State v. Correctional Medical Services, Inc.
State v. Correctional Medical Services, Inc.
Opinion of the Court
The opinion of the court was delivered by
The New Jersey False Claims Act (NJFCA), N.J.S.A. 2A:32C-1 to -15 and N.J.S.A. 2A:32C-17 to -18, was enacted on January 13, 2008. Section 19 of that Act provided: “This act shall take effect on the 60th day after enactment.” See L. 2007, c. 265, § 19. This appeal raises the issue whether, despite that language, the NJFCA should be given retroactive effect.
I.
The issue arises in the following factual context. From 1996 through March 31, 2005, Correctional Dental Associates (CDA), a New Jersey corporation founded by Leslie A. Hayling, Jr., D.D.S., furnished dental services to inmates of New Jersey’s prisons as a subcontractor pursuant to a contract between the State and defendant Correctional Medical Services, Inc. (CMS). In anticipation of the expiration of that contract, in 2004, the Department of Corrections, through the Division of Purchase and Property of the State Department of the Treasury, solicited bids for a new two-year combined health and dental services contract with two one-year optional extensions. CMS responded, submitting a bid with two options: either for CMS to directly provide all services or for it to subcontract with CDS for the provision of the dental service part of the contract. The contract was awarded solely to CMS, effective April 1, 2005. Thereafter, CMS was granted a one-year extension, and then an extension for a “transition period” to September 30, 2008.
In 2005, Hayling commenced investigating CMS and AllCare. That investigation led him to conclude that AllCare was submitting false claims for payment under the dental service portion of the contract. In May 2008, Hayling informed the Office of the Attorney General of his intention to file a qui tarn
Separately, the State, after investigation, determined that the performance by CMS of its contract for provision of medical and dental services did not meet performance standards, and it assessed liquidated damages, which were deducted from amounts due under the contract. On November 10, 2008, CMS filed an action in lieu of prerogative writs against the State to contest that assessment. However, the suit was dismissed without prejudice to CMS’s right to pursue claims against the State arising from the same facts under the Contractual Liability Act, N.J.S.A. 59:13-1 to 10. On April 8, 2010 we affirmed the dismissal in an unpublished opinion. Correctional Med. Servs, Inc. v. State, Dep’t of Treasury, No. A-3820-08, 2010 WL 1425064 (App. Div. April 8,
On September 23, 2009, the State declined to exercise its right, pursuant to N.J.S.A. 2A:32C-5d and e, to intervene in the qui tam litigation, but it permitted the case to proceed.
Following a hearing, the motion judge granted defendants’ motions, ruling that because the events alleged in the underlying complaint as violating the NJFCA occurred from April 1, 2005 through March 31, 2007, but the NJFCA did not become effective until March 13, 2008, the Act was inapplicable. In doing so, the judge gave the Act a wholly prospective application, determining that none of the exceptions to the general rule that a statute is to be applied prospectively was applicable. Additionally, the judge dismissed Hayling’s common-law causes of action for lack of standing. This appeal of the judge’s dismissal of Hayling’s NJFCA claims followed. Hayling has not appealed from the dismissal of his common-law claims.
II.
Having carefully reviewed the legal arguments presented by the parties and the State, we conclude that the motion judge was correct in his determination, as a matter of law, that the
The courts of this State have long followed a general rule of statutory construction that favors prospective application of statutes. The rationale for this rule has been succinctly stated as follows:
It is a fundamental principle of jurisprudence that retroactive application of new laws involves a high risk of being unfair. There is general consensus among all people that notice or warning of the rules that are to be applied to determine their affairs should be given in advance of the actions whose effects are to be judged by them. The hackneyed maxim that everyone is held to know the law, itself a principle of dubious wisdom, nevertheless presupposes that the law is at least susceptible of being known. But this is not possible as to law which has not been made. [2 Sutherland, Statutory Construction, § 41.02 at 247 (4th ed. 1973) (quoted in Weinstein v. Investors Savings [& Loan Ass’n,] 154 N.J.Super. 164,] 167 [381 A.2d 53 (App.Div. 1977) ]).
[Gibbons v. Gibbons, 86 N.J. 515, 521-22, 432 A.2d 80 (1981) (citations and footnote omitted).]
See also, e.g., Cruz v. Central Jersey Landscaping, Inc., 195 N.J. 33, 45, 947 A.2d 1228 (2008).
