CHAPTER........
AN ACT relating to governmental administration; providing a civil penalty for the
submission of a false claim to the state or to a local government; and providing other
matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Title 31 of NRS is hereby amended by adding thereto a
new chapter to consist of the provisions set forth as sections 2 to 30,
inclusive, of this act.
Sec. 2.
As used in this chapter, unless the context otherwise requires,the words and terms defined in sections 3, 4 and 5 of this act have the
meanings ascribed to them in those sections.
Sec. 3.
"Claim" means a request or demand for money, property orservices made to:
1. An officer, employee or agent of this state or of a political
subdivision of this state; or
2. A contractor, grantee or other recipient of money from the state or
a political subdivision of this state if any part of the money, property or
services requested or demanded was provided by the state or political
subdivision.
Sec. 4.
"Political subdivision" means a county, city, assessmentdistrict or any other local government as defined in NRS 354.474.
Sec. 5. (Deleted by amendment.)
Sec. 6.
1. Except as otherwise provided in section 7 of this act, aperson who, with or without specific intent to defraud, does any of the
following listed acts is liable to the state or a political subdivision,
whichever is affected, for three times the amount of damages sustained
by the state or political subdivision because of the act of that person, for
the costs of a civil action brought to recover those damages and for a
civil penalty of not less than $2,000 or more than $10,000 for each act:
(a) Knowingly presents or causes to be presented a false claim for
payment or approval.
(b) Knowingly makes or uses, or causes to be made or used, a false
record or statement to obtain payment or approval of a false claim.
(c) Conspires to defraud by obtaining allowance or payment of a false
claim.
(d) Has possession, custody or control of public property or money
and knowingly delivers or causes to be delivered to the state or a political
subdivision less money or property than the amount for which he
(e) Is authorized to prepare or deliver a receipt for money or property
to be used by the state or a political subdivision and knowingly prepares
or delivers a receipt that falsely represents the money or property.
(f) Knowingly buys, or receives as security for an obligation, public
property from a person who is not authorized to sell or pledge the
property.
(g) Knowingly makes or uses, or causes to be made or used, a false
record or statement to conceal, avoid or decrease an obligation to pay or
transmit money or property to the state or a political subdivision.
(h) Is a beneficiary of an inadvertent submission of a false claim and,
after discovering the falsity of the claim, fails to disclose the falsity to the
state or political subdivision within a reasonable time.
2. As used in this section, a person acts "knowingly" with respect to
information if he:
(a) Has knowledge of the information;
(b) Acts in deliberate ignorance of whether the information is true or
false; or
(c) Acts in reckless disregard of the truth or falsity of the information.
Sec. 7.
In a civil action pursuant to this chapter, the court may givejudgment for not less than twice or more than three times the amount of
damages sustained, and no civil penalty, if it finds that:
1. The person against who the judgment is entered:
(a) Furnished all information known to him concerning the act,
within 30 days after becoming aware of the information, to the attorney
general; and
(b) Fully cooperated with any investigation of the act by the state or
political subdivision; and
2. At the time the information was furnished, no criminal
prosecution or civil or administrative proceeding had commenced with
respect to the act and the person had no knowledge of the existence of
any investigation with respect to the act.
Sec. 8.
Liability pursuant to this chapter is joint and several for anact done by two or more persons.
Sec. 9.
The attorney general may investigate any alleged liabilitypursuant to this chapter and may bring a civil action pursuant to this
chapter against the person liable.
Sec. 10.
(Deleted by amendment.)Sec. 11. 1. Except as otherwise provided in sections 26 and 27 of
this act, a private plaintiff may maintain an action pursuant to this
chapter on his own account and that of the state if money, property or
services provided by the state are involved, or on his own account and
that of a political subdivision if money, property or services provided by
the political subdivision are involved, or on his own account and that of
both the state and a political subdivision if both are involved. After such
an action is commenced, it may be dismissed only with leave of the court,
taking into account the public purposes of this chapter and the best
interests of the parties.
2. A complaint filed pursuant to this section must be placed under
seal and so remain until the attorney general has elected whether to
intervene. No service may be made upon the defendant until the
complaint is unsealed.
3. On the date the private plaintiff files his complaint, he shall send a
copy of the complaint to the attorney general by mail with return receipt
requested. He shall send with each copy of the complaint a written
disclosure of substantially all material evidence and information he
possesses.
Sec. 12.
1. Within 120 days after receiving a complaint anddisclosure, the attorney general may intervene and proceed with the
action or he may, for good cause shown, move the court to extend the
time for his election whether to proceed. The motion may be supported by
affidavits or other submissions in chambers.
