AG Morrisey continuing on with predecessor's final lawsuits

CHARLESTON – It appears that state Attorney General Patrick Morrisey will continue to pursue two of the final consumer protection lawsuits filed by former AG Darrell McGraw.

In February, two federal courts allowed Morrisey and chief counsel Dan Greear to replace McGraw and his top deputy Fran Hughes as counsel in lawsuits against Nationwide Insurance and Pfizer. McGraw had filed the lawsuits in January, two months after losing to Morrisey in the general election.

In the Nationwide suit, Morrisey is fighting a motion to dismiss. In the Pfizer suit, he is asking for an order remanding the case to Mason County Circuit Court, where it was originally filed.

The Nationwide lawsuit was filed on McGraw’s last business day as attorney general – Jan. 14. Private lawyers were hired by McGraw in both cases and appear to be staying on for Morrisey.

Morrisey’s office had no comment on the recent developments. In the past, he has said that he will use outside counsel when needed but he would like to implement a transparent bidding process.

McGraw was criticized by some during his tenure for awarding no-bid contracts to attorneys who contributed to his campaign funds.

“In order to advance transparency and ensure that the taxpayers don’t overpay for legal services, law firms hired by the state must be subject to competition,” Morrisey said during his 2012 campaign. “The concept of competitive bidding has bipartisan support and should be implemented without delay.”

The Nationwide lawsuit concerns the company’s discounts on automobile, homeowners and agribusiness insurances to members of the West Virginia Farm Bureau. It said the rates as applied to policyholders are discriminatory because the discount offered does not correspond to expected losses and average expenses, and there are no expected average cost differences reflected.

Nationwide has noted that the West Virginia Insurance Commission is charged by statute with reviewing proposed insurance rates and did approve Nationwide’s discounts.

“(T)he insurance code does not authorize Attorney General suits, and the Attorney General is not empowered to pursue actions in civil court unless specifically authorized to do so by statute,” the motion to dismiss says.

Nationwide also says the West Virginia Consumer Credit and Protection Act excludes its application to the sale of insurance.

A response filed March 7 by Greear and the Charleston law firm Tiano O’Dell says Nationwide is applying a discount below the seven percent on file with the insurance commissioner. It adds that the motion to dismiss misrepresents the factual and legal basis for the lawsuit.

“Such inaccurate premature misjudgment of claims, at the earliest phase of litigation prior to discovery, is precisely why our law disfavors motions to dismiss.”

In the Pfizer case, the company is alleged to have conspired with Ranbaxy to delay introduction of a generic version of Pfizer’s Lipitor, a cholesterol-lowering drug.

The complaint alleges Pfizer fraudulently obtained a second, duplicative patent from the U.S. Patent and Trademark Office and listed it in the U.S. Food and Drug Administration’s Orange Book, filed a sham citizen petition with the FDA to stall approval of the generic Lipitor, embarked an anticompetitive agreement with Ranbaxy and thwarted efforts to obtain judicial declarations that their patents were invalid.

Attorneys for the defendants noticed a multidistrict litigation proceeding organized in April in a New Jersey federal court over the issue. The MDL consists of 25 class action lawsuits.

The defendants say the case is a “tag-along” and should be incorporated into the MDL.

Greear, Charleston attorney Troy Giatras and Fred Longer of the Philadelphia firm Levin, Fishbein, Sedran & Berman signed the March 8 motion to remand.

It says the defendants “improperly” removed the matter from the Mason court for their own convenience.

Morrisey’s attorneys pointed to a recent U.S. Supreme Court case that held a state court can’t be deprived of subject matter jurisdiction over a state law claim alleging legal malpractice in a patent case.

“As recently seen in the Gunn case, it is not enough to support federal question jurisdiction over a state law claim simply by uttering some magic word, ‘patent,’” the motion says.

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.