Colo. Rev. Stat. § 24-31-1204

Current through 2022 Legislative Session
Section 24-31-1204 - Civil actions for false claims - claims for retaliation - definitions
(1)Responsibility of attorney general.
(a) The attorney general shall diligently investigate a violation of section 24-31-1203. If the attorney general finds that a person has violated or is violating section 24-31-1203, the attorney general may bring a civil action against the person pursuant to this section.
(b) In any action brought pursuant to this part 12 in which the attorney general is a party, either as the plaintiff or as an intervenor, the court may dismiss the action upon motion of the attorney general following the notice and opportunity for a hearing pursuant to subsection (4)(b)(I) of this section. In determining whether to file a motion to dismiss, the attorney general shall consider the severity of the false claim, program or population impacted by the false claim, duration of the fraud, weight and materiality of the evidence, other means to make the program whole, and other factors the attorney general deems relevant. The attorney general's decision-making process concerning a motion to dismiss and any records related to the decision-making process are not discoverable in any action.
(2)Role of the office of the state auditor.
(a) Notwithstanding any other state law requiring the state auditor to keep information confidential, if in the course of its audit authority, the office of the state auditor identifies information of potential false claims submitted to the state or a political subdivision, the state auditor may share any information with the attorney general or the political subdivision. The state auditor may participate, with the consent of the attorney general, in any subsequent investigation or prosecution of that false claim.
(b) If the state auditor elects to participate in any investigation and prosecution of a false claim, the state auditor's interests will be represented by the attorney general.
(3)Actions by private persons.
(a) A person may bring a civil action for a violation of section 24-31-1203 for the person and for the state. The action must be brought in the name of the state. The court shall not dismiss an action upon motion of the private person who brought the action unless the attorney general gives written consent to the dismissal and reasons for consenting.
(b)
(I) A person who brings an action shall serve on the state, pursuant to rule 4 of the Colorado rules of civil procedure, a copy of the complaint and written disclosure of substantially all material evidence and information the person possesses; except that the person shall not disclose any evidence or information that the person reasonably believes is protected by the defendant's attorney-client privilege unless the privilege was waived, inadvertently or otherwise, by the person who holds the privilege; an exception to the privilege applies; or disclosure of the information is permitted by an attorney pursuant to 17 CFR 205.3(d)(2), the applicable Colorado rules of professional conduct, or otherwise. The complaint must be filed in camera, must remain under seal for at least sixty-three days, and must not be served on the defendant until the court so orders. The state may elect to intervene and proceed with the action within sixty-three days after it receives both the complaint and the material evidence and information.
(II) In determining whether to intervene and proceed with an action pursuant to this subsection (3)(b), the attorney general shall consider the factors described in subsection (1)(d) of this section. The attorney general's decision-making process concerning whether to intervene and any records related to the decision-making process are not discoverable in any action.
(c) The state may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal pursuant to subsection (3)(b) of this section. The motion may be supported by affidavits or other submissions in camera. The defendant is not required to respond to any complaint filed pursuant to this section until twenty-one days after the complaint is unsealed and served upon the defendant pursuant to rule 4 of the Colorado rules of civil procedure.
(d) Before the expiration of the sixty-three-day period pursuant to subsection (3)(b) of this section and any extensions obtained pursuant to subsection (3)(c) of this section, the state shall:
(I) Proceed with the action, in which case the state shall conduct the action; or
(II) Notify the court that it declines to take over the action, in which case the person who brought the action has the right to continue the action.
(e) When a person brings an action pursuant to this subsection (3), only the state may intervene or bring a related action based on the facts underlying the pending action.
(f) Any information provided by a person to the state pursuant to this subsection (3) is exempt from disclosure pursuant to the "Colorado Open Records Act", part 2 of article 72 of this title 24.
(4)Rights of parties to private actions.
(a) If the state proceeds with an action brought pursuant to subsection (3) of this section, it has the primary responsibility for prosecuting the action and is not bound by an act of the person who brought the action. The person has the right to continue as a party to the action, subject to the limitations set forth in subsection (3)(b) of this section.
(b)
(I) The state may, at any time, dismiss the action, in whole or in part, notwithstanding the objections of the person who brought the action if the person has been notified by the state of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.
(II) The state may settle the action with the defendant notwithstanding the objections of the person who brought the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. Upon a showing of good cause, the court may hold the hearing in camera.
