Stratienko v. Chattanooga-Hamilton County Hospital Authority, has produced yet another important opinion from the HCQIA prospective. In its most recent ruling, the United States District Court for the Eastern District of Tennessee has dismissed a claim by physicians, named as defendants in the litigation arising out of Dr Stratienko’s suspension, to recover attorney’s fees against Dr. Stratienko. Furthermore, the denial of attorney’s fees arises both under the Health Care Quality Improvement Act (HCQIA) and the Civil Rights Act, i.e. 42 U.S.C. § 1983. Both HCQIA and the Civil Rights Act condition the fee award in favor of prevailing defendants on a finding that the claims were frivolous, unreasonable, brought without foundation, or brought in bad faith.

HCQIA § 11113 states:

"In any suit brought against the defendant, to the extent that a defendant has met the standards set forth under section 412(a)[42 U.S.C. § 11112(a)] 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 suit attributable to such claim, including a reasonable attorney’s fee, if the claim, or the claimant’s conduct during the litigation of the claim, was frivolous, unreasonable, without foundation, or in bad faith."

With respect to HCQIA, the Court indicated that it must: 

". . . carefully distinguish between claims it ultimately finds unmeritorious, and claims that are frivolous from the outset . . . Here, though the Court concluded plaintiff’s claims lacked merit, plaintiff stated those claims by relying on existing precedent and references to the record . . . While the Court ultimately did not agree with plaintiff’s characterization of the facts and legal arguments, this alone does not render his claim frivolous. For these reasons, an award of attorney’s fees, under Section 11113 would be inappropriate."

One important aspect of the case is that, although defendants prevailed upon summary judgment and the Court concluded that they had substantially prevailed in accordance with the HCQIA requirements, the mere fact that they had substantially prevailed on summary judgment did not automatically or presumably indicate that the claim was frivolous, unreasonable, without foundation, or in bad faith.

Another significant aspect of the case is the analysis of the various HCQIA attorney’s fees claims.

The analysis under the civil rights claim was substantially similar. 42 U.S.C. § 1988 allows attorneys fees for prevailing defendants only, upon a finding by the District Court that the plaintiff’s action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith. The Court found that "awarding attorney’s fees against a losing civil rights plaintiff is an extreme sanction and must be limited to truly egregious cases of misconduct . . . While the Court rejected plaintiff’s § 1983 claims as being legally deficient, they were not so wholly without foundation as to be egregious, affording plaintiff no basis on which to bring his suit."