Washington State False Claims Act

Washington State False Claims Act Mirrors the Federal Act But Limited to Medicaid Fraud The federal False Claims Act has had a long history of government service. Not only does it reward whistleblowers (better known as “sentinels”), it also protects them from retaliation. Past attempts to pass a state version in Washington met with stiff opposition. Even the Attorney General opposed it, arguing that there was plenty of whistleblowing going on and there was no need to encourage more. On March 30, 2012, Washington finally joined the 29 other states that have False Claims Act (FCA) by passing the Medicaid Fraud False Claims Act (MFFCA). Like 10 of the 30 states that have a FCA, it is limited only to Medicaid. Washington’s MFFCLA has been reviewed by the U.S. Office of Inspector General (OIG) and has been approved for a 10 percentage-point increase in Washington State’s share of federal Medicaid FCA cases. History of Qui Tam The traditional name for cases which attempt to recover money defrauded from the government (i.e. the king) is “Qui Tam” litigation. Qui Tam is pronounced “kee tam” or “kway tam”) and is an abbreviation from the Latin “qui tam pro domino rege quam pro sic ipso in hoc parte sequitur” meaning “who as well for the king as for himself sues in this matter”. Qui tam legal actions can be traced back as far as 13th Century England where they were used by private citizens to gain access to the king’s court. The U.S. legal system, derived from the British system, allowed qui tam actions since the nation’s founding in 1776. They were...

Unjust Enrichment

Unjust Enrichment – Washington State Law The terms “restitution” and “unjust enrichment” are the modern designations for the older “quasi contracts” terminology.127 WAPRAC § 5.51 The Washington court has adopted the unjust enrichment terminology, but continues to use the quasi contractual terminology interchangeably: “Quasi contracts” are not true contracts but are obligations created by the law when money or property has been placed in one person’s possession under such circumstances that in equity and good conscience, he ought not to retain it. [Citation omitted.] Thus, the substance of an action for unjust enrichment lies in a promise, implied by law, that one will render to the person entitled thereto that which in equity and good conscience, belongs to the latter. At common law, such actions are brought under the principles of assumpsit, and where the cause of action arises from a tortious wrong, it is the general rule, whether or not there be an express contract, that the injured party may waive the tort and sue in assumpsit, in which case the law will imply a contract on the part of the tort-feasor to pay the injured party a just remuneration for the damages suffered to his property.2Bill v. Gattavara, 34 Wash. 2d 645, 209 P.2d 457 (1949), (4-1 decision). In unjust enrichment terms, two basic elements must be established in quasi-contractual actions: the person receiving a benefit (such as money) must be unjustly enriched, and the party conferring the benefit must not be a volunteer.3Lynch v. Deaconess Medical Center, 113 Wash. 2d 162, 776 P.2d 681 (1989); Trane Co. v. Randolph Plumbing & Heating, 44 Wash. App. 438,...

Criminal Profiteering

Criminal Profiteering: Washington State’s “Baby” RICO Act The Criminal Profiteering Act of 1985 is Washington State’s version of the federal RICO law.1State v. Thomas, 103 Wash. App. 800, 14 P.3d 854 (2000); Bowcutt v. Delta North Star Corp., 95 Wash. App. 311, 976 P.2d 643 (1999) (trial court erred in failing to provide full scope of equitable remedies authorized by Washington statute). It provides civil penalties and remedies for a variety of criminal activities. “Criminal profiteering” is defined to include the commission, or attempted commission, for financial gain, of any one of a number of crimes listed in the statute.2These include many violent felonies, as well as felonies relating to gambling, drugs, pornography, prostitution, extortion, and securities fraud. The act provides that a “pattern of criminal profiteering activity” means engaging in at least three acts of criminal profiteering within a five-year period. To constitute a “pattern,” the three acts must have the same or similar intent, results, accomplices, principals, victims or methods of commission, or be otherwise interrelated by distinguishing characteristics including a nexus to the same enterprise, and must not be isolated events. A “pattern” of profiteering is usually required before any of the special civil remedies apply.3Winchester v. Stein, 135 Wash. 2d 835, 852, 959 P.2d 1077, 1083 (1998). See 16A WAPRAC § 26.51. There are many similarities between the Washington statute and the federal statute, and as a result, Washington courts look to the case law interpreting the federal statute as a guide to interpretation of the Washington statute.4Id. However, the Washington statute has been characterized as being somewhat narrower. For example, whereas the federal statute...

Negligence of an Insurance Agent is a CPA Violation

Peterson v. Big Bend Ins. Agency, Inc., 150 Wn. App. 504, 202 P.3d 372 (Wash.App. Div. 3, 2009) Negligence of an Insurance Agent is a CPA Violation The Petersons purchased a home owner’s insurance policy after being assured the agent would cover the full replacement value of their home. The home burned and the coverage proved to be woefully short. Negligence. An insured may bring an action against his insurance agent in negligence as well as contract. Anderson Feed & Produce Co. v. Moore, 66 Wn.2d 237, 242, 401 P.2d 964 (1965). To recover against an insurance agent based on negligence, the insured must prove: (1) that the agent had a duty of care to protect the insured against a certain risk, (2) a breach of that duty, (3) that the breach was the proximate cause, (4) of the insured’s damages. Doty-Fielding v. Town of S. Prairie, 143 Wn.App. 559, 563, 178 P.3d 1054, review denied, 165 Wn.2d 1004 (2008); see Sheikh v. Choe, 156 Wn.2d 441, 128 P.3d 574 (2006). An insurance agent assumes only the duties found in an agency relationship unless the agent assumes additional duties by contract or by holding himself or herself out as possessing an extraordinary skill. Hardt v. Brink, 192 F.Supp. 879, 880-81 (W.D.Wash.1961) (applying Washington law). Generally, the duty of care that an insurance agent owes his or her client does not include the obligation to procure a policy affording the client complete liability protection. Suter v. Virgil R. Lee & Son, Inc., 51 Wn.App. 524, 528, 754 P.2d 155 (1988) (quoting Jones v. Grewe, 189 Cal.App.3d 950, 956, 234 Cal.Rptr. 717...

`This is just a horror,’ local investor laments

Martindale v Labadie Securities fraud related to the Resource Development International Ponzi scheme – Whatcom County Superior Court   `This is just a horror,’ local investor laments John Stark Staff Published: April 3, 2005 BY JOHN STARK THE BELLINGHAM HERALD Lloyd Martindale of Bellingham lost a lot of money in Resource Development International, but he got some satisfaction seeing the fraud’s perpetrators sentenced to 27-year prison terms. Martindale testified for the prosecution in the Santa Clara County, Calif., trial of James and David Edwards. The father-and-son team from Tacoma ran a Ponzi-style investment scheme that victimized an estimated 1,500 investors, including more than 100 in Whatcom County. “It was an extremely exhilarating experience,” Martindale said of the trial and his role in it. “I don’t think I’m vindictive, but I want to see the right thing done.” With the exception of Martindale, local RDI investors contacted by The Bellingham Herald said they preferred not to talk about their painful financial experiences. Martindale was reluctant, too, but he said he wanted to make sure that the investors’ side of the story would be told. Martindale said he found out about RDI from Bellingham accountant Richard Labadie, who kept his plane in a hangar next to Martindale’s at Bellingham International Airport. In October 1998, Martindale said Labadie invited him down to his Harbor Mall office to hear about an investment opportunity. Martindale would later describe the sales pitch in a Dallas federal court, where a U.S. Securities and Exchange Commission attorney was seeking an injunction to put RDI out of business and freeze its assets. Labadie “drew elaborate diagrams on his blackboard,”...