WHEELING – A federal jury has awarded a Marietta, Ohio, hospital $5 million after finding a Parkersburg hospital liable for civil conspiracy and vicarious liability arising from a failed whistleblower lawsuit.
The August 14 verdict followed a two-week trial and ends the latest chapter of litigation tracing back nearly a decade.
Memorial Health System, which operates Marietta Memorial Hospital, said the verdict vindicated its claim that Camden Clark Medical Center officials used the federal whistleblower process not to expose fraud, but to undermine a competing hospital’s ability to recruit physicians and compete in the mid-Ohio Valley.
“Memorial Health System is pleased that after a decade of investigation and appeal a jury has found Camden Clark Medical Center guilty of conspiracy and vicarious liability against Marietta Memorial Hospital,” the plaintiff said in a statement. “The jury concluded that the investigation harmed the hospital and affected its ability to recruit physicians and compete fairly.”
The jury found Camden Clark responsible for tortious conduct by former general counsel Todd A. Kruger and for participation in a civil conspiracy. The jury awarded compensatory damages but declined to award punitive damages.
Other claims against Camden-Clark were rejected. Those included malicious prosecution, abuse of process, fraudulent legal process and negligent supervision. The jury also found no liability against Camden Clark Health Services or West Virginia University Health System.
U.S. District Judge John Preston Bailey had directed a verdict for West Virginia University Hospitals Inc. before deliberations.
“The jury found WVU Medicine Camden Clark Medical Center liable for $5 million in damages to Marietta Memorial Hospital,” the plaintiff statement said. “This will serve as a landmark for health systems in America who respond to false whistleblower lawsuits.
“We are thankful to the jury for their time and verdict, and for supporting this long journey that will enable us to move forward while holding WVU Medicine Camden Clark and administrative officers responsible for their actions. Marietta Memorial Hospital and our entire health system remain committed to delivering excellent, locally accessible healthcare that meets the needs of our region and helps move our communities forward.”
The conflict began with a sealed federal qui tam complaint filed in 2016. The complaint accused Marietta Memorial of paying physicians excessive compensation to induce patient referrals, alleging violations of the False Claims Act, the Stark Law and the federal Anti-Kickback Statute.
Qui tam suits permit private parties, known as relators, to bring claims on the government’s behalf alleging fraud against government programs. Such cases are initially filed under seal, giving the U.S. Department of Justice time to investigate before the defendant is notified.
Marietta Memorial said it spent years responding to a federal investigation and producing more than $500,000 in records before learning who had filed the complaint. The Justice Department ultimately declined to intervene, and the relators moved to dismiss the matter in March 2020.
When the sealed record was unsealed, Marietta learned the relators were former Camden Clark CEO Michael King and Dr. Michael Roberts, a Parkersburg-area surgeon from Parkersburg Surgical Associates.
Marietta Memorial later alleged that the whistleblower case was supported by Camden Clark personnel and internal hospital materials. Marietta Memorial claimed Kruger played a central role in developing the allegations despite not being named as a relator.
The lawsuit followed earlier litigation by Marietta Memorial against King, Roberts and Kruger. A 2023 trial against Kruger ended in a hung jury. The claims involving King and Roberts later settled, according to the litigation history described in the subsequent case.
Marietta Memorial filed its institutional lawsuit in 2023 against Camden Clark, WVU Hospitals and other affiliated businesses. The principal question was whether Kruger’s alleged conduct was undertaken within the scope of his work as Camden Clark’s general counsel and whether hospital leaders knew about, supported or failed to stop it.
The defendants claimed Kruger acted outside his authority and without institutional approval, arguing that King and Roberts acted as private citizens with their own outside counsel and that the defendants did not know the contents of the sealed qui tam complaint before its unsealing in 2020.
The defense also contested Marietta Memorial’s claimed damages, claiming the hospital could not establish that the federal investigation – rather than other factors in the physician-recruitment market – caused its alleged losses.
But Marietta Memorial argued the investigation hindered recruitment during a period of regional health-care consolidation while it was required to respond to extensive federal document requests. The hospital said the inquiry impaired its ability to compete for physicians and imposed substantial legal and operational costs.
The jury’s finding of vicarious liability specifically concerned Kruger’s conduct. It found Camden Clark liable for civil conspiracy as well, while declining to impose liability on the WVU-related corporate defendants.
The case also generated a significant West Virginia Supreme Court of Appeals decision on negligent supervision.
Bailey had stayed the federal case and certified questions to the state’s highest court about whether negligent supervision is recognized under West Virginia law, what a plaintiff must prove and whether intentional or reckless employee conduct can support such a claim.
In May 2025, the West Virginia Supreme Court answered yes to all three questions. It held that a negligent-supervision claim requires proof of the usual negligence elements – duty, breach, causation and damages – as well as proof of a tortious act or omission by the employee whose conduct caused the injury. The court also held that intentional or reckless torts may provide the basis for the claim.
Justice C. Haley Bunn agreed that negligent supervision is a viable claim and agreed on its elements, but she dissented from the court’s answer concerning intentional conduct. She warned that such claims are highly fact-dependent and that intentional torts often fall outside the normal bounds of workplace supervision.
Although the jury ultimately rejected Marietta Memorial’s negligent-supervision claim, the Supreme Court’s ruling established a clearer framework for future negligent-supervision cases in West Virginia.
Marietta Memorial officials characterized the verdict as important not only for Marietta Memorial but also for independent community hospitals facing larger regional competitors.
Editor’s Note: For more information and background about this case, read Jessica Dobrinsky’s coverage here.
