A Tennessee judge ruled Friday that Community Health System's lawsuit against former Lutheran Health Network CEO Brian Bauer can go forward.

The judge also ruled that the Williamson County court has jurisdiction to decide the case.

“This is an important milestone decision in the litigation against Brian Bauer because it means the case will move forward and there can be a full airing of the facts and the evidence that Bauer and others engaged in a scheme to harm Lutheran Health Network,” CHS spokeswoman Tomi Galin said in a statement.

Although two counts were dismissed on what Galin described as “technical grounds,” most of the lawsuit will move forward, including allegations that Bauer is in breach of contract with CHS for sharing confidential information with competitors.

Bauer is counting the decision as a partial win, one that he hopes will lead to a full victory.

“I'm thankful for Fort Wayne and our community that two portions of this baseless suit were dismissed today and confident of a similar outcome for the remainder of the lawsuit now that we are able to begin telling our side of the story,” he said in an email.

“I am also pleased that the court has rejected CHS' CEO's attempt to avoid answering questions under oath,” Bauer said. “As always, our focus should be on our patients, providers and our community, and it is my wish soon we can all move on from this. I remain very excited and confident about the future of healthcare in Fort Wayne.”

CHS had sought to shield CEO Wayne Smith from giving a deposition. The circuit court rejected that request on Friday.

In his filing, Bauer asked the court to dismiss the case against him. He argued the lawsuit offers no specific instances of when Bauer defamed CHS, provides no account of what he supposedly said, and includes no evidence that it lost any money because of interference with business relationships.

Bauer also argued the Tennessee court wasn't the proper place for a case against him because the incidents are alleged to have happened in Indiana. Furthermore, traveling to Tennessee for the case would place an undue burden on Bauer, who has three young children, and the witnesses he'd need to call.

The hearing on Bauer's motion was initially scheduled for Thursday but was moved back one day. It began about 9 a.m. and wrapped up about noon.

CHS, parent company of Lutheran's network, is based in Franklin, Tennessee. Its lawsuit was filed against Bauer and up to five John Does using the alias “Sajin Young” on Facebook.

Among the allegations against Bauer, CHS says he shared confidential information with IU Health in violation of CHS' stock option agreement. The lawsuit contends that Bauer is subject to the agreement's confidentiality and nondisparagement clauses because from 2012 to 2014, Bauer cashed in 3,000 stock options for a profit of more than $74,000.

The lawsuit says Bauer and his allies have spread untrue stories about quality problems at Lutheran network hospitals, attempted to intimidate CHS officials, and threatened to interfere with the network's daily operations.

CHS filed its original lawsuit against Bauer on Nov. 2 and followed with an amended complaint Dec. 27. Bauer's Dec. 6 motion to dismiss doesn't address information included in CHS's later filing. 

CHS's second filing accuses Bauer of engaging in “a long-planned scheme” to drive down the network's value to force a sale. The lawsuit says Bauer traveled to Wisconsin and pitched Lutheran's network to officials at privately held retailer Menard Inc.

After that effort failed, the filing said, Bauer was the mastermind behind the efforts of 10 local physicians to persuade parent company CHS to sell Lutheran Health Network to a New York private equity firm approved by the doctors. CHS rejected the $2.4 billion buyout offer in May.

Bauer, who has denied CHS's amended allegations to The Journal Gazette, was fired from his positions as CEO of the network and of Lutheran Hospital on June 12.

His motion to dismiss the lawsuit against him accused CHS of trying to sabotage his relationship with his current employer, IU Health, and improperly stifle competition from IU Health in the local marketplace.

Bauer's motion said CHS hasn't backed up its allegations with proof of any words he supposedly said or specific business relationship he supposedly damaged.

The filing said CHS doesn't “identify a single employee, customer or patient (out of hundreds of thousands) who supposedly severed ties with plaintiff as a result of Mr. Bauer's alleged conduct.”

The judge dismissed a count related to trade and commercial disparagement, Galin said. The court “took under advisement whether to dismiss the count related to breach of fiduciary duty on jurisdictional grounds,” she added. CHS was given a week to file an additional brief on that point.

Last week, CHS requested a temporary injunction to keep Bauer from working for his new employer, Indiana University Health, arguing that Bauer would continue to disclose confidential information and try to hire away Lutheran-affiliated physicians and staff.

The court has not yet ruled on that request.

IU Health has announced plans to open a primary care office and a Riley Children's Health clinic in Fort Wayne.

sslater@jg.net