[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2041 Reported in Senate (RS)]






                                                       Calendar No. 910
110th CONGRESS
  2d Session
                                S. 2041

                     To amend the False Claims Act.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 12, 2007

Mr. Grassley (for himself, Mr. Durbin, Mr. Leahy, Mr. Specter, and Mr. 
  Whitehouse) introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

                July 29 (legislative day, July 28), 2008

                Reported by Mr. Leahy, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
                     To amend the False Claims Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``False Claims Act Correction 
Act of 2007''.</DELETED>

<DELETED>SEC. 2. FALSE CLAIMS GENERALLY.</DELETED>

<DELETED>    Section 3729 of title 31, United States Code, is amended--
</DELETED>
        <DELETED>    (1) by striking subsection (a) and inserting the 
        following:</DELETED>
<DELETED>    ``(a) Liability for Certain Acts.--</DELETED>
        <DELETED>    ``(1) In general.--Subject to paragraph (2), any 
        person who--</DELETED>
                <DELETED>    ``(A) knowingly presents, or causes to be 
                presented a false or fraudulent claim for Government 
                money or property for payment or approval;</DELETED>
                <DELETED>    ``(B) knowingly makes, uses, or causes to 
                be made or used, a false record or statement to get a 
                false or fraudulent claim for Government money or 
                property paid or approved;</DELETED>
                <DELETED>    ``(C) conspires to commit any substantive 
                violation set forth in this section or otherwise to 
                defraud the Government by getting a false or fraudulent 
                claim for Government money or property paid or 
                approved;</DELETED>
                <DELETED>    ``(D) has possession, custody, or control 
                of Government money or property and, intending to 
                defraud the Government, to retain overpayment, or 
                knowingly to convert the money or property, permanently 
                or temporarily, to an unauthorized use, fails to 
                deliver or return, or fails to cause the return or 
                delivery of the money or property, or delivers, 
                returns, or causes to be delivered, or returned less 
                money or property than the amount due or 
                owed;</DELETED>
                <DELETED>    ``(E) authorized to make or deliver a 
                document certifying receipt of property used, or to be 
                used, by the Government and, intending to defraud the 
                Government, makes or delivers the receipt without 
                completely knowing that the information on the receipt 
                is true;</DELETED>
                <DELETED>    ``(F) knowingly buys, or receives as a 
                pledge of an obligation or debt, public property from 
                an officer or employee of the Government, or a member 
                of the Armed Forces, who lawfully may not sell or 
                pledge property; or</DELETED>
                <DELETED>    ``(G) knowingly makes, uses, or causes to 
                be made or used, a false record or statement to 
                conceal, avoid, or decrease an obligation to pay or 
                transmit money or property to the Government,</DELETED>
        <DELETED>is liable to the United States Government for a civil 
        penalty of not less than $5,000 and not more than $10,000 plus 
        3 times the amount of damages which the Government, its 
        grantee, or administrative beneficiary sustains because of the 
        act of that person.</DELETED>
        <DELETED>    ``(2) Lesser penalty.--If the court finds that--
        </DELETED>
                <DELETED>    ``(A) the person committing the violation 
                of this subsection furnished officials of the United 
                States responsible for investigating false claims 
                violations with all information known to such person 
                about the violation within 30 days after the date on 
                which the defendant first obtained the 
                information;</DELETED>
                <DELETED>    ``(B) such person fully cooperated with 
                any Government investigation of such violation; 
                and</DELETED>
                <DELETED>    ``(C) at the time such person furnished 
                the United States with the information about the 
                violation, no criminal prosecution, civil action, or 
                administrative action had commenced under this title 
                with respect to such violation, and the person did not 
                have actual knowledge of the existence of an 
                investigation into such violation,</DELETED>
        <DELETED>the court may assess not less than 2 times the amount 
        of damages which the Government, its grantee or administrative 
        beneficiary sustains because of the act of the 
        person.</DELETED>
        <DELETED>    ``(3) Costs of civil actions.--A person violating 
        this subsection shall also be liable to the United States 
        Government for the costs of a civil action brought to recover 
        any such penalty or damages.''.</DELETED>
        <DELETED>    (2) by striking subsections (b) and (c) and 
        inserting the following:</DELETED>
<DELETED>    ``(b) Definitions.--For purposes of this section--
</DELETED>
        <DELETED>    ``(1) the terms `known', `knowing', and 
        `knowingly' mean that a person, with respect to information--
        </DELETED>
                <DELETED>    ``(A) has actual knowledge of the 
                information;</DELETED>
                <DELETED>    ``(B) acts in deliberate ignorance of the 
                truth or falsity of the information; or</DELETED>
                <DELETED>    ``(C) acts in reckless disregard of the 
                truth or falsity of the information,</DELETED>
        <DELETED>and no proof of specific intent to defraud is 
        required;</DELETED>
        <DELETED>    ``(2) the term `Government money or property' 
        means--</DELETED>
                <DELETED>    ``(A) money or property belonging to the 
                United States Government;</DELETED>
                <DELETED>    ``(B) money or property the United States 
                Government provides, has provided, or will reimburse to 
                a contractor, grantee, agent or other recipient to be 
                spent or used on the Government's behalf or to advance 
                Government programs;</DELETED>
                <DELETED>    ``(C) money or property belonging to any 
                administrative beneficiary, as defined 
                herein;</DELETED>
        <DELETED>    ``(3) the term `claim' includes any request or 
        demand, whether under a contract or otherwise, for Government 
        money or property; and</DELETED>
        <DELETED>    ``(4) the term `administrative beneficiary' means 
        any natural person or entity, including any governmental or 
        quasi-governmental entity, on whose behalf the United States 
        Government, alone or with others, collects, possesses, 
        transmits, administers, manages, or acts as custodian of money 
        or property.'';</DELETED>
        <DELETED>    (3) by redesignating subsections (d) and (e) as 
        subsections (c) and (d), respectively; and</DELETED>
        <DELETED>    (4) in subsection (c), as redesignated, by 
        striking ``subparagraphs (A) through (C) of subsection (a)'' 
        and inserting ``subsection (a)(2)''.</DELETED>

