A judge has overruled Hutcheson Medical Center's request to keep documents out of Erlanger's hands, and ordered the Fort Oglethorpe hospital to provide Erlanger with the debated documents by the end of the month.
U.S. District Judge Harold Murphy ruled against a motion for a protective order which was filed by non-party Catoosa County, Ga. This court action means that Hutcheson must comply with Erlanger's subpoena and provide a long list of requested documents pertaining to the two hospital's rocky relationship.
On April 10, Erlanger formally requested that Hutcheson produce a specific and lengthy list of emails and documents by 10 a.m. May 4. Hutcheson responded by filing a motion saying the documents were privileged to Georgia entities who have a "common interest" in the proceedings and should not be turned over. Part of Erlanger's document request went to Catoosa County, which is one of the three counties comprising the hospital authority that governs Hutcheson.
Catoosa then filed a motion saying that complying with Erlanger's request would place the county at risk of potential liability and sanctions.
But Murphy disagreed with Hutcheson's claim of privilege, and in an opinion dated Monday, wrote: "[Hutcheson] and the Hospital Authority have not met their burden to show that the common interest doctrine applies. ... Consequently, the objections raised by Defendants to Catoosa's compliance with the subpoena are without merit, and Catoosa should produce the documents at issue."
Murphy granted Hutcheson's request for an extension to provide Erlanger with the records, ordering that they be produce by May 29.
The documents requested by Erlanger largely pertain to the management agreement entered into by the two hospitals, which began in 2011 when leaders from each hospital agreed that Erlanger should manage Hutcheson's day-to-day operations as a way to help curb Hutcheson's then-$60 million debt. Erlanger gave a $20 million loan to Hutcheson, backed by the Catoosa and Walker County governments.
The two hospitals severed ties in 2013, and Erlanger sued Hutcheson demanding its money. Soon after, Hutcheson counter-sued, arguing that Erlanger did not live up to the promises made in the management agreement.
When Erlanger attempted to foreclose on the hospital to collect its money, Hutcheson declared bankruptcy in Aug. 2014.
The multimillion-dollar debate between the two hospitals grew even more heated this April, when Hutcheson accused its former attorney Ward Nelson of sharing Hutcheson's confidential information with Erlanger four years ago, giving Erlanger a competitive advantage. Erlanger responded, saying that Hutcheson was lying, and calling the accusation "nonsense."
Contact staff writer Kendi Anderson at kendi.anderson@timesfreepress.com or 423-757-6592.