Kazmi v. Dep’t of Fin. and Prof’l Regulation (Summary)

PHYSICIAN LICENSURE

Kazmi v. Dep’t of Fin. and Prof’l Regulation, No. 1-13-0959 (Ill. App. Ct. Sept. 10, 2014)

The Appellate Court of Illinois confirmed a decision by the Illinois Department of Financial and Professional Regulation (“Illinois Board of Medicine”) to revoke a physician’s license to practice medicine in the State of Illinois. In so doing, the Court of Appeals reversed the decision of a lower court, which had struck down the initial revocation by the Illinois Board of Medicine as overly harsh and limited the punishment to a suspension of the physician’s license for a minimum of nine months.

At trial, the physician admitted that he had made numerous misrepresentations on his application for an Illinois medical license. These misrepresentations included fabricated employment histories, omissions of various disciplinary and performance problems in past residencies, the failure to disclose a suspension for prescribing controlled substances for his wife, and residencies that he had never completed. The court also noted that the state of Ohio had barred this physician from ever obtaining a medical license because of similar problems.

Based upon these facts and circumstances, the court concluded that the physician’s misrepresentations had prevented the Illinois Board of Medicine from conducting any meaningful assessment of his fitness to practice medicine. The court explained that fraud had “tainted the process from the outset” and that any sanction short of revocation would permit the physician to keep a license he was never entitled to in the first place. Concluding that the Illinois Board of Medicine exercised its authority in an appropriate fashion, the court reversed the lower court’s decision and reinstated the original revocation of the physician’s license to practice medicine in Illinois.

Exeter Hosp. v. Kwiatkowski (Summary)

VICARIOUS LIABILITY

Exeter Hosp. v. Kwiatkowski, No. 14-cv-009-SM (D. N.H. Sept. 4, 2014)

A cardiac catheterization technician was employed at 19 hospitals in the span of nine years, and tested positive for hepatitis C. He often stole drugs from a hospital, used them, and refilled the depleted syringes with saline. The tainted needles were then used on patients, infecting at least 32 with hepatitis C. The hospital settled nearly all suits with affected patients. It then sought statutory contribution from the technician, an employment agency with which he had been affiliated, and the American Registry of Radiologic Technologists (“ARRT”). The employment agency and AART filed motions to dismiss the case, arguing that the hospital failed to allege sufficient facts to show that they had a duty of care of the hospital’s patients.

The court granted the motion to dismiss the employment agency, finding that the hospital had pled insufficient facts for a determination that the agency could have foreseen the criminal conduct that the technician would undertake while working for the hospital. The court denied ARRT’s motion to dismiss, finding that the hospital had alleged sufficient facts to suggest that ARRT had a broader range of duties and responsibilities as a certifying agency. As such, the agency likely had greater knowledge of the technician’s wrongful acts and could have investigated the incident or taken action to revoke the technician’s credentials.

Pinnacle Healthcare v. Sheets (Summary)

RESTRICTIVE COVENANTS

Pinnacle Healthcare v. Sheets, No. 37A04-1401-CT-39 (Ind. Ct. App. Sept. 10, 2014)

The Court of Appeals of Indiana ordered a trial court to hold a hearing on a hospital’s request for a preliminary injunction to require a formerly employed physician to comply with the terms of a noncompete agreement. The appellate court directed the trial court that noncompetition agreements with physicians in Indiana are not “per se unreasonable,” even if they deprive a community of important medical services or if they deny patients the opportunity to choose their own medical provider.

During the summer of 2011, the physician sold his practice to Pinnacle Healthcare (“Pinnacle”) and became one of its employed physicians. Under the terms of his employment agreement, he was prohibited from opening a competing medical practice within 25 miles of Pinnacle and was prohibited from soliciting other employees to leave Pinnacle and from making negative comments about Pinnacle.

In December 2013, the physician gave notice to Pinnacle that he was terminating the employment agreement due to Pinnacle’s alleged failure to pay him funds owed under their agreement. He opened a competing medical practice and began treating former patients at this new location. Pinnacle petitioned the trial court to enjoin the physician from engaging in these activities, but the circuit court refused, citing a shortage of physicians in the community. It concluded that this would be “too great a burden against the public interest.”

The Court of Appeals of Indiana reversed. It explained that noncompetition agreements with physicians are permissible under Indiana law even if they deprive a community of important medical services. Furthermore, it noted that the trial court did not adequately consider Pinnacle’s claims under the non-solicitation and non-disparagement clauses of the employment agreement. It reversed the trial court’s denial of the injunction and remanded with instructions for the trial court to reconsider all of Pinnacle’s allegations.

