The Fourth U.S. Circuit Court of Appeals in Richmond ruled yesterday that a group of doctors and Fairfax City can challenge the sale of Commonwealth Doctors Hospital to Fairfax County.
The decision of the three-judge panel overturns a federal judge's earlier dismissal of a suit filed by the doctors and Fairfax City seeking to ban the hospital's sale.
The doctors, who have staff privileges at the hospital, and Fairfax City charged that the sale of Commonwealth Doctors to Fairfax County violates U.S. antitrust laws because the taxpayers supported Fairfax Hospital Association now operates all four medical facilities in the Fairfax area.
The controversial sale of the hospital to the association technically took place in January, 1976, when $10.4 million in county bonds were sold to finance the purchase and an agreement to lease Commonwealth Doctors was signed.
A month before the sale, U.S. District Court Judge Albert V. Bryand denied an attempt by the doctors and Fairfax City to prevent the bond sale through a court-ordered injunction.
The judge later dismissed the suit without a trial, largely on grounds that there was insufficient interstate commerce involved to be subject to federal antitrust laws.
However, the federal appeals court said. "We do not find that the plantiffs' claims as to the adverse effects upon their direct pecuriary interests are so remote, speculative and conjectural as to permit them to be disposed of by summary judgment.
"There must be an opportunity to present full evidence as to whether there are adverse economic effects upon patients, doctors and the city of Fairfax . . . " the court added.
Opponents of the purchase of Commonwealth Doctors said attthe time of the sale the cost of buying the hospital and increasing salary levels to those at Fairfax Hospital would increase hospital rates. They did go up 7.4 per cent Jan. 1. They also claimed that health care will deteriorate with our competition between the two hospitals.
Supporters of the sale of the 131-bed hospital argued that if Commonwealth Doctors is under community control, rate increase can be limited and operating efficiency increased.
Fairfax City says it could lose $60,000 annually in real estate taxes if the hospital's sale to the Fairfax Hospital Association is upheld.
The purchase of Commonwealth Doctors Hospital was approved by the county Board of Supervisors at 1 a.m. on Oct. 22, 1974, without public notice and with only nine minutes of public discussion. The oboard set up an industrial authority to sell the bonds.
The group of doctors contesting the sale, which includes one of the founders of Commonwealth Doctors Hospital, William E. Gazale, allege in the suit that the industrial development, authority set up to sell the bonds violated the definition of the purpose of such authorities as described by Virginia law.
Officials of the hospital association and an attorney for Fairfax City and the group of doctors said they could not comment on the appeals court decision until they have had an opportunity to interpret it.