SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘False Claims Act Cor-
rection Act of 2009’’. 
SEC. 2. LIABILITY FOR FALSE CLAIMS. 
Section 3729 of title 31, United States Code, is 
amended to read as follows: 
‘‘§ 3729. False claims 
‘‘(a) LIABILITY FOR CERTAIN ACTS.— 
‘‘(1) IN GENERAL.—Any person who— 
‘‘(A) knowingly presents, or causes to be 
presented for payment or approval, a false or 
fraudulent claim for Government money or 
property, 
‘‘(B) knowingly makes, uses, or causes to 
be made or used, a false record or statement to 
get a false or fraudulent claim for Government 
money or property paid or approved, 
‘‘(C) has possession, custody, or control of 
Government money or property and either— 
‘‘(i) fails to comply with a statutory 
or contractual obligation to disclose an 
overpayment about which the person is on 
actual notice, or 
‘‘(ii) intending to— 
‘‘(I) defraud the Government, or 
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‘‘(II) 
knowingly 
convert 
the 
money or property, permanently or 
temporarily, to an unauthorized use, 
fails to deliver or return, or fails to cause 
the return or delivery of, the money or 
property, or delivers, returns, or causes to 
be delivered or returned less money or 
property than the amount due or owed, 
‘‘(D) authorized to make or deliver a docu-
ment certifying receipt of property used, or to 
be used, by the Government and, intending to 
defraud the Government, makes or delivers the 
receipt without completely knowing that the in-
formation on the receipt is true, 
‘‘(E) knowingly buys, or receives as a 
pledge of an obligation or debt, Government 
money or property from an officer or employee 
of the Government, or a member of the Armed 
Forces, who lawfully may not sell or pledge the 
money or property, 
‘‘(F) knowingly makes, uses, or causes to 
be made or used, a false record or statement to 
conceal, avoid, or decrease an obligation to pay 
or transmit money or property to the Govern-
ment, or 
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‘‘(G) conspires to commit any violation set 
forth in any of subparagraphs (A) through (F), 
is liable to the United States Government for a civil 
penalty of not less than $5,000 and not more than 
$10,000, plus 3 times the amount of damages that 
the Government or its administrative beneficiary 
sustains because of the act of that person, subject 
to paragraphs (2) and (3). 
‘‘(2) LESSER PENALTY IF DEFENDANT COOPER-
ATES WITH INVESTIGATION.—In an action brought 
for a violation under paragraph (1), the court may 
assess not less than 2 times the amount of damages 
that the Government or its administrative bene-
ficiary sustains because of the act of the person 
committing the violation if the court finds that— 
‘‘(A) such person provided to those officials 
of the United States who are responsible for in-
vestigating false claims violations, all informa-
tion known to the person about the violation 
within 30 days after the date on which the per-
son first obtained the information; 
‘‘(B) such person fully cooperated with any 
Government investigation of the violation; and 
‘‘(C) at the time such person provided to 
the United States the information about the 
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violation under subparagraph (A), no criminal 
prosecution, civil action, or administrative ac-
tion had commenced with respect to such viola-
tion, and the person did not have actual knowl-
edge of the existence of an investigation into 
such violation. 
