May 14, 2008

Ohio AG Marc Dann Resigns

Guess he was all out of teeth to pull. From AP:

COLUMBUS, Ohio --Ohio's attorney general has resigned amid the scandal of a sexual harassment investigation in his office and his extramarital affair.

Marc Dann has been under pressure of possible impeachment and announced he was stepping down on Wednesday.

The 46-year-old Democrat at first refused to resign, despite demands by Democratic Gov. Ted Strickland and others within his party.

More from Reuters, and WSJ Law Blog.

As of 6:15 p.m., his official website is still up.

With Dann gone, whom will the New York Times now pick as the next Eliot Spitzer? Forbes had a round-up.

P.S. Oh, yes. Jonathan Adler has lots of Dann-related links from his redoubt at Case Western.

May 13, 2008

Plain-Dealer: Ohio AG to Step Down; UPDATE: Or Not

You can't fire me, I quit! Well, I will after a couple of weeks of punishment.

Ohio Attorney General Marc Dann is expected to announce his resignation later today, The Plain Dealer has learned. He planned to break the news to his senior staff this afternoon.

The decision came as Dann faced intense pressure from fellow Democrats and Republican critics who said he was not fit to continue as the state's top lawyer.

It also followed action targeting Dann in the Ohio General Assembly today by lawmakers from both parties. House Democrats this morning filed articles of impeachment against Dann, accusing him of misconduct and malfeasance in office. And House Republicans began plans to fast-track a bill that would allow the state Inspector General's office to conduct an independent investigation into Dann's office.

UPDATE (4:29 p.m.): AG's office says not the case: "At 3:55 p.m., as a group of reporters and camera people stood gathered outside Dann's office on the 17th floor of the Rhodes Office Tower, a receptionist handed out a short statement that read, 'In response to numerous media inquiries today, the office is issuing the following statement: "Ohio Attorney General Marc Dann has not resigned and no further announcements are planned.'"

And here's an observation from Crain's Cleveland Business, made just about a year ago:

Marc Dann is off to an aggressive start as Ohio's new attorney general, and The New York Times has taken notice.

The paper even pays the activist AG what he would view as the ultimate compliment: It compares him with former New York attorney general Eliot Spitzer, the bane of Wall Street, mutual funds and the insurance industry.

Whooooa-kay.

It's the activist side of the AG that has us interested. Dann has certainly taken an activist bent when approaching the foreclosure issue.

May 5, 2008

Ohio Dems to AG Dann: Resign or Be Impeached

Events are moving fast in the scandals engulging Ohio Attorney General Marc Dann. From The Toledo Blade, posted this afternoon. "COLUMBUS -- Gov. Ted Strickland and other high-ranking Ohio Democrats Monday joined Republicans in the chorus for Attorney General Marc Dann to immediately resign and threatened to lead the march toward impeachment if he does not."

A letter demanding resignation was sent Sunday night by Governor Ted Strickland, U.S. Senator Sherrod Brown, Lt. Governor Lee Fisher, Secretary of State Jennifer Brunner, Treasurer Richard Cordray, House Minority Leader Joyce Beatty, Senate Minority Leader Ray Miller and Ohio Democratic Party Chairman Chris Redfern. Text here. It's tough: "Sadly, we no longer have even the most remote hope that you can continue to effectively serve as Attorney General and that is why we are asking for your resignation."

UPDATE (5:20 p.m.), from AP: "Gov. Ted Strickland told reporters that Democrats will begin drafting an impeachment resolution against Attorney General Marc Dann right away."

May 1, 2008

As the Quill Turns...Tobacco

Today's Wall Street Journal carries an editorial on New York Governor David Paterson's intention of taxing internet sales. From "Return of the Web Tax":

By signing the state's budget, Mr. Paterson is now attempting to do what Mr. Spitzer only threatened: Force out-of-state retailers such as Amazon.com to collect New York's sales taxes, which approach 9%, including local levies. A 1992 Supreme Court decision called Quill bars exactly this type of money grab. The Supremes ruled that forcing such obligations on companies with no employees or buildings in a state could cripple interstate commerce. Without Quill, small Web merchants would have to answer to 7,500 state and local tax collectors.

Funny, that's not how North Dakota's Attorney General Nick Spaeth and Tax Commissioner Heidi Heitkamp described the Supreme Court ruling in "North Dakota v. Quill" in their Bismarck news conference back in 1992. (The case started in state court, State v. Quill.) If I recall correctly -- being there as a reporter -- their argument was that the Supreme Court decision was a victory for North Dakota because it said Congress could address the issue of taxation of interstate sales conducted via the Internet.

We mention this in context of the tobacco lawsuit -- really. Heitkamp went to serve as a popular attorney general, one of the many AGs who pursued the tobacco companies through litigation. She recently returned to the news, proposing a state initiated measure to allocate additional moneys from the settlement to health and anti-tobacco programs. From the AP: "It would establish a new fund managed by a nine-member advisory board appointed by the governor. The board would be in charge of developing a comprehensive plan to discourage tobacco use."

So the tobacco settlement continues to drive policy and politics a decade later. Consequences, we think more intended than un.

