Washington State False Claims Act Update
In addition to the legislative action in Maryland this year, there is also good news from the Washington State legislature. At the request of Attorney General Bob Ferguson, Washington state legislators have introduced House Bill 1067, which aims to make the Washington State False Claims Act a permanent law.
Monitoring state FCA legislation is a fascinating way to see the “laboratories of democracy” at work. I didn’t realize when I previously covered the Washington State FCA that it was a temporary law, set to expire in 2016. To date, I cannot recall having ever heard of a state passing a temporary state false claims act. From time to time the feds might pass temporary non-FCA legislation, but I have never seen it in the state context.
Stranger still is that individual portions of the law seem to “sunset” as they call it. Most relevant for our example here is the fact that the qui tam portion of the law is scheduled to “sunset” in 2016. As regular readers know, is the qui tam provision of any false claims act that gives the law teeth because it is the qui tam provisions that allow an individual to file a claim — on their own behalf as well as on behalf of the state government — and share in the state’s recovery.
It is the qui tam provisions of a false claims act that cause insiders to come forward and share their personal, first-hand knowledge about fraud and false claims on the government. In addition to their personal, first-hand knowledge about the wrong doing, these folks also bring evidence and the resources and experience of their counsel to the table.
Without a qui tam provision, in other words, you might as well not even have a state FCA…but that is a topic for another day, and Washington State Attorney General Bob Ferguson seems to be savvy to the importance of qui tam whistleblowers.
Washington State Has Experienced Some Success With the FCA
I am happy to see that Washington State has enjoyed some success with their state FCA since it became law — an excellent article by Christopher Brewer reports that the state has recovered more than $5.7 million in the last two years.
That might seem modest at first blush, but think of it this way — the same Chronicle article reports that the Washington State FCA is enforced by a staff of 15 lawyers, which means that those 15 lawyers returned more than $380,000 each to the state’s treasury. Moreover, the Washington State FCA has only been law for a little over two years — with any new remedial legislation, it always takes a few years for enforcement to really gear-up.
In Virginia, the Fraud Against Taxpayers Act became law in 2002 but things really didn’t start to heat up until 2005 or so.
A Warning to Washington State — Beware of Lobbyists with Helpful Suggestions
It also seems that the usual suspects — principally the Chamber of Commerce, who are now the primary lobbying tool of the pharmaceutical industry — have surfaced in Washington state and are trying to undermine the state FCA. The Chronicle article reports that there “has been some blowback from lobbyists for the pharmaceutical industry and other industry lobbyists … who have expressed some concerns about technical details of that portion [i.e., the qui tam provision] of the act. ”
This is the standard approach of anti-FCA lobbyists nowadays. Once the anti-FCA lobbyists get the feeling the tides have turned and they are no longer fighting a winning fight — and they have clearly felt that way in Washington State this time around — they change their tune and are no longer overtly anti-false claims act. Instead, they suddenly become very much in favor of false claims act legislation, so long as it is done correctly.
And correctly, in their view, usually means killing the qui tam provisions, because those are the provisions they fear most. Just look at the testimony submitted by Chamber lobbyist David Ogden to the U.S. House of Representatives hearing Subcommittee on Civil Justice. He really said things like “I believe in the false claims act” and “The false claims act is the primary tool of the federal government to prevent fraud on the public fisc.”
And then he went on to make helpful suggestions about how to make the law “better” all of which were complete bunk…
So watch out Washington State, this dog-and-pony show is coming your way…