PRINTER'S NO. 3811
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2352
Session of
2020
INTRODUCED BY GROVE, KAUFER, GAYDOS, OWLETT, SANKEY, THOMAS,
JONES, MILLARD, BERNSTINE, RYAN, WHEELAND, SAYLOR, COX, MOUL,
KEEFER, KLUNK, DUSH, B. MILLER, RADER AND ROWE, MAY 21, 2020
REFERRED TO COMMITTEE ON HUMAN SERVICES, MAY 21, 2020
AN ACT
Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
act to consolidate, editorially revise, and codify the public
welfare laws of the Commonwealth," providing for liability
for false claims, for adoption of congressional intent of the
Federal False Claims Act, for damages, costs and civil
penalties, for powers of Attorney General and for civil
investigative demands.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of June 13, 1967 (P.L.31, No.21), known
as the Human Services Code, is amended by adding an article to
read:
ARTICLE XIV-D
LIABILITY FOR FALSE CLAIMS
(a) Preliminary Provisions
Section 1401-D. Short title.
This article shall be known and may be cited as the
Commonwealth Fraud Prevention Act.
Section 1402-D. Definitions.
The following words and phrases when used in this article
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Claim." As follows:
(1) A request or demand for money or property, whether
under contract or otherwise and regardless of whether the
Commonwealth has title to the money or property that is
presented, submitted or otherwise made to:
(i) An employee, officer or agent of the
Commonwealth.
(ii) A contractor, grantee or other recipient, and
any portion of the money or property will be spent or
used on the Commonwealth's behalf or to advance a program
or interest of the Commonwealth, and the Commonwealth:
(A) provides or has provided any portion of the
money or property requested or demanded; or
(B) will reimburse the contractor, grantee or
other recipient for any portion of the money or
property that is requested or demanded.
(2) The term does not include requests or demands for
money or property that the Commonwealth has paid to an
individual as compensation for employment or as an income
subsidy with no restrictions on the individual's use of the
money or property.
(3) To the extent it is not connected to a request or
demand for money or property, a filing with the Commonwealth
pursuant to the Commonwealth's insurance laws shall not
constitute a claim.
"Knowingly." As follows:
(1) Whenever a person, with respect to information, does
any of the following:
20200HB2352PN3811 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(i) Has actual knowledge of the information.
(ii) Acts in deliberate ignorance of the truth or
falsity of the information.
(iii) Acts in reckless disregard of the truth or
falsity of the information.
(2) Proof of specific intent to defraud is not required.
"Legal claim." A claim for relief at law or equity, whether
contemplated or asserted, including any claim, demand, account,
note or any other cause of action or liability.
"Material." A natural tendency to influence, or be capable
of influencing, the payment or receipt of money or property.
"Obligation." An established duty, whether or not fixed,
arising from any of the following:
(1) An express or implied contractual relationship.
(2) An express or implied grantor-grantee relationship.
(3) An express or implied licensor-licensee
relationship.
(4) A fee-based or similar relationship.
(5) A statute or regulation.
(6) The retention of an overpayment.
"Official use." A use that is consistent with the law and
the regulations and policies of the Office of Attorney General,
including the following:
(1) Use in connection with internal memoranda and
reports.
(2) Communications between the Office of Attorney
General and a Federal, State or local government agency or a
contractor of a Federal, State or local government agency,
undertaken in furtherance of an investigation or prosecution
of an action.
20200HB2352PN3811 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(3) Interviews of a whistleblower or other witness.
(4) Oral examinations.
(5) Depositions.
(6) Preparation for and response to civil discovery
requests.
(7) Introduction into the record of an action or
proceeding.
(8) Applications, motions, memoranda and briefs
submitted to a court or other tribunal.
(9) Communications with investigators, auditors,
consultants and experts, the counsel of other parties,
arbitrators and mediators, concerning an investigation,
action or proceeding.
"Original information." Either of the following:
(1) Information voluntarily disclosed to the Office of
Attorney General, prior to a public disclosure, on which the
allegations or transactions in a claim are based.
(2) Information that is independent of and materially
adds to publicly disclosed allegations or transactions.
"Person." A natural person, corporation, firm, association,
organization, partnership, limited liability company, business,
trust, business trust, estate or foundation.
"Public disclosure." Disclosure of substantially the same
allegations or transactions as alleged by a whistleblower, made
in any of the following:
(1) The news media.
(2) A criminal, civil or administrative hearing in which
the Commonwealth is or was a party.
(3) A Federal, State or local legislative or other
governmental report, hearing, audit or investigation.
20200HB2352PN3811 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
"Whistleblower." An individual who furnishes the Office of
Attorney General with information concerning a violation of
section 1411-D.
(b) False Claims
Section 1411-D. Acts subjecting persons to liability and
damages.
(a) Liability.--Except as provided in subsection (b), a
person who commits any of the following acts shall be liable to
the Commonwealth for three times the amount of damages that the
Commonwealth sustains because of the act of that person plus,
subject to subsection (d), a civil penalty of $8,000 for each
violation:
(1) Knowingly presents or causes to be presented a false
or fraudulent claim for payment or approval.
