Amid this year's last-minute budget negotiations, Connecticut's legislature found something on which nearly all members could agree in the bipartisan, sweeping expansion of the State False Claims Act (FCA). Signed into law by the Governor, the changes will take effect on July 1, 2023.
Connecticut's FCA—located at sections 4‑274 to 4‑289 of the General Statutes—has been a relatively narrow healthcare‑fraud statute from its inception. It has prohibited knowingly presenting a false claim for payment "under a state‑administered health or human services program," or making a false record or statement material to such a claim. As in other jurisdictions with analogous laws, this prohibition is enforceable in Connecticut through civil actions for treble damages (plus further remedies) brought by private "qui tam" (i.e., whistleblower) plaintiffs or by the State Attorney General.
The recent amendment dramatically expands the FCA's scope. It does so by deleting the language cabining the statute to health or human services programs—thus extending its reach to payments of state funds in areas such as education, construction, or procurement, to name a few. Breaking with some other States (like New York), Connecticut follows the federal approach by exempting alleged underpayment of taxes from the FCA's purview.
Besides newly barring the State from raising a false-claims counterclaim when a civil defendant, the FCA's procedural provisions remain mostly unchanged. They include the statutes of limitations (six years after the violation or three years post-discovery) and repose (ten years after the violation); anti-retaliation protection for whistleblowers; and a clause preserving any other applicable state or federal remedies. Moreover, although sounding in fraud, FCA claims must be proven only by a preponderance of the evidence, a lower threshold than the clear-and-convincing-evidence standard applied to many other fraud claims.
At least three takeaways should remain in the mind of anyone receiving—or distributing—state funds:
First, the FCA's harsh remedies—including civil penalties of at least $5,000 per violation, triple the amount of provable loss, and attorney's fees—will now have broader reach.
Second, and relatedly, anyone dealing with the State, one of its departments or agencies, or a grantee distributing money on its behalf can expect increased scrutiny from the Attorney General's Office or threat of a whistleblower lawsuit. In a press release extolling the recent amendment, the Attorney General highlighted that more than one hundred different state departments, agencies, and quasi-public agencies spend state funds.
Third, because plaintiffs often cite federal case law as persuasive precedent for construing state false claims acts, Connecticut practitioners will need to keep abreast of federal decisions addressing relevant areas of false‑claims liability—such as education, contracting, or construction—that previously were of federal concern only.
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