N.M. Stat. § 44-9-6 (2026)

subdivision.
    A. If the state or political subdivision proceeds with the action, it shall have the
primary responsibility of prosecuting the action and shall not be bound by an act of the
qui tam plaintiff. The qui tam plaintiff shall have the right to continue as a party to the
action, subject to the limitations of this section.

   B. The state or political subdivision may seek to dismiss the action for good cause
notwithstanding the objections of the qui tam plaintiff if the qui tam plaintiff has been
notified of the filing of the motion and the court has provided the qui tam plaintiff with an
opportunity to oppose the motion and to present evidence at a hearing.
   C. The state or political subdivision may settle the action with the defendant
notwithstanding any objection by the qui tam plaintiff if the court determines, after a
hearing providing the qui tam plaintiff an opportunity to present evidence, that the
proposed settlement is fair, adequate and reasonable under all of the circumstances.

    D. Upon a showing by the state or political subdivision that unrestricted participation
during the course of the litigation by the qui tam plaintiff would interfere with or unduly
delay the prosecution of the case, or would be repetitious, irrelevant or for the purpose
of harassment, the court may, in its discretion, impose limitations on the qui tam
plaintiff's participation, such as:

       (1)    limiting the number of witnesses the qui tam plaintiff may call;

       (2)    limiting the length of testimony of such witnesses;

       (3)    limiting the qui tam plaintiff's cross examination of witnesses; or

       (4)    otherwise limiting the qui tam plaintiff's participation in the litigation.

     E. Upon a showing by a defendant that unrestricted participation during the course
of litigation by the qui tam plaintiff would be for purposes of harassment or would cause
the defendant undue burden or unnecessary expense, the court may limit the
participation by the qui tam plaintiff in the litigation.

    F. If the state or political subdivision elects not to proceed with the action, the qui
tam plaintiff shall have the right to conduct the action. If the attorney general or political
subdivision so requests, the qui tam plaintiff shall serve the attorney general or political
subdivision with copies of all pleadings filed in the action and all deposition transcripts in
the case, at the state's or political subdivision's expense. When the qui tam plaintiff
proceeds with the action, the court, without limiting the status and rights of the qui tam
plaintiff, may permit the attorney general or political subdivision to intervene at a later
date upon a showing of good cause.

    G. Whether or not the state or political subdivision proceeds with the action, upon a
showing by the attorney general on behalf of the state or political subdivision, or a
political subdivision on its own behalf, that certain actions of discovery by the qui tam
plaintiff would interfere with an investigation or prosecution of a criminal or civil matter
arising out of the same facts, the court may stay such discovery for a period of not more
than sixty days. The showing by the state or political subdivision shall be conducted in
camera. The court may extend the sixty-day period upon a further showing in camera
that the state or political subdivision has pursued the criminal or civil investigation or
proceeding with reasonable diligence and any proposed discovery in the civil action will
interfere with the ongoing criminal or civil investigation or proceeding.

   H. Notwithstanding the provisions of Section 44-9-5 NMSA 1978, the attorney
general or political subdivision may elect to pursue the state's or political subdivision's
claim through any alternate remedy available, including an administrative proceeding to
determine a civil money penalty. If an alternate remedy is pursued, the qui tam plaintiff
shall have the same rights in such a proceeding as the qui tam plaintiff would have had
if the action had continued pursuant to this section. A finding of fact or conclusion of law
made in the other proceeding that has become final shall be conclusive on all parties to
an action under the Fraud Against Taxpayers Act. For purposes of this subsection, a
finding or conclusion is final if it has been finally determined on appeal to the
appropriate court, if all time for filing an appeal with respect to the finding or conclusion
has expired or if the finding or conclusion is not subject to judicial review.

History: Laws 2007, ch. 40, § 6; 2015, ch. 128, § 5.

