On November 21, the Florida First District Court of Appeals affirmed the dismissal of a qui tam false claims act lawsuit against a lender, securitization trust, and MERS for the recovery of allegedly unpaid documentary stamp taxes associated with certain assignments of mortgage notes. Stevens v. State of Florida, No. 1D13-1206, 2013 WL 6097312 (Fl. Ct. App. Nov. 20, 2013). Appellants, two Florida residents, sought to recover the alleged unpaid taxes on behalf of the State of Florida as relators under the Florida False Claims Act (FFCA), as well as a cut of the recovered proceeds. But the First District Court of Appeal affirmed the trial court’s determination that it lacked subject matter jurisdiction under the FFCA to address Appellants’ claims. Specifically, the First District found that Florida’s Tax Act—not the FFCA—governed private actions like Appellants’ where a plaintiff sought recovery for a failure to pay taxes. Analyzing the Tax Act and FFCA under well-settled principles of statutory construction, including that specific statutes trump general statutes and that legislatures are presumed to be aware of existing laws when they pass new ones, the court of appeals determined that the Tax Act, which vests the Florida Department of Revenue with the power to compensate tax whistleblowers, precluded Appellants’ FFCA claim. BuckleySandler attorneys Matthew Previn, Andrew Louis, and Bradley Marcus represented the lender, GE Money Bank, which is now known as GE Capital Retail Bank, in the successful lower court action and subsequent successful appeal.
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Florida Appeals Court affirms dismissal of state qui tam FCA lawsuit alleging failure to pay stamp tax upon assignment
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