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Decisions Affecting the Powers and Duties of Attorneys General
By Emily Myers, Antitrust Counsel
This is another in our series reporting on recent decisions from across the country affecting the powers and duties of Attorneys General.
Employees of State Constitutional Officers Subject to Furlough Order by Governor.
Brown v. Chiang, 198 Cal. App. 4th 1203; Cal. 3d App. Dist. 2011)
A state budget crisis led the California governor to issue an Executive Order directing the state Department of Personnel Administration to implement “a furlough of represented state employees and supervisors for two days per month” from February 2009 to June 2010. The Executive Order also requested “other entities of state government not under my direct executive authority” to implement similar cost-saving measures. State employee unions challenged the order and lost. In that case, the court did not address the issue of whether the governor’s order applied to the employees of the state constitutional officers, including the Attorney General. The governor sued the constitutional officers, seeking to apply the same furlough program to their offices. The trial court held that the order did apply to the constitutional officers and the officers appealed, asserting, among other reasons, that “applying the furlough order to the officers’ employees would . . . violate the state Constitution’s system of divided executive authority; . . . and . . . infringe upon the officers’ right to control the staffing and management of their respective offices.”
The court of appeals upheld the trial court’s determination that the employees of the state constitutional officers were subject to the governor’s furlough order because they were subject to the state civil service system. Turning to the question of whether the furlough would violate the state Constitution’s scheme of divided executive authority, the court of appeals noted that the state Constitution does contemplate a divided executive, but that the state legislature has plenary power, and the powers of the state constitutional officers have been left to the legislature to define. The court stated, “[T]he Constitution left defining the functions and duties of the various executive offices to the Legislature. Instead of making these officers entirely independent of the Governor, the Legislature, in 1945, provided that the Governor shall supervise their official conduct.” In addition, because the Legislature ratified the governor’s furlough order, and the Legislature “possesses the ultimate authority to establish or revise the terms and conditions of state employment through legislative enactments,” the furlough order was enforceable.
The court also rejected the state constitutional officers’ argument that the furlough plan interfered with the officers’ “statutory right to control the staffing and management of their respective offices.” The court acknowledged that the furlough order reduced the salaries of the employees. But it does not interfere with the officers’ statutory power to “appoint those employees the officer deems necessary to perform the duties of his or her office.”
Standing of Proponents of an Initiative to Pursue Appeals if Public Officials Decline to Do So:
Perry v. San Francisco, No. S189476 (Cal. Nov. 17, 2011)
California voters passed Proposition 8, a state initiative to ban gay marriage. Several parties filed suit in federal court, seeking to enjoin state and local officials (including the Attorney General) from enforcing the initiative on civil rights grounds. Proponents of the initiative were granted leave to intervene as defendants. The Attorney General then admitted that the initiative violated the Equal Protection clause and declined to defend it. Other state officials, including the governor, also declined to defend the initiative, leaving its defense in the trial court to the initiative proponents. However, all state officials continued to enforce the law, and no gay marriages have taken place in California since adoption of the initiative.
The district court held that the initiative violated the Due Process and Equal Protection clauses of the 14th Amendment and enjoined its enforcement by state officials, including the Attorney General. The proponents of the initiative filed an appeal; although none of the state officers did so. A mandamus proceeding was filed in state court seeking to force the Attorney General and governor to appeal the trial court’s decision, but that proceeding was summarily dismissed and appeal was denied. The Ninth Circuit then certified the following question to the California Supreme Court:
Whether under Article II, Section 8 of the California Constitution, or otherwise under California law, the official proponents of an initiative measure possess either a particularized interest in the initiative’s validity or the authority to assert the State’s interest in the initiative’s validity, which would enable them to defend the constitutionality of the initiative upon its adoption or appeal a judgment invalidating the initiative, when the public officials charged with that duty refuse to do so.
