Court Updated on Maui Hospitals Transition

Maui Memorial Medical Center. File image.

The State Attorney General Doug Chin and the United Public Workers union today announced that the parties are discussing settlement of the union’s appeal regarding the transfer of Maui Memorial Medical Center, Kula Hospital and the Lānaʻi Community Hospital to a new Kaiser Permanente entity.

In a second status report filed with the US Court of Appeals for the 9th Circuit, the Attorney General reports that the parties jointly state that they have engaged in productive conversations regarding a possible resolution.

Attorney General Chin said, “The 9th Circuit issued an order on June 17, 2016, allowing transition activities between the State and Kaiser to resume at the Maui hospitals. The transition to Kaiser will ultimately improve patient care in the Maui region.”

Following the June 17th order, some close to the situation indicated that negotiations continue and the order still prevented the parties from actually closing the transaction.  While the initial injunction was dissolved, it was replaced by a “narrow injunction,” under the June 17th order.

The parties asked the Court to require a further joint status report on July 15, 2016.

Text from the second joint status report filed today is included below:

PARTIES’ SECOND JOINT STATUS REPORT

As ordered by this Court on June 17, 2016, United Public Workers, Plaintiff-Appellant (Union) and Governor David Y. Ige, Defendant-Appellee, jointly submit this second joint status report.

The parties continue to engage in productive discussions regarding settlement. Additional time is necessary for negotiations because implementation of Act 103 has many moving parts. Though the appeal before this Court only involves the parties, a settlement of this case would impact entities outside the lawsuit. This includes, for example, Maui Health System, a Kaiser Foundation Hospitals LLC that will manage and operate the affected hospitals if the transaction is allowed to close; and the Hawaiʻi Government Employees Association (HGEA), the other public-sector union with employee-members affected by Act 103.

The parties therefore request, consistent with their ongoing discussions, that this Court order the filing of a third joint status report on or before Friday, July 15, 2016 to report on whether a settlement was reached.

The parties believe that they can arrive at a settlement through their current efforts. It is possible, however, that further settlement negotiations may benefit from the Ninth Circuit mediator’s assistance. At present the parties seek only to bring this possibility to the Court’s attention and reduce delay in the future should formal mediation prove necessary. The parties do not presently request that the appeal be referred to the mediation program.

In addition to the status report, the parties jointly request that: (1) the narrowed injunction issued June 17, 2016 remain as is; (2) the current expiration date for that narrowed injunction (Sept. 30, 2016, unless sooner lifted by the Court) remain unchanged for now; and (3) that the Court continue to defer further review and consideration of the Governor’s emergency motion filed on May 20, 2016, pending the filing of the parties’ next Joint Status Report. These requests are consistent with this Court’s most recent order on June 17, 2016.

DATED: Honolulu, Hawaiʻi; and San Francisco, California, June 30, 2016.

Respectfully submitted,

/s/ Douglas S. Chin
DOUGLAS S. CHIN 6465
Attorney General of Hawaiʻi
DEIRDRE MARIE-IHA 7923
RICHARD H. THOMASON 5140
Deputy Attorneys General

Attorneys for Defendant-Appellee

/s/ Scott Kronland
SCOTT KRONLAND
STACEY M. LEYTON
CONNIE K. CHAN
ALTSHULER BERZON LLP
177 Post St., Suite 300
San Francisco, California, 94108
Tel. (415) 421-7151

HERBERT TAKAHASHI
REBECCA L. COVERT
TAKAHASHI & COVERT
345 Queen St., Rm. 506
Honolulu, Hawaii, 96813
Tel. (808) 526-3003

Attorneys for Plaintiff-Appellant