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Justices split on transfer of noncompete case

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Two Indiana Supreme Court justices disagreed with their colleagues in not accepting an appeal, finding that a ruling from the state's intermediate appellate court muddled caselaw on medical business and noncompete agreements, and significantly jeopardizes the public's access to medical care.

In a seven-page dissent authored by Chief Justice Randall T. Shepard and joined by Justice Brent Dickson, the two jurists get into why they would have granted transfer in the case of Mercho-Roushdi-Shoemaker-Dilley Thoraco-Vascular Corp. (MRSD) v. James W. Blatchford, III, M.D., and Eve G. Cieutat, No. 84A01-0801-CV-30.

The Feb. 5, 2009, Court of Appeals decision involves the enforceability of a noncompete agreement between doctors and a physicians' group, and this transfer denial keeps in place that holding that could significantly impact Indiana's medical community.

Originating from Vigo Superior No.1, the case goes back more than a decade and involves a group of open-heart surgeons in Indianapolis and Terre Haute who recruited a husband-wife team from Texas to provide more staff capacity at one location. All parties negotiated agreements covering multiple aspects of their business relationship, from stock purchasing to dissolution procedures and noncompete provisions. When the Texas doctors decided several years later to set up a competing practice of their own in Terre Haute, they and their former associates sued each other.

That first round of litigation went to the Court of Appeals, which in 2001 affirmed a trial judge's denial of injunctive relief for the Indiana-based physicians on grounds that an adequate remedy existed at law. But a second round of litigation ensued, and the Court of Appeals affirmed that ruling and held that the noncompete agreements weren't enforceable. In its decision from earlier this year, the three-judge panel unanimously held that enforcing the physicians' business agreements in this case is harmful to patients and contrary to public policy. Specifically, it affirmed solely based on the public interest prong of noncompetition agreement evaluation.

Deciding on the issue during its weekly conference Dec. 17, three justices agreed with the appellate panel's decision and voted not to accept the case. But Chief Justice Shepard and Justice Dickson disagreed with their colleagues.

The chief justice found issues with how James Blatchford and Eve Cieutat had no Indiana connections yet raised arguments that "people would die without (them) practicing in Terre Haute, that it would be very difficult to recruit doctors with their level of training to the area, and that there would be a shortage of capable doctors if they left." The two doctors have since left the state to practice elsewhere.

The chief justice wrote that the physicians group MRSD, and others in similar situations, likely wouldn't have recruited the Texas doctors or any others from outside Indiana if noncompete agreements weren't an option.

"While it is appropriate to treat employment agreements involving doctors with special care, failure to enforce at law the business agreements among doctors will mean fewer doctors available to patients, not more," he wrote, adding later that the Court of Appeals decision "muddles the caselaw of the medical business."

"This case illustrates why non-enforcement of such agreements has the potential to detract from the public interest. Denying damages to a practice seeking to enforce its business arrangements detracts from the very public interests that this Court's decisions aim to protect - patient access to medical care," Chief Justice Shepard wrote. "I think the patients (and doctors) would be well served by vacating the Court of Appeals' declaration that business arrangements between physicians are not enforceable."

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  1. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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