2005 Nevada Revised Statutes - Chapter 357 — Submission of False Claims to State or Local Government

CHAPTER 357 - SUBMISSION OF FALSE CLAIMS TOSTATE OR LOCAL GOVERNMENT

GENERAL PROVISIONS

NRS 357.010 Definitions.

NRS 357.020 Claimdefined.

NRS 357.030 Politicalsubdivision defined.

LIABILITY

NRS 357.040 Liabilityfor damages and civil penalty for certain acts.

NRS 357.050 Limitationof damages and waiver of penalty for cooperation of defendant.

NRS 357.060 Jointand several liability.

CIVIL ACTIONS

NRS 357.070 Investigationand action by Attorney General.

NRS 357.080 Maintenanceof action by private plaintiff; limitations; complaint under seal; copy ofcomplaint and written disclosure of evidence to be sent to Attorney General.

NRS 357.090 Actionbased on information public employee discovered during public employmentprohibited in certain circumstances.

NRS 357.100 Actionbased upon certain public disclosures may only be brought by Attorney Generalor original source of information.

NRS 357.110 AttorneyGeneral may elect to intervene in action by private plaintiff; motion to extendtime for election; unsealing of complaint.

NRS 357.120 Effectof intervention of Attorney General in action by private plaintiff; motion todismiss; settlement.

NRS 357.130 Effectof declination of Attorney General to intervene in action by private plaintiff;authority for and effect of election by Attorney General to intervenesubsequently in such action.

NRS 357.140 Responseby defendant.

NRS 357.150 Stayof discovery by private plaintiff; extension.

NRS 357.160 Court-imposedlimitation upon participation of private plaintiff in action.

NRS 357.170 Limitationof actions; standard of proof; effect of certain findings of guilt in criminalproceeding on action.

NRS 357.180 Awardof expenses and attorneys fees.

DISTRIBUTION OF RECOVERY

NRS 357.190 Recoverydefined.

NRS 357.200 Distributionto special account in State General Fund if Attorney General initiated action.

NRS 357.210 Distributionto private plaintiff in certain actions.

NRS 357.220 Distributionto private plaintiff in action based upon information obtained by publicemployee during public employment.

NRS 357.230 Distributionof unapportioned portion to general fund of State or political subdivision, orboth.

MISCELLANEOUS PROVISIONS

NRS 357.240 Employerprohibited from forbidding employee from making certain disclosures or actingin furtherance of action relating to false claim and from taking anyretaliatory action against employee for such disclosures or actions.

NRS 357.250 Liabilityof employer for violations of NRS 357.240;entitlement of employee to remedies.

_________

GENERAL PROVISIONS

NRS 357.010 Definitions. As used in this chapter, unless the context otherwiserequires, the words and terms defined in NRS357.020 and 357.030 have themeanings ascribed to them in those sections.

(Added to NRS by 1999, 824)

NRS 357.020 Claimdefined. Claim means a request or demand formoney, property or services made to:

1. An officer, employee or agent of this state or of apolitical subdivision of this state; or

2. A contractor, grantee or other recipient of money fromthe State or a political subdivision of this state if any part of the money,property or services requested or demanded was provided by the State orpolitical subdivision.

(Added to NRS by 1999, 824)

NRS 357.030 Politicalsubdivision defined. Political subdivisionmeans a county, city, assessment district or any other local government asdefined in NRS 354.474.

(Added to NRS by 1999, 824)

LIABILITY

NRS 357.040 Liabilityfor damages and civil penalty for certain acts.

1. Except as otherwise provided in NRS 357.050, a person who, with or withoutspecific intent to defraud, does any of the following listed acts is liable tothe State or a political subdivision, whichever is affected, for three timesthe amount of damages sustained by the State or political subdivision becauseof the act of that person, for the costs of a civil action brought to recoverthose damages and for a civil penalty of not less than $2,000 or more than$10,000 for each act:

(a) Knowingly presents or causes to be presented afalse claim for payment or approval.

(b) Knowingly makes or uses, or causes to be made orused, a false record or statement to obtain payment or approval of a falseclaim.

(c) Conspires to defraud by obtaining allowance orpayment of a false claim.

(d) Has possession, custody or control of publicproperty or money and knowingly delivers or causes to be delivered to the Stateor a political subdivision less money or property than the amount for which hereceives a receipt.

(e) Is authorized to prepare or deliver a receipt formoney or property to be used by the State or a political subdivision andknowingly prepares or delivers a receipt that falsely represents the money orproperty.

(f) Knowingly buys, or receives as security for anobligation, public property from a person who is not authorized to sell orpledge the property.

(g) Knowingly makes or uses, or causes to be made orused, a false record or statement to conceal, avoid or decrease an obligation topay or transmit money or property to the State or a political subdivision.

