LAWYER DISCIPLINARY BOARD INVESTIGATIVE PANEL CLOSING ID. No.: 14?02-506 Date Complaint Received: September 26, 2014 COMPLAINANT: Andrew D. Nelson 5148 Lower Newcomb Creek Road Huntington, West Virginia 25704 RESPONDENT: Patrick J. Morrisey, Esquire Bar No.: 11777 1900 Kanawha East Building One, Roorn E-26 Charleston, West Virginia 25305 THE INVESTIGATION OF THIS MATTER having been completed and a report having been made to the Investigative Panel of the Lawyer Disciplinary Board, the Panel orders that this complaint be closed for the following reasons: STATEMENT OF FACTS Complainant Andrew D. Nelson ?led this complaint against Respondent Patrick J. Morrisey, Esquire, a licensed member of the West Virginia State Bar. Respondent is the current Attorney General for the State of West Virginia. In his complaint, Complainant stated that he is the owner and operator of a small business in Milton, West Virginia, and is a citizen and resident of the State. He stated that his business had been adversely affected by the ?seeming epidemic of prescription pain pill addiction in southern West Virginia.? Complainant referenced two civil cases that had been ?led by Respondent?s predecessor, former Attorney General Darrell McGraw, Jr., currently pending in the Circuit Court of Boone County: State of West Virginia v. Cardinal Health, l2-C-140, and State of West Virginia 12. Amerisoarce Bergen, 12-C-141. He stated that he had been following the efforts of the Attorney General?s office to sue the companies responsible for supplying drugs to area ?pill mills.?1 When Respondent was elected, however, Complainant alleged that he began to have misgivings as to whether Respondent would, or could, vigorously prosecute the cases. Complainant alleged that Respondent has close ties to at least one of the companies being sued: Cardinal Health, Inc. Complainant stated that during 2010 and 2011, Respondent lobbied for Healthcare Distribution Management Association a national drug distribution trade association in Washington, DC, generating Two Hundred Fifty Thousand Dollars for his former law ?rm, King Spaulding. Complainant asserted that Respondent was hired by HDMA, following its merger with the Specialty Biotech Distributor Association, of which Respondent was the head. Complainant stated that the Specialty Biotech Distributors Association, prior to the merger, represented six companies, including Cardinal Health and Amerisource Bergen, which are now being sued. The trade association now represented 32 member companies, ten of which are defendants in the drug suits referenced above. Complainant further alleged that Respondent and his wife, Denise Henry, have both lobbied for Cardinal Health, and Ms. Henry continues to lobby for Cardinal Health, receiving some Four Hundred Thousand Dollars in 2012, and another One Hundred Thousand Dollars by March of 2013 in compensation. 1 For the purposes of this complaint, the Investigative Panel takes notice that a ?pill mill? is a term used rimaril local and state investi ators to describe a doctor, clinic or harmacy that is rescribin or dispensing powerful narcotics inappropriately or for non-medical reasons. 2 Complainant asserted that Ms. Henry?s lobbying firm, Capitol Counsel, had received over Two and a Half Million Dollars in payments from Cardinal Health between 2007 and the date of Complainant?s complaint.2 Complainant alleged that it had been reported that Cardinal Health, and its executives, donated a total of Three Thousand Five Hundred Dollars to Respondent?s campaign and, following Respondent?s election, Cardinal Health and some of its executives donated a total of Five Thousand Dollars to Respondent?s inaugural fund. In addition, Complainant alleged that Ms. Henry?s ?rm, Capitol Counsel, donated Five Thousand Dollars to Respondent?s inaugural fund. 3 Based upon the foregoing, Complainant believed that Respondent had an ?incurable con?ict of interest? and could not vigorously and fairly prosecute the case against Cardinal Health. Furthermore, Complainant contended that the business practices and policies of the wholesale drug industry appeared to be complex, and Respondent and Ms. Henry, due to their long involvement in the ?eld, may make important witnesses with regard to relevant practices at issue in the cases. In his response, Respondent, by counsel, asserted that the complaint was unfounded, and did not state proper or suf?cient grounds for the exercise of jurisdiction of the Lawyer Disciplinary Board. As a preliminary matter, Respondent asserted that he was elected to the Office of the Attorney General following a highly contested election, 2 The complaint listed the amounts paid to Capitol Counsel by Cardinal Health as follows: Two Hundred Sixty Six Thousand Dollars in 2007, Two Hundred Ninety Thousand Dollars in 2008; Three Hundred Thousand Dollars in 2009; Two Hundred Eighty Thousand Dollars in 2010; Three Hundred Eighty Thousand Dollars in 2011; Four Hundred Thousand Dollars in 2012; Four Hundred Ten Thousand Dollars in 2013; and Two Hundred Thousand Dollars in 2014. 