New lawsuit seeks to block Mayo Regional Hospital merger, calling it unconstitutional

The town of Cambridge and almost three dozen residents from the other communities that collectively own Mayo Regional Hospital in Dover-Foxcroft have filed a lawsuit trying to block its pending merger with Northern Light Health.

In a 26-page complaint filed in Somerset County Superior Court on Thursday, they argued that special legislation authorizing the merger was unconstitutional and that leaders of the quasi-municipal entity that runs Mayo — Hospital Administrative District 4 — violated that entity’s charter by pursuing the deal without first holding votes in all of its 13 member communities. 

They also charged that HAD 4 used taxpayer funds to promote a partisan cause when the district hired an attorney from Indiana and a Bangor public relations firm to help build support for the merger.

That merger is close to completion. It still needs final approval from state regulators, but analysts from the Maine Department of Health and Human Services last month released a preliminary report endorsing it. The boards of both Northern Light Health — which is based in Brewer and includes nine hospitals throughout much of the state — and HAD 4 also held votes on Dec. 11 and 18, respectively, to complete the merger pending the state’s approval. 

Because of the “irreparable harm” that would come from the deal going forward, “namely the loss of HAD 4 assets, which includes real estate,” the lawsuit requested that the court halt the merger by issuing a temporary restraining order and a preliminary injunction. 

Besides the town of Cambridge, the lawsuit included 33 individual plaintiffs from other HAD 4 member towns. One of them, Sam Katz of Dover-Foxcroft, said he filed the complaint Thursday. No hearings have yet been scheduled in the case. 

The lawsuit named HAD 4 and Northern Light Health as defendants, along with the state of Maine and Commissioner Jeanne Lambrew of Maine DHHS. Representatives from HAD 4, Northern Light Health and Maine DHHS all declined to comment on the litigation. 

Proponents of the merger have previously said that it will ensure the the 25-bed hospital can survive after suffering operating losses every year since 2010, although the merger agreement would only obligate Northern Light Health to maintain its current services for five years. 

HAD 4 was created under a set of state laws in the 1970s that gave the member towns ownership of the hospital and required all of them to hold affirmative votes for it to dissolve. Upon dissolution, the charter required the hospital’s assets to be divided proportionally among the member towns, which also include Abbot, Atkinson, Bradford, Dexter, Guilford, Milo, Monson, Parkman, Sangerville, Sebec and Willimantic. 

But after the HAD 4 and Northern Light Health boards approved the merger agreement without holding those binding votes, the Legislature passed a new law last spring that authorized the merger and eliminated the need for individual towns to vote on it. Instead, lawmakers sought advisory votes from all the member towns before they passed the merger legislation. During that round of votes in April, Cambridge was the only town to oppose the merger. 

The legislation also allowed for all of HAD 4’s assets to be transferred to a new subsidiary of Northern Light Health that would be created to run the hospital. 

The plaintiffs accused the state of Maine and HAD 4 leaders of violating numerous constitutional provisions and the district’s charter when they passed and promoted the merger legislation without seeking binding approval from the member towns. 

The new complaint was written by Beth Seaney, a Dexter attorney who did not respond to a request for comment. Another plaintiff was Gerald Nessmann, a member of the HAD 4 board from Sebec who previously filed a lawsuit seeking to halt the merger until more information about it became public. That complaint was dismissed in March, and Nessmann, who did not respond to a request for comment, has appealed his lawsuit’s dismissal.

According to the new complaint, HAD 4 had about $28 million in net assets as of September 2018, including $16 million in a reserve fund. That reserve fund had about $13.7 million as of earlier this year. 

The complaint accused the leaders of HAD 4 of violating Maine’s Freedom of Access Act by instructing board members not to share the merger agreement with their constituents before it was approved and holding unannounced meetings with legislators. 

The plaintiffs said that someone from HAD 4, identified in the lawsuit as “John or Jane Doe,” was “personally liable” for using “public funds to promote a partisan position” without the proper authorization. According to the lawsuit, HAD 4 hired outside help to mount “a PR-blitz” before the member towns held advisory votes on the merger. 

Attached to their complaint were invoices showing that Bangor public relations firm Sutherland Weston billed Mayo Regional Hospital $27,264 between November 2018 and August 2019 for services that included strategic planning, public relations, Facebook advertising, flyers and the creation of a website with information about the merger. 

They asked the court to block HAD 4, Northern Light and Maine DHHS from taking further steps to advance the merger until they comply with state law, the Constitution and the HAD 4 charter. They also asked the court to stop HAD 4 from using public funds to promote it.