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How Progressives in Law Talk to America

By Reuben Guttman and Paul Zwier

“Originalism is a pretext to justify an ultraconservative agenda.”[2]“Textualism is pretext to discount context.” “The appointment of Judge Brett Kavanaugh to the Supreme Court is a step toward the demise of the administrative state.”

We are progressives, and these are lines that we have picked up from like-minded colleagues over the past several months. We progressives seem to find comfort in encapsulating our views in thematic phrases or conclusions; indeed, we even collect and covet new ones that come our way. How many of us have used the phrase “weaponizing the First Amendment” since Supreme Court Justice Elena Kagan coined that phrase in her Janus dissent?[3]

We as progressives seem to 1) view the current state-of-affairs in the Trump era as a crisis, or at least the dismal end of liberal democracy, 2) complain that the rule of law is in jeopardy, and 3) act bewildered that all Americans do not see things as we do.

Yet, perhaps this third point is precisely because we speak in a language of contempt that is only familiar to those in our “like-minded echo chamber.” And, even among those in the echo chamber, we wonder whether the words we use have either lost their meaning or do not adequately capture the principles they represent.

And who exactly is our audience? Are we trying to persuade Trump supporters to change their minds? Or are we trying to persuade independents who voted for Barack Obama, but then voted for Trump in frustration and anger over a number of real concerns: wage disparities, failed financial products that wreaked havoc on unwitting borrowers, the ever-increasing costs of health care and education, and/or the opioid crisis? Has our rhetoric ignored the grade school and high school classrooms where students formulate their views on the role of government without understanding the difficult relationship between liberty and equality?[4]

Of course in this Botox era of quick fix solutions, how does the complexity of our beliefs compete with simple, but completely wrong and racist, quick fixes like blaming our woes on immigrants and simply summarizing our goals in the phrase “Make America Great Again”? Our striving to learn from the messaging of those who have a different vision for the world has only confused our message.

For example, we call ourselves progressive, but what does that really mean? Does it mean that we still believe in liberal democracy —that there is room for both majority backed solutions and for liberty (that is, plenty of room for individuals to define for themselves what gives their lives meaning)? What has exactly changed in our society and its values that warrant change (progress)? What makes us want to abandon old ways in favor of new ones? While progressives favor change, it is not for change’s sake. We worry about the unintended consequences of any policy or program. We must therefore leave plenty of room in our rhetoric for balancing the interests of individuals with different needs, experiences, and perspectives. In sum, our challenge is to work toward the more perfect provision of health care, public education and protections that afford equality of opportunity; and at the same time we must also protect personal values with regard to religion, leisure time and other liberties.

Of course, the court plays a vital role in balancing between need for change and protections of liberty. The courts balance and adjust liberty and freedom of self-determination, but also of equality and justice, including a fair chance for success, for all. However, it is in an oral adversarial process of combatting narratives where the important balancing and weighing takes place. It is up to trial lawyers to convince a jury or other body, but we must first understand our audience to do so effectively.

As trial lawyers who are in the business of convincing others, we have learned the hard way that not everyone sees the world as we do, speaks our language, or attaches the same meaning to words and phrases that we use. For us, it is an occupational hazard to not be in constant exploration of how others view the world. We confess that taxi drivers, parking attendants, the person checking us in at the hotel, and those we have represented (from salaried to professional workers) are all part of our ever-expanding and continuing focus group. Though one of us dabbles in teaching law as an adjunct faculty member, and one of us is a full-time law school faculty member, our students and clients have been our teachers.

Among the members of our focus group, one of us has been thinking about the Lyft driver who shuttled him home from the airport recently. The Lyft driver is a Navy veteran who spent ten years as a bookkeeper at the Federal Bureau of Investigations (FBI) Quantico facility and has a son who is a police officer in California. With no pension to speak of and struggling to make ends meet, surely his views on the state of the nation had to be like ours. They were not. He said that President Donald Trump’s tax bill put more money in his pocket; getting along with Russia is a good thing (so why all the commotion?); most immigrants are hardworking, but people should not be sneaking across the border; and Hillary Clinton had her foibles, so why can’t the Democrats cut Trump some slack? He was and will continue to be a Trump supporter. He is one of the people that we progressives would have to win over, and yet, I wonder whether we speak in a language that is readily accessible or relatable to him.

Still the chaos and narcissism coming from the White House make for tough sailing for progressives. It is hard for some navigating between kindness, condescension, and contempt. Our tendency is to discuss what we believe a Kavanaugh court might mean. Or the unfairness of not letting Obama fill a seat on the Supreme Court during the last year of his term. Or the self-absorption of a president who shows little concern about Vladimir Putin hacking the 2016 presidential election, his own threat to rule of law in his tweets condemning Attorney General Jeff Sessions’ continuation of the Russia investigation, his removal of former FBI Director James Comey, and/or his insistence on “no collusion,” but that even if he colluded (that is, coordinated or otherwise assisted the Russians in interfering with the election), it is not a crime.[5] We want to ask, “When did a Trump voter’s support turn into support for a Manchurian candidate?” Our responses sometimes stray from concerns regarding our shared vulnerabilities, and are often unkind to the Lyft Driver and others who have graced our paths over the years. Even the legal scholars analyzing the laws that regulate us often show too little care for the public at large. And – of course it is tempting to join the politicians who see a fix in energizing their voting base, which can boil down to bestowing benefits or promoting and assuaging fears with little regard to the facts at issue.

Among these groups, it is the progressive lawyers and legal scholars who are seemingly the best hope to play the role as honest brokers who can provide understandable insight and guidance to those who cast votes. Indeed, there are many progressive scholars who do this well. But those who do so must do more than simply present the data, or show the illogic of Trump’s positions. Such arguments are too susceptible to the “what about” response (“What about Bill Clinton? He had an affair while he was in the White House.”) or to an anti-intellectualism that makes for an easy dismissal of the academic as being part of the elite. No, we as progressives must draw on all of our classical rhetorical skills in making the right case to the right audience.

