NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0749-15T2

 A-0756-15T2

IN THE MATTER OF THE 

ENFORCEMENT OF NEW JERSEY

FALSE CLAIMS ACT SUBPOENAS

________________________________________________________

Argued February 23, 2016 – Decided

Before Judges Fisher, Espinosa and 

Rothstadt.

On appeal from the Superior Court of New 

Jersey, Chancery Division, Essex County, 

Docket No. C-208-15.

Elizabeth J. Hampton argued the cause for 

appellant John Henderson (Fox Rothschild 

LLP, attorneys; Alain Leibman and Ms. 

Hampton, of counsel and on the brief).

Kevin H. Marino argued the cause for

appellant Arthur Nardin (Marino, Tortorella 

& Boyle, P.C., attorneys; Mr. Marino and 

John A. Boyle, on the brief).

Janine Matton, Deputy Attorney General,

argued the cause for respondent State of New 

Jersey (John J. Hoffman, Acting Attorney 

General, attorney; Andrea M. Silkowitz and 

Brian F. McDonough, Assistant Attorneys 

General, of counsel; Ms. Matton, Joan E. 

Karn and Kent D. Anderson, Deputy Attorneys 

General, on the brief).

Lawrence S. Lustberg argued the cause for 

intervenors Medco Health Solutions, Inc. and 

APPROVED FOR PUBLICATION

March 18, 2016

APPELLATE DIVISION

March 18, 2016
2 A-0749-15T2

Express Scripts Holding Co. (Gibbons P.C.,

Jennifer G. Wicht (Williams & Connolly) of 

the Washington, D.C. bar, admitted pro hac

vice, and Holly M. Conley (Williams & 

Connolly) of the Washington, D.C. bar, 

admitted pro hac vice, attorneys; Mr. 

Lustberg, Amanda B. Protess, Ms. Wicht, and 

Ms. Conley, on the brief).

The opinion of the court was delivered by

FISHER, P.J.A.D.

In this appeal, we consider the propriety of an order that 

directed appellants John Henderson and Arthur Nardin and 

intervenors Medco Health Solutions, Inc., and Express Scripts 

Holding Co. to comply with administrative subpoenas issued by 

the Acting Attorney General (the Attorney General) pursuant to 

the New Jersey False Claims Act (NJFCA), N.J.S.A. 2A:32C-1 to 

-15, -17 to -18. Because the NJFCA precludes the Attorney 

General's use of administrative subpoenas into the subject 

matter of a qui tam action once, as here, he declines to 

intervene within the prescribed time period, we reverse.

I

We start at the beginning. In August 2011, Paul Denis, a 

former Medco employee (hereafter "the relator"), commenced a qui 

tam action — under seal — in the United States District Court 

for the District of Delaware. United States ex rel. Denis v. 

Medco Health Sols., Inc., No. 1:11-cv-00684-RGA (D. Del.). Two 

years later, the relator amended his complaint to assert claims 
3 A-0749-15T2

on behalf of the State of New Jersey; he alleged that Medco, the 

pharmacy benefits manager for the State's employee health 

benefits programs, perpetrated a massive fraud on the State and 

other governmental entities by retaining rebates it was required 

to pass through to its clients, in violation of the federal 

False Claims Act, 31 U.S.C.A. § 3729 to § 3733, and the NJFCA.

1

Pursuant to N.J.S.A. 2A:32C-5(d), the Attorney General was 

required to determine, within sixty days of service of the 

amended complaint, whether to intervene and take control of the 

State's claims. This sixty-day period may be extended by motion,

N.J.S.A. 2A:32C-5(f), and the record reveals the Attorney 

General's office repeatedly took advantage of this opportunity; 

extensions granted by the district judge in the qui tam action 

totaled approximately 600 days. When yet another extension was 

sought on March 6, 2015, the district judge granted it but also 

declared that the "final intervention deadline" would be June 2, 

2015.

