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State ex rel. Louie v. Hawaii Government Employees Association

Supreme Court of Hawaii

February 14, 2014

STATE OF HAWAI'I, ex rel. DAVID M. LOUIE, Attorney General, and DEAN H. SEKI, Comptroller of the State of Hawai'i, Petitioners/Plaintiffs-Appellants, Cross-Appellees,
v.
HAWAII GOVERNMENT EMPLOYEES ASSOCIATION, AFSCME LOCAL NO. 152, AFL-CIO; UNITED PUBLIC WORKERS, AFSCME LOCAL NO. 646, AFL-CIO; ROYAL STATE CORPORATION; ROYAL STATE NATIONAL INSURANCE COMPANY, LIMITED; THE ROYAL INSURANCE AGENCY, INC.; VOLUNTARY EMPLOYEES' BENEFIT ASSOCIATION OF HAWAII; MANAGEMENT APPLIED PROGRAMMING, INC., Respondents/Defendants-Appellees, Cross-Appellants.

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (ICA NO. 29352; CIV. NO. 02-1-0685)

Deirdre Marie-Iha for petitioner

Paul A. Schraff for Royal respondent

Charles A. Price for respondent HGEA

Adrian W. Rosehill for respondent UPW

RECKTENWALD, C.J., ACOBA, and McKENNA, JJ., WITH NAKAYAMA, J., DISSENTING, WITH WHOM POLLACK, J., JOINS

OPINION

RECKTENWALD, C.J.

This case arises out of the Hawaii Public Employees Health Fund's "porting" program. Under the program, state and county employees could choose to enroll in health benefits and long-term care benefits plans offered by their respective employee unions, rather than Health Fund-sponsored plans. For employees who chose a union-sponsored plan, the Health Fund would transfer or "port" to the unions the government employers' contributions to the cost of providing insurance. See Hawai'i Revised Statutes (HRS) §§ 87-4, 87-22.3, 87-22.5, 87-23 (repealed)[1] The instant action centers on the State's contention that public funds ported to certain unions exceeded the amounts allowed by law.[2]

Specifically, the Health Fund statutes provided that amounts ported to the unions would be either the public employer's contribution as determined in relevant collective bargaining agreements, or the "actual monthly cost of the coverage, " whichever was less. HRS §§ 87-4, 87-22.3, 87-22.5, 87-23. The State alleged that public funds ported to the Hawai'i Government Employees Association (HGEA) and the United Public Workers (UPW) exceeded the "actual [monthly] cost of coverage."[3]The circuit court ultimately bifurcated the case, requiring the State to seek a declaratory judgment with regard to the interpretation of the statutory phrase "actual monthly cost of the coverage" before allowing litigation on the State's remaining claims. The State then argued that the phrase means

(1) premiums paid to insurance carriers in arm's length transactions, less any refunds, rate credits, and reimbursements, where the carrier is independent of HGEA and UPW, meaning, not controlled by, related to, or conspiring with leaders of HGEA and UPW to circumvent statutory limits on amounts ported by the Health Fund, or (2) allowable claims paid or incurred, plus reasonable administrative fees and profits where the carrier is not independent of HGEA and UPW.

The circuit court rejected the State's interpretation and concluded that the term means "the premium charged by and paid to the carrier." Because there was no dispute that the ported amount equaled the premium charged and paid, the circuit court's declaratory ruling essentially ended the State's case, and the circuit court entered judgment against the State.[4]

The State appealed, arguing, inter alia, that (1) the circuit court erred when it interpreted the phrase "actual monthly cost of the coverage" to mean "the premium charged by and paid to the carrier, " and (2) the circuit court erred when it denied the State leave to file a second amended complaint and "rewrote" the State's complaint.

The Intermediate Court of Appeals affirmed the circuit court's judgment with respect to its interpretation of "actual monthly cost of the coverage." The ICA further determined, inter alia, that in light of its affirming the circuit court's interpretation, the issue of whether the circuit court erred when it denied the State leave to file a second amended complaint and "rewrote" the State's complaint was no longer justiciable. The ICA thus declined to reach that issue.

