Paul L. Caron

Thursday, July 17, 2008

VSP Hires Ken Starr to Prepare Supreme Court Appeal of Revocation of its Tax Exemption

VSP Vision Care has hired former U.S. Solicitor General (and current Pepperdine Dean) Ken Starr to represent the eye care insurance provider in its appeal to the U.S. Supreme Court on the revocation of its tax-exempt status.

Darryll K. Jones (Stetson) of our sister Nonprofit Law Prof Blog notes:

Naturally, counsel for VSP overstates the importance of the case and, indeed, his client's legal position. According to one provocative online op-ed, VSP might have been the poster child for what's wrong with granting tax exempt status to health organizations exclusively engaged, or practically so, in fee for service health care. On the other hand, the VSP website states that the organization's community involvement is extensive, including "a national program that provides free eyecare services to low-income and uninsured children, to a paid volunteer program that enables our employees to support worthy causes." The organization claims that it has provided 410,000 low income children free eyecare since 1997. Counsel for VSP may very well have a point, then, in arguing that the case should not have been decided at the summary judgement stage. If their website can be believed, there seems to be as much community benefit derived from VSP as any other nonprofit, tax exempt health care organization. Of course, those mammoth salaries and bonuses -- and apparently unprepared depositions -- referred to in the online op-ed didn't help their case. It may very well be the case that the case was lost because the organization just didn't make a good record during the pretrial stage.

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