In a certification filed in the suit at hand, the Attorney 

General asserted that since April 2014 he had been "diligently 

investigat[ing] relator's claims . . . to determine whether to 

intervene," although the certification suggests only there were 

 

1 The amended complaint includes claims asserted on behalf of 

other states as well.
4 A-0749-15T2

attempts to schedule meetings and the production of documents 

that, for the most part, never occurred by the time the district

judge's deadline came and went. Even if we were to agree that 

appellants engaged in delaying tactics — as to which we are not 

convinced but need not decide — it neither explains nor excuses 

the Attorney General's failure to proceed more expeditiously for 

such an extraordinarily lengthy period of time. There is no 

dispute Medco was timely served with a subpoena and, to the 

extent it could be argued it did not comply — a matter in 

dispute — the Attorney General did not seek enforcement within 

the extended time period permitted by the district judge. 

Moreover, there is no dispute Henderson and Nardin were not 

served with subpoenas until July 22, 2015 — seven weeks after 

the deadline's expiration and the unsealing of the qui tam 

complaint.

When the district judge's extended deadline expired, 

appellants refused to comply with the Attorney General's tardy 

subpoenas. In September 2015, Medco filed — and Henderson and 

Nardin joined in — a motion in federal court for a protective 

order. The State opposed the motion, which the district judge 

denied because he believed the parties' dispute about the 

enforceability of the administrative subpoenas was a matter to 

be resolved by our courts.
5 A-0749-15T2

While opposing Medco's motion, the Attorney General also

sought — by way of the civil action at hand — enforcement of his

subpoenas, citing N.J.S.A. 2A:32C-14(a) and Rule 1:9-6(b). The 

application was vigorously opposed. For reasons expressed in an 

oral decision, the chancery judge entered an order, which 

enforced the subpoenas and directed Henderson's and Nardin's 

appearances on October 30, 2015, and November 2, 2015, 

respectively.2

On October 30, 2015, we granted an emergent stay of the 

chancery judge's enforcement order and accelerated these 

appeals.

II

The purely legal question posed in these consolidated 

appeals concerns the extent to which the NJFCA permits the 

Attorney General to continue to utilize the NJFCA's 

administrative subpoena power once his right to intervene in the

qui tam action expired. We conclude, for the following reasons, 

that with the passing of the intervention deadline and the 

unsealing of the qui tam complaint, the NJFCA precluded the 

issuance and enforcement of subpoenas for the purpose of 

 

2 We have the added benefit of the chancery judge's submission on 

October 23, 2015, pursuant to Rule 2:5-1(b), of a written 

amplification of the reasons he previously expressed in granting 

relief.
6 A-0749-15T2

investigating the false claim or claims alleged in the qui tam 

action. The parties' dispute about the scope of the subpoena 

power created by the NJFCA turns on the meaning and relationship 

of a number of its provisions.

Initially, we observe that the NJFCA imposes on the 

Attorney General an obligation to investigate NJFCA violations

and gives that office the authority to bring a civil action in 

state or federal court against violators. See N.J.S.A. 2A:32C5(a). The NJFCA, however, also permits "[a] person [to] bring a 

civil action for a violation of this act for the person and for 

the State," N.J.S.A. 2A:32C-5(b), i.e., a qui tam action.3 Such a 

complaint is filed under seal, N.J.S.A. 2A:32C-5(c), and its 

service on the Attorney General triggers his right "to intervene 

and proceed with the action on behalf of the State within 60 

days," N.J.S.A. 2A:32C-5(d). The NJFCA also declares that the 

Attorney General may, "for good cause shown," seek from the qui 

tam court an extension of "the time during which the complaint 

remains under seal." N.J.S.A. 2A:32C-5(f).

