What is the Minnesota Whistleblower Law (the Minnesota False Claims Act)?
The Minnesota whistleblower law, the Minnesota False Claims Act, allows whistleblowers to file “qui tam” lawsuits if they know of persons or entities 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 Minnesota 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 Minnesota Whistleblower Law
A whistleblower filing a Minnesota False Claims Act case may receive between 15 and 25 percent of amounts recovered by the state if the state intervenes at the outset and prosecutes the matter. If the state declines to intervene and the whistleblower successfully prosecutes the case on their own, the whistleblower may receive between 25 and 30 percent of the amounts recovered. In the event the state does not initially intervene, but subsequently joins the case midstream, the award range is between 15 and 30 percent.
Protection from Retaliation under the Minnesota Whistleblower Law
The Minnesota False Claims Act protects whistleblowers who suffer employment retaliation because of their whistleblowing. Protection under the Minnesota 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 Minnesota 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]
Minnesota Whistleblower Law: The Minnesota False Claims Act
Minn. Stat. § 15C.01. Definitions
Subdivision 1. Scope. For purposes of this chapter, the terms in this section have the meanings given them.
Subd. 2. Claim.
“Claim” includes a request or demand, whether under a contract or otherwise, for money or property
and whether or not the state or a political subdivision has title to the money
or property, that:
(1) is presented to an officer, employee, or agent
of the state or a political subdivision; or
(2) is made to a contractor, grantee, or other
recipient if the money or property is to be spent or used on behalf of the
state or the political subdivision or to advance the state’s or political
subdivision’s program or interest, and if the state or political subdivision
provides or has provided a portion of the money or property that is requested
or demanded, or if the state or the political subdivision has reimbursed or
will reimburse the contractor, grantee, or other recipient for a portion of the
money or property that is requested or demanded.
Claim does not include requests or demands for money or property that the state or a political subdivision has
paid to an individual as compensation for state or political subdivision
employment, or as an income subsidy with no restrictions on that individual’s
use of the money or property.
Subd. 3. Knowing and knowingly.
“Knowing” and “knowingly” mean that a person, with respect to information:
(1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or
falsity of the information; or
(3) acts in reckless disregard of the truth or
falsity of the information.
No proof of specific intent todefraud is required, but in no case is a person who acts merely negligently,
inadvertently, or mistakenly with respect to information deemed to have acted
knowingly.
Subd. 3a. Material. “Material” means
having a natural tendency to influence, or be capable of influencing, the
payment or receipt of money or property.
Subd. 3b. Obligation. “Obligation”
means an established duty, whether or not fixed, arising from an express or
implied contractual, grantor-grantee, or licensor-licensee relationship from a
fee-based or similar relationship, from statute or regulation, or from the retention
of any overpayment.
Subd. 4. Original source. “Original
source” means a person who either:
(1) prior to a public disclosure under section
15C.05, paragraph (f), has voluntarily disclosed to the state or a political
subdivision the information on which allegations or transactions in a claim are
based; or
(2) has knowledge that is independent of and
materially adds to the publicly disclosed allegations or transactions, and has
voluntarily provided the information to the state or a political subdivision
before filing an action under this chapter.
Subd. 5. Person. “Person” means a
natural person, partnership, corporation, association or other legal entity but
does not include the state or a political subdivision.
Subd. 6. Political subdivision.
“Political subdivision” means a political subdivision of the state and includes
a department or agency of a political subdivision.
Subd. 7. Prosecuting attorney.
“Prosecuting attorney” means:
(1) the attorney general, if the false or fraudulent
claim involves money, property, or services provided by the state; or
(2) the county attorney, city attorney, or other
attorney representing a political subdivision, if the false or fraudulent claim
involves money, property, or services provided by the political subdivision.
Subd. 8. State. “State” means the
state of Minnesota and includes a department or agency of the state.
Minn. Stat. § 15C.02. Liability for certain acts
(a) A person who commits any act
described in clauses (1) to (7) is liable to the state or the political
subdivision for a civil penalty in the amounts set forth in the federal False
Claims Act, United States Code, title 31, section 3729, and as modified by the
federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,1
plus three times the amount of damages that the state or the political
subdivision sustains because of the act of that person, except as otherwise
provided in paragraph (b):
(1) knowingly presents, or causes to be presented, a
false or fraudulent claim for payment or approval;
(2) knowingly makes or uses, or causes to be made or
used, a false record or statement material to a false or fraudulent claim;
(3) knowingly conspires to commit a violation of
clause (1), (2), (4), (5), (6), or (7);
(4) has possession, custody, or control of property
or money used, or to be used, by the state or a political subdivision and
knowingly delivers or causes to be delivered less than all of that money or
property;
(5) is authorized to make or deliver a document
certifying receipt for money or property used, or to be used, by the state or a
political subdivision and, intending to defraud the state or a political
subdivision, makes or delivers the receipt without completely knowing that the
information on the receipt is true;
(6) knowingly buys, or receives as a pledge of an
obligation or debt, public property from an officer or employee of the state or
a political subdivision who lawfully may not sell or pledge the property; or
(7) knowingly makes or 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 the state or a political subdivision, or knowingly
conceals or knowingly and improperly avoids or decreases an obligation to pay
or transmit money or property to the state or a political subdivision.
