Mehta v. HCA Health Services of Fla.

Case 8:05-cv-00027-SCB-TGW Document 56 Filed 10/31/2006 Page 1 of 15

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

DILIP MEHTA, M.D.,

Plaintiff,

v.

HCA HEALTH SERVICES OF FLORIDA,
INC., d/b/a HCA OAK HILL HOSPITAL,

Defendant.

______________________________________/

Case No. 8:05-CV-27-T24-TGW

ORDER

This cause comes before the Court on Defendant HCA Health Services of Florida, Inc.’s

Motion for Summary Judgment. (Doc. No. 47.) Plaintiff Dilip Mehta, M.D. opposes this motion

arguing that certain genuine issues of material fact remain. (Doc. No. 48.) For the reasons

stated herein, Defendant’s motion is granted.

I. Facts and Procedural History

HCA Health Services of Florida, Inc. operates HCA Oak Hill Hospital in Spring Hill,

Florida (“Oak Hill”). (See Doc. No. 47.) Dilip Mehta, M.D. (“Mehta”) is a radiologist of Indian

descent who performed radiology services at Oak Hill pursuant to a series of exclusive contracts

between Oak Hill and Spring Hill Radiology. (Pl.’s dep. II, pp. 5-6).1

1The parties filed excerpts from two depositions of Mehta. The Court will refer to the
deposition taken on September 16, 2005, as “Pl.’s dep. I,” and the deposition taken on April 7,
2006, as “Pl.’s dep. II.”

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Spring Hill Radiology

Spring Hill Radiology is a partnership comprised of professional associations formed

under the names of the physicians who perform radiology work at Oak Hill.2 (Id. at 33.) Each

professional association is allocated a percentage of the profits and losses of the partnership. (Id.

at 199-200, 235; Ex. 11.) The partnership also employs non-partner physicians to work at Oak

Hill. (Id. at 150, 152, 194.) Unlike the partners who created professional associations under

their name, these employees sign an employment agreement with the partnership and receive a

fixed salary. (Id. at 195, 235; Ex. 22.) As employees, they have no input in the operation of the

partnership, including the renewal of the partnership’s contract with Oak Hill. (Id. at 130-31.)

The Spring Hill Radiology professional associations make decisions regarding the terms and

conditions of the non-partners’ employment. (Id. at 119-21, 233.)

Mehta joined Spring Hill Radiology as an employee in August of 1990, whereupon he

received medical staff privileges at Oak Hill. (Id. at 167, 196-197). Three years later, in August

of 1993, Spring Hill Radiology offered Mehta full partnership, which he accepted. (Id. at 198-

200; Ex.9.) At that time, Mehta formed a professional association in his name, Dilip Mehta,

M.D., P.A., which became a partner of Spring Hill Radiology. (Id. at 200-04, 219-20; Exs. 10,

11.) Mehta is the sole shareholder, officer, and member of the board of directors of Dilip Mehta

M.D., P.A. (Id. at 202; Ex. 10.)

Since the mid-1980’s, Spring Hill Radiology has been the exclusive provider of radiology

services at Oak Hill, pursuant to a series of exclusive contracts. (Id. at 130-31.) Throughout the

2In late 2003, Spring Hill Radiology consisted of Aruna Medara, M.D., P.A., Dilip
Mehta, M.D., P.A., and Robert Weaver, M.D., P.A. (Pl.’s dep. I, p. 33, 70, 103, 118, 120.) At
that time, the partnership also employed Dr. Wasserman. (Id. at 118, 120.)

2

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years, one of the Spring Hill Radiology partners negotiated and executed the renewal of the

contract with Oak Hill. (Id.) The final contract between Spring Hill Radiology and Oak Hill

was for a two-year term to extend from January 1, 2002, to December 31, 2003. (Smith aff.,

p.1.)

Alleged National Origin Discrimination and the Parties’ Negotiations of the
Contract Renewal

Arthur Flatau, M.D. is one of the top ten revenue-generating physicians at Oak Hill.

(Smith dep., p. 103.) On or about September 21, 2003, Flatau accused Mehta of touching his

wife inappropriately. (Pl.’s dep. II, p. 43.) Flatau confronted Mehta about the incident on

several occasions, and each time, Flatau angrily yelled racial slurs at him. (Pl.’s dep. I, p. 334,

344-345.) Flatau called Mehta a “slimy mother fucker Indian bastard” and asked Mehta what the

term “slime ball” meant “in [his] fucking Indian language.” (Id.) Flatau wrote a letter to Mehta

stating that if Spring Hill Radiology left Oak Hill Hospital quietly, his wife would drop her

assault charges against Mehta. (Pl.’s dep. II, p. 45-46.) When Mehta refused to leave Oak Hill,

Flatau also said to him, “you Indian bastards, you do not belong here, this is not your country.”

(Id. at 46.) Flatau generally admits making these statements. (Flatau dep., p. 172, 254, 290-91.)

Mehta reported Flatau’s comments to the Chief Executive Officer of Oak Hill, Mickey

Smith, and the Assistant Administrator of Oak Hill, Thomas Edwards. (Pl.’s dep. I, p. 348, 355,

387-391, 404; Pl.’s dep. II, p.50, 58-61.) On several occasions, Smith spoke to Flatau about his

remarks and his conduct in confronting Mehta. (Pl.’s dep. I, p. 387-391.) Each time they met,

Flatau insisted that either Mehta had to leave Oak Hill Hospital or Flatau would leave. (Smith

dep., p.16, 99-100; Flatau dep., p.194, 234.) Flatau explained that the incident involving his wife

“was not an issue that [he] was going to be able to live with.” (Flatau dep., p. 194.) Flatau

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repeated his demand that Smith force Mehta and Spring Hill Radiology out of Oak Hill on a

weekly basis from September through December of 2003. (Smith dep., p. 100-01.)

Thereafter, Smith and Edwards informed Mehta that, although Flatau admitted making

the remarks, they were not going to suspend him or prohibit him from entering the radiology

department where Mehta worked. (Pl.’s dep. I, p. 387-391.) During this time period, the Oak

Hill Board of Trustees initiated a peer review investigation into Flatau’s allegation that Mehta

touched his wife inappropriately. (Pl.’s dep. II, p. 60.) Apparently, although it is not clear from

the record, the physician members of the Board were recused from the peer review investigation.

(Id.)

Also during this same time period, around October of 2003, Mehta began to negotiate the

renewal of the Spring Hill Radiology contract with Smith and Edwards. (Id. at 89.) Smith

informed Mehta that Oak Hill might not renew the contract if “Dr Flatau is not going to budge . .

. .” (Pl.’s dep. I, p. 324). In fact, Smith told Mehta that “the only reason where I will not renew

your contract . . . is because of Dr. Flatau’s threats.” (Id. at 362).

Despite Flatau’s threats, however, the contract negotiations continued, and in November,

Edwards sent Mehta a draft of the new contract that was set to begin on January 1, 2004. (Pl.’s

dep. II, p. 127-28.) After consulting with his attorney, Mehta again discussed the draft contract

with Edwards in mid-December 2003. (Id. at 19-20, 27-29, 128-29.) Because the December

31st contract termination date was approaching, and the parties had not reached agreement on all

the contract terms, Smith and Mehta decided to extend the existing contract for two months until

February 28, 2004, in order to complete the contract negotiations and to complete the peer

review investigation. (Id. at 29-30.)

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On December 15, 2003, while the contract negotiations were ongoing, Mehta was

summoned to a meeting of the non-recused members of the Oak Hill Board of Trustees. (Id. at

20-24.) The Board informed Mehta that, based on the peer review committee’s report, the Board

had decided not to renew his contract and that he had 48 hours to resign from Oak Hill’s medical

staff. (Id. at 24.) One of the Board members threatened him that “they would make [his] life

miserable if [he] didn’t resign.” (Id.) Smith admits that the purpose of the December 15th

meeting was to give Mehta “the opportunity to resign before the [peer review] proceedings

reached the point where it would be a reportable event,” in which case Flatau’s allegations

against Mehta would be entered into the National Practitioner Data Bank and made available to

the public. (Smith dep., p. 83, 92.) Moreover, the Board threatened Mehta that if he did not

resign, additional women other than Flatau’s wife would be called as witnesses against him in

his peer review proceeding. (Id. at 85). Mehta refused to resign. (Id. at 89).