Chapman v. Lourdes Med. Ctr. of Burlington Cnty. (Summary)

DISCRIMINATION

Chapman v. Lourdes Med. Ctr. of Burlington Cnty., No. A-0120-12T1 (N.J. Super. Ct. App. Div. Sept. 10, 2014)

The Superior Court of New Jersey, Appellate Division affirmed a lower court’s dismissal of an obstetrician’s discrimination and tortious interference claims against a hospital, holding the hospital’s decision was based on sufficient reliable evidence.

Plaintiff, an obstetrician, had clinical privileges at the hospital. Over a seven-year period, he was involved in four medical malpractice suits. Two involved maternal deaths, two involved fetal deaths, and one also involved severe maternal injury. In one of the cases, the New Jersey Board of Medical Examiners found the obstetrician “grossly negligent” and issued a consent order reprimanding and fining him.

The chair of the OB/GYN Department requested the hospital’s Medical Executive Committee (“MEC”) to investigate the obstetrician. The investigation committee recommended that the obstetrician enroll in a continuing education program that involved extensive training in complex care. The MEC rejected this recommendation and voted to revoke the obstetrician’s privileges. This decision was ultimately adopted by the hospital. The obstetrician brought suit, claiming race discrimination, tortious interference with prospective economic advantage, breach of implied contract, and civil conspiracy.

The court affirmed the lower court’s dismissal of all the claims. The court held that the hospital’s decision to revoke the obstetrician’s privileges was supported by sufficient reliable evidence and any other inference would be based on speculation. Furthermore, the court explained that the obstetrician was not treated differently than any other similarly situated individuals because the obstetrician was the only person involved in all four medical malpractice claims.

Loyd v. St. Joseph Mercy Oakland (Summary)

PEER REVIEW PRIVILEGE

Loyd v. St. Joseph Mercy Oakland, No. 13-2335 (6th Cir. Sept. 10, 2014)

The United States Court of Appeals for the Sixth Circuit affirmed a lower court’s dismissal of a security guard’s age, race, and sex discrimination claims against a hospital, holding that the hospital’s internal report on the security guard’s termination was protected by the peer review privilege and the security guard failed to show that she was discriminated against.

Plaintiff, a 52-year-old woman, was a security guard at the hospital. The security guard, already on final written warning for insubordination and leaving her post, was called to restrain an agitated and combative psychiatric patient. The security guard questioned the nurse’s orders and informed the patient that she was free to go. The patient became even more agitated and tried to remove her IV. Additional security guards were called, and the patient was properly restrained.

The hospital performed an internal investigation as part of its quality assurance review system. Upon the investigation’s conclusion, the hospital terminated the security guard. She then brought suit claiming age, race, and sex discrimination.

During discovery, the security guard attempted to compel the production of the quality assurance report. The hospital objected, claiming that it was protected by the peer review privilege.

The court held that the quality assurance report was protected by the peer review privilege because state courts have construed the privilege to encompass reports involving staff members who are not physicians or nurses. Next, the court affirmed the dismissal of the security guard’s race and sex discrimination claims because she had not proved she was treated differently or less favorably than similarly situated employees outside of the protected classes because she was replaced by a woman of the same race. Lastly, the court affirmed the dismissal of the security guard’s age discrimination claim because the hospital’s reason for terminating her was not pretextual.

Robinson v. CareAlliance Health Servs. (Summary)

AMERICANS WITH DISABILITIES ACT

Robinson v. CareAlliance Health Servs., Civil Action No. 2:13-cv-1916-RMG (D. S.C. Sept. 4, 2014)

The United States District Court for the District of South Carolina denied a hospital’s motion to dismiss an obstetrician’s disability discrimination claim, holding that a non-employee obstetrician with clinical privileges is not precluded from bringing a “reasonable accommodation” claim against a “place of public accommodation.”

Plaintiff, an obstetrician, was not able to stand for long periods of time due to a foot fracture stemming from diabetes. Therefore, he delivered babies while sitting on a rolling stool. After a complicated caesarian performed from the stool resulted in an infection to the patient, the hospital suggested the obstetrician take a medical leave of absence. After the leave of absence concluded, the obstetrician experienced difficulty getting his privileges reinstated.

The obstetrician sued, claiming the hospital had violated the Americans with Disabilities Act (“ADA”) by not providing him with a “reasonable accommodation” by allowing him to use a rolling stool and allowing nurses to carry babies for him. The hospital claimed that the obstetrician is precluded from such a claim because he was given privileges at the hospital and is not a member of the public seeking services at “a place of public accommodation.”

The court held that a non-employee obstetrician with hospital privileges is not precluded from bringing a “reasonable accommodation” claim against a “place of public accommodation.” The court relied on the United States Supreme Court’s broad interpretation of the ADA to include non-employees with privileges. The court recognized that other lower courts have used “clients or customers” to limit the ADA’s scope of who can assert a claim against “a place of public accommodation.” However, the court believed that the weight of authority allowed such a claim.

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.