ERIC T. v. NATIONAL MEDICAL ENTERPRISES

• Decision Date: 21 August 1997
• Docket Number: No. 96-CV-12,No. 95-CV-1118,95-CV-1118,96-CV-12
• Citation: 700 A.2d 749
• Parties: ERIC T., et al., Appellants, v. NATIONAL MEDICAL ENTERPRISES, INC., et al., Appellees.
• Court: D.C. Court of Appeals

700 A.2d 749

ERIC T., et al., Appellants, v. NATIONAL MEDICAL ENTERPRISES, INC., etal., Appellees.

Nos. 95-CV-1118, 96-CV-12, -77, -1438, -1439, -1609, & -1874.

District of Columbia Court of Appeals.

Argued June 22, 1997.

Decided August 21, 1997.

APPEAL FROM SUPERIOR COURT, DISTRICT OF COLUMBIA, ANN O'REGAN KEARY AND STEFFEN W. GRAAE, JJ.

E. David Hoskins, with whom Kenneth D. Pack, Baltimore, MD, and John Jude O'Donnell, Washington, DC, were on the brief, for appellants/cross-appellees.

F. Joseph Warin, with whom Julia A. Dahlberg and Thomas G. Hungar, Washington, DC, were on the brief, for appellee Psychiatric Institutes of America, Inc.; Paul D. Krause and Carol Ann Petren, Washington, DC, for appellees Psychiatric Institute of Montgomery County, Inc., Psychiatric Institute of Washington, D.C., Springwood Psychiatric Institute, and Tidewater Psychiatric Institute, Inc.; Andrew E. Vernick and Michael K. Wiggins, Annapolis, MD, for appellees Peter R. Cohen, M.D., Suzanne E. Kerney, M.D., Thomas Lustberg, M.D., Thomas Lustberg, M.D., P.A., William Stran McCurley, M.D., Ralph S. Ryback, M.D., and Associated Mental Health Professionals; Jeffrey J. Hines and Danell Palladine Dean, Washington, DC, for appellees Lawrence Greenwood, M.D., and Clare Stroker, M.D.; Thomas V. Monahan, Jr. and Susan T. Preston, Baltimore, MD, for appellee C. Gibson Dunn, M.D.; Robert W. Goodson and William J.Carter, Washington, DC, for appellee Contemporary Psychiatric Services — Bruce Alan Kehr, M.D., P.A.; and Lawrence K. Gustafson for appellee National Medical Enterprises, Inc.

Andrew E. Vernick, Annapolis, MD, with whom Thomas V. Monahan, Jr. and Susan T. Preston, Baltimore, MD, were on the brief, for appellees/cross-appellants Thomas Lustberg, M.D., Thomas Lustberg, M.D., P.A., and C. Gibson Dunn, M.D.

Before FERREN, SCHWELB and FARRELL, Associate Judges.

SCHWELB, Associate Judge:

These consolidated appeals and cross-appeals arise from suits brought by former patients at certain psychiatric hospitals, and by parents of former patients, against various corporate entities which operate or control these hospitals and against individual psychiatrists who treated the complaining patients. In their complaints, the plaintiffs have alleged medical malpractice, fraud, civil conspiracy, and a number of other torts. In each case, a trial judge dismissed the complaint pursuant to the doctrine of forum non conveniens, which is codified in this jurisdiction in D.C. Code § 13-425 (1995). Dismissal was conditioned on an agreement by each defendant to waive any statute of limitations defense which that defendant may have in an appropriate forum.

On appeal, the plaintiffs contend that the alleged conspiracy said to be at the heart of all of these cases was directed and controlled from the headquarters of the principal corporate defendants in the District of Columbia, and that the trial judges abused their discretion in holding that the District of Columbia is an inconvenient forum. We discern no abuse of discretion.

In separate cross-appeals, two physician-defendants who do not live or presently practice in the District of Columbia, and who had filed motions to dismiss the complaints against them for lack of personal jurisdiction or, in the alternative, for forum non conveniens, contend that the trial court erred by ruling solely on the latter ground and by requiring each physician to waive any limitations defense without first determining that the court had personal jurisdiction over him. We agree, vacate the conditional orders of dismissal as to these defendants, and remand their cases to the trial court for further proceedings.

I. THE TRIAL COURT PROCEEDINGS

The plaintiffs have alleged in their complaints that defendant National Medical Enterprises, Inc. (NME) master-minded a nationwide scheme to defraud certain federal medical insurance programs, including Medicare, Medicaid, and CHAMPUS, as well as private health insurers, by causing these entities to pay for unnecessary and inappropriate hospitalizations of psychiatric patients. According to the plaintiffs, NME and its subsidiary, Psychiatric Institute of America (PIA), conspired with various local hospitals and psychiatrists to admit patients to NME-owned psychiatric hospitals when those patients did not require in-patient treatment. The plaintiffs claim that once a patient had been admitted, the defendants contrived to ensure that he or she would not be discharged until the patient's insurance benefits had been exhausted.

