A hospital chain has agreed to pay up to $32.5 million to settle a class-action lawsuit filed in 1997 after stacks of medical records sat unattended for days in the parking lot of a shuttered psychiatric center in Algiers.

An attorney for the plaintiffs acknowledged, however, that the chain, Tenet Healthcare, likely will end up owing far less than that ceiling of damages due to the age of the case and the difficulty of finding and notifying the 5,649 class members.

The proposed settlement, reached earlier this year on the eve of a jury trial, calls for the plaintiffs, patients of the former JoEllen Smith Psychiatric Center, to receive $1,000 each, with the possibility of additional compensation if they can show they knew of the privacy breach at the time and suffered “actual injuries or damages.”

If approved, the deal would require Tenet to pay administrative costs and nearly $13 million in attorneys’ fees as part of the potential $32.5 million settlement, said Ray Orrill Jr., a New Orleans attorney whose firm has represented the plaintiff class for 17 years. Any money remaining in the settlement fund after the plaintiffs and their attorneys are paid will be returned to the hospital chain.

“My great concern is there’s not going to be that many claimants out there,” Orrill said Monday.

“It’s the oldest class action that anybody can remember.”

Tenet’s attorneys in the case did not respond to a request for comment.

The hospital company did not admit any wrongdoing under the proposed settlement but expressed a “desire on their part to avoid the expense, inconvenience and distraction of further litigating this class action,” according to court documents.

The case has been slowed by the slog of appeals pursued at virtually every turn of the litigation.

Even after the parties agreed to the terms of a settlement in June, important questions remain unclear, Orrill said, such as whether the damages should be deemed inheritable. Orrill said there’s a gray area when it comes to plaintiffs who have died since the filing of the lawsuit in March 1997.

Orleans Parish Civil District Court Judge Ethel Simms Julien, who has presided over the case since its inception, has scheduled a so-called “fairness hearing” for 9 a.m. Monday to decide whether to approve the settlement and close the case.

The plaintiffs’ core argument has been that thousands of psychiatric patients, though perhaps unwittingly, suffered an invasion of their right to privacy in April 1996 when boxes of medical records turned up discarded in the parking lot of the JoEllen Smith Psychiatric Center on Patterson Drive. The center had recently closed, and an administrator gave instructions that it be emptied out.

Among the filing cabinets, desks and lamps moved outside into the parking lot were thousands of hospital records that included diagnoses, treatment and medication information, financial details and a set of admission logs, Orrill said. The documents also included identifying information on callers to the psychiatric center’s crisis line.

“There were enough documents out there to fill the bed of a pickup truck with cases of records stacked two (cases) high,” Orrill said. “It caused kind of a furor among former patients and their families.”

The discarded furniture attracted crowds of people who milled about the parking lot looking for items to carry away.

A former employee of the center, Victor Lloyd, went to the site and became concerned after seeing a number of syringes lying on the ground. “He saw records of patients he had treated,” Orrill said. “He recognized the patients.”

Lloyd and two other employees were asked to leave the site, Orrill said, but they made off with two armfuls of records that ultimately were used to identify the plaintiff class. Among the documents Lloyd took was a two-volume register listing every psychiatric patient admitted to the center between 1981 and 1992, according to court documents.

Former Orleans Parish District Attorney Harry Connick’s office determined the hospital had not broken any criminal laws in the privacy breach, and no charges were filed.

For its part, Tenet contended the vast majority of the plaintiffs had no idea their records ever were compromised and didn’t suffer any measurable harm, meaning they had no cause of action to recover damages.

“This became a huge issue for us,” Orrill said, arguing the plaintiffs’ damages should be treated as a so-called dignitary tort. “Do people who don’t know that their right to privacy has been invaded nevertheless suffer harm?”

Orrill pointed to the circumstances of one of the class representatives, a man referred to in the legal proceedings as John Doe. Orrill said the man learned about the privacy breach and “actually tried to commit suicide because he was so worried that his wife and family might find out what was in his records.”

According to Orrill, a crucial turning point came when Julien found Tenet guilty of spoliation — destroying evidence — after it emerged that the hospital had incinerated or otherwise discarded a large portion of the records left unattended in the parking lot. “She ordered that, at trial, we could tell the jury that the number of class members would have been larger but for the actions of the hospital in destroying these records,” Orrill said.

Tenet had most recently sought to “decertify” the class of plaintiffs, arguing that recent U.S. Supreme Court and Louisiana Supreme Court rulings had “fundamentally changed the law of class certification.”

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