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Seven Things To Know When You Receive A Notice Of Investigation From The Department Of Health

United States Court of Appeals Denies U.S. Nursing Corporations Indemnification Challenge Against Nurse Staffing Agency

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law, and Hartley Brooks, Law Clerk, The Health Law Firm

On May 18, 2023, the United States Court of Appeals for the Sixth Circuit affirmed a U.S. district court’s decision to deny U.S. Nursing Corporation a new trial. The appellate court stated that the opposing counsel’s closing argument and the erroneous preclusion of evidence had no substantial effect on the trial’s outcome; thus there was no reversible error.

The First Lawsuit.

The original lawsuit filed in state court concerned a patient suing Appalachian Regional Healthcare, Inc., for exacerbating his spinal injury. He claimed that a nurse transported him from a car into the emergency room without first stabilizing and immobilizing him, which caused further damage. When the incident occurred, the nurses on staff were two employees of Appalachian Regional and one supplied by U.S. Nursing Corporation to the hospital.

The court granted a motion that dismissed the Appalachian Regional nurses as defendants because there was no evidence in the record that alleged that they moved the patient. As the trial neared, the court granted another motion prohibiting the parties from introducing evidence that the Appalachian Regional nurses moved the patient from the truck into the emergency room.

This earlier state court lawsuit concluded with Appalachian Regional Healthcare paying $2 million in settlement and incurring $823,522.71 in legal fees.

It is important to note that when U.S. Nursing supplied its nurse to Appalachian Regional, they  entered into an agreement that stated U.S. Nursing would indemnify and defend Appalachian Regional for the negligence of any of its employees assigned to Appalachian Regional. The settlement was reached, Appalachian Regional Healthcare demanded that U.S. Nursing indemnify it, but the staffing company refused to do so. In response, Appalachian Regional Healthcare, Inc., sued U.S. Nursing for the $2,823,522.71 state court settlement it paid.

The First Appeal.

In its first appeal, U.S. Nursing argued that the opposing counsel made an inappropriate remark in their closing statement when they stated there was no evidence that showed the Appalachian Regional Healthcare nurses moving the patient and that U.S. Nursing had not argued that such evidence existed. U.S. Nursing claimed this statement was inappropriate because it was prohibited from admitting evidence that showed Appalachian Regional Healthcare nurses having moved the patient. The appellate court decided that U.S. Nursing did not have a full and fair opportunity to litigate the issue, so the appellate court remanded to the district court to determine if the error required a new trial.

The nurse staffing company argued that it was incorrectly prohibited from introducing evidence regarding the other nurses on duty and the possibility that they could have been the ones to move the patient. U.S. Nursing also argued that the opposing counsel exploited the court’s error in their closing statements, though the district court never addressed this claim. However, the appellate court asserted that the evidence excluded would not have caused a different outcome at trial, so no new trial was granted.

The Second Appeal.

In its second appeal, U.S. Nursing argued that the district court abused its discretion when it determined the evidentiary error did not affect the trial. The Sixth Circuit Court of Appeals found that the excluded evidence did very little to support U.S. Nursing’s argument, and in excluding this evidence, it did not affect U.S. Nursing’s substantial rights. The court did, however, state that the opposing counsel misled the jury with their statements. The remarks did not constitute an error significant enough to warrant a new trial since Appalachian Regional Healthcare, Inc., was highly likely to prevail, despite the comments of counsel.

Click here to read the order in full.

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Muyskens, Carolyn. “Full 6th Circ. Won’t Hear Staffing Co.’s Indemnification Row.” Law360. (22 June 2023).

About the Authors: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. The Health Law Firm, 1101 Douglas Avenue, Suite 1000, Altamonte Springs, FL 32714, Phone: (407) 331-6620; Toll-Free (888) 331-6620

Hartley Brooks is a law clerk at The Health Law Firm. She is preparing to attend law school.

Current Open Positions with The Health Law Firm. The Health Law Firm always seeks qualified individuals interested in health law. Its main office is in the Orlando, Florida, area. If you are a current member of The Florida Bar or a qualified professional who is interested, please forward a cover letter and resume to: [email protected] or fax them to (407) 331-3030.

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