93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB4173

 

Introduced 1/22/2004, by John A. Fritchey

 

SYNOPSIS AS INTRODUCED:
 
740 ILCS 175/4   from Ch. 127, par. 4104
740 ILCS 175/8   from Ch. 127, par. 4108

    Amends the Whistleblower Reward and Protection Act. Provides that the State of Illinois shall also receive an amount for reasonable expenses that the court finds to have been necessarily incurred by the Attorney General, including reasonable attorneys' fees and costs, and the amount received by the State of Illinois, exclusive of any proceeds, reasonable expenses, reasonable attorney fees and costs that have been awarded to a Qui Tam plaintiff or any entity other than the State of Illinois or a State agency, shall be deposited in the Whistleblower Reward and Protection Fund created under the Act. Requires (instead of permits) the court to award all proceeds of an action or settlement of the claim to the affected governmental entity, minus reasonable expenses, attorneys' fees, costs, and proceeds that have been awarded to a Qui Tam plaintiff and minus an amount for reasonable expenses that the court finds to have been necessarily incurred by the Attorney General, including reasonable attorneys' fees and costs (instead of such sums as it considers appropriate to the affected entity, specifying in its order the amount to be awarded to the entity from the net proceeds that are deposited in the Whistleblower Reward and Protection Fund), when an action is brought on behalf of any of the listed governmental entities that have been adversely affected by a defendant. Excludes from any payment of proceeds the reasonable expenses, reasonable attorney fees, and costs to a Qui Tam plaintiff or any governmental entity other than the State of Illinois from being deposited in the Whistleblower Reward and Protection Fund. Restructures the use of the money in the Fund to pay the necessary expenses incurred by the Attorney General and for the payment of awards to the State of Illinois (instead of for payment of awards to Qui Tam plaintiffs).


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A BILL FOR

 

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1     AN ACT concerning whistleblowers.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Whistleblower Reward and Protection Act is
5 amended by changing Sections 4 and 8 as follows:
 
6     (740 ILCS 175/4)  (from Ch. 127, par. 4104)
7     Sec. 4. Civil actions for false claims.
8     (a) Responsibilities of the Attorney General and the
9 Department of State Police. The Department of State Police
10 shall diligently investigate a civil violation under Section 3,
11 except for civil violations under Section 3 that relate to and
12 adversely affect primarily the system of State colleges and
13 universities, any school district, any public community
14 college district, any municipality, municipal corporations,
15 units of local government, or any combination of the above
16 under an intergovernmental agreement that includes provisions
17 for a governing board of the agency created by the agreement.
18 The Attorney General may bring a civil action under this
19 Section against any person that has violated or is violating
20 Section 3.
21     (b) Actions by private persons.
22         (1) A person may bring a civil action for a violation
23     of Section 3 for the person and for the State. The action
24     shall be brought in the name of the State. The action may
25     be dismissed only if the court and the Attorney General
26     give written consent to the dismissal and their reasons for
27     consenting.
28         (2) A copy of the complaint and written disclosure of
29     substantially all material evidence and information the
30     person possesses shall be served on the State. The
31     complaint shall be filed in camera, shall remain under seal
32     for at least 60 days, and shall not be served on the

 

 

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1     defendant until the court so orders. The State may elect to
2     intervene and proceed with the action within 60 days after
3     it receives both the complaint and the material evidence
4     and information.
5         (3) The State may, for good cause shown, move the court
6     for extensions of the time during which the complaint
7     remains under seal under paragraph (2). Any such motions
8     may be supported by affidavits or other submissions in
9     camera. The defendant shall not be required to respond to
10     any complaint filed under this Section until 20 days after
11     the complaint is unsealed and served upon the defendant.
12         (4) Before the expiration of the 60-day period or any
13     extensions obtained under paragraph (3), the State shall:
14             (A) proceed with the action, in which case the
15         action shall be conducted by the State; or
16             (B) notify the court that it declines to take over
17         the action, in which case the person bringing the
18         action shall have the right to conduct the action.
19     (5) When a person brings an action under this subsection
20 (b), no person other than the State may intervene or bring a
21 related action based on the facts underlying the pending
22 action.
23     (c) Rights of the parties to Qui Tam actions.
24         (1) If the State proceeds with the action, it shall
25     have the primary responsibility for prosecuting the
26     action, and shall not be bound by an act of the person
27     bringing the action. Such person shall have the right to
28     continue as a party to the action, subject to the
29     limitations set forth in paragraph (2).
30         (2) (A) The State may dismiss the action
31         notwithstanding the objections of the person
32         initiating the action if the person has been notified
33         by the State of the filing of the motion and the court
34         has provided the person with an opportunity for a
35         hearing on the motion.
36             (B) The State may settle the action with the

