Community Memorial Hospital v. County of Ventura

Here we hold that a county’s policy of accepting paying patients at its public hospital is authorized by the Legislature, does not exceed the county’s police powers and does not constitute a gift of public funds. We also hold that a county is not a person subject to suit under the Unfair Practices Act (Bus. & Prof. Code, § 17000 et seq.) or the unfair competition statute (Bus. & Prof. Code, § 17200 et seq.) for acts relating to the operation of its public hospital. We affirm.

Facts

Community Memorial Hospital (CMH) is a private nonprofit general acute care hospital located in the City of Ventura. Ventura County Medical Center (VCMC) is a public general acute care hospital located in the City of Ventura and owned by the County of Ventura (County).

CMH and individual taxpayers (herein collectively CMH) filed an action against the County to enjoin unlawful and unfair competition. The second amended complaint alleged three causes of action. The first cause of action alleged that the County lacked the authority to compete with private hospitals for nonindigent patients. The second cause of action alleged that the County was violating state and federal law by “deflecting”…