Are you a parent corporation with a subsidiary that does business with a state or local government? Are you a manufacturer or supplier whose products end up down the distribution chain with a state or local government? If so, you could be the "beneficiary" of a false claim and could be liable for penalties and treble damages.

Since the 1986 amendments to the federal False Claims Act ("FCA"), 31 U.S.C. § 3729, et seq., added a qui tam provision, an increasing number of states have enacted similar FCA statutes. Currently, twenty-nine states and the District of Columbia have general and/or health care FCA statutes with qui tam provisions, and another six have FCA statutes without qui tam provisions. California led the way in 1987, and in doing so departed from the federal FCA to include a unique provision that makes liable a person who...