2010-08-30 opinion granting uva petition

8/8/2019 2010-08-30 Opinion Granting UVA Petition

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COMMONWEALTH OF VIRGINIAEdward L. Hogshire315 East High StreetCharlottesville, Virginia 22 902(434) 970-3760(434) 970-3038 (fax)

Daniel R. BoutonPO Box 230Orange, Virginia 22960(540) 672-2433(540) 672-2189 (fax)

Sixteenth Judicial CourtAlbemarle Culpeper Fluvanna GoochlandGreene Louisa Madison Orange Charlottesville

Timothy K SannerPO. Box 799Louisa, Virginia 23093(540) 967-5300(540) 967-5681 (fax)Cheryl V Higgins501 C. Jefferson St., 3rd Floo

Charlottesville, Virginia 22 902(434) 972-4015(434) 972-4071 (fax)John G Berry135 W est Cameron StreetCulpeper, Virginia 22701(540) 727-3440(540) 7271535 (fax)

August 30, 2010Chuck Rosenberg, EsquireHogan Lovells US LLPColumbia Square555 Thirteenth Street, NWW ashington, DC 20004W esley G. Russell, Jr. EsquireDeputy Attorney GeneralOffice of the Attorney GeneralCivil Litigation Division900 East Main StreetRichmond, Virginia 23219

Re: The Re ctor and Visitors of the University of VirginiaV.Kenne th T. Cuccinelli, II, Attorney G eneral of VirginiaCase No.: CL10-398

Dear Counsel:This matter came before the Court on August 20, 2010 on the Petition to SetAside Civil Investigative Demands issued to the University of Virginia by Respondent,Kenne th T. Cuccinelli, II, on April 23, 2010. A hearing w as held on August 20, 2010 an dthe Court took the matter under advisem ent to review the legal authority cited.

BACKGROUNDThe C ivil Investigative Dem ands attached as Exhibits 1 and 2 to the P etition areidentical except one is issued to the University of Virginia and the other to the Rectorsand V isitors of the U niversity of Virginia.


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ISSUES PRESENTED1. Does the A ttorney Gen eral have to allege "reason to believe" that theUniversity of Virginia is in possession of documentary m aterial relevant to a false claims

law investigation?2. Has the A ttorney Gene ral stated in the Civil Investigation Dem ands issued "thenature of the con duct constituting the alleged violation of the false claims law that is

under investigation?"3. Is the University of Virginia a "person" under the Act to wh om a civilinvestigative demand m ay issue?4. W ould the issuance of a civil investigative demand by the Attorney General tothe University of Virginia "chill" the academic freedom o f professors like Dr. Mann?5. What are funded grants/awards by the Com monwealth?6. W hat is the scope of the civil investigative demands issued?

ANALYSIS1.REASON TO BELIEVE BY ATTORNEY GENERAL

The A ttorney General argues that the requiremen t of' Section 8.10-216.10 is asubjective standard. In other words, the Attorney Gene ral has unbridled discretion to sayhe believes the University does have relevant m aterial and that the Court does not havethe ability to review any requ irement he has "reason to believe" or not. The Courtdisagrees. In order for the Attorney Gen eral to have "reason to believe", he has to havesome ob jective basis to issue a civil investigative demand, which the C ourt has pow er toreview. This Court rules that the objective basis for the Attorney G eneral to have "reasonto believe" has to be stated in the "nature of the condu ct" requirement con tained inSection 8.01-216.11. Stating the "nature of the conduct" and the applicable law of the A ctbelieved to be violated tells the Cou rt if the Attorney General has "reason to b elieve."2. NATURE OF THE CONDUCT REQUIREMENT

In reviewing the Civil Investigative Dem ands, the Court notes the "applicableprovision of the law alleged to be violated" is stated by reference to the statute. However,the nature of the conduct is not stated so that any reaso nable person could glean w hat Dr.Mann did to violate the statute. The Attorney G eneral says "the investigation relates todata and other m aterials that Dr., Man n presented in seeking award/gran ts funded, in


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nuu-ou-niu NUN 06: 4b AMLBEMARLE CO JUDGE'S OFF34 972 4071. 04Page 4whole or in part, by the Comm onwealth of Virginia or any of the agencies as well as data,materials and comm unications that Dr. Mann created, presented or made in connectionwith or related to the following awards/grants (hereinafter the "Grants"):" W hat theAttorney Ge neral suspects that Dr. Man n did that was false or fraudulent in obtainingfunds from the Com monw ealth is simply not stated. W hen the Court asked Mr. Russellwhere it was stated in his brief the "nature of the conduct" of Dr. Mann that was aviolation of the statute, Mr. Russell referred the C ourt to the first 15 pages of his Brief inOpposition to Petition. The C ourt has read with care those pages and understands thecontroversy regarding Dr Mann's work on the issue of global warming. However, it isnot clear what he did that w as misleading, false or fraudulent in obtaining funds from theCom monwealth of Virginia.3.15 UNIVERSITY OF VIRGINIA A PERSON UNDER STA TUTE?

