Copeland v. MidMichigan Reg’l Med. Ctr. (Summary)

RELEASE FORMS

Copeland v. MidMichigan Reg’l Med. Ctr., Docket No. 314880 (Mich. Ct. App. June 5, 2014)

The Court of Appeals of Michigan ruled that a release form signed by a physician as part of his application for appointment and clinical privileges barred his claim against a hospital for defamation. The court also ruled against the physician on his claims for disability discrimination and breach of contract.

The dispute between the hospital and physician arose after an anonymous individual at the hospital alleged that a neurosurgeon was “slurring his speech and acting erratically” during surgery. The hospital issued a precautionary suspension and required the physician to participate in a substance abuse assessment program. He was found not to have an impairment. The neurosurgeon sued the hospital for breach of contract, defamation, and discrimination under the Michigan Persons with Disabilities Act. In addition, he sued the anonymous informant for defamation and tortious interference with a business relationship.

The trial court concluded that the neurosurgeon’s defamation and tortious interference claims were barred by a release agreement he had signed as part of his application for clinical privileges. This release agreement extended immunity to the hospital for all claims related to summary suspensions or matters of professional competence. Although these claims were unsuccessful, the neurosurgeon was able to compel the hospital to disclose the informant’s identity during discovery. The trial court ruled that Michigan’s peer review statute did not protect the informant’s identity, as it was considered background information and was not part of the peer review deliberations.

The court’s analysis of the neurosurgeon’s disability discrimination claim was slightly more complicated. The neurosurgeon had argued that the hospital discriminated against him because he suffered from hepatitis C. To win on his claim of discrimination, the neurosurgeon needed to prove that his disability was not related to his ability to use privileges at the hospital. The trial court ruled that hepatitis C was related to his ability to use privileges, as the condition had forced him to take time off from work in the past. The appellate court disagreed, ruling the hospital clearly did not regard the neurosurgeon as disabled, since it had reinstated him with full medical privileges despite his hepatitis C-related leave of absence. The appellate court concluded that the hospital had suspended the physician on the basis of perceived substance abuse, which is not a disability under the Persons with Disabilities Act.

Lastly, the court ruled that the neurosurgeon’s remaining breach of contract claim was barred by the Health Care Quality Improvement Act.

Frances v. Nexion Healthcare at McKinney, Inc. (Summary)

AGE DISCRIMINATION

Frances v. Nexion Healthcare at McKinney, Inc., Case No. 4:13cv210 (E.D. Tex. June 17, 2014)

A federal district court in Texas granted in part and denied in part a hospital’s motion to dismiss claims alleging that a former vocational nurse was dismissed due to age discrimination.

The nurse, a 61-year-old male, worked at the health care facility since 2010, where he received satisfactory performance reviews. In the summer of 2011, he was given the choice to be either demoted or terminated. The nurse resigned and was replaced by someone younger.

The court denied the health care facility’s motion to dismiss claims of discriminatory discharge or demotion. The court found that the nurse presented sufficient allegations to support the action, so long as evidence is presented at trial to show that his employment would have been made objectively worse by his employer’s actions.

Additionally, the court found that the nurse alleged sufficient facts to support the nurse’s claim of constructive discharge under the Age Discrimination in Employment Act. Once again, the court reminded the nurse that he will be required to support his claim with evidence to show that he felt compelled to resign in the situation.

Finally, the nurse was held to have first exhausted all of his administrative remedies, as the allegations in his EEOC complaint were consistent with the pleadings brought before the court.

Semertzides v. Bethesda N. Hosp. – June 2014-2015 (Summary)

ANTITRUST/WHISTLEBLOWER/INTENTIONAL INFLICTION/HOSTILE WORK ENVIRONMENT

Semertzides v. Bethesda N. Hosp., No. 1:14-CV-135 (S.D. Ohio June 9, 2014), aff’d, No. 14-3669 (6th Cir. June 4, 2015)

The United States District Court for the Southern District of Ohio dismissed a surgeon’s antitrust, whistleblower, intentional infliction of emotional distress and hostile work environment claims which were filed against a hospital after it terminated the surgeon’s clinical privileges.

 The hospital’s surgical advisory committee raised questions about the surgeon’s competence that turned into an investigation and which ultimately led to his clinical privileges being terminated.  The surgeon filed a lawsuit, alleging, among other things, that the review committee was led by his competitors who wanted to eliminate him from competition.

