by Ryon M. McCabe and Robert C. Glass
In 2013, the Florida Legislature made substantial changes to the Florida False Claims Act (FFCA), codified at F.S. §§68.081, et seq. The FFCA is modeled after its federal counterpart, the False Claims Act (FCA), which was first enacted during the Civil War to combat fraud against the government by defense contractors.1 The FFCA authorizes private individuals to bring “qui tam” suits in the name of the state against persons or entities who have defrauded the state in contracting or other matters.2 As an incentive to bring these suits, the FFCA allows successful plaintiffs, sometimes called whistleblowers or relators, to share in the damages recovered.3 Both the state and federal acts have proven enormously successful, with one study estimating a 15-to-1 return on investment for every dollar spent by the federal government on FCA enforcement.4
Florida’s recent changes follow a rash of amendments made by Congress since 2009 to strengthen the federal version of the law through three major pieces of legislation.5 Like the federal amendments, last session’s Florida amendments strengthen the FFCA and provide added anti-fraud protections to state government and taxpayers. This article examines some of the major changes.
Overview of the FFCA
The FFCA prohibits persons and companies who do business with the state from the following actions, among others:
• Knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval;
• Knowingly making, using, or causing to be made or used false records or statements material to a false or fraudulent claim;
• Knowingly making, using, or causing to be made or used false records or statements material to an obligation to pay or transmit money or property to the state;
• Knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the state; and
• Conspiring to do any of the above.6
The FFCA imposes a penalty on violators equal to three times the amount of damages sustained by the state as a result of the improper conduct, plus a statutory fine of $5,500 to $11,000 per violation.7
A private relator begins a qui tam suit on behalf of the state by notifying the attorney general and the chief financial officer of the alleged misconduct and disclosing “all material evidence and information the person possesses” regarding the violation.8 The relator then files a sealed complaint in the Second Judicial Circuit in and for Leon County.9 The attorney general, or in certain circumstances, the chief financial officer, has 60 days to review the case and decide whether to “intervene,” thereby taking over prosecution of the case from the relator.10 If neither officer elects to intervene, the relator is free to pursue the case on his or her own, prosecuting the case on behalf of the state.11
Like its federal counterpart, the FFCA provides financial incentives for private persons to become relators. If the state intervenes in a case, the relator may recover “at least 15 percent but not more than 25 percent” of the proceeds of the action, “depending upon the extent to which the person substantially contributed to the prosecution of the action.”12 If the state declines to intervene and the relator thereafter decides to pursue the case on his or her own, the relator receives a greater share of the proceeds, between 25 percent and 30 percent.13 In either case, the court has the discretion to reduce a qui tam award if it finds that the relator “planned and initiated” the wrongful conduct at issue.14
2013 Legislative Amendments
At the federal level, Congress has made significant changes to the FCA over the past four years. Because Florida patterned its law on the FCA, Florida has historically followed suit whenever Congress has amended the FCA.15 This year, Florida again amended its own act, and legislative history confirms a specific intent behind the 2013 amendments to “conform to the Federal False Claims Act.”16 This makes sense given that the two acts are often prosecuted simultaneously against fraudsters. Public policy, therefore, supports keeping both statutes in conformity to facilitate dual prosecution and enforcement.
The following provisions underwent revision.
