Despite its acclaim among the climate community, the recent Virginia decision (linked from article here) that public agencies are not subject to the Virginia Fraud Against Taxpayers Act (FATA) is hardly one that resolves any real issue. The decision was not based on a rational consideration of whether Cuccinnelli had sufficient grounds to investigate Mann under FATA (a point on which I had spoken out in Mann’s favor), but on the totally bizarre grounds that the Attorney General is only entitled to investigate individuals and private corporations under FATA and that state agencies (in which category the decision places the University of Virginia) are not subject to FATA. This is a technical and counter-intuitive decision that surely invites either amendment to the legislation or further direct action by Cuccinnelli. I don’t see how anyone can view this as a satisfactory resolution to an unseemly affair.
I say this as someone who spoke out at the time against Cuccinnelli’s original CID to the University of Virginia as an abuse of administrative law. I re-iterated this criticism in my comments to the Heartland conference in May 2010 and was accused of being “naive” by many. Actually, I have a long-standing though passing interest in the topic of abuse of administrative law. My grandfather McRuer was a prominent judge in Canada and led a major Royal Commission that pointed to accretion of administrative authority without avenues for citizens to appeal. His commission led to measures in Ontario against abuse of administrative authority. My objection to Cuccinnelli’s CID was as an apparent abuse of administrative authority. I did not doubt his jurisdiction over the University of Virginia and other public agencies and, if Mann’s name had popped up on a short list using financial criteria under the Act, I would not opposed his CID. I thought that there were (and are) valid reasons why the University of Virginia should have carried out a misconduct investigation; indeed, Ross and I filed a formal complaint with the University of Virginia in 2005 which they refused to investigate. I spoke out against Cuccinnelli’s CID because he had provided inadequate evidence of an offence under FATA to justify the demand.
However, the Virginia decision was decided on the surprising grounds that the Virginia Fraud Against Taxpayers Act does not authorize the Virginia Attorney General to issue CIDs to public agencies, only to individuals and private corporations.
There is a long-standing legal doctrine of “crown immunity” and this doctrine was applied by the Virginia court. The Court quoted the following two 19th century Virginia decisions (which in turn draw from English common law):
It is old and familiar law . . . that where a statute is general, and any . . . interest is diverted or taken from the king, . . . the king shall not be bound unless the statute is made by express words or necessary implication to extend to him.”); Whiteacre v. Rector, 70 Va. (29 Gratt.) 714, 716 (1878)
(“[L]egislative acts are intended to regulate the acts and rights of citizens; and it is a rule of construction not to embrace the government or effect its rights by the general rules of a statute, unless it be expressly and in terms included or by necessary and unavoidable implication.” Levasser v. Washburn, 52 Va. (11 Gratt.) 572, 577 (1854)
The provision (8.01-216.10) authorizing the Virginia Attorney General to issue CIDs is as follows:
A. Whenever the Attorney General or his designee has reason to believe that any person may be in possession, custody, or control of any documentary material or information relevant to a false claims law investigation, the Attorney General or his designee may, before commencing a civil proceeding or making an election under this article, issue in writing and cause to be served upon such person, a civil investigative demand requiring such person (i) to produce such documentary material for inspection and copying, (ii) to answer in writing written interrogatories with respect to such documentary material or information, (iii) to give oral testimony concerning such documentary material or information, or (iv) to furnish any combination of such material, answers, or testimony.
The decision stated that “person” is defined as follows:
For purposes of FATA, a “person” is defined as “any natural person, corporation, firm, association, organization, partnership, limited liability company, business or trust.” Code § 8.01-216.2.
Here the decision somewhat paraphrases the language of the Act which states that the following:
“Person” includes any natural person, corporation, firm, association, organization, partnership, limited liability company, business or trust.
Although the University of Virginia is described as a “corporation” in many documents, the Court determined that it was not a “corporation” under FATA:
Nor do we find the term “corporation” to be sufficient to expressly include corporate agencies of the Commonwealth such as public universities.
The Union of Concerned Scientists praised the decision as a “victory for science”. But a decision that public agencies are immune from having to provide documents in response to investigative demands from the Attorney General for fraud against taxpayers is hardly one that meets any sense of justice or fairness.
In addition, people sometimes have to be careful what they wish for.
The University of Virginia “won” this case by arguing that they were a state agency and therefore not subject to Cuccinnelli’s CID. However, the decision will undoubtedly limit their ability to argue that they are not a state agency for the purposes of FOIA.
The idea that a state Attorney-General be unable to examine records of state agencies for evidence of fraud also seems very counter-intuitive to me. Does an Attorney-General even require a court order to examine records of a state agency? Why would he have to do anything complicated to look at records of the Motor Vehicle Licencing Bureau (or whatever the Virginia name is)? Can’t he just send auditors in without a court order? If the University of Virginia has convinced a court that it’s a state agency under FATA, why wouldn’t they be subject to the same fate?