California Attorney General Kamala Harris filed an amicus brief arguing that “the role of official proponents in the exercise of the initiative power does not confer on the proponents of a successful initiative a substantive right either to defend that measure or to appeal a judgment invalidating it.”
The California Supreme Court first stated, “[T]he question before us involves a fundamental procedural issue that may arise with respect to any initiative measure, without regard to its subject matter.” The court noted that during the initiative process, “voters who have successfully adopted an initiative measure may reasonably harbor a legitimate concern that the public officials who ordinarily defend a challenged state law in court may not, in the case of an initiative measure, always undertake such a defense with vigor or with the objectives and interests of those voters paramount in mind,” consequently, “official proponents of initiative measures in California have uniformly been permitted to participate as parties--either as interveners or as real parties in interest--in numerous lawsuits in California courts challenging the validity of the initiative measure the proponents sponsored.” The court concluded,
Neither the Governor, the Attorney General, nor any other executive or legislative official has the authority to veto or invalidate an initiative measure that has been approved by the voters. It would exalt form over substance to interpret California law in a manner that would permit these public officials to indirectly achieve such a result by denying the official initiative proponents the authority to step in to assert the state’s interest in the validity of the measure or to appeal a lower court judgment invalidating the measure when those public officials decline to assert that interest or to appeal an adverse judgment.”
The court dismissed plaintiffs’ argument that state constitutional and statutory provisions make the Attorney General the only person who can assert the state’s interest in defending a challenged law. Citing past decisions, the court held,
Even when the Attorney General has discretion to decline to defend a challenged law or to appeal a lower court ruling invalidating the law, the Attorney General’s decision to exercise discretion in that fashion does not preclude other officials or entities from defending the challenged law or appealing an adverse judgment. . . . We are aware of no case that has held or suggested that the Attorney General may preclude others from defending a challenged state law or from appealing a judgment invalidating the law when the Attorney General has declined to provide such a defense or take an appeal.
Plaintiffs also argued that the proponents of an initiative should not be allowed to defend a challenged law because they are “private individuals who have not been elected to public office, take no oath to uphold the California Constitution or laws, cannot be recalled or impeached, and are not subject to the conflict of interest rules or other ethical standards that apply to public officials.” The court held that its ruling did not make the initiative proponents into public officials, but was extremely limited, giving the proponents only the ability “to participate as a party in a court action and to assert legal arguments in defense of the state’s interest in the validity of the initiative measure when the public officials who ordinarily would assert the state’s interest in the validity of the measure have not done so.”
Guam Attorney General Common Law Powers Affirmed
Attorney General of Guam v. Gutierrez,2011 Guam 10 (Guam, 2011)
The Guam Attorney General brought an action under Guam’s Enforcement of Proper Government Spending Act, 5 GCA § 7101 et seq., against the former governor and the administrator of the Guam Memorial Hospital Authority, alleging improper and unauthorized payments to a doctor employed by the Authority. The defendants were found liable in the district court and appealed. Defendants argued, among other things, that the Attorney General did not have standing under the Act to bring such an action. Section 7103 of the Act provides, “[a]ny taxpayer who is a resident of Guam shall have standing to sue . . . [to] enjoin any officer . . . or employee of the Executive Branch of the government of Guam from expending money without proper appropriation, without proper authority, illegally, or contrary to law, and to obtain a personal judgment in the courts of Guam . . . .” Defendants argued, and the court of appeals agreed, that section 7103 did not give the Attorney General standing to bring a claim, because it was intended to empower taxpayers, not government officials. However, the court of appeals found that the Attorney General has the power under other Guam statutes and under common law to bring this action.
