Cinergy Health, Inc. v. Dep't of Professional and Fin. Regulation

• Court: Superior Court of Maine
• Decided: December 16, 2011
• Docket: KENcv-11-179
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT KENNEBEC, ss. CIVIL ACTION DOCKET NO. CV-11-179 \)' l"f' ! (-,~ 'I

CINERGY HEALTH, INC., Petitioner,

v. ORDER ON FOAA REQUEST BY CINERGY HEALTH, INC.

DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION, Respondent.

Before the Court is Cinergy Health, Inc.'s appeal of the denial of access to public

records by the State ofMaine, Department of Professional and Financial Regulation,

Bureau of Insurance pursuant to the Freedom of Access Act, 1 M.R.S.A. § 409(1).

FACTS

Cinergy Health, Inc. (Cinergy) is a Florida health insurance corporation that does

business in the state of Maine. On July 14, 2010, staff at the Bureau of Insurance (the

Bureau) petitioned former insurance Superintendent Mila Kofman (Kofman) to undertake

adjudicatory proceedings against Cinergy and Guarantee Trust Life Insurance Company

to determine whether they had committed certain violations under Maine insurance law.

(Stipulated Facts~ 1, hereinafter "SF".) These proceedings were combined into a single

consolidated proceeding. (SF~ 2.) On October 5, 2010, Kofman issued a Notice of

1 Hearing to adjudicate the alleged violations, identifying herself as the hearing officer.

(SF ~ 3.) Prior to the hearing, Cinergy filed a motion for Kofman to recuse herself, based

on its belief that she was biased against the company due to certain scholarship and

advocacy she had undertaken in the past. (SF~ 4; Record 168, hereinafter "R".) Kofman

denied the motion. (SF~ 5.)

At the two-day hearing on December 17 and 30, 2010, Kofman served as the

neutral decision-maker, assisted by the Bureau's general counsel Robert Wake (Wake)

and Assistant Attorney General Mark Randlett (Randlett). (SF~~ 6-8.) Assistant

Attorney General Andrew Black (AAG Black) represented Bureau staff in his

prosecutorial capacity. (SF~ 9.) On April 26, 2011, Kofman issued a final decision

finding insurance violations and issuing sanctions. (SF~ 13.) On May 31, 2011, Kofman

denied Cinergy's motion for reconsideration. (SF~ 17.) The Bureau's decision

constituted final agency action, which is the subject of a separate Rule 80C appeal

pending in this Court. Cinergy Health, Inc. v. Superintendent oflns., Docket No. AP-11-

37 (Me. Super. Ct., Ken. Cty.).

On May 17, 2011, Cinergy filed a FOAA request with the Bureau in order to

uncover evidence ofKofman's possible bias or ex parte communications during the

Cinergy proceedings. (SF~ 15; Br. of Pet. 1-2.) Cinergy requested, generally,

communications from or to Kofman, Wake, and Randlett regarding the Cinergy

proceedings. (SF~ 15; R. 1-2.) On June 22, 2011, the Bureau disclosed certain limited

records, but denied the remainder ofCinergy's request on the following grounds: (1)

attorney-client privilege, (2) the work product doctrine, (3) a so-called "mental

processes" privilege, and (4) confidentiality under 24-A M.R.S.A. § 216. (SF~ 18; R. 4-

2 7.) On July 15, 2011, Cinergy moved for reconsideration of the denial and requested that

the Bureau provide a "privilege log." (SF~ 20.) On August 1, 2011, the Bureau denied

the reconsideration request but provided a privilege log listing approximately 235

separate email documents, many including attachments. (SF~ 21; R. 35-51.)

On August 9, 2011, Cinergy filed the present appeal in Superior Court. (SF~ 22.)