 The court held that the surgeon’s antitrust claim failed because he did not state that the peer review process produced anticompetitive effects concerning a particular product or service, since the complaint discussed general surgical procedures and adhesion surgeries, but never specified the affected service.  The antitrust claim also failed because the surgeon did not define a relevant geographic market, since the claim addressed the county the hospital was located in, the tri-state area, and the entire United States, but never concluded which one was affected.

 The court also ruled that the whistleblower claim failed because it did not allege that the hospital had ever submitted a false claim to the government for payment, that the intentional infliction of emotional distress claim failed because the alleged conduct the hospital engaged in was not “extreme and outrageous…beyond all possible bounds of decency, and which is utterly intolerable in a civilized community” and that the hostile work environment claim failed because the surgeon’s complaint did not contain any allegations indicating that the hospital discriminated against him based on a protected characteristic.

Ohio State Dental Bd. v. HealthCare Venture Partners, LLC (Summary)

DISCOVERY/ALCOHOL TREATMENT RECORDS

Ohio State Dental Bd. v. HealthCare Venture Partners, LLC, No. 14AP-165 (Ohio Ct. App. June 10, 2014)

The Court of Appeals of Ohio affirmed a trial court’s decision that a state dental board could obtain the treatment facility records of a dentist who entered Board-ordered treatment for alcohol dependency issues.

The dentist was investigated after he was found to have performed oral surgery with a blood alcohol content of 0.18 mg/dl.  A few months later, the dentist was arrested for driving with a blood alcohol content well over the legal limit.  The Board ordered the dentist to submit to evaluation at a treatment facility to determine if he suffered from alcohol abuse or dependency that would negatively affect his ability to practice dentistry, and he signed a release form which permitted the facility to disclose information to the Board.  A physician at the treatment facility determined that the dentist was impaired due to alcohol dependency, and the dentist’s license was subsequently suspended by the Board.  After the suspension, the Board subpoenaed the dentist’s treatment facility records for use at his hearing, and the facility refused to comply.  The trial court ruled in favor of the Board, ordering the treatment facility to hand over the dentist’s records.

The appellate court affirmed the trial court’s ruling, holding that the Board provided sufficient good cause for the disclosure of the records, as the public interest for the full disclosure of the dentist’s alcohol dependence outweighed any potential injury to the dentist, his doctor-patient relationship, or his treatment service.  There was no alternative way that the information could have been obtained effectively, and because the dentist signed the waiver, it is clear that he had little expectation of confidentiality when he entered the treatment facility.  Additionally, the appellate court found that disclosure of the information may be allowed if it is in connection with litigation or administrative proceedings.

Hagen v. Siouxland Obstetrics & Gynecology, P.C. – May 2014 (Summary)

EMPLOYMENT TERMINATION/ WRONGFUL DISCHARGE

Hagen v. Siouxland Obstetrics & Gynecology, P.C., No. C 11-4047-MWB (N.D. Iowa May 30, 2014)

In a lawsuit disputing the appropriateness of a physician’s termination from his group practice, the United States District Court for the Northern District of Iowa denied the group practice’s post-trial motion for judgment as a matter of law or, in the alternative, for a new trial.

This case arose after a physician became enraged over the death of a fetus that was supposed to be under the care of one of the physician’s practice partners.  The physician made loud comments about the competence of the hospital nurses and his practice partner at the hospital where the pregnant patient was being treated and loudly spoke about his opinion that the nurses had killed the baby.  After the incident was over, the physician reported his practice partner and the nurses to the hospital, told the patient that his practice partner and the nurses had committed malpractice and she should get a lawyer, and spoke with several attorneys about reporting the incident to the state medical board.  A few days later, his group practice notified him that his employment was terminated.

The physician sued the group practice and its individual physician shareholders, claiming that he was wrongfully terminated, in violation of Iowa’s public policy, for stating an intention to report his practice partner’s negligence to the state medical board, for reporting his partner’s and the nurses’ negligence to the hospital, for disclosing to a patient that she may have been the victim of malpractice, and for consulting with attorneys regarding whether he should make a report to the state medical board.  At trial, the jury held the group practice liable for wrongful discharge, finding that its termination decision was based on the physician report to the hospital, disclosure to the patient, and consultation with attorneys.  The jury awarded the physician $1,051,814 for past lost earnings.

Both parties filed post-trial motions.  The group practice moved for a judgment as a matter of law, or alternatively a new trial.  It argued, among other things, that Iowa law did not recognize any of the activities set forth in the jury’s verdict (reporting negligence to a hospital, disclosing malpractice to a patient, and consulting with an attorney about whether to make a report to a state medical board) as protected conduct.  The federal district court acknowledged no Iowa precedent on this issue, but after certifying the question for the Iowa Supreme Court and having that court decline to answer the certified question, the district court determined that such action is protected conduct actionable under Iowa wrongful discharge law.

