2023 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. Where the court finds that the action
was based on disclosure of specific information related to  the  use  of
government funds during a declaration of a state of emergency, the court
shall  increase  the  percentage  of  the  proceeds  to which the person
commencing such qui tam civil action is entitled by up to  five  percent
more than the maximum percentage allowed pursuant to this paragraph. 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. Where the court finds that the action
was based on disclosure of specific information related to  the  use  of
government funds during a declaration of a state of emergency, the court
shall  increase  the  percentage  of  the  proceeds  to which the person
commencing such qui tam civil action is entitled by up  to  ten  percent
more  than  the  maximum  percentage allowed pursuant to this paragraph.
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.