State ex rel. Foy v. Austin Capital Mgmt., Ltd.
355 P.3d 1
N.M.2015Background
- This NM Supreme Court case addresses whether retroactive application of the Fraud Against Taxpayers Act (FATA) violates ex post facto protections.
- The Foys filed a first qui tam action (Vanderbilt) alleging misconduct dating back to 2003 before FATA’s 2007 enactment.
- The Foys then filed a second FATA action (Austin Capital) against state officials in the First Judicial District Court.
- Section 44-9-9(B) bars suits against state officials where the action is based on information known to the attorney general when filed.
- The Court holds Austin Capital is not barred by the knowledge bar and is not a “parasitic” suit; consolidation with Vanderbilt is warranted for judicial economy.
- The Court concludes treble damages under FATA are predominantly compensatory and may be applied retroactively; civil penalties’ punitive nature awaits a specific amount awarded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 44-9-9(B) bars Austin Capital based on AG knowledge | Foy argues Austin Capital is barred because the action relies on evidence known to AG when filed | Malott argues the action is barred as based on AG knowledge | Not barred; Austin Capital not parasitic under the knowledge bar |
| Whether the case is barred by claim splitting | Foy argues consolidation is appropriate and no final judgment exists in Vanderbilt | Malott contends potential duplicative suits burden defendants | Consolidate Vanderbilt and Austin Capital; proceed in a single action |
| Whether retroactive application of FATA violates ex post facto | Foy argues retroactivity is permissible if damages are remedial | Defendants contend penalties are punitive if retroactive | FATA retroactive as to treble damages are predominantly compensatory; civil penalties await final amount; overall constitutional |
Key Cases Cited
- United States ex rel. Marcus v. Hess, 317 U.S. 537 (U.S. 1943) (government knowledge bar origin; parasitic suits concerns)
- Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280 (U.S. 2010) (context for government knowledge/public disclosure framework)
- Cook Cnty. v. United States ex rel. Chandler, 538 U.S. 119 (U.S. 2003) (treble damages with compensatory/punitive considerations in FCA)
- Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (U.S. 2000) (treble damages/punitive vs remedial assessment)
- Kennedy v. Mendoza-Martinez, 372 U.S. 144 (U.S. 1963) (seven-factor test for punitive vs remedial)
- White Chevy Ut. v., 132 N.M. 187 (N.M. 2002) (NM Supreme Court on remedial purpose of civil penalties)
- Denison v. Tocker, 55 N.M. 184 (N.M. 1951) (remedial vs punitive consideration in penalties)
- Kirby v. State ex rel. Securities Div., 133 N.M. 782 (N.M. 2003) (civil penalties under securities act; remedial characterization)