National Association of Attorneys General

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Decisions Affecting the Powers and Duties of Attorneys General

Emily Myers, Antitrust and Special Projects Counsel

California—Settlement Preempts Later State Claims for Restitution.

People v. Intelligender, --- F.3d ----, 2014 WL 5786718 (C.A.9 (Cal.))

In a case involving removal under the Class Action Fairness Act (CAFA) of a government action, the U.S. Court of Appeals for the Ninth Circuit held that although the state could bring an enforcement action against a party that had previously settled a CAFA class action involving the same claims, it could not seek restitution for members of the class.

A nationwide class, in an action brought under CAFA, reached a settlement with the manufacturer of fetal gender prediction tests. The state subsequently filed suit, alleging violations of California’s consumer protection laws. The defendant moved for an injunction against the state’s action, and the district court denied the injunction. The defendant then sought an injunction only against the state’s restitution claims, which the district court also denied. The defendant appealed.

The Ninth Circuit described CAFA as expanding federal jurisdiction to “ensure uniformity and fairness.” CAFA requires notice of a proposed settlement to be served on appropriate federal and state officials and prohibits a court from ordering final approval of a proposed settlement until 90 days after this notification. States are free not to participate, according to the Ninth Circuit, leaving the equitable compensation of their citizens to the courts. Because states may bring enforcement actions in order to protect their citizens from future harm, 

although the role of potential objector to a proposed settlement under CAFA serves important interests, a sovereign’s ability to bring enforcement actions against private parties that violate the law serves equally if not more important public interests. Nothing in CAFA’s notification requirements could be read to interfere with the power of states or the federal government to bring enforcement actions.

The Ninth Circuit first described a three-pronged test for whether res judicata applies, and an injunction should issue to “protect or effectuate the federal court’s judgments.” Although the state’s case did reach a final judgment on the merits and involve the same cause of action or claim, the court held that there was not sufficient privity between the class action plaintiffs and the state. The court found that the CAFA class action settlement could not bind the state in its sovereign capacity. “Because the State action is brought on behalf of the people, it implicates the public’s interest as well as private interests, and therefore the remedial provisions sweep much more broadly.” The court also rejected the defendant’s argument that the State’s enforcement action should be enjoined because it failed to object to the proposed settlement after receiving the CAFA notice, noting that the notice requirement does not impose any obligations, duties or responsibilities on the state officials.

The Ninth Circuit then addressed the question of whether the state’s claims for restitution should be enjoined, holding that those claims could be enjoined. The court held that although all members of the class were not compensated,

If the State wished to secure compensation for those class members, it had an opportunity to do so by intervening after receiving notice of the proposed settlement . . . This is the method CAFA established for states to seek equitable compensation for class members. The State chose not to use its authority, and the settlement was approved. Compensation is res judicata.

The court explicitly stated that the state can seek civil penalties and injunctive relief, and described CAFA’s notification requirement as “safeguard[ing] the State’s ability to participate, comment, or object during the Rule 23 class action settlement approval process. . .” But, the court held, “Having chosen not to participate, the State is precluded from seeking the same relief sought in the CAFA class action. This is so not because [CAFA] imposes any obligation on the state, but by operation of principles of res judicata.”

California—Attorney General’s Authority in Quo Warranto Actions.

Rando v. Harris, 228 Cal. App. 45h 868 (Ct. App. Cal. 2014).

A California appellate decision recently examined the attorney general’s authority in connection with the rarely-used quo warranto action. Quo warranto is a common law remedy, which in California is codified as the exclusive action “by which one challenges any person who usurps, intrudes into, or unlawfully holds or exercises any public office. A quo warranto action may only be brought by the attorney general. California courts have determined that the attorney general has wide discretion with respect to bringing quo warranto actions and may “refuse to sue where the issue is debatable.” Courts may overrule the attorney general “where the abuse of discretion by the attorney-general is . . . extreme and clearly indefensible.” The attorney general’s actions are challenged through a writ of mandamus.

After the Glendale City Council appointed a former member to fill the term of a retiring member, two petitioners asked the California attorney general to issue a writ of quo warranto, in light of language in the Glendale City Charter which provides, “No former councilmember shall hold any compensated city office or city employment until two (2) years after leaving the office of councilmember.” The attorney general concluded that this language was intended to “prohibit (or rather, continue to prohibit) a Council member from improperly using his or her influence to gain non-elective City employment.” The attorney general acknowledged that there were arguments on both sides, but determined that it was not a close case, and that the quo warranto action should not be allowed. The petitioners filed a writ of mandamus to require the attorney general to file the quo warranto proceeding. The trial court agreed with the attorney general that although an argument could be made for petitioners’ interpretation, the attorney general’s action was not an “extreme and indefensible abuse of discretion.” The petitioners appealed, arguing that the attorney general did not have wide discretion in quo warranto proceedings.

