Madden v. Ortiz

SHANI MADDEN, Plaintiff, v. KEN ORTIZ, in his official capacity as Secretary of the New Mexico General Services Department,and RAUL TORREZ, in his Official Capacity as Second Judicial District Attorney, Defendants.

No. CIV 19-0865 JB\SCY

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

February 27, 2020

MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court on the Motion for Preliminary Injunction, filed in State court August 27, 2019, filed in Federal Court September 19, 2019 (Doc. 3-1)("Motion").¹ The Court held an evidentiary hearing on February 5, 2020. Plaintiff Shani Madden seeks a preliminary injunction prohibiting the New Mexico General Services Department ("General Services") and the New Mexico Second Judicial District Attorney's Office from enforcing N.M. Stat. § 15-7-9(C), which provides that "[a]ny person who reveals" "records pertaining to claims for damages or other relief against any governmental entity" is "guilty of a misdemeanor." N.M. Stat. Ann. § 15-7-9(A)(2), (C). The primary issue is whether Madden has standing to pursue this action. Specifically, the Court must decide whether Madden has alleged a realistic threat of prosecution. The Court concludes that Madden has not alleged a realistic threat of prosecution,because: (i) she does not propose engaging in activity which the statute prohibits; (ii) the Second Judicial District Attorney's Office has committed itself to a policy of non-prosecution; and (iii) the Second Judicial District Attorney's Office has never prosecuted § 15-7-9(C) violations. Accordingly, the Court dismisses this case without prejudice.

FINDINGS OF FACT

The Court takes its facts from the Complaint, filed in State Court Aug. 20, 2019, filed in Federal Court September 18, 2019 (Doc. 1-1), the briefs on the Motion, and the evidence introduced at the hearing.

1. Madden is a private citizen and resident of the State of New Mexico. See Motion ¶ 1, at 1.

2. The New Mexico Risk Management Division ("Risk Management") conserves the State of New Mexico's resources by procuring and administering the State's public liability fund, see N.M. Stat. Ann. § 41-4-23, workers' compensation reserve fund, see N.M. Stat. Ann. § 15-7-6, and the public property reserve fund, see N.M. Stat. Ann. § 13-5-1. Risk Management also administers the State's group benefits self-insurance plan, which provides life, vision, health, dental, and disability coverage for state and local employees. See N.M. Stat. Ann. § 10-7B-1.

3. Risk Management maintains "'records pertaining to claims for damages or other relief against any governmental entity or public officer or employee.'" Motion ¶ 2, at 1 (quoting N.M. Stat. Ann. § 15-7-9).

4. Risk Management is organized within General Services. See Motion ¶ 4, at 2.

5. Ortiz is the Secretary of General Services. See Motion ¶ 4, at 2. Raúl Torrez is the District Attorney for the Second Judicial District, State of New Mexico. See Complaint at 1.

6. On July 5, 2019, the Albuquerque Journal published an opinion article that Ortiz wrote, in which he says that the "General Services Department . . . will not exploit possible loopholes in the 180-day rule and agree to longer confidentiality periods that negotiate away the public's right to know." NM agency shines light on settlements at 1, filed September 19, 2019 (Doc. 3-1)("Ortiz Op-Ed").

7. Ortiz also asserts that "state law prohibits public disclosure of risk settlements until 180 days after the latest of four possible dates. One of those dates is when a lawsuit is brought to final judgment; another is when a case is fully settled." Ortiz Op-Ed at 1.

8. Madden litigated a divorce in New Mexico state court which resulted in a trial in November, 2017. See Draft Hearing Transcript² at 4:1-10 (held February 5, 2020)(Stalter, Madden)("Tr.").

9. After trial, Madden submitted a records request to the General Services for information about the divorce proceeding's opposing counsel and presiding judge, because she suspected a conflict of interest. See Tr. at 5:10-20 (Stalter, Madden).

10. Madden "sought records related to the work of private law firms contracted with [Risk Management] . . . to investigate an undisclosed conflict of interest in her divorce case[.]" Complaint ¶ 11, at 3.

11. After General Services did not respond to her records request, Madden filed suit in New Mexico State court against General Services alleging a violation of the New MexicoInspection of Public Records Act, N.M. Stat. Ann. §14-2-1 ("IPRA"). See Tr. at 5:21-6:1 (Stalter, Madden).

12. Madden and General Services entered into a settlement agreement in which Madden released her IPRA claims against General Services, thus resolving the IPRA suit, on August 15, 2019. See Tr. at 6:9-10 (Stalter, Madden); id. at 6:21-22 (Stalter, Madden).

13. Madden's settlement agreement does not contain a confidentiality provision. See Complaint ¶ 15, at 3.

14. Madden and General Services stipulated to the IPRA lawsuit's dismissal, and the New Mexico state court issued an Order of Dismissal on September 4, 2019. See Stipulated Order of Dismissal in Madden v. N.M. Gen. Servs. Dep't, No. D-101-CV-2019-01185, County of Bernalillo, Second Judicial District, New Mexico (Plaintiff's Hearing Exhibit 3).