Like any trial lawyer appealing to a jury in closing argument, political rhetoric that seeks to persuade the fair minded, or independent, citizen must pay attention to several principles. The first principle is credibility.[6] A trial lawyer’s job is to demonstrate credibility from the start of jury selection through the end of the trial. For the politician, it is a life-long endeavor. For the opinion writer or legal commentator, credibility can be demonstrated by modest reference to one’s careers and personal experiences with the subject matter.

The second principle is posing a balanced argument. Does the candidate recognize genuine fears and concerns that exist in the minds of the audience? What are the legitimate concerns about wealth disparity, immigration, health care, regulation, and education that need to be “heard” and restated before moving to reasonable, workable solutions based on facts? Does the argument appeal to more than one type of the authority—to the law, to economics, to predictions based in data (appropriately detailed), but also to values and common sense? Is the argument multifaceted, so if one basis is not understood, others will be offered to satisfy everyone? And does it build, like a John Oliver presentation—with more than just a one liner, or a “gotcha”—with a light touch, some humor, and a sincere suggestion for action? Does it take the time to use history, or even analogies drawn from songs, sayings, and sacred texts, to make the point?

The third principle is related to passion. Is the speaker’s passion appropriate—not too shrill, not too fast, not too loud, and not too angry? Does the argument contain tactical word emphasis and variation in tone to make it interesting and keep the audience from feeling attacked, and maintain sincerity throughout its delivery, like a skilled musician performing a difficult concerto?

The final principle involves genuine displaying respect and trust for the audience. Does the final appeal respect the intelligence of the audience by not telling the audience what to do, but by asking each one to decide from themselves to do what is right, and what they will be proud to tell their children they did, some years in the future?[7]

We call on our fellow academics to do more blogging and opinion writing. At the end of the day, it is the theorists in consultation with the practitioners who will study the chaos of the Trump administration, perhaps even coining new terms to capture what is happening. They look at individual moves and acts, but see how they are part of a bigger movement or shift in theory. Is the firing of Sessions like Nixon’s Saturday Night Massacre? Is it the move toward totalitarianism, in the name of nationalism? Is it the end of democracy in favor of a dictator? What does it mean about a person’s character, who even if caught lying cheating or stealing, or personally gaining from his office, will put himself above the law? Is it better to invoke history? Are we like Germans living in between World War I and World War II, in stifling poverty and unemployment, ready to blame Jews for the nation’s problems? If we see these conditions, we cannot stand down or escape to our regular scholarship. We must engage and use all the tools that our legal training has provided to us.

For now, the nation is in trouble. In words progressives understand, “the rule of law is in jeopardy.” With a critical Supreme Court nomination pending before the Senate and upcoming national elections slated for November, the big question is how we get more people to understand the nation’s peril. Maybe it is just time to really listen to each other and begin to speak in a common language. Despite these trying times, we must follow the advice that Ruth Bader Ginsberg’s mother gave her as a little girl, that showing anger never advances your cause. Instead, we must remember to take the time to establish our credibility and concede the human emotions that need be conceded. We need to be both balanced and precise in the words that we use. We need to be patient—our work is conversation by conversation, speech by speech, blog by blog. Don’t we need to continue to trust democracy—that rational discourse, step by step and case by case, will bend the arc of history toward justice?

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[1] Reuben Guttman practices law with Guttman, Buschner & Brooks, PLLC, is a Board Member of the American Constitution Society, and an Adjunct Professor and Senior Fellow at Emory Law School; Paul Zwier is a Professor at Emory Law School and Director of the Emory Law Center for Advocacy and Dispute Resolution.

[2] Thomas Jefferson made the case for progressives against originalism in his letter to Samuel Kercheval:

Some men look at constitutions with sanctimonious reverence, and deem them like the arc of the covenant, too sacred to be touched. They ascribe to the men of the preceding age a wisdom more than human, and suppose what they did to be beyond amendment. I knew that age well; I belonged to it, and labored with it. It deserved well of its country. It was very like the present, but without the experience of the present; and forty years of experience in government is worth a century of book-reading; and this they would say themselves, were they to rise from the dead. I am certainly not an advocate for frequent and untried changes in laws and constitutions. I think moderate imperfections had better be borne with; because, when once known, we accommodate ourselves to them, and find practical means of correcting their ill effects. But I know also, that laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy, as civilized society to remain ever under the regimen of their barbarous ancestors. It is this preposterous idea which has lately deluged Europe in blood. Their monarchs, instead of wisely yielding to the gradual change of circumstances, of favoring progressive accommodation to progressive improvement, have clung to old abuses, entrenched themselves behind steady habits, and obliged their subjects to seek through blood and violence rash and ruinous innovations, which, had they been referred to the peaceful deliberations and collected wisdom of the nation, would have been put into acceptable and salutary forms. Let us follow no such examples, nor weakly believe that one generation is not as capable as another of taking care of itself, and of ordering its own affairs.

Letter from Thomas Jefferson to Samuel Kercheval (July 12, 1816) (on file with Library of Cong.).

[3] Janus v. AFSCME, Council 31, 138 S. Ct. 2448, 2501 (2018) (Kagan, J., dissenting).

[4] See Arlie Russell Hochschild,Strangers in their Own Land; Anger and Mourning On the American Right, A Journey in the Heart of Our Political Divide 9 (2016). See also CNN Politics, Exit Polls, CNN (Nov. 23, 3016, 11:58 a.m.), https://www.cnn.com/election/2016/results/exit-polls (describing reasons Trump supporters provided for electing Trump).

