State ex rel. Foy v. Austin Capital Mgmt., Ltd.
| Decision Date | 26 December 2012 |
| Docket Number | Opinion Number: 2013-NMCA-043,Docket No. 31,421 |
| Parties | STATE OF NEW MEXICO, ex rel. FRANK C. FOY AND SUZANNE B. FOY, Qui Tam Plaintiffs-Appellants, v. AUSTIN CAPITAL MANAGEMENT, LTD.; AUSTIN CAPITAL MANAGEMENT GP CORP.; CHARLES W. RILEY; BRENT A. MARTIN; DAVID E. FRIEDMAN; WILL JASON ROTTINGER; VICTORY CAPITAL MANAGEMENT INC.; KEYCORP; BEREAN CAPITAL; DUDLEY BROWN; TREMONT GROUP HOLDINGS, INC.; OPPENHEIMER FUNDS, INC.; GARY BLAND; DAVID CONTARINO; BRUCE MALOTT; MEYNERS AND CO.; MARC CORRERA; ANTHONY CORRERA; SANDIA ASSET MANAGEMENT; ALFRED JACKSON; DAVIS HAMILTON AND JACKSON; GUY RIORDAN; JUNIPER CAPITAL; EILEEN KOTECKI; DAN HEVESI; HENRY "HANK" MORRIS; JULIO RAMIREZ; PAUL CROSS; CROSSCORE MANAGEMENT; SDN INVESTORS; PSILOS GROUP; ALBERT WAXMAN; JEFFREY KRAUSS; STEPHEN KRUPA; DAVID EICHLER; DARLENE COLLINS; WETHERLY CAPITAL GROUP; DAN WEINSTEIN; VICKY SCHIFF; QUADRANGLE GROUP; ALDUS EQUITY; SAUL MEYER; MARCELLUS TAYLOR; MATTHEW O'REILLY; RICHARD ELLMAN; DEUTSCHE BANK; DIAMOND EDGE CAPITAL; MARVIN ROSEN; CARLYLE MEZZANINE PARTNERS; CARLYLE GROUP; DB INVESTMENT MANAGERS; TOPIARY TRUST; PARK HILL GROUP; DAN PRENDERGAST; CATTERTON PARTNERS; BLACKSTONE GROUP; GOLD BRIDGE CAPITAL; DARIUS ANDERSON; KIRK ANDERSON; ARES MANAGEMENT; INROADS GROUP; CAMDEN PARTNERS; HFV; BARRETT WISSMAN; TAG; AJAX INVESTMENTS; CLAYTON DUBILIER AND RICE; INTERMEDIA; LEO HINDERY; WILLIAM R. HOWELL; CABRERA CAPITAL; MARTIN CABRERA; CRESTLINE INVESTORS; TREMONT PARTNERS, INC.; TREMONT CAPITAL MANAGEMENT, INC.; JOHN DOE #1; and JOHN DOES #3 through #50, Defendants-Appellees. |
| Court | Court of Appeals of New Mexico |
Certiorari Granted, March 15, 2013, No. 34,013
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Victor R. Marshall & Associates, P.C.
Stephen Krupa, Crestline Investors, Dan Weinstein, Inroads Group, Wetherly
Capital Group
Modrall, Sperling, Roehl, Harris & Sisk P.A.
and Aldus Equity
French & Associates, PC
Stephen G. French
Albuquerque, NM
for Appellee Guy Riordan
Butt, Thornton & Baehr, PC
Rodney Schlagel
Albuquerque, NM
for Appellee William R. Howell
Silva, Saucedo & Gonzales, PC
Benjamin Silva, Jr.
Albuquerque, NM
for Appellee HFV
Law Office of George "Dave" Giddens, P.C.
Rodey, Dickason, Sloan, Akin & Robb, P.A.
Andrew G. Schultz
Albuquerque, NM
for Appellees DB Investment Managers, Topiary Trust, Deutsche Bank
Basham & Basham, P.C.
Katherine A. Basham
Martin R. Esquivel
Santa Fe, NM
for Appellee Bruce Malott
Robles, Rael & Anaya, PC
Luis E. Robles
Albuquerque, NM
for Appellee Meyners and Company
Gregg Vance Fallick
Albuquerque, NM
for Appellee Bruce Malott
Rubin, Katz, Ahern, Herdman & MacGillivray, P.A.
