Nevada False Claims Act

The State of Nevada enacted its False Claims Act 25 years ago in 1999. See Nev. Rev. Stat. §§ 357.010 et seq. The Act is very similar to the federal FCA and applies to fraudulent claims or statements made to both state and local governments. Liability under the state FCA is triggered when an individual or business knowingly submits false claims for payment by Nevada state or local agencies. The type of conduct outlaws includes using false records or statements to get a claim paid, to avoid repaying the state, or conspiring to commit any of these acts. In addition, anyone who is a beneficiary of an inadvertent submission of a false claim to Nevada, and who fails to disclose the false claim to the state after he or she becomes aware of it, can be held liable under the Act.

The state FCA calls for civil penalties of between $5,500 to $11,000 per individual fraudulent claim plus treble damages to the state. As for the state Act’s statute of limitations, a relator must bring a claim within the latter of three years after the violation is discovered by the Attorney General or within five years after the violation occurs. To secure his or her position as an original source, a whistleblower should consult with counsel and promptly file a disclosure with Nevada as called for under Nev. Rev. Stat. § 357.100.2(b).

Nevada’s qui tam mechanism allows whistleblowers to initiate claims under the state’s FCA and to share in any successful judgments or settlements up to 33% of the civil penalties recovered by the state government. If the state government decides to forgo intervention, the whistleblower may receive up to 50% of the available recovery. Like its federal analogue, the Act arms the whistleblower with protection against employer retaliation. An employer who does retaliate against a whistleblower may be forced to pay compensatory and punitive measures including double lost compensation with interest, any amount of punitive damages, and compensation for the relator’s attorneys’ fees and expenses if that relator disclosed information to Nevada authorities voluntarily.

State Cases

In May 2012, Abbott Laboratories agreed to pay the United States $100 million to resolve false claims allegations against it. Of this amount, Nevada received nearly $1.4 million to benefit consumer protection efforts. The settlement stemmed from allegations that Abbott Labs illegally marketing its drug, Depakote, for uses not approved by the Food and Drug Administration (“FDA”).

In August 2012, Nevada Attorney General Catherine Cortez Masto announced a record $181 million settlement with Johnson & Johnson, the largest multi-state settlement of its kind involving a pharmaceutical company. The state received a $3,328,432 share of the national settlement. The settlement came after a four year investigation which revealed that Johnson & Johnson’s subsidiary, Janssen, engaged in off-label promotions of antipsychotic drugs such as Risperdal and Invega.

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