Blog

State Attorney General Frosh Supports a Better MD False Claims Act

Brian E. Frosh, the Attorney General for the State of Maryland, appears to be pushing very hard to pass a more expansive False Claims Act for his State. Not only is he working in the legislature and posting press releases, but he also just wrote a lengthy Op-Ed in the Baltimore Sun.

Mr. Frosh wants to expand the reach of the current law. Currently, Maryland’s False Claims Act only allows for liability involving state health care funds. He quite sensibly argues for a law that would allow a liability suit to be filed when somebody defrauds any state or county program:

“Maryland has recouped about $60 million since adopting a False Health Claims Act in 2010. But we can do better –— preventing more fraud, and saving more taxpayer dollars. The time has come to enact a full, robust law so that Maryland, its 24 counties and Baltimore City can begin recouping millions that we know are being lost.
That is why I have asked the General Assembly to adopt such a measure this year (House Bill 405/Senate Bill 374).”

Alas, the Maryland law under consideration that I have seen allows for no private right of action if the Attorney General does not accept the case. Still, Mr. Frosh is arguing for increased whistleblower rights, and that is great.

Mr. Frosh cites specific examples of successful cases and makes several strong and interesting arguments. For example, the Attorney General presents the history or rather the recent history of the Federal False Claims Act. He is correct that the law was essentially brought back from obscurity in 1986. Yes, it was enacted under the Lincoln Administration but lay dormant for many years. In Mr. Frosh’s recounting of this recent history I was reminded of the bi-partisan nature of this law. Howard Berman in the U.S. House Sponsored the 1986 Amendments and he was a Democrat from California. However, Charles Grassley, still the law’s champion, sponsored the legislation in the Senate, and he is a Republican from Iowa. The 1986 Amendments were signed into law by no less a conservative figure than Ronald Reagan.

It’s important to remember that the False Claims Act works on and for some very conservative principles. The idea is to incentivize reporting Fraud. That incentive system rewards and makes possible reporting of fraud that simply otherwise may not happen. Whistleblowers need help to do the reporting, and without incentives in the law, lawyers can’t take the risk to use their practices to help. Whistleblowers are always in a tough spot, but the rewards at least make doing the right thing more possible. Since the rewards are only obtained by positive results, the government does not have to allocate as much in the way of resources to fight fraud this way as it would through almost any other system. These are all fundamentally conservative ideas.

Mr. Frosh notes there is nothing anti-business about being anti-cheating:

While some argue that the law would encourage more lawsuits, or dampen the state’s business climate, experience around the country shows that is not the case. Putting cheaters out of business helps firms that play by the rules. Red states and blue states known for business-friendly environments have false claims acts, including Texas, North Carolina, Colorado and Georgia, among others.

Even the idea that the government could save money by cracking down on those who would steal from it hardly seems liberal.

Mr. Frosh’s arguments are worth noting, and it is worth remembering that good ideas should be able to receive support from all sides. Hopefully he will be able to lead the bi-partisan effort in the Maryland Legislature to a successful expansion of the law.

Now we have to get to work in Pennsylvania and Ohio.

_______________________________________________________________________________________

* Tony Munter discusses the False Claims Act in Maryland. He is not, however, licensed to practice in the jurisdiction of Maryland. The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. The content of this Website contains general information and may not reflect current legal developments, verdicts or settlements. The Firm expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this Website.