PioneerLegal Submits Amicus Brief In Pacheco-Law Case Before SJC

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Pioneer Institute (Pioneer) has submitted an amicus brief supporting the defendants in SEIU, Local 509 v. Massachusetts Department of Mental Health et al. (SJC-12035). The case was argued on September 6, 2016, before the Supreme Judicial Court of Massachusetts (SJC).

It involves a claim by the SEIU challenging contracts awarded by the state Department of Mental Health (DMH) to private mental health providers by asserting that the contracts failed to comply with the Pacheco Law – when they were first entered into in 2009.

Pioneer identified this case through PioneerLegal, its new public-interest law initiative.

Pioneer recognizes that September 6th was the first day of the SJC’s 2016-2017 term and, therefore, the first day of argument for the Court’s three new justices – Associate Justices Kimberly Budd, Frank Gaziano and David Lowy. Pioneer is honored to have been a small part of this historic occasion.

The SEIU’s suit was filed over three years into the performance of the original contracts it challenges, which contracts expired during the pendency of this litigation. In order to prevent its claim from being moot on its face, however, and despite the Pacheco Law clearly exempting renewal agreements from its requirements, the SEIU argued that subsequent renewal agreements entered into between DMH and the providers were also invalid.

In September 2015, the Superior Court granted judgment in favor of the DMH and its fellow defendants. The court held that, indeed, the challenge was rendered moot by the expiration of the original contracts and that the Pacheco Law unambiguously exempts renewal agreements from compliance with its provisions. This matter is now on direct appeal to the SJC.

Pioneer argues that the plain text of the Pacheco Law as well as its legislative history and the political context of its enactment support the holding of the Superior Court. Simply put, the language in the Pacheco Law excepting from the definition of “privatization contract” any renewals of the original contract means what it says. And the state legislature did not limit this exception in any way.

As for public policy, the SEIU position would adversely affect the beneficiaries of existing privatized services based on circumstances entirely beyond their control that occurred years before they began receiving the mental health services they need. Patients of the privatized services would lose their providers and be required to establish new relationships at a time when they were most vulnerable.

Invalidating renewal agreements could also set a troubling precedent for rewarding delay in challenging contracts under the Pacheco Law and undermine the prompt resolution of the propriety of contracts required for private partners to invest significant resources in the provision of crucial services to the public.

Knowing that a legal challenge could remain open after the renewal of a privatization contract would eliminate any sense of urgency in resolving Pacheco Law matters. This would defeat the very purpose of the Pacheco exception for renewals. A disaffected party could wait to bring a challenge for years, delaying through the original contract and multiple renewals.

The broad effect of this lack of predictability would be to undermine the rule of law and inhibit the innovative and efficient delivery of government services.

“The barriers to privatization would inevitably – and unjustly – increase, and we believe that’s largely the underlying point of this litigation,” said John Sivolella, Senior Fellow in Law and Policy at Pioneer, who directs PioneerLegal. “The plaintiffs realize that rational agencies and providers would be far less willing to enter into privatization contracts if a legal cloud were permitted to remain over those contracts in perpetuity.”

Mark G. Matuschak, a partner, and Robert Kingsley Smith, a senior associate, from the Boston office of Wilmer Cutler Pickering Hale and Dorr LLP served as counsel to Pioneer. Pioneer expresses its profound thanks for the professionalism and expertise that WilmerHale brought to the process.

In addition to Pioneer, the Massachusetts Council of Human Service Providers submitted an amicus brief in support of the defendants.

Pioneer recently selected the topic “Improving Quality and Access to Care for Individuals Living with Mental Illness” as the subject of its 25th annual Better Government Competition, making Pioneer’s interest in this case particularly relevant.

PioneerLegal works for changes to policies, statutes and regulations that adversely affect the public interest in policy areas including economic freedom, government accountability and school choice.