The Health Care Authority for Baptist Health, an affiliate of UAB Health Systems, and Simeon F. Penton
v.
Central Alabama Radiation Oncology, LLC
Appeal
from Montgomery Circuit Court (CV-18-900710)
MENDHEIM, JUSTICE.
The
Health Care Authority for Baptist Health, an affiliate of UAB
Health Systems ("the Authority"), and Simeon F.
Penton (hereinafter referred to collectively as "Baptist
Health") appeal from a judgment of the Montgomery
Circuit Court requiring Baptist Health to disclose certain
documents to Central Alabama Radiation Oncology, LLC
("CARO"), under the auspices of the Alabama Open
Records Act, §§ 36-12-40 and -41, Ala. Code 1975
("ORA"). We affirm the judgment of the circuit
court.
I.
Facts
CARO is
a Montgomery-area radiation-oncology practice consisting of
four physicians. CARO provides radiation and oncology
services at the Montgomery Cancer Center ("MCC"), a
facility owned and operated by the Authority. The Authority
and CARO executed a noncompetition agreement in May 2012. The
noncompetition agreement provides, in part:
"During the Restricted Period, [the] Authority agrees
for the benefit of [CARO at MCC], that it will not,
indirectly or directly, employ or contract with physicians to
provide radiation oncology services within 150 miles from any
location within the greater Montgomery, Alabama area where
[CARO] provides radiation oncology services. ... [The
Authority] further agrees that it will not work with UAB
Health System or University Hospital in Birmingham to recruit
or employ radiation oncologists in the greater Montgomery,
Alabama area."
The
noncompetition agreement also provided that the agreement
could be terminated by either CARO or the Authority
"upon six months' notice to the other parties"
to the agreement.
On
October 3, 2017, the Authority submitted a letter of intent
to file a certificate-of-need ("CON") application
with the State Health Planning and Development Agency
("SHPDA"). The letter of intent indicated that the
Authority sought to offer radiation-oncology services at the
Prattville location of MCC. CARO alleges that it then
attempted to persuade the Authority to use CARO physicians
for radiation-oncology services at the Prattville location of
MCC but that the Authority rebuffed CARO's overtures. In
February 2018, the Authority filed its CON with SHPDA seeking
permission to offer radiation-oncology services at MCC's
Prattville location. On March 26, 2018, the Authority served
upon CARO a written notice of termination of the
noncompetition agreement.
On
April 18, 2018, CARO filed a "Notice of Intervention and
Opposition" to the Authority's CON application. At
least part of the reason CARO objected to the Authority's
application was that CARO was in the process of developing a
new radiation-oncology facility in Prattville. The facility
would be known as Prattville Cancer Center, and CARO had
broken ground and begun construction of the
facility.[1]
Also on
April 18, 2018, CARO filed in the Montgomery Circuit Court a
"Complaint for Declaratory and Equitable Relief and
Preliminary Injunction" against the Authority, in which
CARO alleged that the Authority had breached the
noncompetition agreement, and CARO sought enforcement of the
noncompetition agreement. On the same date, CARO filed a
motion for expedited discovery in which CARO argued that it
needed an abbreviated discovery schedule in order to be
adequately prepared for the hearing on a preliminary
injunction.
On
April 19, 2018, CARO sent Penton, who is vice president and
general counsel for the Authority, a letter "[p]ursuant
to the Alabama Public Records Law," in which CARO
requested "access to all documents, records, reports,
statements, presentations, writings, filings, or records, of
any kind, addressing, regarding, of, or related to radiation
oncology, including, but not limited to, the use and/or
expansion of radiation oncology services, over the past
twenty-four (24) months." Additionally, CARO requested
the minutes of the meetings of the Authority's Board from
the previous two years ("the Board minutes"). After
CARO received no response to the letter, it sent Penton a
second letter on May 8, 2018, reiterating its requests and
citing legal authority for the proposition that the Authority
was subject to the ORA.
On May
9, 2018, counsel for the Authority responded to CARO by
letter, in which it sought clarification concerning
CARO's request for the Board minutes because there
appeared to be a discrepancy between CARO's request in
its letters and its discovery requests in the filed action.
In the letter, counsel for the Authority also cited legal
authority for the proposition that CARO's ORA request
exceeded the scope of the law.
Also on
May 9, 2018, the circuit court entered an order in which it
noted that it had held a hearing on CARO's motion for
expedited discovery but that after the hearing the circuit
court had heard from the parties that they had "agreed
to a plan allowing for mutual discovery." The circuit
court therefore ruled that the motion for expedited discovery
was moot.
