Mahan v. Avera St. Luke's

621 N.W.2d 150 (2001)

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Nature of the Case

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Facts

D is a private, nonprofit, general acute care hospital located in South Dakota. D is part of Avera Health, a regional health care system sponsored by the Sisters of Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota. D is the only full-service hospital within a 90-mile radius of Aberdeen. D is governed by a Board of Trustees. In mid-1996, D's neurosurgeon left Aberdeen. The Board passed a resolution to recruit two neurosurgeons or two spine-trained orthopedic surgeons. D quickly learned that most neurosurgeon applicants would not be interested in coming to Aberdeen if there was already an orthopedic spine surgeon practicing in the area. Most applicants were doubtful whether Aberdeen could support the practice of both a neurosurgeon and an orthopedic spine surgeon. D was successful in recruiting a neurosurgeon who arrived in December 1996. D also learned that OSS, a group of Aberdeen orthopedic surgeons, had decided to build a day surgery center that would directly compete with ASL. D suffered a 1000 hour loss of operating room usage. D's Board passed two motions. It closed D's medical staff with respect to physicians requesting privileges for (1) spinal fusions, (2) closed fractures of the spine, and (3) laminectomies. The second motion closed D's medical staff to applicants for orthopedic surgery privileges except for two general orthopedic surgeons being recruited by D. The decision did not affect those physicians that had already been granted hospital privileges, including the physician-members of OSS. The Board specifically determined that the staff closures were in the best interests of the Aberdeen community and the surrounding area. OSS recruited P, a spine-fellowship trained orthopedic surgeon engaged in the practice of orthopedic surgery. One of the OSS physicians advised P that the staff at ASL had been closed to orthopedic surgery privileges. Despite this warning, P began practicing with OSS. P twice requested an application for staff privileges which were denied by D. P and OSS sued D claiming that the action was a breach of the medical/dental staff bylaws. Ps sought a writ of mandamus and a permanent injunction. The circuit court determined that the Board had delegated a significant amount of its power and authority concerning staff privileges to the medical staff. Because of this delegation, the Board no longer had the power to initiate actions that affected the privileges of the medical staff. The court determined that the Board had breached its contract with the medical staff when it closed the staff to the named procedures without first consulting the staff. It granted Ps a permanent injunction. D appealed.