We had a weird ruling last week from the Arkansas Supreme Court. It prompted uncommonly candid criticism from Attorney General Dustin McDaniel.
And it advanced the percolating notion that Arkansas courts are becoming ever-more politicized toward pro-business conservatism.
The case is about the drug Risperdal, an anti-psychotic medication. Arkansas joined 34 other states in suing the drugmaker and a subsidiary—Johnson & Johnson and Janssen Pharmaceutics Inc.
Johnson & Johnson has agreed to a federal court settlement in the matter of $2.2 billion.
Our state’s suit, filed by the attorney general, alleged that the drug was marketed to our state’s Medicaid program without proper disclosure of health risks.
The state won before a jury in 2012 in Pulaski Circuit Court. Judge Tim Fox, saying he was bound by mandatory minimum fines per prescription, fined Johnson & Johnson nearly $1.2 billion—$5,000 each for nearly 240,000 prescriptions over a 3 1/2-year period.
State government could always use a billion-plus dollars, if only to offset tax cuts.
It was an outrageous sum, most would agree. It dwarfed all other single-state judgments.
Some larger states settled their similar suits for less. But McDaniel’s office and Johnson & Johnson couldn’t come to terms. So the case went via Johnson & Johnson’s appeal to the Arkansas Supreme Court.
During oral arguments before the high court, Associate Justice Jo Hart asked a question right out of the blue: What if the actual bill passed in 1993 by the Legislature on Medicaid fraud—the basis for the bringing of the suit by the attorney general’s office—was substantively different from the way the Code Revision Commission phrased the statute as it performed the routine technical task of weaving the new act into the codified law?
Lawyers on both sides had no idea. That issue had not previously been raised, much less researched, much less argued in a brief.
In March, the Arkansas Supreme Court threw out the judgment on that very basis—that the suit was brought without standing because the 1993 law was about Medicaid fraud by health-care facilities, not drugmakers, and the codified revision had been fatally flawed.
That is to say Johnson & Johnson won not because of anything its expensive lawyers did, but only because certain justices of the Arkansas Supreme Court dreamed up something entirely different.
Johnson & Johnson’s lawyers argued only free speech and excessive punishment.
McDaniel read the ruling, blew a bit of a gasket and gave an interview to the Talk Business and Politics program.
He said the ruling defied 170 years of precedent by invoking a new issue in the middle of oral arguments and pitting the plain language of codified law against supposed legislative intent with the original bill.
He said the high court erred both in raising the new issue when it did and then in interpreting the code as being different from the original act. He said an expert linguist’s diagramming of the sentences in the code and the act showed the gist to be the same.
The original act from ’93 says it applies to anyone who “knowingly makes or causes to be made any false statement or misstatement of fact in any application for benefit or payment under the Medicaid program.” The code defines the application of that provision as extending to institutions or entities subject to provider agreements or other state laws and regulations.
McDaniel said the ruling removed the state’s ability to sue any other drug marketer for fraud.
Then he said that this state Supreme Court is getting a bit of a reputation for being “result-oriented,” meaning it decides how it wants a case to turn out and then backs into the ruling even if that requires gymnastic contortion.
He said none of that portended well for the court’s credibility.
On Monday when I asked McDaniel what other cases of result-driven contrivances he had observed from this Supreme Court, he said he stood by what he had said, but realized that he shouldn’t have said it publicly, and could see nothing good coming from his elaboration.
McDaniel did say that some lawyers in his office think the state ought to petition the U.S. Supreme Court to hear the case because the outcome—or the manner in which the outcome was reached—raised due-process issues. But he said he wasn’t sure.
Absent McDaniel’s elaboration, I am left only to speculate.
The tort-reform-seeking Arkansas State Chamber of Commerce filed a friend-of-the-court brief in Johnson & Johnson’s behalf deploring the dire and supposedly unjust consequences for the business community if such an excessive sum was allowed to stand.
Elected justices wanting to get re-elected—even those of the supreme variety, if not especially those—surely are cognizant of the highly politicized recent efforts of political and business groups to support the candidacies of judge hopefuls believed to be supportive of business and smaller judgments and so-called tort reform.
There is the matter looming large in the news of pro-tort reform political action committees raising funds for presumably conservative judges such as Mike Maggio, who reduced a jury award against a nursing home.
Among those cognizant of those political factors might be, for example, Associate Justice Courtney Goodson. She is said to want to run for chief justice but is concerned that the business community resents her majority opinion overturning a tort-reform act attempted by the Legislature.
One of the current justices, Cliff Hoofman, was in the Legislature in 1993 when the law in question was passed. He also is known as a bit of stickler. (He was the rules-interpretation specialist for the former state Senate kingpin, named Beebe.)
It’s not out of the question that Hoofman brought up the original idea of a conflict between the original act as he recalled it and the codified version.
And there is always the possibility that $1.2 billion was simply too high, outrageously so, and that the Supreme Court felt a responsibility to contrive some way to toss it out—sort of like U.S. Supreme Court Chief Justice John Roberts’ calling the individual mandate a tax to achieve the result of saving Obamacare.
The Supreme Court doesn’t explain itself. Like the Almighty, it works in mysterious ways.
By the way: The Supreme Court remanded for reconsideration a portion of the suit accusing Johnson & Johnson of deceptive practices. But that’s chicken feed, a few million dollars.
The better solution would have been a negotiated settlement on the larger question, one pre-empting an appeal to the high court and netting an amount substantial if considerably less than $1.2 billion.
Another better solution—as ever—would be that we stop electing judges and have the governor appoint them subject to state Senate confirmation and occasional up-or-down retention by the voters.
It might be as thoroughly political as now, or as fully subject to that perception. But at least we would know where to focus our concerns about the politics.
That would be on the governor, just as many of you—at the presidential level—blame Bill Clinton for Ruth Bader Ginsburg, and Barack Obama for Sonia Sotomayor, and George W. Bush for Samuel Alito and Ronald Reagan for Antonin Scalia, and George H.W. Bush—especially George H.W. Bush—for Clarence Thomas.
John Brummett’s column appears regularly in the Arkansas Democrat-Gazette. Email him at [email protected]. Read his blog at brummett.arkansasonline.com, or his @johnbrummett Twitter feed.