TRENTON
-- Attorney General Anne Milgram and Division
of Law Director Robert Gilson announced
today that the Division of Law obtained
$154 million in recoveries and judgments
on behalf of the state in 2008 through anti-fraud,
consumer protection, environmental and other
litigation.
The
$154 million obtained by the division represents
a $30 million increase, or approximately
24 percent, over the amount obtained on
behalf of the state in 2007, and a $54 million
increase over the amount obtained two years
ago.
Total
dollars obtained through litigation in 2008
included $63 million recovered via settlement
of a pension securities fraud lawsuit against
Tyco International Ltd. and several of its
top executives. In addition, the division’s
legal action resulted in favorable judgments
or cost recoveries as follows: $22 million
via general litigation; $14.7 million through
environmental lawsuits; $19 million from
debt-recovery litigation; $10.2 million
from consumer fraud lawsuits, $6.5 million
from investment fraud litigation; $4.3 million
from civil prosecution of Medicaid and other
insurance fraud, and $1.3 million from litigation
related to the state’s various professional
licensing boards.
While
the dollar amount obtained by the division
in 2008 increased significantly, the total
amount of payouts by the state resulting
from legal action against it dropped by
more than 40 percent -- from $45.6 million
in 2007 to $26.7 million last year.
Attorney General Milgram credited the Division
of Law for its work in obtaining substantially-increased
dollars for the state through litigation
while sharply reducing, during the same
time period, the state’s litigation-related
financial liability.
“Through
its own skilled attorneys and through the
judicious selection of outside counsel where
necessary, our Division of Law continues
to do an excellent job of fighting for New
Jersey citizens and protecting our state’s
assets,” Milgram said.
“We
pursue legal action principally to uphold
the law, safeguard our citizens and preserve
New Jersey’s financial and environmental
resources,” Milgram added. “But
this significant increase in dollars obtained
through litigation is an important achievement,
particularly during difficult fiscal times,
and is evidence of a consistently-high caliber
of legal work done on behalf of the state.”
Director
Gilson commended the division’s staff
attorneys for their consistent hard work
in tackling an array of legal issues, and
for their ongoing dedication to the division
mission.
“On a daily basis, the division's
attorneys handle a broad range of legal
matters that improve the quality of life
in our state,” said Gilson. “The
results they have achieved demonstrate both
their abilities as lawyers and their commitment
as public servants.”
Overall,
the Division of Law handled more than 39,000
pending legal matters in 2008, resolving
nearly 18,000 matters and representing the
state in approximately 1,200 trials and
1,100 administrative hearings.
In
addition, the division handled 1,800 appeals,
prevailing in 82 percent of those cases.
Notable examples include a case in which
the New Jersey Supreme Court upheld the
constitutionality of the state’s Highlands
Water Protection and Planning Act (O.F.P,
LLC v. State of New Jersey), successful
defense of a 2007 Attorney General’s
Directive regarding distribution of materials
at polling locations, and another Appellate
case in which the court upheld the constitutionality
of the state’s current system of paying
restitution to crime victims on a first-in-time
basis.
The
division also prevailed in a number of significant
environmental cases. Acting as lead state
in a 17-state coalition, New Jersey successfully
challenged two federal Environmental Protection
Agency rules pertaining to the emission
of hazardous air pollutants from coal-fired
power plants. In an unrelated environmental
case, Sunoco Inc. paid New Jersey and the
federal government nearly $1.2 million in
stipulated penalties and interest after
failing to meet a deadline to install air
pollution controls at its refinery in Gloucester
County. The Division of Law also took part
in nearly 100 property closings on behalf
of the Department of Environmental Protection’s
Green Acres program, thereby helping preserve
about 5,800 acres of open space with a market
value of more than $50 million.
The
division also handled a number of significant
consumer protection matters in 2008, including
one in which the abrupt, January 2008 closure
of a wedding photography business known
as Celebration Studios, Inc., left many
newlyweds throughout the state without their
paid-for wedding photographs and videos.
Through
the division’s efforts, a Superior
Court judge entered an order in November
2008 providing for turnover of the photographs
and videos to the state for distribution
to the rightful owners.
Also
in 2008, the Division of Law:
-
Filed civil lawsuits targeting businesses
and individuals who engaged in fraudulent
mortgage industry practices. In one such
case, Milgram v. Vest/JP Global, the division
filed civil racketeering and consumer
fraud charges against two related enterprises
that conducted foreclosure “relief”
schemes. Among other things, the defendants
are accused of persuading distressed homeowners
to transfer their property titles to third
party buyers on the false promise that
they would be able to repurchase their
homes in one-to-two years. In fact, the
state’s lawsuits charge, homeowners
were never able to repurchase their homes
because the conspiring businesses and
individuals stripped the equity and charged
the former homeowners excessive rents.
The Division has filed similar suits against
three other enterprises: A&E Mortgage,
American Millennium and Ultimate Realty.
-
Filed a civil lawsuit on behalf of the
state challenging a decision by the federal
Department of Health and Human Services
to make significant changes to the State
Children’s Health Insurance Program
(S-CHIP). The changes would have denied
health insurance coverage for more than
10,000 New Jersey children. The state’s
lawsuit charged that federal officials
circumvented the public rule-making process
by arbitrarily changing the S-CHIP program
eligibility standards without proper notice
to, or comment by, the regulated states.
The federal government ultimately announced
it would not implement the proposed changes
to S-CHIP.
-
Worked closely with the New Jersey Department
of Children and Families to protect abused
and neglected children. Through its DYFS
Practice group, the division won termination
of parental rights in more than 900 guardianship
cases in 2008, freeing the children involved
for adoption.
-
Handled enforcement actions on behalf
of the Department of Banking and Insurance
that resulted in 28 license revocations
and suspensions, as well as $14 million
in fines.
Through its approximately 510 attorneys,
the Division of Law handles the bulk of
the state’s legal matters in-house
– tens of thousands of them annually.
However, for a variety of reasons, the division
sometimes must retain private law firms
to represent the state’s interests.
This retention of “outside counsel”
can be necessitated by any number of factors
including, but not limited to, the requirement
for special expertise based on the nature
of the case, assignment of the matter to
a jurisdiction located out-of-state, or
to avoid actual or perceived conflict of
interest.
In
order to ensure an objective, merit-based
hiring method for outside counsel, the division
employs an RFQ (Request for Quotation) process.
The division solicits proposals from private
law firms to handle specific areas of the
law (for example, employment litigation)
and the firms submit their proposals. The
proposals are then reviewed by an evaluation
committee made up of deputy attorneys general,
their supervisors and, in some instances,
a representative of the client agency whose
interests require representation.
The
evaluation committee ultimately generates
lists of law firms designated as available
and approved for possible hire in specific
areas of the law. Firms are chosen for inclusion
on the lists based on many merit-based factors,
including experience, expertise and the
size of the firm. When the need arises to
hire a private law firm to handle a specific
legal matter on behalf of the state, the
selection is made from the Division’s
lists.
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