False Claims Act Cases in Hawaii

This page is a two part series on the Hawaii whistleblower laws. Tony Munter speaks with Attorney Thomas Grande about the Hawaii False Claims Act and the origins of this state legislation. Click here for Part 2.
*Tony Munter is not licensed to practice in Hawaii

    Tony: How did you get into a false claims practice?
    Thomas: I’ve been practicing law for 30 years and about 18 years ago, a prospective client walked into my office who had a whistleblower case. I had done a large number of employment cases on the plaintiff’s side including a large number of whistleblower cases. In this particular case, the client was a home health coordinator for a local hospital and it very quickly became apparent that she had uncovered some very serious fraudulent activity. Being aware of the false claims act, I looked further at her situation, decided that it was an appropriate False Claims Act case and filed a case. That was my first one in 1998 and I’ve been doing it ever since.
    Tony: How does the Hawaii false claims act differ from the federal false claims act if it does?
      Thomas: Our Act was modeled on the federal false claims act and the California False Claims Act. When we first passed the Hawai’i FCA in 2000, there were really only a handful of states that had state false claims acts. When we drafted the Hawai’i FCA we decided we wanted to adhere to the federal statute as closely as possible but also strengthen it by following what California did.

Since that time, the statute has been amended to conform more closely to the federal statute. As you know, there are Medicaid Funding requirements that give states a greater share of Medicaid funding if they have a false claims act in conformance with certain federal requirements.

One significant difference in our state statute is that we for the past two years, we have been allowed to bring False Claims Act cases on behalf of tax whistleblowers who uncover tax fraud.

That is a significant difference from the federal law and I think we’re one of the few state statutes that allow that. That amendment was passed in 2012.

      Tony: Yes, I’m only aware of one other state that does that. That’s really quite amazing. Have you seen anyone, have you had anyone file a case under that?

 

    Thomas: There have been no unsealed cases. I’ve brought several cases to the state and for different reasons they didn’t work out. But I’m hoping as we move forward you know, in times of fiscal austerity states look for other ways to make sure that they’re getting paid what they should be paid. I think there are some several cases on the horizon that we’ll be looking at, but hopefully we’ll be the first case in Hawaii to get a tax fraud settlement.
    Tony: Is there a minimum?
    Thomas: The statute has a $500 minimum aggregate jurisdictional threshold. It eliminates the smallest claims.
    Tony: That is very unusual. I also realize there is some form of a more local false claims act in Hawaii. As you probably know some states include provisions for so called political subdivisions, some states don’t. Some municipalities have their own false claims act and I gather in Hawaii there is something quite like that.
      Thomas: In 2001, Hawai’i passed a separate state statute that provided for a cause of action by the counties. We have four counties in Hawaii and only one municipality, the city and county of Honolulu.

The Hawai’i County False Claims Act allows the counties to directly bring false claims act cases for false claims that are submitted to the county government. It’s been used somewhat, but because of the smaller budgets and the smaller opportunities for fraud, it hasn’t been used as much as we would like it to be.

      Tony: Is it a little cumbersome to bring a state and county action or

is it possible to

    consolidate those?
    Thomas: It’s similar to bringing a multiple state action in one federal court.   You can bring a multiple county action along with the state action in any state circuit court. Any circuit court in the state has jurisdiction so that’s not a logistical barrier.
    Tony: In your view, would it be possible to do a consolidated action including the county under a federal claim?
    Thomas: I believe that the federal statute would allow for supplemental jurisdiction over those claims, as long as there’s some involvement of federal funds.

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