Opinion
2022 CA 0245 2022 CA 0246 2022 CA 0247 2022 CA 0248
05-08-2023
BOARD OF ETHICS v. PATRICK C. MORROW, SR, ET AL.
Leslie J. Schiff Opelousas, Louisiana and John W. Perry, Jr. Daniel J. Balhoff Baton Rouge, Louisiana and James P. Ryan Opelousas, Louisiana Attorneys for Appellants, Patrick C. Morrow, Sr., Patrick C. Morrow, APLC, and Morrow, Morrow, Ryan & Bassett LaToya D. Jordan Kathleen M. Allen Tracy M. Barker David M. Bordelon Baton Rouge, Louisiana Attorneys for Appellee, Louisiana Board of Ethics
Appealed from the Ethics Adjudicatory Board State of Louisiana, Division of Administrative Law Docket Nos. 2020- 7423, 2020- 7424, 2020-7425, 2020- 8033 Sherlyn D. Shumpert, A. Brock Avery, and Lance B. Vinson, Administrative Law Judges Presiding
Leslie J. Schiff Opelousas, Louisiana and John W. Perry, Jr. Daniel J. Balhoff Baton Rouge, Louisiana and James P. Ryan Opelousas, Louisiana Attorneys for Appellants, Patrick C. Morrow, Sr., Patrick C. Morrow, APLC, and Morrow, Morrow, Ryan & Bassett
LaToya D. Jordan Kathleen M. Allen Tracy M. Barker David M. Bordelon Baton Rouge, Louisiana Attorneys for Appellee, Louisiana Board of Ethics
BEFORE: GUIDRY, C. J., PENZATO, WOLFE, RESTER, AND MILLER, JJ.
PER CURIAM
Patrick C. Morrow, Sr., appeals the order of the Louisiana Ethics Adjudicatory Board (EAB), which overruled his exception of prescription and denied his motion for summary judgment that sought the dismissal of the charge levied against him by the Louisiana Board of Ethics (BOE) for violating La. R.S. 42:1111(C)(2)(d). We reverse the EAB's order and dismiss the charge.
FACTS
Patrick C. Morrow, Sr., is an attorney with the law firm of Morrow, Morrow, Ryan &Bassett (MMRB), whose practice includes class action litigation. In 2011, Hospital Service District No. 2 of St. Landry Parish sought to appoint Mr. Morrow to the Board of Trustees of Opelousas General Hospital Authority, a Louisiana Public Trust (the Hospital). Since the Hospital is a political subdivision of the State of Louisiana, and Mr. Morrow and MMRB were actively representing the Hospital in pending class action lawsuits, the Hospital's legal representative requested confirmation from the BOE that Mr. Morrow's appointment was permissible under the Louisiana Code of Governmental Ethics (the Ethics Code).
After receiving the request, the BOE asked for additional information, which was provided. Specifically, the BOE was provided with MMRB's contract for legal representation of the Hospital in a "PPO class action" and pleadings from the class action suit filed by the Hospital against Fairpay Solutions, Inc., in which MMRB was retained to represent the Hospital. In conveying the Fairpay pleadings, Mr. Morrow related:
The contract clarifies that the class action is against group purchasers as defined by La. R.S. 40:2202, which includes the definition of a Preferred Provider Organization or "PPO."
The parties are in serious settlement discussions in the Fairpay matter and therefore the Court has postponed the hearing regarding the Motion to Certify the Class. As such, no order has been signed as of this date [(February 16, 2012)] regarding the appointment of Class Counsel. In the event settlement discussions are unsuccessful, plaintiff will move
to set the Motion for Class Certification and Appointment of Class Counsel for hearing.
The Hospital's legal representative thereafter informed the BOE that a settlement was reached in the Fairpay class action suit and outlined the required subsequent steps for the distribution of proceeds to class members.
The BOE considered the request for advisory opinion at its March 2012 meeting. On April 5, 2012, the BOE issued an advisory opinion that stated "the [Ethics Code] would not prohibit [Mr.] Morrow from serving as a member of [the Hospital Board] while his law firm ... has an ongoing representation of ... [the Hospital] in several class action lawsuits." The advisory opinion explained, "Since the St. Landry Parish Hospital Service District No. 2 or [the Hospital] does not have the authority to direct the litigation or affect the representation by Mr. Morrow or his law firm in these class actions, there is no transaction in which Mr. Morrow is in any way interested under the supervision or jurisdiction of his board." The advisory opinion further stated "that Mr. Morrow would not be prohibited from providing compensated services to [his law firm] while it represents ... [the Hospital]."
