REPORT TITLE:
False Claims Act

DESCRIPTION:
Establishes a False Claims Act against the government.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           2115
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT
RELATING TO FALSE CLAIMS.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 
 2 a new chapter to be appropriately designated and to read as
 
 3 follows:
 
 4                           "CHAPTER  
 
 5                FALSE CLAIMS AGAINST THE GOVERNMENT
 
 6         -1  Short title; definitions.  (a)  This chapter shall
 
 7 be known and may be cited as the False Claims Act.
 
 8      (b)  For purposes of this chapter:
 
 9      "Claim" includes any request or demand for money, property,
 
10 or services made to any employee, officer, or agent of the State
 
11 or of any political subdivision, or to any contractor, grantee,
 
12 or other recipient, whether under contract or not, if any portion
 
13 of the money, property, or services requested or demanded issued
 
14 from, or was provided by, the State (hereinafter "state funds")
 
15 or by any of its political subdivisions (hereinafter "political
 
16 subdivision funds").
 
17      "Knowing" and "knowingly" means that a person, with respect
 
18 to information:
 
19      (1)  Has actual knowledge of the information;
 
20      (2)  Acts in deliberate ignorance of the truth or falsity of
 

 
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 1           the information; or
 
 2      (3)  Acts in reckless disregard of the truth or falsity of
 
 3           the information.
 
 4      "Political subdivision" includes any city, city and county,
 
 5 or county, except the county of Kalawao.
 
 6      "Prosecuting authority" refers to the county counsel or
 
 7 corporation counsel.
 
 8      "Person" includes any natural person, corporation, firm,
 
 9 association, organization, partnership, limited liability
 
10 company, business, or trust.
 
11         -2 False claims against the government; actionable.
 
12 (a)  A person who:
 
13      (1)  Knowingly presents or causes to be presented to an
 
14           officer or employee of the State or of any political
 
15           subdivision, a false claim for payment or approval;
 
16      (2)  Knowingly makes, uses, or causes to be made or used a
 
17           false record or statement to get a false claim paid or
 
18           approved by the State or by any political subdivision;
 
19      (3)  Conspires to defraud the State or any political
 
20           subdivision by getting a false claim allowed or paid by
 
21           the State or by any political subdivision;
 
22      (4)  Has possession, custody, or control of public property
 
23           or money used or to be used by the State or by any
 

 
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 1           political subdivision and knowingly delivers or causes
 
 2           to be delivered less property than the amount for which
 
 3           the person receives a certificate or receipt;
 
 4      (5)  Is authorized to make or deliver a document certifying
 
 5           receipt of property used or to be used by the State or
 
 6           by any political subdivision and knowingly makes or
 
 7           delivers a receipt that falsely represents the property
 
 8           used or to be used;
 
 9      (6)  Knowingly buys, or receives as a pledge, an obligation,
 
10           debt, or public property from any person who is not
 
11           lawfully authorized to sell or pledge the obligation,
 
12           debt, or property;
 
13      (7)  Knowingly makes, uses, or causes to be made or used, a
 
14           false record or statement to conceal, avoid, or
 
15           decrease an obligation to pay or transmit money or
 
16           property to the State or to any political subdivision;
 
17           or
 
18      (8)  Is a beneficiary of an inadvertent submission of a
 
19           false claim to the State or a political subdivision,
 
20           who subsequently discovers the falsity of the claim,
 
21           and fails to disclose the false claim to the State or
 
22           the political subdivision within a reasonable time
 
23           after discovery of the false claim;
 

 
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 1 shall be liable to the State or political subdivision for three
 
 2 times the amount of damages which the State or political
 
 3 subdivision sustains due to the act committed by that person and
 
 4 the costs of a civil action brought to recover any of those
 
 5 penalties or damages.  The person also may be liable to the State
 
 6 or political subdivision for a civil penalty of up to $10,000 for
 
 7 each false claim.
 
