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Published on March 29, 2012

Scripps Health loses appeal

The California Court of Appeal, Fourth Appellate District, on Thursday upheld a Superior Court decision that found that claims of anti-competitive conduct and unfair business practices brought by Tri-City Healthcare District against Scripps Health, Inc. are not subject to arbitration, but can proceed to trial in Superior Court. The appeals court also awarded ordinary costs to Tri-City.

Tri-City brought its claims against Scripps in San Diego Superior Court due to Scripps’ unfair business practice of directing District patients to Scripps’ facilities outside the District. In 2009, Scripps acquired Sharp Mission Park, a group of 65 primary care doctors who previously referred patients to Tri-City Medical Center through written agreements.

Since Scripps’ acquisition of Sharp Mission Park, Scripps has steered patients living in the District to Scripps facilities in Encinitas, and as far away as Chula Vista, adversely affecting patients and their care.

Scripps sought to have Tri-City’s claims heard in arbitration, rather than in court, based on expired contracts previously entered into by the two entities. The Superior Court, in denying Scripps’ motion to compel arbitration, reasoned that Tri-City’s claims arose from claims that were outside the contracts between Tri-City and Scripps and, thus, were not subject to those contracts’ arbitration clauses.

In affirming the Superior Court ruling, Justice Richard D. Huffman said, "to the extent Tri-City is pleading that public interest is involved, in terms of fulfilling its mission to provide local residents timely access to health care under (the law, certain claims) would not be arbitrable."

Tri-City believes that Scripps’ motion to compel arbitration and its appeal of that motion to the Court of Appeal were tactics designed to delay Tri-City from reaching the merits of its case.

Larry B. Anderson, CEO of Tri-City Medical Center, said the Healthcare District will prove at trial that Scripps’ purchase of Sharp Mission Park and its resulting dislocation of available healthcare services to the District’s residents, was illegal and unconscionable as it placed money over the lives and safety of the Healthcare District’s residents.

Mr. Anderson said evidence at trial will show that the Scripps system, in callous disregard of the safety of residents of North County, has moved patient services, in some cases over 50 miles from the patients’ homes, solely for the financial benefit to the Scripps system without any regard to the healthcare needs of those District residents who previously were allowed to use Tri-City Medical Center as their primary healthcare provider.

Mr. Anderson called on Scripps to stop its delaying tactics and allow the case to proceed to trial to avoid additional liability and harm to residents of the Tri-City Healthcare District.

Tri-City Healthcare District, v. Scripps Health, Inc. et. al., Super. Ct. No. 37-2009-00055376-CU-NP-NC

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