[5] See Stephen Collinson et al., Trump Fires FBI Director James Comey, CNN (May 10, 2017, 9:44 A.M.), https://www.cnn.com/2017/05/09/politics/james-comey-fbi-trump-white-out/index.html; Philip Ewing, Trump Escalates Feud Against Jeff Sessions with New Sarcastic Tweets, NPR (Aug. 24, 2018, 11:23 A.M.), https://www.npr.org/2018/08/24/641543624/trump-escalates-feud-against-jeff-sessions-with-new-sarcastic-tweets; David Jackson, Donald Trump Says Collusion ‘Is Not a Crime,’ Insists His Campaign Did Not Collude with Russia, USA Today (July 31, 2018, 4:50 P.M.), https://www.usatoday.com/story/news/politics/2018/07/31/donald-trump-collusion-not-crime-no-collusion-russia/869821002/.

[6] See generally Aristotle, On Rhetoric: A Theory of civil Discourse (George A. Kennedy ed., Oxford Univ. Press 1991). Of course, Secretary Clinton was credible to a majority of the population, and maybe, however unfair, had lost her credibility not to a majority of voters in key states. See Gregory Kreig, It’s Official: Clinton Swamps Trump in Popular Vote, CNN (Dec. 22, 2016, 5:34 A.M.), https://www.cnn.com/2016/12/21/politics/donald-trump-hillary-clinton-popular-vote-final-count/index.html.

[7] See Aristotle, On Rhetoric : A Theory of civil Discourse (George A. Kennedy ed., Oxford Univ. Press 1991). While some might see these as tactics or strategies, we, along with Aristotle, prefer to see them as virtues. Id. These are the virtues of the citizen performing his or her duty in the public square.

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The Whistleblowers in the White House

I practice law. My clients have been called sneaks and snitches. I just call them “whistleblowers.” If they sue a culprit who has defrauded the government under the False Claims Act against, I might also call them “relators.”[2]

I try to explain to people that the term whistleblower is quintessentially American. It is about challenging accepted but fundamentally wrong practices; indeed, ones carried out by established or respected people or institutions, including corporations and government. And though the term “whistleblower” was coined around the activities of Ralph Nader in the 1960s and 1970s, whistleblowers have been around since the birth of our nation.[3] One need only consider challenges to British Rule and claims of taxation without representation to understand the importance of whistleblowing in our founding.

We talk about the “progressive tradition,” but isn’t that tradition about second-guessing rules that are just not right – rules like slavery, “separate but equal,” and a way of life that denied, and continues to deny, equal rights for women and minorities? And aren’t the folks who stick their necks out to make these challenges just good old American whistleblowers? No doubt though, until their complaint is vetted and their cause pressed to completion, they will be called snitches, even if, at the end of the day, their epitaphs herald them as heroes.

This week we learned that we have whistleblowers in the White House, some of whom cooperated with reporter Bob Woodward, and one of whom penned an Op Ed for the New York Times.[4] True to form, feathers have been ruffled in some circles and our President has called the work of the Op Ed author “TREASON?”[5] Some of these outcries were predicable; yet the cries for help from these particular “whistleblowers” were a bit surprising.

While we have laws that protect whistleblowers and legal channels for them to air their grievances, every now and then these channels are simply not viable; or perhaps, those who might be in a position to hear a complaint won’t listen or are not inclined to take action.[6] Specifically, Congress has seemingly failed to conduct aggressive oversight on issues ranging from the competence of the President to the administration’s foreign policy initiatives.[7]

Maybe this is what the whistleblowers in the White House understand; it is probably why they took their concerns to the only viable outlet: the American Press. After all, was the Republican legislature going to take up their cause?[8]

And like the wide receiver always in the clear to take a pass, the Free Press – another quintessentially American phenomenon – exists as the outlet for whistleblower when all else fails. No doubt, choosing that route comes with fewer statutory protections, but to be clear, whistleblowers working with the press have driven change for the better.[9]

I am a bit curious about these White House whistleblowers —particularly, the individual whose words appeared in the New York Times. I wonder about the phrase in the Op Ed hinting at the virtues of an agenda that specifically favors deregulation and perhaps even the appointment of judges deferential to the well-heeled and less receptive to those without a voice; maybe even judges who are less open to receiving a complaint challenging the status quo from say, for example, a whistleblower?

I wonder whether these whistleblowers in the White House have truly learned about what it feels to be the little guy taking on the system, always in search of a more powerful partner who will make the grievance heard. And also, I wonder when they leave the White House and go back to Corporate America whether they will be the ones calling my clients snitches.

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[1] Reuben Guttman practices law with Guttman, Buschner & Brooks, PLLC, and is a Senior Fellow and Adjunct Professor at Emory Law School. He is a Board Member of the American Constitution Society.

[2] See 31 U.S.C. §§ 3729-3731 (2018). Specifically, 31 U.S.C. § 3730(b) provides for “actions by private citizens” in the name of the government. Private citizens who bring these actions are known as “relators” and the caption on the complaint is styled, for example, United States ex rel Smith v. Jones Corp. The provisions of the False Claims Act that allow for private rights of action are known as the “Qui Tam” provisions. See, e.g.,31 U.S.C. § 3730(c).

[3] See William Safire, On Language; Blowing my Whistle, N.Y. Times Magazine (1983), https://www.nytimes.com/1983/02/06/magazine/on-language-blowing-my-whistle.html.

[4] See, e.g., I am Part of the Resistance Inside the Trump Administration, N.Y. Times (Sept. 5, 2018), https://www.nytimes.com/2018/09/05/opinion/trump-white-house-anonymous-resistance.html; Renae Reints, Bob Woodward’s Latest Book Reveals New Levels of Chaos in Donald Trump’s White House, Fortune(Sept. 4, 2018), http://fortune.com/2018/09/04/woodward-book-donald-trump/.

[5] See Donald J. Trump (@realDonaldJTrump), Twitter (Sept. 5, 2018, 3:15 P.M.), https://twitter.com/realdonaldtrump/status/1037464177269514240?lang=en (responding to the anonymous op ed in the New York Times).

