R.I.P. West Virginia’s False Claims Act

45 House Republicans and 10 Democrats defeated House Bill 4001, the proposed False Claims Act

West Virginia’s version of the False Claims Act, which is created to incentivize whistleblowers, fell to its death in the House of Delegates this February. After a long debate that heard Republican lawmakers express frustration, House Judiciary Chair Tim Manchin’s bill was rejected in a 55-42 vote.

The bill was touted by promoters as a whistleblower protection program that would stop government fraud and save millions. The bill would have allowed whistleblowers to bring lawsuits in West Virginia courts against businesses alleged to have submitted false claims for reimbursement to state and federal programs like Medicaid.

“I am disappointed that this effort to reduce fraud on the government was rejected by a majority in the House of Delegates,” said West Virginia House Speaker Tim Miley in a statement. “Every member claims to come to Charleston with the goal of eliminating fraud and waste and to protecting taxpayer funds, yet that was not evident in the vote.”

The bill would have provided whistleblowers with 15 percent to 25 percent of the recovery that resulted from the lawsuits they filed. After their lawsuits were filed under seal, the Attorney General’s Office would have had the option to review them and decide if it wanted to join.

According to critics, the bill sent the wrong message to the business community and would encourage “sue-and-settle” litigation that benefitted only plaintiff’s lawyers and the whistleblowers they would represent.

“Our strategy now appears to be to sue ourselves into prosperity,” Del. John Shott, R-Mercer, said in a statement. “If we can just find another way to have someone sue somebody, maybe we can solve our problems. This is a terrible message that we’re saying with this bill.”

Republicans argued there was no need for the bill. A part of state law still allows for claims like the ones that would have been brought by whistleblowers but does not provide for whistleblower awards.

In fact, Paul Espinosa, R-Jefferson, noted Manchin’s amendment that changed the bill’s title to the Government Fraud Protection Act and said, “you can put lipstick on a pig, but it’s still a pig.” Espinosa said the bill duplicated existing regulations and said the vote would be a defining moment in the House that would show whether the delegates would side with the business community or plaintiffs lawyers.

Espinosa also called the hearing in the House Judiciary Committee a “charade of an informational hearing.” During his remarks, he complained that the bill was “launched on us” on the first day of the session and that serious study wasn’t conducted. He wished other states with similar legislation had been contacted, as well as the Attorney General’s Office to see what kind of resources would be needed to pursue the suits it wanted to join.

“Whether we agree with that assessment or not, the perception is pervasive outside of the state,” he said. “So it troubles me that our strategy to counter that perception is to basically say, ‘You ain’t seen nothing yet.’”

The last Republican to speak, John McCuskey of Kanawha, said, “If this budget doesn’t have enough money to fund senior programs and fire departments, then I commit to you that we’ve already failed. This bill is a way to create plaintiffs. This is not a way to fix our state’s budget problems.”

Additionally, Barbara Evans Fleischauer of Monongalia joined fellow Democrats Skinner and Manchin in verbally supporting the bill. She argued that the bill would help bring money into the state while only punishing those who would defraud it.

“What is the reality,” Manchin said. “The reality is there is nearly, by some accounts, a hundred billion dollars a year in Medicaid fraud. “We talk about helping the taxpayers. What more can we do to help taxpayers than stop people from cheating them, from taking their money?”

 

For more news on whistleblowers, check out these articles:

Will 2014 be the ‘Year of the Whistleblower?’

Whistling down the wind: The pitfalls and possibilities of the Dodd-Frank whistleblowing program

Johnnie Cochran’s firm wants to represent whistleblowers

Whistleblower speaks out about Justice Department settlement

Contributing Author

author image

Amanda Ciccatelli

Amanda G. Ciccatelli is a Contributing Writer for InsideCounsel, where she covers the patent litigation space. Amanda earned a B.A. in Communications and Journalism from...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.