Despite the fact that the Oak Hill Board asked for Mehta’s resignation, Oak Hill still

desired to renew its contract with Spring Hill Radiology. (Id. at 91-92.) In fact, Smith testified

that there was a possibility that Mehta could continue to work at Oak Hill, if the results of the

peer review investigation did not affect his hospital privileges. (Id.) Therefore, the contract

negotiations continued until mid-January. (Pl.’s dep. I, p. 424; Pl.’s dep. II, p. 30-32.) At that

time, Smith informed Mehta that the peer review committee “found no evidence of wrongdoing,”

but that Oak Hill had decided not to renew the contract with Spring Hill Radiology. (Id.)

The Court’s August 8, 2005 Order

Thereafter, Mehta filed a seven-count complaint against Oak Hill in his individual

capacity, alleging national origin discrimination and retaliation in violation of Title VII of the

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Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Florida Civil Rights Act, Fla. Stat. §

760.01 et seq. (“FCRA”), 42 U.S.C. § 1981, and state breach of contract laws. (Pl.’s Am.

Comp.) Specifically, Mehta alleges that Oak Hill wrongfully capitulated to Flatau’s racist

demands by not renewing its contract with Spring Hill Radiology, deviated from the Oak Hill

Hospital by-laws during the peer review investigation, and terminated his staff privileges. (Id.)

On August 8, 2005, the Court dismissed a majority of Mehta’s claims. (Doc. No. 10.)

First, the Court dismissed Counts I through IV of Mehta’s Amended Complaint, which alleged

discrimination and retaliation in the non-renewal of the Spring Hill Radiology contract in

violation of Title VII and the FCRA. (Id. at 11, 21.) The Court found that Mehta’s status as an

independent contractor–rather than an employee–of Oak Hill precluded him from proceeding

with those claims against Oak Hill. (Id.) However, the Court ruled that Mehta could proceed

with his Title VII claim that, by not renewing the Spring Hill Radiology contract, Oak Hill

interfered with Mehta’s employment opportunities with Spring Hill Radiology. (Id. at 13.)

Next, the Court dismissed Counts V and VI of Mehta’s Amended Complaint, which alleged

discrimination and retaliation in the non-renewal of the Spring Hill Radiology contract in

violation of § 1981. (Id. at 17.) The Court reasoned that it was Spring Hill Radiology’s

right–not Mehta’s right–to enforce the contract with Oak Hill, and therefore Mehta did not have

an individual § 1981 cause of action relating to the contract’s non-renewal. (Id.) Finally, the

Court dismissed Count VII, which alleged breach of contract pursuant to state law, because

Mehta failed to allege intentional fraud. (Id. at 19.)

Accordingly, the remaining allegations before the Court include the following: 1) that

Oak Hill violated Title VII and the FCRA when it interfered with Mehta’s employment

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opportunities with Spring Hill Radiology (Counts I and II), and 2) that Oak Hill violated § 1981

when it discriminated and/or retaliated against Mehta by terminating his medical staff privileges

and by failing to follow its own peer review procedures contained in its Medical Staff Bylaws

(Counts V and VI).

II.

Standard of Review

Summary judgment is appropriate “if the pleadings, depositions, answers to

interrogatories and admissions on file, together with the affidavits, if any, show that the moving

party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). The moving party bears

the initial burden of showing the Court, by reference to materials on file, that there are no

genuine issues of material fact that should be decided at trial. Celotex Corp. v. Catrett, 477 U.S.

317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). A moving party discharges its burden on a

motion for summary judgment by “showing” or “pointing out” to the Court that there is an

absence of evidence to support the non-moving party’s case. Id. at 325, 106 S. Ct. at 2554. Rule

56 permits the moving party to discharge its burden with or without supporting affidavits and to

move for summary judgment on the case as a whole or on any claim. See id. When a moving

party has discharged its burden, the non-moving party must then “go beyond the pleadings,” and

by its own affidavits, or by “depositions, answers to interrogatories, and admissions on file,”

designate specific facts showing there is a genuine issue for trial. Id. at 324, 106 S. Ct. at 2553.

In determining whether the moving party has met its burden of establishing that there is

no genuine issue as to any material fact and that it is entitled to judgment as a matter of law, the

Court must draw inferences from the evidence in the light most favorable to the non-movant and

resolve all reasonable doubts in that party’s favor. Samples v. City of Atlanta, 846 F.2d 1328,

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1330 (11th Cir. 1988). Thus, if a reasonable fact finder evaluating the evidence could draw more

than one inference from the facts, and if that inference introduces a genuine issue of material

fact, then the court should not grant the summary judgment motion. Augusta Iron & Steel

Works, Inc. v. Employers Ins. of Wausau, 835 F.2d 855, 856 (11th Cir. 1988) (per curiam). A

dispute about a material fact is “genuine” if the “evidence is such that a reasonable jury could

return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,

106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986).

III.

Discussion

A.

Counts I and II: Interference with Employment Opportunities in Violation of
Title VII and the FCRA3

First, Oak Hill argues that summary judgment on Mehta’s Title VII and FCRA

interference claims is appropriate because Mehta was not an employee of Spring Hill Radiology

at any time material to the Amended Complaint. Rather, Oak Hill argues that Mehta was the

president and sole shareholder of a professional association that functioned as a partner in the

Spring Hill Radiology partnership. In response, Mehta argues that a genuine issue of material

fact remains as to whether he was an employee of Spring Hill Radiology because he examined

patients in the Oak Hill Radiology Department pursuant to a contract between Spring Hill

Radiology and Defendant. Furthermore, he argues that the partnership controlled his work at

Oak Hill by negotiating the exclusive contract that established the hours and terms of his work in

the Radiology Department. Finally, he argues that the fact that Spring Hill Radiology paid his

3Decisions construing Title VII are applicable when considering claims under the FCRA
because the FCRA was patterned after Title VII. Harper v. Blockbuster Entm’t Corp., 139 F.3d
1385, 1387 (11th Cir. 1998).

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professional association, Dilip Mehta, M.D., P.A.., which in turn paid him, is evidence of the

fact that he was employee of Spring Hill Radiology.

Title VII makes it unlawful for an employer to “fail or refuse to hire or to discharge any

individual, or otherwise to discriminate against any individual with respect to his compensation,

terms, conditions, or privileges of employment, because of such individual’s . . . national origin.”

42 U.S.C. § 2000e-2(a). “It is clear from the language of the statute that Congress intended that

the rights and obligations it created under Title VII would extend beyond the immediate

employer-employee relationship.” Zaklama v. Mt. Sinai Med. Ctr., 842 F.2d 291, 294 (11th Cir.

1988). Therefore, courts have found that the statute extends to the situation in which a defendant

controls, and has interfered with, an individual’s employment relationship with a third party. See

id.; Pardazi v. Cullman Med. Ctr., 838 F.2d 1155, 1156 (11th Cir. 1988) (permitting the plaintiff

to proceed with his claim that the defendant hospital interfered with his employment

opportunities with a third party professional corporation). To bring a Title VII suit for

interference with an employment relationship with a third party, Mehta must first establish that

he was an employee of Spring Hill Radiology. See Llampallas v. Mini-Circuits, Lab, Inc., 163

F.3d 1236, 1242-43 (11th Cir. 1998) (holding “that only those plaintiffs who are ‘employees’

may bring a Title VII suit). An “employee” is defined under Title VII as an “individual

employed by an employer.” 42 U.S.C. § 2000e(f).

In a case analogous to the instant one, Clackamas Gastroenterology Associates, P.C. v.

