Baptist Mem’l Hosp.-N. Miss., Inc. v. Lambert (Summary)

EMPLOYMENT CONTRACT

Baptist Mem’l Hosp.-N. Miss., Inc. v. Lambert, No. 2013–CA–01002–COA (Miss. Ct. App. Jan. 27, 2015)

The Court of Appeals of Mississippi affirmed a lower court’s grant of summary judgment in favor of a physician against a hospital’s counterclaim for breach of contract. The dispute between the physician and the hospital arose when the hospital began to receive complaints from staff and patients about the physician’s angry and abusive behavior. Some of these complaints alleged that the physician had problems with his hands shaking and would sometimes become so insecure and hesitant that he would “freeze up” during surgery.

The CEO of the hospital requested that the physician attend an interview. During this interview, the physician agreed to enter the Mississippi Professional Health Program (“MPHP”), which eventually referred him for treatment at a recovery center. The recovery center evaluator recommended that the hospital place the physician in a monitoring contract with the MPHP for at least five years, and also warned that the physician was currently unfit to practice medicine with reasonable skill and safety.

The hospital suspended the physician’s clinical privileges once it received this evaluation. It then exercised an option to terminate his employment contract. The physician sued the hospital and the recovery center after he lost his job, but the claims were dismissed for failure to comply with the Mississippi Tort Claims Act.

Following this dismissal, the hospital brought its own lawsuit against the physician, claiming that he had failed to perform in accordance with the terms of his employment contract. The lower court granted summary judgment in favor of the physician, concluding that the physician’s obsessive-compulsive personality disorder made it impossible for him to perform in accordance with the contract.

On appeal, the hospital argued that the lower court had erroneously granted summary judgment. The Court of Appeals sided with the physician. It explained that even though the hospital was technically correct about the failure to plead the appropriate legal defenses, the practical impact of this was minimal – the physician could correct it simply by filing another motion in the lower court.

Two of the judges dissented from this ruling. In the dissenting opinion, they explained that the court had failed to distinguish the difference between a mental impairment and an actual disability resulting from a mental impairment. They argued that the mere existence of this mental disorder would not be enough to excuse the physician from his obligation to perform under the contract, and emphasized that the hospital’s claim should have been heard on the merits instead of dismissed through summary judgment.

Virk v. Maple-Gate Anesthesiologists, P.C. (Summary)

ARBITRATION

Virk v. Maple-Gate Anesthesiologists, P.C., No. 14-CV-381S (W.D. N.Y. Jan. 19, 2015)

The United States District Court for the Western District of New York enforced an arbitration clause against an anesthesiologist and his anesthesiologist group, holding that the clause was valid and controlled the parties’ dispute. Plaintiff, an anesthesiologist, was a shareholder and employee of defendant, an anesthesiologist group. The anesthesiologist group terminated the anesthesiologist after he was precautionarily suspended from the primary hospital at which the group practiced. The anesthesiologist sued the hospital and got the precautionary suspension annulled and expunged from his personal file. The anesthesiologist group still upheld the anesthesiologist’s termination. The anesthesiologist brought suit against the group. The group moved to compel arbitration pursuant to the anesthesiologist’s employment agreement. The anesthesiologist argued that the arbitration claim was superseded by a subsequent employment agreement, the dispute was not covered by the arbitration clause, and the arbitration clause conflicted with statutory pre-litigation requirements.

The court held that the anesthesiologist’s arbitration clause was valid and governed his dispute with the anesthesiologist group. The court explained that the arbitration clause was unambiguous and never expressly superseded by a subsequent employment agreement, so it must be enforced. Additionally, the dispute did not fall into any “exclusion from arbitration” explicitly stated within the employment agreement. Furthermore, the employment agreement waived any statutory pre-litigation requirements.

Woods v. State ex rel. Mont. State Hosp. (Summary)

DUTY TO WARN

Woods v. State ex rel. Mont. State Hosp., No. DA 14-0054 (Mont. Jan. 13, 2015)

