Georgia Taxpayer Protection False Claims Act
The Georgia Taxpayer Protection False Claims Act (GTPFCA) went into effect on July 1, 2012. The GTPFCA models the federal FCA, but also contains some provisions that are unique. - —Liability and Damages Provisions - The liability and damages provisions under the GTPFCA are similar to those under the federal FCA. For example, an individual will be liable for knowingly presenting or causing the presentation of a false or fraudulent claim for payment or approval, or...
knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim. Similar to the federal FCA, the GTPFCA explicitly excludes false tax claims. Also like the federal FCA, the GTPFCA exempts claims involving money or property that the government has paid to a state or local government employee as compensation or as an income subsidy without any restrictions on its use. The GTPFCA and the federal FCA, unlike the Georgia False Medicaid Claims Act, are not restricted to only false or fraudulent Medicaid claims.
The damages provision in the GTPFCA is similar to the statutory language of the federal FCA and allows for treble damages and civil penalties ranging from $5,500 to $11,000 per claim. In addition, the GTPFCA follows the federal act and provides for the reduction of liability to twice the damages the state incurred if the defendant voluntarily discloses the violations within thirty days of obtaining the information, if there is no criminal, civil, or administrative action yet taken on the violation, and if the defendant cooperates with the investigation.
[a]—General Procedural Provisions
Unlike its federal counterpart, the Georgia statute states that a civil suit brought by a private person on behalf of the state requires written approval from the Attorney General. However, several of the other procedural provisions in the GTPFCA are the same as in the federal statute, including the sixty-day sealing requirement and the state’s right to request an extension of the seal upon a showing of good cause; the required written disclosure to the state of all material evidence in the relator’s possession; the state’s primary responsibility for litigating the action if it chooses to intervene and the right to limit the relator’s participation; and the state’s right to dismiss the case over the objection of the relator, as long as the state notifies the relator and provides an opportunity for a hearing. The government also has a right to settle the case despite the relator’s objections as long as the court determines that the settlement is “fair, adequate, and reasonable under all circumstances.” If the government declines to intervene, the relator may proceed with the litigation. The state can still intervene at a later date upon a showing of good cause.
The GTPFCA, like the federal FCA, provides that the state or person bringing the suit must prove all the elements of the cause of action, including damages, by a preponderance of the evidence. Also, like the federal FCA, the state may explicitly request a stay of proceedings if discovery would interfere with the investigation of a criminal matter arising from the same facts. The state may request an extension of the stay if it can show that it has pursued the matter with reasonable diligence. In addition, both the federal FCA and the GTPFCA provide that, if a final judgment was rendered in favor of the government in a criminal proceeding, the defendant is estopped from denying the essential elements of the offense in any action brought pursuant to the statute that involves the same transactions.
[b]— Statute of Limitations
The GTPFCA provides the same limitations period as its federal counterpart. Both statutes provide that an action must be brought within six years after a violation of the statute occurred or three years from the date when the state knew or reasonably should have known of material facts of the violation, but not later than ten years after the violation was committed. Also, like the post-FERA federal FCA, the GTPFCA allows the state’s pleading to relate back to the filing date of the relator’s complaint for statute of limitations purposes if the state decides to intervene.
—Jurisdictional Bars to Actions
[a]—First to File Bar and Bar Against Members of Legislative, Executive or Judicial Branches
Like its federal counterpart, the GTPFCA provides jurisdictional bars to certain qui tam actions. The GTPFCA contains a first to file bar and a bar against actions based on transactions or allegations that are the subject of another civil or administrative proceeding to which the government is already a party. However, the GTPFCA differs from the federal FCA in that the federal FCA contains a bar prohibiting actions against members of the judicial, executive and legislative branches, while the GTPFCA contains a bar against only against members of the General Assembly or members of the judiciary.
[b]—Public Disclosure Bar
The GTPFCA also contains a public disclosure bar that is similar to the federal FCA. The GTPFCA prohibits a relator from bringing an action if it contains the same substantial allegations or transactions which were publicly disclosed
“(A) In a state criminal, civil, or administrative hearing in which the state or local government or its agent is a party;
(B) In a state or local government legislative or other state or 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 4 of Chapter 18 of Title 50, the federal Freedom of Information Act, 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; or
(C) From 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, unless the action is brought by the Attorney General or local government, or the person bringing the action is an original source of the information..”
The GTPFCA states that, in order to be an “original source,” the relator must have either 1) voluntarily disclosed the information to the state prior to the public disclosure or 2) have independent knowledge which materially adds to the publicly disclosed information and which the relator voluntarily provided to the state before filing the action. This is similar to the federal FCA language, which was amended in 2010 by the Patient Protection and Affordable Care Act (“the Affordable Care Act”).
The previous version of the federal FCA required an original source to have “direct and independent knowledge.” In the amended version of the federal statute, the definition of “original source” was changed and now allows a person to qualify as an “original source” if that person discloses the information to the government before the public disclosure is made or if they have “knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions.” Also, in the amended version of the federal FCA, the court can only dismiss an action based upon a public disclosure if the government does not oppose the dismissal. In addition, qui tam actions based on public disclosures made in non-governmental civil litigation are not barred in the amended version of the federal statute. The state statute mirrors these changes.
[c]—Additional Jurisdictional Bars
The GTPFCA, unlike the federal FCA, prohibits a public employee or public official from bringing an action under this statute if the allegations are substantially based upon 1) allegations of wrongdoing or misconduct which such person had a duty or obligation to report or investigate within the scope of his or her public employment or office, or 2) information or records to which such person had access as a result of his or her public employment or office.