The BOE's April 5, 2012 advisory opinion indicates that the BOE's meeting was held March 17, 2012; however, the BOE's minutes and notice to appear indicate that the meeting was held on March 16, 2012.
The factual and procedural background for the underlying class action litigation is more fully developed in Opelousas General Hospital Authority v. Fairpay Solutions, Inc., 2013-17 (La.App. 3rd Cir. 7/3/13), 118 So.3d 1269 and Opelousas General Hospital Authority v. PPO Plus, LLC, No. CIV.A. 14-0395, 2014 WL 1713414, at *1 (W.D. La. Apr. 29, 2014).
Based on the BOE's 2012 advisory opinion, Mr. Morrow accepted the appointment to the Hospital Board and, with MMRB, continued representing the Hospital in class action suits.
In 2020, the BOE charged Mr. Morrow with violating La. R.S. 42:1111(C)(2)(d) by receiving a thing of economic value in the form of payments for services rendered to MMRB and/or Patrick C. Morrow, APLC (PMPLC), at a time when MMRB had a contractual, business, or financial relationship with the Hospital. Specifically, the BOE charged that Mr. Morrow received compensation as a result of legal services to the Hospital in the form of: (1) a September 26, 2016 payment in the "PPO Plus" case; (2) a January 2, 2018 payment in the "Fairpay" case; and (3) an April 2, 2018 payment in the "Fairpay" case.
Louisiana Revised Statute 42:1111(C)(2)(d) pertinently provides that no public servant shall receive anything of economic value for or in consideration of services rendered, or to be rendered, to or for any person during his public service unless such services are neither performed for nor compensated by any person from whom such public servant would be prohibited by La. R.S. 42:1115(A)(1) or (B) from receiving a gift.
With reference to the Fairpay litigation, the Board stated in its advisory opinion:
Further, you stated that Mr. Morrow's firm has filed a Motion to Certify Class on behalf of the Trust Authority in another class action against Fairpay; however, this motion was stayed pending settlement, which was confected this month
In the record, Mr. Morrow is described as the sole owner and operator of Patrick C. Morrow, APLC, which is a partner in the law firm of MMRB, described as a Louisiana Partnership.
The charge in the related appeal is that Mr. Morrow in his capacity as Patrick Morrow, A Professional Law Corporation, which is a twenty-five percent owner of the law firm, Morrow, Morrow, Ryan & Bassett, entered into a contract on August 17,2016, to represent OGHS in a class action lawsuit against Blue Cross Blue Shield of Louisiana in violation of La. R.S. 42:1113(B). This litigation began on August 24, 2016, and BCBS raised the issue of Mr. Morrow's ability to serve as class action counsel while serving on the hospital board. The trial court relied on the Board's 2012 advisory opinion and dismissed BCBS's argument regarding Mr. Morrow's ability to serve as class counsel. The appellate court affirmed, finding nothing was presented that would persuade the court "to rule contrary to the Board of Ethics' opinion." The opinion was reported, and writs were denied by the Louisiana Supreme Court. See Opelousas General Hospital Authority v. Louisiana Health Service & Indemnity Co., 2019-736 (La.App. 3rd Cir. 11/12/19), 283 So.3d 619, 627, writ denied, 2019-01848 (La. 1/28/20), 291 So.3d 1054.
Mr. Morrow filed a motion for summary judgment seeking dismissal of the charge due to his detrimental reliance on the BOE's 2012 advisory opinion, which advised that it would not be a violation of the Ethics Code for him to continue his representation "in several class action lawsuits" or to receive compensation as a result thereof. Mr. Morrow noted that the BOE received evidence regarding his involvement in both the PPO Plus and Fairpay class action suits before reaching its decision. In opposition, the BOE argued that detrimental reliance on an advisory opinion is not a defense to charges for violations of the Ethics Code.
Mr. Morrow additionally filed an exception of prescription, arguing that the charge was filed more than two years after the BOE had knowledge that the payments would be received. See La. R.S. 42:1163. The BOE countered that the request for the advisory opinion did not afford it knowledge of future violations of the Ethics Code as was necessary to trigger the prescriptive period. The BOE further contended that an enforcement action could not prescribe before the violation occurred, which in this instance was not until Mr. Morrow received the compensation.
