Jury Finds Big Labor Union Liable for False and Defamatory Campaign

Unite Here Ordered to Pay $17.3 Million to Sutter Health Over Inflammatory Mass Mailing

SACRAMENTO, Calif. July 21, 2006 – One of the nation's largest labor unions has been ordered to pay nearly $17.3 million in damages for defaming the not-for-profit Sutter Health network of doctors and hospitals. A jury in Placer County, Calif. found New York-based Unite Here acted with fraud, malice, or oppression when it mailed defamatory postcards to consumers in communities served by Sutter Health hospitals. The jury awarded Sutter Health and its plaintiff hospitals $17,292,850 in damages for harm to Sutter Health's business and reputation.

"We are pleased that leaders of Unite Here have been held legally accountable for recklessly frightening patients and the public through outrageous and false allegations," said Michael Roosevelt, chair of the Sutter Health Board of Directors. "We truly hope this decision encourages labor unions like Unite Here to think twice before using shameful scare tactics that ultimately hurt patients in an attempt to advance a political agenda."

The $17.3 million in damages awarded by the jury will be invested by Sutter Health and its hospitals directly into advancing patient care. "Providing top quality care is our number-one priority," said Gordon Hunt, M.D., Sutter Health's Chief Medical Officer. "The jury's award to Sutter Health will be reinvested right back into our communities in the form of new programs and health services."

Sutter Health and many of its affiliated hospitals filed suit against Unite Here last year following the mass mailing of a postcard by the union to women of childbearing age in Northern California. The direct mail piece made false and unsubstantiated allegations about Sutter Health hospitals, suggesting that they used linens that were inadequately cleaned by an outside commercial laundry service used by scores of Northern California hospitals. At the time the postcard was mailed, Unite Here, which represents casino, hotel, restaurant and uniform/laundry workers, was in a labor dispute with the laundry service.

Dr. Hunt said the alarmist postcard incited phone calls to Sutter Health hospitals from anxious patients. "We have strict quality assurance processes in place to ensure our linens meet our high quality and safety standards," said Dr. Hunt. "To suggest something to the contrary, in an attempt to scare patients, was dishonorable and unconscionable. The jury's verdict confirms this."

In the complaint, Unite Here was charged with making false accusations to exploit the vulnerability of its intended audience and at the same time harming the reputation of Sutter Health and its affiliated hospitals. In addition to Sutter Health, plaintiffs included the Sacramento Sierra Region of Sutter Health, Alta Bates Summit Medical Center in Berkeley and Oakland, California Pacific Medical Center and St. Luke's Hospital in San Francisco, Eden Medical Center in Castro Valley, Marin General Hospital in Greenbrae, Mills-Peninsula Health Services in Burlingame, Sutter Delta Medical Center in Antioch, Sutter Solano Medical Center in Vallejo, Memorial Hospital Los Banos in Los Banos, Sutter Amador Hospital in Jackson, Sutter Lakeside Hospital in Lakeport, and Memorial Medical Center in Modesto.

The jury rendered its decision after three days of deliberations, following a three-week trial, during which scores of witnesses testified.

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Media Contact
Karen Garner
Communications Director
(916) 286-8297
garnerk@sutterhealth.org

Kami Lloyd
(916) 286-6680
lloydk@sutterhealth.org