2006 New York Code - Civil Actions For False Claims.

 
    * §  7-804.  Civil  actions  for  false  claims. a. If the corporation
  counsel finds that a person has violated or is violating the  provisions
  of  section  7-803  of  this  chapter,  he  or she may institute a civil
  enforcement action  against  that  person  in  any  court  of  competent
  jurisdiction.
    b.  1.  Any  person  may submit a proposed civil complaint to the city
  alleging violations of section 7-803. Proposed civil complaints shall be
  signed  and  verified  and  shall  include  all  material  evidence  and
  information  possessed  by  such person in support of the allegations in
  such proposed civil complaints. The city  shall  diligently  investigate
  all such proposed civil complaints. The city may request such additional
  information  as it deems necessary from the person submitting a proposed
  civil complaint.
    2. The corporation counsel and the commissioner of investigation shall
  promulgate rules establishing a protocol  detailing  the  procedures  by
  which  the  city  will address proposed civil complaints after they have
  been submitted, which protocol shall include the requirement that within
  one hundred eighty days of receipt of a proposed  civil  complaint,  the
  city  shall,  in  writing,  notify the person who submitted the proposed
  civil complaint that the corporation counsel:
    (i) intends to commence a civil enforcement action based on the  facts
  alleged  in  the  proposed  civil  complaint  against one or more of the
  defendants named in the proposed civil complaint, in which  case  he  or
  she  shall commence such action within ninety days of such notification,
  provided that if the corporation counsel  determines  that  a  delay  in
  commencing   such  action  is  warranted,  he  or  she  may  delay  such
  commencement, upon notice to the person who submitted the proposed civil
  complaint, for an additional ninety days at which time he or  she  shall
  commence such action;
    (ii)  designates  the person or, if the person is not an attorney, the
  attorney of such person, as a special assistant corporation counsel  for
  purposes of filing a civil enforcement action against one or more of the
  defendants named in the proposed civil complaint; or
    (iii)  declines  to  commence  a civil enforcement action or designate
  such person to commence a civil enforcement action  in  which  case  the
  corporation counsel shall state in the notification its reason for doing
  so.
    3.  The  corporation counsel shall commence a civil enforcement action
  or designate the person who submitted the proposed civil  complaint  or,
  if  the  person  is  not an attorney, his or her attorney, to commence a
  civil enforcement action unless:
    (i) the proposed civil complaint is barred for the reasons  set  forth
  in subdivision d of this section;
    (ii)  the  corporation  counsel has determined that the proposed civil
  complaint is based upon an interpretation of law or regulation which  if
  adopted, would result in significant cost to the city;
    (iii)  the  corporation counsel has determined that commencing a civil
  enforcement action  would  interfere  with  a  contractual  relationship
  between  the  city and an entity providing goods or services which would
  significantly  interfere  with  the  provision  of  important  goods  or
  services, or would jeopardize the health and safety of the public; or
    (iv)  the  corporation  counsel  has determined that the complaint, if
  filed in a court of  competent  jurisdiction,  would  be  dismissed  for
  failure to state a claim upon which relief may be based.
    c.  If  the  commissioner  of  investigation  determines  that a civil
  enforcement action may interfere with or jeopardize an investigation  by
  a  governmental  agency,  then  the  corporation  counsel may decline to
  commence a civil enforcement action based on a proposed civil  complaint


  or  to  designate the person who submitted such proposed civil complaint
  to commence such action, provided that the corporation counsel  notifies
  the   person   who  submitted  the  proposed  civil  complaint  of  such
  determination within ninety days of receipt by the city of such proposed
  civil  complaint and every one hundred eighty days thereafter until such
  time as the commissioner of investigation  determines  that  such  civil
  enforcement  action  would  no  longer  interfere  with  or jeopardize a
  governmental investigation, at which time the corporation counsel  shall
  provide   to  the  person  who  submitted  the  proposed  complaint  the
  notification required in paragraph two of subdivision b of this section.
