Tuesday, November 12, 2013

Mateo-Woodburn v. Fresno Community Hospital case brief

Mateo-Woodburn v. Fresno Community Hospital case brief summary
270 Cal.Rptr. 894 (1990)

Plaintiff doctors appealed a decision from the Superior Court of Fresno County (California), which denied a permanent injunction and dissolved a preliminary injunction against defendant hospital and health care provider corporation.


In order to resolve certain internal quality control problems, defendant hospital changed its business practice to a closed system and contracted with defendant doctor and his corporation to provide anesthesiology services to the hospital. Plaintiff doctors refused to sign the contract offered to them by the corporation and sought an injunction to stop implementation of the new system. 


  • In affirming the decision, the court held that defendant hospital had authority to adopt any rule of general application to allow a department to be operated through a contractual arrangement. 
  • The contract was undertaken to address an administrative problem affecting the overall quality of medical services. 
  • Thus, the action was quasi-legislative in nature and not subject to judicial review unless contrary to public policy or procedurally unfair. 
  • The court found that plaintiffs had proper notice and opportunity to discuss resolution of the problem. 
  • It also found that the contract did not constitute illegal fee splitting as the corporation could deduct administrative expenses from gross fees collected on behalf of the doctors.

The court affirmed the decision which denied an injunction because it found that defendant hospital's action in contracting with defendant corporation to provide services was quasi-legislative and not subject to judicial review because the decision was not contrary to public policy nor procedurally unfair.

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