There Is a Newer Version of the New York Consolidated Laws
2012 New York Consolidated Laws
STF - State Finance
Article 13 - (187 - 194) NEW YORK FALSE CLAIMS ACT
190 - Civil actions for false claims.
NY State Fin L § 190 (2012) What's This?
§ 190. Civil actions for false claims. 1. Civil enforcement actions.
The attorney general shall have the authority to investigate violations
under section one hundred eighty-nine of this article. If the attorney
general believes that a person has violated or is violating such
section, then the attorney general may bring a civil action on behalf of
the people of the state of New York or on behalf of a local government
against such person. A local government also shall have the authority to
investigate violations that may have resulted in damages to such local
government under section one hundred eighty-nine of this article, and
may bring a civil action on its own behalf, or on behalf of any
subdivision of such local government, to recover damages sustained by
such local government as a result of such violations. No action may be
filed pursuant to this subdivision against the federal government, the
state or a local government, or any officer or employee thereof acting
in his or her official capacity. The attorney general shall consult with
the office of medicaid inspector general prior to filing any action
related to the medicaid program.
2. Qui tam civil actions. (a) Any person may bring a qui tam civil
action for a violation of section one hundred eighty-nine of this
article on behalf of the person and the people of the state of New York
or a local government. No action may be filed pursuant to this
subdivision against the federal government, the state or a local
government, or any officer or employee thereof acting in his or her
official capacity.
For purposes of subparagraphs (i) and (iv) of paragraph (a) of
subdivision eight of section seventy-three of the public officers law,
any activity by a former government employee in connection with the
securing of rights, protections or benefits related to preparing or
filing an action under this article shall not be deemed to be an
appearance or practice before any agency.
(b) A copy of the complaint and written disclosure of substantially
all material evidence and information the person possesses shall be
served on the state pursuant to subdivision one of section three hundred
seven of the civil practice law and rules. Any complaint filed in a
court of the state of New York shall be filed in supreme court in
camera, shall remain under seal for at least sixty days, and shall not
be served on the defendant until the court so orders. The seal shall not
preclude the attorney general, a local government, or the qui tam
plaintiff from serving the complaint, any other pleadings, or the
written disclosure of substantially all material evidence and
information possessed by the person bringing the action, on relevant
state or local government agencies, or on law enforcement authorities of
the state, a local government, or other jurisdictions, so that the
actions may be investigated or prosecuted, except that such seal applies
to the agencies or authorities so served to the same extent as the seal
applies to other parties in the action.
If the allegations in the complaint allege a violation of section one
hundred eighty-nine of this article involving damages to a local
government, then the attorney general may at any time provide a copy of
such complaint and written disclosure to the attorney for such local
government; provided, however, that if the allegations in the complaint
involve damages only to a city with a population of one million or more,
or only to the state and such a city, then the attorney general shall
provide such complaint and written disclosure to the corporation counsel
of such city within thirty days.
The state may elect to supersede or intervene and proceed with the
action, or to authorize a local government that may have sustained
damages to supersede or intervene, within sixty days after it receives
both the complaint and the material evidence and information; provided,
however, that if the allegations in the complaint involve damages only
to a city with a population of one million or more, then the attorney
general may not supersede or intervene in such action without the
consent of the corporation counsel of such city. The attorney general
shall consult with the office of the medicaid inspector general prior to
superseding or intervening in any action related to the medicaid
program. The attorney general may, for good cause shown, move the court
for extensions of the time during which the complaint remains under seal
under this subdivision. Any such motions may be supported by affidavits
or other submissions in camera.
(c) Prior to the expiration of the sixty day period or any extensions
obtained under paragraph (b) of this subdivision, the attorney general
shall notify the court that he or she:
(i) intends to file a complaint against the defendant on behalf of the
people of the state of New York or a local government, and thereby be
substituted as the plaintiff in the action and convert the action in all
respects from a qui tam civil action brought by a private person into a
civil enforcement action by the attorney general under subdivision one
of this section;
(ii) intends to intervene in such action, as of right, so as to aid
and assist the plaintiff in the action; or
(iii) if the action involves damages sustained by a local government,
intends to grant the local government permission to: (A) file and serve
a complaint against the defendant, and thereby be substituted as the
plaintiff in the action and convert the action in all respects from a
qui tam civil action brought by a private person into a civil
enforcement action by the local government under subdivision one of this
section; or (B) intervene in such action, as of right, so as to aid and
assist the plaintiff in the action.
The attorney general shall provide the local government with a copy of
any such notification at the same time the court is notified.
(d) If the state notifies the court that it intends to file a
complaint against the defendant and thereby be substituted as the
plaintiff in the action, or to permit a local government to do so, such
complaint must be filed within thirty days after the notification to the
court. For statute of limitations purposes, any such complaint filed by
the state or a local government shall relate back to the filing date of
the complaint of the qui tam plaintiff, to the extent that the cause of
action of the state or local government arises out of the conduct,
transactions, or occurrences set forth, or attempted to be set forth, in
the prior complaint of the qui tam plaintiff.
