ILNews

Justices split on transfer of noncompete case

Back to TopE-mailPrintBookmark and Share

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."

ADVERTISEMENT

Sponsored by
2015 Distinguished Barrister &
Up and Coming Lawyer Reception

Tuesday, May 5, 2015 • 4:30 - 7:00 pm
Learn More


ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. The $320,000 is the amount the school spent in litigating two lawsuits: One to release the report involving John Trimble (as noted in the story above) and one defending the discrimination lawsuit. The story above does not mention the amount spent to defend the discrimination suit, that's why the numbers don't match. Thanks for reading.

  2. $160k? Yesterday the figure was $320k. Which is it Indiana Lawyer. And even more interesting, which well connected law firm got the (I am guessing) $320k, six time was the fired chancellor received. LOL. (From yesterday's story, which I guess we were expected to forget overnight ... "According to records obtained by the Journal & Courier, Purdue spent $161,812, beginning in July 2012, in a state open records lawsuit and $168,312, beginning in April 2013, for defense in a federal lawsuit. Much of those fees were spent battling court orders to release an independent investigation by attorney John Trimble that found Purdue could have handled the forced retirement better")

  3. The numbers are harsh; 66 - 24 in the House, 40 - 10 in the Senate. And it is an idea pushed by the Democrats. Dead end? Ummm not necessarily. Just need to go big rather than go home. Nuclear option. Give it to the federal courts, the federal courts will ram this down our throats. Like that other invented right of the modern age, feticide. Rights too precious to be held up by 2000 years of civilization hang in the balance. Onward!

  4. I'm currently seeing someone who has a charge of child pornography possession, he didn't know he had it because it was attached to a music video file he downloaded when he was 19/20 yrs old and fought it for years until he couldn't handle it and plead guilty of possession. He's been convicted in Illinois and now lives in Indiana. Wouldn't it be better to give them a chance to prove to the community and their families that they pose no threat? He's so young and now because he was being a kid and downloaded music at a younger age, he has to pay for it the rest of his life? It's unfair, he can't live a normal life, and has to live in fear of what people can say and do to him because of something that happened 10 years ago? No one deserves that, and no one deserves to be labeled for one mistake, he got labeled even though there was no intent to obtain and use the said content. It makes me so sad to see someone I love go through this and it makes me holds me back a lot because I don't know how people around me will accept him...second chances should be given to those under the age of 21 at least so they can be given a chance to live a normal life as a productive member of society.

  5. It's just an ill considered remark. The Sup Ct is inherently political, as it is a core part of government, and Marbury V Madison guaranteed that it would become ever more so Supremely thus. So her remark is meaningless and she just should have not made it.... what she could have said is that Congress is a bunch of lazys and cowards who wont do their jobs so the hard work of making laws clear, oftentimes stops with the Sups sorting things out that could have been resolved by more competent legislation. That would have been a more worthwhile remark and maybe would have had some relevance to what voters do, since voters cant affect who gets appointed to the supremely un-democratic art III courts.

ADVERTISEMENT