A California measure signed into law in September expands who can bring whistleblower claims alleging companies submitted false claims to the State and adds new financial incentives for qui tam relators. Assem. B. 2492, 2011-2012 Gen. Assem. (Cal. 2012) (amending Cal. Gov’t. Code §§ 12650, 12651, 12652, and 12654, to add § 12654.5, and to repeal and add § 12653, relating to the False Claims Act). California is the first state to update its false claims statute with stronger whistleblower protections and stiffer penalties to align with the federal False Claims Act. The new law broadens whistleblower protections covering employees to include contractors and agents, allows for awards of legal fees and costs, and raises civil penalties for violations of the state law from $5,000 to $10,000 per false claim to $5,500 and $11,000. While the California Attorney General and a qui tam relator who is an original source of the information can already bring a false claims action, the new law extends that right to include individuals who are not the original source of the information and may have heard it from a third source. This new group can pursue an action as long as the Attorney General opposes dismissal of the case. The new law also limits the prevailing defendant’s ability to receive attorneys’ fees in cases in which the government has declined to participate, while allowing qui tam relators to potentially share in a minimum guaranteed award even if they participated in the fraud. In addition, the new law expends protections under the anti-retaliation provisions to include not just employees subjected to an adverse employment action because of specific acts in furtherance of a false claims action, but also to anyone who engages in “other efforts to stop one or more violations.”
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California’s expanded whistleblower law paves the way for more suits
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