Since then, the Bureau has disclosed a number of documents it previously withheld, 1 and

it has provided an updated privilege log consisting of 169 communications plus a sealed

portion consisting of 11 additional communications "with other regulatory

agencies/jurisdictions." (R. 114-132.) On November 30, 2011, it provided hard copies of

all the undisclosed documents from the privilege log for in camera review. 2 Having

reviewed the documents, the Court will verify that they primarily consist of"legal

decisions and rulings that [Kofman] faced during the Cinergy proceeding and for which

she was seeking and obtaining advice from the attorneys assigned to assist her and in a

few cases from Bureau employees with specialized knowledge." (Br. ofResp. 3-4.) In

fact, the majority of the emails simply consist ofredlined versions of the draft decision

attached for review between Kofman, Randlett, and Wake. The remaining documents are

"communications originating with other regulatory agencies and jurisdictions." (Br. of

Resp. 4.)

1 On August 30, 2011, the Bureau disclosed to Cinergy 67 of the documents from the original privilege log of August 1, 2011 that it had originally withheld. (SF~ 23.) 2 In camera review is the proper mechanism to determine whether a document is appropriately treated as confidential. Boyle v. Div. ofCmty. Servs., 592 A.2d 489, 491 (Me. 1991).

3 DISCUSSION

I. Maine 's Freedom ofAccess Act

Maine's Freedom of Access Act (FOAA) provides every person with the "right to

inspect and copy any public record during the regular business hours of the agency or

official having custody ofthe public record ...." 1 M.R.S.A. § 408(1). "Public record"

means any "written, printed or graphic matter or any mechanical or electronic data

compilation from which information can be obtained ... that is in the possession or

custody of an agency or public official of this State or any of its political subdivisions ...

" !d. § 402(3).

Excluded from the definition of"public records" are those records "that have been

designated confidential by statute," id. § 402(3)(A), and those "that would be within the

scope of a privilege against discovery or use as evidence recognized by the courts of this

State in civil or criminal trials if [they] were sought in the course of a court proceeding,"

id. § 402(3)(B). The Bureau in this case asserts that the requested documents are

protected by attorney-client privilege and the work product doctrine (thus, exempt from

disclosure under§ 402(3)(B)), and under§ 24-A M.R.S.A. § 216 (exempt under§

402(3)(A)). 3

The Freedom of Access Act "shall be liberally construed and applied to promote

its underlying purposes and policies." 1 M.R.S.A. § 401. A corollary to FOAA's liberal

construction is that any exceptions will likewise be strictly construed. Guy Gannett

3 The Bureau apparently dropped a fourth basis for non-disclosure, the "mental processes privilege," which appeared in its original denial. (R. 5.)

4 Pub/ 'g Co. v. Univ. ofMaine, 555 A.2d 470, 471 (Me. 1989) (citation omitted). The

agency has the burden to prove "just and proper" cause for denying a FOAA request.

1 M.R.S.A. § 409(1); Springfield Terminal Ry. Co. v. Dep 't ofTransp., 2000 ME 126, ~

9, 754 A.2d 353. The Superior Court reviews FOAA denials de novo, and shall enter an

order for disclosure if it "determines such denial was not for just and proper cause."

1 M.R.S.A. § 409(1).

II. Attorney-client privilege does not excuse the Bureau ofInsurance from producing documents relating to the Cinergy case that would otherwise be public records underFOAA.

The general rule of attorney-client privilege confers a client with the right to

"refuse to disclose and to prevent any other person from disclosing confidential

communications" made in the course of legal representation between and amongst a

client, his lawyer, and both their representatives. M.R. Evd. 502(b). The Maine Rules of

Evidence specifically remove the attorney-client privilege as applied to a public officer or

agency and its lawyers unless "the communications concern a pending investigation,

claim or action and the court determines that disclosure will seriously impair the ability

of the public officer or agency to process the claim or conduct a pending investigation,

litigation or proceeding in the public interest." M.R. Evd. 502(d)(6). The purpose of

Rule 502(d)(6) is clearly to limit protection under the traditional attorney-client privilege

in the agency context: "[C]onfidential communications between a public agency and its

lawyer are the exception rather than the rule." Superintendent ofIns. v. Attorney Gen.,