‘‘(3) ASSESSMENT
OF
COSTS.—A person vio-
lating paragraph (1) shall, in addition to a penalty 
or damages assessed under paragraph (1) or (2), be 
liable to the United States Government for the costs 
of a civil action brought to recover such penalty or 
damages. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) the terms ‘known’, ‘knowing’, and ‘know-
ingly’ mean that a person, with respect to informa-
tion— 
‘‘(A) has actual knowledge of the informa-
tion, 
‘‘(B) acts in deliberate ignorance of the 
truth or falsity of the information, or 
‘‘(C) acts in reckless disregard of the truth 
or falsity of the information, 
and no proof of specific intent to defraud is re-
quired; 
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‘‘(2) the term ‘Government money or property’ 
means— 
‘‘(A) money or property belonging to the 
United States Government; 
‘‘(B) money or property that— 
‘‘(i) the United States Government 
provides or has provided to a contractor, 
grantee, agent, or other recipient, or for 
which the United States Government will 
reimburse a contractor, grantee, agent, or 
other recipient; and 
‘‘(ii) is to be spent or used on the 
Government’s behalf or to advance a Gov-
ernment program; and 
‘‘(C) money or property that the United 
States holds in trust or administers for any ad-
ministrative beneficiary; 
‘‘(3) the term ‘claim’ includes any request or 
demand, whether under a contract or otherwise, for 
Government money or property; and 
‘‘(4) the term ‘administrative beneficiary’ 
means any entity, including any governmental or 
quasi-governmental entity, on whose behalf the 
United States Government, alone or with others, 
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serves as custodian or trustee of money or property 
owned by that entity. 
‘‘(c) STATUTORY
CAUSE
OF
ACTION.—Liability 
under this section is a statutory cause of action all ele-
ments of which are set forth in this section. No proof of 
any additional element of common law fraud or other 
cause of action is implied or required for liability to exist 
for a violation of subsection (a). 
‘‘(d) EXEMPTION FROM DISCLOSURE.—Any informa-
tion that a person provides pursuant to subparagraphs (A) 
through (C) of subsection (a)(2) shall be exempt from dis-
closure under section 552 of title 5. 
‘‘(e) EXCLUSION.—This section does not apply to 
claims, records, or statements made under the Internal 
Revenue Code of 1986.’’. 
SEC. 3. CIVIL ACTIONS FOR FALSE CLAIMS. 
(a) ACTIONS BY PRIVATE PERSONS GENERALLY.— 
Section 3730(b) of title 31, United States Code, is amend-
ed— 
(1) in paragraph (1), by striking the last sen-
tence and inserting the following: ‘‘The action may 
be dismissed only with the consent of the court and 
the Attorney General.’’; 
(2) in paragraph (2), by inserting after the sec-
ond sentence the following: ‘‘In the absence of a 
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showing of extraordinary need, the written disclosure 
of any material evidence and information, and any 
other attorney work product, that the person bring-
ing the action provides to the Government shall not 
be subject to discovery.’’; 
(3) in paragraph (4), by striking subparagraph 
(B) and inserting the following: 
‘‘(B) notify the court that it declines to take 
over the action, in which case the person bringing 
the action shall have the right to conduct the action, 
and, within 45 days after the Government provides 
such notice, shall either— 
‘‘(i) move to dismiss the action without 
prejudice; or 
‘‘(ii) notify the court of the person’s inten-
tion to proceed with the action and move the 
court to unseal the complaint, and any amend-
ments thereto, so as to permit service on the 
defendant and litigation of the action in a pub-
lic forum. 
A person who elects to proceed with the action under sub-
paragraph (B)(ii) shall serve the complaint within 120 
days after the person’s complaint is unsealed under such 
subparagraph.’’; and 
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(4) by amending paragraph (5) to read as fol-
lows: 
‘‘(5) When a person brings an action under this sub-
section, no person other than the Government may join 
or intervene in the action, except with the consent of the 
person who brought the action. In addition, when a person 
brings an action that is pled in accordance with this sub-
section and section 3731(e), no other person may bring 
a separate action under this subsection based on the facts 
underlying a cause of action in the pending action.’’. 
(b) RIGHTS
OF
THE PARTIES
TO QUI TAM AC-
TIONS.—Section 3730(c)(5) of title 31, United States 
Code, is amended by striking the second sentence and in-
serting the following: ‘‘An alternate remedy includes— 
‘‘(A) anything of value received by the Govern-
ment from the defendant, whether funds, credits, or 
in-kind goods or services, in exchange for an agree-
ment by the Government either to release claims 
brought in, or to decline to intervene in or inves-
tigate, the action initiated under subsection (b); and 
‘‘(B) anything of value received by the Govern-
ment based on the claims alleged by the person initi-
ating the action, if that person subsequently prevails 
on the claims. 
