Thursday, May 5, 2016
Saint Thomas' Parent Predicts Little Impact From Meningitis Suits
By Walter F. Roche Jr.
Officials of the parent company of Saint Thomas Health in Nashville, Tenn. have informed bond holders that they do not expect some 100 pending suits over a deadly fungal meningitis outbreak to have a substantial adverse financial impact, even if the cases are lost.
The disclosure about the potential financial impact of the lawsuits was included in a $73 million bond prospectus just filed by Ascension Health with regulatory authorities in Alabama.
"At this time," the disclosure states, "management of Ascension does not believe this matter, if decided adversely to the defendants, would have a material adverse impact on the System's financial position or the results of operations as a whole."
One of defendants referred to in the filing is the Saint Thomas Outpatient Neurosurgical Center, the clinic where most of the Tennessee victims of the fatal 2012 fungal meningitis outbreak were injected with fungus tainted spinal steroids.
The outpatient clinic is 50 per cent owned by the Saint Thomas Network, which is named as a defendant in a number of the some 100 pending suits.
As the prospectus discloses several other Saint Thomas entities are also named as defendants. And while a federal judge did dismiss the claims against Ascension Health, the claims against the clinic and the Saint Thomas entities are proceeding towards trials scheduled to begin in mid-July.
"The Saint Thomas entities are in the process of concluding discovery in the (MDL) litigation," the bond document states.
The filing is apparently the first public disclosure of the predicted impact of the litigation.
"The Tennessee Plaintiffs," the disclosure continues," allege only vicarious liability against the Saint Thomas entities and the Ascension entities, where applicable, for the actions of Saint Thomas Outpatient Neurosurgical Center, Howell Allen Clinic and their employees."
Howell Allen is the 50 per cent owner of the outpatient neurosurgical center.
As the filing recounts, the suits, first filed in federal court in Tennessee, have been merged before U.S. District Judge Rya Zobel in federal court in Boston, Mass.
Zobel ruled recently that the victims of the outbreak could not pursue product liability claims against the neurosurgical center and the related parties. Lawyers for victims have asked Zobel to reconsider that decision
Zobel has set a mid-July date to begin the first trial involving a claim by Tennessee victim Jane Wray. Two other so-called bell-wether cases are scheduled for August and September.