Schwab accused of bias in West Penn-UPMC suit

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The federal judge assigned to hear a case in which West Penn Allegheny Health System accuses UPMC of stifling competition has been removed from the case amid allegations that he was biased.

The ruling, filed in the 3rd U.S. Circuit Court of Appeals on Wednesday, comes about a month after lawyers for West Penn Allegheny accused U.S. District Judge Arthur J. Schwab of exhibiting "a worrisome practice of misstating and mischaracterizing" their positions.

UPMC opposed its competitor's request to have the judge removed, and Judge Schwab -- who could not be reached for comment Wednesday night -- previously wrote in court documents that he thought his rulings in the high-profile case were "well-researched, fair, and consistent with applicable law."

Several years ago, he was removed from a criminal case involving former Allegheny County Coroner Cyril H. Wecht after defense attorneys twice accused him of bias.

The case between UPMC and West Penn Allegheny, the region's second-largest hospital system, stems back to 2009, when West Penn accused UPMC and Highmark of working together to thwart competition.

Last year, Highmark invested in West Penn Allegheny, which has since dropped it from the lawsuit.

While reworking its lawsuit to focus entirely on UPMC, lawyers for West Penn Allegheny grew irritated with Judge Schwab's characterizations of some of their requests.

West Penn Allegheny's lawyers disagreed with the judge's wording of their opposition to the release of their Affiliation Agreement with Highmark, which the judge determined must be filed publicly with very limited redactions.

Referencing that instance and others, lawyers for West Penn Allegheny said the system "respectfully urges the Court to correct its misstatements to avoid any possible appearance of bias."

Judge Schwab wrote that he felt threatened by West Penn Allegheny and worried that any judgment in favor of UPMC would be perceived as bias. He placed the case on hold and gave West Penn Allegheny the opportunity to appeal to the 3rd U.S. Circuit Court of Appeals.

Given the opportunity to file a briefing in the appeals court stating why he should stay on the case, Judge Schwab wrote, "While the Court is appreciative of the United States Court of Appeals for the Third Circuit's invitation to address the petition, this Court will decline to further address the allegations/arguments of plaintiff." He referred back to previous court documents outlining his feelings about West Penn Allegheny's claims.

Lawyers representing UPMC argued in their filings that Judge Schwab should remain on the case. They wrote that West Penn's request, because its objections focused primarily on one ruling about discovery, was "unprecedented and unwarranted."

Third Circuit Judges Marjorie Rendell, Joseph Greenaway Jr. and Thomas Vanaskie ruled Wednesday that the discovery order should be vacated and a new judge will take over the case at an unspecified time.

A spokesman for West Penn Allegheny declined to comment, and a spokesman for UPMC did not return phone calls late Wednesday night.

Liz Navratil: , 412-263-1438 or on Twitter @LizNavratil.


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