SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF KINGS

BOERUM HILL ASSOCIATION, BROOKLYNHEIGHTS ASSOCIATION, CARROLL GARDENSNEIGHBORHOOD ASSOCIATION, COBBLE HILLASSOCIATION, RIVERSIDE TENANTS'ASSOCIATION, and WYCKOFF GARDENSASSOCIATION, INC.,

Petitioners,For a Judgment Pursuant to Article 78 of the Civil PracticeLaw and Rules,

-against-

STATE UNIVERSITY OF NEW YORK, TRUSTEES OFSTATE UNIVERSITY OF NEW YORK, NEW YORKSTATE DEPARTMENT OF HEALTH, AND NIRAV R.SHAH, as Commissioner of the New York StateDepartment of Health,

Index No. 13007/13

Justice Baynes

AFFIRMATION OFJIM WALDENIN SUPPORT OFORDER TO SHOW CAUSE

I, Jim Walden, an attorney duly admitted to practice law in the courts of this State, hereby

affirm as follows under penalty of perjury, pursuant to CPLR § 2106, that the following is true

and correct:

I am a partner at the law firm of Gibson, Dunn & Crutcher LLP, with offices

located at 200 Park Avenue, New York, New York, 10166-0193. I am over 18 years of age.

2. On February 24, 2014, this Court so-ordered a Stipulation and Order (filed on the

following day with the clerk's office) intended to settle the Parties' disputes (the "Settlement

Stipulation")

3. I submit this affidavit in support of an Order addressing various violations of the

Settlement Stipulation. Specifically, we respectfully request an Order from this Court: (a)

Disqualifying certain scores registered by Technical Committee members during a Request for

Proposal dictated by the Settlement Stipulation, thereby certifying Prime Healthcare as the

second-highest-ranked bidder and Peebles as the third-highest-ranked bidder; (b) Maintaining

current medical services until further Order of the Court, including by rescinding a notice issued

on April 22, 2014 by Interim CEO Michael Miller, announcing ambulance diversion in violation

of the Settlement Stipulation; (c) Requiring Respondents to publicly release the DOH-approved

closure plan for Long Island College Hospital, which Petitioner's requested on April 23rd but

never received; (d) Ordering Respondents to comply with Paragraph 2(b)ii of the Settlement

Stipulation by providing the documentation required to be produced therein; (e) Ordering

Respondents to undertake other actions as the Court deems appropriate to rectify violations of

the Settlement Stipulation; and (~ Providing such other and further relief as the Court may deem

just and proper.

DISQUALIFICATION OF CERTAIN SCORES

4. The core principle of the Settlement Stipulation was issuance of a new Request

for Proposal ("RFP"), seeking a new operator of afull-service hospital. Indeed, despite SI1NY's

various statements that Petitioners were searching fora "unicorn," four separate proposals

offered afull-service hospital in response to the new RFP.

5. Paragraph 2(e) of the Settlement Stipulation states that "[t]he technical score for

any Offer shall have a maximum of 70 points, and the financial score for any Offer shall have a

maximum of 30 points." Settlement Stipulation at ¶2(e). Pursuant to this provision, members of

the Technical Evaluation Committee were instructed to give each proposal a score from zero to

70 based on the medical-services component of the RFP. A separate financial committee was

directed to give each bidder a score from zero to thirty points. Thus, any proposal could receive

a maximum of 100 points. Once individual scores were submitted, all SL1NY scorers on the

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Technical Committee were weighted as 51 % of the vote, and the Petitioners' scorers were given

a weighted average of 49%.

6. However, beyond this general scoring framework, SUNY never elaborated or

provided specific instructions to the Technical Evaluation Committee on how to score various

elements of each proposal, and the Technical Committee never convened for a meeting in which

its members could obtain clarity on how to score the proposals.

