Vermont False Claims Act Passes House, Senate

Whistleblowers should soon have another state that will compensate them for bringing information about corporate misconduct impacting the state treasury. The House and Senate of Vermont have passed a False Claims Act and the bill is awaiting signature by Governor Peter Shumlin.

The law is modeled after the Federal False Claims Act. It allows relators to receive between 15 and 30 percent of the money recovered under the law. It also allows whistleblowers to file lawsuits if they suffer retaliation, with relief including double back pay and attorneys’ fees.

The legislation has a delayed retroactivity provision. This allows whistleblowers to bring cases that predate the passage of the bill and for Vermont to participate in pending cases of multistate fraud. The constitutionality of similar provisions has been challenged in New York and New Mexico. By delaying implementation until 2016, it allows the legislature to repeal the language if the result of these challenges is unfavorable for the government.

Vermont will join 30 other states, the District of Columbia and several cities with versions of the law. Maryland also passed a state version of the False Claims Act this year. Other states have made efforts unsuccessfully over the past few years. Pennsylvania still has not taken any action on this front since an attempt in 2013. Legislators in West Virginia attempted to pass a law to protect its treasury from fraud last year but the measure failed after opposition by business.

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