After a hearing, the EAB issued an order that denied the motion for summary judgment, finding that material issues of fact remained as to whether Mr. Morrow's reliance on the BOE's 2012 advisory opinion was justifiable relative to his receipt of compensation in the Fairpay and PPO Plus matters. The EAB's order also overruled the exception of prescription, finding that the prescriptive period did not begin to run until either the date of occurrence or the BOE's discovery of the occurrence, and based on either of those dates, the charge was timely. Mr. Morrow now appeals the EAB's order. See La. R.S. 42:1142 (providing that any person aggrieved by any action of the EAB may appeal to the First Circuit Court of Appeal); Board of Ethics in the Matter of Savoie, 2017-0077 (La.App. 1st Cir. 8/7/17), 224 So.3d 1246, 1251 (per curiam) (interpreting La. R.S. 42:1142 to provide for an appeal of the denial of a motion for summary judgment).
In a companion appeal, Mr. Morrow, PMPLC, and MMRB appeal the EAB's order denying their motion for summary judgment that sought dismissal of related charges of violating La. R.S. 42:113(B) by being "in any way interested" in a legal services contract between MMRB and the Hospital for representation in a class action lawsuit against Louisiana Health Service & Indemnity Company, d/b/a Blue Cross/Blue Shield of Louisiana (BCBS-LA), while Mr. Morrow served as an appointed member of the Hospital Board. See Board of Ethics v. Morrow, 2022-0241 (La.App. 1st Cir.___ /___ /___),___ So.3d___ .
DISCUSSION
Louisiana Constitution Article V, Section 8(B) requires that "[a] majority of the judges sitting in a case shall concur to render judgment." As more fully explained in the reasons individually assigned, a majority of the judges comprising the 5-Judge panel in this case concur in reversing the EAB's order and dismissing the charge against Mr. Morrow for alleged violations of La. R.S. 42:1111(C)(2)(d).
CONCLUSION
The Ethics Adjudicatory Board's order is reversed and judgment is rendered dismissing the charge levied against Patrick C. Morrow, Sr., for violating La. R.S. 42:1111(C)(2)(d). Costs of this appeal in the amount of $3,518.00 are assessed to the Louisiana Board of Ethics.
ORDER REVERSED; JUDGMENT RENDERED.
GUIDRY, C.J., dissents and assigns reasons. GUIDRY, C.J., dissenting.
I believe that summary judgment was properly denied, as the evidence submitted by Patrick Morrow is insufficient to establish that no genuine issue of material fact exists regarding his entitlement to prevail on his claim of detrimental reliance as a matter of law. I also adopt the reasons stated by Judge Penzato in her dissenting opinion finding the unsigned and un-notarized affidavit submitted by Patrick Morrow lacks evidentiary value and therefore fails to establish an essential element of his detrimental reliance claim (i.e., his "reasonable reliance" on the 2012 advisory opinion), I further believe the peremptory exception raising the objection of prescription was properly overruled in this matter, as the Board of Ethics (BOE) could not have discovered the alleged violations before they occurred.
Herein, Patrick Morrow filed a motion for summary judgment seeking dismissal of the charge that he violated La. R.S. 42:1111(C)(2)(d) on the basis of detrimental reliance. The theory of detrimental reliance is codified in La. C.C. art. 1967, which pertinently provides, "[a] party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying." To prevail on a claim of detrimental reliance against a government agency, the party asserting the claim must prove: (1) unequivocal advice from an unusually authoritative source; (2) reasonable reliance on that advice; (3) reliance on that advice resulted in extreme harm; and (4) gross injustice will occur in the absence of judicial estoppel. Nucor Steel Louisiana, LLC v. St. James Parish School Board, 21-01814, p. 6 n.3 (La. 6/29/22), 346 So.3d 272, 274 n.3.
The 2012 advisory opinion allegedly relied on is addressed to Nicholas Gachassin, III, general counsel for Opelousas General Hospital Authority (OGHA), who submitted the request for the advisory opinion, and who, along with Patrick Morrow, was present at the March 2012 meeting of the BOE. The advisory opinion mentions three separate legal actions instituted by OGHA against the following named companies respectively: Cleco, Summit Consulting, and Fairpay. The advisory opinion further mentions that two of the actions (Cleco and Summit Consulting) were class actions and that two of the actions had been settled (Summit Consulting and Fairpay).
