For nearly a decade, a looming cloud has hung over Marietta Memorial Hospital, an independent rural hospital in Marietta, Ohio.
In November of 2016, a federal qui tam whistleblower complaint accused Marietta of paying physicians above fair market value to induce referrals. If found to be true, a violation of the False Claims Act, the Stark Law, and the Anti-Kickback Statute. The Department of Justice investigated Marietta for nearly three years before dismissing the complaint.
When the complaint record was unsealed in 2020, it revealed that Michael King, then CEO of Camden-Clark Medical Center, Marietta’s competitor across the river in Parkersburg, and Dr. Michael Roberts, a Parkersburg-area surgeon, had filed it.
But since the investigation first began in 2017, Marietta’s position has been that this was never a good-faith fraud complaint. Rather, it was a competitor’s legal department, working from the inside, using an employer’s resources and federal law to damage a smaller hospital system’s ability to recruit doctors and fairly compete in the mid-Ohio Valley market.
At the center was Todd Kruger, Camden-Clark’s General Counsel at the time. Marietta claims Kruger didn’t just know about the qui tam complaint; he helped build it—using Camden-Clark’s resources and the knowledge of hospital leadership above him. WVU Medicine fired Kruger once they say they learned the extent of his involvement.
This legal battle has already been in court twice. In March 2023, Marietta sued Kruger as an individual, but the jury was hung. Kruger’s personal defense attorney used his closing argument to point the finger at the employer: “If they think Camden was behind this… why didn’t they sue Camden or WVU Medicine?”
A month after the mistrial, Marietta filed a new lawsuit against Camden-Clark Memorial Hospital Corporation, Camden Clark Health Services, West Virginia University Hospitals, and West Virginia United Health System, doing business as WVU Health System.
However, one of the claims—negligent supervision—was enough that Judge Bailey wouldn’t decide it alone. In September 2023, he paused the entire case and certified three questions to the West Virginia Supreme Court of Appeals: (1) whether negligent supervision is a viable claim under West Virginia law, (2) what its elements are, and (3) whether an employee’s intentional or reckless conduct can support it.
Closing arguments of the second trial concluded August 13, 2026, before Judge Bailey in the U.S. District Court for the Northern District of West Virginia.
Marietta asked the jury to find the hospitals’ systems—Camden Clark and WVU Health—liable on six claims:
Malicious prosecution: that the qui tam complaint was procured without probable cause, maliciously
Abuse of process: that a legitimate legal tool was misused for improper purposes (in this case, to damage a competitor rather than expose fraud)
Fraudulent legal process: knowingly engaging in fraudulent court/official proceedings or fraudulent legal processes
Civil conspiracy: that Kruger did not act alone, but as part of an agreement with others inside the hospital system
Vicarious liability: that the hospital systems are legally responsible for what their own employees did within the scope of their work
Negligent supervision: the hospital’s failure to rein in Kruger once they knew
On August 14, the jury issued a $5 million guilty verdict against Camden-Clark Medical Center, owned and operated by WVU Health System, on the charges of civil conspiracy and vicarious liability.
The complaint against Marietta
A qui tam complaint allows a private citizen to sue on the government’s behalf, alleging fraud against federal programs, and it does so entirely in secret. When the complaint is filed, the case is sealed, not just from the public, but also from the defendant. The government gets months, and sometimes years, to investigate the allegations quietly, deciding whether to take the case over before the accused is informed an investigation exists. This is designed to protect investigations, but for the party on the other end, it can feel like living under an X-ray no one will provide you the results of.
This is the position Marietta Memorial Hospital was in for three years.
A complaint alleging that the hospital paid physicians “extraordinary” and “excessive compensation” to induce referrals, in violation of the False Claims Act, the Stark Law, and the Anti-Kickback Statute, sat under seal in federal court in Wheeling from November 2016 until March 2020. Marietta produced documents to federal investigators throughout, spending more than $500,000, without knowing who had filed the complaint, what it alleged, or why.
Scott Cantley, President and CEO of Memorial Health System, later assigned a number to what those years cost the hospital. He estimated the total impact—recruiting losses, legal costs, and the slow bleed as they tried to operate amid a federal fraud investigation hanging over them—at more than $100 million.
The recruiting data Marietta put in front of a jury showed that hospital physician headcount grew slowly over the years of the investigation. 185 doctors in 2015, 196 in 2016, the year the complaint was filed, and 214 by 2020. Marietta also explained their recruiting team watched “days to fill” (the measure of how long an open position sat vacant) climb.
However, in court, WVU Health/Camden Clark contested these claims. They presented testimony from eleven doctors who said they rejected an offer from Marietta but didn’t know about the investigation. The defense argued that they could not attribute the investigation to the loss.
Yet, Marietta’s physician recruiter said there were more than 500 doctors on the recruiting list.
This, of course, became a key point of contention in the fight over Marietta’s damages at trial.
