Marin General Sues Sutter Health for $120 Million

John Commins, August 30, 2010

Marin General Hospital Corp. has filed a suit against Sutter Health Corp. to recover more than $120 million that Marin claims Sutter improperly took from hospital's accounts for four years.

The suit alleges that since 2006, Sutter removed more than $30 million a year from Marin General's reserves, moving the money into Sutter accounts for its own benefit. In the five years before that, Sutter had made "cash sweeps" of less than $3 million a year.

"Sutter utterly ignored its fiduciary responsibility to Marin General and instead chose to line its own pockets with the hospital's reserves," says James J. Brosnahan, senior partner at Morrison & Foerster, the lead litigation attorney for the Marin General board. "It's improper, immoral and reprehensible conduct by a company that was trusted to manage this vital community resource."

Kathie Graham, communications and public affairs director for Sutter Health's West Bay Region, says she couldn't specifically comment on the suit because Sutter hasn't reviewed the allegations. "However, we can say that it is indeed regrettable that the Marin Healthcare District has elected to pursue legal action as there is no basis whatsoever for any such action," she added.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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