<DELETED>SEC. 3. GOVERNMENT RIGHT TO DISMISS CERTAIN ACTIONS.</DELETED>

<DELETED>    Section 3730(b) of title 31, United States Code, is 
amended by adding at the end thereof the following:</DELETED>
        <DELETED>    ``(6)(A) Not later than 60 days after the date of 
        service under paragraph (2), the Government may move to dismiss 
        from the action the qui tam relator that is an employee of the 
        Federal Government if--</DELETED>
                <DELETED>    ``(i) all the necessary and specific 
                material allegations contained in such action were 
                derived from an open and active fraud investigation by 
                the Government; or</DELETED>
                <DELETED>    ``(ii) the person bringing the action 
                learned of the information that underlies the alleged 
                violation of section 3729 that is the basis of the 
                action in the course of the person's employment by the 
                United States, and none of the following has 
                occurred:</DELETED>
                        <DELETED>    ``(I) In a case in which the 
                        employing agency has an inspector general, such 
                        person, before bringing the action--</DELETED>
                                <DELETED>    ``(aa) disclosed in 
                                writing substantially all material 
                                evidence and information that relates 
                                to the alleged violation that the 
                                person possessed to such inspector 
                                general; and</DELETED>
                                <DELETED>    ``(bb) notified in writing 
                                the person's supervisor and the 
                                Attorney General of the disclosure 
                                under division (aa).</DELETED>
                        <DELETED>    ``(II) In a case in which the 
                        employing agency does not have an inspector 
                        general, such person, before bringing the 
                        action--</DELETED>
                                <DELETED>    ``(aa) disclosed in 
                                writing substantially all material 
                                evidence and information that relates 
                                to the alleged violation that the 
                                person possessed, to the Attorney 
                                General; and</DELETED>
                                <DELETED>    ``(bb) notified in writing 
                                the person's supervisor of the 
                                disclosure under division 
                                (aa).</DELETED>
                        <DELETED>    ``(III) Not less than 12 months 
                        (and any period of extension as provided for 
                        under subparagraph (B)) have elapsed since the 
                        disclosure of information and notification 
                        under either subclause (I) or (II) were made 
                        and the Attorney General has not filed an 
                        action based on such information.</DELETED>
        <DELETED>    ``(B) Prior to the expiration of the 12-month 
        period described under subparagraph (A)(ii)(III) and upon 
        notice to the person who has disclosed information and provided 
        notice under subparagraph (A)(ii) (I) or (II), the Attorney 
        General may file a motion seeking an extension of such 12-month 
        period. Such 12-month period may be extended by a court for not 
        more than an additional 12-month period upon a showing by the 
        Government that the additional period is necessary for the 
        Government to decide whether or not to file such action. Any 
        such motion may be filed in camera and may be supported by 
        affidavits or other submissions in camera.</DELETED>
        <DELETED>    ``(C) For purposes of subparagraph (A), a person's 
        supervisor is the officer or employee who--</DELETED>
                <DELETED>    ``(i) is in a position of the next highest 
                classification to the position of such 
                person;</DELETED>
                <DELETED>    ``(ii) has supervisory authority over such 
                person; and</DELETED>
                <DELETED>    ``(iii) such person believes is not 
                culpable of the violation upon which the action under 
                this subsection is brought by such person.</DELETED>
        <DELETED>    ``(D) A motion to dismiss under this paragraph 
        shall set forth documentation of the allegations, evidence, and 
        information in support of the motion.</DELETED>
        <DELETED>    ``(E) Any person bringing a civil action under 
        paragraph (1) shall be provided an opportunity to contest a 
        motion to dismiss under this paragraph. The court may restrict 
        access to the evidentiary materials filed in support of the 
        motion to dismiss, as the interests of justice require. A 
        motion to dismiss and papers filed in support or opposition of 
        such motion shall not be--</DELETED>
                <DELETED>    ``(i) made public without the prior 
                written consent of the person bringing the civil 
                action; and</DELETED>
                <DELETED>    ``(ii) subject to discovery by the 
                defendant.</DELETED>
        <DELETED>    ``(F) If the motion to dismiss under this 
        paragraph is granted, the matter shall remain under 
        seal.</DELETED>
        <DELETED>    ``(G) No later than 6 months after the date of the 
        enactment of this paragraph, and every 6 months thereafter, the 
        Department of Justice shall report to the Committee on the 
        Judiciary of the Senate and the Committee on the Judiciary of 
        the House of Representatives relating to--</DELETED>
                <DELETED>    ``(i) the cases in which the Department of 
                Justice has filed a motion to dismiss under this 
                paragraph;</DELETED>
                <DELETED>    ``(ii) the outcome of such motions; 
                and</DELETED>
                <DELETED>    ``(iii) the status of false claims civil 
                actions in which such motions were filed.''.</DELETED>

