LEGAL NEWSLINE

CHARLESTON, W.Va. (Legal Newsline) - West Virginia House Speaker Tim Miley is considering assigning failed False Claims Act legislation to a committee for further study.

On Tuesday, the state's House of Delegates voted down legislation based on the federal False Claims Act, which allows whistleblowers to bring lawsuits against companies that are allegedly defrauding state- and federal-run programs like Medicaid by making false claims for reimbursement.

Miley, who voted for the bill and is a personal injury lawyer in Clarksburg, issued a press release after its defeat. He said House leadership will consider assigning the legislation to an interim committee for further study following the regular session.

"I am disappointed that this effort to reduce fraud on the government was rejected by a majority in the House of Delegates," Speaker Tim Miley said. "Every member claims to come to Charleston with the goal of eliminating fraud and waste and to protecting taxpayer funds, yet that was not evident in the vote (Tuesday)."

Despite Democrats holding 53 seats in the 100-person House, the bill was defeated in a 55-42 vote after several Republicans criticized the bill as bad for business, expressed frustration with the way it was debated in the House Judiciary Committee and vented that portions of the bill promised "a crumb here and there" for fire departments, seniors and secondary roads in exchange for their support.

During that Judiciary hearing, Chris Hamilton of the West Virginia Business & Industry Council complained that a representative of a national organization funded by whistleblowers and whistleblower attorneys was allowed 90 minutes of testimony and question-and-answer, while the remaining four speakers, including him, were only given five minutes each by Judiciary Chair Tim Manchin, the bill's lead sponsor and a personal injury lawyer in Fairmont.

"On behalf of West Virginia's business community, we appreciate the clear and progressive thinking a majority of the House of Delegates undertook in evaluating this bill and the potential negative impact it could have had on the state," Hamilton said in a joint statement with state Chamber of Commerce president Steve Roberts after Tuesday's vote.

"We are particularly pleased with the bi-partisan rejection of this legislation. We thank those legislators on both sides of the aisle who took the time to listen to our concerns and did the right thing by voting against it."

Ten Democrats voted against the bill. They were: Joshua Barker of Boone; Denise L. Campbell of Randolph; Kevin Craig of Cabell; William Hartman of Randolph; Jim Morgan of Cabell; Rupert Phillips of Logan; Doug Reynolds of Cabell; Doug Skaff of Kanawha; Dale Stephens of Cabell; and Ted Tomblin of Logan.

The bill also would have given the state a law compatible with the federal FCA, thus entitling West Virginia to a greater percentage of multi-state recoveries.

Twenty-nine states and the District of Columbia have versions of the FCA. Fiscal Year 2013 brought in the most recovery from federal FCA claims in the act's history. The federal government accounted for $3.8 billion in settlements and judgments, though some judgments are being appealed.

Supporters of the bill argued it could help balance the state's budget, but John McCuskey, R-Kanawha, said the Legislature should have been able to do so without resorting to "creating plaintiffs."

Del. Clif Moore, D-McDowell, worked on the bill in the Judiciary Committee.

"We are all familiar with the problems our state has experienced with corruption that ends up costing the government," Moore said.

"This legislation would have provided strong incentives for a person, whether working in or outside government, to report the occurrence of fraud. Plus, the bill would have offered whistleblowers some protection from retaliation.

"It is simply responsible public policy to encourage such reporting."

Hamilton and Roberts said the business community asked for input into the bill, but its concerns "went unheard."

From Legal Newsline: Reach editor John O'Brien at jobrienwv@gmail.com.