The market Marietta was recruiting into, meanwhile, wasn’t standing still. In 2018, WVU acquired Wetzel County Hospital and Cornerstone Healthcare. In 2019, it began operating Wheeling Hospital, along with the associated physician practices. By the time the investigation concluded, most physicians in the region were employed and allegedly bound by restrictive non-competes, further narrowing the available pool for Marietta.
While it watched physician recruitment narrow, it was unaware that the competitor’s focus on expansion may have contributed to the complaint.
Unsealing the complaint
By January 2020, the Department of Justice still hadn’t intervened in a case—more than three years after the qui tam was filed. The relators, or filers, were then positioned to either bring the case themselves, at their own expense and risk, or drop it. The complaint was dropped.
On March 20, 2020, the relators jointly asked the court to dismiss the case. Three days later, the court granted the dismissal and unsealed the docket, where Marietta, for the first time, saw the names on the complaint.
They found a 70-page complaint filed in November 2016 that detailed accusations of compensation and a professional service arrangement. The document revealed two relators: Michael King, CEO of Camden-Clark from 2007-2014, and Dr. Michael Roberts, a Parkersburg-area surgeon affiliated with Parkersburg Surgical Associates. The findings were shocking to Marietta.
According to them, the unsealed complaint also drew on material that looked distinctly like Camden-Clark’s internal documentation, something ordinary private citizens wouldn’t have.
Sworn testimony from David McClure, Camden-Clark’s CEO until 2017, stated that he and others at Camden-Clark had been authorized to hand over internal hospital records to support the qui tam complaint. WVU Health denies the allegation and any claims of their involvement.
By this point, Marietta had a strong suspicion and an outline of an institutional pattern at Camden-Clark. Within weeks of the unsealing, Marietta sent King and Roberts a demand letter, calling on the pair to acknowledge the harm the complaint had caused. According to Marietta, King’s response was not to engage with the letter, but to instead reach out to a former Marietta CEO to threaten him, saying the hospital system would come after them.
In September 2020, Marietta filed suit against King and Roberts. That case is referred to as Marietta I, which began in the Southern District of West Virginia and was transferred, on Marietta’s objection, to the Northern District under Judge Bailey in February 2021. During discovery for that case, King’s attorney accidentally produced documents showing that Todd Kruger, Camden Clark’s General Counsel, had a role in the qui tam well beyond what was disclosed. The same discovery process also surfaced a 2013 report to the Department of Justice, filed by individuals affiliated with Camden-Clark, raising the same physician compensation concerns three years before the formal qui tam. A West Virginia and Ohio-licensed attorney had reviewed those 2013 concerns and declined to pursue them further in 2014.
In February 2022, the formal case against Kruger began, with the court granting Marietta permission to name him as a defendant, alleging he “played an integral role in planning and gathering information” for the complaint, despite never being named as a relator.
Kruger attempted to get away from these claims with First Amendment litigation-immunity and that Marietta’s case wasn’t adequate, but the court disagreed. In June 2022, Judge Bailey found that malicious prosecution, tortious interference, abuse of process, fraudulent legal process, and civil conspiracy were all plausible enough to allow the case against Kruger to go to trial.
WVU says they fired Kruger as soon as they learned the extent of his involvement. But Kruger’s position has been that he wasn’t a rogue actor. Camden-Clark’s leadership knew about his role, quietly supported him, and only recast him as an unauthorized outlier to protect itself. Around the time the identity of the relators was about to become public, Kruger emailed a Camden-Clark executive warning him he was about to learn about “our involvement.”
Shortly thereafter, Steve Altmiller, CEO of Camden-Clark from 2018-2024, gave Kruger a positive performance review.
Marietta’s closing argument in the 2026 trial, Marietta II, which closed this week, treated this performance review as evidence of institutional ratification—ordering that review, Marietta argued, roughly two months after leadership knew about his role.
Marietta I went to trial in Wheeling on March 27, 2023, a five-day trial that ended with a deadlocked jury. But in his closing argument, Kruger’s defense attorney turned the case onto his client’s former employer: why, if Marietta believed Camden or WVU were behind it, haven’t they sued the institutions, instead of “an individual who now doesn’t work as a lawyer.”
The Roberts and King case settled.
A month later, Marietta Memorial Hospital filed a new lawsuit—against Camden-Clark and WVU Health System.
Marietta II
The new lawsuit focused on the institutions: Camden-Clark Memorial Hospital Corporation, Camden-Clark Health Services, West Virginia University Hospitals, and West Virginia United Health System, doing business as WVU Health System,
Suing the institutions required a different legal theory: was building and supporting a qui tam something Kruger did as part of his job as Camden-Clark’s general counsel?
