What is the Montana Whistleblower Law (Montana False Claims Act)?
The Montana whistleblower law, called the Montana False Claims Act, allows whistleblowers to file “qui tam” lawsuits against those who knowingly present false or fraudulent claims for payment to the state, misappropriate state property, or deceptively conceal or avoid binding obligations to pay the state, among other violations.
Penalties under the Montana Whistleblower Law
A defendant may be ordered to pay up to three times the actual harm to the state, plus civil fines for each violation of the Act.
Rewards under the Montana Whistleblower Law
A whistleblower filing a Montana False Claims Act case may receive between 15 and 25 percent of amounts recovered if the state intervenes and prosecutes the matter. If the state does not intervene, and the whistleblower successfully prosecutes the case, the whistleblower may receive between 25 and 30 percent of the award. The court may reduce the value of the award if the whistleblower planned and initiated the fraud or if the action is largely based on information disclosed in the media or public hearings.
Protection from Retaliation under the Montana Whistleblower Law
The Montana False Claims Act protects whistleblowers who suffer employment retaliation because of their whistleblowing. Protection under the Montana whistleblower law includes:
- Reinstatement with the same seniority status that the whistleblower would have had but for the retaliation
- Two times the amount of back pay
- Interest on the back pay
- Compensation for any special damages sustained as a result of the retaliation
In successful whistleblower retaliation cases, the defendant is also required to pay litigation costs and reasonable attorneys’ fees.
Time Limits (Statute of Limitations) under the Montana Whistleblower Law
Whistleblowers must generally file a qui tam complaint within six years of the violations they are reporting, but the time for filing may be extended in certain cases to up to ten years.
[Updated October 2023]
Montana Whistleblower Law: The Montana False Claims Act
Mont. Code Ann. § 17-8-401. Short title
This part may be cited as the
“Montana False Claims Act”.
Mont. Code Ann. § 17-8-402. Definitions
As used in this part, the following
definitions apply:
(1) “Claim” includes any request or
demand for money, property, or services, whether made pursuant to a contract
and regardless of whether a governmental entity holds title to the money or
property, that is made to:
(a) an employee, officer, agent, or other
representative of a governmental entity; or
(b) a contractor, grantee, or other person, whether
under contract or not, if any portion of the money, property, or services
requested or demanded is to be spent or used on a governmental entity’s behalf
or to advance a governmental program or interest and if the governmental
entity:
(i) provides or has provided any portion of the
money, property, or services requested or demanded; or
(ii) will reimburse a contractor, grantee, or other
person for any portion of the money, property, or services requested or
demanded.
(2) “Government attorney” means the
attorney general except for complaints involving a unit of the university
system.
(3) “Governmental entity” means:
(a) the state;
(b) a city, town, county, school district, tax or
assessment district, or other political subdivision of the state; or
(c) a unit of the Montana university system.
(4)
(a)
“Knowingly” means that a person, with
respect to information, does any of the following:
(i) has actual knowledge of the information;
(ii) acts in deliberate ignorance of the truth or
falsity of the information; or
(iii) acts in reckless disregard of the truth or
falsity of the information.
(b) A specific intent to defraud is not required.
(5) “Material” means having a natural
tendency to influence or be capable of influencing the payment or receipt of
money, property, or services.
(6) “Obligation” means an established
duty, whether fixed or not, arising from:
(a) an express or implied contractual,
grantor-grantee, or licensor-licensee relationship;
(b) a fee-based or similar relationship;
(c) a statute or regulation; or
(d) the retention of any overpayment.
(7) “Person” includes any natural
person, corporation, firm, association, organization, partnership, limited
liability company, business, trust, or other legal or business entity.
(8) “State” means the state of
Montana.
