NY State Fin L § 190 (2021)
2021 New York Laws STF - State Finance Article 13 - New York False Claims Act 190 - Civil Actions for False Claims.

§  190.  Civil actions for false claims. 1. Civil enforcement actions. The attorney general shall have the authority to investigate  violations under  section  one hundred eighty-nine of this article. If the attorney general believes that  a  person  has  violated  or  is  violating  such section, then the attorney general may bring a civil action on behalf of the  people  of the state of New York or on behalf of a local government against such person. A local government also shall have the authority to investigate violations that may have resulted in damages to  such  local government  under  section  one hundred eighty-nine of this article, and may bring a civil action  on  its  own  behalf,  or  on  behalf  of  any subdivision  of  such  local government, to recover damages sustained by such local government as a result of such violations. No action  may  be filed  pursuant  to this subdivision against the federal government, the state or a local government, or any officer or employee  thereof  acting in his or her official capacity. The attorney general shall consult with the  office  of  medicaid  inspector  general prior to filing any action related to the medicaid program.   2. Qui tam civil actions. (a) Any person may bring  a  qui  tam  civil action  for  a  violation  of  section  one  hundred eighty-nine of this article on behalf of the person and the people of the state of New  York or  a  local  government.  No  action  may  be  filed  pursuant  to this subdivision against  the  federal  government,  the  state  or  a  local government,  or  any  officer  or  employee thereof acting in his or her official capacity.   For purposes of  subparagraphs  (i)  and  (iv)  of  paragraph  (a)  of subdivision  eight  of section seventy-three of the public officers law, any activity by a former government  employee  in  connection  with  the securing  of  rights,  protections  or  benefits related to preparing or filing an action under this  article  shall  not  be  deemed  to  be  an appearance or practice before any agency.  (b)  A  copy  of the complaint and written disclosure of substantially all material evidence and information  the  person  possesses  shall  be served on the state pursuant to subdivision one of section three hundred seven  of  the  civil  practice  law and rules. Any complaint filed in a court of the state of New York  shall  be  filed  in  supreme  court  in camera,  shall  remain under seal for at least sixty days, and shall not be served on the defendant until the court so orders. The seal shall not preclude the attorney general,  a  local  government,  or  the  qui  tam plaintiff  from  serving  the  complaint,  any  other  pleadings, or the written  disclosure  of  substantially   all   material   evidence   and information  possessed  by  the  person bringing the action, on relevant state or local government agencies, or on law enforcement authorities of the state, a local government,  or  other  jurisdictions,  so  that  the actions may be investigated or prosecuted, except that such seal applies to  the agencies or authorities so served to the same extent as the seal applies to other parties in the action.   If the allegations in the complaint allege a violation of section  one hundred  eighty-nine  of  this  article  involving  damages  to  a local government, then the attorney general may at any time provide a copy  of such  complaint  and  written  disclosure to the attorney for such local government; provided, however, that if the allegations in the  complaint involve damages only to a city with a population of one million or more, or  only  to  the state and such a city, then the attorney general shall provide such complaint and written disclosure to the corporation counsel of such city within thirty days.   The state may elect to supersede or intervene  and  proceed  with  the action,  or  to  authorize  a  local  government that may have sustained damages to supersede or intervene, within sixty days after  it  receives  both  the complaint and the material evidence and information; provided, however, that if the allegations in the complaint involve  damages  only to  a  city  with a population of one million or more, then the attorney general  may  not  supersede  or  intervene  in  such action without the consent of the corporation counsel of such city.  The  attorney  general shall consult with the office of the medicaid inspector general prior to superseding  or  intervening  in  any  action  related  to  the medicaid program. The attorney general may, for good cause shown, move the  court for extensions of the time during which the complaint remains under seal under  this subdivision. Any such motions may be supported by affidavits or other submissions in camera.  (c) Prior to the expiration of the sixty day period or any  extensions obtained  under  paragraph (b) of this subdivision, the attorney general shall notify the court that he or she:  (i) intends to file a complaint against the defendant on behalf of the people of the state of New York or a local government,  and  thereby  be substituted as the plaintiff in the action and convert the action in all respects  from a qui tam civil action brought by a private person into a civil enforcement action by the attorney general under  subdivision  one of this section;  (ii)  intends  to  intervene in such action, as of right, so as to aid and assist the plaintiff in the action; or  (iii) if the action involves damages sustained by a local  government, intends  to grant the local government permission to: (A) file and serve a complaint against the defendant, and thereby  be  substituted  as  the plaintiff  in  the  action and convert the action in all respects from a qui  tam  civil  action  brought  by  a  private  person  into  a  civil enforcement action by the local government under subdivision one of this section;  or (B) intervene in such action, as of right, so as to aid and assist the plaintiff in the action.   