The National Attorneys General Training & Research Institute

The National Attorneys General Training & Research Institute The National Attorneys General Training & Research Institute

Recent Powers and Duties Decisions

Emily Myers, NAAG Powers and Duties Chief Counsel and NAGTRI Chief Editor

This is another in our series reporting on recent decisions from across the country affecting the powers and duties of state and territory attorneys general. 

Arizona—Attorney General Intervention in Class Action Suit. A class action suit was filed against the makers of a pressure cooker, alleging that the cookers were defective and could injure users.  The case was filed in 2016 and after motions practice and the first day of trial, the parties reached a settlement under which class members received a $72 credit toward the purchase of the defendant’s products, and a one-year warranty extension.  The settlement also allowed class counsel to apply for attorneys’ fees in an amount that was both no higher than the “lodestar” amount typically used to calculate class counsel fees and no higher than an amount agreed to by defendants. Pursuant to the settlement, the court would determine how much class counsel could recover in fees. No class members objected. The U.S. Department of Justice and the Arizona attorney general’s office argued at the fairness hearing that the settlement disproportionately benefited class counsel, at the expense of the class members. The court approved the settlement and gave class counsel slightly less than the amount they requested.

The state of Arizona and the Arizona attorney general (state parties) sought to intervene as of right in the action to appeal the court’s approval of the settlement under FRCP 24(a). In the alternative, the state and the attorney general asked to be considered formal objectors.  The court denied both motions. According to the court, Supreme Court precedent requires that an intervenor as of right must have “Article III standing to pursue relief that is beyond or different from the relief requested by an existing party.”  Because the state parties were seeking appellate vacatur of the district court’s order, not the monetary damages sought by the class action plaintiffs, the court analyzed their Article III standing.          

The state plaintiffs argued that they have standing as parens patriae to remedy a quasi-sovereign injury to the economic wellbeing of Arizona’s citizens.  The court held that the state parties’ injuries were not separate from the injuries of the individual class members, so the state parties did not demonstrate parens patriae standing. The state parties also argued that the attorney general has standing to appeal the district court’s decision pursuant to section 1715 of the Class Action Fairness Act (CAFA), because CAFA confers on the attorney general a protectable legal interest in class action settlements.  The court held that CAFA explicitly states that it should not be construed to “expand the authority of . . . State officials.” The court held that CAFA only requires that the attorney general receive notice of the settlement and that the settlement be approved not less than 90 days after notice has been received by the state.  Because the attorney general is not alleging that either of these provisions was not followed in this case, the court found that CAFA was not a basis for standing to appeal.      

The court next turned to the question of permissive intervention.  Noting that the law is unclear, the court held that parties seeking permissive intervention under FRCP 24(b) must still have Article III standing. Finally, the court held that allowing the state parties to intervene would delay or prejudice the distribution of relief to the 13,000 class members, and would therefore run afoul of FRCP 23(b)(3).  Chapman v. Tristar Prods., 2018 U.S. Dist. LEXIS 150153 (N.D. Ohio, Sept. 4, 2018)

California—Attorney General Jurisdiction over Indian Tobacco Sales. The attorney general of California filed an enforcement action in state court against a tribal member who was the owner of a smokeshop located on an Indian reservation, alleging violations of the state’s unfair competition law (UCL). The state also alleged violations of the Directory Act, under which it is illegal to sell cigarettes from manufacturers who have not certified their compliance with the tobacco Master Settlement Agreement.  Finally, the state alleged violations of the Fire Safety Act, under which it is illegal to sell cigarettes that do not meet specified testing and packaging standards designed to minimize fire hazards caused by cigarettes.  After the trial court entered a permanent injunction against the tribal member, she appealed, alleging the state court had no jurisdiction because it involved on-reservation activities of a tribal member.  The court of appeals reversed in part and affirmed in part.      

The court of appeals first summarized Public Law 280, which granted six states, including California, plenary criminal jurisdiction over “offenses committed by or against Indians” within Indian country, and limited civil jurisdiction to “causes of action between Indians or which Indians are parties” in cases arising in Indian country.  Based on Supreme Court cases interpreting this provision, the court concluded that it gave the state civil jurisdiction only in “private disputes,” not one in which “the Attorney General sues with the manifest purpose of law enforcement on behalf of the public at large.”  Thus, the court had no subject matter jurisdiction over the claims under the civil provision.    

