On Thursday, May 14, the New Jersey Assembly passed A4041, which would make provisions of the New Jersey False Claims Act retroactive under certain circumstances, by a vote of 42-27-2.


The bill, which is being sponsored by Assembly Members Conaway (D-7) and Singleton (D-7), would allow certain litigants to file claims under the New Jersey False Claims Act for actions that occurred before the Act’s 2008 adoption.


Since this bill’s introduction, we have been repeatedly assured that it is drafted so narrowly it will only apply in an infinitesimal number of cases. This may be true, as the only person who testified in favor of the bill in committee was the lawyer of a dentist who stands to benefit from the bill, but we, however, remain skeptical. Opening the door to retroactive liability in this one circumstance sets a precedent for allowing the retroactive application of all sorts of laws. Businesses need certainty in the law if they are to be comfortable putting down roots and expanding in this state, not jack-in-the-box-style liability springing out unpredictably.


Aside from the bill’s merits, we have identified a serious legal issue with the legislation. The New Jersey appellate decision that triggered this legislative effort did not reach the question of whether a retroactive application of the law would be constitutional. But federal courts have. Two federal district courts have ruled that the retroactive application of the federal version of the Act violated the Ex Post Facto clause of the U.S. Constitution. We have no reason to believe the courts would treat the New Jersey version differently, so we question the value of passing this law just to find out.


Click here to read more about this legislation.