Governor O’Malley Signs the Maryland False Health Care Claims Act of 2010

April 30, 2010

On April 13, 2010, the Maryland False Health Claims Act of 2010 (SB 279) was signed into law by Governor O’Malley.  The Act prohibits a person from knowingly presenting or causing to be presented a false or fraudulent claim for payment or approval to a State health plan or program and creates a right of action against those who submit a false claim.  The Act also creates robust protections for whistleblowers.  Below is a summary of the Act which is to be codified from section 2-601 to section 2-611 of the Annotated Code of Maryland.

• A person may not knowingly present or cause to be presented a false or fraudulent claim for payment or approval.  The concealment or improper reduction of a debt owed to the State (also known as a reverse false claim) is prohibited as well.  Violators are subject to a fine of up to $10,000 and may be liable for up to three times the damages sustained by the State, and in no event, less than the loss suffered by the State.

• An individual may file a civil action on behalf of the State seeking any damages permitted by law as well as costs and attorney’s fees.  An action filed by an individual shall remain under seal for at least 60 days, during which the State shall investigate the claim and may elect to intervene.  If the State declines to intervene, the court must dismiss the case.

• If the State intervenes in a civil action brought by an individual, the State will have the primary responsibility for proceeding with the action and may withdraw from the action at anytime.  If the State withdraws, the court must dismiss the case.

• If the State proceeds with an action and prevails, the person who initiated the action shall be awarded an amount between 15 and 25% of the proceeds of the action.  However, if the court finds that the action is based upon publicly available information, the award is limited to 10% unless the individual is an original source.  Courts do not have jurisdiction to hear claims brought by an individual who is not an original source, though the State may still pursue the action independently. 

• Retaliation against any employee, contractor, or grantee is prohibited.  Protected conduct includes: any lawful act taken in furtherance of the Act; objections to reasonably suspected violations; participation in any action brought under the Act; and any actual or threatened disclosure of information which the whistleblower reasonably believes evidences a violation of the Act.  Prohibited retaliation includes discharging, suspending, demoting, threatening, harassing, discriminating against, or taking any other adverse action relating to the conditions of employment, contract, or agency.  

• Whistleblowers suffering retaliation may file a civil action seeking injunctive relief including reinstatement and up to two times the amount of lost wages, benefits, and other remuneration, including interest.  Whistleblowers may also seek any other relief necessary to make them whole as well and punitive damages. 

For information about The Employment Law Group® law firm’s False Claims Act Practice, click here.

DC City Council Unanimously Approves the DC Whistleblower Protection Amendment Act of 2009

December 17, 2009

Monday, the DC Council approved the Whistleblower Protection Amendment Act of 2009, which strengthens the DC Whistleblower Protection Act (DC Code § 1-615.51 et seq.) and The Employees of District Contractors and Instrumentality Whistleblower Protection Act of 1998 (DC Code § 2-223.01 et seq.).  The Whistleblower Protection Amendment Act of 2009 eliminates loopholes in the existing DC statutes and provides critical enhancements, including the following:

• Clarifying that a whistleblower need not be an original source of a protected disclosure.  The legislative history states: “prospective whistleblowers should not have to guess about whether a supervisor already knows about misconduct in government.”

• Eliminating the “duty speech” loophole, i.e., protected conduct includes blowing the whistle in the course of performing one’s job duties.  Protected acts under the DC WPA include “disclosure[s] made in the ordinary course of an employee’s duties.”

• Clarifying that retaliatory investigations are a form of actionable retaliation.  The DC WPA now defines retaliation to include “conducting or causing to be conducted an investigation of an employee or applicant for employment because of a protected disclosure made by the employee or applicant who is a whistleblower.”  An investigation includes a fitness for duty examination.

• Extending the statute of limitations to 3 years and clarifying that § 12-309 (the pre-suit notice provision) does not apply to DC WPA claims.  Under the revised DC WPA, a “civil action shall be filed within 3 years after a violation occurs or within one year after the employee first becomes aware of the violation, whichever occurs first.”

• Clarifying that a DC WPA action can be brought against a DC supervisor or official having personal involvement in the prohibited personnel action.  “Any person” who is found to have participated in prohibited retaliation may be “subject to appropriate disciplinary action including dismissal.”

• Providing a financial incentive for whistleblowing.  In particular, a whistleblower may receive an award of up to $50,000 for providing information that enables the District to recover or prevent the loss of more than $100,000 in public funds.

• Increasing the civil penalty for retaliation from $1,000 to $10,000.

For information on The Employment Law Group® law firm’s Whistleblower Retaliation Practice.

TELG Client Wins over $282,000 Against UDC in Jury Trial

October 26, 2009

On October 22, 2009, a D.C. Superior Court awarded Colin Browne over $282,000 for his former employer’s violations of the D.C. Whistleblower Protection Act (WPA).  This is one of the highest awards under the D.C. WPA to date.  The award comes after a 5 day jury trial.  We first blogged about the verdict in Mr. Browne’s case here.

 Browne was the program coordinator for UDC’s federally funded Career Counseling and Development Center where he worked with UDC’s at-risk students.  He discovered that his supervisors were intentionally misrepresenting the program’s success to secure federal funding.  He took a stand against this fraud and in return he was retaliated against and ultimately fired. 

Regarding the verdict, R. Scott Oswald, Managing Principal with The Employment Law Group® law firm said, “This case is an extraordinary victory for whistleblower protection in the District of Columbia.  I especially wish to acknowledge Mr. Browne who demonstrated tremendous courage and fortitude throughout his tenure at UDC and the course of this litigation.”