April 24, 2008

Godwin's Law: WV Attorney General Slurs Chamber

West Virginia Attorney General Darrell McGraw, responding to the Chamber of Commerce's Institute for Legal Reform's newly released report, "Lawsuit Climate 2008: Ranking the States."

I do subscribe to the idea that the means and methods the National Chamber uses to influence public opinion are like those Hitler used...Exaggeration and propaganda of all sorts.

National Chamber? Surprised he didn't call it the Volkskammer.

April 15, 2008

Santa Clara v. Superior Court

On April 26 and May 19, Walter noted the important 2007 Santa Clara v. Atlantic Richfield Superior Court decision barring government entities from using contingent-fee attorneys to prosecute governmental claims grounded in public-policy balancing of costs and benefits like public nuisance abatement. The decision was a natural consequence of People ex rel. Clancy v. Superior Court, 39 Cal.3d 740 (1985), where the California Supreme Court noted the ethical conflict of interest stemming from contingent fee agreements:

"[T]he abatement of a public nuisance involves a balancing of interests. On the one hand is the interest of the people in ridding their city of an obnoxious or dangerous condition; on the other hand is the interest of the landowner in using his property as he wishes. And when an establishment such as an adult bookstore is the subject of the abatement action, something more is added to the balance: not only does the landowner have a First Amendment interest in selling protected material, but the public has a First Amendment interest in having such material available for purchase. Thus, as with an eminent domain action [to which the absolute neutrality requirement applies], the abatement of a public nuisance involves a delicate weighing of values. Any financial arrangement that would tempt the government attorney to tip the scale cannot be tolerated."

So the appellate court has ruled in a remarkably poorly-thought-out opinion that, well, financial arrangements that would tempt government attorneys to tip the scale can be tolerated, so long as "in-house counsel retain control over all decision-making."

We'll see if the California Supreme Court believes that Clancy only applies to attorneys named Clancy or has broader precedential value. If the reversal holds, however, all is not lost for defendants: "The record before us contains absolutely no evidence [sic] that private counsel have ever engaged in any conduct that invaded the sphere of control exercised by the public entities' in-house counsel. ... No doubt the companies will seek disqualification of the public entities' private attorneys if they acquire evidence that the private attorneys are improperly exercising control over this action."

1) That "no evidence" line is remarkably disingenuous: the city of Oakland's fee agreement states private counsel have "absolute discretion in the decision of who to sue and who not to sue, if anyone, and what theories to plead and what evidence to present." The appellate court, reached to find facts to override it in Oakland's assertion that the agreement did not actually reflect the deal it had with counsel. It's one thing (and bad enough) for an appellate court to find facts, but it's another to blatantly misrepresent the state of the record. And one wonders if Oakland's contingent-fee counsel will be so eager to ignore the parol evidence rule down the road if there is a later dispute over the size of the fee.

2) Meanwhile, it sure sounds to me like the California appellate court just opened to discovery the internal workings of the relationship between the in-house and outside contingent-fee counsel. Which is normally impermissible under the attorney work product doctrine. Every time a brief is filed, it's cause for additional discovery and scrutiny of whether the line has been crossed. Such are the knots that the court has tied itself in to avoid the bright-line statement of Clancy.

The same appellate court rescued the illegitimate public-nuisance claim from a lower court dismissal in County of Santa Clara v. Atlantic Richfield Co., 137 Cal. App. 4th 292 (2006).

March 26, 2008

Lilly, Alaska settle Zyprexa suit

The state had reportedly been demanding $200 million but will settle for $15 million. Note that coverage in places like the NYT and AP characterize the suit as being over money spent by the state on alleged side effects; as readers of this site (and Beck & Herrmann) know, there were some other reasons the dollar figures under dispute got so big.

When state AGs attack

O'Melveny & Myers's Brian Anderson and Amber Taylor, in Legal Times. Summary: "As traditional class actions become a less reliable tactic for attacking business interests, a new one has emerged. Instead of finding a class to represent, plaintiffs lawyers are representing some state attorneys general in cases brought on behalf of the states and their citizens. The resulting lawsuit can pose a new and dangerous threat to defendants. But such lawsuits also have unique vulnerabilities."

March 22, 2008

Alaska's Zyprexa folly

The state of Alaska has just gone to trial in its suit against Lilly over alleged mispromotion of the psychiatric drug Zyprexa. Beck and Herrmann:

The State of Alaska is seeking civil penalties from Lilly under the Unfair Trade Practice Consumer Protection Act of at least $1000 for every time a physician in Alaska prescribed Zyprexa.

You read that correctly: The remedy is seemingly unrelated to why the physician prescribed the drug and whether or not the patient's condition improved. No causation; no injury; no nothing. It's at least a thousand bucks (and perhaps as much as $25,000) per script times hundreds of thousands of alleged violations....

And that's aside, they say, from whether the suit ignores the provision in Alaska's UTP statute that exempts from its coverage regulated transactions, which the labeling of a drug surely is.

March 13, 2008

"Radioactive in this environment"

Major law firms will probably have to wait through one or two half-life cycles of scandal decay, at least, before they would be willing to offer the governor a job. But what about his close pal and adviser Lloyd Constantine's firm, Constantine Cannon? As those involved in the great credit-card issuance antitrust case could undoubtedly vouch, that firm's probably got the resources to make him a suitable offer.