F IL ED

O c t ober 27, 1998

C eci l C r o w son, Jr .

A ppel l a t e C our t C l e r k

IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

 ______________________________________________

BOB T. SOUDER, Individually

and on behalf of all others similarly

situated, 

Plaintiffs-Appellees,

Madison Chancery No. 53326

Vs. C.A. No. 02A01-9712-CH-00321

HEALTH PARTNERS, INC., 

Defendant-Appellant.

____________________________________________________________________________

FROM THE MADISON COUNTY CHANCERY COURT

THE HONORABLE JOE C. MORRIS, CHANCELLOR

William H. West; Stokes & Bartholomew of Nashville

William H. Shackelford of Jackson

For Appellees

Robert B. Littleton, Mary Ellen Morris; Trabue, 

Sturdivant & DeWitt of Nashville

For Appellant

AFFIRMED AS MODIFIED

Opinion filed:

W. FRANK CRAWFORD,

PRESIDING JUDGE, W.S.

CONCUR:

ALAN E. HIGHERS, JUDGE

HERSCHEL P. FRANKS, JUDGE

This case involves a contract arbitration clause and the Tennessee Open Meetings Act

(Act). Defendant, Health Partners, Inc. (HP), appeals the Chancellor’s order denying its motion

to compel arbitration and granting the Plaintiff’s, Dr. Bob T. Souder, M.D. (Souder), motion for
1

 According to HP’s charter, its purpose is to “further . . . the statutory mission of the

Jackson-Madison County General Hospital District to make health care available to the public.”

2

 This letter was sent to Souder and the others by Joseph McGuire (McGuire), the

Interim Director of Operations of HP. 

3

 Souder’s contract was due to expire on February 1, 1997.

2

judgment on the pleadings. 

HP is a Preferred Provider Organization (PPO) that contracts with insurance companies

and employers from Tennessee and other states. HP provides contracting third-party payors with

a network of physicians. HP was created in 1994 under the authority of the Jackson-Madison

County General Hospital District (District) as a “governmental instrumentality” of the District.

The District created HP in order to further the District’s mission to provide the full range of

health care and allied and incidental services.1

 HP is a not-for-profit mutual benefit corporation

which has, as its sole member, the District. 

In 1994, Souder entered into a Physician Participation Agreement (PPA) with HP. In late

1996, Souder and other physicians who were participating medical providers in HP’s PPO

received a letter2 dated November 26, 1996 from HP which stated in part as follows:

The Board of Directors of Health Partners recently approved

actions which offer an exclusive provider relationship to West

Tennessee Alliance for Healthcare (WTAH), aPhysician Hospital

Organization (PHO), and the Jackson Clinic to serve as the sole

physician networks, for services they render, in Madison County.

. . .

* * * 

It is our understanding that you are not currently a member of

WTAH. Because of the above described decision, we are hereby

notifying you that your existing contract with Health Partners will

not be renewed.3

The action of the Board of Directors of HP described in the above-quoted letter did not

take place at a board meeting, but instead took place in the form of a written consent resolution
4

 The board meeting which was originally called on July 29, 1996 to review this issue

failed to produce a quorum.

5

 The District is, as a matter of law, subject to the requirements of the Act.

3

in lieu of a meeting.4

 On January 9, 1997, the Board of Directors of HP adopted a resolution in

which it restated its previously adopted policy of limiting HP’s physician provider network in

Madison County. This meeting took place without prior public notice as had all previous

meetings of the Board of Directors of HP.

Subsequently, Souder and the other physicians received a letter from McGuire dated

January 31, 1997, which stated as follows:

You previously received from us a letter dated November 26,

1996, advising that your Physician Participation Agreement with

Health Partners, Inc. would not be renewed. We understand there

may be some misunderstanding as to the effect of the notice of

nonrenewal. In order to clarify any confusion that may exist, and

to assure an orderly transition, this letter is notice, pursuant to

Section 9.2 of the Physician Participation Agreement, that the

agreement is terminated. The effective date of the termination of

your Physician Participation Agreement is sixty (60) days from

the date of this letter, April 1, 1997. Until this date, you will

remain a participating provider in Health Partners, Inc.

On July 29, 1997, the Board of Trustees of the District amended HP’s charter making the

Board of Trustees of the District the Board of Trustees of HP. This meeting was announced to

the public and open to such.5 In addition to amending HP’s charter, the Board of Trustees of the

District ratified and confirmed all actions of the previous Board of Directors of HP and the

management of HP. 

In May 1997, Souder filed this suit seeking reinstatement of his PPA with HP alleging

that the actions of HP violated the Act. Souder alleges that the Act is applicable to the Board

of Directors of HP in that it is an entity that falls within the provisions of the Act. Furthermore,

Souder avers that the action of the Board of Directors of HP to limit its network, thereby

excluding himself and other similarly situated physician providers, was taken at meetings

without the required public notice. Souder alleges that all actions taken by the Board of

Directors of HP are void and of no effect since none of its meetings have been open to the public

pursuant to the Act.

HP filed a motion to compel Souder to submit the case to arbitration as required by the

PPA. This motion and a subsequent motion to reconsider were denied by the Chancellor. After
6

 The Chancellor also concluded that HP’s assertion that the subsequent action of the

Board of Trustees cured any violation of the Act to constitute a conclusion of law. As such, the

Chancellor stated that such a conclusion of law is not effective to establish a disputed issue of

fact on the basis of the pleadings in order to avoid entry of a judgment on the pleadings.

Furthermore, the Chancellor rejected HP’s claim that the decision to terminate Souder’s

Physician Provider Agreement was purely a management decision made without reference to the

resolution of the Board of Directors as a legally impossible fact.

4

HP’s answer was filed, Souder filed a motion for judgment on the pleadings with regard to the

applicability of the Act to HP and the possible violations of the Act by HP. 

The Chancellor granted Souder’s motion. The Chancellor concluded that HP was subject

to the coverage and requirements of the Act because of its status as a governmental

instrumentality according to its charter, and because of its status as a subsidiary entity of the

District according to Chapter 165 of the Private Acts of 1992 of the Tennessee General

Assembly. Furthermore, the Chancellor concluded that HP had committed numerous violations

of the Act in that it has never published or publicized any public notice of the meetings of its

Board of Directors. Finding such, the Chancellor declared, as required by statute, all actions of

HP’s Board of Directors void and of no effect. Thus, the action of HP’s Board of Directors in

terminating Souder’s contract was declared void and of no effect, and the Chancellor declared

the PPA between Souder and HP still in effect. In addition, the Chancellor issued an injunction

enjoining HP from further violations of the Act.6

 

HP perfected the present appeal, and presents the following issues, as stated in its brief,

for our review:

1. Whether it was error for the chancery court to fail to compel

the Plaintiff to submit his claim against the Defendant to

arbitration.