558 A.2d 1197, 1203 (Me. 1989).

5 Instead of deliberating over whether the documents in question fit the narrow

privilege envisioned under Rule 502( d)(6), it is enough to say that even the general

attorney-client privilege cannot apply here due to the roles of the parties involved. As the

label of the privilege suggests, communications must involve an attorney and a client to

be protected by the attorney-client privilege. It is common in the administrative setting,

however, for agency members to wear various hats at different times. During the relevant

time period in this case, Kofman was acting squarely in her role as a quasi-judicial,

neutral decision-maker. She was not acting as attorney for the Bureau, nor was the

Bureau in the position of being her client. Protecting the requested documents under

attorney-client privilege would be akin to protecting a judge's communications generated

during the decision-making process. Clearly, that is not the purpose of the attorney-client

privilege.

III. The work product doctrine does not excuse the Bureau ofInsurance from producing documents relating to the Cinergy case that are otherwise public records under FOAA.

The work product doctrine is contained in Maine's discovery rules:

[A] party may obtain discovery of documents and tangible things ... prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative ... only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials ... the court shall protect against disclosure ofthe mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.

M.R. Civ. P. 26(b)(3). The purpose of the rule is to support the adversarial system by

"protecting the confidentiality of papers prepared by or on behalf of attorneys in

6 anticipation oflitigation." Springfield Terminal, 2000 l\.1E 126, ,-r 18, 754 A.2d 353

(citation and quotation omitted). "Our adversary system depends on the effective

assistance of lawyers, fostered by the privacy of communications between lawyer and

client and the privacy in development oflegal theories, opinions, and strategies for the

client." !d.

Here, the majority of the requested documents were not made "in anticipation of

litigation," but, rather, were generated after the hearing had taken place and in the course

ofthe panel's decision-making process. Additionally, as with the attorney-client

privilege, protection of documents as work product is meant to foster the "effective

assistance of lawyers." !d. (emphasis added). Thus, for the same reasons enumerated in

section ill, supra, the Bureau's invocation of the work product doctrine is misplaced. 4

IV. Title 24-A, section 216 ofthe Maine Revised Statutes excuses the Bureau of Insurance from producing documents relating to the Cinergy case that would otherwise be public records under FOAA.

The Bureau's final argument is that the requested documents are excluded from

the definition of "public records" because they have been "designated confidential by

4 The Court is not persuaded by the Bureau's argument that the exception applies because "whenever the Superintendent or his legal advisors draft or edit a decision or order in a disciplinary proceeding, they do so in reasonable anticipation that the subject of the proceeding may appeal the decision and cause the Superintendent to become a party to the appellate litigation." (Br. ofResp. 11.) This is creative but takes the work product doctrine too far and disregards Kofman's actual role during the proceedings under scrutiny. The Bureau also cites to CarlL. Cutler Co., Inc. v. State Purchasing Agent for the general rule "forbidding inquiry into the mental processes of an administrative decision-maker." 472 A.2d 913, 918 (Me. 1984). In that case, petitioner in an 80C appeal was not permitted to take the administrative decision-maker's deposition to develop his theory of bias. The case's reach and applicability is unclear (the Court notes that the Bureau originally cited CarlL. Cutler in support of the so-called "mental processes" privilege that it later dropped). Regardless, the court declines to apply CarlL. Cutler to this set of facts, finding a FOAA request to be very different from a request for additional discovery.

7 statute." 1 M.R.S.A. § 402(3)(A). The statute relied upon, 24-A M.R.S.A. § 216, reads

in pertinent part:

2. All records of the bureau are subject to public inspection ... except that records, correspondence and reports of investigation in connection with actual or claimed violations of this Title or prosecution or disciplinary action for those violations are confidential.

