Jefferson County, Alabama, the biggest U.S. municipality in bankruptcy, does not have to immediately face a lawsuit over its decision to close the emergency room of its money-losing hospital for the poor, a judge ruled.
U.S. Bankruptcy Judge Thomas B. Bennett ruled that the city of Birmingham cannot proceed with a lawsuit seeking to keep the emergency room open after Dec. 1, the day the county plans to end in-patient care at Cooper Green Mercy Hospital.
Bennett had said in August that he was inclined to halt the case. At that Aug. 30 hearing, he told lawyers for the city that, “What I’m looking at is really an action to try to control the operations” of the county, which isn’t allowed under Chapter 9 of the U.S. Bankruptcy Code.
In a hearing today, Bennett confirmed his decision, Jefferson County bankruptcy attorney Lee R. Bogdanoff said in an e-mail.
“He indicated that he would be denying the City of Birmingham’s request for relief,” Bogdanoff said.
The battle over the hospital is the first time the county’s health-care responsibilities have been part of its bankruptcy case. The county has focused on cutting bond debt tied to the county’s sewer system and replacing a wage tax that brought in more than $60 million a year before it was voided by a state court.
Alabama, like most states, requires counties to provide health care for the poor. Jefferson County will continue to meet the state’s requirements, though not through Cooper Green’s emergency room, Patrick Darby, an attorney for the county, said in August.
Birmingham sued the county in state court to try to keep the hospital open. The case is now on hold while the county remains under bankruptcy court protection.
The case is In re Jefferson County, 11-05736, U.S. Bankruptcy Court, Northern District of Alabama (Birmingham).
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