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.

Rochling v. Dep’t of Veterans Affairs (Summary)

HCQIA

Rochling v. Dep’t of Veterans Affairs, No. 12-2828 (8th Cir. Aug. 8, 2013)

The Eighth Circuit U.S. Court of Appeals affirmed a lower court’s grant of summary judgment in favor of a VA hospital, holding that the hospital did not err in reporting a physician to the National Practitioner Data Bank after settling a medical malpractice suit. The hospital determined that its settlement was also “for the benefit of” the physician, which does require a Data Bank report.  The court stated that the report, which simply indicated that a payment was made on behalf of the physician, was neither a rebuke or reprimand of the physician nor a formal disciplinary step that would have required notice and hearing.   The physician failed to demonstrate how this report was a deprivation of a constitutionally protected interest and the court dismissed the due process claim. The circuit court also granted summary judgment on the physician’s claim that the hospital engaged in inadequate fact-finding procedures.

Kimbrell v. Mem’l Hermann Hosp. Sys. (Summary)

AGENCY/INDEPENDENT CONTRACTOR

Kimbrell v. Mem’l Hermann Hosp. Sys., No. 14-12-00108-CV (Tex. App. Aug. 1, 2013)

The Court of Appeals of Texas affirmed a lower court’s grant of summary judgment in favor of a hospital, holding that it could not be held liable as to a patient’s allegations of medical negligence of an independent contractor – the surgeon who operated on him. The court stated that while hospital employees appeared in an infomercial with the surgeon, the infomercial did not explicitly state that the surgeon was an agent or employee of the hospital.  Further, the patient signed multiple consent forms that indicated that the physicians at the hospital were independent contractors and not agents or employees of the hospital.

Wascher v. S. Cal. Permanente Med. Grp. (Summary)

Arbitration Agreements

Wascher v. S. Cal. Permanente Med. Grp., G047042 (Cal. Ct. App. July 29, 2013)

The Court of Appeal for the Fourth District of California affirmed a trial court’s order denying a medical group’s motion to compel their former employee, a surgeon, to arbitrate his claims against them. The court found it was impossible to determine whether this dispute was one which they agreed to arbitrate.  Although the surgeon’s employment contract clearly specified that the medical group’s official rules and regulations contained the applicable dispute resolution procedure and were adequately incorporated into the employment contract, the medical group solely relied upon another dispute resolution contract signed by the surgeon, which omitted those rules and regulations.  The court found that the medical group failed to establish what the parties agreed to arbitrate and the dispute resolution agreement relied upon by the medical group specified that it would not supersede any dispute resolution provision within the surgeon’s employment contract.

U.S. ex rel. Stratienko v. Chattanooga-Hamilton Cnty. Hosp. Auth. (Summary)

False Claims Act – Qui Tam

U.S. ex rel. Stratienko v. Chattanooga-Hamilton Cnty. Hosp. Auth., No. 1:10-CV-322 (E.D. Tenn. July 29, 2013)

The United States District Court for the Eastern District of Tennessee granted in part and denied in part a medical center’s motion to dismiss allegations of false claims and violations of a Corporate Integrity Agreement.  The court found that there had already been a number of public disclosures of the potentially fraudulent activity occurring at the medical center, and much of the relator’s complaint was based on publicly disclosed information.  Based upon the public disclosure provision, the court dismissed the False Claims Act claims.   Furthermore, the court found that the relator failed to establish that she was an original source of the information since she never claimed to have direct knowledge of the fraudulent activity. The court granted the relator leave to amend her claim that the medical center violated its Corporate Integrity Agreement.

U.S. ex rel. Emanuele v. Medicor Assocs (Summary)

Fraud and Abuse

U.S. ex rel. Emanuele v. Medicor Assocs., C.A. No. 10-245 Erie (W.D. Pa. July 26, 2013)

The United States District Court for the Western District of Pennsylvania denied a motion to dismiss a cardiologist’s claims against a corporation that provides cardiology services, a hospital and several physicians for violations of the Stark Act, the Anti-Kickback Statute and the False Claims Act.  The court found that the cardiologist alleged with specificity the nature of the fraudulent scheme, the financial arrangements and inducements among the parties that gave rise to the cardiologist’s belief that fraud occurred.  In addition, the court determined that the Wartime Suspension of Limitations Act does not allow for private False Claims Act claims and, therefore, ruled that some of the cardiologist’s allegations were time-barred.