5.... it is the duty of the superintendent to maintain as confidential a document or information received from the National Association of Insurance Commissioners, public officials of other jurisdiction, agencies of the Federal Government or political subdivisions or other agencies of this State, if the document or the information has been provided to the superintendent with notice that it is confidential under the laws of the jurisdiction that is the source of the document or information ... This subsection does not alter prohibitions or restrictions applicable to ex parte contacts in the course of an adjudicatory proceeding in which a state agency is a party.

(Emphasis added).

The determination of whether § 216 protects the requested documents

from disclosure is a matter of pure statutory construction. Cinergy contends that,

the "exemption is confined to investigation-related records. The phrase 'of

investigation' modifies 'records, correspondence and reports."' (Reply Br. ofPet.

3). Because Kofman was in an adjudicatory rather than investigatory role, her

correspondence regarding the Cinergy case would consequently not satisfy the

exception's requirements. (Br. ofPet. 10.) The Bureau contends that the phrase

"of investigation" does not relate back to the preceding three items contemplated

by the statute. Instead, the statute should be read: '"[R]ecords [and]

correspondence ... in connection with ... disciplinary action ... are

confidential.'" (Br. ofResp. 5.)

8 In construing a statute, the first place to look is the plain meaning of the

language. Johnson v. Smith, 1999 ME 168, ~ 6, 740 A.2d 579. The court aims to

"avoid absurd, illogical, or inconsistent results." !d.

The Court finds that the plain, most logical meaning of§ 216(2)

separately renders confidential "records," "correspondence," and "reports of

investigation," that are made "in connection with" the enumerated situations.

"Correspondence ... of investigation" does not make sense; "correspondence ...

in connection with actual or claimed violations ... or disciplinary action" makes

better grammatical sense and clearly protects the documents in question.

In Doyle v. State, Justice Brennan similarly read the term

"correspondence" separately from "of investigation." 1997 Me. Super. LEXIS

133 (Apr. 22, 1997). In that case, an insurance agent charged with certain

insurance violations requested access to the consumer complaint that formed the

basis for the charges. !d. at *3. The Bureau denied his request on the ground that

it was exempt from FOAA disclosure pursuant to§ 216(2). Id. Upholding the

denial, Justice Brennan wrote: "The plain language of§ 216(2) reveals that

'correspondence ... in connection with actual or claimed violations of [the

Insurance Code] ... shall be confidential."' !d. at 6.

Given these considerations, the Court finds and concludes that§ 216(2)

very broadly limits the public's access to Bureau records generated in connection

with alleged or actual insurance violations and related disciplinary action, without

any requirement that such records directly relate to an investigation. This would

include records generated by Bureau personnel acting in a quasi-judicial capacity,

9 like Kofman in this instance. This interpretation of§ 216(2) makes sound policy

sense, given the obvious problems that would arise if any member of the public

were able to probe the records and correspondence of an administrative panel

during the deliberative and drafting process. 5

The in camera records in this case totaled 1,554 pages, with all but one

being emails and email attachments. The vast majority of the communications

were solely between Kofman, Wake, and Randlett, the bulk of which consist of

numerous drafts passing back and forth in attachment form. Under the Court's

reading of the statute above, these communications fall squarely within the

confidentiality contemplated in§ 216(2). A much more limited segment ofthe

communications involved certain other Bureau personnel, who seemed to be

involved administratively or by giving assistance. 6 There is no evidence,

however, that Kofman, Wake, or Randlett had any ex parte communications with

AAG Black or anyone working directly for him after the Cinergy proceedings

5 At this time, there is no judicial, or quasi-judicial privilege in Maine. The Court would simply note that the policy basis for the so-called "deliberative privilege" in other jurisdictions seems quite sound. See Charles W. Sorenson, Are Law Clerks Fair Game? Invading Judicial Confidentiality, 43 VAL. U.L. REv. 1, 47-74 (2008) (discussing the "Judicial Deliberations Privilege" as adopted by a number ofjurisdictions). 6 The Bureau stated: "The email chain among Wake and several Bureau employees (Communications## 34-41) involved a legal issue that arose during hearing that Wake was seeking clarification on from Bureau employees while drafting the post-hearing decision." (Br. ofResp. 9.) Cinergy seems to imply that these were ex parte communications due to a lack of "information as to whether those employees were also part of the advocacy team prosecuting the Bureau's case against Cinergy." (Reply Br. of Pet. 2.) "Any such advice should have been presented at the hearing, and the persons giving such advice should have been subject to cross-examination." !d. But because there has been no serious contention that these individuals were, in fact, affiliated with AAG Black during the proceedings the Court does not find disclosure necessary on those grounds.