(h) Is a beneficiary of an inadvertent submission of afalse claim and, after discovering the falsity of the claim, fails to disclosethe falsity to the State or political subdivision within a reasonable time.

2. As used in this section, a person acts knowinglywith respect to information if he:

(a) Has knowledge of the information;

(b) Acts in deliberate ignorance of whether theinformation is true or false; or

(c) Acts in reckless disregard of the truth or falsityof the information.

(Added to NRS by 1999, 824)

NRS 357.050 Limitationof damages and waiver of penalty for cooperation of defendant. In a civil action pursuant to this chapter, the court maygive judgment for not less than twice or more than three times the amount ofdamages sustained, and no civil penalty, if it finds that:

1. The person against whom the judgment is entered:

(a) Furnished all information known to him concerningthe act, within 30 days after becoming aware of the information, to theAttorney General; and

(b) Fully cooperated with any investigation of the actby the State or political subdivision; and

2. At the time the information was furnished, nocriminal prosecution or civil or administrative proceeding had commenced withrespect to the act and the person had no knowledge of the existence of anyinvestigation with respect to the act.

(Added to NRS by 1999, 825)

NRS 357.060 Jointand several liability. Liability pursuant tothis chapter is joint and several for an act done by two or more persons.

(Added to NRS by 1999, 825)

CIVIL ACTIONS

NRS 357.070 Investigationand action by Attorney General. The AttorneyGeneral may investigate any alleged liability pursuant to this chapter and maybring a civil action pursuant to this chapter against the person liable.

(Added to NRS by 1999, 825)

NRS 357.080 Maintenanceof action by private plaintiff; limitations; complaint under seal; copy ofcomplaint and written disclosure of evidence to be sent to Attorney General.

1. Except as otherwise provided in this section and NRS 357.090 and 357.100, a private plaintiff may maintainan action pursuant to this chapter on his own account and that of the State ifmoney, property or services provided by the State are involved, or on his ownaccount and that of a political subdivision if money, property or servicesprovided by the political subdivision are involved, or on his own account andthat of both the State and a political subdivision if both are involved. Aftersuch an action is commenced, it may be dismissed only with leave of the court,taking into account the public purposes of this chapter and the best interestsof the parties.

2. If a private plaintiff brings an action pursuant tothis chapter, no other person may bring another action pursuant to this chapterbased on the same facts.

3. An action may not be maintained by a privateplaintiff pursuant to this chapter:

(a) Against a member of the Legislature or theJudiciary, an elected officer of the Executive Department of the StateGovernment, or a member of the governing body of a political subdivision, ifthe action is based upon evidence or information known to the State orpolitical subdivision at the time the action was brought.

(b) If the action is based upon allegations ortransactions that are the subject of a civil action or an administrativeproceeding for a monetary penalty to which the State or political subdivisionis already a party.

4. A complaint filed pursuant to this section must beplaced under seal and so remain until the Attorney General has elected whetherto intervene. No service may be made upon the defendant until the complaint isunsealed.

5. On the date the private plaintiff files hiscomplaint, he shall send a copy of the complaint to the Attorney General bymail with return receipt requested. He shall send with each copy of thecomplaint a written disclosure of substantially all material evidence andinformation he possesses.

(Added to NRS by 1999, 825, 826)

NRS 357.090 Actionbased on information public employee discovered during public employmentprohibited in certain circumstances. No actionmay be maintained pursuant to NRS 357.080that is based upon information discovered by a present or former employee ofthe State or a political subdivision during his employment, unless he first ingood faith exhausted internal procedures for reporting and seeking recovery ofthe proceeds of the fraudulent activity through official channels and the Stateor political subdivision failed to act on the information provided for at least6 months.

(Added to NRS by 1999, 828)

NRS 357.100 Actionbased upon certain public disclosures may only be brought by Attorney Generalor original source of information.

1. No action may be maintained pursuant to thischapter that is based upon the public disclosure of allegations or transactionsin a criminal, civil or administrative hearing, in an investigation, report,hearing or audit conducted by or at the request of a house of the Legislature,an auditor or the governing body of a political subdivision, or from the newsmedia, unless the action is brought by the Attorney General or an originalsource of the information.

2. As used in this section, original source means aperson:

(a) Who has direct and independent knowledge of theinformation on which the allegations were based;

(b) Who voluntarily provided the information to theState or political subdivision before bringing an action based on theinformation; and

(c) Whose information provided the basis or caused themaking of the investigation, hearing, audit or report that led to the publicdisclosure.

(Added to NRS by 1999, 828)

NRS 357.110 AttorneyGeneral may elect to intervene in action by private plaintiff; motion to extendtime for election; unsealing of complaint.