On May
24, 2018, CARO sent Penton a third letter reiterating its ORA
documents requests. Following receipt of that letter, counsel
for both parties arranged for CARO's counsel to conduct
an in camera review of the Board minutes without
redactions. During the first week of June 2018, counsel for
CARO reviewed the Board minutes. In that inspection, CARO
uncovered what it deemed to be a "concerning
portion" of the minutes from a November 30, 2017,
meeting of the Authority's Board:
"[Russell] Tyner [president and CEO of the Authority]
proposed [to establish a radiation-oncology facility in
Prattville]. He reported capital investment and estimated
annual return for this undertaking. He stated that the larger
strategy is to enter the regional Radiation Oncology market
with low risk and reasonable market share; to effectively
eliminate the current monopoly of Central Alabama Radiation
Oncology (CARO), which should decrease the perceived and
actual value of existing CARO operation; and to
potentially create a scenario of cooperative
integration."
(Emphasis added.)
CARO
asserts that the above-quoted portion of the minutes and
others confirmed CARO's suspicion that the Authority was
attempting to drive CARO out of business. A week after it had
inspected the minutes, CARO requested copies of the Board
minutes.
In
response, on June 13, 2018, counsel for the Authority sent
CARO a letter requesting that CARO dismiss its action
because, the Authority asserted, CARO's review of the
Board minutes confirmed that the Authority had not breached
the noncompetition agreement by recruiting or employing
radiation oncologists to work at the Prattville location of
MCC.
On June
18, 2018, counsel for the Authority provided CARO with copies
of the Board minutes that contained numerous redactions. CARO
asserted that the redactions included information relating to
arrangements with medical oncologists, the Medicare 340B
program, [2] and the Authority's other proposed
projects in the Prattville area. Counsel for the Authority
contended that the remainder of the Board minutes and other
documents CARO requested were "confidential and
privileged and/or not subject to production under [the
ORA]."
On June
19, 2018, CARO filed an "Amended Complaint for
Declaratory and Injunctive Relief" in the circuit court
against the Authority and Penton, whom CARO believed to be
the custodian of the Authority's records, that
substituted an ORA claim in the place of all of CARO's
previous claims pertaining to the breach of the
noncompetition agreement. Specifically, CARO requested a
judgment declaring that the Authority had violated the ORA,
and it sought an injunction requiring the Authority and
Penton to produce all the documents CARO had sought in past
correspondence. CARO categorized those documents into two
requests:
"[1] [T]he Radiation Oncologist request: '[A]ll
documents, records, reports, statements, presentations,
writings, filings, or records, of any kind, addressing,
regarding, of, or related to radiation oncology, including,
but not limited to, the use and/or expansion of radiation
oncology services, over the past twenty-four (24)
months.'
"[2] The Board Minutes Request: '[M]inutes from the
last twenty-four (24) months of meetings of the Board of [the
Authority].'"
On June
29, 2018, CARO filed a "Motion for Preliminary and Final
Injunction" in which it presented its arguments as to
why the Authority was subject to the ORA and why its two
documents requests were not protected by exceptions to the
ORA.
On July
3, 2018, Baptist Health filed a motion to dismiss both the
allegations in the original complaint and the ORA claim in
the amended complaint. Baptist Health contended that the
allegations in the original complaint were due to be
dismissed pursuant to Rule 41, Ala. R. Civ. P., for lack of
prosecution. Baptist Health argued that the ORA claim should
be dismissed because, it said, the Authority was not subject
to the ORA. Additionally, Baptist Health argued that, even if
the Authority was subject to the ORA, CARO's requests
exceeded the scope of what the Authority should be required
to produce under the ORA.
On July
31, 2018, the circuit court held a hearing on the motions
from both parties. On August 6, 2018, the circuit court
entered an order granting CARO's ORA documents requests.
Specifically, the circuit court concluded that,
"as a matter of law, [the Authority], as a health care
authority created pursuant to the Health Care Authorities Act
of 1982, Ala. Code [1975, ] § 22-21-310 et
seq., is subject to the Open Records Act. See Tenn.
Valley Printing Co. v. Health Care Auth. of Lauderdale
County, 61 So.3d 1027 (Ala. 2010). Accordingly, [Baptist
Health] must produce documents in response to CARO's
requests."
With
respect to CARO's Board-minutes request, the circuit
court concluded that the Authority had waived any objection
to confidentiality by allowing CARO's counsel to view
unredacted copies of the Board minutes. Accordingly, the
circuit court ordered Baptist Health to produce "an
unredacted copy of the entire set of previously disclosed
Board Minutes." With respect to CARO's
radiation-oncologist request, in accordance with arguments
made by CARO's counsel at the July 31, 2018, hearing, the
circuit court concluded that the second request would be
somewhat more limited than originally described.
Specifically, Baptist Health was ordered to produce
"the following documents created during the two-year
period preceding the Open Records Act requests and related to
radiation oncology ...