Wells, 538 U.S. 440, 123 S. Ct. 1673, 155 L. Ed. 2d 615 (2003), the Supreme Court considered

whether a shareholder-director of a professional corporation qualifies as an “employee” for

purposes of the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. (“ADA”). In

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doing so, the Supreme Court stated that the following six factors are relevant to the inquiry: (1)

whether the organization can hire or fire the individual; (2) to what extent the organization

supervises the individual’s work; (3) whether the individual reports to someone higher in the

organization; (4) to what extent the individual is able to influence the organization; (5) whether

the parties intended that the individual be an employee, as expressed in written contracts; and (6)

whether the individual shares in the profits, losses, and liabilities of the organization. Id. at 449-

50; 123 S. Ct. at 1680. In other words, “an employer is the person, or group of persons, who

owns and manages the enterprise,” who “can hire and fire employees,” who “can assign tasks to

employees and supervise their performance,” and who decides “how the profits and losses of the

business are to be distributed.” Id. at 450; 123 S. Ct. at 1680. Although Clackamas involved a

claim under the ADA, the analysis is applicable to determining whether Mehta, as the owner of a

professional association that is a partner of Spring Hill Radiology, also qualifies as an employee

of Spring Hill Radiology for purposes of Title VII.4

The record reveals that, although Mehta began his tenure with Spring Hill Radiology as

an employee, he was no longer an employee when he became a partner through his professional

association in August of 1993. As the sole shareholder and officer of Dilip Mehta, M.D., P.A.,

Mehta was part of the group that managed Spring Hill Radiology. As a partner, Mehta’s

professional association shared in the profits and liabilities of Spring Hill Radiology and was

compensated based upon how well the partnership performed. In conjunction with the other

4 The ADA and Title VII have nearly identical definitions of “employee.” See 42 U.S.C.
§§ 2000e(f), 12111(4) (both statutes defining “employee” as “an individual employed by an
employer”). Furthermore, the Supreme Court noted that the inter-circuit conflict regarding the
meaning of “employee” extends beyond the ADA to cases involving Title VII. Clackamas, 538
U.S. at 444 n.3, 123 S. Ct. at 1677 n.3.

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partners, his professional association exercised supervision and control over all aspects of Spring

Hill Radiology, including the contract renewal negotiations with Oak Hill and making decisions

regarding the terms and conditions of the non-partners’ employment with Spring Hill Radiology.

Furthermore, Mehta’s role at Spring Hill Radiology was memorialized in a partnership

agreement, not an employment contract. Accordingly, because Mehta has not raised a genuine

issue of material fact as to whether he was an employee of Spring Hill Radiology at the time

relevant to his claims, the Court grants Oak Hill’s motion for summary judgment with regard to

Mehta’s Title VII and FCRA interference claims.

B.

Counts V and VI: Termination of Medical Staff Privileges and Failure
to follow Medical Staff Bylaws regarding Peer Review Procedures in
Violation of § 1981

Next, Oak Hill argues that summary judgment is appropriate as to Mehta’s § 1981 claim

that it discriminated and/or retaliated against him by terminating his medical staff privileges. In

support of its position, Oak Hill relies on the “automatic expiration” provision of the Spring Hill

Radiology contract. Under this provision, the medical staff privileges of the Spring Hill

Radiology radiologists “shall automatically expire” upon the termination of Spring Hill

Radiology’s contract with Oak Hill. Thus, according to Oak Hill, the termination of Mehta’s

staff privileges was not an intentional act of discrimination or retaliation, but an automatic

function of the non-renewal of Spring Hill Radiology’s contract. Furthermore, Oak Hill argues

that Mehta has failed to show that Oak Hill treated any similarly-situated physicians more

favorably than him in applying the automatic termination provision.

Mehta disputes Oak Hill’s interpretation of the “automatic expiration” provision. In

particular, he asserts that this provision only applies “upon the termination of” the contract, and

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the contract between Spring Hill Radiology and Oak Hill was never terminated–it was merely

not renewed at the end of the contract period. Therefore, according to Mehta, the “automatic

expiration” provision was never triggered. Additionally, Mehta relies on Northeast Georgia

Radiological Associates, P.C. v. Tidwell, 670 F.2d 507, 508 (5th Cir. Unit B 1982) for the

proposition that the Oak Hill Medical Staff Bylaws constituted a contract between himself and

Oak Hill, which afforded him due process protections with regard to the termination of his

hospital privileges. Finally, Mehta argues that Florida Statute § 395.0193(3) sets forth the

exclusive conditions upon which a physician’s hospital privileges can be revoked and does not

permit a physician’s hospital privileges to be revoked when a physician loses an exclusive

contract with a hospital.

Summary judgment is appropriate as to this claim for several reasons. First, Mehta has

failed to show that Oak Hill treated similarly-situated physicians more favorably than him with

regard to the termination of his medical staff privileges. “To show that employees are similarly

situated, the plaintiff must show that the employees are similarly situated in all relevant aspects.”

Knight v. Baptist Hosp., Inc., 330 F.3d 1313, 1316 (11th Cir. 2003) (per curiam) (citations and

quotations omitted). At his deposition, Mehta vaguely asserted his belief that Dr. Tracy was

treated more favorably than him with regard to the termination of her hospital privileges. (Pl.’s

dep. II, p. 180-82.) However, the unreed evidence shows that, at one point, Dr. Tracy had

clinical privileges both to perform anesthesiology services and to perform pain management

procedures at Oak Hill. (Smith aff., p.4.) When her group’s exclusive anesthesiology contract

was terminated, Dr. Tracy’s anesthesiology privileges automatically expired. (Id.) Dr. Tracy

remained on the medical staff, however, because of her independent and separate privileges

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to perform pain management procedures. (Id.) Therefore, Dr. Tracy and Mehta are not

similarly-situated physicians. Furthermore, Mehta does not provide any support for his

argument that § 395.0193(3) prohibits a physician’s hospital privileges to be revoked when a

physician loses an exclusive contract with a hospital. That statute sets forth the due process by

which a hospital may suspend, deny, revoke, or curtail a physician’s privileges. Nothing in the

statute prohibits a hospital from terminating a physician’s privileges when the hospital elects not

to renew an exclusive contract between the parties, as is the case here. Finally, Mehta’s reliance

on Northeast Georgia Radiological Associates, P.C. is misplaced. Although the case is factually

analogous to the instant case, it is not controlling because the plaintiff in that case raised a claim

pursuant to § 1983, not § 1981. Accordingly, because there is no genuine issue of material fact

with regard to Mehta’s claim that Oak Hill discriminated and/or retaliated against him by

terminating his hospital privileges, the Court hereby grants Oak Hill’s motion with regard to this

claim.

Finally, Oak Hill asserts that summary judgment is appropriate as to Mehta’s § 1981

claim that he was subjected to discrimination and/or retaliation in the way that Oak Hill

conducted the peer review investigation of Flatau’s wife’s allegation that Mehta touched her

inappropriately. Relying on Florida Statute §§ 395.0191 and 395.0193, Oak Hill asserts that any

discovery or discussion of the matters concerning the peer review process would invade Florida

statutory privileges governing hospital procedures for the credentialing of medical staff and peer

review procedures. Accordingly, Oak Hill does not discuss the substance of the peer review

process in its motion for summary judgment. Nevertheless, Oak Hill argues that summary

judgment is appropriate because Mehta has not alleged that he suffered an adverse employment

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action with regard to the peer review proceedings. To the contrary, according to Oak Hill,

Mehta admits that it decided not to take any adverse action against him.

In response, Mehta asserts that he alleged an adverse employment action sufficient to

preclude summary judgment, namely, that Oak Hill improperly excused physician members of

the peer review committee, which resulted in a termination of his medical staff privileges and the

non-renewal of Spring Hill Radiology’s contract. In particular, Mehta points to his deposition

testimony in which he stated his belief that the Spring Hill Radiology contract would have been

renewed, and therefore his staff privileges would have been retained, “[i]f the peer review

[investigation] had been [conducted] the way it should normally [be conducted] based on the

bylaws of the Hospital.” (Pl.’s dep. II, p. 12-13.)

To state a prima facie case of discrimination or retaliation, the plaintiff must show that he

suffered an “adverse employment action.” Davis v. Town of Lake Park, Fla., 245 F.3d 1232,

1238 (11th Cir. 2001). To prove an adverse employment action, “an employee must show a

serious and material change in the terms, conditions, or privileges of employment.” Id. at 1239.

Furthermore, “the employee’s subjective view of the significance and adversity of the

employer’s action is not controlling; the employment action must be materially adverse as

viewed by a reasonable person in the circumstances.” Id.

Summary judgment is appropriate as to this remaining claim because Mehta has failed to

put forth sufficient evidence to raise an issue of fact at the summary judgment stage of this

litigation. The record is almost entirely devoid of details regarding the peer review process, and

although some of the deposition testimony alludes to the removal of physician members from the

peer review investigation, the Court does not have sufficient evidence before it to find that there

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is a genuine issue for trial. Mehta’s testimony that he believes the outcome of the peer review

investigation would have been different had Oak Hill not removed the physician members from

the process is insufficient. Furthermore, although Mehta filed the Oak Hill Hospital Medical

Staff Bylaws, the Court is unable to determine how Oak Hill deviated from these Bylaws during

the peer review process. Therefore, viewing the record in the light most favorable to Mehta, the

Court grants Oak Hill’s motion for summary judgment with regard to this final claim.