3 The referenced monetary figures appear to come from articles previously published in Charleston Gazette. 3 and he believed that the ?ling of this complaint was a ?political tactic aimed at creating the appearance of an ethical cloud,? pointing to the release of this complaint to the press immediately after it was filed. Respondent assumed of?ce on January 14, 2013. Respondent asserted that he had been ?fully cognizant of his ethical responsibilities from the outset,? that he had sought and received advice about his ethical obligations, and that he had ?adhered to a standard that exceeds the standard of the ethical rules and his duties to the people of West Virginia.? Respondent asserted that the facts simply cannot establish the existence of a con?ict on his part. Respondent stated that he never represented any client in a matter substantially related to the State?s litigation against Cardinal Health, and that personal interest con?icts arising from spousal relationships are not imputed to the lawyer?s ?firm,? whether that ?rm is governmental or private. Respondent asserted that before making decisions in the matters referenced herein, he sought ethical advice from internal and external sources, and was aware that he had to consider both his ethical obligations as a lawyer and his constitutional and statutory obligations as Attorney General. After considering all these factors, Respondent stated that he ?reached a practical decision to screen himself from the Cardinal Health litigation, but to allow that litigation to proceed under the supervision and direction of other experienced lawyers inside and outside the Attorney General?s office.? Respondent stated that his previous experience in private practice primarily focused on Medicare, Medicaid and FDA regulatory issues and, in the course of that work, he represented several major pharmaceutical companies, including Cardinal Health. However, according to Respondent, he did not represent Cardinal Health in the 4 area of prescription drug abuse or DEA regulations or policies. Respondent emphasized that the bulk of his practice involved working with federal regulators on health care reimbursement and fraud issues. Respondent stated that he resigned from the law ?rm King Spalding on or about June 30,2012, to focus on his campaign for Attorney General, and has no ongoing ?nancial ties to King Spalding or any other private law ?rm. Respondent explained that Denise Henry Morrisey, whom he wed in 2008, is a principal in Capitol Counsel, a Washington, DC. government relations ?rm, where she focuses on health care issues. Respondent stated that Capitol Counsel?s clients include Cardinal Health, and that his wife has represented Cardinal Health for many years, dating back to well before she married Respondent. Respondent said that Ms. Henry Morrisey received no fees directly from Cardinal Health, but she has an ownership interest in Capitol Counsel and is compensated based on the pro?ts of the ?rm, including the pro?ts that derive from fees paid by Cardinal Health. In reasons set forth in several af?davits, Respondent asserted that he has no material interest in any compensation received by Ms. Henry Morrisey. Ms. Henry Morrisey is not a lawyer. Respondent stated that on or about June 26, 2012, two complaints were ?led in the Circuit Court of Boone County. The ?rst complaint named Cardinal Health, Inc. as the sole defendant, and alleged that Cardinal Health distributed disproportionally large quantities of controlled substances, such as pain killers, to West Virginia pharmacies in violation of law, thereby contributing to a serious problem of prescription drug abuse in the State. The second complaint contained similar claims and named as defendants AmerisourceBergen, Miami-Luken Inc., JM Smith Corp, dba Smith Drug Complaint, The 5 Harvard Drug Group LLC, ANDA, Inc., Associated Pharmacies, lnc., Auburn Pharmaceutical Co., H.D. Smith Wholesale Drug Co., KeySource Medical Inc., Masters Pharmaceuticals Inc., Quest Pharmaceuticals Inc., Richie Pharmacal Co. Inc., and Rx Inc. The initial plaintiff in both complaints was ?the State of West Virginia, by and through its duly-elected Attorney General Darrell V. McGraW, Jr.? After Respondent took of?ce, he was substituted in as the named plaintiff in both matters, and two additional state of?cials were added to the complaints as plaintiffs: the Secretary of the West Virginia Department of Military Affairs and Public Safety, and the Secretary of the West Virginia Department of Health and Human Resources. James A. Cagle, Esquire, has litigated both cases from the onset as a Special Assistant Attorney General, and Respondent said that he had never sought to replace him as plaintiffs? counsel. Respondent asserted that during his time in private practice, Respondent represented Cardinal Health and a trade association that included at least one of the Amerisource defendants over Medicare reimbursement matters. Respondent stated that, to the best of his