• Direct Presentment — First, the legislature updated the FFCA to conform to the FCA on the issue of “direct presentment.” This issue arose from previous language in the FCA that made it unlawful to “knowingly present, or cause to be presented, to an officer or employee of the United States [g]overnment…a false or fraudulent claim for payment or approval.”17 Several courts had interpreted this italicized language to mean the false claim at issue had to be “directly presented” to the government for payment.18
This requirement proved problematic in the face of modern government contracting, which involves multiple layers of contractors and subcontractors, many of whom never deal directly with a government officer. What if a subcontractor presents a bogus claim to a general contractor, knowing full well that the claim will be paid with government money? Congress thought this situation should be covered by the FCA, and in 2009, Congress amended the law to eliminate any “direct presentment” requirement.19 The legislative history makes clear that Congress believed that FCA liability should attach “whenever a person knowingly makes a false claim to obtain money or property, any part of which is provided by the [g]overnment without regard to whether the wrongdoer deals directly with the [f]ederal [g]overnment.”20
Congress accomplished this change by deleting the prepositional phrase “to an officer or employee of the [g]overnment, or to a member of the armed forces” from 31 U.S.C. §3729(a)(1).21 With the removal of this phrase, liability attaches to any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.”22
Last session, the Florida Legislature made a near-identical change to the FFCA, deleting the prepositional phrase “to an officer or employee of an agency” from F.S. §68.082(2)(a).23 This change eliminates any “direct presentment” requirement under Florida law. Like the FCA, the FFCA now clearly covers situations in which an unscrupulous subcontractor submits false claims to a general contractor operating under a state contract, regardless of whether the subcontractor deals directly with the state.
• Intent to Defraud the State — The legislature likewise followed Congress in clarifying a significant issue of intent that arose from the U.S. Supreme Court decision in Allison Engine Co., Inc. v. U.S. ex rel. Sanders, 553 U.S. 662 (2008), another case involving multiple layers of contractors. In that case, a general contractor for the U.S. Navy required all subcontractors to certify that their work complied with Navy specifications. Certain subcontractors were accused of submitting bogus “certificates of conformance” to the general contractor, knowing the work was not in compliance. The subcontractors argued, in opposition to the relator’s claim under then §3729(a)(2),24 that they did not “get” a false or fraudulent claim “paid or approved by the [g]overnment”; their claim was paid by the general contractor. The relator offered no proof that the subcontractors intended to defraud the Navy as opposed to merely defrauding the general contractor.
The Supreme Court agreed with this position, reasoning that “a person must have the purpose of getting a false or fraudulent claim ‘paid or approved by the [g]overnment’ in order to be liable.”25 Making a false statement or claim to a general contractor without any specific intent to defraud the government — as opposed to the general contractor alone — was not enough.26
Congress disagreed with this interpretation and imposed a legislative fix through its 2009 FERA legislation. The legislative history shows Congress was concerned that, should Allison Engine remain law, “even when a subcontractor in a large [g]overnment contract knowingly submits a false claim to the general contractor and gets paid with [government funds, there can be no liability unless the subcontractor intended to defraud the federal government, not just their general contractor.”27 Congress believed this to be in direct conflict with the “original intent in passing the law,” namely, to protect the government from dishonest vendors and contractors.28
Accordingly, Congress clarified that the FCA covers situations when a subcontractor intends to defraud a general contractor operating under a government contract. Congress did this by deleting the words “get” and “paid or approved by the [g]overnment” from §3729(a)(2) (now renumbered as §3729(a)(1)(B)), thus, eliminating the language deemed so critical in the Allison Engine decision.29 Congress also amended the definition of “claim” to include claims submitted to contractors “whether or not the United States has title to the money or property” being requested, so long as the government has provided any portion of the money requested or will reimburse the contractor for any portion of the money requested.30 At the same time, Congress added the word “material” to the phrase “to a false or fraudulent claim” in §3729(a)(1)(B), indicating that the violator’s false record or statement must be “material” to a decision to pay the claim.31 “Material” means “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.”32
The net effect of these changes is to impose liability against anyone who knowingly makes, uses, or causes to be made or used any false statement or record material to get a false or fraudulent claim paid. The term “claim” includes any claim made upon government contractors, but the violator need not have a specific intent to defraud the government. Intent to defraud the contractor is sufficient, so long as the false statement or record is “material” to the violator’s receipt of government funds.
In 2013, the Florida Legislature made near-identical changes to the FFCA.33 As a result, the FFCA now tracks the language of the FCA and covers false claims against state contractors. Without these changes, fraud on state-contracted intermediaries might not have triggered false claims liability. As an example, under the much-discussed proposals to privatize Florida Medicaid, fraud on the private intermediaries might not have triggered liability, despite the fact that the ill-gotten funds would have come straight from state coffers. This amendment closes this loophole and provides added protections for taxpayers.
