Debevoise & Plimpton LLP has successfully represented Prudential, John Hancock, AXA, Guardian, MassMutual and TIAA in a qui tam lawsuit filed against them in the Supreme Court of the State of New York, County of New York alleging over $14.5 billion in damages. In a total victory for the firm’s clients, Justice Andrea Masley granted its motion to dismiss with prejudice and denied plaintiff’s request to re-plead.

Plaintiff-Relator Total Asset Recovery Services, LLC (“TARS”), an audit firm, brought the action on behalf New York in 2010 under the qui tam provisions of the New York False Claims Act (“NYFCA”). TARS alleged that the life insurers knowingly failed to report and escheat abandoned life insurance policy proceeds. The lawsuit was an attempt to capitalize on a 2012 paradigm shift in the law governing the payment of life insurance claims, when New York instituted a requirement that insurance companies use electronic databases such as the Social Security Administration’s Death Master File (“DMF”) to proactively search for potentially deceased insureds. The NYAG investigated the matter for several years before ultimately declining to intervene in the case. Debevoise represented all six clients in those investigations and was central in convincing the NYAG not to pursue the claims itself.

Justice Masley’s decision adopted all of Debevoise’s main arguments for dismissal, including that plaintiff failed to state a claim because life insurers were not required to search the DMF before 2012, nor were they required to escheat policy proceeds on the basis of a DMF search; that TARS did not adequately allege scienter or plead its claims with particularity as required by the NYFCA; and that the NYFCA’s 10-year statute of limitations applies to all NYFCA claims, even those premised on violations of statutes with longer limitation periods, such as the Abandoned Property Law.

The Court also denied TARS’s request for leave to re-plead its complaint because it had already amended the complaint three times, most recently in November 2017 (shortly before the case was unsealed). TARS and the New York Attorney General have 30 days to file a notice of appeal.

The Debevoise team was led by partners Maeve O’Connor, Susan Reagan Gittes and Edwin G. Schallert, associates Brooke J. Willig, Matthew J. Sorensen and Kate Walsh, and litigation support team member Steve Horner. Partners Edwin G. Schallert, Mark P. Goodman and Maeve O’Connor also led the matters for various clients in the related years-long NYAG investigation.

Debevoise & Plimpton LLP is a premier law firm with market-leading practices, a global perspective and strong New York roots. We deliver effective solutions to our clients’ most important legal challenges, applying clear commercial judgment and a distinctively collaborative approach.