1. Within 120 days after receiving a complaint anddisclosure, the Attorney General may intervene and proceed with the action orhe may, for good cause shown, move the court to extend the time for hiselection whether to proceed. The motion may be supported by affidavits or othersubmissions in chambers.

2. If the Attorney General elects to intervene, thecomplaint must be unsealed. If the Attorney General elects not to intervene,the private plaintiff may proceed and the complaint must be unsealed.

(Added to NRS by 1999, 826)

NRS 357.120 Effectof intervention of Attorney General in action by private plaintiff; motion todismiss; settlement.

1. If the Attorney General intervenes, the privateplaintiff remains a party to an action pursuant to NRS 357.080.

2. The Attorney General may move to dismiss the actionfor good cause. The private plaintiff must be notified of the filing of themotion and is entitled to oppose it and present evidence at the hearing.

3. Except as otherwise provided in this subsection,the Attorney General may settle the action. If the Attorney General intends tosettle the action, he shall notify the private plaintiff of that fact. Upon therequest of the private plaintiff, the court shall determine whether settlementof the action is consistent with the public purposes of this chapter and shallnot approve the settlement of the action unless it determines that suchsettlement is consistent with the public purposes of this chapter.

(Added to NRS by 1999, 826)

NRS 357.130 Effectof declination of Attorney General to intervene in action by private plaintiff;authority for and effect of election by Attorney General to intervenesubsequently in such action.

1. If the Attorney General elects not to intervene inan action pursuant to NRS 357.080, theprivate plaintiff has the same rights in conducting the action as the AttorneyGeneral would have had. A copy of each pleading or other paper filed in theaction, and a copy of the transcript of each deposition taken, must be mailedto the Attorney General if the Attorney General so requests and pays the costthereof.

2. Upon timely application, the Attorney General mayintervene in an action in which he has previously declined to intervene, if theinterest of the State or a political subdivision in recovery of the money orproperty involved is not being adequately represented by the private plaintiff.

3. If the Attorney General so intervenes, the privateplaintiff retains primary responsibility for conducting the action and anyrecovery must be apportioned as if the Attorney General had not intervened.

(Added to NRS by 1999, 826)

NRS 357.140 Responseby defendant. The defendant is entitled to 30days in which to respond after a complaint filed pursuant to NRS 357.080 is unsealed and served uponhim.

(Added to NRS by 1999, 826)

NRS 357.150 Stayof discovery by private plaintiff; extension.

1. The court may stay discovery by a private plaintifffor not more than 60 days if the Attorney General shows that the proposeddiscovery would interfere with the investigation or prosecution of a civil orcriminal matter arising out of the same facts, whether or not the AttorneyGeneral participates in the action.

2. The court may extend the stay upon a furthershowing that the Attorney General has pursued the civil or criminalinvestigation or proceeding with reasonable diligence and the proposed discoverywould interfere with its continuation. Discovery may not be stayed for a totalof more than 6 months over the objection of the private plaintiff, except forgood cause shown by the Attorney General.

3. A showing made pursuant to this section must bemade in chambers.

(Added to NRS by 1999, 828)

NRS 357.160 Court-imposedlimitation upon participation of private plaintiff in action. Upon a showing by the Attorney General that unrestrictedparticipation by a private plaintiff would interfere with or unduly delay theconduct of an action, or would be repetitious, irrelevant or solely forharassment, the court may limit his participation by, among other measures,limiting:

1. The number of witnesses he may call;

2. The length of the testimony of the witnesses; or

3. His cross-examination of witnesses.

(Added to NRS by 1999, 828)

NRS 357.170 Limitationof actions; standard of proof; effect of certain findings of guilt in criminalproceeding on action.

1. An action pursuant to this chapter may not becommenced more than 3 years after the date of discovery of the fraudulentactivity by the Attorney General or more than 5 years after the fraudulentactivity occurred, whichever is earlier. Within those limits, an action may bebased upon fraudulent activity that occurred before October 1, 1999.

2. In an action pursuant to this chapter, the standardof proof is a preponderance of the evidence. A finding of guilt in a criminalproceeding charging false statement or fraud, whether upon a verdict of guiltyor a plea of guilty or nolo contendere, estops the person found guilty fromdenying an essential element of that offense in an action pursuant to thischapter based upon the same transaction as the criminal proceeding.

(Added to NRS by 1999, 829)

NRS 357.180 Awardof expenses and attorneys fees.

1. If the Attorney General or a private plaintiffprevails in or settles an action pursuant to NRS357.080, the private plaintiff is entitled to a reasonable amount forexpenses that the court finds were necessarily incurred, including reasonablecosts, attorneys fees and the fees of expert consultants and expert witnesses.Those expenses must be awarded against the defendant, and may not be allowed againstthe State or a political subdivision.

2. If the defendant prevails in the action, the courtmay award him reasonable expenses and attorneys fees against the party orparties who participated in the action if it finds that the action was clearlyfrivolous or vexatious or brought solely for harassment.

