Bhan v. Battle Creek Health Sys. (Summary)

TORTIOUS INTERFERENCE

Bhan v. Battle Creek Health Sys., No. 13-1682 (6th Cir. Sept. 8, 2014)

The United States Court of Appeals for the Sixth Circuit affirmed the dismissal of a physician’s tortious interference, defamation, and breach of contract claims against two hospitals, holding that the physician failed to allege any particular action that the hospitals engaged in that could give rise to a legal claim.

Plaintiff, a physician, had clinical privileges at two hospitals. The first hospital summarily suspended and then later revoked his clinical privileges. A year later, the second hospital suspended his privileges and reported the suspension to the National Practitioner Data Bank. The physician alleged that the hospitals’ actions were based on improper motives and failed to follow the procedures set forth in their medical staff bylaws. The physician brought suit claiming tortious interference with a business relationship, defamation, and breach of contract claims against both hospitals.

The court held the physician failed to allege in his complaint any actions the hospitals took that tortiously interfered with a business relationship. The physician’s allegations failed to show that the hospitals’ actions were malicious or taken with an improper motive or that any of the hospital’s agents acted solely for their personal benefit. Next, the court held the physician’s defamation allegation failed to specifically identify what the defamatory words were. Instead, the physician claimed that the entire National Practitioner Data Bank report was false and defamatory, even though it included facts that were undeniably true. Lastly, the court held that the medical staff bylaws did not create a contract between the physician and each hospital.

Deweese v. Lakeview Clinic (Summary)

EMPLOYMENT DISPUTE

Deweese v. Lakeview Clinic, A13-2152A13-2160 (Minn. Ct. App. Sept. 8, 2014)

The Court of Appeals of Minnesota affirmed in part and reversed in part a trial court’s verdict against an employer, holding that there was sufficient evidence for the jury to find that the employer breached its fiduciary duty to its stockholder/employee and wrongfully terminated his shareholder status.

Plaintiff, a physician, was a stockholder in his employer’s clinic. The physician went on a medical leave of absence after he developed psychiatric symptoms and was diagnosed with bipolar disorder. Prior to returning to work, the physician met with the employer’s executive board. The physician informed the executive board that he was cleared to work on a part-time basis. The executive board informed the physician that due to his new status, he was required to redeem his shares of stock in the employer.

A few months later, the physician’s symptoms returned while he was on vacation. In order to get a prescription of Seroquel, the physician lied to his former treating physician/coworker at the employer about his current treatment. This incident was reported to the employer’s executive committee who immediately placed the physician on a paid administrative leave. Consequently, the physician forged a letter from his psychiatrist stating that he could return to work without restrictions. Upon discovery, the employer terminated the physician and the physician brought suit, claiming that the employer breached its fiduciary duty and wrongfully terminated his shareholder status.

The court held that there was sufficient evidence for the jury to find that the employer breached its fiduciary duty and wrongfully terminated the physician’s shareholder status. The employer’s executive board did not “deal openly, honestly, or fairly” with its stockholder, as is required by law. Instead, it fraudulently informed the physician that he was required to relinquish his stock before he could return to work on a part-time basis. No such requirement was in any stockholder agreement or has ever been enforced. The employer improperly induced the physician to redeem his shares, and the physician relied on this inducement. The jury found that without the employer’s breach of its fiduciary duty the physician would have held onto the employer’s stock until his retirement and awarded him $1,285,384.

Next, the court held that pursuant to state statute, the physician’s award should be reduced by $155,000, the amount the employer paid out in disability benefits to the physician while he was on leave.

Rawdin v. Am. Bd. of Pediatrics (Summary)

AMERICANS WITH DISABILITIES ACT

Rawdin v. Am. Bd. of Pediatrics, No. 13-4544 (3d Cir. Sept. 3, 2014)

The United States Court of Appeals for the Third Circuit affirmed a district court’s decision denying a physician’s request for special accommodations on the General Pediatrics Certifying Examination (“Exam”). The physician argued that he was entitled to an alteration of the Exam under the Americans with Disabilities Act, which prohibits certain types of discrimination based on a person’s perceived or actual disability.

In 2000, the physician successfully obtained his Pennsylvania medical license and began practicing at the Children’s Hospital of Philadelphia. Children’s Hospital requires its physicians to obtain board certification within five years of joining the hospital. The only certifying organization for pediatricians is the American Board of Pediatrics (“ABP”), which uses the Exam as part of its certification procedure. Although the physician had successfully treated over 10,000 patients at Children’s Hospital, he struggled to pass the ABP Exam. The physician suffered from a cognitive disorder that impaired his memory and made multiple choice examinations difficult for him.

