Monday, October 4, 2010

No Right To Seek Disqualification

The web page of the Pennsylvania disciplinary board reports:

On August 17, 2010, the Supreme Court of Pennsylvania decided a high-profile case involving an attempt by a pharmaceutical company to disqualify the private law firm hired by the Commonwealth to pursue a claim for damages for Medicaid and other program funds spent as a result of off-label marketing efforts by the company.

In the case of Commonwealth v. Janssen Pharmaceutica, Inc., No. 24 EAP 2009, the company had sought to disqualify the Texas law firm of Perrin Bailey, LLP, which represents several states in similar litigation. The company attacked the contingent fee contract between the firm and the Office of General Counsel on several theories, including:

  • it restricted the ability of the state to enter into a nonmonetary settlement;
  • it was an improper delegation of spending authority;
  • it infringed on the General Assembly’s exclusive spending power; and,
  • it violated the company’s due process rights by giving a party acting on behalf of the government a financial interest in the outcome.

In the majority opinion, written by Chief Justice Castille, the Court did not reach these issues. Rather, it decided the case under the terms of Section 103 of the Attorneys Act, 71 P.S. 732-103, which states that no party other than a Commonwealth agency has standing to challenge the authority of the legal representation of the agency. The Court described Janssen’s statutory and constitutional arguments as “cogent,” but concluded that the intent of the Legislature to deny private parties the right to challenge the representation of the Commonwealth was clear.

In a concurring opinion Justice Baer, joined by Justice McCaffery, agreed with the majority’s reasoning, but expressed concern about whether the issue might be moot.

Justice Saylor filed a dissent in which he expressed the view that the constitutional issues raised by Janssen were not subject to limitation by Section 103, and that its efforts to disqualify the firm should be determined by traditional standing analysis.

(Mike Frisch)

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