• Overpayments and “Reverse” False Claims — The legislature also strengthened the provision for so-called “reverse false claims” — the term applied to situations when someone knowingly underpays a government obligation. Before the recent amendments, the FCA and FFCA imposed liability against persons who knowingly made, used, or caused 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.34 The provision applied only to situations in which a person made an affirmative record or statement in order to lower or decrease a pre-existing obligation to pay money to the government.35
But what about situations when no affirmative false record or statement is made? Many times, a violator remains silent in the face of an obligation to pay money, or the violator receives an overpayment of government funds and remains silent in the face of an obligation to repay those funds.36 The violator cheats the government, but he or she never makes an affirmative statement or record in the process. This “affirmative act” requirement left a significant loophole in both acts.
To cure the problem, Congress amended the FCA, via FERA, to clarify that liability attaches whenever one knowingly makes or uses a false record or statement “material to an obligation to pay or transmit money or property to the [g]overnment, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the [g]overnment.”37 This change eliminates any requirement that the violator take an affirmative act to conceal the obligation to pay the government money. If one owes the government money and knowingly fails to pay, liability may attach.
Congress also defined, for the first time, the term “obligation” to mean “an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment.”38 This language clarifies that the term “obligation” includes both liquidated and unliquidated obligations, as well as contingent obligations.39 Congress repudiated prior case law indicating that an “obligation” included only “fixed,” pre-existing obligations to the government.40 Congress made these revisions on the recommendation of the Department of Justice in order to “prevent [g]overnment contractors and others who receive money from the [g]overnment incrementally based upon cost estimates from retaining any [g]overnment money that is overpaid during the estimate process.”41
Recognizing the benefits of these amendments, the 2013 Florida Legislature incorporated them into the FFCA as well.42 As a result, fraud on the state by omission or by concealment can now be remedied through a qui tam suit, regardless of whether the violator makes affirmative misrepresentations or records in the process of doing so.
• Public Disclosure Bar — The legislature also incorporated recent federal changes to the public disclosure bar. This bar imposes certain limits on relators intended to prevent opportunistic claims based on information that is already known to the government or in the public domain.43 A person cannot normally read about fraud in the newspaper, for example, and then file a qui tam suit to claim a reward. Prior to recent amendments, the FCA imposed a jurisdictional bar against actions “based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless…the person bringing the action is an original source of the information.”44 “Original source” was defined as an individual “who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the [g]overnment before filing an action.”45
Congress substantially changed the public disclosure bar with the passage of the Patient Protection and Affordable Care Act (PPACA) in 2010. To begin, public disclosure is no longer a jurisdictional bar. It remains a grounds for dismissal of a qui tam suit, but only when the government does not oppose dismissal.46 This provides the government with an opportunity to rescue a meritorious claim that would otherwise be barred by a public disclosure.
Next, Congress narrowed the types of public disclosures that can trigger the bar. To qualify, the public disclosure must involve “substantially the same allegations or transactions as alleged in the claim” and it must have been made in one of three places: 1) in a federal criminal, civil, or administrative hearing in which the government or its agent is a party; 2) in a congressional, GAO, or other federal report, hearing, audit, or investigation; or 3) in the news media.47
Finally, Congress altered the definition of “original source” to remove any requirement that the relator have “direct” knowledge of the scam. “Original source” is now defined as, either 1) someone who makes a voluntary disclosure to the government prior to a “public disclosure” described above; or 2) someone “who has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions,” and who provides the information voluntarily to the government before filing the action.48
The legislature followed suit in 2013 and adopted substantially identical changes to Florida’s public disclosure provisions.49 The net effect of these changes will make it easier for persons to become FFCA relators and report fraud against state government.