 8      (b)  Notwithstanding subsection (a), the court may assess
 
 9 not less than two times and not more than three times the amount
 
10 of damages which the State or the political subdivision sustains
 
11 due to an act described in subsection (a) that is committed by a
 
12 person, and no civil penalty, if the court finds all of the
 
13 following:
 
14      (1)  The person committing the violation furnished state or
 
15           political subdivision officials responsible for
 
16           investigating false claims violations with all
 
17           information known to that person about the violation
 
18           within thirty days after the date on which the person
 
19           first obtained the information;
 
20      (2)  The person fully cooperated with any investigation by
 
21           the State or a political subdivision of the violation;
 
22           and
 
23      (3)  At the time the person furnished the State or the
 

 
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 1           political subdivision with information about the
 
 2           violation, no criminal prosecution, civil action, or
 
 3           administrative action had commenced with respect to the
 
 4           violation, and the person did not have actual knowledge
 
 5           of the existence of an investigation into the
 
 6           violation.
 
 7      (c)  Liability under this section shall be joint and several
 
 8 for any act committed by two or more persons.
 
 9      (d)  This section shall not apply to any controversy
 
10 involving an amount of less than $500 in value.  For purposes of
 
11 this subsection, "controversy" means any one or more false claims
 
12 submitted by the same person in violation of this chapter.  Proof
 
13 of specific intent to defraud is not required.
 
14      (e)  This section shall not apply to claims, records, or
 
15 statements for which procedures and remedies are otherwise
 
16 specifically provided for under law.
 
17         -3  Actions initiated by the attorney general.  (a)  The
 
18 attorney general shall diligently investigate violations under
 
19 section    -2 involving state funds.  If the attorney general
 
20 finds that a person has violated or is violating section    -2,
 
21 the attorney general may bring a civil action under this section
 
22 against that person.
 
23      (b)  If the attorney general brings a civil action under
 

 
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 1 this section on a claim involving political subdivision funds as
 
 2 well as state funds, the attorney general, on the same date that
 
 3 the complaint is filed in that action, shall serve by mail with
 
 4 "return receipt requested", a copy of the complaint on the
 
 5 appropriate prosecuting authority.
 
 6      (c)  The prosecuting authority may intervene in an action
 
 7 brought by the attorney general under this section within sixty
 
 8 days after receipt of the complaint pursuant to subsection (b).
 
 9         -4  Actions initiated by a prosecuting authority.  (a)
 
10 The prosecuting authority of a political subdivision shall
 
11 diligently investigate violations under section    -2 involving
 
12 political subdivision funds.  If the prosecuting authority finds
 
13 that a person has violated or is violating section    -2, the
 
14 prosecuting authority may bring a civil action under this section
 
15 against that person.  If the prosecuting authority brings a civil
 
16 action under this section on a claim involving state funds as
 
17 well as political subdivision funds, the prosecuting authority,
 
18 on the same date that the complaint is filed in that action,
 
19 shall serve by mail with "return receipt requested" a copy of the
 
20 complaint on the attorney general.
 
21      (b)  Within sixty days after receiving the complaint
 
22 pursuant to this section from the prosecuting authority, the
 
23 attorney general shall intervene in the action and do either of
 

 
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 1 the following:
 
 2      (1)  Notify the court that it intends to proceed with the
 
 3           action, in which case the attorney general shall assume
 
 4           primary responsibility for conducting the action and
 
 5           the prosecuting authority shall have the right to
 
 6           continue as a party; or
 
 7      (2)  Notify the court that it declines to proceed with the
 
 8           action, in which case the prosecuting authority shall
 
 9           have the right to conduct the action.
 
10         -5  Actions initiated by a private person; filing
 
11 procedures.(a)  A private person may bring a civil action for a
 
12 violation of this chapter for the person and either for the State
 
13 in the name of the State, if any state funds are involved, or for
 
14 a political subdivision in the name of the political subdivision,
 
15 if political subdivision funds are exclusively involved.  The
 
16 private person bringing the action shall be referred to as the
 
17 private plaintiff.  Once filed, the action may be dismissed only
 
18 with the written consent of the court, taking into account the
 
19 best interests of the parties involved and the public purposes
 
20 behind this chapter.
 
21      (b)  A complaint filed by a private person under this
 
22 section shall be filed in circuit court and may remain sealed by
 
23 the court for up to sixty days.  No service shall be made on the
 

 
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 1 defendant until after the complaint is unsealed.
 
 2      (c)  On the same day as the complaint is filed pursuant to
 
 3 subsection (b), the private plaintiff shall serve by mail with
 
 4 "return receipt requested", the attorney general or appropriate
 
 5 prosecuting authority with a copy of the complaint and a written
 
 6 disclosure of substantially all material evidence and information
 
 7 the person possesses.
 
