Lyon County judge issues ruling on hospital board authority

MARSHALL – A lawsuit related to medical staff bylaws at Avera Marshall Regional Medical Center may have reached its conclusion, after a judge’s ruling was issued Friday.

The ruling addresses a question left unanswered by a Minnesota Supreme Court ruling – namely, whether the Avera Marshall board of directors has the power to amend the medical staff bylaws without a majority of the medical staff’s approval.

The answer to that question was “yes,” said attorneys involved with the case.

“It is a clear victory for the hospital,” said David Crosby, the attorney representing Avera Marshall in the lawsuit.

The full story of the lawsuit reaches back to 2012, when two members of the Avera Marshall medical staff, Dr. Steven Meister and Dr. Jane Willett, filed the suit on the medical staff’s behalf. The lawsuit alleged that Avera Marshall had violated medical staff bylaws and prevented the medical chief of staff and the hospital’s Medical Executive Committee (MEC) from fulfilling its duties.

However, the key issues in the lawsuit that a Lyon County District Court judge ruled on were whether the medical staff was a legal entity that could sue; whether the medical staff bylaws were a contract between the hospital and the medical staff; and whether Avera Marshall had the power to change the bylaws without the medical staff’s approval.

The district court ruled that the medical staff wasn’t an entity that could sue or be sued in court. The ruling also said the medical staff bylaws weren’t a contract and that Avera Marshall could change the bylaws without getting the approval of a two-thirds majority of the medical staff.

Meister and Willett took the case to the Minnesota Court of Appeals, where the district court ruling was upheld, and then to the Minnesota Supreme Court in 2013. In January, the Supreme court overturned two of the lower court rulings – the medical staff was a group that could sue, and the medical staff bylaws formed a contractual relationship between Avera Marshall and individual medical staff members. The Supreme Court then turned the case back to Lyon County court, to implement the ruling.

Earlier this year, the Avera Marshall medical staff acted to remove itself as a plaintiff in the lawsuit.

Currently, the named plaintiffs in the suit include Meister, Willett and Dr. Anthony Nwakama.

Court arguments in the case continued this summer, and Lyon County District Court Judge Michelle Dietrich took the case under advisement in July. Crosby said the question at the core of the proceedings was whether the hospital board had the authority to amend medical staff bylaws.

In her ruling, Dietrich said both Minnesota law and the Avera Marshall hospital bylaws gave the board the authority to change medical staff bylaws.

“Obviously, I’m a little disappointed,” Meister said of Friday’s ruling. Ultimately, he said, the lawsuit wasn’t about questioning the hospital board’s authority. “It’s about whether members of the medical staff can have a voice to speak up for the quality of medical care in the community.”

Court documents said the lawsuit plaintiffs asked the judge to make several declarations upholding Avera Marshall’s 2010 medical staff bylaws, including that the hospital board could not unilaterally grant clinical privileges to physicians; that the MEC can appoint members to serve on the Medical Staff Quality Improvement Committee, and that the MEC had responsibilities for holding peer reviews as described in the 2010 bylaws.

In her ruling, Dietrich said those requests were only granted in part. The ruling said Avera Marshall is required to follow the provisions of its bylaws. However, the 2010 medical staff bylaws would apply to actions taken prior to April 30, 2012. Amended bylaws created in 2012 would apply to actions taken from May 1, 2012, onward, the ruling said.

In the conclusion of her ruling, Dietrich said, “The Medical Staff in general and the plaintiffs in particular serve in an advisory capacity to the Board, and are not and cannot be veto-holders over the Board.”

“We’re grateful to Judge Dietrich for providing a clear and compelling affirmation of our Board’s right to manage the hospital,” said Mary Maertens, Avera Marshall’s president and CEO. “The court’s ruling is a careful and measured review of the facts and bylaws at issue and supports our longstanding position that the hospital board is ultimately responsible for ensuring the health and safety of our patients, for the care and comfort of their families and for operating the hospital in the best interests of the community. With this ruling, our hope is that all parties will consider this matter once and for all settled.”

Meister said the lawsuit plaintiffs have a 60-day period in which they can appeal this most recent ruling. He said he doesn’t yet know if they plan to appeal.

“I think we’re going to sit back and consider what to do next,” Meister said.