Source: https://www.phillipsandcohen.com/rhode-island/
Timestamp: 2019-04-23 20:52:22+00:00

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•What the law says – The Rhode Island False Claims Act allows whistleblowers to file “qui tam” lawsuits if they know of violations of that state law. The Rhode Island False Claims Act imposes liability on persons who knowingly present false or fraudulent claims for payment to the state, misappropriate state property, or deceptively avoid binding obligations to pay the state, among other violations.
•Fines – A defendant may be ordered to pay a civil penalty in an amount equal to the civil penalty set forth in the Federal False Claims Act.
•Whistleblower awards – A whistleblower who files a successful claim may receive between 15 and 25 percent of any recovery to the state if the Rhode Island Attorney General intervenes in the matter. If the whistleblower successfully prosecutes the case on his own, he may receive between 25 and 30 percent of amounts recovered. The court may reduce the value of the award if the whistleblower planned and initiated the fraud, or if the action is largely based on information disclosed in the media or public hearings.
•Whistleblower protection – The Rhode Island False Claims Act also protects whistleblowers from retaliation by their employers for filing a claim or assisting the state with its own claim.
9-1.1-1. Name of act. — This chapter may be cited as the state false claims act.
(1) “Custodian” means the custodian, or any deputy custodian, designated by the attorney general or a solicitor under § 9-1.1-6 of the Rhode Island general laws.
(2) “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 in or accessible through computer or other information retrieval systems, together with instructions and all other materials necessary to use or interpret such data compilations, and any product of discovery.
(3) “Guard” means the Rhode Island National Guard.
(4) “Investigation” means any inquiry conducted by any investigator for the purpose of ascertaining whether any person is or has been engaged in any violation of this chapter.
(5) “Investigator” means a person who is charged by the Rhode Island attorney general, a solicitor, or designee with the duty of conducting any investigation under this act, or any officer or employee of the State acting under the direction and supervision of the department of attorney general.
(iii) Any index or other manner of access to any item listed in paragraph (i).
(7) “Solicitor” means a municipality, acting through its city or town solicitor or other duly appointed legal counsel.
(8) “State” means the state of Rhode Island; any agency of state government; and any political subdivision meaning any city, town, county or other governmental entity authorized or created by state law, including public corporations and authorities.
(7) 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 state, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state; is liable to the state for a civil penalty in an amount equal to the civil penalty set forth in the Federal False Claims Act, following the Federal Civil Penalties Inflation Agreement Act of 1990 (31 U.S.C. § 3729(a)), Pub. L. No. 101-410 § 5, 104 Stat. 891, note following 28 U.S.C. § 2461, as amended and annually adjusted by the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015, plus three (3) times the amount of damages the state sustains because of the act of that person. A person violating this subsection (a) shall also be liable to the state for the costs of a civil action brought to recover any penalty or damages.
(iv) Requires no proof of specific intent to defraud.
(3) “Material” means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.
(c) Exclusion. This section does not apply to claims, records, or statements made under the Rhode Island personal income tax law contained in chapter 30 of title 44.
P.L. 2007, ch. 73, art. 18, §§ 1, 2, eff. July 1, 2007; P.L. 2013, ch. 311, § 1, eff. July 15, 2013; P.L. 2013, ch. 391, § 1, eff.
July 15, 2013; P.L. 2018, ch. 155, § 1, eff. July 2, 2018; P.L. 2018, ch. 257, § 1, eff. July 2, 2018.
9-1.1-4. Civil actions for false claims. (a) Responsibilities of the attorney general and solicitor. The attorney general or solicitor diligently shall investigate a violation under § 9-1.1-3. If under this section the attorney general or solicitor finds that a person has violated or is violating § 9-1.1-3, the attorney general or solicitor may bring a civil action under this section against the person.
(2) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the state upon the attorney general. The complaint shall be filed in camera; shall remain under seal for at least sixty (60) days; and shall not be served on the defendant until the court so orders. The state may elect to intervene and proceed with the action within sixty (60) days after it receives both the complaint and the material evidence and information.
(3) The state may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under subsection (b)(2). Any motions may be supported by affidavits or other submissions in camera. The defendant shall not be required to respond to any complaint filed under this section until twenty (20) days after the complaint is unsealed and served upon the defendant.
(ii) 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.
(5) When a person brings an action under this subsection, no person other than the state may intervene or bring a related action based on the facts underlying the pending action.
(1) If the state proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. The person shall have the right to continue as a party to the action, subject to the limitations set forth in subsection (c)(2).
(2)(i) The state may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the state of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.
(ii) The state may settle the action with the defendant notwithstanding the objections of the person initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. Upon a showing of good cause, such hearing may be held in camera.
