State AGs In The News - May 29th, 2014

Hot News

U.S. Supreme Court Bars State Suit Against Indian Community for Operating a Casino Outside Indian Lands

The U.S. Supreme Court ruled, in a 5-4 decision in the case of Michigan v. Bay Mills Indian Community, that tribal sovereign immunity bars Michigan's suit against the Bay Mills Indian Community for opening a casino outside Indian lands. Justice Sotomayor filed a concurring opinion. Justices Scalia, Ginsburg, and Thomas joined by Scalia, Ginsburg, and Alito filed dissenting opinions. We had listed this as a case to watch in an October 2013 blog post. Sixteen AGs had filed a brief in support of the petitioner, Michigan. Oklahoma had submitted a separate brief supporting the petitioner. The decision affirmed a judgment of the U.S. Court of Appeals for the Sixth Circuit. The Supreme Court stated, "We hold that immunity protects Bay Mills from this legal action. Congress has not abrogated tribal sovereign immunity from a State's suit to enjoin gaming off a reservation or other Indian lands. And we decline to revisit our prior decisions holding that, absent such an abrogation (or a waiver), Indian tribes have immunity even when a suit arises from off-reservation commercial activity. Michigan must therefore resort to other mechanisms, including legal actions against the responsible individuals, to resolve this dispute." In addition to civil or criminal actions against tribal officials, the court also mentioned that states can use their leverage in negotiating a compact to bargain for waiver of the tribe's immunity. Michigan AG Bill Schuette said he would follow the court's advice and target individual tribal members for civil and criminal penalties. State False Claims Act Enforcement Explodes in 2014

Over the last decade, False Claims Act ("FCA") litigation has exploded, and actions asserting new theories of liability are resulting in increasingly large recoveries. Last year the U.S. Department of Justice (DOJ) announced that it had recovered $3.8 billion under the federal FCA in FY 2013. From all appearances FY 2014 promises to be another "banner year for civil fraud recoveries," and the DOJ has already put up impressive numbers. While the DOJ continues to vigorously pursue FCA cases against companies in the health care and other sectors, cash-strapped states are now following suit. State Attorneys General (AGs) have increasingly pursued novel and creative FCA actions, as have private plaintiffs, who are authorized by qui tam provisions to stand in the shoes of states to sue and receive part of any recovery. A driver of this action was the Deficit Reduction Act (DRA) of 2005, which authorized states to receive, in addition to their own recoveries, 10 percent of the federal government's share of recovered Medicaid funds if their FCAs are at least as robust as the federal FCA. As a...