FOI Daily Dose: Attorney sues Carolinas HealthCare System for withholding confidential settlement

A Charlotte attorney is suing Carolinas HealthCare System for allegedly violating the state’s “sometimes-ambiguous” public records law by keeping a settlement confidential, according to The Charlotte Observer.

Attorney Gary Jackson is arguing that Carolinas HealthCare has no legal right to keep its settlement confidential, and he’s asking for a court order to force disclosure of the document so he can see if it’s fair.

Carolinas HealthCare won the confidential settlement in a court complaint in 2008 against the former Wachovia Bank. The hospital system said the bank broke its promise to put the hospital’s money in low-risk investments. One of their investments fell from about $15 million to $1.8 million, according to The Observer.

The hospital system’s board of directors in 2011 went into a closed session to approve the settlement, but they kept it confidential and refused to provide copies of the agreement.

Jackson and Carolinas HealthCare representatives came before a Superior Court Judge this week in a hearing to present their case.

The hospital is motioning to dismiss Jackson’s suit because the public records law does not explicitly say suits filed by a government agency are public records.

Mark Merritt, a lawyer representing the hospital system, said public disclosure could cost public bodies more money. He argued that the settlement falls through one of the public records act’s many loopholes because the law only requires public release of “any suit, administrative proceeding or arbitration instituted against any agency of North Carolina government.”

“I describe (the public records act) as a Swiss cheese,” Merritt said at the hearing. “It’s got a lot of holes in it.”

Jackson agreed the law does have holes, but said he doesn’t believe confidential settlements in lawsuits filed by public agencies should be allowed to slip through and evade the public eye.

“It’s a public body and there needs to be that transparency,” he said.

Jackson said even though Carolinas Healthcare is the largest employer in Mecklenburg County, it is “not known for transparency.”

Carolinas HealthCare system is a public, tax-exempt hospital, but Mecklenburg County officials have criticized it for acting more like a private organization than a public one, The Observer reported.

The Observer lists a series of speculative open records and open meetings violations committed by the hospital, including failing to share data about a county-owned psychiatric hospital, not inviting the public to quarterly board meetings and not providing The Observer with its administrative expenses.

Kara Hackett is SPJ’s Pulliam/Kilgore Freedom of Information intern, a freelance writer and a free press enthusiast. Contact her at khackett@spj.org or on Twitter: @KaraHackett.

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