With respect to the Summit Consulting class action, the advisory opinion states "[a] special master has been appointed to oversee the disbursement of settlement funds." With respect to the Fairpay action, the opinion mentions that a motion to certify the litigation as a class action had been filed, but was stayed pending settlement, which was recently "confected." Thereafter, the advisory opinion states, "[w]ith the exception of these class action lawsuits, you [Mr. Gachassin] stated that neither Mr. Morrow nor his firm has any other dealings with ...[OGHA]." Finally, the advisory opinion concludes with the caveat: "This advisory opinion is based solely on the facts as set forth herein. Changes to the facts as presented may result in a different application of the provisions of the Code of Ethics."
The advisory opinion, which is dated April 5, 2012, recites that settlement of the Fairpay litigation "was confected this month," However, the reference to "this month" appears to be a reference to March 2012, when the BOE held the hearing on Mr. Gachassin's request for an advisory opinion, as the advisory opinion starts with the statement that the BOE considered Mr. Gachassin's request at its March 2012 meeting and then goes on to mention what Mr. Gachassin stated at that meeting.
Prior to the March 2012 hearing and the issuance of the advisory opinion, Mr. Gachassin submitted documentation to the BOE regarding then-pending litigation in which the appellants were representing the OGHA. One of the documents submitted is titled "PPO CLASS ACTION ATTORNEY REPRESENTATION AGREEMENT" and lists four different law firms that were retained to seek injunctive relief, declaratory relief, and penalties against group purchasers establishing a preferred provider organization (PPO). While the PPO Class Action document lists Morrow, Morrow, Ryan &Bassett as one of the four law firms retained to represent "Client," an unidentified healthcare provider, only one of the four listed law firms (not Morrow, Morrow, Ryan &Basset) signed the document as accepting the representation agreement. The other documentation submitted relates to the litigation involving Cleco, Summit Consulting, and Fairpay.
In the ruling of the Ethics Adjudicatory Board (EAB) denying Patrick Morrow's motion for summary judgment, the EAB states that the "PPO Class Action" document identifies "client" as "the undersigned health care provider" and observes, "it would require taking judicial notice of [OGHA's] physical address for the document to contain any identifiable reference to [OGHA]."
The payments for which the BOE charged Patrick Morrow with violating La. R.S. 42:1111(C)(2)(d) are a September 2016 payment identified simply as "PPO Plus," and payments received in January and April 2018 identified as "Fairpay." Whether the "PPO Plus" litigation is connected with or is the same as the Cleco, Summit Consulting, or Fairpay litigation mentioned in the 2012 advisory opinion is not clear from the record. Moreover, it is equally unclear whether the 2018 payments received from "Fairpay" were derived from the Fairpay settlement reached in March 2012. Hence, for these reasons, 1 find summary judgment was properly denied, as the evidence offered by Patrick Morrow fails to establish that the 2016 and 2018 payments fall within the scope of the compensated services deemed not prohibited by the 2012 advisory opinion. Specifically, I find the evidence in the record before us fails to establish whether the settled actions mentioned in the 2012 advisory opinion were the source of the payments received by Patrick Morrow in 2016 and 2018.
As previously mentioned, to prove a claim of detrimental reliance, Patrick Morrow has to prove, in relevant part, "unequivocal advice." The 2012 advisory opinion, however, is "equivocal" in that the advice is expressly premised on the facts remaining the same or not differing from the facts as stated in the opinion. In this case, a genuine issue exists as to the material fact of whether the payments received resulted from the matters referenced in the advisory opinion; that is, whether the 2016 and 2018 payments received by Patrick Morrow were in fact part of the services for which the 2012 advisory opinion declared compensation was not prohibited. To the extent the evidence in the record before us fails to conclusively show that the facts are the same - that is that the 2016 and 2018 payments are for the services for which the 2012 advisory opinion declared compensation is not prohibited - Patrick Morrow failed to prove, as a matter of law, that it was reasonable for him to rely on the 2012 advisory opinion with respect to his receipt of the 2016 and 2018 payments. Accordingly, summary judgment was properly denied.
