What are the differences between state and federal whistleblower claims?

Many states have enacted whistleblower laws modeled on the federal False Claims Act (FCA). So have certain local jurisdictions, including New York City, Philadelphia, Chicago, the District of Columbia, and Miami-Dade and Broward Counties in Florida. Whistleblowers can sue under those laws to address fraud committed against state and local governments.

Such suits can often include claims under the federal FCA as well, such as where the fraud targets a Medicaid program jointly administered by states and the federal government.

While most state and local whistleblower laws are similar to the FCA in substance and structure, several key differences exist.

First, state and local whistleblower laws apply only to fraud against the relevant state or local government. Whistleblowers cannot invoke New York law to report fraud against Pennsylvania. When fraud cuts across jurisdictions, a whistleblower may need to pursue claims under multiple different laws.

Second, the scope of state and local FCAs can vary. While many states have enacted whistleblower laws of general application, authorizing suits against a wide variety of fraud, others like Texas, Michigan, and Louisiana have limited false claims suits to healthcare fraud.

Third, some states have broadened their FCAs to permit whistleblowers to pursue tax fraud. In New York and Washington, D.C., for example, whistleblower statutes authorize false claims suits against knowing violations of the state and local tax laws, provided the resulting tax evasion exceeds certain minimum thresholds. Other states, however, explicitly exclude tax-fraud from their whistleblower statutes. 

Finally, state and local whistleblower laws also differ in the size of the awards they offer, the protections they provide against retaliation, and other respects.

To learn more about the False Claims Act and other whistleblower programs, go to www.mololamken.com and follow us on LinkedIn.  “Brilliant lawyers with courtroom savvy” — Benchmark Litigation.  Copyright MoloLamken LLP 2023.