Article, 1016 UTBJ, Vol. 29, No. 5. 20

Author:Robert D. Sherlock, Jeffrey D. Eisenberg, and Sarah M. Wade, J.


Vol. 29 No. 5 Pg. 20

Utah Bar Journal

October, 2016

          September, 2016

         The Case for Expanding the Utah False Claims Act

          Robert D. Sherlock, Jeffrey D. Eisenberg, and Sarah M. Wade, J.

         Government spending in Utah will exceed $14 billion for fiscal year 2016.[1] Unfortunately, it is estimated that up to 10% of government outlays are lost to fraud.[2] This means that, in one year alone, around $1.4 billion tax dollars will go to people and entities that provide no benefit to Utahns. The primary tool by which the federal government recovers taxpayer dollars lost to fraud is the Federal False Claims Act (the Federal Act), and the vast majority of cases brought under the Federal Act are initiated by private whistleblowers. The unmatched success of the modern Federal Act, which has led to over $40 billion in recoveries to the United States since 1986, has prompted a growing majority of states, including Texas, North Carolina, and Oklahoma, to enact their own laws, which closely track the Federal Act. State false claims acts have led to substantial recoveries. For example, in Texas, one settlement netted the state almost $45 million, while California recovered more than $187 million in a single settlement. In addition, Florida has collected over $30 million in Medicaid fraud recoveries alone.

         Although a Utah False Claims Act exists, its reach is limited to state healthcare dollars and it does not contain the whistleblower provisions that make the Federal Act and other states’ false claims acts so successful. To better root out fraud against taxpayer dollars, the legislature should amend the Utah False Claims Act to mirror the Federal Act. A Utah False Claims Act that mirrors the Federal Act would create liability for any person who knowingly submits a false claim or causes another to submit a false claim to the state of Utah or knowingly makes a false record or statement to get a false claim paid by the state. It would also impose liability where a person improperly avoids having to pay money to the state and would create liability for those who conspire to violate the Utah False Claims Act.

         Further, a whistleblower would be permitted to initiate suit by providing the state Attorney General with all material evidence and information the whistleblower possesses and by filing a complaint under seal. During the seal period, the government would be empowered to investigate the whistleblower’s allegations to determine their validity and to assess whether to intervene in the case and to take primary responsibility for the litigation. If the government decided not to intervene, the whistleblower would still have the right to continue the action on behalf of the government via private counsel. A successful whistleblower would...

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