Caldwell ex rel. State v. Janssen Pharm., Inc.

• Decision Date: 17 October 2012
• Docket Number: No. 11–1184.,11–1184.
• Citation: 100 So.3d 865
• Parties: “Buddy” CALDWELL, Attorney General ex rel. STATE of Louisiana v. JANSSEN PHARMACEUTICAL, INC., et al.
• Court: Court of Appeal of Louisiana — District of US

100 So.3d 865

“Buddy” CALDWELL, Attorney General ex rel. STATE of Louisiana

v.JANSSEN PHARMACEUTICAL, INC., et al.

No. 11–1184.

Court of Appeal of Louisiana, Third Circuit.

Aug. 31, 2012.

Rehearing Denied Oct. 17, 2012.

Patrick C. Morrow, James P. Ryan, Jeffrey M. Bassett, Morrow & Morrow, Opelousas, LA, Kenneth W. DeJean, Attorney at Law, Lafayette, LA, Robert Lyle Salim, Attorney at Law, Natchitoches, LA, L. Christopher Styron, Assistant Attorney General, Baton Rouge, LA, Michael W. Perrin, Fletcher V. Trammel, Bailey, Perrin & Bailey, Kenneth T. Fibich, Fibich, Hampton, et al., Robert Cowan, Attorney at Law, Houston, TX, for Plaintiff/Appellee, James D. “Buddy” Caldwell, Louisiana Attorney General.

James B. Irwin, David W. O'Quinn, Kim E. Moore, Monique M. Garsaud, Douglas J. Moore, Irwin, Fritchie, Urquhart & Moore, LLC, New Orleans, LA, James T. Guglielmo, James C. Lopez, Guglielmo, Lopez, Tuttle, Opelousas, LA, Thomas F. Campion, Drinker, Biddle & Reath, LLP, Florham Park, NJ, Brian C. Anderson, Michael E. Stamp, Stephen D. Brody, O'Melveny & Myers, LLP, Washington, DC, for Defendants/Appellants, Johnson & Johnson, Ortho–McNeil Janssen Pharmaceutical, Inc.

Court composed of J. DAVID PAINTER, SHANNON J. GREMILLION, and PHYLLIS M. KEATY, Judges.

KEATY, Judge.

[3 Cir. 1]The issue in these consolidated cases is whether the Attorney General, acting with authority pursuant to the Louisiana Medical Assistance Programs Integrity Law (MAPIL), La.R.S. 46:437.1 through 46:440.3, ¹ and represented by private attorneys, can successfully recover civil penalties from a pharmaceutical company without proving damages. After a multi-day trial, the jury unanimously concluded that the pharmaceutical company's aggressive marketing campaigns had violated MAPIL, resulting in a civil penalty of $257,679,500. The pharmaceutical company was also assessed $70,000,000 in attorney fees and $3,000,200 in costs. From these judgments the pharmaceutical company appeals. Finding that the jury was not manifestly erroneous in determining that the pharmaceutical company had violated Subsection 438.3 of MAPIL, we affirm the trial court's judgment in that regard. Finding that the trial court was not erroneous in its determination of when interest should begin accruing on the penalty award and on the award of attorney fees, we likewise affirm the trial court's judgment on the issue of interest.

FACTS AND PROCEDURAL HISTORY

The Attorney General of the State of Louisiana initially filed suit against Janssen Pharmaceutica, Inc.² (Janssen) on September 16, 2004, in the Twenty–Seventh Judicial District Court on a myriad of legal theories, a recitation of which is not necessary for purposes of this appeal. Ultimately, the only issue presented at trial was whether the defendant, Janssen, violated La.R.S. 46:438.3, a subsection of MAPIL that prohibits persons from presenting, or causing to be presented, false or [3 Cir. 2]fraudulent claims or misrepresentations to the Louisiana medical assistance program funds.

After six years of litigation, the matter proceeded to trial by jury on September 28, 29, and 30, 2010, and October 12 and 14, 2010. The jury was presented with a plethora of evidence from both parties. At the conclusion of trial, the jury determined that Janssen had violated MAPIL 35,542 times, and that each violation was subject to a civil penalty of $7,250, resulting in a civil monetary penalty of $257,679,500. At an ancillary hearing, the trial court assessed Janssen with $70,000,000 in attorney fees and $3,000,200 in costs. The trial court denied Janssen's request for judgment notwithstanding the verdict (JNOV) and motion for new trial. From these judgments, Janssen appeals.

