Doctors’ Lawsuit May Go Forward

In a split decision, a Ventura County Superior Court judge ruled Thursday that the medical staff at Community Memorial Hospital could sue the hospital for allegedly infringing on doctors’ rights, but that the physicians could pursue some claims only as individual staff members.

Lawyers for the rebellious doctors declared victory because Judge Henry J. Walsh ruled that the medical staff was a legal entity and that the lawsuit it filed in April after a year of acrimony could go forward.

“It’s a pretty good victory because it establishes that hospitals must be held accountable for their behavior in court,” said Charles Bond, attorney for the doctors. “So the message is if hospitals engage in excesses, medical staffs have legal recourse. He allowed our fundamental case to go forward.”

Attorneys for Community Memorial also praised the decision, saying it boiled the case down to essential issues of money and workplace conduct, while paring away erroneous claims that the hospital administration had hurt the quality of care at Ventura’s largest medical center.

“The most important thing is for the public to know this has nothing to do with the quality of care,” said lawyer Peter Goldenring, who represents the hospital. “The judge has recognized that there are two core issues: who gets to control money and who gets to control physician behavior at the hospital.”

In his three-page ruling, Walsh sided with the hospital on five of seven causes of action. But he allowed the doctors to redraft and refile their complaints on the dismissed issues, which lawyers said they would do. Their deadline is Sept. 5.

The judge allowed to go forward the doctors’ claim that the hospital had illegally seized a $250,000 bank account maintained by the medical staff. He said the doctors could also pursue, as a group, their objections to an 18-page code of conduct implemented unilaterally by the hospital board of trustees in April.

Those two issues clearly affect the hospital’s entire medical staff, while other allegations, such as unfair business practices, hospital retaliation against some physicians and interference with other staff affairs, may not, the judge wrote.

Regarding the medical staff’s legal standing, the judge cited a 1998 Los Angeles case in which a footnote declared the medical staff “a separate legal entity ... which is required to be self-governing and independently responsible from the hospital for its own duties and policing its members.”

“The court concludes,” Walsh wrote, “that the relationship between a hospital and its medical staff is a unique one where each has a potential legal liability to the patient population whose welfare is of their mutual concern.”

But the judge said the degree to which a court could intervene in disputes between a hospital and its staff was another matter, and not the subject of his ruling Thursday.

Lawyers for the doctors said they felt that most of the five claims dismissed by Walsh could be resurrected through rewritten complaints allowed by the judge.

“Some of these are part and parcel of the issues he let stand,” Bond said.

Goldenring would not concede that Walsh had granted the doctors legal standing, even for the two complaints he allowed to go forward. “A lawsuit has a lot of stages,” Goldenring said. “ ... He allowed them to go forward until the time is right for that decision, on a motion for dismissal.”

Community Memorial has been embroiled in an internal fight for more than a year, as the 242-bed hospital has tightened controls over its medical staff and physicians have bristled at what they consider an erosion of their rights. After attempts at mediation, a group of physicians, led by a majority of the medical staff executive committee, filed suit.

Doctors specifically allege that administrators tried to rig a staff election, adopted a code of conduct to stifle dissent, implemented a conflict-of-interest policy to disqualify select physicians from leadership positions and illegally allowed physicians to practice at the hospital without the staff’s review.

The hospital maintains that the dispute is purely financial and is being pressed, in large part, by doctors with conflicts of interest -- such as competing in-office surgery wards -- that take business away from the hospital. Under Community Memorial’s new conflicts policy, such doctors could not be elected to leadership positions on the medical staff or vote in staff elections.

Doctors maintain that they are a legally independent arm of the medical center whose authority has been undermined by administrators, while the hospital argues that its medical staff is an advisory body that gains its power only from the hospital board of trustees, not from law.

Both sides have agreed that whatever decision is made at the trial court level, the case will probably end up before the state Supreme Court.

That is because no other California case has focused on whether a hospital medical staff’s traditional role as a self-governing branch of a hospital is a legal responsibility rather than one bestowed by hospital trustees.