Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
The city of Hammond lacked standing to bring a case against Franciscan Alliance for planning to close a hospital, the Court of Appeals of Indiana has ruled in reversing a trial court’s preliminary injunction.
Franciscan moved to close St. Margaret’s Hospital in Hammond at the end of 2022 following years of financial losses, but the city of Hammond sought a preliminary injunction to keep the hospital open.
The city relied on a purported promise made by Franciscan executives 17 months prior that it would not close the hospital and emergency room.
The Lake Superior Court granted the injunction and ordered Franciscan to keep the hospital open for nine more months.
Franciscan filed an emergency motion to stay, citing the looming loss of the hospital’s licensure and accreditation at the end of the year, which it said would make it impossible to comply with the injunction.
Franciscan raised two points on appeal, alleging that the city lacks standing to bring its claims and that the trial court erred in granting the preliminary injunction.
The Court of Appeals agreed with Franciscan’s standing argument.
At an evidentiary hearing, the city argued closing the hospital would negatively impact Hammond’s residents by leaving approximately 80,000 people without immediate access to emergency medical services. The city also argued the closure would negatively impact its reputation and ability to attract business.
“Yet even if true, any alleged negative effects on Hammond’s citizens cannot sustain the City’s standing. As a municipality, the City may not assert claims on behalf of its citizens,” the Court of Appeals ruled, citing the case Bd. of Comm’rs of Union Cnty. v. McGuinness, 80 N.E.3d 164 (Ind. 2017).
The Court of Appeals additionally ruled damages for the loss of reputation aren’t recoverable on a promissory estoppel claim.
Anticipating it would take about 18 months to plan, budget for and incur the costs of things like new ambulances and finding a new emergency health provider, city officials blamed Franciscan for the “loss of opportunity” to address problems earlier when it first discussed downsizing plans in June 2021.
The trial court agreed with that argument, ruling closing the hospital would endanger Hammond’s residents.
But the Court of Appeals ruled the trial court “improperly focused on speculative and hypothetical damages.”
The city failed to show it has sustained or was in immediate danger of sustaining a demonstrable injury, the Court of Appeals said, adding that the city also didn’t allege a “direct injury” from Franciscan’s conduct.
“The City merely fears that it will incur the cost of new ambulances from the pressure of increased response times — which arises only indirectly from Franciscan’s decision to close the Hospital,” the opinion says. “Thus, there is no direct injury traceable to Franciscan’s conduct.”
The case was remanded with instructions to dismiss the city’s claim.
Judge Lenna Weissmann wrote the opinion. Judges L. Mark Bailey and Elaine Brown concurred.
The case is Franciscan Alliance, Inc. v. City of Hammond, Indiana, 22A-PL-3085.
Please enable JavaScript to view this content.