Manion v. Spectrum Healthcare Resources (Summary)

RETALIATORY TERMINATION – FEDERAL CONTRACTOR

Manion v. Spectrum Healthcare Resources, No. 7:12-CV-247-BO (E.D. N.C. Aug. 6, 2013)

The United States District Court for the Eastern District of North Carolina denied a health care contracting company’s motion to dismiss an employed psychiatrist’s claims of illegal reprisal for protected disclosures under the Defense Contractor Whistleblower Protection Act (“DCWPA”).

The psychiatrist, who was employed by a contracting service to provide psychiatric treatment to severely injured sailors and marines returning from combat duty, was terminated after he filed complaints with Congress and the OIG about the lack of protocols for managing psychotic, suicidal and homicidal patients, as well as chronic under-staffing in a Navy hospital.  The psychiatrist sued both the health care contracting company and the secondary company that it had assigned his contract to in order to monitor his employment.  The health care contracting company claimed that the psychiatrist had no standing to sue under the DCWPA because he was not an employee civilian defense contractor, but rather an independent contractor of the secondary company under a personal services contract with the Navy.

The court resolved the issue of whether the psychiatrist was entitled to whistleblower protection under the DCWPA by pointing out that a similarly remedial statute, the False Claims Act, favored a broader definition of the term “employee” to protect the government from fraud.

In re Higby (Summary)

PEER REVIEW PRIVILEGE

In re Higby, No. 01-11-00946-CV (Tex. App. Aug. 13, 2013)

The Court of Appeals of Texas granted a relator’s petition for writ of mandamus, finding that the American College of Obstetrics and Gynecology’s (“ACOG”) Grievance Committee, which reviews allegations made about physician fellows who are members of the group, falls within the purview of the medical peer review committee statute, and, thus, the relator’s communications that had been made to the committee were privileged.  The underlying matter involved two physicians – one a maternal-fetal medicine specialist and one an obstetrician-gynecologist – who had served as experts in a malpractice case, one on behalf of the plaintiff mother and the other on behalf of the defendant obstetrician.

After reviewing the reports completed by the obstetrician-gynecologist expert, the maternal-fetal medicine physician filed a complaint with the ACOG Grievance Committee alleging that the reports were full of false and misleading statements.  As a result, the obstetrician-gynecologist expert sued the maternal-fetal medicine physician for defamation.  At a deposition, the maternal-fetal medicine physician refused to answer several questions about his complaint claiming that the information sought was protected by the state peer review privilege because the Grievance Committee was a “medical peer review committee.”

The court looked to the state medical peer review statute for the definition of “medical peer review committee” and found that it defines such a committee as one which is “authorized to evaluate the quality of medical and health care services…[and] the competence of physicians….” As such, the court reasoned that providing expert testimony and opinions clearly implicates the competence of the physician, thus suggesting that the Grievance Committee is a peer review committee and that the maternal-fetal medicine physician’s communications to the committee were privileged.

Cole v. Jersey City Med. Ctr. (Summary)

TERMINATION OF EMPLOYMENT

Cole v. Jersey City Med. Ctr., A-6-12; 070542 (N.J. Aug. 14, 2013)

The Supreme Court of New Jersey affirmed a lower court’s decision finding that an anesthesia group with an exclusive contract to provide anesthesia services at a hospital waived its right to arbitrate during the course of litigation involving one of its employed certified registered nurse anesthetists (“CRNA”).

A hospital suspended the privileges of the CRNA, an employee of the anesthesia group, after certain improprieties in her drug accounting practices were discovered.  As a result, the anesthesia group terminated her employment.  The CRNA sued the hospital and the hospital brought the anesthesia group into the lawsuit as a third-party defendant.  The hospital ultimately settled and the anesthesia group was granted summary judgment on two of the four remaining causes of action.  Three days before the trial on the remaining claims was set to commence, and 21 months after the initiation of the lawsuit, the anesthesia group sought to invoke the arbitration clause that was in the CRNA’s employment contract with the group.

The court found that a 21-month delay was substantial, especially since the anesthesia provider failed to notify the former employee of its intent to seek arbitration. Furthermore, the court found that, as the motion to compel arbitration occurred a mere three days before the scheduled trial date, this had a detrimental impact on the litigation process because the parties had invested considerable time in the lawsuit and the referral to arbitration delayed the resolution of the case, forcing the former employee to start over in a different forum under different rules.

