Court Opinion

ID: 9781640
Source: CourtListenerOpinion
Date Created: 2023-08-30 16:57:51.666397+00
Date Added: 2024-06-11T12:11:20.665639
License: Public Domain

Rose, C. J.,
with whom Maupin, J., agrees,
dissenting:
The majority opinion rightly concludes that tax liability matters are included as a possible false claim under Nevada’s False Claims Act (FCA). However, it then goes on to conclude that for policy considerations, an alleged false tax claim should not be included in the definition of false claims if facts must be evaluated or the revenue statutes interpreted. I have two objections to this latter conclusion. First, it is the Legislature’s function to determine the policy of revenue collection, and the Legislature has placed no such limitation in the FCA. Second, permitting the Attorney General to dismiss a whistleblower’s complaint on the grounds presented, and belatedly presented in the Beeler, Schad & Diamond, P.C., actions, will have a chilling effect on all future whistleblower actions, effectively discouraging whistleblowers from coming forward with information of wrongful conduct.
To justify negating a duly passed law, the majority opinion states that fact-based legal determinations under the tax statutes are “best left to the Department of Taxation” and cites Malecon Tobacco v. State, Department of Taxation1 as authority for this proposition. Malecón concerned whether a taxpayer could file a class action lawsuit contesting the collection of certain taxes and the constitutionality of the NRS 370.440 tax levy. The taxpayer was not suing under any specific statute permitting a lawsuit, as in our present cases. This court concluded that the taxpayer had not exhausted its administrative remedies with the Nevada Tax Commission and dismissed the case. However, several things differentiate these cases from Malecón. These whistleblower cases are not brought by a taxpayer seeking relief, as in Malecón. Instead, the whistleblowers brought suit under a specific statutory authority, the FCA, and they are opposed by taxpayers claiming that they owe no taxes. While the general approach of requiring taxpayers to exhaust administrative remedies before filing a legal action is a good one, it has no application in these factually different cases.
The majority opinion then goes on to state that the FCA is meant to encourage citizens to reveal tax cheats who submit doc*163uments containing false facts or data. However, nowhere in the FCA does it state this limitation, and the legislative history provides no indication that this limitation was intended. The FCA encourages citizens to report all attempts to avoid an obligation to pay money to the state, and I have no idea where the majority opinion comes up with this limitation except by judicially declaring that it is so. The end result of judicially engrafting a limitation onto the FCA is the elimination of all those cases where a person does not pay a governmental obligation.
Moreover, allowing the Attorney General to dismiss a case for this reason, especially after the Attorney General initially declined to intervene, will have a chilling effect on whistleblowers coming forward to report wrongdoing. The purpose of a whistleblower statute is to encourage people to reveal acts taken to cheat the government out of obligations owed. In return, the whistleblower is awarded compensation from the amount collected and protected from an employer’s harassment, coercion, or other retaliation. Most states have adopted some type of whistleblower statute,2 and courts reviewing those statutes generally broadly interpret them to carry out their “good government” purpose.3
By giving the whistleblower statute a very narrow interpretation and effectively curtailing its use in many cases, the majority opinion does just the opposite. The whistleblower act is designed to encourage citizens to report those who do not meet their obligations to the state and thereby secure the fulfillment of obligations duly owed. The two district judges who denied the Attorney General’s requests to dismiss these whistleblower actions clearly understood this. The majority opinion thwarts this noble purpose and provides a disincentive to all future whistleblowers — leaving the whistle-blowers out in the cold without any protection or compensation. Nevada’s whistleblower act has now been gutted by judicial fiat, and this is not what the Legislature intended or anticipated. For these reasons, I dissent.

 118 Nev. 837, 59 P.3d 474 (2002).

 E.g., Cal. Gov’t Code § 12653 (West 2005).

 E.g. Spencer v. Barnwell County Hosp., 444 S.E.2d 538, 540 (S.C. Ct. App. 1994).