2023 New Mexico Statutes › Chapter 44 - Miscellaneous Civil Law Matters › Article 9 - Fraud Against Taxpayers Act › Section 44-9-5 - Civil action by qui tam plaintiff; state or political subdivision may intervene.

A. A person may bring a civil action for a violation of Section 44-9-3 NMSA 1978 on behalf of the person and the state or political subdivision. The action shall be brought in the name of the state or political subdivision. The person bringing the action shall be referred to as the qui tam plaintiff. Once filed, the action may be dismissed only with the written consent of the court, taking into account the best interest of the parties involved and the public purposes behind the Fraud Against Taxpayers Act.
B. A complaint filed by a qui tam plaintiff shall be filed in camera in district court and shall remain under seal for at least sixty days. No service shall be made on a defendant and no response is required from a defendant until the seal has been lifted and the complaint served pursuant to the rules of civil procedure.
C. On the same day as the complaint is filed, the qui tam plaintiff shall serve the attorney general, and the political subdivision, if applicable, with a copy of the complaint and written disclosure of substantially all material evidence and information the qui tam plaintiff possesses. The attorney general on behalf of the state or the political subdivision, or the political subdivision on its own behalf, may intervene and proceed with the action within sixty days after receiving the complaint and the material evidence and information. Upon a showing of good cause and reasonable diligence in the state's or political subdivision's investigation, the state or political subdivision may move the court for an extension of time during which the complaint shall remain under seal.
D. Before the expiration of the sixty-day period or any extensions of time granted by the court, the attorney general or political subdivision shall notify the court that the state or the political subdivision:
(1) intends to intervene and proceed with the action; in which case, the seal shall be lifted and the action shall be conducted by the attorney general on behalf of the state or the political subdivision, or the political subdivision shall conduct the action on its own behalf; or
(2) declines to take over the action; in which case the seal shall be lifted and the qui tam plaintiff may proceed with the action.
E. When a person brings an action pursuant to this section, no person other than the attorney general on behalf of the state or a political subdivision, or a political subdivision on its own behalf, may intervene or bring a related action based on the facts underlying the pending action.
History:
Laws 2007, ch. 40, § 5; 2015, ch. 128, § 4.
ANNOTATIONS
Cross references.
— For the rules of civil procedure for district courts,
see
1-001 NMRA.
For a history of qui tam prosecutions,
see
Guiterrez v. Gober, 43 N.M. 146, 87 P.3d 437 (1939).
The 2015 amendment,
effective June 19, 2015, authorized qui tam plaintiffs to bring civil actions for violations of the Fraud Against Taxpayers Act on behalf of political subdivisions and authorized political subdivisions to intervene in such actions; in the catchline, added "or political subdivision"; in Subsection A, after "Section", deleted "3 of the Fraud Against Taxpayers Act" and added "44-9-3 NMSA 1978", after "person and the state", added "or political subdivision", and after "the name of the state", added "or political subdivision"; in Subsection C, after "attorney general,", added "and the political subdivision, if applicable", after "behalf of the state", added "or the political subdivision, or the political subdivision on its own behalf", after "diligence in the state's", added "or political subdivision's", and after "investigation, the state", added "or political subdivision"; in the introductory sentence of Subsection D, after "attorney general", added "or political subdivision", and after "that the state", added "or the political subdivision"; in Paragraph (1) of Subsection D, after "behalf of the state", added "or the political subdivision, or the political subdivision shall conduct the action on its own behalf"; and in Subsection E, after "behalf of the state", added "or a political subdivision, or a political subdivision on its own behalf".
Proper service of process is required before a court can exercise jurisdiction.
