Are Virginia Counties utilizing an unconstitutional law to fund charitable organizations?

UPDATE: Sen. Chap Petersen (D- Fairfax) has thrown in his opinion on the importance of the AG advisory opinion.  Generally, he is correct about the interpretation, and identifies a reasonable Constitutional solution.   We still will likely disagree regarding the policy of specific charitable purposes that may or may not be funded if the Constitution is amended.  We can all have that debate if the Constitution is amended.

Greg Letiecq over at BVBL.com periodically raises thorny legal issues.  Today he identified a fascinating one that begs for litigation.  As discussed in his post it appears local governments in Virginia may be regularly exercising unconstitutional authority in making appropriations to charitable organizations.

Below is my commentary on Mr. Letiecq’s post:

First, I agree that the power to appropriate directly to charitable institutions from the G.A. is prohibited by Va. Const. Art. IV § 16. 

For localities:  Localities only have those powers granted to them by the General Assembly.  The questions asked by Greg are valid and unanswered by the January AG opinion.  Va. Const. Art. VII § 3 governs the scope of authority that can be granted to localities, and states in part:

“The General Assembly may provide by general law or special act that any county, city, town, or other unit of government may exercise any of its powers or perform any of its functions. . .”

There is a distinct absence of case law analyzing Va. Const. Art. VII § 3, meaning we are left with nothing to analyze but the actual text of Va. Const. Art. VII § 3.  In my opinion, this necessarily excludes the ability to grant to localities powers the G.A. itself does not possess.  In short, Va. Code § 15.2-953 is unconstitutional to the extent the locality is attempting to exercise the authority to give money to a charity that could not qualify for receipt off funds under the narrow factors of  Va. Const. Art. IV § 16.  Even shorter:  Va. Code § 15.2-953 is unconstitutional.

Remember, it is still appropriate for a charity to provide services pursuant to government appropriations as long as the appropriation is to a government agency that subsequently farms out the payments to non-profits and for-profits to provide social services.  A prime recent example in public discussion is the provision of adoption placement services in Virginia by charities.  Nonetheless, direct contributions to charities by Counties, Cities, and Towns appear to be unconstitutional.

Way to blow the lid off this one Greg.

Virginia Attorney General retains Civil Investigative Demand powers

Ignoring the fact that Virginia’s current Attorney General will not always be Virginia’s Attorney General, two Senate Democrats (Sen. Don McEachin and Sen. Chap Petersen) and a Delegate (Del. David Toscano) in a politically motivated manner sought to curb the powers of the Virginia Attorney General to investigate fraud perpetrated on the Commonwealth of Virginia.

Today that attempt was unceremoniously put to rest in the House of Delegates Civil Subcommittee by voice vote.  The Democrats on the Subcommittee did not appear to even force a recorded vote.  Washington post coverage can be found here.

Attorney General Cuccinelli, and future Attorneys General, will retain their Civil Investigative demand powers.

A word to statewide office seekers:  If pushing politically motivated legislation that you know will fail, make a bigger deal about it.  Activists will remember how hard you fought for the things you believe in.

A link to a press conference of the bills’ supporters so you can hear their own words can be found here.

I discussed the flaws of the original proposals here.

Sen. McEachin’s quiet capitulation on his bill is discussed here.

Standard for Virginia preliminary injunctions about to become more confusing

The version of SB851 offered by Se. Chap Petersen (D - Fairfax) that passed the Virginia Senate has high probability of passing the House.  In its current format it will cause more confusion in preliminary injunction matters than the current standard.

In my post dated January 9, 2011 I critiqued the bill as originally proposed, discussed the standard for temporary injunctions without this statute, and identified a potential weakness.  

The Senate amended the bill.  Unfortunately the amendment increases the problems with the bill, while the original problems remain unresolved.  If passed in its current format, it will disrupt and prevent orderly adjudications of preliminary relief in civil cases.

The amended version of the bill gives the expected four factor test, and states that the court should “review” the four factors.  It does not say that relief should only be based on the four factors, or that the four factors should be balanced to determine the equities and grant or deny relief.  Arguably, as written, a Court need only “review” the factors, and then could grant relief based on the judge’s own interpretation of common law rights to and standards for preliminary relief.