IV.

Conclusion

Accordingly, it is ORDERED AND ADJUDGED that Oak Hill’s Motion for Summary

Judgment (Doc. No. 47) is granted in its entirety. As there are no remaining claims before the

Court, the pretrial conference set in this case for Thursday, November 2, 2006, is hereby

cancelled. The Clerk is directed to enter judgment in favor of Defendant Oak Hill and to close

this case.

DONE AND ORDERED at Tampa, Florida, this 31st day of October, 2006.

Copies to:
Counsel of Record

15

Mehta v. HCA Health Services of Florida (Summary)

EMPLOYEE DISCRIMINATION

Mehta v. HCA Health Services of Florida, No. 8:05-CV-27-T24-TGW (M.D. Fla. Oct. 31, 2006)

The United States District Court for the Middle District of Florida granted a hospital’s motion for summary judgment in a suit brought by a physician that alleged discrimination. The physician sued the hospital, claiming discrimination, after it did not renew its exclusive contract with the professional partnership of radiologists of which he was a partner. The district court found that to bring a Title VII suit under the federal Civil Rights Act, the physician had to be an employee of the partnership whose contract was not renewed by the hospital. As a partner, and not an employee, the physician failed to satisfy this requirement. The physician also failed on his claim under §1981, which alleged his privileges were terminated because of discrimination, as the “automatic expiration” provision concerning the physician’s medical staff appointment that was a part of the hospital’s contract with the partnership was not prohibited by the statute. Since the doctor failed to raise a genuine issue of material fact regarding his claims of discrimination, summary judgment was granted for the hospital.

 

 

Mehta v. HCA Health Services of Florida

Case 8:06-cv-01284-SCB-MSS Document 34 Filed 08/20/2007 Page 1 of 12

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

DILIP MEHTA, M.D., d/b/a
SPRING HILL RADIOLOGY,

Plaintiff,

v.

HCA HEALTH SERVICES OF FLORIDA,
INC., d/b/a HCA OAK HILL HOSPITAL,

Defendant.

______________________________________/

Case No. 8:06-CV-1284-T-24-MSS

ORDER

This cause comes before the Court on Defendant HCA Health Services of Florida, Inc.’s

(“HCA”) Motion for Summary Judgment (Doc. No. 17) as to Plaintiff Dilip Mehta, M.D. d/b/a

Spring Hill Radiology’s (“Spring Hill”) national origin discrimination claim under 42 U.S.C. §

1981(b). Spring Hill argues that a genuine issue of material fact remains as to whether HCA

discriminated against the partnership when it attempted to modify and failed to renew the

parties’ exclusive contract for radiology services. (Doc. No. 25.) With the Court’s permission,

HCA filed a reply. (Doc. No. 30.) For the reasons stated herein, HCA’s motion is granted.

I. Facts

Defendant HCA Health Services of Florida, Inc. operates HCA Oak Hill Hospital in

Spring Hill, Florida. Since the mid-1980’s, Plaintiff Spring Hill Radiology has been the

exclusive provider of radiology services at the hospital, pursuant to a series of exclusive

contracts. The final contract between Spring Hill and HCA was for a two-year term to extend

Case 8:06-cv-01284-SCB-MSS Document 34 Filed 08/20/2007 Page 2 of 12

from January 1, 2002, to December 31, 2003. Dilip Mehta, M.D. is a radiologist of Indian

descent who performed radiology services at the hospital pursuant to the contracts between

Spring Hill and HCA.

Arthur Flatau, M.D. is one of the top ten revenue-generating physicians at the hospital.

On September 21, 2003, Flatau accused Mehta of touching his wife inappropriately. Flatau

demanded that Spring Hill leave the hospital quietly or else Flatau would press criminal charges

against Mehta.

Flatau again confronted Mehta on several occasions over the following weeks, each time

angrily yelling racial slurs at Mehta and demanding that Spring Hill leave the hospital quietly.

Flatau said to him, “you Indian bastards, you do not belong here, this is not your country.” On

another occasion, Flatau pushed Mehta to the wall, put his finger in Mehta’s face, and said, “you

mother fucking Indian slime ball, do you know in your mother fucking Indian language what that

means.” Flatau also met with the Chief Executive Officer of Oak Hill Hospital, Mickey Smith,

and repeatedly insisted that either Spring Hill and Mehta had to leave the hospital or he would

leave. Flatau explained to Smith that the incident involving his wife was not an issue that he was

going to be able to live with.

On or about October 24, 2003, Mehta reported Flatau’s threatening behavior and racist

demands to Smith. Smith responded that, although Flatau admitted the threatening behavior, the

hospital was not going to suspend him or prohibit him from entering the radiology department

were Mehta worked. During this meeting, Smith and Mehta also discussed whether HCA would

renew the Spring Hill contract. Smith told Mehta that “the only reason not to renew the . . .

contract is because of Dr. Flatau.” He added that “this has nothing to do with you as a

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radiologist, your services or anything else.” Furthermore, Smith informed Mehta that, despite

Flatau’s insistence that Spring Hill leave the hospital, he would talk with the Assistant

Administrator of Oak Hill Hospital, Tom Edwards, and provide Spring Hill with a draft of a

renewal contract.

On October 28, 2003, Mehta met with Smith and Edwards to discuss several issues

relating to the contract renewal. One issue concerned the ability of Spring Hill to recruit and

retain the appropriate number of full-time radiologists, as one of the radiologists was leaving the

partnership. Mehta agreed that Spring Hill would be able to achieve full radiologist staffing by

January 31, 2004. At the conclusion of the meeting, Edwards informed Mehta that he would be

able to produce a draft contract within a couple of days.

On November 3, 2003, Mehta again met with Edwards about the renewal of the Spring

Hill contract. Edwards informed Mehta that he would not be able to provide the draft contract

for another three to four weeks because several HCA officials and departments first would have

to review it. Mehta explained that he would not be able to recruit another radiologist without a

contract from the hospital, and therefore, he proposed that the January 31, 2004 deadline by

which he was required to achieve full radiologist staffing be extended to 90 days after the

contract was signed. Edwards agreed.

Shortly thereafter, on or about November 6, 2003, Flatau filed a complaint against Mehta

with the hospital’s medical executive committee, which initiated an investigation into Flatau’s

allegations that Mehta inappropriately touched his wife. While the committee’s investigation

was ongoing, on December 1, 2003, HCA sent Mehta the draft renewal contract, who then

forwarded it to his attorney. Approximately two weeks later, on December 15, 2003, the

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hospital’s Board of Trustees informed Mehta that, based on the review committee’s report, the

Board had decided not to renew his contract and that he had 48 hours to resign from Oak Hill’s

medical staff.

Despite the fact that the Oak Hill Board asked for Mehta’s resignation, the contract

negotiations continued. After consulting with his attorney, on December 17 and 30, 2003, Mehta

met with Smith and Edwards to discussed the draft contract. During these meetings, the parties’

negotiations centered on Spring Hill’s ability to achieve full radiologist staffing. However, they

also discussed other issues, such as HCA’s requirement that the radiologists have a certain

amount of medical malpractice insurance, HCA’s expectation that the radiologists work eight

hours per day, the timeliness of Spring Hill’s radiology reports, and Spring Hill’s previous

treatment of certain individual patients. At the December 30, 2003 meeting, because the parties

had not reached agreement on all the contract terms and the December 31st contract termination

date was imminent, they agreed to extend the existing contract for two months until February 28,

2004, in order to complete the contract negotiations.

By January 16, 2004, HCA and Spring Hill had not agreed upon the terms of the contract

renewal, and no contract had been signed. On that date, Smith informed Mehta that HCA had

decided not to renew the contract with Spring Hill. Smith explained that he “has to do what is

right for the hospital” and that “there is enough pressure from Dr. Flatau.”

Thereafter, Spring Hill filed this suit against HCA for national origin discrimination in

violation of 42 U.S.C. § 1981(b). Specifically, Spring Hill alleges that HCA wrongfully

capitulated to Flatau’s racist demands when it attempted to modify and failed to renew the

parties’ exclusive contract for radiology services.

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II.