Under 5 GCA §30103, the Attorney General has common law powers “which include, but are not limited to, the right to bring suit to challenge laws which he believes to be unconstitutional and to bring action on behalf of the Territory representing the citizens as a whole for redress of grievances which the citizens individually cannot achieve, unless expressly limited by any law of Guam to the contrary.” Defendants argued that because the citizens individually can bring such suits under section 7103, the Attorney General does not have authority to do so. The court of appeals held that because the statute describes the Attorney General’s powers as including, but not being limited to, the bringing of suits where citizens cannot, this statute does not limit the Attorney General’s powers. In addition, the Enforcement of Proper Government Spending Act itself recognizes, in its first section, “the Attorney General is the only officer empowered to bring court actions to control such illegal spending and the only officer who can represent the government in recovering such money . . . .” The court of appeals interpreted this to mean that the taxpayers had an additional, rather than a substitute, remedy under the Act.
The court of appeals also found that the Attorney General had standing under several other provisions of Guam law. Under 5 GCA § 30104, "[t]he Attorney General shall have cognizance of all matters pertaining to public prosecution, including the prosecution of any public officials.” Because the defendants allegedly spent money contrary to law, the Attorney General has discretion to pursue a claim against them. Additional authority is found in 5 GCA § 30109(f), which provides that the Attorney General must "[b]e diligent in protecting the rights and properties of the government of Guam.” Finally, the court reiterated an earlier holding that, under the common law, in the absence of legislative intent, the Attorney General may act in the public interest. Pursuing these claims is in furtherance of that interest, and the Attorney General therefore has authority to do so.
New Mexico Attorney General May Prosecute Criminal Violations of Campaign Laws Without Referral from Secretary of State.
State v. Block, 2011 NMCA 101, (N.M. Ct. App. 2011)
Under New Mexico’s Voter Action Act, candidates who receive money from the state’s public election fund must comply with various conditions, including limiting expenditures to the amount distributed by the fund and using disbursed funds only for campaign purposes. The Act provides, “If the secretary makes a determination that a violation of that act has occurred, the secretary shall impose a fine or transmit the finding to the attorney general for prosecution.” There are both civil and criminal penalties for violations of the Act.
The secretary of state investigated and fined a Public Regulation Commission candidate for three violations of the Voter Action Act. Notice of the fines was sent to the Attorney General’s office, but the secretary of state did not ask the Attorney General to take any action. Five months later, the candidate and his father were indicted on multiple counts of conspiring to violate and violating the Act. The defendants moved to dismiss all the counts because the secretary of state had not referred the matter to the Attorney General for prosecution, which they argued was required by the Voter Action Act. Defendants also argued that some of the charges amounted to double jeopardy because the secretary of state had already assessed fines for the same conduct. The district court, agreeing with both arguments, dismissed all charges. The Attorney General appealed.
The court of appeals first addressed the question of the Attorney General’s authority to bring criminal charges without a referral from the secretary of state. Although the Attorney General of New Mexico does not have common law powers, the grant of prosecutorial authority in the New Mexico statutes is still very broad. “[The statute] provides authority for the [attorney general] to prosecute criminal cases in any court when the [s]tate’s interest requires such action,” but that authority may be limited or conditioned where the Legislature has “otherwise provided by law.” The Voter Action Act prescribes actions to be taken by the secretary of state, but is silent as to actions by the Attorney General, thus the legislature has not “otherwise provided by law” any limitations on the Attorney General’s power. The court concluded,
“We doubt that the Legislature meant the wording in that section to place the secretary of state in an “either/or” straitjacket or by implication to hamstring the attorney general when a felony has been committed. We are unpersuaded that the Legislature would enact a criminal felony proscription intending a violation of it to be rendered unenforceable at the whim of the secretary of state.”
Attorney General Power to Represent State
State ex rel. Merrill v. Ohio Dept. of Natural Resources, Slip Opinion No. 2011-Ohio-4612 (Sept. 14, 2011)
Landowners on the south shore of Lake Erie sued the state, the Ohio Department of Natural Resources (ODNR) and its director, disputing the rights asserted by ODNR to land up to the high-water mark. The Attorney General’s office, representing the state, decided to litigate the case separately from ODNR, and the Attorney General retained outside counsel for ODNR. Before the lower court’s ruling on motions for summary judgment, ODNR filed a response stating that it would “adopt or enforce administrative rules and regulatory policies with the assumption that the lakefront owners’ deeds are presumptively valid.” The court of common pleas ruled that the limit of the territory regulated by ODNR was the water’s edge, wherever that boundary may be at any given time on any given property. The Attorney General appealed that ruling, ODNR did not.