— Where plaintiffs filed a complaint against defendant, the mayor of Edgewood, and the town of Edgewood for quo warranto and declaratory judgment, and a writ of mandamus for violations of Edgewood's nepotism ordinance and fraud, and timely served defendant by certified mail and by personal delivery, and although defendant was served, he did not enter his appearance in the case, and where, a month later, plaintiffs filed the first amended complaint, adding a qui tam claim under the Fraud Against Taxpayers Act, 44-9-1 to 44-9-14 NMSA 1978, which requires plaintiffs to file the complaint under seal and serve notice on both the attorney general and the appropriate political subdivisions, gives the attorney general sixty days while the complaint is under seal to decide whether to intervene and proceed with the qui tam claim, and during this time, a defendant cannot be served and no response is required until the seal has been lifted and the qui tam plaintiff serves the defendant, and where, after being served with the sealed complaint, the attorney general filed notice declining to intervene, and where the district court granted a motion to lift the seal and ordered plaintiffs to serve a copy of the first amended complaint on all parties to the proceedings, and although plaintiffs served the attorney general and the town of Edgewood, plaintiffs did not serve a copy of the first amended complaint on defendant, either individually or in his capacity as mayor, and where plaintiffs moved for default judgement against defendant on certain counts of the first amended complaint, the district court erred in granting plaintiffs' motion for default judgment, because defendant was never served with the first amended complaint and proper service of process is required before a court can exercise jurisdiction over a defendant and render a binding judgment.
McGill v. Bassett
, 2023-NMCA-033.
The district court was authorized to permit the attorney general to participate in the qui tam action after the attorney general initially declined to intervene.
— In a qui tam action, where the district court entered a judgment that dismissed the plaintiffs' Fraud Against Taxpayers Act (FATA) claims in their entirety and also approved a settlement negotiated by the attorney general's office (AGO), and where the plaintiffs claimed that the AGO was without authority to seek dismissal of the FATA claims and approval of the settlement agreement when the AGO declined to intervene in the qui tam action, and that once the AGO declined to take over the case, plaintiffs became the sole representative of the state's interest, the district court did not err in allowing the AGO to participate in the qui tam action because § 44-9-6(F) NMSA 1978, expressly authorizes the court to permit the attorney general to intervene at a later date upon a showing of good cause.
State ex rel. Foy v. Vanderbilt Capital Advisors
, 2022-NMCA-026, cert. denied.
Claims preclusion.
— Where plaintiff was an inmate of a correctional facility; defendant had a service contract with the corrections department to provide meals for inmates in the facility which required defendant to provide food for religious diets for inmates who were approved to receive a religious diet; in 2008, plaintiff sued defendant for damages on the ground that although defendant had been approved to receive a religious vegetarian diet, defendant had refused to provide plaintiff with an adequate vegetarian diet which prohibited plaintiff from freely exercising plaintiff's religion; and in 2010, plaintiff sued defendant for violation of the Fraud Against Taxpayers Act to recoup money paid to defendant by the corrections department on the ground that defendant refused to provide food of the nutritional content and quality specified in the service contract, the doctrine of claims preclusion did not bar plaintiff's 2010 lawsuit because in the 2008 lawsuit plaintiff, as an individual on plaintiff's own behalf, sought to recover damages for wrongful acts perpetrated by defendant on plaintiff personally and in the 2010 lawsuit, plaintiff, on behalf of and in the name of the state, sought to recover damages sustained by the state as a result of defendants false claims for compensation for non-conforming goods and services.
State ex rel. Peterson v. Aramark Corr. Servs., LLC
, 2014-NMCA-036.
Issue preclusion.
— Where plaintiff was an inmate of a correctional facility; defendant had a service contract with the corrections department to provide meals for inmates in the facility which required defendant to provide food for religious diets for inmates who were approved to receive a religious diet; in 2008, plaintiff sued defendant for damages on the ground that although defendant had been approved to receive a religious vegetarian diet, defendant had refused to provide plaintiff with an adequate vegetarian diet which prohibited plaintiff from freely exercising plaintiff's religion; and in 2010, plaintiff sued defendant for violation of the Fraud Against Taxpayers Act to recoup money paid to defendant by the corrections department on the ground that defendant refused to provide food of the nutritional content and quality specified in the service contract; the doctrine of issue preclusion did not bar plaintiff's 2010 lawsuit because the relevant issue in the 2008 lawsuit was whether plaintiff had been defrauded and the district court focused on the adequacy of plaintiff's vegetarian meals and the relevant issue in the 2010 lawsuit was whether defendant knowingly presented fraudulent claims for payment to the state and the district court focused on the adequacy of meals provided to all inmates in the facility.
State ex rel. Peterson v. Aramark Corr. Servs., LLC
, 2014-NMCA-036.