The lawsuit in question was filed in U.S. District Court in Greeneville on April 12, naming as defendants Ballad Health, ETSU Physicians and all 11 members of Ballad’s board of directors.
In short, the lawsuit seeks to have Ballad’s board of directors reconstituted with new members who, in the view of the plaintiffs, do not have a conflict of interest, while declaring Ballad’s Certificate of Public Advantage (COPA) as inadequate when it comes to state supervision.
The plaintiffs include Christine and David Bearden, Teri Cook, Carolyn Gibbons, Elmer and Ladonna Greer, Mark Hutchins, Kevin Mitchell, Jamie Pierson and Crystal Regan. Defendants include ETSU Physicians, Ballad Health and its board of directors: Barbara Allen, Julie Bennett, David Golden, David Lester, Alan Levine, David May, Scott Niswonger, Brian Noland, Gary Peacock, Doug Springer and Keith Wilson.
Greeneville attorney Francis X. Santore Jr. is representing the plaintiffs.
A MOTION TO DISMISS
Earlier this month, Ballad filed a motion to dismiss the lawsuit, arguing that the plaintiffs did not have standing to bring the lawsuit in the first place, that they failed to allege a case or controversy and that Ballad has immunity under federal antitrust laws.
A statement from Ballad declared, “The motion to dismiss clearly demonstrates that the claims made by the plaintiffs are without merit.”
On Friday, the plaintiffs filed a 34-page memorandum opposing the motion to dismiss and likening Ballad to an “octopus” and a “bully of the seas.”
“The Ballad Octopus ... is being confronted in a challenge by ten brave, honorable people with no financial interest in the outcome of this litigation,” the memorandum states. “Having been so confronted, Ballad Health now attempts to slink back into its hidey hole by firing its putrid pool of purple ink into the faces of these plaintiffs, who dare challenge its hegemony over the health care of the persons in this market area.”
The memorandum argues that Ballad Health does compete with ETSU Physicians (thus meaning that members of one board should not be able to serve on the board of the other at the same time). Santore says the plaintiffs have standing to bring the lawsuit and have certainly proven injuries.
“Being the intelligent creature it is, the Ballad Octopus rains havoc over the inhabitants of its market area who, it assumes, are dumb, uneducated hillbillies,” the memorandum states. “This time, the Octopus cannot escape into its underground lair.”
In January 2018, the Tennessee Department of Health approved a COPA which allowed for the merger of Mountain States Health Alliance and Wellmont Health System into Ballad Health.
The plaintiffs argue that the COPA does not provide for active state supervision of the composition of Ballad’s board of directors, noting that three members of the board are essentially “serving two masters.”
The plaintiffs claim that Noland, Niswonger and Golden have conflicts of interest that prohibit them from serving on Ballad’s board of directors. Noland is the president of ETSU, while Niswonger and Golden both serve on the board of trustees of ETSU.
“In the extreme ... Niswonger and Golden have the authority, in conjunction with their fellow trustees, to dissolve ... ETSU Physicians, and thus completely stifle its status as a market competitor with Ballad,” the lawsuit states.
The plaintiffs are seeking an injunction preventing Noland, Niswonger and Golden from serving on two competing boards and an order compelling the reconstituting of the Ballad board of directors.