“The U. S. District Court for the Middle District of Pennsylvania ruled that Lewistown Hospital was not entitled to recover the legal costs incurred fighting the allegations of Dr. Alan D. Gordon under the Sherman Act because the hospital could not show the claims brought by the ophthalmologist were frivolous or unreasonable, or brought in bad faith.” BNA Health Care Daily, October 18, 2006.
The Health Care Quality Improvement Act (HCQIA), § 11113, provides as follows:
“In any suit brought against the defendant, to the extent that a defendant has met the standards set forth under § 11112 (A) of this title and the defendant substantially prevails, the court shall, at the conclusion of the action, award to a substantially prevailing party defending against any such claim the cost of the suit attributable to such claim, including a reasonable attorneys’ fees, if the claim, or the claimant’s conduct or the litigation of the claim, was frivolous, unreasonable, without foundation, or in bad faith. For the purposes of this section, a defendant shall not be considered to have substantially prevailed when the plaintiff obtains an award for damages or permanent injunctive or declaratory relief.”
Lewistown Hospital had alleged that Dr. Gordon was either frivolous or unreasonable and acted in bad faith. Dr. Gordon argued that, in order to prevail, Lewistown must prove that he was both frivolous and that he acted in bad faith. The court rejected that argument, interpreting the statutory conditions in the disjunctive manner based upon the presence of the word "or".
However, the court also concluded that feelings of hostility or revenge do not demonstrate bad faith and are not uncommon in adversarial proceedings stating “to find bad faith on the existence of such feelings alone, absent some indication that those feelings fuel litigation, believed to be baseless, just for the sake of litigation, would seem to award attorneys’ fees in almost every case.” The court opined that, in order to show bad faith, the plaintiff would have had to knowingly proceed when the claim was “baseless, known to be baseless, and motivated by improper purpose.”