The Supreme Court of Montana affirmed a lower court’s grant of summary judgment in favor of a state hospital on a “failure to warn” claim by the estate of a woman who was shot to death by a former mental patient of the hospital. The court held that no actual threat of violence was made to trigger a mental health professional’s statutory duty to warn. A patient with a history of self-harm was involuntarily committed to a state mental hospital after he was found unconscious in his house due to heavy drinking and ingesting pain medication. During a counseling session with a mental health professional of the hospital, the patient admitted to having an alcohol dependency problem. The patient said that when he was intoxicated he would become aggressive towards his then girlfriend. After continued sessions over a two-week period, the mental health professional observed that the patient had realized the seriousness of his alcohol problem and was planning to follow through with outpatient treatment. The patient was released. Four months later, at a bar, he saw his ex-girlfriend with a male companion. The patient followed the two as they left. Outside, the patient assaulted the male companion, and fired multiple gunshots at his ex-girlfriend’s vehicle, killing her. The patient then shot himself. Plaintiff, patient’s ex-girlfriend’s estate, brought suit against the hospital claiming that the hospital failed to warn the patient’s ex-girlfriend of the risk of violent behavior by the patient pursuant to a state statute.

The court affirmed the lower court’s dismissal of the claim, holding that there was no actual threat of physical violence by specific means to trigger the statutory duty to warn. The court explained that the patient must have made a specific expression or gesture against the ex-girlfriend to trigger the duty to warn. The fact that the patient may have presented a potential danger to the ex-girlfriend under certain circumstances, including his continued alcohol abuse and the end of their intimate relationship, was not sufficient, in the court’s opinion, to trigger a mental health professional’s statutory duty to warn.

O’Hara v. W. Calcasieu Cameron Hosp. Found. (Summary)

EMTALA

O’Hara v. W. Calcasieu Cameron Hosp. Found., No. 2:13-cv-967 (W.D. La. Jan. 20, 2015)

The United States District Court for the Western District of Louisiana granted summary judgment in favor of a hospital on a patient’s Emergency Medical Treatment and Active Labor Act (“EMTALA”) claim, holding that the patient failed to establish that she was diagnosed with an emergency medical condition. The plaintiff patient was experiencing pain, swelling, and difficulty swallowing after a dental procedure. Plaintiff presented at the defendant hospital’s emergency room. The patient was diagnosed with facial cellulitis and given a prescription for the pain. The hospital discharged the patient and instructed her to go to another hospital for additional treatment the following day. The next morning the patient was unable to open her jaw and then brought suit against the hospital claiming that the hospital did not stabilize her as is required by EMTALA.

The court dismissed the patient’s EMTALA claim because she failed to establish that the hospital diagnosed her with an emergency medical condition. The court explained that even though the patient was diagnosed with facial cellulitis, the hospital did not diagnose her condition as an emergency medical condition. The hospital did not have actual knowledge of an unstabilized emergency medical condition before it discharged her; therefore, EMTALA’s stabilization duty did not apply to the hospital.

Miller v. Imaging on Call (Summary)

BREACH OF CONTRACT/GOOD FAITH/NEGLIGENT AND INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

Miller v. Imaging on Call, No. 3:13-cv-00679 (JAM) (D. Conn. Jan. 12, 2015)

The United States District Court for the District of Connecticut dismissed a lawsuit filed by a plaintiff radiologist against defendant teleradiology company after her privileges were revoked at a hospital at which she provided teleradiology services.

The radiologist entered into a contract as an independent contractor with the teleradiology company to provide services for the hospital. The hospital complained of the radiologist’s performance to the company for a number of years, but not to the radiologist herself. The hospital began a formal investigation regarding the radiologist, but did not tell her that she was under investigation. One week later, the company contacted the radiologist and suggested that she resign her privileges at the hospital, without mentioning that she was under investigation. The radiologist resigned, and the hospital reported her to the National Practitioner Data Bank since she had resigned while under investigation. The radiologist then rescinded her resignation, and the hospital subsequently revoked her privileges. The radiologist filed a lawsuit against the company, alleging, among other things, breach of contract, breach of implied covenant of good faith and fair dealing, negligent misrepresentation, negligent infliction of emotional distress, and intentional infliction of emotional distress, and the company filed a motion to dismiss the lawsuit for failure to state a claim.

On the breach of contract claim, the court ruled in favor of the company and held that the radiologist did not allege enough facts to plausibly show that there was any violation of her contract with the company, as the contract did not require the company to alert the radiologist about complaints from the hospital. The court also found that because the parties maintained an independent contractor relationship, there was no fiduciary or employment relationship that would have triggered a covenant of good faith and fair dealing. Furthermore, the court found no evidence of a bad faith violation by the company.

On the general negligence claim, the court ruled in favor of the company by stating that the radiologist did not identify any duty that the company owed to her apart from the duties undertaken under the terms of the contract.

