MDI Holdings Wins Landmark Case in California Appeals Court

Wed Nov 4, 2009 2:56pm EST

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MDI Has Right to Sue over Contract Dispute; Court Upholds MDI`s Right to Due
Process
PONTE VEDRA, Fla.--(Business Wire)--
The United States Court of Appeals for the Ninth Circuit has held that Medical
Development International (MDI) had the right to bring its lawsuit against the
California Department of Corrections and Rehabilitation (CDCR) and CDCR`s
court-appointed federal Receiver to recover payments for provider payments made
to California Providers on behalf of CDCR and the receiver. MDI sued the CDCR
and the Receiver in connection with the lack of reimbursement payments made by
MDI and due under a contract performed by MDI in 2006-2007. The disputes over
reimbursements made to California Providers caused MDI to file lawsuits both in
federal courts and California state court to recover MDI funds expended on
behalf of CDCR and Receiver. MDI was strong in its conviction that it had a
right to due process and spent more than a year fighting for its right to sue. 

On October 30, 2009, the United States Court of Appeals for the Ninth Circuit
held that Medical Development International had the right to bring its lawsuit
against the California Department of Corrections and Rehabilitation and CDCR`s
court-appointed federal Receiver to recover payments for provider payments made
to California Providers on behalf of CDCR and the receiver. MDI sued the CDCR
and the Receiver in connection with the lack of reimbursement payments made by
MDI and due under a contract performed by MDI in 2006-2007. The disputes over
reimbursement caused MDI to file lawsuits both in federal courts and California
state court to recover MDI funds expended on behalf of CDCR and Receiver. 

At the trial court level, two federal district courts in northern California
dismissed MDI`s lawsuits ruling that MDI failed to gain approval from the
Receiver`s appointing court before bringing suit, and that judicial immunity
also barred actions against the federal Receiver. MDI took a consolidated appeal
of these decisions to the United States Court of Appeals for the Ninth Circuit. 

In a unanimous published decision, the Ninth Circuit held that neither the
Receiver nor CDCR were immune from MDI`s suit, and remanded the case back to the
United States District Court for the Eastern District of California for trial.
The Ninth Circuit`s decision provides important protection to contractors with
public entities under receivership, which is an increasingly common remedy
employed by courts to address systemic issues. 

MDI president Richard Willich recognizes the importance of the decision, "The
Ninth circuit`s opinion affirms the rights of all individuals and contractors
who have contracts with the CDCR. It is clear that the CDCR and Receiver are
accountable under their contracts with individuals and service providers. Rest
assured that MDI shall aggressively prosecute its case."

For MDI Holdings
Maria Coppola, 904-398-7279 Office or 904-312-3321 Cell
maria@bbased.com



Copyright Business Wire 2009

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