(e) If the state notifies the court that it intends to intervene in
the action, or to permit a local government to do so, then such motion
for intervention shall be filed within thirty days after the
notification to the court.
(f) If the state declines to participate in the action or to authorize
participation by a local government, the qui tam action may proceed
subject to judicial review under this section, the civil practice law
and rules, and other applicable law.
The qui tam plaintiff shall provide the state or any applicable local
government with a copy of any document filed with the court on or about
the date it is filed, or any order issued by the court on or about the
date it is issued. A qui tam plaintiff shall notify the state or any
applicable local government within five business days of any decision,
order or verdict resulting in judgment in favor of the state or local
government.
3. Time to answer. If the state decides to participate in a qui tam
action or to authorize the participation of a local government, the
court shall order that the qui tam complaint be unsealed and served at
the time of the filing of the complaint or intervention motion by the
state or local government. After the complaint is unsealed, or if a
complaint is filed by the state or a local government pursuant to
subdivision one of this section, the defendant shall be served with the
complaint and summons pursuant to article three of the civil practice
law and rules. A copy of any complaint which alleges that damages were
sustained by a local government shall also be served on such local
government. The defendant shall be required to respond to the summons
and complaint within the time allotted under rule three hundred twenty
of the civil practice law and rules.
4. Related actions. When a person brings a qui tam action under this
section, no person other than the attorney general, or a local
government attorney acting pursuant to subdivision one of this section
or paragraph (b) of subdivision two of this section, may intervene or
bring a related civil action based upon the facts underlying the pending
action, unless such other person has first obtained the permission of
the attorney general to intervene or to bring such related action;
provided, however, that nothing in this subdivision shall be deemed to
deny persons the right, upon leave of court, to file briefs amicus
curiae.
5. Rights of the parties of qui tam actions. (a) If the attorney
general elects to convert the qui tam civil action into an attorney
general enforcement action, then the state shall have the primary
responsibility for prosecuting the action. If the attorney general
elects to intervene in the qui tam civil action then the state and the
person who commenced the action, and any local government which
sustained damages and intervenes in the action, shall share primary
responsibility for prosecuting the action. If the attorney general
elects to permit a local government to convert the action into a civil
enforcement action, then the local government shall have primary
responsibility for investigating and prosecuting the action. If the
action involves damages to a local government but not the state, and the
local government intervenes in the qui tam civil action, then the local
government and the person who commenced the action shall share primary
responsibility for prosecuting the action. Under no circumstances shall
the state or a local government be bound by an act of the person
bringing the original action. Such person shall have the right to
continue as a party to the action, subject to the limitations set forth
in paragraph (b) of this subdivision. Under no circumstances shall the
state be bound by the act of a local government that intervenes in an
action involving damages to the state. If neither the attorney general
nor a local government intervenes in the qui tam action then the qui tam
plaintiff shall have the responsibility for prosecuting the action,
subject to the attorney general's right to intervene at a later date
upon a showing of good cause.
(b)(i) The state may move to dismiss the action notwithstanding the
objections of the person initiating the action if the person has been
served with the motion to dismiss and the court has provided the person
with an opportunity to be heard on the motion. If the action involves
damages to both the state and a local government, then the state shall
consult with such local government before moving to dismiss the action.
If the action involves damages sustained by a local government but not
the state, then the local government may move to dismiss the action
notwithstanding the objections of the person initiating the action if
the person has been served with the motion to dismiss and the court has
provided the person with an opportunity to be heard on the motion.
(ii) The state or a local government may settle the action with the
defendant notwithstanding the objections of the person initiating the
action if the court determines, after an opportunity to be heard, that
the proposed settlement is fair, adequate, and reasonable with respect
to all parties under all the circumstances. Upon a showing of good
cause, such opportunity to be heard may be held in camera.
(iii) Upon a showing by the attorney general or a local government
that the original plaintiff'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 the original qui tam plaintiff's
unrestricted participation during the course of the litigation would be
for purposes of harassment or would cause the defendant undue burden,
the court may, in its discretion, impose limitations on the original
plaintiff's participation in the case, such as:
(A) limiting the number of witnesses the person may call;
(B) limiting the length of the testimony of such witnesses;
(C) limiting the person's cross-examination of witnesses; or
(D) otherwise limiting the participation by the person in the
litigation.
(c) Notwithstanding any other provision of law, whether or not the
attorney general or a local government elects to supersede or intervene
in a qui tam civil action, the attorney general and such local
government may elect to pursue any remedy available with respect to the
criminal or civil prosecution of the presentation of false claims,
including any administrative proceeding to determine a civil money
penalty or to refer the matter to the office of the medicaid inspector
general for medicaid related matters. If any such alternate civil remedy
is pursued in another proceeding, the person initiating the action shall
have the same rights in such proceeding as such person would have had if
the action had continued under this section.