The court of appeals held that the Attorney General (representing the state) no longer had standing to participate in the case, because the Attorney General may only act at the behest of the governor or the General Assembly. Because ODNR had not appealed, the Attorney General had no authority to do so. The Attorney General appealed the decision to the Ohio Supreme Court.
The Ohio Supreme Court held that the Attorney General had standing to participate in the case and appeal the judgment, even in the absence of ODNR. First, the state, as well as ODNR, had been sued by the plaintiffs. The state was thus an aggrieved party, because the appellate court’s decision was adverse to its position. Also, although ODNR was designated as the state agency for “all matters pertaining to the care, protection, and enforcement of the state’s rights designated in this section,” this language did not “prohibit[ ] the state from litigating its interests in the public trust, including its right to appeal from a judgment that adversely affects those interests.”
Turning to the common law powers of the Attorney General, the court noted that the governing statute provides,
The attorney general shall appear for the state in the trial and argument of all civil and criminal causes in the supreme court in which the state is directly or indirectly interested. When required by the governor or the general assembly, the attorney general shall appear for the state in any court or tribunal in a cause in which the state is a party, or in which the state is directly interested. Upon the written request of the governor, the attorney general shall prosecute any person indicted for a crime.
According to the court, the Ohio Constitution did not repudiate the established common law principles that existed at the time of its adoption. Long-settled Ohio law requires that “the General Assembly will not be presumed to have intended to abrogate a settled rule of the common law unless the language used in a statute clearly imports such intention.” The court held that nothing in the Ohio statutes appears to abrogate the Attorney General’s “common law power to appeal on behalf of the state from an adverse judgment.”
CAFA Decisions—The ability of state Attorneys General to bring cases in their state courts, without being removed to federal court pursuant to the Class Action Fairness Act (CAFA), has been upheld in several recent cases.
In re: Oxycontin Antitrust Litigation (Commonwealth of Kentucky, ex rel. Conway v. Purdue Pharma), 2011 U.S. Dist. LEXIS 111068 (S.D.N.Y. 2011)Kentucky, through its Attorney General, brought an action in state court alleging that defendants violated Kentucky state law by misleading health care providers, consumers, and government officials regarding the risks of addiction associated with the prescription drug OxyContin. Defendants removed the action to federal court, claiming federal subject matter jurisdiction and the case was transferred to the federal court in New York hearing the multidistrict antitrust litigation concerning OxyContin. The state sought remand to state court. Defendants argued that the federal court had federal question jurisdiction and that the case was a putative class action removable under the Class Action Fairness Act of 2005 (CAFA).
The court held that there was no federal question jurisdiction, and then turned to the question of whether CAFA applied. CAFA applies to certain actions where there are at least 100 plaintiffs. The defendants argued that Kentucky consumers were the real parties in interest, rather than the state, so there were more than 100 plaintiffs. The court held that the state, not its citizens, was the real party in interest, so CAFA did not apply. The state brought the action in both its proprietary and parens patriae capacities, seeking damages for an injury the Commonwealth suffered (payment of Medicaid claims involving OxyContin) and equitable and injunctive relief on the basis of its “quasi-sovereign interest” in protecting the health and safety of its citizens. The court pointed to the language of the complaint, which states that the “Commonwealth seeks reimbursement for the health care costs, medical care costs, prescription costs, and rehabilitation and other programs and services costs that it paid pursuant to its State Medicaid Program [citations omitted]. Nowhere in the restitution claim does the Commonwealth seek damages on behalf of individual Kentucky consumers.” The court concluded,
But the Commonwealth has expressly asserted that it only seeks recovery for expenses incurred by the State; it is not asserting any private claims on behalf of Kentucky citizens. The Court sees no reason not to accept the Commonwealth's representations regarding the relief it seeks.