2. If the attorney general elects to intervene, the complaint must be
unsealed. If the attorney general elects not to intervene, the private
plaintiff may proceed and the complaint must be unsealed.
Secs. 13 and 14.
(Deleted by amendment.)Sec. 15. 1. If the attorney general intervenes, the private plaintiff
remains a party to an action pursuant to section 11 of this act.
2. The attorney general may move to dismiss the action for good
cause. The private plaintiff must be notified of the filing of the motion
and is entitled to oppose it and present evidence at the hearing.
3. Except as otherwise provided in this subsection, the attorney
general may settle the action. If the attorney general intends to settle the
action, he shall notify the private plaintiff of that fact. Upon the request
of the private plaintiff, the court shall determine whether settlement of
the action is consistent with the public purposes of this chapter and shall
not approve the settlement of the action unless it determines that such
settlement is consistent with the public purposes of this chapter.
Sec. 16.
1. The defendant is entitled to 30 days in which to respondafter a complaint filed pursuant to section 11 of this act is unsealed and
served upon him.
2. If a private plaintiff brings an action pursuant to this chapter, no
other person may bring another action pursuant to this chapter based on
the same facts.
3. An action may not be maintained by a private plaintiff pursuant to
this chapter:
(a) Against a member of the legislature or the judiciary, an elected
officer of the executive department of the state government, or a member
of the governing body of a political subdivision, if the action is based
upon evidence or information known to the state or political subdivision
at the time the action was brought.
(b) If the action is based upon allegations or transactions that are the
subject of a civil action or an administrative proceeding for a monetary
penalty to which the state or political subdivision is already a party.
Sec. 17.
1. If the attorney general elects not to intervene in anaction pursuant to section 11 of this act, the private plaintiff has the
same rights in conducting the action as the attorney general would have
had. A copy of each pleading or other paper filed in the action, and a
copy of the transcript of each deposition taken, must be mailed to the
attorney general if the attorney general so requests and pays the cost
thereof.
2. Upon timely application, the attorney general may intervene in an
action in which he has previously declined to intervene, if the interest of
the state or a political subdivision in recovery of the money or property
involved is not being adequately represented by the private plaintiff.
3. If the attorney general so intervenes, the private plaintiff retains
primary responsibility for conducting the action and any recovery must
be apportioned as if the attorney general had not intervened.
Sec. 18.
As used in sections 19 to 22, inclusive, of this act,"recovery" includes civil penalties and does not include any allowance of
expenses or attorney’s fees.
Sec. 19.
If the attorney general initiates an action pursuant to thischapter, 33 percent of any recovery must be paid into the state general
fund to the credit of a special account, for use by the attorney general as
appropriated or authorized by the legislature in the investigation and
prosecution of false claims.
Sec. 20.
1. If the attorney general intervenes at the outset in anaction pursuant to section 11 of this act, the private plaintiff is entitled,
except as otherwise provided in section 21 of this act, to receive not less
than 15 percent or more than 33 percent of any recovery, according to
the extent of his contribution to the conduct of the action.
2. If the attorney general does not intervene in the action at the
outset, the private plaintiff is entitled, except as otherwise provided in
section 21 of this act, to receive not less than 25 percent or more than 50
percent of any recovery, as the court determines to be reasonable.
Sec. 21.
1. If the action is one described in section 26 of this act,the present or former employee of the state or political subdivision is not
entitled to any minimum percentage of any recovery, but the court may
award him no more than 33 percent of the recovery if the attorney
general intervenes in the action at the outset, or no more than 50 percent
if the attorney general does not intervene, according to the significance
of his information, the extent of his contribution to the conduct of the
action and the response to his efforts to report the false claim and gain
recovery through other official channels.
2. If the private plaintiff is a present or former employee of the state
or a political subdivision and benefited financially from the fraudulent
activity, he is not entitled to any minimum percentage of any recovery,
but the court may award him no more than 33 percent of the recovery if
the attorney general intervenes in the action at the outset, or no more
than 50 percent if the attorney general does not intervene, according to
the significance of his information, the extent of his contribution to the
conduct of the action, the extent of his involvement in the fraudulent
activity, his attempts to avoid or resist the activity and the other
circumstances of the activity.
Sec. 22.
The portion of any recovery not apportioned pursuant tosections 19, 20 and 21 of this act must be paid into the state general fund
if the money, property or services were provided only by the state, or into
the general fund of the political subdivision if they were provided only by
a political subdivision. If the action involved both the state and a political
subdivision, the court shall apportion the remaining portion of any
recovery between them according to the respective values of the money,
property or services provided by each.
Sec. 23.
