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State AGs, plaintiffs' lawyers gain power, money in health care bill

In any bill of 1,000 pages or more, politics require the tucking in of provisions in to benefit special interests. H.R. 3962, the Affordable Health Care for America Act, is an astonishing 2,016 pages, so there's all the more tucking and the many more special interests. Benefiting in this case is the plaintiffs' bar, gaining more opportunity to sue businesses via the power of state attorneys general.

Victor Schwartz of Shook, Hardy & Bacon* has researched the language in Section 257 (page 151 of the bill) and finds that it provides a state attorney general broad authority to enforce any provisions or regulations under Title II of the act, "Protections and Standards for Qualified Health Benefits Plans." And, the AGs can go after monetary damages on behalf of private plaintiffs for technical violations, and even farm out the work to private law firms. Here's the provision:

Any State attorney general may bring a civil action in the name of such State as parens patriae on behalf of natural persons residing in such State, in any district court of the United States or State court having jurisdiction of the defendant to secure monetary or equitable relief for violation of any provisions of this title or regulations issued thereunder. Nothing in this section shall be construed as affecting the application of section of the Employee Retirement Income Security Act of 1974.

In a background memo, Schwartz writes:

Given the scope of the legislation, it will, as a practical matter, be extremely difficult for defendants to comply perfectly with every provision and corresponding regulation, especially where ambiguous. For that reason, section 257 would effectively grant state attorneys general the authority to target almost any business. The provisions also does not restrict state attorneys general from delegating their authority to pursue state-sponsored litigation to private plaintiffs' lawyers. Thus, the end result of this provision could very easily mean hundreds of millions in liability for businesses based on the whims of the state attorney general or private plaintiffs' attorneys.

And that's just one section, a single paragraph! Imagine all the other provisions favoring this group or that, having very little to do with health care or reform.

* Shook, Hardy & Bacon handles much of the amicus work for my employers, the National Association of Manufacturers.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.