PRIOR PRINTER'S NO. 2088 PRINTER'S NO. 3508
No. 1671 Session of 1997
INTRODUCED BY KENNEY, LYNCH, J. TAYLOR, GEIST, WOGAN, FICHTER,
DeLUCA, CLARK, COY, GODSHALL, BUNT, MELIO, SATHER, BROWNE,
RAMOS, YOUNGBLOOD, HENNESSEY, RAYMOND, LEH, E. Z. TAYLOR,
FARGO, KELLER, TRELLO, SHANER, GIGLIOTTI, McGEEHAN, SAINATO,
COLAFELLA, CIVERA, SAYLOR, BOSCOLA, THOMAS, BENNINGHOFF AND
BARD, JUNE 16, 1997
AS AMENDED, COMMITTEE ON JUDICIARY, HOUSE OF REPRESENTATIVES,
APRIL 28, 1998
AN ACT
1 Prohibiting false claims; imposing duties on the Attorney
2 General and on district attorneys; and providing for
3 procedures and for penalties.
4 TABLE OF CONTENTS
5 Chapter 1. Preliminary Provisions
6 Section 101. Short title.
7 Section 102. Definitions.
8 Section 103. Construction.
9 Chapter 3. False Claims
10 Section 301. Offenses defined.
11 Section 302. False claims jurisdiction.
12 Section 303. Procedure.
13 Chapter 5. Qui Tam Actions
14 Section 501. Definitions.
15 Section 502. General provisions.
16 Section 503. Commonwealth funds.
1 Section 504. Political subdivision funds.
2 Section 505. Complaints relating to Commonwealth and political
3 subdivision funds.
4 Section 506. Intervention by political subdivision.
5 Section 507. Extension of time.
6 Section 508. Other actions prohibited.
7 Section 509. Exclusions.
8 Section 510. Employment-related discovery of information.
9 Section 511. Responsibility for prosecution.
10 Section 512. Dismissal of action.
11 Section 513. Settlement.
12 Section 514. Election not to proceed.
13 Section 515. Intervention.
14 Section 516. Proceeds.
15 Section 517. Reversion to General Fund.
16 Section 518. Expenses.
17 Chapter 7. General Provisions
18 Section 701. Stay of discovery.
19 Section 702. Limitations on participation.
20 Section 703. Employee protection.
21 Section 704. Limitations.
22 Section 705. Remedies.
23 Section 706. Enforcement.
24 Section 707. Civil investigative demand.
25 Section 708. Immunity.
26 Section 709. Effective date.
27 The General Assembly of the Commonwealth of Pennsylvania
28 hereby enacts as follows:
29 CHAPTER 1
30 PRELIMINARY PROVISIONS
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1 Section 101. Short title.
2 This act shall be known and may be cited as the False Claims
3 Act.
4 Section 102. Definitions.
5 The following words and phrases when used in this act shall
6 have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 "Claim." Any request or demand for money, property or
9 services made to any employee, officer or agent of the
10 Commonwealth or of any political subdivision thereof or to any
11 contractor, grantee or other recipient, whether under contract <--
12 CONTRACTOR, SUBCONTRACTOR, GRANTEE OR OTHER RECIPIENT OF THE <--
13 COMMONWEALTH OR ANY POLITICAL SUBDIVISION THEREOF, WHETHER UNDER
14 CONTRACT or not, if any portion of the money, property or
15 services requested or demanded issued from or was provided, WAS <--
16 PROVIDED OR WILL BE REIMBURSED by the Commonwealth, referred to
17 as Commonwealth funds, or by any political subdivision thereof,
18 referred to as political subdivision funds.
19 "FALSE." IN ADDITION TO ITS ORDINARY MEANING, THIS TERM ALSO <--
20 MEANS FRAUDULENT.
21 "Knowing" or "knowingly." A person who, with respect to
22 information, does any of the following:
23 (1) Has actual knowledge of the information. <--
24 (2) Acts in deliberate ignorance of the truth or falsity
25 of the information. Proof of specific intent to defraud is
26 not required.
27 (1) HAS ACTUAL KNOWLEDGE OF THE INFORMATION; <--
28 (2) ACTS IN DELIBERATE IGNORANCE OF THE TRUTH OR FALSITY
29 OF THE INFORMATION; OR
30 (3) ACTS IN RECKLESS DISREGARD OF THE TRUTH OR FALSITY
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1 OF THE INFORMATION.
2 PROOF OF SPECIFIC INTENT TO DEFRAUD SHALL NOT BE REQUIRED.
3 "Person." Any natural person, corporation, county, political
4 subdivision, firm, association, legal entity, organization,
5 partnership, business or trust.
6 "Political subdivision." Any city, county, tax or assessment
7 district, MUNICIPAL OR GOVERNMENT AUTHORITY or other legally <--
8 authorized local governmental entity in this Commonwealth with <--
9 jurisdictional boundaries.
10 "Prosecuting authority." The Attorney General and WHERE <--
11 APPROPRIATE UNDER SECTION 3, the district attorney of any county
12 charged with investigating, filing and conducting legal
13 proceedings.
14 Section 103. Construction.
15 This act shall be liberally and broadly construed to
16 effectuate its purposes. It shall be applied and interpreted to
17 promote the public interest in eliminating fraud, waste and
18 abuse through the submission of false or fraudulent claims in
19 this Commonwealth or in any of its political subdivisions.
20 CHAPTER 3
21 FALSE CLAIMS
22 Section 301. Offenses defined.
23 (a) Liability.--A person who commits any of the following
24 acts shall be liable to the Commonwealth or to the political
25 subdivision for three times the amount of damages which the
26 Commonwealth or the political subdivision sustains because of
27 the act of that person and shall also be liable to the
28 Commonwealth or to the political subdivision for the costs of a
29 civil action brought to recover any of those penalties or
30 damages and shall be liable to the Commonwealth or political
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1 subdivision for a civil penalty of not less than $5,000 nor more
2 than $10,000 for each false claim:
3 (1) Knowingly presents or causes to be presented to an
4 officer or employee of the Commonwealth or any political
5 subdivision a false claim for payment or approval.
6 (2) Knowingly makes, uses or causes to be made or used a
7 false record or statement to collect a false claim or secure <--
8 approval for a claim from the Commonwealth or from any GET A <--
9 FALSE CLAIM PAID OR APPROVED BY THE COMMONWEALTH OR BY ANY
10 political subdivision.
11 (3) Conspires to defraud the Commonwealth or any
12 political subdivision by collecting GETTING a false claim <--
13 allowed or paid by the Commonwealth or by any political
14 subdivision.
15 (4) Has possession, custody or control of public
16 property or money used or to be used by the Commonwealth or
17 by any political subdivision and knowingly delivers or causes
18 to be delivered less property than the amount PROPERTY OR <--
19 LESSER QUALITY, QUANTITY OR VALUE THAN for which the person
20 receives a certificate or receipt.
21 (5) Is authorized to make or deliver a document
22 certifying receipt of property used or to be used by the
23 Commonwealth or by any political subdivision and knowingly
24 makes or delivers a receipt that falsely represents the
25 QUALITY, QUANTITY OR VALUE OF THE property used or to be <--
26 used.
27 (6) Knowingly buys or receives as a pledge of an
28 obligation or debt public property from any person who
29 lawfully may not sell or pledge the property.
30 (7) Knowingly makes, uses or causes to be made or used a
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1 false record or statement to conceal, avoid or decrease an
2 obligation to pay or transmit money or property to the
3 Commonwealth or any political subdivision.
4 (8) Is a beneficiary of an inadvertent submission of a
5 false claim to the Commonwealth or a political subdivision,
6 subsequently discovers the falsity of the claim and fails to
7 disclose the false claim to the Commonwealth or the political
8 subdivision within a reasonable time, but in no event longer
9 than 90 days after discovery of the false claim.
10 (b) Reduced assessment.--Notwithstanding subsection (a), the
11 court may assess not less than two times nor more than three
12 times the amount of damages which the Commonwealth or the
13 political subdivision sustains because of the act of the person
14 described in subsection (a)(1), and no civil penalty, if the
15 court finds all of the following:
16 (1) The person committing the violation furnished
17 officials of the Commonwealth or of the political subdivision <--
18 THE PROSECUTING AUTHORITY with all information known to that <--
19 person about the violation within 60 days after the date on
20 which the person first obtained the information.
21 (2) The person fully cooperated with any investigation
22 by the Commonwealth or a political subdivision PROSECUTING <--
23 AUTHORITY of the violation.
24 (3) At the time the person furnished the Commonwealth or <--
25 the political subdivision PROSECUTING AUTHORITY with <--
26 information about the violation, no criminal prosecution,
27 civil action or administrative action had commenced with
28 respect to the violation and the person did not have actual
29 knowledge of the existence of an investigation into the
30 violation.