(III) Upon a showing by the state that unrestricted participation during the course of the litigation by the person who brought the action would interfere with or unduly delay the state's prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose limitations on the person's participation, including but not limited to:
(A) Limiting the number of witnesses the person may call;
(B) Limiting the length of the testimony of the witnesses called by the person;
(C) Limiting the person's cross-examination of witnesses; and
(D) Otherwise limiting the participation by the person in the litigation.
(IV) Upon a showing by the defendant that unrestricted participation during the course of the litigation by the person who brought the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation by the person in the litigation as described in subsection (4)(b)(III) of this section.
(c) The fact that the state has elected not to proceed with an action is not a basis for a motion to dismiss, motion for determination of a question of law, or motion for summary judgment, nor is it a basis to deny the court jurisdiction over the action, but if the attorney general submits to the court the attorney general's reasons for not proceeding with the action, the court may consider the reasons when deciding a motion or whether the court has jurisdiction. If the state so requests, it must be served with copies of all pleadings filed in the action and, at the state's expense, be supplied with copies of all deposition transcripts. When the person proceeds with the action, the court, without limiting the status and rights of the person, may nevertheless permit the state to intervene at a later date upon a showing of good cause.
(d) Regardless of whether the state proceeds with the action, upon a showing by the state or political subdivision that certain actions of discovery by the person who brought the action would interfere with the state's investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay the discovery for a period of not more than sixty-three days. The showing by the state must be conducted in camera. The court may extend the sixty-three-day period upon a further showing that the state has pursued the criminal or civil investigation or proceedings with reasonable diligence and that any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceedings.
(e) Notwithstanding subsection (3) of this section, the state may elect to pursue its claim through any alternate remedy available to the state. If an alternate remedy is pursued in another proceeding, the person who brought the action pursuant to subsection (3) of this section has the same rights in that proceeding as the person would have had if the action had continued pursuant to this section. Any finding of fact or conclusion of law made in the other proceeding that has become final is binding on all parties to an action brought pursuant to this section. For purposes of this subsection (4)(e), a finding or conclusion is final if it has been finally determined on appeal to the appropriate court of the state, if all time for filing such an appeal with respect to the finding or conclusion has expired, or if the finding or conclusion is not subject to judicial review.
(5)Award to a person who brings an action.
(a)
(I) Subject to subsection (5)(a)(II) of this section, if the state proceeds with an action brought by a person pursuant to subsection (3) of this section, the court shall award the person at least fifteen percent but not more than twenty-five percent of the proceeds received from the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the investigation and prosecution of the action.
(II) If the court finds the action to be based primarily on disclosures of specific information, other than information provided by the person who brought the action, relating to allegations or transactions in a criminal, civil, or administrative hearing; in a legislative, administrative, or formal audit report, hearing, or investigation; or from the news media, the court may award to the person such sums as it considers appropriate but in no case more than ten percent of the proceeds. In making its determination, the court shall consider the significance of the information provided by the person and the role of the person in advancing the case to litigation.
(III) Any payment to a person made pursuant to this subsection (5)(a) must be made from the proceeds. In addition to an award made pursuant to subsection (5)(a)(I) or (5)(a)(II) of this section, the court shall award the person an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorney fees and costs. The court shall award all of the expenses, fees, and costs against the defendant.
(IV) If the person who brought the action is a government employee who, in the course of the person's work for the state gains knowledge of any information that forms, in whole or in part, the basis of the person's claim, the court shall award to the state that employs the person the amount that would otherwise be awarded to the person pursuant to this subsection (5).
(b) If the state does not intervene in and proceed with an action pursuant to subsection (3)(b) of this section, the person prevailing in the action or settling the claim must receive an amount that the court decides is reasonable for collecting the civil penalty and damages. The amount must be at least twenty-five percent but not more than thirty percent of the proceeds received from the action or settlement and must be paid out of the proceeds. The court shall award the person an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorney fees and costs. The court shall award all of the expenses, fees, and costs against the defendant.
(c) Regardless of whether the state intervenes in and proceeds with an action pursuant to subsection (3)(b) of this section, if the court finds that the action was brought by a person who planned and initiated the violation of section 24-31-1203 upon which the action was brought, the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action that the person would otherwise receive pursuant to this subsection (5), taking into account the role of the person in advancing the case to litigation and any relevant circumstances pertaining to the violation. If the person is convicted of criminal conduct arising from his or her role in the violation of section 24-31-1203, the court shall dismiss the person from the civil action and the person must not receive any share of the proceeds of the action. Such dismissal does not prejudice the right of the state to continue the action.