After failing the ABP Exam on several occasions, the physician requested that ABP provide him with the following testing accommodations: extended time, a quiet setting, advance knowledge of the subjects on the Exam, access to reference materials, short breaks, and an essay format. ABP denied the physician’s requests for advance knowledge of the test topics and access to reference materials, arguing that this would compromise the validity of the Exam. It also refused to provide an essay format, citing prohibitive expenses.

After failing the Exam for the fifth time, the physician sued ABP for failure to provide reasonable accommodations under the Americans with Disabilities Act. The trial court ruled against the physician, concluding that there was not enough evidence to show that the physician was entitled to these testing accommodations. In particular, the court highlighted how the physician’s only expert witness had admitted that he knew nothing about the Exam’s questions, layout, or format and had never developed an exam himself. On appeal, the Third Circuit concluded that the district court had not erred in ruling against the physician. The Third Circuit acknowledged the physician’s “impressive clinical talents,” but concluded that neither the evidence nor the law supported his request for testing accommodations.

McDaniel v. Loyola Univ. Med. Ctr. (Summary)

RESIDENCY TERMINATION

McDaniel v. Loyola Univ. Med. Ctr., Case No. 13-cv-06500 (N.D. Ill. Aug. 28, 2014)

The United States District Court for the Northern District of Illinois granted in part and denied in part a motion to dismiss filed by Loyola University Medical Center against a former resident’s claims of defamation, tortious interference, and wrongful termination. Dr. McDaniel, the former resident, sued the medical center and multiple physicians after he was terminated from the university’s five-year orthopaedic residency program.

McDaniel first began to experience problems with his superiors near the end of his fourth year in the program, when he refused to answer a 2011-2012 ACGME compliance survey about the number of consecutive hours he had worked that year. ACGME mandates that no resident may work more than 30 consecutive hours, but McDaniel had logged 37 hours during a shift in May 2012. Shortly after this occurred, the residency program director denied McDaniel’s request for ten days off from work, which he requested in order to recover from surgery for a detached retina. Later that same summer, the residency program director also took issue with McDaniel’s Air National Guard obligations, which required him to miss work for three weeks. When they met to discuss the resident’s military leave, the program director placed McDaniel on academic probation. McDaniel was terminated from the residency program not long after that.

In his lawsuit, McDaniel alleged that he had been subject to adverse employment actions and a hostile work environment on the basis of his military service. In addition, he claimed breach of contract, defamation, tortious interference, and violation of his due process rights. The defendants moved to dismiss all of these claims for failure to allege sufficient factual evidence. The court ultimately granted a motion to dismiss with regard to claims against the plaintiff’s co-resident and also for a claim of tortious interference against one of the plaintiff’s superiors. It denied the motion to dismiss for the remaining claims, holding that McDaniel had presented sufficient evidence for his lawsuit to continue. The court also gave the defendants additional time to file another reply.

Stein v. Tri-City Healthcare Dist. (Summary)

FALSE CLAIMS ACT – RETALIATION

Stein v. Tri-City Healthcare Dist., No. 3:12-CV-2524-BTM-BGS (S.D. Cal. Aug. 27, 2014)

The United States District Court for the Southern District of California denied a hospital’s motion to dismiss its former in-house counsel’s False Claims Act (“FCA”) retaliation, civil rights violation, and intentional infliction of emotional distress claims. Plaintiff, former in-house counsel for the defendant government hospital, was allegedly terminated after he warned upper management and the hospital’s Board about potential FCA violations. The hospital asked counsel for his resignation and counsel refused. Instead, counsel requested time off and stopped going to work. Soon after, the hospital terminated him without offering him a hearing. Counsel claimed this incident caused him physical and emotional distress.

The hospital argued that counsel’s warnings about potential FCA violations were actually part of his job and not protected activity that would trigger FCA whistleblower protection. The hospital also argued that any information counsel offered about potential FCA violations was protected by the attorney-client privilege. Next, the hospital argued that counsel’s civil rights were not violated because he quit his position, so a due process hearing was not required. Finally, the hospital argued that its conduct was not outrageous and counsel did not suffer severe or extreme emotional distress.