 

 

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1         defendant notwithstanding the objections of the person
2         initiating the action if the court determines, after a
3         hearing, that the proposed settlement is fair,
4         adequate, and reasonable under all the circumstances.
5         Upon a showing of good cause, such hearing may be held
6         in camera.
7             (C) Upon a showing by the State that unrestricted
8         participation during the course of the litigation by
9         the person initiating the action would interfere with
10         or unduly delay the State's prosecution of the case, or
11         would be repetitious, irrelevant, or for purposes of
12         harassment, the court may, in its discretion, impose
13         limitations on the person's participation, such as:
14                 (i) limiting the number of witnesses the
15             person may call:
16                 (ii) limiting the length of the testimony of
17             such witnesses;
18                 (iii) limiting the person's cross-examination
19             of witnesses; or
20                 (iv) otherwise limiting the participation by
21             the person in the litigation.
22             (D) Upon a showing by the defendant that
23         unrestricted participation during the course of the
24         litigation by the person initiating the action would be
25         for purposes of harassment or would cause the defendant
26         undue burden or unnecessary expense, the court may
27         limit the participation by the person in the
28         litigation.
29         (3) If the State elects not to proceed with the action,
30     the person who initiated the action shall have the right to
31     conduct the action. If the State so requests, it shall be
32     served with copies of all pleadings filed in the action and
33     shall be supplied with copies of all deposition transcripts
34     (at the State's expense). When a person proceeds with the
35     action, the court, without limiting the status and rights
36     of the person initiating the action, may nevertheless

 

 

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1     permit the State to intervene at a later date upon a
2     showing of good cause.
3         (4) Whether or not the State proceeds with the action,
4     upon a showing by the State that certain actions of
5     discovery by the person initiating the action would
6     interfere with the State's investigation or prosecution of
7     a criminal or civil matter arising out of the same facts,
8     the court may stay such discovery for a period of not more
9     than 60 days. Such a showing shall be conducted in camera.
10     The court may extend the 60-day period upon a further
11     showing in camera that the State has pursued the criminal
12     or civil investigation or proceedings with reasonable
13     diligence and any proposed discovery in the civil action
14     will interfere with the ongoing criminal or civil
15     investigation or proceedings.
16         (5) Notwithstanding subsection (b), the State may
17     elect to pursue its claim through any alternate remedy
18     available to the State, including any administrative
19     proceeding to determine a civil money penalty. If any such
20     alternate remedy is pursued in another proceeding, the
21     person initiating the action shall have the same rights in
22     such proceeding as such person would have had if the action
23     had continued under this Section. Any finding of fact or
24     conclusion of law made in such other proceeding that has
25     become final shall be conclusive on all parties to an
26     action under this Section. For purposes of the preceding
27     sentence, a finding or conclusion is final if it has been
28     finally determined on appeal to the appropriate court, if
29     all time for filing such an appeal with respect to the
30     finding or conclusion has expired, or if the finding or
31     conclusion is not subject to judicial review.
32     (d) Award to Qui Tam plaintiff.
33         (1) If the State proceeds with an action brought by a
34     person under subsection (b), such person shall, subject to
35     the second sentence of this paragraph, receive at least 15%
36     but not more than 25% of the proceeds of the action or

 

 