(iv) Upon a showing by the defendant that unrestricted participation during the course of the litigation by the person initiating the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation by the person in the litigation.
(4) Whether or not the state proceeds with the action, upon a showing by the state that certain actions of discovery by the person initiating the action would interfere with the state’s investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay discovery for a period of not more than sixty (60) days. Such a showing shall be conducted in camera. The court may extend the sixty-day (60) period upon a further showing in camera that the state has pursued the criminal or civil investigation or proceedings with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceedings.
purposes of the preceding sentence, a finding or conclusion is final if it has been finally determined on appeal to the appropriate court; if all time for filing an appeal with respect to the finding or conclusion has expired; or if the finding or conclusion is not subject to judicial review.
(1) If the state proceeds with an action brought by a person under this section, the person shall, subject to the second sentence of this paragraph, receive at least fifteen percent (15%) but not more than twenty-five percent (25%) of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action. Where the action is one that the court finds to be based primarily on disclosures of specific information (other than information provided by the person bringing the action) relating to allegations or transactions in a criminal, civil, or administrative hearing, in a legislative, administrative, or auditor general’s report, hearing, audit, or investigation, or from the news media, the court may award those sums as it considers appropriate, but in no case more than ten percent (10%) of the proceeds, taking into account the significance of the information and the role of the person bringing the action in advancing the case to litigation. Any payment to a person under the first or second sentence of subsection (d)(1) shall be made from the proceeds. The person shall also receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs. The state shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred by the attorney general, including reasonable attorneys’ fees and costs, and the amount received shall be deposited in the false claims act fund created under this chapter. All expenses, fees, and costs shall be awarded against the defendant.
(2) If the state does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than twenty-five percent (25%) and not more than thirty percent (30%) of the proceeds of the action or settlement and shall be paid out of the proceeds. The person shall also receive an amount for reasonable expenses the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs. All expenses, fees, and costs shall be awarded against the defendant.
(3) Whether or not the state proceeds with the action, if the court finds that the action was brought by a person who planned and initiated the violation of § 9-1.1-3 upon which the action was brought, then the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action the person would otherwise receive under subsection (d)(1) or (d)(2), taking into account the role of that person in advancing the case to litigation and any relevant circumstances pertaining to the violation. If the person bringing the action is convicted of criminal conduct arising from his or her role in the violation of § 9-1.1-3, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. The dismissal shall not prejudice the right of the state to continue the action.
(4) If the state does not proceed with the action and the person bringing the action conducts the action, the court may award to the defendant its reasonable attorneys’ fees and expenses if the defendant prevails in the action and the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.
(1) No court shall have jurisdiction over an action brought by a former or present member of the guard under this section (actions by private persons) against a member of the guard arising out of the person’s service in the guard.
(2) No court shall have jurisdiction over an action brought pursuant to § 9-1.1-4(b) (actions by private persons) against the governor, lieutenant governor, the attorney general, members of the general assembly, a member of the judiciary, the treasurer, secretary of state, the auditor general, any director of a state agency, and any other individual appointed to office by the governor if the action is based on evidence or information known to the state when the action was brought.
are the subject of a civil suit or an administrative civil money penalty proceeding in which the state is already a party.
(iii) From the news media, unless the action is brought by the attorney general or the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, “original source” means an individual who either: (i) Prior to the public disclosure under subsection (e)(4)(A), has voluntarily disclosed to the state the information on which the allegations or transactions in a claim are based; or (ii) Who has knowledge that is independent of and materially adds to the publicly disclosed allegations or transaction, and who has voluntarily provided the information to the state before filing an action under this section.
(f) State not liable for certain expenses. The state is not liable for expenses that a person incurs in bringing an action under this section.
costs and reasonable attorneys’ fees. An employee, contractor, agent, or associated others may bring an action in the appropriate superior court for the relief provided in this subsection (g).
(h) Limitation on bringing civil action. A civil action under subsection (g) may not be brought more than three (3) years after the date when the retaliation occurred.
P.L. 2007, ch. 73, art. 18, §§ 1, 2, eff. July 1, 2007; P.L. 2012, ch. 217, § 1, eff. June 13, 2012; P.L. 2012, ch. 227, § 1, eff. June 13, 2012; P.L. 2013, ch. 311, § 1, eff. July 15, 2013; P.L. 2013, ch. 391, § 1, eff. July 15, 2013; P.L. 2018, ch. 155, § 1, eff. July 2, 2018; P.L. 2018, ch. 257, § 1, eff. July 2, 2018.
9-1.1-5. False claims procedure. — (a) A subpoena requiring the attendance of a witness at a trial or hearing conducted under § 9-1.1-4, may be served at any place in the state.