"Before the expiration" of that 60-day period or any 

permitted extension, the Attorney General "shall" either:

 

3 "Qui tam" is a shortened title for the Latin expression, "qui 

tam pro domino rege quam pro si ipso in hac parte sequitur," 

meaning: "who sues on behalf of the King as well as for 

himself." Black's Law Dictionary 1251 (6th ed. 1990).
7 A-0749-15T2

(1) file a pleading with the [qui tam] court 

that he intends to proceed with the action, 

in which case the action is conducted by the 

Attorney General and the seal shall be 

lifted; or

(2) file a pleading with the [qui tam] court 

that he declines to proceed with the action, 

in which case the seal shall be lifted and 

the person bringing the action shall have 

the right to conduct the action.

[N.J.S.A. 2A:32C-5(g).]

The NJFCA provides the Attorney General with no further options.

Although the Attorney General expressly chose neither of 

these two options, he has acknowledged that we may assume he 

chose the second option, and that we should consider the issues 

presented as if he filed a pleading in federal court declining 

to proceed with the qui tam action on behalf of the State.

III

The Attorney General argues we should affirm the 

enforcement order, claiming his right to investigate remains 

unfettered despite the passing of the federal court's 

intervention deadline and the unsealing of the complaint. The 

Attorney General contends his right to investigate is limited 

only by the duration of the last vestige of his future potential 

involvement — the opportunity to seek intervention upon good 

cause shown. See N.J.S.A. 2A:32C-6(f) (recognizing when the 

Attorney General opts out and the relator "proceeds with the 
8 A-0749-15T2

action" the Attorney General may later be "permit[ted] . . . to 

intervene and take over the action on behalf of the State . . . 

upon a showing of good cause"). The Attorney General also relies 

on N.J.S.A. 2A:32C-14(a), as if its terms were untethered to his 

choice not to intervene as of right; this provision states:

If the Attorney General has reason to 

believe that a person has engaged in, or is 

engaging in, an act or practice which 

violates this act, or any other relevant 

statute or regulation, the Attorney General 

or the Attorney General's designee may 

administer oaths and affirmations, and 

request or compel the attendance of 

witnesses or the production of documents. 

The Attorney General may issue, or designate 

another to issue, subpoenas to compel the 

attendance of witnesses and the production 

of books, records, accounts, papers and 

documents.

The Attorney General asserts that this "extensive authority 

granted to [him] over the State's false claims matters" imbues 

him with "a broad subpoena power . . . that does not cease upon 

the unsealing of a qui tam complaint or a decision to decline 

intervention, and is not limited solely to determining whether 

to intervene as of right in a qui tam." And the Attorney General 

lastly urges that we consider the NJFCA's remedial purposes and 

the legislative mandate that the NJFCA be applied liberally, 

citing N.J.S.A. 2A:32C-17.

We reject the Attorney General's arguments. N.J.S.A.

2A:32C-14(a) broadly, but only generally, sets forth the 
9 A-0749-15T2

administrative investigatory powers granted the Attorney 

General. It does not provide an additional or separate font of 

power once the Attorney General declines the right to intervene 

in a qui tam action within the prescribed timeframe. In other 

words, N.J.S.A. 2A:32C-14(a) only describes the authority of the 

Attorney General to investigate a violation of the NJFCA and, 

therefore, may only be utilized when the Attorney General acts 

pursuant to N.J.S.A. 2A:32C-5. The triggering language of 

N.J.S.A. 2A:32C-14(a) — "[i]f the Attorney General has reason to 

believe that a person has engaged in, or is engaging in, an act 

or practice which violates this act" — merely describes the 

Attorney General's broad obligation to investigate violations of 

the NJFCA, see N.J.S.A. 2A:32C-5(a) (declaring that "[t]he 

Attorney General shall investigate a violation of this act"), 

and his specific right to investigate for the purpose of 

deciding whether to intervene in an existing qui tam action, 

N.J.S.A. 2A:32C-5(g). Because N.J.S.A. 2A:32C-14(a) is expressed 

in general terms, it cannot be construed so as to swallow up the 

NJFCA's careful and specific expression of the Attorney 

General's rights and obligations. See Wilson v. Unsatisfied 

Claim & Judgment Fund Bd., 109 N.J. 271, 278 (1988); Maressa v. 

