The preliminary injunction ordering SchoolCare to continue paying Dover educators’ health care claims may have implications for the 89 other school districts that paid SchoolCare’s special assessment, according to Anthony Carr of Shaheen and Gordon.
“This could be significant for those 89 other towns and districts,” said Carr, who is representing Superintendent Christine Boston in the lawsuit against SchoolCare.
SchoolCare threatened to stop paying claims on May 1 if Dover failed to pay a special assessment of $1.7 million above and beyond its normal monthly premium in order to cover the insurance risk pool’s losses. Dover refused to pay the special assessment, arguing that it was illegal.
Superior Court Judge John Curran, finding that school employees covered by SchoolCare could face “irreparable harm,” ordered SchoolCare to continue to pay “covered healthcare claims of Dover employees, spouses, dependents, and retirees.”
Curran also found that if the case went to trial, Dover would “likely succeed on the merits” of its case.
Whether the case will go to trial remains an open question, as the judge has not ruled on the claims of SchoolCare and the New Hampshire Secretary of State that the court is not the proper jurisdiction for Dover’s complaint.
“The court will duly consider the important jurisdictional question this case presents in ruling upon those pending motions to dismiss …,” Judge Curran wrote. “For the purposes of this motion, the court finds that the plaintiffs have a sufficient likelihood of establishing jurisdiction at this stage.”
Carr said the order for the preliminary injunction is “very helpful, very favorable.” However, the only “asterisk” is that there is a pending motion to dismiss for lack of jurisdiction.
Favorable ruling hinges on pending jurisdictional argument
Both New Hampshire Secretary of State David Scanlan, through the New Hampshire Bureau of Securities Regulation and its counsel, which intervened, and SchoolCare, have filed motions to dismiss the case with jurisdictional arguments.
“The Bureau respectfully asks this Court to dismiss the District’s Complaint in its entirety because the claims contained therein fall under the Bureau’s exclusive jurisdiction and authority and are best submitted to the Bureau’s administrative enforcement mechanism,” according to court documents.
SchoolCare has argued the plaintiffs can’t show a “likelihood of success on the merits” as the matter needs to be brought before the secretary of state, not the Superior Court.
“Basically, SchoolCare and the Secretary of State are trying to argue that none of these claims brought by Dover, none of these claims brought by Dr. Boston, should be in any court in the state, and these are all issues that should be squarely and solely resolved by the Secretary of State. So that’s really the only lingering issue in that regard,” said Carr.
The lawyer said they’re “hopeful,” based on their comprehension of the law, that a “favorable ruling” will soon come out on the jurisdiction argument.
“Once the jurisdictional issue is resolved, it will be much more clear that the 89 towns and districts likely have causes of action, similar breach of contract actions against SchoolCare to recoup the funds that they were forced to pay under duress, and SchoolCare may not have had a lawful basis to request or receive those funds,” Carr said.
89 members who paid assessment could follow Dover’s lead
Carr explained what the preliminary injunction could mean to the other districts and towns.
“If the jurisdiction were to get resolved favorably, then what those 89 towns and districts would be able to do is piggyback this order, which although it’s directly granting a preliminary injunction, what it’s inherently doing as part of that is saying that we are likely to succeed on the merits of our claim. And one of those claims is the breach of contract claims. So, if we were to be successful on jurisdiction, those other 89 towns and districts would be pretty wise to say that they very well may have viable claims as well,” said Carr.
“This order recognizes that all 89 of those towns and districts may have legal rights to recoup those funds and redeploy them for the betterment of their communities and children, including going toward educational services and staffing. I hope that other towns and school districts will follow the lead of Dover and Dr. Boston and stand up to SchoolCare and demand what’s right,” Carr said in a press release.
He called the judge’s ruling a “huge win for Dover.”
He highlighted one of the immediate results being that district teachers and staff “don’t have to worry about coverage stopping in the middle of a policy period. That’s amazing. We heard stories about a kid who was scheduled to have heart surgery. I believe a staff member needed a kidney transplant. And so, the stakes are very high. And these are people, real humans in Dover, who were worried about how this might go,” said Carr.
“On the flip side, if Dover was forced to pay the ransom, we offered testimony that $1.7 million is the equivalent of about 16 and a half full-time salaries. And we’ve seen in other towns and districts, not just the budget being thrown into crisis, but again, real humans with families being laid off. So it both preserves the status quo for the health coverage for all the fantastic teachers and staff in Dover. And it also, at least for the time being, precludes great teachers and staff within Dover from being laid off,” Carr said.
“I would not want to be the 89th or the 88th town or district that pursues recourse. I think it’s important to act urgently,” said Carr. “I guess I’m on a bit of a personal mission to kind of see all these issues through and to make sure that SchoolCare does not benefit from its own improper conduct. So, we will see what the future holds, but I may very well be representing some of these towns and districts. I would say there’s really no need for any of the towns and districts to wait (for the jurisdictional issue),” said Carr.
Portsmouth agreed to pay assessment ‘under protest’
Trevor McCourt, Portsmouth’s deputy city attorney, said “the city of Portsmouth has not made payment on the $1.57 million assessment at this time. We’ve made arrangement to make that payment by July 15th of this year, and the City Council’s vote was specifically to authorize that payment under protest.”
McCourt said “the last act of the City Council was to agree to make that payment under protest. Certainly, I don’t know what the plan will be moving forward. We plan to make the payment. We continue to make our monthly payments.”
He said they’re “certainly encouraged” by the ruling out of the Strafford Superior Court, and that he personally has already commented “pretty publicly, I agree with the position that Dover is taking.”
What’s next for the case?
Carr said right now, they have “a laser focus on an order on the jurisdictional issue, just so we can make sure that we’ve got the green light to keep these claims in court where we feel like they belong.”
Carr said if they receive a favorable ruling on jurisdiction, they’re attention will be on prosecuting their case and going to trial if needed.
“One of the elements of getting a preliminary injunction is the court has to find a likelihood of succeeding on the merits, meaning that the court is not quite, but kind of pre-adjudicating whether our claims are going to win or not,” said Carr. “So, for the court to find at this early stage that we’ve met that threshold is a great indication, but it doesn’t necessarily mean game over. What it means game over for is that Dover does not have to pay the $1.7 million now. The case will proceed on a 12-month trial track after this, and whether it’s through a jury trial or through pre-trial briefing, we will be hopeful to get a result saying that we never have to pay the $1.7 million.”