Mont. Code Ann. § 17-8-403. False claims–procedures–penalties
(1) Except as provided in subsection
(2), a person is liable to a governmental entity for a civil penalty of not less
than $5,500 and not more than $11,000 for each act specified in this section,
plus three times the amount of damages that a governmental entity sustains,
along with expenses, costs, and attorney fees, if the person:
(a) knowingly presents or causes to be presented a
false or fraudulent claim for payment or approval;
(b) knowingly makes, uses, or causes to be made or
used a false record or statement material to a false or fraudulent claim;
(c) conspires to commit a violation of this
subsection (1);
(d) has possession, custody, or control of public
property or money used or to be used by the governmental entity and knowingly
delivers or causes to be delivered less than all of the property or money;
(e) is authorized to make or deliver a document
certifying receipt of property used or to be used by the governmental entity
and, with the intent to defraud the governmental entity or to willfully conceal
the property, makes or delivers a receipt without completely knowing that the
information on the receipt is true;
(f) knowingly buys or receives as a pledge of an
obligation or debt public property of the governmental entity from any person
who may not lawfully sell or pledge the property;
(g) knowingly makes, uses, or causes to be made or
used a false record or statement material to an obligation to pay or transmit
money or property to a governmental entity or knowingly conceals or knowingly
and improperly avoids or decreases an obligation to pay or transmit money or
property to a governmental entity; or
(h) as a beneficiary of an inadvertent submission of
a false or fraudulent claim to the governmental entity, subsequently discovers
the falsity of the claim or that the claim is fraudulent and fails to disclose
the false or fraudulent claim to the governmental entity within a reasonable
time after discovery of the false or fraudulent claim.
(2) In a civil action brought under
17-8-405 or 17-8-406, a court shall assess a civil penalty of not less than
$5,500 and not more than $11,000 for each act specified in this section, plus
not less than two times and not more than three times the amount of damages
that a governmental entity sustains if the court finds all of the following:
(a) The person committing the act furnished the
government attorney with all information known to that person about the act
within 30 days after the date on which the person first obtained the
information.
(b) The person fully cooperated with any
investigation of the act by the government attorney.
(c) At the time that the person furnished the
government attorney with information about the act, a criminal prosecution,
civil action, or administrative action had not been commenced with respect to
the act and the person did not have actual knowledge of the existence of an
investigation into the act.
(3) A person who violates the
provisions of this section is also liable to the governmental entity for the
expenses, costs, and attorney fees of the civil action brought to recover the
penalty or damages.
(4) Liability under this section is
joint and several for any act committed by two or more persons.
(5) This section does not apply to
claims, records, or statements made in relation to claims filed with the state
compensation insurance fund under Title 39, chapter 71, or to claims, records,
payments, or statements made under the tax laws contained in Title 15 or 16 or
made to the department of natural resources and conservation under Title 77.
(6)
(a) A court shall dismiss an action or claim brought
under 17-8-406, unless opposed by the governmental entity or unless the action
is brought by the government attorney or the person who is the original source
of the information, if substantially the same allegations or transactions
alleged in the action or claim were publicly disclosed in:
(i) a criminal, civil, or administrative hearing in
which the governmental entity or an agent of the governmental entity is a
party;
(ii) a state legislative, state auditor, or other
governmental entity report, hearing, audit, or investigation; or
(iii) the news media.
(b) The production of a record pursuant to Article
II, section 9, of the Montana constitution or 2-6-1003 is not a public
disclosure for purposes of this section.
(c) For purposes of this subsection (6), “original
source” means an individual who:
(i) prior to a public disclosure, voluntarily
disclosed to the governmental entity the information on which the allegations
or transactions in a claim are based; or
(ii) has knowledge that is independent of and
materially adds to the publicly disclosed allegations and transactions and
voluntarily provided the information to the governmental entity before filing
an action.
(7) A person may not file a complaint
or civil action brought under 17-8-406 against the state or an officer or
employee of the state arising from conduct by the officer or employee within
the scope of the officer’s or employee’s duties to the state unless the officer
or employee has a financial interest in the conduct upon which the complaint or
civil action arises.
(8) The amount of the civil penalty set
forth in subsections (1) and (2) must be adjusted for inflation in a manner
consistent with the Federal Civil Penalties Inflation Adjustment Act of 1990,
Public Law 101-410.
