Decisions Affecting the Powers and Duties of Attorneys General

By Emily Myers, NAAG Antitrust Counsel and Powers and Duties Counsel

Emily Myers, Antitrust and Special Projects Counsel

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

Hawaii and Mississippi

Attorneys General Not Bound by Class Action Settlement to Which They Were Not Parties.

Spinelli v. Capital One Bank, USA, 2012 U.S. Dist. LEXIS 118667, (M.D. Fla. 2012)

Private plaintiffs filed a class action against Capital One bank. The parties reached a settlement which was approved by the Federal District Court in Florida. The settlement covered natural persons in the United States who had enrolled in or been charged for Payment Protection by Capital One. The court declined to retain jurisdiction. A year and a half after the settlement was approved, defendants sought to enjoin the attorneys general of Hawaii and Mississippi from prosecuting cases against the defendants.

The court declined to enjoin the attorneys general, stating

The Court’s Order approving the settlement and closing this case did not bind the States of Mississippi and Hawaii. The Attorney General of Mississippi and Hawaii were not defined as class members and did not have an opportunity to participate in the litigation or opt out of the class.

The court also disagreed with defendants’ arguments that it should enjoin the attorneys general under the Anti-Injunction Act, which the court held did not direct a court to issue an injunction “to prevent a non-party from litigating its claims.” The court agreed with the state of Mississippi that “the State’s sovereign interests were neither raised, actually litigated, nor resolved in the [class action].” Finally, the court stated, “It should also be noted that when a party seeks to use the final disposition of a case in one court to preclude litigation in a second court, it is for the second court, not the first court, to determine whether the first action should bar the second action from moving forward.”

District of Columbia

Attorney General Bound by Dismissal of Case by U.S. Attorney

Washington v. District of Columbia, 2012 D.C. App. LEXIS 504 (D.C. Ct. App. 2012).

During a police chase, defendant drove recklessly, hit another car, injuring its occupants, and drove away, eventually losing control of the car and being arrested by Washington D.C. police. In the District of Columbia, the prosecutorial authority is divided, with the D.C. Attorney General’s office (AGO) prosecuting some minor crimes, and the United States Attorney for the District of Columbia (USAO) prosecuting most other criminal violations. Offenses prosecuted by the two agencies may be joined for trial if the offenses could have been charged in the same indictment, and one agency may prosecute all offenses if the other agency agrees. In this case, unbeknownst to each other, both the AGO and the USAO filed charges against defendant, before separate judges in the District of Columbia courts. Defendant was incarcerated in Maryland and unavailable to face charges in D.C., so the USAO lodged a detainer, pursuant to the Interstate Agreement on Detainers (IAD). The defendant invoked his right to speedy trial under the IAD, which requires that a defendant be brought to trial within 180 days. The USAO failed to bring him to trial within that time, and the charges were dismissed with prejudice. The OAG pursued its case against defendant for reckless driving and leaving after colliding. Defendant’s counsel moved to dismiss the charges, citing the dismissal by the USAO. The trial court denied the motion, and defendant was convicted of all charges brought by the OAG. He appealed.

The OAG argued that the OAG never consented to the USAO’s prosecution of the D.C. Code charges for reckless driving and leaving after colliding, which would normally be handled by the OAG, and that dismissal of the USAO’s charges thus did not affect its case. The D.C. Court of Appeals disagreed. The IAD is an agreement between “States.” The appellate court held,

The unique status of the District of Columbia -- having multiple prosecuting offices with some overlapping authority -- should not mean that the party “State” of the District of Columbia gets multiple “bites” at the proverbial “apple” under the IAD. . . . Allowing the OAG to re-prosecute charges that have been dismissed with prejudice due to the USAO’s failure to bring defendant to trial within the time limitations set by the IAD would undercut the statute’s purpose of inducing compliance [with speedy trial requirements] in future cases.”

Kentucky

Attorney General Has Authority to Issue CIDs

ABC Corp. v. Commonwealth ex rel. Conway, 2012 Ky. App. LEXIS 156 (Ky. Ct. App. 2012).

The attorney general of Kentucky issued a civil investigative demand (CID) to National College, a for-profit undergraduate college. The Kentucky Consumer Protection Act (KCPA) provides that the attorney general may issue CIDs either when “the attorney general has reason to believe that a person has engaged in, is engaging in, or is about to engage in any act or practice declared to be unlawful by [KCPA], or when he believes it to be in the public interest that an investigation should be made to ascertain whether a person in fact has engaged in, is engaging in or is about to engage in, any act or practice declared to be unlawful by [KCPA].” National College sued the attorney general, alleging that he had no reason to believe it had violated or was about to violate the KCPA, and that the public interest did not require that he investigate any past or present violation. The trial court held that the attorney general did have authority to issue the CID, and National College appealed.

