Logan v. HCA

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BRADLEY S. LOGAN, M.D.,
Plaintiff,

v.
HCA, INC., et al.,
Defendants.

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
)
)
)
)
) Case No. 3:05-0006
)
Judge Echols
)

)
)
MEMORANDUM
Pending before the Court are the Report and Recommendation
entered by the United States Magistrate Judge on May 23, 2005,
(Docket Entry No. 85), and Plaintiff’s Objections (Docket Entry No.
86.) Defendants have filed Responses to the Objections by
incorporating the arguments made in their Memoranda in Support of
their Motions to Dismiss. (Docket Entry Nos. 87 & 88.) The
Magistrate Judge recommends that this Court take the following
actions: (1) grant the various Defendants’ Motions to Dismiss
(Docket Entry Nos. 37, 45, 47, 49, 56 and 61); (2) dismiss this
action; and (3) deem Defendants’ Motion to Strike (Docket Entry
No. 55) moot.

I. STANDARD OF REVIEW
When a party makes timely objections to a Report and
Recommendation, the Court “shall make a de novo determination of
the matter and may conduct a new hearing, take additional evidence,
recall witnesses, recommit the matter to the Magistrate Judge for
further proceedings and consideration, conduct conferences with
counsel for the affected parties, and receive additional arguments,

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either oral or written, as the District Judge may desire.”
L.R.M.P. 9(b)(3). See also, Fed.R.Civ.P. 72(a).
II. ANALYSIS
Plaintiff, a physician, was a member of the medical staff at
St. Petersburg General Hospital (“St. Petersburg”) in St.
Petersburg, Florida. After resigning that position, he moved to
Lawrenceburg, Tennessee where he practiced at Crockett General
Hospital (“Crockett”). Plaintiff then left that position, having
already signed a Recruiting Agreement for clinical privileges at
the Skyline Medical Center (“Skyline”) in Nashville. The
Recruiting Agreement was ultimately rescinded and a second
application withdrawn.
Because of the events which led to his resignations at St.
Petersburg and Crockett, as well as the denial of privileges at
Skyline, Plaintiff filed suit in this Court against dozens of
individual and corporate defendants. The Complaint is long,
spanning almost eighty pages. Such “length and breadth,” Plaintiff
explains, was necessary to “document[] almost ten years of
malfeasance by multiple entities and agents[.]” (Docket Entry No.
86 at 1.)
Plaintiff alleges he was harmed by assorted acts of one or
more of the Defendants relating to his employment at St. Peterburg
and Crockett General Hospitals, and that misconduct on the part of
some Defendants led to the denial of privileges at Skyline. A bevy
of claims for relief are asserted, including fraudulent
misrepresentation;
“suppression”
or
misrepresentation
by

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concealment; conspiracy; negligence; “wantonness”; breach of
contract; abuse of process; violations of the Racketeer Influenced
Corrupt Organizations Act (“R.I.C.O.”), 18 U.S.C. § 1961 et seq.;
“stigmatizing statements” and failure to provide due process in
violation of 42 U.S.C. § 1983; and violations of the Health Care
Quality Improvement Act of 1986 (“HCQIA”).
The Magistrate Judge concluded that Plaintiff’s Complaint
failed to state a claim upon which relief could be granted under 42
U.S.C. § 1983, the HCQIA, or R.I.C.O. That being so, there
remained only state law claims. Since federal question
jurisdiction is the basis for this Court’s original jurisdiction,
the Magistrate Judge recommends that this Court decline to exercise
supplemental jurisdiction over the state law claims and dismiss the
entire action.
Plaintiff takes issue with respect to the Magistrate Judge’s
conclusion his Complaint fails to state a claim under any of the
federal statutes cited. He also takes issue with factual
statements contained in the Report and Recommendation.
A. Objections To Factual Statements
Plaintiff first asserts “[t]he Report contains an error in
substance when it states that Plaintiff, while residing in
Florida[,] resigned his position ‘because of a dispute arising over
his care of certain patients.’” (Docket Entry No. 86 at 2.)
Instead, Plaintiff maintains a more accurate characterization is
that he resigned “when it became apparent that St. Petersburg
General Hospital was acting in an aggressive and harassing matter

