Court rules administration must release records in health care contract

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The state must produce records related to the cancellation of Client Network Services Inc.’s nearly $200 million contract for Medicaid claims processing, a state 1st Circuit Court of Appeal panel ruled Friday.

The public records litigation is related to a lawsuit Maryland-based CNSI filed alleging the state wrongfully terminated the multiyear contract last March. The Jindal administration canceled the pact after news broke of a federal grand jury probe into the contract’s award. The state alleged insider knowledge as well as other improprieties. CNSI sought the documents, which it claims will show no wrongdoing occurred.

The Louisiana attorney general fought the records’ release, contending it would interfere with an ongoing state criminal investigation into the contract’s award.

On Friday, Assistant Attorney General David Caldwell said the state will not appeal the public records decision. But, Caldwell said, “if there’s any danger of disclosure regarding specific parts of our investigation, we will certainly step forward and fight those if it means we have to do it on a piecemeal basis ... The investigation is still ongoing.” Caldwell heads the justice agency’s public corruption unit.

CNSI attorneys hailed the decision in which the appellate court upheld a ruling by Judge Tim Kelley, of the 19th Judicial District Court in Baton Rouge, which found that most of the records sought by CNSI were public.

“We have been stonewalled from the very beginning,” said CNSI attorney Michael W. McKay. “The state has been claiming we did X, Y and Z, and that’s why they terminated the contract. We said, ‘That’s bull. You did not have grounds to.’ Let’s see what the documents say.”

CNSI attorney Lewis Unglesby said, “We are confident that this will result in the disclosure of more evidence that clearly demonstrates that CNSI has been mistreated and its contract was valid and their work was good.”

When it canceled the contract, the state cited as grounds a Louisiana law that states: “If the person awarded the contract has acted fraudulently or in bad faith, the contract shall be declared null and void.”

The state health chief at the time of the contract’s award — Bruce Greenstein — was a former CNSI executive. The state alleged improper communication between Greenstein and CNSI officials as one of the reasons for contract cancellation. He resigned shortly after the contract termination and news that a federal grand jury subpoenaed records. Caldwell said a state probe had been underway for some time.

Greenstein and CNSI have denied wrongdoing.

The 1st Circuit panel wrote that Kelley “correctly applied the law in upholding McKay’s right to access records that are unquestionably public.”

“The attorney general’s interpretation of the public records exemption is not based on the unequivocal language of the statute and is in derogation of the requirement of liberal construction in favor of the public’s right of access to public records,” according to the ruling.

The attorney general claimed access to the records would “gut” the law enforcement exemption anytime a criminal investigation involved records held by a public body.

“As the district court explained, the disclosure does not reveal the Attorney General’s investigative process because hundreds of thousands of documents are responsive to McKay’s request such that those of particular interest to the Attorney General are just part of a massive group of records,” the 1st Circuit noted.

The court noted that Kelley exempted those records, “which might tend to show the mental impression, conclusions, opinions or investigative processes of the Attorney General’s office.”

All three members of the 1st Circuit panel concurred in the ruling. Sitting on the panel were Appeal Court Judges James E. “Jimmy” Kuhn, Toni Higginbotham and Mitchell Theriot.