The outcome of a recent lawsuit against the University of New Mexico and its medical school probably isn’t sitting well with some medical staff. A settlement over the university’s alleged mishandling of a reported rape cost staff their year-end bonus. That’s according to a department head who broke the news to his faculty, via email, about a month before Christmas last year.

UNM settled a lawsuit filed by former anesthesiology resident Cynthia Herald in November for an undisclosed amount, but it was significant enough to impact her former department. A closer look at why that’s happening reveals that it may be unprecedented for an individual department to bear the brunt of a payout like the one Herald received.

Attorneys for UNM agreed to the settlement late at night last year, hours before the jury was set to hear closing arguments and deliberate on the lawsuit that alleged UNM punished Herald for reporting she was raped. About two weeks later, Dr. Hugh Martin, the UNM Health Sciences Center Anesthesiology Chair, emailed the department’s faculty to break some bad news—blaming Herald, who casually goes by Cyndi, and her lawyer for a lack of bonuses.

“I regret to inform the faculty that due to the recent legal settlement with the former dismissed problem resident, Cyndi Herald, that the Department had to reallocate the monies I had planned to use for a retention bonus to pay the settlement legal costs to Ms. Herald/Attorney Lisa Curtis,” Martin wrote.

UNMHSC spokeswoman Alex Sanchez told NM Political Report the retention bonuses Martin was referring to are part of an “incentive pay” program within the medical school.

“The idea is that it’s not just an automatic thing, it’s based on your performance, so that we’re ensuring New Mexicans are getting the highest quality care that they deserve and expect when they come to a UNM hospital facility,” Sanchez said.

Sanchez also confirmed that Herald’s settlement directly impacted the department, rather than a risk fund or insurance policy most people would think handles settlements.

“I think it’s accurate to say in this situation the department’s finances were used in the proceedings of this case,” Sanchez said.

It’s not uncommon for higher education institutions like UNM and its medical school to be armed with a risk management department to pay out legal settlements.

The school’s policy on how to pay for legal settlements is silent on where the money comes from, but Sanchez said it’s not unheard of for an individual department to cover the costs of settlements.

“Sometimes it does affect a certain budget, sometimes it is kind of an overall risk management type thing or an insurance type thing,” Sanchez said. “It just kind of depends on the situation.”

Retired UNM Counsel Nick Estes said those situations were “very rare” but not completely unheard of during his tenure at the university, where he oversaw the legal office for 18 years before retiring in 2005.

Estes said the only similar situation when UNM split the cost with the state’s risk management department he remembered also involved the medical school.

“It was a personnel thing, it was one of those things where you really wanted to get on with life,” Estes said. “[UNM was] willing to put in a little extra money.”

While the anesthesiology department was on the hook for at least part of Herald’s settlement, it doesn’t appear to be responsible for the school’s legal fees.

According to Sanchez, the costs of UNM’s contracted legal defense, provided by private attorneys Patricia Williams and Lorna Wiggins over the course of seven years, were covered by the state-run risk management department. NM Political Report requested invoices sent from Williams and Wiggins, but the school’s records custodian said there were no such records. NM Political Report sent a second, differently worded request for the invoices, which UNM said required extra time to fulfill. Sanchez said she did not know how much Williams and Wiggins were paid, but the two lawyers have represented UNM in the case intermittently for about seven years.

Seven years in the making

In 2011, Herald sued the medical school for violating both the New Mexico Human Rights Act and the New Mexico Whistleblower Protection Act when it dismissed her from the anesthesiology residency program. Herald said she was fired after alleging  a fellow resident raped her.

New Mexico state District Judge Shannon Bacon ruled Herald could not sue for both violations and that the Human Rights Act violation took precedent by default. The case made its way to the New Mexico Supreme Court, which ruled in favor of Herald in 2015 and she took the case back to the beginning of the legal process, in state district court.

For two weeks in November a second jury heard Herald’s allegations and UNM’s claims that Herald was not fired for reporting a rape but instead for a prescription drug problem and poor work performance, which the school said put patients in danger.

A few hours after news of the settlement broke, Martin updated his staff and faculty on what happened that morning, “regarding former dismissed problem resident, Cyndi Herald.”

While the school or its lawyers have not publicly explained their reasons for settling, Martin alluded to one reason for a payout to Herald.

“Given the current high profile Harvey Weinstein social environment and the threat of forced reinstatement of a known problem resident back into our Department, we thought the wisest move was to settle and move on,” Martin wrote.

At least twice during the November trial, Herald’s lawyers equated the case with that of high-powered movie executive Harvey Weinstein and the reported rape cover-ups surrounding him.

Bacon ordered one of those references to Weinstein struck from the record and told jurors to disregard it at the request of UNM’s lawyers.

In his letter to the anesthesia department, Martin also described his view of the court proceedings leading up to the last trial.

“The Department and UNM were acquitted after a length [sic] trial,” Martin wrote. “Subsequent to that, on a legal loophole allowed through a poor decision regarding jury instructions by Judge Bacon, the Appeals Court and then the New Mexico Supreme Court ordered a new trial.”

During the November trial former and current UNM employees often intimated that there wasn’t enough proof that Herald was raped. In one of his emails to staff and faculty, Martin opined not only that Herald may have lied, but also that UNM’s top officials did not botch an investigation into Herald’s claim.

“She alleged that she was fired for reporting a sexual abuse that may or may not have occurred and that she was subsequently fired in retaliation for reporting this alleged event,” Martin said. “I am confident that the Department leadership at that time, Graduate Medical Education and UNM handled the case in a professional and supportive manner.”

UNMH email by New Mexico Political Report on Scribd