2016-0199, The State of New Hampshire v. Actavis Pharma, Inc. & a.

defendant Endo Pharmaceuticals, Inc. Glahn, III and Michael A. Delaney on the joint brief, and Mr. Glahn orally), for McLane Middleton, P rofessional Association, of Manchester (Wilbur A.

defendant Actavis Pharma, Inc. Preti Flaherty, PLLP, of Concord (Brian M. Quirk on the joint brief), for

brief, and Ms. English orally), for the State. attorney general, and Francis C. Fredericks, assistant attorney general, on the Joseph A. Foster, attorney general (Lisa M. English, senior assistant

No. 2016 - 0199 Merrimack

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh. us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E - mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concor d, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

about the use of opioids for chronic pain, and each defendant ’ s role in causing nature of and basis for representations made to prescribers and consumers each defendant ’ s plans and efforts to market opioids for chronic pain, t he defendant ’ s opioid sales volume in New Hampshire, the nature and scope of competition.” The subpoenas seek documents and information related to each engaged in or have information about unfa ir trade practices and methods of because the Attorney General has reason to believe that [the defendants] have by the Attorney General” specified “information and documentary material the defendants, with return dates of September 15, “to produce for examination In August p. 2 2015, p ursuant to RSA 358 - A:8 (2009), the OAG subpoenaed

fraudulent marketing of opioid drugs.” (Emphasis added.) assist [the OAG] in an investigation and litigation of potential claims regarding The September retainer agreement states that Cohen Milstein is retained “to retainer agreement, executed June 15, p. 2 2015, and is effective as of that date.” Milstein entered into a second retainer agreement that “supersedes the initial of opioid drugs.” (Emphasis added.) In September, the OAG and Cohen investigation and litigation of potential claims regarding fraudulent marketing (Cohen Milstein) on a contingen cy fee basis “to represent [the OAG] in an General (OAG) retained the law firm of Cohen Milstein Sellers & Toll PLLC The relevant facts follow. In June 2015, the Offic e of the Attorney

the defendants’ motion for a protective order. We reverse and remand. Protection Act (CPA), RSA chapter 358 - A ( p. 2 2009 & Supp. 2016), and granting administrative subpoenas issued to the defendants under the Consumer the Superior Court (Nicolosi, J.) denying the State’s motion to enforce Pharma L.P., and Teva P h armaceuticals USA, Inc., cross - appeal, an order of Inc., Endo Pharmaceuticals, Inc., Janssen Pharmaceuticals, Inc., Purdue DALIANIS, C. J. The State appeals, and the defendants, Actavis Pharma,

Carter on the joint brief), for defendant Teva P h armaceuticals USA, Inc. Hinckley Allen, of Concord (Michael J. Connolly and Christopher H.M.

defendant Purdue Pharma L.P. MacDonald, Holly J. Barcroft, and Anthony J. Galdieri on the joint brief), for Nixon Peabody LLP, of Manchester (David A. Vicinanzo, Gordon J.

brief), for defendant Janssen Pharmaceuticals, Inc. Boutin & Altieri, P.L.L.C., of Londonderry (Edmund J. Boutin on the joint p. 3 3

the OAG supervises outside counsel and retains control over all critical due process by contingency fee arrangements in certain ci vil litigation where agreeing with “the greater weight of judicial precedent finding no violation of claim that the contingency fee arrangement violates their due process rights, “does not create a conflict of interest.” The court also rejected the defendants’ Hampshire Rules of Professional Conduct, the contingency fee arrangement (amended 2016), or a “public attorney” under the common law or the New Exec utive Branch Code of Ethics (Ethics Code), see RSA 21 - G:21 -: 27 (2012) finding that because Cohen Milstein is not a “public employee” under the The trial court rejected the defendants’ ethics violations arguments,

