Complaint: Outling should be sanctioned for United Healthcare matter

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Justin Outling

Lewis Pitts, a former lawyer who has been a vocal proponent of police reform in Greensboro, is urging the State Bar to sanction Councilman Justin Outling, a lawyer employed with Brooks Pierce, over his July 18 vote on a matter involving employee health management services provided by outside vendors.

Outling, who represents District 3, voted as part of a 6-3 majority on July 18 to suspend a Request For Proposals process for a contract to manage medical and pharmacy benefits for city council. The decision by council prevented the award from going to Cigna Health Insurance, despite a recommendation from staff and a finding by an independent consultant that the firm would save the city $650,000 per year over its current provider, United Healthcare. The vote requires staff to restart the Request For Proposals process and bring back a new recommendation to council.

Justin Outling acknowledged that Brooks Pierce, the law firm where he is employed as an associate, “has represented United Healthcare for several years,” according to memo filed yesterday by City Attorney Tom Carruthers.

Outling’s conduct in the July 18 vote and a previous one in 2016 “reeks of the appearance, if not actual, conflict of interest,” Pitts said in a complaint against Outling to the State Bar on Monday. “Any modern-day concept and interpretation of ethical rules for lawyers should prohibit such stark huckstering by a lawyer.”

Carruthers said in his memo to city council yesterday that he agrees with Outling “that the firm’s representation of United Healthcare on unrelated matters did not rise to the level of a conflict that would prevent his consideration of and participation in the cancellation of the RFP on July 18th.”

As a basis for his opinion, Carruthers cited NCGS § 160A-75, which states, “No member shall be excused from voting except upon matter[s] involving the consideration of the member’s own financial interest or official conduct….” Carruthers also cited NCGS § 14-234, which he said, “addresses conflicts of interest where public officials or their spouses receive a direct benefit from a contract with the city. A contract entered into in violation of this section is void and anyone violating the section shall be guilty of a Class 1 misdemeanor.”

Carruthers wrote in his opinion that “the vote to terminate an RFP is not the ‘making of a contract’ under [the city’s charter]; it is the termination of a solicitation process.”

The city charter and state laws don’t address the appearance of impropriety.

“That’s one of the tough positons of the members of city council because when you look at 160A-75, it says, ‘No member shall be recused from voting,’” Carruthers said. “That’s called a mandate to vote or a strong presumption to vote. That’s the duty of the legislative branch. If it’s not a direct or indirect financial interest, then you shall not be excused from voting.”

Even though Outling did not represent United Healthcare in the contract proposals considered by the city, Pitts argued Outling should be sanctioned.

“A quid pro quo exchange of bribe money for a vote or some other direct enrichment has never been, and should never be, the standard of ‘professional’ conduct of lawyers,” Pitts wrote. “Jurisprudential literature is replete with reasoning for why even the appearance of impropriety and conflict of interest should be avoided.”

Carruthers said his memo is only meant to address whether Outling’s action complied with municipal law, not whether it was ethical in the sense that the State Bar might consider it.

Rather than require Brooks Pierce to discharge United Healthcare as a client, Pitts said Outling should be “barred from taking action as an elected official which could, or could appear to, or in this case, did, favorably benefit his firm’s client.”

Outling said in an interview with Triad City Beat that he doesn’t understand why people contend that his vote benefited United Healthcare, adding that at the culmination of the next bid process, city staff’s recommendation “could go to Cigna, as well [as United Healthcare].”

Carruthers also told Triad City Beat that he does not believe Outling’s vote favored United Healthcare, even though the termination of the Request For Bids aborted a recommendation by staff to give the contract to Cigna, United Healthcare’s competitor.

“Staff does not control, and I disagree,” he said.

Pitts argued that the benefit to United Healthcare is obvious.

“Think about it: If Outling voted against United Healthcare, as the cogent evidence seemed to mandate, do you think the client, United Healthcare, would have contacted Brooks Pierce and their lobbyists to complain and threaten to take their legal business elsewhere?” he said. “Of course they would have. Outling felt pressure to vote favorably for the firm’s client. Duh. This is so elementary obvious to any objective person that it seems preposterous to be writing out an argument. He should be sanctioned.”

Outling said there might be a vote to consider awarding a contract to United Healthcare at the council’s next meeting on Aug. 15, although the agenda is not expected to be released until Friday. He said he’ll check with Carruthers to see whether it would be a conflict of interest for him to vote. Carruthers declined to comment on whether he might recommend Outling’s recusal.

“I think that’s a hypothetical question that is best to be determined when it is before me and attorney Outling,” he said.