2. Whether it was error for the chancery court to grant the

Plaintiff a judgment on the pleadings on the applicability of the

Open Meetings Act.

3. Whether it was error for the chancery court to find that the

Open Meetings Act applied to Health Partners.

4. Whether it was error for the chancery court to find that the

termination of the Plaintiff’s contract with Health Partners was an

action of Health Partners’ Board of Directors.

5. Whether it was error for the chancery court not to find that any

violation of the Open Meetings Act that might have occurred was

cured by action of the Board of Trustees of the District.

6. Whether the scope of the injunction entered by the chancery
5

court is impermissibly broad.

Standard of Review

It appears from an examination of the Chancellor’s Conclusions of Law, that he relied

on matters outside the pleadings. “When matters outside the pleadings are presented to and

considered by the court, the motion is treated as a motion for summary judgment under Rule 56.

. . .” 3 Nancy F. MacLean and Bradley A. MacLean, Tennessee Practice §12.12, p. 191 (2d ed.

1989). Generally, a motion for summary judgment allows the non-moving party time to present

a defense, Tenn. R. Civ. P. 56.03, but HP makes no complaint that it was denied extra time.

Thus, Souder’s motion will be treated as a summary judgment motion.

A motion for summary judgment should be granted when the movant demonstrates that

there are no genuine issues of material fact and that the moving party is entitled to a judgment

as a matter of law. Tenn. R. Civ. P. 56.04. The party moving for summary judgment bears the

burden of demonstrating that no genuine issue of material fact exists. Bain v. Wells, 936 S.W.2d

618, 622 (Tenn. 1997). On a motion for summary judgment, the court must take the strongest

legitimate view of the evidence in favor of the nonmoving party, allow all reasonable inferences

in favor of that party, and discard all countervailing evidence. Id. In Byrd v. Hall, 847 S.W.2d

208 (Tenn. 1993), our Supreme Court stated:

Once it is shown by the moving party that there is no genuine issue of material

fact, the nonmoving party must then demonstrate, by affidavits or discovery

materials, that there is a genuine, material fact dispute to warrant a trial. In this

regard, Rule 56.05 provides that the nonmoving party cannot simply rely upon

his pleadings but must set forth specific facts showing that there is a genuine

issue of material fact for trial.

Id. at 211 (citations omitted) (emphasis in original).

Summary judgment is only appropriate when the facts and the legal conclusions drawn

from the facts reasonably permit only one conclusion. Carvell v. Bottoms, 900 S.W.2d 23, 26

(Tenn. 1995). Since only questions of law are involved, there is no presumption of correctness

regarding a trial court's grant of summary judgment. Bain, 936 S.W.2d at 622. Therefore, our

review of the trial court’s grant of summary judgment is de novo on the record before this Court.

Warren v. Estate of Kirk, 954 S.W.2d 722, 723 (Tenn. 1997).

Arbitration

H P contends t hat t he Chancel l o r er r ed by not com pel l i ng Souder t o subm i t hi s c l a i m t o ar b i t r a t i on. H P
7

 The Chancellor relied on Exhibit A of Michael Grafton’s affidavit in rendering his

decision.

6

prem i ses th i s conten t i on upon a pr ovi s i on i n t he PPA w h i ch pr ovi des t hat any cont r over sy, di sput e or di s a g r eem ent

a ris i n g ou t of or relat ing to the P P A be sub m i t ted to a rbit rati o n . H P further co nten ds t hat suc h a cl aus e m andat i n g

a r b i t r a t i on r equi r e s t h i s Court t o subm i t a di sput e over t he vi o l a t i on of t he A c t t o ar b i t r a t i on. 

W e note t hat Souder ’ s c o m p l a i n t does not pr e s ent i s s ues deal i ng w i t h t he t erm s and provis i ons of hi s cont rac t

w ith H P. To the contr ary, t he con t ent i on in hi s com p l a i n t i s t hat H P’s ac tio n i n curt a i l i ng the provi der net w ork w a s

t aken i n vi o l a t i on of t he A c t . Such a com p l a i n t i s out s i de of t he am b i t of So uder’ s cont rac t and d eal s w i t h an ext r aneous

m a tte r t hat i s not pr oper l y a s ubj ect f o r ar b i t r a t i on. I n City of Blaine v. John Coleman Hays & Assoc.,

Inc., 81 8 S . W . 2 d 33 (T e n n. A p p . 19 9 1 ) , thi s C o u r t he ld t h a t an a rbit rati o n clau s e in a contr act w as not appli cabl e i n

d e t e r m i n i n g w het her a cont rac t i ng p art y w as f raudul ent l y i ndu ced t o enter i n t o t he con t rac t . W e det erm i ned th a t

i nducem ent t o enter i n t o t he con t rac t w as not w i t h i n t he pu rvi e w of t he con t rac t i t sel f . T h e refore, t h e arb i t rati o n clau s e

w a s not appl i cabl e . A l t hough t he ca s e at bar i s not factua l l y the sam e a s City of Blaine, w e do have a n anal ogous

situ a tio n i n t hat Souder ’ s c o m p l a i n t deal s wit h a m a t t e r t hat i s not w i t h i n t he pu rvi e w of t he con t rac t but r a t her t hat HP ’ s

m anner of deal i ng w i t h t he cont r act w a s i l l egal beca use of t h e v i o l a tio n of t he A c t . The t r i a l cour t di d not er r i n denyi n g

H P’s m o t i on t o subm i t t h i s m a t t e r t o ar b i t r a t i on.

Judgment on the Pleadings

In t he second i s s ue present ed t o t h i s C ourt , H P co n t ends t hat i t w as er ror f o r t he Chancel l o r t o grant So uder

a j udg m ent on the pl eadi ngs. A s w e explai ned earl i er, t he C hancell or r e l i ed on m a t t e r s out s i de t he pl eadi ngs. 7

 Th i s

rel i ance co n v erted the m oti o n for jud g m e n t on the plea ding s to a m oti o n for su m m ary judg m e n t and ren d e rs H P ’ s

asse r t ions m o o t .

Open Meetings Act

I n th e t h i rd and m ost com p l ex i s s ue, H P cont ends t hat t he A c t does not appl y beca use i t s Boar d of D i r ect o r s

i s not a “gov erni ng b ody ” as def i ned b y st a t u t e and case l a w . W e re spect ful l y dis agree.

T h e l egi s l a t u r e has decl a r ed t hat i t i s t h e pol i cy of t h i s s t a t e t hat “t he f o r m a t i on of publ i c pol i cy and de c i s i ons

i s publ i c bus i nes s a nd sha l l not be conduc t ed i n se c r e t . ” T. C . A . § 8- 44- 101( a ) ( 1993) . Publ i c know l edge of t h e m anner

i n w hich go v e rnm e n t dec isi o n s are m a d e b y p u b l i c o ffi cials i s a n es s e n t i a l el e m ent of a dem ocr a t i c gover n m ent .