 8      (d)  Within sixty days after receiving a complaint and
 
 9 written disclosure of material evidence and information alleging
 
10 violations that involve state funds but not political subdivision
 
11 funds from a private plaintiff, the attorney general may elect to
 
12 intervene and proceed with the action.
 
13      (e)  The attorney general, for good cause shown, may file a
 
14 motion with the court for an extension of the time during which
 
15 the complaint remains under seal pursuant to subsection (b).  The
 
16 motion may be supported by affidavits or other submissions.
 
17      (f)  Before the tolling of the sixty-day period or any
 
18 extensions obtained under subsection (e), the attorney general
 
19 shall do either of the following:
 
20      (1)  Notify the court that it intends to proceed with the
 
21           action, in which case the action shall be conducted by
 
22           the attorney general and the seal shall be lifted; or
 
23      (2)  Notify the court that it declines to proceed with the
 

 
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 1           action, in which case the seal shall be lifted and the
 
 2           private plaintiff shall have the right to conduct the
 
 3           action.
 
 4      (g)  Within fifteen days after receiving a complaint
 
 5 alleging violations that exclusively involve political
 
 6 subdivision funds, the attorney general shall forward copies of
 
 7 the complaint and written disclosure of material evidence and
 
 8 information to the appropriate prosecuting authority for
 
 9 disposition, and shall notify the private plaintiff of the
 
10 transfer.  Within forty-five days after the attorney general
 
11 forwards the complaint and written disclosure, the prosecuting
 
12 authority may elect to intervene and proceed with the action.
 
13      The prosecuting authority, for good cause shown, may file a
 
14 motion with the court for an extension of the time during which
 
15 the complaint remains under seal.  The motion may be supported by
 
16 affidavits or other submissions.
 
17      Before the expiration of the forty-five-day period or any
 
18 extensions obtained under this subsection, the prosecuting
 
19 authority shall do either of the following:
 
20      (1)  Notify the court that it intends to proceed with the
 
21           action, in which case the action shall be conducted by
 
22           the prosecuting authority and the seal shall be lifted;
 
23           or
 

 
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 1      (2)  Notify the court that it declines to proceed with the
 
 2           action, in which case the seal shall be lifted and the
 
 3           private plaintiff shall have the right to conduct the
 
 4           action.
 
 5      (h)  Within fifteen days after receiving a complaint
 
 6 alleging violations that involve both state and political
 
 7 subdivision funds, the attorney general shall forward copies of
 
 8 the complaint and written disclosure to the appropriate
 
 9 prosecuting authority, and shall coordinate its review and
 
10 investigation with those of the prosecuting authority.  Within
 
11 sixty days after receiving a complaint and written disclosure of
 
12 material evidence and information alleging violations that
 
13 involve both state and political subdivision funds, the attorney
 
14 general or the prosecuting authority, or both, may elect to
 
15 intervene and proceed with the action.
 
16      The attorney general or the prosecuting authority, or both,
 
17 for good cause shown, may file a motion with the court for an
 
18 extension of the time during which the complaint remains under
 
19 seal under subsection (b).  The motion may be supported by
 
20 affidavits or other submissions.  Before the expiration of the
 
21 sixty-day period or any extensions obtained under this
 
22 subsection, the attorney general shall do one of the following:
 
23      (1)  Notify the court that it intends to proceed with the
 

 
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 1           action, in which case the action shall be conducted by
 
 2           the attorney general and the seal shall be lifted;
 
 3      (2)  Notify the court that it declines to proceed with the
 
 4           action but that the prosecuting authority of the
 
 5           political subdivision involved intends to proceed with
 
 6           the action, in which case the seal shall be lifted and
 
 7           the action shall be conducted by the prosecuting
 
 8           authority; or
 
 9      (3)  Notify the court that both it and the prosecuting
 
10           authority decline to proceed with the action, in which
 
11           case the seal shall be lifted and the private plaintiff
 
12           shall have the right to conduct the action.
 
13      If the attorney general proceeds with the action pursuant to
 
14 paragraph (1), the prosecuting authority of the political
 
15 subdivision shall be permitted to intervene in the action within
 
16 sixty days after the attorney general notifies the court of its
 
17 intentions.
 