Although the Court has held that the rule of interpretation just set forth is not to be applied mechanically, and it has recognized exceptions to the rule, the Court has stated that those exceptions are applicable in instances in which “there is no clear expression of intent by the Legislature that the statute is to be prospectively applied only.” Gibbons, supra, 86 N.J. at 522, 432 A.2d 80. In the present case, the fact that the Legislature postponed the Act’s effective date provides clear evidence that it envisioned only prospective application. See Twiss v. State, 124 N.J. 461, 468, 591 A.2d 913 (1991) (noting that a postponed effective date is an indicium that the Legislature intended a statute to have prospective application) (citing Sutherland, Statutory Construction, § 41.04 at 350 (4th ed. 1986)); see also Sarasota-Coolidge Equities II, L.L.C. v. S. Rotondi & Sons, Inc., 339 N.J.Super. 105, 116, 770 A.2d 1264 (App.Div. 2001) (applying this principle and citing multiple decisions construing the Uniform Commercial Code and other statutes holding likewise); Town of Secaucus v. Hackensack
As the State noted in its brief on appeal, the Legislature declined to follow the model of some other states, which specified that their false claims acts would have retroactive application. See New York False Claims Act, L. 2007, c. 58, § 93 (“section thirty-nine of this act [Civil actions for false claims] shall apply to claims filed or presented prior to, on or after April 1, 2007 [the Act’s effective date].”); Cal. Gov.Code § 12654(b) (“A civil action under Section 12652 may be brought for activity prior to January 1,1988, if the limitations period set in subdivision (a) has not lapsed.”).
As our Supreme Court has held:
“ ‘In the interpretation of a statute our overriding goal has consistently been to determine the Legislature’s intent.’ ” Young v. Schering Corp., 141 N.J. 16, 25 [660 A.2d 1153] (1995) (quoting Roig v. Kelsey, 135 N.J. 500, 515 [641 A.2d 248] (1994)). As a general rule, that process begins with an examination of the plain language of the statute. Where a statute is clear and unambiguous on its face and admits of only one interpretation, a court must infer the Legislature’s intent from the statute’s plain meaning. A court may neither rewrite a plainly-written enactment of the Legislature nor presume that the Legislature intended something other than it expressed by way of the plain language. “[W]e need delve no deeper than the act’s literal terms to divine the Legislature’s intent.” [State v.] Butler, 89 N.J. [220,] 226 [445 A.2d 399 (1982) ].
[O’Connell v. State, 171 N.J. 484, 488, 795 A.2d 857 (2002) (citations omitted).]
The New Jersey False Claims Act provides clear evidence of the Legislature’s intent that the Act be applied prospectively. We thus need no further analysis to buttress our conclusion that the motion judge properly decided this issue.
III.
Hayling, nonetheless, urges us to look further, which we do for purposes of completeness.
We disagree. The word that Hayling has singled out does not appear in a discussion of retroactivity — and, indeed, retroactivity is never discussed directly by the Assemblyman. Rather, the word upon which Hayling’s argument hinges appears in a general description of the statute itself. Thus, it is far more reasonable to construe the phrase in which the word “past” is found as an expression of the Legislature’s intent to permit statutory causes of action occurring after the effective date of the statute that are premised upon either completed acts of fraud or ongoing conduct.
Nor do we find that a retroactive interpretation of the NJFCA must be implied as “necessary to make the statute workable or to give it the most sensible interpretation.” Gibbons, supra, 86 N.J. at 522, 432 A.2d 80. The Act establishes a qui tam action as a means of policing fraud on state government, thereby recognizing a cause of action that had previously been unavailable under the laws of New Jersey. Construing the Act as prospectively applicable in no way destroys its functionality, as was the
Further, retroactivity is not otherwise required for the reasonable application of the Act. While it is possible that, if the statute were applied retroactively, the State could recover additional funds paid by it as the result of false claims, we find no evidence that the Legislature envisioned such additional potential recoveries when enacting the NJFCA The fact that reach of an ameliorative statute could be broader does not constitute a sufficient reason, without support in the legislative history, for declaring a statute to be retroactive. See Cruz, supra, 195 N.J. at 42, 947 A.2d 1228 (declaring system for compensation of injured workers to be remedial and entitled to a liberal construction) and at 48 (nonetheless, determining not to retroactively apply amendments to the Workers’ Compensation Act increasing the level of death benefits).
