Jury Awards $52M to MRI Group in Suit with ID Medical Center

For the second time in four years, a jury has handed a Boise, ID radiologists' group a multimillion-dollar award in its suit against one-time partner Saint Alphonsus Regional Medical Center.

The complaint by MRI Associates alleged that Saint Alphonsus conspired with a rival imaging group to steer business away from MRI Associates, even though it was partners with the hospital.

Last week, a 12-member jury needed only one day of deliberations after an eight-week trial before it awarded MRI Associates $52 million, which plaintiffs' attorney Wade Woodard says represents the value of the income lost when Saint Alphonsus drove business to rival startup Intermountain Medical Imaging.

"This case was all about money, profits," Wade Woodard, a principal Banducci Woodard Schwartzman PLLC, a Boise-based litigation law firm, told HealthLeaders Media. "Saint Alphonsus went from having about a 27% interest in all the MRI scans that were done to a 50% interest."

MRI Associates was founded in 1985 as a partnership among physicians, radiologists, and several hospitals, including Saint Alphonsus. In about 2000, however, radiologists at the hospital started their own practice, Intermountain Medical Imaging.

Woodard says Saint Alphonsus took an active role in establishing Intermountain and worked to drive business toward the rival practice, even as it was in an active partnership with MRI Associates. Woodard says the hospital acted in bad faith and reneged on a no-compete promise with MRI Associates, which he says has lost about $25 million in value since 2005.

"St. Al's, while it was in a partnership, competed against that partnership. That is against the law. The jury saw that," Woodard says. "St. Al's should have told the radiologists 'whatever you guys do, we are sticking by our partners.'"

In 2007, during the first trial, a jury awarded MRI Associates $63.5 million – the largest jury award in Idaho history. However, that award was reduced by a judge to $36 million, and the verdict was reversed by the state supreme court and sent back to the lower court for retrial.

Last week's $52 million award represents the second-largest jury award in Idaho history.

Woodard says he anticipates that Saint Alphonsus – which is affiliated with Trinity Health – will appeal the latest verdict as well. "We are hopeful that it will stand up. The judge ran a clean trial and there is no reason why it shouldn't stand up on appeal," he says.

Elizabeth C. Duncan, director of public relations for Saint Alphonsus, said in an email response to HealthLeaders Media that the health system is considering its options.

"Saint Alphonsus is studying our grounds for appeal of the jury verdict and believes that there are a number of substantial issues for consideration by the Idaho Supreme Court," she says. "The timing and amount of any payment by Saint Alphonsus will depend on the outcome of the appellate process and any further proceedings, which at a minimum would take many months."

"Saint Alphonsus mission of providing superior quality care to serve the community is at the forefront of every decision it makes, including those made in connection with this matter. Saint Alphonsus declines further comment at this time, as the matter remains in active litigation.

Woodard says the suit should serve as a cautionary tale to other hospitals. "If you're in a partnership, be true to that partnership," he said.