(b) Notwithstanding paragraph (a),
the court may assess not less than two times the amount of damages that the
state or the political subdivision sustains because of the act of the person
if:
(1) the person committing a violation under
paragraph (a) furnished an officer or employee of the state or the political
subdivision responsible for investigating the false or fraudulent claim
violation with all information known to the person about the violation within
30 days after the date on which the person first obtained the information;
(2) the person fully cooperated with any
investigation by the state or the political subdivision of the violation; and
(3) at the time the person furnished the state or
the political subdivision with information about the violation, no criminal
prosecution, civil action, or administrative action had been commenced under
this chapter with respect to the violation and the person did not have actual
knowledge of the existence of an investigation into the violation.
(c) A person violating this section
is also liable to the state or the political subdivision for the costs of a
civil action brought to recover any penalty or damages.
(d) A person is not liable under this
section for mere negligence, inadvertence, or mistake with respect to
activities involving a false or fraudulent claim.
Minn. Stat. § 15C.03. Exclusion
This chapter does not apply to
claims, records, or statements made under portions of Minnesota Statutes
relating to taxation.
Minn. Stat. § 15C.04. Responsibilities of prosecuting attorney
Subdivision 1. General. A prosecuting
attorney may investigate violations of section 15C.02. If a prosecuting
attorney finds that a person has violated or is violating section 15C.02, the
prosecuting attorney may bring a civil action under this chapter against the
person to enjoin an act in violation of section 15C.02 and to recover damages
and penalties.
Subd. 2. Attorney general
investigatory powers. In connection with an investigation under this section, the
attorney general has the powers listed in section 8.31, subdivisions 2 and 3.
Minn. Stat. § 15C.05. Private remedies; complaint under seal; copy of complaint and
written disclosure of evidence to be sent to prosecuting attorney
(a) Except as otherwise provided in
this section, a person may maintain an action under this chapter on the person’s
own account and that of the state; the person’s own account and that of a
political subdivision; or on the person’s own account and that of both the
state and a political subdivision. After an action is commenced, it may be
voluntarily dismissed only if the court and the prosecuting attorney give
written consent to the dismissal and their reasons for consenting.
(b) If an action is brought under
this section, no other person may bring another action under this section based
on the same facts that are the subject of the pending action.
(c) An action may not be maintained
under this section:
(1) against the state, the legislature, the
judiciary, the executive branch, or a political subdivision, or respective
officers, members, or employees if the action is based on evidence or
information known to the state or political subdivision when the action was
brought; or
(2) if the action is based upon allegations or
transactions that are the subject of a civil action or an administrative
proceeding for a monetary penalty to which the state or a political subdivision
is already a party.
(d) A complaint in an action under
this section must be commenced by filing the complaint with the court in
chambers and the court must place it under seal for at least 60 days. No
service may be made upon the defendant until the complaint is unsealed.
(e) If a complaint is filed under
this section, the plaintiff shall serve a copy of the complaint on the
prosecuting attorney in accordance with the Minnesota Rules of Civil Procedure
and at the same time shall serve a written disclosure of all material evidence
and information the plaintiff possesses.
(f) A court must dismiss an action or
claim under this section, unless opposed by the prosecuting attorney, if
substantially the same allegations or transactions as alleged in the action or
claim were publicly disclosed:
(1) in a criminal, civil, or administrative hearing
in which the state or a political subdivision or its agent is a party;
(2) in a report, hearing, audit, or investigation of
the legislature, the governing body of a political subdivision, the legislative
auditor, or the state auditor; or
(3) by the news media.
This paragraph does not apply if the
action or claim is brought by the prosecuting attorney or the person bringing
the action or claim is an original source of the information.
Minn. Stat. § 15C.06. Prosecuting attorney intervention; motion to extend time;
unsealing of complaint
(a) Within 60 days after receiving a
complaint and disclosure under section 15C.05, the prosecuting attorney shall
intervene or decline intervention or, for good cause shown, move the court to
extend the time for doing so. The motion may be supported by affidavits or
other submissions in chambers.
(b) The complaint must be unsealed
after the prosecuting attorney decides whether or not to intervene.