[6] See infra, note 8. Historic examples of when government insiders have used the press because no viable internal recourse existed include Mark Felt’s (“Deep Throat”) cooperation with Bob Woodward and Carl Bernstein of the Washington Postand Daniel Ellsberg’s leaking of the Pentagon Papers. See The Most Dangerous Man in America, PBS, http://www.pbs.org/pov/mostdangerousman/timeline/ (last visited Sept. 13, 2018); The Watergate Story, Wash. Post, http://www.washingtonpost.com/wp-srv/politics/special/watergate/part1.html (last visited Sept. 13, 2018).

[7] See Kris Kolesnik, GOP Destroyed Oversight – Dems Obligated to Clean up Mess if Elected, The Hill (Sept. 11, 2018, 11:30 A.M.), http://thehill.com/opinion/campaign/405931-gop-destroyed-oversight-dems-obligated-to-clean-up-mess-if-elected.

[8] For example, any one of a number of Congressional oversight committees – if inclined – has the ability to subpoena documents and call witnesses. See generally Todd Garvey, Cong. Research Serv., Congress’s Contempt Power and the Enforcement of Congressional Subpoenas: Law, History, Practice, and Procedure (May 12, 2017), https://fas.org/sgp/crs/misc/RL34097.pdf. In combination with the press, these committees have immense power of persuasion. One can only harken back to the Watergate Committees to appreciate this point. See Tevi Troy, Congressional Hearings Aren’t What They Used to Be. Here’s How to Make Them Better, Wash. Post (Oct. 21, 2015), https://www.washingtonpost.com/posteverything/wp/2015/10/21/congressional-hearings-arent-what-they-used-to-be-heres-how-to-make-them-better/?noredirect=on&utm_term=.73a4fff44fae.

[9] The Occupational Safety and Health Administration allows for redress regarding retaliation provisions written into at least twenty separate federal statutes. See Occupational Safety and Health Admin., U.S. Dep’t of Labor, OSHA Fact Sheet (2013), https://www.osha.gov/OshDoc/data_General_Facts/whistleblower_rights.pdf. But the protection is for individuals who engage in protected conduct. Reporting wrongdoing to a federal agency is clearly protected conduct. What is less clear is when an individual neglects to report an issue directly to an agency and goes to the press. For example, one need only study the matter of the Pentagon Papers where Daniel Ellsberg was charged under the Espionage Act for his leaking of documents to the Washington Postand the New York Times; the charges were later dismissed because of prosecutorial misconduct. See Judge William Byrne; Ended Trial over Pentagon Papers, Wash. Post (Jan. 15, 2006), http://www.washingtonpost.com/wp-dyn/content/article/2006/01/14/AR2006011401165.html. Despite the legal perils of Mr. Ellsberg, we look back over four decades on his efforts and view his conduct as having a positive impact on the process of evaluating US involvement in the Vietnam War.

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Government by Contract: Considering a Public Service Ethics to Match the Reality of the “Blended” Public Work force

By Dan Guttman

While succeeding generations of members of Congress and presidents have vowed in the name of efficiency to shrink Big Government, the size of the federal civil service work force has remained fairly constant for decades.1 Beyond the symbolic politics surrounding philosophical differences over the appropriate size of government are the often less discussed, but fundamental issues raised by the “fourth branch” or “shadow government” which has expanded in scope and function in recent decades.2 This refers to the vast array of private contractors who work in every area of government from building weapons to writing regulations. While data on the number of civil servants is available, there is no comparable data on the number of government contractors and their employees who perform work of the kind that citizens might think of as the work of the government.3 For decades, this had been Washington’s “best kept secret” according to the late Harold Seidman, a distinguished scholar of public administration who advised both President Dwight Eisenhower and President John Kennedy when their administrations struggled with the governing implications of the growing number of government contractors.4 The most troubling aspect of the blended public-private work force resulting from “government by contract” is the challenge for accountability.

Mr. Guttman is a highly-regarded expert on third-party governance. The Shadow Government (1976) which he co-authored is recognized as a seminal study in modern government contracting. In 1978 he authored perhaps the first law journal article (in the Harvard Journal on Legislation) on modern contractor conflict-of-interest laws. He was special counsel to US Senator David Pryor in Senate investigations of the Federal government’s use of contractors to do its basic work. He has written extensively on contracting and testified many times before Congress and other public bodies on this topic. He shared in an investigative journalism award for a 2004 study of $900 billion in Defense Department contracting. As a private lawyer, Mr. Guttman’s practice has involved a broad range of areas of law.

Mr. Guttman wishes to thank the numerous scholars, students, citizens, and government and contractor employees who have helped further his understanding that led to this paper. In particular, he is greatly indebted to the late Harold Seidman, scholar and public servant, who provided seminal understanding of the evolution, and importance of, the dual sets of rules governing civil servants (and political appointees) and private citizens who perform the work of government under contract. The contents and opinions expressed in this report are those of the author who is solely responsible for any
errors or omissions.

Read the full white paper here.

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Effective Compliance Means Imposing Individual Liability

Deputy Attorney General Sally Yates said it in a memo dated September 9, 2015, and her successor, Rod Rosenstein, said it in remarks dated October 6, 2017: corporations act through individuals, and compliance enforcement must necessarily account for holding individuals liable for the wrongs they orchestrate under cover of the corporate umbrella.(1)

The logic is reasonable and necessary. We blame corporations for catastrophic environmental events(2), misbranded drugs that cause injury, and financial products that destroy the life savings of those who have toiled for a living; yet at the helm of the corporations—guiding their path of impropriety—are people, many of whom who have benefited handsomely from the corporate misconduct that they have captained. Unfortunately, in comparison to the guilty pleas that are taken by corporations, which cannot be put behind bars, prosecutors—both criminal and civil—barely scratch the surface when it comes to pursuing the individual human culprits.

