Please wait while the document is loaded.

A07424
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, ROWE AND NELSON,
MAY 21, 2020
AS REPORTED FROM COMMITTEE ON HUMAN SERVICES, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 9, 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. 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, for civil investigative demands
and for COVID-19-related liability.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Declaration of policy.
Section 103. Definitions.
Chapter 3. False Claims
Section 301. Acts subjecting persons to liability and damages.
Section 302. Attorney General investigations, prosecutions and
civil actions.
Section 303. Civil investigative demands.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Section 304. Disposition of Commonwealth's proceeds.
Section 305. Report.
Section 306. Statute of limitations, burden of proof and
estoppel.
Section 307. Relief from retaliatory actions.
Section 308. Actions and remedies under other laws.
Section 309. Qualification of act for increase share of
recoveries.
Section 310. Rules of procedure.
Section 311. Implementation.
Section 312. Jurisdiction and Attorney General as relator in
Federal false claims actions.
Chapter 5. COVID-19 Related Liability
Section 501. Definitions.
Section 501.1. School and child care liability.
Section 502. Personal protective equipment liability.
Section 503. Business or government services liability.
Section 504. Covered provider liability.
Section 505. Application of chapter.
Section 506. Construction of chapter.
Chapter 7. Miscellaneous Provisions
Section 701. Nonseverability.
Section 702. Expiration.
Section 703. Effective date.
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
A07424 - 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
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
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.
A07424 - 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) 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:
(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:
A07424 - 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
(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.
(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
A07424 - 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
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.
"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
A07424 - 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
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.
(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
A07424 - 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
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
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).
A07424 - 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
(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
February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law.
(F) RECIPIENT LIABILITY RESTRICTED.--A PERSON WHO IS A
RECIPIENT OF PUBLIC SUPPORT SERVICES SHALL NOT BE LIABLE FOR A
VIOLATION UNDER THIS SECTION UNLESS THE INDIVIDUAL INTENTIONALLY
VIOLATES SUBSECTION (A) AND BENEFITS FINANCIALLY FROM THE
VIOLATION.
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
A07424 - 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
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.
(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
A07424 - 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
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
committed a violation under section 1411-D, the whistleblower
must first inform the whistleblower's employer OR THE OFFICE
OF ATTORNEY GENERAL 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
A07424 - 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
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
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
A07424 - 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
(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
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.
A07424 - 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
(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:
(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
A07424 - 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
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.
(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
A07424 - 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
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:
(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:
A07424 - 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
(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
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
A07424 - 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
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
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
A07424 - 18 -
1
2
3
4
5
6
7
8
9
10
11