurrences set\nforth, or attempted to be set forth, in the complaint of the qui tam\nplaintiff.\n (f) If the state declines to participate in the action or to authorize\nparticipation by a local government, the qui tam action may proceed\nsubject to judicial review under this section, the civil practice law\nand rules, and other applicable law.\n The qui tam plaintiff shall provide the state or any applicable local\ngovernment with a copy of any document filed with the court on or about\nthe date it is filed, or any order issued by the court on or about the\ndate it is issued. A qui tam plaintiff shall notify the state or any\napplicable local government within five business days of any decision,\norder or verdict resulting in judgment in favor of the state or local\ngovernment.\n 3. Time to answer. If the state decides to participate in a qui tam\naction or to authorize the participation of a local government, the\ncourt shall order that the qui tam complaint be unsealed and served at\nthe time of the filing of the complaint or intervention motion by the\nstate or local government. After the complaint is unsealed, or if a\ncomplaint is filed by the state or a local government pursuant to\nsubdivision one of this section, the defendant shall be served with the\ncomplaint and summons pursuant to article three of the civil practice\nlaw and rules. A copy of any complaint which alleges that damages were\nsustained by a local government shall also be served on such local\ngovernment. The defendant shall be required to respond to the summons\nand complaint within the time allotted under rule three hundred twenty\nof the civil practice law and rules.\n 4. Related actions. When a person brings a qui tam action under this\nsection, no person other than the attorney general, or a local\ngovernment attorney acting pursuant to subdivision one of this section\nor paragraph (b) of subdivision two of this section, may intervene or\nbring a related civil action based upon the facts underlying the pending\naction; provided, however, that nothing in this subdivision shall be\ndeemed to deny persons the right, upon leave of court, to file briefs\namicus curiae.\n 5. Rights of the parties of qui tam actions. (a) If the attorney\ngeneral elects to convert the qui tam civil action into an attorney\ngeneral enforcement action, then the state shall have the primary\nresponsibility for prosecuting the action. If the attorney general\nelects to intervene in the qui tam civil action then the state and the\nperson who commenced the action, and any local government which\nsustained damages and intervenes in the action, shall share primary\nresponsibility for prosecuting the action. If the attorney general\nelects to permit a local government to convert the action into a civil\nenforcement action, then the local government shall have primary\nresponsibility for investigating and prosecuting the action. If the\naction involves damages to a local government but not the state, and the\nlocal government intervenes in the qui tam civil action, then the local\ngovernment and the person who commenced the action shall share primary\nresponsibility for prosecuting the action. Under no circumstances shall\nthe state or a local government be bound by an act of the person\nbringing the original action. Such person shall have the right to\ncontinue as a party to the action, subject to the limitations set forth\nin paragraph (b) of this subdivision. Under no circumstances shall the\nstate be bound by the act of a local government that intervenes in an\naction involving damages to the state. If neither the attorney general\nnor a local government intervenes in the qui tam action then the qui tam\nplaintiff shall have the responsibility for prosecuting the action,\nsubject to the attorney general's right to intervene at a later date\nupon a showing of good cause.\n (b)(i) The state may move to dismiss the action notwithstanding the\nobjections of the person initiating the action if the person has been\nserved with the motion to dismiss and the court has provided the person\nwith an opportunity to be heard on the motion. If the action involves\ndamages to both the state and a local government, then the state shall\nconsult with such local government before moving to dismiss the action.\nIf the action involves damages sustained by a local government but not\nthe state, then the local government may move to dismiss the action\nnotwithstanding the objections of the person initiating the action if\nthe person has been served with the motion to dismiss and the court has\nprovided the person with an opportunity to be heard on the motion.\n (ii) The state or a local government may settle the action with the\ndefendant notwithstanding the objections of the person initiating the\naction if the court determines, after an opportunity to be heard, that\nthe proposed settlement is fair, adequate, and reasonable with respect\nto all parties under all the circumstances. Upon a showing of good\ncause, such opportunity to be heard may be held in camera.