N.J. Monthly, 89 N.J. 176, 195, cert. denied, 459 U.S. 907, 103 

S. Ct. 211, 74 L. Ed. 2d 169 (1982).
10 A-0749-15T2

That is, giving N.J.S.A. 2A:32C-14(a) the broad 

interpretation urged by the Attorney General would render 

meaningless most of what the Legislature carefully delineated in 

the NJFCA's earlier specific sections. The Legislature fixed a 

sixty-day deadline for the Attorney General to decide whether to 

take over the relator's action or opt out. N.J.S.A. 2A:32C-5(g). 

The argument that the Attorney General could continue an

investigation for so long as he cared, notwithstanding the 

passage of the deadline, implies that the Attorney General could 

seek leave to intervene in the qui tam action at any time up 

until the entry of final judgment. There is no support in this 

legislative framework for such an absurd result. Our goal in 

interpreting the NJFCA, or any other legislative enactment, is 

to construe and interpret its terms and provisions in a way that 

gives meaning to every part and produces "a harmonious whole." 

Bedford v. Riello, 195 N.J. 210, 224 (2008). We reject the 

contention that the investigative powers delineated in N.J.S.A.

2A:32C-14(a) provide the Attorney General with a continuing 

right to investigate matters that are the subject of an unsealed 

qui tam action4; to hold otherwise would render meaningless the 

 

4 We are cognizant of the fact that other states' false claims 

acts, as well as the federal False Claims Act, expressly declare 

that the passing of the intervention-as-of-right deadline 

terminates the subpoena power contained in those acts. See, 

(continued)
11 A-0749-15T2

time frames set forth in N.J.S.A. 2A:32C-5. The Attorney 

General's repeated requests for extensions in the qui tam action 

belie his contention that the right to serve and enforce 

administrative subpoenas survives undisturbed once the 

opportunity to intervene as of right passes.

N.J.S.A. 2A:32C-6(f), which is fully implicated here,

limits the Attorney General's rights once he has decided "not to 

proceed" with the qui tam action and once the seal has been 

lifted. First, this provision recognizes that, once the Attorney 

General selects a course, "the person who initiated the action 

[the relator] shall have the right to conduct the action." Ibid.

Once the relator is placed in control of the litigation, the 

NJFCA clearly presupposes that the Attorney General must stand 

down. This logical consequence of the Attorney General's 

declination of the right to intervene is emphasized in the 

provision's next sentence, which declares that "[t]he decision 

of the Attorney General on whether to proceed with an action 

shall be deemed final and shall not be subject to review by any 

 

(continued)

e.g., 31 U.S.C.A. § 3733(a)(1); Ga. Code Ann. § 23-3-125(b)(1); 

740 Ill. Comp. Stat. 175/6(a)(1); Mass. Gen. Laws, Ch. 12, §

5N(1). This does not mean that by failing to unambiguously 

express a limitation on the subpoena power the NJFCA imposes no 

limit at all. The absence of such clarity merely renders the 

NJFCA ambiguous in this regard, leaving us to ascertain the

legislative intent through traditional canons of statutory 

construction.
12 A-0749-15T2

court or agency." Ibid. When a choice is made, there is no 

turning back.

N.J.S.A. 2A:32C-6(f)'s next sentence relegates the Attorney 

General to mere bystander: "If the Attorney General so requests, 

the Attorney General shall be served at the expense of the 

Attorney General with copies of all pleadings and motions filed 

in the action and copies of all deposition transcripts." And the 

sentence that immediately follows describes the only remaining 

avenue for the Attorney General's subsequent participation in 

the qui tam action: "When a person [i.e., the relator] proceeds 

with the action, the [qui tam] court, without limiting the 

rights of the person initiating the action, may permit the 

Attorney General to intervene and take over the action on behalf 

of the State at a later date upon a showing of good cause." 