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If any such alternate remedy is pursued in another pro-
ceeding, the person initiating the action shall have the 
same rights in such proceeding as such person would have 
had if the action had continued under this section, except 
that the person initiating the action may not obtain an 
award calculated on more than the total amount of dam-
ages, plus any fines or penalties, that could be recovered 
by the United States under section 3729(a).’’. 
(c) AWARD
TO
QUI
TAM
PLAINTIFF.—Section 
3730(d) of title 31, United States Code, is amended— 
(1) in paragraph (1)— 
(A) in the first sentence, by inserting ‘‘an 
award of’’ after ‘‘receive’’; 
(B) by striking the second and third sen-
tences and inserting the following: ‘‘Any pay-
ment to a person under this paragraph or 
under paragraph (2) or (3) shall be made from 
the proceeds, and shall accrue interest, at the 
underpayment rate under section 6621 of the 
Internal Revenue Code of 1986, beginning 30 
days after the date the proceeds are paid to the 
United States, and continuing until payment is 
made to the person by the United States.’’; and 
(C) in the next to the last sentence, by 
striking ‘‘necessarily’’; 
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(2) in paragraph (2)— 
(A) in the second sentence, by striking 
‘‘and shall be paid out of such proceeds’’; and 
(B) in the third sentence, by striking ‘‘nec-
essarily’’; and 
(3) by amending paragraph (3) to read as fol-
lows: 
‘‘(3)(A) Whether or not the Government proceeds 
with the action, if the court finds that the action was 
brought by a person who either— 
‘‘(i) planned and initiated the violation of sec-
tion 3729 upon which the action was brought, or 
‘‘(ii) derived his or her knowledge of the action 
primarily from specific information relating to alle-
gations or transactions (other than information pro-
vided by the person bringing the action) that the 
Government publicly disclosed, within the meaning 
of subsection (e)(4)(A), or that it disclosed privately 
to the person bringing the action in the course of its 
investigation into potential violations of section 
3729, 
then the court may, to the extent the court considers ap-
propriate, reduce the share of the proceeds of the action 
that the person would otherwise receive under paragraph 
(1) or (2) of this subsection, taking into account the role 
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of that person in advancing the case to litigation and any 
relevant circumstances pertaining to the violation. The 
court shall direct the defendant to pay any such person 
an amount for reasonable expenses that the court finds 
to have been incurred, plus reasonable attorneys’ fees and 
costs. 
‘‘(B) If the person bringing the action is convicted 
of criminal conduct arising from his or her role in the vio-
lation of section 3729, that person shall be dismissed from 
the civil action and shall not receive any share of the pro-
ceeds of the action. Such dismissal shall not prejudice the 
right of the United States to continue the action, rep-
resented by the Department of Justice.’’. 
(d) CERTAIN ACTIONS BARRED.—Section 3730(e)(4) 
of title 31, United States Code, is amended to read as 
follows: 
‘‘(4)(A) Upon timely motion of the Attorney General 
of the United States, a court shall dismiss an action or 
claim brought by a person under subsection (b) if the alle-
gations relating to all essential elements of liability of the 
action or claim are based exclusively on the public disclo-
sure of allegations or transactions in a Federal criminal, 
civil, or administrative hearing, in a congressional, Federal 
administrative, or Government Accountability Office re-
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port, hearing, audit, or investigation, or from the news 
media. 
‘‘(B) For purposes of this paragraph, a ‘public disclo-
sure’ includes only disclosures that are made on the public 
record or have otherwise been disseminated broadly to the 
general public. An action or claim is ‘based on’ a public 
disclosure only if the person bringing the action derived 
the person’s knowledge of all essential elements of liability 
of the action or claim alleged in the complaint from the 
public disclosure. The person bringing the action does not 
create a public disclosure by obtaining information from 
a request for information made under section 552 of title 
5 or from exchanges of information with law enforcement 
and other Government employees if such information does 
not otherwise qualify as publicly disclosed under this para-
graph.’’. 