18      (i)  The defendant shall not be required to respond to any
 
19 complaint filed under this section until thirty days after the
 
20 complaint is unsealed and served upon the defendant.
 
21      (j)  When a person brings an action under this section, no
 
22 other person may bring a related action based on the facts
 
23 underlying the pending action.
 

 
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 1         -6  Limitations on actions.(a)  No court shall have
 
 2 jurisdiction over an action brought under section    -5 against a
 
 3 member of the state senate or state house of representatives, a
 
 4 member of the judiciary, an elected official in the executive
 
 5 branch of the State, or a member of the governing body of any
 
 6 political subdivision, if the action is based on evidence or
 
 7 information known to the state or political subdivision when the
 
 8 action was brought.
 
 9      (b)  In no event may a person bring an action under section
 
10    -5 that is based upon allegations or transactions that are the
 
11 subject of a civil suit or an administrative civil monetary
 
12 penalty proceeding in which the State or political subdivision is
 
13 already a party.
 
14      (c)  No court shall have jurisdiction over an action under
 
15 this chapter based upon the public disclosure of allegations or
 
16 transactions in a criminal, civil, or administrative hearing, in
 
17 an investigation, report, hearing, or audit conducted by or at
 
18 the request of the senate, house of representatives, auditor, or
 
19 governing body of a political subdivision, or from the news
 
20 media, unless the action is brought by the attorney general or
 
21 the prosecuting authority of a political subdivision, or the
 
22 person bringing the action is an original source of the
 
23 information.
 

 
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 1      For purposes of this subsection, "original source" means an
 
 2 individual who has direct and independent knowledge of the
 
 3 information on which the allegations are based, who voluntarily
 
 4 provided the information to the State or political subdivision
 
 5 before filing an action based on that information, and whose
 
 6 information provided the basis or catalyst for the investigation,
 
 7 hearing, audit, or report that led to the public disclosure.
 
 8      (d)  No court shall have jurisdiction over an action brought
 
 9 under section    -5 based upon information discovered by a
 
10 present or former employee of the State or a political
 
11 subdivision during the course of the person's employment, unless
 
12 that employee first in good faith exhausted existing internal
 
13 procedures for reporting and seeking recovery of the falsely
 
14 claimed sums through official channels and unless the State or
 
15 political subdivision failed to act on the information provided
 
16 within a reasonable period of time.
 
17         -7  Prosecution, dismissal, or settlement of action.
 
18 (a)  If the State or political subdivision proceeds with the
 
19 action, it shall have the primary responsibility for prosecuting
 
20 the action.  The private plaintiff shall have the right to
 
21 continue as a full party to the action.
 
22      (b)  The State or political subdivision may seek to dismiss
 
23 the action for good cause notwithstanding the objections of the
 

 
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 1 private plaintiff if the private plaintiff has been notified by
 
 2 the State or political subdivision of the filing of the motion
 
 3 and the court has provided the private plaintiff with an
 
 4 opportunity to oppose the motion and present evidence at a
 
 5 hearing.
 
 6      (c)  The State or political subdivision may settle the
 
 7 action with the defendant notwithstanding the objections of the
 
 8 private plaintiff if the court determines, after a hearing
 
 9 providing the private plaintiff an opportunity to present
 
10 evidence, that the proposed settlement is fair, adequate, and
 
11 reasonable under all of the circumstances.
 
12      (d)  If the State or political subdivision elects not to
 
13 proceed, the private plaintiff shall have the same right to
 
14 conduct the action as the attorney general or prosecuting
 
15 authority would have had if it had chosen to proceed under this
 
16 section.  If the State or political subdivision so requests, and
 
17 at its expense, the State or political subdivision shall be
 
18 served with copies of all pleadings filed in the action and
 
19 supplied with copies of all deposition transcripts.
 
20      (e)  Upon timely application, the court shall permit the
 
21 State or political subdivision to intervene in an action with
 
22 which it had initially declined to proceed if the interest of the
 
23 State or political subdivision in recovery of the property or
 

 
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 1 funds involved is not being adequately represented by the private
 
 2 plaintiff.  If the State or political subdivision is allowed to
 
 3 intervene, the private plaintiff shall retain principal
 
 4 responsibility for the action and the recovery of the parties
 
 5 shall be determined as if the State or political subdivision had
 
 6 elected not to proceed.
 