10 commenced. Lastly, the final 13 pages of the record consist mostly of an

exchange between Wake and numerous other individuals in various jurisdictions.

and these fall within the coverage of§ 216(5), protecting communications from

other jurisdictions accompanied by the requisite confidentiality notice. Otherwise,

these are covered by §216(2) in that they relate directly or indirectly to the

Bureau's Cinergy investigation. 7

The entry will be:

The Court DENIES Cinergy' s FOAA request.

DATE SUPERIOR COURT WSTICE

7 Note that all such contact happened before July 14, 2010, when Bureau staff petitioned Kofman to take action. Thus, these could not constitute ex parte contact.

11 CINERGY HEALTH INC - PLAINTIFF SUPERIOR COURT KENNEBEC, ss. Attorney for: CINERGY HEALTH INC Docket No AUGSC-CV-2011-00179 CHARLES DINGMAN - RETAINED PRETI FLAHERTY ET AL 45 MEMORIAL CIRCLE DOCKET RECORD PO BOX 1058 AUGUSTA ME 04332-1058

VS DEPARTMENT OF PROFESSIONAL AND FINANCIAL - DEFENDANT

Attorney for: DEPARTMENT OF PROFESSIONAL AND FINANCIAL ANDREW BLACK - RETAINED ATTORNEY GENERAL OFFICE OF AG 111 SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-0006

Filing Document: COMPLAINT Minor Case Type: OTHER STATUTORY ACTIONS Filing Date: 08/09/2011

Docket Events: 08/11/2011 FILING DOCUMENT - COMPLAINT FILED ON 08/09/2011

08/11/2011 Party(s): CINERGY HEALTH INC ATTORNEY - RETAINED ENTERED ON 08/09/2011 Plaintiff's Attorney: CHARLES DINGMAN

08/11/2011 Party(s) : DEPARTMENT OF PROFESSIONAL AND FINANCIAL ATTORNEY - RETAINED ENTERED ON 08/09/2011 Defendant's Attorney: ANDREW BLACK

08/11/2011 MOTION - OTHER MOTION FILED ON 08/09/2011 Plaintiff's Attorney: CHARLES DINGMAN MOTION FOR EXPEDITED TRIAL DE NOVO, ENTRY OF PROPOSED SCHEDULING ORDER, AND ORDER SPECIFYING THE FUTURE COURSE OF PROCEEDINGS AND INCORPORATED MEMORANDUM OF LAW, SCHEDULING ORDER AND REQUEST FOR HEARING.

08/16/2011 ASSIGNMENT - SINGLE JUDGE/JUSTICE ASSIGNED TO JUSTICE ON 08/16/2011 M MICHAELA MURPHY , JUSTICE

08/25/2011 Party(s): DEPARTMENT OF PROFESSIONAL AND FINANCIAL OTHER FILING - ENTRY OF APPEARANCE FILED ON 08/23/2011 Defendant's Attorney: ANDREW BLACK

08/26/2011 ORDER - SCHEDULING ORDER ENTERED ON 08/26/2011 M MICHAELA MURPHY , JUSTICE ORDERED INCORPORATED BY REFERENCE AT THE SPECIFIC DIRECTION OF THE COURT. COPY TO ATTY DINGMAN AND AAG BLACK

