NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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 argue d the cause for appellant John Henderson (Fox Rothsc hild 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 Attorney s 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, 2016A - 0749
- 15T2 2 Express Scripts Holding Co. (Gibbons P.C., Jennifer G. Wicht ( Williams & Connoll y ) 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 M s . 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 J ohn Henderson and Arthur Nardin and intervenors Medco Health Solutions, Inc. , and Express Scripts Holding Co. to comply with administ rative 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 wi thin the prescribed time period , we reverse.
I We start at the beginning. I n 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 th e District of Delaware. United States ex rel . Denis v. Medco Health Sol s . , Inc. , No. 1: 11
- cv - 00684
- RGA (D. Del.) . Two years later, the relator amended his complaint to assert claimsA - 0749
- 15T2 3 on behal f of the State of New Jers ey; 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 entit ies 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, w hether to intervene and take control of the State's claims . T his sixty
- day period may be extended by motion,
N.J.S.A. 2A:32C
- 5(f), and t he record reveals the Attorney
Genera l's office repeatedly took advantage of this opportunity;

e xtensions granted by the district judge in the qui tam action totaled ap proximately 600 days. When yet another extension was sought on March 6, 201 5, the district judge granted it but also declared that the "final intervention deadline " would be June 2, 2015.
In a cer tification filed in the suit at hand , the Attorney General a sserted that since April 2014 he had been "diligently investigat[ing] relator's claims . . . to determine whet her to intervene , " although the c ertification suggests only there were

1 The amended complaint includes claims asserted on behalf of other states as well.A - 0749
- 15T2 4 attempts to schedule meeti ngs and the production of documents
t hat, 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 neithe r explains nor excuses the Attorney General 's failure to proceed more expeditiously for such an extraordi narily 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 we eks after the deadline's exp iration and the unsealing of the qui tam complaint. When the district judge's extend ed deadline expired, appellants refused to comply with the Attorney General's tardy subpoenas. I n September 2015, Medco filed

— an d Henderson and Nardin joined in

— a motion in federal court for a prote ctive order . The State opposed the motion, which the district judge denied because he believed the parties' dispute about the enforceability of the administrative subpoe nas was a matter to be reso lved by our courts .A - 0749
- 15T2 5 While opposing Medco's motion, the Attorney General also sought
— by way of the civil action at hand

— enfo rcement 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 ex pressed 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 e mergent stay of the chancery judge's enforcement order and accelerated these appeals.
II The pur ely 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

a dministrative subpoena power once his right to inte rvene in the qui tam action expired . We conclude, for the following reasons , that with the passing of the intervention deadli ne 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.A - 0749
- 15T2 6 investigating the false claim or claims alleged in the qui tam action . The parties' dispute about the scope of the subpoena power creat ed by the NJFCA turns on the meaning and r elationship of a number of it s provisions. Initially, we observe that the NJFCA imposes on the Attorney General an obligation to investigate NJFCA violation s and gives that office the authority to bring a civil action in state or f ederal court against violators . See N.J.S.A. 2A:32C
5( a). The NJFCA, how ever, 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 t he qui
tam court an extension of "the time during which the complaint remains under seal." N.J.S.A. 2A:32C
- 5(f).
"B efore the expiration" of that 60
- day period or any permitted extension , the Attorney General "shall" either :

3 "Qui t am" 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).A - 0749
- 15T2 7 (1) file a pleading with the [qu i 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 expr essly chose neither of the se 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 Att orney 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 theA - 0749
- 15T2 8 action" the Attorney General may later be "permit[ted] . . . to intervene and take over the action on beha lf 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 statu te 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 issu e, 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 t he 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 int ervene 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 theA - 0749
- 15T2 9 administrative investigatory powers granted the Attorney General . It does not provide an additional or separate font of
power once t he Attorney General declines the right to intervene in a qui tam action within the prescribed timeframe . I n other words, N. J.S.A. 2A:32C
- 14(a) on ly describes the authority of the Attorney General to investigate a violation of the NJF CA and, therefore, may only be utilized when the Attorney General acts pursuant to N.J.S.A. 2A:32C
- 5. T he triggering language of
N.J.S.A. 2A:32C
- 1 4(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, s ee N.J. S.A. 2A:32C
- 5(a) ( declaring that " [ t ] he Attorney General shall investiga te a violation of this act"), and his specific right to investigate for the purpose of decid ing whether to intervene in a n 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, i t 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) .A - 0749
- 15T2 10 T hat is, giving N.J.S.A. 2A:32C
- 14(a) the broad int erpretation 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 ).
T he argument that the Attorney General could continue an investigation for so long as he cared , not withstanding 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 judgmen t. 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 pro duces " 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 mat ter s that are the sub ject of an unsealed qui tam action 4 ; to hold otherwise would render meaningless the

4 We are cognizant of the fac t that other states' fal se claims acts, as well as the f ederal False Cl aim s Act, expressly declare that the passing of the intervention
- as - of
- right deadline terminates the subpoena power contained in those acts . See , (continued)A - 0749
- 15T2 11 time frames set forth in N.J.S.A. 2A:32C
- 5. The Attorney General's repeated request s 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) , whi ch is fully implicated here, limits the Attorney General's rights once he has decided "not to
proc eed " with the qui tam act ion and once the seal has been lifted. First, this provision recognize s that , once the Attorney General selects a course , "the person who initiated the action [the relator] shall have the right to conduct the a ction ." Ibid. Once the relator is placed in co ntrol 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 l imitation on the subpoena power the NJFCA imposes no limit at all . The absence of such clarity m erely renders the NJFCA ambiguous in this regard, leaving us to ascertain the legislative intent through traditional canons of statutory construction.A - 0749
- 15T2 12 court or agency." Ibid. When a choice is made, t here is no turni ng 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 o f all deposition t ranscripts." And the
sentence t hat immediately follows describ es 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 favo rs a broa d reading of this last sentence , urging that the existence of this right to later seek intervention upon a showing of goo d

cause for not having previously intervened justifies his continuing right to serve and enf orce 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 interf erence : (1) theA - 0749
- 15T2 13 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 hi s expense; and (4) the Attorney General remains on the outside looki ng in unless he can later convince the qui tam court that he has "good cause" for intervening . The fo urth 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 legisl ative intent that the relator be uninhibited in controlling his qui tam action . T he Attorney Genera l'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 t enor 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 . I n 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 managemen t of the quiA - 0749
- 15T2 14 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).
T he 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 w ould be entitled to in generally investigating and prosecuting NJFCA violations , or in determining whether to intervene as of right, q uickly shifts in favor of the relator once the Attorney Genera l 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 retain s 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 b efore he declined to intervene as of right. ThisA - 0749
- 15T2 15 holding does not preclude any actions that may be taken in aid or pursuit of a criminal prosecution 5 nor does it impinge on the Attorney General's investigation of other violations of the
NJFCA or as may oth erwise be permitted by law . Reversed.

5 Although N.J.S.A. 2A:32C
- 6(g) recognizes the Attorney Genera l's right to seek a stay of qui tam discove ry 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 qu i tam complaint is unsealed. Th e 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.