Minnesota Court Of Appeals Holds Hospital May Unilaterally Amend Bylaws

The Minnesota Court of Appeals recently upheld a district court opinion holding: (1) a hospital medical staff was not a separate legal entity with capacity to sue; and (2) the bylaws governing a hospital medical staff do not create a contractual relationship. Medical Staff of Avera Marshall Regional Medical Center v. Avera Marshall, Minn. Appeals No. A12-2117 (July 22, 2013).

Background

In 2012, the medical staff, medical executive committee ("MEC"), chief of staff and chief of staff-elect, brought a declaratory judgment action against Avera Marshall Regional Medical Center ("Avera Marshall"), a nonprofit hospital, asking the court to enjoin Avera Marshall from unilaterally repealing the old medical staff bylaws and imposing new ones. Leading up to the decision to repeal the bylaws was an almost two-year history of friction between a majority of the medical staff and Avera Marshall. At the time, the medical staff bylaws provided a process for revising the bylaws, which included, in part, review by the MEC or special committee of the MEC and then, after providing at least 30 days' notice, a vote by the medical staff with a two-thirds majority required to alter the bylaws. The bylaws further stated that all changes to the bylaws "become effective upon the approval of the Board of Directors" and included language stating the powers of the medical staff to discharge its responsibilities under the bylaws were subject to the authority of the board of directors. Lastly...