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March 4th, 2016

‘False Claims’ Decision by Florida Appeals Court Could Be Basis for Reform in Other States

In what could serve as the basis for a reasonable reform of frequently abused False Claims Act statutes in other states, a Florida appellate court last month upheld the state attorney general’s authority to dismiss meritless whistleblower claims when the state chooses not to join the lawsuit.

As reported by Legal Newsline.com, the case was first brought in 2009 by an engineer formerly with Motorola, which had designed and sold an automated fingerprint identification system to the Florida Department of Law Enforcement.  The engineer claimed Motorola failed to tell the FDLE about problems that required several million dollars to correct.

“But an affidavit filed by the FDLE said the system ‘was, and is, successful and fully complies with the contract’” Motorola had entered into with the state, Legal Newsline’s W.J. Kennedy wrote.

Both federal and state FCA laws give governments the option to intervene in cases, and in 2010, Florida’s Attorney General Pam Bondi chose not to intervene in what she deemed a meritless case, and in 2013 she dismissed it outright.

Attorneys for the whistleblowing engineer, known as the “relator” in FCA parlance, argued that the state had lost the authority to dismiss when it chose not to intervene.

However, the First District Court of Appeal’s unanimous panel decision on Feb. 23, written by Judge Brad Thomas, said, “We hold that the attorney general possesses the plenary authority to unilaterally dismiss a qui tam (whistleblower) action, regardless of the state’s decision to decline to previously intervene in the litigation.”

Florida’s FCA, unlike the federal statute on which it is largely based, contains no provision for a hearing regarding the government’s decision to dismiss a qui tam action, and Bondi’s brief pointed out that “lack of notice and hearing provisions in the dismissal context was a deliberate policy choice by the Legislature to provide the Attorney General with unfettered control over qui tam actions . . . .”

President of the Florida Justice Reform Institute, William W. Large, praised the appellate decision:

“To allow an individual relator – motivated solely by personal financial reward and with no special expertise in, or necessary regard for proper policy implications – to stymie the Attorney General’s discretionary decision to dismiss a case makes no sense.”

To the extent that other states’ lawmakers are inclined to protect the interests of both taxpayers and companies that provide governments with quality goods and services at competitive prices, reforming their FCA statutes to include state authority for unilateral dismissals would make a lot of sense.

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