On April 16, the New Jersey Supreme Court resolved a longstanding open issue as to whether a hospital's bylaws or course of conduct created a contract between the hospital and its medical staff, which in turn would give rise to an implied duty of good faith and fair dealing, and a right to monetary damages for breach of contract.

In Comprehensive Neurosurgical v. Valley Hospital, a group of neurosurgeons with longstanding privileges at Valley Hospital sued the hospital after it granted certain exclusive privileges to a competing neurosurgery practice, the Columbia Group, which adversely affected the plaintiff neurosurgeon's ability to practice at the hospital. The plaintiffs brought two claims that were tried in front of the jury: a breach-of-contract claim resulting from the hospital's alleged failure to follow its medical staff bylaws and give the plaintiffs a hearing before granting the exclusive privileges, and a claim for breach of the implied covenant of good faith and fair dealing. The jury found in favor of the implied-covenant claim, and the Appellate Division affirmed on appeal by the hospital. The Supreme Court then held: the hospital's medical staff bylaws were not an underlying contract that could support a claim that the hospital breached the implied covenant of good faith and fair dealing; the hospital's administrative health care decision to award exclusive privileges to the other group of neurosurgeons could not, on its own, support a claim that the hospital breached the implied covenant of good faith and fair dealing; there was a genuine issue of material fact as to whether there was an implied-in-fact contract; there was a genuine issue of material fact as to whether the hospital's alleged bad-faith conduct precluded summary judgment; the jury instructions did not support verdict that the hospital breached the implied covenant of good faith and fair dealing; the jury could have reached a different result if it had been correctly instructed on the claim; and the hospital did not waive attorney-client privileges as to certain e-mails that were inadvertently produced during discovery.