Baptist Health v. Bruce Murphy, Et Al
373 S.W.3d 269 (2010)
Facts
D is a private, charitable, nonprofit corporation that operates several full-service community hospitals. Ps are cardiologists and partners in Little Rock Cardiology Clinic, P.A. (LRCC). Ps hold an indirect interest in the Arkansas Heart Hospital (AHH) because LRCC owns 14.5% of AHH. Murphy and D. Andrew Henry, M.D. (part of Ps also directly own a percentage of AHH. Ps are on the medical staff at AHH, are on the professional staff at Baptist Medical Center in Little Rock, and admit patients to each facility. The Board of Trustees of D adopted an 'Economic Conflict of Interest Policy' (Policy), which is the subject of the instant litigation. The Policy mandates the denial of initial and renewed professional staff appointments or clinical privileges at any D hospital to any practitioner who, directly or indirectly, acquires or holds an ownership interest in a competing hospital. Two of the Ps, Doctors Murphy and Beau, had terms of appointment at D that were set to expire on February 26, 2004. Both owned, either directly or indirectly, ownership interests in AHH and, pursuant to the Policy, were deemed ineligible for reappointment by D. The remaining Ps also own a direct or indirect interest in AHH and allege that they would have been similarly affected at the expiration of their terms of appointment. Ps filed suit alleging violations of the federal Anti-kickback statute, 42 U.S.C. § 1320a-7b(b); the Arkansas Medicaid Fraud Act, Ark. Code Ann. § 5-55-111 (Repl. 2005); the Arkansas Medicaid Fraud False Claims Act, Ark. Code Ann. § 20-77-902 (Repl. 2001); and the ADTPA. Ps also asserted claims for tortious interference. Ps sought a declaratory judgment that the Policy is contrary to federal and state law and to enjoin D from enforcing the Policy. After the injunction and appeal, the circuit judge entered a more detailed order, again granting a preliminary injunction, which, on appeal, was affirmed. LRCC filed an antitrust lawsuit against D in the U.S. District Court for the Eastern District of Arkansas, alleging various violations of the Sherman Act. On August 29, 2008, after the instant case was tried to the circuit judge, but before an order or judgment deciding the matter was entered, the federal district court judge dismissed all of the federal claims against D with prejudice. D moved to reopen the instant case, to admit new evidence, and for directed verdict, on the grounds that the dismissal with prejudice of the federal claims had res judicata effect on the pending state claims. The judge eventually denied the motion. The circuit judge granted a permanent injunction, awarded $2,305.88 in costs to Ps, and denied their request for attorneys' fees. D appealed. The essence of this appeal is that the circuit judge erred in finding that Ps proved their tortious interference and ADTPA claims by a preponderance of the evidence.
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