The Louisiana Supreme Court ruled
that Caldwell, on behalf of the state, failed to show that the manufacturers/marketers
of the antipsychotic drug Risperdal had attempted to place false claims with
the state. And very properly so, for the case was riddled with weaknesses
throughout. While it began about a decade ago, the award – with $70 million
going to private lawyers – was made initially by a district court in notorious
litigant-friendly St. Landry Parish.
The argument allowed to go
forward by this court was that the state had been defrauded not because it
actually had paid out taxpayer money on the basis of several thousand letters,
eventually corrected, with a claim the Food and Drug Administration said was
misleading and tens of thousands more visits made by pharmaceutical representatives
in the interim, but because of the mere fact that the letters had gone out and
the visits made. A court majority wisely rebuffed the minority’s, and Caldwell’s,
view that a literal reading of the state law in question that actual payments
by the state for a false claim billed by a party should be expanded in this
instance to include entities not billing and rejected his definition of “misrepresentation”
on which he built his case. In other words, in contrast
to some other recent rulings, the Court rightfully refused to engage in
judicial activism (even as one dissenter very erroneously substituted the idea
that to not stretch statutes beyond their intent as he argued itself
constituted a form of activism).
It’s a case that never
should have been brought, given what was known about it and how similar
claims elsewhere had been handled. For example, Caldwell and the district court
relied heavily on logic expressed in a lower court case in West Virginia – even
though a higher court in that state reversed it. Worse, Caldwell passed up an opportunity
to join in a federal-government led suit with 45 other states that focused on this
and other claims about marketing the drug and others for unapproved uses, to unapproved
patient groups (some later authorized), and paid kickbacks in some cases. That recently
brought a settlement of $2.2 billion. Caldwell has the option to try to sue
on this basis as well, although it’s unclear how long and how many state resources
would have to be committed to this.
One wonders why Caldwell did not
join the national suit. It could be because the national suit only drew in
$1.39 billion for false claims, but which included another drug. Louisiana’s
share likely would have been in the neighborhood (based on population) of only
$28 million. It also could be that there would have been little if any largesse
to throw to state trial lawyers in prosecuting the case; it would be
interesting to compare contracts with campaign finance donations to see which
firms/lawyers that were in line to receive fees also have donated to Caldwell
over the past few years.
By bringing and winning this
case, not only could have Caldwell publicized to state voters he had stuffed
into its coffers over a quarter-billion bucks, he also would have helped line
the pockets of trial lawyers with a ridiculously high amount ($7,250 per letter
or sales call) of cash. Best of all, to both he could prove he was a cash cow
that donors should support in order to help tell voters this story justifying their
keeping him in office.
Instead, now it appears he’s
wasted an undetermined amount of taxpayer money and resources of private law
firms hoping to share in the fatted calf he couldn’t rope in. Voters aren’t
going to like the squandering of resources, and lawyers will lose confidence
that he can steer money their way. None of this will help in a reelection
campaign – especially if the contrast is made that for much less the state
could have signed on to a campaign that could have paid off (population adjusted)
at least $44 million.
Nonetheless, it’s a win for the
state’s reputation in that its top judicial organ looks askance at attempts to
allow litigants to bet on anything in the hopes that the Dr.
Dealgood philosophy of justice produces a big payoff. It reassures of an
impartial legal environment that doesn’t create different rules for different
levels of income, and that should attract business, jobs, and money incomes.
But the definite loser here is
Caldwell, who is made to look incompetent both as a lawyer and as a politician,
interested more in grabbing headlines than getting a winning result. It only
makes him seem more vulnerable in a 2015 reelection bid.
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