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1 (c) Joint and severable SEVERAL liability.--Liability under <--
2 this section shall be joint and several for any act committed by
3 two or more persons.
4 (d) Limitation.--
5 (1) This section does not apply to any controversy
6 involving an AGGREGATE amount of less than $2,500 in value OR <--
7 TO ANY CLAIMS INVOLVING BENEFITS OR COMPENSATION CONFERRED
8 UNDER THE ACT OF JUNE 2, 1915 (P.L.736, NO.338), KNOWN AS THE
9 WORKERS' COMPENSATION ACT, OR THE ACT OF DECEMBER 5, 1936
10 (2ND SP.SESS., 1937 P.L.2897, NO.1), KNOWN AS THE
11 UNEMPLOYMENT COMPENSATION LAW, OR THE ACT OF JUNE 13, 1967
12 (P.L.31, NO.21), KNOWN AS THE PUBLIC WELFARE CODE, EXCEPT
13 WHERE THE CLAIM HAS NOT BEEN FILED BY THE INDIVIDUAL
14 RECIPIENT OF BENEFITS.
15 (2) As used in this subsection, the term "controversy"
16 means any one or more false claims submitted by the same <--
17 person OR CAUSED TO BE SUBMITTED BY EITHER A PERSON OR <--
18 PERSONS WHO ACT PURSUANT TO A COMMON PLAN, SCHEME OR DESIGN
19 in violation of this act.
20 Section 302. False claims jurisdiction.
21 An action under this act must be brought in the Commonwealth
22 Court if the defendant or defendants can be found, reside or <--
23 transact COURT IF ANY DEFENDANT CAN BE FOUND, RESIDES OR <--
24 TRANSACTS business in this Commonwealth or if an act proscribed
25 by this act occurred in WITHIN this Commonwealth. <--
26 Section 303. Procedure.
27 (a) Attorney General prosecution.--
28 (1) The Attorney General shall diligently investigate
29 violations under section 301 involving Commonwealth funds. If
30 the Attorney General finds that a person has violated or is
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1 violating section 301, he THE ATTORNEY GENERAL may bring a <--
2 civil action under this section against that person.
3 (2) If the Attorney General brings a civil action under
4 this act on a claim involving political subdivision funds as
5 well as Commonwealth funds, he THE ATTORNEY GENERAL shall, on <--
6 the same date that the complaint is filed in this action,
7 serve by mail, return receipt requested, a copy of the
8 complaint on the appropriate prosecuting authority.
9 (3) The prosecuting authority shall have the right to
10 intervene in an action brought by the Attorney General under
11 this act within 90 days after receipt of the complaint
12 pursuant to paragraph (2).
13 (b) Political subdivision prosecution.--
14 (1) The prosecuting authority of REPRESENTING a <--
15 political subdivision shall diligently investigate violations
16 under section 301 involving political subdivision funds. If
17 the prosecuting authority REPRESENTING THE POLITICAL <--
18 SUBDIVISION finds that a person has violated or is violating
19 section 301, he may bring a civil action under this section
20 against that person.
21 (2) If the prosecuting authority REPRESENTING THE <--
22 POLITICAL SUBDIVISION brings a civil action on a claim
23 involving Commonwealth funds as well as political subdivision
24 funds, he THE PROSECUTING AUTHORITY shall, on the same date <--
25 that the complaint is filed in this action, serve BY MAIL, <--
26 RETURN RECEIPT REQUESTED, a copy of the complaint on the
27 Attorney General.
28 (3) Within 90 days after receiving the complaint
29 pursuant to paragraph (2), the Attorney General shall do one
30 of the following:
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1 (i) Notify the court that he THE PROSECUTING <--
2 AUTHORITY intends to proceed with the action, in which
3 case the Attorney General shall assume primary
4 responsibility for conducting the action and the
5 prosecuting authority REPRESENTING THE POLITICAL <--
6 SUBDIVISION shall have the right to continue as a party.
7 (ii) Notify the court that he declines to take over <--
8 the action, in which case the prosecuting authority shall
9 have the right to conduct the action on his own.
10 (II) NOTIFY THE COURT THAT THE PROSECUTING AUTHORITY <--
11 DECLINES TO PROSECUTE THE ACTION, IN WHICH CASE THE
12 PROSECUTING AUTHORITY REPRESENTING THE POLITICAL
13 SUBDIVISION SHALL HAVE THE RIGHT TO CONDUCT THE ACTION ON
14 ITS OWN.
15 (iii) Proceed jointly with the prosecuting
16 authority, assuming coequal responsibility for
17 prosecution of the action.
18 CHAPTER 5
19 QUI TAM ACTIONS
20 Section 501. Definitions.
21 The following words and phrases when used in this chapter
22 shall have the meanings given to them in this section unless the
23 context clearly indicates otherwise:
24 "Proceeds." The term includes civil penalties as well as
25 double or treble damages as provided in Chapter 3.
26 Section 502. General provisions.
27 (a) When action may be brought.--A person may bring a civil
28 action for a violation of this act for the person and either for
29 the Commonwealth in the name of the Commonwealth if any
30 Commonwealth funds are involved or for a political subdivision
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1 in the name of the political subdivision if political
2 subdivision funds are exclusively involved. A qui tam complaint
3 may be brought alleging fraud involving both Commonwealth and
4 political subdivision funds. The person bringing the action
5 shall be referred to as the qui tam plaintiff. Once filed, the
6 qui tam action may be dismissed only by the written consent of
7 the court AND THE PROSECUTING AUTHORITY, taking into account the <--
8 best interests of the parties involved and the public purposes
9 of this act. No dismissal shall occur by the court unless an in <--
10 camera hearing is held with an opportunity for participation by
11 the qui tam plaintiff and counsel and the prosecuting authority.
12 The defendant shall not be present at this hearing.
13 (b) Filing.--A complaint filed by a private person under
14 this section must be filed ex parte under seal with the Clerk of
15 the Commonwealth Court OR IN THE APPROPRIATE FEDERAL DISTRICT <--
16 COURT IF FEDERAL FUNDS ARE ALSO INVOLVED, and the complaint and
17 all related pleadings must remain under seal for 90 days FROM <--
18 THE DATE OF SERVICE. No service shall be made on the defendant
19 until after the complaint is unsealed by order of the court.
20 (c) Service upon Attorney General.--On the same day as the <--
21 complaint is WITHIN THREE DAYS OF THE COMPLAINT BEING filed <--
22 pursuant to subsection (b), the qui tam plaintiff shall serve by
23 mail, return receipt requested, the Attorney General with a copy
24 of the complaint and a written disclosure of substantially all
25 material evidence and information the person possesses at that
26 time.
27 Section 503. Commonwealth funds.
28 Within 90 days after receiving a complaint alleging
29 violations which involve Commonwealth funds, but not political
30 subdivision funds, the Attorney General shall do either of the
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1 following:
2 (1) Notify the court that it intends to proceed with the
3 action and petition the court to have the case unsealed. If
4 the court grants the Attorney General's request, the seal may
5 be lifted. THE COURT MAY, UPON MOTION BY THE ATTORNEY <--
6 GENERAL, ORDER A PARTIAL UNSEALING WHERE APPROPRIATE.
7 (2) Notify the court that it declines to take over <--
8 PROSECUTE the action, in which case the complaint may be <--
9 unsealed by the court within 20 days after written
10 notification is made by the Attorney General to the qui tam
11 plaintiff and counsel that the Attorney General does not wish
12 to intervene. Upon such notification, the qui tam plaintiff
13 shall have the right to conduct the action.
14 Section 504. Political subdivision funds.
15 (a) Procedure.--Within 30 days after receiving a complaint
16 alleging violations which exclusively involve political
17 subdivision funds, the Attorney General shall promptly forward
18 the complaint and written disclosure to the appropriate
19 prosecuting authority for review and disposition and shall
20 notify in writing the qui tam plaintiff and counsel of the
21 transfer.
22 (b) Duty of prosecuting authority.--Within 60 days after the
23 Attorney General forwards the complaint and written disclosure
24 under subsection (a), the prosecuting authority shall do either
25 of the following:
26 (1) Notify the court that it intends to proceed with the
27 action and petition the court to have the case unsealed. If
28 the court grants the prosecuting authority's request, the
29 seal shall be lifted.
30 (2) Notify the court that it declines to take over the
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1 action, in which case the seal may be lifted within 20 days
2 after such notification has been made and the qui tam
3 plaintiff shall have the right to conduct the action.