(e) RELIEF FROM RETALIATORY ACTIONS.—Section 
3730(h) of title 31, United States Code, is amended to 
read as follows: 
‘‘(h) RELIEF FROM RETALIATORY ACTION.—Any 
person who is discharged, demoted, suspended, threat-
ened, harassed, or in any other manner discriminated 
against in the terms or conditions of employment, or is 
materially hindered in obtaining new employment or other 
business opportunities, by any other person because of 
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lawful acts done by the person discriminated against or 
others associated with that person— 
‘‘(1) in furtherance of an actual or potential ac-
tion under this section, including investigation for, 
initiation of, testimony for, or assistance in an ac-
tion filed or to be filed under this section, or 
‘‘(2) in furtherance of other efforts to stop one 
or more violations of section 3729, 
shall be entitled to all relief, from the person who has en-
gaged in the discrimination, that is necessary to make the 
person whole. Such relief shall include reinstatement with 
the same seniority status such person would have had but 
for the discrimination, 2 times the amount of back pay 
or business loss, interest on the back pay or business loss, 
and compensation for any special damages sustained as 
a result of the discrimination, including litigation costs 
and reasonable attorneys’ fees. An action under this sub-
section may be brought in the appropriate district court 
of the United States for the relief provided in this sub-
section.’’. 
(f) RELIEF TO ADMINISTRATIVE BENEFICIARIES.— 
Section 3730 of title 31, United States Code, is amended 
by adding at the end the following new subsection: 
‘‘(i) DAMAGES COLLECTED FOR FINANCIAL LOSSES 
SUFFERED BY ADMINISTRATIVE BENEFICIARIES.— 
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‘‘(1) IN GENERAL.—After paying any awards 
due one or more persons who brought an action 
under subsection (b), the Government shall pay from 
the proceeds of the action to any administrative ben-
eficiary, as defined in section 3729(b), all amounts 
that the Government has collected in the action for 
financial losses suffered by such administrative bene-
ficiary. Any remaining proceeds collected by the 
Government shall be treated in the same manner as 
proceeds collected by the Government for direct 
losses the Government suffers because of violations 
of section 3729. 
‘‘(2) ALTERNATIVE
REMEDIES.—Nothing in 
section 3729 or this section precludes administrative 
beneficiaries from pursuing any alternate remedies 
available to them for losses or other harm suffered 
by them that are not pursued or recovered in an ac-
tion under this section, except that if proceedings for 
such alternate remedies are initiated after a person 
has initiated an action under subsection (b), such 
person shall be entitled to have such alternative rem-
edies considered in determining any award in the ac-
tion under subsection (b) to the same extent that 
such person would be entitled under subsection 
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(c)(5) with respect to any alternate remedy pursued 
by the Government.’’. 
SEC. 4. FALSE CLAIMS PROCEDURE. 
(a) STATUTE OF LIMITATIONS; INTERVENTION BY 
THE GOVERNMENT.—Section 3731(b) of title 31, United 
States Code, is amended to read as follows: 
‘‘(b) STATUTE OF LIMITATIONS; INTERVENTION BY 
THE GOVERNMENT.— 
‘‘(1) STATUTE OF LIMITATIONS.—A civil action 
under section 3730 (a), (b), or (h) may not be 
brought more than 8 years after the date on which 
the violation of section 3729 or 3730(h) (as the case 
may be) is committed. 
‘‘(2) INTERVENTION.—If the Government elects 
to intervene and proceed with an action brought 
under section 3730(b), the Government may file its 
own complaint, or amend the complaint of the per-
son who brought the action under section 3730(b), 
to clarify or add detail to the claims in which it is 
intervening and to add any additional claims with 
respect to which the Government contends it is enti-
tled to relief. For purposes of paragraph (1), any 
such Government pleading shall relate back to the 
filing date of the complaint of the person who origi-
nally brought the action to the extent that the Gov-
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ernment’s claim arises out of the conduct, trans-
actions, or occurrences set forth, or attempted to be 
set forth, in the person’s prior complaint.’’. 