The appellate court reviewed past decisions and attorney general opinions, and concluded:

[T]he existence of a legal dispute or justiciable issue does not invariably give the Attorney General “reason to believe” that the conditions mandating a quo warranto action exist. Rather, the Attorney General retains discretion to evaluate the proposed action and address three relevant inquiries: 1. Is quo warranto the proper remedy to resolve the issues which are presented? 2. Has the proposed relator raised a substantial question of law or fact? 3. Would the public interest be served by judicial resolution of the question?" 

In this case, “It was well within the scope of the Attorney General’s discretion to conclude that the presence of a debatable issue neither raised a substantial question of law or fact, nor established that the public interest would be served by judicial resolution.” The appellate court also affirmed the attorney general’s conclusion that the law was intended to operate as a term limits provision, rather than simply preventing employment by the city of former elected officials.

District of Columbia—Election of Attorney General.

Zukerberg v. D.C. Board of Election, 97 A.3d 1064 (D.C. Ct. Apps. 2014).

A voter referendum approved an amendment to the District of Columbia charter that would allow election of the D.C. attorney general. After the City Council sought to delay the election for several years, the D.C. Court of Appeals held that the election of the attorney general must be held in 2014, or as soon thereafter as is practicable. (The election was held in November 2014).

The D.C. Council passed legislation in 2010 to allow D.C. residents to elect the attorney general, and eventually followed the procedure outlined in the D.C. Charter to have the legislation become effective upon approval by the voters through a referendum. The D.C. Board of Elections prepared a summary of the referendum which stated, “If voters approve of this amendment and the U.S. Congress does not reject the measure, residents of the District of Columbia would begin voting for the Attorney General in 2014.” D.C. voters overwhelmingly approved the referendum in November 2010 and the Charter was amended.

The mayor proposed legislation to the Council to reorganize the attorney general’s office in light of the new electoral status. A councilmember added an amendment to this legislation stating “Until such time as an Attorney General is elected . . . which time shall not be before January 1, 2018, the Attorney General for the District of Columbia shall be appointed by the Mayor . . .” The City Council passed the bill and the Mayor allowed it to become law without his signature. A candidate for the office of attorney general sued to enjoin the Board of Elections or the City Council from taking action to “inhibit the creation of the elected office of Attorney General.” The trial court dismissed the suit, because the “ordinary meaning” of the words “after January 1, 2014” in the referendum did not conflict with the delayed election. The plaintiff appealed.

The Court of Appeals first held that the Charter is the equivalent of a state constitution, and any amendments to it cannot be countermanded by legislation. Therefore, the court turned to the question of whether the provision that the attorney general election “shall be after January 1, 2014” permits a delay of the election. The court first determined that the meaning of the phrase was not plain, but was ambiguous, susceptible of a meaning between “the day following January 1, 2014” to never, because that would also be “after” the date. The court then looked at the Charter amendment as a whole to determine its meaning. The amendment states that the attorney general “shall be elected on a partisan basis” and that the term of the attorney general shall be four years and shall “coincide with the term of office of the Mayor.” The court interpreted these sections to mean that there was an intention to hold the attorney general election in 2014 on the same partisan election schedule as the mayoral election.

The court next turned to legislative history. The City Council argued that only its intent should be taken into account because only its members drafted the statute that became the Charter amendment. The court rejected the idea that the intent of the voters in approving the referendum should be ignored. In 2010, when the legislation was first approved, the Chairman of the City Council, who added the “after January 1, 2014” language, stated that the language clarified that the attorney general election would coincide with the election for mayor in 2014. The City Council passed the bill with that language. The Board of Elections subsequently prepared a ballot summary which stated that D.C. residents would “begin voting for the Attorney General in 2014.” The City Council did not object to this summary, and the voters approved the referendum based on that summary. Finally, the intent of the Council can be discerned by the fact that they passed a later statute to move the date of the election. If they believed that the election could be scheduled at any time after Jan. 1, 2014, they would not have needed to pass an additional delaying statute.