In its application for writ of certiorari, the State raises the following questions:

1. Did the [ICA] gravely err when it interpreted the phrase "actual monthly cost of the coverage" from Hawai'i Revised Statutes (HRS) §§ 87-22.3, 87-22.5 and 87-23 to mean the premium set by an insurance carrier, even if the State of Hawaii alleges that (a) the insurance carriers had extraordinarily high gross profits, (b) the insurance carriers had extraordinarily high administrative fees, and (c) the amount charged for the premium was grossly inflated and did not reflect the "actual cost" of the coverage in a legitimate arm's-length business transaction?
2. Did the ICA gravely err when it failed to vacate the circuit court's orders denying the State leave to amend its complaint, when the circuit court (a) denied leave to amend even though the court had previously granted leave to file similar causes of action, (b) interpreted Hawaii Rules of Civil Procedure (HRCP) [Rule] 9 incorrectly to conclude that the State's civil conspiracy to defraud claim was insufficiently precise, (c) misused HRCP [Rule] 12(f) in order to edit the State's complaint itself, and (d) precluded the State from amending its definition of "actual cost of coverage" to make the definition consistent with the complaint as amended by the court?

(Emphasis in original).

We hold that the circuit court did not err in interpreting "actual monthly cost of the coverage" in chapter 87 to mean "the premium charged by and paid to the [insurance] carrier." We recognize that the State has raised serious and troubling allegations regarding improper financial dealings amongst the defendants. However, the State chose to tie its allegations to the statutes, and conceded at oral argument that its claims, including conspiracy to defraud the State, depended entirely on its interpretation of the statutory phrase "actual monthly cost of the coverage." We cannot rewrite the State's complaint to allege causes of action the State did not pursue. Nor can we rewrite the statutes to include prohibitions that the legislature never contemplated. Even if the State could have asserted a claim for conspiracy to defraud wholly apart from the provisions of chapter 87, it did not do so. The question here, as framed by the State, is a narrow one: do the factual allegations constitute a violation of the provisions of chapter 87? The answer to that question is no.

The State concedes that such a disposition would render moot its second argument regarding the pleadings process. Thus, we do not reach that issue. Accordingly, we affirm the judgment of the ICA.

I. Background

The following factual background is taken from the record on appeal.

A. Health Fund

In 1961, the Legislature established the Health Fund for the purpose of providing public employees and their dependents with a health benefits plan. 1961 Haw. Sess. Laws Act 146, § 1 at 191. The Health Fund was defined to consist of "contributions, interest, income, dividends, refunds, rate credits and other returns." Id. at 192. Act 146 required the State to make monthly contributions to the Health Fund for health benefits for employees and their dependents. Id. at 192-93. Employees also were required to make a monthly contribution to the Health Fund for "the difference between the monthly charge of the health benefits plan selected by the employee-beneficiary and the State's contribution to the fund." Id. at 193. The Health Fund board was authorized to contract with carriers to provide health benefits plans. Id. at 194. During the life of the Health Fund, which was replaced by the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) on July 1, 2003, the Health Fund expanded the benefits provided to public employees to include plans such as prescription drug, vision, dental, and group life insurance plans. See 1965 Haw. Sess. Laws Act 235, § 2 at 393; 1967 Haw. Sess. Laws Act 110, § 3 at 101; 1985 Haw.

Sess. Laws Act 304, §§ 1-2 at 816-17. Initially, the public employer's contribution was a specific dollar amount determined by statute. See, e.g., 1961 Haw. Sess. Laws Act 146, § 1 at 192. However, effective July 1, 1985, the legislature amended the Health Fund statute to require government employers to contribute amounts as set forth in "the applicable public sector collective bargaining agreement" or as established under HRS chapter 89C, which pertains to public officers and employees excluded from collective bargaining. 1984 Haw. Sess. Laws Act 254, §§ 4, 9 at 570-71, 573; HRS § 87-4 (a) (1985 & 1993).

Beginning at various times during the existence of the Health Fund, the applicable statutes were amended to allow state and county employees to choose to enroll in union-sponsored insurance plans, in lieu of Health Fund-sponsored plans. See 1967 Haw. Sess. Laws Act 110, § 3, at 101; 1984 Haw. Sess. Laws Act 71, § 1, at 123. For employees who chose a union-sponsored plan, the Health Fund would pay or "port" to the unions the government employers' contributions to the cost of providing insurance. See HRS §§ 87-4, 87-22.3, 87-22.5, 87-23.