<DELETED>SEC. 4. BARRED ACTIONS.</DELETED>

<DELETED>    (a) Provisions Relating to Actions Barred.--Section 
3730(b)(1) of title 31, United States Code, is amended by adding at the 
end the following: ``No claim for a violation of section 3729 may be 
waived or released by any action of any person, except insofar as such 
action is part of a court approved settlement of a false claim civil 
action brought under this section. Nothing in this section shall be 
construed to limit the ability of the United States to decline to 
pursue any claim brought under this subchapter.''.</DELETED>
<DELETED>    (b) Dismissal.--Section 3730(e)(4) of title 31, United 
States Code, is amended to read as follows:</DELETED>
<DELETED>    ``(4)(A) Upon timely motion of the Attorney General, a 
court shall dismiss an action or claim brought under section 3730(b) if 
the allegations relating to all essential elements of liability of the 
action or claim are based exclusively on the public disclosure of 
allegations or transactions in a Federal criminal, civil, or 
administrative hearing, in a congressional, Federal administrative, or 
Government Accountability Office report, hearing, audit or 
investigation, or from the news media.</DELETED>
<DELETED>    ``(B) In this paragraph:</DELETED>
        <DELETED>    ``(i) The term `public disclosure' includes only 
        disclosures made on the public record or that have otherwise 
        been disseminated broadly to the general public.</DELETED>
        <DELETED>    ``(ii) The person bringing the action does not 
        create a public disclosure by obtaining information from a 
        Freedom of Information Act request or from information 
        exchanges with law enforcement and other Government employees 
        if such information does not otherwise qualify as publicly 
        disclosed.</DELETED>
        <DELETED>    ``(iii) An action or claim is based on a public 
        disclosure only if the person bringing the action derived his 
        knowledge of all essential elements of liability of the action 
        or claim alleged in his complaint from the public 
        disclosure.''.</DELETED>
<DELETED>    (c) Qui Tam Awards.--Section 3730(d)(3) of title 31, 
United States Code, is amended to read as follows:</DELETED>
<DELETED>    ``(3)(A) Whether or not the Government proceeds with the 
action, the court may, to the extent the court considers appropriate, 
reduce the share of the proceeds of the action which a person would 
otherwise receive under paragraph (1) or (2) of this subsection (taking 
into account the role of that person in advancing the case to 
litigation and any relevant circumstances pertaining to the violation), 
if the court finds that person--</DELETED>
        <DELETED>    ``(i) planned and initiated the violation of 
        section 3729 upon which the action was brought; or</DELETED>
        <DELETED>    ``(ii) derived the knowledge of the claims in the 
        action primarily from specific information relating to 
        allegations or transactions (other than information provided by 
        the person bringing the action) that the Government publicly 
        disclosed, as that term is defined in subsection (e)(4)(A), or 
        that the Government disclosed privately to the person bringing 
        the action in the course of its investigation into potential 
        violations of this subchapter.</DELETED>
<DELETED>    ``(B) If the person bringing the action is convicted of 
criminal conduct arising from the role of that person in the violation 
of section 3729, that person shall be dismissed from the civil action 
and shall not receive any share of the proceeds of the action. Such 
dismissal shall not prejudice the right of the United States to 
continue the action, represented by the Department of 
Justice.''.</DELETED>