(2) Knowingly makes, uses or causes to be made or used,
a false record or statement material to a false or fraudulent
claim.
(3) Has possession, custody or control of property or
money used or to be used by the Commonwealth and knowingly
delivers or causes to be delivered less than all of the money
or property.
(4) Is authorized to make or deliver a document
certifying receipt of property used or to be used by the
Commonwealth and, intending to defraud the Commonwealth,
makes or delivers a receipt without completely knowing that
the information on the receipt is true.
(5) Knowingly buys or receives as a pledge of an
obligation or debt, public property from an officer or
employee of the Commonwealth who lawfully may not sell or
pledge the property.
20200HB2352PN3811 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(6) Knowingly makes, uses or causes to be made or used,
a false record or statement material to an obligation to pay
or transmit money or property to the Commonwealth or
knowingly conceals, or knowingly and improperly avoids or
decreases an obligation to pay or transmit money or property
to the Commonwealth.
(7) Knowingly fails to disclose a fact, event or
occurrence material to an obligation to pay or transmit money
or property to the Commonwealth.
(8) Is a beneficiary of an inadvertent submission of a
false claim, subsequently discovers the falsity of the claim
and fails to disclose the false claim to the Commonwealth
within a reasonable time after discovery of the false claim.
(9) Conspires to commit a violation of paragraph (1),
(2), (3), (4), (5), (6), (7) or (8).
(b) Safe harbor and limitation of damages.--
(1) Notwithstanding subsection (a), a person violating
this section shall not be subject to more than one time the
amount of damages under subsection (a) if all of the
following apply:
(i) The person committing the violation furnished
the Office of Attorney General with all information known
to that person about the violation within 30 days after
the date on which the person first obtained the
information.
(ii) The person fully cooperated with an
investigation by the Commonwealth.
(iii) At the time the person furnished the Office of
Attorney General with information about the violation, no
criminal prosecution, civil action or administrative
20200HB2352PN3811 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
action had commenced with respect to the violation, and
the person did not have actual knowledge of the existence
of an investigation into the violation.
(iv) Under terms that the Attorney General specifies
or to which the Attorney General otherwise agrees, the
person pays the Commonwealth for the total amount of
damages that the Commonwealth sustained as a result of
the violation, plus applicable civil penalties under
subsection (a) and the Commonwealth's costs under
subsection (c).
(2) This subsection shall not be construed to:
(i) limit the Attorney General's authority and
discretion to investigate a violation of, or prosecute or
settle an action brought under, section 1412-D; or
(ii) restrict the terms of a settlement respecting a
violation of section 1412-D.
(c) Commonwealth costs.--A person liable for damages or
penalties under subsection (a) shall also be liable to the
Commonwealth for the reasonable costs of investigating and
prosecuting violations specified under subsection (a) or (b),
including reasonable costs to the Office of Attorney General
and, if applicable, a district attorney designated under section
1412-D(a)(2).
(d) Adjustment of penalties.--The civil penalties payable
under subsection (a) shall be adjusted from time to time
consistent with the Federal Civil Penalties Inflation Adjustment
Act of 1990 (Public Law 101-410, 28 U.S.C. § 2461 note, as
amended).
(e) Exemption from disclosure.--Information furnished under
subsection (b) shall be exempt from disclosure under the act of
20200HB2352PN3811 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law .
Section 1412-D. Attorney General investigations, prosecutions
and civil actions.
(a) Responsibilities.--The following shall apply:
(1) The Attorney General shall have authority to
investigate a violation of section 1411-D. If the Attorney
General finds that a person has violated or is violating
section 1411-D, the Attorney General may bring a civil action
under this section against that person.
(2) The Attorney General may enter into an agreement
with a district attorney to designate the district attorney
to serve as the Attorney General's designee, investigate a
violation of section 1411-D and bring a civil action under
this section against a person that has violated or is
violating section 1411-D. The Attorney General at any time
may rescind the designation made under this paragraph.
(3) Nothing in section 1407 shall be construed to limit
the authority of the Attorney General to investigate or
prosecute violations under section 1411-D.
(b) Information provided by whistleblowers.--The following
shall apply:
(1) I f the Commonwealth prosecutes an action under
section 1411-D based on original information furnished by a
whistleblower, the Attorney General may award the
whistleblower a portion of the proceeds of the action or
settlement of the legal claim, not to exceed 25% based on the
following factors:
(i) The extent to which the information
substantially contributed to the prosecution of the
action or settlement of the legal claim.
20200HB2352PN3811 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(ii) Whether the action is based primarily on
disclosures of specific information, other than
information provided by the whistleblower, relating to
allegations or transactions in a criminal, civil or
administrative hearing in which the Commonwealth is a
party or in a Federal, State or local legislative or
governmental report, hearing, audit or investigation, or
from the news media.
(iii) If the whistleblower planned or initiated the
violation.
(iv) Whether the whistleblower complies with
paragraph (2).
(2) If a whistleblower is a relator or qui tam plaintiff
in an action in another jurisdiction and the action is based
on or related to information that the whistleblower furnishes
or will furnish under this subsection, within 90 days after
becoming a party to the action, the whistleblower must serve
on the Office of Attorney General a copy of the complaint and
written disclosure of substantially all material evidence and
information that the whistleblower possesses, including all
material evidence and information adduced in the action.