(9) If a governmental entity does not
intervene, the person who initiated the action has the same right to conduct
the action as the government attorney would have had if the governmental entity
had intervened, including the right to inspect government records and interview
officers and employees of the governmental entity.
Mont. Code Ann. § 17-8-404. Limitation of actions
(1) A complaint or civil action filed
under 17-8-405 or 17-8-406 must be brought by the later of:
(a) 6 years after the date on which the violation
was committed; or
(b) 3 years after the date when facts material to
the right of action are known or reasonably should have been known by the
official of the governmental entity charged with responsibility to act in the
circumstances.
(2) In no event may an action brought
pursuant to subsection (1)(b) be brought more than 10 years after the date on
which the violation was committed.
(3) If the governmental entity elects
to intervene in any action brought under 17-8-406, the complaint in
intervention must relate back to the filing date of the original complaint to
the extent that the governmental entity’s claim arises out of the conduct,
transactions, or occurrences set forth or attempted to be set forth in the
original complaint.
Mont. Code Ann. § 17-8-405. Investigation and civil action by government attorney
The government attorney shall
investigate an alleged violation of 17-8-403 and may file a civil action
against any person who has violated or is violating 17-8-403.
Mont. Code Ann. § 17-8-406. Complaint by person–civil action
(1) A person may bring a civil action
for a violation of 17-8-403 on behalf of the person and the governmental
entity. The action must be brought in the name of the governmental entity. The
action may be dismissed only if the court and the government attorney give
written consent to the dismissal and provide their reasons for consenting to
the dismissal.
(2) A copy of the complaint and
written disclosure of substantially all material evidence and information that
the person possesses must be served on the government attorney pursuant to Rule
4(c)(2)(C), (c)(2)(D), and (d) through (s), Montana Rules of Civil Procedure.
The complaint must be filed under seal and must remain under seal for at least
60 days. The complaint may not be served upon the defendant until the court
orders that it be served.
(3) Within 60 days after receiving
the complaint and the material evidence and information, the government
attorney may elect to intervene and proceed with the action or to notify the
court that the government attorney declines to take over the action. If the
government attorney declines to intervene or take over the action, the person
bringing the action has the right to conduct the action. The government
attorney may, for good cause shown, move the court for extensions of the time
during which the complaint remains under seal.
(4) The defendant may not be required
to respond to any complaint until 20 days after the complaint is unsealed and
served upon the defendant pursuant to Rule 4(c)(2)(C), (c)(2)(D), and (d)
through (s), Montana Rules of Civil Procedure.
(5) If the government attorney
proceeds with the action, the government attorney has the primary
responsibility for prosecuting the action and is not bound by an act of the
person bringing the action. The person bringing the action has the right to
continue as a party to the action subject to the limitations set forth in this
part.
(6) If the government attorney elects
not to proceed with the action and the person who initiated the action conducts
it:
(a) the person who initiated the action shall, upon
the government attorney’s request, serve the governmental entity with copies of
all pleadings filed in the action and shall supply the government attorney with
copies of all deposition transcripts at the government attorney’s expense;
(b) the court, without limiting the status and
rights of the person initiating the action, may permit the government attorney
to intervene at a later date upon a showing of good cause.
(7) When a person files a civil
action pursuant to this section, no person other than the government attorney
may intervene or bring a related action based on the facts underlying the
pending action.
(8) Upon a showing by the government
attorney that unrestricted participation during the course of the litigation by
the person initiating the action would interfere with or unduly delay the
government attorney’s prosecution of the case or would be repetitious,
irrelevant, or for purposes of harassment, the court may in its discretion
impose limitations on the person’s participation, including but not limited to:
(a) limiting the number of witnesses the person may
call;
(b) limiting the length of testimony of witnesses
called by the person;
(c) limiting the person’s cross-examination of
witnesses; or
(d) otherwise limiting the participation of the
person in the litigation.