<DELETED>SEC. 5. RELIEF FROM RETALIATORY ACTIONS.</DELETED>

<DELETED>    Section 3730(h) of title 31, United States Code, is 
amended to read as follows:</DELETED>
<DELETED>    ``(h) Relief From Retaliatory Actions.--</DELETED>
        <DELETED>    ``(1) In general.--Any employee, government 
        contractor, or agent shall be entitled to all relief necessary 
        to make that employee, government contractor whole, if that 
        employee, government contractor, or agent is discharged, 
        demoted, suspended, threatened, harassed, or in any other 
        manner discriminated against in the terms and conditions of 
        employment because of lawful acts done by the employee, 
        government contractor, or agent on behalf of the employee, 
        government contractor, or agent or associated others in 
        furtherance of other efforts to stop 1 or more violations of 
        this subchapter.</DELETED>
        <DELETED>    ``(2) Relief.--Relief under paragraph (1) shall 
        include reinstatement with the same seniority status that 
        employee, government contractor, or agent would have had but 
        for the discrimination, 2 times the amount of back pay, 
        interest on the back pay, and compensation for any special 
        damages sustained as a result of the discrimination, including 
        litigation costs and reasonable attorneys' fees. An action 
        under this subsection may be brought in the appropriate 
        district court of the United States for the relief provided in 
        this subsection.''.</DELETED>

<DELETED>SEC. 6. STATUTE OF LIMITATIONS.</DELETED>

<DELETED>    Section 3731(b) of title 31, United States Code, is 
amended to read as follows:</DELETED>
<DELETED>    ``(b)(1) A civil action under section 3730 may not be 
brought more than 10 years after the date on which the violation of 
section 3729 or 3730 is committed.</DELETED>
<DELETED>    ``(2) Upon intervention, the Government may file its own 
complaint in intervention or amend the complaint of a person who has 
brought an action under section 3730(b) to clarify or add detail to the 
claims in which the Government is intervening and to add any additional 
claims with respect to which the Government contends it is entitled to 
relief. For statute of limitations purposes, any such Government 
pleading shall relate back to the filing date of the complaint of the 
person who originally brought the action, to the extent that the claim 
of the Government arises out of the conduct, transactions, or 
occurrences set forth, or attempted to be set forth, in the prior 
complaint of that person.''.</DELETED>

<DELETED>SEC. 7. CIVIL INVESTIGATIVE DEMANDS.</DELETED>

<DELETED>    Section 3733(a)(1) of title 31, United States Code, is 
amended--</DELETED>
        <DELETED>    (1) in the matter preceding subparagraph (A), by 
        inserting ``, or a designee (for purposes of this section),'' 
        after ``Whenever the Attorney General''; and</DELETED>
        <DELETED>    (2) in the matter following subparagraph (D), by--
        </DELETED>
                <DELETED>    (A) striking ``may not delegate'' and 
                inserting ``may delegate''; and</DELETED>
                <DELETED>    (B) adding at the end the following: ``Any 
                information obtained by the Attorney General or a 
                designee of the Attorney General under this section may 
                be shared with any qui tam relator if the Attorney 
                General or designee determine it is necessary as part 
                of any false claims act investigation.''.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``False Claims Act Correction Act of 
2008''.

SEC. 2. FALSE CLAIMS GENERALLY.