South Dakota—Limits of Open Records Disclosure:

Mercer v. South Dakota Attorney General Office, 32 CIV 14-120 (6th Jud. Cir., S.D. Cir. Ct. Sept. 2, 2014).

The South Dakota attorney general undertook an investigation of potential criminal financial misconduct in the governor’s Office of Economic Development. The attorney general concluded that there was evidence of criminal wrongdoing, but the individual involved was deceased. Richard Benda, former secretary of tourism was found dead shortly before the investigation concluded, of a self-inflicted gunshot wound.

Plaintiff made a public records request for reports on the death of Richard Benda. The attorney general first described the exemptions that applied to revealing this information, but because of the public interest in the case, he offered to make the information available in a limited way, provided Richard Benda’s family filed a release granting permission for the disclosure. Plaintiff was unable to obtain such a release, and the attorney general denied the request. The plaintiff appealed, arguing, among other things, that since the death was not a crime, there was no basis to withhold the information.

The court held that the records were not subject to public disclosure. “Unlike public access to court proceedings, hearings and court documents, the general public and press do not have a recognized constitutional right of access to documents held by law enforcement agencies.” The court found that the legislature intended to allow law enforcement agencies the ability to conduct investigations free from mandatory disclosure. If a criminal investigation does not find a criminal violation, that does not mean that the entire record should be revealed, and the legislature did not apparently intend to allow that. The court also rejected plaintiff’s argument that the conditions imposed by the attorney general before information could be revealed were improper because they were not prescribed by the legislature. The court held that if the attorney general could not reveal the information upon satisfaction of the conditions, he had no discretion to reveal the information at all. The court found that the attorney general did have discretion to disclose information, and that his decision to exercise discretion to protect the privacy of the family is not “discretion exercised to an end or purpose not justified by, and clearly against, reason and evidence.” The court concluded “A mere suspicion is not enough to outweigh the privacy interests, the presumption of innocence, protection of the criminal process, and protection of the decedent’s minor child.”

New Jersey and Texas—Attorney General Representation of State Employees

Lavezzi v. State of New Jersey, 219 N.J. 1633, 97 A.3d 681 (N.J. 2014)

Phelan v. Norville, 2014 Tex. App. Lexis 10560 (Tex. Ct. App. Sept. 22, 2014)

In two separate cases brought in New Jersey and in Texas, courts addressed the attorney general’s obligation to defend state employees

In the New Jersey case, non-contraband items were seized in the course of a criminal investigation by a local prosecutor. The investigation was abandoned, but the items were lost and damaged while in the custody of the prosecutor’s office. The attorney general declined to defend the employees of the prosecutor’s office because the processing and safeguarding the plaintiffs’ property were administrative acts not taken “in the discharge of their law enforcement duties.” The attorney general’s decision was affirmed by the appellate court and was appealed to the New Jersey Supreme Court.

The state Supreme Court held that the processing and safeguarding of the items were part of their law enforcement duties, and that the employees should be represented by the attorney general. New Jersey case law has created a distinction in the case of county prosecutors with respect to their representation by the attorney general. If the actions at issue are administrative (for example, actions involving personnel or public records), the attorney general is not required to indemnify the employee. The test, according to the court, is “whether the act or omission of the county prosecutor’s office and its employees that gave rise to the potential liability derived from the prosecutor’s power to enforce the criminal law, and constituted an exercise of that power.” In this case, seizure of the items occurred during a criminal investigation. Even if the damage occurred to the items when the investigation was closed, “the continued retention of plaintiffs’ property, either intentionally or by oversight, derives from and directly relates to the law enforcement function. . . “

In the Texas case, a professor at Texas Tech (a state university) brought assault and libel claims against his supervisor, the head of the school’s Department of Engineering. After a number of rulings by different courts, a jury trial was held and damages were awarded to the plaintiff, although some claims were dismissed. The plaintiff appealed, and challenged the attorney general’s representation of the defendant because the defendant was not acting in his official capacity in the assault and libel of the plaintiff. The court rejected this argument because the attorney general may determine that indemnification is in the interest of the state, and the attorney general’s decision can only be challenged by the party seeking representation, not by a third party.

Texas—Prosecutorial Authority of Attorney General

Adler v. State of Texas, 2014 Tex. App. LEXIS 11730 (Tx. Ct. App. Oct. 23, 2014)

Plaintiff appealed from two convictions for securing the execution of a document by deception. Plaintiff had induced an elderly and incompetent man to sign a will in her favor. Plaintiff raised a number of issues on appeal, including that the indictments were invalid because the attorney general lacked the authority to present them to the grand jury, and that the attorneys from the attorney general's Medicaid Fraud Control Unit did not have authority to prosecute the case.

