Philadelphia’s False Claims Ordinance is a Sleeping Giant. When Will It Wake Up?

Roughly 30 states have their own versions of the federal False Claims Act, through which individuals, known as relators, can bring qui tam actions by filing lawsuits on behalf of the government against persons or entities that have allegedly defrauded it. If successful, the relator is entitled to a portion of the recovery. Qui tam actions brought on behalf of the federal government are authorized by the False Claims Act, 31 U.S.C. §§ 3729–3733.

Pennsylvania does not have a False Claims Act. It is the most populous state without one. A bill enacting one, House Bill 1697, passed the Pennsylvania House of Representatives in July 2025 but stalled in the State Senate. Governor Josh Shapiro used his February 2026 budget address to urge the legislature to “finally get it done.”

Perhaps in part to fill the gap left by Pennsylvania’s absence of a statewide statute, the City of Philadelphia enacted its False Claims Ordinance (“Philadelphia FCO”) in 2010 to combat fraud in its programs and contracts. Phila. Code §§ 19-3601 et seq. Yet, over the last 16 years, the ordinance has rarely been used to prosecute fraud against the City. Many attorneys, including those who routinely represent whistleblowers, continue to overlook this powerful tool. They shouldn’t.

The Philadelphia FCO contains attractive remedies, including treble damages and attorneys’ fees. And the opportunities for enforcement are substantial. The City spends over $3.8 billion annually on professional services, giving wrongdoers ample opportunity to defraud it. The Philadelphia FCO punishes and deters that conduct.

The text of the Philadelphia False Claims Ordinance

 To bring a qui tam action under the Philadelphia FCO, a private person may submit a proposed civil complaint to the City Solicitor. Phila. Code § 19-3603(2)(a). Mirroring the federal False Claims Act, the ordinance then affords the City time to investigate the allegations and decide whether it wishes to intervene by bringing a civil action. Id.

One important distinction between Philadelphia’s ordinance and the federal False Claims Act is that a private individual may pursue the case under the Philadelphia FCO only if the City Solicitor expressly authorizes their doing so. The ordinance gives the City Solicitor the authority to “designate” the person who submitted the proposed civil complaint, or that person’s attorney, to file a civil action. Id. § 19-3603(2)(b)(.2). The ordinance does not permit a private individual who submitted a proposed complaint to pursue a claim on their own if the City Solicitor declines to designate them, as Section 19-3603(4) states that “[n]othing herein shall be construed as authorizing anyone, other than the City Solicitor or a person or attorney designated pursuant to this Chapter, to commence a civil action to represent the City under this Chapter.”

There are significant financial incentives to bringing a claim under the Philadelphia FCO. If the action is successful, the relator is entitled to between 10% and 25% of the proceeds if the City Solicitor brings the action or between 15% and 30% if the relator litigates the case after being designated to pursue it on the City’s behalf. Id. § 19-3603(8). Like its federal counterpart, the Philadelphia ordinance authorizes treble damages and attorneys’ fees. Id. § 19-3602.

Attorneys and their clients pursuing actions under the Philadelphia FCO should also understand its limitations. For example, the ordinance excludes claims against the federal government, the Commonwealth of Pennsylvania, the City itself, or their officers and employees acting within the scope of their employment. Id. § 19-3603(3). It also bars claims based on publicly disclosed information unless the relator is the “primary source” of that information. Id. A government employee who discovers fraud while on the clock faces an additional hurdle: the employee must have first reported it to the City, and the City must have failed to act within six months. Id.

Like most false claims statutes, the Philadelphia FCO contains an express prohibition against retaliation or discrimination based on lawful acts taken in furtherance of a qui tam action. Id. § 19-3604(1). If retaliation occurs, an employee may seek reinstatement and recover back pay with interest, special damages, litigation costs, and attorneys’ fees. Id. § 19-3604(2).

Why the Philadelphia False Claims Ordinance has largely gone unused

 Despite its potential value to plaintiffs’ attorneys and their clients, the Philadelphia FCO remains dormant. There is little published case law interpreting the ordinance and relatively little commentary discussing its use. The ordinance’s lack of utilization should not be mistaken for a lack of viability. The ordinance tracks many provisions of the federal False Claims Act, and practitioners can draw guidance from decades of federal False Claims Act jurisprudence.

A more plausible explanation is structural. Municipal governments possess fewer investigative resources than state attorney general offices or the federal government. The City may therefore be less inclined to devote substantial resources to investigating complex fraud allegations.

