Dusting off rarely used powers held under the Class Action Fairness Act, the U.S. Department of Justice and some state attorneys general have begun to file in opposition to class action settlements. In a case against defendants Ashburn Corporation and online discount wine retailer Wines ‘Til Sold Out (WTSO), which had already drawn objections from CEI’s Ted Frank, DoJ and AGs from 19 states succeeded in getting some settlement terms rewritten, in a deal then denied final approval by the trial judge, who saw additional problems. [Alison Frankel, Reuters; Perry Cooper, Bloomberg Law and more; Nicholas Malfitano, Legal Newsline] For Arizona Attorney General Mark Brnovich, the wine case was the ninth in which his office had intervened against a class settlement it viewed as unfair [Brnovich press release] “If your state’s AG isn’t joining the briefs of the bipartisan coalition led by Arizona defending consumers against class action abuse, you should be asking their office some tough questions.” [@tedfrank on Twitter]
A New York appellate court has upheld an order that New York Attorney General Eric Schneiderman pay counsel fees to the Competitive Enterprise Institute for having resisted required disclosure of the “AGs United for Clean Energy” secrecy agreement [Anna St. John, CEI; Chris White, Daily Caller]
- One-woman false-accusation machine induced Pittsburgh police to file eight criminal cases against couple; one was jailed for six days and the other for six months before she admitted making it up [Paula Reed Ward, Pittsburgh Post-Gazette]
- Regulation is the bane of a great many California small businesses, and that goes for Humboldt County marijuana growers too [David Boaz, Cato]
- One Billy Goat might have cause to regret picking trademark fight with another [Timothy Geigner, TechDirt]
- “Antitrust Jurisprudence Is the Right’s Greatest Legal Success” [John McGinnis, Law and Liberty]
- State Attorney General Election Tracker is a new resource from law firm Cozen O’Connor tracking campaign and election news from state attorney general elections across the country;
- “Iowa judge admits hundreds of his rulings were ghost-written by attorneys” [Clark Kauffman, Des Moines Register]
The use of contingency fees by governmental plaintiffs incentivizes sharp practice and overzealous litigation in lawyers charged with representing the general public; it also invites corruption and end runs around democratic legislatures intended at making law through litigation. All these evils manifested themselves in the tobacco and gun rounds of mass litigation, and there are some cases offering precedent for the proposition that their use can violate defendants’ rights to due process. Nonetheless, the Ninth Circuit has lately upheld a California district attorney’s hiring of outside law firms on a contingency basis against such a challenge [Amanda Bronstad, The Recorder] And the Supreme Court last month refused to review a challenge to the New Hampshire attorney general’s use of contingency-fee counsel in an opioids suit against Endo Pharmaceuticals [Peter Hayes and Steven M. Sellers, Bloomberg, in a piece surveying current use of public contingency fees more broadly]
In a $850 million settlement of environmental claims by the state of Minnesota against 3M, private attorneys hired by the state will get $125 million, and the settlement fund is structured so as to evade the legislative appropriations power [Youssef Rddad, AP/St. Paul Pioneer Press]
The “American public may soon pay for a billion-dollar wealth transfer from the pharmaceutical industry to state and local government,” writes Margaret Little:
Proceedings moving apace before Ohio U.S. District Judge Dan Polster bode the worst of all solutions to the opioid crisis – a swift global settlement modelled on the tobacco settlement of the 1990s. The result will inflict lasting damage on our constitutional order and do virtually nothing to solve the opioid crisis. Opioid abusers, just like smokers in the infamous tobacco settlement, stand to receive nothing. A single unelected federal judge will have feigned to have “solved” opioids, levied billions in unlegislated taxation, made drugs more costly and harder to secure for non-abusers while leading abusers to turn to heroin and fentanyl, and filled state and local coffers with revenue-by-judiciary while richly endowing trial lawyer barons – hand-picked by the judge – with billions in public funds. A swift education of the American public about this abuse of the judicial process is in order, not a swift settlement.