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1     settlement of the claim, depending upon the extent to which
2     the person substantially contributed to the prosecution of
3     the action. Where the action is one which the court finds
4     to be based primarily on disclosures of specific
5     information (other than information provided by the person
6     bringing the action) relating to allegations or
7     transactions in a criminal, civil, or administrative
8     hearing, in a legislative, administrative, or Auditor
9     General's report, hearing, audit, or investigation, or
10     from the news media, the court may award such sums as it
11     considers appropriate, but in no case more than 10% of the
12     proceeds, taking into account the significance of the
13     information and the role of the person bringing the action
14     in advancing the case to litigation. Any payment to a
15     person under the first or second sentence of this paragraph
16     (1) shall be made from the proceeds. Any such person shall
17     also receive an amount for reasonable expenses which the
18     court finds to have been necessarily incurred, plus
19     reasonable attorneys' fees and costs. The State of Illinois
20     shall also receive an amount for reasonable expenses which
21     the court finds to have been necessarily incurred by the
22     Attorney General, including reasonable attorneys' fees and
23     costs, and the amount received by the State of Illinois,
24     exclusive of any proceeds, reasonable expenses, reasonable
25     attorneys' fees and costs that have been awarded to a Qui
26     Tam plaintiff or any entity other than the State of
27     Illinois or a State agency, shall be deposited in the
28     Whistleblower Reward and Protection Fund created under
29     this Act. All such expenses, fees, and costs shall be
30     awarded against the defendant. When an action under this
31     Act is brought on behalf of the system of State colleges
32     and universities, any school district, any public
33     community college district, any municipality, any
34     municipal corporation, any unit of local government, or any
35     combination of the above under an intergovernmental
36     agreement that has been adversely affected by a defendant,

 

 

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1     the court shall may award all proceeds of an action or
2     settlement of the claim to the affected governmental
3     entity, minus reasonable expenses, attorneys' fees, costs,
4     and proceeds that have been awarded to a Qui Tam plaintiff
5     and minus an amount for reasonable expenses that the court
6     finds to have been necessarily incurred by the Attorney
7     General, including reasonable attorneys' fees and costs.
8     such sums as it considers appropriate to the affected
9     entity, specifying in its order the amount to be awarded to
10     the entity from the net proceeds that are deposited in the
11     Whistleblower Reward and Protection Fund.
12         (2) If the State does not proceed with an action under
13     this Section, the person bringing the action or settling
14     the claim shall receive an amount which the court decides
15     is reasonable for collecting the civil penalty and damages.
16     The amount shall be not less than 25% and not more than 30%
17     of the proceeds of the action or settlement and shall be
18     paid out of such proceeds. Such person shall also receive
19     an amount for reasonable expenses which the court finds to
20     have been necessarily incurred, plus reasonable attorneys'
21     fees and costs. All such expenses, fees, and costs shall be
22     awarded against the defendant.
23         (3) Whether or not the State proceeds with the action,
24     if the court finds that the action was brought by a person
25     who planned and initiated the violation of Section 3 upon
26     which the action was brought, then the court may, to the
27     extent the court considers appropriate, reduce the share of
28     the proceeds of the action which the person would otherwise
29     receive under paragraph (1) or (2) of this subsection (d),
30     taking into account the role of that person in advancing
31     the case to litigation and any relevant circumstances
32     pertaining to the violation. If the person bringing the
33     action is convicted of criminal conduct arising from his or
34     her role in the violation of Section 3, that person shall
35     be dismissed from the civil action and shall not receive
36     any share of the proceeds of the action. Such dismissal

 

 

