A Superior Court judge has rejected New Hampshire’s claim a medical malpractice fund is an agency of the state.
Judge Kathleen McGuire’s ruling Thursday appears to undermine the state’s argument it can use a $110 million surplus in the New Hampshire Medical Malpractice Joint Underwriting Association fund to balance the newest state budget.
Gov. John Lynch and the Legislature laid claim to the JUA surplus only after the attorney general’s office said the move was legal.
More than 200 health care providers who pay into the fund are suing in Belknap County Superior Court, arguing the money doesn’t belong to the state. McGuire ruled Thursday the attorney general’s office can’t represent the association in court.
The JUA moved to disqualify the office of the Attorney General from representing it “because such representation is necessarily in conflict with related representation and advice provided to the Department of Insurance,” the ruling says.
Meanwhile, the AG’s office argues that “the JUA is not an entity legally separated and distinct from New Hampshire State government, but rather part of the government, created at the discretion of and supervised by the Insurance Commissioner pursuant to the authority vested in him by statute. The JUA board members and the board administrators are therefore officials of the State of New Hampshire Insurance Department.”
The court disagreed finding the AG’s characterization of the JUA and its board members and found that the petitioners have met their burden of proof by clear and convincing evidence that conflict exists between the Department of Insurance and the JUA preventing both of them from being represented by the Attorney General’s Office,” the ruling reads.
“Given the quasi-private/public and voluntary nature of the JUA; the lack of any state funding to implement or support the JUA; the fact the Department does not guarantee coverage to policyholders if the JUA were unable to do so; and the broad powers and responsibilities of the JUA board, the court concluded that the JUA is a separate entity from the Insurance Department and is not part of the executive branch of state government. Rather, it is akin to the New Hampshire Retirement System which the N.H. Supreme Court has held is “an independent entity rather than an executive department or agency,” the ruling says.
The court also rejected the respondent’s motion to disqualify the law firm of Nixon and Peabody of Manchester from representing the petitioners basing its ruling on the fact that the New Hampshire Insurance Commissioner is not a client of the firm.
A hearing is scheduled for July 1 at 9:30 a.m.