April 11, 2016 23:15 ET

WellCare Legal Case -- Federalist Society Covers the Argument of United States v. Clay Issues of Over-Criminalization

WASHINGTON, DC--(Marketwired - April 11, 2016) -  The Federalist Society for Law and Public Policy Studies has presented two back-to-back popular items titled "Courthouse Steps Teleforum Preview: Regulatory Crimes: Clay v. U.S. Oral Argument" and a podcast "Courthouse Steps Teleforum Call: Regulatory Crimes: Clay v. U.S. Oral Argument". In these two pieces, John J. (Jack) Park, Jr., of counsel to the law firm Strickland Brockington Lewis, LLP, first previews the oral argument in U.S. v. Clay in the Eleventh Circuit Court of Appeals and then follows up with a live post-argument analysis of it in a recorded podcast. U.S. v. Clay has gained national attention in the legal community as a prime example of overcriminalization of regulatory disputes where businesses make reasonable efforts to comply with unclear laws and where civil and administrative remedies would be more appropriate than criminal prosecution. A decision in the case is expected shortly.

In the Federalist Society Podcast preview of the argument, Jack Park noted that the case "raises important questions about the nature of regulatory prosecutions," particularly in determining "what conduct constitutes a crime and what mental state is required to prove criminal conduct." The U.S. v. Clay case arises out of a contract dispute between WellCare, a Florida Medicaid provider, and the State of Florida over how much unused Medicaid funds WellCare should have been returned to the State of Florida. The so-called "80/20" law in question provided that WellCare was required to spend 80 percent of the funds on certain behavioral health care services and return amounts under 80% that were not spent. As Park explained, after consulting "WellCare's attorneys, including outside counsel who formerly worked for the Florida regulators," WellCare counted payments made to its affiliate as being within the spending obligation. So did some of WellCare's competitors. As Park further explained, there was an "absence of any clear Florida statute or regulations" to show that WellCare's method of computing the refund was unreasonable. Despite this good faith and reasonable interpretation of the law, WellCare executives were prosecuted, whereas its competitor was only sued in civil court. The central issue on appeal is "whether a crime was even committed," argues Park.

After attending the oral argument in the Eleventh Circuit in Jacksonville, Florida on October 2, 2015, Jack Park analyzed it in a live Federalist Society "Courthouse Steps Teleforum" one-hour podcast. In his observations, Park noted that bulk of the questioning during the rare two-hour oral argument came from Circuit Judge Frank Hull to Seth Waxman, former Solicitor General of the United States and counsel to the former CEO of WellCare. The other judges on the panel were Circuit Judge Gerald Tjoflat and visiting District Court Judge James Hall. Per Park's analysis, Judge Hull's questioning focused on the provisions of the lengthy contract between WellCare and Florida, grilling the government attorney as to what gave WellCare notice that its use of a subsidiary were not allowed. As for the mens rea issue, Judge Hull stated during the argument that even she "was confused about [the] template [expense reporting form]," and suggested that the prosecution's position was weaker for the 2006 period than that for 2005 where the jury acquitted the defendants of any wrongdoing. Finally, Park observed that Judge Hall was particularly concerned about the prosecution's use at trial of the after-the-fact restatement of earnings filed by WellCare with the Securities and Exchange Commission, telling the government attorney that the use of such evidence was "big time prejudicial." Park concluded the podcast stating that the government should inform a regulated company "what's the rules of the road" before criminally prosecuting executives and that there are sufficient civil and administrative remedies to handle these kinds of regulatory disputes.

The Federalist Society's Teleforum Preview of the U.S. v. Clay oral argument was published on September 30, 2015, and the Courthouse Steps post-argument podcast was first aired live from Jacksonville, Florida on October 2, 2015. The Federalist Society is a well-respected national organization based in Washington, D.C. and dedicated to advancing principles of individual liberty, traditional values, and the rule of law. Jack Park previously served as the Deputy Attorney General of Alabama and participated in three Supreme Court victories on behalf of Alabama. Park was also a Visiting Legal Fellow in the Center for Legal and Judicial Studies at the Heritage Foundation in Washington, D.C.

Regulatory Crimes: Clay v. US Oral Argument - The Federalist Society:

To access The Federalist Society Courthouse Steps post-argument Teleforum Podcast, visit:

For more information about the WellCare Criminal Prosecution Case, visit:

Contact Information

  • John J. Park, Jr.
    Strickland Brockington Lewis LLP
    Midtown Proscenium Suite 2200
    1170 Peachtree Street NE
    Atlanta, Georgia 30309-7200