Standard of Review

Summary judgment is appropriate “if the pleadings, depositions, answers to

interrogatories and admissions on file, together with the affidavits, if any, show that the moving

party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). The moving party bears

the initial burden of showing the Court, by reference to materials on file, that there are no

genuine issues of material fact that should be decided at trial. Celotex Corp. v. Catrett, 477 U.S.

317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). A moving party discharges its burden on a

motion for summary judgment by “showing” or “pointing out” to the Court that there is an

absence of evidence to support the non-moving party’s case. Id. at 325, 106 S. Ct. at 2554. Rule

56 permits the moving party to discharge its burden with or without supporting affidavits and to

move for summary judgment on the case as a whole or on any claim. See id. When a moving

party has discharged its burden, the non-moving party must then “go beyond the pleadings,” and

by its own affidavits, or by “depositions, answers to interrogatories, and admissions on file,”

designate specific facts showing there is a genuine issue for trial. Id. at 324, 106 S. Ct. at 2553.

In determining whether the moving party has met its burden of establishing that there is

no genuine issue as to any material fact and that it is entitled to judgment as a matter of law, the

Court must draw inferences from the evidence in the light most favorable to the non-movant and

resolve all reasonable doubts in that party’s favor. Samples v. City of Atlanta, 846 F.2d 1328,

1330 (11th Cir. 1988). Thus, if a reasonable fact finder evaluating the evidence could draw more

than one inference from the facts, and if that inference introduces a genuine issue of material

fact, then the court should not grant the summary judgment motion. Augusta Iron & Steel

Works, Inc. v. Employers Ins. of Wausau, 835 F.2d 855, 856 (11th Cir. 1988) (per curiam). A

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dispute about a material fact is “genuine” if the “evidence is such that a reasonable jury could

return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,

106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986).

III.

Discussion

Section 1981 prohibits intentional discrimination in the making and enforcement of

private contracts, including employment contracts. 42 U.S.C. § 1981. A plaintiff may prove a

claim of national origin discrimination under § 1981 through direct or circumstantial evidence.

Price v. M&H Valve Co., No. 05-15205, 2006 WL 897231, at *15 (11th Cir. Apr. 7, 2006).

Here, Spring Hill asserts that it has presented both direct and circumstantial evidence of national

origin discrimination, although it does not distinguish between the two methods of proof in its

memorandum.

A.

Direct Evidence of Discrimination

“Direct evidence of discrimination is evidence which, if believed, would prove the

existence of a fact in issue without inference or presumption. Only the most blatant remarks,

whose intent could be nothing other than to discriminate on the basis of [a protected

characteristic] constitute direct evidence of discrimination.” Bass v. Bd. of County Comm’rs.,

256 F.3d 1095, 1105 (11th Cir. 2001) (quotations, alterations, and citations omitted).

Furthermore, “remarks by non-decisionmakers or remarks unrelated to the decisionmaking

process itself are not direct evidence of discrimination.” Standard v. A.B.E.L. Servs., Inc., 161

F.3d 1318, 1330 (11th Cir. 1998). When refuting direct evidence of discrimination, the

defendant’s burden “is one of persuasion and not merely production.” Bass, 256 F.3d at 1104.

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The Court concludes that Spring Hill did not present any direct evidence of

discrimination. Spring Hill’s only evidence concerning discriminatory intent consists of Flatau’s

comments to Mehta that “you Indian bastards, you do not belong here, this is not your country”

and “you mother fucking Indian slime ball, do you know in your mother fucking Indian language

what that means.” These statements by Flatau do not constitute direct evidence that HCA acted

with discriminatory intent because Flatau was not the decisionmaker, nor did he have the

authority to make any decision on behalf of the HCA, with regard to the renewal of the Spring

Hill contract. Furthermore, the comments are not directly related to the decisionmaking process,

but rather constitute generalized name-calling.1 Although Flatau’s statements may provide

circumstantial support for Spring Hill’s claims, they do not constitute direct evidence of

discrimination. See Standard, 161 F.3d at 1330.

B.

Circumstantial Evidence of Discrimination

When a plaintiff relies on circumstantial evidence to prove discrimination under § 1981,

the Court uses the traditional McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817,

36 L. Ed. 2d 668 (1973), burden-shifting analysis. Brooks v. County Comm’n of Jefferson

County, Ala., 446 F.3d 1160, 1162 (11th Cir. 2006). Under this framework, the plaintiff must

raise an inference of discrimination by establishing a prima facie case of discrimination.

McDonnell Douglas Corp., 411 U.S. at 802, 93 S. Ct. at 1824. The burden then shifts to the

1Spring Hill argues that it was Flatau–not Smith–who was the actual decisionmaker.
Such an argument necessarily requires the Court to presume Flatau’s influence or leverage over
Smith, who was the official decisionmaker, and to impute Flatau’s discriminatory intent to him.
Accordingly, the argument does not “prove the existence of a fact in issue without inference or
presumption,” and thus, does not constitute direct evidence of discrimination. Bass, 256 F.3d at
1105.

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defendant to “articulate some legitimate nondiscriminatory reason” for the alleged

discrimination. Id. Once the defendant produces such a reason, the plaintiff must then prove

that the legitimate reason was a mere pretext for discrimination. Id. at 804, 93 S. Ct. at 1826. To

avoid summary judgment, the plaintiff must produce sufficient evidence to show “that the

employer intentionally discriminated against [it] because of [its] [protected characteristic].”

Holifield v. Reno, 115 F.3d 1555, 1565 (11th Cir. 1997) (per curiam).

To establish a prima facie case of disparate treatment discrimination under the

McDonnell Douglas framework, a plaintiff must establish by a preponderance of the evidence:

“(1) a discriminatory animus . . . , (2) an alteration in the terms and conditions of . . .

employment by the employer, and (3) a causal link between the two.” Llampallas v. Mini-

Circuits, Lab, Inc., 163 F.3d 1236, 1245-46 (11th Cir. 1998). HCA argues that Spring Hill has

failed to establish a prima facie case of disparate treatment because there is no causal link

between the non-renewal of the Spring Hill contract and Flatau’s alleged discriminatory animus.2

The parties characterize this as a “cat’s paw” case. Under a “cat’s paw” theory of

liability, the discriminatory animus of a non-decisionmaking employee can be imputed to the

neutral decision-maker when the decisionmaker does not conduct his own independent

investigation. Llampallas, 163 F.3d at 1249. “In such a case, the recommender is using the

decision maker as a mere conduit, or ‘cat’s paw’ to give effect to the recommender’s

discriminatory animus.” Stimpson v. City of Tuscaloosa, 186 F.3d 1328, 1332 (11th Cir. 1999).

Essentially, where the individual accused of discriminatory animus is “an integral part” of a

2Because the Court concludes that Spring Hill has failed to establish a causal link, the
Court assumes without deciding that Flatau’s comments reflects his discriminatory animus.

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multi-level personnel decision, their improper motivation may “taint[] the entire . . . process.”

Schoenfeld v. Babbit, 168 F.3d 1257, 1268 (11th Cir. 1999). To survive summary judgment on

this theory, Spring Hill must show that Flatau harbored a discriminatory animus against it and

that the decisionmaker, Smith, acted in accordance with Flatau’s discriminatory demands

without separately evaluating whether HCA should renew its contract with Spring Hill. See

Llampallas, 163 F.3d at 1249.

The Court concludes that summary judgment is appropriate because Spring Hill has

failed to establish a causal connection between the non-renewal of the Spring Hill contract and

Flatau’s alleged discriminatory animus. Spring Hill has presented no evidence that Smith’s

decision was tainted by Flatau’s discriminatory intent or that Smith’s decision was simply a tacit

approval of Flatau’s racist demands. Rather, the undisputed evidence shows that HCA decided

not to renew the contact only after a thorough and independent assessment of Spring Hill’s

ability to provide radiology services according to HCA’s terms. In the same October 2003

meeting in which Mehta reported Flatau’s racist demand that he leave the hospital, Smith

informed Mehta that he would provide a draft of a renewal contract. Their negotiations

continued through the Fall of 2003 and included drafts of the contract and several meetings

between Smith, Edwards, and Mehta. The parties even agreed to extend the existing contract, so

that the renewal negotiations could continue. It was only after extensive negotiations revealed

that the parties could not reach an agreement on the terms that the negotiations failed, and HCA

decided not to renew. Spring Hill has not established that Smith succumbed to Flatau’s demands

without independently investigating the advantages and disadvantages of renewing the contract,

and therefore, Spring Hill has not established a causal connection pursuant to a “cat’s paw”

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theory of discrimination. Hankins v. Airtran Airways, Inc., No. 06-15406, 2007 WL 1705579, at

*6 (11th Cir. June 14, 2007) (concluding that, even when the decisionmaker was aware of his

colleague’s bias, the plaintiff failed to establish a causal connection because the decisionmaker

conducted an independent investigation regarding whether to terminate the plaintiff).