This is not to say that there have been no criminal prosecutions of individuals for corporate crime. Insider trading cases are quite common, and when the wrongdoing has catastrophic consequences, as in Enron, Tyco, WorldCom, and the Madoff organization, prosecutors have put real people behind bars.(3)

There are, however, too many instances where individuals have put a corporation on a destructive tear, and still managed to elude personal liability. Considering that many of the large drug companies have either taken guilty pleas or paid fines to the government for conduct that has placed patients at risk by causing the consumption of powerful, unnecessary drugs, it is astounding that few, if any, pharmaceutical executives have been pursued criminally for conduct tantamount to battery.(4) Imagine, for example, if an intruder broke into your house, opened your medicine cabinet, and loaded the cabinet with bottles of pills that were either not medically necessary—or worse—could cause physical injury or illness? How far removed is this from marketing schemes that cause doctors to write prescriptions based on misinformation, that cause dangerous products to be placed in medicine cabinets and ultimately consumed? Or what about the drug companies that funnel kickbacks to doctors disguised as “speaker fees” or “consulting agreements” while monitoring prescription data to confirm that the doctors are writing the “scripts” as directed.

In 2012, Abbott Labs, one of the largest pharmaceutical companies in the world, plead guilty to illegally marketing the powerful drug, Depakote, which is a limited indication anti-epileptic. Among other things, Abbott marketed the drug to elderly patients in nursing homes for off-label purposes and for pediatric use, even though Depakote was not approved to treat anyone under the age of 18. After the entry of a guilty plea, the U.S. Attorney for the Western District of Virginia, Timothy Heaphy, noted in a Department of Justice press release that, “Abbott unlawfully targeted a vulnerable patient population, the elderly, through its off-labelpromotion.”(5) Think hard about this statement; a company that holds itself out as a manufacturer of life-saving drugs was knowingly placing patients at risk for the purpose of making a buck.

In 2013, Wyeth Pharmaceuticals agreed to pay $490.9 million in criminal and civil penalties for engaging in proscribed marketing practices regarding the prescription drug, Rapamune. Rapamune is an immuno- suppressive drug—that is, it prevents the body’s immune system from rejecting a transplanted organ. At the time of the guilty plea, Wyeth had merged into Pfizer, and was no longer a standalone entity. Wyeth plead guilty to a criminal information, charging it with a misbranding violation under the Food, Drug, and Cosmetic Act. In characterizing the case, Antoinette V. Henry, Special Agent in Charge of the Metro-Washington field office of the FDA’s Office of Criminal Investigations noted, “Wyeth’s conduct put profits ahead of the health and safety of a vulnerable patient population dependent on life sustaining therapy.”(6) Also in 2013, pharma- giant GlaxoSmithKline plead guilty and paid $3 billion to the government in order to resolve fraud allegations and the failure to report safety data. As part of a global settlement, the company also settled a series of civil claims under the False Claims Act, stemming from marketing derelictions including kickbacks.

Time and time again, large pharmaceutical companies have engaged in conduct that placed patients at risk, and, at times, caused real harm, yet, virtually no individual has been prosecuted or put behind bars.(7) The idea that misrepresentations, kickbacks, and assorted fraudulent schemes can be employed to cause patients to put drugs in their bodies at personal peril without anyone going to prison is stunning. Our jails have no shortage of inmates sentenced to long terms for selling illegal drugs and/or engaging in various batteries. Yet, when white collar executives engage in schemes to drive revenue by causing the consumption of extra drugs, or the use of drugs for improper purposes, individual liability is rare.

Consider that this nation is immersed in battling what the press now calls the “opioid crisis”(8) or the “opioid epidemic.” (9) This crisis reared its head at least a decade ago when the U.S. Attorney in the Western District of Virginia prosecuted the drug manufacturer Purdue Pharma, and three corporate executives for illegally marketing the drug Oxycontin. On July 23, 2007, the United States District Court for the Western District of Virginia (James P. Jones, Judge) issued an Opinion and Order approving a criminal plea agreement and summarizing its provisions. Among other misdeeds, during a six-year period, “certain Purdue supervisors and employees with the intent to defraud or mislead, marketed and promoted OxyContin as less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal than any other pain medications.” Among an array of specific derelictions, Purdue representatives “told certain health care providers that Oxycontin did not cause a ‘buzz’ or euphoria, caused less euphoria, had less addiction potential, had less abuse potential, was less likely to be diverted than immediate-release opioids, and could be used to ‘weed out’ addicts and drug seekers.”(10) The court’s opinion noted that “Purdue has agreed that these facts are true, and that the individual defendants, while they do not agree that they had knowledge of these things, have agreed that the Court may accept these facts in support of their guilty pleas.” The plea agreement—accepted by the Court—called for Purdue to pay approximately $600 million to resolve civil and criminal claims. It also provided that no individual defendant would be incarcerated. In the absence of record proof of their culpability, the Court was left with no choice but to accept the agreement as to no prison time for individuals. Noting what we now know about the opioid problem, the Court made this ominous point:

I would have preferred that the plea agreements had allocated some amount of the money for the education of those at risk from the improper use of prescription drugs, and the treatment of those who have succumbed to such use. Prescription drug abuse is rampant in all areas of our country, particularly among the young people, causing untold misery and harm. The White House drug policy office estimates that such abuse rose seventeen percent from 2001 to 2005. That office reports that currently there are more new abusers of prescription drugs than users of any illicit drugs. As recently reported, “Young people mistakenly believe that prescription drugs are safer than street drugs. . . but accidental prescription drug deaths are rising and students who abuse pills are more likely to drive fast, binge-drink and engage in other dangerous behaviors.” Carla K. Johnson, Arrest Puts Spotlight on Prescription Drug Abuse, The Roanoke Times, July 6, 2007, at 4A. It has been estimated that there are more than 6.4 million prescription drug abusers in the United States.(11)

