HAWAII FALSE CLAIMS ACT

<body bgcolor="white"> <div align="left"><table border="0" cellpadding="0" cellspacing="0" width="500"> <tr> <td colspan="2" valign="top"><p align="center"><a href="AF_frm.htm" target="_top">About the Firm</a> | <a href="fca_f.htm" target="_top">The False Claims Act</a> | <a href="wr_f.htm" target="_top">Whistleblower's reward</a> | <a href="caintr_f.htm" target="_top">Have a case?</a><a href="story_f.htm" target="_top"><br> Whistleblowers' stories</a> | <a href="resman_f.htm" target="_top">Resources</a> | <a href="what_f.htm" target="_top">What's new</a> </td> </tr> <tr> <td width="357" valign="top"><font size="4" color="#333366">Hawaii</font></td> <td valign="top"><img src="../../GIF/PC_url.GIF" width="143" height="14" align="right"></td> </tr> <tr> <td colspan="2"><p align="center"><br> <b>HAWAII FALSE CLAIMS ACT</b> </p> <p align="center">BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:</p> <p align="left"><b>SECTION 1. </b>Chapter 661, Hawaii Revised Statutes, is amended<br> by adding a new part to be appropriately designated and to read<br> as follows:</p> <p align="left"><b>"PART . QUI TAM ACTIONS OR RECOVERY OF</b> <b>FALSE CLAIMS TO THE STATE</b></p> <p align="left"><b>§661- </b>Actions for false claims to the State; qui tam<br> actions.(a) Notwithstanding section 661-7 to the contrary, any<br> person who:<br> (1) Knowingly presents, or causes to be presented, to an<br> officer or employee of the State a false or fraudulent<br> claim for payment or approval;<br> (2) Knowingly makes, uses, or causes to be made or used, a<br> false record or statement to get a false or fraudulent<br> claim paid or approved by the State;<br> (3) Conspires to defraud the State by getting a false or<br> fraudulent claim allowed or paid;<br> (4) Has possession, custody, or control of property or<br> money used, or to be used, by the State and, intending<br> to defraud the State or wilfully to conceal the<br> property, delivers, or causes to be delivered, less<br> property than the amount for which the person receives<br> a certificate or receipt;<br> (5) Is authorized to make or deliver a document certifying<br> receipt of property used, or to be used by the State<br> and, intending to defraud the State, makes or delivers<br> the receipt without completely knowing that the<br> information on the receipt is true;<br> (6) Knowingly buys, or receives as a pledge of an<br> obligation or debt, public property from any officer or<br> employee of the State who may not lawfully sell or <br> pledge the property;<br> (7) Knowingly makes, uses, or causes to be made or used, a<br> false record or statement to conceal, avoid, or<br> decrease an obligation to pay or transmit money or<br> property to the State; or<br> (8) Is a beneficiary of an inadvertant submission of a<br> false claim to the State, who subsequently discovers<br> the falsity of the claim, and fails to disclose the<br> false claim to the State within a reasonable time after<br> discovery of the false claim;<br> shall be liable to the State for a civil penalty of not less than<br> $5,000 and not more than $10,000, plus three times the amount of<br> damages that the State sustains due to the act of that person.<br>  <br> (b) If the court finds that a person who has violated<br> subsection (a):<br> (1) Furnished officials of the State responsible for<br> investigating false claims violations with all<br> information known to the person about the violation<br> within thirty days after the date on which the<br> defendant first obtained the information;<br> (2) Fully cooperated with any State investigation of such<br> violation; and<br> (3) At the time the person furnished the State with the<br> information about the violation, no criminal<br> prosecution, civil action, or administrative action had<br> commenced under this title with respect to such<br> violation, and the person did not have actual knowledge<br> of the existence of an investigation into such<br> violation;<br> the court may assess not less than two times the amount of<br> damages that the State sustains because of the act of the person.<br> A person violating subsection (a), shall also be liable to the<br> State for the costs and attorneys' fees of a civil action brought<br> to recover the penalty or damages.<br> (c) Liability under this section shall be joint and several<br> for any act committed by two or more persons.<br> (d) This section shall not apply to any controversy<br> involving an amount of less than $500 in value. For purposes of<br> this subsection, "controversy" means the aggregate of any one or<br> more false claims submitted by the same person in violation of<br> this chapter. Proof of specific intent to defraud is not<br> required.