(3) A whistleblower shall not be eligible to receive an
award under this subsection if the whistleblower planned and
initiated the violation of section 1411-D and is convicted of
criminal conduct arising from the whistleblower's role in the
violation. The conviction shall not prejudice the
Commonwealth's authority to prosecute an action under section
1411-D.
(4) T o qualify for an award under this subsection, if a
whistleblower is an employee of a person suspected to have
20200HB2352PN3811 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
committed a violation under section 1411-D, the whistleblower
must first inform the whistleblower's employer that the
conduct may constitute a violation under this article. A
whistleblower who so informs the employer shall qualify for
the protections specified under section 1417-D.
(c) Commonwealth not liable for expenses.--The Commonwealth
is not liable for expenses that a whistleblower incurs in
furnishing information described in subsection (b).
(d) Cooperation by agencies.--Commonwealth agencies shall
cooperate in the investigation and prosecution of false claims
under this section.
(e) Limitations on Office of Attorney General.--A person
suspected of committing a violation under section 1411-D may not
be investigated if the whistleblower associated with the
suspected violation was part of one of the following:
(1) A civil action taken by the United States Department
of Justice for a violation under the False Claims Act (Public
Law 97-258, 31 U.S.C. § 3729-3733).
(2) An action taken by a qui tam plaintiff under the
False Claims Act (Public Law 97-258, 31 U.S.C. § 3729-3733)
that was dismissed by a court of competent jurisdiction, but
only if the dismissal was based on the merits.
Section 1413-D. Civil investigative demands.
(a) Issuance and service.--The following shall apply:
(1) Whenever the Attorney General or, for the purposes
of this subsection, the Attorney General's designee, has
reason to believe that a person may be in possession, custody
or control of documentary material or information relevant to
a false claims investigation under this article, the Attorney
General or designee may, before commencing a civil action
20200HB2352PN3811 - 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
under section 1412-D(a), issue in writing and cause to be
served upon the person a civil investigative demand requiring
the person to:
(i) produce documentary material for inspection and
copying;
(ii) answer in writing written interrogatories with
respect to documentary material or information;
(iii) give oral testimony concerning documentary
material or information; or
(iv) furnish any combination of materials, answers
or testimony.
(2) Whenever a civil investigative demand is an express
demand for a product of discovery, the Attorney General or
the Attorney General's designee shall:
(i) cause to be served in any manner authorized by
this subsection a copy of the demand upon the person from
whom or which the discovery was obtained; and
(ii) notify the demand issuee of the date on which
the copy was served.
(3) Notwithstanding the provisions of 18 Pa.C.S. Ch. 91
(relating to criminal history record information) or any
other law to the contrary, the Attorney General may access
and share data, records, documents or other information,
including criminal history record information, intelligence
information, investigative information and treatment
information obtained during the course of, and as necessary
to advance, an investigation or prosecution of a potential or
actual violation of section 1411-D with the following:
(i) A section, unit, subunit or individual employee
or agent of the Office of Attorney General authorized and
20200HB2352PN3811 - 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
designated by the Attorney General to investigate or
prosecute a potential or actual violation of section
1411-D.
(ii) The United States Department of Justice.
(iii) The appropriate civil prosecutorial authority
of another jurisdiction.
(4) The recipient described in paragraph (3)(i) shall be
subject to the provisions of 18 Pa.C.S. Ch. 91 relating to
further disclosure, dissemination and sharing of the
information with noncriminal justice agencies, departments
and individuals, except as may be permitted by paragraph (3)
(ii) and (iii).
(b) Contents and deadlines.--The following shall apply:
(1) A civil investigative demand shall state the nature
of the conduct constituting the alleged violation of this
article that is under investigation and the applicable
provisions of this article alleged to be violated.
(2) If the civil investigative demand is for the
production of documentary material, the demand shall:
(i) describe each class of documentary material to
be produced with definiteness and certainty as to permit
the material to be fairly identified;
(ii) prescribe a return date for each class that
will provide a reasonable time period within which the
material so demanded may be assembled and made available
for inspection and copying; and
(iii) identify the false claims investigator to whom
the material shall be available.
(3) If the civil investigative demand is for answers to
written interrogatories, the demand shall:
20200HB2352PN3811 - 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(i) set forth with specificity the written
interrogatories to be answered;
(ii) prescribe dates at which time the answers to
the written interrogatories shall be submitted; and
(iii) identify the false claims investigator to whom
the answers shall be submitted.
(4) If the civil investigative demand is for oral
testimony, the demand shall:
(i) prescribe a date, time and place at which the
oral testimony shall be given;
(ii) identify a false claims investigator who shall
conduct the examination and the custodian to whom the
transcript of the examination shall be submitted;
(iii) specify that attendance and testimony are
necessary to the conduct of the false claims
investigation; and
(iv) describe the general purpose for which the
demand is being issued and general nature of the
testimony, including the primary areas of inquiry, which
will be taken under the demand.
