Florida False Claims and the Department of Financial Affairs

This is the fourth segment of Tony Munter’s interview with Gary Farmer, an experienced attorney who handles false claims cases in Florida. In the interview below Gary Farmer discusses the Department of Financial Affairs. (Click here for Part 1, Part 2, Part 3, Part 5). Tony Munter is not licensed in the jurisdiction of Florida.

Tony: Okay. Are there other ways to pursue cases under the Florida Law?
Gary: Well people don’t realize that Department of Financial Services also has jurisdiction for Qui Tam cases under our state statute.
Tony: Right.
Gary: They only can take the case if they’ve had an open investigation already at the time the case is filed. I have one such case that we just settled that I believe the settlement agreement is being signed today. So I can’t tell you the party or anything of detail because the seal is still in place. But I can tell you that the Attorney General has been collaborating with a Relator in New Jersey who is trying to come in and take a portion of this case and they’re doing so, because they’re irate at the Financial Services Office that they also have jurisdiction over these cases. The fact that this office is also is taking cases is making the Attorney General look bad. The only cases where the Florida Attorney General has obtained any kind of recovery in Qui Tam are federal cases where they had a pending claim and they just laid around and did nothing and got their share of the money automatically.
Tony: You’re certainly making it sound like in Florida you want to pursue a federal claim in conjunction with a state claim if you have that option.
Gary: Yeah. Yeah.
Tony: I don’t want to leave everybody with the impression that there’s no such thing as a successful Florida false claims case. But you’re certainly making it sound like one should be looking for the federal claim to bring if you’ve got a false Florida case. Would that be fair to say?
Gary: Absolutely.
Tony: I must tell you. I’ve had good experiences with US attorney’s offices in Florida. Not so much with case law necessarily but I’ve…
Gary: US attorney in the middle district, Tony, just had like a meet and greet two Fridays ago. Unfortunately, I had a conflict I couldn’t go. They invited Relators’ counsel to meet the US Attorney, meet his assistant US Attorney and basically it was kind of like hey we’re open for business. If you got good cases bring them. We want to do them.
Tony:  Yes. I’m hearing about that across the country actually. We had that in DC. It was a breath of fresh air just to be able to know that they felt that way, that you could walk in and talk them on a case. So I had that experience here in DC and as I say I have good experiences to the US Attorneys down there. But you’re scaring me with the Attorney General’s office. I must tell you.
Gary: Yeah. Purely state cases. If it’s a purely state case with just state money, Relators need to be aware regarding our Attorney General. It’s just a fact.
Tony: Now is that because it’s an elected position? Is it because of the culture of Florida? Is it the professionals within the office? I mean I have to talk to other states where quite frankly the culture of supporting a False Claims Act case within the state Attorney General’s office seems stronger than this. Do you see this changing if there’s a different Attorney Generally or do you think it’s just a cultural thing in the office? I mean is there any hope.

Gary: Yes. I think so.

The Attorney General unfortunately is aligned to and tied with the real hardcore Republicans compared to a guy like Jeff Atwater who is the CFO who oversees the Department of Financial Services. That’s something to talk about. That’s unique I think to our statute. Maybe a couple of other states have it. But the fact that is that there are two different agencies in Florida that do have jurisdiction over these cases…

Tony:  That is unusual. I think there’s one other state I know of that might have that structure. You spoke about that just a little bit earlier. What’s the overlap in terms of jurisdiction? I mean it sounds like there’s a little bit of jealousy but how are they supposed to decide under the statute and law.
Gary: The statute refers to the Department of Legal Affairs, which is the Attorney General’s Office, and they are the department as that term is used in the statute. However, if a case is filed in which the Department of Financial Service already has an open investigation then DFS shall has jurisdiction over the case.
Tony: That’s not any kind of public disclosure bar or anything like that if they have an open investigation?

Gary:  There’s still a public disclosure bar, but there are circumstances, which do not bar a Relator from bringing the case. For example the case that I just told you about that I just settled is an example. Our guy, our Relator had gone to the inspector general with some of his concern and that got related to financial services because it related to a contract. So they open an investigation and then he filed the lawsuit. We filed the lawsuit. So under those circumstances it’s not a public disclosure bar. His complaint relates back to his initial disclosure and he was deemed the whistleblower because he was also being retaliated against. That’s how it all came about. So because they have that open investigation when we filed the false claims case, DFS was able to take it and run with it because they already had an open investigation.The Attorney General hates that.

Jeff Atwater as an elected official his team has kind of been stamping out fraud. He went after the [PIP auto] insurance and the clinic a couple of years ago.

He’s also the Chief Fire Marshall. He’s done a lot to stop fraudulent fire claims. And the rumor is he’s going to run for either US Senate or Governor when Rick Scott is done. So his theme has been to be the anti-fraud guy. Doing Qui Tam and false claims cases is right in this wheelhouse and it is how people know him. He likes to be able to do more of them. Unfortunately the AG gets them all and then kills them. So there’s nothing more to do. positive experiences filing False Claims Act cases in Florida. The federal law is doing very very well. Florida is a good center of healthcare cases. Unfortunately, there’s a lot of fraud, but I guess that’s a lot of opportunity for people to file good cases down there.

Gary: Yes. You know we do have the Department of Financial Services and they’d shown a great willingness to handle these cases and an openness to the cases. So the good news in Florida is you’re not necessarily stuck with the Attorney General’s office and perhaps even the Attorney General’s office may change its tune over time perhaps with new personnel or whatnot. We have been sort of saved by the fact the CFO is very much anti-fraud so false claims cases are really right in his wheelhouse. So that’s the positive for Florida.
Tony: Well, it’s interesting because its a good institutional check if you think about  as far as I know there’s only one other state that has another agency with concurrent jurisdiction like that. Any state it seems to me is subject to who gets elected to what office. So if you have two offices that can pursue the case maybe you do have a better opportunity than if you’re just only one game in town. That’s very interesting.

Tony:  I was wondering, obviously as practitioners you run into problems and it always what you talk about. You must have moreGary: Yes. It is a unique thing and thankfully right now we have it. Otherwise I think you’d see a tremendous chilling effect as a result of the AG’s actions on the willingness of attorney to pursue these cases. I mean these cases can take a long time and we can spend a lot of our own money on these cases. I’ve had Relators who’ve worn wires and gone in and recorded marketing schemes and gotten CEOs of companies making statements. There’s no way I could counsel for my client to do something like that and take that kind of risk if I knew that after doing all that that just on a whim and for no reason without any notice to the court or us that they could just drop our case and its outrageous.I mean there’s no provision in the law for notice to us and an opportunity be heard if the AG is going to dismiss. So, fortunately, we do have the State CFO office, which provides us with an option.

Tony:   That is a good thing.

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