    Section 3729 of title 31, United States Code, is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Liability for Certain Acts.--
            ``(1) In general.--Subject to paragraph (2), any person 
        who--
                    ``(A) knowingly presents, or causes to be 
                presented, a false or fraudulent claim for payment or 
                approval;
                    ``(B) knowingly makes, uses, or causes to be made 
                or used, a false record or statement to get a false or 
                fraudulent claim paid or approved;
                    ``(C) conspires to commit a violation of 
                subparagraph (A), (B), (D), (E), (F), or (G) or 
                otherwise to defraud the Government by getting a false 
                or fraudulent claim paid or approved;
                    ``(D) has possession, custody, or control of 
                property or money used, or to be used, by the 
                Government and knowingly delivers, or causes to be 
                delivered, less than all of that money or property;
                    ``(E) is authorized to make or deliver a document 
                certifying receipt of property used, or to be used, by 
                the Government and, intending to defraud the 
                Government, makes or delivers the receipt without 
                completely knowing that the information on the receipt 
                is true;
                    ``(F) knowingly buys, or receives as a pledge of an 
                obligation or debt, public property from an officer or 
                employee of the Government, or a member of the Armed 
                Forces, who lawfully may not sell or pledge property; 
                or
                    ``(G) knowingly makes, uses, or causes to be made 
                or used, a false record or statement to conceal, avoid, 
                or decrease an obligation to pay or transmit money or 
                property to the Government, or knowingly conceals, 
                avoids, or decreases an obligation to pay or transmit 
                money or property to the Government,
        is liable to the United States Government for a civil penalty 
        of not less than $5,000 and not more than $10,000, as adjusted 
        by the Federal Civil Penalties Inflation Adjustment Act of 1990 
        (28 U.S.C. 2461 note; Public Law 104-410), plus 3 times the 
        amount of money or property paid or approved because of the act 
        of that person.
            ``(2) Reduced damages.--If the court finds that--
                    ``(A) the person committing the violation of this 
                subsection furnished officials of the United States 
                responsible for investigating false claims violations 
                with all information known to such person about the 
                violation within 30 days after the date on which the 
                defendant first obtained the information;
                    ``(B) such person fully cooperated with any 
                Government investigation of such violation; and
                    ``(C) at the time such person furnished the United 
                States with the information about the violation, no 
                criminal prosecution, civil action, or administrative 
                action had commenced under this title with respect to 
                such violation, and the person did not have actual 
                knowledge of the existence of an investigation into 
                such violation,
        the court may assess not less than 2 times the amount of money 
        or property paid or approved because of the act of that person.
            ``(3) Costs of civil actions.--A person violating this 
        subsection shall also be liable to the United States Government 
        for the costs of a civil action brought to recover any such 
        penalty or damages.'';
            (2) by striking subsections (b) and (c) and inserting the 
        following:
    ``(b) Definitions.--For purposes of this section--
            ``(1) the terms `knowing' and `knowingly' mean that a 
        person, with respect to information--
                    ``(A) has actual knowledge of the information;
                    ``(B) acts in deliberate ignorance of the truth or 
                falsity of the information; or
                    ``(C) acts in reckless disregard of the truth or 
                falsity of the information,
        and no proof of specific intent to defraud is required;
            ``(2) the term `claim'--
                    ``(A) means any request or demand, whether under a 
                contract or otherwise, for money or property and 
                whether or not the United States has title to the money 
                or property, that--
                            ``(i) is presented to an officer, employee, 
                        or agent of the United States; or
                            ``(ii) is made to a contractor, grantee, or 
                        other recipient if the United States 
                        Government--
                                    ``(I) provides or has provided any 
                                portion of the money or property 
                                requested or demanded; or
                                    ``(II) will reimburse such 
                                contractor, grantee, or other recipient 
                                for any portion of the money or 
                                property which is requested or 
                                demanded; and
                    ``(B) does not include requests or demands for 
                money or property that the Government has paid to an 
                individual as compensation for Federal employment or as 
                an income subsidy with no restrictions on that 
                individual's use of the money or property; and
            ``(3) the term `obligation' means a fixed duty, or a 
        contingent duty arising from an express or implied contractual, 
        quasi-contractual, grantor-grantee, licensor-licensee, fee-
        based, or similar relationship, including customs duties for 
        mismarking country of origin, and the retention of any 
        overpayment.'';
            (3) by redesignating subsections (d) and (e) as subsections 
        (c) and (d), respectively; and
            (4) in subsection (c), as redesignated, by striking 
        ``subparagraphs (A) through (C) of subsection (a)'' and 
        inserting ``subsection (a)(2)''.

SEC. 3. GOVERNMENT RIGHT TO DISMISS CERTAIN ACTIONS.

