Taxpayers dodged a financial punch when a judge ruled this month Augusta doesn’t have to pay attorney fees to the company that successfully sued the city over its bidding process.
Meritain, an independent subsidiary of Aetna insurance, sought more than $300,000 for legal expenses incurred in a suit against the city.
Meritain will receive the $33,917 it spent preparing a bid to oversee the city employees’ self-insured health insurance fund, Judge J. David Roper ruled in a July 8 order.
In late 2013 Meritain filed a Richmond County Superior Court lawsuit against the city after Blue Cross Blue Shield was awarded the contract with an annual estimated value of $20 million.
Roper agreed with Meritain’s legal position that state laws and the city’s purchasing ordinances were violated when the rules for awarding the bid were changed at the last minute. The change gave Blue Cross Blue Shield an unfair advantage over Meritain, which until that point was deemed the best company for the job, Roper found.
Compounding the unfair bidding process was the city’s commissioners handling of Meritain’s bid protest, the judge ruled in a scathing order last summer.
Commissioners voted Dec. 5, 2013, to deny Meritain’s bid protest without any evidence, public debate or giving Meritain’s representatives a chance to present its case.
Roper’s ruling and the city’s failure to file a timely appeal meant Augusta had to rebid the contract. City commissioners again selected Blue Cross Blue Shield to manage the fund, which provides health insurance for the city’s workforce of more than 2,000 employees and their families.
Although Meritain’s legal challenge was successful, the legal standard to award attorney fees required bad faith on the city’s part. Bad judgment and negligence doesn’t equate to bad faith, Roper wrote. There were legitimate legal questions to be decided in the lawsuit, he wrote.