<br> (e) For purposes of this section:<br> "Claim" includes any request or demand, whether under a<br> contract or otherwise, for money or property that is made to a<br> contractor, grantee, or other recipient if the State provides any<br> portion of the money or property that is requested or demanded,<br> or if the government will reimburse the contractor, grantee, or<br> other recipient for any portion of the money or property that is<br> requested or demanded.<br> "Knowing" and "knowingly" means that a person, with respect<br> to information:<br> (1) Has actual knowledge of the information;<br> (2) Acts in deliberate ignorance of the truth or falsity of<br> the information; or<br> (3) Acts in reckless disregard of the truth or falsity of<br> the information;<br> and no proof of specific intent to defraud is required.<br> (f) This section shall not apply to claims, records, or<br> statements for which procedures and remedies are otherwise<br> specifically provided for under chapter 231.<br> <b>§661- </b>Civil actions for false claims. The attorney<br> general shall investigate any violation under section 661- .<br> If the attorney general finds that a person has violated or is<br> violating section 661- , the attorney general may bring a<br> civil action under this section.<br>  <b><br> §661- </b>Evidentiary determination; burden of proof. A<br> determination that a person has violated the provisions of this<br> chapter shall be based on a preponderance of the evidence.<br> <b>§661- </b>Statute of limitations. An action for false<br> claims to the State pursuant to this chapter shall be brought<br> within six years after the false claim is discovered or by<br> exercise of reasonable diligence should have been discovered and,<br> in any event, no more than ten years after the date on which the<br> violation of section 661- is committed.<br> <b>§661- </b>Action by private persons.(a) A person may<br> bring a civil action for a violation of section 661- for the<br> person and for the State. The action shall be brought in the<br> name of the State. The action may be dismissed only with the<br> written consent of the court, taking into account the best<br> interests of the parties involved and the public purposes behind<br> this chapter.<br>  <br> (b) A copy of the complaint and written disclosure of<br> substantially all material evidence and information the person<br> possesses shall be served on the State in accordance with the<br> Hawaii Rules of Civil Procedure. The complaint shall be filed in<br> camera, shall remain under seal for at least sixty days, and<br> shall not be served on the defendant until the court so orders.<br> The State may elect to intervene and proceed with the action<br> within sixty days after it receives both the complaint and the<br> material evidence and information.<br> (c) The State may, for good cause shown, move the court for<br> extensions of the time during which the complaint remains under<br> seal under subsection (b). Any such motions may be supported by<br> affidavits or other submissions in camera. The defendant shall<br> not be required to respond to any complaint filed under this<br> section until twenty days after the complaint is unsealed and<br> served upon the defendant in accordance with the Hawaii Rules of<br> Civil Procedure.<br> (d) Before the expiration of the sixty-day period or any<br> extension obtained, the State shall:<br> (1) Proceed with the action, in which case the action shall<br> be conducted by the State and the seal shall be lifted;<br> or<br> (2) Notify the court that it declines to take over the<br> action, in which case the person bringing the action<br> shall have the right to conduct the action and the seal<br> shall be lifted.<br> (e) When a person brings an action under this section, no<br> person other than the State may intervene or bring a related<br> action based on the facts underlying the pending action.<br> <b>§661-</b> Rights of parties to qui tam actions.(a) If<br> the State proceeds with an action under section 661- , the<br> State shall have the primary responsibility for prosecuting the<br> action and shall not be bound by an act of the person bringing<br> the action. The person shall have the right to continue as a<br> party to the action, subject to the following limitations:<br> (1) The State may dismiss the action notwithstanding the<br> objections of the person initiating the action if the<br> court determines, after a hearing on the motion, that<br> dismissal should be allowed;<br> (2) The State may settle the action with the defendant<br> notwithstanding the objections of the person initiating<br> the action if the court determines, after a hearing,<br> that the proposed settlement is