(b) STANDARD OF PROOF.—Section 3731(c) of title 
31, United States Code, is amended— 
(1) by striking ‘‘(c) In’’ and inserting ‘‘(c) 
STANDARD OF PROOF.—In’’; and 
(2) by striking ‘‘United States’’ and inserting 
‘‘plaintiff’’. 
(c) NOTICE OF CLAIMS; VOID CONTRACTS, AGREE-
MENTS, AND CONDITIONS
OF EMPLOYMENT.—Section 
3731 of title 31, United States Code, is amended by add-
ing at the end the following new subsections: 
‘‘(e) NOTICE
OF CLAIMS.—In pleading an action 
brought under section 3730(b), a person shall not be re-
quired to identify specific claims that result from an al-
leged course of misconduct if the facts alleged in the com-
plaint, if ultimately proven true, would provide a reason-
able indication that one or more violations of section 3729 
are likely to have occurred, and if the allegations in the 
pleading provide adequate notice of the specific nature of 
the alleged misconduct to permit the Government effec-
tively to investigate and defendants fairly to defend the 
allegations made. 
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‘‘(f) VOID CONTRACT, AGREEMENTS, AND CONDI-
TIONS OF EMPLOYMENT.— 
‘‘(1) IN
GENERAL.—Any contract, private 
agreement, or private term or condition of employ-
ment that has the purpose or effect of limiting or 
circumventing the rights of a person to take other-
wise lawful steps to initiate, prosecute, or support an 
action under section 3730, or to limit or circumvent 
the rights or remedies provided to persons bringing 
actions under section 3730(b) and other cooperating 
persons under section 3729 shall be void to the full 
extent of such purpose or effect. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not pre-
clude a contract or private agreement that is entered 
into— 
‘‘(A) with the United States and a person 
bringing an action under section 3730(b) who 
would be affected by such contract or agree-
ment specifically to settle claims of the United 
States and the person under section 3730; or 
‘‘(B) specifically to settle any discrimina-
tion claim under section 3730(h) of a person af-
fected by such contract or agreement.’’. 
(d) CONFORMING AMENDMENTS.—Section 3731 of 
title 31, United States Code, is amended— 
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(1) in subsection (a), by striking ‘‘(a) A sub-
pena’’ and inserting ‘‘(a) SERVICE
OF
SUB-
POENAS.—A subpoena’’; and 
(2) in subsection (d), by striking ‘‘(d) Notwith-
standing’’ and inserting ‘‘(d) ESTOPPEL.—Notwith-
standing’’. 
SEC. 5. FALSE CLAIMS JURISDICTION. 
Section 3732 of title 31, United States Code, is 
amended by adding at the end the following new sub-
section: 
‘‘(c) SERVICE ON STATE OR LOCAL AUTHORITIES.— 
With respect to any State or local government that is 
named as a co-plaintiff with the United States in an action 
brought under subsection (b), a seal on the action ordered 
by the court under section 3730(b) shall not preclude the 
Government or the person bringing the action from serv-
ing the complaint, any other pleadings, or the written dis-
closure of substantially all material evidence and informa-
tion possessed by the person bringing the action on the 
law enforcement authorities that are authorized under the 
law of that State or local government to investigate and 
prosecute such actions on behalf of such governments.’’. 
SEC. 6. CIVIL INVESTIGATIVE DEMANDS. 
