U.S. decides not to challenge St. David's verdict

The U.S. Justice Department has decided not to appeal an adverse jury verdict in the St. David's Health Care System tax case, despite filing a notice of appeal last month. "It's finally the end of the road," St. David's Chief Executive Officer Carol Clark said. "We are ecstatic." A Justice Department spokesman would not comment on the matter. A jury in March ruled that not-for-profit St. David's, part owner of six-hospital St. David's HealthCare Partnership in a joint venture with for-profit HCA, deserved tax-exempt status. The government's decision not to follow through with an appeal ends a long dispute. The Internal Revenue Service revoked St. David's tax exemption in 2000, arguing that it no longer operated exclusively for charitable purposes because of the then-4-year-old partnership with HCA; the case has been in the courts since. Had St. David's lost, it could have owed nearly $40 million in back taxes, interest and penalties, Clark said. -- by Mark Taylor