Ibid. (emphasis added). The Attorney General naturally favors a 

broad reading of this last sentence, urging that the existence 

of this right to later seek intervention upon a showing of good 

cause for not having previously intervened justifies his 

continuing right to serve and enforce administrative subpoenas. 

He is mistaken.

All four sentences of N.J.S.A. 2A:32C-6(f) clearly favor 

the relator's right to control the action, as they concomitantly 

limit the Attorney General's further interference: (1) the 
13 A-0749-15T2

relator has "the right to conduct the action"; (2) the Attorney 

General's decision to opt out is final and unreviewable; (3) the 

Attorney General is entitled to copies of pleadings, motions and 

deposition transcripts but only at his expense; and (4) the 

Attorney General remains on the outside looking in unless he can 

later convince the qui tam court that he has "good cause" for 

intervening. The fourth sentence, upon which the Attorney 

General's position turns, must be construed in light of its 

neighboring three sentences, all of which are flooded with a 

legislative intent that the relator be uninhibited in 

controlling his qui tam action. The Attorney General's 

opportunity to intervene at a later date is similarly limited, 

requiring a demonstration of good cause that should be 

considered in light of the entire tenor of N.J.S.A. 2A:32C-6(f).

This understanding of N.J.S.A. 2A:32C-6(f) compels our 

conclusion that the Legislature meant to bar the Attorney 

General's separate NJFCA investigations into the same subject 

matter.

In the same spirit, we must also be mindful that the 

control of the qui tam discovery proceedings rests with the 

federal court. Matters of comity counsel against authorizing a 

separate collateral investigation by the Attorney General that 

might interfere with the federal judge's management of the qui 
14 A-0749-15T2

tam action. See Sensient Colors, Inc. v. Allstate Ins. Co., 193 

N.J. 373, 387 (2008); Continental Ins. Co. v. Honeywell Intern., 

Inc., 406 N.J. Super. 156, 173-74 (App. Div. 2009).

The Attorney General lastly contends that special care 

should be paid to N.J.S.A. 2A:32C-17, which mandates a 

"liberal[] constru[ction]" of the NJFCA "to effectuate its 

remedial and deterrent purposes." The Attorney General's 

reliance on N.J.S.A. 2A:32C-17 is misplaced, because the 

liberality the Attorney General would be entitled to in 

generally investigating and prosecuting NJFCA violations, or in 

determining whether to intervene as of right, quickly shifts in 

favor of the relator once the Attorney General opts out. 

Consequently, the liberal construction of N.J.S.A. 2A:32C-6(f), 

which the Attorney General urges, warrants a cessation of his 

administrative subpoena powers, not their expansion.

IV

We recognize that the Attorney General retains the 

opportunity to seek intervention upon good cause shown in the 

qui tam action. But the NJFCA does not give the Attorney General 

the right to investigate the allegations of the qui tam action 

by way of administrative subpoena or through the conducting of 

ex parte interviews of witnesses as otherwise would have been 

permitted before he declined to intervene as of right. This 
15 A-0749-15T2

holding does not preclude any actions that may be taken in aid 

or pursuit of a criminal prosecution5 nor does it impinge on the 

Attorney General's investigation of other violations of the 

NJFCA or as may otherwise be permitted by law.

Reversed.

 

5 Although N.J.S.A. 2A:32C-6(g) recognizes the Attorney General's 

right to seek a stay of qui tam discovery proceedings if he can 

demonstrate those proceedings would interfere with a pending 

civil or criminal investigation, we do not view this provision 

as meaning the administrative subpoena powers remain open to him 

once the qui tam complaint is unsealed. The provision only 

recognizes the possibility that the exercise of the Attorney 

General's other broad investigatory powers may at times come in 

conflict with qui tam proceedings.