• Definition of “State” — The legislature also adopted changes not tied to the federal amendments. Most significantly, the legislature broadened the scope of government agencies entitled to protection under the FFCA. Prior to the 2013 amendments, the act prohibited false or fraudulent claims only when made to or paid by an “agency,”50 which was defined as “any official, officer, commission, board, authority, council, committee, or department of the executive branch of state government.”51 This definition proved to be extremely narrow, as it excluded two branches of state government and a host of other subdivisions and instrumentalities of the state.
In 2013, the legislature deleted the word “agency” and replaced it with “state.”52 The FFCA defines “state” as “the government of the state or any department, division, bureau, commission, regional planning agency, board, district, authority, agency, or other instrumentality of the state.”53 This definition is far broader, and the committee staff analysis confirms the purpose of the change was to “expand the applicability of the FFCA to state divisions and instrumentalities where prior law limited it to agencies.”54
The change opens the FFCA to portions of state government that did not fit cleanly into the previous definition of “agency.” Such portions include school districts, water management districts, the Office of the State Courts Administrator, the Public Service Commission, and other entities with budgetary autonomy, all of which could be victims of fraud.
Perhaps most significantly, the amendment appears to clear the way for recovery on behalf of Florida counties and municipalities. Fla. Const. art. VIII expressly defines counties as political subdivisions of the state: “The state shall be divided by law into political subdivisions called counties.”55 Florida courts have repeatedly described counties as “divisions” or “subdivisions” of the state.56
Likewise, Florida courts have repeatedly described municipalities as “instrumentalities” of the state.57 According to the Florida Supreme Court, “a municipal corporation is an instrumentality of the state established for the more convenient administration of local government.”58 Put another way, “a municipal corporation is in substantial measure merely a projection of the state government to the local level.”59
Given that legislative history expresses a desire to expand protection to “state divisions and instrumentalities,” counties and municipalities should now fall within the definition.60 This would be in accord with Florida’s sovereign immunity statute, which defines “state agencies or subdivisions” to include “counties and municipalities.”61 These revisions thereby open up significant protections for counties and municipalities by giving relators a financial incentive to blow the whistle on fraud being committed by unscrupulous contractors and vendors.62
In fiscal year 2012, the federal government recovered more than $4.9 billion in settlements and judgments from FCA cases.63 Without question, the FCA and its state counterpart, the FFCA, give taxpayers a powerful tool against those who seek to defraud the government in contracting and other matters. The recent changes enacted by the legislature in 2013 make the FCA more potent and provide added protections for Florida government and its taxpayers.
1 See Rainwater v. United States, 356 U.S. 590, 592 (1958) (“That [a]ct was originally passed in 1863 after disclosure of widespread fraud against the [g]overnment during the War Between the States.”).
2 “Qui tam” is an abbreviation of the Latin phrase “qui tam pro domino rege quam pro si ipso in hac parte sequitur,” which means “who as well for the king as for himself sues in this matter.” Black’s Law Dictionary (9th ed. 2009). In qui tam suits, a private person brings a suit in the name of the sovereign and is given a portion of the monetary recovery the sovereign receives. Outside of the False Claims Act, such suits are rare. See Vt. Agency of Natural Res. v. U.S. ex rel. Stevens, 529 U.S. 765, 769 n.1 (2000).
3 See Fla. Stat. §68.085.
4 Jack A. Meyer, Fighting Medicare & Medicaid Fraud: The Return on Investments from False Claims Act Partnerships 1 (2013), http://www.taf.org/TAF-ROI-report-October-2013.pdf.
5 The amendments were made through three separate acts of Congress: the Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111-21, 123 Stat. 1617 (2009) [FERA]; the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203, 124 Stat. 1367 (2010); and the Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, 124 Stat. 119 (2010) [PPACA]. PPACA is more colloquially known as “Obamacare.”
6 Fla. Stat. §§68.082(2)(a)-(c), (g).
7 Fla. Stat. §68.082(2).
8 Fla. Stat. §68.083(3).
10 Id. The CFO, as head of the Department of Financial Services (DFS), may only intervene if the action “is based upon the facts underlying a pending investigation” by DFS. If DFS elects to intervene, the CFO must notify the Department of Legal Affairs (DLA) of its intent within 20 days of the filing of the action. Fla. Stat. §68.083(4).