    Section 3730(b) of title 31, United States Code, is amended--
            (1) in paragraph (2), by striking ``Rule 4(d)(4)'' and 
        inserting ``rule 4''; and
            (2) by adding at the end the following:
            ``(6)(A) Not later than 120 days after the date of service 
        under paragraph (2), the Government may move to dismiss from 
        the action a qui tam relator that is an employee of the Federal 
        Government, or that is a family member of an employee of the 
        Federal Government, if--
                    ``(i) the necessary and specific material 
                allegations contained in such action were derived from 
                a filed criminal indictment or information or an open 
                and active criminal, civil, or administrative 
                investigation or audit by the Government into 
                substantially the same fraud alleged in the action;
                    ``(ii) the duties of the employee's position 
                specifically include uncovering and reporting the 
                particular type of fraud that is alleged in the action, 
                and the employee, as part of the duties of that 
                employee's position, is participating in or has 
                knowledge of an open and active criminal, civil, or 
                administrative investigation or audit by the Government 
                of the alleged fraud;
                    ``(iii) the person bringing the action learned of 
                the information that underlies the alleged violation of 
                section 3729 that is the basis of the action in the 
                course of the person's employment by the United States, 
                and either--
                            ``(I) in a case in which the employing 
                        agency has an inspector general, such person, 
                        before bringing the action has not--
                                    ``(aa) disclosed in writing 
                                substantially all material evidence and 
                                information that relates to the alleged 
                                violation that the person possessed to 
                                such inspector general; and
                                    ``(bb) notified in writing the 
                                person's supervisor and the Attorney 
                                General of the disclosure under 
                                division (aa); or
                            ``(II) in a case in which the employing 
                        agency does not have an inspector general, such 
                        person, before bringing the action has not--
                                    ``(aa) disclosed in writing 
                                substantially all material evidence and 
                                information that relates to the alleged 
                                violation that the person possessed, to 
                                the Attorney General; and
                                    ``(bb) notified in writing the 
                                person's supervisor of the disclosure 
                                under division (aa); or
                    ``(iv) the person bringing the action learned of 
                the information that underlies the alleged violation of 
                section 3729 that is the basis of the action in the 
                course of the person's employment by the United States, 
                made the required disclosures and notifications under 
                clause (iii), and--
                            ``(I) less than 18 months (and any period 
                        of extension as provided for under subparagraph 
                        (B)) have elapsed since the disclosures of 
                        information and notification under clause (iii) 
                        were made; or
                            ``(II) within 18 months (and any period of 
                        extension as provided for under subparagraph 
                        (B)) after the disclosures of information and 
                        notification under clause (iii) were made, the 
                        Attorney General has filed an action based on 
                        such information.
            ``(B) Prior to the expiration of the 18-month period 
        described under subparagraph (A)(iv)(II) and upon notice to the 
        person who has disclosed information and provided notice under 
        subparagraph (A)(iii), the Attorney General may extend such 18-
        month period by 1 additional 12-month period.
            ``(C) For purposes of subparagraph (A), a person's 
        supervisor is the officer or employee who--
                    ``(i) is in a position of the next highest 
                classification to the position of such person;
                    ``(ii) has supervisory authority over such person; 
                and
                    ``(iii) such person believes is not culpable of the 
                violation upon which the action under this subsection 
                is brought by such person.
            ``(D) A motion to dismiss under this paragraph shall set 
        forth documentation of the allegations, evidence, and 
        information in support of the motion.
            ``(E) Any person against whom the Government has filed a 
        motion to dismiss under subparagraph (A) shall be provided an 
        opportunity to contest a motion to dismiss under this 
        paragraph. The court may restrict access to the evidentiary 
        materials filed in support of the motion to dismiss, as the 
        interests of justice require. A motion to dismiss and 
        evidentiary material filed in support or opposition of such 
        motion shall not be--
                    ``(i) made public without the prior written consent 
                of the person bringing the civil action; and
                    ``(ii) subject to discovery by the defendant.
            ``(F) Upon granting a motion filed under subparagraph (A), 
        the court shall dismiss the qui tam relator from the action.
            ``(G) If the motion to dismiss under this paragraph is 
        granted, the matter shall remain under seal.
            ``(H) Not later than 12 months after the date of the 
        enactment of this paragraph, and every 12 months thereafter, 
        the Department of Justice shall submit a report to the 
        Committee on the Judiciary of the Senate and the Committee on 
        the Judiciary of the House of Representatives relating to--
                    ``(i) the cases in which the Department of Justice 
                has filed a motion to dismiss under this paragraph;
                    ``(ii) the outcome of such motions; and
                    ``(iii) the status of false claims civil actions in 
                which such motions were filed.
            ``(I) Nothing in this paragraph shall be construed to limit 
        the authority of the Government to dismiss an action or claim, 
        or a person who brings an action or claim, under this 
        subsection for any reason other than the grant of a motion 
        filed under subparagraph (A).''.

SEC. 4. BARRED ACTIONS.