The attorney general’s office investigated and prosecuted the case at the request of the district attorney, who later recused his office from the case and sought to have the attorney general’s office appointed as attorneys pro tem. Although the court characterized the state as “imprecise and inconsistent with their terminology,” the attorneys from the attorney general’s office were operating as special prosecutors, the use of which is not predicated on the disqualification of the elected district attorney. Therefore, the prosecution was proper.

The court also addressed the plaintiffs claim that attorneys from the Medicaid Fraud Control Unit lack authority to prosecute the charges against her because they are restricted to prosecution of Medicaid fraud and physical abuse of patients. The court held that a prosecuting attorney may appoint any assistant attorney general as an assisting prosecuting attorney to assist in the prosecution of criminal cases. The appointment of the MFCU attorneys was proper.

West Virginia—Attorney General May Not Assist County Prosecutors, Common Law in Criminal Prosecution has Been Abolished.

West Virginia ex rel. Morrisey, v. West Virginia Office of Disciplinary Counsel, 2014 W.Va. LEXIS 1067 (W.V. Oct. 15, 2014).

In an important case involving the common law powers of the West Virginia attorney general, the West Virginia Supreme Court held that the attorney general’s common law criminal prosecution powers had been abolished by the West Virginia Constitution and statutes.

After receiving requests for assistance from two county prosecutors, the attorney general sought guidance from the West Virginia Lawyers Disciplinary Board as to whether such assistance could be provided. The Board issued an informal opinion that the attorney general did not have authority to prosecute criminal cases outside the limited circumstances in West Virginia’s statutes. The attorney general sought a writ of prohibition against the Board, arguing that county prosecutors have authority to request assistance from the attorney general in criminal prosecutions, and the office has independent common law authority to prosecute criminal cases.

The West Virginia Supreme Court first addressed the issue of standing. Because the attorney general had not had any ethics charges filed against him, but had only received an adverse informal advisory opinion from the Board. The court stated, “All that the Attorney General has shown is that he disagrees with an informal advisory opinion by ODC that suggests ethical violations may occur if he prosecutes criminal cases in the manner proposed by him. This showing does not satisfy the “affected or injured” requirement for standing to seek a writ of prohibition.”

Despite this finding, the West Virginia Supreme Court addressed the issue of the attorney general’s authority to prosecute criminal cases. The court first determined that county prosecutors in West Virginia do not have authority to appoint the attorney general to prosecute criminal cases. First, although one West Virginia statute seems to permit the county prosecutor to appoint practicing attorneys to assist him in his duties, other statutes clarify that such appointments must be made with the consent of the county commission, and the appointed attorneys would be employees of the prosecutor and county commission. In addition, the West Virginia legislature has given prosecutors authority to appoint special prosecutors from the attorney general’s office in extraordinary circumstances in counties where there are correctional facilities. This limited grant argues against a broad discretion in prosecutors to appoint the attorney general for any case. The court held, “county prosecutors do not have authority . . . to appoint the Attorney General or any member of the Attorney General’s office as a special prosecutor.”

The court next addressed the attorney general’s argument that the office’s common law powers, which were reinstated in Discover Financial Services v. Nibert in 2013 (see NAAGazette Vol. 7, No. 8 (http://www.naag.org/volume-7-number-8.php)) would provide authority to prosecute criminal cases. The Supreme Court disagreed, noting that the decision in Nibert explicitly recognized that the common law powers of the attorney general could be abolished by law, and that decisions as to common law authority need to be made on a case-by-case basis. The court cited Article 9 of the West Virginia Constitution, which provides that the voters of each county shall elect a prosecuting attorney, and W.Va. Code ¿7-4-1, which describes the duty of the prosecuting attorney to “attend to the criminal business of the State in the county in which he is elected,” and “to institute and prosecute all necessary and proper proceedings against the offender.” The court reasoned, “As a result of the constitutional creation of the office of prosecutor, the Legislature empowered that office with all of the powers of criminal law prosecution. This empowerment repealed the Attorney General’s common law authority to prosecute criminal offenses.” The Supreme Court concluded, “As a result of the ratification of West Virginia Constitution article 9, ¿ 1 by the people of this State and the Legislature’s enactment of W. Va. Code ¿ 7-4-1 . . . the common law criminal prosecutorial authority of the Attorney General was abolished.”

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