Metropolitan Air Research Testing Auth., Inc. (MARTA) v. Metropolitan Gov’t, 842 S. W . 2d 611,

616 (T e n n. A p p . 19 9 2 ) . In o rde r t o p rov ide o p e n n ess in g o v ern m e n t , the leg isl ature p asse d the O p e n M e e t i n g s A c t .

T h e A ct, in pe r t inen t part, pro vide s: 
7

Open meetings - “Governing body” defined - “Meeting”

defined. -

(a) A l l m eet i ngs of any gover n i ng body ar e dec l a r ed t o be pub l i c m eet i ngs op e n

t o t he pu b l i c at al l t i m es, except as provi ded b y t he C onst i t u t i on o f Tenn ess ee.

( b ) ( 1 ) "G over n i ng body" m eans :

( A ) The m e m ber s of any publ i c body w h i ch cons i s t s of t w o (2) or m ore m e m bers ,

w ith th e aut hor i t y t o m ake de c i s i ons f o r or r ecom m endat i ons t o a publ i c body on

p o lic y o r a d m i n i s tra tio n . . . .

T . C . A . § 8- 44- 102 ( 1993 & Supp. 1998) .

T h e Ac t i s r e m edi a l i n natur e . Dorrier v. Dark, 537 S. W . 2d 888, 891 ( Tenn. 1976) ; Memphis Publ’g

Co. v. City of Memphis, 513 S.W . 2d 5 11, 513 (Ten n . 197 4). “It shoul d , t her e f o r e , be cons t r ued br oadl y t o pr o m o t e

opennes s a nd acc ount abi l i t y i n gover n m ent , . . . and to prot ect t he pu b l i c agai nst cl osed do or m eet i ngs at every st age

o f a gov ernm ent bod y’s del i berat i on.” MARTA, 842 S. W . 2d at 616 ( c i t a t i ons om i t t ed) . Furt her , “[ t ] he [ A ] c t i s t o be

const rued m ost fav ora bly to the pu bli c a n d is al l enc o m p a ssi n g an d a p p l i es to ever y m eet i ng of a gover n i ng body exce p t

w here t he st a t u t e , on i t s f ace , excl udes i t s a ppl i cat i on. ” State v. Shelby County Bd. of Comm’rs, 1990 W L

29276, at *4 ( Tenn. A pp. W . S . M a r ch 21, 1990) . To tha t end, t he A c t r equi res pub l i c noti ce of al l regul ar or speci a l

m eet i ngs of a governm ent a l bod y . T . C . A . § 8-44-103 (199 3). Fu r t herm ore, secr e t vot e s ar e pr ohi b i t ed, and m i nutes

o f t he m eet i ng ar e r equi r ed. T. C . A . § 8- 44- 104 ( 1993) . I n t he eve n t t hat t hes e r equi r e m ent s a r e not m e t , “[ a ] n y act i o n

t aken a t a m eet i ng i n vi o l a t i on of t h i s pa r t sha l l be voi d and of no ef f ect . ” T. C . A . § 8- 44- 105 ( 1993) .

T he i s s ue before us i s one of f i r s t i m pres s i on. The ter m “pub l i c bod y” as used i n t he abo ve st a t u t e , w a s not

def i ned. T heref ore, w e m ust fi r s t det erm i ne w het her t he G eneral A s s e m b l y i n t ended t hat a PPO ’ s boa r d of di r ect o r s

f a l l w i t h i n t he cove r age of a “governi ng b ody . ” See Mid-South Publ’g Co. v. Tennessee State Univ. &

Community College Sys. Bd. of Regents, N o . 01- A - 01- 900 2CH 000 74, 199 0 W L 2074 10 ( Tenn . A pp. M . S .

D ec. 19, 1990) . 

T h e ground w ork f or det erm i n i ng w hat const i t u t e s a “gove r n i ng body” f o r t he pur pose s of t he A c t i s f ound i n

t he ca s e of Dorrier v. Dark, 537 S.W . 2d 8 88 (T enn. 1976). Jam es D ark w a s a t eac her w i t h t he D avi dson Count y

s c hool syst e m w hen t he l ocal sc hool boar d br ought “negl ect of du ty an d c o n d u ct un b e c o m ing a teach er” c h a rge s ag ainst

h i m . A f t e r a hea r i ng i n f r ont of t he M e t r opol i t an Board of Educat i on, D a r k w a s t e r m i nat ed. D a r k chal l enged t h e

deci s i o n in co urt an d “ asse r t e d that t h e B o a rd’s ac t i o n w as v oid b e c a u se it w as ‘fo r m u l a t ed’ i n a cl ose d se s s i on i n

v i o l a t i on . . . of t he O pen M eet i ngs A c t . ” Id. at 889.

T h e Supre m e Court di s c uss ed t he A c t i n dept h and at t e m p t ed t o cl a r i f y T. C . A . § 8- 44- 102. A f t e r car e f u l

cons i der a t i on, t he cour t concl uded t hat t h e t e r m “publ i c body” s houl d be br oadl y i n t e r p r e t ed. The C our t not ed t hat t h e

t erm “pub l i c bod y” as used i n T . C . A . § 8-44-102 w as not an un cer t a i n t erm . T he C ourt st a t ed:
8

 The court relied heavily on the Georgia Supreme Court’s decision in Red & Black

Publ’g Co. v. Board of Regents, 427 S.E.2d 257 (1993). In that case, the Court held that the

Student Organization Court of the University of Georgia was subject to the Open Meetings Act

because a public agency had delegated official responsibilities and authority to the Student

Organization Court. Thus, a subsidiary of a public agency was deemed subject to the Open

Meetings Act.

8

I t i s cl ear th a t fo r th e pur pose of t h i s Act , t he Legi s l a t u r e i n t ended t o i ncl ude any

boar d , com m i s s i on, com m i t t ee, agenc y , aut hor i t y or any ot her body, by w hat ever

nam e , w hose or i g i n and aut hor i t y m ay be t r ace d t o St a t e , C i t y or C ount y

l e g isla tiv e act i on and w h o se m e m b e r s ha ve aut hor i t y t o m ake de c i s i ons or

r ecom m e ndat i ons on pol i cy or adm i n i s t r a t i on af f ect i ng t he conduc t of t h e

busi nes s of t he peopl e i n t he gover n m ent a l se c t o r .

Id. a t 892.

W h ile Dorrier provi des i nsi ght i n t o t he A c t , i t does no t address t he part i cul ar i s s ue before t h i s court . T h e

cas e of Northwest Georgia Health Sys., Inc. v. Times-Journal, Inc., 461 S. E . 2d 297 ( G a . A pp. 1995)

i s i nst ruct i ve on t h i s i s s ue. T here, t he M ari e t t a D a i l y Jour n a l fi l ed sui t al l egi ng that t he N ort h w est G eorgi a H eal t h

S y s t e m , I nc. and Pr o m i na H eal t h Syst e m , I nc. vi o l a t ed t he G eor g i a O pen M eet i ngs Act by r e f usi ng t o hol d publ i c

m eet i ngs. Id. at 298. 

