This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
A group of relators, employees of the New Mexico Office of the Superintendent of Insurance (OSI), alleged that Presbyterian Health Plan (PHP) and Presbyterian Insurance Company (PIC) underpaid premium taxes by improperly applying deductions and credits over a 14-year period. The relators filed a qui tam lawsuit under the Fraud Against Taxpayers Act (FATA), seeking a share of the recovery from an administrative audit conducted by OSI, which resulted in a $15.6 million recovery from PHP and PIC (paras 2-4, 11).
Procedural History
- District Court: Denied relators' claim for a share of the recovery, finding insufficient overlap between the relators' lawsuit and the administrative recovery (para 18).
- Court of Appeals: Affirmed the district court's decision, agreeing that there was no overlap between the relators' complaint and the administrative proceedings (para 20).
Parties' Submissions
- Plaintiffs: Argued they were entitled to a share of the $15.6 million recovery from the administrative audit, as it resulted from their original qui tam complaint (para 5).
- Defendant: Contended that the relators were not entitled to a share because their complaint did not specifically mention the Medical Insurance Pool (MIP) credits, which were the basis of the administrative recovery (para 4).
Legal Issues
- Whether the relators are entitled to a share of the proceeds collected by the State through an alternate remedy under FATA (para 1).
- What standard should be applied to determine the overlap between the relators' complaint and the State's recovery (para 22).
Disposition
- The Supreme Court of New Mexico vacated the Court of Appeals' decision and remanded the case to the district court for further proceedings consistent with the opinion (para 68).
Reasons
Per Thomson, Chief Justice (Vigil, Bacon, Zamora JJ., and Chavez Ortega J. concurring):
The Court found that the district court applied an inappropriate standard by requiring a perfect overlap between the relators' complaint and the administrative recovery. The Court rejected the heightened pleading standard from Bledsoe and instead adopted the material elements test from FATA's first-to-file rule. This test requires that the relators' complaint provide the government with sufficient information to investigate the related frauds uncovered during the alternate remedy proceeding. The Court emphasized that the relators should have the same rights to recovery regardless of whether the State intervenes or pursues an alternate remedy. The case was remanded to the district court to determine if the State's alternate remedy was merely a continuation of the relators' original FATA action and to apply the material elements test if necessary (paras 6, 22-24, 46-47, 56-60).