SAN FRANCISCO (CN) California court officials pushing a controversial IT project heralded a medical billionaire’s promise to put $20 million into a project that has already cost more than $400 million.”We have an additional alternative available to us that I think is literally a game-changer,” said Justice Terence Bruiniers, who unveiled the surprise funding at a meeting of the Judicial Council on Thursday.
The benefactor made his fortune by selling an expensive drug to women with breast cancer. He is is now developing a a system to share medical information, a project that has similarities to the court IT project which would also share valuable legal information.
Medical mogul Dr. Patrick Soon-Shiong, a South African of Chinese descent, would host the information and the court network through his own data center, thus putting himself in a position to control the information and potentially profit from it.
A number of court systems have entered into damaging financial arrangements with big legal publishers that sought a similar control of electronic court records. English conglomerate Reed-Elsevier controlled the entire state of Colorado’s court information for years by controlling the data center, the communication lines and the technical expertise involved in the project. The publisher considered Colorado a “cash cow,” according to Colorado court officials.
Through its Lexis-Nexis division, the same company was on the brink of taking control of San Francisco’s court electronic records last year, before the court leadership reconsidered a deal that appeared to have already been struck.
The common barter of such deals is that the court receives a ready-made electronic records system and the publisher takes all or most of the millions generated from sale of the records. They work as state-granted monopolies over public information to the exclusion of all other publishers and news organization, and serve, in the words of a Colorado lawyer, as “the troll at the courthouse door.”
Soon-Shiong made the offer of a grant from the Chan Soon-Shiong Family Foundation after a meeting arranged by former Sen. Joe Dunn, executive director of the lawyers organization for California, the State Bar.
This is not the first time Dunn has stepped in to help the embattled court bureaucracy.
Several years ago during a period of animosity between former AOC Director Bill Vickrey and the legislature over the budget, Dunn was called in to repair the relationship. At Thursday’s meeting, Dunn said the State Bar would also be willing to make a financial contribution to CCMS.
Judge Rosenberg of Yolo County, who called Soon-Shiong a “white knight,” said the offer had been in the works for “well over a year.”
The Judicial Council is expected to vote tomorrow on whether to consider the offer.
In addition to the money, Soon-Shiong has also offered the AOC use of his data center, his fiber optic network to connect to that data center and the technical expertise of his staff. Judge James Herman of Santa Barbara said he was present at a meeting with Soon-Shiong, who apparently said his healthcare grid was similar to CCMS, which was what attracted him to the project.
“What he has expressed in the meetings that I participated in is his interest in ensuring that for public safety and public welfare reasons that we have the ability within the judicial branch to share material information that is critical to our decision-making,” Bruiniers added.
If the council agrees to the deal, it must spend 90 days forming a budget plan, and the funds will eventually be used to install newer versions of CCMS in Ventura, San Luis Obispo and Fresno.
Gesturing enthusiastically, Marin County court clerk Kim Turner sought to attract attention from the council leader, Supreme Court Chief Justice Tani Cantil-Sakauye, for permission to speak. “I am so excited about the opportunity that this presents,” gushed Turner. “I’m sure that they would be an excellent, excellent partner for our venture.”
Soon-Shiong is a pharmaceutical magnate who developed the breast cancer drug Abraxane, criticized in a New York Times article for its high cost. While he is now being called a “white knight” and “an angel” by several council members, news articles have described him as “ruthless” and a “headline-grabber.”
In 1998 he was sued for alleged fraud by his brother and original business partner, after both were sued by former partner Mylan Laboratories. Soon-Shiong ended up paying his brother and Mylan $32 million.
A Forbes article on “The Richest People in America” notes, “As a scientist he has been criticized for hyping his research results; as a drug-maker he has been accused of ripping off investors.”
A letter of intent on Soon-Shiong’s offer, which would outline the deal through its description of the conditions on the gift, was distributed to council members, but not to media.
The lone skeptic in the room, Judge Burt Pines of Los Angeles said he thought the council should look into the opportunity, but did not see the grant as the lifeline many others did.
“In my mind the bigger question in the end is whether we can afford this,” he said. “I grant you that it may solve a lot of problems and meet a lot of needs. But according to the estimates originally provided by the AOC, this is a $1.9 billion dollar project. We spent 500 million so far, whatever it is. There’s at least a billion left. I’ve got a real question whether in the end this is affordable.”