Mazzorana v. Emergency Physicians Med. Grp., Inc. (Summary)

EMPLOYMENT DISCRIMINATION Mazzorana v. Emergency Physicians Med. Grp., Inc., No. 2:12-CV-1837 JCM (PAL) (D. Nev. Aug. 6, 2013) The United States District Court for the District of Nevada ruled to dismiss in favor of a medical group, finding that a  physician’s gender and age discrimination claims were time-barred because the physician did not identify a single allegedly unlawful practice that happened within 300 days of her filing a charge with the EEOC, as required by statute.  The court also dismissed the physician’s Equal Pay Act claim, finding that the physician had not set forth any allegations regarding a “substantially equal” position held by a male. Further, the court dismissed the physician’s retaliation claim, finding that the claim was based on conduct that occurred after filing the charge.  The court found that the conduct mentioned in the retaliation claim is conduct that could not have been alleged in the EEOC charge, as it occurred as a result of the physician filing the charge with the EEOC.

Pal v. New York Univ. (Summary)

FELLOWSHIP TERMINATION

Pal v. New York Univ., No. 06 Civ. 5892(PAC)(FM) (S.D. N.Y. Aug. 6, 2013)

The United States District Court for the Southern District of New York ruled in favor of a medical school, finding that the medical school’s suspension and subsequent termination of a physician in a fellowship program were not retaliatory actions that are protected by New York state labor laws, but, rather, were legitimately based on the physician’s improper behavior. The court found that the medical school had demonstrated that it had not acted adversely toward the physician because she had expressed concerns regarding patient safety, but instead, because she made anonymous pre-operative calls to patients, expressing her concerns and creating risks to the patients’ health. The court found that the physician was less concerned about patient safety than she was about herself and whether she would be blamed for a particular patient’s death.

Raja v. Englewood Cmty. Hosp., Inc. (Summary)

RACIAL DISCRIMINATION

Raja v. Englewood Cmty. Hosp., Inc., No. 8:12-cv-02083-JDW-AEP (M.D. Fla. Aug. 6, 2013)

The United States District Court for the Middle District of Florida granted in part and denied in part a hospital’s motion to dismiss a gastroenterologist’s claims that he was discriminated against on the basis of race after his application for reappointment was denied. The court refused to dismiss the intentional discrimination claim, holding that the gastroenterologist pled sufficient facts in his complaint to establish he had been treated differently from similarly situated, nonminority employees even though he had not identified such individuals by name.

However, the court did dismiss the retaliation claim, stating that the gastroenterologist failed to demonstrate a causal relationship between a lawsuit he filed against the hospital alleging discrimination in 2008 and the 2011 denial of his reappointment, noting that the hospital had actually renewed his appointment once in the time period between the filing of his initial lawsuit and the 2011 denial, making it “implausible” that the denial was retaliatory.

The district court also dismissed the gastroenterologist’s state law breach of contract claim because it was barred by the state peer review statute which grants immunity to individuals involved in the appointment and reappointment process. The court stated that the denial of reappointment required a demonstration of intentional fraud in order to overcome that statutory immunity and that the gastroenterologist’s allegation that the board had engaged in “secret” peer review proceedings was not sufficient to establish such fraud.

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On November 7, 2013, the United States District Court for the Middle District of Florida denied the gastroenterologist’s motion for reconsideration and leave to amend to file a fourth amended complaint to plead intentional fraud and a new claim for breach of medical staff bylaws against the hospital.  Raja v. Englewood Cmty. Hosp., Inc., No. 8:12-cv-02083-JDW-AEP (M.D. Fla. Nov. 7, 2013).

Dunning v. War Mem’l Hosp. (Summary)

DISABILITY DISCRIMINATION

Dunning v. War Mem’l Hosp., No. 12-2540 (6th Cir. Aug. 6, 2013)

The United States Court of Appeals for the Sixth Circuit affirmed a lower court’s grant of summary judgment in favor of a hospital, finding that a surgeon who sued the hospital alleging discrimination failed to establish the necessary elements of ADA and Rehabilitation Act claims.

The surgeon had initially been summarily suspended at the hospital after concerns arose about his medical practice and interpersonal relationships.  The summary suspension was eventually lifted, restrictions were put into place and the surgeon was required to obtain a “professional evaluation” by one of two programs identified by the Medical Executive Committee.  These actions were upheld by the Board following a hearing and an appeal and, while the surgeon did obtain the required evaluation, he refused to provide the results to the hospital.  After being informed that his medical staff appointment would expire at the end of the current term unless he provided the results of the evaluation, he sued in federal court one day before his appointment term was to expire, alleging that the hospital had discriminated against him on the basis of his disability – a personality disorder.

The court found that the lower court did not abuse its discretion in denying the surgeon an extension of time to file a response to the hospital’s summary judgment, as the surgeon continuously failed to adhere to the lower court’s schedule.  The court further found that the surgeon’s ADA claim was unfounded, as the surgeon failed to establish that he has a disability of which the hospital was aware, noting that the only mention of a personality disorder was found in the evaluation that the hospital had not even received and that the surgeon himself disagreed with and claimed was full of false statements. As for the surgeon’s Rehabilitation Act claim, the court found that the surgeon failed to state a cognizable claim, as he could not show that he was “excluded solely by reason of his disability.”