Under the statutory scheme at the time of the instant case, the Health Fund was to provide health benefits to public employees in the following manner:

(1) For those employee-beneficiaries who are not participating in a health benefits plan of an employee organization . . ., the [Health Fund] shall establish health benefits plans and the requirements for eligibility under the health benefits plans; or
(2) For employee-beneficiaries who participate in the health benefits plan of an employee organization, the [Health Fund] shall pay a monthly contribution for each employee-beneficiary, in the amount provided in section 87-4 (a), [5] or the actual monthly cost of the coverage, whichever is less, towards the purchase of health benefits under the health benefits plan of an employee organization.

HRS § 87-22.3 (Supp. 2002) (emphasis added).

Similar language appeared in HRS § 87-22.5[6] (determining dental plan benefits) and HRS § 87-23[7] (determining group life benefits). Under this statutory scheme, the Health Fund's contribution ported to the union would be either (1) the public employer's contribution for the cost of insurance, as determined by the applicable collective bargaining agreement, see HRS § 87-4;[8] or (2) the actual monthly cost of the coverage, whichever was less. As aptly explained by the ICA majority opinion:

First, say the applicable collective bargaining agreement provided that the public employer would pay 60% of the monthly health premiums for the unionized employees. This calculation was based on the monthly premium of the medical plan sponsored by the Health Fund, which in turn was defined as the plan with the largest number of active employee enrollments as of December 31st of the previous fiscal year.[9] If the most popular plan's monthly premium was, say, $100, the amount ported to the union would be, at the most, $60. If, however, the "actual cost of coverage" of the union's health benefits plan was $50, then the maximum amount that could be ported under this statutory provision would be $50.

Before participating in the Health Fund's porting program, unions were required to submit to the Health Fund a copy of their charters and by-laws and a letter that:

(1) Identifies the name and address of the person who is authorized to represent the employee organization;
(2) Certifies that its health benefits plan complies with all applicable State laws; and
(3) Agrees that its health benefits plan complies and will continue to comply with the following requirements:
(A) Maintain reasonable accounting and enrollment records and furnish such records and reports as may be requested by the board, its administrator, or the State comptroller;
(B) Permit representatives of the board and State comptroller to audit and examine its records that pertain to its health benefits plan at reasonable times and places as may be designated by the board or the State comptroller; and
(C) Accept adjustments for error or other reasons as may be required under chapter 87, Hawaii Revised Statutes, and chapters 30 through 36 of title 6, administrative rules.

Hawai'i Administrative Rules (HAR) § 6-34-9; see also HAR §§ 6-35-5 (dental plan) & 6-36-7 (life insurance plan).

In June 1989, HGEA submitted a letter to the Health Fund that certified that its plans complied with state laws, and agreed to, inter alia, permit the Health Fund and state comptroller to audit and examine its records. UPW submitted similar certifications to the Health Fund in June 1989 and June 1990. Both HGEA and UPW identified Melvin Higa, chief executive officer of Royal State Corporation (Royal State) and Mutual Benefit Association of Hawaii, as HGEA's and UPWs representative regarding their benefit plans.

In 1999, the State Auditor conducted an operational audit of the Health Fund and reported that the Health Fund board never audited the union benefit plans and thus "[fell] short of fulfilling its fiduciary responsibility to carry out the purposes of the health fund."[10] The State Auditor's report stated that "in spite of the significant increases in premiums ported to union health plans, the current board [had] not requested the unions to provide information on their health benefit plans' operations until this study." The Auditor's report further stated that:

By statute, the amount ported is determined by collective bargaining agreements or the actual monthly cost of the coverage, whichever is less. However, without auditing the union health benefit plans, the board has no way of verifying the actual monthly cost of the coverage. Beyond the unions' assertion, the board has no assurance that the ported funds are used for purchasing health benefits for union plan enrollees. At least one union that was about to receive a premium refund from a health insurance carrier has contacted the health fund inquiring about the disposition of the refund. None of the union plans has ever returned any difference between what it cost to provide coverage and what was ported to them.

As a result of the State Auditor's report, the State Comptroller sent notices to public employee unions, including HGEA and UPW, requesting that they make their records available for an audit.

