Peter Canfield (left) and Randy Evans Peter Canfield (left) and Randy Evans (Photos: John Disney/ALM)

The high-stakes battle over whether records from an Atlanta hospital’s $100 million acquisition of four private medical practices are subject to open records laws returned to the state Court of Appeals for the second time Wednesday.

Attorneys representing the hospital and its nonprofit parent company—led by Dentons partner Randy Evans—squared off against Jones Day partner Peter Canfield, who is representing fellow partner Kendrick Smith.

Wednesday’s appellate panel, which included Chief Judge Stephen Dillard and Judges John Ellington and Christopher McFadden, heard oral arguments on whether Smith can be compelled to reveal why he sought records that hospital lawyers claim are confidential trade secrets, and whether he is acting on behalf of an anonymous Northside Hospital competitor seeking a business  advantage.

The state Supreme Court unanimously reversed the lower courts in November and remanded the case with instructions to determine whether the acquisitions Smith sought to examine would qualify as actions taken on behalf of the Fulton County Hospital Authority, which is subject to the state open records laws.

The high court also directed the trial court to make a separate determination on whether the sought-after records are trade secrets that are exempt from the open records law.

But before the case was sent back to Fulton County Superior Court Judge Gail Tusan, Northside lawyers persuaded the state appeals court to reopen their earlier cross-appeal to reverse a protective order Tusan issued that barred Northside from questioning Smith about his possible client or his motive. The appellate court said there was no need to consider it at the time.

During oral arguments Wednesday, Evans said Smith and his counsel used the protective order as cover to conduct a “vitriolic, vicious attack” on Northside, intimating the hospital engaged in illegal kickback schemes and other fraudulent conduct. But Evans said that when he sought to question Smith about the allegations, Smith cited the protective order in declining to answer.

McFadden, who dissented from the appeals court’s earlier decision affirming that the sought-after records were not public, challenged Evans’ contention that he had a right to know whether Smith was acting on behalf of a Northside competitor.

But Evans said that once Smith elected to testify, “The defendant is entitled to cross-examine them on the basis of their statements. Mr. Smith took the witness stand. I didn’t call him. They called him … Tell me where in the statute it says cross-examination is allowed—except in a GORA [Georgia Open Records Act] case?”

Canfield countered that questions about  Smith’s reasons for seeking the records, or whether he was doing so at a client’s behest are irrelevant to whether the records should be public.

“As someone who has been trying open records cases for decades, I don’t believe I have ever had a case where requesters [of public documents] have been subjected to discovery, much less the relentless kind of discovery Northside has pursued with Mr. Smith,” he said.

Canfield also took umbrage with allegations that he or Smith made “scurrilous” assertions about why Northside might want to keep the records under wraps.

“We pointed out there are many reasons why they are legitimate public records,” he said, citing a report in The Atlanta Journal-Constitution that cancer patients’ costs increased tenfold when the private medical practices merged with Northside.

“These kind of health care transactions are the most regulated legally,” he said. “There are all sorts of compliances. There is certainly a general public interest in seeing that.”

Canfield also argued that public record custodians generally have no legitimate reason to ask why records are being requested. “The question is whether the public has a right of access to these records, not whether any private person has a right,” he added

“Northside obviously doesn’t like the fact that an attorney brought these open record requests,” Canfield continued. “Attorneys are allowed to bring open records requests … The statute permits that. I suspect here in Georgia, public record requests generally come more from lawyers than anyone else.”

And, he argued, “To permit the kind of questioning Northside seeks to do here would impinge on attorney-client privilege.”

Asked by Dillard whether the records would be exempt from disclosure as trade secrets, Canfield said not in this case. While hospital authorities and nonprofits like Northside may withhold documents as trade secrets under the law, those records are subject to disclosure once the transaction is approved or rejected.

“Here, the approval occurred long before the request was made,” he said.

Canfield also said Evans couldn’t question Smith’s motives in an effort to make a case that the documents are trade secrets.

“You  don’t prove your records are subject to the trade secrets exemption just because somebody asked for them, [or] that the requester represents some competitive interest,” he said. “You show it by looking at the nature of the record … You have to do it by submitting the records for in camera inspection. We have asked Northside to do that in this case. They have refused.”