(5) A civil investigative demand shall contain the
following statement printed at the beginning of the demand:
"You have the right to seek the assistance of an attorney,
who may represent you in all phases of the investigation of
which this civil investigative demand is a part."
(6) A civil investigative demand that is an express
demand for a product of discovery shall not be returned or
returnable until 20 days after a copy of the demand has been
served upon the person from whom or which the discovery was
obtained.
20200HB2352PN3811 - 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(7) The date prescribed for commencement of oral
testimony under a civil investigative demand shall not be
less than seven days after the date on which the demand is
served, unless the Attorney General or a designee determines
that exceptional circumstances exist and warrant the
commencement of testimony within a lesser time period.
(8) The Attorney General, or a designee, may not
authorize the issuance of more than one civil investigative
demand for the same person's oral testimony unless:
(i) the person requests otherwise; or
(ii) the Attorney General or designee notifies the
person in writing that an additional demand for oral
testimony is necessary.
(c) Protected material or information.--The following shall
apply:
(1) A civil investigative demand issued may not require
the production of documentary material, the submission of
answers to written interrogatories or the giving of oral
testimony if the material, answers or testimony would be
protected from disclosure under:
(i) the standards applicable to subpoenas or
subpoenas duces tecum issued by a court of this
Commonwealth to aid in a grand jury investigation; or
(ii) the standards applicable to discovery under the
Pennsylvania Rules of Civil Procedure or other applicable
court rule, to the extent that the application of the
standards to a demand is appropriate and consistent with
the provisions and purposes of this section.
(2) With respect to the effect on other orders, rules
and laws:
20200HB2352PN3811 - 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(i) Except where a statute explicitly precludes the
superseding effect imposed by this paragraph, a civil
investigative demand that is an express demand for a
product of discovery supersedes an inconsistent order,
rule or provision of law, other than in this section,
that prevents or restrains disclosure of the product of
discovery to any person.
(ii) A person's disclosure of a product of discovery
under an express demand does not constitute a waiver of
any right or privilege to resist discovery of trial
preparation materials that the person may be entitled to
invoke.
(d) Service and jurisdiction.--Except as otherwise provided,
the following apply to civil investigative demands issued and
served under this section and petitions filed under subsection
(j):
(1) The following shall apply regarding by whom served:
(i) A civil investigative demand may be served by a
false claims investigator, a law enforcement officer or
another individual authorized by law to serve process in
the jurisdiction where the demand is served.
(ii) A petition may be served by any person
authorized to serve process under the Pennsylvania Rules
of Civil Procedure or other applicable court rule.
(2) The following shall apply regarding location of
service:
(i) A civil investigative demand or petition may be
served upon a person or entity consistent with and in the
manner prescribed by 42 Pa.C.S. Ch. 53 (relating to bases
of jurisdiction and interstate and international
20200HB2352PN3811 - 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
procedure) and the Pennsylvania Rules of Civil Procedure
or other applicable court rule, for personal service
inside or outside this Commonwealth.
(ii) To the extent that the courts of the
Commonwealth can assert jurisdiction over a person
outside this Commonwealth, a court with jurisdiction over
an action filed under this article shall have the same
jurisdiction to take action respecting the person's
compliance with this section that it would have if the
person resided within the court's jurisdiction.
(3) The following shall apply regarding service upon
legal entities and natural persons:
(i) A civil investigative demand or petition may be
served upon a legal entity by:
(A) delivering an executed copy of the demand or
petition to any partner, executive officer, managing
agent or general agent of the legal entity or to an
employee designated or agent authorized by
appointment or law to receive service of process on
behalf of the legal entity;
(B) delivering an executed copy of the demand or
petition to the legal entity's principal office or
place of business;
(C) depositing an executed copy of the demand or
petition in the United States mail by registered or
certified mail with a return receipt requested,
addressed to the legal entity at its principal office
or place of business; or
(D) any other method provided by the
Pennsylvania Rules of Civil Procedure or other
20200HB2352PN3811 - 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
applicable court rule.
(ii) A civil investigative demand or petition may be
served upon a natural person by:
(A) delivering an executed copy of the demand or
petition to the person;
(B) depositing an executed copy of the demand or
petition in the United States mail by registered or
certified mail with a return receipt requested,
addressed to the person at the person's residence or
principal office or place of business; or
(C) any other method provided by the
Pennsylvania Rules of Civil Procedure or other
applicable court rule.
(4) A verified return by the individual serving a civil
investigative demand or petition, setting forth the manner of
service, shall be proof of service. In the case of service by
registered or certified mail, the return post office receipt
of the demand's or petition's delivery shall accompany the
return.
(e) Documentary material.--
(1) The following shall apply regarding verified
certificate:
(i) The production of documentary material shall be
made under a written and verified certificate, in the
form as the demand designates, by the following
individuals:
(A) if the demand issuee is a natural person, by
the demand issuee; and
(B) if the demand issuee is not a natural
person, by an individual who has knowledge of facts
20200HB2352PN3811 - 17 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and circumstances relating to the production and is
authorized to act on the demand issuee's behalf.
(ii) The certificate shall state that all the
documentary material required by the demand and in the
demand issuee's possession, custody or control has been
produced and made available to the false claims
investigator identified in the demand.