4 Section 505. Complaints relating to Commonwealth and political
5 subdivision funds.
6 (a) Complaints.--Within 30 days after receiving a complaint
7 alleging violations which involve or allege both Commonwealth
8 and political subdivision funds, the Attorney General shall
9 forward copies of the complaint and written disclosure to the
10 appropriate prosecuting authority and shall coordinate its
11 review and investigation with those of the prosecuting
12 authority.
13 (b) Procedure.--Within 90 days after receiving a complaint
14 alleging violations which involve or allege both Commonwealth
15 and political subdivision funds, the Attorney General shall do
16 one of the following:
17 (1) Notify the court in writing that he THE ATTORNEY <--
18 GENERAL intends to proceed with the action, in which case the
19 seal shall be lifted and service effected on the defendant.
20 (2) Notify the court in writing that he THE ATTORNEY <--
21 GENERAL declines to take over the action but that the
22 prosecuting authority of the political subdivision involved
23 intends to proceed with the action, in which case the seal
24 shall be lifted and the action shall be conducted by the
25 prosecuting authority.
26 (3) Notify the court that both he and the prosecuting <--
27 authority
28 (3) NOTIFY THE COURT THAT BOTH THE ATTORNEY GENERAL AND <--
29 THE DISTRICT ATTORNEY REPRESENTING THE POLITICAL SUBDIVISION
30 decline to take over the action, in which case the seal may
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1 be lifted within 20 days after notification has been made and
2 the qui tam plaintiff shall have the right to conduct the
3 action.
4 Section 506. Intervention by political subdivision.
5 If the Attorney General proceeds with the action under
6 section 504(b)(1), the DISTRICT ATTORNEY REPRESENTING THE <--
7 political subdivision shall be permitted to intervene in the
8 action within 60 days after the Attorney General notifies the
9 court of his intentions.
10 Section 507. Extension of time.
11 Upon a showing of good cause and reasonable diligence in his
12 investigation, the Attorney General PROSECUTING AUTHORITY or the <--
13 prosecuting authority of a political subdivision may move the
14 court for reasonable extensions of time during which the
15 complaint will remain under seal. The qui tam plaintiff shall be
16 notified of any extensions requested under this section. Any
17 such motions may be supported by affidavits or other submissions
18 in camera.
19 Section 508. Other actions prohibited.
20 When a person brings an action under this chapter, no other
21 person shall be permitted to bring a related action based on the
22 same or similar facts underlying the pending action.
23 Section 509. Exclusions.
24 (a) General rule.--No court shall have jurisdiction over an
25 action brought under this chapter against a member of the
26 General Assembly, a member of the State judiciary, an elected
27 official in the executive branch of State government or a member
28 of the governing body OR ELECTED OFFICIAL of any political <--
29 subdivision if the action is based on evidence or information
30 known to the Commonwealth or political subdivision when the
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1 action was brought.
2 (b) Dismissal.--The court may dismiss an action under this
3 act upon motion of the Attorney General if it finds that
4 substantially all allegations and material facts have been
5 publicly disclosed in a criminal, civil or administrative
6 hearing, in an investigation, report, hearing or audit conducted
7 by or at the request of the General Assembly, auditor or
8 governing body of a political subdivision or by the news media,
9 unless the action is brought by the Attorney General or the
10 prosecuting authority of a political subdivision or the person
11 bringing the action is an original source of the information. NO <--
12 COURT SHALL HAVE JURISDICTION OVER AN ACTION UNDER THIS SECTION
13 BASED UPON THE PUBLIC DISCLOSURE OF ALLEGATIONS OR TRANSACTIONS
14 IN A CRIMINAL, CIVIL OR ADMINISTRATIVE HEARING, IN ANY
15 GOVERNMENTAL REPORT, HEARING, AUDIT OR INVESTIGATION OR FROM THE
16 NEWS MEDIA, UNLESS THE ACTION IS BROUGHT BY A PROSECUTING
17 AUTHORITY OR THE PERSON BRINGING THE ACTION IS AN ORIGINAL
18 SOURCE OF THE INFORMATION.
19 (c) Definition.--As used in this section, the term "original
20 source" means an individual who has voluntarily provided the
21 information to the Commonwealth or political subdivision before
22 filing an action based on that information and either has DIRECT <--
23 AND independent knowledge of the information on which the
24 allegations are based or directly or indirectly provided the
25 impetus, basis or catalyst for the investigation, hearing, audit
26 or report which led to the public disclosure.
27 Section 510. Employment-related discovery of information.
28 No court shall have jurisdiction over an action brought under
29 this chapter based upon information discovered by a present or
30 former employee of the Commonwealth or a political subdivision
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1 during the course of his employment unless that employee first
2 in good faith exhausted ATTEMPTS TO USE existing internal <--
3 procedures for reporting and seeking recovery of the falsely
4 claimed sums through official channels and unless the
5 Commonwealth or political subdivision failed to act on the
6 information provided within a reasonable period of time. A
7 reasonable period of time shall mean no longer than six months
8 after information has been disclosed.
9 Section 511. Responsibility for prosecution.
10 If the Commonwealth or political subdivision proceeds with
11 the action, it shall have the primary responsibility for
12 prosecuting the action. The qui tam plaintiff shall have the
13 right to continue with all rights and obligations as a full
14 party to the action.
15 Section 512. Dismissal of action.
16 The Commonwealth or political subdivision may seek to dismiss
17 the action for good cause notwithstanding the objections of the
18 qui tam plaintiff if the qui tam plaintiff has been notified by
19 the Commonwealth or political subdivision of the filing of the
20 motion and the court has provided the qui tam plaintiff with an
21 adequate opportunity to oppose the motion. and present evidence <--
22 at an in camera hearing in opposition to the dismissal.
23 Section 513. Settlement.
24 The Commonwealth or political subdivision may settle the
25 action with the defendant notwithstanding the objections of the
26 qui tam plaintiff if the court determines, after a full and <--
27 complete hearing providing the qui tam plaintiff an adequate
28 opportunity to present evidence, that the proposed settlement is
29 fair, adequate and reasonable under all of the circumstances to
30 all parties involved.
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1 Section 514. Election not to proceed.
2 If the Commonwealth or political subdivision elects not to
3 proceed, the qui tam plaintiff shall have the same rights, <--
4 powers and obligations to conduct the action as the Attorney
5 General or prosecuting authority would have had if it had chosen
6 to proceed under this chapter. If the Commonwealth or political
7 subdivision so requests, and at its sole expense, the RIGHT TO <--
8 CONDUCT THE ACTION. IF THE COMMONWEALTH OR POLITICAL SUBDIVISION
9 SO REQUESTS, THE Commonwealth or political subdivision shall be
10 served with copies of all pleadings filed in the action and
11 supplied with copies of all deposition transcripts.
12 Section 515. Intervention.
13 (a) General rule.--Upon timely application, the court may <--
14 permit the Commonwealth or political subdivision to intervene in
15 an action with which it had initially declined to proceed if the
16 interest of the Commonwealth or political subdivision in
17 recovery of the property or funds involved is not being
18 adequately represented by the qui tam plaintiff.
19 (b) Untimely intervention.--If the Commonwealth or political <--
20 subdivision is allowed the opportunity for untimely intervention
21 under subsection (a), the qui tam plaintiff may retain principal
22 responsibility for the action and the recovery of the parties
23 shall be determined as if the Commonwealth or political
24 subdivision had elected not to proceed.
25 Section 516. Proceeds.
26 (a) Office of Attorney General.--If the Attorney General <--
27 initiates an action under section 303(a) or assumes control of
28 an action initiated by a prosecuting authority pursuant to
29 section 303, the Office of Attorney General shall receive a
30 fixed 33% of the proceeds of the action or settlement of the
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1 claim, which funds shall be used to support and expand its
2 ongoing investigation and prosecution of false claims violations
3 in this Commonwealth.
4 (b) Prosecuting authority.--If a prosecuting authority
5 initiates and conducts an action pursuant to section 303(b), the
6 office of the prosecuting authority shall receive a fixed 33% of
7 the proceeds of the action or settlement of the claim, which
8 funds shall be used to support and expand its ongoing
9 investigation and prosecution of false claims violations within
10 its jurisdiction.
11 (c) Award of portion of recovery.--If a prosecuting
12 authority intervenes in an action initiated by the Attorney
13 General pursuant to section 303(a)(3) or remains a party to an
14 action assumed by the Attorney General pursuant to section
15 303(b)(3)(i), the court may award the office of the prosecuting
16 authority a portion of the Attorney General's fixed 33% of the
17 recovery under subsection (a), taking into account the
18 prosecuting authority's role in investigating and conducting the
19 action and the resources of the office expended on the
20 prosecution.