Fast-forward eleven years, and the opioid crisis—which commenced with pharmaceutical companies manufacturing and marketing opioids well beyond their legitimate demand—and we have a nation now addicted to drugs, with additional supplies flowing from Mexico and China. The origin of this crisis is not just the drug companies; it starts with the individuals who ran the drug companies, placing revenue generation ahead of medical need—perhaps because bonus structures and stock options made it personally advantageous.(12)

Today, legislators on Capitol Hill grouse about the cost of our healthcare system and debate what level of benefits should be reduced. Yet, few, if any, lawmakers focus on what should be a front-end question: how much money is being wasted through fraud and abuse? Few, if any lawmakers are even contemplating a second question: how much money is spent to treat injuries and illnesses attributable to drugs that should never have been taken? And few, if any, have contemplated how to change behavior by holding individuals accountable. And of course, few, if any, legislators have contemplated making drug companies pay for wide dissemination of honest information about their products as one Federal Judge in the Western District of Virginia contemplated over a decade ago.

At the end of the day, if there is a perception that only a legal fiction will be caught holding the bag (albeit a fiction impossible to imprison), corporations—and those individuals that control their conduct—will view civil and even criminal sanctions as simply the price for a license to break the law. And to company insiders—that is to say, the shareholders, officers and Directors—paying this fee for the license to break the law may be worth it if the analysis was simply a matter of dollars and cents.

In 2012, when Pfizer paid $2.3 billion to settle unlawful marketing claims involving a number of its products, it was a small price to pay for the right to engage in a history of conduct that generated a revenue stream in excess of $100 billion.(13) Moreover, it was a small price to pay for the right to poison the market for honest medical information and thus establish a standard of care that would generate a revenue stream in the years to come. Put simply, when companies engage in pervasive misbranding of their products over a period of years, they disseminate misinformation that then becomes the standard of care. While that standard may not be evidence based, it is still hard to undo. Hence, paying a mere dollar fine will not reset or correct the market for honest medical information; and so manufactures get the continued benefit of a standard of care which may encourage use of a product even though it is potentially harmful or not otherwise medically necessary.

It is not just a problem endemic to the pharmaceutical industry. An array of corporations routinely game the system seemingly calculating the penalties for non-compliance. Publicly traded big box stores routinely pollute our navigable waterways with runoffs from parking lots that aggregate toxic hydrocarbons from leaky vehicles. Similarly, manufacturing plants have created a legacy—and continue to do so—of groundwater contamination that will for centuries prevent the safe enjoyment of our aquifers and tributaries. They do so because the cost of preventing the harm may well exceed the fine.

The externalities of corporate greed are not only imposed on consumers. Labor lawyer, Jon Karmel, in his recent book, Dying to Work,(14) raises awareness of unsafe working conditions that have resulted in death and/or injury to workers. Karmel traveled the country to interview victims and their families and his book highlights how corporations have simply not placed a premium on protecting their workers from harm. Unfortunately, our laws make it too easy for employers to game out the penalty for unsafe workplaces. Workers compensation systems designed to provide injured workers with quick relief also cap liability by preventing direct causes of action for significant actual and punitive damages. There is no shortage of reports of coal miners toiling in unsafe mines replete with regulatory derelictions, who have lost life and/or limb in pursuit of company profit.(15) Yet, compensation systems cap the employer’s economic exposure and—again—at the end of the day, few, if any, individuals are held personally accountable.(16) For the corporation, the fix or preventative measures are often considered more expensive than the penalty.

Over the past year, the nation has come to realize what many have known as true for some time; that discrimination based on class, race, gender, and national origin festers in our workplaces. There may be few, if any, visible cross burnings in this century, but the internet and cyberspace are overflowing with evidence that the most vulgar forms of racism and gender discrimination are thriving even in the 21st century. Perhaps, some had thought, that the civil rights legislation of the 1960s struck a blow to discrimination, causing its demise. Although we sing the praises of this legislation, it too caps liability and limits the rights of the aggrieved. Consider Title VII of the 1964 civil rights act(17)—that statute requires that claims of discrimination be brought within six months.(18) Punitive damages are capped, and the courts have impeded plaintiffs from seeking redress on a class basis for wrongful conduct.(19) Other than damage to brand and reputation, employers can easily calculate the fee for the license to discriminate. Before the #MeToo movement, which now seemingly causes consumers to factor in a company’s compliance with laws proscribing discrimination in evaluating the integrity of a brand, derelictions of employment laws had less severe consequences for corporate wrongdoers. For years, Wal-Mart battled claims of pervasive gender discrimination without any significant impact on its brand. (20)

Against this backdrop, the regulators and those enforcing compliance routinely tout million, multi-million, and even billion-dollar settlements as evidence of efforts that change corporate behavior. But do these settlements really change behavior? The answer is no. If our laws are structured to allow corporate defendants to game out the penalty, corporate insiders will gauge the cost of noncompliance as the cost of doing business. Penalties that appear to be massive may be minimal when compared to the profits the corporation secured through wrongful conduct. If corporations can game out the price of non-compliance and individual wrongdoers can hide behind the corporate cloak and continue to collect bonuses based on unlawful corporate conduct, business will continue as usual. And this is the lesson for both regulators and lawmakers.

Reuben A. Guttman is a partner at Guttman, Buschner, PLLC and has represented whistleblowers in cases against the pharmaceutical industry which have returned more than $5 Billion to the Federal and State governments. He is an Adjunct Professor at Emory Law School and a Senior Fellow at the Center for Advocacy and Dispute Resolution. He is also a member of the Board of the American Constitution Society. He extends thanks to his colleagues Traci Buchner, Liz Shofner, Caroline Poplin, MD, Dan Guttman, Paul Zwier, Richard Harpootlian, the Honorable Nancy Gertner, and Joy Bernstein, who have been a constant sounding board for these issues.