The attorney general shall provide the local government with a copy of any such notification at the same time the court is notified.  (d) If the state  notifies  the  court  that  it  intends  to  file  a complaint  against  the  defendant  and  thereby  be  substituted as the plaintiff in the action, or to permit a local government to do so,  such complaint,  whether  filed  separately or as an amendment to the qui tam plaintiff's complaint, must  be  filed  within  thirty  days  after  the notification to the court. For statute of limitations purposes, any such complaint  filed by the state or a local government shall relate back to the filing date of the complaint of the qui tam plaintiff, to the extent that the cause of action of the state or local government arises out  of the  conduct, transactions, or occurrences set forth, or attempted to be set forth, in the complaint of the qui tam plaintiff.  (e) If the state notifies the court that it intends  to  intervene  in the  action,  or to permit a local government to do so, then such motion to intervene, whether filed separately or as an amendment to the qui tam plaintiff's complaint, shall be  filed  within  thirty  days  after  the notification  to  the  court.  For  statute of limitations purposes, any complaint filed by the  state  or  a  local  government,  whether  filed separately  or  as  an  amendment  to the qui tam plaintiff's complaint, shall relate back to the filing date of the complaint  of  the  qui  tam plaintiff,  to the extent that the cause of action of the state or local government arises out of the conduct, transactions, or  occurrences  set forth,  or  attempted  to  be set forth, in the complaint of the qui tam plaintiff.  (f) If the state declines to participate in the action or to authorize participation by a local government, the  qui  tam  action  may  proceed  subject  to  judicial  review under this section, the civil practice law and rules, and other applicable law.   The  qui tam plaintiff shall provide the state or any applicable local government with a copy of any document filed with the court on or  about the  date  it is filed, or any order issued by the court on or about the date it is issued. A qui tam plaintiff shall notify  the  state  or  any applicable  local  government within five business days of any decision, order or verdict resulting in judgment in favor of the  state  or  local government.   3.  Time  to  answer. If the state decides to participate in a qui tam action or to authorize the participation  of  a  local  government,  the court  shall  order that the qui tam complaint be unsealed and served at the time of the filing of the complaint or intervention  motion  by  the state  or  local  government.  After  the complaint is unsealed, or if a complaint is filed by the  state  or  a  local  government  pursuant  to subdivision  one of this section, the defendant shall be served with the complaint and summons pursuant to article three of  the  civil  practice law  and  rules. A copy of any complaint which alleges that damages were sustained by a local government shall  also  be  served  on  such  local government.  The  defendant  shall be required to respond to the summons and complaint within the time allotted under rule three  hundred  twenty of the civil practice law and rules.   4.  Related  actions. When a person brings a qui tam action under this section,  no  person  other  than  the  attorney  general,  or  a  local government  attorney  acting pursuant to subdivision one of this section or paragraph (b) of subdivision two of this section,  may  intervene  or bring a related civil action based upon the facts underlying the pending action;  provided,  however,  that  nothing in this subdivision shall be deemed to deny persons the right, upon leave of court,  to  file  briefs amicus curiae.   5.  Rights  of  the  parties  of  qui tam actions. (a) If the attorney general elects to convert the qui tam  civil  action  into  an  attorney general  enforcement  action,  then  the  state  shall  have the primary responsibility for prosecuting  the  action.  If  the  attorney  general elects  to  intervene in the qui tam civil action then the state and the person  who  commenced  the  action,  and  any  local  government  which sustained  damages  and  intervenes  in  the action, shall share primary responsibility for prosecuting  the  action.  If  the  attorney  general elects  to  permit a local government to convert the action into a civil enforcement  action,  then  the  local  government  shall  have  primary responsibility  for  investigating  and  prosecuting  the action. If the action involves damages to a local government but not the state, and the local government intervenes in the qui tam civil action, then the  local government  and  the person who commenced the action shall share primary responsibility for prosecuting the action. Under no circumstances  shall the  state  or  a  local  government  be  bound  by an act of the person bringing the original action.  