City of Cookeville v. William M. Humphrey

This is a declaratory judgment action wherein a private act hospital authority, established pursuant to Tennessee Code Annotated sections 7-57-601 to 604, seeks a declaration that it has the authority to enter into an exclusive contract for professional radiology services, thus limiting the use of imaging equipment and hospital support staff situated in the hospital to such exclusive providers of radiology services. Defendants are four competent radiologists, presently on the medical staff of the hospital, who have also established Premier Diagnostic Imaging Center, LLC to provide outpatient radiology services independent of the hospital. The exclusive contract sought by the hospital would effectively "close" use of the hospital imaging facilities and support staff to all radiologists except the providers named in the exclusive contract. The trial court declared that the hospital was authorized to enter into such an exclusive provider contract, and we affirm the judgment of the trial court.