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[sic] in reviewing patient charts not only of the Plaintiff but
others; soon it became evident that violations of HCQIA were
occurring.” (Id.)
Plaintiff’s own characterization of this “fact” shows the
Magistrate Judge did not improperly describe what happened. In
Plaintiff’s own words, patient charts were being reviewed by the
hospital, suggesting that there was a dispute or question over
patient care. Regardless, this “fact” is not relevant in ruling on
the legal question of whether this Court has federal question
jurisdiction.
Plaintiff next objects because while the Report and
Recommendation states that an administrator of St. Petersburg
notified the National Practitioner Data Base (“NPDB”) and the
Florida Agency for Healthcare Administration (“AHCA”) that
Plaintiff had resigned while under investigation, the Report
dismisses any act of mail or wire fraud. Obviously, this is not an
Objection to the fact recounted, i.e., that the NPDB and AHCA were
notified Plaintiff resigned while under investigation, but only an
objection to whether that “fact” was properly taken into account in
ruling on the Motions to Dismiss.
Plaintiff claims “[t]he Report also errs in asserting in the
Background of the case when it proffers as truth that the
Recruiting Agreement with Skyline was rescinded ‘because the
plaintiff had failed to commence the full-time practice of medicine
in the Skyline community on or before January 1, 2002.’” (Id. at
2-3.) Although Plaintiff recognizes “a letter certainly exists

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representing that as the stated reason,” (id. at 3), the Report and
Recommendation fails to assert that another doctor with a
“virtually identical Agreement” (id.) in similar circumstances did
not have her agreement rescinded, nor does the Report and
Recommendation indicate “that concurrent events such as
falsification of meeting dates were being perpetrated.” (Id.)
Tellingly, Plaintiff does not dispute that he did not in fact
commence the full-time practice of medicine in the Skyline
community by the set date. In this light, the “fact” identified by
the Magistrate Judge cannot be viewed as erroneous–only that other
“facts” were not included. Given the length of Plaintiff’s
Complaint, it was necessary for the Magistrate Judge to pare down
the facts and set forth only those which were relevant to
determination of the legal issues at hand. Besides, even if
another doctor in allegedly similar circumstances was treated
differently, and even if dates of meetings were misstated (or in
Plaintiff’s words “falsified”), this would not change the Court’s
conclusion that Plaintiff does not have a federal claim so as to
support this Court’s jurisdiction.
Finally in regard to the facts, Plaintiff asserts that while
the Magistrate Judge was correct in setting forth a chronology of
events which related to Plaintiff’s failure to obtain privileges at
Skyline, the Report and Recommendation failed to include “key
occurrences such as the Credentials Committee meeting in December,
2002 or the Hearing Committee in May, 2003.” Id. Again, given the
abundance of “facts” recited throughout the seventy-nine page

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Complaint, it would be virtually impossible for any decision to
coherently contain all of the “facts.” Moreover, inclusion of
these “key occurrences” would not change the outcome–Plaintiff has
failed to state a federal claim upon which relief can be granted.
B. Objections to Legal Analysis
Plaintiff concedes this Court’s jurisdiction to entertain his
claims rests upon the viability of a cause of action under 42
U.S.C. § 1983, the HCQIA and/or R.I.C.O. (Docket Entry No. 86 at
3-4.) Accordingly, the Court will address Plaintiff’s Objections
to the Magistrate’s Recommendations regarding the same.
1. Claim Under 42 U.S.C. § 1983
In the Report and Recommendation, the Magistrate Judge noted
that in order to establish a claim under Section 1983, Plaintiff
must show that Defendants, while acting under color of state law,
deprived Plaintiff of some right or privilege guaranteed by the
Constitution or laws of the United States. (Docket Entry No. 85 at
5.) The Magistrate Judge also noted the Defendants in this case
were not individuals or entities with direct authority to act on
behalf of the state and therefore, to be liable under Section 1983,
it was necessary that their actions be fairly attributable to the
state. Since Plaintiff failed to offer any “factual allegations
that would seriously suggest that the defendants’ actions are
fairly attributable to either Florida or Tennessee,” (id.),
Plaintiff failed to state a claim under 42 U.S.C. § 1983.
Plaintiff asserts “[t]he Report errs in stating: ‘To state a
claim for relief under 42 U.S.C. 1983, the plaintiff must plead and
prove that the defendants, while acting…”’ (Docket Entry No. 86
6

