OMA Case Note: Stapleton v. PeaceHealth (Oregon District Court 2026)

May 28, 2026

On May 22, 2026, a federal judge in Oregon dismissed the first lawsuit to be brought under the state's novel corporate practice of medicine law passed in 2025. While there is no legal precedent created by the case, the nature of the case and outcome that resulted in a private settlement provided some insight into how a court might review the law.

What is the case about?

In 2025, a hospital in Oregon, PeaceHealth, announced it would not renew a contract with a local emergency room physician group, Eugene Emergency Physicians, PC (EEP). The hospital attempted to replace EEP with an out-of-state management services organization, ApolloMD (ApolloMD or MSO) that needed to establish a new physician group. EEP challenged that process.

On March 20, 2026, EEP filed a lawsuit against the hospital, the MSO, and the new group, Lane Emergency Physicians, LLC, in state court alleging the new proposed deal violated Oregon’s corporate practice of medicine law. Through a legal process, the hospital moved the lawsuit to federal court because not all the parties were from Oregon.

During a preliminary evidentiary hearing before a trial could be conducted, a federal judge listened to testimony from witnesses for each party. The judge indicated he felt the incoming MSO and the new physician group had "no light" between them, raising concerns about potential violations of the law. On the final day of the hearing, EEP unexpectedly announced a settlement with the hospital to remain in place under a new agreement.

What do you need to know?

There is a legal term called the corporate practice of medicine doctrine (CPOM), which means that physicians — not corporations — should practice medicine. Oregon updated its doctrine in 2025 more extensively than any other state to restrict how an MSO may manage a group of physicians.

EEP believed the new deal violated Oregon's CPOM law because the MSO exerted excessive control, leaving the physician group without authority over clinical matters. They asked the court to pause the deal, while the other parties requested dismissal.

As the hearing progressed, the judge's questioning revealed concerns about the relationship between the MSO and the new physician group. The judge stated he saw "no light" between them, suggesting the case might proceed to trial and the deal could be paused. However, the parties reached a settlement before that occurred.

Without a written opinion, no formal legal precedent was established. However, several lessons emerged:

  • Oregon's new law influenced how the case progressed and was resolved. Before 2025, physician groups like EEP would have had limited ability to challenge such arrangements.
  • Lawsuits remain the primary way to challenge potential violations, as there is no state oversight agency for CPOM compliance.
  • The concept of who controls medical decision-making is critical. Even if a structure appears compliant on paper, excessive MSO influence may be viewed as "de facto" control and a violation.
  • Hospitals are not classified as MSOs, but they may still bear responsibility for ensuring compliance when working with one.

Where may you learn more about the case?

Many documents related to the case are part of a federal court database called PACER and are not publicly accessible without cost.

The case has been widely publicized and may be searched using terms such as:

  • "Stapleton v. PeaceHealth"
  • "Eugene Emergency Physicians v. PeaceHealth"

You may also review litigation trackers such as: Georgetown University Litigation Tracker.

For additional information, you may contact the OMA team about the case and CPOM law.


Disclaimer: This material is for informational purposes only and is not intended to constitute legal advice. The information, examples, and suggestions presented in this material (though reliable) should not be construed as legal or other professional advice. Before applying this information in legal situations, we recommend you consult with legal counsel or other professional advisors.