 7         -8  Awarding of proceeds of action or settlement.(a)
 
 8 If the attorney general initiates an action pursuant to section
 
 9    -3 or assumes control of an action initiated by a prosecuting
 
10 authority pursuant to section    -4(b)(1), the attorney general
 
11 shall receive thirty-three per cent of the proceeds of the action
 
12 or settlement of the claim, which shall be used to support its
 
13 ongoing investigation and prosecution of false claims.
 
14      (b)  If a prosecuting authority initiates and conducts an
 
15 action pursuant to section    -4, the prosecuting authority shall
 
16 receive thirty-three per cent of the proceeds of the action or
 
17 settlement of the claim, which shall be used to support its
 
18 ongoing investigation and prosecution of false claims.
 
19      (c)  If a prosecuting authority intervenes in an action
 
20 initiated by the attorney general pursuant to section    -3(c) or
 
21 remains a party to an action assumed by the attorney general
 
22 pursuant to section    -4(b)(1), the court may award the
 
23 prosecuting authority a portion of the attorney general's thirty-
 

 
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 1 three per cent of the recovery under subsection (a), taking into
 
 2 account the prosecuting authority's role in investigating and
 
 3 conducting the action.
 
 4      (d)  If the State or political subdivision proceeds with an
 
 5 action brought by a private plaintiff under section    -5, the
 
 6 private plaintiff, subject to subsections (f) and (g), shall
 
 7 receive at least fifteen per cent but not more than thirty-three
 
 8 per cent of the proceeds of the action or settlement of the
 
 9 claim, depending upon the extent to which the private plaintiff
 
10 substantially contributed to the prosecution of the action.  When
 
11 it conducts the action, the attorney general or the prosecuting
 
12 authority shall receive thirty-three per cent of the proceeds of
 
13 the action or settlement of the claim, which shall be used to
 
14 support its ongoing investigation and prosecution of false claims
 
15 made against the State or political subdivision.  When both the
 
16 attorney general and a prosecuting authority are involved in a
 
17 private plaintiff action pursuant to section    -5, the court, in
 
18 its discretion, may award the prosecuting authority a portion of
 
19 the attorney general's thirty-three per cent of the recovery,
 
20 taking into account the prosecuting authority's contribution to
 
21 investigating and conducting the action.
 
22      (e)  If the State or political subdivision do not proceed
 
23 with an action under this section, the private plaintiff, subject
 

 
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 1 to subsections (f) and (g), shall receive an amount that the
 
 2 court decides is reasonable for collecting the civil penalty and
 
 3 damages on behalf of the government.  The amount shall be not
 
 4 less than twenty-five per cent and not more than fifty per cent
 
 5 of the proceeds of the action or settlement and shall be paid out
 
 6 of these proceeds.
 
 7      (f)  Where the action is one provided for under section
 
 8    -6(d), the present or former employee of the State or
 
 9 political subdivision shall not be entitled to any minimum
 
10 guaranteed recovery from the proceeds.  The court, however, may
 
11 award the private plaintiff sums from the proceeds as it
 
12 considers appropriate, but in no case more than thirty-three per
 
13 cent of the proceeds if the State or political subdivision goes
 
14 forth with the action or fifty per cent if the State or political
 
15 subdivision declines to go forward, taking into account the
 
16 significance of the information, the role of the private
 
17 plaintiff in advancing the case to litigation, and the scope of,
 
18 and response to, the employee's attempts to report and gain
 
19 recovery of the falsely claimed funds through official channels.  
 
20      (g)  Where the action is one that the court finds to be
 
21 based primarily on information from a present or former employee
 
22 who actively participated in the fraudulent activity, the
 
23 employee shall not be entitled to any minimum guaranteed recovery
 

 
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 1 from the proceeds.  The court, however, may award the private
 
 2 plaintiff any sums from the proceeds that it considers
 
 3 appropriate, but in no case more than thirty-three per cent of
 
 4 the proceeds if the State or political subdivision goes forward
 
 5 with the action or fifty per cent if the State or political
 
 6 subdivision declines to go forward, taking into account the
 
 7 significance of the information, the role of the private
 
 8 plaintiff in advancing the case to litigation, the scope of the
 
 9 present or past employee's involvement in the fraudulent
 
10 activity, the employee's attempts to avoid or resist the
 
11 activity, and all other circumstances surrounding the activity.  
 
