Sutter Wins: State Supreme Court Denies Healthcare District’s Petition

April 12, 2012 | After over two years of legal maneuvering between the Eden Township Healthcare District and Sutter Health, the issue of who owns San Leandro Hospital is fact. The California State Supreme Court Wednesday denied the District’s petition to settle its dispute with Sutter over conflict of interests allegations stemming from a three-year-old agreement…

The high court’s decision is the end of the line for San Leandro Hospital–at least, in the court room. The District failed to convince two lower courts to unwind the 2008 agreement its then-board of directors signed with Sutter leveraging the $300 million reconstruction of Eden Medical Center in Castro Valley for an opportunity for San Leandro Hospital restore fiscal sustainability.

Two years later, Sutter moved to exercise an option to purchase the facility and lease it to the Alameda County Medical Center as an acute rehabilitation center. The District board of directors blocked the purchase option and the dispute headed to the courts in 2010.

Wednesday’s decision by the state supreme court represents the definitive end of the legal situation, but the fate of the hospital is not yet clear. Employees at San Leandro Hospital have reported over the past few months, the presence of county workers at the facility, measuring tape in hand. Management from Sutter two weeks ago urged employees to begin looking for other job opportunities and notifying them the hospital could be closed in the next 90 days. Both instances, whether real or scare tactics, have been used in the past, but with the legal case closed, the threats take on new meaning for hundreds of health care workers.

Carole Rogers, chair of the District board of directors, declined to comment on the denial of petition until issues surrounding legal fees potentially owed to Sutter are resolved. By some estimates, the legal bill could be as high as $25 million. A settlement that large could possibly bankrupt the health care district.

Most observers, including the director of Alameda County Healthcare Services, believe Sutter will return to the negotiating table with the county officials once the lawsuit is resolved. Sutter, Briscoe noted last month, is still a reliable business partner in various areas of the county health care system. The future of the facility may entail returning to the original plan brokered by Sutter and the county in 2010, making their business relationship even stronger.


Categories: Eden Township, S.L. Hospital, Sutter, Sutter Lawsuit

33 replies

  1. The district does have one more option. They can appeal to the U.S. supreme court.


  2. Or Federal Circuit Court, 9th District. It's much more liberal than the Ca Supremes. Other than that SLH is in the lion's den at the mercy of a buck-stops-here, “not-for-profit” corp. It's going to get pretty “interesting” from here on out.

    SLH can only hope the City of SL reps finally put their foot down and start something up that has some legal substance, or face a very unhappy electorate that has lost its one and only medical facility while 600 professionals are dumped to pound the pavement looking for work.

    FYI, Sutter tried this before in Santa Rosa — and failed. Wake up SL!


  3. The current agreement between ACMC and Sutter is unacceptable. It is undeniable but never publicly conceded that this deal will literally kill people.

    Over 1,000 people per year come to San Leandro Hospital's ER in critical condition; the extra minutes of transport to another 24-hour, full-service ER will cause needless deaths.

    The deal would save the County much money for its Acute Rehab replacement, and Sutter would milk more profits from the community it hates over the next 50 years. That those things take priority for many people seems obscene right now.

    We're just going to have to win anyway.


  4. The reality is setting in at SLH and people realize it's over. It's a very sad ending but none the less, the end. I believe the place we call “hell” was created for people like Sutter CEO and Tony Santos. Neither will escape their karma. In this life or the next


  5. The true culprits was the Eden Healthcare Township Board who gave away SLH for peanuts. They brought in Sutter and Sutter does what Sutter does which is consolidate services regionally into one or tow hospitals and close the other nearby ones.


  6. Case closed except in the logic and minds of fools.


  7. Carol Rodgers is to blame for all of this. She wasted millions of dollars when a compromise was on the table.
    How about Cassidy? Didn't he promise to make sure the hospital stayed open?
    In the long run East Oakland suffers since over 1/2 the emergency patients come from there, only 1/3 come from San Leandro.


  8. waiting for a retreat reply from papa john


  9. Did anyone happen to notice that Kaiser is building a big new hospital in San Leandro complete with an ED? Kaiser is as responsible for seeing all ED patients who present for care as any other provider under federal law. To say that SL will be without a hospital or emergency department simply doesn't know what's happeing.


