Daily Dicta: Why Is Quinn Emanuel's Alex Spiro Bringing a Books and Records Suit? Hint: Jay-Z
"Forty inmates dying in the last few months at Parchman alone is neither outstanding nor innovative," Spiro said "And it's definitely nothing to be proud of."
May 28, 2020 at 02:28 AM
5 minute read
"A stockholder concerned about the conduct of a company overseeing a human rights crisis has two options: sell its shares or demand answers."
That's how Quinn Emanuel Urquhart & Sullivan partner Alex Spiro kicked off a books and records suit against Centene Corp. filed Wednesday in Delaware Chancery Court.
Such suits—where a shareholder under Section 220 of the Delaware General Corporation Law can demand to inspect a corporation's "books and records"—rarely make news. But this one has a twist.
The complaint focuses on Centene subsidiary Centurion, which contracts to provide health care to prisons across the county—including the Mississippi State Penitentiary at Parchman. And indeed, much of the complaint criticizes conditions there, alleging that "Parchman is experiencing an entire breakdown in its healthcare system."
Why the emphasis on Parchman?
Perhaps because Spiro on behalf of Parchman inmates is also going after Centurion in a class action pending in the Northern District of Mississippi. That suit is backed by one of Spiro's more notable clients, rapper/ entrepreneur Jay-Z .
Billboard calls Spiro Jay-Z's "go-to trial lawyer." The Quinn Emanuel partner has previously repped the star in a dispute with fashion company Iconix Brand Group and a defamation lawsuit arising from a former Philadelphia police officer's claims that she was defamed in a documentary about hip-hop artist Meek Mill.
The books and records demand was filed on behalf of Laura Wood, who owns 344 shares of Centene common stock (worth about $22,600) and has held Centene shares continuously since 2008.
While such demands have been available for decades, "there has been a recent upswing in their use as stockholders (including activist stockholders) have discovered the usefulness of Section 220 in obtaining materials for future litigation and campaigns," wrote Kirkland & Ellis litigators in a general interest article last year.
I think it's safe to assume that Wood on her own didn't hire Sprio—who has also racked up recent wins for the likes of Elon Musk in the British caver defamation suit and New England Patriots owner Robert Kraft in the Florida prostitution sting.
In Wood's complaint, Spiro and co-counsel Ellyde Thompson and Molly Webster from Quinn Emanuel and Michael P. Kelly, Daniel Silver and Sarah Delia from McCarter & English attack the company for its "long history of failing to provide proper health care" to prison populations. They note that it has been hit with multiple med mal lawsuits, and that the Department of Justice recently announced an investigation at Parchman.
"Despite Centurion's well-documented failings, Centene has taken no steps to develop any oversight over its wholly-owned subsidiaries, even as this apparent and public misconduct continues," Spiro wrote. "Particularly as the COVID-19 crisis continues … Ms. Wood is concerned that the reports of inadequate medical care at Parchman and other facilities operated by Centurion falls grossly short of its contractual duties and jeopardizes the health of everyone at the facility."
That sounds a lot like some of the allegations in the prisoner suit filed by Spiro and co-counsel from The Blackmon Firm that's backed by Team ROC, the philanthropic wing of Jay-Z's Roc Nation, as well as rapper Yo Gotti.
On March 16, the Parchman inmates filed an emergency motion for a temporary restraining order and preliminary injunction, arguing that an "outbreak of coronavirus inside Parchman, where many inmates suffer from respiratory diseases that place them at increased risk, will immediately overwhelm Parchman's broken medical apparatus and wreak havoc on the health and safety of the inmate population."
U.S. District Judge Debra Brown denied the motion, ruling that there was "insufficient evidence to support a finding of deliberate indifference, at least with respect to COVID-19."
As that litigation continues, Wood in Delaware is demanding Centene turn over vast swaths of material—everything from prior settlements or nondisclosure agreements concerning negligence, medical malpractice, inadequate health care, or prison rights violations to the company's "efforts to address the current crisis and lack of adequate medical care at Parchman" to how it is reserving litigation expenses for lawsuits.
A Centene spokeswoman in a statement said, "Centurion and its board of directors are proud of the company's history of providing outstanding and innovative health-care solutions to this vulnerable population. We look forward to sharing more about our role in the delivery of health-care to these individuals during legal proceedings."
Spiro's response? "Forty inmates dying in the last few months at Parchman alone is neither outstanding nor innovative," he said in an email. "And it's definitely nothing to be proud of."
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