Interestingly, the court also rejected the group practice’s argument that the jury should have been instructed that it could find wrongful discharge only if it determined the group practice had no overriding business justification for the termination.  The court held that its instruction that the jury should consider whether there were other “legitimate reasons or motives for the discharge” was sufficient.  Despite this, without explanation, the court held that its ruling (which prevented the group practice from offering testimony from a list of witnesses who would have corroborated the practice’s testimony that the physician displayed a long history of inappropriate and disruptive behavior) was not erroneous and, even if it were, it was harmless.

For more on the history of this interesting case, see:

Hagen v. Siouxland Obstetrics & Gynecology, P.C., No. C 11-4047-MWB (N.D. Iowa Aug. 29, 2013)

Hagen v. Siouxland Obstetrics & Gynecology, P.C., No. C 11-4047-MWB (N.D. Iowa Mar. 20, 2013)

Hagen v. Siouxland Obstetrics & Gynecology, P.C., No. C11-4047-MWB (N.D. Iowa Dec. 7, 2012)

King v. Garfield Cnty. Pub. Hosp. (Summary)

EMPLOYMENT TERMINATION

King v. Garfield Cnty. Pub. Hosp., No. 12-CV-0622-TOR (E.D. Wash. June 6, 2014)

The United States District Court for the Eastern District of Washington denied a defendant-public hospital’s motion for reconsideration regarding its ruling that a plaintiff-nurse was entitled to due process after his employment was terminated for a positive drug test.

 The nurse was prescribed painkillers with codeine after a dental procedure.  In the days that followed, another employee suspected that the public hospital’s supply of morphine had been diverted and diluted, and the hospital subsequently administered a drug test to its employees.  The nurse was found to have high levels of morphine in his system, and was subsequently put on leave, then terminated.  It was later found that while there was morphine in the nurse’s system, the results were not consistent with the use of morphine from the hospital, and thus the test results were inaccurate.

 In a prior opinion, the district court found potential merit in the nurse’s claims that his termination without a hearing was in violation of his right to due process, and that even though the nurse was later able to find employment elsewhere, a name-clearing hearing was still deemed appropriate because the accuracy of the termination charges was contested, the charges had been made subject to public disclosure, and the accusations were connected to his termination.  (See King v. Garfield Cnty. Pub. Hosp., No. 12-CV-0622-TOR (E.D. Wash. May 1, 2014)).

 In this subsequent opinion, the hospital argued that the due process protections were not triggered because the defamation did not occur within the course of termination.  The court disagreed, finding a strong inference that the nurse was terminated as a result of the inaccurate drug test.

 The hospital argued also that the termination was not publicly disclosed, as the nurse’s test results were confidential.  However, the court found that placing stigmatizing information in an employee’s personnel file, which is classified as public record, is sufficient to constitute publication.  Additionally, though the statement of the failed drug test was not technically false, the court held that it created a strong and stigmatizing inference of drug diversion.  Because the defamatory events were public, inaccurate, and within the course of the nurse’s termination, the court maintained that the nurse was entitled to a name-clearing hearing.

Marsh v. Anesthesia Servs. Med. Grp., Inc. (Summary)

INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE

Marsh v. Anesthesia Servs. Med. Grp., Inc., D064024 (Cal. Ct. App. June 6, 2014)

A California appellate court reversed a lower court’s ruling that was in favor of a physician group that dismissed an anesthesiologist’s claims of intentional interference with prospective economic advantage.

 The anesthesiologist’s claim of intentional interference with prospective economic advantage was predicated on defamatory statements allegedly made by the group.  The anesthesiologist argued that these statements had caused two plastic surgeons to stop using her services, causing her economic harm.

 The lower court had dismissed the anesthesiologist’s claim, ruling that she had not adequately linked the group’s defamatory statements with the plastic surgeons’ decision to stop using her services.  The California appellate court reversed this part of the lower court’s decision, concluding that the anesthesiologist had adequately linked the conduct of the plastic surgeons with the statements made by the group, and that she could continue her lawsuit for intentional interference with prospective economic advantage.

U.S. ex rel. Judd v. Quest Diagnostics, Inc. (Summary)

FALSE CLAIMS – QUI TAM

U.S. ex rel. Judd v. Quest Diagnostics, Inc., No. 10-4914 (KM) (D.N.J. May 30, 2014)

The U.S. District Court for the District of New Jersey granted in part and denied in part a diagnostic testing laboratory’s motion to dismiss the qui tam allegations of false claims brought by a physician who alleged that the lab provided his office practice with free supplies and discounted lab services in order to induce the referral of Medicare and Medicaid patients to the lab.

