A federal judge believes Hutcheson Medical Center's legal team is withholding information.
In a U.S. District Court order Monday, Judge Harold Murphy wrote that Hutcheson needs to provide more documents to Erlanger Health System as part of the two hospitals' ongoing lawsuits against each other. Erlanger asked for the judge's help last month, saying Hutcheson's team has not provided enough pertinent documents as part of the discovery process.
Murphy agreed with Erlanger.
"The Court finds it hard to believe that the Hospital Authority [of Catoosa, Dade and Walker counties] would not have more relevant, non-privileged documents within its possession," he wrote.
Murphy wrote that the hospital authority - the governing board that controls Hutcheson - needs to provide more documents to Erlanger by April 11. After that, Murphy ruled, the Hutcheson team will not be able to use any other pieces of information to support their lawsuit in court.
Murphy also ordered Georgia Rep. Tom Weldon, R-Ringgold, the lawyer for Hutcheson, to provide a report explaining everything he has done to try to find important documents in preparation for the case. Also, Hutcheson will have to pay for all the work Erlanger's lawyers had to do to try to get those documents, with Murphy arguing that Hutcheson's side didn't work hard enough to provide Erlanger with discovery material.
In April 2011, Erlanger and Hutcheson reached a management agreement. Erlanger would run the hospital in Fort Oglethorpe, which was tens of millions of dollars in debt and on the brink of bankruptcy. Erlanger would also loan Hutcheson $20 million.
If Hutcheson could not pay that money back, Catoosa and Walker counties would each be on the hook for about $10 million. The elected officials of the two counties agreed to the deal in an intergovernmental agreement.
In 2014, after the management agreement died and nobody had paid back Erlanger, the Chattanooga hospital sued Hutcheson, demanding the $20 million - plus interest. Hutcheson, in turn, counter-sued Erlanger, saying the leaders of Erlanger intentionally mismanaged Hutcheson so the Fort Oglethorpe hospital would financially fail.
Both lawsuits are pending in U.S. District Court.
In February 2015, Erlanger sent a request for documents to Hutcheson. Erlanger's lawyers asked 25 questions and said they wanted all records that pertained to those questions. In April, according to Erlanger's court filings, Hutcheson supplied nine documents.
Hutcheson's lawyers said all of the other documents were protected by attorney-client privilege and other rules. In July, Erlanger filed its motion to compel, asking Murphy to force Hutcheson to provide more information. Hutcheson then gave Erlanger more documents in August.
But Erlanger's lawyers believe Hutcheson is still holding out, so they filed a new motion last month. In response, Hutcheson's team said they had nothing left to give Erlanger.
"There are no other known documents that are responsive to the request," Weldon wrote in an affidavit.
Murphy, however, did not believe him.
"The Hospital Authority's responses and amended responses [to Erlanger's discovery requests] are, frankly, simply not credible," the judge wrote. "It appears to the Court that the Hospital Authority for whatever reason has not conducted a diligent or thorough search for responsive documents."
He added: "It is impossible to believe that almost all of the Hospital Authority's business decisions, internal operations and communications with third parties are contained in attorney-client or work product doctrines."
Murphy also ruled that Hutcheson would have to cover Erlanger's attorneys' fees for the work Erlanger's lawyers did in getting these documents. Essentially, he argued, this was work Erlanger's lawyers shouldn't have had to do.
"Erlanger attempted to confer in good faith with the Hospital Authority before filing its Motion to Compel," Murphy wrote. "With all due respect to the Hospital Authority and its counsel, the refusal or failure to respond here was clearly not substantially justified."
Contact staff writer Tyler Jett at 423-757-6476 or at tjett@timesfreepress.com.