  10. people who aren't kaiser don't go to kaiser ED, stupid.


  11. Please research a little tfederal law called EMTALA. No licensed ED can turn a patient away for any reason. KP offers short term memberships for non-members who present for services. While researching the law, take a moment and look in the mirror…


  12. It has ended as I predicted; Sutter played its cards right and with the district refusing to negotiate ,there was nothing Sutter could do except to defend the lawsuit. I had told Carole Rogers to negotiate with Sutter and she refused and as she had a majority of the board with her, they were able to prosecute a loser.Wasted $5 million dollars along the way and now the district could face bankruptcy. Everyone now waiting for cooment from Sutter on its intentions; I would hope Sutter/ACMC can reignite the 2009 agreement; this might be only option, but it really is up to Sutter. Carole Rogers can now move to Palm Springs where she really wants to be, but before going, she owes the community, Dr. Ratnesar and Dr. Rico and all of us in the district an apology for her hard headeness. So who lost the hospital : CAROL ROGERS AND THOSE WHO SUPPORTED HER!! Tony Santos


  13. Carol Rogers is stupid. She was simply a mouthpiece for the unions who paid for her election. She is a fool. Shame on the District for wasting so much money on what most of us saw as a losing lawsuit.

    Sutter should clean the Districts bank account of money.

    Board members should resign. It's hard for me to believe that there are so many foolish people living in this community.


  14. Anyone can go to a Kaiser hospital for Emergency services, even though the public has a mistaken opinion about this. San Leandro residents should be happy and proud to have Kaiser in their city. I am not a Kaiser member but I know Kaiser gives excellent care.


  15. If you don't go to the new eden. then sutter will close it.


  16. Kaiser does NOT take its EMTALA obligations seriously. They treat EMT's like crap when they bring a non Kaiser member to a Kaiser ER. Ditto if you walk in there – you get a roll of the eyes and they will grudgingly take care of you, sure, but just barely enough so they can rush you out the door. No WAY will Kaiser in San Leandro serve as an adequate replacement for the loss of SL hospital.


  17. Steve – where’s Senator Corbett’s press release (your story) on San Leandro Hospital? She pushed everyone who was trying to broker a deal out of the way so SHE could save the hospital. She came up empty handed much like most things she works on.

    Two weeks (August 30, 2011) after Stark’s Congressional lines shifted south (August 15, 2011) leaving San Leandro and its hospital out of that new district, she gutted her own bill, SB 134, which SHE proclaimed would save San Leandro Hospital – to language that provides taxpayer subsidies to now-defunct solar companies. She did so just as SB 134 was going to be passed in the Assembly and head to the governor’s desk. It could have went into effect January 1, 2012. Yet, you write nothing of this betrayal to her constituents. If this doesn’t show the people her true stripes, nothing will! – Bill Sneed


  18. Well here is what some of you wanted, but probably not what you want to hear, exactly which one of you is the FAT LADY and when will we hear you sing, and your trashing of Carol is just what I would expect from you bunch of ignorant fools, I would wonder how many of you were at any of the board meetings or rallys that were held by not just hospital and board members but citizens of San Leandro, with the exception of our portly ex mayor, which by the way has seen to it that the majority of large employees are no longer in San Leandro, with a record as mayor that he has you would have to be a fool to even listen to this losers BS, I dont know Mr.Sneed but I do know he doesnt know me or Carol, I have known Carol for around 13 years and know of the many things that she has done, not only here but in places like Africa helping out with her Nursing skills, so dont speak about someone who you know so little about, and because she is trying to help the citizens of this community is just the way she is, and for those of you who dont have Kaiser insurance and you have other insurance, they may stop the bleeding but the minute they do, where do you think they will send you, well Eden of course, and if you have no insurance, welcome to Highland Hospital, it is hard to imagine how you people imagine how the hospital system works, but if and when the hospital does close you will soon find out. So until you see a column on the EBC that the mandatory 90 day notice has been given that the hospital is closing just shut your pie holes and get a life, thats all folks. Yours Truly, John Kalafatich ( PAPA JOHN )


  19. why dont we try yo make kaiser obey the ER law? or we can sue them like sutter has?


