We successfully defended a prominent local retail chain which was accused of underreporting and underpaying sales tax to the State of Rhode Island in violation of Rhode Island’s False Claims Act. The case was a so-called qui tam (pronounced “key tam”) action, in which a private individual (called the “relator”) who claims to have knowledge of fraud being perpetrated against the government brings suit on the government’s behalf. Such fraud, if proven, violates Rhode Island’s False Claims Act, which imposes substantial financial penalties on violators.
Although there are no reported state court decisions addressing claims under Rhode Island’s False Claims Act, we relied on federal false claims act law in arguing that the relator’s allegations were too vague to meet the strict pleading standard in fraud cases. The Superior Court – in a lengthy written decision that is the first reported decision under Rhode Island’s Act – agreed with our arguments and granted judgment in our client’s favor. By securing an early victory, our client avoided what promised to be a long and expensive discovery and trial process.
The Superior Court’s decision is available here: https://www.courts.ri.gov/Courts/SuperiorCourt/SuperiorDecisions/15-4895-15-4896.pdf