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at 5.) It is more correct to say, Plaintiff contends, that “to
succeed in proving a claim the defendant must first plead and then
prove.” Id. (emphasis in original).
Perhaps this is a scrivener’s error on Plaintiff’s part since
Defendants need not prove anything with respect to Plaintiff’s
claims. Regardless, the Magistrate Judge did not err in writing in
the conjunctive, even though proof follows only if a claim is
properly pled. In fact, in a recent case, the United States Court
of Appeals for the Sixth Circuit, on appeal from the grant of a
motion to dismiss, wrote: “All § 1983 violations depend on the
plaintiff’s ability to plead and prove that a defendant: 1) acting
under the color of state law 2) deprived a plaintiff of a right
secured by the Constitution or law of the United States.” Stanley
v. City of Norton, 124 Fed.Appx. 305, 309, 2005 WL 65522 at *4 (6th
Cir. Jan. 6, 2005)(emphasis added).
The linchpin of Plaintiff’s objection to the Report and
Recommendation about section 1983 liability is his belief that “the
‘state law’ in question here arises from the United States
Congress.” (Docket Entry No. 86 at 7.) In this vein, Plaintiff
writes “[u]nder cloak of authority and qualified immunity granted
by Congress in HCQIA, the Defendants performed their racketeering
acts, which resulted in the placement of stigmatizing statements
into a repository founded by and overseen by the federal
government, as well as loss of property memorialized by the
Recruiting Agreement with Skyline.” (Id. at 5.) Plaintiff then
writes:

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Under HCQIA the government has, by reciprocity in
authority and protection, entwined itself with hospitals
for the responsibility of peer review activity, has set
standards for its performance and reporting, has provided
qualified immunity for its participants acting in their
official capacities and when compliant with the HCQIA due
process requirements, and has imposed penalties on
participants who fail to report their findings to NPDB.
Id. Plaintiff also states “[o]ne of the very reasons this claim was
brought in a federal court is that the federal HCQIA is the law
being perverted by hospitals and their peer review committees for
unintended nefarious purposes.” Id. at 10.
Insofar as Plaintiff is suggesting that HCQIA supplies the
necessary “state action” for a Section 1983 claim, he is mistaken.
As Plaintiff recognizes, the HCQIA is a federal statute. Where
actions are taken under color of federal law, and not color of
state law, no section 1983 action will lie. Ana Leon T. v. Federal
Reserve Bank of Chicago, 823 F.2d 978, 931 (6th Cir. 1987). See
also, Sarin v. Samaritan Health Center, 813 F.2d 755, 759 (6th Cir.
1987)(in physician’s claim relating to revocation of staff
privileges, no state action was found to exist even though hospital
was licensed by the state and received federal funds); Medical
Society of New Jersey v. Mottola, 320 F.Supp.2d 254, 264 (D.N.J.
2004)(plain reading of statute indicates Congress did not intend
HCQIA to allow private individuals to bring section 1983 action);
Canady v. Providence Hospital, 903 F.Supp. 125, 127 (D.D.C.
1995)(“A decision to restrict staff privileges does not constitute
state action.”).

