Next month the Supreme Court of Pennsylvania will hear argument in a pharmaceutical case that has implication for all readers of MassTortDefense, regardless of what industry they may represent. See Commonwealth of Pennsylvania, C/O Office of General Counsel v. Janssen Pharmaceutica, Inc., No. 24 Eap 2009 (S.Ct. Pa.).  This case presents not only significant constitutional and statutory issues, but also impacts policies affecting the public interest in open government, health care policy, and the regulation of the practice of law in the context of governmental litigation.

In the underlying case, the Commonwealth seeks damages for asserted financial harm allegedly caused by Janssen’s supposed deceptive marketing practices in promoting its anti-psychotic drug, Risperdal, for off-label uses. This action was originally filed in the Court of Common Pleas of Philadelphia County in February 2007. In June 2008, Janssen filed a Motion to Disqualify Plaintiff’s Counsel, the private Texas-based plaintiff personal injury firm of Bailey Perrin & Bailey, which had been hired by the state on a contingency fee basis.   Public records indicate that during the precise time period that the fee contract was negotiated and executed, one of Bailey Perrin’s founding partners made repeated and significant contributions, totaling more than $100,000, to Pennsylvania Governor Rendell’s re-election campaign and to the Democratic Governors Association, according to defendant.

The Commonwealth opposed the Motion; the trial court denied the Motion on December 8, 2008. Janssen thereafter sought extraordinary appellate relief in the state Supreme Court, which was granted.

The Commonwealth’s retention of contingent fee private counsel in this matter raises significant issues including whether and when state law authorizes the Office of General Counsel to enter into a contingent fee contract with outside counsel; whether the Commonwealth’s hiring of outside litigation counsel on a contingent fee basis violates the state constitution, including the separation-of-powers mandate of the Pennsylvania Constitution; and whether the Commonwealth’s hiring of outside litigation counsel on a contingent fee basis violates the due process rights of the defendant company.

In many contexts, the legal policy of the Commonwealth — like many states — strongly favors open, competitive bidding for contracts involving state funds. Such requirements, included in the state Constitution and various statutes, are designed to prevent fraud, eliminate bias and favoritism, and thus protect vital public interests.

Those same goals of open and good government reside in the requirement that state officials give their undivided loyalty to the people of the Commonwealth. The antithesis of these goals and policies is “pay-to-play,” the award of government contracts to major campaign contributors. This case threatens to expand the scope of pay-to-play in unprecedented fashion. The very sovereignty of the Commonwealth itself – its legal enforcement authority and parens patriae powers – should not be subject to sale. Public records reveal hundreds of thousands of dollars of contributions to the benefit of the state governor in close proximity to the issuance of a no-bid, contingency fee contract to one of the contributors, according to defendant.  The media has widely and correctly assailed the appearance of impropriety thus created.

Aside from its questionable origins, the contingent fee contract violates the core principle that attorneys pursuing actions on behalf of the Commonwealth represent a sovereign whose obligation to govern impartially is essential to its right to govern. Government attorneys must exercise independent judgment as a ministers of justice and not act simply as advocates. The impartiality required of government lawyers cannot be met here, where the private pecuniary interest inherent in the contingent fee is the primary motive force behind the bringing of this very action. By turning over sovereign prosecutorial power to contingency counsel, the Governor effectively created a new branch of government – motivated by the prospect of private gain rather than the pursuit of justice or the public welfare.

This subversion of neutrality does more than implicate the due process rights of those confronting such tainted prosecutions. Direction of state prosecutions by financially interested surrogates also damages the very public interest that such litigation is supposed to advance. Here, it is already clear that Pennsylvania’s in-force health care policies concerning the use of atypical anti-psychotic medications dramatically conflict with the reckless allegations of contingent fee counsel’s complaint. Those (typical plaintiff) allegations broadly equate all “off-label” use of prescription drugs with “medically unnecessary” use, and blindly assert that all such “medically unnecessary” use is “illegal.” The law, however, recognizes off-label use as generally accepted by the medical community and the FDA, and as perfectly legal, and does not consider prescription drugs unsuitable for use merely due to lack of FDA approval. The allegations of the complaint – crafted more for the pecuniary goals of counsel than for the needs of the patients served by the affected state programs – risk the public health by threatening to deprive some of our neediest citizens of a medicine that the Commonwealth’s own unbiased administrators consider “preferred” for the same off-label indications that the complaint brands “illegal.”

It will be interesting to see how the Supreme Court approaches these significant issues int he coming weeks.

[Your faithful blogger was able to contribute to the amicus brief of the Washington Legal Foundation , the public interest law and policy center, in this matter.]