Brooklyn Supreme Court judge issues surprise ruling in LICH/SUNY-Downstate case
Late Thursday afternoon, State of New York University (SUNY) Downstate Medical Center was dealt a surprise blow by Brooklyn Supreme Court Justice Carolyn Demarest.
In an unrelated case involving Long Island Hospital (LICH) in Cobble Hill — owned and operated by SUNY — Demarest has given SUNY a little more than 30 days to issue an report to the court regarding property transactions between LICH and SUNY.
In May 2011, LICH requested and was granted the opportunity to transfer some of its assets to SUNY. The order was granted under the express declaration that “SUNY-Downstate will continue [LICH’s] operation as a hospital.” Earlier this year, SUNY made clear its intent and desire to close LICH and cease its existence as a functioning hospital, contradicting its 2011 declaration to keep the hospital open.
It is unclear why, in 2011, LICH required the transfer of some of its property to SUNY, given both the recent stated goal of SUNY to permanently shut down LICH and its previous promise not to do so. Demarest revisited the order granting the property transfer to ensure that the parameters of the 2011 order were being adhered to.
A separate case, New York Nurses Association v State University, presently presided over by Brooklyn Supreme Court Justice Johnny Lee Baynes, began in 2013 as an effort to prevent SUNY from ending the hospital operations of LICH.
In that case, Baynes issued a temporary restraining order in April, preventing SUNY from taking measures that would lead to the hospital’s closing. Supporters of LICH have asserted that SUNY has refused to adhere to this order and has, in effect, taken steps to close the hospital — such as reducing physician and nursing staff and diverting ambulances from LICH’s emergency room — in an alleged de facto attempt to eliminate the need for a functioning emergency room function at LICH.
Given “press coverage reciting continuing efforts to close LICH” in disregard of Baynes’ temporariy restraining order and “[i]n light of the public acknowledgment by SUNY-Downstate of its intent to close LICH,” Demarest has now requested that SUNY provide a full accounting of all of the properties transferred from LICH to SUNY as of May 29, 2011.
Demarest has ordered that SUNY must provide the court with a full accounting of the property transferred, the disposition of such property, any income derived from the property, and how that income was used.
Given the request to account for funds and the use of transferred property, Demarest’s recent ruling may be viewed as a measure to determine whether, in 2011, SUNY misrepresented to the court its intention to keep LICH open despite the property transfers.
Demarest’s current order asks for an explanation of the approximately $15 million withdrawn from the LICH Liability Fund — a fund that is used to pay professional liability claims — that was to be applied “exclusively to the costs of continued operation of [LICH],” and an accounting of the costs that SUNY incurred by operating LICH since May 29, 2011, the date the property transfer request was granted. This is another indication that Demarest is attempting to ascertain whether or not SUNY Downstate lied to the court in 2011.
Baynes’ April temporary restraining order demanded that SUNY maintain the staffing levels at LICH. Demarest followed up by demanding that SUNY provide a complete list of all personnel employed by LICH on May 29, 2011, and at the present time — a request that appears to discern whether or not SUNY was taking steps to close LICH in 2011 by reducing staff levels while at the same time telling the court that it would keep the hospital open.
SUNY’s report to Demarest is due August 5, 2013.