As for the peremptory exception raising the objection of prescription, a violation of La. R.S. 42:1111(C)(2)(d) requires "receipt" of the payment. To the extent the charge is based on the payments received in 2016 and 2018, the BOE timely filed the charge. No sanction could be imposed and prescription could not begin to run until the allegedly prohibited payments were received. There is no mention or reference to "potential receipt" or the "attempt to receive" anything of economic value in the statute. Rather, the statute states:
No public servant and no legal entity in which the public servant exercises control or owns an interest in excess of twenty-five percent, shall receive any thing of economic value for or in consideration of services rendered, or to be rendered, to or for any person during his public service unless such services are... [n]either performed for nor compensated by any person from whom such public servant would be prohibited by R.S. 42:1115(A)(1) or (B) from receiving a gift.La. R.S. 42:1111(C)(2)(d) (emphasis added). See also In re Louisiana Board of Ethics, 2013-1602, p. 11 (La.App. 1st Cir. 3/21/14), 2014 WL 1165873, at *6 ("If the Ethics Board's review of every advisory opinion request constituted knowledge of future violations so as to commence the running of the two-year prescriptive period, the Ethics Board would be obligated to investigate every person who submits an advisory opinion request to determine whether its advice was in fact being heeded.").
As Patrick Morrow is charged with the "receipt of a thing of economic value" in violation of La. R.S. 42:1111(C)(2)(d) based on the payments received in 2016 and 2018, and the BOE established that it received notice of the receipt of those payments in December 2019, the charge filed with the Ethics Adjudicatory Board (EAB) in September 2020, was timely filed within two years of discovery of the alleged violations and four years of occurrence. See La. R.S. 42:1163.
Accordingly, for the foregoing reasons, as well as those stated by Judge Penzato in her dissenting opinion, I respectfully dissent from the per curiam opinion herein that reverses the EAB's ruling and renders judgment dismissing the charge filed against Patrick Morrow for violating La. R.S. 42:1111(C)(2)(d).
PENZATO, J., dissents.
I respectfully disagree with the result reached in this per curiam. I find that Morrow failed to offer sufficient evidence to satisfy the applicable summary judgment burden of proof. La. Admin. Code 52:1.1102(C)(4); La. C.C.P. art. 966(D)(4). In a case involving the Board of Ethics (BOE) and the Ethics Adjudicatory Board (EAB), this court has held that the Code of Civil Procedure governs administrative agency proceedings where agency laws are silent. See Board of Ethics Matter of Monsour, 2016-1159 (La.App. 1st Cir. 6/21/17), 233 So.3d 625, 631, writ granted, 2017-1274 (La. 12/5/17), 231 So.3d 623, and affirmed, 2017-1274 (La. 5/1/18), 249 So.3d 808; Louisiana Board of Ethics in the Matter of Villere, 2015-1939 (La.App. 1st Cir. 12/22/16), 208 So.3d 940,949, writ denied, 2017-0128 (La. 3/13/17), 216 So.3d 807; In re Fontenot, 2014-0337 (La.App. 1st Cir. 12/30/14), 2014 WL 7455199, *2 (unpublished). Louisiana Code of Civil Procedure article 966, which governs motions for summary judgment, has been applied in similar ethics proceedings, including subsection (A)(4), setting forth the exclusive list of documentary evidence that may be relied upon to support or oppose a motion for summary judgment. See Board of Ethics Matter of Monsour, 233 So.3d at 631 (finding that La. C.C.P. arts. 966 and 967 applied to the summary judgment proceeding conducted by the Ethics Adjudicatory Board, which erred by admitting certain exhibits into evidence that did not meet the requirements of these articles and, therefore, did not constitute proper summary judgment evidence.) See Board of Ethics Matter of Monsour, 249 So.3d at 810 ("Because the Administrative Procedure Act contains no specific requirements for evidence at the summary judgment stage, the provisions of [La. C.C.P.] arts. 966 and 967 are applicable.")
Factual findings made by the EAB cannot be based solely on incompetent evidence. Generally, the competency of the evidence presented at an administrative hearing is determined by considering the degree of reliability and trustworthiness of the evidence presented and by considering whether it is of the type that reasonable persons would rely upon. Board of Ethics Matter of Monsour, 233 So.3d at 630 (citing cases illustrating that some form of certification, verification, or testimony is generally utilized in demonstrating the competence, i.e., the trustworthiness and reliability, of evidence submitted in agency adjudication proceedings).