21 (A) ATTORNEY GENERAL.--IF THE ATTORNEY GENERAL INITIATES AN <--
22 ACTION UNDER SECTION 303(A) OR ASSUMES CONTROL OF AN ACTION
23 INITIATED BY THE DISTRICT ATTORNEY REPRESENTING THE POLITICAL
24 SUBDIVISION PURSUANT TO SECTION 303, THE ATTORNEY GENERAL SHALL
25 RECEIVE A FIXED 33% OF THE PROCEEDS OF THE ACTION OR SETTLEMENT
26 OF THE CLAIM, WHICH FUNDS SHALL BE USED TO SUPPORT AND EXPAND
27 ITS ONGOING INVESTIGATION AND PROSECUTION OF FALSE CLAIMS
28 VIOLATIONS IN THIS COMMONWEALTH OR TO SUPPORT OTHER
29 INVESTIGATION AND PROSECUTION EFFORTS.
30 (B) DISTRICT ATTORNEY.--IF A DISTRICT ATTORNEY REPRESENTING
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1 A POLITICAL SUBDIVISION INITIATES AND CONDUCTS AN ACTION
2 PURSUANT TO SECTION 303(B), THE OFFICE OF THE DISTRICT ATTORNEY
3 SHALL RECEIVE A FIXED 33% OF THE PROCEEDS OF THE ACTION OR
4 SETTLEMENT OF THE CLAIM, WHICH FUNDS SHALL BE USED TO SUPPORT
5 AND EXPAND ITS ONGOING INVESTIGATION AND PROSECUTION OF FALSE
6 CLAIMS VIOLATIONS WITHIN ITS JURISDICTION OR TO SUPPORT OTHER
7 INVESTIGATION AND PROSECUTION EFFORTS.
8 (C) AWARD OF PORTION OF RECOVERY.--IF A DISTRICT ATTORNEY
9 INTERVENES IN AN ACTION INITIATED BY THE ATTORNEY GENERAL
10 PURSUANT TO SECTION 303(A)(3) OR REMAINS A PARTY TO AN ACTION
11 ASSUMED BY THE ATTORNEY GENERAL PURSUANT TO SECTION
12 303(B)(3)(I), THE COURT MAY AWARD THE OFFICE OF THE DISTRICT
13 ATTORNEY A PORTION OF THE ATTORNEY GENERAL'S FIXED 33% OF THE
14 RECOVERY UNDER SUBSECTION (A), TAKING INTO ACCOUNT THE DISTRICT
15 ATTORNEY'S ROLE IN INVESTIGATING AND CONDUCTING THE ACTION AND
16 THE RESOURCES OF THE OFFICE EXPENDED ON THE PROSECUTION.
17 (d) Qui tam recovery.--
18 (1) If the Commonwealth or political subdivision
19 proceeds with an action brought by a qui tam plaintiff under
20 this chapter, the qui tam plaintiff shall, subject to
21 subsections (f) and (g), receive not less than 20% nor more
22 than 33% of the full proceeds of the action or settlement of
23 the claim, depending upon the extent to which the qui tam
24 plaintiff substantially contributed to the overall
25 prosecution of the action.
26 (2) When it conducts the action, the Office of Attorney
27 General or the office of the prosecuting authority of the
28 political subdivision shall receive a fixed 33% of the
29 proceeds of the action or settlement of the claim, which
30 funds shall be used to support and expand its ongoing
19970H1671B3508 - 18 -
1 investigation and prosecution of false claims made against
2 the Commonwealth or political subdivision. Upon good cause <--
3 shown, the Office of Attorney General or the office of the
4 prosecuting authority may use a portion of the recovered
5 funds to expand its investigation and prosecution of violent
6 crimes and public corruption in this Commonwealth.
7 (3) When both the Attorney General and a prosecuting
8 authority are involved as coparties in a qui tam action
9 pursuant to section 504, the court in its discretion may
10 award the prosecuting authority a portion of the Attorney
11 General's fixed 33% of the recovery, taking into account the
12 prosecuting authority's cooperation and contribution to
13 investigating and conducting the action. OR OTHERWISE TO <--
14 INVESTIGATE OR PROSECUTE CONSISTENT WITH THE DUTIES OF THOSE
15 OFFICES.
16 (3) WHEN BOTH THE ATTORNEY GENERAL AND THE DISTRICT
17 ATTORNEY REPRESENTING THE POLITICAL SUBDIVISION ARE INVOLVED
18 AS COPARTIES IN A QUI TAM ACTION PURSUANT TO SECTION 504, THE
19 COURT IN ITS DISCRETION MAY AWARD THE DISTRICT ATTORNEY A
20 PORTION OF THE ATTORNEY GENERAL'S FIXED 33% OF THE RECOVERY,
21 TAKING INTO ACCOUNT THE DISTRICT ATTORNEY'S COOPERATION AND
22 CONTRIBUTION TO INVESTIGATING AND CONDUCTING THE ACTION.
23 (e) Decline to proceed.--If the Commonwealth or political
24 subdivision declines to proceed with an action under subsection
25 (c), the qui tam plaintiff shall, subject to subsections (f) and
26 (g), receive an amount which the court decides is reasonable for
27 collecting the civil penalty and damages on behalf of the
28 Commonwealth or political subdivision. The amount awarded by the
29 court shall be not less than 30% nor more than 50% of the
30 proceeds of the action or settlement and shall be paid out of
19970H1671B3508 - 19 -
1 the proceeds.
2 (f) Present or former employee.--If the action is one
3 provided for under section 508, the present or former employee
4 of the Commonwealth or political subdivision shall not be
5 entitled to any minimum guaranteed recovery from the proceeds.
6 The court, however, may award the qui tam plaintiff those sums
7 from the proceeds as it considers appropriate, but in no case
8 more than 33% of the proceeds if the Commonwealth or political
9 subdivision goes forth with the action or 50% if the
10 Commonwealth or political subdivision declines to go forth,
11 taking into account the significance of the information, the
12 role of the qui tam plaintiff in advancing the case to
13 litigation and the scope of and response to the employee's
14 attempts to report and gain recovery of the falsely claimed
15 funds through official channels.
16 (g) Fraudulent activity.--If the action is one which the <--
17 court finds to be based primarily on information from a present
18 or former employee who actively participated in the fraudulent
19 activity, the employee shall not be entitled to any minimum
20 (G) FRAUDULENT ACTIVITY.-- <--
21 (1) WHERE THE ACTION IS ONE WHICH THE COURT FINDS TO BE
22 BASED PRIMARILY ON INFORMATION FROM A PERSON WHO ACTIVELY
23 PARTICIPATED IN THE FRAUDULENT ACTIVITY, THE PERSON SHALL NOT
24 BE ENTITLED TO ANY MINIMUM guaranteed recovery from the
25 proceeds. The court, however, in its sole discretion after a
26 full review of all of the facts and circumstances may award
27 the qui tam plaintiff such sums from the proceeds as it
28 considers appropriate under the circumstances, but in no case
29 more than 33% of the proceeds if the Commonwealth or
30 political subdivision goes forth with the action or 50% if
19970H1671B3508 - 20 -
1 the Commonwealth or political subdivision declines to go
2 forth, taking into account the significance of the
3 information, the role of the qui tam plaintiff in advancing
4 the case to litigation, the scope of the present or past <--
5 employee's PERSON'S involvement in the fraudulent activity, <--
6 the employee's PERSON'S attempts to avoid or resist such <--
7 activity and all other circumstances surrounding the
8 activity.
9 (2) A PERSON WHO HAS BEEN CONVICTED OF A CRIME, EITHER <--
10 IN THE SAME OR ANOTHER JURISDICTION, BASED ON PARTICIPATION
11 IN THE FRAUDULENT ACTIVITY SHALL UNDER NO CIRCUMSTANCES BE
12 PERMITTED TO PARTICIPATE IN ANY ACTION UNDER THIS ACT AS A
13 QUI TAM PLAINTIFF.
14 (H) PRESENT OR FORMER SWORN LAW ENFORCEMENT OFFICER OR OTHER
15 GOVERNMENTAL INVESTIGATOR.--ANY PRESENT OR FORMER SWORN LAW
16 ENFORCEMENT OFFICER OR OTHER GOVERNMENTAL INVESTIGATOR WHO
17 OBTAINS INFORMATION REGARDING A FALSE CLAIM IN THE COURSE OF
18 THAT OFFICER'S OR INVESTIGATOR'S OFFICIAL DUTIES SHALL BE
19 PRECLUDED FROM PARTICIPATING IN THE PROCEEDS OF A QUI TAM ACTION
20 ON THE BASIS OF THAT INFORMATION.
21 Section 517. Reversion to General Fund.
22 The portion of the recovery not distributed under section 516
23 shall revert to the General Fund if the underlying false claims
24 involved Commonwealth funds exclusively and to the political
25 subdivision if the underlying false claims involved political
26 subdivision funds exclusively. If petitioned to do so, the court
27 shall make an apportionment of the recovered proceeds between
28 the Commonwealth and political subdivision based on their
29 relative share of the funds falsely claimed.