For information on The Employment Law Group® law firm’s Whistleblower Practice, click here.

D.C. Whistleblower Wins Verdict Against UDC at Trial

October 08, 2009

On October 6, 2009, a jury in the District of Columbia decided in favor of D.C. Whistleblower Colin Browne in the case of Browne v. University of District of Columbia.  In the suit, Colin Browne alleged that his former employer, the University of the District of Columbia (UDC) violated the D.C. Whistleblower Protection Act (WPA) when it retaliated against him for raising concerns that Kevin Naiker, the former Director of UDC’s at-risk program, and his supervisors were intentionally misreporting the retention rate of UDC’s program for at-risk students.  Despite Browne’s repeated disclosures to management, UDC’s Board of Trustees and even to the President of the University, UDC failed to respond.  Browne also discovered that Naiker was unlicensed and did not have a doctorate even though he represented to Browne and others that he was licensed, possessed a doctorate, and would supervise Browne for his licensure. Browne reported Naiker’s misrepresentations of his license status but UDC failed to take action.  Instead, Naiker began retaliating against Browne by “auditing” his files, berating him in front of co-workers, passing him up for promotion and ultimately terminating his employment.

The jury awarded Browne compensatory damages based on its finding that UDC violated the D.C. WPA and was liable for negligent hiring and negligent supervision of Naiker.  The court will hear evidence on Browne’s economic damages claim on October 22, 2009.

R. Scott Oswald and David Scher, Principals at The Employment Law Group® law firm (www.employmentlawgroup.com), represented Mr. Browne and can be reached at 202-331-2806 and 202-261-2802, respectively.

D.C. District Court Rejects Employer’s Attempt to Carve New Loopholes Into Whistleblower Protection Statutes

September 17, 2009

Affirming a jury’s finding that Mohammed Kakeh, a Controller for the United Planning Organization (“UPO”) was terminated for his refusal to engage in fraudulent billing and for providing information to the Office of Inspector General, Judge Kessler rejected several arguments by UPO that would undermine the statutory whistleblower protections under which Kakeh brought his claim, the D.C. Whistleblower Protection Act (“WPA”) and the retaliation provisions of the False Claims Act (“FCA”) and the D.C. False Claims Act (“DCFCA”).
 
Gross Does Not Apply to FCA Retaliation Claims
UPO argued that the Supreme Court’s recent holding in Gross v. FBL Fin. Svcs., Inc., 129 S. Ct. 2343 (2009) requires courts to apply a “but for” causation standard to the retaliation provisions in the Federal and D.C. False Claims Acts.  Judge Kessler held that Gross does not apply to FCA retaliation claims, distinguishing Gross in part on the ground that it is an ADEA case.  The “because of” causation standard in the text of the FCA’s retaliation provision has been construed as a “motivating factor” causation standard, i.e., plaintiff can prevail by demonstrating that the adverse action was motivated, at least in part, by the employee having engaging in protected activity.
 
The “Duty Speech” Doctrine Does Not Apply to FCA Retaliation Claims
UPO argued that Kakeh’s disclosures were not protected because they were made pursuant to his “regular job duties.”  Relying on U.S. ex rel. Yesudian v. Howard Univ., 153 F.3d 731, 736 (D.C. Cir. 1998), which sets forth a favorable standard of protected conduct under the FCA’s retaliation provision, Judge Kessler held that “an employee engages in protected activity when he discloses fraud and corruption, as opposed to making a ‘complaint about mere regulatory compliance’. . . Plaintiff  repeatedly stated that he believed that Defendant’s billing practices were fraudulent and . . . . consistently framed these differences as matters of fraud and ethics, rather than routine disagreements about regulatory compliance. Therefore there was sufficient evidence for a reasonable juror to conclude that Plaintiff was engaging in protected activity.”
 
Plaintiff Need Not Use “Magic Words” to Engage in Protected Conduct
Defendant argued that to be covered by the WPA, Plaintiff’s disclosures must use “the language or terminology of fraud, waste, or misuse.”  Judge Kessler concluded:  “As Plaintiff correctly states, however, Plaintiff was not obligated to use “magic words” to trigger the protections of the WPA. As the WPA indicates, a disclosure is protected if the employee “reasonably believes” that he is revealing a gross misuse of public funds or a violation of a law, rule, regulation, or contract term. D.C. Code 2-223.01(7).”
 
Disclosure of Public Information Can Constitute Protected Conduct
UPO asserted that plaintiff did not disclose to his supervisor any information that “was not already known as [sic] result of the prior year-end audit reports, Mr. Eboda’s preliminary report, the Head Start monitoring review and/or The Washington Post articles.”   Judge Kessler held that “[e]ven if this information was already public and even if Jones already had knowledge of it, Plaintiff was the one responsible for disclosing it in the first instance.”

California Governor Signs into Law New Whistleblower Protections for City and County Employees

October 03, 2008

On September 26, 2008, California Governor Arnold Schwarzenegger signed into law a new whistleblower protection bill to extend whistleblower protections to city and county employees who report waste, fraud and abuse of government funds.  The new law authorizes cities and counties to create and maintain whistleblower hotlines to receive calls from employees who have information regarding possible violations of state, federal or local statutes, rules or regulations.  The new law also requires city and county auditors and controllers to maintain the confidentiality of a whistleblower’s identity throughout the investigation process.