Mont. Code Ann. § 17-8-407. Dismissal of civil action
On the motion of the government
attorney, the court may dismiss a civil action notwithstanding the objection of
the person who initiated the action if the government attorney has notified the
person of the filing of the motion to dismiss and the court has given the
person an opportunity to oppose the motion and present evidence at a hearing.
Mont. Code Ann. § 17-8-409. Burden of proof–effect of criminal conviction
(1) The plaintiff in an action under
17-8-405 or 17-8-406 shall prove each essential element of the cause of action,
including damages, by a preponderance of the evidence.
(2) A person convicted of or who
pleaded guilty or nolo contendere to a criminal offense may not deny the
essential elements of the offense in an action under 17-8-405 or 17-8-406 that
involves the same event or events as the criminal proceeding.
Mont. Code Ann. § 17-8-410. Distribution of damages and civil penalty
(1) Except as provided in subsection
(2), if the government attorney proceeds with an action brought by a person
pursuant to 17-8-406, the person must receive at least 15% but not more than
25% of the proceeds recovered and collected in the action or in settlement of
the claim, depending on the extent to which the person substantially
contributed to the prosecution of the action.
(2)
(a) The court may award an amount it considers
appropriate but in no case more than 10% of the proceeds in an action that the
court finds to be based primarily on disclosures of specific information, other
than information provided by the person bringing the action, relating to
allegations or transactions disclosed through:
(i) a criminal, civil, or administrative hearing;
(ii) a legislative, administrative, auditor, or
inspector general report, hearing, audit, or investigation; or
(iii) the news media.
(b) In determining the award, the court shall take
into account the significance of the information and the role of the person
bringing the action in advancing the case to litigation.
(3) Any payment to a person bringing
an action pursuant to this part may be made only from the proceeds recovered
and collected in the action or in settlement of the claim. The person must also
receive an amount for reasonable expenses that the court finds to have been
necessarily incurred, plus reasonable attorney fees and costs. The expenses,
fees, and costs must be awarded against the defendant.
(4) If the government attorney does
not proceed with an action pursuant to 17-8-406, the person bringing the action
or settling the claim must receive an amount that the court decides is
reasonable for collecting the civil penalty and damages on behalf of the
government attorney or governmental entity. The amount may not be less than 25%
or more than 30% of the proceeds recovered and collected in the action or
settlement of the claim and must be paid out of the proceeds. The person must
also receive an amount for reasonable expenses that the court finds were
necessarily incurred, plus reasonable attorney fees and costs. All expenses,
fees, and costs must be awarded against the defendant.
(5) Whether or not the government
attorney proceeds with the action, if the court finds that the action was
brought by a person who planned and initiated the violation of 17-8-403, the
court may, to the extent the court considers appropriate, reduce or eliminate
the share of the proceeds of the action that the person would otherwise receive
pursuant to subsections (1) through (4) of this section, taking into account
the role of the person in advancing the case to litigation and any relevant
circumstances pertaining to the violation. If the person bringing the action is
convicted of criminal conduct arising from the person’s role in the violation
of this part, the person must be dismissed from the civil action and may not
receive any share of the proceeds of the action. The dismissal does not
prejudice the right of the government attorney to continue the action.
(6) The governmental entity is
entitled to any damages and civil penalty not awarded to the person [sic]
Any damages and civil penalties that remain after calculation and distribution
to the person under subsections (1) through (5) must be distributed first to
fully reimburse any losses suffered by the governmental entity as a result of
the defendant’s actions, and the remainder of the damages and any civil penalty
must be deposited in the general fund of the governmental entity. Reimbursement
must be made to the trust fund or program of the governmental entity that
suffered the loss. If more than one trust fund or program suffered a loss and
there are not enough recovered funds to fully reimburse each, then the
distribution must be proportionate.
(7) Unless otherwise provided, the
remedies or penalties provided by this part are cumulative to each other and to
the remedies or penalties available under all other laws of the state.
