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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. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

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