The Gibbons Court also recognized, as an exception to the presumption of prospective application of statutes, instances in which amendatory statutes were ameliorative or curative in nature. However, the NJFCA is not “ameliorative” — a concept that has been utilized only in a criminal context. See Kendall v. Snedeker, 219 N.J.Super. 283, 286, 530 A.2d 334 (App.Div. 1987) (limiting applicability of concept to criminal eases); In re Smigelski, 30 N.J. 513, 527, 154 A.2d 1 (1959) (holding a statutory amendment restricting a juvenile’s possible exposure to commitment was ameliorative and, for that reason, could be applied retroactively).
Further, the NJFCA is not “curative” as we have defined that term. We have held that the “curative” exception “generally includes ‘curative acts [which] are made necessary by inadver
The final factor recognized in Gibbons applies when “the expectations of the parties may warrant retroactive application of a statute.” Gibbons, supra, 86 N.J. at 523, 432 A.2d 80. The Court found such a circumstance to exist in 2nd Roc-Jersey, supra. There, municipalities had established SIDs as a means of encouraging economic growth and employment, but many had excepted residential properties from assessments levied to accomplish the statutory purposes. In an unreported decision in Gonzalez v. Borough of Freehold, No. A-3476-92 (App. Div. June 30, 1994), certif. denied, 147 N.J. 576, 688 A.2d 1052 (1997), we upheld the constitutionality of the statute authorizing the establishment of SIDs, but invalidated the provision of a municipal SID ordinance
In summary, even if we embark upon the expanded analysis that Hayling urges, we find no basis for a conclusion that the NJFCA should be applied retroactively. We decline to consider whether such retroactive application would be constitutional, determining such an analysis is unnecessary, given our affirmance of the motion judge’s conclusion that the NJFCA should only be given prospective effect. Randolph Town Ctr., L.P. v. Cnty. of Morris, 186 N.J. 78, 80, 891 A.2d 1202 (2006).
IV.
Hayling makes an additional argument that the motion judge erred in dismissing his action in toto, pointing to allegations of his complaint that concern conduct occurring after the effective date of the NJFCA. To the extent that Hayling’s claims in this regard
We decline to address Hayling’s argument that this matter should be consolidated with the pending action by CMS against the State, regarding the trial judge to be in a better position to determine, after reviewing the procedural posture of the two actions, whether consolidation would be appropriate.
Affirmed in part and reversed in part.
Thereafter, medical and dental services were provided by the University of Medicine and Dentistry of New Jersey.
Qui tam is short for qui tarn pro domino rege quam pro se ipso in hac parte sequitur, meaning, who pursues this action on our Lord the King’s behalf as well as his own. Rockwell Int'l Corp. v. U.S., 549 U.S. 457, 463 n. 2, 127 S.Ct. 1397, 1403 n. 2, 167 L.Ed.2d 190, 200 n. 2 (2007). Pursuant to N.J.S.A. 2A:32C-7, the person bringing the action, known as the "relator" is provided a share in the proceeds of a successful action.
N.J.S.A. 2A:32C-6b gives the Attorney General the right to dismiss an action for good cause shown, upon notice to the relator and an opportunity to be heard, notwithstanding the objections of the relator.
In making this argument, Hayling points to no ambiguity in the statement of the effective date of the NJFCA, and he ignores the principle that "[a] court should not 'resort to extrinsic interpretive aids’ when ‘the statutory language is clear and unambiguous, and susceptible to only one interpretation____DiProspero v. Penn, 183 N.J. 477, 492, 874 A.2d 1039 (2005) (quoting Lozano v. Frank DeLuca Constr., 178 N.J. 513, 522, 842 A.2d 156 (2004) (internal quotations omitted)).
The record of Assemblyman Conaway’s statements is available in audio only at http://www.njleg.state.nj.us/media/archive_audio2.asp?KEY=AJU& SESSION=2006.
Senate No. 360 is the bill at issue here; the other bill concerned Medicaid fraud.
We take our description of this decision from the Court’s opinion in 2nd Roc-Jersey, supra, 158 N.J. at 587, 731 A.2d 1.
We note that a timely filed new action would not be barred by the applicable statute of limitations. N.J.S.A. 2A:32C-11 (establishing a six-year limit "after the date on which the violation of the act is committed”).
Reference
- Full Case Name
- STATE OF NEW JERSEY, THROUGH LESLIE A. HAYLING, JR., D.D.S. v. CORRECTIONAL MEDICAL SERVICES, INC., ALLCARE DENTAL GROUP, L.L.C., VICKIE BYBEE, DAVID MEEKER, JANICE BELL, D.M.D., AND LIONEL ANICETTE, M.D., DEFENDANTS-RESPONDENTS
- Cited By
- 2 cases
- Status
- Published