  20. Kaiser San Leandro won't be open for another year or two. It does NOT increase 24-hour Emergency Departments and Acute Care Inpatient bed capacity in the region, as Kaiser is closing their Hayward Hospital when San Leandro opens, leaving only St. Rose as a full-service hospital in Hayward. There are no full-service Hospitals in Union City and Newark.

    Under normal circumstances, Kaiser cannot legally refuse a patient coming into the ER, but they cannot be counted on to provide the same comprehensive set of acute and ancillary services to a non-Kaiser member that that same person could expect from any other hospital. If the Kaiser ER is full, they can declare themselves on bypass, which would legally allow them to refuse to accept ambulances with acutely ill County residents.

    The problem is that there are usually 27,000 patients a year coming through San Leandro Hospital's ER, approximately 14,000 of whom are too ill to recieve optimal care at the proposed 7 am to 7 pm Urgent Care Center that ACMC would operate if they were allowd to complete the deadly deal with Sutter. We need a comprehensive discussion, in public and under public questioning, where those patients will be expected to go and how those other hospitals will handle the overflow.

    Lasseter, Bischalaney, and Fry must by asked IN PUBLIC: If you complete the current deal, it is evident that people will die whose lives are currently being saved at SLH. Simply saying “No one will die” is not borne out by the facts. How many people will die over the next 25 years as a result of your deal? If you have not calculated that, how can we trust ANYTHING you have to say regarding the impact to public health which will take place as a result of this deal?


  21. I would guess the majority of San Leandrans have Kaiser. Regardless only 1/3 of the emergency patients are local, the balance are from out of town. So why should we pay so Papa John has a convenient emergency room?


  22. I would guess that you are wrong with your figures I would say probably 2/3 of the people in SL have other insurance other than Kaiser, and just where are you from are you one of the balance or one the Kaiser patients, in any event if you are in or near San Leandro Hospital and should have a Stroke, Heart Attack or other life threatening emergency, good luck on the extra time it will take to get to another ER if SLH is closed, it is kind of sad that some of you people who have no idea of what goes on in hospitals can make so many comments on what should be done with them, I have spent a good portion of my life in hospitals, as I was a Hospital Corpsman while in the Air Force, and now here at SLH I know the value of human life and it is not in dollars and cents as some of you seem to think, it is in the people who have chosen to help and save and heal people and that is by having an ER and Acute care Hospital in their town, so I will continue to speak for those people and urge Sutter and everyone else who should want the hospital to close to reconsider their views it could be your life next time that will be saved by the excellent care at SLH. John Kalafatich
    ( PAPA JOHN )


  23. Kaiser in San Leandro is a fine addition, but it really is not part of the equation when it comes to SLH. If you don't have insurance, they will take you in, stabilize you and send you to wherever you need to be. You won't get addition care there.

    The poor and the uninsured use SLH and that's why supporters and workers there are fervent in their support of the hospital. Your political ideology might say let those people fend for themselves, but it will cost you in the end because those patients are going to tap into your tax dollars in very inefficient ways.


  24. Exactly. It will be nice to have a new Kaiser, and I'm sure the Kaiser members getting care there and people working there will be happier for it. However, if you aren't a Kaiser member you will only get the bare minimum from the ED there. You will not get the kind of care that San Leandro (and St. Rose for that matter in their community…) provides for the public. California actually has some of the worst access for emergency care in the country, and losing SL or St. Rose would make matters far worse for people in the area. These people would just end up delaying care even more, and arrive at ER's further afield even sicker than they otherwise would be, which would cost the institutions that end up seeing them far more than it would if they just had been seen locally at the ER/hospital in their community. Shows how desperately we need a single payer healthcare system…


  25. 70% of San Leandro hospitals emergency patients come from outside of town, should we subsidize the 70%?
    This is a national problem not a local problem and we can't afford to fix it locally.
    Cassidy, Carol Rogers and Papa John were never going to solve this problem.
    Look at Alameda Hospital, the only reason it has stayed open is because Kaiser leased a big portion of the facility and Alamedans passed a bond to finance the rest. Now that kaiser no longer needs the space and the bond money is fading away. Alameda, which needs a hospital er more than San Leandro due to being an Island may also be forced to close.
    Those that try to blame local folks for the failure of a national ineptness are just dumb.
    Even stupider are people who believe Rogers, Cassidy and any local politician could have solved this issue.