(d) If the state does not intervene in and proceed with an action pursuant to subsection (3)(b) of this section and the person who brought the action pursues the action, the court may award to the defendant reasonable attorney fees and expenses if the defendant prevails in the action and the court finds that the claim of the person was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.
(6)Certain actions barred.
(a) A court does not have jurisdiction over an action brought pursuant to this section:
(I) Against a serving member of the general assembly, a member of the state judiciary, an executive director of a state agency, or an elected official in the executive branch of the state of Colorado acting in the member's, executive director's, or official's official capacity;
(II) Against a serving elected official of a political subdivision, a member of a political subdivision's judiciary, or an appointed official of a political subdivision acting in the member's or official's official capacity; or
(III) If the action is brought by a person pursuant to subsection (3) of this section and is based on evidence or information known to the state when the action was brought.
(b) A person may not bring an action pursuant to subsection (3) of this section that is based upon allegations or transactions that are the subject of a civil suit in a court of this state or an administrative civil money penalty proceeding in which the state is already a party.
(c)
(I) A court shall dismiss an action or claim brought pursuant to subsection (3) of this section if the action pursued by the person is based upon substantially the same allegations or transactions publicly disclosed in a criminal, civil, or administrative hearing; in a legislative, administrative, or formal audit report, hearing, or investigation; or from the news media, unless:
(A) The state intervenes and prosecutes the action pursuant to subsection (3)(b) of this section;
(B) The state opposes dismissal; or
(C) The person who brought the action is an original source of the information that is the basis for the action.
(II) As used in this subsection (6)(c), "original source" means an individual who:
(A) Prior to public disclosure pursuant to subsection (6)(c)(I) of this section, has voluntarily disclosed to the state the information on which the allegations or transactions in a claim are based; or
(B) Has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions and has voluntarily provided the information to the state before filing an action pursuant to subsection (3) of this section.
(7)State not liable for certain expenses. The state is not liable for expenses that a person incurs in bringing an action pursuant to subsection (3) of this section.
(8)Private action for retaliation.
(a) As used in this subsection (8), unless the context otherwise requires:
(I) "Confidential information" includes documents; e-mails and other electronic data; medical records; financial records; trade secret information; intellectual property; or information that is subject to an employment agreement, confidentiality agreement, or nondisclosure agreement or for which the person who brought the action pursuant to subsection (3) of this section has a fiduciary obligation to maintain as confidential. Confidential information does not include information that is protected by the defendant's attorney-client privilege unless the privilege was waived, inadvertently or otherwise, by the person who holds the privilege; an exception to the privilege applies; or disclosure of the information is permitted by an attorney pursuant to 17 CFR 205.3(d)(2), the applicable Colorado rules of professional conduct, or otherwise.
(II) "Lawful acts" includes, but is not limited to, the following:
(A) Conducting or assisting with an investigation for, initiation of, testimony for, or assistance in an action filed or to be filed pursuant to this section, or conducting or assisting with an investigation when there is a reasonable belief of a potential violation of this section;
(B) Meeting with potential or retained counsel or agents or representatives of the state about the matter that is the subject of an action filed or to be filed pursuant to this section;
(C) Providing the individual's counsel or agents or representatives of the state with confidential information; or
(D) Filing an action pursuant to this section.
(b) An employee, contractor, or agent is entitled to all relief necessary to make that individual whole if the individual is discharged, demoted, suspended, threatened, harassed, intimidated, sued, defamed, blacklisted, or in any other manner retaliated against or discriminated against in the terms and conditions of the individual's employment, contract, business, or profession by the defendant or by any other person because of lawful acts done by the individual or associated others in furtherance of an action brought pursuant to this section or in furtherance of an effort to stop any violation, or what the individual reasonably believes to be a violation, of section 24-31-1203.
(c)
(I) If the disclosure of confidential information is in furtherance of an action brought pursuant to this section or in furtherance of an effort to stop any violation, or what the individual reasonably believes to be a violation, of section 24-31-1203, an individual has a privilege to disclose the confidential information to:
(A) The individual's counsel;
(B) A person with whom the individual has a statutory or common law privilege; or
(C) An agent or authorized representative of the state.
(II) The individual's disclosure of confidential information to the individual's counsel or to an agent or authorized representative of the state does not constitute a waiver by a defendant of any right or privilege that the defendant may be entitled to invoke.
(d)
(I) An individual seeking relief pursuant to this subsection (8) may seek relief by:
(A) Filing a motion in the action brought pursuant to subsection (3) of this section; or
(B) Bringing a separate action in an appropriate court of the state for the relief provided pursuant to this subsection (8).
