Nevada attorney general urged to fight health bill

The governor turned up the heat Wednesday on the state's attorney general, directing her to take immediate legal action to oppose new federal health insurance reform legislation.

"If there was ever an appropriate time for a governor of this State to request a suit be commenced on behalf of the State of Nevada, this is that time," Gov. Jim Gibbons wrote to Attorney General Catherine Cortez Masto. "There is no question that the recently passed healthcare act eviscerates the interests of the State."

But Masto responded that the time is not ripe.

"If this office institutes litigation against the Federal Government, that lawsuit will have a solid basis in law and will be able to withstand the scrutiny of a federal court," she wrote back to Gibbons. "Anything less would be a disservice to the citizens of Nevada and would be a waste of taxpayer dollars."

The letters reflect a standoff between two high-ranking officers over who sets the legal agenda for Nevada, with Gibbons saying state law allows him to direct the attorney general and Masto saying Nevada's constitution creates her post as a separate constitutional office.

"Like you I have a responsibility to represent the State's interests," she wrote to the governor.

"That really involves a fairly sophisticated state constitutional question," said former U.S. Sen. Richard Bryan, D-Nev., who has served as both attorney general and governor. "I don't think we've ever had this situation occur."

If both sides dug in their positions the dispute could land with the Nevada Supreme Court. Or if Masto believes the legal challenge to the health bill is without merit, she could authorize a special deputy to handle it, Bryan said.

"That would eliminate the impasse," he said.

Gibbons could also choose to back off while states with unified leadership conduct the legal fight, then decide whether Nevada should move forward. That seems unlikely.

"The governor has never surrendered and is not a quitter, so I am certain he would find a way" to proceed with a lawsuit, Gibbons spokesman Dan Burns said.

The tension has been simmering since January when Gibbons first suggested he would direct Masto to act and Masto resisted.

It gained steam Tuesday when President Barack Obama signed the health bill into law and attorneys general from more than a dozen states, led by Florida Attorney General Bill McCollum, filed a lawsuit to stop it. Gibbons wants to join the other states' lawsuit.

Like the fight over health care at the federal level, the Nevada dispute divides Democrats and Republicans.

Gibbons, a Republican, echoes the views of congressional Republicans who universally opposed the bill. In general, they say the federal government is overreaching its power by asserting it can mandate individuals purchase health insurance or face financial penalties.

Republicans also argue by increasing the number of people who are eligible to receive Medicaid benefits the federal government is imposing a huge unfunded mandate on the states.

The cost to state government in Nevada alone due to the federal bill is expected to be about $613 million from 2014-19.

"Any governor who has to put together a balanced budget has to be alarmed," said former Nevada Gov. Robert List, a Republican who, like Bryan, also served as attorney general.

Democrats, led by Sen. Harry Reid, D-Nev., have embraced the health bill as Congress' greatest accomplishment in advancing public health since 1965 when it created Medicare, a program that provides health care for senior citizens.

"It's shameful that Jim Gibbons is pulling out all the stops to block the new health care law that would improve the lives of hundreds of thousands of Nevadans," Reid said Wednesday, adding the new reform law will provide tax breaks for small businesses to provide health insurance and make prescription drugs cheaper for tens of thousands of Nevada seniors.

Republican Brian Sandoval, a former attorney general now campaigning against Gibbons, said if he were in power he would pursue a lawsuit.

"I think the cases absolutely have merit and should be considered and scrutinized by the federal courts," he said.

Masto hasn't yet said she won't file a lawsuit on behalf of Nevada, only that she wants more time to study the issue. She also wants to wait for Congress to approve a pending reconciliation bill that is expected to tweak parts of the health reform that just passed.

Both List and Bryan agreed Masto would be within her rights to decline to file a lawsuit if she felt such a case were frivolous. That's because attorneys are bound to proceed only with cases they believe have legal merit.

"From an ethical standpoint, a lawyer can't argue something he or she believes is contrary to the standing principles of law," List said.

But the legal arguments get murkier when it comes to determining whether or not Gibbons could proceed on his own without Masto's consent.

Although there are provisions in state law to authorize a governor to hire outside counsel when an attorney general can't proceed because of a conflict of interest, it is unclear how those statutes apply when the two officials have a policy disagreement.

Contact reporter Benjamin Spillman at bspillman@ or 702-477-3861.