  The determination by the commissioner of investigation shall be final.
    d. Certain actions barred. This section shall  not  apply  to  claims,
  records,  or statements made pursuant to federal, state or local tax law
  nor to any proposed civil complaints:
    1. based upon one or more false claims with a cumulative value of less
  than twenty five thousand dollars;
    2. based upon allegations or transactions which are the subject of any
  pending criminal or  civil  action  or  proceeding,  including  a  civil
  enforcement  action,  or  an  administrative action in which the city is
  already a party;
    3. derived from public disclosure of allegations or transactions in  a
  criminal,   civil   or  administrative  hearing,  in  a  legislative  or
  administrative  report,  hearing,  audit  or  investigation,   or   upon
  allegations or transactions disclosed by the news media and likely to be
  seen  by  the  city  officials  responsible for addressing false claims,
  unless the person who submitted the proposed complaint  is  the  primary
  source of the information;
    4. based upon information discovered by an employee of the city, state
  or federal government in the course of his or her employment unless: (i)
  such  employee  first  reported  such  information  to the department of
  investigation; and (ii) the city failed to act on the information within
  six months of its receipt by the department of investigation; or
    5. against the federal government, the state of New York, the city  or
  any  officer  or  employee  acting  within  the  scope  of  his  or  her
  employment.
    e. Nothing herein shall be construed as authorizing anyone other  than
  the  corporation counsel and a person or attorney authorized pursuant to
  this chapter to commence a civil enforcement  action  to  represent  the
  city of New York in legal proceedings.
    f.  Pending  and  related  actions.  1.  No  person,  other  than  the
  corporation counsel, may intervene or bring a related action based  upon
  the  facts  underlying  a  civil  enforcement  action, unless such other
  person has first obtained the permission of the corporation  counsel  to
  intervene or to bring such related action.
    2. Regardless of whether the corporation counsel has commenced a civil
  enforcement  action  or  another party has been designated to do so, the
  city may elect to pursue  any  alternate  action  with  respect  to  the
  presentation of false claims, provided that the person who submitted the
  proposed  civil  complaint upon which such alternate action is based, if
  any, shall be entitled to the same percentage share of any cash proceeds
  recovered by the city as such person would have been entitled to if such
  alternate action was a civil enforcement action.
    g. Rights of the parties. 1. If  the  corporation  counsel  elects  to
  commence  a  civil enforcement action, then the city shall have the sole
  authority  for  prosecuting,  and,  subject  to  the  approval  of   the
  comptroller,  settling the action and may move to dismiss the action, or
  may settle the action notwithstanding the objections of the  person  who


  submitted the proposed civil complaint upon which such civil enforcement
  action is based.
    2.  If  a  person  who  submitted  a  proposed complaint or his or her
  attorney has been designated to commence  a  civil  enforcement  action,
  then  the  corporation  counsel  and  such authorized person or attorney
  shall share authority for prosecuting the case. However, the corporation
  counsel may move to dismiss the action notwithstanding the objection  of
  the  person  who  submitted  the  proposed civil complaint provided such
  person has been served with an appropriate  motion  and  the  court  has
  provided  such  person  with an opportunity to be heard. The corporation
  counsel may also, subject to the approval of the comptroller, settle the
  action notwithstanding the objection of the  person  who  submitted  the
  proposed  civil  complaint  if the court determines after providing such
  person with an opportunity to be heard, that the proposed settlement  is
  fair, adequate, and reasonable.
    3.  The  corporation  counsel may apply to the court for and the court
  may issue an order restricting the participation of a person  designated
  to   commence   a   civil   enforcement   action   in   such  litigation
  notwithstanding the objections of such person if the  court  determines,
  after  providing  such  person  an  opportunity  to  be heard, that such
  person's unrestricted participation during the course of the  litigation
  would  interfere  with  or  unduly delay the prosecution of the case, or
  would be repetitious or irrelevant, or upon a showing by  the  defendant
  that  such  person's unrestricted participation during the course of the
  litigation would be for  purposes  of  harassment  or  would  cause  the
  defendant  undue burden.  Such restrictions may include, but need not be
  limited to: (i) limiting the number of witnesses such person  may  call,
  (ii)  limiting  the  length  of  the  testimony of such witnesses, (iii)
  limiting such person's cross-examination of witnesses, or (iv) otherwise
  limiting such person's participation in the litigation.
