Case Background
Three related healthcare entities brought this action in the U.S. District Court for the Northern District of West Virginia. The Plaintiffs were Marietta Area Healthcare, Inc., Marietta Memorial Hospital, and Marietta Healthcare Physicians, Inc. Together, they referred to themselves as Memorial Health.
The case arose from an earlier qui tam lawsuit filed against Memorial Health under the federal False Claims Act. Memorial Health alleged that the Defendants played a role in that lawsuit and the federal investigation it triggered. It claimed that the process damaged its business and reputation.
Cause
In November 2016, the Qui Tam Group filed a qui tam complaint against Memorial Health. According to the Second Amended Complaint, Michael A. King, Dr. Michael D. Roberts, and Todd A. Kruger pursued that action. Memorial Health referred to the three men as the Qui Tam Group.
King and Roberts served as the named relators. Memorial Health alleged that Kruger was a co-client of the same relator counsel. It claimed that Kruger stayed unnamed because of his position with Camden-Clark.
The qui tam complaint accused Memorial Health of violating the False Claims Act, the Stark Law, and the Anti-Kickback Statute. The allegations focused on physician compensation and patient referrals. Memorial Health alleged that the accusations were false and materially misstated.
Memorial Health further alleged that federal investigators reviewed the claims for more than three years. It claimed that the investigators found the allegations unsubstantiated. According to the complaint, the government then declined to intervene. In March 2020, the Qui Tam Group asked the Court to dismiss the case, and the Court granted the request.
Memorial Health alleged that Kruger's role came to light around January 2022. It claimed that Camden-Clark had approved the Qui Tam Group's efforts through certain officers or directors. Memorial Health then filed this action against the Defendants.
Injury
Memorial Health alleged that the qui tam action and investigation harmed its physician relationships and recruitment efforts. It claimed that more than 30 physicians declined its recruiting offers during the investigation.
The Plaintiffs also alleged lost business and damage to existing and prospective business relationships. They claimed that the cost of responding to the process exceeded hundreds of thousands of dollars. Memorial Health further alleged harm to its reputation within the local medical community.
Damages
In the Second Amended Complaint, Memorial Health sought compensatory and consequential damages against the two Camden-Clark entities. It asked for an amount to be determined at trial.
The Plaintiffs also requested punitive damages, attorneys' fees, and Court costs and expenses. In addition, they sought pre-judgment and post-judgment interest at the maximum rates allowed by law. According to Camden-Clark Memorial's post-trial motion, the Plaintiffs presented about $30 million in claimed lost profits at trial.
Key Arguments and Proceedings
Legal Representation
Plaintiff(s): Marietta Area Healthcare, Inc. | Marietta Memorial Hospital | Marietta Healthcare Physicians, Inc.
Counsel for Plaintiff(s): Carl Winfield Shaffer | Daniel B. Schwaber | Max C. Gottlieb | Michael B. Hissam | Skyler A. Matthews [Terminated: 02/20/2025]
Defendant(s): Camden-Clark Memorial Hospital Corporation | Camden-Clark Health Services, Inc. | West Virginia United Health System, Inc., doing business as West Virginia University Health System | West Virginia University Hospitals, Inc. [Terminated: 08/11/2026]
Counsel for Defendant(s): Andrew B. Cooke | Christine S. Vaglienti | Jason A. Proctor | Patrick S. Casey | Philip J. Combs | Ryan P. Orth | Samuel A. Adams | Sandra M. Chapman | Susan W. Romaine | Sherrie A. Armstrong [Terminated: 06/30/2025] | Tessa L. Adkins [Terminated: 02/21/2024]
Movant: Parkersburg Cardiology Associates, Inc.
Counsel for movant(s): Jennifer Brown Hagedorn | Lindsay M. Gainer
Key Arguments or Remarks by Counsel
Memorial Health argued that Camden-Clark knowingly supported a lawsuit built on flimsy and false accusations. It claimed the Qui Tam Group knew news of a federal investigation would spread quickly through the local medical community. According to the complaint, the group furthered the harm by spreading word of the action and investigation.