Moreover, even assuming that Spring Hill’s evidence was sufficient to create an issue of

fact as to whether Flatau was the actual decisionmaker, the Court concludes that Spring Hill has

failed to establish that HCA’s legitimate, nondiscriminatory reason for not renewing the

contract–that Spring Hill refused to agree to HCA’s terms regarding radiology services at the

hospital–was pretextual. In a “cat’s paw” scenario, “the causal ink between the animus of a

subordinate and the decisionmaker’s decision is severed if instead of merely tacitly approving or

otherwise ‘rubber stamping’ another’s adverse recommendation . . . , the decision maker

conducts an independent investigation into the allegations against the plaintiff.” Jackson v. Mid-

America Apartment Communities, 325 F. Supp. 2d 1297, 1302 (M.D. Ala. 2004). As stated

previously, any causal connection between Flatau’s discriminatory intent and the decision not to

renew the Spring Hill contract was severed as a matter of law when Smith and Edwards

continued the contract negotiations with Mehta, despite their knowledge of Flatau’s racist

demands.3

3The Court rejects Spring Hill’s contention that HCA has offered inconsistent reasons for
not renewing the contract and that such inconsistencies are evidence of pretext. The undisputed
evidence reveals that the parties’ negotiations centered on the specific terms by which Spring
Hill would be required to provide radiology services. When Spring Hill did not agree to HCA’s
terms, HCA decided not to renew the contract. Spring Hill has failed to demonstrate that HCA
has taken inconsistent positions regarding this decision, or that such decision was discriminatory.

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Finally, even assuming that HCA’s true reason for not renewing the contract was its

desire to retain Flatau, despite his discriminatory animus, because he is more valuable to the

hospital, such reason is a legitimate, non-discriminatory reason that Spring Hill has failed to

rebut. “[Section 1981] does not prohibit an employer from discharging an employee because it

wishes to retain another, presumably more valuable, employee–unless, of course, the desired

employee is of a different [national origin] from the plaintiff, and the decision can be linked to a

discriminatory animus towards persons of the non-desired employee’s [national origin].” See

Llampallas, 163 F.3d at 1248-49. Here, there is no evidence that Smith adopted the racial

animus of Flatau. Therefore, even assuming that Smith chose Flatau over Mehta because he

brings more money to the hospital, such a decision based on economic concerns, including a

desire to retain a valued physician, is not a form of actionable discrimination. See Brown v. Am.

Honda Motor Co., Inc., 939 F.2d 946, 951 (11th Cir.1991) (“[A] contract may be granted for a

good reason, a bad reason, a reason based on erroneous facts, or for no reason at all, as long as it

is not for a discriminatory reason.”) (quotations and citations omitted). Accordingly, viewing the

record in the light most favorable to Spring Hill, the Court concludes that Spring Hill has failed

to put forth evidence to raise an genuine issue of material fact sufficient to withstand summary

judgment.

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IV.

Conclusion

It is ORDERED AND ADJUDGED that HCA’s Motion for Summary Judgment (Doc.

No. 17) is GRANTED. As there are no remaining claims before the Court, the pretrial

conference set in this case for Wednesday, September 5, 2007, is hereby cancelled, and this case

is removed from the Court’s October 2007 trial calendar. The Clerk is directed to enter

judgment in favor of HCA and to close this case.

DONE AND ORDERED at Tampa, Florida, this 20th day of August, 2007.

Copies to:
Counsel of Record

12

Medical Protective Co. v. Pang

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WO

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA

vs.

Herman Pang, M.D.,
Defendant.

No. CV 05-2924-PHX-JAT
ORDER

)
The Medical Protective Company, a
)
foreign corporation
)
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Plaintiff,
)
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Pending before the Court is Scottsdale Healthcare Corporation’s Objection to
Subpoena Duces Tecum and Motion to Quash (Doc. # 58). The Court now rules on the
Objection/Motion.
Background
I.
Plaintiff Medical Protective Company (MPC) has sued to rescind Dr. Pang’s medical
malpractice insurance policy limits from $5 million/$5 million to $1 million/$ 3 million.
MPC claims that Dr. Pang made material misstatements to MPC on his application for
increased limits; including, denying knowledge of potential malpractice claims against him
and denying any knowledge of peer review proceedings relating to his care of patients. Dr.
Pang has counterclaimed against MPC for bad faith.
On November 29, 2006, MPC served a subpoena duces tecum on Scottsdale
Healthcare Corporation (SHC) in an effort to discover how many, if any, peer review

Case 2:05-cv-02924-JAT Document 63 Filed 02/06/2007 Page 1 of 4

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2.

3.

proceedings Dr. Pang knew of before he applied for increased policy limits. The subpoena
requested the following:
1.
All policies and procedures of Scottsdale Healthcare in
effect in 2001 and 2002 regarding peer review of
physicians at Scottsdale Healthcare Shea and Scottsdale
Healthcare Osborn.
Documents that reflect the dates of any peer reviews of
Herman Pang, M.D. for treatment of patients by Dr. Pang
at Scottsdale Healthcare Shea and/or Scottsdale
Healthcare Osborn in 2001 and 2002.
Documents regarding any peer reviews conducted of
Herman pang, M.D. for treatment of patients by Dr. Pang
at Scottsdale Healthcare Shea and/or Scottsdale
Healthcare Osborn in 2001 and 2002.
The production date on the subpoena was December 15, 2006.
In response to the subpoena, SHC produced: (1) the Medical Staff Rules and
Regulations Governing Confidentiality of Medical Staff Records and Quality Assessment
and Improvement Records for SHC for years 2001 and 2002 and (2) a list of dates of peer
review of Defendant Herman Pang, M.D. during 2001 and 2002. SHC objected to any
further requests on grounds of peer review privilege. On December 14, 2006, SHC filed the
pending Objection/Motion and sent a letter to MPC’s counsel notifying counsel of SHC’s
objection to producing privileged material.
II.
Analysis and Conclusion
SHC argues that the Court should quash the subpoena because the subpoena seeks
privileged information. SHC states that Arizona’s statutory peer review privilege covers all
information SHC has not produced already. Arizona Revised Statutes §36.445 provides, in
relevant part:

The governing body of each licensed hospital shall require that
physicians admitted to practice in the hospital . . . organize into
committees or other organizational structures to review the
professional practices within the hospital . . . for the purposes of
reducing morbidity and mortality and for the improvement of
the care of patients . . . Such review shall include the nature,
quality, and necessity of the care provided and the preventability
of complications and deaths occurring in the hospital.

In pertinent part, Arizona Revised Statutes §36-445.01 reads:

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Case 2:05-cv-02924-JAT Document 63 Filed 02/06/2007 Page 2 of 4

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All proceedings, records and materials prepared in connection
with the reviews provided for in §36-455, including all peer
reviews of individual health care providers . . . shall be
confidential and shall not be subject to discovery except in
proceedings before the board of medical examiners, or the board
of osteopathic examiners, or in actions by an individual health
care provider against a hospital . . . .
Arizona statutes also provide that when heath care providers establish quality assurance
processes to investigate the quality of health care, the information secured through those
processes is confidential and undiscoverable. ARIZ. REV. STAT. ANN. §§36-2401-2404.
MPC attacks the motion to quash on both procedural and substantive bases. The
Court will address the procedural issue first. MPC claims that the motion is premature
because SHC did not attempt to resolve the dispute informally as required by Fed. R. Civ.
P. 26(c). But Fed. R. Civ. P. 45(3) allows the Court to quash a subpoena upon “timely
motion” if the subpoena requires disclosure of privileged information. Rule 45 does not
require the movant to attach an affidavit stating the movant attempted to resolve the dispute
informally; and Plaintiff does not contend that SHC’s motion was untimely. The Court
therefore will not deny the motion on procedural grounds.
MPC makes two substantive objections to the motion to quash: 1) that the peer review
privilege does not apply and 2) that the Defendant and SHC have waived the privilege. The
Court will address MPC’s arguments in that order.
The Arizona peer review statutes govern the discoverability of peer review material.
Humana Hosp. Desert Valley v. Superior Court, 742 P.2d 1382, 1384 (Ariz. Ct. App. 1987).
Arizona’s statutory peer review privilege protects the peer review process itself, including
the names of the persons in attendance and discussions, exchanges, and opinions found in the
committee minutes. Yuma Reg’l Med. Ctr. v. Superior Court, 852 P.2d 1256, 1259 (Ariz. Ct.
App. 1993). The privilege also prohibits a party from engaging in a “fishing expedition to
ascertain what information was considered by the peer review committee . . . .” Id. at 1260.
MPC’s third production request, “Documents regarding any peer reviews conducted
of Herman pang, M.D. for treatment of patients by Dr. Pang at Scottsdale Healthcare Shea
and/or Scottsdale Healthcare Osborn in 2001 and 2002,” calls for exactly the sort of