In seeking dismissal, the lab first argued that the doctor’s claims were barred by the public disclosure provision, which prevents a relator from bringing a qui tam action if the fraudulent scheme underlying that action has already been publically disclosed, unless the relator is an original source of the information.  The court held that the claims underlying this lawsuit had already been publically disclosed in two prior lawsuits, but also held that the relator in this case was an original source of information with respect to the specific fraud that occurred at his own medical practice (with the relator providing substantial details of the fraudulent scheme as it was implemented at his office, including identifying specific tests and equipment provided to the practice for free, as well as identifying a number of claims submitted to Medicare/Medicaid by the practice for equipment that had been provided to the practice at no cost by the lab).

The court went on to note that the doctor did not have direct or independent knowledge regarding other medical providers who allegedly entered into similar arrangements with the lab and, therefore, held that the doctor was not an original source of information with respect to any such claims.  Further, the court held that the doctor had not pled with specificity any false claims submitted by the lab to the federal government and, accordingly, the court dismissed all false claims allegations based on claims allegedly submitted by the lab (as opposed to those submitted by the physician’s medical practice).

Pacific Radiation Oncology, LLC v. Queen’s Med. Ctr. (Summary)

BREACH OF BYLAWS & UNFAIR COMPETITION

Pacific Radiation Oncology, LLC v. Queen’s Med. Ctr., Civil No. 12–00064 LEK-KSC (D. Haw. May 30, 2014)

The United States District Court for the District of Hawai’i denied a motion by plaintiff physicians to dismiss counterclaims by a hospital and its board and managers for breach of contract and unfair competition in violation of Hawai’i law.

The breach of contract claim was based on the Medical Staff Bylaws, which included a covenant not to sue the hospital for any matter relating to clinical privileges.  The hospital and its board of managers argued that this provision entitled them to countersue the physicians who filed a lawsuit challenging the hospital’s policy that only employed radiation oncologists could exercise clinical privileges.

The hospital’s unfair competition counterclaim alleged that the plaintiff physicians were improperly diverting patients from the hospital to radiation oncology facilities in which the physicians held an ownership interest, which the hospital alleged constituted “free riding.”

Tabata v. Charleston Area Med. Ctr., Inc. (Summary)

BREACH OF PATIENT CONFIDENTIALITY

Tabata v. Charleston Area Med. Ctr., Inc., No. 13–0766 (W. Va. May 28, 2014)

The West Virginia Supreme Court of Appeals reversed a lower court’s ruling that a group of patients did not meet the criteria for a class action lawsuit.  The dispute emerged after a medical center accidentally published patients’ personal and medical information on a public website.

In February 2011, certain patients received a letter from a local medical center informing them that some of their personal and medical information had been unintentionally placed on the Internet.  The information, which had been exposed since September 2010, included the patients’ names, dates of birth, contact details, social security numbers, and basic respiratory care records.  Although there was no evidence of unauthorized access, the local medical center admitted that someone could have found the information by conducting an “advanced internet search.”  The medical center offered to provide the affected patients with a full year of credit monitoring.

Some patients filed lawsuits alleging a breach of confidentiality and an invasion of privacy.  In addition, they attempted to initiate a class action lawsuit on behalf of the 3,655 patients affected by the breach.  The lower court ruled that the patients lacked standing to bring a claim because they could not show that they had suffered any kind of actual harm from the publication of their medical records.  Further, the lower court held that the patients did not meet the requirements for a class action lawsuit, including commonality (i.e., that the class, as a whole, has common issues of law or fact to raise in the lawsuit), typicality (i.e., that the representatives of the class have claims that are typical of the other members of the class), and predominance of common issues of law or fact (i.e., that the common issues of law or fact are greater than the individual issues that members of the class may have) among members of the class.

On appeal, the high court reversed the lower court decision, finding that patients have a legal interest in the confidentiality and privacy of their health information and, in turn, the plaintiff patients in this case had standing to bring a suit alleging violation of those interests.  Further, the court held that the patients satisfied the requirements for bringing a class action, noting that the claims of the entire class would be based on the same set of facts and would allege the same legal claims for violation of confidentiality and invasion of privacy.

Read the Supreme Court of West Virginia Opinion Here

Read the Dissenting Opinion of Justice Ketchum Here