The Supreme Court on Tuesday heard arguments from hospital critic and accountant Charles Rehberg and from James Paulk, the chief investigator of the Dougherty County district attorney's office. Court records say Paulk testified falsely before a secret grand jury three times in order to secure indictments against Rehberg, a staunch critic of Phoebe Putney Memorial Hospital in Albany.
Rehberg said the three indictments against him—all dismissed by courts before trials—were clear retaliation for publishing an anonymous newsletter (PDF) with embarrassing facts about Phoebe Putney highlighting its practice of showering board members with lavish travel spending while the tax-exempt public hospital brought collections lawsuits against impoverished residents who didn't pay for hospital care.
Rehberg sued Paulk for malicious prosecution, winning in the trial court and losing on circuit court appeal. The Supreme Court heard arguments from both sides on Tuesday afternoon after lawyers cited conflicting national precedents for when law-enforcement officials should be considered immune from prosecution.
The Phoebe Putney retaliation case is not the first of its kind. Last June, Winkler County (Texas) Sheriff Robert Roberts was convicted of six crimes, including four felonies, for using indictments to retaliate against two nurses who had anonymously reported a local doctor to the state medical board. A former administrator of the hospital has pleaded guilty in the case, and the doctor and the county attorney are still awaiting trial.
Phoebe Putney has been in the news a number of times recently. The 439-bed hospital pitched a fierce legal battle against its only local competitor, Palmyra Park Hospital, after the HCA-owned Palmyra was granted a certificate of need to open an obstetrics unit in town.
Attorneys for Phoebe Putney appealed that case all the way to the 11th U.S. Circuit Court of Appeals in Atlanta, which ruled against its protest in April 2010. The following December, Phoebe announced it would purchase 120-bed Palmyra for $195 million—a sum so large that antitrust regulators with the Federal Trade Commission said it indicated Phoebe was paying a premium to buy a monopoly.
The FTC has challenged the merger, losing in the trial court and then arguing the case before the 11th Circuit judges last month. Attorneys for Phoebe maintain that their purchase is immune from FTC challenge under Supreme Court precedent that allows state governments to take anticompetitive actions. Legally, Phoebe is owned by the public and leased to an independent, not-for-profit hospital operator for $1 per year.
Thomas Chambless, senior vice president and general counsel for Phoebe Putney Health System, said in an e-mailed statement that only Rehberg's side of the story was being looked at in the court's analysis of the legal issue.
“In contrast to that version is the fact that the hospital categorically did not cause Rehberg to be indicted,” Chambless' statement says, noting that a special prosecutor was brought in from another county to handle the investigation and make the prosecutorial decisions in the cases against Rehberg. "That DA from another circuit made those decisions independently and was solely responsible for the decision to prosecute the case."