30 Section 518. Expenses.
19970H1671B3508 - 21 -
1 If the Commonwealth, political subdivision or qui tam
2 plaintiff prevails in or settles any action under this chapter,
3 the qui tam plaintiff shall receive an amount for all reasonable
4 expenses incurred in the prosecution of the claim, including
5 expert witness fees plus reasonable litigation costs and
6 attorney fees. All expenses, costs and attorney fees shall be
7 awarded against the defendant, and under no circumstances shall
8 they be the responsibility of the Commonwealth, a political <--
9 subdivision or a qui tam plaintiff OR A POLITICAL SUBDIVISION. <--
10 CHAPTER 7
11 GENERAL PROVISIONS
12 Section 701. Stay of discovery.
13 The court may stay an act of discovery of the person <--
14 initiating the action for a period of not more than 90 days if
15 the Attorney General or local prosecuting authority shows by a <--
16 preponderance of the evidence that the act of discovery would
17 THE PROSECUTING AUTHORITY SHOWS THAT DISCOVERY WOULD interfere <--
18 with an investigation or a prosecution of a criminal or civil
19 matter arising out of the same facts, regardless of whether the
20 Attorney General or local prosecuting authority proceeds with <--
21 the action. Such a showing shall be conducted in camera. The
22 court may extend the 90-day period upon a further showing in
23 camera that the Attorney General or local prosecuting authority <--
24 has pursued the criminal or civil investigation or proceedings
25 with reasonable diligence and that any proposed discovery in the
26 civil action would interfere with the ongoing criminal or civil
27 investigation or proceedings.
28 Section 702. Limitations on participation.
29 Upon a showing by the Attorney General or local prosecuting <--
30 authority by a preponderance of the evidence that unrestricted
19970H1671B3508 - 22 -
1 participation during the course of the litigation by the person
2 initiating the action would interfere with or unduly delay the
3 Attorney General's or local prosecuting authority's prosecution <--
4 of the case or would be repetitious, irrelevant or for purposes
5 of harassment, the court may, in its discretion, impose
6 limitations on the person's participation, including the
7 following:
8 (1) Limiting the number of witnesses the person may <--
9 call.
10 (2) Limiting the length of the testimony of these
11 witnesses.
12 (3) Limiting the person's cross-examination of
13 witnesses.
14 (4) Otherwise limiting the participation by the person
15 in the litigation.
16 (1) LIMITING THE NUMBER OF WITNESSES THE PERSON MAY <--
17 CALL;
18 (2) LIMITING THE LENGTH OF THE TESTIMONY OF THESE
19 WITNESSES;
20 (3) LIMITING THE PERSON'S CROSS-EXAMINATION OF
21 WITNESSES; OR
22 (4) OTHERWISE LIMITING THE PARTICIPATION BY THE PERSON
23 IN THE LITIGATION.
24 Section 703. Employee protection.
25 (a) Disclosing information.--No employer shall SOLICIT, <--
26 ATTEMPT OR CONSPIRE TO PREVENT, make, adopt or enforce any rule,
27 regulation or policy preventing an employee from disclosing
28 information to a State or local law enforcement agency or from
29 acting in furtherance of a false claims action, including
30 investigating, initiating, testifying or assisting in an action
19970H1671B3508 - 23 -
1 filed or to be filed under this act.
2 (b) Discrimination.--No employer shall discharge, demote,
3 suspend, threaten, harass, deny promotion to or in any other
4 manner discriminate, OR SOLICIT, ATTEMPT OR CONSPIRE TO <--
5 DISCRIMINATE against an employee in the terms of and conditions
6 of employment because of lawful acts done by the employee on
7 behalf of the employee or others in disclosing information to a
8 State or local government or law enforcement agency or in
9 furthering false claims action, including investigation for,
10 initiation of, testimony for or assistance in an action filed or
11 to be filed under this act.
12 (c) Penalty.--An employer who violates subsection (A) OR (b) <--
13 shall be liable for all relief necessary to make the employee
14 whole, including reinstatement with the same seniority status
15 that the employee would have had but for the discrimination,
16 three times the amount of back pay, prevailing interest on the
17 back pay, compensation for any special damage sustained as a
18 result of the discrimination and, where appropriate, punitive
19 damages. In addition, the defendant shall be required to pay all
20 litigation costs and reasonable attorney fees. An employee may
21 bring an action in the Commonwealth Court for the relief
22 provided in this subsection.
23 (d) Limitations.--An employee who is discharged, demoted,
24 suspended, harassed, denied promotion, THREATENED WITH <--
25 TERMINATION or in any other manner discriminated against in the
26 terms and conditions of employment by his employer because of
27 participation in conduct which directly or indirectly resulted
28 in a false claim being submitted to the Commonwealth or a
29 political subdivision shall be entitled to the remedies under <--
30 subsection (c) if, and only if, both of the following occur:
19970H1671B3508 - 24 -
1 (1) The employee voluntarily discloses information to a
2 State or local government or law enforcement agency or acted
3 in furtherance of a false claims action, including
4 investigation for, initiation of, testimony for or assistance
5 in an action filed or to be filed.
6 (2) The employee has been harassed, threatened with
7 termination or demotion or otherwise coerced by the employer
8 or its management into engaging in the fraudulent activity in
9 the first place. TO THE REMEDIES UNDER SUBSECTION (C) IF THE <--
10 EMPLOYEE VOLUNTARILY DISCLOSES INFORMATION TO A STATE OR
11 LOCAL GOVERNMENT OR LAW ENFORCEMENT AGENCY OR ACTED IN
12 FURTHERANCE OF A FALSE CLAIMS ACTION, INCLUDING INVESTIGATION
13 FOR, INITIATION OF, TESTIMONY FOR OR ASSISTANCE IN AN ACTION
14 FILED OR TO BE FILED.
15 Section 704. Limitations.
16 (a) Time of filing.--A civil action under this act may not
17 be filed more than six years after the date on which the
18 violation of this act is committed or more than three years
19 after the date of discovery by the official of the Commonwealth
20 or political subdivision charged with responsibility to act in
21 the circumstances, but in any event no more than ten years after
22 the date on which the violation of section 301 is committed.
23 (b) Prior acts.--A civil action under this act may be
24 brought for activity prior to the effective date of this act if
25 the limitations period set in subsection (a) has not elapsed.
26 (c) Proof.--In any action brought under this act, the
27 Commonwealth, the political subdivision or the qui tam plaintiff
28 shall be required to prove all essential elements of the cause
29 of action, including damages, by a preponderance of the
30 evidence.
19970H1671B3508 - 25 -
1 (d) Estoppel.--Notwithstanding any other provision of law, a
2 guilty verdict, guilty plea or nolo contendere plea rendered in
3 a criminal proceeding which alleged a scheme to obtain funds
4 fraudulently from the Commonwealth or a political subdivision
5 shall estop the defendant from denying the essential elements of
6 the offense in any action which involves the same transaction as
7 in the criminal proceeding and which is brought under this act.
8 Section 705. Remedies.
9 (a) Civil remedies.--
10 (1) The Commonwealth Court shall have jurisdiction to
11 prevent and restrain violations of section 301 by issuing
12 appropriate orders, including, but not limited to, orders
13 relating to any of the following: <--
14 (i) Ordering any person to divest himself of any
15 financial interest in any business or entity.
16 (ii) Imposing reasonable restrictions on the future
17 activities or investments of any person, including, but
18 not limited to, prohibiting any person from engaging in
19 the same type of endeavor and/or freezing the person's
20 assets.
21 (iii) Making due provision for:
22 (A) The rights of innocent persons.
23 (B) Ordering the dissolution of any business or
24 entity.
25 (C) Ordering the denial, suspension or
26 revocation of charters of domestic corporations.
27 (D) Certificates of authority authorizing
28 foreign corporations to do business in this
29 Commonwealth.
30 (E) Licenses, permits or prior approval granted
19970H1671B3508 - 26 -
1 to any business or entity by any department or agency
2 of the Commonwealth or any of its political
3 subdivisions.