1. If the attorney general or a private plaintiff prevails inor settles an action pursuant to section 11 of this act, the private plaintiff
is entitled to a reasonable amount for expenses that the court finds were
necessarily incurred, including reasonable costs, attorney’s fees and the
fees of expert consultants and expert witnesses. Those expenses must be
awarded against the defendant, and may not be allowed against the state
or a political subdivision.
2. If the defendant prevails in the action, the court may award him
reasonable expenses and attorney’s fees against the party or parties who
participated in the action if it finds that the action was clearly frivolous
or vexatious or brought solely for harassment.
Sec. 24.
1. The court may stay discovery by a private plaintiff fornot more than 60 days if the attorney general shows that the proposed
discovery would interfere with the investigation or prosecution of a civil
or criminal matter arising out of the same facts, whether or not the
attorney general participates in the action.
2. The court may extend the stay upon a further showing that the
attorney general has pursued the civil or criminal investigation or
proceeding with reasonable diligence and the proposed discovery would
interfere with its continuation. Discovery may not be stayed for a total of
more than 6 months over the objection of the private plaintiff, except for
good cause shown by the attorney general.
3. A showing made pursuant to this section must be made in
chambers.
Sec. 25.
Upon a showing by the attorney general that unrestrictedparticipation by a private plaintiff would interfere with or unduly delay
the conduct of an action, or would be repetitious, irrelevant or solely for
harassment, the court may limit his participation by, among other
measures, limiting:
1. The number of witnesses he may call;
2. The length of the testimony of the witnesses; or
3. His cross-examination of witnesses.
Sec. 26.
No action may be maintained pursuant to section 11 of thisact that is based upon information discovered by a present or former
employee of the state or a political subdivision during his employment,
unless he first in good faith exhausted internal procedures for reporting
and seeking recovery of the proceeds of the fraudulent activity through
official channels and the state or political subdivision failed to act on the
information provided for at least 6 months.
Sec. 27.
1. No action may be maintained pursuant to this chapterthat is based upon the public disclosure of allegations or transactions in
a criminal, civil or administrative hearing, in an investigation, report,
hearing or audit conducted by or at the request of a house of the
legislature, an auditor or the governing body of a political subdivision, or
from the news media, unless the action is brought by the attorney general
or an original source of the information.
2. As used in this section, "original source" means a person:
(a) Who has direct and independent knowledge of the information on
which the allegations were based;
(b) Who voluntarily provided the information to the state or political
subdivision before bringing an action based on the information; and
(c) Whose information provided the basis or caused the making of the
investigation, hearing, audit or report that led to the public disclosure.
Sec. 28.
1. An employer shall not adopt or enforce any rule orpolicy forbidding an employee to disclose information to the state, a
political subdivision or a law enforcement agency or to act in furtherance
of an action pursuant to this chapter, including investigation for,
bringing or testifying in such an action.
2. An employer shall not discharge, demote, suspend, threaten,
harass, deny promotion to or otherwise discriminate against an employee
in the terms or conditions of his employment because of lawful acts done
by him on his own behalf or on behalf of others in disclosing information
to the state, a political subdivision or a law enforcement agency in
furtherance of an action pursuant to this chapter, including investigation
for, bringing or testifying in such an action.
Sec. 29.
1. An employer who violates subsection 2 of section 28 ofthis act is liable to the affected employee in a civil action for all relief
necessary to make him whole, including, without limitation,
reinstatement with the same seniority as if the discrimination had not
occurred or damages in lieu of reinstatement if appropriate, twice the
amount of lost compensation, interest on the lost compensation, any
special damage sustained as a result of the discrimination and punitive
damages if appropriate. The employer is also liable for expenses
recoverable pursuant to section 23 of this act, costs and attorney’s fees.
2. An employee is entitled to the remedies provided in subsection 1
(a) He voluntarily disclosed information to the state or a political
subdivision or voluntarily acted in furtherance of an action pursuant to
this chapter; and
(b) He was harassed, threatened with termination or demotion, or
otherwise coerced by his employer into any participation in fraudulent
activity.
1. An action pursuant to this chapter may not becommenced more than 3 years after the date of discovery of the
fraudulent activity by the attorney general or more than 5 years after the
fraudulent activity occurred, whichever is earlier. Within those limits, an
action may be based upon fraudulent activity that occurred before
October 1, 1999.
2. In an action pursuant to this chapter, the standard of proof is a
preponderance of the evidence. A finding of guilt in a criminal
proceeding charging false statement or fraud, whether upon a verdict of
guilty or a plea of guilty or nolo contendere, estops the person found
guilty from denying an essential element of that offense in an action
pursuant to this chapter based upon the same transaction as the criminal
proceeding.
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