11 Fla. Stat. §68.084(3).
12 Fla. Stat. §68.085(1). If DLS or DFS proceeds with the action and prevails, but the court finds the action to be based “primarily” on the public disclosure of specific information, “other than that provided by the person bringing the action,” the award is limited to a maximum of 10 percent of the proceeds recovered by the state. Fla. Stat. §68.085(2) (emphasis added). The court must take account the “significance of the information and the role of the person bringing the action in advancing the case to litigation.” Id.
13 Fla. Stat. §68.085(2).
14 Fla. Stat. §68.085(4).
15 In 2007, for example, the legislature amended the Florida FCA and added language to make the act apply to people who knowingly present “false or fraudulent” claims for payment or approval, which paralleled the federal act. Act effective July 1, 2007, Ch. 07-236, §§1-2, 2007 Fla. Sess. Law Serv. Ch. 2007-236 (C.S.S.B. 2312) (West) (emphasis added). At the same time, the legislature increased the statute of limitations for bringing claims under the Florida FCA to six years and increased the civil penalty to a range of $5,500 to $11,000 per violation. Id. at §§2-3, 6. The express purpose of these amendments was to bring the Florida FCA “into closer conformity to the Federal False Claims Act.” Fla. S. Comm. on Judiciary, SB 2312 (2007) Staff Analysis 1, 3 (Apr. 11, 2007) (on file with Fla. Senate).
16 Fla. H.R. Comm. on Judiciary, HB 935 (2013) Staff Analysis 1 (June 5, 2013) (on file with Fla. Senate Archives) [HB 935 Staff Analysis].
17 21 U.S.C. §3729(a)(1) (1994) (emphasis added). The analogous provision of the Florida FCA was Fla. Stat. §68.082(2)(a) (2012).
18 U.S. ex rel. Totten v. Bombardier Corp., 380 F.3d 488, 490-91 (D.C. Cir. 2004). Totten involved frauds perpetrated on Amtrak, a federally chartered corporation that receives federal subsidies but that “is not a department, agency, or instrumentality of the United States Government.” 49 U.S.C. §24301(a)(3).
19 See S. Rep. No. 111-10 at 11 (2009), as reprinted in 2009 U.S.C.C.A.N. 430, 439 (“[The bill clarifies that direct presentment is not required for liability to attach.”).
22 31 U.S.C. §3729(a)(1)(A) (2013).
23 Act effective July 1, 2013, Ch. 13-104, §2, 2013 Fla. Sess. Law Serv. Ch. 2013-104 (C.S.C.S.H.B. 935) (West).
24 Prior to the FERA amendments, §3729(a)(2) proscribed knowingly making, using, or causing to be made or used “a false record or statement to get a false or fraudulent claim paid or approved by the [g]overnment.”
25 Allison Engine, 553 U.S. at 668-69.
26 Id. at 671-72. The Court explained its reasoning as follows: “In such a situation, the direct link between the false statement and the [g]overnment’s decision to pay or approve a false claim is too attenuated to establish liability.” Id. The Court wanted to avoid turning the FCA into an “all-purpose antifraud statute.” Id. at 672.
27 S. Rep. No. 111-10 at 10.
29 S. Rep. No. 111-10 at 12.
30 FERA §4(a)(2) (codified at 31 U.S.C. §3729(b)(2)(A)).
31 FERA §4(a)(1) (codified at 31 U.S.C. §3729(a)(1)(B)).
32 FERA §4(a)(2) (codified at 31 U.S.C. §3729(b)(4)).
33 Act effective July 1, 2013, Ch. 13-104, §2, 2013 Fla. Sess. Law Serv. Ch. 2013-104 (C.S.C.S.H.B. 935) (West) (codified at Fla. Stat. §§68.082(1)(a), (1)(d), (2)(b)).
