Opinion ID: 2633588
Heading Depth: 1
Heading Rank: 4

Heading: The CFCA.

Text: The CFCA, which is patterned after a similar federal law, was adopted in 1987. (Stats.1987, ch. 1420, § 1, p. 5237.) It provides that [a]ny person who, among other things, [k]nowingly presents or causes to be presented to . . . the state or . . . any political subdivision thereof, a false claim for payment or approval, or [k]nowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the state or by any political subdivision, or [c]onspires to defraud the state or any political subdivision by getting a false claim allowed or paid by the state or any political subdivision, or [i]s a beneficiary of an inadvertent submission of a false claim to the state or a political subdivision, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the state or the political subdivision within a reasonable time after discovery [thereof], shall be liable to the state or to the political subdivision for three times the amount of damages the state or political subdivision thereby sustained, as well as for the state's or political subdivision's costs of suit, and may also liable for a civil penalty of up to $10,000 for each false claim. (Gov.Code, § 12651, subd. (a)(1)-(3), (8).) [11] The CFCA defines a person to include any natural person, corporation, firm, association, organization, partnership, limited liability company, business, or trust. (Gov.Code, § 12650, subd. (b)(5).) Where a person has submitted a false claim upon state funds, or upon both state and political subdivision funds, in violation of the CFCA, the Attorney General may sue that person to recover the damages and penalties provided by the statute. (Gov.Code, § 12652, subd. (a)(1).) Where the false claim was upon political subdivision funds, or upon both state and political subdivision funds, the prosecuting authority of the affected political subdivision may bring such an action. ( Id., subd. (b)(1).) [12] When either the Attorney General or the local prosecuting authority unilaterally initiates an action involving both state and political subdivision funds, the other affected official or officials must be notified. If the Attorney General initiates such an action, the local prosecuting authority may, upon receiving notice, intervene. If the local prosecuting attorney is the initiator, the Attorney General may, upon notice, elect to assume responsibility for the action, though the local prosecuting authority may continue as a party. (Gov.Code, § 12652, subds.(a)(2), (3), (b)(2), (3).) A CFCA action may also be initiated by a person, as a qui tam plaintiff, for and in the name of the state or the political subdivision whose funds are involved. (Gov.Code, § 12652, subd. (c)(1), (3).) The complaint in such an action shall be filed in camera, and may remain under seal for up to 60 days. While the complaint remains sealed, [n]o service shall be made on the defendant. ( Id., subd. (c)(2).) The qui tam plaintiff must immediately notify the Attorney General of the suit and disclose to him all material evidence and information the plaintiff possesses. If the qui tam complaint involves only state funds, the Attorney General may, within the 60-day period or extensions thereof, elect to intervene and proceed with the action. If political subdivision funds alone are involved, the Attorney General must forward the qui tam complaint to the local prosecuting authority, who may elect to intervene and proceed with the action. If both state and political subdivision funds are involved, the Attorney General and the local prosecuting authority are to coordinate their investigation and review. Either official, or both of them, may then elect to intervene and proceed with the action. If these officials decline to proceed, the qui tam plaintiff shall have the right to conduct the action. (Gov.Code, § 12652, subd. (c)(4)-(8).) If state or local officials intervene, they may assume control of the action, but the qui tam plaintiff may remain as a party. ( Id., subd. (e)(1).) A substantial portion of the proceeds of any settlement or court award in a CFCA actionas much as 66 percentdoes not revert to the general coffers of the state or the political subdivision against which the false claim was submitted. Instead, a significant cut of these proceeds goes to those who pursued the action on behalf of the defrauded entity. Thus, if the Attorney General or a local prosecuting authority initiated an CFCA action, that officer is entitled to a fixed 33 percent of the proceeds of the action, or settlement thereof. Where a local prosecuting authority intervened in an action initiated by the Attorney General, the court may award the local prosecuting authority a portion of the Attorney General's 33 percent, as appropriate to the local authority's role in conducting the action. If, in an action brought by a qui tam plaintiff, the Attorney General or the local prosecuting authority proceeds with the action, that official receives a fixed 33 percent of the proceeds, and the qui tam plaintiff receives from 15 to 33 percent, depending on his or her litigation role. Where both the Attorney General and a local prosecuting authority are involved in a qui tam action, the court may award the latter officer a portion of the Attorney General's 33 percent, depending on the role played by the local prosecutor. [13] If neither the Attorney General nor the local prosecuting authority elects to proceed with the action, the qui tam plaintiff may receive between 25 and 50 percent of the proceeds. (Gov.Code, § 12652, subd.(g).) The CFCA's remedies are cumulative to any others provided by statute or common law. (Gov.Code, § 12655, subd. (a).) Further, its provisions shall be liberally construed and applied to promote the public interest. ( Id., subd. (c).)