Reproduced below is a letter from the Policyholders' counsel to Governor Lynch's lawyer with details of the State's misconduct:
March 18, 2011
Jeffrey A. Myers, Esquire
Legal Counsel
Office of the Governor
State House
107 North Main Street
Concord, NH 03301
RE: Georgia Tuttle, M.D., et al. v. NHMMJUA, et al.
Dear Jeff:
As you know, this firm represents the putative class of policyholders of the JUA in various legal actions involving the JUA, its Board of Directors, and some public officials. For the past 10 months we have been trying to obtain from the State—including the Governor’s office—information required for production under RSA 91-A and Part I, Art. 8, of the New Hampshire Constitution. The State has failed to fulfill its obligations in multiple ways even after the entry of various Superior Court orders. Against this factual context, we read with some interest your recent comments that Governor Lynch believes he has “always approached the JUA matter in an open and transparent way” and that any suggestions to the contrary are “irresponsible and absurd.”
These comments suggest that you and the Governor are unfamiliar with the following facts:
Withholding and Concealment of Documents
• Right to Know Requests dating back to May 5, 2010 remain outstanding;
• The State continues to withhold thousands of documents from production;
• The State claims that certain materials are protected from disclosure under privileges not recognized in New Hampshire (i.e., executive privilege, deliberative process privilege and legislative privilege);
• On October 21, 2010, Petitioners filed a Right to Know lawsuit because of the State’s failure to comply with its obligations;
• On November 30, 2010, the Court ordered the State to produce all responsive materials and a particularized privilege log by dates selected by the State. The State failed to meet their self-selected deadlines or meet the requirements for a privilege log. (Copy of Order attached as Exhibit A);
• On February 4, 2011, the Court again ordered the State to produce a detailed privilege log consistent with the obligations of New Hampshire law and its prior Order. (Copy of Order attached as Exhibit B);
• On February 14, 2011, the State sought leave to continue to conceal information concerning the Governor claiming that the information ordered produced “could be used by Petitioners to try to piece together actions that the Governor’s Office took at certain times.” (Copy of Motion to Clarify attached as Exhibit C);
• On March 1, 2011, the Court rejected the request to conceal this information and again ordered the State to comply with its obligations under RSA 91-A. (Copy of Order attached as Exhibit D);
Suppression of JUA Opposition to Proposed Transfer
• On December 9, 2008, during the JUA Board discussed the proposed transfer of surplus funds to the general fund. The minutes state: “The Department was of the opinion that a distribution would not be in conflict with Regulation 1700—the regulations governing JUA operations—while Mr. Solitro opined that the regulation as well as the terms of JUA insurance policies limited assessments and distributions to JUA insureds exclusively. Provider and Industry representation on the Board expressed opposition to distribution to anyone not otherwise entitled to such by the terms of Regulation or Policy requirements. The Board was unanimous in its opinion that an opinion from JUA counsel would likely be necessary to clarify the issue of eligibility to receive any portion of the JUA surplus deemed to be excess.” (Copy of minutes are attached as Exhibit E);
• On February 10, 2009, Dr. Bagan was summoned to a meeting with Governor Lynch and Michael Delaney. This meeting was two days before the Governor’s budget address at which he suggested the transfer of JUA surplus funds to fill the then existing budget gap. During his deposition on January 13, 2011, Dr. Bagan was instructed by the State, and the outside counsel it retained, not to testify about this meeting with the Governor under a claim of executive privilege. Dr. Bagan was also instructed not to testify about two other meetings with the Governor. (Copy of Dr. Bagan’s Deposition Transcript is attached as Exhibit F, pp. 23-35 );
• Despite the instruction not to answer, it appears that the Governor and Michael Delaney were informed by Dr. Bagan that the JUA Board had retained its own counsel—Michael Aylward of Morrison Mahoney—to review the legality of the proposed transfer. (Copy of February 13, 2011, Delaney e-mail attached as Exhibit G); See Exhibit F, Bagan Depo. at pp. 92:17 – 93:1. When asked if Dr. Bagan told the Governor about his opposition to the transfer, Dr. Bagan was instructed not to answer. See Exhibit F, Bagan Depo. at pp. 32-33;