34 31 U.S.C. §3729(a)(7) (2008); Fla. Stat. §68.082(2)(g) (2012).
35 In U.S. ex rel. Stevens v. McGinnis, Inc., No. C-1-93-442, 1994 WL 799421 at *6 (S.D. Ohio Oct. 26, 1994), the trial court held that a reverse false claim could be asserted when “a defendant has omitted to disclose information to the [g]overnment that concealed or avoided its obligation to pay the cleanup costs for its discharges and the associated fines for intentional dumping.” The Sixth Circuit later rejected this holding. Am. Textile Mfrs. Inst., Inc. v. The Limited, Inc., 190 F.3d 729, 735-36 (6th Cir. 1999) (“Thus, we hold that a reverse false claim action cannot proceed without proof that the defendant made a false record or statement at the time the defendant owed to the government an obligation sufficiently certain to give rise to an action of debt at common law.”). See also United States v. Boursean, 531 F.3d 1159, 1169 (9th Cir. 2008) (discussing requirement that a defendant must take an affirmative act constituting a false statement); U.S. ex rel. Marcy v. Rowan Cos., Inc., No. 03-3395, 2006 WL 2414349 at *16 (E.D. La. Aug. 17, 2006) (recognizing that “avoidance of fines, penalties, etc. are insufficient to state a claim under the reverse false claims subsection”).
36 S. Rep. No. 111-10 at 14 (2009), as reprinted in 2009 U.S.C.C.A.N. 430, 441; 155 Cong. Rec. E1295-03, E1299 (daily ed. May 18, 2009) (statement of Rep. Howard Berman).
37 FERA §4(a)(1) (codified at 31 U.S.C. §3729(a)(1)(G)) (emphasis added).
38 FERA §4(a)(2) (codified at 31 U.S.C. §3729(b)(3)) (emphasis added).
39 S. Rep. No. 111-10 at 14.
40 Id. at 14, n.10. American Textile Manufacturers,190 F.3d 736, 741, is a prime example of what Congress sought to rectify. In that case, the court held that an “obligation” must be “sufficiently certain to give rise to an action of debt at common law” and that an obligation “does not include those contingent obligations that arise only because the government has prohibited an act, or arising after the exercise of government discretion.”
41 S. Rep. No. 111-10, at 15.
42 Act effective July 1, 2013, Ch. 13-104, §2, 2013 Fla. Sess. Law Serv. Ch. 2013-104 (C.S.C.S.H.B. 935) (West) (codified at Fla. Stat. §68.082(2)(g)) (imposing liability on one who “[k]nowingly 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 an agency”).
43 Graham Cnty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 294 (2010).
44 31 U.S.C. §3730(e)(4)(A) (2008).
45 31 U.S.C. §3730(e)(4)(B) (2008).
46 PPACA §10104(j)(2) (codified at 31 U.S.C. §3730(e)(4)(A)).
47 Id. (emphasis added).
48 Id. (codified at 31 U.S.C. §3730(e)(4)(B)).
49 Act effective July 1, 2013, Ch. 13-104, §8, 2013 Fla. Sess. Law Serv. Ch. 2013-104 (C.S.C.S.H.B. 935) (West) (codified at Fla. Stat. §68.087(3)).