bet ween the OAG and Cohen Milstein is ultra vires and void.” compensate outside counsel,” a nd, therefore, “the contingency fee agreement the OAG acted outside the scope of its statutory authority to hire and approval of joint legislative fiscal committee and the governor and council,. . . concluded that “in executing the contingency fee agreement without the standing to bring their claims. Construing RSA 7:12 and :6 - f, t he court invalid.” The trial court determin ed that the defendants had demonstrated extent that the OAG and Cohen Milstein’s contingency fee agreement is the subpoenas and grant ed the defendants ’ motion for a protective order “to the Following a hearing, the trial court den ied the State’s motion to enforce

proceeding.” and that the defendants “lack standing to raise that complaint at all in this not an appropriate justification for refusing to comply with lawful subpoenas” asserting that “an objection to the Attorney General’s use of outside counsel is under the New Hampshire and United States Const itutions. The State replied, New Hampshire Rules of Professional Conduct; and (6) violate due process :6 - f (Supp. 2016); (4) violate the doctrine of separation of powers; (5) violate the vires because the OAG did not comply with RSA 7:12 (201 p. 3 3) (amended 2016) or (2012) (amended 2016); (2) violate New Hampshire common law; (3) are ultra OAG’s fee agreement s with Cohen Milstein: (1) violate RSA 21 - G:22 and :23 action pertaining to alleged CPA violations.” The defendants argued that the or (b) participate in or assume responsibility for any subsequent enforcem ent for any aspect of the State’s investigation of alleged violations of the CPA . . .; engaging contingent fee counsel to: (a) participate in or assume responsibility moved for a protective order, seeking to “bar the Attor ney General from OAG’s engagement of outside counsel is unlawful. In addition, t he defendants The defendants answered the State’s complaint and counterclaimed that the In October, the State moved to enforce the administrative subpoenas.

of Cohen Milstein to assist in the investigation on a contingency fee basis. they subsequent ly refused to do so, citing their objection to the OAG’s retention defendants initiall y stated that they intended to comply with the subpoenas, health care providers to prescribe opioids to treat chronic pain. A lthough the p. 4 4

v. Capitol Broad. Corp., 161 N.H. 192, 199 (2010). “The doctrine of standing ordinarily does not include the power to issue advisory opinions.” Birch Broad. challenge rests upon the constitutional principle that the judicial power “The requirement that a party demonstrate harm to m aintain a legal

State, 166 N.H. 321, 33 p. 4 4 (2014) (quotation omitted). must show that its “own rights have been or will be directly affected.” Eby v. interest. Duncan, 166 N.H. at 643, 646 (quotation omitted). Rather, the party suffered by the public at large” is sufficient to constitute a personal, concrete observed” nor an injury indistinguishable from a “generalized wrong allegedly Neither an “abstract interest in ensuring that the State Constitution is O’Brien v. NH Democratic Party, 166 N.H. 138, 142 (2014) (quotatio n omitted). party suffered a legal injury against which the law was designed to protect.” “In evaluating whether a party has standing to sue, we focus on whether the redress.” Duncan v. State, 166 N.H. 630, 6 42 - 43 (2014) (citations omitted). regard to an actual, not hypothetical, dispute, which is capable of judicial have personal legal or equitable rights that are adverse to one another, with (2014). “[S]tanding under the New Hampshire Constitution requires parties to court’s determination on standing. Lynch v. Town of Pelham, 167 N.H. 14, 20 When the relevant facts are not in dispute, we review de novo the trial