Such  person  shall  have  the  right  to continue  as a party to the action, subject to the limitations set forth in paragraph (b) of this subdivision. Under no circumstances  shall  the state  be  bound  by the act of a local government that intervenes in an action involving damages to the state. If neither the  attorney  general nor a local government intervenes in the qui tam action then the qui tam plaintiff  shall  have  the  responsibility  for prosecuting the action, subject to the attorney general's right to intervene  at  a  later  date upon a showing of good cause.  (b)(i)  The  state  may move to dismiss the action notwithstanding the objections of the person initiating the action if the  person  has  been served  with the motion to dismiss and the court has provided the person  with an opportunity to be heard on the motion. If  the  action  involves damages  to  both the state and a local government, then the state shall consult with such local government before moving to dismiss the  action. If  the  action involves damages sustained by a local government but not the state, then the local government may  move  to  dismiss  the  action notwithstanding  the  objections  of the person initiating the action if the person has been served with the motion to dismiss and the court  has provided the person with an opportunity to be heard on the motion.  (ii)  The  state  or a local government may settle the action with the defendant notwithstanding the objections of the  person  initiating  the action  if  the court determines, after an opportunity to be heard, that the proposed settlement is fair, adequate, and reasonable  with  respect to  all  parties  under  all  the  circumstances. Upon a showing of good cause, such opportunity to be heard may be held in camera.  (iii) Upon a showing by the attorney general  or  a  local  government that  the  original  plaintiff's  unrestricted  participation during the course of the litigation  would  interfere  with  or  unduly  delay  the prosecution  of the case, or would be repetitious or irrelevant, or upon a showing by  the  defendant  that  the  original  qui  tam  plaintiff's unrestricted  participation during the course of the litigation would be for purposes of harassment or would cause the  defendant  undue  burden, the  court  may,  in  its discretion, impose limitations on the original plaintiff's participation in the case, such as:  (A) limiting the number of witnesses the person may call;  (B) limiting the length of the testimony of such witnesses;  (C) limiting the person's cross-examination of witnesses; or  (D)  otherwise  limiting  the  participation  by  the  person  in  the litigation.  (c)  Notwithstanding  any  other  provision of law, whether or not the attorney general or a local government elects to supersede or  intervene in  a  qui  tam  civil  action,  the  attorney  general  and  such local government may elect to pursue any remedy available with respect to  the criminal  or  civil  prosecution  of  the  presentation of false claims, including any administrative  proceeding  to  determine  a  civil  money penalty  or  to refer the matter to the office of the medicaid inspector general for medicaid related matters. If any such alternate civil remedy is pursued in another proceeding, 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.  (d) Notwithstanding any other provision of law,  whether  or  not  the attorney  general  elects  to  supersede or intervene in a qui tam civil action, or to permit a local government to supersede or intervene in the qui tam civil action, upon a showing by the state  or  local  government that  certain  actions  of discovery by the person initiating the action would interfere with the state's or a local  government's  investigation or  prosecution  of  a  criminal or civil matter arising out of the same facts, the court may stay such discovery for a period of not  more  than sixty  days.  Such a showing shall be conducted in camera. The court may extend the period of such stay upon a further showing in camera that the state  or  a  local  government  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.   6.  Awards to qui tam plaintiff. (a) If the attorney general elects to convert the qui tam civil action into an  attorney  general  enforcement action,  or  to  permit  a local government to convert the action into a civil enforcement action by such local government, or  if  the  attorney general  or  a local government elects to intervene in the qui tam civil  action, then the person or persons  who  initiated  the  qui  tam  civil action  collectively  shall  be  entitled to receive between fifteen and twenty-five percent of the  proceeds  recovered  in  the  action  or  in settlement  of  the  action. The court shall determine the percentage of the proceeds to which a person commencing a  qui  tam  civil  action  is entitled, by considering the extent to which the plaintiff substantially contributed to the prosecution of the action. Where the court finds that the  action  was  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  or  administrative  report, hearing,  audit  or investigation, or from the news media, the court may award such sums as it considers appropriate, but in no  case  more  than ten percent of the proceeds, taking into account the significance of the information and the role of the person or persons bringing the action in advancing  the case to litigation. Any such person shall also receive an amount for reasonable  expenses  that  the  court  finds  to  have  been necessarily  incurred, reasonable attorneys' fees, and costs pursuant to article eighty-one of  the  civil  practice  law  and  rules.  