Jepsen v. Assured Rx, LLC

George Jepsen, Attorney General of the State of Connecticut v. Assured Rx, LLC et al

No. HHDCV166068755

Superior Court of Connecticut, Judicial District of Hartford, Hartford

January 10, 2017

UNPUBLISHED OPINION

MEMORANDUM OF DECISION RE RESPONDENTS' MOTION TO DISMISS #107

Kevin G. Dubay, J.

Presently before the court is a motion jointly filed by the respondents, Assured Rx, LLC and Boots Rx, Inc., that seeks to dismiss an application for an order of compliance with investigative subpoenas issued by the petitioner, George Jepsen, Attorney General of the state of Connecticut (Attorney General), pursuant to General Statutes § § 1-3b and 4-61dd(d). The respondents claim that the court lacks both subject matter and personal jurisdiction to grant the Attorney General's application. For the reasons set forth herein, the court denies the respondents' motion.

In furtherance of his authority to investigate potential violations of the False Claims Act (FCA), General Statutes § 4-274 et seq., the Attorney General pursuant to § § 4-61dd(d)^[1] and 4-276, ^[2] served the subpoenas duces tecum on the respondents during his investigation of the marketing of compound drugs to members of the state's employee benefit plans. As noted by the Attorney General, the investigation particularly concerns whether false claims were submitted to the state of Connecticut employee benefit plans. Although the respondents provided some responsive material the Attorney General claims that they have not fully complied with the subject subpoenas, thus prompting him to commence this proceeding; in his application for an order of compliance, the Attorney General cites § 1-3b^[3] as the authority for this court to enforce the subject subpoenas. Significantly, the parties do not dispute that the respondents are corporate entities that are registered or incorporated in the state of Florida.^[4]

In opposing this court's enforcement of the subject subpoenas, the respondents first contend that this court lacks subject matter jurisdiction to enforce the Attorney General's investigative subpoenas because § 4-61dd(d) does not authorize the Attorney General to issue investigative subpoenas to out of state companies regarding information that is not located in the state of Connecticut. In other words, the legislature did not expressly provide the Attorney General with the authority to issue extraterritorial investigative subpoenas regarding violations of the FCA. According to the respondents, because the Attorney General is not authorized to issue such extraterritorial subpoenas, the petitioner's enforcement action in this context does not fall within the parameters of § 1-3b and, therefore, the court lacks subject matter jurisdiction to enforce the subpoenas. Alternatively, the respondents claim that this court lacks personal jurisdiction over them because a court's subpoena power ends at the state's borders. More specifically, the respondents contend that the Attorney General cannot rely on the relevant longarm statutes, General Statutes § § 33-929 and 52-59b, to establish personal jurisdiction for the enforcement of the subject subpoenas. According to the respondents, those statutes only apply to a " cause of action arising out of" business conducted in this state, and this " enforcement application is not a 'cause of action arising out of' any conduct enumerated in the longarm statutes." Finally, the respondents contend that the materials sought by the investigative subpoenas exceed the scope of the Attorney General's investigative authority.

Contrary to the respondents' position, the Attorney General asserts that the state of Connecticut has sufficient " specific jurisdiction" over the respondents due to their business contacts with this state. Although not directly responsive to the respondents' arguments targeted at this court's subject matter jurisdiction, the Attorney General essentially argues that § 1-3b affords this court with jurisdiction to enforce the subject investigative subpoenas because the respondents' actions " clearly come within the purview of Connecticut's long-arm statutes." ^[5] Additionally, the Attorney General asserts that the respondents' claims regarding the " scope" of the subpoenas are impermissibly presented in a motion to dismiss. According to the Attorney General, the respondents argue that the investigative subpoenas at issue here exceed the Attorney General's authority, which is an argument impermissibly presented by a motion to dismiss. This latter argument also relates to the respondents' challenge to this court's subject matter jurisdiction. The court will address each issue in turn, and additional facts will be included as necessary.