The U niversity of Virginia claims it is not subject to the statute as a "p erson" towhom a civil investigative demand for m aterials may issue. It argues that the definitionsection of the statute om itted "State or political subdivision of a State" as a person u nderthe statute. It says the University is an extension of the C omm onwealth and is not bou ndby statues of general application "unless named expressly or included by necessaryimplication." Commonwealth ex rel. Pross v. Board of Sup i rs of S potsylv ania, 225 Va.492, 494 (1983).The Attorney G eneral responds that the law states the Board of Visitors of theUniversity of Virginia is a "corporation." Section 23-69 of the C ode of Virginia states:

"The board of visitors of the University of Virginia shall be and remain a corporation,under the style of 'the Rector and V isitors of the University of Virginia,' and shall have,in addition to its other powers, all the corporate powers given to corporations by theprovisions of Title 13.I...."

The U niversity is a public institution. The University is controlled through apublic corporation created for the purp ose, and is a pu blic institution governed andcontrolled by the State. Phillips v. R ector and V isitors of the Univ ersity of V irginia, 97Va, 472 (189 9). See also U.S. v. Bly, 510 F.3d 453 (4th Cir. 2007 )The C ourt finds that the University of Virginia is a corporation in the

Com monw ealth and is a "person" under the definitional section of the statute. Therefore,it is a proper subject of a civil investigative demand.4.00 CIDs INFRINGE ACADEMIC FREEDOM?

The Un iversity of Virginia argues the A ttorney General cannot evaluate thatacademic freedom unless (1) the interests of the government are strong and (2) the extentof intrusion carefully limited. Dow Chem . Co v. Allen, 612 F. 2d 1262, 1275 (7th Cir,


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1982). It says that four of the five grants listed in the CID s are federal grants, which werenot money p aid by the Com monw ealth of Virginia to Dr. Mann . It further says that thefifth grant listed was an internal grant awarde d to Dr. M ann in 2001. Since the V irginiaFraud A gainst Taxpayers Ac t did not become effective until January 1, 2003, the fifthgrant in the sum of $214,700 is not subject to the Act.

If the Attorney G eneral and the University agree that the first four listed grants arefederal grants, this Court sup ports the position of the University that the Attorney Generalshould not be able to investigate these grants for the add itional reason noted hereafter.The Un iversity in its Brief in Support of Petition at page 7 states: "The Comm onwealthadmits that the CDs relate to those grants listed on Dr. M ann's CV that contain anyreference to the University. See Answer paragraphs 3 and 13. But D r. Mann's CV itselfshows that the first four grants identified in the CIDs were awarded by federal, notCom monw ealth, funds." The CID s do not state on their face whether or not the first fourgrants are federal or state funds.As to the fifth grant of $214,700, the Attorney Ge neral noted in his brief at page15, "if the grant and payment documen ts requested showed no claims for payment madeon the University and no paymen ts made by the University related to the grants afterJanuary 1, 2003, that might obviate the need for the remainder of the investigation." TheCourt is of the opinion that if the fifth grant was Comm onwealth of Virginia funds, andany funds were pa id on the grant after January 1, 2003, the Attorney General has the rightto investigate if he meets the other requirements of the statute.

5. WHAT ARE FUNDS OF THE COMM ONWEALTH OF VIRGINIA?The Attorney General argued on Aug ust 20, 2010 that funds paid to Dr. Mann bya federal grant and placed into a Un iversity of Virginia bank accoun t became funds of theCom monw ealth. This Court disagrees. The Attorney General can only investigate fundspaid by the Comm onwealth for a grant to Dr. Mann .

6. WHAT IS THE SCOPE OF THE INQUIRY BY THE ATTORNEY GENERAL?In the Civil Investigative Demand s, the Attorney General asked for production ofmaterials described in the Attachment. In the A ttachment Instructions it is stated "each

paragraph of this Civil Investigative Demand (CIE)) relates to the period from January 1,1999 through the present date." If the CID s were allowed to go forward, this requestwould be limited to correspondence, emails, messages, etc. to or from D r. Mann thatrelate to any information, materials or documents contained in the application for the2001 U.Va internal grant and any information, materials, or documents provided by or toDr. Ma nn that relates to approval or paymen t of any funds to him at any time under thegrant until it ended.


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As to the fifth grant, the 2001 U.Va internal grant, the law is clear that FAT A didnot becom e effective until January 1, 2003. It is settled law the statute applies onlyprospectively as the General Assem bly did not say expressly that it applied retroactively.Therefore, any investigation has to be into acts of Dr. M ann to obtain state money afterJanuary 1, 2003. Howev er, information may be sought as noted above prior to January I,2003 as reasonable discovery to evaluate any conduct after January 1, 2003.

CONCLUSIONFor the reasons stated above, this Court rules that the two C IDs in question so notshow a "reason to believe" that the University of Virginia is in possession of m aterialsrelevant to a false claims law investigation and hav e not stated the "nature of theconduct" with sufficiency to satisfy the requirement of the statute. However, theUniversity of Virginia is a proper subject for a CID and the A ttorney General mayinvestigate grants made with Com monw ealth of Virginia funds to professors such as Dr.Man n. As noted by the Attorney Gen eral in argument to the Court, the University ofVirginia is a State institution and Professor M ann was a state employee allegedlyobtaining state funds to conduct his research.Accordingly, the Court sets aside the C IDs in their entirety without prejudice tothe Com monw ealth to proceed according to law. Mr. Rosenberg is directed to prepare anorder consistent with this opinion, circulate it to Mr. Russell for endorsement, and presen tit to the Court for entry.

Paul M. Peatross, Jr.Judge Designate

2010-08-30 opinion granting uva petition

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