(Quotations omitted.) issued in an investigation that . . . exceeds an executive agency’s authority.” injury is personal to [them] because they are the direct targets of subpoenas addition, the defendants argue that the trial court “properly found that this bias ed by Cohen Milstein’s conflict of interest.” (Quotations omitted.) In adverse” to them, “because the State’s investigation of [them] is inherently contingency - fee agreement presently taints the investigation in a manner on any ‘hypothetical’ or ‘future’ harm,” but correctly found that “the The defendants counter that the trial cour t “did not find standing based

committee or the [G overnor and C ouncil].” into a contingency fee agreement without seeking approval fro m the fiscal any way linked to the challenged conduct — namely the OAG’s decision to enter harm, the [defendants] have failed to show the alleged risk o f future harm is in the State argues that, “even if speculative risk did amount to a cognizable defendants “failed to make the requisite showing of ‘actual harm. ’” Further, follow claimed s tate contract f ormalities.” T he State asserts that the are not a party to and that is predicated upon the [OAG’s] all eged failure to standing “to make an ultra vires challenge to a government contract that they The State appeals the trial court’s finding that the defendants have

This appeal followed. decisions such that the outside counsel’s personal interest is neutralized.” p. 5 5

hold that the trial court’s contrary determination is erroneous. OAG and Cohen Milstein is ultra vires under RSA 7:12, I, and: 6 - f. Thus, we with respect to their claims that the contingency fee agreement between the We conclude that t he defendants have failed to demonstrate standing

other grounds, 23 p. 5 5 F.3d 415 (8th Cir. 2000). and, therefore, standing becomes an issue for the defendant as well”), aff’d on seeking the jurisdiction of the court to hear its claims as much as a plaintiff 1998) (explaining that “[i]n raising an affirmative defense, a defendant is to raise its claim); United States v. Neset, 1 0 F. Supp. 2d 1113, 1116 (D.N.D. encompassed by plaintiff’s case - in - chief,” defendant needed to show standing “defendant raises a true affirmative defense seeking to litigate questions not judicial determi nation of its contention” and concluding that because government’s conduct in such a context to demonstrate its right to obtain in logic not to require a defendant who seeks to litigate the lawfulness of the Insurance Company’s actions were ultra vires, “[t]here appears to be no reason defendant raised, as an affirmative defense, a claim that the Federal D eposit F. Supp. 259, 268 - 69 (E.D. Cal. 1987) (reasoning that, in a case in which the raise their claims. See, e.g., Federal Deposit Ins. Corp. v. Main Hurdman, 655 Under these circumstances, the defendants must establish standing to

that the contingency fee agreement is ultra vires. that investigation.” In doing so, the defendants raised several claims, including a ny participation in this investigation or any subsequent lawsuit arising from basis is void and unlawful and that such outside counsel is prohibited from outside counsel to conduct the Bureau’s investigation on a contingency fee the State, seeking a protective order that “the Attorney General’s engagement of attorney general’s statutory authority. T he defendants counterclaimed against unrelated to the adequacy of the subpoenas that were issued pursuant to the otherwise, the defendants are themselves seeking affirmative judicial relief ongoing State investigation.” We di sagree. Contrary to their representations to defend themselves in a proceeding initiated by the State as part of an contingency - fee agreement with Cohen Milstein,” and the defendants “seek only su bpoenas, “the State affirmatively put at issue the propriety of its According to the defendants, by bringing its action to enforce administrative initiate a lawsuit, not a defendant’s right to resist the claims against it.” not apply to them because “standing applies only to a plaintiff’s ability to As a threshold matter, the defendants argue that sta nding principles do

for the sake of convenience and efficiency.” Id. (quotation omitted). urge to proceed directly to the merits of an important dispute and to ‘settle’ it power within its proper cons titutional sphere, we must put aside the natural of this overriding and time - honored concern about keeping the Judiciary’s the political branches.” O’Brien, 1 p. 6 66 N.H. at 144 (quotation omitted). “In light serves to prevent the judicial process from being used to usurp the powers of 6

statutory interpretation, we are the final arbiters of the legislature’s intent as presents a question of law, which we review de novo. Id. In matters of 142 (quotation omitted). The interpretation and application of a statu t e the Ethics Code “is a matter of statutory construction.” O’Brien, 1 p. 6 66 N.H. at T he determination of whether the defendants have standing to sue under

memoranda, we conclude that it does not. the Ethics Code provides a private right of action. After considering the parties’ Code. Following oral argument, we requested the parties to address whether agreement between the OAG and Cohen Milstein does not violate the Ethics The defendants cross - appeal the trial court’s finding that the fee