DISCUSSION

The standard governing this court's review of the present motion to dismiss is well settled. " [A] motion to dismiss . . . properly attacks the jurisdiction of the court essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 350, 63 A.3d 940 (2013). " A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) MacDermid, Inc. v. Leonetti, 310 Conn 616, 626, 79 A.3d 60 (2013). " A court deciding a motion to dismiss must determine not the merits of the claim or even its legal sufficiency, but rather, whether the claim is one that the court has jurisdiction to hear and decide Where . . . the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue and need not conclusively presume the validity of the allegations of the complaint." (Citation omitted internal quotation marks omitted.) Hinde v. Specialized Education of Connecticut, Inc., 147 Conn.App. 730, 740-41, 84 A.3d 895 (2014); see also Practice Book § § 10-30(a) and (c).

I Subject Matter Jurisdiction

" [J]urisdiction of the subject matter is the power [of the court] to hear and determine cases of the general class to which the proceedings in question belong . . . A court has subject matter jurisdiction if it has authority to adjudicate a particular type of legal controversy." (Internal quotation marks omitted.) Lostritto v. Community Action Agency of New Haven, Inc., 269 Conn. 10, 31, 848 A.2d 418 (2004); accord Gurliacci v. Mayer, 218 Conn 531, 542, 590 A.2d 914 (1991). Indeed, " [a] court does not truly lack subject matter jurisdiction if it has competence to entertain the action before it . . . Once it is determined that a tribunal has authority or competence to decide the class of cases to which the action belongs, the issue of subject matter jurisdiction is resolved in favor of entertaining the action . . . It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Citations omitted; internal quotation marks omitted.) Amodio v. Amodio, 247 Conn. 724, 728, 724 A.2d 1084 (1999). Moreover, as previously noted, a motion to dismiss is not to be used to determine the merits of a particular claim. See, e.g., Hinde v. Specialized Education of Connecticut, Inc., supra, 147 Conn.App. 740.

This court's subject matter jurisdiction, as argued by the respondents, is called into question because the legislature did not expressly authorize the Attorney General to issue extraterritorial investigative subpoenas in the FCA context. Such argument misconstrues the nature of the court's subject matter jurisdiction and is also misplaced. The relevant inquiry is whether the court has the authority " to adjudicate the type of controversy presented by the action before it . . . [Indeed, ] [a] court does not truly lack subject matter jurisdiction if it has the competence to entertain the action before it." (Emphasis added.) Amodio v. Amodio, supra, 247 Conn. 727-28; see also Gurliacci v. Mayer, supra, 218 Conn. 542 (" Subject matter jurisdiction is the power of the court to hear and determine cases of the general class to which the proceedings in question belong"). The court, by operation of § 1-3b, has the competence to adjudicate the type of controversy presented by the action before it. Moreover, although framed as an issue of subject matter jurisdiction, whether the Attorney General is " authorized" to issue the subject subpoenas; see General Statutes § 1-3b; goes to the merits of the present application for an order of compliance. See, e.g., Hinde v. Specialized Education of Connecticut, Inc., supra, 147 Conn.App. 740; see also In re Jose B., 303 Conn. 569, 573-74, 34 A.3d 975 (2012) (noting distinction between court's subject matter jurisdiction and authority to act); Cantoni v. Xerox Corp., 251 Conn. 153, 162, 740 A.2d 796 (1999) (attack on propriety of exercising statutory authority implicates authority to act, not subject matter jurisdiction). In other words, it hinges on whether the Attorney General has exceeded the scope of his authority under § 4-61dd(d). Thus, the respondents' argument is misplaced in this procedural setting.

Additionally the court is unpersuaded by the authority cited by the respondents from the Superior Court and foreign jurisdictions. The respondents' reliance on State v. Anthem Health Plans, Inc., Superior Court, judicial district of Hartford, Docket No. CV-05-4034076 (April 20, 2010, Graham, J.) [49 Conn.L.Rptr. 665, ], is misplaced because the court did not conclude that it lacked subject matter jurisdiction to enforce a subpoena; rather, Judge Graham concluded that the Attorney General was not entitled to information outside of Connecticut dealing with matters...