                                      ANNOTATIONS

The 2015 amendment, effective June 19, 2015, provided for the rights of a political
subdivision when bringing an action pursuant to the Fraud Against Taxpayers Act;
added "or political subdivision" throughout the section; in the catchline, added “or
political subdivision”; in the introductory paragraph of Subsection D, after "unduly delay
the", deleted "state’s"; in Subsection G, after "behalf of the state", added "or political
subdivision, or a political subdivision on its own behalf", after "interfere with", deleted
"the state’s" and added "an"; and in Subsection H, after "Section", deleted "5 of the
Fraud Against Taxpayers Act" and added "44-9-5 NMSA 1978", and after "remedy
available", deleted "to the state".

The district court was authorized to permit the attorney general to participate in
the qui tam action after the attorney general initially declined to intervene. — 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
claimed that the AGO was without authority to seek dismissal of the FATA claims and
approval of the settlement agreement when the AGO declined to intervene in the qui
tam action, and that once the AGO declined to take over the case, plaintiffs became the
sole representative of the state's interest, the district court did not err in allowing the
AGO to participate in the qui tam action because § 44-9-6(F) NMSA 1978, expressly
authorizes the court to permit the attorney general to intervene at a later date upon a
showing of good cause. State ex rel. Foy v. Vanderbilt Capital Advisors, 2022-NMCA-
026, 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).

Standard of proof to find "good cause" for dismissal of qui tam action. — Good
cause for dismissal of a qui tam action on behalf of a political subdivision exists where
the dismissal is rationally related to a legitimate government purpose, and not arbitrary,
capricious, made in bad faith, based on improper or illegal motives, founded on an
inadequate investigation, or pretextual. In exercising its discretion, the trial court may
consider any matter relevant to the issue, including the relative merits of the action, the
interest of the qui tam plaintiff, the purposes underlying the Fraud Against Taxpayers
Act, and the potential waste of government resources. State ex rel. Foy v. Vanderbilt
Capital Advisors, 2022-NMCA-026, cert. denied.

The district court applied an appropriate standard of proof to find "good cause"
for dismissal of 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 claimed that the district court erred in
dismissing the FATA claims, the district court did not abuse its discretion in dismissing
plaintiffs' claims or in approving the settlement agreement where the court detailed the
AGO's extensive collection efforts taken apart from the FATA claims, and the court's
observations and concerns about the viability and practicality of plaintiffs' litigation
strategy were well-founded. Comparing the relative success of the AGO's alternative
remedies with the lack of progress and built-in difficulties with plaintiffs' efforts supports
the district court's decision. The district court did not err in concluding that the AGO's
request to dismiss was well-founded, in good faith, not pretextual and based on
adequate investigation. State ex rel. Foy v. Vanderbilt Capital Advisors, 2022-NMCA-
026, cert. denied.

Qui tam plaintiffs not entitled to full-blown discovery prior to proposed settlement
approval. — Although a qui tam plaintiff is entitled to discovery on the fairness of a
proposed settlement, the discovery must be limited to effectuate the goal of allowing
plaintiffs a meaningful participation in the fairness hearing without unduly burdening the
state or political subdivision or the defendants, or causing unnecessary delay. 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 denied all discovery, the district court did
abuse its discretion in limiting discovery and denying plaintiffs’ broad discovery requests
that were unrelated to the factors the district court considered to assess the fairness,
adequacy, and reasonableness of the settlements. N.M. State Inv. Council v. Weinstein,
2016-NMCA-069, cert. denied.

Decisions in an alternate remedy proceeding dispose of claims in a qui tam
action. — 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 acted beyond its
jurisdiction when, in approving the settlements, the district court released the
defendants from claims in an entirely separate case, the district court did not exceed its
jurisdiction because the fact that a decision in a qui tam action may have an impact on
another pending proceeding does not necessarily diminish the court’s jurisdiction, and
44-9-6(H) NMSA 1978 contemplates the disposal of claims in a qui tam action by
decisions rendered in an alternate proceeding. N.M. State Inv. Council v. Weinstein,
2016-NMCA-069, cert. denied.