Frank T. Herdman
Santa Fe, NM
for Appellee Clayton Dubilier and Rice
Madison & Mroz, PA
Michael J. Dekleva
Albuquerque, NM
for Appellee Julio Ramirez
Robert Becker & Associates
Robert W. Becker
Albuquerque, NM
for Appellee Guy Riordan
Keleher & McLeod, P.A.
Sean Olivas
Albuquerque, NM
for Appellee Martin Cabrera and Cabrera Capital
Debevoise & Plimpton, LLP
Mark P. Goodman
Amanda Ulrich
Lisa Howley
New York, NY
for Appellee Victory Capital and Clayton Dubilier and Rice
Fried, Frank, Harris, Shriver & Jacobson, LLP
Peter L. Simmons
for Appellees DB Investment Managers, Topiary Trust, and Will Jason Rottinger
{1} New Mexico's Fraud Against Taxpayers Act, NMSA 1978, §§ 44-9-1 to -14 (2007) (FATA or the Act) was passed in 2007. The next year, Plaintiffs filed a qui tam action under the Act alleging violations that occurred as early as 2003. Although these alleged acts predate the effective date of FATA, they fall within the period provided for in FATA's retroactivity provision, Section 44-9-12(A) (). Defendants argued that FATA's retroactivity provision violates the federal and state Ex Post Facto Clauses and is therefore unconstitutional. The district court agreed and dismissed that portion of the complaint containing allegations of acts that occurred before the effective date of FATA. We granted leave to file an interlocutory appeal, and we now affirm.
{2} Before beginning our discussion of the constitutional question, we provide a short background. This action is linked to a companion lawsuit, State ex rel. Foy v. Vanderbilt Capital Advisors, LLC, D-101-CV-2008-1895 (Vanderbilt), with similar allegations fromthe same plaintiffs, Frank and Suzanne Foy (Plaintiffs) along with the State of New Mexico (the State). Plaintiffs allege that Defendants—who include Wall Street firms and investment advisors, as well as high-ranking state officials—executed fraudulent schemes that led to the loss of hundreds of millions of dollars at the expense of the State Investment Council (SIC) and the New Mexico Educational Retirement Board (ERB). Plaintiffs also allege that Defendants misrepresented their investment products and services and paid kickbacks and bribes to get business from the SIC and ERB. The complaint alleges that some state officers, including the heads of the SIC and ERB, conspired with their co-defendants to steer state investment funds to firms that were willing to pay kickbacks. Some of the acts are alleged to have occurred as early as 2003, which predates implementation of the Act but falls within its retroactivity provision.
{3} The district court in Vanderbilt zeroed in on the issue of FATA's retroactivity provision and ruled that it was an unconstitutional violation of the federal and state Ex Post Facto clauses. The district court in this action eventually adopted the reasoning of the Vanderbilt court and severed the retroactivity clause while allowing the rest of the action covering conduct that occurred on July 1, 2007 or later, to continue prospectively. We granted leave for interlocutory appeal to consider the constitutionality of the retroactivity clause. We also allowed parties, in their briefs, to raise the question of whether the case should be dismissed for lack of subject matter jurisdiction. We briefly touch on the question of subject matter jurisdiction and then proceed with our analysis of the constitutionality of FATA's retroactivity provision.
{4} As a preliminary matter, we address the question of subject matter jurisdiction. Defendants ask us to dismiss the complaint for lack of subject matter jurisdiction for two reasons: (1) they say Plaintiffs failed to exhaust their administrative remedies, and (2) they claim that Plaintiffs are barred from bringing an action against state officials. See § 44-9-9(B) (). The district court tentatively denied Defendants' motions to dismiss based on lack of subject matter jurisdiction under both arguments, and the court invited the parties to brief the issue and advance their arguments.
{5} We conclude that both arguments would benefit from factual developments and legal arguments to the court below, and we decline to address the issue of subject matter jurisdiction at this time. Cf. City of Las Cruces v. El Paso Elec. Co., 1998-NMSC-006, ¶ 24, 124 N.M. 640, 954 P.2d 72 (); Schlieter v. Carlos, 108 N.M. 507, 510, 775 P.2d 709, 712 (1989) ().
{6} "We review issues of...
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