B. Circuit Court Proceedings

On March 15, 2002, the State filed a complaint against HGEA, UPW, and Royal State, alleging that the State sought to audit the public employee unions' welfare benefit plans, and that every union except for HGEA and UPW produced or agreed to produce their records for audit. According to the complaint and correspondence attached as exhibits to the complaint, UPW responded by requesting, inter alia, copies of the Health Fund's administrative rules authorizing the audit, a specific list of records requested "in order for the UPW to determine whether the records you require are subject to the audit and to retrieve the records from storage[, ]" and a list of names of the people who would be conducting the audit. The comptroller sent UPW a letter that, inter alia, provided copies of applicable sections of the Health Fund's administrative rules and identified Ernst & Young LLP as conducting the audit. On February 8, 2002, the comptroller sent letters to the unions, including HGEA and UPW, with a description of the scope of the audit and a list of the required financial records for the audit. In a memo dated February 11, 2002, UPWs state director requested copies of "the state and federal laws" that, inter alia, "require audits of the UPW Health." In a letter dated March 1, 2002, the comptroller stated that the Hawaii Administrative Rules authorizing the audit were already provided to UPW, and stated that unless UPW stated in writing that it would "unconditionally make the previously described records available[, ]" the comptroller would seek a court order requiring UPW to make its records available. In a letter dated February 27, 2002, but time-stamped as received by the comptroller on March 5, 2002, UPW stated its "willingness to fully cooperate" with the audit "if such an audit is permissible by law." UPW stated that "fundamental issues of authority, purpose, scope and objectives of the independent audit have not been satisfactorily resolved between the parties[, ]" and requested a copy of the "RFP used in the procurement of an independent auditor and the contract with Ernst & Young to perform the independent audit." In response, the comptroller stated, inter alia, that copies of the "RFP used to select E&Y and the E&Y engagement letter" would be made available for examination, but that such information was unnecessary "for UPW to honor its certified and unconditional commitment to make the subject records available for audit[.]" The comptroller further stated that unless UPW sends a written "commitment to make the subject records available" for the audit, "we will assume that UPW has no intention of honoring its agreement without a court order[.]" The State alleged that HGEA and HGEA's representative, Voluntary Employees' Benefit Association of Hawaii (VEBAH), also did not cooperate with the State's audit.

The State's complaint against UPW, HGEA, and Royal State alleged five claims for relief, including violation of the Health Fund's administrative rules, right to an accounting, breach of contract, breach of fiduciary duty, and promissory estoppel. The State sought an order granting a preliminary and permanent injunction requiring the defendants and their officers and agents to fully comply with the audit. The State also sought "an accounting of the payments made by the [Health] Fund since July 1, 1994 through June 30, 2001 and the actual cost of providing health, dental and group life insurance benefits to those enrolled in Defendants' Welfare Benefit Plans, including any premium credits or refunds received by the Defendants." The State also requested a decree of specific performance requiring HGEA and UPW to honor their certification to make their records available for inspection.

On March 22, 2002, the State filed a motion for preliminary and permanent injunction requiring HGEA and UPW to make records available for the audit, and restraining defendants from obstructing the audit or destroying or altering records within the scope of the audit. On April 23, 2002, the circuit court granted the State's motion for a preliminary injunction, and ordered HGEA, UPW, and their agents to make their records available to the State for review and audit.

On April 26, 2002, HGEA filed a motion for clarification or instructions regarding the circuit court's injunction order, stating that although HGEA wanted to comply with the order, the records at issue were physically possessed by VEBAH, which asserted that it was not an "agent" bound by the order. UPW joined HGEA's motion. On May 31, 2002, the circuit court granted HGEA's motion for clarification, and ordered UPW and HGEA to serve subpoenae duces tecum on VEBAH, the Royal Insurance Company, and Management Applied Programming, Inc. (MAP) for the required documents.

On October 1, 2003, the State moved for leave to file a first amended complaint. The proposed first amended complaint added VEBAH[11] and MAP[12] as defendants, and county finance officials as "Necessary Party Defendants." The proposed first amended complaint asserted nine causes of action: (1) conspiracy to defraud the State, (2) interference with contract, (3) assumpsit, (4) restitution and constructive trust, (5) equitable accounting, (6) specific performance, (7) injunction, (8) unjust enrichment, and (9) breach of fiduciary duty. The proposed first amended complaint alleged, inter alia, that the defendants "purchased" contracts for insurance from various third-party insurers, under which the insurers were required to reimburse amounts paid by the defendants if the amounts paid exceeded allowable claims plus an agreed profit. The proposed first amended complaint further alleged that the defendants received reimbursements from insurers under such contracts that should have been returned to the Health Fund, but were not. The proposed first amended complaint also alleged that the Health Fund ported funds to provide insurance for HGEA and UPW members under plans that supplemented a spouse's health insurance, and that the actual cost of providing coverage under these supplemental plans was less than the ported amount. The proposed first amended complaint further alleged that the difference should have been returned to the Health Fund, but was not. According to the proposed first amended complaint, the defendants "used or allowed the use of Welfare Benefit Plan funds to improperly make payments to or for the benefit of insiders" such as then-UPW executive director Gary W. Rodrigues and Rodrigues' daughter Robin Sabatini.

