A legal malpractice lawsuit accusing a major Columbia law firm of causing the destruction of one of South Carolina’s most prominent, locally owned hospitals must be tried in Sumter County – not in the federal courts.
“There is little governmental interest in adjudication of state law professional malpractice claims in federal court,” wrote U.S. Judge Margaret Seymour in an opinion.
Seymour’s ruling sends the suit filed by Tuomey Healthcare against the Nexsen Pruett law firm back to Sumter for a likely jury trial. Nexsen Pruet had wanted it tried in federal court.
A law firm spokesman issued the following statement: “Nexsen Pruet accepts the Court’s decision and looks forward to having the case resolved before a South Carolina Circuit Court Judge and having a chance to tell our side of the story.”
In 2015, after losing a high-stakes federal court battle over questionable business practices involving payments to physicians, and facing a $237.4 million judgment, Tuomey hospital was forced to sell its assets. Although it still operates, the hospital – for decades the pride of the Sumter community – has lost its independent identity and has been folded into the Columbia hospital giant, Palmetto Health, one of the state’s largest employers.
The entity that brought the lawsuit is Tuomey Healthcare System Inc., a nonprofit governed by a volunteer board that is winding down the affairs of the old, locally owned Tuomey and is not affiliated with Palmetto Health. As one of its last duties, the board is suing Nexsen Pruet.
The Nexsen Pruet spokesman said, “It is important to remember that Tuomey Hospital has not sued Nexsen Pruet. This lawsuit has been filed by three former Hospital Board Members.”
In its lawsuit, the volunteer board seeks $117 million in damages for legal havoc allegedly wreaked by “misleading and reckless” advice from Nexsen Pruet, according to legal papers.
The lawsuit said Tuomey hospital’s reliance on Nexsen Pruet’s advice caused the hospital to set up a system of incentive-driven payments to physicians that the firm should have known were clearly not allowed under federal law.
Since the early 2000s, the hospital spent some $15 million on legal fees to Nexsen Pruet in a losing court fight over the payment scheme, the lawsuit said. In the end, it had to pay $72.4 million to the federal government.
The Tuomey board has said that any money gotten from the lawsuit will go to the Tuomey Foundation, a Sumter nonprofit, and will be used to improve community health care.