knowledge, he did not represent any of the Amerisouce defendants individually or directly, and never had involvement with any matter similar to the claims ?led against the Cardinal Health or Amerisource defendants. In addition, Respondent asserted that he was not involved in any way in the current Cardinal Health or Amerisource litigation during his time in private practice, and also did not recall working on any of issues arising from oversupply of prescription medications in any capacity during his years in private practice. When he took of?ce, Respondent stated that he assigned Chief Counsel Dan Greear to evaluate the status of the cases pending in the of?ce. Respondent said that he 6 was aware of the potential for a con?ict in the Cardinal Health litigation, and he asked Mr. Greear to handle that litigation while Respondent determined whether he should or should not be involved. Respondent asserted that from January, 2013, forward, Mr. Greear ?exclusively managed the Cardinal Health litigation without any pressure, in?uence or interference? by Respondent. Mr. Greear agreed with this assessment in a sworn af?davit and in sworn testimony taken at the Of?ce of Disciplinary Counsel on November 6, 2015. Respondent said as he and Mr. Greear considered the potential con?icts issues, they recognized that ?a resolution was complicated by the Attorney General?s constitutional and statutory duties to the state and people of West Virginia.? Respondent said that he was concerned that a complete recusal by the Attorney General, including all attorneys within his of?ce, would give the defendants a basis for arguing that the cases were not cognizable. Respondent asserted that he sought the advice of outside ethics counsel, retired Professor Forest ?Jack? Bowman, Esquire, and, after considering the facts provided, Mr. Bowman conveyed verbal opinions to Respondent in the Spring and Summer of 2013 that Respondent could ethically participate in the Cardinal Health litigation, if he elected to do so. In a sworn af?davit dated November 26, 2014, Prof. Bowman veri?ed that he had made the foregoing representations to Respondent. It does not appear that Respondent sought an informal advisory opinion or ethics advice on this issue from the Of?ce of Lawyer Disciplinary Counsel, who may provide such opinions pursuant to Rule 2.15 of the Rules of Lawyer Disciplinary Procedure. Respondent asserted that in the Spring of 2013 he did provide Mr. Greear with directions about how to handle the management of consumer cases and of certain 7 considerations he should be aware of. Respondent said that he made it clear that in all instances special assistant attorney generals needed to be supervised in their activities by the Attorney General?s of?ce ?both because such management was in the State?s best interests and in order to avoid an argument that the cases should be dismissed.? Respondent stated that he also met with Cardinal Health representatives prior to the implementation his permanent screen from the case ?to discuss the company?s substance abuse strategies and to help him better evaluate any potential for con?icts that could arise if he ultimately decided to manage the case.? At this meeting, which occurred on or about May 22, 2013, Respondent viewed a PowerPoint presentation from representatives of Cardinal Health, which reportedly outlined steps Cardinal Health was taking to protect persons from the diversion of controlled substances. Respondent asserted, however, that he was never involved with the Cardinal Health litigation ?in a substantive way.? Respondent said that he decided to permanently screen himself from the Cardinal Health case in July of 2013. Respondent stated that Mr. Greear and others informed attorneys in the of?ce that Respondent was to have no involvement whatsoever in the litigation and was not to be copied on correspondence or pleadings or consulted on strategy issues. In the fall of 2013, Respondent said that he also asked his IT department to implement an electronic wall, and his of?ce has since implemented a formal con?ict of interest policy and formal screening procedures. In both an af?davit and in sworn testimony, Mr. Greear veri?ed that Respondent abided by the permanent screen from the Cardinal Health case following its implementation in July, 2013, and, even from onset of being assigned the Cardinal Health case in or about January, 2013, he understood that he was to exercise his own independent judgment in matter without any interference from Respondent. Although Respondent said that he initially asked Mr. Greear to manage the Amerisource litigation, he stated that he re-assigned the matter to another assistant attorney general so that Respondent could consult independently on that matter and ensure that ?more meaningful separated existed in the office? on the cases. Respondent continues to be involved in the Amerisource litigation. Respondent asserted that he has no con?ict in this litigation because his wife does not have associations with any of the defendants