fair, adequate, and<br> reasonable. Upon a showing of good cause, the hearing<br> may be held in camera;<br> (3) The court, upon a showing by the State that<br> unrestricted participation during the course of the<br> litigation by the person initiating the action would<br> interfere with or unduly delay the State's prosecution<br> of the case, or would be repetitious, irrelevant, or<br> for purposes of harassment, may, in its discretion<br> impose limitations on the person's participation by:<br> (A) Limiting the number of witnesses the person may<br> call;<br> (B) Limiting the length of the testimony of the<br> witnesses;<br> (C) Limiting the person's cross-examination of<br> witnesses; or<br> (D) Otherwise limiting the participation by the person<br> in the litigation.<br> (b) The defendant, by motion upon the court, may show that<br> unrestricted participation during the course of the litigation by<br> the person initiating the action would be for purposes of<br> harassment or would cause the defendant undue burden or<br> unnecessary expense. At the court's discretion, the court may<br> limit the participation by the person in the litigation.<br> (c) If the State elects not to proceed with the action, the<br> person who initiated that action shall have the right to conduct<br> the action. If the State so requests, it shall be served with<br> copies of all pleadings filed in the action and shall be supplied<br> with copies of all deposition transcripts at the State's expense.<br> When a person proceeds with the action, the court without<br> limiting the status and rights of the person initiating the<br> action, may nevertheless permit the State to intervene at a later<br> date upon showing of good cause.<br> (d) Whether or not the State proceeds with the action, upon<br> motion and a showing by the State that certain actions of<br> discovery by the person initiating the action would interfere<br> with the State's investigation or prosecution of a criminal or<br> civil matter arising out of the same facts, the court may stay<br> the discovery for a period of not more than sixty days. The<br> court may extend the sixty day period upon a motion and showing<br> by the State that the State has pursued the investigation or<br> prosecution of the criminal or civil matter with reasonable<br> diligence and the proposed discovery would interfere with the<br> ongoing investigation or prosecution of the criminal or civil<br> matter.<br> (e) Notwithstanding section 661- , the State may elect<br> to pursue its claim through any alternate remedy available to the<br> State, including any administrative proceedings to determine<br> civil monetary penalties. If any alternate remedy is pursued in<br> another proceeding, the person initiating the action shall have<br> the same rights in the proceedings as the person would have had<br> if the action had continued under this section. Any finding of<br> fact or conclusion of law made in the other proceeding that<br> becomes final shall be conclusive on all parties to an action<br> under this section. <br> (f) Whether or not the State elects to proceed with the<br> action, the parties to the action shall receive court approval of<br> any settlements reached.<br> <b>§661- </b>Awards to qui tam plaintiffs.(a) If the State<br> proceeds with an action brought by a person under section<br> 661- , the person shall receive at least fifteen per cent but<br> not more than twenty-five per cent of the proceeds of the action<br> or settlement of the claim, depending upon the extent to which<br> the person substantially contributed to the prosecution of the<br> action. Where the action is one that the court finds to be based<br> primarily on disclosures of specific information, other than<br> information provided by the person bringing the action, relating<br> to allegations or transactions in a criminal, civil, or<br> administrative hearing, in a legislative or administrative<br> report, hearing, audit, or investigation, or from the news media,<br> the court may award sums as it considers appropriate, but in no<br> case more than ten per cent of the proceeds, taking into account<br> the significance of the information and the role of the person<br> bringing the action in advancing the case to litigation. Any<br> payment to a person under this subsection shall be made from the<br> proceeds. Any person shall also receive an amount for reasonable<br> expenses that the court finds to have been necessarily incurred,<br> plus reasonable attorneys' fees and costs. All expenses, fees,<br> and costs shall be awarded against the defendant.