The GTPFCA, like its federal counterpart, protects whistleblowers from retaliation by their employers. The damages recoverable under the state statute are almost identical to those recoverable under the federal FCA. Damages include reinstatement with the same seniority status and all damages necessary to make the employee whole, such as double the amount of back pay, interest on the back pay, and special damages, including litigation costs and reasonable attorney’s fees.
The relator’s recovery under the GTPFCA is identical to the relator’s recovery under the federal FCA. If the state decides to intervene on an action, the relator is entitled to fifteen to twenty-five percent of the proceeds. If the state declines to intervene, the relator is entitled to twenty-five to thirty percent of the proceeds. The statute also allows for a recovery of reasonable attorney’s fees and costs. Like the federal FCA, the statute allows for a reduction of the award to not more than ten percent of the proceeds if the suit is based upon public disclosure and the relator is an original source. Both statutes also allow a reduction of the award if the relator “planned and initiated” the violation. If the relator is convicted of criminal conduct due to his role in the fraud, the relator shall be dismissed from the civil action and will not share in the proceeds. The GTPFCA allows a successful defendant to recover reasonable attorney’s fees and expenses if the suit was filed for purposes of harassment or if the suit was clearly frivolous or vexatious. However, the state is not liable for expenses incurred by a party in an action.
1. Author of treatise, Federal False Claims Act and Qui Tam Litigation, Law Journal Press (2010), research source of the issues discussed in this article.
2. Ga. Code Ann. §§ 23-3-120 to 23-3-127. Georgia Taxpayer Protection False Claims Act.
3. 31 U.S.C. §§ 3729- 3733. Federal False Claims Act.
4. Ga. Code Ann. § 23-3-121(a).
6. Ga. Code Ann. § 23-3-121(e). See also 31 U.S.C. § 3729(d).
7. Ga. Code Ann. § 23-3-120. See also 31 U.S.C. § 3729(b)(2)(B).
8. Ga. Code Ann. §§ 23-3-120 & 23-3-121(a). See also 31 U.S.C. § 3729. Compare Ga. Code Ann. §§ 49-4-168(1) & 49-4-168.1(a).
9. Ga. Code Ann. § 23-3-121(a). Compare 31 U.S.C. § 3729(a). The civil penalties under the federal FCA have now been raised to $5,500 and $11,000 to account for inflation. See Chapter 4, supra, for further discussion of this issue.
10. Ga. Code Ann. § 23-3-121(b).
11. Ga. Code Ann. § 23-3-122(b)(1). Compare 31 U.S.C. § 3730(b)(1).
12. Ga. Code Ann. §§ 23-3-122(b)(2)-(3).
13. Ga. Code Ann. § 23-3-122(b)(2).
14. Ga. Code Ann. §§ 23-3-122(c)(1) & (4).
15. Ga. Code Ann. § 23-3-122(c)(2).
16. Ga. Code Ann. § 23-3-122(c)(3).
17. Ga. Code Ann. § 23-3-122(e).
19. Ga. Code Ann. § 23-3-123(e). Compare 31 U.S.C. § 3731(d). The federal FCA states only that the “United States” must prove all elements by a preponderance of the evidence.
20. Ga. Code Ann. § 23-3-122(f). See also 31 U.S.C. 3730(c)(4).
22. Ga. Code Ann. § 23-3-123(f). See also 31 U.S.C. § 3731(e).
23. Ga. Code Ann. § 23-3-123(a). See also 31 U.S.C. § 3731(b).
25. Fraud Recovery and Enforcement Act, Pub. L. No. 111-21. § 4, 123 Stat. 1623 (May 20, 2009).
26. Ga. Code Ann. § 23-3-123(d). See also 31 U.S.C. § 3731(c).
27. Ga. Code Ann. § 23-3-122(b)(5).
28. Ga. Code Ann. § 23-3-122(j)(2).
29. Ga. Code Ann. § 23-3-122(j)(1). Compare 31 U.S.C. § 3730(e)(2).
30. Ga. Code Ann. § 23-3-122(j)(3).
31. Ga. Code Ann. § 23-3-122(j)(3)(C).
32. 31 U.S.C. § 3730(e)(4)(B).
33. Patient Protection and Affordable Care Act (“the Affordable Care Act”), Pub. L. No. 111-148, 124 Stat. 119 (March 23, 2010).
34. Pub. L. No. 111-148, § 1303(j)(2), 124 Stat. 119 (March 23, 2010), amending 31 U.S.C. § 3730(e)(4).
36. Id. Actions based on public disclosures are only barred if they are made in a criminal, civil, or administrative hearing in which the government is a party
37. Ga. Code Ann. § 23-3-122(j).
38. Ga. Code Ann. § 23-3-122(i).
39. Ga. Code Ann. § 23-3-122 (l).
40. Ga. Code Ann. § 23-3-122 (l)(2).
41. Ga. Code Ann. § 23-3-122(h)(1).
42. Ga. Code Ann. § 23-3-122(h)(2).
43. Ga. Code Ann. §§ 23-3-122(h)(1)-(2).
44. Ga. Code Ann. § 23-3-122(h)(1).
45. Ga. Code Ann. § 23-3-122(h)(3).
47. Ga. Code Ann. § 23-3-122(h)(4).
48. Ga. Code Ann. § 23-3-122(k).
ABOUT THE AUTHOR: By: Joel M. Androphy, Rachel Grier, and Nisha Ghosh
Qui Tam Attorney, Joel Androphy, discusses the growing use of civil discovery to reveal the identity of the informers in related criminal cases.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.