in that matter, and Respondent did not personally represent any of the defendants while in private practice. Although some of the defendants were constituents in a trade association that was a former client of Respondent, he contends that his client was the trade association, and a lawyer for a trade association is generally not considered the lawyer for the association?s members for purposes of con?icts of interest.4 Accordingly, because Respondent said that he saw no basis for a con?ict in the Amerisource case, he has not recused himself from involvement. Respondent says that although other attorneys manage the matter, he ?stays abreast of that litigation.? Respondent said that he does not participate in any planning or other sessions in which both the Amerisource and Cardinal Health cases are discussed. Respondent further asserted that he had no con?ict of interest as it pertains to the Cardinal Health litigation. Respondent referenced Rule 1.7(b) of the Rules of 4 In support of this argument, Respondent cites to R. Rotunda J. Dzienkowski, THE DESKBOOK ON PROFESSIONAL RESPONSIBILITY 1.13-5 at 644 (2014-15) lawyer who represents a trade normally represents that ?entity,? and not the individual members of the trade association?), and United States v. American Soc ?y of Composers, Authors Pubiishers, 129 F. Supp. 2d 327, 337-38 (S.D.N.Y. 2001) (lawyer for ASCAP could represent ASCAP in suit by member, and collecting authority). 9 Professional Conduct5 which provides that ?a lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer?s responsibilities to another client or to a third person, or by the lawyer?s own interests.? Respondent denied that his representation of the State in the Cardinal Health litigation could be limited by his responsibilities to another client, stating that his only current client is the State of West Virginia and its constituent agencies. Respondent also denied that he had any relevant con?icting responsibilities to a third person in the matter. As to the allegation in the complaint that Respondent?s representation may be materially limited by his own interests due to the income his wife receives as a lobbyist who has a business relationship with Cardinal Health, Respondent referred to his earlier declaration that he has no material interest in any compensation received by Ms. Henry Morrisey, and asserted that income his wife receives has no impact on his own judgment. Respondent also asserted that he and his wife do not share con?dences of their clients with each other. However, Respondent said that in an abundance of caution, he concluded that it would be better to remove himself completely from the Cardinal Health litigation, and he did so in July of 2013. Respondent asserted that the case is supervised by an experienced Assistant Attorney General and managed by special assistant attorneys general. Respondent denied that he possessed any con?dential information relevant to the litigation, and said that he certainly had not used any such information to the disadvantage of a former client. Moreover, Respondent stated that it was obvious that he 5 The instant complaint was initiated prior to January 1, 2015. As such, the version of the Rules of Professional Conduct in effect prior to the January 1, 2015 amendments is referenced herein. 10 did not previously represent any defendant in the same matter, or in matters substantially related to the work he did in private practice. Therefore, Respondent denied that he had engaged in conduct in violation of Rule 1.9 of the Rules of Professional Conduct. However, Respondent believed that Rule 1.11 of the Rules of Professorial Conduct was intended to govern former-client con?icts for current government lawyers. Rule 11(c) of the Rules of Professional Conduct bars a government lawyer from participating in a matter ?in which the lawyer participated personally and substantially while in private practice or nongovernmental employment. . Respondent stated that he never participated personally or substantially in the Cardinal Health matter while in private practice. Further, Respondent asserted that his conduct was consistent with the rule because it allows a government lawyer to participate in a matter if ?under applicable law no one is, or by lawful delegation may be authorized to act in the lawyer?s stead in the matter.? Pursuant to this provision of Rule Respondent did not believe he could constitutionally delegate his responsibility to represent the State?s interest to an unsupervised outside lawyer. Respondent also cited to the decision in State ex rel. Discover Fin. Sewn, Inc. v. Nibert, 231 227, 744 625 (2013), which advised that the Attorney General must maintain supervisory authority over special assistant attorneys general appointed to represent the State. Respondent asserted that Rule 1.10 of the Rules of Professional Conduct regarding imputation of con?icts did not apply to a government lawyer like himself. Respondent noted that an amendment to ABA Model Rule 1.10 added in 2002 clari?ed that