federal judge in Orlando, Fla., has blocked Columbia/HCA Healthcare Corp. from co-owning a Florida hospital until a not-for-profit hospital system's lawsuit against the nation's largest for-profit hospital chain is resolved.
On April 14, U.S. District Judge G. Kendall Sharp agreed with Orlando Regional Healthcare System that co-owning the hospital with Columbia could cause the system irreparable harm.
Sharp's temporary injunction is the latest twist in the ongoing dispute among Columbia, Healthtrust and Orlando Regional over the ownership of 206-bed South Seminole Hospital in Longwood, Fla.
The dispute had threatened to derail Columbia's purchase of Healthtrust.
Healthtrust, a Nashville, Tenn.-based chain, and Orlando Regional, a not-for-profit system, co-own South Seminole through a joint venture they formed in 1992. But Healthtrust's proposed sale to Columbia moved the fate of the joint venture into federal court.
Orlando Regional contends it's entitled to buy out Healthtrust's interest in the hospital because of the chain's pending sale to Columbia. Healthtrust disagrees and has refused to accept a buyout offer, prompting Orlando Regional to sue.
In March, the court refused Orlando Regional's motion for a preliminary injunction that would have barred Columbia's acquisition of Healthtrust pending the resolution of the South Seminole dispute (April 3, p. 4).
Orlando Regional subsequently appealed the injunction denial to the 11th U.S. Circuit Court of Appeals in Atlanta. It also asked the district court for a limited injunction barring Columbia from co-owning South Seminole.
In his April 14 ruling, Sharp said he did "not find it probable" that the system would win its appeal for an injunction to block the entire Columbia-Healthtrust deal.
But in granting Orlando Regional's motion for a limited injunction, Sharp said, "If Columbia is able to utilize its new position as partner at South Seminole to uncover secret information, and then use that information to substantially weaken competition among hospitals in central Florida, the public interest will be disserved.