(a) 
CIVIL
INVESTIGATIVE
DEMANDS.—Section 
3733(a) of title 31, United States Code, is amended— 
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(1) in paragraph (1)— 
(A) in the matter following subparagraph 
(D)— 
(i) by striking ‘‘The Attorney General 
may not delegate’’ and all that follows 
through ‘‘subsection.’’; and 
(ii) by striking ‘‘, the Deputy Attorney 
General, or an Assistant Attorney Gen-
eral’’; and 
(B) by adding at the end the following: 
‘‘Any information obtained by the Attorney 
General under this section may be shared with 
any a person bringing an action under section 
3730(b) if the Attorney General determines 
that it is necessary as part of any false claims 
law investigation.’’; and 
(2) in paragraph (2)— 
(A) in subparagraph (F), by striking ‘‘or 
an Assistant Attorney General designated by 
the Attorney General’’; and 
(B) in subparagraph (G), by striking the 
second sentence. 
(b) PROCEDURES.— 
(1) ORAL EXAMINATIONS.—Section 3733(h)(6) 
of title 31, United States Code, is amended by strik-
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ing ‘‘, the Deputy Attorney General, or an Assistant 
Attorney General’’. 
(2) CUSTODIANS.—Section 3733(i)(3) of title 
31, United States Code, is amended to read as fol-
lows: 
‘‘(3) USE OF MATERIAL, ANSWERS, OR TRAN-
SCRIPTS
IN
FALSE
CLAIMS
ACTIONS
AND
OTHER 
PROCEEDINGS.—Whenever any attorney of the De-
partment of Justice has been designated to handle 
any false claims law investigation or proceeding, or 
any other administrative, civil, or criminal investiga-
tion, case, or proceeding, the custodian of any docu-
mentary material, answers to interrogatories, or 
transcripts of oral testimony received under this sec-
tion may deliver to such attorney such material, an-
swers, or transcripts for official use in connection 
with any such investigation, case, or proceeding as 
such attorney determines to be required. Upon the 
completion of any such investigation, case, or pro-
ceeding, such attorney shall return to the custodian 
any such material, answers, or transcripts so deliv-
ered that have not passed into the control of a court, 
grand jury, or agency through introduction into the 
record of such case or proceeding.’’. 
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(c) DEFINITIONS.—Section 3733(l) of title 31, 
United States Code, is amended— 
(1) in paragraph (6), by striking ‘‘and’’ after 
the semicolon; 
(2) in paragraph (7), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(8) the term ‘official use’ means all lawful, 
reasonable uses in furtherance of an investigation, 
case, or proceeding, such as disclosures in connec-
tion with interviews of fact witnesses, settlement dis-
cussions, coordination of an investigation with a 
State Medicaid Fraud Control Unit or other govern-
ment personnel, consultation with experts, and use 
in court pleadings and hearings.’’. 
(d) DELEGATION OF AUTHORITY.—Section 3733 of 
title 31, United States Code, is amended by adding at the 
end the following: 
‘‘(m) DELEGATION.—The Attorney General may del-
egate any authority that the Attorney General has under 
this section.’’. 
SEC. 7. EFFECTIVE DATE. 
(a) IN GENERAL.—The amendments made by this 
Act shall take effect on the date of the enactment of this 
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Act and, except as provided in subsection (b), shall apply 
to any case pending on, or filed on or after, that date. 
(b) EXCEPTIONS.—The following provisions of title 
31, United States Code, as amended by this Act, shall 
apply only to cases filed on or after the date of the enact-
ment of this Act: 
(1) Section 3729(a)(1)(C)(i), relating to the 
failure to comply with a statutory or contractual ob-
ligation to disclose an overpayment. 
(2) Section 3730(h), to the extent such section 
applies to discrimination against a person because of 
lawful acts done by others associated with that per-
son. 
(3) Section 3731(b)(1). 
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Union Calendar No. 44 
111TH CONGRESS 
1ST SESSION 
H. R. 1788 
[Report No. 111–97] 
A BILL 
To amend the provisions of title 31, United States 
Code, relating to false claims to clarify and make 
technical amendments to those provisions, and 
for other purposes. 
MAY 5, 2009 
Committed to the Committee of the Whole House on the 
State of the Union and ordered to be printed 
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