4 (F) Prohibiting any business or entity from
5 engaging in any business. RELATING TO ORDERING ANY <--
6 PERSON TO DIVEST HIMSELF OF ANY FINANCIAL INTEREST IN
7 ANY BUSINESS OR ENTITY; IMPOSING REASONABLE
8 RESTRICTIONS ON THE FUTURE ACTIVITIES OR INVESTMENTS
9 OF ANY PERSON, INCLUDING, BUT NOT LIMITED TO,
10 PROHIBITING ANY PERSON FROM ENGAGING IN THE SAME TYPE
11 OF ENDEAVOR OR FREEZING THE PERSON'S ASSETS, MAKING
12 DUE PROVISIONS FOR THE RIGHTS OF INNOCENT PERSONS;
13 ORDERING THE DISSOLUTION OF ANY BUSINESS OR ENTITY;
14 ORDERING THE DENIAL, SUSPENSION OR REVOCATION OF
15 CHARTERS OF DOMESTIC CORPORATIONS, CERTIFICATES OF
16 AUTHORITY AUTHORIZING FOREIGN CORPORATIONS TO DO
17 BUSINESS IN THIS COMMONWEALTH, LICENSES, PERMITS OR
18 PRIOR APPROVAL GRANTED TO ANY BUSINESS OR ENTITY BY
19 ANY DEPARTMENT OR AGENCY OF THE COMMONWEALTH OR ANY
20 OF ITS POLITICAL SUBDIVISIONS; OR PROHIBITING ANY
21 BUSINESS OR ENTITY FROM ENGAGING IN ANY BUSINESS.
22 (2) INJUNCTIONS AGAINST FALSE CLAIMS:
23 (I) IF A PERSON VIOLATES OR IS ABOUT TO VIOLATE THIS
24 ACT, THE PROSECUTING AUTHORITY MAY COMMENCE AN ACTION IN
25 COMMONWEALTH COURT TO ENJOIN SUCH VIOLATION.
26 (II) IF A PERSON ALIENATES OR DISPOSES OF PROPERTY,
27 OR INTENDS TO ALIENATE OR DISPOSE OF PROPERTY OBTAINED AS
28 A RESULT OF A VIOLATION OF THIS ACT OR PROPERTY WHICH IS
29 TRACEABLE TO SUCH VIOLATION, THE PROSECUTING AUTHORITY
30 MAY COMMENCE AN ACTION IN COMMONWEALTH COURT TO ENJOIN
19970H1671B3508 - 27 -
1 SUCH ALIENATION OF DISPOSITION OF PROPERTY, OR FOR A
2 RESTRAINING ORDER TO PROHIBIT ANY PERSON FROM
3 WITHDRAWING, TRANSFERRING, REMOVING, DISSIPATING OR
4 DISPOSING OF ANY SUCH PROPERTY OR PROPERTY OF EQUIVALENT
5 VALUE AND APPOINT A TEMPORARY RECEIVER TO ADMINISTER SUCH
6 RESTRAINING ORDER.
7 (2) (3) In any proceeding under this section, the court <--
8 shall proceed as soon as practicable to the hearing and
9 determination thereof. Pending final determination, the court
10 may enter preliminary or special injunctions or take such
11 other actions, including the acceptance of satisfactory
12 performance bonds, as it may deem proper.
13 (b) Remedies cumulative.--The provisions of this act are not
14 exclusive, and the remedies provided for in this act shall be in
15 addition to any other remedies provided for in any other law or
16 available under common law.
17 Section 706. Enforcement.
18 (a) Attorney General.--The Attorney General shall have the <--
19 (A) PROSECUTING AUTHORITY.--THE PROSECUTING AUTHORITY SHALL <--
20 HAVE THE power and duty to enforce this act, including the
21 authority to issue civil investigative demands pursuant to this
22 act, to institute proceedings under this act and to take such
23 actions as may be necessary to ascertain and investigate alleged
24 violations of this act. THE PROSECUTING AUTHORITY MAY DELEGATE <--
25 ITS POWERS TO INVESTIGATE AND PROSECUTE ACTIONS UNDER THIS ACT
26 TO APPROPRIATE DEPUTY ATTORNEYS GENERAL OR DEPUTY OR ASSISTANT
27 DISTRICT ATTORNEYS.
28 (b) Construction.--Nothing contained in this act shall be
29 construed to limit the regulatory or investigative authority of
30 any department or agency of the Commonwealth whose functions
19970H1671B3508 - 28 -
1 might relate to persons, enterprises or matters falling within
2 the scope of this act.
3 Section 707. Civil investigative demand.
4 (a) General rule.--Whenever the Attorney General PROSECUTING <--
5 AUTHORITY has reason to believe that any person may be in
6 possession, custody or control of any documentary material OR <--
7 INFORMATION relevant to a false claim investigation, he THE <--
8 PROSECUTING AUTHORITY may issue in writing and cause to be
9 served upon the person a civil investigative demand requiring
10 the production of the material for examination. SUCH PERSON TO: <--
11 (1) PRODUCE SUCH DOCUMENTARY MATERIAL FOR INSPECTION AND
12 COPYING;
13 (2) ANSWER IN WRITTEN INTERROGATORIES WITH RESPECT TO
14 SUCH DOCUMENTARY MATERIAL OR INFORMATION;
15 (3) GIVE ORAL TESTIMONY CONCERNING SUCH DOCUMENTARY
16 MATERIAL OR INFORMATION; OR
17 (4) FURNISH ANY COMBINATION OF SUCH MATERIAL, ANSWERS
18 AND TESTIMONY.
19 (b) Content.--Each demand under this section shall:
20 (1) State the nature of the conduct constituting the
21 alleged false claim violation which is under investigation
22 the provision of law applicable thereto and the connection <--
23 between the documentary material demanded and the conduct
24 under investigation.
25 (2) Describe the class or classes of documentary
26 material to be produced thereunder with such definiteness and
27 certainty as to permit the material to be fairly identified.
28 (3) State that the demand is returnable forthwith or
29 prescribe a return date which will provide a reasonable
30 period of time within which the material so demanded may be
19970H1671B3508 - 29 -
1 assembled and made available for inspection and copying or
2 reproduction.
3 (4) Identify a false claims investigator to whom the
4 material shall be made available. AND THE PROVISION OF LAW <--
5 APPLICABLE THERETO.
6 (2) IF THE DEMAND IS FOR THE PRODUCTION OF DOCUMENTARY
7 MATERIAL:
8 (I) DESCRIBE THE CLASS OR CLASSES OF DOCUMENTARY
9 MATERIAL TO BE PRODUCED THEREUNDER WITH SUCH DEFINITENESS
10 AND CERTAINTY AS TO PERMIT THE MATERIAL TO BE FAIRLY
11 IDENTIFIED;
12 (II) STATE THAT THE DEMAND IS RETURNABLE FORTHWITH
13 OR PRESCRIBE A RETURN DATE WHICH WILL PROVIDE A
14 REASONABLE PERIOD OF TIME WITHIN WHICH THE MATERIAL SO
15 DEMANDED MAY BE ASSEMBLED AND MADE AVAILABLE FOR
16 INSPECTION AND COPYING OR REPRODUCTION; AND
17 (III) IDENTIFY AN INVESTIGATOR TO WHOM THE MATERIAL
18 SHALL BE MADE AVAILABLE.
19 (3) IF THE DEMAND IS FOR WRITTEN INTERROGATORIES:
20 (I) SET FORTH WITH SPECIFICITY THE WRITTEN
21 INTERROGATORIES TO BE ANSWERED;
22 (II) PRESCRIBE DATES AT WHICH TIME ANSWERS TO
23 WRITTEN INTERROGATORIES SHALL BE SUBMITTED; AND
24 (III) IDENTIFY THE INVESTIGATOR TO WHOM SUCH ANSWERS
25 SHALL BE SUBMITTED.
26 (4) IF SUCH DEMAND IS FOR THE GIVING OF ORAL TESTIMONY:
27 (I) PRESCRIBE A DATE, TIME AND PLACE AT WHICH ORAL
28 TESTIMONY SHOULD BE COMMENCED;
29 (II) IDENTIFY THE INVESTIGATOR WHO SHALL CONDUCT THE
30 EXAMINATION AND THE PERSON TO WHOM THE TRANSCRIPT OF SUCH
19970H1671B3508 - 30 -
1 INVESTIGATION SHALL BE SUBMITTED;
2 (III) SPECIFY THAT SUCH ATTENDANCE AND TESTIMONY ARE
3 NECESSARY TO THE CONDUCT OF THE INVESTIGATION; AND
4 (IV) DESCRIBE THE GENERAL PURPOSE FOR WHICH THE
5 DEMAND IS BEING ISSUED AND THE GENERAL NATURE OF THE
6 TESTIMONY, INCLUDING THE PRIMARY AREAS OF INQUIRY, WHICH
7 WILL BE TAKEN PURSUANT TO THE DEMAND.
8 (5) Contain the following statement printed
9 conspicuously at the top of the demand:
10 You have the right to seek the assistance of any
11 attorney, and he may represent you in all phases of
12 the false claim investigation of which this civil
13 investigative demand is a part.
