RICHMOND, Va. (Legal Newsline) - The Virginia Supreme Court on Friday sided with the University of Virginia in a probe of one of its former professor's climate research.
The state's high court affirmed the judgment of the Albemarle County Circuit Court, which had set aside Virginia Attorney General Ken Cuccinelli's civil investigative demands.
However, unlike the circuit court, the Supreme Court set aside the CIDs with prejudice, on the ground that the university, as an agency of the Commonwealth, does not constitute a "person" under the state's Fraud Against Taxpayers Act.
Therefore, it cannot be the proper subject of such a demand, the Court said.
Cuccinelli, citing the Fraud Against Taxpayers Act, has been investigating whether former UVA professor Michael Mann used fraudulent data to obtain government grants.
Albemarle Circuit Judge Paul M. Peatross Jr. had set aside the attorney general's original civil investigative demand issued against the university in August 2010.
However, Cuccinelli submitted a narrower demand, seeking information on one $214,700 grant issued by UVA to Mann and two other researchers.
The university, in turn, asked the court to set aside the latest demand, which targeted "the same professor on the same grounds that the court already found insufficient," it argued.
In September, Albemarle Circuit Judge Cheryl Higgins put the case on hold, saying she would not rule on the attorney general's scaled-down demand.
Instead, she said she had to wait for the Supreme Court -- which at that point had already agreed to review -- to hear the case.
Mann, an assistant professor of environmental sciences at UVA from 1999 to 2005, is known for his research on global warming. He now teaches at Pennsylvania State University.
It was Mann who produced the widely publicized "hockey stick" graph showing a sharp increase in global average temperatures in the industrial age.
His work was called into question in the investigations into the so-called "Climategate" scandal following the unauthorized release of hundreds of emails from a British climate center.
However, several investigations, including an extensive review of his research by Penn State, have cleared him of academic misconduct.
"Because UVA is indeed a public corporation, and the term 'corporation' can be found in the definition of a 'person' under FATA, Code § 8.01-216.2, the circuit court ended its investigation at this juncture," Justice LeRoy F. Millette Jr. wrote for the Court.
Millette, in the Court's 17-page opinion, said the lower court ignored "several significant reasons" why "person" cannot properly be read to include agencies of the Commonwealth.
"Code § 8.01-216.2, the definitional portion of FATA, contains no express inclusion of the Commonwealth in its definition of 'person.' Nor do we find the term 'corporation' to be sufficient to expressly include corporate agencies of the Commonwealth such as public universities," he wrote.
"This conclusion is evidenced by the incongruity that would be introduced into the Code as a whole, beyond FATA, by affirming the circuit court's interpretation. The Code is replete with definitions of 'person' that include the term 'corporation' but do not otherwise include governmental entities."
The Court explained that the state Legislature has demonstrated throughout the code its ability to define the term "person" to include governmental bodies when it so intended.
"The General Assembly could have defined 'person' accordingly in Code § 8.01-216.2," it noted.
"Since the General Assembly has expressly included the Commonwealth and its agencies when the General Assembly so intended and expressly excluded the Commonwealth and its agencies elsewhere in the Code, we cannot find that FATA expressly includes UVA under its definition of 'person' merely because the definition includes corporations."
However, the Court observed the express use of the term "agency" elsewhere in the FATA.
It appears in the definition of "Commonwealth," and an express reference to "agency" can be found in a section of the FATA.
"Because neither of these references pertains directly to a 'person' under the statute, we find that they do not constitute the type of express reference required by this Court in Deal.
"If anything, the use of the term 'agency' elsewhere in the Act lends greater strength to our belief that the General Assembly would have expressly included the term 'agency' in the definition of 'person,' had it been intended."
The Court also rejected Cuccinelli's claim that UVA is swept into the definition of "person" by necessary implication.
A necessary implication is "an implication so strong in its probability that anything to the contrary would be unreasonable."
"The Attorney General's argument for a 'necessary implication' amounts to a policy preference for CIDs as an investigatory tool," Millette wrote. "The language of the Act still functions without including Commonwealth agencies within the statute's definition of corporations. We therefore do not find that Commonwealth agencies are included by 'necessary implication.'
"In sum, neither by express language nor by necessary implication does FATA provide the Attorney General with authority to issue CIDs to Commonwealth agencies."
The Court said it remains "unconvinced" that this statute of general applicability was intended to apply to corporate bodies that are arms of the Commonwealth.
Justice Elizabeth A. McClanahan, who concurred in part and dissented in part, disagreed with the majority's threshold determination that UVA, as an agency of the Commonwealth, is exempt from the FATA.
"Concluding that UVA is subject to the Attorney General's investigative authority under FATA, I would affirm the circuit court on its finding that the CIDs were facially deficient, but only on the ground that they were deficient in 'stat(ing) the nature of the conduct constituting the alleged violation' of FATA that was under investigation, as expressly required by Code § 8.01-216.11," she wrote.
"I would reject the circuit court's holding that the CIDs were also required to contain the Attorney General's 'reason to believe' that UVA was in possession of material or information relevant to that investigation under the terms of Code § 8.01-216.10(A), as I read no such requirement in the statute."
McClanahan said her reading of the code is dictated by its "common sense application."
"If the legislature intended to allow the Attorney General to bring a FATA action against an agency of the Commonwealth, the legislature undoubtedly intended to grant the Attorney General the authority to obtain relevant investigative information from an agency of the Commonwealth through the issuance of a CID to the agency, whether the object of the investigation was the agency or some third party," she wrote.
Cuccinelli said Friday the Court's ruling means that the university and all other state agencies cannot be served with CIDs.
"From the beginning, we have said that we were simply trying to review documents that are unquestionably state property to determine whether or not fraud had been committed.
"Today, the court effectively held that state agencies do not have to provide state-owned property to state investigators looking into potential fraud involving government funds," the attorney general said in a statement.
Consistent with the Court's opinion, Cuccinelli's office said it will move to dismiss the CID case still pending in the Albemarle Circuit Court.
From Legal Newsline: Reach Jessica Karmasek by email at firstname.lastname@example.org.