The court held that for counsel’s conduct to be protected under the FCA, he must have done more than his normal job. The court held that counsel proffered enough evidence to show that he acted outside his normal duties and chain of command so that a reasonable jury could find that he put the hospital on notice that his activities qualified for whistleblower protections under the FCA. Furthermore, the court held that counsel could potentially prove his claims without disclosing the content of privileged communications and, if he could not, the court will seal the courtroom and transcripts. Next, the court held that a material issue of fact existed as to whether counsel actually quit his job, or he was terminated. Finally, the court held a jury could find that the hospital’s conduct was outrageous and counsel experienced severe or extreme emotional distress.

The court also stated that the hospital potentially violated counsel’s civil rights and right to a due process hearing and would not let him work part-time or have a flexible schedule. According to the court, this conduct could be found to be so outrageous “that it is beyond the bounds of a civilized society.” The court also ruled that counsel alleged severe and emotional distress that was “beyond the stress of everyday life” because counsel suffered anxiety and panic attacks after being allegedly terminated.

DeLouis v. Iowa Bd. of Med. (Summary)

BOARD OF MEDICINE

DeLouis v. Iowa Bd. of Med., No. 13-1623 (Iowa Ct. App. Aug. 27, 2014)

The Court of Appeals of Iowa affirmed a lower court’s dismissal of a physician’s request that the Iowa Board of Medicine rescind her Settlement Agreement, holding that the physician was on notice of the terms and conditions of the agreement and accepted them. Plaintiff, a physician, was accused of violating the prohibition on prescribing a controlled substance for a family member. The board presented the physician with a Statement of Charges and a Settlement Agreement, which explicitly stated that the physician “voluntarily waives any rights to a contested case hearing on the allegations contained in the Statement of Charges and waives any objections to the terms of this Order.”

The Board of Medicine, pursuant to federal law, reported the Settlement Agreement to the National Practitioner Data Bank (“NPDB”), after which the physician’s medical malpractice insurance carrier dropped her coverage. About 60 days later, the physician requested the Board of Medicine to rescind the Settlement Agreement and its report to the NPDB because she did not know that a report would be made to the NPDB and she did not understand the nature or the importance of the charges against her. The Board of Medicine denied the physician’s request, and the physician asked the lower court to review the Board of Medicine’s decision. The lower court held that the physician did not seek judicial review of the Settlement Agreement in a timely manner. The physician appealed.

The appellate court affirmed the lower court’s dismissal, holding that the Settlement Agreement was the final agency action in a contested case proceeding, so a petition for review should have been filed within 30 days of the agreement. The court relied on the fact that the Settlement Agreement explicitly stated that it was a “contested case proceeding.” Additionally, the court held that the NPDB report did not extend the deadline for a petition for judicial review because it was not an “other agency action.” The physician agreed to the terms of the Settlement Agreement and the Board’s rules provide that it will report final decisions to the NPDB.

Emanuel Med. Ctr., Inc. v. Dominique (Summary)

SLAPP

Emanuel Med. Ctr., Inc. v. Dominique, No. F066648 (Cal. Ct. App. Aug. 27, 2014)

The California Court of Appeals affirmed a trial court’s order to strike a hospital’s cross-complaint against an employee under the anti-SLAPP (“Strategic Lawsuit Against Public Participation”) statute.

An employee was hired by the hospital to create and manage a cardiovascular services department. After several encounters with a surgeon who was angry at being asked to report his schedule, the employee was told she was being investigated due to her managerial style. Soon after, she alleged that she was told that she had “lost the support of her staff,” was placed on administrative leave, and was informed that her employment would be terminated. The employee filed a complaint for wrongful termination. The hospital discovered that the employee had continued to access her company e-mails even after being notified of her termination. The hospital, therefore, filed a cross-complaint alleging that she stole proprietary information by e-mailing work e-mails to her personal e-mail account. The employee sought to strike this cross-complaint, arguing that the employee’s e-mails were a means of gathering evidence for her attorney, which is a protected activity. The court agreed with this assertion and struck the hospital’s claims.

The appellate court affirmed the trial court’s decision to strike the hospital’s cross-complaint. The court found that the employee’s act of accessing and collecting e-mails was protected under the anti-SLAPP statute, because it arose from the protected act of filing a complaint and because it was a means of communication with her attorneys in preparation for bringing an action. However, the court clarified that forwarding e-mails to oneself does not constitute protected activity. Additionally, the court concluded that the hospital did not make the requisite showing that the access to e-mails was unlawful or resulted in any actual damage.