Prom i n a w as the sole m e m b e r of N orthw est G e o rgia H e a l t h S ystem s . N orthw est w as a “ p r i vat e , nonpr o f i t

G eor g i a cor por a t i on . . . or gani zed ‘ f o r t he bene f i t of , t o per f o r m t he f unct i ons of , or t o car r y out t he pur pose s of ’ ”

sever a l loca l cou nty h osp i t als. Prom i na cha r act e r i zed i t s e l f as a hol d i ng com pany and pa r ent cor por a t i o n o f N o rth w e st.

F u r t her, N o r t h w e s t ’ s boa r d of t r ust ees w e r e nom i nat ed by N o r t h w e s t ’ s boa r d and appr o ved by Pr o m i na’ s boa r d . Fi nal l y ,

t h e only t a x dol l a r s Nort h w e s t r ece i ved w e r e count y fun ds re i m b u rsi n g N orthw est for pro viding indige nt ca re. T h e s e

reim b u rsem e n ts am o u nted to l ess tha n tw o (2 ) pe rcen t of N orthw est’s r e v e n u e s . Id. at 298- 99. 

T h e G eor g i a Court of A ppeal s he l d t hat N o r t h w e s t w a s a publ i c age ncy be caus e i t s “ subs i d i a r y hospi t a l

cor por a t i ons contr act ual l y agree d t o op erate p u b l i c h osp i t al au thorit y a ssets for t h e pu bli c g o o d a n d N orthw est’s

s t a t e m ent of cor porat e purpose i s ( i n part ) t o op era t e t hose asset s for t he ben efi t . . . of publi c hospit a l aut hori t i es. ” Id.

a t 300. C itin g t he G eor g i a Supr e m e Court ,

8

 t he cou r t of appeal s s t a t ed “t hat an enti t y t o w h i ch a pu b l i c agency had

del egat e d its o f f i c i a l re s p o n sib ilitie s a n d a u t h o rity w a s th e v e h i c l e b y w h i c h th e a g e n c y c a r r i e d o u t its r e s p o n sib ilitie s

and . . . w as s ubject t o t he O pen M eet i ngs A c t . ” Id. Fi nal l y , t he cour t concl uded:

W i t hout ques t i on, t hes e pr i vat e , nonpr o f i t corporat i ons becam e t he veh i c l e

t h r oug h w h i ch t he pu b l i c hospit a l aut hori t i es car r i ed ou t t hei r of f i c i a l

r e s p o n sib ilitie s . C onse quent l y , des p i t e t he pr i vat e , nonpr o f i t st a t us of def endant s

N ort h w est and P rom i na and t hei r s ubsi d i ary hospi t a l cor por a t i ons, t he t r i a l cour t

i n t he case sub j udice w as aut hori zed t o con c l ude o n t he fact s bef ore i t th a t

N ort h w est an d P rom ina, as ve hicles f or publi c agencies , w ere subj ect t o t he [O pen

M e e tin g s ] A c t. . . .
9

Id. (citation o m i t ted ) .

I n ad d i t i on t o t he f o r egoi ng cas e , t he ca s e of Finister v. Humboldt Gen. Hosp., Inc., 970 S. W . 2 d

435 ( Tenn. 1998) pr ovi d e s f u r t her i nsi ght i n t o t he i s s ue bef o r e us . I n Finister, M a r y Fi n i s t e r f i l ed s u i t se eki n g

w orker s ’ com pens a t i o n benefi t s fr o m H u m boldt G eneral . H u m boldt G eneral cl a i m ed i m m unit y un der t he T ennessee

W orker s ’ C o m pensat i on A c t , T . C . A . § 50 -6- 106 (5) , w h i ch st a t es: “[t ]he W orker s ’ C o m pensat i on A c t sha l l not appl y

to . . . [t ]he stat e o f T e n n e ssee , co u n t i es the reo f an d m u n ici p a l corp ora t i o n s . ”

H u m bol d t G ener a l and H P occupy i dent i cal posi t i ons in re l a tio n to th e D istr i c t. H u m b o l d t G e n e r a l, lik e H P ,

i s a cr eat i on of t he J acks on- M adi son Count y H o s p ita l D istr i c t. It w a s o r g a n i z e d in 1 9 9 1 , a n d th e D istr i c t is its so l e

m e m ber. In def ense t o F i n i s t er’ s w orker s ’ com pensat i on clai m , H u m boldt G eneral “ar gued th a t it is a su b sid i a r y o f th e

exem p t H o s p ita l D istr i c t a n d as a r esul t , i t i s al so exem p t fr o m t he W orker s [ s i c] Co m pensat i on L a w s . ” Id. at 437.

F i n i s t e r ar gued t hat nei t her t he D i s t r i c t nor H u m bol d t G ener a l w e r e exe m p t . 

T h e C ourt det erm i ned that t he D i s t r i c t w as not covered by t he W orker s ’ Co m pensat i o n A c t . R e l y i ng on

Johnson v. Chattanooga-Hamilton County Hosp. Auth., 749 S. W . 2d 36 ( Tenn. 1988) , t he Court f ound

t hat “a l egi s l a t i vel y cr eat ed non- p r o f i t H ospi t a l D i s t r i c t w h i ch ac t s on be h a lf of a g o vernm ent a l ent i t y and w h i c h

per f o r m s a gover n m ent a l f unct i on i s a ‘ m uni c i pal cor por a t i on’ w i t h i n t he m eani ng of t he s t a t u t o r y exem p t i on pr o v i s i on. ”

Finister, 970 S. W . 2d at 438. The C our t f ound th a t th e D istr i c t in t ended t o and does “ac t on behal f of and f o r t h e

benefi t of M adi son C oun t y and t he C i t y of Jackson. ” T he C ourt hel d t hat t he D i s t r i c t w a s a m uni c i pal cor por a t i o n and

exem p t fr o m w orker s ’ com pensat i on u nder t he st a t u t e . Id. a t 439 . The C our t concl uded t hat a s ubsi d i a r y of a

m unici pal corporat i on is , i n essence, “a di v i s i on o r depar t m ent of t he S t a t e or count y or m uni c i pal cor por a t i on, ” and t h e

statu tory ex e m pti o n ap pli e d to suc h d ivi sions a n d de p a r t m e n ts. Id. Sever a l f act o r s c onvi nced t he Court t hat H u m bol d t

