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Committee hears bill to create a Washington State False Claims Act with qui tam enforcement
Summary
Substitute HB 2585 would create a state False Claims Act modeled on the federal law and the state's Medicaid version, authorizing the attorney general and private relators to sue for false claims to state funds, imposing treble damages and civil penalties, and establishing whistleblower protections. Business groups urged narrow carve‑outs for taxes and good‑faith contract claims.
Substitute House Bill 2585 was presented to the House Civil Rights & Judiciary Committee on Jan. 27 as a measure to expand Washington's civil tools against fraud in state programs. Staff described the bill as modeled on the federal False Claims Act and the state Medicaid False Claims Act, extending civil liability to fraudulent claims presented to the state and authorizing qui tam suits by private relators.
Edie Adams (committee staff) explained the bill creates civil penalties and treble damages tied to federal penalty amounts (which staff cited as currently ranging about $14,308 to $28,619 per violation when adjusted for inflation under federal law). The bill would allow private relators to file under seal and serve the Attorney General, who may choose to intervene; relators would be eligible for a share of any proceeds — the staff summary cited ranges of 15–25% of proceeds if the Attorney General intervenes and 25–30% if the AG does not intervene.
Sponsor Rep. David Hackney said Washington is an outlier for limiting its false‑claims authority to Medicaid and urged a state law that can recover stolen public dollars, empower whistleblowers and deter fraud. He framed the bill as a tool to protect taxpayers and hold wrongdoers accountable.
Witness testimony showed broad support from former federal prosecutors, whistleblower attorneys and nonprofit legal advocates who described recoveries on behalf of state programs and the role of qui tam provisions in surfacing fraud. Dan Fruchter, a former DOJ prosecutor, said the expanded tool would help reclaim public funds and deter abuse in programs ranging from wage‑theft enforcement to environmental and housing programs.
Business groups and industry witnesses urged careful drafting. The Associated General Contractors warned that poorly drawn language could turn ordinary contract change orders into fraud claims; CTIA (wireless industry) urged an explicit tax exemption, noting tax controversies are typically handled by revenue auditors and appeals. Representatives of the Attorney General's Office said they were broadly supportive in concept but expected to provide technical feedback to reconcile interactions with the Medicaid statute and to propose clarifying amendments.
Committee members probed how high the treble‑damages standard would be to prove fraud and whether the bill could produce frivolous suits; witnesses responded that False Claims Act law generally requires scienter (intent to defraud) and materiality, a high standard designed to deter only deliberate fraudulent conduct. Witnesses also said courts have generally required relators to proceed with counsel because suits are brought in the name of the state and nonlawyers cannot represent the state in court.
No committee vote was recorded on Jan. 27; testimony will inform technical amendments the sponsor and Attorney General's Office expect to negotiate.