Defenders of Wildlife, 504 U.S. 555, 5 p. 6 60 (1992). actual n or imminent. S ee Duncan, 166 N.H. at 642; see also Lujan v. one in this case. We agree. A ny alleged violation of the statute is neit her settlement or judgment.” Further, as the State contends, there may never be as the State argue s, RSA 7:6 - f “only comes into play — if at all — after a CPA contingency fee basis “regardless of any approval s the [O AG] seeks.” However, that this provision prohibits the OAG from retaining Cohen Milstein on a be deposited in a consumer protection escrow account.” The defendants a ssert the s tate or its citizens as a result of any . . . action under [the CPA]. . . shall provides in part that “[a]ny funds received by the attorney general on behalf of challenge the contingency fee agreement based upon RSA 7:6 - f. RSA 7:6 - f We, likewise, conclude that the defendants lack standing, at this time, to

plaintiff failed to establish standing). had not sustained an injury attributable to the purported statutory violation, O’Brien, 1 p. 6 66 N.H. at 144 - 45 (concluding that whe n plaintiff conceded that he capable of judicial redress.” Dun can, 166 N.H. at 642 - 43 (citation omitted); see defendants have not established “an actual, not hypothetical, dispute which is approval before retaining outside counsel on a contingency fee basis — the the challenged violation — the State’s failure to obtain legislative and executive inherently biased by Cohen Milstein’s participation — cannot fairly be traced to not be alleviated. Because the alleged injury — an investigation allegedly legislative fiscal committee an d the Governor and C ouncil, their injury would that, even if the contingency fee agreement had been ratified by the joint nothing to do with the alleged violation of the statute. The defendants concede conflict of interest.” (Quotation omitted.) However, the bias claimed has the State’s investigation of [them] is inherent ly biased by Cohen Milstein’s contend that the trial court correctly determined that they are injured “because any money in the treasury not otherwise appropriated.” The defendants employ counsel,. .. and may pay them reasonable compensation . . . out of fiscal committee and the governor and council, the attorney general may RSA p. 7 7:12, I, provides that “[w] ith the approval of the joint legislative 7

and creates at least the appearance of impropriety.” The trial court found that that interest compromises the ‘impartiality’ required of all government lawyers represents the State in a matter in which the lawyer has a personal interest, (Capitalization and bolding omitted.) The y assert that “[w]hen a priva te lawyer longstanding New Hampshire common law and ethics . . . rules.” The defendants also argue that “the contingency - fee agreement violates

action to seek a d eclaration that the statute has been violated). (concluding that the Right to Privacy Act does not create a private right of to a civil remedy for its violation); Cross v. Brown, 148 N.H. 485, 48 p. 7 7 (2002) 407, 411 (2005) (explaining that child abuse reporting statute does not give rise under the Ethics Code. See Berry v. Watchtower Bible & Tract Soc., 152 N.H. Accordingly, we hold that the defendants do not have standing to bring claims legislature intended to create a private right of action for its violation. There is nothing in the Ethics Code t o suppor t a conclusion that the

I (d) (2012) (amended 2016). findings of fact and conclusions with respect to such conduct.” RSA 21 - G:30, this subdivision. . . by executive branch officials and make appropriate authorized to “[r] eceive sworn complaints, investigate allegations of violations of RSA 21 - G:29, II (Supp. 201 5) (amended 2016). The committee is also matters arising under the executive branch code of ethics, RSA 21 - G:21 - 2 p. 7 7.” I (b) (2012) (amended 2016). The jurisdiction of the committee “shall consist of clarifying any law . . . within the jurisdiction of the committee.” RSA 21 - G:30, The committee is authorized to “issue interpretive rulings explaining and who are not classified employees.” RSA 21 - G:29, I (2012) (amended 2016). resolve . . . issues, questions, or complaints involving executive branch officials The Ethics Code establishes an executive branch ethics committee “to

