ChristianaCare Files Lawsuit to Address Constitutional and Corporate Franchise Issues in Delaware House Bill 350

WILMINGTON, DE – July 29, 2024 -- ChristianaCare has filed a lawsuit seeking declaratory and injunctive relief related to Delaware House Bill 350 (HB 350), asserting the law is unlawful and infringes on ChristianaCare’s fundamental state and federal constitutional rights and is an infringement that threatens ChristianaCare’s simple yet profound mission: to care for the community.

The complaint asserts that HB 350, signed into law on June 13, 2024, violates Delaware’s general corporation law and state constitution by authorizing state control over the strategic and business decision-making authority from the boards of certain private hospitals, including ChristianaCare. The law created a politically appointed, unelected and unaccountable “super-board”— the Diamond State Hospital Cost Review Board — administered by the Delaware Healthcare Commission with authority to override the strategic and budgetary decisions made by the hospitals’ duly-elected directors.

The complaint also argues that HB 350 violates federal constitutional rights through the take-over of private hospital governance and budgets, by forcing private hospitals to disclose confidential information about their future priorities and strategy, and by unfairly targeting only a few private hospitals.

“House Bill 350 raises important questions about the integrity of the corporate franchise in Delaware, and whether it is legal for the government to usurp authority over core business decisions such as setting the budget from a corporation’s duly elected board,” said Nicholas Marsini, chair of ChristianaCare’s Health System Board. “We are hopeful that the Court of Chancery will provide clear guidance on these important legal questions that impact not only ChristianaCare, but potentially any corporation that does business in Delaware.”

ChristianaCare raised constitutional concerns during the legislative process that were not addressed and has filed this lawsuit as a necessary next step in protecting the community’s continued access to excellent hospital care, close to home.

“This lawsuit is necessary to preserve and ensure independence in clinical decision-making and patient care, critically necessary hospital services and resources, non-profit board autonomy, and a strong health care delivery system in this community for generations to come,” said Lolita Lopez, chair of ChristianaCare’s Health Services Board.

ChristianaCare has served this non-profit mission over 136 years, providing acute hospital care and medical services to patients throughout the community and region, making high-quality care more accessible, equitable, and affordable, with a commitment to improving the health of the population and the health outcomes for every person it serves.

ChristianaCare shares the legislature's concerns about the cost of health care and recognizes the complexity of this national issue. We look forward to collaborating with various stakeholders in our health eco-system in order to improve health outcomes for Delawareans, and make high-quality care more accessible, equitable and affordable for all in our community.