Maheshwari v. Governing Bd. of Sharp Mem’l Hosp.

Filed 4/10/03 Maheshwari v. Governing Bd. of Sharp Mem. Hosp. CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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 This opinion has not been certified for publication or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.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

D039509

(Super. Ct. No. GIC771148)

v.

Plaintiff and Appellant,

B. D. MAHESHWARI,

GOVERNING BOARD OF SHARP
MEMORIAL HOSPITAL,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of San Diego County, John S.

Meyer, Judge. Affirmed.

By this appeal, the plaintiff B. D. Maheshwari, M.D., a cardiologist, seeks to

overturn the court’s decision upholding Sharp Memorial Hospital’s (Sharp’s) decision to

deny his application for staff privileges. When Dr. Maheshwari applied for staff

privileges, the medical executive committee (MEC) for Sharp denied his application on

the basis that (1) it had concerns about the quality of Dr. Maheshwari’s care at another

hospital, Riverside Community Hospital (RCH), where he had previously worked; and

(2) he allegedly did not provide sufficient information to Sharp with his application for

Sharp to perform a complete evaluation of his application. Dr. Maheshwari appealed that

decision to Sharp’s judicial review committee (JRC), and when it denied his appeal, he

appealed to the defendant Governing Board of Sharp Memorial Hospital (the Board).

The Board denied Dr. Maheshwari’s appeal.

Dr. Maheshwari thereafter filed a petition for writ of administrative mandamus

(petition) under Code of Civil Procedure section 1094.5,1 asserting that Sharp’s

application process violated his due process rights, was unfair, and that Sharp’s actions

were arbitrary and capricious. He also contended that there was no substantial evidence

to support Sharp’s decision, and that Sharp erred by excluding certain evidence Dr.

Maheshwari sought to submit at the hearing before the JRC (JRC Hearing).

The court ruled in favor of Sharp on Dr. Maheshwari’s petition. First, the court

found that substantial evidence supported Sharp’s decision. The court also found that

Sharp provided Dr. Maheshwari with a fair procedure in conjunction with his application.

The court found that there was no substantial evidence to support Dr. Maheshwari’s

assertion that Sharp acted arbitrarily and capriciously during the process. The court also

found that Sharp’s decision to exclude certain evidence was supported by the record.

1
All further statutory references are to the Code of Civil Procedure unless otherwise
specified.

2

Finally, the court found that there was no merit to Dr. Maheshwari’s claim of a violation

of his due process rights.

On this appeal, Dr. Maheshwari first asserts his fair procedure rights were violated

because Sharp’s actions were “arbitrary and capricious.” Specifically, Dr. Maheshwari

asserts that Sharp (1) decided to “get rid of” his application before it received any records

concerning the RCH cases; (2) refused to allow him to meet with Sharp committees; (3)

required Dr. Maheshwari to submit patient names and other confidential information in

connection with his application; (4) conducted an investigation searching for medical

malpractice actions filed against him and his wife; and (5) breached its promise to obtain

patient information from other hospitals before making a decision on his application. Dr.

Maheshwari also contends that the process was unfair because Sharp allowed its chief of

medical staff, who was biased against Dr. Maheshwari’s application, to be involved in the

decision-making process.

Dr. Maheshwari asserts that his equal protection rights were violated because

Sharp’s bylaws do not afford applicants for staff privileges the same right to meet with

committee members as members of the medical staff. Dr. Maheshwari asserts that the

JRC hearing officer erred by excluding from consideration on his appeal certain medical

records, follow-up information and declarations from former patients. Finally, Dr.

Maheshwari contends that Sharp’s expert witness who testified before the JRC applied

the wrong standard of care in evaluating Dr. Maheshwari’s care of patients.

We conclude that (1) Sharp did not violate Dr. Maheshwari’s fair hearing rights;

(2) there was no error in the exclusion of evidence he presented for the first time at the

3

JRC Hearing; and (3) Sharp’s expert’s testimony does not require a reversal in this

matter.2 Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

I. Factual Background

A. Dr. Maheshwari’s Qualifications

Dr. Maheshwari earned his medical degree at a medical school in India and then

worked as a doctor in Great Britain for five years. He came to the United States in 1971.

Dr. Maheshwari completed a fellowship in cardiology, including cardiac catherization, at

Wayne State University in Detroit, Michigan. He has been board certified in internal

medicine since approximately 1973 and board certified in cardiology since 1975. Dr.

Maheshwari is also an attorney.

