Civil Procedure Keyed to Hazard
Liljeberg v. Health Services Acquisition Corp.
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Health Services Acquisition Corporation (Plaintiff) was a Louisiana company in the business of operating hospitals. Plaintiff entered negotiations with business promoter John Liljeberg, Jr. (Defendant) to purchase the rights to operate a hospital to be built in Kenner, Louisiana. While negotiating the deal with Plaintiff, Defendant was under the impression that he would remain an employee of St. Jude after the rights to operate the hospital were sold to Plaintiff. Defendant sold the business to Plaintiff, though Plaintiff correctly noted that there was no written support for Defendant’s claim of an agreement for his continued employment. At the same time as he was negotiating the deal with Plaintiff, Defendant was negotiating with Loyola University to build a hospital on land he would purchase from the university. This deal would be separate from the deal with Plaintiff and Defendant would only be able to build one of the hospitals due to a license from the state making the operation of such a hospital possible. Plaintiff sued Defendant in federal court, seeking a declaratory judgment regarding the alleged agreement to employ Defendant with St. Jude. The case was heard by Judge Robert Collins, who decided the case without a jury. Judge Collins ruled in Defendant’s favor, giving Defendant the opportunity to sell the hospital business to Loyola. The decision was upheld by a divided court of appeals. Ten months later, Plaintiff learned that Judge Collins sat on the Board of Trustees for Loyola University and he was aware that his ruling benefitted the university by allowing it to sell land to Defendant, though he only learned of this connection a few days after Judge Collins handed down his decision. Plaintiff moved to vacate the decision and Judge Collins denied the motion. Plaintiff appealed and the court of appeals remanded to a different judge on the district court to perform fact-finding regarding Health Service’s claims. The district court again denied Health Service’s motion to vacate. The court of appeals reversed. Defendant appealed.
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