(c) Notwithstanding the prosecuting
attorney’s decision regarding intervention in an action brought by a plaintiff
under section 15C.05, the prosecuting attorney may pursue the claim through any
alternate remedy available to the state, including an administrative proceeding
to determine a civil monetary penalty. If the prosecuting attorney pursues an
alternate remedy in another proceeding, the person initiating the action has
the same rights in that proceeding as if the action had continued under section
15C.05. A finding of fact or conclusion of law made in the other proceeding
that has become final is conclusive on all parties to an action under section
15C.05. For purposes of this paragraph, a finding or conclusion is final if it
has been finally determined on appeal to the appropriate state court, if the
time for filing an appeal has expired, or if the finding or conclusion is not
subject to judicial review.
Minn.
Stat. § 15C.07. Service of unsealed complaint and response by defendant
When unsealed, the complaint must be
served on the defendant pursuant to rule 3 of the Minnesota Rules of Civil
Procedure. The defendant must respond to the complaint within 20 days after it
is served on the defendant.
Minn. Stat. § 15C.08. Prosecuting attorney and private party roles
(a) Except as otherwise provided by
this section, if the prosecuting attorney does not intervene at the outset in
an action brought by a person under section 15C.05, the person has the same
rights in conducting the action as the prosecuting attorney would have. A copy
of each pleading or other paper filed in the action and a copy of the
transcript of each deposition taken must be mailed to the prosecuting attorney
if the prosecuting attorney so requests and pays the cost of doing so.
(b) If the prosecuting attorney
elects not to intervene at the outset of the action, the court, without
limiting the status and rights of the person initiating the action, may
nevertheless permit the prosecuting attorney to intervene at a later date, upon
a showing of good cause. If the prosecuting attorney so intervenes, the
prosecuting attorney subsequently has primary responsibility for conducting the
action.
(c) If the prosecuting attorney
elects at the outset of the action to intervene, the prosecuting attorney has
the primary responsibility for prosecuting the action. The person who initially
brought the action remains a party but the person’s acts do not bind the
prosecuting attorney.
(d) If the prosecuting attorney
elects to intervene, either at the outset or subsequently, the prosecuting
attorney may file the prosecuting attorney’s own complaint or amend the
complaint of the person who initially brought the action to clarify or add
details to the claims in which the prosecuting attorney is intervening and to
add any additional claims with respect to which the prosecuting attorney
contends the prosecuting attorney is entitled to relief. For statute of
limitations purposes, any prosecuting attorney pleading relates back to the
filing date of the complaint of the person who originally brought the action,
to the extent that the claim of the prosecuting attorney arises out of the
conduct, transactions, or occurrences set forth, or attempted to be set forth,
in the prior complaint of that person.
(e) Whether or not the prosecuting
attorney intervenes in the action, the prosecuting attorney may move to dismiss
the action for good cause. The person who brought the action must be notified
of the filing of the motion and may oppose it and present evidence at the
hearing. The prosecuting attorney may also settle the action. If the
prosecuting attorney intends to settle the action, the prosecuting attorney
shall notify the person who brought the action. The state or the political
subdivision may settle the action with the defendant notwithstanding the
objections of the person initiating the action if the court determines, after a
hearing, that the proposed settlement is fair, adequate, and reasonable under
all the circumstances. Upon a showing of good cause, the hearing may be held in
chambers.
Minn. Stat. § 15C.09. Stay of discovery; extension
(a) The court may stay discovery by a
person who brought an action under section 15C.05 for not more than 60 days if
the prosecuting attorney shows that the proposed discovery would interfere with
the investigation or prosecution of a civil or criminal matter arising out of
the same facts, whether or not the prosecuting attorney participates in the
action.
(b) The court may extend the stay
upon a further showing that the prosecuting attorney has pursued the civil or
criminal investigation or proceeding with reasonable diligence and that the
proposed discovery would interfere with its continuation. Discovery may not be
stayed for a total of more than six months over the objection of the person who
brought the action, except for good cause shown by the prosecuting attorney.
(c) A showing made pursuant to this
section must be made in chambers.
Minn. Stat. § 15C.10. Court-imposed limitation upon participation of private
plaintiff in action
Upon a showing by the prosecuting
attorney in an action in which the prosecuting attorney has intervened that
unrestricted participation by a person under this chapter would interfere with
or unduly delay the conduct of the action, or would be repetitious, irrelevant,
or solely for harassment, the court may limit the person’s participation by
limiting the number of witnesses, the length of the testimony of the witnesses,
the cross-examination of witnesses by the person, or by other measures.
Minn. Stat. § 15C.11. Limitation of actions; remedies
(a) An action under this chapter may
not be commenced more than three years after the date of discovery of the
fraudulent activity by the prosecuting attorney or more than six years after
the fraudulent activity occurred, whichever occurs later, but in no event more
than ten years after the date on which the violation is committed.