The court next addressed whether it had subject matter jurisdiction over the claims under the criminal jurisdiction of Public Law 280.  Supreme Court precedent establishes that state “criminal/prohibitory” actions are authorized, but state “civil/regulatory” actions are not.  The question, according to the court, is whether “the intent of a state law is generally to prohibit certain conduct,” in which case it is criminal, or whether it “generally permits the conduct at issue, subject to regulation,” in which case it is civil.  In this case, the court concluded that the Directory Act claim and the Fire Safety Act claim were criminal/prohibitory in nature and may be enforced under Public Law 280.  The court likened these statutes to laws against cigarette sales to minors or underage drinking, both of which have been found to be criminal in nature.  The UCL claims, on the other hand, are civil/regulatory because ”the UCL applies to business competition generally, which is not only permitted but promoted in California, and outlaws only specific practices comprising a subset of competition.”       

After determining that state enforcement was not preempted here, the court reversed summary judgment for the state on the UCL claim, but retained the remainder of the injunction entered by the trial court.  People ex rel. Becerra v. Huber, 27 Cal. App. 5th 642 (2018). 

Maine—Attorney General Control of State Litigation.  The attorney general of Maine joined a lawsuit, filed in federal court in California, challenging the federal government’s decision to rescind the Deferred Action for Childhood Arrivals (DACA) program.  The governor objected to the attorney general entering into litigation in another state on behalf of Maine without the authorization of the governor or the legislature, and characterized the attorney general’s action as ultra vires. When the attorney general declined to dismiss the suit, the governor filed suit in state court seeking a court order that the attorney general may not participate in litigation outside the state of Maine without being requested to do so by the governor or the legislature. The governor cited 5 M.R.S. 191(3), which provides, in part, 

The Attorney General or a deputy, assistant or staff attorney shall appear for the State, the head of any state department, the head of any state institution and agencies of the State in all civil actions and proceedings in which the State is a party or interested, or in which the official acts and doings of the officers are called into question, in all the courts of the State and in those actions and proceedings before any other tribunal when requested by the Governor or by the Legislature or either House of the Legislature.

The court treated the governor’s suit as an appeal of an agency decision and applied an “abuse of discretion” standard to determine whether the attorney general’s actions were appropriate. The court noted that although the language of the statute appears reasonably clear, past decisions of the state’s highest court have interpreted the powers of the attorney general broadly, allowing her to "institute, conduct, and maintain all such actions and proceedings as [s]he deems necessary for the enforcement of the laws of the State, the preservation of order, and the protection of public rights."  The court stated its belief that “it must be the [state supreme court] that decides if the holding . . . should be overturned or modified as it might deem appropriate.” The governor’s case was dismissed.  LePage v. Mills, No. CV-17-185 (Kennebec Super. Ct. Oct. 12, 2018)

Missouri—Attorney General Jurisdiction Over Misdemeanor Appeals.  A defendant who was sentenced to prison on several felony theft charges appealed his sentences based on a recent Missouri supreme court case. In the course of his appeal, the defendant argued that the attorney general was not authorized to prosecute misdemeanor appeals. The defendant cited Mo. Rev. Stat. §27.050, which provides “the attorney general shall appear on behalf of the state in the court of appeals and in the supreme court and have the management of and represent the state in all appeals to which the state is a party other than misdemeanors . . . . “  The court held that this statute did not bar the attorney general from representing the state in misdemeanor appeals, but described the cases that the attorney general must handle.  The court stated, “Although section 27.050 does not require the attorney general to handle misdemeanor appeals, as the “chief legal officer of the State,” he may handle such appeals if he chooses.”  State v. Rall, 2018 Mo. App. LEXIS 878 (Mo. Ct. App. Aug. 14, 2018)           

Montana—Federal Question Jurisdiction in Opioid Case. Montana, like many other jurisdictions and governmental entities, sued Purdue Pharma, the manufacturer of prescription opioid drugs that the state alleges are liable for the costs Montana “has incurred, and will continue to incur, in addressing the opioid public health crisis.”  Montana filed suit in state court, alleging five state law claims and a claim for violation of an earlier consent judgment.  Montana sought a preliminary injunction to require Purdue to disclose certain things about its opioid drugs when undertaking promotional or educational activities with prescribers or consumers.         

Purdue removed the case to federal court based on federal question jurisdiction.  Purdue argued that the state’s requested relief “attempts to supplant” the FDA’s “complex regulatory determinations” and tries to use state law to require that Purdue convey “different information about the safety and efficacy of its opioid medications” than what the FDA requires. Citing Grabel & Sons Metal Prods., Inc. v. Darue Eng’g and Mfg.  545 U.S. 308 (2005), the federal district court described a four-part test for the very limited circumstances when state claims give rise to federal jurisdiction:  1) the federal issue is necessarily raised; 2) actually disputed; 3) substantial, and 4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.           