Dr. Maheshwari has practiced medicine in Corona, California, since

approximately 1975. He had full invasive cardiology privileges, including balloon

angioplasty and coronary stenting, at RCH, Anaheim Memorial Hospital (AMH), and

Western Medical Center, Anaheim (WMC). He also had provisional invasive cardiology

privileges at Scripps Memorial Hospital in San Diego.

B. Dr. Maheshwari’s Application for Staff Privileges at Sharp

In November 1998, Dr. Maheshwari submitted an application for staff privileges

to Sharp. In that application Dr. Maheshwari sought privileges to perform general

2
As we shall discuss, post, based upon the reasons for our holding that there was no
violation of Dr. Maheshwari’s fair hearing rights, we need not address his claim that his
equal protection rights were violated.

4

cardiology, diagnostic catherization and interventional cardiology services. As part of

the application, Dr. Maheshwari agreed that he, as an applicant, had the burden of

producing to Sharp adequate information for it to evaluate his competence and

qualifications. The bylaws of the attending medical staff for Sharp (Staff Bylaws),

paragraph 5.2 provides in part:

“[T]he Applicant shall have the burden of producing information for
an adequate evaluation of the applicant’s qualifications and
suitability for the clinical privileges and staff category requested, of
resolving any reasonable doubts about these matters, and of
satisfying requests for information. The applicant’s failure to sustain
this burden shall be grounds for denial of the application.”

Dr. Maheshwari also agreed to provide patient records for use in the evaluation

process if Sharp deemed them relevant. Dr. Maheshwari was granted temporary

privileges pending a decision on his application.

Shortly after the review process began, Sharp discovered that Dr. Maheshwari was

under review by RCH because of quality-of-care concerns in seven cases Dr. Maheshwari

worked on there. In a memorandum Barbara Grondona, Sharp’s medical staff office

manager, told Sharp’s chief of staff, Dr. David Ostrander, of the review by RCH. The

memorandum also spoke of the status of Dr. Maheshwari’s temporary privileges pending

investigation of the RCH review:

“The issue is that, if we terminate these privileges, it’s reportable to
both the Medical Board and Data Bank and this doctor would be
entitled to his hearing rights, under the Bylaws. I’ve confirmed this
with legal counsel. They had a good alternative: [¶] They suggest
that you speak with Dr. Maheshwari and be candid with him. Tell
him that, in conjunction with the credentialing process, we have
learned that he is currently under quality review at another hospital.
Let him know that, in light of this, it is incumbent upon the Medical

5

Staff to investigate and that, pending conclusion of the investigation,
it is our recommendation that he withdraw his temporary privileges.
Let him know that we will proceed with processing his application
and that any information that he can provide, regarding the quality
review, will be helpful to our medical staff in assessing his
application. Let him know that if he does not agree to this, we will
have to terminate his temporary privileges, we will have to report
him.” (Italics added.)

Dr. Ostrander followed this up with a telephone conversation with the chief of

staff at RCH, Dr. C. Bevan Stuart. Dr. Stuart outlined some of the concerns RCH had

with Dr. Maheshwari’s treatment of patients. Based upon this conversation, Dr.

Ostrander decided that Sharp should investigate the RCH review.

Dr. Ostrander thereafter informed Dr. Maheshwari that Sharp was investigating

the RCH review and advised him that they needed further information that they could not

obtain from RCH:

“We were not able to learn any details regarding the specific reasons
for this review, and our routine query of your status with that
hospital has not been answered, despite several requests. [¶] . . .
[¶] In light of the absence of specific details involving this matter
and our inability to get the required written response from [RCH],
your application is considered incomplete. If there is any further
information you can provide, as to your current situation at that
hospital, please do so.” (Italics added.)

Dr. Maheshwari was also advised that as he had not requested renewal of his

temporary privileges after 90 days, they had expired and would not be renewed.

C. Decision by Hoagland Committee

Dr. Ostrander advised Dr. Maheshwari that a panel of cardiologists would be

appointed to review the quality of care issue. This committee was known as the

“Hoagland Committee” because Dr. Paul Hoagland chaired it.

6

Dr. Maheshwari replied to Dr. Ostrander’s letter as follows:

“I understand that there has been an understanding between you and
Maurice Buchbinder that I will supply you with details of these
cases, and that you will appoint a panel of cardiologists from [Sharp]
to review that cases with respect to the quality. I am sending you
copies of the medical records obtained from [RCH] on these
patients, the observations of the members of the Cardiology Section
of [RCH] on the individual cases, and my responses. . . .

“. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“If you or your committee have any questions with respect to the
[RCH] cases, I will be very happy to visit and answer the questions.”
(Italics added.)

However, only portions of the medical records were submitted at that time. Dr.

Ostrander acknowledged receipt of the documents Dr. Maheshwari provided and

informed him that Sharp would “proceed with the review of these cases and the

processing of your application. Additionally, if you are able to provide any additional

information regarding the status of the peer review proceedings at [RCH], it will be most

helpful. Should additional information be needed, we will contact you.” (Italics added.)

Dr. Maheshwari then sent a letter with information concerning the review at RCH.

Dr. Maheshwari also stated in that letter that he was “very willing to come and talk to you

and/or any other cardiologist(s) who have an interest in exploring further these matters.”

Dr. Ostrander informed Dr. Maheshwari that the Hoagland Committee would need

the radiological studies or “cine films,” which were films taken of the actual procedures

performed by Dr. Maheshwari, for each patient in the suspect cases. Dr. Ostrander

informed Dr. Maheshwari that his application would “be considered incomplete until we

receive this information and any other information which might be deemed necessary.”

7

Although the chief of staff at RCH initially refused to release the cine films, after threat

of a lawsuit by Dr. Maheshwari, RCH sent the cine films to Sharp.

After the cine films were received by Sharp, Dr. Ostrander informed Dr.

Maheshwari that “[t]he information will now be reviewed and you will be informed of

the outcome of this review process.” The Hoagland Committee met and reviewed the

cine films and concluded that Dr. Maheshwari’s treatment was below the standard of care

in six of the seven cases.

Following receipt of the Hoagland Committee’s report, Dr. Ostrander notified Dr.

Maheshwari that Sharp would seek an independent review of the medical records and the

cine films through the California Medical Association (CMA). This was proposed,

according to Dr. Ostrander, as it was “most fair” that the issue be reviewed by someone

not known to any of the parties involved. Dr. Maheshwari responded that he did not “see

any need for independent CMA review of the medical records and cine films since the

cardiologists at [RCH], as well as[] at [Sharp,] have already reviewed them. Any further

review would be redundant.”

D. Denial of Application by MEC

Thereafter, Dr. Maheshwari’s application went to the MEC for a decision. The

MEC, through Dr. Ostrander, advised Dr. Maheshwari that it had reviewed his request for

privileges, had concerns about the quality of care rendered in the RCH cases, and wanted

him to provide patient information for his cardiology cases for the past six months at all

facilities where he currently held privileges. Dr. Maheshwari responded that he would

not provide the information due to privacy concerns as to his patients and that, based

8

upon the information he had already provided, he had established his qualifications for

privileges.

Dr. Ostrander responded to Dr. Maheshwari by clarifying that Sharp was only

seeking a sampling of these cases, that the privacy concerns could be addressed, and by

citing state law that allows physicians to disclose medical information to committees at

hospitals that are reviewing the competence or qualifications of doctors. Dr. Ostrander

reminded Dr. Maheshwari that it was his burden to provide information to establish his

competence and qualifications and stated that if he refused to provide the requested

information his application would be deemed denied. Dr. Maheshwari wrote back,

stating that if Sharp needed the patient information, it should request it from the hospitals

itself. Dr. Maheshwari also stated that Sharp’s delay in rendering a decision on his

application had “damaged” him.

Because of Dr. Maheshwari’s refusal to obtain the requested patient records

requested by the MEC, the MEC itself contacted RCH and other hospitals to attempt to

obtain a sampling of six months of Dr. Maheshwari’s cases. After receiving authorization

from Maheshwari, Sharp requested samplings from RCH and the Corona Regional

Medical Center (CRMC). Dr. Stuart of RCH wrote a letter to Sharp’s then-chief of staff,

Dr. Kenneth J. Roth, expressing concerns about patient confidentiality and stating that he

believed this was information that Dr. Maheshwari himself should provide to Sharp. Dr.

Roth also spoke to Dr. Stuart by telephone around this time. Dr. Stuart told Dr. Roth

about problems RCH had had with Dr. Maheshwari. Dr. Roth’s notes of the conversation

with Dr. Stuart reflect that Dr. Stuart stated as to Dr. Maheshwari that “he’s the worst

9

physician on our staff” and that “I regret the day we ever granted him privileges here.”

