Court Grants Reargument/Reconsideration Of Dismissal Of Claim Under The New York State False Claims Act To Allow Liquidated Civil Penalties

Posted: June 11, 2025 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Categories Civil Litigation, False Claims Act

Court Grants Reargument/Reconsideration Of Dismissal Of Claim Under The New York State False Claims Act To Allow Liquidated Civil Penalties

On May 15, 2025, Justice Andrew Borrok granted a plaintiff’s motion for reargument/reconsideration of complete dismissal of its claim under the New York State False Claims Act (NYSFCA), holding that although the claim for actual damages was properly dismissed, the plaintiff could still pursue liability for civil penalties. In State of New York ex rel. Edelweiss Fund, LLC, v. JPMorgan Chase & Co., et al., Index No. 100559/2014, the Court had previously granted a motion to dismiss the NYSFCA claim based on the failure to show actual damages. However, the Court reversed its prior ruling for “overlook[ing] or misapprehend[ing]” that the NYSFCA also allowed plaintiffs to seek a liquidated civil penalty against a defendant. The Court explained:

Liability for violation includes a liquidated civil penalty and damages, which need not be shown to state a claim but which if shown will be doubled and may be trebled . . . it protects the Treasury from monetary injury. Put plainly, the statute is remedial and exposes even unsuccessful false claims to liability.

The attorneys at Schlam Stone & Dolan frequently advise clients concerning the availability of actual and liquidated damages. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.