Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘attorneys general’

West Virginia Attorney General Involved in Medicaid Fraud?

One of the tricks states have used in recent years to raise money without raising taxes is to sue companies for the products they manufacture, on the legal theory that the use of those products lead to increased state health care spending. (The most prominent example, obviously, is the tobacco Master Settlement Agreement.) Not surprisingly, it often turns out that this legal theory is more of a pretext by state attorney generals to get their names in the paper than it is to actually remedy the alleged harms caused by the companies.

In 2004, West Virginia settled with Purdue Pharma, the manufacturer of Oxycontin, over the increased Medicaid costs allegedly caused by addiction to the drug. The settlement was worth $10 million. Logically, then, that $10 million should have gone to the state’s Department of Health and Human Resources to defray Medicaid costs. But there was a problem. Two problems, actually. The first was that giving the money to the DHHR wouldn’t allow Darrell McGraw, the state Attorney General, to dole out money as he saw fit. The second was that the state shares its Medicaid expenses with the federal government, so giving money to the DHHR would enable the federal government to recover part of the settlement.

The first issue has caused political controversy in West Virginia, because McGraw has given out the settlement proceeds to pretty much everybody except the underfunded DHHR, including private law firms that he hired to work on the case. But even the money that the state actually kept was handed out by McGraw based on his personal whims ($500,000 to establish a state pharmacy school (!) at the University of Charleston) rather than by the state legislature, which is constitutionally tasked with making spending decisions about state money.

But the second issue may be causing legal controversy. Legalnewsline reports that the federal government is now investigating the state’s handling of the funds, trying to find out why it hasn’t been credited for its share of the Medicaid funds. But it’s not as if it’s a secret; the deputy attorney general recently testified as to their thinking:

“We have arranged a methodology that has prevented the federal government from coming back and seizing money,” Hughes said.

Or maybe not. If you’re going to try to cheat the federal government, you should probably be a little more subtle about it. No formal charges have been filed, to be sure, and the federal government may simply resolve the problem by withholding future federal payments to the state. But that certainly won’t fix the problem caused by McGraw’s behavior; it will leave a large hole in the state’s budget which could make them worse off than if he hadn’t sued Purdue in the first place.

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April 24 roundup

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Duke recriminations

North Carolina attorney general Roy Cooper deserves credit for making it clear to all that the players were innocent and not merely unprosecutable (Stuart Taylor, Jr., “An unbelievable day”, Newsweek, Apr. 12 (web-only)). Cooper may not deserve so much credit for sparing the false accuser any public legal consequences (John Podhoretz, “Let the liar be named and shamed”, New York Post, Apr. 12). Durham DA Mike Nifong is in richly deserved trouble, of course but it would be wrong to let the press off the hook for its many sins in covering the case (Howard Kurtz, “Media Miscarriage”, Washington Post, Apr. 12; K.C. Johnson, Apr. 12 (on the New York Times’ reporting; check other entries at his blog for the sins of the Durham Herald-Sun, Newsday, etc.)). And let’s not forget the Duke faculty, or at least large portions of it (Vince Carroll, Rocky Mountain News, Apr. 12).

See these links for our extensive earlier coverage of the case.

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Implausible claims in Texas

Under Tennessee v. Lane, the ADA does not apply to states unless the states waive their sovereign immunity and permit the federal cases to proceed in state court. Attorney General Greg Abbott of Texas (coincidentally enough wheelchair-bound himself), has exercised that sovereign immunity in ADA suits, and there is a movement for the legislature to repeal the immunity. I think the voters of a state can rationally decide whether they want to allow the disabled residents of the state to be able to sue the state and its agencies for alleged discrimination against the disabled; it’s a conscious decision whether the value of that access is worth the expense to taxpayers. (Of course, the ADA is poorly drafted enough that the consequences can be silly from time to time, but that’s a different issue.)

But it doesn’t seem sporting in arguing for the change to claim that such a waiver will have “no fiscal impact” on the state, as Dennis Borel and Bruce Todd argue in an Austin American-Statesman op-ed seeking a waiver in Texas. Even one suit would cost the state money that it could spend on disciplining lawyers or speeding up the licensing of doctors wishing to practice in Texas. If there’s no money to be had from state coffers by making suits available, why the need to make suits available? One would have more respect for proponents if they were forthright in telling voters how much in taxpayer dollars they want to spend annually to achieve their goals. And since Texas does have sovereign immunity from the ADA, it is under no obligation to make a full waiver: it could choose to create some rights to suit, but not others, and thus avoid the worst abuses of the Act, a possibility that does not even seem to be under consideration.

Separately in the implausible claims department: a page on the DOJ site, much repeated elsewhere, claims that there have been only 650 ADA suits in five years. Given that there are filing mills that come close to hitting that total by themselves, this seems extraordinarily unlikely.

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Obama finally pays his traffic tickets

Because it’s not as if traffic law counts as real law, right? (Howie Carr, “Hillary circling as Obama searches for parking space”, Boston Herald, Mar. 8).

P.S. in response to comments: I think it’s a cultural fact worth recording that the editor of the Harvard Law Review felt no obligation at the time to settle up on a stack of unpaid parking tickets. It’s not wholly unrelated to the phenomenon of attorney general nominees’ not having bothered to tell the IRS about their household employees, or of U.S. Supreme Court justices’ meeting for regular poker nights reputedly in noncompliance with local law: namely, it suggests that sonorous Law Day maxims about the need for each of us to respect the law in its full majesty have surprisingly little traction even in (especially in?) elite law circles. That’s a fact worth knowing, if true.

That Obama is running for president now is the least interesting bit of the story (and indeed is only of significance in that it provided the impetus for him to pay up). Far from being received as an unforgivable blot on his character, I suspect the story will (like his smoking habit) serve to humanize the senator for many voters, perhaps especially among those who, like many readers of this site, have a somewhat rebellious attitude toward law to begin with.