Dr. Roth did not relay this information to Dr. Maheshwari. CRMC never responded to

the MEC’s request for records.

Based upon Dr. Maheshwari’s refusal to provide any further information to the

MEC, his expressed concern over the time that had passed since his application was

submitted, and the lack of cooperation from RCH and CRMC, the MEC decided to

proceed with a vote upon Dr. Maheshwari’s application without the six-month sampling.

In February 2000, Dr. Roth, then-chief of staff for Sharp, informed Dr. Maheshwari that

the MEC had voted to recommend denial of the application. The denial was based upon

the MEC’s concerns about the quality of care in Dr. Maheshwari’s coronary interventions

and its doubts concerning his overall clinical judgment in cardiology. Dr. Maheshwari

was also notified that the denial was based in part upon his failure to meet his burden of

producing information that would have allowed the MEC to more fully evaluate his

qualifications and suitability for general cardiology privileges.

E. JRC Hearing

In February 2000 Dr. Maheshwari advised Sharp that he was requesting a JRC

Hearing, as provided in Sharp’s Staff Bylaws, to contest the decision by the MEC. The

JRC Hearing was conducted before the JRC, which consisted of physicians from the

medical staff at Sharp. The hearing was also presided over by a hearing officer, Steven

Landuyt, Esq.

The JRC Hearing took place over five days in April and May 2000. The JRC

received and reviewed medical records, the cine films and other supporting documents

10

from the RCH cases. Dr. Maheshwari testified concerning his management of the RCH

cases. He also established that he was never disciplined by RCH concerning those cases

and that RCH not only renewed his privileges after he treated those patients, but also

granted him additional privileges in interventional cardiology.

The JRC heard testimony from experts retained by both Dr. Maheshwari and

Sharp. Dr. Paul Phillips, Sharp’s expert, testified that Dr. Maheshwari’s treatment in the

RCH cases “fell below the standard of care.” When asked to define the standard of care,

Dr. Phillips stated that it was what a “quorum of physicians” would feel that a “majority

of cardiologists” would have done. Dr. Phillips further explained that in Dr.

Maheshwari’s case “the standard of therapy being administered was below that which I

would accept in my laboratories.”

Dr. Maheshwari called Dr. Maurice Buchbinder as his expert. Dr. Buchbinder was

Sharp’s director of interventional cardiology from 1995 to 1999. Dr. Buchbinder had

known Dr. Maheshwari professionally for 10 to 12 years and had worked on

approximately 20 to 25 interventions with Dr. Maheshwari. Dr. Buchbinder opined that

Dr. Maheshwari’s “judgment was right on in the median and mean of every individual

that I have come across. His synthesis of the cases have [sic] been, generally speaking,

what I would have thought of . . . I have not been struck by anything unusual more than

standard practice.”

Dr. Buchbinder stated that in most cases Dr. Maheshwari’s decisions were the

same as he would have made. Although in some instances he would have acted

differently, Dr. Buchbinder testified that in his opinion Dr. Maheshwari’s actions were

11

reasonable and within the standard of care. Dr. Buchbinder stated that the standard of

care was what a reasonable interventional cardiologist would do in the circumstances of a

particular case.

At the JRC Hearing Dr. Maheshwari also sought to admit the complete medical

records of the six RCH patients, as well as declarations from some of those patients. The

hearing officer requested letter briefs on the issue and concluded that the evidence should

be excluded as Sharp had requested all information concerning the RCH patients from the

beginning. The hearing officer concluded that Dr. Maheshwari understood the

importance of those records and could have submitted the entire chart for each of the

patients initially, but did not do so. Instead, Dr. Maheshwari requested that his

application be reviewed based upon the information he had already provided.

F. The JRC’s Decision

The JRC upheld the decision to deny Dr. Maheshwari’s application for privileges.

In reaching this decision the JRC relied upon the testimony of Dr. Phillips, cine films and

the medical records provided by Dr. Maheshwari. Based upon this evidence, the JRC

concluded that serious quality-of-care issues existed in the six RCH cases. The JRC also

concluded that Dr. Buchbinder’s testimony, rather than supporting Dr. Maheshwari,

“damned” him “with faint praise.” The JRC also was not persuaded by Dr. Maheshwari’s

own testimony concerning his care in the six RCH cases.

