Phone Recovery Services, LLC v. Verizon of New England, Inc., 102 N.E.3d 968

Background

PRS, a New Jersey LLC, filed a qui tam suit under the Massachusetts False Claims Act (G. L. c. 12, §§ 5A–5O) alleging telecom providers failed to bill, collect, and remit the mandated $0.75/month enhanced 911 surcharge, causing underpayments to the Commonwealth.
PRS filed the complaint under seal and served the Attorney General; the AG declined to intervene and PRS proceeded as relator seeking a share of any recovery.
Defendants moved to dismiss raising multiple grounds: failure of particularity, that PRS is not a proper “relator,” the public-disclosure bar, and the tax bar; the trial judge dismissed solely on the tax-bar ground.
The Supreme Judicial Court transferred the appeal to itself and held the case must be dismissed for lack of subject-matter jurisdiction because PRS (a corporation) lacks statutory standing as a “relator.”
The court’s analysis focused on statutory interpretation: the Massachusetts Act defines "relator" as an "individual," whereas "person" (a defined term that includes corporations) is used elsewhere in the statute, indicating the Legislature intended relators to be natural persons only.
The court remanded with instructions to dismiss for lack of jurisdiction and noted PRS could attempt to substitute an individual relator, but the present complaint by the LLC cannot proceed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether PRS has standing to sue as a relator under the Massachusetts FCA	PRS argued it qualifies as a relator and courts should interpret the Act like the federal FCA, allowing corporate relators	Defendants argued the Act limits relators to “individual[s]” and thus PRS (a corporation) lacks standing	Held: PRS lacks standing because the Act defines relator as an "individual," so a corporation cannot be a relator; dismissal for lack of subject-matter jurisdiction
Whether the court should dismiss on the tax-bar ground (trial court’s basis)	PRS disputed that the 911 surcharge is a tax for purposes of the Act or that tax-bar applies	Defendants argued the 911 surcharge is a tax and thus excluded from the Act’s reach	Court did not decide this; affirmed dismissal on standing grounds instead
Whether federal FCA precedent (allowing corporate relators) controls interpretation of Massachusetts Act	PRS urged analogical reliance on federal FCA cases allowing corporate relators	Defendants emphasized statutory textual differences between Mass. Act and federal FCA	Held: Federal FCA is inapposite because Massachusetts Act uses different, controlling statutory text ("individual" vs "person")
Whether dismissal for lack of jurisdiction precludes a later-filed action by an individual relator	PRS argued it could substitute an individual relator or later file anew	Defendants invoked the Act’s first-to-file rule to bar substitution	Held: Dismissal for lack of jurisdiction is not an adjudication on the merits; a new individual relator would not be precluded by this dismissal (court skeptical of first-to-file argument)

Key Cases Cited

Ginther v. Commissioner of Ins., 427 Mass. 319 (standing requires person to have suffered or be in danger of suffering legal harm)
Doe v. Governor, 381 Mass. 702 (standing and actual controversy relate to subject-matter jurisdiction)
Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000) (jurisdictional issues under FCA; priority of standing questions)
Commonwealth v. Va Meng Joe, 425 Mass. 99 (appellate court may affirm on alternative grounds)
Scannell v. Attorney Gen., 70 Mass. App. Ct. 46 (discussing relator role under Mass. False Claims Act and guidance from federal law)
Commonwealth v. Gagnon, 439 Mass. 826 (interpretive canon: differing word choice implies differing scope)
Bevilacqua v. Rodriguez, 460 Mass. 762 (dismissal for lack of jurisdiction is not an adjudication on the merits)
Ex parte McCardle, 7 Wall. 506 (when jurisdiction ceases, court must dismiss)