The "affidavit" offered by Mr. Morrow, which purports to establish facts in support of Morrow's detrimental reliance cause of action, is not signed or notarized and, therefore, has no evidentiary value. Although the court must consider any summary judgment evidence to which no objection is made, we must also decide de novo whether we should give the documents any evidentiary value. La. C.C.P. art. 966(D)(2); Hernandez v. Livingston Parish School Board, 2021-0764 (La.App. 1st Cir. 3/30/22), 341 So.3d 680, 684 n.2; Pottinger v. Price, 2019-0183 (La.App. 1st Cir. 10/23/19), 289 So.3d 1047, 1053. Unsworn or unverified documents annexed to a motion for summary judgment are not self-proving and will not be considered; attaching such documents to a motion for summary judgment does not transform such documents into competent summary judgment evidence. Velocity Investments, LLC v. Pasqua, 2022-0626 (La.App. 1st Cir. 1/10/23), - So.3d -, 2023 WL 142715, *3 n.6. A document that is not an affidavit or sworn to in any way, or is not certified or attached to an affidavit, has no evidentiary value on a motion for summary judgment. Board of Ethics Matter of Monsour, 233 So.3d at 631. Thus, I find Morrow's motion for summary judgment was properly denied.
I also find the exception of prescription was properly denied. There was no alleged violation of La. R.S. 42:1113(C)(2)(d) until Mr. Morrow was appointed to the Board and accepted payments.
WOLFE, J., concurring.
I agree with the majority decision to reverse the EAB's order and dismiss the charge levied against Mr. Morrow for violating La. R.S. 42:1111(C)(2)(d), because I believe Mr. Morrow is entitled to summary judgment based on his detrimental reliance on the BOE's 2012 advisory opinion.
The theory of detrimental reliance is that "[a] party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying." La. Civ. Code art. 1967. To prevail on a detrimental reliance claim against a government agency, the party asserting the claim must prove: (1) unequivocal advice from an unusually authoritative source; (2) reasonable reliance on that advice; (3) reliance on that advice resulted in extreme harm; and (4) gross injustice will occur in the absence of judicial estoppel. Nucor Steel Louisiana, LLC v. St. Janies Parish School Board, 2021-01814 (La. 6/29/22), 346 So.3d 272, 274 n.3.
The EAB considered the motion for summary judgment prior to the Nucor Steel decision, which clarified that the legal standard applied by the EAB is applicable to private parties, not governmental agencies. Nucor Steel, 346 So.3d at 274.
Mr. Morrow established that, with full knowledge of his participation in the Fairpay and PPO class action lawsuits, the BOE unequivocally stated in its 2012 advisory opinion that "the [Ethics Code] would not prohibit [Mr.] Morrow from serving as a member of [the Hospital Board] while his law firm ... has an ongoing representation of... [the Hospital] in several class action lawsuits," and further, "that Mr. Morrow would not be prohibited from providing compensated services to [his law firm] while it represents ... [the Hospital]." As the government agency charged with administering and enforcing the Ethics Code and statutorily authorized to render advisory opinions regarding its application, the BOE is an undisputedly authoritative source. See La. R.S. 42:1134(E); Duplantis v. Louisiana Board of Ethics, 2000-1750 (La. 3/23/01), 782 So.2d 582, 586. It is uncontested that Mr. Morrow accepted the appointment to the Hospital Board based on the BOE's advice that he could continue participating in representation of the Hospital in class action litigation and would not be prohibited from receiving compensation related thereto.In reliance on the BOE's advice, he did just what the BOE said he could - while serving as an appointed member of the Hospital Board, Mr. Morrow continued to provide compensated services to MMRB while MMRB represented the Hospital in class actions lawsuits, including the Fairpay and PPO class litigation. Then in 2020, despite the advice given in its 2012 advisory opinion, the BOE charged Mr. Morrow with violating La. R.S. 42:1111(C)(2)(d) by receiving a thing of economic value in the form of three payments related to the Fairpay and PPO Plus class action suits, at a time when MMRB had a contractual, business, or financial relationship with the Hospital. As a result, Mr. Morrow faces the imposition of penalties by the EAB, leaving no dispute that gross injustice will occur in the absence of judicial estoppel. See La. R.S. 42:1153(B); La. R.S. 42:1155(A).