(2) The following shall apply regarding production of
materials:
(i) A demand issuee shall make the demanded material
available for inspection and copy to the false claims
investigator identified in the demand:
(A) at the demand issuee's principal place of
business;
(B) at another place as the false claims
investigator and the demand issuee thereafter may
agree and prescribe in writing; or
(C) as the court may direct under this section.
(ii) The documentary material shall be made
available on the return date specified in the demand or
on a later date as the false claims investigator may
prescribe in writing. The demand issuee may, upon written
agreement with the false claims investigator, substitute
copies for originals of all or any part of the material.
(3) If the demand issuee objects to the production of
any portion of the required documentary material or otherwise
withholds any portion of the material, the issuee shall with
particularity state the reasons for the objection or
withholding and identify all withheld material.
(f) Interrogatories.--
20200HB2352PN3811 - 18 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(1) With respect to answers and verified certificates,
each interrogatory in a civil investigative demand shall be
answered separately and fully in writing under oath and shall
be submitted under a verified certificate, in the form as the
demand designates stating that all information required by
the demand and in the demand issuee's possession, custody,
control or knowledge has been submitted by the following
individuals:
(i) if the demand issuee is a natural person, by the
demand issuee; and
(ii) if the demand issuee is not a natural person,
by the individuals responsible for answering each
interrogatory.
(2) With respect to objections and withholding of
information, if the demand issuee objects to an interrogatory
or any portion thereof, or otherwise withholds information,
the demand issuee shall state with particularity the reasons
for the objection or withholding and identify all withheld
information.
(g) Oral examinations.--The following shall apply:
(1) With respect to procedures:
(i) The examination of a person under a civil
investigative demand for oral testimony shall be taken
before an officer authorized to administer oaths and
affirmations by the laws of this Commonwealth or of the
place where the examination is held.
(ii) The officer shall put the witness on oath or
affirmation and shall personally or by someone acting
under the officer's direction and in the officer's
presence, record the witness's testimony.
20200HB2352PN3811 - 19 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(iii) The testimony shall be stenographically
transcribed.
(iv) When the transcribing is complete, the officer
shall promptly transmit a copy of the transcript to the
custodian.
(v) This subsection shall not preclude the taking of
testimony by any means authorized by, and in a manner
consistent with, the Pennsylvania Rules of Civil
Procedure or other applicable court rule.
(2) With respect to persons present, the false claims
investigator conducting the examination shall exclude from
the place where the examination is held all persons except
the following:
(i) the witness giving the testimony;
(ii) the attorney for the witness;
(iii) the attorney for the Commonwealth;
(iv) the officer before whom the testimony is to be
taken;
(v) the court reporter taking the testimony; and
(vi) any other person agreed to by the witness and
the attorney for the Commonwealth.
(3) Oral testimony taken under a civil investigative
demand shall be taken in the county or city within which the
person resides, is found, or transacts business, or in a
place to which the false claims investigator and the witness
otherwise agree.
(4) With respect to transcripts:
(i) When the transcript of testimony is completed,
the false claims investigator or the officer before whom
the testimony is taken shall afford the witness, who may
20200HB2352PN3811 - 20 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
be accompanied by counsel, a reasonable opportunity to
examine and read the transcript, unless the witness
waives the reading and examination.
(ii) The officer or false claims investigator shall
enter and identify on the transcript any changes in form
or substance that the witness desires to make with a
statement of the reasons the witness gives for making the
changes.
(iii) The witness shall sign the transcript after
the changes, if any, are made, unless the witness waives
the signing in writing, is ill, cannot be found, or
refuses to sign. If the witness does not sign the
transcript within 30 days after being afforded a
reasonable opportunity to sign it, the officer or false
claims investigator shall sign it and state on the record
the fact of the witness's waiver, illness, absence or
refusal to sign, together with the reasons, if any, given
for why the witness did not sign the transcript.
(iv) The officer before whom the testimony is taken
shall certify on the transcript that the witness was
sworn by the officer and the transcript is a true record
of the witness's testimony, and the officer shall
promptly deliver the transcript or send the transcript by
registered or certified mail to the custodian.
(v) Upon receipt of payment of reasonable charges,
the false claims investigator shall furnish a copy of the
transcript to the witness only, except that the Attorney
General or the Attorney General's designee may, for good
cause, limit the witnesses to inspecting the official
transcript.
20200HB2352PN3811 - 21 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(5) With respect to the conduct of oral testimony, the
following shall apply:
(i) A witness compelled to appear for oral testimony
may be accompanied, represented, and advised by counsel.
Counsel may advise the witness in confidence with respect
to any question asked of the witness.
(ii) The witness or counsel may object on the record
to any question, in whole or in part, and shall briefly
state for the record the reason for the objection. An
objection may be made, received and entered upon the
record when the objection is claimed that the witness is
entitled to refuse to answer on the grounds of any
constitutional or legal right or privilege, including the
privilege against self-incrimination. The witness may not
otherwise object to or refuse to answer any question and
may not directly or through counsel otherwise interrupt
the oral examination. If a witness refuses to answer a
question, a petition may be filed with the court under
this section for an order compelling the witness to
answer the question.
