Baptist Health v. Murphy (Summary)
ECONOMIC CONFLICT OF INTEREST POLICY
Baptist Health v. Murphy, No. 09-1070 (Ark. Sept. 30, 2010)
The Supreme Court of Arkansas held that the claims asserted by a group of physicians against a Health System were not barred by a prior federal court decision in favor of the Health System. The court also affirmed the lower court’s decision holding that the Health System had tortiously interfered with the physicians’ contracts with patients, awarding declaratory judgment in favor of the physicians and enjoining the Health System from denying the physicians’ staff appointment and clinical privileges.
In this case, the Health System adopted an "Economic Conflict of Interest Policy" that mandated the denial of initial and renewed staff appointments and clinical privileges at any of the Health System’s hospitals to any physician who, directly or indirectly, acquired or held an ownership interest in a competing hospital. The physicians claimed that this policy tortiously interfered with the doctor-patient relationship, and also violated the Arkansas Deceptive Trade Practices Act. The Health System argued that the physicians’ claims were barred by an earlier unsuccessful antitrust suit brought against the Health System under the doctrine of res judicata (barring re-litigation of the same claim), and that the physicians had not proven that the hospital intentionally interfered with their doctor-patient relationships.
The court held that the Health System had waived its right to assert the doctrine of res judicata because it had tacitly consented to the two actions that proceeded simultaneously against it in state and federal court. Additionally, the court held that the physicians had proven their claim of tortious interference because they had demonstrated that the Health System was aware of the doctor-patient relationships which constituted contracts, and knew that the policy would disrupt patients’ relationships with the physician of their choice. The court, however, reversed the lower court’s finding that the physicians had a claim under the Arkansas Deceptive Trade Practices Act because that Act provided a private right of action only to recover actual damages and not for actions seeking injunctive relief.