Pacific Radiation Oncology, LLC v. Queen’s Med. Ctr. (Summary)

BREACH OF BYLAWS & UNFAIR COMPETITION

Pacific Radiation Oncology, LLC v. Queen’s Med. Ctr., Civil No. 12–00064 LEK-KSC (D. Haw. May 30, 2014)

The United States District Court for the District of Hawai’i denied a motion by plaintiff physicians to dismiss counterclaims by a hospital and its board and managers for breach of contract and unfair competition in violation of Hawai’i law.

The breach of contract claim was based on the Medical Staff Bylaws, which included a covenant not to sue the hospital for any matter relating to clinical privileges.  The hospital and its board of managers argued that this provision entitled them to countersue the physicians who filed a lawsuit challenging the hospital’s policy that only employed radiation oncologists could exercise clinical privileges.

The hospital’s unfair competition counterclaim alleged that the plaintiff physicians were improperly diverting patients from the hospital to radiation oncology facilities in which the physicians held an ownership interest, which the hospital alleged constituted “free riding.”