14 (c) Limitation.--No demand under this section shall:
15 (1) contain any requirement which would be held to be
16 unreasonable if contained in a subpoena duces tecum issued by
17 any court in connection with a grand jury investigation of
18 the alleged fraud violation; or
19 (2) require the production of any documentary evidence
20 which would be privileged from disclosure if demanded by a
21 subpoena duces tecum issued by any court in connection with a
22 grand jury investigation of the alleged false claim
23 violation.
24 (d) Service.--Service of any demand or any petition filed
25 under this section shall be made in the manner prescribed by the
26 Pennsylvania Rules of Civil Procedure for service of writs and
27 complaints UNLESS OTHERWISE AGREED TO BY THE PROSECUTING <--
28 AUTHORITY AND THE PERSON.
29 (e) Return.--A verified return by the individual serving any
30 demand or petition under this section setting forth the manner
19970H1671B3508 - 31 -
1 of service shall be prima facie proof of such service. In the
2 case of service by registered or certified mail, the return
3 shall be accompanied by the return post office receipt of
4 delivery of the demand.
5 (f) Procedure.--
6 (1) A party PERSON upon whom a demand issued under this <--
7 section has been duly served shall make the demanded material
8 available for inspection and copying or reproduction to a <--
9 false claims investigator AN INVESTIGATOR designated in the <--
10 demand at the principal place of business of the party PERSON <--
11 or at such other place as the investigator and the party <--
12 PERSON thereafter may agree or as the court may direct <--
13 pursuant to this section on the return date specified in the
14 demand. The party PERSON may, upon agreement of the <--
15 investigator, substitute copies of all or any part of the
16 demanded material for the originals of the demanded material.