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Perhaps recognizing the difficulty with the assertion that the
HCQIA could provide the requisite action “under color of state law”
for purposes of section 1983 liability, Plaintiff notes that
Tennessee and Florida peer review statutes “depend upon federal
HCQIA” and that Tennessee’s provisions “reference[s] and combine[s]
the federal law [.]” (Docket Entry No. 86 at 7.)
It is true that Tennessee Code Annotated § 63-6-219, which is
the Tennessee Peer Review Law, begins by referencing the
“applicable policies of the Health Care Quality Improvement Act of
1986.” The statute then goes on to note it is “the stated policy
of Tennessee to encourage committees made up of Tennessee’s
licensed physicians to candidly, conscientiously, and objectively
evaluate and review their peers’ professional conduct, competence,
and ability to practice medicine.” This grant of statutory
authority for peer review, however, does not provide a basis for a
claim under Section 1983.
In this regard, the decision in Freilich v. Board of Directors
of Upper Chesapeake Health, Inc., 142 F.Supp.2d 679 (D.Md. 2001),
aff’d, 313 F.3d 205 (4th Cir. 2002), is instructive. There, a
physician filed a seventy-six page complaint against a hospital,
assorted individuals, and the government, claiming the hospital and
its board of directors participated in “a predetermined and a
deliberate scheme and systematic program designed to force her out
of [the hospital] in violation of [her] Constitutional Rights and
in violation of Maryland’s Health Code[.]” Id. at 685.

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In addressing the doctor’s Section 1983 claim, the court in
Freilich properly noted that to allege such a claim it was
necessary that there be not only action under state law but also
that “the party charged with the deprivation must also be a person
who may fairly be said to be a state actor.” Id. (citing, American
Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 50 n.8, 119 S.Ct. 977
(1999)). While the Maryland regulations required hospitals to
“establish a formal reappointment process and to collect and review
information,” the regulations did not require hospitals to deny
reappointment and the state played no role in the individual
hospital’s decision whether or not to reappoint a particular
physician. Id. at 686-87. Since the regulatory scheme left the
decision to the judgment of the hospitals, “the actions of [the
hospital] and the individual hospital defendants are not fairly
attributable to the state.” Id. at 686. See also Pinhas v. Summit
Health Ltd., 894 F.2d 1024, 1033-34 (9th Cir. 1989)(there was no
state action even though hospital’s peer-review process was
statutorily mandated since decision to remove physician’s staff
privileges was made by private parties).
Likewise in this case, the Tennessee statute cited by
Plaintiff does not transform the present Defendants into state
actors. Instead, committees made up of licensed physicians are to
review their peers’ professional conduct.
The Magistrate Judge did not err in concluding that
Plaintiff’s Complaint failed to state a claim under Section 1983
upon which relief could be granted. Accordingly, Plaintiff’s

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objections relating to his purported Section 1983 claim will be
overruled.
2.
The HCQIA Claim
The Report and Recommendation notes that courts have
repeatedly held the HCQIA does not establish a private right of
action and cites for that proposition Wayne v. Genesis Medical
Center, 140 F.3d 1145, 1148 (8th Cir. 1998); Hancock v. Blue Cross-
Blue Shield of Kansas, Inc., 21 F.3d 373, 374-75 (10th Cir. 1994)
and Bok v. Mutual Assurance, Inc., 119 F.3d 927, 928-29 (11th Cir.
1997). Recently, the United States Court of Appeals for the
Eleventh Circuit added its view on the issue holding “[t]here is no
express private right of action under the HCQIA.” Morris v. Emory
Clinic Inc., 402 F.3d 1076, 1083 (11th Cir. 2005).
In his objections, Plaintiff claims he is not disputing the
results of a peer review proceeding “but rather is claiming that
his due process rights were denied during the peer review
proceedings[.]” (Docket Entry No. 86 at 11.) Plaintiff also
claims that in enacting the HCQIA, “[t]he federal government had no
intention of creating a private system that would deprive
physicians of due process rights.” (Id. at 11-12.)
While Plaintiff’s suggestion may be facially correct, the
purpose of the Act was not to protect physicians subjected to peer
review. Quite the contrary, the “grant of immunity to review
boards strongly suggests that the Act was not enacted to benefit
the physician undergoing peer review.” Wayne, 140 F.3d at 1148.
In any event, the issue is whether the HCQIA provides for a private

