State Approval Not Required for Retaliation Claims Under the Georgia False Claims Act

EDIT: On May 2, 2016, the Georgia Supreme Court reversed the Court of Appeals decision discussed below. An individual seeking to file a retaliation claim under the Georgia Taxpayer Protection False Claims Act must seek approval to do so from the state attorney general's office.

A good decision came out of the Georgia Court of Appeals today in the case of Fuciarelli v. McKinney, A15A0223holding that plaintiffs do not have to get written permission from the state to file a retaliation claim under the Georgia non-Medicaid False Claims Act statute.

The Georgia Taxpayer Protection False Claims Act, O.C.G.A. § 23-3-120, is the state's "non-Medicaid" False Claims Act. It may be the most inclusive false claims act in the country, encompassing misuse not only of state funds, but also any and all "local funds", including: "Georgia county, municipal corporation, consolidated government, authority, board of education or other local public board, body, or commission, town, school district, board of cooperative educational services, local public benefit corporation, hospital authority, taxing authority, or other political subdivision of the state or of such local government, including the Metropolitan Atlanta Rapid Transit Authority." This is in addition to a separate act that addresses fraud and misuse of Medicaid funding, the State False Medicaid Claims Act.

The trade-off for having such an inclusive FCA is that the state wanted some measure of control over claims brought under the statute. So it included a requirement that "a civil action under this article may also be brought by a private person upon written approval by the Attorney General." While the federal or other state governments generally have the right to dismiss an FCA case if they wish, no other state has such a requirement that a plaintiff must get special permission to even file their case. Moreover, while this "written approval" language was inserted so as to more easily control the flow of qui tam cases (and kick out the clearly frivolous ones before they are even filed), the language does not differentiate between qui tam cases and retaliation cases. This was the issue addressed in Fuciarelli.

Plaintiff Alfred Fuciarelli is a public employee who was retaliated against by his public employer for complaining about misuse of state funding: “The gist of Fuciarelli’s complaint appears to be that [Valdosta State University], in declining to implement Fuciarelli’s research management tools, had misused or was at risk of “misusing government funds in many of its sponsored [research] programs,” and that when Fuciarelli complained to the administration about those matters, the administration retaliated by demoting him.”

As one might expect, the state of Georgia does not want a qui tam action to go forward against a state university, and had permission been sought to file a qui tam action, it likely would have refused. Mr. Fuciarelli filed a retaliation lawsuit under the state FCA. But the state also has an interest in shutting down retaliation cases brought against it or entities that it funds, and so it argued that even a retaliation lawsuit requires the permission of the state attorney general's office.

In a 4-3 decision, the Georgia Court of Appeals held that not only is it inappropriate to give the state authority over a personal retaliation claim, but that it leads to “absurd results” where, in many cases, a state-supported entity or the state itself will have been the employer. Accordingly, it held that the “civil action” that requires written approval refers only to qui tam cases, and not merely retaliation claim.

This is of considerable import to public employees who are retaliated against for questioning the misuse of state or local funding. Although the Court of Appeals also held that the state and its political subdivisions are immune from suit, the Georgia FCA allows for retaliation suits against individuals (such as a supervisor), local non-state entities, and private entities operating with state or local funding.

Bracker & Marcus was not a part of the Fuciarelli case, but it does represent individual plaintiffs in both qui tam and retaliation actions under state and federal False Claims Acts.