TRENTON – Attorney General Jeffrey S. Chiesa announced today that the Division of Law obtained settlements and judgments totaling approximately $200 million last year through litigation on behalf of the state.
The $200 million obtained by the Division in 2012 represents a $61 million increase -- or approximately 44 percent -- over the amount obtained on behalf of the state in 2011, and a $36 million increase over the amount obtained in 2010.
Settlements and judgments obtained by Division of Law attorneys included more than $100 million from lawsuits related to alleged consumer, securities and other fraud, $61 million through environmental litigation, and more than $11 million through debt recovery litigation.
While the dollar amount obtained on behalf of the State increased significantly in 2012, the amount of payouts by the State resulting from legal action against it dropped for the second year in a row – to $49 million compared with approximately $54 million in 2011 and $66 million the year before.
Attorney General Chiesa credited the Division of Law for its efforts in obtaining substantially-increased dollars on behalf of the State while working successfully to reduce, during the same time period, the State’s litigation-related financial liability.
”The Division of Law continues to do an excellent job of handling affirmative litigation, defending New Jersey statutes and preserving the State’s precious financial resources,” said Attorney General Chiesa. “The judgments and recoveries we obtained through litigation last year are significant, and are a credit to the consistently-high caliber of legal work being done by our attorneys.”
In New Jersey, the Attorney General’s Office has a statutory duty to serve as both legal adviser to all “officers, departments, boards, bodies, commissions and instrumentalities” of State government, and to defend State laws. It is through the Division of Law – sometimes referred to as “New Jersey’s law firm” -- that this aspect of the Attorney General’s mission is accomplished.
"We remain committed to pursuing monetary and other relief to protect government resources, aid New Jersey residents who have been victimized, and ensure that government programs are not abused," said Division Director Christopher S. Porrino. ”While these recovery and payout figures can be influenced in any given year by a number of variables, one constant in the mix is the high caliber of legal talent working in our Division of Law, and the extraordinary effort our attorneys give each and every day.”
Noteworthy Division-negotiated settlements in 2012 included:
Municipal Bonds Derivative Matter:New Jersey recovered substantial funds in 2012 through its participation in settlements related to a multi-state investigation of alleged collusion by various financial institutions when bidding for municipal bond derivatives contracts. The Division’s participation in the multi-state effort on behalf of New Jersey resulted in settlements with Bank of America, J.P. Morgan Chase & Co., Wachovia Bank, UBS AG, and GE Funding Capital Market Services, Inc. As a result of these settlements, more than $1.3 million was distributed to harmed New Jersey entities. The State also received approximately $1.1 million for its costs associated with the investigation.
Major State-Federal Mortgage Servicing Settlement: The Division represented New Jersey in a national investigation of alleged foreclosure abuses by the nation’s five largest mortgage servicers -- Bank of America, Wells Fargo, JP Morgan Chase, Citi and GMAC – and in a joint state-federal settlement that resolved those allegations. The alleged foreclosure abuses included “robo-signing,” in which low-level employees signed affidavits attesting to mortgage defaults and ownership without having personal knowledge, or even verifying, the facts stated in their affidavits. As part of a $25 billion multi-state settlement, New Jersey received a direct payment of more than $72 million.
Record Multi-state Settlement Resolving Risperdal Off-Label Marketing Allegations: The Division represented New Jersey in a four-year, multi-state consumer fraud investigation of alleged “off-label” marketing of the anti-psychotic drug Risperdal by Janssen Pharmaceuticals, Inc., a Titusville-based subsidiary of Johnson & Johnson. As a result of the settlement, New Jersey received $5.3 million. Janssen allegedly promoted Risperdal for off-label uses to both geriatric and pediatric populations, targeting patients with Alzheimer’s disease, dementia, depression, and anxiety, when these uses were not approved by the federal Food and Drug Administration.
Actions Against Banking Licensees, Insurance Producers/Companies, etc: The Division handles administrative law cases, as well as any ensuing appeals, seeking disciplinary action against individuals and corporations licensed by the State for violations of New Jersey banking and insurance laws. During 2012, the Division’s actions resulted in 25 license revocations and suspensions. The Division also obtained more than $1.2 million in fines and costs.
Debt Recovery: The Division’s Debt Recovery Section successfully collected nearly $11.9 million in 2012 through litigation efforts in both state and federal court, as well as post-judgment collection actions brought on behalf of various state agencies. The post-judgment collection efforts included seizing assets (including bank accounts), filing wage-execution applications, and filing motions to secure funds. The majority of the Division’s debt recovery work is done on behalf of the Division of Taxation, the Department of Labor, and New Jersey Transit.
DEP v. Almo Anti-Pollution Services Corp., et al: In 2002, the state Department of Environmental Protection (DEP) filed suit against the owners and operators of the BEMS Landfill in Southampton Township, Burlington County, and against generators and transporters of hazardous substances that went to that landfill. The suit sought to recover DEP's costs to properly close and remediate the landfill. The original defendants subsequently added 200 more parties to the case. Prior to 2012, Division of Law attorneys reached a settlement with defendant Owens Corning for $2 million. In 2012, the Division reached settlement with many of the other defendants. Under that settlement, DEP received $14.1 million.