The request for advisory opinion established that its purpose was to provide guidance for Mr. Morrow's acceptance of the position on the Hospital Board. In further support, Mr. Morrow submitted his own affidavit in which he attested that he would not have accepted the position without the BOE's favorable advisory opinion. Although Mr. Morrow's affidavit was not signed and was not in proper form, the BOE raised no objection to its consideration and the EAB did not exclude it as incompetent. See Admin. Code art. 52:1.1102(C)(6) (providing the EAB may exclude incompetent, irrelevant, or immaterial, and unduly repetitious evidence); and 52:1.1102(C)(7) (permitting objections to offered evidence). Since deference is owed to an administrative agency's construction and interpretation of its own rules and regulations, and since the EAB itself did not exclude the affidavit, then we must consider the affidavit as part of our de novo review. See Winmill Tire, LLC v. Colt, Inc., 2020-01446 (La. 1/28/22), 333 So.3d 414,421; see also Ellis v. Circle L Trucking, L.L.C., 2021-0457 (La.App. 1st Cir. 12/30/21), 340 So.3d 985, 991 (finding that in a summary judgment proceeding governed by the Louisiana Code of Civil Procedure, an unsigned affidavit to which there was no objection must be considered by this court in conducting de novo review).
On appeal, the BOE argues for the first time that the charge against Mr. Morrow for violating La. R.S. 42:1111(C)(2)(d) was based on compensation related to the BCBS-LA class action litigation, which is the subject of the charges addressed in the companion appeal. However, the BOE's assertion is not reflected in its charge, is unsupported by the record, and is not properly considered as part of this appeal.
In opposition to the motion for summary judgment, the BOE offered only its 2012 advisory opinion and the minutes of the meeting at which it considered the request for an advisory opinion, which pertinently stated that the Ethics Code would not be violated by Mr. Morrow providing compensated services to his law firm while his law firm represents the Hospital in class action litigation "since the contract... entered prior to the firm's appointment by the Court as legal counsel for the class no longer controls and it is basically meaningless." Thus, rather than establishing a genuine issue of material fact, the BOE's evidence actually supports Mr. Morrow's position.
Mr. Morrow's summary judgment evidence proves that this is quintessential detrimental reliance. Mr. Morrow is entitled to summary judgment dismissing the BOE's charges against him for violating the Ethics Code by doing exactly what the BOE sanctioned in its 2012 advisory opinion.
I additionally concur with Judge Miller that the charges are prescribed.
MILLER, J., concurring.
I agree with the majority decision herein to reverse the July 22, 2021 order of the Ethics Adjudicatory Board. While I believe the Ethics Adjudicatory Board's denial of Mr. Morrow's motion for summary judgment should be affirmed for the reasons set forth in my concurrence in the related appeal,[1] I believe Mr, Morrow's peremptory exception of prescription in the instant matter should be maintained because the charges against him were not timely brought and should be dismissed as prescribed.
Louisiana Revised Statute 42:1111(C)(2)(d) provides that no public servant and no legal entity in which the public servant exercises control or owns an interest in excess of twenty-five percent shall receive anything of economic value for or in consideration of services rendered, or to be rendered, to or for any person during his public service unless such services are neither performed for nor compensated by any person from whom such public servant would be prohibited by La. R.S. 42:1115(A)(1) or (B) from receiving a gift. The charges levied against Mr. Morrow by the Board of Ethics ("the Board") alleged that Mr. Morrow received compensation for his representation of Opelousas General Health System ("OGHS") in class action litigation on September 26, 2016 (PPO Plus), January 2, 2018 (Fairpay), and April 2, 2018 (Fairpay) while serving on the hospital board.[2]
Louisiana Revised Statute 42:1163 provides that "(n]o action to enforce any provision of this Chapter shall be commenced after the expiration of two years following the discovery of the occurrence of the alleged violation, or four years after the occurrence of the alleged violation, whichever period is shorter." Thus, pursuant to La. R.S. 42:1163, discovery of the occurrence of the alleged violation triggers the two-year prescriptive period for bringing an action to enforce the Ethics Code.
Typically, knowledge sufficient to commence the running of a prescriptive period can be actual or constructive. In determining whether a party has constructive knowledge of a particular action, courts generally look to the reasonableness of the party's action or inaction. In re Louisiana Bd. of Ethics, 2013-1602 (La.App. 1stCir. 3/21/14), 2014 WL 1165873, *6 (unpublished), citing Bailey v. Khoury, 20040620 (La. 1/20/05), 891 So.2d 1268, 1275-1276. In particular, constructive knowledge is whatever notice is enough to excite attention and put the injured party on guard and call for inquiry. Such notice is tantamount to knowledge or notice of everything to which a reasonable inquiry may lead. Guerin v. Travelers Indemnity Company, 2019-0861 (La.App. 1st Cir. 2/21/20), 296 So.3d 625,629 (citing Campo v. Correa, 2001-2707 (La. 6/21/02), 828 So.2d 502, 511).