(Added to NRS by 1999, 828)

DISTRIBUTION OF RECOVERY

NRS 357.190 Recoverydefined. As used in NRS 357.190 to 357.230, inclusive, recovery includescivil penalties and does not include any allowance of expenses or attorneysfees.

(Added to NRS by 1999, 827)

NRS 357.200 Distributionto special account in State General Fund if Attorney General initiated action. If the Attorney General initiates an action pursuant tothis chapter, 33 percent of any recovery must be paid into the State GeneralFund to the credit of a special account, for use by the Attorney General asappropriated or authorized by the Legislature in the investigation andprosecution of false claims.

(Added to NRS by 1999, 827)

NRS 357.210 Distributionto private plaintiff in certain actions.

1. If the Attorney General intervenes at the outset inan action pursuant to NRS 357.080, theprivate plaintiff is entitled, except as otherwise provided in NRS 357.220, to receive not less than 15percent or more than 33 percent of any recovery, according to the extent of hiscontribution to the conduct of the action.

2. If the Attorney General does not intervene in theaction at the outset, the private plaintiff is entitled, except as otherwiseprovided in NRS 357.220, to receive notless than 25 percent or more than 50 percent of any recovery, as the courtdetermines to be reasonable.

(Added to NRS by 1999, 827)

NRS 357.220 Distributionto private plaintiff in action based upon information obtained by publicemployee during public employment.

1. If the action is one described in NRS 357.090, the present or former employeeof the State or political subdivision is not entitled to any minimum percentageof any recovery, but the court may award him no more than 33 percent of the recoveryif the Attorney General intervenes in the action at the outset, or no more than50 percent if the Attorney General does not intervene, according to thesignificance of his information, the extent of his contribution to the conductof the action and the response to his efforts to report the false claim andgain recovery through other official channels.

2. If the private plaintiff is a present or formeremployee of the State or a political subdivision and benefited financially fromthe fraudulent activity, he is not entitled to any minimum percentage of anyrecovery, but the court may award him no more than 33 percent of the recoveryif the Attorney General intervenes in the action at the outset, or no more than50 percent if the Attorney General does not intervene, according to thesignificance of his information, the extent of his contribution to the conductof the action, the extent of his involvement in the fraudulent activity, hisattempts to avoid or resist the activity and the other circumstances of theactivity.

(Added to NRS by 1999, 827)

NRS 357.230 Distributionof unapportioned portion to general fund of State or political subdivision, orboth. The portion of any recovery not apportionedpursuant to NRS 357.200, 357.210 and 357.220 must be paid into the State GeneralFund if the money, property or services were provided only by the State, orinto the general fund of the political subdivision if they were provided onlyby a political subdivision. If the action involved both the State and apolitical subdivision, the court shall apportion the remaining portion of anyrecovery between them according to the respective values of the money, propertyor services provided by each.

(Added to NRS by 1999, 827)

MISCELLANEOUS PROVISIONS

NRS 357.240 Employerprohibited from forbidding employee from making certain disclosures or actingin furtherance of action relating to false claim and from taking anyretaliatory action against employee for such disclosures or actions.

1. An employer shall not adopt or enforce any rule orpolicy forbidding an employee to disclose information to the State, a politicalsubdivision or a law enforcement agency or to act in furtherance of an actionpursuant to this chapter, including investigation for, bringing or testifyingin such an action.

2. An employer shall not discharge, demote, suspend,threaten, harass, deny promotion to or otherwise discriminate against an employeein the terms or conditions of his employment because of lawful acts done by himon his own behalf or on behalf of others in disclosing information to theState, a political subdivision or a law enforcement agency in furtherance of anaction pursuant to this chapter, including investigation for, bringing ortestifying in such an action.

(Added to NRS by 1999, 829)

NRS 357.250 Liabilityof employer for violations of NRS 357.240; entitlement of employee toremedies.

1. An employer who violates subsection 2 of NRS 357.240 is liable to the affectedemployee in a civil action for all relief necessary to make him whole, including,without limitation, reinstatement with the same seniority as if thediscrimination had not occurred or damages in lieu of reinstatement ifappropriate, twice the amount of lost compensation, interest on the lostcompensation, any special damage sustained as a result of the discriminationand punitive damages if appropriate. The employer is also liable for expensesrecoverable pursuant to NRS 357.180,costs and attorneys fees.

2. An employee is entitled to the remedies provided insubsection 1 only if:

(a) He voluntarily disclosed information to the Stateor a political subdivision or voluntarily acted in furtherance of an actionpursuant to this chapter; and

(b) He was harassed, threatened with termination ordemotion, or otherwise coerced by his employer into any participation infraudulent activity.

(Added to NRS by 1999, 829)

 

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