A. Except as otherwise provided in this section, if the state or a political subdivision proceeds with an action brought by a qui tam plaintiff and the state or political subdivision prevails in the action, the qui tam plaintiff shall receive:

1. (1) at least fifteen percent but not more than twenty-five percent of the proceeds of the action or settlement, depending upon the extent to which the qui tam plaintiff substantially contributed to the prosecution of the action; or

2. (2) no more than ten percent of the proceeds of the action or settlement if the court finds that the action was based primarily on disclosures of specific information, not provided by the qui tam plaintiff, relating to allegations or transactions in a criminal, civil, administrative or legislative hearing, proceeding, report, audit or investigation or from the news media, taking into account the significance of the information and the role of the qui tam plaintiff in advancing the case to litigation. However, if the attorney general or political subdivision determines and certifies in writing that the qui tam plaintiff provided a significant contribution in advancing the case, then the qui tam plaintiff shall receive the share of proceeds set forth in Paragraph (1) of this subsection.

   B. If the state or political subdivision does not proceed with an action brought by a qui tam plaintiff and the state or political subdivision prevails in the action, the qui tam plaintiff shall receive an amount that is not less than twenty-five percent or more than thirty percent of the proceeds of the action or settlement, as the court deems reasonable for collecting the civil penalty and damages.

   C. Whether or not the state or political subdivision proceeds with an action brought by a qui tam plaintiff:

3. (1) if the court finds that the action was brought by a person that planned or initiated the violation of Section 44-9-3 NMSA 1978 upon which the action was based, the court may reduce the share of the proceeds that the person would otherwise receive under Subsection A or B of this section, taking into account the role of the person as the qui tam plaintiff in advancing the case to litigation and any relevant circumstances pertaining to the violation; or

4. (2) if the person bringing the action is convicted of criminal conduct arising from that person's role in the violation of Section 44-9-3 NMSA 1978 upon which the action was based, that person shall be dismissed from the civil action and shall not receive a share of the proceeds. The dismissal shall not prejudice the right of the state or political subdivision to continue the action.

   D. Any award to a qui tam plaintiff shall be paid out of the proceeds of the action or settlement, if any. The qui tam plaintiff shall also receive an amount for reasonable expenses incurred in the action plus reasonable attorney fees that shall be paid by the defendant.

   E. The state or political subdivision is entitled to all proceeds collected in an action or settlement not awarded to a qui tam plaintiff. The state or political subdivision is also entitled to reasonable expenses incurred in the action plus reasonable attorney fees, including the fees of the attorney general or state agency counsel or counsel employed by the political subdivision that shall be paid by the defendant.

   F. Proceeds and penalties collected by the state or political subdivision shall be deposited as follows:

5. (1) proceeds in the amount of the false claim paid and attorney fees and costs shall be returned to the fund or funds from which the money, property or services came;
6. (2) civil penalties shall be deposited in the current school fund pursuant to Article 12, Section 4 of the constitution of New Mexico;

7. (3) except as provided in Paragraph (4) of this subsection, all remaining proceeds shall be deposited as follows:

   1. (a) one-half into a fund for the use of the attorney general in furtherance of the obligations imposed upon that office by the Fraud Against Taxpayers Act; and
   2. (b) one-half into the general fund; or
8. (4) remaining proceeds collected by counties or municipalities as political subdivisions acting on their own behalf shall be disposed of in accordance with the direction of the governing body of the county or municipality.

History: Laws 2007, ch. 40, § 7; 2015, ch. 128, § 6.

ANNOTATIONS

The 2015 amendment, effective June 19, 2015, provided for the distribution of monetary awards when a political subdivision is successful in an action pursuant to the Fraud Against Taxpayers Act; added "or a political subdivision", throughout the section; in the catchline, added “or political subdivision”; in Paragraph (1) of Subsection C, after "Section", deleted "3 of the Fraud Against Taxpayers Act" and added "44-9-3 NMSA 1978"; in Paragraph (2) of Section C, after "Section", deleted "3 of the Fraud Against Taxpayers Act" and added "44-9-3 NMSA 1978"; in Subsection E, after "agency counsel", added "or counsel employed by the political subdivision"; designated the last sentence of Subsection E as new Subsection F and Paragraphs (1) through (3) of Subsection E as Paragraphs (1) through (3) of Subsection F; in Paragraph (2) of Subsection F, after "New Mexico", deleted "and"; in the introductory sentence of Paragraph (3) of Subsection F, after "(3)", added "except as provided in Paragraph (4) of this subsection"; in Subparagraph F(3)(b), after "general fund", added "or"; and added new Paragraph (4) of Subsection F.