(6) With respect to fees, a witness appearing for oral
testimony under a civil investigative demand shall be
entitled to the same fees and allowances that are paid to
witnesses in the courts of common pleas.
(h) Refusal to comply on self-incrimination privilege
grounds.--The Attorney General may invoke the provisions of 42
Pa.C.S. § 5947 (relating to immunity of witnesses) if a demand
issuee on the grounds of privilege against self-incrimination,
refuses to:
(1) furnish documentary material or answer an
20200HB2352PN3811 - 22 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
interrogatory in response to a civil investigative demand;
(2) answer a question asked during oral examination made
under a civil investigative demand; or
(3) otherwise comply with a civil investigative demand.
(i) Custody of documents, answers and transcripts.--
(1) With respect to the designation of a custodian,
unless the Attorney General designates another person, the
false claims investigator identified on a civil investigative
demand shall serve as custodian of documentary material,
interrogatory answers and oral testimony transcripts received
under this section. The Attorney General may designate
additional persons as the Attorney General determines to be
necessary to serve as deputy, alternative or successor
custodians.
(2) With respect to responsibility for materials, copies
and disclosure, a false claims investigator who receives
documentary material, interrogatory answers or oral testimony
transcripts under this section shall:
(i) if serving as custodian, take possession of the
material, answers or transcripts and be responsible for
their usage and for the return of documentary material;
or
(ii) if not serving as custodian, transmit the
materials, answers or transcripts to the custodian, who
shall take possession and responsibility for the
materials, answers or transcripts.
(3) With respect to custodian copies, the custodian may
cause the preparation of copies of documentary material,
interrogatory answers or oral testimony transcripts as may be
required for official use by a false claims investigator or
20200HB2352PN3811 - 23 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
any other officer or employee of the Office of Attorney
General authorized to use the materials, answers or
transcripts in connection with the taking of oral testimony
under this section. Except as otherwise provided in this
section, no documentary material, interrogatory answers or
oral testimony transcripts or copies of the foregoing shall
be available for examination by any individual other than a
false claims investigator or other officer or employee of the
Office of Attorney General.
(4) With respect to restricted disclosure:
(i) Except as otherwise provided in this section, no
documentary material, interrogatory answers or oral
testimony transcripts or copies of the foregoing shall be
available for examination by any individual other than a
false claims investigator or other officer or employee of
the Office of Attorney General.
(ii) The prohibition under subparagraph (i) shall
not apply if the person producing material, answers or
transcripts, or in the case of any product of discovery
produced under an express demand for the material, the
person from whom or which the discovery was obtained,
consents.
(iii) Nothing in this paragraph shall be construed
to prevent disclosure to the General Assembly or to a
Commonwealth agency in furtherance of statutory or
constitutional obligations, except that any disclosure
shall be subject to 18 Pa.C.S. Ch. 91.
(iv) While in the custodian's possession and under
reasonable terms and conditions as the Attorney General
prescribes, documentary material, interrogatory answers
20200HB2352PN3811 - 24 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and oral testimony transcripts shall be made available
for examination by the person that produced them or by
the person's authorized representative.
(5) With respect to the use of documentary material,
answers or transcripts in other proceedings:
(i) Notwithstanding 18 Pa.C.S. Ch. 91, an attorney
of the Office of Attorney General who is designated to
appear before a court, grand jury or Commonwealth agency
in a case or proceeding may, in connection with the case
or proceeding, obtain from the custodian and use any
documentary material, interrogatory answers or oral
testimony transcripts that the attorney determines is
required.
(ii) Upon the case's or proceeding's completion, the
attorney shall return to the custodian documentary
material, interrogatory answers or oral testimony
transcripts that have not passed into the court's, grand
jury's or agency's control through introduction into the
case or proceeding's record.
(6) With respect to conditions for return of material,
the following shall apply:
(i) Subject to subparagraphs (ii) and (iii), upon
the written request of a person producing documentary
material in connection with a false claims investigation,
the custodian shall return the material.
(ii) The custodian shall return the material only
if:
(A) all cases or proceedings arising out of the
false claims investigation have been completed; or
(B) no case or proceeding in which the material
20200HB2352PN3811 - 25 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
may be used has been commenced within a reasonable
time after completion of the examination and analysis
of all documentary material and other information
assembled in the course of the false claims
investigation.
(iii) The custodian shall not return either of the
following:
(A) material that has passed into a court, grand
jury or Commonwealth agency's control through
introduction into a case or proceeding's record; or
(B) copies furnished to the false claims
investigator or made for the Attorney General under
this subsection.
(j) Judicial proceedings.--The following shall apply:
(1) With respect to a petition for enforcement, the
Attorney General or the Attorney General's designee may file
and serve upon a person a petition for a court order
enforcing a civil investigative demand if:
(i) the person fails to comply with a demand served
upon the person; or
(ii) satisfactory copying or reproduction of the
material requested in the demand cannot be done and the
person refuses to surrender the material.