_____

  1. See “Individual Accountability for Corporate Wrongdoing,”U.S. Department of Justice (September 9, 2015) https://www.justice.gov/archives/dag/file/769036/download; Rod J. Rosenstein, Deputy Attorney General, Keynote Address at the NYU Program on Corporate Compliance & Enforcement (October 6, 2017) https://wp.nyu.edu/compliance_enforcement/2017/10/06/nyu-program-on-corporate-compliance-enforcement- keynote-address-october-6-2017/.
  2. “Deepwater Horizon,” U.S. Department of Justice: Environment and Natural Resources Division, https://www.justice.gov/enrd/deepwater-horizon.
  3. See Aaron Smith, “Madoff Arrives at N.C. Prison”, CNN:Money (stating Bernie Madoff, release date November 14, 2139, is inmate 61727-054 at the Butner Medium Security Prison) (July 14, 2009 2:19 PM) (http://money.cnn.com/2009/07/14/news/economy/madoff_prison_transfer/; Marcia Heroux Pounds, “Dennis Kozlowski, former Tyco CEO who went to prison, back in M&A business”, Sun-Sentinel (stating Tyco CEO Dennis Kozlowski spent six and one half years in prison and was released in 2015) (Jan. 11, 2017 6:26 PM) http://www.sun-sentinel.com/business/fl-dennis-kozlowski-life-after-prison-20170111-story.html;”Bernie Ebbers’ wife files for divorce,” NewsOK (Worldcom CEO, Bernard J Ebbers, release date July 4, 2028, is inmate number 56022-054 at the FMC Forth Worth Federal Prison) (April 23, 2008 4:48 AM) http://newsok.com/article/3233823; Rufus-Jenny Triplett, “Prisonworld View-Corporate CEO Gets Skimmed Sentence,” Dawah Interational, LLC (stating Former Enron CEO, Jeffrey K Skilling, release date February 21, 2019, is inmate number 29296-179 at the FPC Montgomery Federal Prison Camp) (May,15, 2015) http://prisonworldblogtalk.com/2015/05/15/prisonworld-view-corporate-ceo-gets-skimmed-sentence/.
  4. See, e.g., “Criminal Resolution”, U.S. Department of Justice: Glaxosmithkline Settlement Fact Sheet, https://www.justice.gov/sites/default/files/usao-ma/legacy/2012/10/09/Settlement_Fact_Sheet.pdf ; “Pfizer to Pay $2.3 Billion for Fraudulent Marketing,” U.S. Department of Justice: Justice Department Announces Largest Health Care Fraud Settlement in its History, https://www.justice.gov/opa/pr/justice-department- announces-largest-health-care-fraud-settlement-its-history; Megan Stride, “Wyeth Paying $491 M to End Criminal, Civil Rapamune Cases”, Law360, https://www.law360.com/articles/461203/wyeth-paying-491m-to- end-criminal-civil-rapamune-cases
  5. See “Abbott Laboratories Sentenced for Misbranding Drug”, U.S. Department of Justice (October 2, 2012) https://www.justice.gov/opa/pr/abbott-laboratories-sentenced-misbranding-drug.
  6. See “Wyeth Pharmaceuticals Agrees To Pay $490.0 Million For Marketing The Prescription Drug Rapamune For Unapproved Uses”, U.S. Department of Justice (July 30, 2012) https://www.justice.gov/usao-wdok/pr/wyeth-pharmaceuticals-agrees-pay-4909-million-marketing-prescription-drug-rapamune.
  7. See Erica Goode, “3 Schizophrenia Drugs May Raise Diabetes Risk, Study Says”, The New York Times (August 25, 2003) https://mobile.nytimes.com/2003/08/25/us/3-schizophrenia-drugs-may-raise- diabetes-risk-study-says.html.
  8. Opiod Crisis Fast Facts, CNN: Health, (March 2, 2018 9:25 AM) https://www.cnn.com/2017/09/18/health/opioid-crisis-fast-facts/index.html.
  9. M. Scott Brauer, “Inside a Killer Drug Epidemic: A Look at America’s Opioid Crisis, (Jan. 6, 2017) (according to the New York Times, “the opioid epidemic killed more than 33,000 people in 2015) https://www.nytimes.com/2017/01/06/us/opioid-crisis-epidemic.html.
  10. United States v. Purdue Frederick Co., 963 F.Supp.2d 561 (W.D.Va. 2013).
  11. Id.
  12. See Reuters, U.S. Senator Sanders Introducing Bill Targeting Opioid Manufacturers, VOA: USA, (April 17, 2018 10:24 AM) (stating the idea of imposing harsher criminal penalties on drug company executives has been championed by Vermont Senator Bernie Sanders who has proposed the Opioid Crisis Accountability Act of 2018) https://www.voanews.com/a/us-senator-sanders-bill-opioids-manufacturers/4351732.html
  13. See Gardiner Harris, “Pfizer Pays $2.3 Billion to Settle Marketing Case”, The New York Times (September 2, 2009) https://www.nytimes.com/2009/09/03/business/03health.html.
  14. Karmel, Jon, Dying to Work, Cornell University Press (2017)
  15. See, e.g., Dana Ford, “Don Blankenship, ex-Massey Energy CEO, sentenced to a year in prison,” CNN, (April 6, 2016 11:29 PM) (explaining it was the explosion at Massey Energy’s Upper Big Branch mine which killed 29 people. Massey CEO Don Blankenship was ultimately convicted of a misdemeanor with regard to the skirting of safety regulations. He served one year in prison and is now a candidate for the United States Senate in West Virginia) https://www.cnn.com/2016/04/06/us/former-massey-energy-ceo-don- blankenship-sentenced/index.html; Nicole Gaudiano, “Don Blankenship, convicted ex-Massey CEO now Senate candidate, calls for more mine safety,” USAToday: OnPolitics, (April 4, 2018 6:43 PM) https://www.usatoday.com/story/news/politics/onpolitics/2018/04/04/don-blankenship-convicted-massey-ceo- senate-candidate/487230002/.
  16. See “Dying to Work: Death and Injury in the American Workplace”, Cornell University Press (December 2017).
  17. 42 U.S.C § 2000e (1964).
  18. Dov Ohrenstein, “Limitation Periods–What’s the Limit,” Healys LLP, http://www.radcliffechambers.com/wp-content/uploads/2010/02/Limitation_seminar_-_Dov_Ohrenstein.pdf (Explaining in comparison to claims for contracts and most torts, six months is a very limited statute of limitations. Undoubtedly many claims die on the vine because they were not brought in time)
  19. See infra note 18.
  20. Wal-Mart Stores, Inc. v. Dukes, et al., 564 U.S. 338 (2011) (explaining the case is one of several cases impacting the ability to certify class action discrimination cases).