17 (2) The false claims investigator to whom any <--
18 documentary material is so delivered shall take physical
19 possession of the material and shall be responsible for the
20 use made of the material and for its return pursuant to this
21 section. The investigator may cause the preparation of the
22 copies of the documentary material as may be required for
23 official use. While in the possession of the investigator, no
24 material so produced shall be available for examination by
25 any individual other than the Attorney General or any false <--
26 claims investigator without the consent of the party who
27 produced the material. Under such reasonable terms and
28 conditions as the Attorney General shall prescribe, ANY <--
29 INDIVIDUAL OTHER THAN THE PROSECUTING AUTHORITY OR ANY
30 INVESTIGATOR WITHOUT THE CONSENT OF THE PERSON WHO PRODUCED
19970H1671B3508 - 32 -
1 THE MATERIAL. UNDER SUCH REASONABLE TERMS AND CONDITIONS AS
2 THE PROSECUTING AUTHORITY SHALL PRESCRIBE, documentary
3 material while in the possession of the investigator shall be
4 available for examination by the party PERSON who produced <--
5 the material or any duly authorized representatives of that
6 party PERSON. <--
7 (3) THE PRODUCTION OF DOCUMENTARY MATERIAL IN RESPONSE <--
8 TO A CIVIL INVESTIGATIVE DEMAND SERVED UNDER THIS SECTION
9 SHALL BE MADE UNDER A SWORN CERTIFICATE, IN SUCH FORM AS THE
10 DEMAND DESIGNATES, BY:
11 (I) IN THE CASE OF A NATURAL PERSON, THE PERSON TO
12 WHOM THE DEMAND IS DIRECTED; OR
13 (II) IN THE CASE OF A PERSON OTHER THAN A NATURAL
14 PERSON, A PERSON HAVING KNOWLEDGE OF THE FACTS AND
15 CIRCUMSTANCES RELATING TO SUCH PRODUCTION AND AUTHORIZED
16 TO ACT ON BEHALF OF SUCH PERSON.
17 THE CERTIFICATE SHALL STATE THAT ALL OF THE DOCUMENTARY
18 MATERIAL REQUIRED BY THE DEMAND AND IN THE POSSESSION,
19 CUSTODY OR CONTROL OF THE PERSON TO WHOM THE DEMAND IS
20 DIRECTED HAS BEEN PRODUCED AND MADE AVAILABLE TO THE
21 INVESTIGATOR IDENTIFIED IN THE DEMAND.
22 (4) EACH INTERROGATORY IN A CIVIL DEMAND SERVED UNDER
23 THIS SECTION SHALL BE ANSWERED SEPARATELY AND FULLY IN
24 WRITING UNDER OATH AND SHALL BE SUBMITTED UNDER A SWORN
25 CERTIFICATE, IN SUCH FORM AS THE DEMAND DESIGNATES, BY:
26 (I) IN THE CASE OF A NATURAL PERSON, THE PERSON TO
27 WHOM THE DEMAND IS DIRECTED; OR
28 (II) IN THE CASE OF A PERSON OTHER THAN A NATURAL
29 PERSON, A PERSON OR PERSONS RESPONSIBLE FOR ANSWERING
30 EACH INTERROGATORY. IF ANY INTERROGATORY IS OBJECTED TO,
19970H1671B3508 - 33 -
1 THE REASONS FOR THE OBJECTION SHALL BE STATED IN THE
2 CERTIFICATE INSTEAD OF AN ANSWER. THE CERTIFICATE SHALL
3 STATE THAT ALL INFORMATION REQUIRED BY THE DEMAND AND IN
4 THE POSSESSION, CUSTODY, CONTROL OR KNOWLEDGE OF THE
5 PERSON TO WHOM THE DEMAND IS DIRECTED HAS BEEN SUBMITTED.
6 TO THE EXTENT THAT ANY INFORMATION IS NOT FURNISHED, THE
7 INFORMATION SHALL BE IDENTIFIED AND REASONS SET FORTH
8 WITH PARTICULARITY REGARDING THE REASONS WHY THE
9 INFORMATION WAS NOT FURNISHED.
10 (5) (I) THE EXAMINATION OF ANY PERSON PURSUANT TO A
11 CIVIL INVESTIGATIVE DEMAND FOR ORAL TESTIMONY SERVED
12 UNDER THIS SECTION SHALL BE DEEMED AN "OFFICIAL
13 PROCEEDING" WITHIN THE MEANING OF 18 PA.C.S. CH. 49
14 SUBCH. A (RELATING TO PERJURY AND FALSIFICATION IN
15 OFFICIAL MATTERS). THE EXAMINATION SHALL BE TAKEN BEFORE
16 AN OFFICER AUTHORIZED TO ADMINISTER OATHS AND
17 AFFIRMATIONS BY THE LAWS OF THIS COMMONWEALTH. THE
18 OFFICER BEFORE WHOM THE TESTIMONY IS TO BE TAKEN SHALL
19 PUT THE WITNESS ON OATH OR AFFIRMATION AND SHALL,
20 PERSONALLY OR BY SOMEONE ACTING UNDER THE DIRECTION OF
21 THE OFFICER AND IN THE OFFICER'S PRESENCE, RECORD THE
22 TESTIMONY OF THE WITNESS. THE TESTIMONY SHALL BE TAKEN
23 ACCURATELY AND SHALL BE TRANSCRIBED. WHEN THE TESTIMONY
24 IS FULLY TRANSCRIBED, A COPY OF THE TRANSCRIPT SHALL BE
25 PROMPTLY FORWARDED TO THE DESIGNATED PERSON. THIS
26 SUBSECTION SHALL NOT PRECLUDE THE TAKING OF TESTIMONY BY
27 ANY MEANS AUTHORIZED BY, AND IN A MANNER CONSISTENT WITH,
28 THE PENNSYLVANIA RULES OF CIVIL PROCEDURE.
29 (II) THE INVESTIGATOR CONDUCTING THE EXAMINATION
30 SHALL EXCLUDE FROM THE PLACE WHERE THE EXAMINATION IS
19970H1671B3508 - 34 -
1 HELD ALL PERSONS EXCEPT THE PERSON GIVING THE TESTIMONY,
2 THE ATTORNEY FOR AND ANY OTHER REPRESENTATIVE OF THE
3 PERSON GIVING THE TESTIMONY, THE PROSECUTING AUTHORITY,
4 ANY PERSON WHO MAY BE AGREED UPON BY THE PROSECUTING
5 AUTHORITY AND THE PERSON GIVING THE TESTIMONY, AND ANY
6 STENOGRAPHER TAKING SUCH TESTIMONY.
7 (III) THE ORAL TESTIMONY OF ANY PERSON TAKEN
8 PURSUANT TO A CIVIL INVESTIGATIVE DEMAND SERVED UNDER
9 THIS SECTION SHALL BE TAKEN IN THE COUNTY WHERE THE
10 OFFICE OF THE INVESTIGATOR CONDUCTING THE EXAMINATION IS
11 SITUATED, OR IN SUCH OTHER PLACE AS MAY BE AGREED UPON BY
12 THE INVESTIGATOR AND SUCH PERSON.
13 (IV) WHEN THE TESTIMONY IS FULLY TRANSCRIBED, THE
14 INVESTIGATOR SHALL AFFORD THE WITNESS, WHO MAY BE
15 ACCOMPANIED BY COUNSEL, A REASONABLE OPPORTUNITY TO
16 EXAMINE AND READ THE TRANSCRIPT, UNLESS SUCH EXAMINATION
17 AND READING ARE WAIVED BY THE WITNESS. ANY CHANGES IN
18 FORM OR SUBSTANCE WHICH THE WITNESS DESIRES TO MAKE SHALL
19 BE ENTERED AND IDENTIFIED UPON THE TRANSCRIPT BY THE
20 OFFICER OR THE INVESTIGATOR, WITH A STATEMENT OF THE
21 REASONS GIVEN BY THE WITNESS FOR MAKING SUCH CHANGES. THE
22 TRANSCRIPT SHALL THEN BE SIGNED BY THE WITNESS, UNLESS
23 THE WITNESS IN WRITING WAIVES THE SIGNING, IS ILL, CANNOT
24 BE FOUND OR REFUSES TO SIGN. IF THE TRANSCRIPT IS NOT
25 SIGNED BY THE WITNESS WITHIN 30 DAYS AFTER BEING AFFORDED
26 A REASONABLE OPPORTUNITY TO EXAMINE IT, THE OFFICER OR
27 THE INVESTIGATOR SHALL SIGN IT AND STATE ON THE RECORD
28 THE FACT OF THE WAIVER, ILLNESS, ABSENCE OF THE WITNESS
29 OR THE REFUSAL TO SIGN, TOGETHER WITH THE REASONS, IF
30 ANY, GIVEN THEREFOR.
19970H1671B3508 - 35 -
1 (V) UPON PAYMENT OF REASONABLE CHARGES THEREFOR, THE
2 INVESTIGATOR SHALL FURNISH A COPY OF THE TRANSCRIPT TO
3 THE WITNESS ONLY, EXCEPT THAT THE PROSECUTING AUTHORITY
4 MAY, FOR GOOD CAUSE, LIMIT SUCH WITNESS TO INSPECTION OF
5 THE OFFICIAL TRANSCRIPT OF THE WITNESS' TESTIMONY.
6 (VI) ANY PERSON COMPELLED TO APPEAR FOR ORAL
7 TESTIMONY UNDER A CIVIL INVESTIGATIVE DEMAND MAY BE
8 ACCOMPANIED, REPRESENTED AND ADVISED BY COUNSEL. COUNSEL
9 MAY ADVISE THE PERSON, IN CONFIDENCE, WITH RESPECT TO ANY
10 QUESTION ASKED OF THAT PERSON. THE PERSON OR COUNSEL MAY
11 OBJECT ON THE RECORD TO ANY QUESTION, IN WHOLE OR IN
12 PART, AND SHALL BRIEFLY STATE FOR THE RECORD THE REASON
13 FOR THE OBJECTION. AN OBJECTION MAY BE MADE, RECEIVED AND
14 ENTERED UPON THE RECORD WHEN IT IS CLAIMED THAT SUCH
15 PERSON IS ENTITLED TO REFUSE TO ANSWER THE QUESTION ON
16 THE GROUNDS OF ANY CONSTITUTIONAL OR OTHER LEGAL RIGHT OR
17 PRIVILEGE, INCLUDING THE PRIVILEGE AGAINST SELF-
18 INCRIMINATION. THE PERSON MAY NOT OTHERWISE OBJECT TO OR
19 REFUSE TO ANSWER ANY QUESTION, AND MAY NOT DIRECTLY OR
20 THROUGH COUNSEL OTHERWISE INTERRUPT THE ORAL EXAMINATION.
21 IF THE PERSON REFUSES TO ANSWER ANY QUESTION, A PETITION
22 MAY BE FILED IN THE COMMONWEALTH COURT UNDER SECTION
23 706(G) FOR AN ORDER COMPELLING THE PERSON TO ANSWER THE
24 QUESTION.
25 (3) (6) Upon completion of: <--
26 (i) the false claims investigation for which any
27 documentary material was produced under this section; and
28 (ii) any case or proceeding arising from such
29 investigation;
30 the investigator shall return to the party PERSON who <--
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1 produced the material all of the material other than copies
2 of the material made pursuant to this section which have not
3 passed into the control of any court or grand jury through
4 introduction into the record of such case or proceeding.
5 (4) (7) When documentary material has been produced by a <--
6 party PERSON under this section for use in a false claims <--
7 investigation and no case or proceeding arising from the
8 investigation has been instituted within a reasonable time
9 after completion of the examination and analysis of all
10 evidence assembled in the course of the investigation, the
11 party PERSON shall be entitled, upon written demand made upon <--
12 the Attorney General PROSECUTING AUTHORITY, to the return of <--
13 all documentary material, other than copies of the material
14 made pursuant to this section, so produced by that party <--
15 PERSON. <--
16 (g) Failure to comply.--Whenever a person fails to comply
17 with a civil investigative demand that is served upon him under
18 this section or whenever satisfactory copying or reproduction of
19 any of the material cannot be done and the party PERSON refuses <--
20 to surrender the material, the Attorney General PROSECUTING <--
21 AUTHORITY may file in the Commonwealth Court and serve upon the
22 party PERSON a petition for an order of the court for the <--
23 enforcement of this section.
24 (h) Petition for relief.--
25 (1) Within 20 days after the service of any demand under
26 this section upon any person or at any time before the return
27 date specified in the demand, whichever period is shorter,
28 the party PERSON may file in the Commonwealth Court and serve <--
29 upon the Attorney General PROSECUTING AUTHORITY a petition <--
30 for an order of the court modifying or setting aside this
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1 demand. The time allowed for compliance with the demand, in
2 whole or in part, as deemed proper and ordered by the court
3 shall not run during the pendency of the petition in the
4 court. The petition shall specify each ground upon which the
5 petitioner relies in seeking the relief and may be based on
6 any failure of the demand to comply with the provisions of
7 this section or on any constitutional or other legal right or
8 privilege of the party PERSON. <--
9 (2) At any time during which the Attorney General <--
10 PROSECUTING AUTHORITY is in custody or control of documentary <--
11 material delivered by a party PERSON in compliance with a <--
12 demand under this section, the party PERSON may file in the <--
13 Commonwealth Court and serve upon the Attorney General <--
14 PROSECUTING AUTHORITY a petition for an order of the court <--
15 requiring the performance of any duty imposed by this
16 section.
17 (3) Whenever a petition is filed in the Commonwealth
18 Court, the court shall have jurisdiction to hear and
19 determine the matter so presented and, after a hearing at
20 which all parties are represented, to enter such order or
21 orders as may be required to carry into effect the provisions
22 of this section.
23 (I) DEFINITION.--AS USED IN THIS SECTION, THE TERM <--
24 "DOCUMENTARY MATERIAL" INCLUDES, BUT IS NOT LIMITED TO, ANY
25 BOOK, PAPER, RECORD, RECORDING, TAPE, REPORT, MEMORANDUM,
26 WRITTEN COMMUNICATION OR OTHER DOCUMENT RELATING TO THE BUSINESS
27 AFFAIRS OF ANY PERSON, ENTERPRISE OR MATTER FALLING WITHIN THE
28 PURVIEW OF THIS ACT.
29 Section 708. Immunity.
30 Whenever any individual refuses on the basis of his privilege
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1 against self-incrimination to comply with a civil investigative
2 demand issued pursuant to this act or to testify or produce
3 other information in a proceeding under this act, the Attorney <--
4 General PROSECUTING AUTHORITY may invoke the provisions of 42 <--
5 Pa.C.S. § 5947 (relating to immunity of witnesses).
6 Section 709. Effective date.
7 This act shall take effect in 60 days.
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