7. The intent of the RFP to find an operator of afull-service hospital could not be

clearer in the Settlement Stipulation and the new RFP, the language of which was drafted by,

among others, counsel for Petitioners. The Settlement Stipulation provides as follows:

a. "Offers are strongly encouraged to include a facility with

services/departments sufficient to support afull-service emergency room,

an intensive care unit, and in-patient beds. Any Offer lacking these

services will be subject to receiving a lower technical score." Settlement

Stipulation at ¶2(a)(i).

b. "Desired elements of medical-services plan: full-service hospital with at

least 100 in-patient beds. Any Offer including these medical services will

be eligible for a higher technical score." Settlement Stipulation at

¶2(a)(ii).

c. "Offers that include a teaching hospital or an affiliation with a teaching

hospital will be eligible for a higher technical score." Settlement

Stipulation at ¶2(a)(iii).

d. "Offers providing a realistic method to continue health care operations

after StJNY exits from health care operations as contemplated by

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paragraph 6 of this Stipulation and Order, and thereby avoid any gap in the

provision of health care services at the LICH campus at no additional cost

to SUNY, are preferred. While Offers with more comprehensive health

care services are preferred, Offers that provide for maintenance of some

health care operations during the interim period prior to a closing of a

transaction resulting from an Offer will be eligible for a higher technical

score." Settlement Stipulation at ¶2(a)(iv).

8. As this Court is well aware, SIJNY insisted that the sale of LICH was necessary

because it was unable to sustain LICH financially. The procurement process for the property

was initially designed to attract real estate developers, which SLTNY justified by arguing that "no

other hospital bidders existed." See e.g., Irina Ivanova, SLJNY Tables Long Island College

Hospital Mall Plan, Crain's New York (December 17, 2013, 3:43PM),

http•//www crainsnewyork.com/article/20131217/HEALTH CARE/131219883 ("The university

received no proposals from hospital operators in New York state," quoting Lora Lefebvre,

SL1NY Assoc. Vice Chancellor for Health Affairs); and SUNY's Memo. in Support of Mot. to

Vac. Orders, at 11, Sept. 26, 2013.

9. The Settlement Stipulation therefore specifically modified the evaluation criteria

for the new RFP and provided for the reconfiguration of the Technical Committee. The Parties

agreed to the terms of the new RFP, and SLTNY released the new RFP to the public on February

26, 2014. The RFP unambiguously restated the purpose of the process was "to provide, ideally,

L!

an acute care hospital (preferably a teaching hospital)...."1 From the beginning of the settlement

discussions, the Petitioners were aware that even with the best efforts of all Parties, it was

possible that no full-service hospital operator would come forward in response to the new RFP.

Petitioners understood that, should no viable full-service hospital emerge, they would be bound

to accept anon-hospital operator as the fair outcome of the RFP. However, four of the nine

proposals offered full-service hospitals. Yet, despite these offers, only one of the full-service

hospital operators was selected among the top three finalists. The winner is referred to herein as

"Brooklyn Health Partners." Although Brooklyn Health Partners' proposal for afull-service

hospital received the highest overall score, second- and third-place rankings were awarded to

non-hospital bidders. Of the remaining hospital proposals, Prime Healthcare finished fourth,

Trindade sixth, and CCACO eighth. See Exhibit A, RFP Score Sheet.

10. As the Court will recall, the Court was abundantly clear that the future minimum

services at the LICH site should include, at least, afull-service emergency room, an intensive

care unit, and in-patient beds. This guidance from the Court served as the central basis of the

Settlement Stipulation. See Settlement Stipulation at ¶2(a)(i).

11. SLTNY released the scores, on an anonymous basis, at the request of Petitioners on

or about April 28, 2014. The release of the RFP scores revealed that six evaluators gave their

highest technical score to non-hospital operators. Ex. A. There could be no rational basis for

this outcome, as none of the non-hospital bidders offered any of the elements listed in the

Settlement Stipulation ¶2(a)(i)-(iii), and thus were subject to lower technical scores by the very

terms of the settlement stipulation. They did not include a "full-service emergency room, an

~ SUNY Request for Proposal X002654, available at http://www.suny.edu/media/suny/content-

assets/documents/hospitals/LI CH_RFP_2-25-14.pdf

intensive care unit, and in-patient beds" as provided by the Settlement Stipulation at ¶2(a)(i); nor

did they include "full-service hospital with at least 100 in-patient beds," as provided by the

Settlement Stipulation at ¶2(a)(ii); nor did they include a teaching hospital, as provided by the

Settlement Stipulation at ¶2(a)(iii).