Rule 1.11 is intended to be the exclusive rule governing the imputation of con?icts of interests of current or former government lawyers. The Investigative Panel agrees, and believes Rule 1 1.11 of the Rules of Professional Conduct controls in this matter. Indeed, Rule 1.10(d) of the Rules of Professional Conduct now in effect states, ?The disquali?cation of lawyers associated in a ?rm with former or current government lawyers is governed by Rule 1.11.? Respondent stated that even if he had a personal con?ict in the matters discussed herein, which he denies, Rule 1.11 would not impute the con?icts to other attorneys in his of?ce. Respondent cited to the comment to the ABA Model Rule 1.11 and West Virginia Rule 1.11, effective January 1, 2015, which speci?cally provides for screening and notice pursuant to disquali?cations due to con?icts of interest, but not the imputation of con?icts to other associated government of?cers or employees. Respondent provided reports of the United States Attorney General and several state attorneys generals recusing themselves, but not their entire of?ces, from various matters. In addition, Respondent denied that a con?ict arising from his spousal relationship would be imputed to other lawyers who work for Respondent. Respondent asserted that a con?ict is not imputed to other lawyers in a ?rm even when the con?icted lawyer?s spouse is representing a party directly adverse to the lawyer?s client, per Rule 1.8(i) of the Rules of Professional Conduct. Respondent asserted that even though he concluded that no actual con?ict existed, the screen he implemented in the underlying matter was a praCtical solution, and he believed that the men and women who serve as government of?cers should have no dif?culty honoring a screen, even when the boss is the screened party. Respondent stated that the allegation that Respondent or his wife are potential witnesses in the litigation is ?frivolous and patently unfounded.? Respondent asserted that Rule 3.7 of the Rules of Professional Conduct only prohibits a lawyer acting as advocate 12 at a trial in which the lawyer is likely to be a necessary witness and, as such, the rule does not apply when the lawyer?s spouse will be a necessary witness. In addition, Respondent said that there are no facts or plausible allegations that suggest that Respondent or his wife would become a necessary witness, and no party to the litigation has ever made that suggestion. Respondent also asserted that he has had no prior material involvement in matters relevant to the litigation and there are many other persons far more capable of providing this kind of industry testimony, thereby clearly making his testimony not ?necessary.? Respondent asserted that he had complied with the Rules of Professional Conduct in this matter. Respondent stated that his ?balanced and careful approach of eliminating any issue as to his own conduct and yet preserving the State?s interest in participating in and supervising important litigation embodies the application of the principle that the Rules are ?rules of reason? Respondent asked that this complaint be dismissed. REASONS CLOSED Rule 1.11(c) of the Rules of Professional Conduct states, in part: (0) Except as law may otherwise expressly permit, a lawyer serving as a public officer or employee shall not: (1) Participate in a matter in which the lawyer participated personally and substantially while in private practice or nongovernmental employment unless under applicable law no one is, or by lawful delegation may be authorized to act in the lawyer?s stead in the matter; The Investigative Panel notes that a matter is considered substantially related if the current matter involves the work the lawyer performed for the former client; or (2) there is substantial risk that representation of the present client will involve the use of 1 3 information acquired in the course of representing the former client, unless that information has become generally known.? In re James, 223 870, 878, 679 701 (2009). After review of the evidence, the Investigative Panel ?nds that it fails to set forth a basis for ?nding a substantial relationship between Respondent?s prior representation of Cardinal Health in Medicare reimbursement and related regulatory issues and the matters at issue in the Cardinal Health litigation; the problem of oversupply of addictive prescription medications. The Investigative Panel also ?nds that there is no evidence that has been presented that Respondent possesses con?dential information that would be material to the State in prosecuting the Cardinal Health matter. However, the Investigative Panel believes that it was appropriate for Respondent to recuse himself from the Cardinal Health case due to his wife?s ?nancial ties to the defendant. Although Respondent has denied that his wife?s interests create a con?ict of interest on his part in the Cardinal Health case, the Investigative Panel asserts that lawyers holding public of?ce are held to a higher standard of ethical conduct,6 and circumstances may require recusal whether or not actual con?icts of interest exists or can be proven. Respondent?s involvement with the Cardinal Health under the existing circumstances could reasonably be seen in the eyes of the public to diminish the integrity of the process and thereby create the appearance of impropriety. Respondent?s actions of ultimately removing himself from the case helps to reassure the public as to the reliability and integrity of attorneys. The screening implemented by Respondent also safeguards the public?s interests in the administration of justice and eliminates any plausible prospect of 6 See, Committee on Legal Ethics 12. Roark, 181 260, 382 313 (1989). 