<br> (b) If the State does not proceed with an action under this<br> section, the person bringing the action or settling the claim<br> shall receive an amount that the court decides is reasonable for<br> collecting the civil penalty and damages. The amount shall be<br> not less than twenty-five per cent and not more than thirty per<br> cent of the proceeds of the action or settlement and shall be<br> paid out of the proceeds. The person shall also receive an<br> amount for reasonable expenses that the court finds to have been<br> necessarily incurred, plus reasonable attorneys' fees and costs.<br> All expenses, fees, and costs shall be awarded against the<br> defendant.<br> (c) Whether or not the State proceeds with the action, if<br> the court finds that the action was brought by a person who<br> planned and initiated the violation of section 661- upon<br> which the action was brought, then the court may, to the extent<br> the court considers appropriate, reduce the share of the proceeds<br> of the action that the person would otherwise receive under<br> subsection (a), taking into account the role of that person in<br> advancing the case to litigation and any relevant circumstances<br> pertaining to the violation. If the person bringing the action<br> is convicted of criminal conduct arising from the person's role<br> in the violation of section 661- , that person shall be<br> dismissed from the civil action and shall not receive any share<br> of the proceeds of the action. The dismissal shall not prejudice<br> the right of the State to continue the action.<br> (d) If the State does not proceed with the action and the<br> person bringing the action conducts the action, the court may<br> award to the defendant its reasonable attorneys' fees and<br> expenses if the defendant prevails in the action and the court<br> finds that the claim of the person bringing the action was<br> frivolous, vexatious, or brought primarily for purposes of<br> harassment.<br> (e) In no event may a person bring an action under section<br> 661- :<br> (1) Against a member of the state senate or state house of<br> representatives, a member of the judiciary, or an<br> elected official in the executive branch of the State,<br> if the action is based on evidence or information known<br> to the State. For purposes of this section, evidence<br> or information known only to the person or persons<br> against whom an action is brought shall not be<br> considered to be known to the state;<br> (2) When the person is a present or former employee of the<br> State and the action is based upon information<br> discovered by the employee during the course of the<br> employee's employment, unless the employee first, in<br> good faith, exhausted any existing internal procedures<br> for reporting and seeking recovery of the falsely<br> claimed sums through official channels and the State<br> failed to act on the information provided within a<br> reasonable period of time; or<br> (3) That is based upon allegations or transactions that are<br> the subject of a civil or criminal investigation by the<br> State, civil suit, or an administrative civil money<br> penalty proceeding in which the State is already a<br> party.<br> <b>§661- </b>Jurisdiction. No court shall have jurisdiction<br> over an action under this part based upon the public disclosure<br> of allegations or transactions in a criminal, civil, or<br> administrative hearing, in a legislative or administrative<br> report, hearing, audit, or investigation, or from the news media,<br> unless the action is brought by the attorney general or the<br> person bringing the action is an original source of the<br> information. For purposes of this section:<br> "Original source" means an individual who has direct and<br> independent knowledge of the information on which the allegations<br> are based and has voluntarily provided the information to the<br> State before filing an action under this part that is based on<br> the information, and whose information provided the basis or<br> catalyst for the investigation, hearing, audit, or report that<br> led to the public disclosure.<br> <b>§661-</b> Fees and costs of litigation. The State shall<br> not be liable for expenses or fees, including attorney fees, that<br> a person incurs in bringing an action under this part and shall<br> not elect to pay those expenses or fees.<br> <b>SECTION 2.</b> The provisions of this Act are not exclusive and<br> are in addition to any other applicable law or remedy. This Act<br> shall be liberally construed and applied to promote the public<br> interest.<br> <b>SECTION 3.</b> This Act shall take effect upon its approval.<br>  <br>  <br>  <br> Added by Act 126, 5/26/00. <br>  <br>  <br> </p> <p align="center"><font size="1">© 2000 Phillips & Cohen. All rights reserved<br> <a HREF="cred_f.htm" TARGET="_top">Credits</a></font> </td> </tr> </table> </div> </body>