All  such expenses, fees, and costs shall be awarded against the defendant.  (b)  If  the  attorney general or a local government does not elect to intervene or convert the action, and the action is successful, then  the person  or  persons  who  initiated  the  qui  tam  action which obtains proceeds shall be entitled to receive  between  twenty-five  and  thirty percent  of  the  proceeds  recovered in the action or settlement of the action. The court shall determine the  percentage  of  the  proceeds  to which  a  person  commencing  a  qui  tam  civil  action is entitled, by considering the extent to which the plaintiff substantially  contributed to  the  prosecution  of  the  action. Such person shall also receive an amount for reasonable  expenses  that  the  court  finds  to  have  been necessarily  incurred, reasonable attorneys' fees, and costs pursuant to article eighty-one of  the  civil  practice  law  and  rules.  All  such expenses, fees, and costs shall be awarded against the defendant.  (c)  With  the  exception  of  a  court  award  of  costs, expenses or attorneys' fees, any payment to a  person  pursuant  to  this  paragraph shall be made from the proceeds.  (d)  If  the  attorney  general or a local government 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.   7. Costs, expenses, disbursements and attorneys' fees. In  any  action brought  pursuant  to  this  article,  the  court  may  award  any local government that participates as a party in  the  action  an  amount  for reasonable  expenses  which  the  court  finds  to have been necessarily incurred, plus  reasonable  attorneys'  fees,  plus  costs  pursuant  to article  eighty-one  of  the  civil  practice  law  and  rules. All such expenses, fees and costs shall be awarded directly against the defendant and shall not be charged from the proceeds, but shall only be awarded if a local government prevails in the action.   8. Exclusion from recovery. If the court finds that the qui tam  civil action was brought by a person who planned or initiated the violation of section  one  hundred  eighty-nine of this article 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 which the person would otherwise be entitled to receive under subdivision  six  of this  section,  taking into account the role of such person in advancing  the case to litigation and any relevant circumstances pertaining to  the violation.  If the person bringing the qui tam civil action is convicted of criminal conduct arising from his or her role  in  the  violation  of section  one  hundred  eighty-nine of this article, that person shall be dismissed from the qui tam civil action and shall not receive any  share of  the  proceeds  of the action. Such dismissal shall not prejudice the right of the attorney general to supersede or intervene in  such  action and  to  civilly  prosecute  the  same on behalf of the state or a local government.   9. Certain actions barred. (a) The  court  shall  dismiss  a  qui  tam action under this article if:  (i)  it  is based on allegations or transactions which are the subject of a pending civil action or an administrative action in which the state or a local government is already a party;  (ii) the state or local government has reached a binding settlement or other agreement  with  the  person  who  violated  section  one  hundred eighty-nine  of this article resolving the matter and such agreement has been approved in writing by the attorney general, or by  the  applicable local government attorney; or  (iii)  against a member of the legislature, a member of the judiciary, or a senior executive branch official if the action is based on evidence or information known to the state when the action was brought.  (b) The court shall dismiss a  qui  tam  action  under  this  article, unless opposed by the state or an applicable local government, or unless the  qui  tam  plaintiff  is  an  original source of the information, if substantially the same allegations or transactions  as  alleged  in  the action were publicly disclosed:  (i)  in a state or local government criminal, civil, or administrative hearing in which the state or a local  government  or  its  agent  is  a party;  (ii) in a federal, New York state or New York local government report, hearing,  audit,  or  investigation that is made on the public record or disseminated  broadly  to  the  general  public;  provided   that   such information  shall  not  be  deemed  "publicly disclosed" in a report or investigation because it was disclosed or provided pursuant  to  article six  of  the  public  officers law, or under any other federal, state or local law, rule or program enabling the public to  request,  receive  or view  documents  or information in the possession of public officials or public agencies;  (iii)  in  the  news  media,  provided  that   such   allegations   or transactions  are  not  "publicly  disclosed" in the "news media" merely because information of allegations or transactions have been  posted  on the internet or on a computer network.   10.  Liability.  Neither  the  state nor any local government shall be liable for any expenses which any person incurs in bringing  a  qui  tam civil action under this article.