Legislation that would have created a new private cause of action for the enforcement of state fraud statutes was defeated on the Senate floor earlier this week by a vote of 25-21.

The bill, SB 215, would have established additional penalties for the filing of a false claim for state health benefits. It would have also authorized a person to file suit on behalf of the state for an alleged false claim and recover up to 30 percent of the proceeds of the suit, plus attorney’s fees and costs.

The Maryland Chamber fought to defeat this bill. We believe that the state should directly prosecute any person who defrauds the state under a benefit program or contract. However, we believe it is inappropriate for the state to create a new private cause of action for the enforcement of state fraud statutes. This type of system will lead to needless litigation and harassment of government contractors by overzealous trial lawyers.

The Maryland Chamber thanks the senators who voted no on SB 215. Here is the vote.