12. Any proposal – hospital or nonhospital –was eligible for a technical enhancement

if the proposal assured continuous medical services at the LICH campus. However, to the extent

the non-hospitals bids were eligible for a technical score enhancement because they proposed the

maintenance of some medical services at LICH pursuant to the Settlement Stipulation ¶2(a)(iv),

each of the hospital bidders were also eligible for the same enhancement, as each provided at

least as much continuous medical service, and some offered more continued services, than their

non-hospital counterparts. For example, CCACO, a full hospital bidder which finished in eighth

place overall, proposed to "immediately take over the daily operations and management at

LICH."2 Thus, the full-service hospital proposals, all of which provided plans for continuous

medical services, should have received a higher technical score than non-hospital proposals.

13. The most-glaring example of scores that fail to abide by the letter and spirit of the

Settlement Stipulation was SLTNY Scorer 9. This Technical Committee member—on a technical

score scale of zero to seventy points—gave every sin lg ehospital-proposing bidder a score of

zero, and gave Fortis (a non-hospital bidder failing to meet the minimum requirements of a full-

service emergency room, an intensive care unit, and in-patient beds) a perfect score of 70.

14. But the problems went well beyond this one scorer. Five other evaluators—

Evaluators 6, 10, 11, 14, and 15—gave their highest score to a nonhospital proposal. Together

2 CCACO RFP Proposal at 18, available at: http://www.suny.edu/media/sunv/content-assets/documents/hospitals/ChineseCommunityAccountableCareOr~-Part] Redacted.pdf.

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with SUNY Evaluator 9, we refer herein to these scorers as the "Subject Scorers." Four of the

six Subject Scorers did not even rank a hospital proposal within their top three highest scores.

15. In the aggregate, the Subject Scorers' failure to abide by the principles of the

Settlement Stipulation and the RFP skewed the results heavily toward anon-hospital operator,

resulting in Peebles and Fortis finishing second and third, respectively. For example, the SLTNY-

appointed Technical Committee members—who accounted for 51 % of the weight of the

Technical Score, which accounted for 70% of the total score—collectively gave the top scores to

Fortis, Brooklyn Hospital Center (another non-hospital), and Peebles by a wide margin. Their

scores dropped off sharply for the full-service hospital proposals. Ex. A.

16. The primary elements of the settlement were that (1) the RFP scoring should be

weighted in favor of proposals for full-service hospitals, (2) the Parties would "perform the

obligations contained" in the Stipulation "in good faith" and "take no action inconsistent with

[the] Stipulation and Order (Settlement Stipulation Preamble), and (3) "Offers will be evaluated

based only upon the criteria set forth in the New RFP." Settlement Stipulation at ¶2(d). The

Scorers, as agents of the Parties to the Settlement Stipulation, were obligated to adhere to the

terms of the Settlement Stipulation, which is one of the few instructions they did receive from

SUNY at the start of the process.

17. This Court is empowered to order specific performance to disqualify the scores

from the Subject Scorers who scored non-hospital proposals highest. The Settlement Stipulation

provides that "the Supreme Court, Kings County, Justice Johnny Lee Baynes, shall maintain

jurisdiction to enforce the terms of this Stipulation and Order." Settlement Stipulation at ¶7.

Under New York law, the Court may order the performance of specific actions for the purpose of

enforcing a settlement order. See, e.g., Pate°olmen's Benevolent Assn of City of Long Beach, Inc.

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v. City of Long Beach, 57 A.D.3d 499, 499, 868 N.Y.S.2d 306, 307 (2d Dep't 2008) (affirming

Supreme Court's order directing specific performance to satisfy stipulations reached between the

parties in settlement).

18. As one trial court stated, "stipulations of settlement entered into in open court are

contracts binding upon the parties thereto.... Moreover, when so-ordered by the Court, such

stipulations are subject to the full panoply of judicial enforcement, as would any direct order of

the Court." Thompson v. Data Field Servs., Inc., 31 Misc. 3d 1236(A) (Sup. Ct. 2011) (citing

Judiciary Law § 753; McCormick v. Axelrod, 59 N.Y.2d 574, 453 N.E. 2d 508 (1983)).

For these reasons, we respectfully ask this Court to disqualify scores submitted by the Subject

Scorers. Based on our calculations, as contained in Exhibit B hereto, this decision would result

in the following weighted-scoring tallies: (1) Brooklyn Health Partners, (2) Prime Healthcare,

and (3) Peebles. Thus, the practical effect would change the results in an important regard:

SLTNY would be obligated to negotiate with Prime Healthcare as the second-highest-scoring

proposal. Thus, the requested Order would not impact any rights or remedies sought by

Brooklyn Health Partners, as it would remain the proposal obtaining the highest score even under

the recalculation.