On November 18, 2003, the circuit court granted the State's motion for leave to file a first amended complaint "on condition that (1) there is specificity regarding alleged fraud and alleged civil conspiracy to defraud as required by [HRCP] Rule 9 and as interpreted by the Court, and (2) Plaintiffs make clear which defendants did certain things or failed to do certain things, rather than referring generically to ''Defendants.'" However, the State did not file the proposed first amended complaint. On June 10, 2004, the parties stipulated, inter alia, that VEBAH would disclose the requested records and the State would "withhold" filing the first amended complaint.

More than a year later, on January 18, 2006, the State filed a motion for leave to serve and file a second amended complaint and supplemental summons. The proposed second amended complaint (January 2006 proposed second amended complaint) was based on a December 1, 2005 report from the California accounting firm Biggs & Co., which reviewed VEBAH's records. The Biggs Summary Report[13] (Biggs report) concluded, inter alia, that it appeared that premiums received for benefit coverage underwritten by "independent insurance companies such as HMSA, Kaiser and Kapiolani" were "being used to cover the cost of insurance at an estimated break even basis, after excluding administrative fees and risk charges assessed by Royal State and VEBAH." The Biggs report also concluded that "self insured programs maintained by Royal State and VEBAH generated extremely high gross profits calculated on the amount of premiums collected less the cost of related claims paid." In particular, the Biggs report discussed the high profitability of supplemental health programs underwritten by Royal State and VEBAH. The Biggs report stated that such programs were "believed to generate high profitability and low risk to Royal State" for two principal reasons:

First, these are both supplemental health care programs which generally provide excess health care coverage over and above the medical benefits provided under basic medical care programs such as HMSA, Kaiser, and Kapiolani. In other words, the supplemental health care programs provide coverage for the insured's deductible portions and medical care costs beyond the limits of coverage of the basic medical programs. Since the basic medical care programs are structured to provide coverage for the majority of the health care costs, the supplemental programs inherently provide coverage for the less risky portion of medical care.
Second, the amounts ported (i.e. porting rates) from the Health Fund for coverage of the supplemental programs are the same as for the major medical programs under HMSA, Kaiser, Kapiolani, etc. For instance, the medical coverage porting rates for HGEA AFSCME Local 152, AFL-CIO Unit single and family are $79.80 and $239.40 respectively, regardless of whether the employee maintains [supplemental or basic medical care programs]. A basic premise of insurance is that risk and cost are directly related in that the higher the risk, the higher the cost. In this instance, the cost of the programs (i.e. the premium received) is the same but the supplemental programs are less risky and, correspondingly, more profitable.

(Emphases added).

According to the Biggs report, the gross profit generated by Royal State and VEBAH on their self insured programs "was excessively high compared to that realized by independent insurance companies providing similar products."[14] For example, the Biggs report stated that the gross profit - calculated as premiums less the cost of related claims paid - on Royal State's supplemental programs averaged 58.7 percent between July 1994 to June 2003. According to the Biggs report, the "gross profit realized by Royal State on its self insured life program was significantly lower than for the other self insured programs but was still a healthy 36.1% for [fiscal year 1999-2000] and averaged 35.2% over the three fiscal years from July 1998 through June 2001. The Biggs report further stated that while some administrative fees and costs assessed by Royal State and VEBAH "appeared reasonable and were consistent with contractual allowances, the totality of all the fees assessed appeared excessive, particularly in consideration of the high gross profit realized on self insured programs."

