Louisiana’s Buddy System Suffers a Loss: State High Court Overturns $331M Judgment

Louisiana’s Supreme Court this week landed a solid blow against the state’s notorious “Buddy System,” wherein state Attorney General James “Buddy” Caldwell hires his friends among the personal injury bar to sue deep-pocket corporate defendants on behalf of the state so they can collect big fees and, in turn, generously contribute to his next political campaign.
A 4-3 high court majority overturned a $258 million verdict in the state’s lawsuit against a drug company for allegedly downplaying, in a letter to doctors, the risk of diabetes associated with an anti-psychotic medicine, Risperdal.  The decision also wipes out $70 million in fees and $3 million in costs and expenses that the court additionally awarded to the private-sector plaintiffs’ lawyers who convinced the attorney general’s office to pursue the litigation in the first place.
In fairness to Caldwell, this particular case, Caldwell v. Janssen
Pharmaceutical Inc., was initiated by his predecessor, Charles Foti.  But Caldwell embraced it as his own and has since made it a model for his own tenure as attorney general.
“[W]e find the Attorney General failed to establish sufficient facts to prove a cause of action against the defendants under [the state’s Medical Assistance Programs Integrity Law] because no evidence was presented that any defendant made or attempted to make a fraudulent claim for payment against any Louisiana medical assistance program within the scope of MAPIL,” wrote Justice Greg Guidry for the majority.
“Even if the defendants misrepresented the efficacy or safety of their product to Louisiana doctors, there is simply no evidence in this record, and moreover no allegation, that this misrepresentation in fact caused any health care provider or his billing agent to knowingly present a claim for payment that is false, fictitious, untrue or misleading in regard to any material information,” Guidry added.
More coverage of this important Louisiana Supreme Court decision is offered by the Associated Press, Bloomberg News and Legal Newsline.com.