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Case 2:05-cv-02924-JAT Document 63 Filed 02/06/2007 Page 3 of 4

information covered by the peer review privilege. Nor do any of the statutory exceptions
apply. The peer review privilege therefore will prevent the discovery of the information
requested if the privilege has not been waived.
The peer review statutes instruct the hospitals to create peer review committees; and
the peer review documents belong to the hospitals. The Court therefore agrees with SHC that
the hospital holds the peer review privilege; and only the hospital can waive the privilege.
SHC has maintained its peer review files and documents in a confidential manner, has not
disclosed confidential information to a third party, and has not voluntarily testified about its
confidential information; and SHC has specifically asserted the privilege. The Court finds
that SHC has not waived the privilege, as Plaintiff suggests, by requiring Dr. Pang to
maintain medical malpractice insurance.
Accordingly,
IT IS ORDERED GRANTING SHC’s Objection to Subpoena Duces Tecum and
Motion to Quash (Doc. # 58).
DATED this 6th day of February, 2007.

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Case 2:05-cv-02924-JAT Document 63 Filed 02/06/2007 Page 4 of 4

Medical Society of New Jersey v. Mottola

National Practitioner Data Bank

Medical Society
of New Jersey v. Mottola, Civ. No. 04-2126 (WGB) (D.N.J. June 8, 2004)

The
United States District Court for the District of New Jersey upheld the constitutionality
of a state statute that requires that medical malpractice data regarding physicians
and podiatrists be made available to the public on the Internet and via a toll-free
telephone line. The court also refused to enjoin an order of a state court
judge that malpractice data that had been reported to the state was a public
record, and could thus be disclosed to a newspaper under the state’s open records
law. In reaching its decision, the federal court noted that the confidentiality
provisions of the Health Care Quality Improvement Act ("HCQIA") do
not protect data that is reported directly to state agencies, even if the data
reported to the state agency is identical to that which is reported to the
National Practitioner Data Bank. Also, the court found that the HCQIA does
not give private individuals a right to sue government officials under 42 U.S.C. §1983
for alleged violations of their right to privacy.

 

 

Med. Protective Co. v. Pang

PEER REVIEW PRIVILEGE

Med. Protective Co. v. Pang, No. CV 05-2924-PHX-JAT (D.
Ariz. Feb. 6, 2007)

In
a lawsuit by an insurance company seeking to substantially reduce one of
its insured physician’s medical malpractice policy limits, the United States
District Court for the District of Arizona granted a hospital’s objection to
a subpoena issued by the insurance company that was requesting documents regarding
the peer review proceedings involving the insured physician at the hospital.
The court noted that the state peer review statute protects the peer review
process and prohibits a third party from attempting to ascertain what information
was considered in the peer review proceedings. Because the insurance company’s
subpoena sought the type of information covered under the peer review privilege,
unless the hospital waived the privilege, the documents were protected. The
court found that the hospital did not waive the privilege, as the insurance
company argued, by requiring the physician to maintain medical malpractice
insurance.

 

Med. Bd. of Cal. v. Superior Court,

Filed 1/7/2

NOT TO BE PUBLISHED

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or
ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Sacramento)

—-

MEDICAL BOARD OF CALIFORNIA,

C037790

Petitioner,

(Super. Ct. No. 99CS02282)

v.

THE SUPERIOR COURT OF SACRAMENTO
COUNTY,

Respondent;

WILLIAM BRYCE MCLEOD,

Real Party in Interest.

The Medical Board of California (Board), having found that

William Bryce McLeod, a licensed gynecologist and obstetrician,

had engaged in at least 15 acts of unprofessional conduct with

both patients and nurses, revoked but stayed the revocation of

his license, and placed him on probation with various

conditions. The superior court sustained the Board’s findings

of unprofessional conduct but concluded the penalty was too

severe and the conditions of probation were inappropriate.

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The Board seeks a writ of mandamus to set aside the judgment

reducing the penalty, contending that the trial court usurped

the Board’s discretion to determine the appropriate penalty.1

We issued an alternative writ of mandate. Having considered

the matter, we now agree with the Board and issue a peremptory

writ pursuant to Business and Professions Code section 2337.

FACTS

On remand from the superior court, the Board made

175 factual findings. Those voluminous findings form the basis

on which the Board revoked, and then stayed, McLeod’s license

and imposed terms of probation. We need only highlight a few of

his transgressions to demonstrate that the Board did not abuse

its discretion in penalizing him for his unprofessional conduct.

Our summary is, therefore, brief.

Many patients testified that Dr. McLeod made them extremely

uncomfortable with both what he said and what he did. While

squeezing one patient’s nipples during a breast examination, he

remarked, “I bet you don’t let your husband do this anymore,”

and during a pelvic examination he commented, “I bet you don’t

let your husband make love to you much these days.” With

1 McLeod contends the case is not ripe for appellate review
because the Board has not rendered a second decision following
the court’s second remand. Petition to this court for a writ of
mandamus is proper and is, in fact, the only vehicle to obtain
review by this court. (Bus. & Prof. Code, § 2337; Leone v.
Medical Board (2000) 22 Cal.4th 660, 663-664.) McLeod cites no
authority to compel the Board to issue yet another decision
before we can review the trial court’s ruling.

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another, he assured her that her sex life would improve after

she had a hysterectomy, as his wife’s had; thereafter, he tried

to rehook her brassiere without permission. When the elastic

popped loose, he reached for it and, in doing so, rubbed his

hand against her breast. He gave a third patient a breast

examination during almost every prenatal visit even though the

standard of care for a patient without specific complaints is

to give only one breast examination during a pregnancy. While

examining another patient’s breast, he pointed to bumps around

the nipple known as the “follicles of Montgomery” and told the

patient’s boyfriend he could see who had been pregnant by

looking for these bumps on the nipples of models in Playboy

magazine.

Dr. McLeod examined one of his patients very late in the

day. There was no chaperone present. He shaved her genital

area, closely examined her, and took photographs of her vulvar

lesions. Although the examination was finished, he stayed in

the room while she dressed. He then asked her about a lesion

below her shoulder, pulled up her brassiere without her consent,

and palpated her lower breast. Walking her to her car after

the examination, he asked her when she would stop being a “sex

slave” to her boyfriend.

What began as reciprocal horseplay with nurses at the

hospital escalated into unwelcome physical touching and resulted

in a group of nurses reporting McLeod’s behavior to their

supervisor. They reported that McLeod tried to unsnap the

ons of their work smocks, pretended to take off a nurse’s

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pants on several occasions, and pulled nurses to sit on his lap.

He put his hands on one nurse’s shoulders, backed her up against

a wall, and told her he wanted to touch her breasts. He was

warned by hospital administrators to refrain from unprofessional

conduct with the staff. Nevertheless, he later allowed nurses

to sit on his lap in the nurses’ station.

Based on these findings, the Board revoked his license,

stayed the revocation, and placed McLeod on probation for five

years subject to various terms and conditions. McLeod

petitioned the superior court for a writ of administrative

mandamus. Although the court upheld the factual findings, it

granted the petition for a writ of mandate and ordered the

matter remanded to the Board to issue a new decision. The Board

changed its conclusions of law consistent with the trial court

ruling. These conclusions are not challenged in these

proceedings. At issue is the penalty imposed by the Board. The

Board revoked McLeod’s license but stayed the revocation. It

also placed him on probation for five years with various terms

and conditions, including enrollment in an ethics course, the

presence of a chaperone during all examinations of female

patients, and clinical training through the University of

California’s physician assessment and clinical education program

(PACE program) to obtain an understanding of appropriate sexual

boundaries and an awareness of patient sensitivities.