  26. So Rogers and Cassidy should just roll over like loser santos who decided he couldn't win so might as well jump on their bandwagon?

    Some times doing the right thing isn't profitable.


  27. What is this nattering on about subsidies and 70% and what “we” can't afford??

    I'm sorry, I'd like to be more civil, but the stupidity and sociopathy of some commenters here is exasperating.

    What shriveled excuse of a human being roots for a hospital to close, or looks on indifferently as it happens? The Citizen has done dozens and dozens of stories on San Leandro Hospital (are we up to 100 yet?). If you haven't figured it out yet, Steve and many valuable commenters have shared reams of factual information which show that this saga has arrived on our doorstep because

    1) Laws in recent decades allowing profit-first decision-making from health care organizations, even “non-profits” like Sutter, have caused much of the American healthcare system to become an immoral sewer, and

    2) Sutter Health executives are GREEDY. The need to pursue “subsidies” for the operation of current SLH services is only necessary because Sutter is unwilling to provide the very mild funding which would sustain patient care there. Sutter's cooked books have them losing a few million dollars at SLH in recent years, while Sutter has made these systemwide annual profits during the SLH saga:

    2011- $634 million
    2010- $878 million
    2009- $453 million
    2008- $463 million
    2007- $471 million
    2006- $587 million
    2005- $442 million

    Sutter CEO Pat Fry's total pay in recent years:
    2011- apx. $4.6 million
    2010- over $4 million
    2009- $3,992,642
    2008- $2,825,989

    In 2009, over 20 Sutter executive made over $1 million.

    So, how can anyone say that “we” can't afford this?

    Finally, WHO CARES if the majority of SLH patients come from Oakland and Hayward? We're all in a community together; SLH is a community hospital.


  28. Poster above, people who like hospitals closed are not fans of logical thinking. your explanation falls on deaf ears


  29. I dont know if anyone from Sutter management reads these comments but if they do this is for them.
    I have always had pride in my jobs and employers, I was proud to serve in the Air Force and I was proud to work here at SLH for Sutter, that was before all of this wanting to close the hospital entered my life. I think it is time for Sutter to review its Mission Statement,its Community Benefit Statement, its Charity Care statement, and its Motto, With you for LIFE, and also its claim to be a NOT FOR PROFIT HOSPITAL, how can I take pride in someone who makes these claims and then closes and or trys closing hospitals, and at the same time makes profits in the MILLIONS, and pays its top people such high salaries, there are people who cant help not having insurance who cant help being out of work, who just are unfortunate enough to live where Sutter is trying to close their hospital. So Sutter I think its time for you to live up to your Mission Statement and the other staements and claims that you make to the public whose hospital you want to close, and again make me proud to be an employee of Sutter Health. John Kalafatich ( PAPA JOHN )




  31. too little too late. Why is no one remembering that it was the original members of the Eden township that are to blame. It's not as if Sutter had a great reputation before all of this. the primal members sold SLH down the river to Sutter and they did it behind closed doors. Just another government agency supposedly for the public, that made a back door deal completely screwing the community


  32. It is true that in past years the Eden Township Healthcare District Board was pliant in the face of an extraordinarily ruthless and wealthy opponent. We could also blame the citizens of the Healthcare District for our votes in the late '90's approving the “partnership” (as we were told) between the District and Sutter. In both cases, the citizens 15 years ago and the Board more recently, we were told that if we did not vote to approve the issue before us, Eden Hospital would not be rebuilt.

    We are where we are. Sutter should not force the community to accept an outcome we reject, one which would kill people. They can afford to finance an outcome which saves lives. They should negotiate a decent outcome.


  33. Did you just see the story in the SF Business Times about the leaked Sutter Health documents showing that they would deliberately make St. Luke's bottom line low so they could bail out and close it? Have you figured out yet that this is exactly what they did at San Leandro? What a bunch of lying crooks.


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