Maternal-Fetal Med. Assocs. of Md., LLC v. Stanley-Christian (Summary)

CONTRACT BREACH/COVENANT NOT TO COMPETE

Maternal-Fetal Med. Assocs. of Md., LLC v. Stanley-Christian, No. 0967 (Md. Ct. Spec. App. July 24, 2013)

The Court of Special Appeals of Maryland affirmed in part and vacated in part a lower court’s judgment, finding that the medical practice group has no contractual right to recover attorney’s fees and costs. A physician and her former employer, the medical practice group, both brought suit against each other. The former alleged: (1) fraud in the inducement; (2) breach of contract and duty of good faith and fair dealing; (3) tortious interference with contract or prospective business advantage; (4) wrongful termination (constructive discharge); and seeking (5) a declaratory judgment as to whether or not the non-competition provision was enforceable. The latter counter-claimed, asserting that the physician had breached the non-competition provision of her employment contract by working for her new employer.

The court found that the lower court’s granting of summary judgment in favor of the medical practice group did not bar the physician from later being able to assert that she did not materially breach the non-competition provision or that the medical practice group had breached other provisions of the contract. Furthermore, upon considering the medical practice group’s expert testimony, the court found that the lower court did not abuse its discretion in giving the instruction or permitting closing argument on the question of the medical practice group’s breach.

The court considered the physician’s evidence that indicated that the medical practice group rarely treated indigent, uninsured patients, which were the only patients treated by her new employers. Using this evidence, the court found that the lower court did not abuse its discretion in allowing the physician to claim that she had not materially breached her employment agreement by working for her new employer. Looking at the provision in the employment agreement that states the covenant not to compete, the court applied them to the facts of the case, and found that neither party was entitled to a contractual award of attorney’s fees and costs.  The court reasoned that the medical practice group failed in its attempt to enforce the non-competition provision and the physician was in breach of her obligation to reimburse the medical practice group for her pre-paid malpractice premium, per the contract.

The court concluded that the non-competition provision was reasonable on its face. Further, the geographical scope of the non-competition provision, twenty miles, is limited, and its duration, two years, is not unreasonable. The court agreed with the lower court that the parties considered the “non-compete was necessary for the protection of the parties and of the business.”

The court also deemed appropriate the lower’s court granting of summary judgment in favor of the medical practice group on the physician’s constructive discharge claim. There was no evidence to generate a jury question as to whether the medical practice group deliberately caused or allowed the physician’s working conditions to become so intolerable that she was forced into an involuntary resignation.

U.S. ex rel. Osheroff v. MCCI Group Holdings, LLC (Summary)

QUI TAM/FALSE CLAIMS ACT

U.S. ex rel. Osheroff v. MCCI Group Holdings, LLC, No. 10-24486-cv-SCOLA (S.D. Fla. Aug. 2, 2013)

The U.S. District Court for the Southern District of Florida granted in part a relator’s motion to enforce settlement, finding that a settlement between the relator and MCCI, a healthcare entity, is subject to enforcement. The relator brought a qui tam action against MCCI, among others, and, after participating in mediation, reached a settlement agreement with MCCI (but no others).  The settlement terms were set forth in a handwritten “Memo of Understanding,” executed by both parties and their counsel.  While more work remained to prepare a final and formal settlement agreement, the parties filed notices of settlement with the court, stating that they had reached a “full settlement” and would be seeking dismissal upon consent of the Government. The agreed upon proposal was never formally presented for the Government’s approval.  The lower court denied the relator’s motion to enforce the settlement due to the parties’ failure to meet the condition that the agreement be approved by the Attorney General. On appeal, the district court reversed and found that the two parties reached an agreement on all essential terms and memorialized them. The court directed the parties to finalize and execute the agreement and then present the executed agreement to the Government.

San Diego Hosp. Based Physicians v. El Centro Reg’l Med. Ctr. (Summary)

CONTRACT BREACH

San Diego Hosp. Based Physicians v. El Centro Reg’l Med. Ctr., D061740 (Cal. Ct. App. Aug. 1, 2013)

The Court of Appeal for the Fourth District of California affirmed the denial of a hospital’s motion to dismiss against a physician group (which had sued the hospital for claims of retaliation and breach of contract) based on the state’s anti-SLAPP statute.  The physician group alleged that the hospital retaliated against the group for complaining about patient care practices.  The court determined that while the physician group was subject to the anti-SLAPP statute, the group had met its burden to show a probability of prevailing on each of the causes of action.

The hospital had argued that the group’s retaliatory claims would not prevail because, among other reasons, administrative remedies were not exhausted and the physician group failed to show that the hospital acted with retaliatory motive.  However, the court found that administrative remedies were not available to the physician group and that retaliatory acts indeed occurred shortly after the complaints about patient care were raised.  Thus, the physician group satisfied the minimal anti-SLAPP burden.