California State Court twice finds that L.A. County’s Department of Health Services violated the law by illegally awarding a $75M ‘no-bid’ contract to a favored vendor; Court also awards several hundred thousand dollars in legal fees to AHF, which brought the lawsuits.
In two separate lawsuits brought by AHF, the Court found the County violated the law in awarding contracts to manage the County’s Healthy Way HIV Contract to Ramsell Public Health Rx, LLC, a private company that provides pharmacy benefits management services, without competitive bidding or a competitive negotiation.
LOS ANGELES (September 17, 2013)⎯In an egregious example of how Los Angeles County officials mismanage taxpayer money, AIDS Healthcare Foundation (AHF) announced that the County of Los Angeles has been ordered to pay over $150,000 in legal fees to AHF after the Superior Court of the State of California found that the County twice violated the law in awarding ‘’no-bid’ contracts to a favored vendor without following proper legal procedures on competitive bidding.
In two separate, but related legal actions brought by AHF, the Superior Court of California found that the County violated the law by twice illegally awarding a $75 million contract to Ramsell Public Health Rx, LLC, a private company that provides pharmacy benefits management services, for it to manage the County’s Healthy Way HIV Contract—the first contract of which was pushed through for County approval in just one day. In a June 2012 ruling granting AHF’s request for a Peremptory Writ to block implementation of the first illegal contract, Ann I. Jones, Judge of the Superior Court, wrote that Los Angeles County “…abused its discretion in awarding the contract to Ramsell without competitive bidding or a competitive negotiation.”
After the rulings, AHF was granted permission to petition to Court to be awarded attorneys’ fees from the County. The reason AHF was awarded fees is because, in exposing and eliminating ongoing illegal conduct by the County in its contracting processes in Court, AHF was the ‘successful party’ under Code of Civil Procedure section 1021.5 because the Court granted the Petition for Writ of Mandate and required the County to rescind its contract with Ramsell; and because AHF enforced ‘Important Rights Affecting the Public Interest’ by invalidating a contract entered in violation of the law and because the necessity and financial burden of private enforcement (via AHF’s lawsuits) made the award of legal fees appropriate. In the first case, the Court ordered the County to pay $157,688.50 to AHF; in the second case, AHF has incurred fees in excess of $230,000. A formal motion for attorneys’ fees and costs in the second case [case # BS138053] was filed filed yesterday with the Court.
“Proven facts are that the County of Los Angeles has now twice violated the law with regard to the competitive bidding process. Not only did this illegal conduct waste taxpayer money, as a result the County also will end up paying hundreds of thousands of dollars in attorneys’ fees to AHF due to its repeated law-breaking activity,” said Michael Weinstein, President of AIDS Healthcare Foundation. “This all could have been avoided if the County simply had followed the law. In both instances, County officials have completely mismanaged taxpayer money and squandered the public’s trust. This occurred, in part, because there is little or no accountability for County officials across the board. In the course of these two legal actions and for years before, County officials made unsubstantiated, unproven allegations against AHF—so much so, that we filed a whistleblower lawsuit against the County in early August to try and put a halt to their illegal intimidation and retaliation.”
Violation of Competitive Bidding Laws: the Ramsell Sole-source Contract
Despite L.A. County’s campaign against AHF, attorneys for AHF were determined to challenge the ongoing government wrongdoing and hold the County and its officials accountable. Toward that end, AHF has now twice successfully sued to block L.A. County from illegally awarding a soul-source, $75 million pharmacy benefits management (PBM) contract to Ramsell Public Health Rx, LLC, a favored County contractor.
Since County officials refused to follow the legally required competitive bidding rules, AHF officials were forced (in April 2012) to file suit in state court seeking a writ of mandate. In June 2012, the Superior Court of Los Angeles County granted AHF’s request for writ of mandate, ruling that the County had abused its discretion. The Court also compelled the County to void the contract with Ramsell and comply with the law in any further contracting for pharmacy administrator services.
Despite the first legal ruling against them, County officials again sought to award its PBM contract to Ramsell (the Ramsell II contract), and AHF again sued. Once again—almost a year to the date of its earlier court loss, on June 5, 2013—the Court issued a Writ invalidating the Ramsell II contract, finding that the County had abused its discretion when issuing the sole source Ramsell II contract. And despite issuing an RFP related to these services on March 28, 2013, the County has yet to award the contract to any party.