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1     shall not prejudice the right of the State to continue the
2     action.
3         (4) If the State does not proceed with the action and
4     the person bringing the action conducts the action, the
5     court may award to the defendant its reasonable attorneys'
6     fees and expenses if the defendant prevails in the action
7     and the court finds that the claim of the person bringing
8     the action was clearly frivolous, clearly vexatious, or
9     brought primarily for purposes of harassment.
10     (e) Certain actions barred.
11         (1) No court shall have jurisdiction over an action
12     brought by a former or present member of the Guard under
13     subsection (b) of this Section against a member of the
14     Guard arising out of such person's service in the Guard.
15         (2) (A) No court shall have jurisdiction over an action
16         brought under subsection (b) against a member of the
17         General Assembly, a member of the judiciary, or an
18         exempt official if the action is based on evidence or
19         information known to the State when the action was
20         brought.
21             (B) For purposes of this paragraph (2), "exempt
22         official" means any of the following officials in State
23         service: directors of departments established under
24         the Civil Administrative Code of Illinois, the
25         Adjutant General, the Assistant Adjutant General, the
26         Director of the State Emergency Services and Disaster
27         Agency, members of the boards and commissions, and all
28         other positions appointed by the Governor by and with
29         the consent of the Senate.
30         (3) In no event may a person bring an action under
31     subsection (b) which is based upon allegations or
32     transactions which are the subject of a civil suit or an
33     administrative civil money penalty proceeding in which the
34     State is already a party.
35         (4)  (A) No court shall have jurisdiction over an
36         action under this Section based upon the public

 

 

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1         disclosure of allegations or transactions in a
2         criminal, civil, or administrative hearing, in a
3         legislative, administrative, or Auditor General's
4         report, hearing, audit, or investigation, or from the
5         news media, unless the action is brought by the
6         Attorney General or the person bringing the action is
7         an original source of the information.
8             (B) For purposes of this paragraph (4), "original
9         source" means an individual who has direct and
10         independent knowledge of the information on which the
11         allegations are based and has voluntarily provided the
12         information to the State before filing an action under
13         this Section which is based on the information.
14     (f) State not liable for certain expenses. The State is not
15 liable for expenses which a person incurs in bringing an action
16 under this Section.
17     (g) Any employee who is discharged, demoted, suspended,
18 threatened, harassed, or in any other manner discriminated
19 against in the terms and conditions of employment by his or her
20 employer because of lawful acts done by the employee on behalf
21 of the employee or others in furtherance of an action under
22 this Section, including investigation for, initiation of,
23 testimony for, or assistance in an action filed or to be filed
24 under this Section, shall be entitled to all relief necessary
25 to make the employee whole. Such relief shall include
26 reinstatement with the seniority status such employee would
27 have had but for the discrimination, 2 times the amount of back
28 pay, interest on the back pay, and compensation for any special
29 damages sustained as a result of the discrimination, including
30 litigation costs and reasonable attorneys' fees. An employee
31 may bring an action in the appropriate circuit court for the
32 relief provided in this subsection (g).
33 (Source: P.A. 89-260, eff. 1-1-96.)
 
34     (740 ILCS 175/8)  (from Ch. 127, par. 4108)
35     Sec. 8. Funds; Grants.

 

 

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1     (a) There is hereby created the Whistleblower Reward and
2 Protection Fund as a special fund in the State Treasury. All
3 proceeds of an action or settlement of a claim brought under
4 this Act by the State of Illinois, exclusive of any payment of
5 proceeds, reasonable expenses, reasonable attorneys' fees, and
6 costs to a Qui Tam plaintiff or any governmental entity other
7 than the State of Illinois pursuant to subsection (d) of
8 Section 4 of this Act, shall be deposited in the Fund.
9     (b) Monies in the Fund shall be allocated, subject to
10 appropriation, as follows: One-sixth of the monies shall be
11 paid to the Attorney General and one-sixth of the monies shall
12 be paid to the Department of State Police for State law
13 enforcement purposes. The remaining two-thirds of the monies in
14 the Fund shall be used for payment of awards to Qui Tam
15 plaintiffs, for attorneys' fees and expenses necessarily
16 incurred by the Attorney General and for payment of awards to
17 the State of Illinois. , and as otherwise specified in this
18 Act. The Attorney General shall direct the State Treasurer to
19 make disbursement of funds to the State of Illinois as provided
20 in court orders setting the State of Illinois' those awards,
21 fees, and expenses. The State Treasurer shall transfer the
22 remaining funds any fund balances in excess of those required
23 for these purposes to the General Revenue Fund.
24 (Source: P.A. 87-662.)