State spends millions on civil litigation, often silently
Risk Management Division, shielded by law that keeps settlements confidential for six months, largely mum on decisions
Phillip G. Ramirez Jr., an Army National Guard veteran who served in Iraq and Kuwait, filed a lawsuit against the state of New Mexico in 2008, claiming his supervisors in the state Children, Youth and Families Department harassed and discriminated against him when he returned from more than a year of active duty.
They refused to make accommodations for his diagnosis of post-traumatic stress disorder, Ramirez claimed in the lawsuit, then tried to push him out by mandating what he called unreasonable job requirements that made it impossible for him to fulfill his role as a community support officer monitoring at-risk juvenile offenders.
Fired by the department in 2008, Ramirez claimed the department violated a federal law that protects the employment rights of service members deployed for more than 30 days.
“I felt betrayed,” said Ramirez, who had received positive performance reviews by CYFD for nearly a decade before his deployment, according to his suit. “I was fighting the enemy overseas and when I returned I was fighting the enemy, too,” he said. “Coming home should be peacetime and I felt the fight was still on my hands.”
In 2011, a Gallup jury found in Ramirez’s favor. He was to receive $36,000 in back pay. But rather than write the check and make accommodations for him, the state appealed the state District Court’s decision to the New Mexico Court of Appeals — a move that sparked a yearslong legal battle that eventually prompted a second lawsuit and ultimately concluded with the state Supreme Court ruling in favor of Ramirez.
In the end, the costs to the state were $598,857 in legal fees for the first lawsuit; $36,000 to satisfy the judgment in the case; $235,000 to cover Ramirez’s legal expenses; $74,108 to fight a second lawsuit; $115,000 to settle that case out of court. Total bill: $1,058,965. The Ramirez case illustrates the high risk and, at times, low visibility of cases overseen by the state’s Risk Management Division, which paid more than $5.5 million in fiscal year 2017 to settle 35 civil claims brought by individuals who said they’d been wronged by state departments and agencies, according to documents obtained by The
New Mexican through public records requests.
The documents also show the state spent about $2.8 million fighting these cases in the years leading up to the settlements, but that figure could be higher. In some instances, records do not seem to reflect all the costs associated with each case. The records also show that in 11 of the 35 cases, private lawyers paid to defend the state against civil claims were paid as much or more than the plaintiffs. For example, the state spent:
$182,486 in legal fees fighting a wrongful death complaint filed against the New Mexico Behavioral Health Institute by the estate of Mary Jane PaizPiedra, a 43-year-old woman who was stabbed to death by her son the day he was released from the state psychiatric hospital in Las Vegas, N.M. Paiz-Piedra had told caregivers her son intended to harm her. After fighting the case for more than five years, the state paid her estate $75,000 to drop the complaint.
$45,756 fighting a medical negligence complaint against the state-run Miners’ Colfax Medical Center in Raton. Amanda Perez claimed in the lawsuit that she went to the hospital complaining of bleeding and contractions at the 26-week mark of her pregnancy. She was sent home but returned in preterm labor the next day and delivered a premature baby. According to the lawsuit, the hospital did not have supplies on hand to treat the baby’s undeveloped lungs, and the baby died. The state fought the case for two years before paying Perez $15,000 to drop her complaint.
$206,810 in legal fees fighting a civil rights violation claim filed by former state inmate Samuel P. Chavez, a prisoner representative during the implementation of the Duran Consent Decree following the 1980 riot at the Penitentiary of New Mexico, south of Santa Fe. In a 2007 lawsuit, Chavez claimed state prison officials retaliated against him for advocating for his legal rights and those of fellow inmates by subjecting him to torturous living conditions. After litigating the case for 10 years, the state paid Chavez $135,000 to dismiss his lawsuit.
Notable in many cases is a lack of accountability in determining who decides which cases the state’s Risk Management Division chooses to fight, for how long and at what expense to taxpayers. Although the department says the decision to settle always rests with a government official with the division, no high-ranking member of the General Services Department, which oversees Risk Management, would agree to a face-to-face or telephone interview to discuss the process.
Former General Services Department Secretary Ed Burckle, who retired last month, did not respond to multiple interview requests between December and March. Acting Secretary Ned Fuller also did not respond to a request for an interview. State Rep. Patricia Lundstrom, a Gallup Democrat who advocated for Ramirez before his case settled and a member of the Legislative Finance Committee, declined to comment. Written questions posed to a spokesman for Gov. Susana Martinez were not answered.
