Blumenthal draws criticism over withdrawn lawsuit

Attorney General Richard Blumenthal said he had an open-and-shut case.

A prominent Stamford fertility doctor had been charging a $600 facility fee to patients who used the ambulatory surgical unit he had installed in his office.

If, as the attorney general and his staff believed, the doctor was already being reimbursed by his patients' insurers for the use of the facility, the $600 charges were a violation of the law against so-called "balance billing."

So on April 11, 2005, as he has on so many occasions in nearly two decades in office, Blumenthal sued.

"This doctor imposed special fees to give himself special compensation, while falsely promising special care," Blumenthal declared in a press release announcing his suit against the doctor, Gad Lavy, who runs the New England Fertility Institute in Stamford. "In reality, these 'facility fees' were a false front - a scheme to pad his own profits."

Blumenthal also told the Stamford Advocate that he would consider referring the case for criminal prosecution.

"Imposing special payments for parenthood is unconscionable and unlawful," Blumenthal added, "and now, Dr. Lavy will pay in court."

But Lavy never did pay in court, and he didn't pay an out-of-court settlement, either.

Instead, after five years of expensive litigation - and only days after a trial judge scolded Blumenthal's staff when it sought more time to seek new evidence to back up its charges - the attorney general's office withdrew its case against Lavy this spring.

'Sue first' strategy

For Blumenthal, whose sky-high name recognition is driven in part by his high-profile legal actions and court victories, the Lavy case was an uncharacteristic black eye. Blumenthal's staff readily provides inquiring reporters with extensive lists of his past accomplishments on behalf of consumers and the state, including tens of millions of dollars collected in damages and reimbursement.

But the Lavy case, according to the doctor and the legal team that defended him, was a damaging and costly ordeal that uncovered no wrongdoing and could have been avoided altogether.

The case also could provide more fodder for the attorney general's ideological and political opponents, who have long insisted that Blumenthal and his staff are too quick to sue when less combative means of upholding and defending the state's civil statutes are available.

The attorney general's preferred method has been to "sue first and ask questions later," said Ross Garber, one of the Republican candidates seeking to succeed Blumenthal, in a debate with rival Martha Dean.

It was Garber, a partner in the Hartford offices of Shipman & Goodwin, who led Lavy's defense through years of wrangling with Blumenthal's staff, including negotiations intended to reach a settlement.

In a statement provided to The Day on Sunday, Lavy said he was thankful that Blumenthal's office had finally withdrawn its suit against him in March, after what Lavy called "baseless accusations" that "seemed designed to damage my professional reputation.

"This case was baseless from the beginning," Lavy said. "It hurt me, my family, and my patients. I was pleased the Attorney General dropped the case, but it should not have taken 5 years to do so."

Blumenthal, in a written statement, defended the suit.

"We continue to believe our suit had a valid basis in both fact and law," Blumenthal said.

In the past decade, he said, his office has won more than $400,000 for patients who were billed for services for which medical providers had already been reimbursed by insurers. After pursuing balance-billing actions against 200 medical practitioners, only two, including Lavy, went to court, Blumenthal said.

The suit against Lavy was preceded by nine months of investigation, said Perry Zinn Rowthorn, the associate attorney general who oversees litigation matters in Blumenthal's office.

Asked why the state had never agreed to settle Lavy's case, particularly after the doctor had ceased charging the facilities fee to his patients in 2005, Rowthorn said he could not discuss specifics of those negotiations.

"I will say at the time of those discussions there wasn't a settlement that we considered adequate or sufficiently concrete for us to pursue," he said.

The suit falls apart

When, on Jan. 5, the state's suit against Lavy finally reached trial, it didn't take long to fall apart.

Charles C. Hulin, an assistant attorney general who was the lead attorney for the state, had just begun to question his first witness, Kimberly M. Walsh, an executive from the insurer Connecticare, about whether the company's reimbursements to doctors for in-vitro fertilization procedures would include payment for use of Lavy's surgical facility.

The question was a crucial one. If Lavy did receive a reimbursement that included the cost of operating his facility, it would be a violation of the Connecticut Unfair Trade Practices Act for the doctor to assess an additional fee to his patient.

The state maintained that Lavy did assess such fees to 355 female patients, sometimes for multiple procedures, totaling nearly $350,000.

But Garber rose to object to the state's witness, arguing that Blumenthal's staff should produce copies of the insurance contracts for each patient, which should say whether the cost was a covered expense or not.

The argument found favor with Judge Grant H. Miller, who noted that any contracts stating what services were covered were ones "the court would usually like the opportunity to read."

"Let me ask you a very blunt question," Miller said to Hulin. "Where are the managed care plans?"

The plans, Hulin explained, don't contain specific information about what individual medical costs are reimbursed in an in-vitro fertilization.

The contracts, Hulin said, are "useless to us."

But Miller soon sided with Garber's argument that relying on the testimony of witnesses, rather than the contracts themselves, would violate Article 10 of the rules of evidence, which requires that the contents of a document are proven by the document itself - not what witnesses say it contains.

That ruling threw the state's case into jeopardy, Hulin said, as he pleaded with Miller to grant the state a 30-day continuance in which to seek copies of the insurance contracts and other evidence that would bolster its case.

It would be "the death knell of the case if we don't get another chance to show you what's out there and to address the question again," Hulin said.

"Well, the case has been pending since 2005," Miller replied.

"That's right," Hulin said. "We think you're going to see eventually that we have a strong case and that we have - "

"Wasn't the time to show the court you had a strong case now?" Miller responded.

In a March 3 decision formally rejecting requests for a continuance, Miller wrote, "When a party comes to court unprepared to address an important evidentiary issue which it well knew would be disputed at trial, and that party fails to prevail on the issue, the trial judge does not stop the proceedings and give the losing party time to correct the mistake. That is not how things work in our system of justice."

t.mann@theday.com

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