Purdue argued that the relief sought by Montana is attempting to “usurp the FDA’s authority to regulate the information provided to physicians and patients about the safety and efficacy of Purdue’s opioid medications.”  Montana argued that it has not asked the court to stop Purdue from using, or change the content of, any FDA-approved drug labels. Instead, the state is seeking to change Purdue’s promotional and educational activities, which were not reviewed or approved by the FDA.  The court agreed, and held that if Montana’s preliminary injunction motion was granted, there would be no change required in the labeling.  The court remanded the case to state court.  State of Montana v. Purdue Pharma, No. 1:18-OP-45604 (N.D. Ohio Aug. 23, 2018).

New Mexico—State May Pursue Claims After Qui Tam Dismissal.  A relator brought a federal action alleging violations of both the federal False Claims Act (FCA) and the New Mexico Medicaid False Claims Act (MFCA) by Bristol-Myers Squibb, the manufacturers of the pharmaceutical Plavix.  The relator sent the complaint and relevant information to the state, which declined to intervene.  Relator filed several amended complaints, the last of which was dismissed in 2017, and relator did not appeal or seek to amend the complaint after 2017.         

Shortly before the last complaint was dismissed, the New Mexico attorney general filed suit against Bristol-Myers Squibb, alleging violations of the New Mexico Unfair Practices Act, the New Mexico Medicaid Fraud Act and other statutory and common law claims. The state’s complaint did not allege violations of the MFCA.  Upon dismissal of the relator’s complaint, the defendants sought to dismiss the state’s complaint, alleging that claim preclusion barred the state’s complaint.  The district court dismissed some claims, allowed some to be refiled, and upheld the others.  The court held that claim preclusion did not apply because the causes of action were not the same in the two suits. Defendants appealed.          

The court of appeals first outlined the test for claim preclusion: 1) final judgment on the merits in the earlier action; 2) identity of parties; and 3) identity of the cause of action.  Addressing the first element of claim preclusion, the court of appeals reviewed a number of cases and determined that “claim preclusion in the qui tam context could operate adverse to the public interest” because relators could file poorly written or improperly pleaded actions in order to induce the government to intervene to protect any future claims against the defendant.  Courts also have dismissed complaints without prejudice to the government where the relator failed to prosecute or acted improperly in the litigation. The court concluded that although the lower court had in fact issued a final judgment as to the relator’s claims, that order was without prejudice to the government, and the dismissal was not a “final judgment on the merits” for claim preclusion purposes.  State of New Mexico ex rel. Balderas v. Bristol-Myers Squibb Company, No. A-1-CA-36906 (N.M. Ct. App. Oct. 24, 2018).

Pennsylvania—Attorney General Office Immunity from Suit.  A number of searches, authorized by warrants from a state grand jury investigation directed by the attorney general’s office, were conducted on the property of Minuteman Spill Response, an environmental services company.  Numerous felony charges were brought, but all were eventually dismissed and the defendants entered into the state’s Accelerated Rehabilitative Disposition program on two misdemeanor charges.  The defendant filed for bankruptcy.  In the bankruptcy court, defendant brought claims against the attorney general’s office (OAG), assistant attorneys general, law enforcement officers and the attorney general, claiming that the seizures were a violation of its constitutional rights.  After the bankruptcy estate was closed, the company filed an amended complaint which included Pennsylvania’s current attorney general as a defendant.          

The attorney general’s office moved to dismiss the claims on the grounds of Eleventh Amendment immunity.  Plaintiffs argued that the OAG waived its sovereign immunity because it filed a Proof of Claim in the bankruptcy proceedings.  The court held that the waiver applied only to the bankruptcy proceedings themselves, which are now over. Turning to the question of absolute immunity for the assistant attorneys general, the court held that absolute immunity applied to their actions in preparing or presenting the case to the grand jury, but that “absolute immunity does not apply when a prosecutor gives advice to police during a criminal investigation.”  The court noted that the question of immunity could again be raised after development of a factual record. Finally, the court dismissed the claims against Attorney General Shapiro, who had taken office long after the search and seizure had taken place.  The court held that the complaint “did not permit the court to infer more than the mere possibility of misconduct,” on the part of Attorney General Shapiro. Bolus v. Carnicella, 2018 U.S. Dist. LEXIS 156887 (M.D.Pa. Sept. 14, 2018).







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