Judge dismisses Prime Healthcare's suit against former California AG over failed hospital deal

A lawsuit from Ontario, Calif.-based Prime Healthcare Services claiming former California Attorney General Kamala Harris imposed unprecedented conditions on Prime's proposed purchase of Los Altos, Calif.-based Daughters of Charity Health System has been thrown out, reports SFGATE.

Prime claimed the conditions imposed by Ms. Harris constituted "governmental overreach" and satisfied demands from Service Employees International Union-United Healthcare Workers West, a union that strongly opposed the transaction.

On Wednesday, U.S. District Judge Gonzalo Curiel in San Diego said the case failed to show Ms. Harris discriminated against Prime or that the former California AG, now a Democratic U.S. senator for California, did anything unlawful, according to the report.

The judge further described Ms. Harris' actions as "discretionary state decision-making" and dismissed the lawsuit.

Daughters of Charity, a six-hospital network, agreed to sell its hospitals to Prime in October 2014. Ms. Harris approved the sale in February 2015 with strict conditions. These strict conditions included requiring Prime to keep the facilities operating for their existing purposes for a decade, among other requirements.

Prime ultimately decided against the purchase, and in July 2015, Daughters of Charity chose private investment firm BlueMountain Capital Management to manage and operate Daughters of Charity facilities and the system's medical foundation.

Prime's attorney, Mark Hardiman, told Becker's Hospital Review via email, "We are currently reviewing the court's ruling and considering our options for appeal."

 

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