ISSUES PRESENTED

Janssen asserts eighteen assignments of error for our review. In answering Janssen's appeal, the Attorney General raises one additional error. The assignments of error presented by Janssen are:

I. The Trial Court Erred As A Matter Of Law When It Entered Judgment Against Appellants Because The Trial Record Is Insufficient To Establish A MAPIL Violation

II. The Trial Court Erred As A Matter Of Law By Allowing The Attorney General To Pursue MAPIL Penalties Based On Alleged FDA Regulatory Violations

III. The Trial Court Erred As A Matter Of Law By Allowing The Attorney General To Pursue MAPIL Penalties Based On Petitioning Activity Protected By The First Amendment To The United States Constitution And Article I, Section 9 Of The Louisiana Constitution

IV. The Judgment Violates The First Amendment To The United States Constitution And Article I, Section 7 Of The Louisiana Constitution By Punishing Constitutionally–Protected Speech

V. The Trial Court Erred By Excluding Scientific Evidence That Supported The Accuracy Of The Scientific Opinions Challenged By The Attorney General

VI. 3 The Trial Court Erred By Excluding Evidence Of Conduct Of The Attorney General And The Louisiana Department Of Health And Hospitals Inconsistent With The Attorney General's Litigation Position

VII. The Trial Court Erred By Excluding Testimony From Appellants' Statistical Expert

VIII. The Trial Court Erred By Admitting The Informal And Advisory DDMAC Warning Letter ³ And July 21, 2004 Letter Into Evidence

IX. The Trial Court's Erroneous Evidentiary Rulings Denied Appellants Due Process Of Law

X. The Trial Court Erred By Allowing The Attorney General's Improper And Inflammatory Closing Argument, Which Appealed To Prejudice Against Out–Of–State Corporations In Violation Of Louisiana Law And The Due Process Clauses

Of The United States And Louisiana Constitutions

XI. The Trial Court Erred By Allowing The Attorney General To Argue To The Jury That Proof Of Actual Damages To Louisiana Medicaid Had Been Shown, When No Such Proof Was Offered At Trial

XII. The Trial Court Erred By Failing To Instruct The Jury On The Law Applicable To The Attorney General's Claim

XIII. The Trial Court Erred By Instructing The Jury On MAPIL's Legislative Intent And Purpose, The Medical Assistance Programs Fraud Detection Fund, Conspiracy And FDA Regulations

XIV. The Trial Court Erred By Failing To Instruct The Jury On The First Amendment And The Inapplicability Of FDA Regulations To MAPIL

XV. The Trial Court Erred By Adopting A Verdict Form That Allowed The Jury To Enter A Verdict Unsupported By Law

XVI. The Penalty Imposed By The Trial Court's Judgment Violates The 8th And 14th Amendments To The United States Constitution And Louisiana Constitution Article I, Section 2

XVII. 4The Trial Court Erred By Awarding $70 Million In Attorneys Fees And $3.2 Million In Costs To The Attorney General

XVIII. The Trial Court Erred When It Denied Appellants' Motion For Judgment Notwithstanding The Verdict Or, In The Alternative, A New Trial.

The assignment of error presented by the Attorney General in its answer to Janssen's appeal is that: “The Trial Court Erred in Refusing to Award Interest From Date of Judicial Demand on both The Judgment Rendered by The Jury and The Award of Attorneys Fees by The Court.”

DISCUSSION

The resolutions of the myriad of issues in this case are primarily fact driven. We will first address Janssen's assertion that the evidence presented was insufficient to establish a claim under MAPIL. We will then address the errors concerning the trial court's evidentiary rulings, the Attorney General's closing arguments, the jury instructions and jury verdict form, the attorney fees and costs, and the interest awarded. Once we have discussed these assignments of error, we will turn our attention to the appropriateness of the trial court's denial of Janssen's JNOV and motion for new trial. We will then address the assertion that the trial court allowed the Attorney General to pursue MAPIL penalties based on alleged FDA regulatory violations. Finally, we will address Janssen's constitutional grievances. Ultimately, we conclude that the judgments should be affirmed in their entirety.

Evidence Insufficient to Establish MAPIL

In its first assignment of error, Janssen asserts that the trial court erred when it entered judgment against them because the trial record is insufficient to establish a MAPIL violation. Specifically, they argue that Subsections A, B, and C of La.R.S. 46:438.3 do not apply to the conduct challenged by the Louisiana Attorney [3 Cir. 5]General and that the Attorney General failed to satisfy the threshold requirement of proving or alleging $1,000 in actual damages, pursuant to La.R.S. 46:438.3(F). For the following reasons, we find that this assignment lacks merit.

Determining whether a statute applies to a specific set of facts requires judicial interpretation of the statute. The supreme court discussed statutory interpretation by the judiciary in Pumphrey v. City of New Orleans, 05–979 (La.4/4/06), 925 So.2d 1202, a case in which they determined whether a statute exempted the City of New Orleans from a statutory penalty for non-payment and untimely payment of insurance benefits. In examining the language of the pertinent statute, they stated:

The fundamental question in all cases of statutory interpretation is legislative intent and the ascertainment of the reason or reasons that prompted the Legislature to enact the law. In re Succession of Boyter, 99–0761, p. 9 (La.1/7/00), 756 So.2d 1122, 1128. The rules of statutory construction are designed to ascertain and enforce the intent of the Legislature. Id.;Stogner v. Stogner, 98–3044, p. 5 (La.7/7/99), 739 So.2d 762, 766. Legislation is the solemn expression of legislative will, and therefore, interpretation of a law involves primarily a search for the Legislature's intent. La.Rev.Stat. § 1:4 (2004); La. Civ.Code art. 2 (2004); Lockett v. State, Dept. of Transp. and Development, 03–1767, p. 3 (La.2/25/04), 869 So.2d 87, 90.

When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the...