court.” RSA 15 - B:2, IX (2012) (amended 2016). on behalf of the governor, any exe cutive branch official, agency, or the general classified or non - classified employee or volunteer, who conducts state business “[p] ublic employee” defined as “any person, including but not limited to a financial gain.” RSA 21 - G:23, I. An “executive branch official” includes a in the performance of his or her duties for the state for personal benefit or for official shall . . . [d]isclose or use confidential or privileged information acquired perf ormance of their duties.” RSA 21 - G:22. In addition, “[n]o executive branch have a private interest which may directly or indirectly affect or influence the conflicts of interest” and “shall not participate in any matter in which they . . . The Ethics Code provides that “[e]xecutive branch officials shall avoid

statutory scheme. Id. enacting them and in light of the policy sought to be advanced by the entire used. Id. Our goal is to apply statutes in light of the legislature’s intent in interpreting statutes, we ascribe the plain and ordinary meanings to the words expressed in the words of the statute considered as a whole. Id. When p. 8 8

challenges to it, the relevant law, and the record submitted on appeal, we 740 (2014). Based upon our review of the trial court’s order, the defendants’ the burden of demonstrating reversible error. Gallo v. Traina, 166 N.H. 7 37, As the appealing parties with respect to this issue, the defendants have

applicable to those acting in a prosecutorial or plaintiff - like capacity”). designed for officials performing judicial or quasi - judicial functions, are not administration,” the Court held that the “rigid requirements of [neutrality], process “by creating an impermissible risk of bias in the Act’s enforcement and that the penalties provision in the Fair Labor Standards Act violated due prosecution”); Marshall, 446 U.S. at 239, 24 p. 8 8 - 49 (in reject ing the contention should be as disinterested as a public pr osecutor who undertakes such a case, “a private attorney appointed to prosecute a criminal contempt. . . the issues before us. See Young, 481 U.S. at 804 (explaining that in a criminal Jerrico, Inc., 446 U. S. 238 (1980). These cases, however, are not pertinent to U nited S tates ex rel. Vuitton et Fils S. A., 481 U.S. 787 (1987), and Marshall v. justice over personal interest.” In support, the defendants rely upon Young v. arrangement that could undermine a government lawyer’s duty to pursue that the United States Supreme Court “has categorically barred a ny over the investigation, the agreement does not violate due process. They argue the contingency fee agreement provides for the OAG to retain ultimate control Finally, t he defendants cross - appeal the t rial court’s finding that because

ability to represent the State as a substitute for the OAG.” no authority to make any key administration decisions and therefore lacks the hold that the trial court did not err in concluding that “Cohen Milstein . . . has discretion, whether to move forward to litigation.” Given these plain terms, we the investigation has been completed, the OAG “will determine, in its sole “will designate a point of contact who will supervise the investigation.” When interviews,” that the OAG “will review and approve all key documents,” a nd to [the] OAG on the investigation, including summaries of documents and agreement further provides that Cohen Milstein must “provide regular reports proceed with litigation, which claims to adva nce and what relief to seek.” The investigation and . . . make all key decisions, including whether and how to The September agreement provides that the OAG “will maintain control of the Milstein, the OAG retains direct authority over all aspects of the investigation. Under the plain terms of the agreement between the OAG and Cohen

trust and the fair administration of the law.” stake will create a conflict of interest that will negatively impact the public governmental function and in a position of public trust where its financial because they are “based on the premise that Cohen Milstein is vested with a Professional Conduct” and rejected the defendants ’ claims to the contrary “Cohen Milstein is not a public attorney under common law or the Rules of p. 9 9

HICKS, CONBOY, and LYN N, JJ., concurred.

issue. conclude that the defendants have not demonstrated reversible error as to this