12      (h)  The portion of the recovery not distributed pursuant to
 
13 subsections (a) to (g), shall revert to the State if the
 
14 underlying false claims involved state funds exclusively and to
 
15 the political subdivision if the underlying false claims involved
 
16 political subdivision funds exclusively.  If the violation
 
17 involved both state and political subdivision funds, the court
 
18 shall make an apportionment between the State and political
 
19 subdivision based on their relative share of the funds falsely
 
20 claimed.
 
21      (i)  For purposes of this section, "proceeds" include civil
 
22 penalties as well as double or treble damages as provided in
 
23 section    -2.
 

 
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 1      (j)  If the State, political subdivision, or the private
 
 2 plaintiff prevails in or settles any action under section    -7,
 
 3 the private plaintiff shall receive an amount for reasonable
 
 4 expenses that the court finds to have been necessarily incurred,
 
 5 plus reasonable costs and attorneys' fees.  All expenses, costs,
 
 6 and fees shall be awarded against the defendant and under no
 
 7 circumstances shall they be the responsibility of the State or
 
 8 political subdivision.
 
 9      (k)  If the State, a political subdivision, or the private
 
10 plaintiff proceeds with the action, the court may award to the
 
11 defendant its reasonable attorneys' fees and expenses against the
 
12 party that proceeded with the action if the defendant prevails in
 
13 the action and the court finds that the claim was clearly
 
14 frivolous or brought solely for purposes of harassment.
 
15         -9  Discovery actions; interference.  The court may stay
 
16 an act of discovery of the person initiating the action for a
 
17 period of not more than sixty days if the attorney general or
 
18 prosecuting authority show that the act of discovery would
 
19 interfere with an investigation or a prosecution of a criminal or
 
20 civil matter arising out of the same facts, regardless of whether
 
21 the attorney general or prosecuting authority proceeds with the
 
22 action.  The court may extend the sixty-day period upon a showing
 
23 that the attorney general or prosecuting authority has pursued
 

 
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 1 the criminal or civil investigation or proceedings with
 
 2 reasonable diligence and any proposed discovery in the civil
 
 3 action shall interfere with the ongoing criminal or civil
 
 4 investigation or proceedings.
 
 5         -10  Unrestricted participation by private person
 
 6 initiating action; limitations.  Upon a showing by the attorney
 
 7 general or prosecuting authority that unrestricted participation
 
 8 during the course of the litigation by the private person
 
 9 initiating the action would interfere with or unduly delay the
 
10 attorney general's or prosecuting authority's prosecution of the
 
11 case, or would be repetitious, irrelevant, or for purposes of
 
12 harassment, the court may impose limitations on the private
 
13 person's participation, including the following:
 
14      (1)  Limiting the number of witnesses the private person may
 
15           call;
 
16      (2)  Limiting the length of the testimony of the witnesses;
 
17      (3)  Limiting the private person's cross-examination of
 
18           witnesses; and
 
19      (4)  Otherwise limiting the participation by the private
 
20           person in the litigation.
 
21         -11  False claims act fund; establishment.  There is
 
22 established within the state treasury a false claims act fund
 
23 into which all proceeds and interest from the action or
 

 
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 1 settlement of the claim by the attorney general pursuant to this
 
 2 chapter shall be deposited.  Moneys in the fund, upon
 
 3 appropriation by the legislature, shall be used by the attorney
 
 4 general to support the ongoing investigation and prosecution of
 
 5 false claims in furtherance of this chapter.
 
 6         -12  Applicability; University of Hawaii.
 
 7 Notwithstanding any other provision of law, the University of
 
 8 Hawaii shall be considered a political subdivision, and the
 
 9 general counsel of the University of Hawaii shall be considered a
 
10 prosecuting authority for the purposes of this chapter.  The
 
11 university shall have the right to intervene in an action brought
 
12 by the attorney general under section    -3 or a private party
 
13 under section    -5 or investigate and bring an action pursuant
 
14 to section    -3, if it is determined that the claim involves the
 
15 University of Hawaii.
 
16         -13  Freedom of disclosure without fear of reprisal.
 