    4. The corporation counsel may apply to the court for a  stay  of  any
  civil  enforcement action if it will interfere with any investigation or
  prosecution of a criminal matter arising out of the same facts.
    h. Under no circumstances shall the city be  bound  by  an  act  of  a
  person designated to commence a civil enforcement action.
    i.  Awards from proceeds. 1. If the corporation counsel has elected to
  commence a civil enforcement action based on a proposed civil complaint,
  then the person or persons who submitted such proposed  civil  complaint
  collectively  shall  be  entitled to receive between ten and twenty-five
  percent of the proceeds recovered in such civil enforcement action or in
  settlement of such action.
    2. If a person, or such  person's  attorney  has  been  designated  to
  commence  a  civil  enforcement  action  based on such person's proposed
  civil complaint, then such person shall be entitled to  receive  between
  fifteen  and  thirty  percent  of  the  proceeds recovered in such civil
  enforcement action or in settlement of such action.
    3. The court shall determine the share of  the  proceeds  to  which  a
  person  submitting  a  proposed complaint is entitled, and may take into
  account the following factors:
    (i) the extent to which the person who submitted  the  proposed  civil
  complaint  contributed to the prosecution of the action, either in time,
  effort or finances;
    (ii) whether the civil  enforcement  action  was  based  primarily  on
  information  provided  by  the  person  who submitted the proposed civil
  complaint, rather than information derived from public sources  such  as
  allegations  or  transactions  in  a  criminal,  civil or administrative
  hearing, in a legislative or administrative report,  hearing,  audit  or
  investigation, or from the news media;


    (iii) any unreasonable delay by such person in submitting the proposed
  civil complaint;
    (iv)  the extent to which the allegations involve a significant safety
  issue;
    (v) whether the person who submitted the proposed civil complaint that
  formed the basis of the civil enforcement action initiated the violation
  of section 7-803 of this chapter alleged in such action, in  which  case
  the  percentage  share  of  the  proceeds of the action that such person
  would otherwise receive under this section  may  be  reduced  below  the
  minimum  percentages  set  forth  in  paragraphs  one  and  two  of this
  subdivision, taking into account the role of such  person  in  advancing
  the  case  to  litigation and any relevant circumstances including those
  pertaining to the violation;
    (vi) whether the person who submitted  the  proposed  civil  complaint
  that  formed  the basis of the civil enforcement action has been charged
  with criminal conduct arising from  his  or  her  role  in  the  alleged
  violation  of  section  7-803 of this chapter, in which case such person
  shall not receive any share of the proceeds of the action  if  convicted
  on such charges; and
    (vii)  fundamental  fairness  and  any  other  factors the corporation
  counsel and the court deem appropriate.
    j. Costs, expenses and attorneys' fees. 1. In  any  civil  enforcement
  action commenced pursuant to this chapter, the corporation counsel, or a
  person   designated  to  commence  such  civil  enforcement  action,  if
  applicable, may  apply  for  an  amount  of  reasonable  expenses,  plus
  reasonable attorneys' fees, plus costs. Costs and expenses shall include
  costs  incurred  by the department of investigation in investigating the
  false claim and prosecuting conduct relating thereto. All such expenses,
  attorneys'  fees  and  costs  shall  be  awarded  directly  against  the
  defendant  and shall not be charged from the proceeds, but shall only be
  awarded if the city prevails in the action
    2. In a civil enforcement action commenced by a designated person or a
  such person's  attorney  the  defendant  may  apply  for  an  amount  of
  reasonable expenses, plus reasonable attorneys' fees, plus costs and the
  court  may  award  such  expenses,  attorneys'  fees  and  costs  if  it
  determines that such civil enforcement action was  frivolous.  All  such
  expenses,  attorneys'  fees  and costs shall be awarded directly against
  the person or person's attorney that commenced the action.
    k. The city shall not be liable for any expenses, attorneys'  fees  or
  costs  that  a  person  or  a  person's  attorney incurs in submitting a
  proposed civil complaint or commencing or litigating a civil enforcement
  action pursuant to this section.
    * NB Repealed June 1, 2012