P.P.S. There have apparently been some malfunctions with comments on this entry — if you entered a comment and it didn’t show up within a reasonable time, you might want to email and let us know.

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“Not about the money” files: Dickie Scruggs edition

“It was never about the money for me, this litigation,” said Dickie Scruggs, who stands to collect between $26 million and $46 million from a settlement accomplished by the use of the state attorney general, Jim Hood, to extort State Farm with the threat of criminal proceedings for daring to enforce their flood exclusion clauses in their contracts. [Lattman] Many many posts on the subject at Point of Law.

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Airport Parking, Antitrust & Eminent Domain

For the past three years, Stan Cramer has been fighting to save his parking garage near the Harrisburg International Airport from eminent domain seizure by the airport’s municipal operating authority. The airport wants to eliminate competition with its own parking lots, and when Cramer refused to sell voluntarily, the authority used its powers under Pennsylvania law to take the property by force. Recently, a Pennsylvania judge allowed Cramer’s lawsuit to stop the seizure to proceed to trial.

In a related case, Pennsylvania AG Tom Corbett filed a federal lawsuit last year to stop the airport authority’s seizure on the grounds that it violates federal antitrust law. It’s a strange setup: The Commonwealth of Pennsylvania suing one of its own subdivisions in federal court over the use of power granted by state law. In March, U.S. District Judge Christopher Conner dismissed the AG’s complaint, citing the airport authority’s immunity from federal antitrust lawsuit as a state actor. Conner said the airport’s anti-competitive motives were irrelevant; its actions were clearly authorized by the Pennsylvania legislature.

Corbett appealed the judge’s dismissal to the Third Circuit Court of Appeals. Briefs were filed in October, and a decision on the appeal is expected next year. Meanwhile, new management has taken over at the airport, and they are trying to negotiate a settlement with Cramer.

Read On…

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“Blaming cars in California”

Steve Chapman on attorney general Lockyer’s suit against automakers for facilitating carbon emissions:

So serious is the harm from this conduct that Lockyer wants automakers to … keep doing it. The usual remedy for a public nuisance–say, someone in a residential neighborhood holding raucous parties every night till dawn, or letting vicious dogs run loose–is to stop it. But the state doesn’t propose that they quit selling their products to Californians or switch to zero-emission cars. Instead, it asks the manufacturers to turn over large sums of money while continuing to commit their terrible wrongs.

That should be a clue to something Lockyer passes over: While cars may have drawbacks, they also have benefits, and most people would not be willing to give up those benefits or pay a lot more to enjoy them. That combination of virtues and vices makes autos well-suited to regulations reflecting a democratic consensus, and a poor candidate for control by the courts.

Read the whole thing (Chicago Tribune, Dec. 21).

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Not your usual AG candidate

Former California Gov. Jerry Brown is overwhelmingly favored to become the state’s next attorney general, but don’t assume he’ll necessarily follow in the footsteps of Bill Lockyer:

“I’m going to take a very practical, common-sense approach as attorney general,” Brown said in a recent interview. “I’m someone who’s acutely aware of the fact that we as a state have added 25,000 laws since I was governor. I think we ought to give people some space to live their lives.” …

And don’t assume that he will agree completely with Lockyer’s decisions. Asked about the global-warming lawsuit, Brown said he’d have to “take a good look at it.”

“I think there’s an issue of causation there,” he said, adding that California needs to consider automakers’ “imploding” financial situation. …

“He was the first politician to turn litigation into a press release [as California Secretary of State, elected in 1970],” said Hiestand, the former Brown aide [Fred Hiestand, now prominent in California litigation-reform circles].

In post-Watergate 1974, the reform-minded Brown was swept into the governor’s office. One year later, Brown and the Legislature were besieged with pleas from doctors facing skyrocketing malpractice insurance costs. Brown called a special session that would eventually lead to the Medical Injury Compensation Reform Act, or MICRA, California’s law capping pain and suffering awards at $250,000.

Hiestand remembers philosophical discussions with Brown on the best ways to compensate malpractice victims. After graduating from Yale Law School in 1964, Brown clerked for state Supreme Court Justice Mathew Tobriner, a contemporary of tort expert and future chief justice Roger Traynor. Brown, Hiestand said, recalled Traynor’s critical dissent in a 1962 case where a woman injured on a bus was awarded $134,000 for non-economic damages. Traynor said such awards were troubling because they are tied to subjective amounts of pain and suffering.

“At one point Jerry looks at me and says, ‘Money is a false god. If you’re in pain, you should turn to religion, sex or drugs,'” Hiestand said.

(Cheryl Miller, “Former Calif. Gov. Jerry Brown Runs for State Attorney General”, The Recorder/Law.com, Oct. 16)(cross-posted from Point of Law’s Featured Discussion on the election, which is still going great guns).

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Tomorrow at Point of Law: election roundtable

Just announced at my other website, Point of Law:

Tomorrow we kick off our next featured discussion, a four-day round-robin on the election and its implications for legal reform. It won’t be a debate format, more like a free-for-all of commentary and reporting that will tackle such topics as:

1) Races around the country where law and litigation have been an issue, or a motivating force;

2) Activist state attorney generals on the ballot, or running for higher office;

3) Ballot propositions to watch on election night;

4) Implications for lawsuit reform and other legal issues if one or both Houses of Congress turn Democratic.

Ted Frank, Jim Copland and I will all be participating, and we also expect surprise guests to stop by for one or more days. In fact, if you’ve got something interesting to say about the legal politics of Election ’06, we invite you to send any of us an email (my address is editor – [at] – this-domain-name – .com) to ask about contributing.

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