(2) With respect to a petition to modify or set aside a
demand, the following shall apply:
(i) A demand issuee that has received a civil
investigative demand may file and serve upon the false
claims investigator identified in the demand a petition
for a court order modifying or setting aside the demand.
(ii) If a civil investigative demand is an express
20200HB2352PN3811 - 26 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
demand for a product of discovery, the person from whom
or which discovery was obtained may, upon receipt of the
demand, file and serve upon the false claims investigator
identified in the demand a petition for a court order
modifying or setting aside those portions of the demand
requiring production of the product of discovery.
(iii) A petition under this paragraph must be filed
within:
(A) The earlier of 20 days after the civil
investigative demand is served on the person or at
any time before the return date specified in the
demand; or
(B) a longer period if the false claims
investigator so prescribes in writing in the demand.
(iv) A petition under this paragraph shall specify
each ground the petitioner relies on in seeking relief
and may be based on either of the following:
(A) failure of the civil investigative demand,
or any portion thereof, to comply with this section's
provisions; or
(B) a constitutional or other legal right or
privilege of the petitioner.
(v) During the pendency of a petition under this
paragraph, the following apply:
(A) The court may stay, as it deems proper,
compliance with all or part of the demand and the
running of time allowed for compliance therewith.
(B) The petitioner must comply with any portion
of the demand that is not sought to be modified or
set aside, or otherwise subject to a stay issued by
20200HB2352PN3811 - 27 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
the court.
(3) With respect to a petition to require custodian's
performance of duties, at any time a custodian possesses or
is in custody or control of documentary material,
interrogatory answers or transcripts of oral testimony given
under a civil investigative demand, the following persons may
file and serve upon the custodian a petition for a court
order requiring the custodian to perform any duty imposed on
the custodian by this section:
(i) the demand issuee furnishing the material,
answers or testimony; and
(ii) in the case of an express demand for a product
of discovery, the person from whom or which discovery was
obtained.
(4) With respect to jurisdiction and contempt, the
following shall apply:
(i) The court shall have jurisdiction to hear and
determine a petition filed under this section and, after
a hearing at which all parties have the opportunity to be
heard, to enter orders as may be required to carry out
the provisions of this section.
(ii) A final order entered by Commonwealth Court
under this section shall be subject to appeal to the
Supreme Court under 42 Pa.C.S. § 723 (relating to appeals
from Commonwealth Court).
(k) Exemption from disclosure.--Documentary material,
interrogatory answers and oral testimony provided under a civil
investigative demand issued are exempt from disclosure under the
act of February 14, 2008 (P.L.6, No.3), known as the Right-to-
Know Law.
20200HB2352PN3811 - 28 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(l) Definitions.--For purposes of this section, the
following words and phrases shall have the meanings given to
them in this subsection unless the context clearly indicates
otherwise:
"Custodian." The false claims investigator or other
custodian or any deputy or alternate custodian designated by the
Attorney General under subsection (i).
"Demand issuee." A person to whom or which a civil
investigative demand is issued or directed.
"Documentary material." Includes the original or any copy of
any book, record, report, memorandum, paper, communication,
tabulation, chart or other document or data compilations stored
or accessible through computer or other information retrieval
systems, together with appropriate and succinct instructions and
all other materials necessary to use or interpret the data
compilations, and any product of discovery.
"False claims investigation." Any inquiry conducted by a
false claims investigator for the purposes of ascertaining
whether any person is or has been engaged in a violation of this
article.
"False claims investigator." An attorney or investigator
employed by the Office of Attorney General, or by a district
attorney designated under section 1412-D(a)(2), who is charged
with the duty of enforcing or carrying out the provisions of
this article, or an officer or employee of the Commonwealth
acting under the attorney or investigator's direction and
supervision in connection with a false claims investigation.
"Legal entity." A person other than a natural person.
"Person." As defined in 1 Pa.C.S. § 1991 (relating to
definitions).
20200HB2352PN3811 - 29 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
"Product of discovery." The term includes:
(1) the original or duplicate of a deposition
interrogatory, document, thing, result of the inspection of
land or other property, examination or admission that is
obtained by any method of discovery in a judicial or
administrative proceeding of an adversarial nature;
(2) a digest, analysis, selection, compilation or
derivation of an item listed in paragraph (1); and
(3) an index or other manner of access to an item listed
in paragraph (1).
"Verified." Supported by oath or affirmation and averred
subject to the penalties of 18 Pa.C.S. § 4904 (relating to
unsworn falsification to authorities).
Section 1414-D. Disposition of Commonwealth's share of
proceeds.
(a) Distribution and division.--The Commonwealth's share of
the proceeds of an action or settlement under this article, not
including the costs under section 1411-D(c) and less any amount
legally required to be paid from the Commonwealth's share, shall
be distributed in the following manner:
(1) An amount equal to the total enforcement costs shall
be distributed from the Commonwealth's share as follows:
(i) The Office of Attorney General shall receive an
amount proportionate to its share of the enforcement
costs.
(ii) The amount proportionate to the district
attorney's share of the enforcement costs.
(iii) Money distributed to the Office of Attorney
General under this paragraph shall be reserved for use by
the Medicaid Fraud Control Section.