Of the claims brought against the WVU system and affiliates, Judge Bailey sent one to a different court: negligent supervision, the theory that Camden-Clark and WVU Health System’s own failure to rein in Kruger, once they knew what he was doing, was itself independently actionable. Judge Bailey paused the case and certified three questions with the West Virginia Supreme Court of Appeals: whether negligent supervision is a viable claim under West Virginia law, if it is, what are its elements, and whether an employee’s intentional or reckless conduct can support it.
In May 2025, West Virginia’s highest court ruled 4-0 in Marietta’s favor in all three questions. Justice Bunn dissented on whether an employee’s intentional conduct could support negligence, writing that employer liability for an employee’s intentional torts remains “quite rare,” and calling negligent supervision “a narrow and highly fact-dependent cause of action.”
With the questions answered, the stay was lifted. All four defendants filed formal answers in June 2025, denying involvement and demanding a jury trial.
Closing Arguments and a Verdict
The final day of testimony and closing arguments occurred on August 13.
Notably, the trial concluded with the defense’s final witness: Sean Smith, Camden-Clark’s current President and CEO. Smith has worked with the hospital since 2011, when he joined as director of physician recruitment. His testimony surfaced a long email trail with Kruger—who he called a “personal friend”—running from 2013 to 2019, in which Kruger repeatedly deflected or joked about the federal investigation. “I know nothing,” in one message. In another, calling it “a game to catch crooks.” Another: referencing a Hogan’s Heroes character catch phrase, “I see nothing! I hear nothing! I know nothing!… That’s my story for the time being, and I’m sticking to it.” Smith testified he didn’t learn the full scope of Kruger’s involvement until 2022, while Smith was chief operating officer.
Smith said, “Kruger had a strong disdain for Marietta.”
During cross-examination, when asked whether he stood behind the qui tam complaint, Smith refused to give a yes-or-no answer. On redirect, he said this trial was the first time he had seen the qui tam complaint himself—a striking admission from the man now running the hospital at the center of it.
Marietta’s closing argument was built around three questions:
1) Was the qui tam a corporate decision, and who, specifically, was on it?
Marietta’s attorney identified the individuals involved and pointed to Kruger’s strong performance review as evidence of institutional ratification rather than discipline. They argued that WVU Health System’s CEO, Albert Wright, bore direct responsibility for negligent supervision and for ratifying what Kruger had done.
2) Did the complaint itself contain false statements?
Marietta’s attorney notes the Department of Justice declined to pursue the case despite reviewing more than a million pages of documents, calling the 2016 filing a “spiced up version” of the 2013 report that had gone nowhere, and bluntly referring to the complaint as “a complaint of lies.”
3) Did the investigation actually damage Marietta?
Here, they cited the more than $500,000 spent producing documents to the federal government, pushed back on defense’s explanation that recruitment challenges occurred due to the COVID-19 pandemic, and closed by asking the jury to divide the responsibility for damages awarded equally between Camden Clark and WVU Health System.
The defense’s closing held its line from the start: Kruger acted alone and outside of his authority as Camden-Clark’s lawyer. King and Roberts, they argued, retained their own outside counsel and acted as private citizens, and the institutions themselves didn’t know what was in the complaint until it was unsealed in 2020. The defense’s closing argument started with a “see something, say something” intention they seemed to believe the relators had. They then distilled their argument of the case into a few words: “you cannot supervise a liar.”
On August 14, the jury reached its decision. It found Camden-Clark liable for civil conspiracy and vicarious liability. It did not find WVU Hospitals or WVU Health System, the parent entities, liable on any charge.
The jury awarded Marietta $5 million in compensatory damages.
This case marks fresh precedent, with the West Virginia Supreme Court of Appeals ruling that negligent supervision is a viable claim in the state and can rest on an employee’s intentional misconduct, not just ordinary carelessness.
The jury verdict is another first: no hospital system anywhere in the country has been found civilly liable—through conspiracy and vicarious liability—for using a federal whistleblower statute to go after a competing hospital instead.
For a hospital system that has spent much of the past decade consolidating smaller providers across West Virginia and the surrounding region, a jury’s willingness to find that a West Virginia hospital conspired against a competitor—using the machinery of a federal fraud statute built to protect the public—is the kind of finding regulators, lawmakers, and hospitals across the country will not treat as a one-off.
Hospital systems watching this case from the outside should take note: the qui tam process is not a safe place to settle a grudge.
After the verdict was read, Paul Westbrock, Vice President and General Counsel of Memorial Health System, said, “We fought back. And we didn’t just fight back for ourselves but for community hospitals across the country that might be victimized like this… This will never happen again.”
President and CEO of Memorial Health System, Scott Cantley, said, “We feel incredibly thankful today for the jury supporting this long journey to really hold Camden-Clark and the individuals responsible for this conspiracy that the jury found Camden-Clark guilty of. We feel incredibly blessed that they were able to listen to our story and confirm to us the damage that has been done.”
Wow, indeed. Aspiring monopolists enlist all the tools they can to control the market.
Wow! Not eloquent, but all I can summon. Wow!