Mont. Code Ann. § 17-8-411. Costs and attorney fees
The governmental entity that filed a
civil action or intervened is entitled to reasonable costs and attorney fees if
the action is settled favorably for the governmental entity or the governmental
entity prevails. In an action in which outside counsel is engaged by a
government attorney, the costs and attorney fees awarded to that counsel must
equal the outside counsel’s charges reasonably incurred for costs and attorney
fees in prosecuting the action. In any other actions in which costs and
attorney fees are awarded to the governmental entity, they must be calculated
by reference to the hourly rate charged by the department of justice agency
legal services bureau for the provision of legal services to state agencies,
multiplied by the number of attorney hours devoted to the prosecution of the
action, plus the actual cost of any expenses reasonably incurred in the
prosecution of the action. A person who is a plaintiff or coplaintiff is
entitled to reasonable expenses that the court finds to have been necessarily
incurred, plus reasonable costs and attorney fees, if the action is settled
favorably for the governmental entity or the governmental entity prevails in
the action. A defendant in a civil action brought pursuant to this part who
prevails in an action that is not settled and that the court finds was clearly
frivolous or brought solely for harassment purposes is entitled to the
defendant’s reasonable costs and attorney fees. If the governmental entity does
not intervene, it is not responsible for any of the defendant’s fees and costs.
Mont. Code Ann. § 17-8-412. Retaliatory actions prohibited–remedies
(1) A governmental entity, private
entity, or person may not adopt or enforce a rule, regulation, or policy
preventing an employee, agent, or contractor from disclosing information to a
government or law enforcement agency with regard to or from acting in
furtherance of an investigation of a violation of 17-8-403 or an action brought
pursuant to 17-8-405 or 17-8-406.
(2) A governmental entity, private
entity, or person may not discharge, demote, suspend, threaten, harass, or deny
promotion to or in any other manner discriminate against an employee, agent, or
contractor in the terms and conditions of employment, agency, or contract
because of the disclosure by the employee, agent, or contractor of information
to a government or law enforcement agency pertaining to a violation of
17-8-403.
(3) An employee, contractor, or agent
is entitled to all relief necessary to make the employee, contractor, or agent
whole if the employee, contractor, or agent is discharged, demoted, suspended, threatened,
harassed, or in any other manner discriminated against in the terms and
conditions of employment because of lawful acts done by the employee,
contractor, or agent or associated others in furtherance of an action under
this part or other efforts to stop one or more violations of this part.
(4) Relief under subsection (3)
includes reinstatement with the same seniority status the employee, contractor,
or agent would have had but for the discrimination, two times the amount of
back pay, interest on the back pay, and compensation for any special damages
sustained as a result of the discrimination, including litigation costs and
reasonable attorney fees. A civil action may be brought in the appropriate
district court of the state for the relief provided in this subsection.
(5) A civil action under this section
may not be brought more than 3 years after the date on which the retaliation
occurred.
Mont. Code Ann. § 17-8-413. Settlement by government attorney
A government attorney may settle the
case with a defendant notwithstanding the objections of the persons who
initiated the action if the court determines, after a hearing, that the
settlement is fair, adequate, and reasonable under the circumstances. Upon a
showing of good cause, the hearing may be held in camera.
Mont. Code Ann. § 17-8-416. Reporting
The attorney general shall submit to
the law and justice interim committee a report in accordance with 5-11-210
containing the following information:
(1) the number of cases filed under the Montana
False Claims Act, Title 17, chapter 8, part 4, that were pending in the state
during the previous calendar year;
(2) the number of cases filed under the Montana
False Claims Act that were settled during the previous calendar year;
(3) the number of cases filed under the Montana
False Claims Act in which judgment was entered during the previous calendar
year;
(4) the total proceeds paid to the state and the
total proceeds paid to the qui tam plaintiffs in cases filed under the Montana
False Claims Act during the previous calendar year; and
(5) the number of qui tam cases pending in other
jurisdictions involving the state in the previous calendar year.