Montana False Claims Act
Below, Tony Munter provides a brief summary of the Montana False Claims Act. Tony Munter is not a Montana False Claims Act attorney. He is not licensed to practice in Montana. For information on the FCA Laws of other states, click here.
In 2005, the State of Montana used its biannual legislative session to enact House Bill 146 and the Montana False Claims Act was born. It is a relatively new law, but also a fairly strong one. (See Mont. Code Ann. Sections 17-8-401 et seq.)
The Montana Attorney General recently reported that the law was responsible for modest collections in 2014. Perhaps there is not as much fraud being conducted in Montana, even on a per capita basis, as in my home state of Massachusetts. However, the number that caught my attention in the Attorney General’s Report was 252, referring to the number of cases filed in any jurisdiction in which the State of Montana has an interest of some kind. You can view a copy of the report here.
Montana State and Federal FCA Cases
Even though the state has less than a million people, Montana has an interest in and potential collections from some of the largest national False Claims Act cases. Would a state such as this with a relatively smaller budget have the resources to pursue major corporations conducting huge nationwide fraud schemes? Maybe if they devoted the entire Attorney General’s office to False Claims Act cases. However, it is hard to imagine any state having the resources to pursue 252 investigations into national fraud schemes.
The fact that states can work together on such cases, and they can also work with the federal government, makes these investigations more fruitful and efficient. Of course, they also must work with the False Claims Act whistleblower who provides the crucial information needed to bring a successful case.
Under the current legal structure, Montana—like other states—can leverage the federal government’s participation in such cases if the case is filed as a coordinated action. That is because the state’s claims will be settled and/or adjudicated along with the claims of other states and the federal government.
It may make even more sense for less populous states to pursue false claims allegations in this way. After all, any other action to recover funds requires a greater investment of scarce state resources.
Montana’s New False Claims Act
Of course, the Montana False Claims Act also allows individuals to sue when they find a matter of fraud being committed “only” against the state of Montana. The law is new and we may see some more examples of these kinds of cases in future Attorney General’s Reports.
The law should lend itself to state court filings because it is in the class of state False Claims Acts, which provide for many different kinds of liability when a defendant defrauds Montana. Under the Montana False Claims Act, the defendant is liable for any false claim if any Montana governmental entity provides a portion of the funds. “Governmental entity” is defined to mean the state, any city, town, county, school district, tax or assessment district, or other political subdivision of the state, or a unit of the Montana university system.
In light of this, virtually any kind of fraud committed against the state creates liability under the Montana False Claims Act. While one would expect the majority of collections to involve healthcare fraud, as is the case in most states, Montana’s law allows for any form of fraud against the state to be filed as a case.
Individuals have the opportunity to work with the office of the Attorney General and potentially to collect a share of anything the state collects as a result of the suit. The relator can obtain from 15 to 30 percent under Montana’s law, the same as in the federal law. The Montana False Claims Act also imposes liability, including treble damages and civil fines, under a similar structure as the federal False Claims Act.