More: “After New York Sues Opioid Manufacturers, Drug Policy Experts Warn That Legal Action Won’t Save Lives” [Zachary Siegel, In Justice Today] The FDA is charged with setting uniform national policy on pharmaceuticals; will it allow regulatory power to be transferred pell-mell to MDL court or to the actors in a resulting settlement? [WLF] And from Jim Beck, Drug and Device Law:
…injuries from illegal opioid use are precisely the sort of injuries that the in pari delicto doctrine was designed to preclude from being recovered in litigation.
Well, what about the states as plaintiffs?…[W]ho can restrict the rights of physicians to prescribe drugs for off-label uses? That would be the states, in their traditional roles of regulators of medical practice…. States could ban precisely the off-label uses they are complaining about, but they haven’t.
California is prosecuting a man under state electronic-harassment law for posting five insults on an Islamic Center’s Facebook page [Eugene Volokh] A court filing by California Attorney General Xavier Becerra denies that the insults are protected speech or that the law is unconstitutional as applied. UCLA First Amendment expert Eugene Volokh writes, of California’s logic defending the prosecution: “This can’t possibly be consistent with the First Amendment.”
Related: New Jersey Supreme Court adopts narrow reading of criminal harassment statute so as to avoid covering repeated offensive speech which, though intended to annoy, does not invade privacy or put target in reasonable fear as to safety or security.
State attorneys general are teaming up with the tort bar in an alliance against opioids makers that’s all about the settlement prospects, writes Margaret Little at Law and Liberty:
The Financial Times has predicted a “tidal wave” of litigation that will snowball into a global settlement. Once an industry finds itself in a position where it faces a plaintiff at every level of government in nearly every state, cities, towns, counties and states jostle to put their claims into suit to get a piece of the action, “particularly when it doesn’t cost politicians anything,” as Richard Ausness, a professor at the Kentucky College of Law, told the FT.
Which leads to the heart of the question. Any settlement will likely follow the template of the tobacco Master Settlement Agreement, a quarter of a trillion-dollar wealth transfer that bloated state governments, levied unlegislated and cruelly regressive taxes on smokers, and sent $20 billion in unappropriated public money to the state AGs’ favorite donors: the mass-tort trial lawyers who have become government-financed Lawyer Barons.
A similar settlement on opioids would temporarily ease fiscal crises in the many states that have frittered away their tobacco-settlement money; but it would only encourage more such lawless and unlegislated regulation of other targets. Furthermore, it will lead to higher pharmaceutical prices and higher healthcare costs and premiums, in a process that is utterly opaque to the public, taxed without representation to enrich the lawyers (many of them former state Attorneys General stepping into a self-engineered path to personal wealth) and the governments with which they are in league.
Read the whole thing here.
P.S. Esme Deprez and Paul Barrett of Bloomberg on wheeler-dealer Mike Moore.
“Warning to Corporate Counsel: If State AGs Can Do This to ExxonMobil, How Safe Is Your Company?” Prof. John Baker in the Georgetown Journal of Law and Public Policy, excerpt:
Nation-states have long fought wars for control of oil. In a novel development, American states are now fighting a war over control of oil—not with one state attempting to take oil from another, but with some states attempting to deny its use to other states. In 2015, New York’s Attorney General, Eric Schneiderman, began an investigation of ExxonMobil. Then, at a news conference held in New York City on March 29, 2016, Schneiderman said that he and a group of other attorneys general were looking at “creative legal theories” to bring about “the beginning of the end of our addiction to fossil fuel.” The group is comprised of seventeen attorneys general, representing fifteen states, the District of Columbia, and one territory. Opposing these attorneys general from mostly “blue states” are attorneys general from twenty-seven mostly “red states.”
We’ve covered one angle of the investigation — its attempt to attach legal consequences to wrongful climate advocacy, and use subpoena power to investigate advocates — at length. Baker writes about many others, including the murky origins of the multi-state investigation and related professional responsibility questions, Exxon’s subdued public response, and the prospect of an ideological “War Between the States.”
Auto emissions design is an issue of federal regulation, and other elements of the legal process protect the rights of affected individuals, a federal court rules. So, no, states don’t get to file lawsuits of their own just because they want to. [Sara Randazzo, WSJ]