The district court did not err in accepting the terms of the settlement agreement in the qui tam action. — In a qui tam action, where the district court entered a judgment that dismissed the plaintiffs' Fraud Against Taxpayers Act (FATA) claims in their entirety and also approved a settlement negotiated by the attorney general's office (AGO), and where the plaintiffs filed a motion asserting that the attorney fee provision of the settlement agreement was precluded by FATA, the district court did not err in denying plaintiffs' motion, because New Mexico has a strong public policy of encouraging settlements, the provisions of FATA do not prohibit a lump sum settlement, and the lump sum settlement agreed upon in this case was an acceptable way to resolve the qui tam action. State ex rel. Foy v. Vanderbilt Capital Advisors, 2022-NMCA-026, cert. denied.

Qui tam plaintiff’s award is collateral to adjudication of the merits of the action. — The language of the Fraud Against Taxpayers Act, 44-9-1 to -14 NMSA 1978, contemplates resolution of the merits of the action before determination of the qui tam plaintiff’s award and attorney fees, and therefore the calculation of the qui tam plaintiff’s award is subsequent to and supplementary to adjudication of the merits of the action or resolution by settlement. N.M. State Inv. Council v. Weinstein, 2016-NMCA-069, cert. denied.

Where qui tam plaintiffs, in an appeal of the district court’s approval of settlements in a qui tam action, argued that the district court’s orders dismissing the defendants from the case were not final appealable orders because the orders did not adjudicate the share of the settlement that should be awarded to the qui tam plaintiffs or the amount of attorney fees that should be paid by the defendants, the pendency of the award issues did not render the dismissal order non-final, because the calculation of a qui tam plaintiff’s award is subsequent to and supplementary to adjudication of the merits of a qui tam action or resolution by settlement, and where a post-judgment request, such as one for attorney fees, raises issues collateral to and separate from the decision on the merits, such a request will not destroy the finality of the decision. N.M. State Inv. Council v. Weinstein, 2016-NMCA-069, cert. denied.

Material elements test adopted to determine a relator's right to an award in an alternate remedy proceeding. — The general rule is that a subsequent action is related, and therefore, barred from a share of the proceeds if it alleges the same material elements of fraud described in an earlier suit, regardless of whether the allegations incorporate somewhat different details. When a relator's complaint pleads sufficient facts to put the government on notice of the related fraud in the alternate remedy proceeding, the relator deserves a share of the award. When the state pursues its claim through an alternate remedy proceeding, the qui tam plaintiff has the same rights as if the action continued in the district court. Galloway v. N.M. Off. of the Superintendent of Ins., 2025-NMSC-012, vacating A-1-CA-38974, mem. op. (N.M. Ct. App. July 14, 2022) (nonprecedential).

Relator's qui tam complaint put the government on notice of related frauds uncovered during an alternate remedy proceeding. — In a qui tam action, where plaintiffs brought a declaratory judgment action against the office of superintendent of Insurance seeking a twenty percent qui tam share of $15.6 million recovered from an alternate remedy proceeding, and where the district court denied plaintiffs' recovery, finding there was insufficient overlap between plaintiffs' Fraud Against Taxpayers Act (FATA) lawsuit and the administrative recovery because plaintiffs' complaint lacked the required specificity to allow recovery of proceeds from the alternate remedy, the district court erred in denying plaintiffs' recovery, because a relator is entitled to a share of the proceeds if their FATA action put the government on notice of the related frauds uncovered during the alternate remedy proceeding, and in this case, although the attorney general joined two additional defendants and alleged five additional claims, each of the supplemental claims was against the original defendant and based on allegations from plaintiffs' FATA complaint. The record suggests a finding that plaintiffs' allegations put the State on notice of defendant's improper application of tax credits. Galloway v. N.M. Off. of the Superintendent of Ins., 2025-NMSC-012, vacating A-1-CA-38974, mem. op. (N.M. Ct. App. July 14, 2022) (nonprecedential).