Oral Testimony of Colette G. Matzzie, Partner at Phillips & Cohen LLP, whistleblower attorney and resident of Maryland in support of Senate Bill SB666/House HB0773 to expand the Maryland False Claims Act and Maryland False Health Claims Act
Chairman Smith, Vice Chairman Waldstreicher, and distinguished members of the Senate Judicial Proceedings Committee, thank you for the opportunity to testify today in support of revisions to Senate Bill SB666/HB0773, Maryland False Claims Act and Maryland False Health Claims Act – Revisions.
By way of background, I am both a resident of Maryland and a partner at Phillips & Cohen LLP, the oldest and most successful law firm representing qui tam whistleblowers nationwide having recovered over $12 billion for the federal and state treasuries. I also have experience initiating cases under state False Claims Acts including two successful actions alleging that two multinational food vendors – Sodexo and Chartwells – had overcharged and failed to provide quality meals to public school lunch programs in New York State and the District of Columbia. Those intervened state-only qui tam actions recovered $40 million total for the two jurisdictions returning the taxpayer money to state coffers. Our law firm has substantial experience with litigating False Claims Act cases both where the Government has intervened and where it has declined to intervene. These lawsuits, including the non-intervened ones, have resulted in recovery of many millions for the Government. In fact, last year under the federal False Claims Act, recoveries nationwide for so-called declined cases exceeded those where the United States had intervened.
As you know, Maryland tax dollars are precious and enforcement resources are limited. The federal and state False Claims Acts contemplate a public-private partnership to amplify state resources for detecting and prosecuting fraudsters. The statutes also incentivize whistleblowers – those in a position to know about fraudulent schemes often from the inside – to come forward to report wrongdoing and to be protected from retaliation including by allocation of a portion of the proceeds of any recovery from the qui tam action. Notably, qui tam attorneys like our firm only recover our fees and expenses if the federal or state government also recovers, giving us a tremendous incentive to screen our cases carefully before filing suit and especially before bringing a case into litigation post-declination. Knowing that we can proceed with a case whether or not the Maryland OAG has the resources to prosecute it will influence both the decisions made by whistleblowers to step forward and the decision by our firm to invest in a case. It also makes settlement more likely because the defendant knows it will face an enforcement action whether or not the government intervenes. Additional benefits accrue through the deterrence robust False Claims Acts provide by putting fraudsters on notice that they risk damages and penalties for defrauding Maryland programs. Enforcement also guards against serious risks to public health and safety since many fraud schemes typically target vulnerable populations that depend on state programs including the Medicaid and school lunch programs.
The Maryland legislature has an important opportunity to modernize the Maryland False Claims Acts and give the Office of the Attorney General the same authority to allow declined cases to proceed that the United States and many of the states bordering Maryland already have including Delaware (6 Del. C. § 1204(d)), the District of Columbia (D.C. Code § 2- 381.03(b)(4)(B)), and Virginia (Va. Code § 8.01-216.5(D)).
As a whistleblower lawyer and a Maryland resident, I know substantial recoveries are quite feasible for Maryland with stronger statutes. I urge the distinguished members of the Senate Judicial Proceedings Committee to strengthen the Maryland False Claims Acts by passing Senate Bill SB666.
Watch Colette testify in the Maryland State Senate.
Watch Colette testify in the Maryland House of Delegates.