The appellate court reviewed Kentucky law on the issue. The court cited Hancock v. Pineur, 533 S.W.2d 527 (Ky. 1976), which “specifically held that there was no statutory or constitutional requirement that the CID “recite on its face the reason or grounds for its issuance[.]” . . . “Even if one were to regard the request for information in this case as caused by nothing more than official curiosity, nevertheless law-enforcing agencies have a legitimate right to satisfy themselves that corporate behavior is consistent with the law and the public interest.” National College argued that later statutory language required that the information sought must be relevant to the investigation, even if the attorney general is acting under the “public interest” prong of the statute. The court agreed, but held that “But there must be a suspicion of some wrongdoing or the attorney general would not have a basis to begin an investigation. In the present case, though, the attorney general did in fact suspect that National College had violated the KCPA in areas related to the withholding of financial aid, the loan default rate, job placement rates, and transferability of credits.”

Montana

Attorney General’s Review of Initiative Was Proper

Montanans Opposed to I-166 v. State of Montana, 365 Mont. 520; 285 P.3d 435 (Mont. 2012).

Opponents of Montana ballot initiative 166 brought an original action in the state’s Supreme Court, asking the court to find that the state’s attorney general and secretary of state should have barred the initiative from the ballot. Initiative 166 establishes that the policy of the state of Montana is that corporations are not entitled to constitutional rights and are not persons. It charges elected officials to implement the policy in part by acting to prohibit corporate political campaign spending and to limit political spending in elections and directs Montana’s congressional delegation to propose a Constitutional amendment establishing that corporations are not entitled to constitutional rights.

Under Montana law, an initiative is submitted to the secretary of state, who in turn submits it to the attorney general for review. The attorney general’s review is limited to determining the sufficiency of the ballot statements and a review of the ballot issue for legal sufficiency, e.g., whether the language is clear, and whether the summary statement of the initiative is no more than 100 words. The legal sufficiency review specifically “does not include consideration of the substantive legality of the issue if approved by the voters.” Mont. Code Ann. § 13-27-312 (7). The Supreme Court held,

The petitioners in this case seek to have this Court require that the Attorney General undertake precisely the substantive legal review that is excluded by law. By statute, the Attorney General had no power to review the substantive legality of I-166. The petition does not allege nor does this Court find that the petition was legally insufficient as to the requirements for submission of a proposed ballot issue.

Ohio

Contribution Limits in Attorney General Election Unconstitutional.

Lavin v. Husted, 689 F.3d 543 (6th Cir. 2012)

Ohio law makes it a crime for state attorney general or county-prosecutor candidates to accept campaign contributions from Medicaid providers or any person with an ownership interest in a Medicaid provider. Ohio Rev. Code §3599.45. A number of physicians who were Medicaid providers wanted to contribute to an attorney general candidate, but he returned their contributions. They brought an action for declaratory judgment against the secretary of state, alleging that the statute was unconstitutional. The trial court held that the court should not second-guess the legislature’s choice to prevent public corruption, and upheld the statute. The Medicaid providers appealed.

The secretary of state (represented by the attorney general) argued that the plaintiffs did not have standing and that since the election was over, their case was moot. The appeals court held that the First Amendment rights of the plaintiffs had been infringed, and that the issue was capable of repetition, yet evading review, so it was not moot. The court then turned to the question of whether the contribution limits were closely tailored to the problem they were trying to cure. The secretary of state argued that they prevented corruption, but the court required a more detailed showing. The secretary conceded that there was no evidence that the attorney general or local prosecutors in Ohio have abused their discretion by declining to prosecute Medicaid providers who contributed to their campaigns. The plaintiffs submitted affidavits from three former Ohio attorneys general, each of whom says that “decision making in the Attorney General’s Office regarding Medicaid fraud would not have been influenced by my campaign committee’s receipt of campaign contributions from individual Medicaid providers or those with ownership interests in them.”

The court concluded that the ban was not sufficiently closely drawn to withstand scrutiny, in part because only .003 percent of Ohio’s 93,000 Medicaid providers had been prosecuted in the past year. The court held,

The statute here restricts the First Amendment rights of nearly 100,000 Medicaid providers who do not commit fraud, based on an attenuated concern about a relative handful of providers who do. There is no avoiding the conclusion that the contribution ban set forth in §3599.45 is not closely drawn. The ban is therefore unconstitutional.

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