FALSE CLAIMS ACT NOT RETROACTIVE

In early 2008, New Jersey adopted its own version of a federal law called the False Claims Act. The law allows private individuals to sue government contractors for fraud on behalf of the state. This is called a qui tam claim. Someone who sues under this law is allowed to keep between 15% and 30% of the recovered damages. A government contractor can incur liability by, among other things, submitting false claims or engaging in other dishonest practices.

Recently, a New Jersey appeals court was presented with an interesting question: can someone bring a false claims lawsuit for misdeeds that they allege to have occurred prior to the law being passed? The court ruled that the law cannot be applied retroactively. The court looked to the likely intent of the legislature.  The judges decided that the lawmakers probably didn’t want the law to be applied retroactively, because they left out a specific provision discussing retroactivity, which other state legislatures with similar laws have included.

The actual case was brought before the court by a dentist who used to provide dental care to inmates of New Jersey prisons. The dentist conducted his own investigation of another dental office, after that office was awarded a state contract for inmate dental care.  The dentist who sued apparently wanted the contract back for his own office.  He reached the conclusion that the other office was overcharging. We’ll never really know if the claim was valid, because the court, having ruled that the law was not retroactive, never reached the merits of the case.

I guess I’m just surprised that inmates have dental coverage worth fighting over.

(By the way, please contact us if you are aware of any shenanigans that are defrauding our beloved government. We love to do our part to reduce the budget deficit, and you might make a nice profit in the process.)