FAILURE TO MAINTAIN SERVICES

19. The Settlement Stipulation requires SIJNY to "maintain the current level of

medical services at LICH between the execution date hereof and such closure date as provided

for above," which is May 22, 2014. Settlement Stipulation at ¶6. However, SUNY has

announced that it will cease providing certain medical services as early as May 12, 2014. In a

letter to patients, Interim CEO Michael Miller informed patients that (1) "the emergency room

will no longer be accepting patients and ambulances on May 12, 2014;" (2) "[t]he Hospital will

E:

not accept new admissions as of May 12, 2014;" (3) "[t]he Labor and Delivery services will be

discontinued at LICH on May 12, 2014;" and (4) "[a]rrangements are underway" for the

cessation of renal dialysis services at LICH. Exhibit C, Letter from Interim CEO Michael Miller,

dated Apri122, 2014.

20. As noted by the Affirmations of Dr. Conchita Mendoza, M.D., and Dr. Alice

Garner, M.D., submitted together with this motion, other medical services—including, at least,

colonoscopies, specialty services, and inpatient services—have already been discontinued at

LICH.

21. In addition, as noted in the attached Affidavit of Dr. Stacey Weiss, SLTNY has

also directed cessation of the dialysis clinic, and order a plan to transfer 182 patientsa

particularly vulnerable patient populationto other dialysis services. However, the time is

insufficient to provide for adequate medical care. Indeed, many of these elderly patients would

be forced into distant clinics, where the only available dialysis appointments will require 4-hour,

overnight dialysis treatments.

22. The failure to "maintain the current level of medical services at LICH" through

May 22, 2014, is a breach of the Settlement Stipulation. Thus, the Court should extend SIJNY's

obligation to maintain current medical services and arrest the daily diminution in medical

services ongoing even today.

FAILURE TO PROVIDE DOCUMENTATION

23. The Settlement Stipulation states that SLJNY will provide documentation related

to the Othmer Funds. Paragraph 2(b)(ii) provides as follows: "SIJNY will provide to the

Petitioners the written reports to the Office of the Attorney General described in that certain

letter dated October 26, 2010, from Clifford D. Stromberg, Esq. Counsel to SUNY Downstate, to

~~

Paula Gellman, Esq., Assistant Attorney General, and her response thereto (the "Report"), For

calendar years 2013 and 2014, up to the date of the cessation of operations by StTNY." Yet,

SIJNY never provided the documentation. This is a violation of the Settlement Stipulation.

24. Moreover, the Settlement Stipulation required SUNY to "continue current

medical services until May 22." DOH apparently approved reduction of medical services before

May 22, in violation of the Stipulation. It is clear DOH allowed SLTNY to divert ambulances on

May 12, which is one such violation, since SLJNY itself announced the diversion. Exhibit C.

But the DOH-authorized violations of the Settlement Stipulation likely go beyond ambulance

diversion. We need, and the Court requires, the closure plan—thus far withheldto gauge the

full extent of the violations.

25. Despite several requests, neither SLTNY nor DOH has provided the closure plan to

counsel. Exhibits D and E, Email Requests from M. White to M. Holsinger and N. Gueron,

dated Apri123 –May 7, 2014.

26. For these reasons, we respectfully request that the Court issue an order: (a)

Disqualifying scores submitted by the Subject Scorers, thereby certifying Prime Healthcare as

the second-highest-ranked bidder and Peebles as the third-highest-ranked bidder; (b) Maintaining

current medical services until further Order of the Court, including by rescinding a notice issued

on April 22, 2014 by Interim CEO Michael Miller, announcing ambulance diversion in violation

of the Settlement Stipulation; (c) Requiring Respondents to publicly release the DOH-approved

closure plan for Long Island College Hospital, which Petitioner's requested on April 23rd but

never received; (d) Ordering Respondents to comply with Paragraph 2(b)ii of the Settlement

Stipulation by providing the documentation required to be produced therein; (e) Ordering

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Respondents to undertake other actions as the Court deems appropriate to rectify violations of

the Settlement Stipulation; and (~ Providing such other and further relief as the Court may deem

just and proper.

DATED: New York, New YorkMay 7, 2014

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WALDEN