\n (iii) Upon a showing by the attorney general or a local government\nthat the original plaintiff's unrestricted participation during the\ncourse of the litigation would interfere with or unduly delay the\nprosecution of the case, or would be repetitious or irrelevant, or upon\na showing by the defendant that the original qui tam plaintiff's\nunrestricted participation during the course of the litigation would be\nfor purposes of harassment or would cause the defendant undue burden,\nthe court may, in its discretion, impose limitations on the original\nplaintiff's participation in the case, such as:\n (A) limiting the number of witnesses the person may call;\n (B) limiting the length of the testimony of such witnesses;\n (C) limiting the person's cross-examination of witnesses; or\n (D) otherwise limiting the participation by the person in the\nlitigation.\n (c) Notwithstanding any other provision of law, whether or not the\nattorney general or a local government elects to supersede or intervene\nin a qui tam civil action, the attorney general and such local\ngovernment may elect to pursue any remedy available with respect to the\ncriminal or civil prosecution of the presentation of false claims,\nincluding any administrative proceeding to determine a civil money\npenalty or to refer the matter to the office of the medicaid inspector\ngeneral for medicaid related matters. If any such alternate civil remedy\nis pursued in another proceeding, the person initiating the action shall\nhave the same rights in such proceeding as such person would have had if\nthe action had continued under this section.\n (d) Notwithstanding any other provision of law, whether or not the\nattorney general elects to supersede or intervene in a qui tam civil\naction, or to permit a local government to supersede or intervene in the\nqui tam civil action, upon a showing by the state or local government\nthat certain actions of discovery by the person initiating the action\nwould interfere with the state's or a local government's investigation\nor prosecution of a criminal or civil matter arising out of the same\nfacts, the court may stay such discovery for a period of not more than\nsixty days. Such a showing shall be conducted in camera. The court may\nextend the period of such stay upon a further showing in camera that the\nstate or a local government has pursued the criminal or civil\ninvestigation or proceedings with reasonable diligence and any proposed\ndiscovery in the civil action will interfere with the ongoing criminal\nor civil investigation or proceedings.\n 6. Awards to qui tam plaintiff. (a) If the attorney general elects to\nconvert the qui tam civil action into an attorney general enforcement\naction, or to permit a local government to convert the action into a\ncivil enforcement action by such local government, or if the attorney\ngeneral or a local government elects to intervene in the qui tam civil\naction, then the person or persons who initiated the qui tam civil\naction collectively shall be entitled to receive between fifteen and\ntwenty-five percent of the proceeds recovered in the action or in\nsettlement of the action. The court shall determine the percentage of\nthe proceeds to which a person commencing a qui tam civil action is\nentitled, by considering the extent to which the plaintiff substantially\ncontributed to the prosecution of the action. Where the court finds that\nthe action was based primarily on disclosures of specific information\n(other than information provided by the person bringing the action)\nrelating to allegations or transactions in a criminal, civil or\nadministrative hearing, in a legislative or administrative report,\nhearing, audit or investigation, or from the news media, the court may\naward such sums as it considers appropriate, but in no case more than\nten percent of the proceeds, taking into account the significance of the\ninformation and the role of the person or persons bringing the action in\nadvancing the case to litigation. Where the court finds that the action\nwas based on disclosure of specific information related to the use of\ngovernment funds during a declaration of a state of emergency, the court\nshall increase the percentage of the proceeds to which the person\ncommencing such qui tam civil action is entitled by up to five percent\nmore than the maximum percentage allowed pursuant to this paragraph. Any\nsuch person shall also receive an amount for reasonable expenses that\nthe court finds to have been necessarily incurred, reasonable attorneys'\nfees, and costs pursuant to article eighty-one of the civil practice law\nand rules. All such expenses, fees, and costs shall be awarded against\nthe defendant.\n (b) If the attorney general or a local government does not elect to\nintervene or convert the action, and the action is successful, then the\nperson or persons who initiated the qui tam action which obtains\nproceeds shall be entitled to receive between twenty-five and thirty\npercent of the proceeds recovered in the action or settlement of the\naction. The court shall determine the percentage of the proceeds to\nwhich a person commencing a qui tam civil action is entitled, by\nconsidering the extent to which the plaintiff substantially contributed\nto the prosecution of the action. Where the court finds that the action\nwas based on disclosure of specific information related to the use of\ngovernment funds during a declaration of a state of emergency, the court\nshall increase the percentage of the proceeds to which the person\ncommencing such qui tam civil action is entitled by up to ten percent\nmore than the maximum percentage allowed pursuant to this paragraph.