McLeod filed a supplemental petition for a writ of

administrative mandate, challenging the Board’s decision on

remand. Again, the superior court granted the petition and

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ordered the Board to set aside its decision and to issue a new

decision.

DISCUSSION

“There is no other profession in which one passes so

completely within the power and control of another as does the

medical patient. [Citation.] The physician-patient

relationship, built on trust, was violated by [Dr. McLeod].

[Citation.] Nor does the absence of any resulting physical harm

negate the damage done that relationship.” ( Shea v. Board of

Medical Examiners (1978) 81 Cal.App.3d 564, 578-579.)

McLeod minimizes the seriousness of his conduct, accusing

the Board of imposing prudish, Victorian standards. He ignores,

however, the fundamental principles limiting the scope of our

review of the Board’s determination of an appropriate penalty.

“[T]he propriety of a penalty imposed by an administrative

agency is a matter vested in the discretion of the agency and

its decision may not be disturbed unless there has been a

manifest abuse of discretion. [Citations.] ‘[I]n reviewing the

penalty imposed by an administrative body which is duly

constituted to announce and enforce such penalties, neither a

trial court nor an appellate court is free to substitute its own

discretion as to the matter; nor can the reviewing court

interfere with the imposition of a penalty by an administrative

tribunal because in the court’s own evaluation of the

circumstances the penalty appears to be too harsh. [Citation.]

Such interference . . . will only be sanctioned when there is an

arbitrary, capricious or patently abusive exercise of

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discretion.’ [Citation.]” (Cadilla v. Board of Medical

Examiners (1972) 26 Cal.App.3d 961, 966 (Cadilla).)

We look to the action of the Board, not the trial court.

(Landau v. Superior Court (1998) 81 Cal.App.4th 191, 217.)

“One of the tests suggested for determining whether the

administrative body acted within the area of its discretion is

whether reasonable minds may differ as to the propriety of the

penalty imposed. The fact that reasonable minds may differ will

fortify the conclusion that there was no abuse of discretion.”

(Cadilla, supra, 26 Cal.App.3d at p. 968.) In medical cases

such as this, protection of the public is paramount. ( Bryce v.

Board of Medical Quality Assurance (1986) 184 Cal.App.3d 1471,

1476.)

McLeod specializes in gynecology and obstetrics, a

specialization requiring sensitivity to patients’ privacy and

respect for the patients’ sexual boundaries. The Board and the

trial court found multiple transgressions of those boundaries,

which amounted to unprofessional conduct. Similarly, the Board

and the trial court also found McLeod’s behavior with the

hospital nurses was unprofessional.

The Board is charged with protecting the public from

physicians whose personal sense of appropriate behavior with

patients and staff is skewed. The trial court’s barometer may

have differed from the Board’s, but it is the Board and not the

court that has the discretion to assess the nature of the

misconduct and to determine an appropriate penalty. When, as

here, reasonable minds may differ as to whether a stayed

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revocation was too harsh, we must defer to the professional

assessment of the Board.

We can find no abuse of discretion. McLeod emphasizes

that he was exonerated of sexual misconduct and negligence

allegations. The Board expressly found he was not a sexual

predator. But that is not to say the Board abused its

discretion by imposing a restrained penalty to curb

unprofessional conduct falling short of sexual misconduct.

Quite to the contrary, the Board was justified in revoking the

license of a physician who had demonstrated a pattern of making

offensive remarks to his patients and offensive physical contact

with hospital staff and with his patients. He retained the

ability to practice his profession, albeit with the benefit of

education and monitoring. Hence, the Board’s measured response

is well within the ambit of its discretion.

McLeod also objects to one of the conditions of his

probation. He contends that enrollment in the PACE program is

far too onerous a burden for the minor transgressions he

committed. He objects to the evaluation of his medical skills

as well as the appraisal of his psychological condition,

required of all participants in the program, insisting that

there were no findings reflecting a problem with either his

medical competence or his psychological health. The trial court

agreed.

Again, we must emphasize that neither a trial court nor a

Court of Appeal can interfere with the Board’s exercise of

discretion. The evaluations conducted by the PACE program are

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a routine component required of all participants. Because the

PACE program is individualized, the initial assessment is

necessary to facilitate the design of a custom program tailored

to meet the enrollee’s specific deficiencies. Whether the

assessment process is longer or more involved than McLeod needs

is not for an appellate court, or a trial court for that matter,

to determine. We must conclude that the Board did not abuse its

discretion by referring McLeod to the PACE program to curb his

unprofessional conduct, a program that reasonably includes a

comprehensive evaluation of the physician’s competence and

mental health.

We also conclude that enrollment in the PACE program is not

duplicative of a separate condition of probation to take an

annual course in patient boundaries and sensitivities. As the

Board points out, enrollment in the PACE program might satisfy

the condition for the first year of probation. Thereafter,

however, an annual course would help to prevent a relapse into

the kind of unprofessional conduct upon which the discipline was

based.

We need not consider whether the trial court erred by

directing the Board to modify one of its findings. As both

parties concede, the modification would not affect the basis for

discipline or the penalty imposed.

The judgment granting the peremptory writ of administrative

mandate is reversed and the case remanded to the trial court

with directions to recall the peremptory writ and to enter

judgment denying the petition. When this decision becomes

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final, the stay is to be vacated. The alternative writ, having

served its purpose, is discharged. Petitioner shall recover the

costs of this proceeding.

RAYE , J.

We concur:

BLEASE , Acting P.J.

SIMS , J.

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Med. Protective Group v. Herrin

Med. Bd. of Cal. v. Superior Court,

Med. Bd. of Cal. v. Superior Court,
No. C037790 (Cal. Ct. App. Jan. 7, 2002)

The Medical Board of California appealed after the Superior Court reduced
a penalty the Board had imposed on a gynecologist and obstetrician (OBGYN) for
unprofessional conduct. The Board made 175 factual findings involving at least
15 acts of inappropriate sexual comments and touching with patients and hospital
nursing staff. The Board revoked the OBGYN’s license, then stayed the revocation
and placed him on probation. The Board further required that the OBGYN submit
to conditions on his license including enrollment in an ethics course, the presence
of a chaperone during all examinations of female patients, and clinical training
through the state’s physician assessment and clinical education program to obtain
an understanding of appropriate sexual boundaries.

The Superior Court upheld the Board’s finding of unprofessional conduct but
found the penalty too severe and ordered the Board to impose a new sentence.
The Board appealed. The Court of Appeal of California ruled that the imposition
of a penalty for unprofessional conduct was within the discretion of the Board.
The court further ruled that the Board’s decision may not be disturbed unless
it is arbitrary, capricious, or an abuse of discretion. The court concluded
that reasonable minds could differ as to the appropriate penalty, and the Superior
Court was therefore not at liberty to overrule the Board’s decision.

 

 

Med. Protective Group v. Herrin

Medical Malpractice

Med. Protective Group v. Herrin , No. 06-06-00048-CV (Tex. App. Oct. 3, 2007)

Prior to agreeing to settle a malpractice case, the physician allegedly asked the agent for the insurer whether the settlement would result in the cancellation or non-renewal of his policy. The physician claimed that the agent told him no. The agent claimed that he told the physician that the policy would not be cancelled as a result of the settlement. However, two years later the insurer refused to renew the physician’s policy due to the high "frequency " and "severity" of claims.

Even though the physician was able to obtain other coverage without a lapse in coverage, the physician sued the insurer, claiming that the insurer violated the Texas Deceptive Trade Practices Act (DTPA) and committed fraud. The jury ruled that the insurer violated the DTPA but that the physician suffered no direct damage as a result. However, the jury awarded the physician damages for mental anguish on the DTPA count and additional monetary damages on the fraud count.

Texas Court of Appeals first held that awards for mental anguish are not permitted under the DTPA and, as such, reversed this award. The Appellate Court then rendered a judgment in favor of the insurer on the fraud claim, finding that there was no evidence that connected the insurer’s alleged fraudulent conduct with the physician’s alleged pecuniary losses.