• Dr. Bagan testified that the JUA’s independent counsel prepared an opinion shared with the State that was in conflict with Attorney General’s opinion concerning the legality of the proposed transfer (the “Conflicting Opinion”). The State waived the attorney/client privilege to selectively disclose the Attorney General’s opinion but concealed the existence of the Conflicting Opinion. At no time has the State informed the Legislature, the Courts or the policyholders about the Conflicting Opinion or the JUA’s opposition to the proposed transfer. See Exhibit F, Bagan Depo. at pp. 92:22 – 93:18, 97:18 – 98:1;
• Soon after receiving the Conflicting Opinion from the JUA’s own counsel, the State instructed the JUA to terminate this lawyer and accept representation by the Attorney General. See Exhibit F, Bagan Depo. at 98:6 – 16. At no time were the Legislature, the Courts, or the policyholders informed of this instruction to fire the JUA’s independent counsel;
• The Conflicting Opinion was not produced in any of the petitioners’ actions despite the fact that the JUA has asserted the advice of counsel as a defense. As troubling, the Conflicting Opinion was not disclosed on any of the privilege logs prepared by the State until petitioners had uncovered the omission of this highly relevant and material information;
The State’s Knowing Actions In Violation of the Conflict of Interest Rules
• On May 29, 2009, we wrote to the Dr. Bagan demanding action to protect policyholder rights. Among other things, that letter stated “we would respectfully suggest that the Board has an obligation to decline the services of the Attorney General with regard to this matter. With due respect to the many talented attorneys who serve this State in that office, the Attorney General has a material professional conflict of interest in providing counsel to the Board concerning its independent contractual and fiduciary obligations given its Opinion to the Governor and Insurance Commissioner on the propriety of taking these surplus funds.” (Copy of letter is attached as Exhibit H). The State failed to acknowledge that at the time of this letter, the JUA Board had already expressed its opposition to the Governor and Michael Delaney, the JUA had already obtained the Conflicting Opinion, and had thereafter been instructed to fire its counsel;
• On June 2, 2009, Roger Sevigny responded to the May 29 letter ostensibly at the request of Dr. Bagan although Dr. Bagan denies that he authorized Mr. Sevigny to do so. See Exhibit F, Bagan Depo. at 231. In this unauthorized response, Mr. Sevigny stated that the JUA was represented by the Attorney General. Mr. Sevigny also failed to disclose that the JUA had retained its own firm, that the firm had prepared the Conflicting Opinion and that the JUA had been instructed to fire that firm;
• On June 2, 2009, we wrote to Glenn Perlow (with copies to Kelly Ayotte, Richard Head, Anne Edwards and Michael Brown) stating “respectfully, we do not believe the rules permit single counsel to represent the Insurance Commissioner or the executive generally on the issue of the propriety of a proposed legislative taking from the JUA/JUA policyholders and concurrently attempt to represent the JUA or individual board members concerning their present contractual, fiduciary and regulatory duties to JUA policyholders. The proposed engagement involve direct adversity and require that counsel materially limit advice and loyalty to one client at the expense of the other. The rules plainly prohibit such professional conduct and apply equally to the Attorney General.” Unbeknownst to the Policyholders at the time of this letter, Dr. Bagan had already informed the Governor of his opposition to the proposed taking and of the JUA’s retention of its own lawyer. (Copy of Letter attached as Exhibit I);
• On June 3, 2009, we wrote to Assistant Attorney General Glenn Perlow (with copies to Kelly Ayotte, Richard Head, Anne Edwards and Michael Brown) once again raising the issue of an irreconcilable conflict of interest under Rule 1.7 of the Professional Rules of Conduct in representing the JUA. (Copy of Letter attached as Exhibit J);
• On June 8, 2009, The State responded to the above saying “The Office of the Attorney General declines your request that we disqualify ourselves from representing the parties against whom you threatened legal action in your May 29, 2009.” The State did not disclose that the JUA board had retained its own counsel who had generated the Conflicting Opinion, and that the State had instructed that the JUA fire this attorney. (Copy of Letter attached as Exhibit K);
• On June 18, 2009, the Policyholders moved to disqualify the Attorney General from simultaneously representing the State (proposed taker of the JUA funds) and the JUA (from whom the funds would be taken);
• On June 23, 2009, during oral argument on the Motion to Disqualify, the State made material misstatements to the Court in response to the Court’s direct inquiry about the JUA’s separately retained counsel:
“THE COURT: The board is aware of the suit and all?
