BLOUNT COUNTY, Tenn. — Blount Memorial Hospital, Inc. filed a lawsuit on Wednesday against Blount County and Tennessee over a battle between commissioners and the hospital's board that has gone on for almost a year.
In June 2022, Blount County leaders wrote a letter to the hospital's board of directors explaining their concerns over how the board was choosing its CEO. Blount County Mayor Ed Mitchell was one of the leaders who signed the letter. It said that the mayors felt the process to find a new CEO did not strictly follow state law and hospital policies.
Then in November 2022, Mitchell sent another letter to the hospital saying he had "grave concerns" about how BMH is operated. In it, he said that BMH was appointed to operate the hospital on behalf of the county, but it never became the owner of any hospital assets.
Later in December 2022, BMH filed a lawsuit that asked for a ruling to allow BMH to proceed with plans to sell a facility in the Springbrook area for around $22.2 million. It was opened in 1996 and provided outpatient care, as well as other healthcare services, according to a press release from the hospital. According to the lawsuit, the sale was meant to "relieve its current financial strain."
In March 2023, the Blount County Commission approved talks between Mitchell and the University of Tennessee Medical Center about the future of the hospital. Talks about a merger between Blount Memorial Physicians Group and Covenant Health then started in April. Blount Memorial Physicians Group is a for-profit corporation, created in 2002, according to their state business record.
In May, Governor Bill Lee signed a bill into law that allows the Blount County Commission to change the management of the hospital. The county commission requested the law after controversy surrounding the sale of the Springbrook facility and the hospital's board members.
It amends a 1945 law, known as the Private Acts, which gave Blount County the authority to create a hospital. The act gave the Blount County Commission the authority to turn over operation and maintenance to a non-profit corporation.
Blount County created Blount Memorial Hospital, Inc., a non-profit corporation, for that purpose.
The latest amendment to the Private Acts of 1945 says, "Any non-profit corporation selected to serve as the manager of the hospital should not be deemed the owner of any assets of the hospital."
BMH's latest lawsuit against the county and state asks the court to say the law signed in May violates the Fifth Amendment and the Fourteenth Amendment to the U.S. Constitution.
It argues Blount Memorial's charter gives it the power to "purchase and hold or receive by gift, bequest or device, personal property and real estate, and also to accept any real estate or personal property in payment or in part payment of any debt due to the corporation and sell the same." It then argues that because of the charter and the Tennessee Nonprofit Corporation Act, Blount Memorial possesses the express power to own real and personal property.
It also said efforts by Blount Memorial to speak out against the law signed by Gov. Lee "was virtually ignored at every turn." After it passed, it said the county started looking for proposals to effectively replace Blount Memorial Inc. with a new manager, ending the 75-year relationship.