\nSuch person shall also receive an amount for reasonable expenses that\nthe court finds to have been necessarily incurred, reasonable attorneys'\nfees, and costs pursuant to article eighty-one of the civil practice law\nand rules. All such expenses, fees, and costs shall be awarded against\nthe defendant.\n (c) With the exception of a court award of costs, expenses or\nattorneys' fees, any payment to a person pursuant to this paragraph\nshall be made from the proceeds.\n (d) If the attorney general or a local government does not proceed\nwith the action and the person bringing the action conducts the action,\nthe court may award to the defendant its reasonable attorneys' fees and\nexpenses if the defendant prevails in the action and the court finds\nthat the claim of the person bringing the action was clearly frivolous,\nclearly vexatious, or brought primarily for purposes of harassment.\n 7. Costs, expenses, disbursements and attorneys' fees. In any action\nbrought pursuant to this article, the court may award any local\ngovernment that participates as a party in the action an amount for\nreasonable expenses which the court finds to have been necessarily\nincurred, plus reasonable attorneys' fees, plus costs pursuant to\narticle eighty-one of the civil practice law and rules. All such\nexpenses, fees and costs shall be awarded directly against the defendant\nand shall not be charged from the proceeds, but shall only be awarded if\na local government prevails in the action.\n 8. Exclusion from recovery. If the court finds that the qui tam civil\naction was brought by a person who planned or initiated the violation of\nsection one hundred eighty-nine of this article upon which the action\nwas brought, then the court may, to the extent the court considers\nappropriate, reduce the share of the proceeds of the action which the\nperson would otherwise be entitled to receive under subdivision six of\nthis section, taking into account the role of such person in advancing\nthe case to litigation and any relevant circumstances pertaining to the\nviolation. If the person bringing the qui tam civil action is convicted\nof criminal conduct arising from his or her role in the violation of\nsection one hundred eighty-nine of this article, that person shall be\ndismissed from the qui tam civil action and shall not receive any share\nof the proceeds of the action. Such dismissal shall not prejudice the\nright of the attorney general to supersede or intervene in such action\nand to civilly prosecute the same on behalf of the state or a local\ngovernment.\n 9. Certain actions barred. (a) The court shall dismiss a qui tam\naction under this article if:\n (i) it is based on allegations or transactions which are the subject\nof a pending civil action or an administrative action in which the state\nor a local government is already a party;\n (ii) the state or local government has reached a binding settlement or\nother agreement with the person who violated section one hundred\neighty-nine of this article resolving the matter and such agreement has\nbeen approved in writing by the attorney general, or by the applicable\nlocal government attorney; or\n (iii) against a member of the legislature, a member of the judiciary,\nor a senior executive branch official if the action is based on evidence\nor information known to the state when the action was brought.\n (b) The court shall dismiss a qui tam action under this article,\nunless opposed by the state or an applicable local government, or unless\nthe qui tam plaintiff is an original source of the information, if\nsubstantially the same allegations or transactions as alleged in the\naction were publicly disclosed:\n (i) in a state or local government criminal, civil, or administrative\nhearing in which the state or a local government or its agent is a\nparty;\n (ii) in a federal, New York state or New York local government report,\nhearing, audit, or investigation that is made on the public record or\ndisseminated broadly to the general public; provided that such\ninformation shall not be deemed "publicly disclosed" in a report or\ninvestigation because it was disclosed or provided pursuant to article\nsix of the public officers law, or under any other federal, state or\nlocal law, rule or program enabling the public to request, receive or\nview documents or information in the possession of public officials or\npublic agencies;\n (iii) in the news media, provided that such allegations or\ntransactions are not "publicly disclosed" in the "news media" merely\nbecause information of allegations or transactions have been posted on\nthe internet or on a computer network.\n 10. Liability. Neither the state nor any local government shall be\nliable for any expenses which any person incurs in bringing a qui tam\ncivil action under this article.\n