(II) An individual who seeks relief pursuant to this subsection (8) is entitled to all relief necessary to make the individual whole. The relief must include, but is not limited to:
(A) If the individual is an employee, reinstatement with the same seniority status the individual would have had but for the discrimination, twice the amount of back pay, and interest on the back pay;
(B) If the individual is a contractor, subcontractor, or independent contractor, reinstatement of a contract or subcontract that was canceled, nonrenewed, or modified because of retaliation, with all compensation or contractual consideration that the individual would have received had the contract or subcontract not been canceled, nonrenewed, or modified; and
(C) Compensation for any special damages sustained as a result of the discrimination or retaliation, including litigation costs and reasonable attorney fees.
(e)
(I) The court shall award the individual not less than the damages described in subsection (8)(d)(II) of this section if a defendant, employer, or other person retaliates against an individual by bringing another action against the individual for:
(A) Acts later determined to be lawful acts;
(B) Disclosure of confidential information to counsel or an agent or representative of the state pursuant to this subsection (8);
(C) Violating an employment contract, confidentiality agreement, nondisclosure agreement, or other agreement; or
(D) Committing any other tort or breach of duty and the court hearing the action determines by a preponderance of the evidence that the defendant, employer, or other person brought the lawsuit against the individual for the purpose of retaliating against the individual.
(II) In addition to any other remedy or share of the proceeds of the action to which the individual is entitled pursuant to this subsection (8) and regardless of whether the individual is determined to be entitled to share in the proceeds of the action or claim filed pursuant to subsection (3) of this section, in addition to any other consequential damages permitted by law, the damages for a violation of this subsection (8)(e) must be not less than:
(A) Twice the individual's actual attorney fees and costs if the defendant, employer, or other person brought the lawsuit against the individual in a court in the state of Colorado; or
(B) Three times the individual's actual attorney fees and costs if the defendant, employer, or other person brought the lawsuit in a jurisdiction outside of Colorado.
(f)
(I) The court hearing the action brought pursuant to subsection (3) of this section has jurisdiction to hear a private action or motion for retaliation brought pursuant to this subsection (8).
(II) Upon motion by the individual, the venue of an action filed in another court of the state of Colorado against the individual by the defendant, the employer of the person who brought the action pursuant to subsection (3) of this section, or other person arising out of the subject matter of the action brought pursuant to subsection (3) of this section must be changed to the court hearing the action brought pursuant to subsection (3) of this section.
(9)Discovery in other actions.
(a) If a person who brings an action pursuant to subsection (3) of this section is a party to or witness in an action other than an action brought pursuant to subsection (3) of this section, referred to in this subsection (9) as an "other action", and a party in the other action seeks discovery from the person of information about other lawsuits, which discovery would require the person to disclose information about an action filed pursuant to subsection (3) of this section while that action is still under seal, the person shall:
(I) Within a reasonable time, notify the state investigating the action brought pursuant to subsection (3) of this section of the pending discovery request; and
(II) Respond to the discovery request by stating only that the matter is confidential, without further elaboration, and shall maintain that response until the state elects to proceed or not proceed with the action brought pursuant to subsection (3) of this section or until the court lifts the seal.
(b) If necessary, in any other action, a person who brought the action pursuant to subsection (3) of this section or the attorney general may file an ex parte motion, in camera and under seal, seeking a protective order or an extension of time for the person to respond to a discovery request. If a party in the other action moves to compel an answer to the discovery, the person who brought the action pursuant to subsection (3) of this section shall file, ex parte and in camera, a response to the motion to compel, in which the attorney general may join. The response to the motion to compel must remain under seal until such time as the state elects to proceed or not proceed with the action or until such time as the court lifts the seal.
(c) Notwithstanding any provision of this subsection (9) to the contrary, information about an action filed pursuant to subsection (3) of this section that is protected by the defendant's attorney-client privilege is not discoverable in any other action unless the privilege was waived, inadvertently or otherwise, by the person who holds the privilege; an exception to the privilege applies; or disclosure of the information is permitted by an attorney pursuant to 17 CFR 205.3(d)(2), the applicable Colorado rules of professional conduct, or otherwise.

C.R.S. § 24-31-1204

Added by 2022 Ch. 394,§2, eff. 8/10/2022.
2022 Ch. 394, was passed without a safety clause. See Colo. Const. art. V, § 1(3).