Stroock Special Bulletin
"When Is Your Tax Return a False Claim to the Government?"
Court of Appeals Authorizes State False Claims Act Enforcement Action in People v. Sprint
On October 20, 2015, the New York Court of Appeals issued a 6-1 decision in People v. Sprint Nextel Corp. allowing the New York Attorney General (“AG”) to pursue an enforcement action against Sprint Nextel Corporation (“Sprint”), based on allegations that Sprint violated the New York State False Claims Act (“NYFCA”) by engaging in allegedly fraudulent tax practices. This Stroock Special Bulletin examines some of the implications of the decision (the first opinion from New York’s highest court on this statute), which is the latest in a string of court cases that state governments and qui tam plaintiffs (also known as “relators”) have brought in the past decade, alleging that companies have violated a given state’s false claims act by failing to comply with that state’s tax laws.