50 See, e.g., Fla. Stat. §68.082(2)(a)-(g) (2012).
51 Fla. Stat. §68.082(1)(a) (2012) (emphasis added).
52 Ch. 13-104, §2, 2013 Fla. Sess. Law Serv. Ch. 2013-104 (codified generally at Fla. Stat. §68.082.).
53 Id. (codified at Fla. Stat. §68.082(1)(f)).
54 HB 935 Staff Analysis 3.
55 Fla. Const. art. VIII, §1.
56 State ex. rel. Watson v. Lee, 24 So. 2d 798 (Fla. 1946) (stating that “the county is one of the political divisions of the state”); Whitney v. Hillsborough County, 127 So. 486, 492 (Fla. 1930) (noting counties are “divisions” of the state, citing Amos v. Mathews, 126 So. 308, 321 (Fla. 1930)); see also Fla. Pawnbrokers & Secondhand Dealers Ass’n, Inc. v. City of Ft. Lauderdale, Fla., 711 F. Supp. 1084, 1086 (S.D. Fla. 1989) (explaining that a county is a “sub-division of the state”); Canaveral Port Auth. v. Dep’t of Revenue, 690 So. 2d 1226, 1228 (Fla. 1996) (concluding that a county was an entity “expressly recognized in the Florida Constitution as performing a function of the state” for purposes of ad valorem taxation); Maloy v. Board of Cnty. Comm’rs of Leon Cnty., 946 So. 2d 1260, 1263-64 (Fla. 1st DCA 2007) (explaining for sovereign immunity purposes that Florida’s counties are “divisions of the state”).
57 See, e.g., Florida Pawnbrokers, 711 F. Supp. at 1086 (“[A] city is also a branch of state government in that it exercises state power.”); City of Miami v. Lewis, 104 So. 2d 70, 72 (Fla. 3d DCA 1958) (“A municipal corporation exercises the attributes of sovereignty and as such is a political subdivision or arm of the state.”). While an “instrumentality,” a municipality has been held not to be a “subdivision” of equal stature with a county. See City of Miami v. Rosen, 10 So. 2d 307, 309 (Fla. 1942) (“Municipalities in Florida are not subdivisions of the [s]tate as are counties.”). The primary difference between the two types of entities is that a county is a constitutional creation, whereas municipalities are legislative creations. Lewis, 104 So. 2d at 72; accord Demings v. Orange Cnty. Citizens Review Bd., 15 So. 3d 604, 606 n.2 (Fla. 5th DCA 2009).
58 Turk v. Richard, 47 So. 2d 543, 543 (Fla. 1950).
59 State v. City of Auburndale, 85 So. 2d 611, 613 (Fla. 1956).
60 Indicating that the amendments would reach “divisions” and “instrumentalities,” the staff analysis cited, by way of a “cf.” citation, a previous attorney general opinion finding that the pre-2013 use of the term “agency” throughout §68.082 meant that the FFCA did not apply to fraud on municipal governments. See HB 935 Staff Analysis at 3, n.6 (citing Op. Atty’ Gen. Fla. 2011-10 (2011)). The citation, using the comparative “cf.,” further shows a legislative intent that the new term “state” includes municipalities, in contrast to Attorney General Bondi’s 2011 opinion.
61 Fla. Stat. §768.28(2).
62 Two Florida counties, Miami-Dade and Broward, currently have their own false claims ordinances, but both offer lesser protections than afforded by the FFCA. See, e.g., Ch. 21, art. XV, Miami-Dade Cnty. Code of Ordinances; and Ch. 1, art. XIV, Broward Cnty. Code of Ordinances.
63 Press release, U.S. Dep’t of Justice, Justice Department Recovers Nearly $5 Billion in False Claims Act Cases in Fiscal Year 2012 (Dec. 4, 2012), http://www.justice.gov/opa/pr/2012/December/12-ag-1439.html.
Ryon M. McCabe is a partner with McCabe Rabin, P.A., in West Palm Beach, where his practice includes representation of whistleblowers in qui tam cases. He previously served as an assistant U.S. attorney in the Southern District of Florida and as a judicial law clerk to Judge Lacey A. Collier in the Northern District of Florida. He graduated from the FSU College of Law in 1994 with high honors.
Robert C. Glass is an associate with McCabe Rabin, P.A., in West Palm Beach, where his practice includes representation of whistleblowers in qui tam cases. He previously served as a judicial law clerk to Judge Kenneth A. Marra, U.S. District Court for the Southern District of Florida, and to Judge Spencer D. Levine, Fourth District Court of Appeal. Glass is a 2007 graduate of the University of Virginia School of Law.
This column is submitted on behalf of the Business Law Section, Stephen E. Nagin, chair, and Mark Nichols, editor.