VALUEZTV PM EDITION
Lawyers for Centene Corp., an embattled prison healthcare company, suspect that rapper and businessman Jay-Z is using Delaware's business court to push for reforms at Mississippi prisons.
In arguments in Delaware Chancery Court Thursday, the attorneys said there is reason to believe that Shawn "Jay-Z" Carter is the silent financier behind a lawsuit to force their client to hand over internal documents about the provision of care in Mississippi prisons.
Last month, an outside doctor inspecting the Mississippi State Penitentiary called living conditions there “sub-human and deplorable in a civilized society."
Centene's lawyers said Laura Wood, a company shareholder and a plaintiff in the case, is really a "strawman" in a legal maneuver orchestrated by Jay-Z and his entertainment company, Roc Nation, to publicize the healthcare provider's Mississippi operations.
They said that would amount to an improper use of Delaware's business law,
which allows shareholders to inspect the "books and records" of a company if they believe it is acting outside of their financial interests.
In response, Wood's attorneys said there is no evidence that she has been "manipulated."
Wood simply is a shareholder who is concerned for the health of prisoners and her own investment, Wilmington attorney Mike Kelly said.
Following arguments Thursday, Delaware judge Vice Chancellor Paul Fioravanti said Centene's legal quest to prove its theory was not a "fishing expedition," but ruled that its lawyers from the firm, Skadden Arps Slate Meagher & Flom, could not subpoena Jay-Z's entertainment company, Roc Nation, nor its attorneys.
A spokesman for Roc Nation did not immediately respond to a request to comment.
Fioravanti will allow Centene's attorneys to seek documents from Wood herself,
which they believe could show communications and coordination with Roc Nation.
"The defendant is going to be permitted to inquire into the plaintiffs stated purpose," Fioravanti said."
The case, which could turn Delaware's normally dry business court into a forum for social justice during an upcoming September trial, is one of several legal offenses that seeks to draw attention to what critics call the "barbaric" state of prisons in the Gulf Coast state.
Jay-Z and Roc Nation has been among the chief critics. In January, he and fellow rapper Yo Gotti filed a class-action civil rights lawsuit against Mississippi on behalf of the prisoners.
A month later, they filed a second suit with corresponding press release claiming inmates at the Mississippi State Penitentiary at Parchman had "been forced to live in deadly environments."
"So bad is the medical care at Parchman that inmates have resorted to lighting fires in conditions of total confinement, where escape from smoke and flames is impossible, simply to draw attention to emergent medical issues occurring in the housing units," the press release from Roc Nation stated.
Centene, a $39 billion Missouri-based healthcare conglomerate, controls a subsidiary that contracts with prisons in Mississippi and at least a dozen other states, including Delaware, to provide medical care.
Wood sued the company in May to force it to hand over scores of internal documents, and claimed Centene-subsidiary Centurion "has a long history of failing to provide proper health care to the prison populations."
Wood says those failures have hurt company shareholders as Centurion has been forced to "defend numerous lawsuits—many of which appear to have been resolved through financial settlements."
Cases of shareholders suing on claims that companies acted as poor fiduciaries of their investments are common in Delaware, as it is the legal home to more than a million companies.
Fioravanti noted that Wood's Delaware case is not typical. It has attracted considerable national attention, from publications ranging from Bloomberg to TMZ, in part, because an attorney with Roc Nation's Mississippi class action also is working on Wood's lawsuit.
Fioravanti said he may limit the amount of documents Wood can inspect, if evidence emerges showing she has an ulterior motive.
"Even if the plaintiff is able to establish a proper purpose, (the law) allows this court in its discretion to provide any limitation or conditions with reference to the inspection," Fioravanti said.
Contact Karl Baker at email@example.com or (302) 324-2329. Follow him on Twitter @kbaker6.