15. When Madden and General Services entered into the settlement agreement, Madden was aware of the New Mexico statute, N.M. Stat. Ann. § 15-7-9(C), which prohibits her from publishing records pertaining to the settlement's details for 180 days. See Tr. at 11:8-18 (Park, Madden).

16. N.M. Stat. Ann. 15-7-9(C) provides:

"Any person who reveals records protected pursuant to Subsection A of this section to another person in violation of this section is guilty of a misdemeanor and shall, upon conviction, be fined not more than one thousand dollars ($1,000). The State shall not employ any person so convicted for a period of five years after the date of conviction."

Complaint ¶ 2, at 1-2 (quoting N.M. Stat. Ann. 15-7-9(C)).

17. General Services may refer violations of § 15-7-9(C) to local district attorneys' offices for prosecution. See Tr. at 17:5-7 (Pardo).

18. In August, 2019, Madden solicited Risk Management's interpretation of § 15-7-9. See Email from Douglas E. Gardner to Sean FitzPatrick at 1 (dated Aug. 12, 2019)("Gardner Email"), filed Sept. 19, 2019 (Doc. 3-1).

19. Risk Management responded that

"15-7-9(C) applies to 'Any person who reveals records.' This would include Plaintiff, so far as the settlement amount and the release itself, it automatically applies and does not require Plaintiff to "agree" to it, rather, they contend that they are informing Plaintiff of the consequences should she violate State statute. We can modify the language to reflect this, but we need a record that Plaintiff was informed."

Motion ¶ 5, at 4 (quoting Gardner Email at 1).

20. Madden "wishes to discuss her claim and its outcome with friends and family and to publicize it on social media." Motion ¶ 1, at 1.

21. Madden believes that her IPRA litigation and the records she sought are "part of the bigger picture," and she "want[s] to tell [her] story[ to] expose wrongdoing." Tr. at 8:18-22 (Madden).

22. On August 20, 2019, KRQE, an Albuquerque, New Mexico, news broadcaster, interviewed Madden about her "divorce, . . . discovery of a potential conflict of interest, having to sue for records, and not being allowed to discuss settlement." Tr. at 9:12-20 (Stalter, Madden).

23. In the interview, Madden disclosed that she had settled with General Services, but did not share "the release or any details of the settlement." Tr. at 9:21-10:1 (Stalter, Madden).

24. Following the interview, neither General Services nor Risk Management "ever contacted [Madden] . . . regarding [her] case." Tr. at 10:2-5 (Stalter, Madden).

25. Madden has never been "threatened with prosecution regarding the statute." Tr. at 11:22-24 (Park, Madden).

26. The Second Judicial District Attorney's Office maintains records of all prosecutions since 1983. See Tr. at 15:1-4 (Park, Madden).

27. The Second Judicial District's records database does not, however, record whether an outside agency refers a case which the Second Judicial District Attorney's Office declines to prosecute. See Tr. at 16:10-17 (Stalter, Pardo)(stating that a case is referred by an outside entity). The Second Judicial District Attorney's Office has no records that it has prosecuted any violations of § 15-7-9(C) since 1983. See Tr. at 15:10-14 (Park, Pardo).

28. Pardo announced at the evidentiary hearing, for the first time, that the Second Judicial District Attorney's Office has decided recently not to prosecute any violations of § 15-7-9(C). See Tr. at 18:9-10 (Stalter, Pardo).

29. Although Pardo does not generally hold authority to issue prosecution policies for the Second Judicial District Attorney's Office, the Second Judicial District Attorney -- Torrez -- authorized him to issue such a policy regarding § 15-7-9(C). See Tr. at 20:10-23 (Stalter, Pardo).

PROCEDURAL BACKGROUND

Before Ortiz and Torrez removed this action to federal court, Madden filed the Motion in State court on August 27, 2019. See Motion at 1. The State court "had not heard or ruled on the" Motion. Motion ¶ 4, at 1. After Ortiz and Torrez removed this case, Madden filed a Notice of Pending Motion alerting the Court to Madden's Motion. See Notice of Pending Motion, filed September 19, 2019 (Doc. 3).

1. The Motion.

Madden seeks a preliminary injunction "prohibiting Defendants from enforcing [N.M. Stat. Ann. §] 15-7-9(C)." Motion at 1. Madden asserts that § 15-7-9 prohibits private citizens fromrevealing "'to another person'" details about lawsuit settlements with State government entities within 180 days of settlement. Motion ¶ 3, at 2 (quoting N.M. Stat. Ann. 15-7-9(C)). Madden argues that Risk Management has stated that § 15-7-9 applies to all settlement agreements between private citizens and State government entities, regardless whether the parties bargain for...