(c) If the state elects to intervene and proceed with an action brought under § 9-1.1-4, the state may file its own complaint or amend the complaint of a person who has brought an action under § 9-1.1-4 to clarify or add detail to the claims in which the state is intervening and to add any additional claims with respect to which the state contends it is entitled to relief. For statute of limitations purposes, any state pleading shall relate back to the filing date of the complaint of the person who originally brought the action, to the extent that the claim of the state arises out of the conduct, transactions, or occurrences set forth, or attempted to be set forth, in the prior complaint of that person.
(d) In any action brought under § 9-1.1-4, the state shall be required to prove all essential elements of the cause of action, including damages, by a preponderance of the evidence.
charging fraud or false statements, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, shall stop the defendant from denying the essential elements of the offense in any action that involves the same transaction as in the criminal proceeding and is brought under § 9-1.1-4(a) or 9-1.1-4(b).
9-1.1-6. Subpoenas. — (a) In general.
(A) to produce such documentary material for inspection and copying.
(B) to answer, in writing, written interrogatories with respect to such documentary material or information.
(C) to give oral testimony concerning such documentary material or information; or (D) to furnish any combination of such material, answers, or testimony.
The attorney general may delegate the authority to issue subpoenas under this subsection (a) to the state police subject to conditions as the attorney general deems appropriate. Whenever a subpoena is an express demand for any product of discovery, the attorney general, solicitor, or respective delegate shall cause to be served, in any manner authorized by this section, a copy of such demand upon the person from whom the discovery was obtained and shall notify the person to whom such demand is issued of the date on which such copy was served.
(2) Where a subpoena requires the production of documentary material, the respondent shall produce the original of the documentary material, provided, however, that the attorney general or solicitor may agree that copies may be substituted for the originals. All documentary material kept or stored in electronic form, including electronic mail, shall be produced in hard copy, unless the attorney general or solicitor agrees that electronic versions may be substituted for the hard copy. The production of documentary material shall be made at the respondent’s expense.
(C) Shall state the date, place, and time at which the person is required to appear, produce written answers to interrogatories, produce documentary material or give oral testimony. The date shall not be less than ten (10) days from the date of service of the subpoena. Compliance with the subpoena shall be at the office of the attorney general or solicitor.
(F) Shall advise that the person has twenty (20) days from the date of service or up until the return date specified in the demand, whichever date is earlier, to move, modify, or set aside the subpoena pursuant to subparagraph (j)(2)(A) of this section.
(B) the standards applicable to discovery requests under the Rhode Island superior court rules of civil procedure, to the extent that the application of such standards to any such subpoena is appropriate and consistent with the provisions and purposes of this section.
(c) Service in general. Any subpoena issued under subsection (a) may be served by any person so authorized by the Attorney General or by any person authorized to serve process on individuals within Rhode Island, through any method prescribed in the Rhode Island superior curt rules of civil procedure or as otherwise set forth in this chapter.
(e) Proof of service. A verified return by the individual serving any subpoena issued under subsection (a) or any petition filed under subsection (j) setting forth the manner of such service shall be proof of such service. In the case of service by registered or certified mail, such return shall be accompanied by the return post office receipt of delivery of such subpoena.
(B) in the case of a person other than a natural person, a person having knowledge of the facts and circumstances relating to such production and authorized to act on behalf of such person. The certificate shall state that all of the documentary material required by the demand and in the possession, custody, or control of the person to whom the subpoena is directed has been produced and made available to the attorney general or solicitor.
(2) Production of materials. Any person upon whom any subpoena for the production of documentary material has been served under this section shall make such material available for inspection and copying to the attorney general or solicitor at the place designated in the subpoena, or at such other place as the attorney general or solicitor and the person thereafter may agree and prescribe in writing, or as the court may direct under subsection (j)(1). Such material shall be made so available on the return date specified in such subpoena, or on such later date as the attorney general or solicitor may prescribe in writing. Such person may, upon written agreement between the person and the attorney general or solicitor, substitute copies for originals of all or any part of such material.
(1) Procedures. The examination of any person pursuant to a subpoena for oral testimony served under this section shall be taken before an officer authorized to administer oaths and affirmations by the laws of this state or of the place where the examination is held. The officer before whom the testimony is to be taken shall put the witness on oath or affirmation and shall, personally or by someone acting under the direction of the officer and in the officer’s presence, record the testimony of the witness. The testimony shall be taken stenographically and shall be transcribed. When the testimony is fully transcribed, the officer before whom the testimony is taken shall promptly transmit a certified copy of the transcript of the testimony in accordance with the instructions of the attorney general or solicitor. This subsection shall not preclude the taking of testimony by any means authorized by, and in a manner consistent with, the Rhode Island superior court rules of civil procedure.
