June 25, 2018

State law encourages secret payouts

Before Cynthia Herald left the Bernalillo County courthouse last November she told reporters that she was relieved to finally gain closure on an ordeal with the University of New Mexico that lasted more than half a decade. Herald sued the university’s medical school, claiming she was wrongfully dismissed from a residency program and settled before closing arguments.

The terms of the settlement were, by state law, temporarily shielded from public scrutiny.

That meant the public couldn’t see the total amount UNM agreed to pay, including how much money was to come from the medical school’s anesthesiology department and how much from the state’s Risk Management Division. Seven months later, the University still won’t release that information and cites the same law.

That law allows some public agencies to withhold settlement payouts for a minimum of six months, and sometimes obscuring when that information is publicly available. While government transparency advocates say the law is pointless and should go, at least one attorney who’s represented government agencies says the statue helps to protect the public.

‘Better off without it,’ or cost saving measure?

According to New Mexico law any records related to “claims for damages or other relief against any governmental entity” handled by the New Mexico General Services Department (GSD), which oversees the state’s Risk Management Division, are not subject to public inspection for at least 180 days after the case is considered closed. Albuquerque lawyer and the New Mexico Foundation for Open Government’s immediate past president Greg Williams said keeping settlement agreements involving a public entity under wraps for any length of time creates unneeded secrecy.

“It’s an anti-transparency statute, there’s no question about it,” Williams said. “It takes what would otherwise be a public record and delays its release and the state would be better off without it.”

By nature it can also be difficult to determine when a claim is considered closed as that information is part of the shielded settlement agreement. Other than a court record showing when a settlement became final, there is little indication of when the six-month clock starts ticking. Further, Williams said, the settlement confidentiality statute is written so vaguely that state entities can interpret it differently. Williams used the example of a hypothetical injury claim against a state entity. Such a claim may have a specific statute of limitations or a time limit in which a person can sue. If that limitation is two years, a state department may determine that settlement information cannot be released for two years, plus the six-month confidentiality period.

Indeed, the statute lists four different dates that could determine when the six month period starts: when the statute of limitation us up, when a court determines litigation to be done and all appeals are exhausted, when a claim is considered “fully and finally settled” and when a claim “has been placed on closed status.” The latest occurring event determines the start of the six-month period.

Williams said public interest in the amount of a settlement often wanes over time. For instance, Williams said, the head of a department or elected official may be out of the public eye by the time settlement information is released.

“Part of the benefit of transparency is timeliness and the longer the public has to wait for public information, the less practical use that information is,” Williams said.

Luis Robles agreed a delay in disclosure of settlement amounts could lead to less public interest.  His law firm, Robles, Rael & Anaya, often represents state and municipal government agencies in civil lawsuits on contract.

“If you think about it in a much more tactical sense, let a story die and then the story’s dead,” Robles said in respect to media attention of large settlement amounts.

But, Robles defended confidential settlements as a way to protect taxpayers from having to pay for excessive payouts. He said settlement information released immediately can indicate to lawyers and their clients what the current “going rate” of settlements are and likened it to stock trading.

Robles compared it to buying and selling commodity stocks.

“Knowing what the commodity went for a month ago, is of no value to me. What it’s going for today is very meaningful information, he said.”

Robles said obscuring current or recent settlements can save taxpayers from footing the bill for countless other lawsuits spurred by an initial settlement.

“At the end of the day, protecting the public treasury is noble for everyone,” Robles said.

Albuquerque attorney Randi McGinn dismissed Robles’ claim that a current “going rate” for settlements is of any more use to lawyers than settlements in years past. McGinn represented Herald in her case against the UNM medical school, but declined to discuss specifics of the settlement because it has not yet been released.

Speaking generally, though, McGinn said, it’s in the public’s best interest if settlement information draws more attention from others who may have similar experiences. The Santa Fe New Mexican recently reported on a lawsuit filed against New Mexico State Police Chief Pete Kassetas. The lawsuit states that the state paid more than half a million dollars to three women who claimed they were sexually harassed on Gov. Susana Martinez’s campaign bus in 2014. In reference to that lawsuit McGinn posed a hypothetical legal scenario where it’s beneficial for more people to come forward.

“If there were a bunch of people were sexually harassed on a campaign bus, you would want to find all of those people,” McGinn said.

McGinn said besides disconnecting “the state’s bad behavior from the consequence of the bad behavior,” temporarily-confidential settlements result in a less-interested public when specifics are finally revealed.

“If [the state] can wait for six months to tell you the answer, they hope that reporters won’t track it down and try to keep track of it, or that nobody else will care six months later,” McGinn said.

Ask again later

New Mexico’s confidential settlement statute only applies to claims that are handled by the state’s risk management division, but that doesn’t limit it to only state agencies. For example, in the case filed by Herald against UNM, risk management handled the claim. And while a court document in that case signals when the six-month period starts, records requests made by NM Political Report did little to clarify the situation. One request to UNM in May—six months after the university announced they agreed to settle the case—seeking both the settlement agreement and related communications was deemed too broad by UNM. The university then denied a request seeking only the settlement agreement, with the university’s record custodian citing  the state’s “six-month confidentiality provision.”

The state’s General Services Department denied a similar request based on settlement confidentiality statute. But the department’s denial letter obscured specifics of the case even more.

“As the settlement agreement in the Herald case is the subject of current litigation, the claim has neither been brought to final judgment nor has it fully and finally settled,” a GSD records custodian wrote. “The Risk Management Division is statutorily prohibited from releasing the requested documents associated with this claim or with any related claims at this time.”

While GSD said they welcomed another records request “when the responsive material becomes releasable,” the department did not indicate when that time might be.