Nath v. Tex. Children’s Hosp. (Summary)

ATTORNEY’S FEES

Nath v. Tex. Children’s Hosp., No. 12-0620 (Tex. Aug. 29, 2014)

The Supreme Court of Texas upheld sanctions imposed on a physician, holding that there was sufficient evidence for the lower court to require the physician to pay the hospital’s and college of medicine’s attorney’s fees because the physician brought frivolous, time-barred claims. The court, however, remanded the case to determine whether the behavior of the hospital and the College of Medicine caused their legal expenses to accrue. The court pointed out that the defendants waited four years to file a summary judgment motion after they became aware that the physician’s claims were frivolous and time-barred. During these four years, the physician filed six amended complaints to which the defendants were required to respond, inflating their attorney’s fees to $1.4 million.

See Dissenting Opinion Here

Tibbs v. Bunnell (Summary)

PSQIA

Tibbs v. Bunnell, No. 2012-SC-000603-MR (Ky. Aug. 21, 2014)

The Supreme Court of Kentucky reversed a decision issued by the state’s Court of Appeals regarding the disclosure of a surgical nurse’s post-incident event report. The incident report was requested as part of a medical malpractice and wrongful death lawsuit filed by the estate of a deceased patient.

The medical malpractice action concerned an elective spine surgery performed at the University of Kentucky Hospital. The patient died due to complications from the surgery; later that day, a surgical nurse at the hospital generated a post-incident event report. When the patient’s estate requested peer review and incident reports related to the death, the physicians argued that the surgical nurse’s report was protected by the Patient Safety and Quality Improvement Act of 2005 (“PSQIA”). The PSQIA is a federal statute that protects information reported to patient safety organizations for the purposes of quality improvement and patient safety.

The Court of Appeals ruled that the PSQIA only protects documents employing a “self-examining analysis,” and had ordered the circuit court to review the surgical nurse’s report in order to see whether it was protected by the law. The Supreme Court of Kentucky reversed this decision, ruling that the nurse’s incident report was not protected by the PSQIA because its collection, creation, maintenance, and utilization was mandated by Kentucky law as part of its oversight of healthcare facilities. The Supreme Court of Kentucky concluded that information normally contained in an incident report is not privileged under the PSQIA.

U.S. ex rel. Helfer v. Associated Anesthesiologists (Summary)

FALSE CLAIMS – QUI TAM RELATOR

U.S. ex rel. Helfer v. Associated Anesthesiologists, No. 10-3076 (C.D. Ill. Aug. 25, 2014)

The United States District Court of the Central District of Illinois granted in part and denied in part an anesthesiology group’s motion to dismiss a lawsuit filed by a qui tam relator (“relator”). The relator, who had formerly served as a member of the anesthesiology group’s Board of Directors, alleged that the group’s billing practices were illegal under Illinois law and under the regulations issued by the Centers for Medicare & Medicaid Services (“CMS”).

Disputes arose after a business consultant advised the Board of the anesthesiology group to resubmit claims for epidural services administered for patients in labor. These proposed billing changes would indicate that an anesthesiologist had continuously performed the service from the time anesthesia was administered to the delivery of the child. The consultant further advised the Board that it could avoid review from insurance companies by capping its billing at ninety percent of the maximum amount that other anesthesia groups in the state were charging.

The relator, who was present for the discussion, reviewed the CMS regulations after the meeting. The relator came to the conclusion that the proposed billing practice would be illegal, since none of the anesthesiologists actually remained in the Obstetrics Department after beginning the epidural anesthesia service. When the relator aired his concerns with other physicians in the group, one said that he was “just trying to cause trouble.” The relator ultimately chose to contact CMS to see whether the proposed arrangement was legal. When the anesthesiology group learned about this, they informed the relator that he could either resign or be terminated. The relator chose to file a lawsuit, alleging violations of both state and federal laws.

The anesthesiology group and the other defendants succeeded in dismissing several claims due to procedural and jurisdictional defects. However, the court ruled that the relator had adequately alleged federal and state claims for retaliatory discharge, and also permitted the relator to continue his lawsuit for violations of both state law and the federal False Claims Act. In addition, the court held that the relator could sue for violations of the Illinois Insurance Claim Fraud Prevention Act, so long as the violations had occurred within the past eight years.