Illinois Attorney General Kwame Raoul will need to explain in court next month why his office should be allowed to continue partnering with a group of out-of-state trial lawyers on an investigation of insulin prices, after the companies targeted in the investigation claimed the attorney general appears unconcerned that the lawyers could improperly use the authority of the state to secure information to help them in lawsuits they are now pursuing against the companies on behalf of other clients elsewhere.
Last month, attorneys for pharmacies Optum RX, Caremark and Express Scripts filed a motion in Cook County Circuit Court, asking a judge to disqualify six attorneys from continuing to serve as so-called “special assistant attorneys general” on behalf of the state of Illinois.
The attorneys are identified as Joanne Cicala and Josh Wackerly, of The Cicala Law Firm, of Dripping Springs, Texas, and New York; Edwin Gault, of Forman Watkins & Krutz, of Jackson, Mississippi; Lawrence Deas and William Liston, of Liston & Deas, of Ridgeland, Mississippi; and Matthew McDonald, of David Nutt & Associates, of Ridgeland, Mississippi.
According to the filing and others in the case, Cicala and her colleagues were retained by Raoul’s office to serve as special assistant attorneys general to aid in the investigation of prices charged to consumers for insulin.
In June, Raoul’s office sent subpoenas to the companies, using the regulatory and legal power of the office to demand the companies turn over a host of documents and other information concerning their business practices as “pharmacy benefit managers,” dating back to 2003.
In a motion filed Oct. 7, the pharmacy companies described the information demands as “sweeping subpoenas … seeking all manner of confidential business records, information, and testimony relating to insulin pricing and other facets of (the companies’) work as pharmacy benefit managers (PBMs).”
The subpoenas directed the companies to return the demanded documents and other information to Cicala, acting on behalf of the state and the Attorney General.
The companies later learned through Freedom of Information Act requests that Raoul’s office had similarly empowered the other “special assistant attorneys general,” as well.
According to the filing, Cicala was retained under a contract that “provides for a contingency fee of up to 25% of any ‘recoveries’ obtained for the state.” So, while the state has not yet filed suit against the companies, they note the contingency retention agreement could allow Cicala and her colleagues to “seek millions in damages.”
The companies stressed in their motion that they are not resisting or challenging the authority of Raoul, as Illinois Attorney General, to issue the information disclosure demands.
However, they said they are balking at the prospect that Cicala and her colleagues will turn around and then use that information against them in court, in lawsuits she and her colleagues are leading against those same companies in court, representing other states and private clients in potentially massive actions worth many millions of dollars.
The companies “recognize and do not challenge the (Office of the Attorney General’s) authority to undertake investigations or to appoint Special Assistants,” the companies wrote in their motion.
“But it is unethical for Cicala, Wackerly, Gault, Deas, Liston, and McDonald … to investigate (these companies) as Special Assistant Attorneys General while simultaneously suing (the companies) in other jurisdictions on behalf of various private and public clients.”
The companies said they informed Raoul’s office of their concerns soon after receiving the subpoenas, and informed the Attorney General of their belief that allowing the allegedly conflicted lawyers to continue in their role on behalf of the Attorney General’s office amounts to violation of rules governing the practice of law in Illinois and elsewhere.
They pointed to Illinois Rule of Professional Responsibility 1.11 (c) which they say forbids lawyers who serve as “a public officer or employee” from using information they gained while in that service to advance the interests of private clients.
They further assert the arrangement with Cicala and her colleagues violates Illinois state law, which forbids those in “government service” from using “insider information” for their own personal benefit. In this case, they said, the lawyers could use the information from the subpoenas “to litigate cases in which they have a financial incentive.”
The companies note Cicala alone has filed more than 50 lawsuits against the companies over the companies’ profits and practices related to the distribution of insulin and opioid medications.
The filing notes that Cicala has issued strong public statements against the businesses, calling them “villains” and touting her history of filing lawsuits against such pharmacies. They pointed to a statement, issued by Cicala, claiming the PBMs and pharmaceutical companies “have been working together to create an artificial pricing system, and so anyone purchasing insulin is being harmed by this conspiracy by two dominant market actors.”
Further, Cicala “promised that ‘change is going to come’ to the alleged ‘pricing scheme.’”
The companies said Cicala’s colleagues are working with her on at least two large cases, representing the states of Mississippi and Arkansas in lawsuits against the companies related to insulin prices.
The companies said the information they obtain under the threat of prosecution from Raoul’s office could be used against them in those or other cases.
“In the conflicted lawyers’ hands, the OAG’s Subpoenas are not merely investigative tools but are instead vehicles for obtaining discovery that could benefit their private practices and other clients elsewhere,” the companies said in their Oct. 7 motion. “The ethical concerns do not turn on the conflicted lawyers’ intentions (good or bad.) It is enough that the conflicted lawyers could use confidential information gained through the Subpoenas to advance separate litigation against (the companies.)
“Applicable rules require disqualification.”
However, the companies said, their concerns have so far fallen on deaf ears. Rather than respond directly to their concerns, the companies said Raoul’s office responded with a petition asking a Cook County judge to force them to obey the subpoenas.
Raoul's stance, they said, sends a “remarkable – and troubling” message, that Raoul appears to believe “that when the OAG appoints private lawyers to serve as Special Assistant Attorneys General for the purpose of investigating on the State’s behalf, those private lawyers can wield governmental power without abiding by the ethical rules that apply to government lawyers.”
“That is not, and cannot be, the law,” the companies argued.
The companies said they have offered to follow standard practices regarding such subpoenas, and negotiate over the terms of the information disclosure. However, they have asked the court to not force them to give the information over to the “conflicted lawyers.”
If Raoul will not relent on his association with Cicala and her colleagues, the companies have asked the court to dismiss Raoul’s subpoenas.
Raoul's office did not answer questions posed by The Cook County Record concerning why his office hired these particular trial lawyers to aid in this investigation.
Rather, in a statement provided by Raoul’s office, his spokesperson said: "The true conflict of interest lies in the fact that these pharmacy benefit managers have enriched themselves by artificially inflating the price of insulin in Illinois to more than five times the price in other countries. These PBMs cannot avoid producing the pricing information requested by the Attorney General by wrongfully attacking the lawyers representing the Attorney General’s office. Those lawyers have no conflict of interest as they represent the Attorney General’s office. The PBMs’ motion reflects a misunderstanding of applicable Illinois law, and we expect the judge to reject their baseless challenges and require the PBMs to produce the requested information."
The parties are scheduled to present their arguments in court on their competing motions on Dec. 9.
Cicala and the other lawyers targeted for disqualification did not respond to a request for comment on the accusations against them.