Class action lawsuit alleges Alaska mishandled public guardianship duties

Several disabled Alaskans have filed a class action lawsuit against the state of Alaska over its mishandling of the guardianship services it was required under law to provide.

The lawsuit stems from the Alaska Office of Public Advocacy’s decision two years ago to request that dozens of public guardianship clients — all disabled and vulnerable adult residents of Alaska — be transferred from the care of the state to the care of a private guardian who proved incapable of ensuring their basic needs were met.

Under a 2022 court order, private guardian Thomas McDuffie took over dozens of cases from the Office of Public Advocacy even before McDuffie formally received his guardianship license. What followed were reports of neglect and abuse that led some wards to lose property, incur massive debt and suffer from declining health.

According to the lawsuit, which was filed on behalf of 10 named plaintiffs by Anchorage civil rights attorney Caitlin Shortell, Alaska’s Adult Protective Services agency received multiple complaints about McDuffie’s misconduct and negligence, but the agency failed to respond to the complaints and investigate the wrongdoing as required by law.

McDuffie is facing numerous lawsuits over his alleged misconduct in neglecting and mishandling his duties to care for around 122 guardianship and conservatorship wards between 2021 and 2023. No criminal charges have been filed against him.

This is the first lawsuit that names the state of Alaska and heads of public agencies as partially responsible for the damage suffered by McDuffie’s former wards.

Alongside McDuffie and his private guardianship agency, Cache Integrity Services, the lawsuit filed in July names as plaintiffs Beth Goldstein, the deputy director of the Office of Public Advocacy, and Anthony Newman, the director of Adult Protective Services within the Alaska Department of Health.

The plaintiffs, who belong to a group of around 122 guardianship and conservatorship wards that were transferred from the care of the Office of Public Advocacy to McDuffie’s agency, are seeking compensation from the defendants on account of their misconduct.

According to the lawsuit, the actions of Newman and Goldstein resulted in “egregious neglect, abuse, and loss of real and personal property, money and benefits.” The lawsuit states that Newman and Goldstein “knew or should have known that they were obligated to protect plaintiffs but were deliberately indifferent to their duties.”

The state of Alaska has not yet formally responded to the lawsuit, and has several weeks to do so.

“As a general matter, we can all agree that the actions of Cache Integrity are tragic, and OPA and the Department of Law have been working diligently on solutions,” Alaska Department of Law spokesperson Sam Curtis said by email. “Our focus remains on how to improve the situation and ensure Cache Integrity can do no more harm. It is unfortunate that the State has been included in this lawsuit when the responsibility lies with those that caused the injury.”

Individuals placed under a court-appointed guardianship are adults who rely on their guardian to ensure they are housed and their most basic needs are met. The guardian is also responsible for ensuring wards receive public benefits, on which wards typically depend.

According to the lawsuit, Goldstein “recommended, transferred and referred” Alaskans who had been wards of the state to McDuffie’s agency but did not verify that McDuffie met the requirements of a private guardian.

The Adult Protective Services agency, overseen by director Newman, then “received numerous complaints” regarding neglect of the plaintiffs by McDuffie and his agency “but inexcusably failed to direct staff to investigate those reports of harm, prolonging and compounding the harms” to the plaintiffs in the case, according to the lawsuit.

After McDuffie and his agency proved incapable of caring for their guardianship and conservatorship clients, the individuals were transferred back to the responsibility of the Office of Public Advocacy in 2023, and Goldstein was appointed “special investigative conservator” by Anchorage Superior Court Judge Eric Aarseth.

Since then, McDuffie’s former wards “have been unable to recover lost property and funds” and have lost access to public benefits, leaving some of them unable to pay for room and board, and causing some to be evicted from their housing, according to the lawsuit.

Goldstein and the Office of Public Advocacy “failed to remedy the harms caused by McDuffie and Cache Integrity Services,” according to the lawsuit. The state did not hire a forensic accountant as ordered by the Superior Court, and the plaintiffs’ funds were not released to their new guardians and conservators.

“We had hoped that Goldstein and the State of Alaska would act, but their ongoing negligence and failure to protect Plaintiffs has necessitated the filing of this class action complaint,” Shortell said in a written statement. “We are seeking damages and injunctive relief for Plaintiffs and all 122 former wards of Thomas McDuffie and Cache Integrity Services.”

Between August 2022 and November 2023, Adult Protective Services, an agency within the Alaska Department of Health charged with investigating potential mistreatment of adults, received several complaints alleging that McDuffie and his agency were neglecting the wards assigned to the agency.

Complaints submitted to Adult Protective Services are not made public until investigations are complete.

The complaints included allegations from assisted living homes that McDuffie was not submitting payment for wards’ housing, according to the lawsuit. They also included reports from care coordinators that McDuffie did not respond to requests for signatures on needed documents to authorize Medicaid services. Family members of wards reported that McDuffie and his agency had breached their conservatorship or guardianship duties.

In one case, McDuffie left one of his wards in the hospital for more than a year when hospitalization was not necessary, incurring a hospital bill of more than $615,000, according to the court filing.

In another case, McDuffie failed to file and pay taxes on behalf of a ward, until the IRS seized the ward’s property and froze the bank accounts of the ward’s daughter.

Adult Protective Services is required by statute to “promptly initiate an investigation to determine whether the vulnerable adult who is the subject of the report suffers from abandonment, exploitation, abuse, neglect, or self neglect.” According to the lawsuit, Adult Protective Services did not conduct the required investigation and take action to protect the wards from neglect and abuse.

The plaintiffs are requesting financial compensation. They are also asking the court to prohibit Goldstein from serving as special investigative conservator, and to ensure that a forensic accountant is hired to unwind the finances of the plaintiffs and return their property to them. Aarseth, the judge assigned to oversee McDuffie’s former wards, previously declined requests to appoint an independent investigator.

[Judge rejects call for independent investigation of state-endorsed private guardian who neglected dozens of clients]

If the court certifies the class described in the lawsuit, including all of wards that had been transferred from the state to McDuffie’s agency, then every one of those wards could be entitled to compensation, rather than just the 10 named plaintiffs in the lawsuit.

William Earnhart, an attorney representing Cache Integrity Services, has filed a motion to consolidate the six separate lawsuits targeting McDuffie and his agency that have been filed in recent months.

According to the motion, Cache Integrity Services “is for all practical purposes bankrupt.” The agency has a $1 million general liability policy that could cover some of the damages requested by the plaintiffs, Earnhart wrote in the motion.