AG Xavier Becerra Doubles Down on Bid to Block County Purchase of St. Louise, O’Connor Hospitals

California Attorney General Xavier Becerra is making one last attempt to block the sale of O’Connor and Saint Louise hospitals to Santa Clara County, asking the U.S. District Court for an “emergency” stay before the sale is final March 1.

Becerra submitted his 29-page filing late Friday, just two days after a similar request for a stay was rejected by the same U.S. Bankruptcy Court judge who had approved the hospitals’ sale in late December. If the District Court—where the appeal of the December ruling is pending—grants the stay before deadline, the deal is dead and the hospitals will likely close, according to the county and Verity Health System, owner of the hospitals.

Verity Health System’s request for Chapter 11 bankruptcy protection last fall led to the sale. The purchase agreement with Santa Clara County expires March 1. Becerra argued in his court request that a stay “would promote the public interest,” and “involves important issues of state law regarding health, safety and welfare.”

Without the stay, “the families and patients served by O’Connor Hospital and Saint Louise Regional Hospital will suffer irreparable injury,” wrote Becerra.

The AG made no mention in his filing of the claim by the county and Verity Health that if he is successful in his legal fight, O’Connor and Saint Louise will close.

In bankruptcy court last week, the attorney general’s staff said simply that they did not believe the hospitals would close, despite the fact that the purchase agreement expires March 1 and there are no other suitors. Becerra’s latest filing repeated arguments that were soundly rejected by bankruptcy Judge Ernest Robles, who said in his Jan. 23 ruling that he was concerned about the impact on county residents if the hospitals were to close.

The attorney general warned that without a stay, the sale would go through and would render his appeal moot. He claimed that only his office could “protect” the wellbeing of county citizens, because without his enforcement of specific conditions, ““the county is free to close the hospitals or eliminate vital healthcare services in those communities.”

This claim was called “just absurd,” last week by Santa County Executive Jeff Smith. Smith was the county offered $234 million to buy the two hospitals to keep—and expand—vital healthcare services, not to shut them down.

In the Feb. 1 documents, Becerra repeated his claim that the county had refused to commit to providing vital healthcare services.

This claim was called “false,” and “misleading” last week by Smith, who said the county had in fact offered the attorney general in mid-January a memorandum of understanding to Becerra’s office, committing the county to providing a wide variety of essential services, 24-hour emergency services and services for MediCal and Medicare patients, which the attorney general had rejected without discussion.

Becerra acknowledged in court papers Feb. 1 that the Jan. 23 ruling by Robles means that the sale order became immediately effective and allows the parties to close the transaction before the federal court could rule on the appeal.

“Without a stay, the attorney general’s appeal regarding an important state law issue affecting public health, safety and welfare will likely be rendered moot.”

Smith said the attorney general’s actions could only be explained by a desire to exert his authority, at the expense of the health and safety of county residents, especially those in Morgan Hill, Gilroy and San Martin. In his Jan. 23 ruling, Robles agreed with that assessment, saying the harm to the attorney general’s office would pale in comparison to the harm to Santa Clara County if the hospitals were to close.

Robles also said that Becerra’s District Court appeal was futile and that he would probably lose. Becerra said the opposite on Feb.1, telling the District Court he is likely to succeed on the merits of his appeal of the Bankruptcy Court’s approval of the sale.

Robles said Becerra didn’t have legal authority to get involved in the sale of a private non-profit hospital to a government entity.

Smith said in a Jan. 31 interview that the stated goals of quality health care for all are share by the county and the AG. “We’re on the same time team, with the same goals,” he said. “It’s as if someone on the same team is trying to shoot me in the back.”

“We’re going to continue to work as if it’s a done deal,” he said. “We’re anticipating a clean sale order on the First of March.”

15 Comments

  1. Go AG! This is why I voted for you. You must protect the most vulnerable people of this whealthy Santa Clara County ruled by bullies, corrupted, snobby politicians and their elite circle of friends and allies.

      • The employees at Valley are the lowest paid! The union runs like a mob and is empowered by the board of supervisors. They can’t retain nurses or doctors. The patients can never get in to see a doctor and have poor follow up care. I have seen first hand the poor level of medical care and it is below the standard of care!Their insurance is not accepted by most doctors and their reviews on their health plan are substandard at best. I’m not sure what is worst, a corrupt hedge fund buying a hospital in distress, flipping it in a clever bankruptcy scam and making millions to cheat employees out of pensions and wages or a corrupt county official to rob tax payers of their hard earned money to add to a dysfunctional medical empire. Wake up people, you are being played.

        • That is exactly what happens. White collar criminals call their frauds a necessary backruptcy. They become richer at the expenses of those who make sacrifices to save for their retirement. RIPOFF ALERT!

    • Do you know what bananas and politicians have in common? Answer: You won’t find one straight politician or banana. I vote for the least evil! Santa Clara County Official are most corrupted than the people in hell! I play the best cards to achieve results!

      • > I vote for the least evil! Santa Clara County Official are most corrupted than the people in hell!

        But the corrupt Santa Clara County officials control the elections. Correct?

        So, how is voting in corrupt elections going to fix anything?

        The results of elections in California are known before the first vote is cast,.

        Do you think California is a “democracy”?

        • Bubble, in other posts I asked you to Recall Jeff Rosen. Get your retired republicans friends together and recall some of these people. Politics is a duty business. I need your help with that. You have the passion; go for it!

  2. The accusations made against Attorney General Becerra is that he is playing politics in his opposition to the purchase of the two hospitals by the County. Maybe he is. But maybe he is not and is rightfully concerned about the administration of the hospitals under Jeff Smith’s autocratic leadership that puts patient care in jeopardy. Look at the millions spent on lawsuits due to wrongful terminations at VMC due to Jeff Smith’s leadership of the County and the war against whistleblowers. Millions of dollars in missing hospital equipment. The 20 year revolving door of nurses who leave for higher pay after 6 months of training costing the County $80,000 per newly trained nurse. The hostile work environment at Valley Medical Center that features a culture of bullying and retaliation. And this is a culture that is supported by the County’s leadership.

    So speculation regarding attorney general’s motives does not address the elephant in the room.

    In my view the price that the County would pay to purchase the hospitals is a good value and I am supportive of nurses, doctors, and all medical staff from these hospitals the County is trying to purchase. Under different record and circumstances, the Attorney General’s objection would seem capricious and political, but given the long record of abuse corruption, incompetence, lack of accountability, and transparency, under the leadership of Jeff Smith and the County Board of Supervisors, who for years have ignored and condoned the chronic problems plaguing the County’s Hospital, the public needs to look at the underlying problems and well documented complaints regarding the County’s mismanagement led by Jeff Smith, including termination of medical staff who are whistleblowers, rather than scapegoat without facts the attorney general.

    It is not fair to both the medical staff or Santa Clara County taxpayers to continue supporting and subsidizing Jeff Smith and the County Supervisors corrupt, wasteful and incompetent “Just Culture” that has punished doctors, nurses and medical staff for speaking up against the corruption and County’s malfeasance in Valley Medical Center. No one should be above the law, especially when they have a long history of violating it.

    • The “elephant in the room” is the AG is on the take from some other wealthy venture that want’s the hospitals and can’t have them if the county gets them.

    • Santa Clara county corruption must come to a stop what does it cost to donate a full functioning hospital to ensure patients our safe from malpractice behavior.

  3. Reason San Jose Hospital shut down is became of malpractice behavior resulting in death and trust in my name in wells Fargo since 2002 and wells Fargo never let me no

  4. I would approve Santa Clara county to upkeep hospitals after correcting ownership of banks

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