(d) Notwithstanding any other provision of law, whether or not the
attorney general elects to supersede or intervene in a qui tam civil
action, or to permit a local government to supersede or intervene in the
qui tam civil action, upon a showing by the state or local government
that certain actions of discovery by the person initiating the action
would interfere with the state's or a local government's investigation
or prosecution of a criminal or civil matter arising out of the same
facts, the court may stay such discovery for a period of not more than
sixty days. Such a showing shall be conducted in camera. The court may
extend the period of such stay upon a further showing in camera that the
state or a local government has pursued the criminal or civil
investigation or proceedings with reasonable diligence and any proposed
discovery in the civil action will interfere with the ongoing criminal
or civil investigation or proceedings.
6. Awards to qui tam plaintiff. (a) If the attorney general elects to
convert the qui tam civil action into an attorney general enforcement
action, or to permit a local government to convert the action into a
civil enforcement action by such local government, or if the attorney
general or a local government elects to intervene in the qui tam civil
action, then the person or persons who initiated the qui tam civil
action collectively shall be entitled to receive between fifteen and
twenty-five percent of the proceeds recovered in the action or in
settlement of the action. The court shall determine the percentage of
the proceeds to which a person commencing a qui tam civil action is
entitled, by considering the extent to which the plaintiff substantially
contributed to the prosecution of the action. Where the court finds that
the action was based primarily on disclosures of specific information
(other than information provided by the person bringing the action)
relating to 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, the court may
award such sums as it considers appropriate, but in no case more than
ten percent of the proceeds, taking into account the significance of the
information and the role of the person or persons bringing the action in
advancing the case to litigation.
(b) If the attorney general or a local government does not elect to
intervene or convert the action, and the action is successful, then the
person or persons who initiated the qui tam action which obtains
proceeds shall be entitled to receive between twenty-five and thirty
percent of the proceeds recovered in the action or settlement of the
action. The court shall determine the percentage of the proceeds to
which a person commencing a qui tam civil action is entitled, by
considering the extent to which the plaintiff substantially contributed
to the prosecution of the action.
(c) With the exception of a court award of costs, expenses or
attorneys' fees, any payment to a person pursuant to this paragraph
shall be made from the proceeds.
7. Costs, expenses, disbursements and attorneys' fees. In any action
brought pursuant to this article, the court may award the attorney
general, on behalf of the people of the state of New York, and any local
government that participates as a party in the action, and any person
who is a qui tam plaintiff, an amount for reasonable expenses which the
court finds to have been necessarily incurred, plus reasonable
attorneys' fees, plus costs pursuant to article eighty-one of the civil
practice law and rules. All such expenses, 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 state or a local government
or the qui tam civil action plaintiff prevails in the action.
8. Exclusion from recovery. If the court finds that the qui tam civil
action was brought by a person who planned or initiated the violation of
section one hundred eighty-nine of this article upon which the action
was brought, then the court may, to the extent the court considers
appropriate, reduce the share of the proceeds of the action which the
person would otherwise be entitled to receive under subdivision six of
this section, taking into account the role of such person in advancing
the case to litigation and any relevant circumstances pertaining to the
violation. If the person bringing the qui tam civil action is convicted
of criminal conduct arising from his or her role in the violation of
section one hundred eighty-nine of this article, that person shall be
dismissed from the qui tam civil action and shall not receive any share
of the proceeds of the action. Such dismissal shall not prejudice the
right of the attorney general to supersede or intervene in such action
and to civilly prosecute the same on behalf of the state or a local
government.
9. Certain actions barred. (a) The court shall dismiss a qui tam
action under this article if:
(i) it is based on allegations or transactions which are the subject
of a pending civil action or an administrative action in which the state
or a local government is already a party;
(ii) the state or local government has reached a binding settlement or
other agreement with the person who violated section one hundred
eighty-nine of this article resolving the matter and such agreement has
been approved in writing by the attorney general, or by the applicable
local government attorney; or
(iii) against a member of the legislature, a member of the judiciary,
or a senior executive branch official if the action is based on evidence
or information known to the state when the action was brought.
(b) The court shall dismiss a qui tam action under this article,
unless opposed by the state or an applicable local government, or unless
the qui tam plaintiff is an original source of the information, if
substantially the same allegations or transactions as alleged in the
action were publicly disclosed:
(i) in a state or local government criminal, civil, or administrative
hearing in which the state or a local government or its agent is a
party;
(ii) in a federal, New York state or New York local government report,
hearing, audit, or investigation that is made on the public record or
disseminated broadly to the general public; provided that such
information shall not be deemed "publicly disclosed" in a report or
investigation because it was disclosed or provided pursuant to article
six of the public officers law, or under any other federal, state or
local law, rule or program enabling the public to request, receive or
view documents or information in the possession of public officials or
public agencies;
(iii) in the news media, provided that such allegations or
transactions are not "publicly disclosed" in the "news media" merely
because information of allegations or transactions have been posted on
the internet or on a computer network.
10. Liability. Neither the state nor any local government shall be
liable for any expenses which any person incurs in bringing a qui tam
civil action under this article.
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