On the negligent representation claim, the court ruled in favor of the company, stating that the radiologist should have known not to reasonably rely on the company’s assurance that her resignation was merely routine and insignificant. Also, the court dismissed the radiologist’s claims of negligent infliction of emotional distress, finding that the radiologist did not make any factual allegations that the company caused stress enough to put her at risk of illness or bodily harm. Finally, the court found no conclusory factual allegations to suggest that the company intentionally caused the radiologist emotional distress, since there was nothing to suggest that any distress was intentionally imposed on the radiologist.

Jamaleddin v. Oakland Physicians Med. Ctr. (Summary)

DISCRIMINATION/ BREACH OF CONTRACT

Jamaleddin v. Oakland Physicians Med. Ctr., No. 13–cv–12735 (E.D. Mich. Jan. 12, 2015)

The United States District Court for the Eastern District of Michigan granted a hospital’s motion for summary judgment against a resident’s claim of retaliatory harassment, while denying its motion for summary judgment against the resident’s claims of national origin discrimination and breach of contract.

The resident, who was of Arabic descent, had executed a “residency agreement” with the hospital and accepted appointment as a first year resident in family medicine. The resident received several warnings about his professionalism and his communication skills. In his lawsuit, the resident argued that these warnings were rooted in discriminatory motives. He alleged that one of his direct supervisors had told him to “give up [his] Arabic mentality” and had made jokes about whether the resident was using “Arabic time.”

The resident decided to tell another supervisor that he believed he was being discriminated against because of his Arabic descent. That same evening, the resident asked another physician to complete a patient history for him so that he did not have to stay overtime. The hospital discovered this and then fired the resident a week later. According to the resident, the hospital then forced him to sign a resignation form instead of appealing the decision, threatening him that he would “end up nowhere” unless he complied.

The court ruled in favor of the hospital on the retaliation claim, finding that although the resident alleged that he was fired just a week after complaining about discrimination to his supervisor, there was insufficient proof of a causal connection between the two events. However, the court ruled against the hospital on the discrimination claim, noting that even though the hospital had warned him about a lack of professionalism and deficient interpersonal skills, the resident had immediately corrected many of the flaws after he learned about them. In addition, the resident had shown that several of his supervisors gave him positive performance evaluations in the past, undercutting their argument that he was a problem employee. The court also ruled against the hospital on the breach of contract claim, because the residency agreement itself included a clause preventing discrimination on the basis of national origin.

Thorton v. Md. Gen. Hosp. (Summary)

VICARIOUS LIABILITY

Thorton v. Md. Gen. Hosp., Civil Action No. WMN-13-162 (D. Md. Jan. 7, 2015)

The United States District Court for the District of Maryland denied a defendant hospital’s motion to dismiss, holding that the hospital may be held vicariously liable for the conduct of a non-employee physician and such determination is for the trier of fact after a trial.

A patient presented at the hospital, while in labor. The patient delivered a stillborn infant under the care of an obstetrician who was not an employee of the hospital, but had clinical privileges. Plaintiffs, the patient’s family, brought suit against the obstetrician and the hospital after the patient’s condition worsened and she passed away. The hospital moved to dismiss the case, arguing that it cannot be liable for the obstetrician’s conduct because he is not an agent of the hospital.

The court held that even though the obstetrician was not an actual agent of the hospital, it could still be liable for his conduct if a jury finds that he was an apparent agent of the hospital. Apparent agency is applied when a third person, in this case a patient, justifiably relies upon a principal’s representation, here a hospital, that another is its agent. The court explained that the obstetrician arrived wearing the hospital’s identification badge and said nothing to indicate that he was not an employee of the hospital. Thus, a jury could conclude that the obstetrician appeared to be an agent of the hospital and the patient relied on this representation.

Brown v. St. Mary’s Hosp. (Summary)

EMTALA

Brown v. St. Mary’s Hosp., No. 3:14CV228 (DJS) (D. Conn. Jan. 12, 2015)

The United States District Court for the District of Connecticut denied a defendant hospital’s motion to dismiss a lawsuit which alleged that the hospital violated the Emergency Medical Treatment and Active Labor Act (“EMTALA”) by failing to stabilize a patient’s emergency medical condition prior to his discharge.

The patient was admitted to the hospital based on his belief that he was suffering from diabetic ketoacidosis. While in the hospital, the patient underwent laboratory testing, x-rays, urinalysis, and an electrocardiogram. The patient was discharged while still in a state of diabetic ketoacidosis. He died soon after as a result of diabetes mellitus and diabetic ketoacidosis.