08/26/2011 CASE STATUS - CASE FILE LOCATION ON 08/26/2011 W/ AP-11-31 AND AP-11-37

Page 1 of 3 Printed on: 01/24/2012 AUGSC-CV-2011-00179 DOCKET RECORD

09/27/2011 Party{s): DEPARTMENT OF PROFESSIONAL AND FINANCIAL OTHER FILING - STIPULATION FILED ON 09/23/2011 Defendant's Attorney: ANDREW BLACK Plaintiff's Attorney: CHARLES DINGMAN STIPULATED FACTS

09/27/2011 Party(s): DEPARTMENT OF PROFESSIONAL AND FINANCIAL OTHER FILING - STIPULATION FILED ON 09/23/2011 Defendant's Attorney: ANDREW BLACK Plaintiff's Attorney: CHARLES DINGMAN STIPULATED RECORD

10/13/2011 Party{s): CINERGY HEALTH INC OTHER FILING - OTHER DOCUMENT FILED ON 10/07/2011 Plaintiff's Attorney: CHARLES DINGMAN BRIEF OF CINERGY HEALTH, INC.

10/21/2011 Party(s): DEPARTMENT OF PROFESSIONAL AND FINANCIAL OTHER FILING - OTHER DOCUMENT FILED ON 10/21/2011 Defendant's Attorney: ANDREW BLACK BRIEF OF RESPONDENT

11/02/2011 Party(s): CINERGY HEALTH INC OTHER FILING - OTHER DOCUMENT FILED ON 10/28/2011 Plaintiff's Attorney: ANDREW LANDRY REPLY OF CINERGY HEALTH, INC. IN SUPPORT OF REQUEST FOR PUBLIC RECORDS

12/01/2011 Party{s): DEPARTMENT OF PROFESSIONAL AND FINANCIAL OTHER FILING - OTHER DOCUMENT FILED ON 11/30/2011 Defendant's Attorney: ANDREW BLACK UNDER SEAL - COPIES OF COMMUNICATIONS AND ATTACHMENTS THAT WERE PREVIOUSLY PROVIDED ON DISK.

12/19/2011 FINDING - JUDGMENT DETERMINATION ENTERED ON 12/16/2011 M MICHAELA MURPHY , JUSTICE ORDERED INCORPORATED BY REFERENCE AT THE SPECIFIC DIRECTION OF THE COURT.

12/19/2011 ORDER - COURT JUDGMENT ENTERED ON 12/16/2011 M MICHAELA MURPHY , JUSTICE ORDERED INCORPORATED BY REFERENCE AT THE SPECIFIC DIRECTION OF THE COURT. THE COURT DENIES CINERGY'S FOAA REQUEST COPY TO ATTY DINGMAN, AAG BLACK, AND ATTY THAXTER Judgment entered for DEPARTMENT OF PROFESSIONAL AND FINANCIAL and against CINERGY HEALTH INC.

12/19/2011 FINDING - FINAL JUDGMENT CASE CLOSED ON 12/19/2011

12/20/2011 CASE STATUS - CASE FILE RETURNED ON 12/19/2011

)1/06/2012 MOTION - OTHER MOTION MOOT ON 01/05/2012 M MICHAELA MURPHY , JUSTICE MOTION FOR EXPEDITED TRIAL DE NOVO, ENTRY OF PROPOSED SCHEDULING ORDER, AND ORDER SPECIFYING THE FUTURE COURSE OF PROCEEDINGS AND INCORPORATED MEMORANDUM OF LAW, SCHEDULING Page 2 of 3 Printed on: 01/24/2012 AUGSC-CV-2011-00179 DOCKET RECORD

ORDER AND REQUEST FOR HEARING.

01/24/2012 NOTE - OTHER CASE NOTE ENTERED ON 01/24/2012 NOTICE OF REMOVAL OF RECORD/EXHIBITS MAILED TO ATTY DINGMAN AND AAG BLACK

01/24/2012 ORDER - COURT JUDGMENT COPY TO REPOSITORIES ON 01/24/2012

A TRUE COPY ATTEST: Clerk

Page 3 of 3 Printed on: 01/24/2012