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New Hampshire’s Highest Court Sides with Policyholders and Stops State from Taking $110 Million from State Medical Malpractice Joint Underwriting Association; New Hampshire Supreme Court Calls Proposed Transfer of $110 Million Unconstitutional

Manchester, NH. New Hampshire Supreme Court ruled today in favor of a coalition of more than 250 health care providers who argued that the State of New Hampshire has no right to take $110 million in surplus from the fund that provides malpractice insurance. This ruling affirms the July decision of the Belknap County Superior Court finding the State’s proposed transfer of $110 million from New Hampshire Medical Malpractice Joint Underwriting Association (JUA) to the general fund unconstitutional and unenforceable. New Hampshire Governor John Lynch had proposed using the money to fund the current, previous and future state budgets.

1/28/2010

“Today’s decision confirms what policyholders have contended since announcement of the plan to take this money: that the State can’t take property that belongs to private citizens or impair their contracts in an effort to solve public problems. The attempt to do so offends the New Hampshire Constitution,” said Kevin Fitzgerald, Nixon Peabody partner representing the policyholders. “The Court’s holding underscores that these fundamental legal constraints on state action remain at the center of our form of government, and are not subject to fiscal or political exception.“

The health care coalition’s lead plaintiffs include Georgia Tuttle, M.D., Derry Medical Center, and LRGHealthcare, who are represented by Nixon Peabody litigation partners, Kevin Fitzgerald, Scott O’Connell, and Gordon MacDonald.

“This case has implications in New Hampshire and in other states as lawmakers look for needed solutions to solve pressing financial issues,” added Mr. O’Connell, Nixon Peabody partner representing the policyholders. “This decision serves as a reminder to lawmakers that solutions to critical problems—no matter how well intended—cannot do harm to our state and federal constitutions.”

The JUA was created to provide medical malpractice insurance coverage to health care providers in the state. Under the express terms of the individual insurance policies and the applicable regulations, policyholders are the sole parties entitled to receive excess surplus funds from the JUA.

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