(b) A finding of guilt in a criminal
proceeding charging a false statement or fraud, whether upon a verdict of
guilty or a plea of guilty or nolo contendere, stops the person found guilty
from denying an essential element of that offense in an action under this
chapter based upon the same transaction as the criminal proceeding.
(c) In an action under this chapter,
the state or the political subdivision and any plaintiff under section 15C.05
must prove the essential elements of the cause of action, including damages, by
a preponderance of the evidence.
Minn. Stat. § 15C.12. Award of expenses and attorney fees
If the prosecuting attorney or a
person who brought an action under section 15C.05 prevails in or settles an
action under this chapter, the court shall award the prosecuting attorney or
person reasonable costs, reasonable attorney fees, and the reasonable fees of
expert consultants and expert witnesses. These expenses must be awarded against
the defendant and are not allowed against the state or a political subdivision.
If the prosecuting attorney does not intervene in the action and the person
bringing the action conducts the action and the defendant prevails in the
action, the court shall award to the defendant reasonable expenses and attorney
fees against the person bringing the action if it finds that the action was
clearly frivolous or vexatious or brought in substantial part for harassment.
The state or a political subdivision is not liable for expenses, attorney fees,
or other costs incurred by a person in bringing or defending an action under
this chapter.
Minn. Stat. § 15C.13. Distribution to private plaintiff in certain actions
If the prosecuting attorney
intervenes at the outset in an action brought by a person under section 15C.05,
the person is entitled to receive not less than 15 percent or more than 25
percent of any recovery of the civil penalty and damages or settlement,
depending on the extent to which the person substantially contributed to the
conduct of the action. If the prosecuting attorney does not intervene in the
action at any time, the person is entitled to receive not less than 25 percent
or more than 30 percent of any recovery of the civil penalty and damages, or
settlement, as the court determines is reasonable. If the prosecuting attorney
does not intervene in the action at the outset but subsequently intervenes, the
person is entitled to receive not less than 15 percent or more than 30 percent
of any recovery of the civil penalty and damages or settlement, as the court determines,
depending on the extent to which the person substantially contributed to the
prosecution of the action. For recoveries whose distribution is governed by
federal code or rule, the basis for calculating the portion of the recovery the
person is entitled to receive shall not include amounts reserved for
distribution to the federal government or designated in their use by federal
code or rule.
Minn. Stat. § 15C.145. Relief from retaliatory actions
(a) An employee, contractor, or agent
is entitled to all relief necessary to make that employee, contractor, or agent
whole if that 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, agent, or associated others in furtherance of an action under this
chapter or other efforts to stop one or more violations of this chapter.
(b) Relief under paragraph (a) shall
include reinstatement with the same seniority status that 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.
(c) A civil action under this section
may not be brought more than three years after the date when the retaliation
occurred.
Minn. Stat. § 15C.15. Deposit of state funds; false claims account
Subdivision 1. Deposit of funds. The
net proceeds received by the state in an action under this chapter, after
distributions made to private plaintiffs and as otherwise required by federal
law, must be deposited in the state treasury and credited as follows:
(1) the portion of net proceeds equal to the amount
of the actual damages that the state sustains because of an act specified in
section 15C.02 must be credited to the fund that sustained the damages;
(2) the portion of net proceeds equal to the
additional recovery of federal money authorized by United States Code, title
42, section 1396h, for a recovery under this chapter, as determined by the
commissioner of management and budget, must be credited to the false claims
account under subdivision 2, provided that the amount credited may not exceed
$1,000,000 in a fiscal year; and
(3) the remainder of the net proceeds must be
credited to the general fund.
Subd. 2. False claims account. A
false claims account is established in the special revenue fund in the state
treasury. The commissioner of management and budget may enter into interagency
agreements to deposit up to $2,055,000 for litigation and related expenses
under this chapter. Money in the account deposited through interagency
agreement or under subdivision 1 is annually appropriated to the attorney
general for purposes of this chapter.
Minn. Stat. § 15C.16. Reporting
The attorney general shall report to
the chairs and ranking minority members of the senate and house of
representatives committees with jurisdiction over state government finance by
January 15 each year, on activities under this chapter during the prior
calendar year. The report must include:
(1) the number of complaints received by the
attorney general under section 15C.05;
(2) the number of times the attorney general
intervened and declined to intervene after receiving a complaint;
(3) an estimate of the amount of time spent by
attorneys in the attorney general’s office and an estimate of the amount of
time spent by other staff in the attorney general’s office on activities under
this chapter; and
(4) net proceeds received by the state in each
action under this chapter.