Pa. SC: Drug company can't challenge outside counsel agreement

John O'Brien Aug. 26, 2010, 9:01am


PHILADELPHIA (Legal Newsline) - The Pennsylvania Supreme Court has decided not to rule on whether using private attorneys to represent the State violates a defendant's constitutional rights.

Instead, the court ruled earlier this month that Janssen Pharmaceutica does not have standing to challenge such an agreement. The company had argued attorneys representing a government office should not be motivated to secure the best financial outcome but instead by justice.

The case involves Houston plaintiffs firm Bailey Perrin Bailey, which donated heavily to Gov. Ed Rendell at the same time Rendell picked them for a lawsuit alleging Janssen improperly marketed the drug Risperdal for off-label uses.

"We agree with (the Office of General Counsel) that the language of Section 103 (of the Attorneys Act) is clear and unambiguous and thus provides a clear indication of the General Assembly's intent," Justice Ronald Castille wrote Aug 17.

"The obvious interpretation of Section 103 is that no party to an action other than the Commonwealth agency involved in the action itself may challenge the authority of the agency's legal representation."

Justice Thomas Saylor dissented. He says that because Janssen has an interest in the case, it should be allowed to seek BPB's disqualification.

"(N)ot only does Janssen aver that the Commonwealth's strategic litigation decisions are likely to be distorted to Janssen's detriment by Bailey Perrin's pecuniary interest in the outcome, but its allegations include a suggestion that this particular litigation might not have occurred at all but for the aggressive efforts of Bailey Perrin in seeking to convince state officials to initiate it under a contingent-fee arrangement..." Saylor wrote.

Recently, the California Supreme Court ruled that private lawyers could represent government agencies as long as the agency retained final decision-making power. It was a similar decision to a 2008 ruling in Rhode Island.

The Pennsylvania case has made national news, as some have alleged it is an example of "pay-to-play." BPB donated $91,000 to Rendell's campaign in 2006 -- $75,000 in direct contributions and $16,000 in air travel.

BPB also gave $25,000 to the Democratic Governors Association.

Janssen did not challenging the campaign support but has made a note of it in its filings.

"These separate allegations are not germane to our disposition and will not be addressed," Castille wrote in a footnote.

The actual lawsuit has not gone as well for Rendell and his lawyers. Judge Frederica Massiah-Jackson of the Court of Common Pleas of Philadelphia County recently ruled that the case can't proceed to trial, granting the company's motion for compulsory nonsuit.

BPB had proposed the suit to state Attorney General Tom Corbett, but he was not impressed with the firm's evidence and declined to file it.

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