G eneral w as, i n fact , a subsi d i ary of t he D i s t r i c t . Fir s t , t he C ourt noted t hat t he D i s t r i c t organi zed H u m boldt G eneral

a s a non- p r o f i t , publ i c bene f i t cor por a t i on. Second, t he Board of T rus t ees of H u m boldt G eneral and the D i s t r i c t w ere

i denti cal . T h i rd, t he bo ard m e m bers rec e i ved n o com pensat i on an d w ere sel ect e d by co u n ty an d c i t y o ffi cials. Fourt h ,

none of H u m bol d t G ener a l ’ s ne t ear n i ngs were di s t r i but ed t o any pr i vat e per son or ent i t y . Fi f t h , upon di s s o l u t i on, t h e

D istr i c t w oul d r ece i ve any ne t as s e t s . I n addi t i on t o t he f o r egoi ng, t he Court found tw o fact ors very pers uasi ve. First,

the Tennessee General Assembly has provided:

T h e m i s s i on and pur pose of t he J acks on- M adi son Co unt y G eneral H ospi t a l

D istr i c t sh all b e fo r t he bene f i t of t he Cit y of Ja cks on, Tenness ee a nd M adi son

C ount y , T ennessee, t o provide, on a f ee- f o r - s e r v i ce ba s i s wit h due r egar d f o r t h e

needs of l o w - i ncom e and indi gen t pat i ent s , t he ful l range of heal t h care. . . .

Each nonprofit corporation of which such hospital district is

the sole member existing when this amendment becomes law or

thereafter created, shall be deemed a subsidiary entity of such
10

hospital district created by this act and s hal l be a gove r n m ent a l ent i t y

for purposes of t he T ennessee G overnm ent a l T ort L i abi l i t y A c t . . . .

C hapter 165, Pri vat e A c t s of 1992 ( e m phas i s a dded) . Secondl y , H u m b o ldt G e n eral’s corp ora te ch arter em p o w ers it

t o : “f u r n i sh a f f o r dabl e an d m ore ac c e ssi ble h e a l t h c are a n d serv ices to the c i t izen s of the C i t y of Ja cks on and M adi son

C ount y as ‘ a gover n m ent a l i nst r u m ent a l i t y f o r t h e excl usi ve ben efi t of t he Jackson-M adi son C oun t y H ospi t a l D i s t r i c t . ’ ”

Finister, 970 S. W . 2d at 439- 40.

Finister w a s conce r ned w i t h t h e appl i cat i on of t he w o r ker s ’ com pens a t i on l a w and t h e exem p t i on aff orded

t o , am ong ot hers , m uni c i pal cor por a t i ons. H o w ever , w e bel i eve t hat i f t he D i s t r i c t i s a m uni c i pal cor por a t i o n fo r th e

purposes of the w ork ers’ co m p e nsa t i o n law , it is al s o a m unici pal cor por a t i on and a publ i c body as r e f e r r ed t o i n T. C . A .

§ 8- 44- 102 ( 1993 & Supp. 199 8). Fu r t herm ore, t he si m i l ari t i es of H P in t he i nst ant case and H u m boldt G eneral in th e

Finister case ar e re adi l y app are n t . H P is a non prof i t corporat i on w i t h t he D i s t r i c t as i t s onl y m e m ber, and i s deem e d

a subs i d i a r y ent i t y of t he D i s t r i c t by C hapt e r 165, Pri vat e A c t s 1992. T he corporat e chart er of H P clear l y st a t es t hat it

w a s crea ted a s “a go v e rnm e n t i nstrum e n tal i t y o f t h e Jac kso n-M a d ison C o u nty G eneral H o s p ita l D i s tri c t.” H P ’ s

exi s t ence i s pr e m i s e d on t he i dea tha t i t w i l l furth er “ the statu tory m issio n o f the [D istri ct] to m a k e q u ality h e a l t h ca r e

avai l abl e t o t he pu b l i c at rea sonable cost s . ” 

O t her fac t ors are al so pert i nent. H P co m m i ngled f und s w i t h t he D i s t r i c t , and H P ev en al l o w ed i t s f und s and

bookkeepi n g t o be handl ed by t he ac count i ng depar t m ent of t he D i s t r i c t . H P funds w e r e depos i t ed and i nvest e d in th e

sam e m anner as f u nds of t he D i s t r i ct. F urthe r m ore , the D ist r i ct ap p o int e d the m e m b e rs of H P ’s B o a rd, and these

m e m bers r ece i ved no com pens a t i on. Fi nal l y , i n or ar ound 1992, t he D i s t r i c t gave H P $400, 0 0 0 i n se ed ca p i t a l and

ext ended a $500, 000 l i ne of cr edi t .

A fte r e x a m inin g all the rele v a n t fac tors , w e fin d tha t H P is a s u b sid iary o f the D istri ct. A su b sid iary o f a n

exem p t m uni c i pal cor por a t i on l i k e t he D i s t r i c t i s “com parabl e t o a di v i s i on o r depar t m ent of t he S t a t e or county. ” See

Finister, 970 S. W . 2 d at 439 . W e agree w i t h t he G eor g i a Court of A ppeal s r eas oni ng i n Times-Journal and hol d

t hat subs i d i a r i e s t o w h i ch m uni c i pal cor por a t i ons have d e l egat ed t hei r of f i c i a l res pon s i b i l i t i es and authori t y are s ubject

t o t he O pen M eet i ngs A c t . See Northwest Georgia Health Sys. v. Times-Journal, Inc., 461 S. E . 2d 297

( G a . A pp. 1995). W i t h t he for egoing, w e conclude t hat H P is subj ect t o t he provis i ons and requi rem ent s of t he A c t , and

t he m eet i ng of i t s gove r n i ng body ar e publ i c m eet i ngs. T. C . A . § 8- 44- 102 ( 1993 & Supp. 1998) .

Decision of the Board of Directors or of Management

N ext , H P asser t s t hat even if t he A c t i s appl i cabl e , So uder canno t cl a i m t hat t he P P A w as t erm i nat e d i n

v i o l a t i on of t h e Ac t beca use t he ac t ual deci s i on t o t e r m i nat e t he PPA w a s i ndepende n t l y m ade by H P’s m anage m ent ,
11

not i t s B oard of D i rec t ors . H P co n t ends t hat t he P P A contai ned a p rovi s i on that al l o w e d ei t her par t y t o t e r m i nat e t h e

agr eem ent w i t h or w i t hout caus e , and t hat such provis i on w as exer c i sed by H P’s m anagem ent i n a l e t t er t o So uder dat e d

January 31, 199 7 no t i fyi ng h i m t hat t he P P A w as t erm i nat ed pu r s uant t o t he provis i on in t he P P A al l o w i ng such . 

H P ’ s content i on that t h i s w as a m anagem ent deci s i on is w i t hou t m eri t . From t he fac ts in th e re c o r d , it is

obvi ous t hat t he dec i s i on t o l i m i t the n etw ork thereb y term inati n g S o u d e r’s PP A , i n add i t i on to t he con t rac t s of ot her

physi c i ans , wa s m ade by H P’s B oard of D i rec t ors . In t he l e t t er s ent t o S oud e r f r o m H P dat ed N ovem ber 26, 1996, i t

is state d tha t “[t]h e b o ard o f d irec tors o f H eal t h P art ners rec ent l y app roved act i ons w h i ch off er a n exclusi ve provider

r e l a t i onshi p t o t he W est T ennessee A l l i ance for H eal t hcare. ” T he l e t t er c onti nues by st a t i ng t hat “[ b ] eca use of t he above

descr i bed deci s i on, w e ar e her eby not i f y i ng you t hat your exi s t i ng cont r act w i t h H eal t h Par t ner s wil l not be r enew ed. ”

T h i s letter re fers t o act i on t aken by t he Board of D i r ect o r s t h r ough a w r i t t en cons ent r e s o l u t i o n to lim i t H P ’s n etw o r k .

F u r t herm ore, on Janu ary 9, 199 7 , t he B oard of D i rec t ors of H P ad opted a r esol u t i on in w h i c h it re sta t e d t he abo ve po l i c y

o f li m i t ing H P ’s n etw o r k i n M adi son Cou n t y . I n addi t i on t o t he N ovem ber 26, 1996 l e t t e r and t he J anuar y 9, 1997

r e s o l u t i on, an aff i davit , of M i chael G raf t on, V i ce Presi dent f or Fi scal A f f a irs a n d C h i e f F i n a n c i a l O f f i c e r o f th e D istr i c t ,

s t a t ed t hat t he Board of D i r ect o r s of H P m ade t he dec i s i on t o l i m i t i t s ne t w o r k . 

I n cons i der a t i on of t he f o r egoi ng i t e m s , i t appea r s t o t h i s Court t hat t he dec i s i on t o l i m i t H P’s net w o r k t her eby

r e q u irin g th e te r m i n a tio n of Soud e r ’ s PPA w a s m ade by t he Board of D i r ect o r s of H P . The cont ent i on of H P t hat t h i s

w a s a m anage m ent deci s i on i s unt enabl e in t h e face of the facts prese nted . T h u s , w e agr ee w i t h t he Chancel l o r i n hi s

concl usi o n t hat t he “a c t i o n s r e f e r ence d i n t he J anuar y 31, 1997 l e t t e r . . . m ake i t cl ear t hat t he t e r m i nat i on of t h e

phy s i c i a n part i c i pat i on ag ree m ent w as ent i rel y con s i s t ent w i t h , and w as r equir ed by , t he ac t i on of t he boar d of di r ect o r s

of H eal t h P art ners , Inc. ”

Ratification

H P fur t her as s e r t s t hat i f i t i s s ubj ect t o t he A c t and t hat t he ac t i on of t he Board of D i r ect o r s r e s u l t ed i n t h e

t erm i nat i on o f Soud er’ s PP A , So uder has no basi s f or r e l i ef because any vi o l a t i on o f t he A c t has been cu red by t h e

s u b s e q u e n t ra tific a tio n o f a ll a c tio n s o f H P ’ s B o a r d o f D ire c t o r s b y th e B o a r d o f T r u ste e s o f th e D istr i c t in a m e e tin g

hel d i n com p l i ance w i t h t he A c t .

A s pr evi ousl y st a t ed, T. C . A . § 8- 44- 105 pr ovi des t hat “[ a ] ny act i on t aken a t a m eet i ng i n vi o l a t i on of [ t h e

A c t ] sha l l be voi d and of no ef f ect . ” H o w ever , i t w a s not t he i n t ent of t he l egi s l a t u r e t o f o r ever bar a gover n i n g

bod y fr o m rat i fyi ng a p r i or deci s i on m ade i n viol a t i on o f t he A c t . Neese v. Paris Special Sch. Dist., 813

S . W . 2d 432, 436 ( Tenn. A pp. 1990) . O n t he ot her hand, i t w a s not t he i n t ent of t he l egi s l a t u r e t o al l o w a gover n i n g

bod y t o rat i fy a deci s i on in a subsequent m eet i ng b y a “perf unctor y cryst a l l i zat i on” o f i t s pr evi ous act i on. Id.
9

 The record was deficient with regard to a copy of the notice of the July 29, 1997

meeting of the Board of Trustees of the District. 

12

R athe r , “the pu rpo se o f t h e ac t i s sati sfi e d if the u l t i m ate d e c isi o n is m a d e in a c c ord a n c e w i t h the [A ct], an d if i t i s a

new and sub s t ant i a l rec onsi derat i on o f t he i s s ues i nvo l ved, i n w h i ch t he pu b l i c i s af for ded am p l e opp ort unit y t o

kno w t he fact s and t o be h ear d w i t h ref ere nce t o t he m a t t ers at i s s ue. ” Id.

C oncedi ng t hat t he ac t i on of t he Board of D i r ect o r s c oul d have be en r a t i f i ed t h r ough t he s ubse quent act i o n

of t he B oard of Trust ees, So uder ass ert s t hat t he Jul y 29 , 199 7 m eet i ng o f t he B oard of Trust ees of t he D i s t r i c t fai l e d

t o cur e any pr evi ous vi o l a t i on of t he A c t i n t hat not i ce of t he m eet i ng w a s not i n com p l i ance w i t h t he pr ovi s i ons of

t he A c t . Souder cont ends t hat t he not i ce f a i l ed t o m ent i on any cont ent of t he m eet i ng and f a i l ed t o gi ve t he publ i c

any n o t i ce of w hat i s s ues w ould be dis cussed at such m eet i ng. Thu s , si nce no t i ce of t he m eet i ng w as def ect i ve, t h e

act i on o f t he B oard of Trust ees f a i l ed t o com p l y w i t h t he A c t t hereby renderi ng such act i on v o i d and of no eff ect .

T . C . A . § 8-44-103 p rovi des t hat “adequ a t e pub l i c noti ce” m ust be given of m eet i ngs by t he go vernm ent a l

bod y ho l d i ng such m eet i ngs be it a re gular or s peci a l m eet i ng. I n con s i deri ng the phrase “ adequ a t e pub l i c noti ce, ”

t he Tennes s e e Supr e m e Court has obse r ved:

W e t h i nk it i s i m possi b l e t o for m u l a t e a general rul e i n regar d t o w hat t he ph ras e

“adequ a t e pub l i c noti ce” m e a ns. H o w e ver , . . . adequa t e publ i c not i ce m eans

adequ a t e pub l i c noti ce und er t he ci rcum s t ances, or s uch n o t i ce based on t h e

t o t a l i t y of t he ci rcum s t ances as w ould f a i r l y i nfor m t he pu b l i c .

Memphis Publ’g Co. v. City of Memphis, 513 S. W . 2d 511, 513 ( Tenn. 1974) .

Thus, t he ci rcum s t ances of eac h cas e m ust be t aken i n t o acc ount i n or der t o det e r m i n e t he ade quacy of t he not i ce gi ven.

A ccor d i n g to t he fact s as pres ent ed i n t he recor d , t he B oard of Trust ees of t he D i s t r i c t hel d a m eet i ng on Jul y

29, 1997, i n w h i ch t he B oard of Trust ees am ended t he chart er of H P m aki ng the B oard of Trust ees of t he D i s t r i c t th e

B oard of Trus t ees of H P. Furt herm ore, t he B oard of Trust ees r a t i f i ed and confi r m e d al l act i ons of t he previ ous B oard

o f D irec tors o f H P and t he m anage m ent of H P “i ncl udi ng w i t hout l i m i t a t i on t he l e t t i ng and t e r m i nat i on of cont r act s of

a l l ki nds. ” T he B oard of Trust ees annou nced thi s m eet i ng to t he pu b l i c by m a i l i ng n o t i ce of t he m eet i ng to t he l ocal

new spaper, l ocal r adi o st a t i ons, and t he l ocal t e l evi s i on st a t i on appr oxi m a t e l y ei ght days bef o r e t he m eet i n g w as hel d .

A ccor d i n g t o Souder ’ s br i e f , t he not i ce of t he m eet i ng, w h i ch Souder cont ends do e s not cons t i t u t e ade quat e publ i c

noti ce, stat e d , “[t] h e bo ard of trustees o f W est T e n n e ssee H e a l t h c are w i l l m e e t i n the cit y-c o u nty c o n feren c e of Ja c k son -

M adi son Count y G ener a l H ospi t a l at 5: 00 p. m . on Tuesday, ___________. ”

9

W h i l e t he A c t requi res al l m eet i ngs of ent i t i es s ubject t o t he A c t be op en t o t he pu b l i c , i t does no t guarant e e

a l l cit izen s the right to pa r t ici p a te i n the m e e t i n g s . Whittemore v. Brentwood Planning Comm’n, 83 5
13

S . W . 2d 11, 18 ( Tenn. A pp. 1992) .

[ T ] h e noti c e r equi r ed b y T e n n. C o d e A n n . § 8 -44 -10 3 is suffici e n t as l o n g a s it

g i ves i n t e r e s t ed ci t i zens a r eas onabl e oppor t uni t y t o exer c i s e t h e i r r i g h t to b e

p r e s ent at a gov erni ng b ody ’ s m eet i n g . The not i ce ne ed not i nvi t e publ i c

p a r t ici p a t i o n in a p u b l i c m e e t i n g in ord er to sati sfy the [A ct’s] req uirem e n ts.

State ex rel. Akin v. Town of Kingston Springs, N o . 01- A - 01- 9209- C H 00360, 1993 W L 339305, at *5

( Tenn. A pp. M . S . Sept . 8, 1993) .

I n vi e w of t he t o t a l i t y of t he ci r cum s t ance s , t he not i ce of t he m eet i ng com por t s w i t h t he provis i ons of t he A c t .

N o tic e w as gi ven to t he m edi a i n order t o not i f y t he publ i c of t he m eet i ng. The not i ce pr ovi ded t he publ i c w i t h a

r eas onabl e oppor t uni t y t o be p res ent at t he m eet i ng. I n fact , acc o r d i ng t o t he m i nut e s of t he m eet i ng, m e m ber s of t h e

m edi a and the publi c w ere i n at t endan ce at t he m eet i ng. Furt herm ore, w h i l e So uder prot est s t he con t ent s of t he no t i c e

i n not r e f e r r i ng t o t he pr opose d act i on of l i m i t i ng t he phys i c i an net w o r k , t he m eet i n g w a s n o t lim ite d to th i s sol e subj ect .

T h e agend a of t he m eet i ng p res ent ed several di f f ere n t are as r egardi ng the busi ness o f th e D istr i c t. T h u s, f a ilin g to

speci f i cal l y st a t e i n t he not i ce t he i s s u e conce r n i ng H P di d not m ake t h e noti ce i nadeq uat e i n l i ght of t he several purposes

o f t he m eet i ng. W e ar e of t he op i n i on that noti ce w as gi ven w h i ch “w oul d f a i r l y i n f o r m t he publ i c” unde r t h e

circum stanc es.

W h ile t he no t i ce m ay com port w i t h t he A c t , w e fi nd that t he rat i f i cat i on an d con f i r m a t i on o f al l act i ons of t h e

B oard o f D irec tors of H P by t he Board of Trus t ees of t h e D istr i c t w a s m e r e l y a p e r f u n c t o r y ru b b e r s t a m p th e r e b y fa ilin g

t o cur e t he pr evi ous vi o l a t i ons of t he A c t . A ccor d i ng t o t he m i nut e s of t he J u l y 29, 1997 m eet i ng, t he onl y r e s o l u t i o n

per t a i n i n g t o H P t hat w a s r a i s e d dur i ng t he m eet i ng i n di s c uss i o n w as t he est abl i shm ent of t he Board of Trus t ees of t h e

D istr i c t as t he B oard f or H P. The m i nutes st a t e t hat “M r . M oss expl a i ned to t he B oard t he pu rpose of reor gani z i n g

H eal t h Part ners w h i c h w ill e sta b lish t he D i s t r i c t ’ s B oard of Trust ees as t he B oard f or H eal t h P art ners as out l i ned in t h e

r e s o l u t i o n pr e s ent ed. D r . N e w ell m a d e a m oti o n to ap pro v e , sec o n d e d b y M r . M a n sfi eld a n d the B o a rd u n a nim o u sly

approved . ” 

T here w a s no di s c uss i on by t he Board of Trus t ees per t a i n i ng t o th e l i m i t a t i on of H P’s physi c i an net w o r k

p r evi ousl y adop t ed by t he B oard of D i rec t ors of H P. A s pr evi ousl y st a t ed, t he ado p t ed r e sol u t i on of t he Board of

T rus t ees m ere l y st a t es t hat al l act i ons of t he B o a r d of D i r ect o r s of H P ar e r a t i f i ed and c onf i r m ed i ncl udi ng t h e

t e r m i n a tio n of al l contr act s . Since t here w as no dis cussi on o f t he m a t t er of l i m i t i ng the net w ork and the onl y m ent i o n

o f suc h i s t he adopt ed r e s o l u t i on of w h i ch t her e is n o evi dence o f any di scuss i on o n t he m a t t er, t he act i on o f t he B oard

of T rustees is m erely a “p erfun ctory cry stal l i z a t i o n ” o f t h e de cisi o n m a d e b y the B o a rd o f D i r e c tors.

I n th a t th e B oard of Trust ees f a i l ed t o give “new and sub s t ant i a l rec onsi derat i on” o f t he act i ons t aken b y t h e
14

B oard of D i rec t ors , t he act i on o f t he B oard of Trust ees w as a s ubter fuge and n o t h i ng m ore t han a m e r e r a t i f i cat i on of

t he previ ous act i ons t aken i n cont r avent i on of t he A c t . A s s uch, t h e act i ons of t he Board of Trus t ees di d not cur e t h e

p r evi ous vi o l a t i ons of t he A c t by t he Board of D i r ect o r s . There f o r e , t he ac t i on by t he Board of D i r ect o r s i s voi d and

of n o e ffect and rem ains su c h since it w as n ot cu red by the a cti o n s of the B o a rd o f T rustees.

Injunction

The Fina l Judgm ent and I n j unct i o n of t he C hancell or pr ovides i n pert i nent par t :

4 . Pri o r t o any ac t i o n t aken b y t he curr ent board of H eal t h P art ners , Inc. agai nst

t h e contr a c t ual i n t ere s t s of D r . So uder t o be eff ect i ve, H eal t h P art ners , Inc. ,

beca use of its h i s t o r y of i gnor i ng t he cl ear r equi r e m ent s of t he O pen M eet i ngs

A c t , m ust es t abl i sh, t o t he s a t i s f act i on of t h i s C our t , t hat suc h act i ons w ere t aken

i n ful l com p l i ance w i t h t he requi rem ent s of t he O pen M eet i ngs A c t . U n til su c h

a det erm i n a tio n occurs, al l pref err ed provider agreem ent s bet w een H eal t h

Part ners , Inc. and an y part i c i pat i n g provi der s hal l rem a i n i n eff ect unti l t hey

e x pire b y o p e rati o n of the i r ow n term s .

5 . T h i s C ourt shal l ret a i n j uri sdi c t i on o ver t he part i e s heret o , and H eal t h Part ners ,

Inc. shal l r epor t t o t h i s Court i n w r i t i ng ev ery s i x m onths f or a per i od o f one year

f r o m t he dat e of t he ent r y of th i s O rder w i t h regar d t o t he fact of i t s com p l i ance

o f t he O pen M eet i ngs A c t . . . . H eal t h P a r t n e r s , I nc. i s he r eby r e s t r a i ned f r o m

v i o l a t i ng an y of t he requi rem ent s of t he O pen M eet i ngs A c t . . . .

H P clai m s t hat t he i n j uncti on is i m perm i s s i b l y broad in t hat i t w ent fur t her t han n ecess ary t o grant So uder

rel i ef, t he on l y plai n t i f f befor e t he cou r t . H P co n t ends t hat t he C hancell or overs t epped hi s j uri sdi c t i on b y grant i n g

such a broad inj uncti on d espi t e t he fact t hat So uder never t ook st eps t o hav e t he case cer t i f i ed as a cl ass act i on. 

F u r t herm ore, H P asser t s t hat t here i s not h i ng in t he recor d t o i ndicat e t hat ot her physi c i ans w hose P P A s w ere

t erm i nat ed hav e any d esi re t o rem a i n m e m bers of H P. I n add i t i on, H P co n t ends t hat t he i n j uncti on is i n t ernal l y

i ncon s i s t ent i n t hat i t decl are s al l act i ons ever t aken b y H P’s B oard of D i rec t ors null and v o i d t hereby vo i d i ng all

P P A s ent ere d i n t o by H P w h i l e si m u l t aneou s l y requi r i ng that al l PP A s r e m a i n i n eff ect .

T . C . A . § 8-44-106 p rovi des i n pert i nent par t :

(a) T he ci rcui t court s , ch ance r y c our t s , and ot her cour t s whic h have e qui t y

j u ris d i c tio n , have j u r i sdi c t i on t o iss u e i n j unct i ons, i m p o se p e n alt ies, an d o therw ise

enfor ce t he pu rposes of [ t he A c t ] upon ap p l i cat i on o f any ci t i zen of t h i s s t a t e .

* * *

( c ) The cour t sha l l per m anent l y enj o i n any per son a d j udged by it in v i o l a tio n of

[th e A c t] f r o m fu rth e r v i o l a tio n o f [ t h e A c t]. E a c h separ a t e occurr ence of such

m eet i ngs no t hel d i n accordance w i t h t h i s par t const i t u t es a s eparat e vi o l a t i on.

( d ) The fi nal j udgm ent or decr ee i n eac h s u it sh a l l st a t e t hat t he cour t r e t a i n s

j uri sdi c t i on o ver t he part i es and subject m a tte r f o r a p e rio d of one ( 1 ) year f r o m

dat e of ent ry, and the court shal l o r d e r t he def endant s t o r epor t i n w r i t i n g

sem i annu a l l y t o t he cou r t of t hei r com p l i ance w i t h [t he A c t ] .

W e agr ee w i t h t h e Chancel l o r i n Par agr aph 5 of t he above - quot ed por t i on of t he i n j unct i on. This se c t i on i s

i n keepi ng w i t h t he pr ovi s i ons of T. C . A . § 8- 44- 106( c ) - ( d ) . O n t he ot her hand, Par agr aph 4 of t he above - quot ed por t i o n
15

i s und u l y broad in i t s r each. So uder w a s t he onl y pl a i n t i f f bef o r e t he Chancel l o r . A s s uch, t he i n j unct i on af f ect i n g al l

p refe rred provi der agr eem ent s i s i m perm i s s i b l y broad because i t goes w e l l beyo nd w hat i s necess ary t o aff ord So uder

r e lie f as t he on l y pl a i n t i f f i nvol ved i n t he l a w sui t . Furt her m o r e , Par agr aph 4 i s que s t i onabl e in th a t it sta t e s th a t “ [ p ] r i o r

t o any ac t i on t aken . . . H eal t h P art ners , Inc. . . . m ust est abl i sh . . . t hat such act i ons w ere t aken in f u l l com p l i ance” w i t h

t h e A c t . T h i s par agraph i s unw orkabl e and u nnecessar y . Paragraph 5 provides t he proper m echa n i s m fo r as s u ring

com p l i ance w i t h t he A c t i n t he for m of a cont e m p t act i on if t he A c t i s vi o l a t ed by H P in t he fut ure.

W e cons t r u e t he j udgm ent t o per m anent l y enj o i n H P f r o m f u r t her vi o l a t i ons of t he A c t as r equi r ed by T. C . A .

§ 8-44-106(c) . T heref ore, the jud g m e n t shall be m o d i f ied to e l i m inate P arag rap h 4 . T h u s , H P i s e n j o i ned f r o m vi o l a t i n g

any of t he r equi r e m ent s of t he A c t and s hal l r epor t t o t he Chancel l o r as pr ovi ded f o r i n Par agr aph 5.

Conclusion

T he j udg m ent of t he C hancell or, as m odif i ed i n regar d t o t he i n j uncti on, i s af f i r m e d , and the case is

remanded for such further proceedings as necessary. Costs of appeal are assessed against the

appellants.

_________________________________

W. FRANK CRAWFORD, 

PRESIDING JUDGE, W.S.

CONCUR:

____________________________________

ALAN E. HIGHERS, JUDGE

____________________________________

HERSCHEL P. FRANKS, JUDGE