LG Display Co. Ltd. v. Madigan, 2011 U.S. App. LEXIS 23036(7th Cir. 2011)The Attorney General of Illinois filed suit in state court against eight manufacturers of LCD panels for violations of the Illinois Antitrust Act. The complaint sought injunctive relief, civil penalties, and treble statutory damages for the state as a purchaser and, as parens patriae, for harmed residents. The defendants removed the case to federal court under CAFA. The Attorney General moved to remand and argued that the suit did not meet CAFA requirements and that, therefore, the district court did not have jurisdiction. The district court agreed and granted the motion to remand. The defendants sought to appeal the remand order to the Court of Appeals for the Seventh Circuit. The Seventh Circuit denied the motion on the grounds that the Attorney General’s action was not a “class action” covered by CAFA, so the court did not have jurisdiction.
Defendants argued that although this case was not filed under Federal Rule 23 (governing class actions) or its state equivalent, it was still a class action because the Illinois Antitrust Act (IAA) provides “no person shall be authorized to maintain a class action in any court of this State for indirect purchasers asserting claims under this Act, with the sole exception of this State’s Attorney General, who may maintain an action parens patriae.” The court rejected this argument because a claim brought under the IAA does not need to be brought by a “representative person” and has no requirements of numerosity, adequacy, typicality or commonality for the plaintiffs. The court also found that the case was not a “mass action” because all of the claims are asserted on behalf of the public, and not on behalf of individual claimants.
Defendants also argued that the Attorney General’s claims should be examined on a “claim-by-claim” basis, arguing that the state is the real party in interest for the “enforcement claims,” but individuals are the real parties in interest for the damages claims. This approach was used in a Fifth Circuit decision in Louisiana ex rel. Caldwell v. Allstate Insurance Co., 536 F.3d 418 (5th Cir. 2008). The Seventh Circuit rejected a claim-by-claim analysis, instead looking at the complaint as a whole and concluding that the state was the real party in interest. The court noted that there was no support for the claim-by-claim approach in CAFA itself. The court concluded that federal courts should strictly construe removal statutes, especially in light of the sovereignty issues that arise when a state’s suit, brought in state court, is removed to federal court.State of Washington v. Chimei Innolux Corp., 2011 U.S. App. LEXIS 20083 (9th Cir., Oct. 3, 2011). The Attorneys General of Washington and California filed actions in state court alleging that defendants conspired to fix the prices of LCD panels, in violation of state antitrust laws. Both cases were filed by the Attorneys General as parens patriae for the citizens of their states and sought injunctive relief, civil penalties and damages and restitution on behalf of the state, state agencies, and citizens of the state. Defendants removed each of the cases, alleging federal jurisdiction under CAFA on the grounds that consumers were the real parties in interest for the monetary relief, and that the cases were disguised class actions. The district court remanded both cases and defendants appealed. The Ninth Circuit affirmed the trial court’s decision.
Noting that CAFA requires that the suit be filed under federal Rule 23 or a state statute authorizing class actions, the court found that the state statutes did not authorize class actions. The Ninth Circuit agreed with an earlier Fourth Circuit decision that stated, “[The state statute] must, at a minimum, provide a procedure by which a member of a class whose claim is typical of all members of the class can bring an action not only on his own behalf but also on behalf of all others in the class.” Attorney General parens patriae actions are different because the Attorney General is not representing the class, and the Attorney General’s interest might be different from or even inconsistent with, the interests of the class. The Ninth Circuit held that “Parents patriae suits lack the defining attributes of true class actions. As such, they only “resemble” class actions in the sense that they are representative suits.”
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Contact: Bill Malloy
Contact: Bill Malloy