Noteworthy Case

Community Health Systems, Inc.

Robbins LLP served as co-lead counsel in this shareholder derivative litigation on behalf of Community Health Systems, Inc. and obtained what is believed to be the largest shareholder derivative recovery in the Sixth Circuit to date. The firm’s client alleged that the officers and directors of Community Health systematically steered patients into medically unnecessary inpatient admissions when they should have been treated as outpatients. The allegations included claims that the defendants’ wrongful conduct resulted in the company being forced to pay millions of dollars to resolve federal and state investigations into its Medicare compliance practices.

After five years of contentious litigation and discovery, defendants agreed to settle the case, which included a $60 million cash payment to Community Health and the implementation of extensive corporate governance reforms, including board modifications to ensure director independence, improved internal disclosure policies to allow for the confidential reporting of suspected violations of healthcare laws, and the establishment of a Trading Compliance Committee to ensure compliance with Community Health’s insider stock trading policy, among others.

In re Community Health Systems, Inc. Shareholder Derivative Litig., No. 3:11-cv-00489 (M.D. Tenn. Jan. 20, 2017)

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