14 harm to his former clients assuming he possessed any con?dential information of pertinence. Respondent made public statements that he stepped aside from the Cardinal Health case after taking of?ce in January. Respondent asserted that he assigned the Cardinal Health case to Mr. Greear when he assumed of?ce in January of 2013, but he does not deny that he had some involvement with the case before his decision to screen himself entirely from the case in July of 2013. Evidence obtained by the Of?ce of Disciplinary Counsel re?ects that Respondent requested that a joint-status conference in the cases be continued due to his unavailability, provided directions to Mr. Greear about the supervision of special assistant attorney generals in the cases, and that he met with Cardinal Health representatives to discuss the company?s substance abuse strategies in May of 2013. Respondent claimed that his involvement before the ?permanent screen? was to help him better evaluate any potential for con?icts that could arise if he ultimately decided to manage the case. Mr. Greear testi?ed that he felt he had the authority to make all the decisions in the case at all times and that Respondent never tried to give him any instructions or push him in a certain way in the litigation. Indeed, the Investigative Panel ?nds no clear evidence that Respondent was ever involved with the Cardinal Health litigation in a substantive way. The Investigative Panel has concerns that the claims in both the Amerisource and Cardinal Health cases are essentially indistinguishable and if, as a practical matter, Respondent can effectively avail himself of an appearance of impropriety if he still maintains involvement with the Amerisource case. Respondent has publicly stated that the cases deserve to be decided on the merits. The Investigative Panel notes that these 15 matters involve pending litigation before a tribunal with appropriate jurisdiction and the ultimate decision of whether there is a basis for disquali?cation due to a con?ict of interest is a matter for the Court to decide after carefully examining all relevant evidence. See, Gariow v. Zakaib, 186 W. Va. 457, 413 112 (1991); State ex rel. Ogden Newspapers v. Wilkes, 211 W. Va. 423, 566 560 (2002). The Circuit Court can, of course, disqualify a lawyer from a case because of a con?ict of interest where the con?ict clearly calls into question the fair or ef?cient administration of justice. The Investigative Panel also notes that the complaints cite to Respondent?s authority as a basis to bring the action, the ?nal authority for handling the control of the cases does not rest solely within the discretion of the Of?ce of the Attorney General, as there are other named plaintiffs who must consent to certain decisions. As to the allegations that Respondent received campaign donations from individuals associated with Cardinal Heath, the Investigative Panel ?nds that there is insuf?cient evidence to conclude that the donations were unethical under the legal precedents of this State. Contributions to campaigns remain necessary and the referenced donations do not appear to amount to extraordinary campaign support. Moreover, allegations regarding Respondent?s conduct as it pertains to Code 6B-2-5 (?Ethical standards for elected and appointed of?cials and public employees?) are outside of the jurisdiction of the Lawyer Disciplinary Board. The Investigative Panel does point out, however, that attorney generals of other states have implemented voluntary 16 restrictions banning donations from companies that are the subject of an ongoing investigation by their offices? After review of the evidence, the Investigative Panel has determined that probable cause does not exist to charge Respondent with a violation of the Rules of Professional Conduct. Respondent is strongly warned regarding his duties pursuant the con?ict of interest provisions of Rules of Professional Conduct, and warned that any future violations of the Rules may result in sanction. There being no further action to be taken, this matter is closed. CLOSING ORDERED on the 17?h day of December, 2015, and ENTERED this the 17th day of December, 2015. I I RBbb'y J. Alif Ch why/(? Investigative anel Lawyer Dis iplinary Board 7 See, Lipton, Eric. ?Missouri Attorney General Puts Limit on Contributions.? he New York Times 19 Nov. 2014. 17