    (a) Provisions Relating to Actions Barred.--Section 3730(b)(1) of 
title 31, United States Code, is amended by adding at the end the 
following: ``No claim for a violation of section 3729 may be waived or 
released by any action of any person who brings an action under this 
subsection, except insofar as such action is part of a court approved 
settlement of a false claim civil action brought under this section. 
Nothing in this paragraph shall be construed to limit the ability of 
the United States to decline to pursue any claim brought under this 
subsection, or to require court approval of a settlement by the 
Government with a defendant of an action brought under subsection (a), 
or under this subsection, unless the person bringing the action objects 
to the settlement under subsection (c)(2)(B).''.
    (b) Dismissal.--Section 3730(e)(4) of title 31, United States Code, 
is amended to read as follows:
            ``(4) A court shall dismiss an action or claim or the 
        person bringing the action or claim under subsection (b), upon 
        a motion by the Government filed on or before service of a 
        complaint on the defendant under subsection (b), or thereafter 
        for good cause shown if--
                    ``(A) on the date the action or claim was filed, 
                substantially the same matters, involving the same 
                wrongdoer, as alleged in the action or claim were 
                contained in, or the subject of--
                            ``(i) a filed criminal indictment or 
                        information, or an open and active criminal, 
                        civil, or administrative investigation or 
                        audit; or
                            ``(ii) a news media report, or public 
                        congressional hearing, report, or 
                        investigation, if within 90 days after the 
                        issuance or completion of such news media 
                        report or congressional hearing, report, or 
                        investigation, the Department of Justice or an 
                        Office of Inspector General opened a fraud 
                        investigation or audit of the facts contained 
                        in such news media report or congressional 
                        hearing, report, or investigation as a result 
                        of learning about the public report, hearing, 
                        or investigation;
                    ``(B) any new information provided by the person 
                does not add substantial grounds for additional 
                recovery beyond those encompassed within the 
                Government's existing criminal indictment or 
                information, or an open and active criminal, civil, or 
                administrative investigation or audit; and
                    ``(C) the Government's existing criminal indictment 
                or information, or an open and active criminal, civil, 
                or administrative investigation or audit, or the news 
                media report, or congressional hearing, report, or 
                investigation was not initiated or published after the 
                Government's receipt of information about substantially 
                the same matters voluntarily brought by the person to 
                the Government.''.
    (c) Qui Tam Awards.--Section 3730(d) of title 31, United States 
Code, is amended--
            (1) in paragraph (1), by striking the second sentence and 
        inserting ``If the person bringing the action is not dismissed 
        under subsection (e)(4) because the person provided new 
        information that adds substantial grounds for additional 
        recovery beyond those encompassed within the Government's 
        existing indictment, information, investigation, or audit, then 
        such person shall be entitled to receive a share only of 
        proceeds of the action or settlement that are attributable to 
        the new basis for recovery that is stated in the action brought 
        by that person.''; and
            (2) by striking paragraph (3) and inserting the following:
    ``(3)(A) Whether or not the Government proceeds with the action, 
the court may, to the extent the court considers appropriate, reduce 
the share of the proceeds of the action which a person would otherwise 
receive under paragraph (1) or (2) of this subsection (taking into 
account the role of that person in advancing the case to litigation and 
any relevant circumstances pertaining to the violation), if the court 
finds that person--
            ``(i) planned and initiated the violation of section 3729 
        upon which the action was brought; or
            ``(ii) derived the knowledge of the claims in the action 
        primarily from specific information relating to allegations or 
        transactions (other than information provided by the person 
        bringing the action) that the Government publicly disclosed, as 
        that term is defined in subsection (e)(4)(A), or that the 
        Government disclosed privately to the person bringing the 
        action in the course of its investigation into potential 
        violations of this subchapter.
    ``(B) If the person bringing the action is convicted of criminal 
conduct arising from the role of that person in the violation of 
section 3729, that person shall be dismissed from the civil action and 
shall not receive any share of the proceeds of the action. Such 
dismissal shall not prejudice the right of the United States to 
continue the action, represented by the Department of Justice.''.

SEC. 5. RELIEF FROM RETALIATORY ACTIONS.

    Section 3730(h) of title 31, United States Code, is amended to read 
as follows:
    ``(h) Relief From Retaliatory Actions.--
            ``(1) In general.--Any employee, government contractor, or 
        agent shall be entitled to all relief necessary to make that 
        employee, government contractor, or agent whole, if that 
        employee, government contractor, or agent is discharged, 
        demoted, suspended, threatened, harassed, or in any other 
        manner discriminated against in the terms and conditions of 
        employment because of lawful acts done by the employee, 
        government contractor, or agent on behalf of the employee, 
        government contractor, or agent or associated others in 
        furtherance of other efforts to stop 1 or more violations of 
        this subchapter.
            ``(2) Relief.--Relief under paragraph (1) shall include 
        reinstatement with the same seniority status that employee, 
        government contractor, or agent would have had but for the 
        discrimination, 2 times the amount of back pay, interest on the 
        back pay, and compensation for any special damages sustained as 
        a result of the discrimination, including litigation costs and 
        reasonable attorneys' fees. An action under this subsection may 
        be brought in the appropriate district court of the United 
        States for the relief provided in this subsection.''.