By

Will High Court Ever End Circuit Split Over FCA Pleading?

The U.S. Supreme Court’s latest refusal to tackle the enduring and highly consequential circuit split over how precisely False Claims Act suits must be pled has left lawyers wondering whether justices will wade into the legal morass anytime soon.

The refusal happened on April 16 when justices shot down a petition from Johnson & Johnson, which is accused of defrauding Medicare by selling defective hip implants. J&J wanted the high court to resolve the split over Federal Rule of Civil Procedure 9(b), which requires that FCA suits be pled with “particularity.”

It marked at least the second time this term that justices swatted away an FCA petition involving 9(b). In October, the Supreme Court batted down a petition from Pennsylvania-based Victaulic Co., which allegedly violated the FCA by importing unmarked pipe fittings and falsifying import documents.

The high court’s repeated refusals have occurred despite its clear interest in the topic; twice since 2010, justices have asked the U.S. solicitor general whether to address the split, but they still haven’t pulled the trigger on a 9(b) case.

“Given recent history, it is difficult to envision a scenario in which the Supreme Court would be eager to weigh in as to how the requirements of Rule 9(b) should be applied to FCA claims in the near term,” Bass Berry & Sims PLC member Matthew Curley told Law360.

Notably, the petitions that the Supreme Court have rejected have often involved some of the country’s biggest businesses and most elite lawyers. J&J, of course, is a corporate powerhouse, and its lead counsel was appellate superstar Paul Clement of Kirkland & Ellis LLP.

If that sort of petition isn’t enough for the Supreme Court right now, then it’s hard to see any petition satisfying the court in the next few years, some observers say.

“It appears to me that there were very competent lawyers laying out the argument that the Supreme Court should address this issue, and it’s clear to me that it’s not something that’s going to be addressed in the near future,” said Reuben A. Guttman of Guttman Buschner & Brooks PLLC. “But obviously that can change.”

The central dispute over 9(b) is whether it requires whistleblowers to identify specific billing claims that were allegedly fraudulent. The Fourth, Sixth, Eighth and Eleventh Circuits usually require such specificity, while the other circuits are more tolerant of allegations that strongly suggest fraudulent billing claims must have been filed.

Attorneys differ over the scope of the split, but most agree it’s real enough to make or break cases depending solely on where they’re filed. For the plaintiffs bar, heavy-handed applications of 9(b) are unwise because they shield fraudsters simply because whistleblowers don’t have easy access to billing records.

“The lack of information on particular details when the whistleblower has plausibly alleged a scheme involving fraud on the government should not derail a case at an early stage,” Phillips & Cohen LLP partner Claire Sylvia said.

It’s also not always clear that a specific billing claim is essential to 9(b)’s main purpose, which is to provide adequate notice of fraud allegations and thereby allow a robust defense.

“The reality is that 9(b) is just a defense red herring. … It’s not a reality that they don’t know what the case is about — they’re just raising a technical argument,” Guttman said.

Defense lawyers see things much differently, arguing that whistleblowers can embark on unwarranted fishing expeditions if allowed to proceed to discovery without first identifying a single bogus billing claim.

“A relaxed or watered-down version of Rule 9(b) often allows complaints to proceed where there is no real connection between the alleged fraud scheme and any actual false claims,” Curley said.

There are different theories about why the Supreme Court hasn’t waded into the 9(b) fight. It’s possible that it has hoped the circuit split would resolve itself — something the solicitor general in 2014 said looked increasingly likely, but which has not yet happened.

It’s also possible that the Supreme Court is wary of mandating a one-size-fits-all approach that ends up torpedoing relatively strong FCA cases or unleashing relatively weak FCA cases.

“Pleading is kind of the bailiwick of the lower courts in some ways,” Morgan Verkamp LLC founding partner Rick Morgan said. “I think that the Supreme Court is concerned about appearing to cabin the discretion of the front-line judges.”

Alternatively, the right case may simply not have presented itself yet.

“I think the court looks at each petition presented by litigants and determines whether the particular case meets the criteria for meriting Supreme Court review,” Sylvia said. “I don’t think the court is looking for an FCA 9(b) case or avoiding an FCA 9(b) case.”

Whatever the reason, it won’t be long before the Supreme Court will once again have to consider delving into the circuit split. Whistleblowers earlier this month filed a petition asking the Supreme Court to resolve the 9(b) split as part of an FCA case they filed against Bristol-Myers Squibb Co. and Otsuka America Pharmaceutical Inc.

The whistleblowers — former sales representatives at Bristol-Myers — are represented by Morgan. He called the case a solid vehicle for addressing 9(b), while also acknowledging that it could join the long line of 9(b) cases that the Supreme Court has swept aside.

“We certainly think that it’s very well-founded, and that the court should be looking for a way to rationalize the 9(b) jurisprudence across the circuits,” Morgan said. “At the same time, there’s now a many-year history of the court not taking cases like this. So we put it up and see what happens.”

By Jeff Overley www.law360.com
–Additional reporting by Braden Campbell. Editing by Pamela Wilkinson and Breda Lund.

Reprinted with permission.