Following an investigation, the United States Attorney filed a criminal information against PIA and others in the United States District Court for the District of Columbia. On June 29, 1994, PIA admitted its guilt of the offenses charged in the information and entered a plea of guilty pursuant to a negotiated plea agreement. PIA was ordered to pay substantial fines and penalties.

Following the disposition of the criminal case against PIA, the law office of Peter Angelos, which represents the appellants in these cases, conducted an advertising campaign designed to apprise possible victims of PIA's fraudulent scheme of their rights and to offer the law firm's services to those who might be interested in seeking judicial redress. Beginning on March 17, 1995, the Angelos firm filed more than 200 suits in the Superior Court on behalf of former patients at NME-owned psychiatric hospitals in the District of Columbia, Maryland and Virginia,and on behalf of parents of some of the patients. The defendants in each of these suits included NME, PIA, and the corporations that operated the local hospitals to which the complaining patients had been admitted. In some — but not all — of these cases, the complaints also named treating physicians as defendants.

Of the suits brought by plaintiffs' counsel, approximately fifty-eight involved patients who received treatment exclusively in the District of Columbia at the Psychiatric Institute of Washington (PIW). Those fifty-eight cases are not directly affected by these appeals. The remaining cases — 145 in number, according to the brief for appellees — were dismissed by a total of seven Superior Court judges on the grounds of forum non conveniens.¹

These dismissals have generated numerous appeals and, on January 24, 1997, the five appeals presently before us were designated as "lead" cases and consolidated for appeal. In each of these five cases, the plaintiffs are non-residents of the District of Columbia.² In all but one case, the patient was hospitalized exclusively in facilities outside the District.³ In the four cases in which physicians were joined as defendants,⁴ all physician-defendants are non-residents of the District, and none presently practices medicine in the District. The local hospitals that have been joined as defendants likewise have no offices in the District.

NME and PIA are incorporated in Nevada and Delaware respectively. Their corporate headquarters are located in California. These defendants presently maintain no employees or offices in the District, but both corporations are alleged to have transacted business in this jurisdiction at the time of the alleged conspiracy which resulted in PIA's criminal conviction.

II. THE ERIC T. DECISION

On July 28, 1995, Judge Ann O'Regan Keary dismissed Eric T.'s complaint on forum non conveniens grounds in a thoughtful and thorough oral decision. Judge Keary began by noting that "at bottom, the claim of injury to Eric T. is a medical one" which centered on his "improper treatment at the hands of medical professionals who detained him, and perhaps admitted him improperly, to a psychiatric facility." This was so, the judge explained, regardless of whether or not the defendants harbored a fraudulent intent and engaged in a conspiracy to enhance corporate revenues. The judge further noted that Eric T. and his parents were residents of Maryland, and that little weight should be accorded to their choice of forum.

The judge then addressed in turn the relevant "private" and "public" interest factors specified in the applicable case law. See, e.g., Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507-09, 67 S.Ct. 839, 842-43, 91 L.Ed. 1055 (1947); Mills v. Aetna Fire Underwriters Ins. Co., 511 A.2d 8, 10 (D.C. 1986).⁵ Withrespect to the private interest factors, the judge concluded that because most of Eric T.'s hospitalizations were in Maryland⁶ and because most of the parties and witnesses were localized in Maryland, the convenience of the parties in terms of ease of access to witnesses and documents favored trial in Maryland. Without specifically finding that the plaintiffs intended to vex or oppress the defendants by electing to bring the suit in the District of Columbia, she stated that their choice of forum could be viewed as an "obvious attempt to avoid the Maryland arbitration system" and to litigate instead in the District, "where we are unfettered by any type of tort reform."

Turning to the "public interest" factors, the judge found that they "overwhelming[ly]" favored trial in Maryland. She reasoned, in pertinent part, as follows:

We are also seeing a high incidence of filings in cases where one sees litigants who had a choice of forum and are choosing the District of Columbia. Some perhaps to avoid the neighboring jurisdiction's tort reform. Some also to seek speedy resolutions in that this court has had some success in reducing delay in its civil calendars. Whatever the reason, the District has become a very desirable forum and its dockets are quite clogged at this point.

It is also true that as a type, medical malpractice cases, particularly one as complex as this and as multi-faceted as this, present one of the most burdensome types of cases for the judiciary to deal with. The length of the case, both in terms of the period of time involved in discovery, the variety of issues which must be resolved by the court in motions practice prior to the setting of a...