The court stated that EMTALA placed two obligations on the hospital – to provide a medical screening examination to determine if an emergency medical condition exists and, if one does exist, to stabilize it. The hospital argued that it was not liable under EMTALA since it provided the same treatment to the patient as it did to all other patients with diabetic ketoacidosis. In support of this argument, the hospital cited cases that stated EMTALA was violated if there was disparate treatment in stabilization. However, the court stated that those cases were not binding precedent, stated that some courts held that the stabilization requirement is not met by dispensing uniform treatment, and denied the hospital’s motion to dismiss.

Med. Staff of Avera Marshall Reg’l Med. Ctr. v. Marshall (Summary)

MEDICAL STAFF BYLAWS; MEDICAL STAFF AS AN ORGANIZATION

Med. Staff of Avera Marshall Reg’l Med. Ctr. v. Marshall, No. A12-2117 (Minn. Dec. 31, 2014)

The Minnesota Supreme Court reversed a lower court and held that the medical staff of an Avera hospital could sue the hospital itself, in the process holding that the medical staff bylaws were a contract between the hospital and the individual members of the medical staff and that the medical staff as an entity is capable of bringing a lawsuit.

The legal dispute began in 2012, when the Board of Avera Marshall Regional Medical Center, a nonprofit hospital, announced its plan to repeal and revise the hospital’s medical staff bylaws. The medical staff, along with its chief of staff and chief of staff-elect, brought an action in the courts for a declaration that medical staff bylaws were an enforceable contract between the hospital and the medical staff.

According to the provisions of the bylaws, the chief of staff, the Medical Executive Committee, the Board, or one-third of the active medical staff members could propose amendments to or the repeal of the medical staff bylaws. To effect a change, an affirmative vote of two-thirds of the eligible medical staff members was required. However, the bylaws also stated that the amendment and repeal process could not supersede the general authority of the Board as set forth under the corporate bylaws and applicable common law. Although the Board had stated that its repeal of the bylaws would not be submitted for a vote by the medical staff, the medical staff nevertheless voted on the proposed changes and rejected the repeal.

When the revised bylaws took effect on May 1, 2012, the medical staff sued. At the trial level, the district court dismissed the case, concluding that the medical staff bylaws were not an enforceable contract and that the medical staff did not have the legal standing to sue the hospital. After the court of appeals affirmed this decision, the medical staff appealed to the Minnesota Supreme Court.

The Minnesota Supreme Court explained that under Minnesota law, unincorporated associations have the right to sue if they can meet statutory criteria. The court found that the medical staff met those requirements, since the physicians associated and acted together for the purpose of ensuring proper patient care at the hospital.

The supreme court next addressed the issue of whether the bylaws created an enforceable contract and determined that they were. The court noted that physicians who seek privileges at the hospital must agree to be bound by the medical staff bylaws as a condition of appointment. It reasoned that a physician might choose not to join the medical staff because of those bylaws. Consequently, the court concluded that there was a bargained-for exchange of promises and mutual consent to the exchange.

The lawsuit has now been remanded to the district court for further proceedings.

U.S. ex rel. Sheldon v. Kettering Health Network (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Sheldon v. Kettering Health Network, No. 1:14-cv-345 (S.D. Ohio Jan. 6, 2015)

The U.S. District Court for the Southern District of Ohio dismissed a relator’s False Claims Act (“FCA”) claim against a hospital, holding that the relator failed to allege that the hospital submitted any false claim to the government. The relator alleged that her estranged husband began an extramarital relationship while being an employee of defendant, a hospital. In furtherance of this relationship, the relator alleged that her estranged husband accessed and shared her protected electronic health care information with others. The relator sued the hospital for violating the FCA. The relator claimed that the hospital failed to adhere to the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) and falsely certified its compliance with the HITECH Act, thereby collecting undeserved “Meaningful Use” dollars from the federal government.

The court dismissed the relator’s suit, holding that the relator failed to allege that the hospital was not compliant with the HITECH Act or submitted any false claims or certifications to the government for payment. The relator incorrectly argued that an isolated privacy breach constituted a violation of the HITECH Act. However, the court found that the hospital was compliant with the HITECH requirements and followed its instructions after it discovered the relator’s breach. Furthermore, the relator did not have adequate personal knowledge of any false claims or certification by the hospital. The relator was never an employee of the hospital or involved in any claim or certification. Instead, she based her whole argument on secondhand knowledge from her estranged husband.