AB 2570 — False Claims Act.

Summary

Existing law, the False Claims Act, provides that any person who commits specified acts, including, but not limited to, knowingly presenting a false or fraudulent claim for payment or approval or knowingly making or using a false record or statement material to a false or fraudulent claim, is liable to the state or to the political subdivision for 3 times the amount of damages that the state or political subdivision sustained because of the act and for the costs of a civil action brought to recover any penalties or damages, and is subject to a civil penalty. That act requires the Attorney General or the prosecuting authority of a political subdivision to diligently investigate violations of those specific acts involving state funds or political subdivision funds, respectively, and authorizes the Attorney General, the prosecuting authority, or a qui tam plaintiff to bring a civil action against a person who commits those acts. The False Claims Act requires a complaint filed by a qui tam plaintiff to be filed in superior court in camera and allows the complaint to remain under seal for up to 60 days to allow for the Attorney General or prosecuting attorney to elect to intervene and proceed with the action or to decline to proceed, as specified. The act prohibits service to be made on the defendant until after the complaint is unsealed. This bill, with respect to whether a false record or statement is material, would require that the materiality test focus on the potential effect of the false record or statement when it is made. This bill would specify that the amount of damages, as described above, include consequential damages. The bill would state that these changes are declaratory of existing law. This bill would require a complaint filed by a qui tam plaintiff to remain under seal for at least 60 days, and would prohibit the complaint being served on the defendant until the court so orders. The bill would deem a demand for payment or request for payment based on an alleged violation that is made prior to filing a complaint by an attorney representing a private person to be a violation of the requirement that the complaint be filed in superior court in camera. The False Claims Act does not apply to claims, records, or statements made under the Revenue and Taxation Code. This bill would apply the False Claims Act to apply to claims, records, or statements made under the Revenue and Taxation Code if specified conditions are met, including if damages pleaded in an action under the act exceed $200,000 and that the claim, record, or statement was made on or after January 1, 2021. The bill would define "person" for these purposes. This bill would require the Attorney General or prosecuting authority, as described, to consult with the taxing authorities to whom the claim was submitted prior to filing or intervening in any action under the act that is based on the filing of false claims, records, or statements made under the Revenue and Taxation Code. This bill would authorize the Attorney General or the prosecuting authority, but not the qui tam plaintiff, to obtain otherwise confidential records relating to taxes, fees, or other obligations under the Revenue and Taxation Code. The bill would prohibit the disclosure of federal tax information to the Attorney General or the prosecuting authority without authorization from the Internal Revenue Service. The bill would require that any such information obtained be kept confidential, except as necessary to investigate and prosecute violations of these provisions. Under the False Claims Act, an employee, contractor, or agent who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment for engaging in lawful acts, as specified, or other efforts to stop violations of the act, is entitled to all relief necessary to make them whole. This bill would specify that the relief described above applies to any current or former employee, contractor, or agent if these parties are otherwise harmed or penalized by an employer. This bill would define lawful acts to include specified acts that may violate a contract, employment term, or duty owed to an employer or contractor. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect.

Bill Text

• Amended 07/02/20 - Amended Senate Current pdf July 02, 2020
• Amended 05/04/20 - Amended Assembly pdf May 04, 2020
• Introduced 02/20/20 - Introduced pdf February 20, 2020
• AB2570 View text html

Action History

1. July 02, 2020

   From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on JUD.

2. July 01, 2020

   Referred to Com. on JUD.

3. June 11, 2020

   In Senate. Read first time. To Com. on RLS. for assignment.

4. June 10, 2020

   Read third time. Passed. Ordered to the Senate. (Ayes 44. Noes 20. Page 4768.)

5. June 04, 2020

   Read second time. Ordered to third reading.

6. June 03, 2020

   From committee: Do pass. (Ayes 13. Noes 5.) (June 3).

7. June 02, 2020

   In committee: Set, first hearing. Referred to APPR. suspense file.

8. May 12, 2020

   From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 3.) (May 11). Re-referred to Com. on APPR.

9. May 05, 2020

   Re-referred to Com. on JUD.

10. May 04, 2020

    From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.

11. March 17, 2020

    In committee: Hearing postponed by committee.

12. March 02, 2020

    Referred to Coms. on JUD. and REV. & TAX.

13. February 21, 2020

    From printer. May be heard in committee March 22.

14. February 20, 2020

    Read first time. To print.

Sponsors

• Mark Stone · Primary

Votes

Subjects