The January 2006 proposed second amended complaint, which added as defendants Royal State National Insurance Company, Ltd. (RSN) and The Royal Insurance Agency (TRIA), alleged that HGEA and UPW transferred ported funds to VEBAH, Royal State, and TRIA to purchase or provide insurance coverage or related services for HGEA and UPW members. The January 2006 proposed second amended complaint further alleged, inter alia, that between July 1, 1994 and June 30, 2003, the Health Fund ported funds to HGEA and UPW for supplemental health plans known as Comprehensive Health and Medical Plan (CHAMP), supplemental adult dental, drug, and vision plan (DDV), and Supplemental Health Plan (SHP) .[15] CHAMP and SHP were underwritten by RSN, and DDV was underwritten by VEBAH. The January 2006 proposed second amended complaint also alleged that the Health Fund ported funds to HGEA and UPW for life insurance underwritten by RSN. The January 2006 proposed second amended complaint further alleged that the ported amounts for the foregoing plans exceeded the "actual cost of providing coverage[.]" For example, the January 2006 proposed second amended complaint alleged:

27. . . . During the period from July 1, 1994 to June 30, 2003, [the Health Fund] ported to HGEA over $68 million in employer contributions for [CHAMP, DDV and SHP] and almost $15 million to UPW. The actual cost of providing coverage under HGEA's plans did not exceed, however, $36 million, and under UPWs plans, it did not exceed $7 million. The difference, approximately $40 million, should have been returned to [the Health Fund], but it was not.
28. Amounts that [the Health Fund] ported to HGEA and UPW were used to provide life insurance underwritten by RSN. Premiums contributed by State and County employers for the three years ended June 30, 2003 were almost $22 million, while the actual cost of providing coverage did not exceed $16 million. The difference, approximately $6 million, plus any excess porting for other years, should have been returned to [the Health Fund], but it was not.
29. Defendants HGEA, UPW, and VEBAH, either directly or through others, purchased insurance contracts from various third parties that required the insurer to refund or credit premiums that exceeded allowable claims plus an agreed profit. Defendants received reimbursements or rate credits under such contracts that should have been returned to [the Health Fund], but they were not.
30. Defendants HGEA and UPW used or permitted others to use amounts ported by [the Health Fund] to pay unreasonable administrative expenses and fees. Those amounts should have been returned to the Health Fund, but they were not.
31. Defendants RSC, RSN, TRIA, VEBAH, and MAP retained or received, or allowed the use of ported funds by others for, unreasonable administrative expenses and fees. Those funds exceeded the actual cost of insurance coverage and should have been returned to [the Health Fund], but they were not.
32. Defendants HGEA, UPW, RSC, TRIA, and VEBAH used, or allowed the use of, ported funds to make payments to themselves or to related parties for Welfare Benefit Plans in amounts that exceeded the actual cost of coverage. Such excessive payments should have been returned to [the Health Fund], but they were not.

(Emphases added).

The January 2006 proposed second amended complaint also alleged, inter alia, that at various times, VEBAH executives representing HGEA, a Royal State Group executive representing HGEA and UPW, and UPW director Gary Rodrigues requested that the Health Fund port monthly employer contributions for certain employee or retiree health and group life plans, and that such requests "certified falsely that the amounts specified therein did not exceed the actual monthly cost of covering" employees, dependents and/or retirees under those plans. (Emphasis added). The January 2006 proposed second amended complaint alleged ten causes of action, including conspiracy to defraud the State, interference with contract, assumpsit, false claims, restitution and constructive trust, equitable accounting, specific performance, injunction, unjust enrichment, and breach of fiduciary duty.

HGEA, Royal State, and UPW opposed the State's motion to file a second amended complaint. On June 2, 2006, the circuit court denied without prejudice the State's motion for leave to file a second amended complaint and bifurcated the case. Specifically, the circuit court ruled as follows:

1. The motion is denied without prejudice as to the proposed First Cause of Action (Conspiracy to Defraud the State) on the grounds that it fails to comply with Rule 9(b) of the Hawaii Rules of Civil Procedure.[16] Failure to comply with Rule 9(b) in any further proposed amended complaint will result in denial of the fraud and conspiracy claims with prejudice;
2. [The State] may move to amend its complaint to seek a declaratory ruling as to the meaning of the term "actual monthly cost of the coverage, " as used in former Sections 87-22.3, 87-22.5, and 87-23 of the Hawaii Revised Statutes;
3. The motion is denied in all other respects at this time. If [the State] amends the complaint as provided in paragraph numbered 2 above, and the court issues a ruling that is consistent with the theory underlying the proposed Second Amended Complaint, then [the State] may ...

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