The road leading away from HCA Healthcare’s 2019 acquisition of the multi-campus Mission Health hospital system in Western North Carolina has been a bumpy ride. HCA has faced suit connected to the transaction alleging it exploited monopoly power – resulting in higher prices, lower quality care, and limited patient access. State and local politicians decried HCA’s record on charity care and patient safety. And a non-profit watchdog agency reported on a purported exodus of doctors from the system.

But it was Attorney General Josh Stein’s complaints that HCA failed to meet contractual obligations regarding provision of emergency and trauma care that brought the Business Court into the litigation fray. In Stein v. HCA Mgmt. Servs., LP, 2024 NCBC Order 44, the Attorney General alleged that understaffing at Mission Hospital had led to excessive patient wait times, overcrowding in the emergency department, and a failure to meet the requirements of its Trauma Center classification. The State alleged that “[l]ocal emergency management services are frustrated by how long it takes their patients to be transferred into the emergency department,” and that it led to times “when Buncombe County has been left without an available ambulance.” Id. ¶¶ 6-7.

Two weeks after entry of a case management order, with nearly six months remaining in the fact discovery period defined in that order, Buncombe County moved to intervene. It sought damages and equitable relief arising from “allegedly excessive wait times its EMS crews have experienced.” Id. ¶ 8. The County alleged on brief that the defendants “knowingly caused excessive EMS wait times” at the Mission ER and “unlawfully relied on EMS crews to provide care for ER patients.”

 Judge Earp denied the county’s motion to intervene under the “as of right” and permissive components of N.C.R. Civ. P. 24.

Intervention “as of right”

The Court ruled the county failed to meet the “as of right” intervention standard that it had a “direct and immediate interest” in the matter, that there would be a “practical impairment” of its ability to protect that interest, and that its interests were not adequately represented by the Attorney General. Id. ¶ 11 (quoting Virmani v. Presbyterian Health Servs. Corp., 350 N.C. 449, 459 (1999)). While the Court agreed there was “some factual overlap” where the Attorney General did, and the County sought to, rely on evidence of ER wait times and trauma care, the difference for intervention purposes was how the information was used (Id. ¶ 22):

“The present litigation involves Defendant’s compliance with the terms of the APA going forward. The County’s claims are for past wages and other costs that it allegedly incurred as a result of increased wait times at the Emergency Department.”

Because the County’s claims “would exist” regardless of dispute about whether the underlying conduct violated HCA’s purchase agreement, the Court found its interest in the Attorney General’s lawsuit “is at best an indirect one.” Id. Moreover, the Court discounted the County’s purported right to intervene based on its alleged uncertainty about whether the next Attorney General would continue the suit. Judge Earp noted the County cited no legal support “that a possible change in the office of the Attorney General resulting from the upcoming election” was sufficient to establish the County’s interests would not be adequately represented. Id. ¶ 24.

Permissive Intervention

The Court observed that Rule 24(b)’s standard that an intervenor’s “claim or defense and the main action have a question of law or fact in common” posed “a relatively low bar” for the County’s motion under permissive intervention. Id. ¶¶ 15-16. But even in an Olympic year, clearing that hurdle may not be enough where the commonality is “so tangential that adding the movant’s claims has the potential to sidetrack the primary litigation and delay its resolution.” Id. ¶ 17 (citing Chambers v. Moses H. Cone Mem. Hosp., 2017 WL 1025461, *9 (N.C. Super. Ct. Mar. 13, 2017)).

The Court determined that it “would not be in the best interests of the parties already before the Court” to permit the County to intervene where the “factual overlap” suggested by its claims was “just one aspect of a much broader concern” put forth by the Attorney General about HCA’s conduct and ongoing compliance with contractual requirements. Judge Earp noted that the close of discovery was “mere weeks away” and an associated concern that the case would be “diverted by the effort that will be required for the County to prove liability and damages.” Moreover, where “additional discovery and motion practice will undoubtedly result” from intervention by the County, the Court found that HCA’s litigation burden would have been disproportionately impacted. Id. ¶¶ 28-29.

Worth Noting

• The Court’s concern about disrupting progress of the case when discovery is at an advanced stage commends caution by proposed intervenors. Here, the motion was filed when six months of fact discovery remained under a recently entered case management order, but in deciding it the Court worried about how much of that period remained at the point of its order. Requests for expedited briefing or hearing may be important when an intervenor contemplates the need for additional discovery likely not envisioned by the existing parties.
• The Court also considered it important that the County’s request for a jury trial was inconsistent with the governing contract provision that allowed for bench trial in the Business Court of the Attorney General’s claims against HCA. Id. ¶ 30.

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