Absent from any amendments are clear instructions of how and when to apply preliminary relief.  To make SB851 workable in a courtroom the following additional items need to be added:

McEachin gives up on Civil Investigative Demands

On January 16 I discussed Sen. Don McEachin’s (D - Richmond) blunt overreaction to the perceived problem of an Attorney General being able to investigate fraud in government contracting.  SB1314 would have completely eliminated the investigatory power of the Virginia Attorney General (regardless of the nature of the fraud, or the political party of the Attorney General) prior to the filing of a lawsuit.  

On January 31, 2011 this bill was “incorporated” into Sen. Chap Petersen’s (D - Fairfax) SB831.  SB831 prohibits Civil Investigative Demands [CIDs] in the limited instance in which a CID is issued against an academic institution and the subject matter is “a matter of academic inquiry or research.”  In a cursory manner, I criticized the merits of Sen. Petersen’s narrower bill in an update to the January 16 post.  At Least Sen. Petersen’s bill targets directly the behavior he finds objectionable, the investigation of Climategate through the use of CIDs.

Since SB1314 and SB831 had somewhat common goals it makes some since for one to be the primary bill, and the other to be incorporated.  Since SB831 is now the primary bill and it has passed out of committee we should look at what the combined bill looks like compared to the original.  See the current version here, and the original here.

So what parts of SB1314 were incorporated in SB831?

 ANSWER after the jump:

Sen. McEachin proposes to eliminate powers of the Attorney General

UPDATE:  Narrower proposal offered by Sen. Chap Petersen
UPDATE2: McEachin gives up on Civil Investigative Demands Here

As suggested in the Spring of 2010, Sen. Don McEachin (D - Richmond) has proposed a bill to eliminate the power of the Attorney General of the Commonwealth of Virginia to issue civil investigative demands [CID] in cases of suspected o fraud on the taxpayers. 

SB1314 takes away all court enforceable investigative authority from the AG until after a lawsuit is filed.  It does not water the subpoena process down or impose limitations.  Instead, the bill completely eliminates the process and the nine statutes underlying the process.  Pretrial investigative authority will be limited to that which the AG can gain voluntary compliance. 

At this point, many people know about the AG's attempt to obtain documents through this civil investigative demand from the University of Virginia.  Unfortunately Sen. McEachin's heavy handed attempt to put a check on the current AG's power will have the unintended consequence of leaving Virginia less able to properly exercise its rights under the Virginia Fraud Against Taxpayers Act [FATA]. 

Chap Petersen’s plan to fix the standard for temporary injunctions

Most people understand that the court system can be used to sue people for money.  Often people will show up on my doorstep asking me to ask a court to award something other than money such as declaring someone’s rights or obligations, or forcing somebody to do something or stop doing something. 

These other non-monetary remedies are generally called equitable remedies under Virginia law.  Of these equitable remedies if you want somebody to be forced to do something or stop doing something you need an injunction.  But lawsuits can take about a year in most northern Virginia Circuit Courts, and sometimes longer.  If you need the injunction now, the court can enter a preliminary injunction.  Preliminary injunctions are difficult to obtain, but for the unfamiliar attorney extremely difficult to understand procedurally.

In bill SB851, Sen. Chap Petersen (D-Fairfax) seeks to solve the most pressing question regarding preliminary or temporary injunctions.  Under Virginia law there is no controlling authority on how to define if a party seeking a temporary injunction is entitled to such injunction based on the “equities” under Va. Code § 8.01-628.  There is a standard that has been employed, a four factor test, by approximately 15 Virginia Circuit Court Judges which all rely (ultimately) on Federal District Court decisions for their origination.   This four factor test is respected outside Virginia and is taught to attorneys as black letter law for the bar exam.  Nonetheless, the Virginia Supreme Court has yet to weigh in on this four factor test and clarify “equities” for litigants.  SB851 takes the four part test and places it squarely in the code, so litigants seeking a temporary injunction no longer need to cite to 4 to 8 decisions for a Circuit Court to accept the four part test is the accepted standard.  

Here is where it gets interesting: