A New Orleans judge gave preliminary approval today to a settlement agreement that would end a class-action lawsuit against one of the nation's largest publicly owned health care companies. Under the terms of the deal, Tenet Healthcare Corporation and a subsidiary will pay $25 million to patients and visitors trapped at Memorial Medical Center after Hurricane Katrina.
The settlement would release the company from any future liability for claims by the class members. The $25 million, minus legal fees, will be divided by a court-appointed administrator according to criteria that have not yet been established. The number of class members is unknown, but there were 187 patients and about 800 visitors in the hospital when the emergency took hold. Tenet reported revenues of more than $9 billion in 2010.
In her order, Orleans Parish civil district court Judge Rosemary Ledet called the proposed settlement "fair, reasonable and adequate." The parties reached a tentative agreement in March during jury selection for a trial, but the outlines of the agreement were kept confidential until today.
The bodies of 45 patients were found at Memorial Medical Center after the August 2005 storm. Some doctors subsequently acknowledged that they had hastened the deaths of patients by injecting them with drugs. No criminal charges were ever brought, and the medical staff said they had done their best under extraordinary conditions.
Some relatives of patients who died at Memorial have opted out of the class-action suit and pursued separate claims against Tenet and other defendants. Survivors of some patients settled a separate action against LifeCare, a long-term acute care hospital that leased space at Memorial; one, whose mother died several days after he personally rescued her from Memorial, disclosed in a deposition receiving a payment of more than $200,000.
The lawsuit against the hospital and its parent company, Tenet Healthcare Corporation, alleged that they failed to prepare for and respond sufficiently to a foreseeable disaster. Patients and others who took shelter at Memorial were harmed, the plaintiffs claimed, because emergency plans for evacuation and backup power were inadequate.
The hospital was plunged into darkness after its backup generators failed, and helicopters hired by the corporation did not arrive until two days after the streets around Memorial flooded. Maintenance staff at the hospital had warned prior to Katrina that the hospital's electrical system was vulnerable to flooding, a known hazard in the low-lying city.
In the settlement agreement, Tenet and the hospital, which has since been sold, deny all of the allegations brought against them in the case, as they have previously. Records in the case show that Tenet and hospital officials spent days frantically soliciting assistance for the hospital from FEMA, the Coast Guard, the National Guard, state officials and private ambulance companies. Attorneys for Tenet and Memorial had lined up experts to testify that the city's failed levees, a chaotic government response and the hurricane itself are what created the deadly environment.
A commentary on the case published this week in the Journal of the American Medical Association said that health care entities may increasingly face legal action for deficiencies in emergency preparedness. It called for clearer legal standards for hospitals "so health care entities are not compelled to prepare endlessly for every contingency."
Potential members of the class have until Sept. 27 to lodge complaints or objections to the settlement. Those will be considered at a final courthouse hearing in New Orleans in October.