Prior to the Board's issuance of its April 2012 advisory opinion, Mr. Morrow submitted to the Board a copy of the PPO class action fee and representation agreement. The agreement plainly provides:
If the class action is certified as a class action, and if a monetary recovery is obtained therein for the plaintiff class(es), either by settlement or judgment, ATTORNEYS will apply to the Court for reimbursement of their costs and payment of their fees as a reasonable percentage of such recovery, on an equitable common
benefit basis, and/or by defendants if allowed by law. The court has authority and discretion to fix the fee at the level it determines to be reasonable. [Emphasis added.]
Moreover, on February 16, 2012, Mr. Morrow corresponded with the Board for the purpose of revealing that he served as counsel in the Fairpay class action litigation. Therein, Mr. Morrow candidly advised the Board that "a Motion for Class Certification" had been filed and that the parties were "in serious settlement discussions." Mr. Morrow further disclosed that, pending the settlement negotiations, the Court had postponed the hearing on certifying the class, but that "in the event settlement negotiations [were] unsuccessful, plaintiff will move to set the Motion for Class Certification and Appointment of Class Counsel for hearing." To this correspondence, Mr. Morrow attached an "Order of Preliminary Approval of Proposed Settlement" and a "Motion to Certify Class (Filed Under Seal)" appointing him as class counsel. Through email correspondence with counsel for the Board, counsel for Mr. Morrow confirmed that in this litigation, "OGHS does not have the authority to direct the litigation and does not have the right to remove Mr. Morrow or his firm from representation as he was appointed by the Court to represent the Class." In its advisory opinion, the Board expressly acknowledged these pleadings and confection of the settlement in the Fairpay class action litigation[3]
Thus, in both the PPO and Fairpay class action litigation, the Board was made plainly aware that Mr. Morrow would receive compensation for his representation considering it sanctioned Mr. Morrow's involvement in these class action matters through its advisory opinion. Nonetheless, in spite of the information provided, including the contracts, pleadings, and correspondence with the Board's legal counsel, the Board now contends that it had no knowledge that Mr. Morrow received anything of economic value or was compensated for the work expended in the sanctioned class action matters until it received an anonymous complaint on December 20, 2019, resulting in its issuance of the charges on September 24, 2020. Tn my view, considering the knowledge gained by the Board from the information provided above, the Board's inaction or lack of awareness was not reasonable. See In re Louisiana Bd. of Ethics, 2014 WL 1165873 at *6.
I believe the Board had constructive knowledge, i.e, the Board knew or had reason to know, that after receiving and reviewing the documents submitted with its request for an advisory opinion, including the specific fee and representation agreements, pleadings concerning certification of the class, proposed settlement agreements, and correspondence between counsel for Mr. Morrow and the Board advising and confirming the status of this litigation, that Mr. Morrow would receive economic value from the approved contracts and that some payment was imminent. Certainly, the information Mr. Morrow provided to the Board prior to the issuance of the advisory opinion was enough to excite attention and put the Board on guard and call for inquiry. See Guerin, 296 So.3d at 629. At the very least, the Board could not look away and claim ignorance until a complaint was lodged. I believe that the receipt of these payments thus triggered the two-year prescriptive period for the ethics complaint. Cf. In re Krantz, 2013-1732 (La.App. 1st Cir. 5/29/14), 147 So.3d 737, 742, writ denied, 2014-1363 (La. 10/3/14), 149 So.3d 797 (facts contained in the request for the advisory opinion may trigger the two-year prescriptive period of La. R.S. 42:1163).
For these reasons, I believe that the Board had reason to know of Mr. Morrow's compensation and that the receipt of those anticipated payments triggered the commencement of the two-year prescriptive period. As such, the Board's charges filed on September 24, 2020, over two years after the payments were received, are untimely.[4]
[1] In the instant appeal and in the related appeal, I believe the EAB correctly denied the motions for summary judgment urged by Mr. Morrow because I do not believe that an advisory opinion of the Board of Ethics is sufficient to support a claim of detrimental reliance. See Board of Ethics v. Morrow, 2022-0241, 2022-0242, 2022-0243, 2022-0244 (La.App. 1st Cir.___/___/___),___ So, 3d___,___, Miller, J. concurring.