The Defendants disputed these claims and denied liability for Memorial Health's alleged losses. They challenged the Plaintiffs' account of their involvement, as well as causation and damages.
Claims
The Second Amended Complaint asserted eight counts. The first four were malicious prosecution, tortious interference with business relationships, abuse of process, and fraudulent legal process. The remaining counts were civil conspiracy, negligent supervision, aiding and abetting tortious conduct, and vicarious liability.
Before trial, the Plaintiffs moved to dismiss two counts with prejudice. These were tortious interference in Count II and aiding and abetting in Count VII. The Court granted the request, so neither claim went to the jury. The jury therefore decided the remaining six claims.
Defense
Camden-Clark Memorial Hospital Corporation denied that it approved, authorized, supported, or participated in the qui tam action. It also denied approving the extent of Kruger's involvement. The hospital stated that it would have tried to stop Kruger's involvement had it known the extent sooner.
The hospital further argued that Kruger acted outside the scope of his employment and that his conduct was not foreseeable. It reserved the defense that the qui tam action was not baseless or fraudulent. It also invoked the litigation privilege where applicable.
Its other defenses included failure to plead fraud with particularity, justified interference, and lack of causation. The hospital also raised statutes of limitations, res judicata, failure to mitigate, release, and accord and satisfaction. It asked the Court to dismiss the complaint and award its costs and reasonable attorneys' fees.
Jury Verdict
The case went to trial before District Judge John Preston Bailey from August 3 through August 14, 2026. The jury returned a unanimous verdict. The Court entered its judgment order on August 17, 2026.
The jury found that no Defendant maliciously prosecuted Memorial Health. It also found no unlawful abuse of process by any Defendant. In addition, the jury found that no Defendant knowingly engaged in a fraudulent legal process.
The jury reached a different result on civil conspiracy. It found that Camden-Clark Memorial Hospital Corporation consciously conspired with others to commit a tortious act against the Plaintiffs. The jury made no such finding against Camden-Clark Health Services or West Virginia United Health System.
Next, the jury held Camden-Clark Memorial Hospital Corporation vicariously liable for tortious conduct by Todd A. Kruger and Michael A. King. It found no vicarious liability against the other two Defendants. The jury also found that no Defendant negligently supervised Kruger or another employee or agent.
In addition, the jury found that the Plaintiffs filed their claims within the applicable limitations periods.
On fault, the jury assigned 52% to Todd Kruger and 30% to Camden-Clark Memorial Hospital Corporation. It assigned 10% to Michael King, 5% to Dr. Michael Roberts, and 3% to the Plaintiffs. The other two Defendants and non-party Bryan Vroon received no fault.
The jury awarded $5 million in compensatory damages. The award included $500,000 for expenses and costs and $2.5 million for lost profits. It also included $1 million for reputational harm and $1 million for aggravation, annoyance, and inconvenience.
The jury found that no Defendant acted with malice and that the Plaintiffs were not entitled to punitive damages. The Court then directed the Clerk to enter judgment for the Plaintiffs in the amount of $5 million.
Post-trial Motions
On August 28, 2026, Camden-Clark Memorial Hospital Corporation filed a renewed motion for judgment as a matter of law. In the alternative, it asked the Court for a new trial.
The hospital first argued that res judicata barred the case. It pointed to an earlier lawsuit Memorial Health filed against Kruger, King, and Roberts. That case arose from the same qui tam action and ended in dismissals with prejudice in May 2023. The hospital argued that the jury's findings showed it was in privity with those individuals.
Second, the hospital argued that the Court wrongly admitted the Plaintiffs' damages testimony under Federal Rule of Evidence 702. It claimed that this testimony was the sole basis for the damages award.
The hospital stated that it was also seeking to amend the judgment to apply credits and reductions. It said the renewed motion might become unnecessary if the Court granted that relief. The motion also referred to a separate motion by the Plaintiffs to alter or amend the judgment. The Court set September 11, 2026, as the deadline for responses.
Court Documents:
Documents are available for purchase upon request at [email protected]
