Supreme Court tells lower court to weigh whether whistleblowers should get more money

Jan. 9—The state Supreme Court held Thursday that the lower courts must reconsider whether three women whose lawsuit helped the state collect millions of dollars from one of New Mexico’s largest health insurers are entitled to a greater share of the money they helped recover.

A First District Court judge had previously ruled the three weren’t entitled to more money, a decision upheld by the Court of Appeals.

Monica Galloway, Shawna Maestas and Jolene Gonzales, former employees of the New Mexico Office of the Superintendent of Insurance, filed a whistleblower complaint in 2016 accusing Presbyterian Health Plan of avoiding tax liability through fraudulent practices. The women testified they filed their lawsuit — which accused Presbyterian Health of cooking its books to avoid tax liability, among other things — after they reported their findings to their boss, then-Superintendent of Insurance John Franchini, and he refused to take action.

Under the Fraud Against Taxpayers Act, citizens who suspect government fraud can file their own lawsuit but the Attorney General’s Office gets a chance to prosecute the allegations first if it wishes. Then-Attorney General Hector Balderas brought a case against Presbyterian accusing the company of improperly claiming tax credits in 2003 and 2004, later reaching a settlement in which the insurer agreed to pay $18.5 million but admitted no wrongdoing.

The three women were part of that settlement and collected 20% of the money, or about $3.7 million, as allowed by law. The Office of Superintendent of Insurance subsequently recovered an additional $15.5 million through an administrative proceeding. The women’s attorney argued they were entitled to 20% of that money as well, but state District Judge Francis J. Mathew ruled in 2020 the additional money wasn’t related to any wrongdoing the women had brought to light and they were not entitled to a share of it.

The state Court of Appeals affirmed Mathew’s decision, but Thursday’s Supreme Court ruling sends the case back to District Court. The lower courts application of case law in relation to the Fraud Against Taxpayer Act complaint “is antithetical to encouraging whistleblower claims,” Chief Justice David Thomson wrote.

“This Court declines to support an approach that would allow the government to simply push a matter into an alternate proceeding and preclude a relator’s fair share based on a post hoc hypertechnical review,” the ruling says.

Attorney Stephen P. Thies who represented the Office of the Superintendent of Insurance, said he was still digesting the ruling Thursday and wasn’t prepared to comment.

Plaintiffs’ attorney Kate Ferlic called the ruling a “tremendous victory” for her clients and “everyday New Mexican’s who report fraud,” saying it affirms the critical role the Fraud Against Taxpayers Act plays in holding corporations accountable to taxpayers.

“These ladies are warriors for what is right,” Ferlic said.

“The only bittersweet part,” Ferlic added, is Galloway will never know she won or be able to collect additional funds, She died on Dec. 29 from complications associated with a medical procedure.

“She was the most tenacious person I’ve ever known,” Ferlic said of Galloway. “Her diligence and faith drove her to fight for what is right.”

Galloway — 57 at the time of her death— is survived by her wife and teenager daughter.

“She leaves a legacy of faith tenacity, and profound sense of justice,” Ferlic said.

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