A Medical Device Daily

Tenet Healthcare (San Diego) reported that a federal jury in San Diego has deadlocked and unable to reach a verdict in the retrial of the case entitled U.S. of America v. Barry Weinbaum, Tenet HealthSystem Hospitals Inc. and Alvarado Hospital Medical Center Inc. As a result, U.S. District Judge M. James Lorenz declared a mistrial. Tenet HealthSystem Hospitals is a Tenet subsidiary that owns Alvarado Hospital Medical Center (San Diego).

“It is unfortunate that this second jury, like the first, was unable to reach a verdict in this case after a seven-month trial and more than 60 days of deliberations over the past four and a half months,“ said Peter Urbanowicz, general counsel for Tenet. “Tenet continues to believe that physician relocation agreements such as those entered into by Alvarado are a common practice used by many hospitals to bring needed healthcare resources to their communities.“

Urbanowicz added: “Like the two juries that have deadlocked in February 2005 and now April 2006, Tenet and the prosecutors disagree over whether anyone at Alvarado Hospital Medical Center intended to break the law when they recruited physicians to the fast-growing eastern part of San Diego County. Because there is no reason to believe any other jury would produce a different result, we earnestly hope that the prosecutors will decide not to re-try this case a third time. It's time for all of us now to devote our full energies to resolving the broader issues.“

In June 2003, a federal grand jury returned a multi-count indictment related to payments made by the hospital under physician relocation agreements that had been entered into over a period of several years in the 1990s.

Tenet said in a statement: “Federal law permits hospitals to assist physicians financially in relocating to a new community if the hospital can demonstrate that there is a need for the physician's services in the hospital's service area.“

Alvarado Hospital Medical Center, a 311-bed acute care hospital in the eastern San Diego County community, provides cardiac services, emergency medicine, neuroscience, orthopedics, oncology, rehabilitation, skull base surgery, surgical services, vascular services and surgical weight reduction.

Tenet, through its subsidiaries, owns and operates acute care hospitals and related health care services.

In other legal action: CytoCore (Chicago; formerly Molecular Diagnostics) and Diamics (Novato, California) said that they have “amicably resolved“ a dispute between them concerning allegations of trade secret misappropriation, unfair competition, patent infringement, copyright infringement in litigation, filed in Federal District Court in San Francisco.

Diamics was founded by Peter Gombrich, former CEO and chairman of MDI, while Gombrich was working at Molecular Diagnostics.

CytoCore, as Molecular Diagnostics, last year filed suit vs. Diamics, seeking injunctive relief and damages in excess of $30 million (Medical Device Daily, Oct. 27, 2005). The suit alleged that Diamics' actions “were accompanied by oppressive and malicious actions to take [Molecular Diagnostics'] proprietary trade secrets and convert them to its own use.“

CytoCore develops cancer screening systems, which can be utilized to assist in the early detection of cervical, endometrial, and other cancers. Its InPath System is being developed to provide medical practitioners with a highly accurate, low-cost, cervical cancer screening and treatment system.