SEC. 6. STATUTE OF LIMITATIONS.

    Section 3731(b) of title 31, United States Code, is amended to read 
as follows:
    ``(b)(1) A civil action under section 3730 may not be brought more 
than 10 years after the date on which the violation of section 3729 or 
3730 is committed.
    ``(2) Upon intervention, the Government may file its own complaint 
in intervention or amend the complaint of a person who has brought an 
action under section 3730(b) to clarify or add detail to the claims in 
which the Government is intervening and to add any additional claims 
with respect to which the Government contends it is entitled to relief. 
For statute of limitations purposes, any such Government pleading shall 
relate back to the filing date of the complaint of the person who 
originally brought the action, to the extent that the claim of the 
Government arises out of the conduct, transactions, or occurrences set 
forth, or attempted to be set forth, in the prior complaint of that 
person.''.

SEC. 7. CIVIL INVESTIGATIVE DEMANDS.

    Section 3733 of title 31, United States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A)--
                                    (I) by inserting ``, or a designee 
                                (for purposes of this section),'' after 
                                ``Whenever the Attorney General''; and
                                    (II) by striking ``the Attorney 
                                General may, before commencing a civil 
                                proceeding under section 3730 or other 
                                false claims law,'' and inserting ``the 
                                Attorney General, or a designee, may, 
                                before commencing a civil proceeding 
                                under section 3730(a) or other false 
                                claims law, or electing under section 
                                3730(b),''; and
                            (ii) in the matter following subparagraph 
                        (D)--
                                    (I) by striking ``may not 
                                delegate'' and inserting ``may 
                                delegate''; and
                                    (II) by adding at the end the 
                                following: ``Any information obtained 
                                by the Attorney General or a designee 
                                of the Attorney General under this 
                                section may be shared with any qui tam 
                                relator if the Attorney General or 
                                designee determine it is necessary as 
                                part of any false claims act 
                                investigation.''; and
                    (B) in paragraph (2)(G), by striking the second 
                sentence;
            (2) in subsection(i)(2)--
                    (A) in subparagraph (B), by striking
                ``, who is authorized for such use under regulations 
                which the Attorney General shall issue''; and
                    (B) in subparagraph (C), by striking ``Disclosure 
                of information to any such other agency shall be 
                allowed only upon application, made by the Attorney 
                General to a United States district court, showing 
                substantial need for the use of the information by such 
                agency in furtherance of its statutory 
                responsibilities.''; and
            (3) in subsection (l)--
                    (A) in paragraph (6), by striking ``and'' after the 
                semicolon; and
                    (B) in paragraph (7), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(8) the term `official use' means any use that is 
        consistent with the law, and the regulations and policies of 
        the Department of Justice, including use in connection with 
        internal Department of Justice memoranda and reports; 
        communications between the Department of Justice and a Federal, 
        State, or local government agency, or a contractor of a 
        Federal, State, or local government agency, undertaken in 
        furtherance of a Department of Justice investigation or 
        prosecution of a case; interviews of any qui tam relator or 
        other witness; oral examinations; depositions; preparation for 
        and response to civil discovery requests; introduction into the 
        record of a case or proceeding; applications, motions, 
        memoranda and briefs submitted to a court or other tribunal; 
        and communications with Government investigators, auditors, 
        consultants and experts, the counsel of other parties, 
        arbitrators and mediators, concerning an investigation, case or 
        proceeding.''.

SEC. 8. SEVERABILITY.

    If any provision or application of this Act is held invalid, the 
invalidity shall not affect other provisions or applications of this 
Act which can be given effect without regard to the invalid provision 
or application, and to this end the provisions or applications of this 
Act are severable.

SEC. 9. EFFECTIVE DATE AND APPLICATION.

    (a) In General.--Except as provided under subsections (b) and (c), 
the amendments made by this Act shall take effect on the date of 
enactment of this Act and shall apply to all civil actions filed 
before, on, or after that date.
    (b) False Claims.--The amendments made by section 2 shall take 
effect on the date of enactment of this Act and shall apply to conduct 
occurring after that date of enactment.
    (c) Statute of Limitation.--The amendment made to section 
3731(b)(1) of title 31, United States Code, by section 6 of this Act 
shall take effect on the date of enactment of this Act and shall apply 
to civil actions filed after that date of enactment.
                                                       Calendar No. 910

110th CONGRESS

  2d Session

                                S. 2041

_______________________________________________________________________

                                 A BILL

                     To amend the False Claims Act.

_______________________________________________________________________

                July 29 (legislative day, July 28), 2008

                       Reported with an amendment