20200HB2352PN3811 - 30 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) After distribution under paragraph (1), an amount
sufficient to reimburse the damages sustained by Commonwealth
agencies as a result of a violation of section 1411-D shall
be distributed from the Commonwealth's share to the agencies.
A Commonwealth agency distributed money under this paragraph
shall use the money to reimburse the programs administered by
the agency whose funds were diminished as a result of the
violation.
(3) The amount from the Commonwealth's share remaining
after distribution under paragraphs (1) and (2) shall be
deposited into the Budget Stabilization Reserve Fund.
(b) Definition.--As used in this section, the term
"enforcement costs" means the costs awarded under section 1411-
D(c) to the Office of Attorney General and, if applicable, to a
district attorney designated under section 1411-D(a)(2).
Section 1415-D. Annual report.
(a) Report required.--The Attorney General shall prepare an
annual report concerning actions taken under this article by
December 31 each year, beginning December 31, 2021. The report
shall be submitted to the following:
(1) The Governor.
(2) The Department of Auditor General.
(3) The Independent Fiscal Office.
(4) The Office of Inspector General.
(5) The members of the General Assembly.
(6) The Legislative Budget and Finance Committee.
(b) Contents.--The report shall include the following:
(1) The number of actions filed under this article by
the Attorney General.
(2) The number of actions filed under this article by
20200HB2352PN3811 - 31 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
the Attorney General that were completed.
(3) The amount that was recovered in actions filed under
this article by the Attorney General through settlement or
through a judgment and, if known, the amount recovered for
damages, penalties and litigation costs.
(4) The amount expended by the Office of Attorney
General for investigation, litigation and all other costs for
legal claims under this article.
(5) A narrative describing the most notable or prevalent
violations of section 1411-D and recommendations on how
Commonwealth agencies may prevent similar violations from
occurring.
(6) Legislative recommendations that the Attorney
General may have for amendments to this article and any other
law as it relates to this article.
Section 1416-D. Statute of limitations, burden of proof and
estoppel.
(a) Statute of limitations.--
(1) Except as otherwise provided under this section, a
civil action under section 1412-D may not be brought more
than 10 years after the date on which the violation was
committed.
(2) If a violation is part of a continuing course of
conduct, a civil action under section 1412-D may not be
brought more than 10 years after the date on which the last
violation in the continuing course of conduct was committed.
(b) Burden of proof.--In an action brought under section
1412-D, the Commonwealth shall be required to prove all
essential elements of the cause of action, including damages, by
a preponderance of the evidence.
20200HB2352PN3811 - 32 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(c) Estoppel.--Notwithstanding any other provision of law, a
final judgment rendered in favor of the Commonwealth in a
criminal proceeding charging false statements or fraud, whether
upon a verdict after trial or upon a plea of guilty or nolo
contendere, shall estop the defendant from denying the essential
elements of the offense in an action brought under section 1412-
D that involves the same transaction as in the criminal
proceeding.
Section 1417-D. Relief from retaliatory actions.
(a) General rule.--An employee, contractor or agent shall be
entitled to all relief necessary to make the employee,
contractor or agent whole, if the employee, contractor or agent
is discharged, demoted, suspended, threatened, harassed or in
any other manner discriminated against in the terms and
conditions of employment, contract or agency because of lawful
acts done by the employee, contractor, agent or associated
others in furtherance of an action under this article or other
efforts to stop one or more violations of this article.
(b) Relief.--Relief under subsection (a) shall include
reinstatement with the same seniority status that the employee,
contractor or agent would have had but for the discrimination,
two times the amount of back pay, interest on the back pay and
compensation for special damages sustained as a result of the
discrimination, including litigation costs and reasonable
attorney fees.
(c) Limitation.--An action under this section may not be
brought more than three years after the date on which the
retaliation occurred.
Section 1418-D. Actions and remedies under other laws.
(a) Actions and remedies not exclusive.--The provisions of
20200HB2352PN3811 - 33 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
this article are not exclusive and the actions and remedies
provided for in this article shall be in addition to any other
actions and remedies provided for in any other law or available
under the common law.
(b) Construction.--The availability of an action or remedy
provided for in any other law or available under the common law
shall not be construed to exclude, impair or limit the
availability or use of the provisions of this article.
(c) Existing privileges and immunities unaffected.--This
article shall not abrogate or modify any existing statutory or
common law privilege or immunity.
Section 1419-D. Rules of procedure.
Except as otherwise specified in, or where clearly
inconsistent with, this article, civil actions under this
article shall be governed by the Pennsylvania Rules of Civil
Procedure or other applicable court rule.
Section 1420-D. Implementation.
(a) Regulations.--The Attorney General is empowered and
authorized to promulgate regulations as necessary to carry out
the purpose of this article.
(b) Guidelines.--The following shall apply:
(1) To facilitate the prompt implementation of this
article, in lieu of initially promulgating regulations, the
Attorney General may promulgate, adopt and use guidelines
that shall be transmitted to the Legislative Reference Bureau
for publication in the Pennsylvania Bulletin. A guideline
promulgated under this section shall not be subject to review
under any of the following:
(i) Section 612 of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of
20200HB2352PN3811 - 34 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30