MS. EDWARDS: Yes.
THE COURT: I guess if they want to take an independent position, they have counsel in other matters.
MS. EDWARDS: Well, Your Honor, the counsel that they have in other matters is not counsel that provides legal advice to them on how they function. It’s their claims dispute counsel. They hire that counsel as part of their role through the Department of Insurance to deal with claims that are made against the JUA fund.
So it is not like a private law firm that they have on retainer to answer questions for them. The questions with respect to their functioning and their law and their rules are requests that come to the Attorney General’s Office to be answered.
THE COURT: Okay.”
(Transcript attached as Exhibit L);
• On June 25, 2009, notwithstanding the State’s misrepresentation, the Court disqualified the Attorney General from representing the JUA. (Order attached as Exhibit M.) As part of the Order, the Court made specific findings of fact. Copies of the adopted findings are attached as Exhibit N. Contrary to repeated representations by the State to the contrary, neither this order nor the Findings of Fact were among the specific matters appealed to the Supreme Court (Copy of the notice of appeal is attached as Exhibit O);
• On April 28, 2010, the State once again purported to resume concurrent representation of both Commissioner Sevigny and the JUA Board in direct contravention of the unappealed June 25, 2009, Order and incorporated findings of fact. (Copy of Letter attached as Exhibit P);
State’s Improper Instructions and “Threats” to the JUA
• As referenced above, the State improperly instructed the JUA Board to terminate Morrison Mahoney after providing the Conflicting Opinion over the Governor’s recommendation;
• On September 1, 2009, the Insurance Commissioner again improperly prevented the JUA Board from retaining Devine Millimet and Deloitte & Touche to advise it concerning its obligations to policyholders. (Copy of Letter attached as Exhibit Q);
• On February 23, 2010, the Commissioner Sevigny wrote a letter to Dr. Bagan and other JUA Board members indicating that indemnification could be jeopardized if the JUA Board did not suspend certain actions in compliance with obligations to policyholders. (Copy of Letter attached as Exhibit R); Dr. Bagan has testified that he considered this to be a “an implied threat.” See Exhibit F, Bagan Depo. at 204.
This history may be described in many ways but “open and transparent” is not among them. Ironically, only a few weeks before you offered that description in your public remarks the Attorney General had expressly opposed the production sought from your office stating to the Court that if such disclosure were to occur it would permit the public to “piece together actions taken by the Governor’s office at various times.” Exhibit C. These actions describe deliberate choices to block public disclosure of the Governor’s actions, not transparency. The Governor, through attorneys acting in his name, is exhausting all efforts to prevent disclosure to the citizens of New Hampshire of the true facts—their constitutional and statutory entitlement-- as to how the rights of policyholders were, and continue to be, violated through a systematic abuse of power by public officials. Your deflection of these serious allegations as “absurd and irresponsible” deserves to be, and in time will be, compared to the detail of what has actually occurred when the authentic openness and transparency guaranteed by New Hampshire law is secured.
In providing this detailed information, we allow for the possibility that Governor Lynch and you are unaware of the full extent of the State’s activities. We believe a reasonable review of these details compels the conclusion that the State should correct its course and comply with its disclosure obligations. If the Governor is as committed to transparency as you say, he will be equally troubled by the actions taken in the name of the State and immediately release the requested information. What he does, not what he says, will reveal the Governor’s true commitment to the public’s right to know. As the proverb goes, the sermons are best lived, not preached.
If you require further information on these issues, please let me know.
Very truly yours,
W. Scott O’Connell
Attachments
cc: Kevin M. Fitzgerald, Esquire
Gordon J. MacDonald, Esquire
