Marion County Hospital District’s hiring of new general counsel raises conflict of interest concerns

File photo: Robert Batsel Jr., who were all representing the City of Ocala, left to right, listen during the $80 million City of Ocala Fire Fee lawsuit hearing at the Marion County Judicial Center in Ocala, Fla. on Tuesday, May 10, 2022. More than 250 concerned citizens packed courtroom 1 for the final hearing of the lawsuit at the courthouse. [Bruce Ackerman/Ocala Gazette] 2022.

Editor’s Note: This article has been updated to clarify bidding for legal services was not open to all lawyers.

On Jan. 29, the Marion County Hospital District approved a contract for legal services with the firm of Gooding & Batsel after parting ways with longtime attorney and former hospital district trustee Joseph Hanratty.

MCHD did not open for bid proposals from attorneys for the legal services contract other than those they invited. Government entities are not required to open bidding for professional services like these although most of the time they do.

The MCHD is a little-known but key component of the local healthcare infrastructure.   This year, the district marks 10 years since it received almost $213 million after the county, with approval from Marion County voters, decided to lease the county hospital, Munroe Regional Medical Center, to a private healthcare company. The hospital lease has changed hands a few times since then and is now held by AdventhHealth.

MCHD has invested that money and now it totals almost $300 million. The money is to be used by the trustees to meet the health needs of Marion County residents. The MCHD has an annual operating budget of $12 million to spend on a host of programs from playgrounds for children to mental health assistance for first responders.

Gooding & Batsel is a prominent firm that for decades has been representing local government entities from the city of Ocala to the College of Central Florida as well as developers and other business clients who often do business before these bodies.

The letter attached to the Gooding & Batsel’s initial proposal acknowledged that there would be conflicts of interest to navigate since the firm represents so many other local institutions, but the lawyers said they would be steadfast about identifying them.

The contract for legal services was not attached to the Jan. 29 district board meeting agenda. There was no discussion about which other law firms had applied or how any potential for conflicts of interest would be addressed. No trustee disclosed the firm as a “business associate” or indicated any other connection.

In response to questions from the “Gazette” about whether any members of the board have now or in the past had dealings with the law firm, Batsel wrote in an email that his client list was confidential.

The MCHD trustees are appointed by the Marion County Board of Commissioners and are subject to the state’s ethics rules and Sunshine Laws. Commissioner Michelle Stone is now the liaison between the commission and the hospital district.

Batsel said he did not think the trustees needed to disclose whether his firm ever represented them individually or as trustees on other boards or their businesses before voting on the contract.

The “Gazette” obtained a copy of the legal services following the meeting. The firm will bill the MCHD $250 per hour for lawyer fees and $100 per hour for law clerks. The hourly rate is $25 less than the hourly rate reflected on the last invoice for legal services reviewed by the “Gazette” from Hanratty.

Historically, MCHD has paid approximately $80,000 annually for legal fees to its general counsel. The attorneys’ fee bills are usually not attached to a meeting agenda, but the “Gazette” has obtained and reviewed some of them in the past.

In Gooding & Batsel’s first draft fee agreement and proposal, the firm acknowledged a conflict of interest between the firm’s representation of the district and the College of Central Florida, which receives significant support from MCHD. The firm attempted to set a priority of sorts between the firm’s representation of the college and the district, indicating that if a conflict came up between the two entities, Gooding & Batsel would represent the college.

In the final draft agreement between the firm and the district, however, that paragraph was stricken. In the accompanying email to the MCHD, Batsel outlined a new arrangement.

“We have spoken with Dr. (James) Henningsen, President of the College of Central Florida. Our previous draft agreement acknowledged our representation of the College and provided that, in the event of a conflict of interest, to the extent permitted under the Florida Bar Rules of Professional Conduct, the District would waive the conflict and allow us to represent the College. With the College’s support, we decided to strike this language (which was found in paragraph 13.8 of the prior draft agreement) and have eliminated it from the attached draft. Practically speaking, if we are honored with your trust and serve as your General Counsel, then our intention is to notify both parties of any conflict, abstain from representation concerning the matter, and advise each to seek separate counsel.”

The college sought an independent legal opinion about the conflict of interest, and Candace A. Brascomb of the Orlando law firm Gray & Robinson concluded that an attorney who serves as general counsel for two public entities “should not participate in transactions or proceedings between the two entities in which they have adverse interests. However, your proposed arrangement for both parties to hire outside counsel in business dealings complies with Florida law.”

Brascomb’s opinion points to two issues: the first is Florida Bar ethics rule 4-1.7, which prohibits “representation of one client (that) will be directly adverse to another client; the second being when there is a substantial risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client.”

Brascomb determined “part-time general counsel will not represent either party in circumstances in which the parties are conducting business, it seems that such an arrangement is allowable under Florida Bar Rules.”

She also explored another applicable rule in Code of Ethics for Public Officers and Employees that establishes ethical standards for public officials,  including government lawyers like Batsel’s firm.

“Generally, s. 112.313(7)(a), F.S. prohibits a public officer or agency employee from having an employment or contractual relationship with a business entity or agency that is subject to the regulation of, or is doing business with, his or her agency,” wrote Brascomb.

However, she felt there was an exception for a “part-time firm” for a government entity so long as they were “not a full-time employee or member of the unit of local government’s governing body.”

The determination of whether Gooding & Batsel should be considered a “part-time” firm for MCHD is nuanced and should include consideration of the many interactions the district has with various entities in Marion County.

Notably, Bascomb’s opinion focuses solely on the district’s relationship with CFC. It does not address other potential conflicts of interest involving trustees and the law firm or nonprofit organizations that do business with the MCHD and are represented by Gooding & Batsel.

The new arrangement also could impact the public’s access to MCHD records. Historically, the district listed general counsel Hanratty’s email address on its website for obtaining public records. There are no instructions on the district’s website now for accessing public records, but presumably, those requests will continue to be handled by the district’s general counsel. Batsel’s email is: RBatsel@lawyersocala.com.

Curt Brummond responded to a records request since Batsel’s appointment directing all future questions and records requests to Batsel.

The “Gazette” asked Batsel if there would  be a different arrangement if the records requested were related to CFC, any MCHD trustee, the multiple public boards at least one of the trustees serves on, or the private businesses the firm also represents.

Batsel assured the “Gazette” that records requests should be sent to Batsel by email and that “we are developing a more streamlined approach with a central custodian and a mechanism to charge hard costs of production and excessive staff time, when applicable. I appreciate your concern about cluttering in-boxes, but we are, obviously, required to respond appropriately and will do so. Obviously, this bears a cost to the District due to staff or attorney time that takes away from our ability to focus on other District business, hence our attempt to develop a more efficient system. I’d only ask that you propound clear requests when you feel it’s necessary and remember that we may not be able to engage in Q&A when higher priorities demand our attention.”

Additionally, he assured the “Gazette” that “managing conflicts is part of every attorney’s practice and I will continue to do so on a case-by-case basis in the event a conflict arises.”

The college is frequently discussed during MCHD meetings because it receives financial support to help create more healthcare jobs that are desperately needed. Many times, however, those conversations are not listed on board meeting agendas, nor are they included in the minutes of meetings.

The “Gazette” has frequently expressed concern to the trustees about the scant level of information in their meeting minutes and agendas, particularly since the board does not produce audio or video recordings of its meetings. Efforts by the “Gazette” to record meetings and publish them for the public were thwarted at the Jan. 29 meeting when the attorney’s fee issue was being voted on.