Dear House Judiciary Committee: In Questioning William Barr, Employ the Ethics Complaint That 27 Distinguished DC Lawyers Filed Wednesday

FREDERICK BARON, DENNIS AFTERGUT, AUSTIN SARAT

Frederick Baron, former associate deputy attorney general and director of the Executive Office for National Security in the Department of Justice, Dennis Aftergut, a former federal prosecutor, and Austin Sarat, Associate Provost and Associate Dean of the Faculty and William Nelson Cromwell Professor of Jurisprudence & Political Science at Amherst College, call upon the House Judiciary Committee to carefully read the ethics complaint by 27 distinguished DC lawyers against William Barr before questioning him today, July 28, 2020.

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In re: Suboxone Antitrust Litigation

Docket: 19-3640

Opinion Date: July 28, 2020

Judge: Patty Shwartz

Areas of Law: Antitrust & Trade Regulation, Class Action, Drugs & Biotech

Reckitt developed Suboxone tablets, a prescription drug used to treat opioid addiction. Toward the end of its seven-year period of exclusivity in which other manufacturers could not introduce generic versions, Reckitt developed an under-the-tongue film version of Suboxone, which would enjoy its own exclusivity period. Generic versions of Suboxone tablets would not be rated as equivalent to the name-brand Suboxone film, so state substitution laws would not require pharmacists to substitute generic Suboxone tablets if a patient were prescribed Suboxone film. Purchasers filed suit, alleging that Reckitt’s transition to Suboxone film was coupled with efforts to eliminate the demand for Suboxone tablets and to coerce prescribers to prefer film in order to maintain monopoly power, in violation of the Sherman Act, 15 U.S.C. 2. The Purchasers submitted an expert report indicating that, due to Reckitt’s allegedly-anticompetitive conduct, the proposed class paid more for brand Suboxone products. The district court certified a class of “[a]ll persons or entities . . . who purchased branded Suboxone tablets directly from Reckitt” during a specified period. The Third Circuit affirmed. Common evidence exists to prove the Purchasers’ antitrust theory and the resulting injury. Although allocating the damages among class members may be necessary after judgment, such individual questions do not ordinarily preclude the use of the class action device; the court correctly found that common issues predominate.

Libertarian Party of Pennsylvania v. Governor of Pennsylvania

Docket: 20-2481

Opinion Date: July 28, 2020

Judge: Per Curiam

Areas of Law: Constitutional Law, Election Law

Rejecting a challenge to Pennsylvania’s ballot laws under the First and Fourteenth Amendments, the district court concluded that enforcing the signature requirement, in combination with the Governor’s Orders issued to address the COVID-19 pandemic, imposed only a moderate burden. The court found that the plaintiffs had sufficient time and means to meet the signature requirements under Pennsylvania law, which were reduced by more than 90% in a 2018 suit and that the August 3 deadline for collecting signatures did not constitute a “severe burden” requiring strict scrutiny. The Third Circuit affirmed. The district court correctly applied the Supreme Court’s balancing test and the law survives intermediate scrutiny because it serves the Commonwealth’s legitimate and sufficiently important interests in “avoiding ballot clustering, ensuring viable candidates, and the orderly and efficient administration of elections.”

Commissioner of Internal Revenue v. Brokertec Holdings Inc

Docket: 19-2603

Opinion Date: July 28, 2020

Judge: Thomas L. Ambro

Areas of Law: Tax Law

The New Jersey Business Employment Incentive Program provides cash grants for companies willing to relocate or expand to New Jersey. A company receiving the grant must maintain a minimum number of employees and remain at the new location for a certain time period but there are no restrictions on how the company can use the grant, which is calculated as a percentage of state income taxes withheld from the wages of the company’s employees at the new location. In 2011, Garban’s offices in the World Trade Center were destroyed, and First Brokers’ nearby offices were rendered uninhabitable. Both companies, subsidiaries of BrokerTec, entered into agreements for 10-year Incentive Program grants. From about 2004-2013, the state paid BrokerTec about $170 million, which was used to purchase stock to expand into other trading markets. In 2010-2013, the companies' consolidated tax returns excluded $56 million in grant payments as non-taxable, non-shareholder contributions to capital under 26 U.S.C. 118. The IRS issued a deficiency notice. The Tax Court held that the grants were capital contributions. The Third Circuit reversed. Because the state did not restrict how BrokerTec could use the cash and because the grants were calculated based on the amount of income tax revenue that the new jobs would generate—the grants were taxable income, not contributions to capital.