Risk Management Division Director Lara White-Davis defended the division’s work with civil litigation, stressing in an email the agency often reaches timely and reasonable resolutions in cases prior to litigation, but that it also “must perform due diligence to evaluate liability exposure.”
In addition to officials’ reluctance to grant interviews, a state law that keeps the division’s settlements confidential for six months — and in some cases, years longer — also makes it difficult to determine who decides which lawsuits get settled and which are battled for years by outside lawyers paid as much as $300 an hour.
State Sen. Liz Stefanics, D-Cerrillos, who served as a Risk Management Division director during the administration of Gov. Bill Richardson, said the handling of cases greatly depends on the philosophy of whomever happens to be the General Services Department secretary.
During her tenure, Stefanics said, cases over $75,000 had to be reviewed by a committee, which would help decide if a case should be litigated. She acknowledged there occasionally would be a case in which “a person who was high up or a person who was being named in a lawsuit would say, ‘I want to fight this all the way.’ And we oftentimes didn’t get to overrule them.”
White-Davis did not address a question about whether there are any preset intervals at which private firms are required to consult with government officials on the direction a case is taking — or whether the crossing of any financial thresholds triggers a review of a case.
She wrote that the division “sometimes must spend money to highlight weaknesses in a plaintiff ’s case,” adding the state’s method “does not substantially differ from the model used in the private sector.”
But Joleen Youngers, a private practice lawyer who has sued state agencies many times over the past 25 years, said she doesn’t believe the state always handles cases in a cost-effective way.
“It’s been my experience in cases against nongovernmental entities that insurance companies tend to be more pragmatic and take a business perspective in adjusting claims,” she said. “Whereas in some of the claims against the government, the actual parties who are being sued may be involved in the decision-making. Then you no longer have a business perspective; you have someone who is really personally invested in the outcome so all the business perspective goes out the window and it gets really personal.
“It’s certainly been my experience that cases could have been settled sooner for much less money, with the added benefit that they would pay their lawyers much less,” Youngers said. “If the state had a more comprehensive or aggressive first look at the cases, that might be helpful. As a litigator who sues the government, it appears to me that the Risk Management Division or the state isn’t closely supervising all the cases.”
A top lawmaker said the difficulty of getting information from Risk Management is frustrating.
Sen. John Arthur Smith, D-Deming, the Legislative Finance Committee vice chairman, said even legislators’ requests for information are frequently “completely ignored.”
“Quite frankly,” Smith said in a recent interview, “the oversight is real limited. Not only limited, but oftentimes … the fallback position by General Services and Risk Management Division is ‘we can’t disclose that.’ ”
As a result, Smith said, most discussions regarding the division’s actions take place after the fact.
Public records requests are essentially the only way to peek behind the curtain of confidentiality. In November and December, The New Mexican filed requests for the settlement agreements for all lawsuits the state settled between July 2016 and June 2017, and the legal fees paid in each case. The General Services Department took months to produce the records and in at least one case responded with documents that were incomplete.
The Legislative Finance Committee noted in the General Services Department’s second quarter performance report card that due to the statute that keeps settlements secret for six months, the division disclosed only one-third of the payments it made from the public liability fund in its annual report to the Legislature.
Staff members who produced the report card wrote, “Legislation that requires loss payments be disclosed on the Sunshine Portal could be helpful because statutory disclosure restrictions in place do not aid transparency.”
Sen. Sander Rue, an Albuquerque Republican, sponsored a bill in the 2018 legislative session that would have required settlement amounts and legal costs associated with all human rights claims be published on the Sunshine Portal within 30 days of settlement.
His bill died without discussion, but Rue said he simply wanted to introduce the idea in hopes of refining the bill and reintroducing something similar in the future.
Rue said he believes the measure would increase accountability, particularly in cases of sexual misconduct.
“If the state is just paying out money to silence people, are we burying and covering up bad behavior and issues that the taxpayers should be aware of ?” he asked. “This isn’t a gotcha thing, as I say again and again with this transparency stuff. Just put it out there. Let the public see what is being done with taxpayer dollars, and then these folks would have to explain what they did and why they did it.”