Disciplinary panel sinks water firm’s ethics charges

It is not unethical for an attorney working for a company’s potential competitor to work as a legal adviser to a municipality and argue against that company’s proposal, the New Hampshire Supreme Court’s Professional Conduct Committee has ruled.

The PCC dismissed a complaint against John Ratigan, an attorney who represented the town of Peterborough against Monadnock View Holdings LLC’s plan to expand. Ratigan also worked as the attorney and registered agent for Barking Dog Water, another Peterborough company that also wished to bottle water.

It stems from a three-year attempt by Monadnock View to expand, but like other such proposals from spring water companies – most notably USA Springs in Nottingham — the plan was opposed by residents concerned about increased truck traffic and the effect pumping might have on their wells.

The PCC’s ruling, which came in March, is the most recent setback for Monadnock View Holdings and its subsidiary, Highland Springs. The company also lost a federal court suit that raised this and another conflict of interest issue: that Roberta “Posey” Bass, sister of former Congressman Charlie Bass and Barking Dog’s managing partner, sat on the town planning board that opposed the project.

Monadnock View, which also was unable to use a bankruptcy filing to prevent foreclosure on its property, claimed that both the federal suit and professional conduct complaint were dismissed primarily on technical grounds, and planned to renew its legal battle in a $5 million suit in state court.

“Our investors got completely screwed,” said Lawrence Foy, general manager of Monadnock View. “The rich people like the Basses run the town. The town lawyer is in their pocket, and they have friends and relatives in town government. It sucks. It’s un-American, that is what it is.”

Ratigan and Liz Thomas, chair of the board of selectmen, declined to comment on the controversy, saying the matter might soon again be in litigation.

Margaret Nelson, chair of the PCC, said that the committee’s policy would not allow her to comment on specifics, but did respond generally to the criticism that its decisions were technical in nature.

“There has to be a violation of the rules of professional conduct, under a clear and convincing standard,” said Nelson. “That’s a very high standard, and we have to look very closely at the rules.”

While Monadnock View sees the issue as revolving around ethics, it also is the story of a business seeking to make money off of the state’s groundwater. Like other such proposals, it was opposed by residents who were concerned over the effect the pumping might have on their wells.

Only the state can restrict water withdrawals, but the town can stop expansion based on increased traffic, which the town zoning board did in February 2002. Monadnock View tried again the following year after a special request was granted to Upland Farms (another water bottling company).

The difference, the suit noted, is that Upland Farms’ president, John H. Morrison III, had a “close relationship with Defendants Bass and Thomas.”

Monadnock View tied the expansion plan to a plan to restore the 100-year-old stone barn – one of two such structures in the state — located on the property. The company said that it needed the extra revenue to complete the expansion. Without that extra cash, the company said it would have to demolish the barn or truck it away.

Opponents of the plan said that offer amounted to blackmail.

The suit also charges that the zoning board refused to take testimony from Monadnock View’s various experts and rejected the proposal, after being advised by Ratigan, without the attorney disclosing his relationship with Barking Dog.

Monadnock View tried to put the question to voters as a ballot initiative, getting the Heritage Commission and Conservation Commission on board after it agreed to pay $50,000 in escrow should there be an impact to abutters and $100,000 to renovate the stone barn. But Ratigan opposed the plan as “illegal spot zoning,” and Bass – also without disclosing her relationship with Barking Dog – “was instrumental” in getting the planning board to come out against the initiative in 2004, according to the federal suit filed by Monadnock View.

Voters rejected the plan on March 9, 2004.

However, in the ensuing months, Ratigan – representing Barking Dog — appeared before the town of Sharon four times, and once with Bass in front of the Jaffrey zoning panel concerning a plan to withdraw 720,000 gallons a day. That plan – even though it was in neighboring towns – would be upstream of Monadnock View’s wells, resulting in more groundwater withdrawal and more truck traffic through the town, contended Foy.

At a public hearing, according to the PCC’s summation of the fact, Ratigan said that Peterborough was “a likely customer” to supply the water. Barking Dog didn’t go ahead with the project, not getting state approvals, but both Ratigan and Bass should have disclosed their interest in Barking Dog to Monadnock View when its project was considered, Foy contended.

These claims were included in a federal suit filed in December 2005 – first reported the following month by New Hampshire Business Review — and a professional conduct complaint in June 2006.

In December 2006, U.S. District Court Judge Paul Barbadoro dismissed the federal complaint on a number of grounds, primarily technical in nature, but declined to rule on state claims, saying that it was not in his jurisdiction.

The PCC complaint — which only became public after its dismissal – focused on Ratigan, charging he was involved in state court action in October 2003, a zoning board hearing in May 2005 and a notice of decision in May 2005, all while he was employed by Barking Dog, which was applying to the state to withdraw 720,000 gallons of water per day.

“This is more than seven times the amount that I had wished to withdraw,” said John Blanchette, managing member of Monadnock View. “Not once during the numerous times when attorney Ratigan was advising the various Peterborough boards did he ever disclose that he was employed by a potential business competitor of MVH. I consider this a patent and gross conflict of interest.”

But Ratigan said that he was under no ethical obligation to disclose it. First, Blanchette should have known anyway because of the “public nature” of the proceedings in other towns. Second, Monadnock View was not his client. The town of Peterborough was, and he orally advised the town that he was representing Barking Dog back in 2003.

“No conflict has ever existed between the Town of Peterborough and (Barking Dog),” he wrote.

James Kruse, assistant disciplinary counsel for the Supreme Court’s Attorney Discipline Office, appeared to agree with most of Ratigan’s arguments in his motion to dismiss the complaint before the advisory board.

Barking Dog, he said, was not a party to the Monadnock View proceeding, and had no pending application in Peterborough. Ratigan, as a private counsel to the town – and not a town-employed attorney – only had an obligation to disclose possible conflicts to the town which, Kruse wrote, he had done.

In addition, according to previous federal and state court rulings, there was nothing wrong with Ratigan’s advice. While his legal advice might have contributed to rulings “adverse” to Monadnock View, he wrote, “such rulings were not the product of a breach of loyalty owed to (Monadnock View) as an existing former client.”

Monadnock View lambasted Kruse’s dismissal motion for focusing on “more narrow legalization interpretations” of the rules “that while possibly technically correct, completely ignores Mr. Ratigan’s fundamentally dishonest and corrupt acts.”

Calling Kruse’s reasoning “hair-splitting,” Foy added, “there is also a ‘smell’ test to employ: did he behave ethically and honestly? I don’t think any developer wants to appear before any board having to guess whether the town attorney … is in the secret employ of a competitor.”

Kruse would only say that “our jurisdiction is limited to the New Hampshire rules of professional conduct. That is what we have to look like when we evaluate these allegations.”

On March 22, the board upheld Kruse’s dismissal motion, without elaboration. While the decision is public record, Nelson said that the vote of the 12-member committee, or any of its deliberations, is not.