17 (a)  No employer shall make, adopt, or enforce any rule,
 
18 regulation, or policy preventing an employee from disclosing
 
19 information to a government or law enforcement agency or from
 
20 acting in furtherance of a false claims action, including
 
21 investigating, initiating, testifying, or assisting in an action
 
22 filed or to be filed under sections    -3 to    -5.
 
23      (b)  No employer shall discharge, demote, suspend, threaten,
 

 
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 1 harass, deny promotion to, or in any other manner discriminate
 
 2 against, an employee in the terms and conditions of employment
 
 3 because of lawful acts done by the employee on behalf of the
 
 4 employee or others in disclosing information to a government or
 
 5 law enforcement agency or in furthering a false claims action,
 
 6 including investigation for, initiation of, testimony for, or
 
 7 assistance in, an action filed or to be filed under sections
 
 8    -3 to    -5.
 
 9      (c)  An employer who violates subsection (b) shall be liable
 
10 for all relief necessary to make the employee whole, including
 
11 reinstatement with the same seniority status that the employee
 
12 would have had but for the discrimination, two times the amount
 
13 of backpay, interest on the back pay, compensation for any
 
14 special damage sustained as a result of the discrimination, and,
 
15 where appropriate, punitive damages.  In addition, the defendant
 
16 shall be required to pay litigation costs and reasonable
 
17 attorneys' fees.  An employee may bring an action in the
 
18 appropriate circuit court of the State for the relief provided in
 
19 this subsection.
 
20      (d)  An employee who is discharged, demoted, suspended,
 
21 harassed, denied promotion, or in any other manner discriminated
 
22 against in the terms and conditions of employment by the
 
23 employee's employer because of participation in conduct which
 

 
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 1 directly or indirectly resulted in a false claim being submitted
 
 2 to the State or a political subdivision shall be entitled to the
 
 3 remedies under subsection (c) if, and only if, both of the
 
 4 following occur:
 
 5      (1)  The employee voluntarily disclosed information to a
 
 6           government or law enforcement agency or acted in
 
 7           furtherance of a false claims action, including
 
 8           investigation for, initiation of, testimony for, or
 
 9           assistance in an action filed or to be filed; and
 
10      (2)  The employee had been harassed, threatened with
 
11           termination or demotion, or otherwise coerced by the
 
12           employer or its management into engaging in the
 
13           fraudulent activity.
 
14         -14  Statute of limitations.(a)  A civil action under
 
15 section    -3 to    -5 shall not be filed more than three years
 
16 after the date of discovery by the official of the State or
 
17 political subdivision charged with responsibility to act in the
 
18 circumstances or, in any event, no more than ten years after the
 
19 date on which the violation of section    -2 is committed.
 
20      (b)  A civil action under section    -3,    -4, or    -5
 
21 may be brought for activity prior to January 1, 2001, if the
 
22 limitations period set in subsection (a) has not lapsed.
 
23      (c)  In any action brought under section    -3,    -4, or
 

 
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                                     S.B. NO.           2115
                                                        
                                                        

 
 1    -5 the State, the political subdivision, or the private
 
 2 plaintiff shall be required to prove all essential elements of
 
 3 the cause of action, including damages, by a preponderance of the
 
 4 evidence.
 
 5      (d)  Notwithstanding any other provision of law to the
 
 6 contrary, a guilty verdict rendered in a criminal proceeding
 
 7 charging false statements or fraud, whether upon a verdict after
 
 8 trial or upon a plea of guilty or nolo contendere, except for a
 
 9 plea of nolo contendere made prior to January 1, 2001, shall
 
10 prevent the defendant from denying the essential elements of the
 
11 offense in any action which involves the same transaction as in
 
12 the criminal proceeding and which is brought under section    -3
 
13 or    -4.
 
14         -15  Application.  (a)  The provisions of this chapter
 
15 are not exclusive, and the remedies provided for in this chapter
 
16 shall be in addition to any other remedies provided for in any
 
17 other law.
 
18      (b)  This chapter shall be liberally construed and applied
 
19 to promote the public interest."
 
20      SECTION 2.  This Act shall take effect upon its approval.
 
21 
 
22                           INTRODUCED BY:  _______________________