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cause of action. Those Circuits which have addressed the issue
uniformly answer the question in the negative and Plaintiff has
presented no reason why this Court should hold to the contrary.
Thus, Plaintiff’s objections which assert the Magistrate Judge
erred in concluding there is no private right of action under the
HCQIA will be overruled.
3. The R.I.C.O. Claim
The Magistrate Judge recommends dismissal of the R.I.C.O.
count because “the overt acts complained of involve the alleged
misrepresentation of facts relating to peer reviews of the
plaintiff’s competence as a physician, his application for or
resignation of hospital privileges and ‘stigmatizing’ statements
made about him,” none of which “acts qualify as racketeering
activity.” (Docket Entry No. 85 at 8.) Plaintiff objects noting
“[w]ire and mail fraud certainly qualify as acts of racketeering,”
(Docket Entry No. 86 at 15), and since he alleged the exchange of
mail (particularly the sending of the reports to the NPDB and AHCA)
and telephone calls, he stated a claim for relief under the civil
R.I.C.O. statute.
Wire and mail fraud can be the predicate racketeering acts for
purposes of R.I.C.O. However, merely mailing peer review committee
results does not constitute mail fraud. Wasserman v. Maimonides
Medical Center, 970 F.Supp. 183, 188 (E.D.N.Y. 1997).
Moreover, with respect to the reports which were sent to NPDB
and AHCA, Plaintiff has failed to plead sufficient facts which
would demonstrate that he relied on Defendants’ alleged fraudulent

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misrepresentation, something which is necessary to support a
R.I.C.O. claim. Central Distributors of Beer, Inc. v. Conn, 5 F.3d
181, 184 (6th Cir. 1993); Blount Financial Services, Inc. v. Heller,
819 F.2d 151, 152 (6th Cir. 1987).
The facts as pled by Plaintiff are general allegations of
fraud with no specificity as to how the statements were false.
This is insufficient because allegations of fraudulent predicate
acts are subject to the heightened pleading requirements of Rule
9(b) of the Federal Rules of Civil Procedure. “In addition to
alleging the particular details of a fraud, ‘the plaintiff[] must
allege facts that give rise to a strong inference of fraudulent
intent.’” First Capital Asset Management, Inc. v. Satinwood, Inc.,
358 F.3d 159, 179 (2d Cir. 2004)(emphasis in original, citation
omitted). Citing acts without showing they are indictable is
insufficient to survive a motion to dismiss. Howard v. America
Online, 208 F.3d 741, 748 (9th Cir. 2000).
Here, Plaintiff has alleged no facts which would show the
predicate acts are indictable or give rise to the strong inference
of fraudulent intent on behalf of the Defendants. Accordingly, the
Magistrate Judge was correct in ruling the Plaintiff’s R.I.C.O
claim failed to state a claim upon which relief could be granted
and Plaintiff’s objections to the contrary will be overruled.
III. CONCLUSION
On the basis of the foregoing, Plaintiff’s Objections (Docket
Entry No. 86) will be overruled and the Magistrate Judge’s Report
and Recommendation (Docket Entry No. 85) will be adopted.

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Defendants’ Motions to Dismiss (Docket Entry Nos. 37, 45, 47, 49,
56 and 61) will be granted. Defendants’ Motion to Strike Portions
of the Complaint (Docket Entry No. 40) will be deemed moot. This
case will be dismissed with prejudice.
An appropriate Order will be entered.

_________________________________
ROBERT L. ECHOLS
UNITED STATES DISTRICT JUDGE