208 So. 3d 384
La. Ct. App.2016Background
- Louisiana Attorney General filed suit (Sept. 11, 2013) against numerous pharmaceutical companies alleging a scheme to obtain improper Medicaid payments, asserting claims under LUTPA and MAPIL and for fraud, negligent misrepresentation, redhibition, and unjust enrichment.
- Defendants removed to federal court; the case was remanded to state court. Defendants later filed peremptory exceptions of no right and no cause of action.
- The district court sustained the exception of no right of action and dismissed the State's suit; the State appealed that ruling.
- Central dispute: whether the State (through the Attorney General) or the Department of Health and Hospitals (DHH) is the real party in interest and thus has the right to bring the asserted causes of action.
- Statutory framework: DHH is a body corporate with power to sue; LUTPA and MAPIL contain express grant of enforcement authority to the Attorney General.
- Procedural result below: court sustained no-right-of-action exception as to common-law claims (fraud, negligent misrepresentation, redhibition, unjust enrichment) but the appellate court reviewed whether statutory causes of action could be pursued by the Attorney General.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the State (Attorney General) has a right to sue under LUTPA | Attorney General has statutory authority to enforce LUTPA and seek penalties and restitution in the name of the State | Claims arising from Medicaid reimbursements belong to DHH, not the State, so AG cannot usurp agency claims | AG has express LUTPA authority; State may pursue LUTPA claims (reversed as to LUTPA) |
| Whether the State (Attorney General) has a right to sue under MAPIL | MAPIL expressly contemplates AG as an agent with authority to pursue remedies to protect medical assistance programs | Defendants argue agency (DHH) is the proper plaintiff for Medicaid-related causes | AG has express MAPIL authority; State may pursue MAPIL claims (reversed as to MAPIL) |
| Whether the State may pursue common-law claims (fraud, negligent misrep., redhibition, unjust enrichment) arising from Medicaid reimbursements | State brought these claims in its own name via AG to recover for alleged harm to Medicaid program | Such common-law causes belong to the state agency (DHH) absent statutory authorization to the AG | No statutory authority found for AG to bring those common-law claims; portion of judgment sustaining no-right-of-action as to these claims affirmed |
| Whether the district court properly dismissed entire suit based on no right of action | State argued statutory and constitutional provisions make the State the real party in interest for claims it brought | Defendants argued dismissal appropriate because many claims are DHH's, and suit seeks to circumvent prescription | Court affirmed dismissal only for nonstatutory common-law claims and reversed as to LUTPA and MAPIL claims; remanded for further proceedings |
Key Cases Cited
- Torbert Land Co., L.L.C. v. Montgomery, 42 So.3d 1132 (standard of review: de novo for right-of-action issue)
- Industrial Companies, Inc. v. Durbin, 837 So.2d 1207 (function of exception of no right of action)
- State ex rel. Jones v. Doucet, 14 So.2d 622 (State cannot sue for causes belonging to political subdivision absent statute)
- State v. Tensas Delta Land Co., 52 So. 216 (authority on State v. subdivision suits)
- State v. Standard Oil Co. of La., 113 So. 867 (authority on limits of State suing for subdivision causes)
- Hooper v. Wisteria Lakes Subdivision, 135 So.3d 9 (silence in judgment deemed denial of unaddressed exception)