But the likely main reason the Philadelphia FCO is so rarely invoked is that it differs from the federal False Claims Act in a key way. The federal False Claims Act allows a relator to “bring a civil action” and to proceed even when the government declines to intervene. 31 U.S.C. § 3730(b), (c)(3). The Philadelphia FCO is narrower; under it, “any person may submit a proposed civil complaint” to the City Solicitor, who may then bring the action, designate the relator to bring it, or “decline to commence a civil action and decline to designate” the relator altogether. Phila. Code § 19-3603(2).

Submitting a claim is not the same as filing one, and the ordinance forecloses any workaround: no one but the City Solicitor or a designated person may commence an action under the Philadelphia FCO. Id. § 19-3603(4). Even designation is not full control. The City Solicitor retains sole authority to settle a qui tam claim, subject to court approval, and may move to dismiss the claim over the relator’s objection after the relator has an opportunity to be heard. Id. § 19-3603(6)(b). The City could amend the ordinance at any time. But this structure is likely why few private attorneys have prosecuted cases under it, let alone built a practice around doing so.

I’ve seen firsthand the challenges presented by the Philadelphia FCO. I attempted to use it in a matter involving fraud within a Philadelphia program through which low-income families obtain behavioral health treatment for their children. In addition to submitting a proposed complaint to the City Solicitor, I filed a parallel complaint under the federal False Claims Act. The City ultimately deferred to the U.S. Attorney’s Office for the Eastern District of Pennsylvania and declined to conduct an independent investigation.

That experience illustrates a strategic consideration for bringing claims under the Philadelphia FCO. City-level fraud schemes often overlap with federally funded programs, creating opportunities for parallel liability. Because the ordinance leaves a would-be relator with nowhere to go when the City Solicitor declines to take the case or declines to designate the would-be relator to do so, the better option may be to view the Philadelphia FCO as one prong in a two-pronged approach when federal funds are implicated in fraud claims concerning City programs. By pairing a claim under the Philadelphia FCO with a parallel federal False Claims Act claim, a would-be relator could pursue the federal action independently, no matter how the City Solicitor exercises its discretion.

Opportunities under the Philadelphia False Claims Ordinance

 The more opportunities the City Solicitor has to bring claims under, or designate relators to bring claims under, Philadelphia’s FCO, the more familiar City officials may become with administering investigations under the ordinance. Increased use could, over time, encourage the City to commit more resources to investigating and prosecuting such claims, since successful claims return taxpayer funds to the City’s coffers and deter similar fraudulent conduct.

False claims cases commonly target fraud in healthcare, defense contracting, and procurement. Philadelphia’s ordinance is well-suited to address a broad range of misconduct affecting City funds. Potential examples of such misconduct include:

• A contractor inflating invoices for repairs performed at City Hall;
• A healthcare provider billing a City-sponsored health plan for services never rendered;
• A contractor securing a City contract and then paying workers off the books to evade prevailing wage requirements after falsely certifying compliance with City wage regulations;
• A City vendor facilitating the transfer of municipal property to a private party at below-market value, where a false certification or invoice induced the transfer; and
• A grant recipient falsely certifying compliance with conditions attached to City funding.

Attorneys who handle employment matters, commercial litigation, government-contract disputes, healthcare cases, or general civil litigation may encounter facts supporting a Philadelphia FCO claim without realizing it. When a client presents a potential legal claim that hints at organizational misconduct or fraud, they may have a claim under the Philadelphia FCO, and perhaps the federal False Claims Act, if the facts suggest a false claim was submitted to the City of Philadelphia.

Waking up a sleeping giant?

The Philadelphia FCO allows citizens to help protect City funds while sharing in any recovery obtained on the City’s behalf. For plaintiffs’ attorneys, it also represents an often-overlooked opportunity for high-impact litigation. Attorneys who encounter misconduct involving City funds while investigating their clients’ claims should consider whether the Philadelphia FCO applies before focusing solely on employment or whistleblower claims to assert on their clients’ behalf.

Philadelphia’s false claims ordinance has spent much of its existence as a sleeping giant. Whether it remains one depends on whether attorneys in the region more often wield this powerful anti-fraud tool, and whether they can persuade the City Solicitor to do the same.

Jeremy E. Abay is the chair of the national employment litigation group at Pond Lehocky Giordano Inc., the largest workers’ compensation and social security disability law firm in Pennsylvania, and one of the largest in the U.S. He can be reached at jabay@pondlehocky.com.