Lawsuits against state government mounting

By JOHN MAGINNIS and JEREMY ALFORD

LaPolitics.com

BATON ROUGE — Considering all the lawsuits that have been filed and those that are anticipated, the court system is putting Gov. Bobby Jindal and his administration on the defensive more this session than lawmakers ever could.

But unlike former Gov. Edwin Edwards, who wound up on the wrong side of the law with a string of corruption charges, Jindal’s time in court has had more to do with his policies and his administration’s interpretations of the state Constitution than anything else.

Lawmakers and others worry this may not be a healthy trend; litigating costs money and adverse decisions erode faith in the legislative process.

For instance, the outcome of a lawsuit challenging Jindal’s budget from last year, filed by state Reps. Kirk Talbot, R-River Ridge, and Cameron Henry, R-Metairie, could soon be known, with the trial set to begin Wednesday.

The lawmakers say the governor’s budgetary contingencies amount to one-time revenue, which the state constitution prohibits using for recurring costs. Talbot, vice chairman of the House Commerce Committee, added that he has asked the judge to review this year’s budget proposal as well and to provide “a decision that is sooner rather than later.”

The new legal threat on the horizon comes from Rep. Marcus Hunter, D-Monroe, who told KTBS-V in Shreveport that he will soon sue to assert the Legislature’s authority to review Jindal’s proposed privatization agreements for public hospitals.

According to a recent attorney general’s opinion, the governor does not have to seek lawmakers’ approval to implement privatization, but most legislators want a say in that process anyhow.

Rep. Jared Brossett, D-New Orleans, said he requested the legal opinion on the Legislature’s role from the Attorney General’s Office to ensure that public health care is “equitable, accessible, and affordable, and that it delivers quality services.” He said some concerns were alleviated by the opinion’s position on the new public-private ventures being required to provide the same level of health care services.

Inching closer to Edwards territory, the Jindal administration soon may see another lawsuit from CNSI, the company that lost a massive $185 million state Medicaid claims processing contract after it attracted the interest of a federal grand jury.

Former Health and Hospitals Secretary Bruce Greenstein, who changed the rules to allow CNSI to compete for the contract, announced his resignation when a federal subpoena came to light. Greenstein worked for CNSI before taking a job with Jindal.

When Jindal’s administration canceled the CNSI contract, company officials cried foul and insisted the problem was not on their end. CNSI spokesman Sonny Cranch said a late April meeting was scheduled with DHH, after which the likelihood of litigation will become clearer.

“We’re going to wait and see,” he said. “But right now we don’t want to predict that.”

To be certain, CNSI already has public relations battle on its hands, given the “numerous and repeated telephone and text message contacts” the administration released last week showing Greenstein and others allegedly helping the company land the work.

Also, if the federal investigation results in the indictment of state officials, it could lead to a serious political corruption trial that could mar the Jindal administration’s reputation for ethics.

Yet another potential lawsuit involves the Artificial Reef Development Fund, into which the oil and gas industry pays to help create underwater habitats using decommissioned drilling rigs.

The fund has been targeted for a $20.6 million transfer to help balance Jindal’s proposed state budget for the next fiscal year. Additionally, Jindal already has taken $45 million from the fund since the 2009-2010 fiscal year.

Members of the Wildlife and Fisheries Commission, all appointed by the governor, argue that the reef funds can only be used for habitat creation, not to prop up the administration’s budget proposal, which could be the foundation for its potential lawsuit. On the agenda for its next meeting May 2, the commission has included a discussion on the “prospective litigation” in executive session, meaning behind closed doors.

Rebecca Triche, executive director of the Louisiana Wildlife Federation, said another argument could be made that the money paid into the fund is protected by Louisiana‘s guiding charter.

“The donations are made to the Conservation Fund, which is constitutionally protected,” she said.

The Department of Wildlife and Fisheries oversees the Conservation Fund, from which money for the reef fund is appropriated.

The Jindal administration already is in court defending a constitutional challenge to a 2009 law that provided generous repayment terms for $186 million that lawmakers and the administration withdrew from the so-called Rainy Day Fund that year.

If that challenge succeeds, it could blow a $400 million hole in next fiscal year’s budget, which already is projected to be $1.3 billion short. Lawmakers are working on a fix this session, but nothing is certain.

Then there are the judgments already rendered against Jindal’s controversial education and public pension reforms.

One judge ruled that Jindal’s voucher program unconstitutionally diverts public funds to private schools, while another decided that his “cash balance” retirement plan, set to go into effect next fiscal year, did not receive enough votes for passage last year.

Following the Senate’s lead, a House committee approved a resolution last week that would suspend the state’s controversial “cash balance plan,” designed to replicate the functions of a 401(k) because it has less investment risk. Jindal pushed the pension reform in 2012 to replace the traditional defined benefits plan for future state hires.

The Louisiana State Employees Retirement System and the Teachers Retirement System of Louisiana want the Legislature to delay the plan. House Concurrent Resolution 2 by Rep. Joe Harrison, R-Napoleonville, would do just that, until July 1, 2014. The measure is now a carbon copy of Senate Concurrent Resolution 1 by Sen. Page Cortez, R-Lafayette, which is pending final passage on the Senate floor.

Harrison said his resolution is needed because last summer the Division of Administration sought determinations from the Internal Revenue Service on whether the cash balance plan would provide a benefit equivalent to Social Security. No answer has been supplied by the IRS yet and Cortez has said that “it is extremely unlikely that a private letter ruling will be issued prior to July 1, 2013.”

If the IRS replies in the negative, Harrison told the committee that the state would be forced “in a position to where we would have to pay” whatever the difference would be to make sure benefits are equal to Social Security.

On the education front, Jindal threatened lawmakers with the possibility of a special session on education if the Supreme Court denies two appeals by the state of the two major education laws passed last year. A district judge ruled last year that the state’s voucher plan unconstitutionally uses local education dollars.

Earlier this year, a district judge ruled that the Jindal-backed Act 1 of 2012 dealing with tenure, the hiring and firing authority of school boards and the ability of local district to set salary schedules was unconstitutional because it dealt with multiple objects.

The separate three bills aimed to fixed the multiple-object problem were deferred last week by the House Education Committee. Legislators question if the votes are there to pass the bills this year.

Passed instead by the committee was House Bill 160 by Rep. Gene Reynolds, D-Minden, which delays implementation of the new public school teacher evaluation tool known as Compass until next year. It also takes the bite away from the Compass evaluations currently being performed. Without Compass in place, critics argue Act 1 remains on shaky ground since they are interconnected.

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