The New Jersey Appellate Division for the Superior Court, Mercer County, recently held that the New Jersey False Claims Act, N.J.S.A. 2A:32C–1 to –15 and N.J.S.A. 2A:32C–17 to –18, which was enacted on January 1, 2008 and made effective on March 13, 2008, does not apply retroactively to allegedly false claims submitted prior to the statute’s effective date.  See State of New Jersey ex rel. State ex rel. Hayling v. Correctional Medical Services, Inc., — A.3d —-, Case No. A-5575-09T2, 2011 WL 4770453 (N.J.Super.A.D., Oct 11, 2011).

In Correctional Medical Services, the relator, Leslie A. Hayling, accused Correctional Medical Services’s subcontractor, AllCare Dental Group, of submitting false claims relating to a period which the court held to be before the NJ FCA became effective on March 13, 2008.  Quoting the New Jersey Supreme Court case, Gibbons v. Gibbons, 86 N.J. 515, 521–22 (1981), the Appellate Division stated:    

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.

The Appellate Division further held that no exception applied in Correctional Medical Services, finding the legislative intent clear:  “In the present case, the fact that the Legislature postponed the Act’s effective date provides clear evidence that it envisioned only prospective application.”