(3) Where testimony taken. The oral testimony of any person taken pursuant to a subpoena served under this section shall be taken in the county within which such person resides, is found, or transacts business, or in such other place as may be agreed upon by the attorney general or solicitor and such person.
(4) Transcript of testimony. When the testimony is fully transcribed, the attorney general or solicitor or the officer before whom the testimony is taken shall afford the witness, who may be accompanied by counsel, a reasonable opportunity to review and correct the transcript, in accordance with the rules applicable to deposition witnesses in civil cases. Upon payment of reasonable charges, the attorney general or solicitor shall furnish a copy of the transcript to the witness, except that the attorney general or solicitor may, for good cause, limit the witness to inspection of the official transcript of the witness’ testimony.
(A) Any person compelled to appear for oral testimony under a subpoena issued under subsection (a) may be accompanied, represented, and advised by counsel, who may raise objections based on matters of privilege in accordance with the rules applicable to depositions in civil cases. If such person refuses to answer any question, a petition may be filed in superior court under subsection (j)(1) for an order compelling such person to answer such question.
(B) If such person refuses any question on the grounds of the privilege against self-incrimination, the testimony of such person may be compelled in accordance with rules of criminal procedure.
(A) Designation. The attorney general or solicitor, or their respective delegate shall serve as custodian of documentary material, answers to interrogatories, and transcripts of oral testimony received under this section.
(B) Except as otherwise provided in this section, no documentary material, answers to interrogatories, or transcripts of oral testimony, or copies thereof, while in the possession of the custodian, shall be available for examination by any individual, except as determined necessary by the attorney general or solicitor and subject to the conditions imposed by him or her for effective enforcement of the laws of this state, or as otherwise provided by court order.
(1) Petition for enforcement. Whenever any person fails to comply with any subpoena issued under subsection (a), or whenever satisfactory copying or reproduction of any material requested in such demand cannot be done and such person refuses to surrender such material, the attorney general or solicitor may file, in the superior court of the county in which such person resides, is found, or transacts business, or the superior court in the he county in which an action filed pursuant to section 9-1.1-4 is pending if the action relates to the subject matter of the subpoena and serve upon such person a petition for an order of such court for the enforcement of the subpoena.
(ii) within such longer period as may be prescribed in writing by the attorney general or solicitor.
(3) Petition to modify or set aside demand for product of discovery. In the case of any subpoena issued under subsection (a) which is an express demand for any product of discovery, the person from whom such discovery was obtained may file, in the superior court of the county in which the proceeding in which such discovery was obtained is or was last pending, a petition for an order of such court to modify or set aside those portions of the subpoena requiring production of any such product of discovery, subject to the same terms, conditions, and limitations set forth in subparagraph (j)(2) of this section.
(4) Petition to require performance by custodian of duties. At any time during which any custodian is in custody or control of any documentary material or answers to interrogatories produced, or transcripts of oral testimony given, by any person in compliance with any civil investigative demand issued under subsection (a), such person, and in the case of an express demand for any product of discovery, the person from whom such discovery was obtained, may file in the superior court of the county in which the office of such custodian is situated, and serve upon such custodian, a petition for an order of such court to require the performance by the custodian of any duty imposed upon the custodian by this section.
(5) Jurisdiction. Whenever any petition is filed in any superior court under this subsection (j), such court shall have jurisdiction to hear and determine the matter so presented, and to enter such orders as may be required to carry out the provisions of this section. Any final order so entered shall be subject to appeal in the same manner as appeals of other final orders in civil matters. Any disobedience of any final order entered under this section by any court shall be punished as a contempt of the court.
(k) Disclosure exemption. Any documentary material, answers to written interrogatories, or oral testimony provided under any subpoena issued under subsection (a) shall be exempt from disclosure under the Rhode Island access to public records law, section 38-2-2.
9-1.1-7. Procedure. — The Rhode Island superior court rules of civil procedure shall apply to all proceedings under this chapter, except when those rules are inconsistent with this chapter.
9-1.1-8. Funds. — There is hereby created a separate fund entitled the false claims Act Fund. All proceeds of an action or settlement of a claim brought under this chapter shall be deposited in the fund , with the exception of actions brought directly by a solicitor, in which case the proceeds of an action or settlement of a claim brought under this chapter shall be provided to the respective municipality.
9-1.1-9. Powers conferred upon municipal solicitors. – All powers conferred under this chapter upon the attorney general with regard to the state are conferred upon solicitors with regard to their respective municipalities in matters involving an action under the false claims act.

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