The JRC found that Dr. Maheshwari had the burden of producing information for

an adequate evaluation of his qualifications for staff membership and privileges,

including the burden of producing satisfactory information to resolve reasonable doubts

12

concerning his qualifications and suitability for the clinical privileges that he was

seeking. The JRC concluded that Sharp received information that raised reasonable

doubts concerning Dr. Maheshwari’s qualifications for general cardiology and

interventional cardiology privileges. The JRC found that Sharp took reasonable steps to

resolve the questions raised about Dr. Maheshwari’s qualifications. The JRC then

concluded that the evidence demonstrated that in six of the seven cases under review by

RCH Dr. Maheshwari’s treatment fell beneath the standard of care for cardiologists.

The JRC also found that Dr. Maheshwari refused to provide information requested

by Sharp that was needed to establish his qualifications and to resolve reasonable doubts

that had arisen regarding his qualifications. Finally, the JRC found that Dr. Maheshwari

failed at the JRC Hearing to meet his burden of persuading the JRC, by a preponderance

of the evidence, of his qualifications of membership and privileges in general cardiology

and interventional cardiology.

G. Appeal to Sharp’s Board

In September 2000, Dr. Maheshwari appealed the JRC’s decision to Sharp’s Board.

In that appeal Dr. Maheshwari first asserted that Sharp’s evaluation of his application was

a “sham” and that Sharp had decided to deny his application before it had the necessary

information. In the appeal Dr. Maheshwari also contended that he had proved by a

preponderance of the evidence that he was qualified to have privileges at Sharp.

Dr. Maheshwari asserted that the evidence demonstrated that his handling of the

six RCH cases did not violate the standard of care. Dr. Maheshwari also asserted that the

13

hearing officer erred in excluding the new evidence he sought to admit at the JRC

Hearing.

Dr. Maheshwari contended that Sharp’s standards for evaluating applicants for

staff privileges were “arbitrary and capricious” and that it acted in an arbitrary and

capricious manner in denying his application. Finally, Dr. Maheshwari asserted that the

JRC violated Staff Bylaws and his due process rights when it considered different

allegations of improper care in the RCH patients from that considered by the Hoagland

Committee.

In June 2001, the Board issued its decision affirming the decision of the JRC. In

doing so, the Board concluded that the JRC’s decision was not arbitrary or capricious and

was supported by substantial evidence. The Board also rejected Dr. Maheshwari’s claim

that the hearing officer improperly excluded evidence and that certain procedural errors

resulted in a miscarriage of justice. Specifically, the Board found:

“1. The [JRC’s] decision is not arbitrary or capricious and is
supported by subtantial evidence. The record supports the [JRC’s]
conclusion that cases reviewed by an ad hoc committee (the
Hoagland committee) demonstrated problems with Dr. Maheshwari’s
care of patients at another facility and it was reasonable to request
Dr. Maheshwari to produce additional information (i.e., information
sufficient to allow (Sharp) to conduct a review of a random sample
of Dr. Maheshwari’s cardiology cases over a six month period) to
resolve reasonable doubts about his qualifications and suitability for
medical staff membership.

“2. The record supports the [JRC] Hearing Officer’s decision to
exclude certain evidence proffered by Dr. Maheshwari on the ground
that it was inadmissible under Medical Staff Bylaws section 83-7(2).

“3. While it appears that the Medical Staff failed to comply with the
requirement in the [Sharp] Bylaws, Article X, section 1(d), it also

14

appears that such provision is not mirrored by any [Sharp] Medical
Staff Bylaws provision. It is clear from the record that the Medical
Staff sought throughout the proceedings to comply fully with the
procedural requirements of the Medical Staff Bylaws. The standard
for determining the effect of an error in procedure is set forth in the
Medical Staff Bylaws section 8.4-2: ‘In no event shall the decision
of the [JRC] be set aside or reversed on the grounds of improper
admission or rejection of evidence, or for any error in matters of
notice or procedure, unless, after an examination of the entire cause,
including the evidence, the governing body shall be of the opinion
that the error complained of has resulted in a miscarriage of justice.’

“After an examination of the entire cause, the Appellate Panel
believes that the error complained of (i.e., the failure of Dr.
Maheshwari to appear before an ad hoc investigating committee of
his section/clinical department) did not result in a miscarriage of
justice. Dr. Maheshwari was afforded the opportunity to present any
evidence he wished to the Hoagland committee, and he was afforded
and took advantage of the opportunity to appear in person and testify
before the [JRC] and to present evidence. In addition, the Appellate
Panel notes that the [Sharp] Bylaws section in question is vague
and/or confusing about the timing of the right to appear before an ‘ad
hoc investigating committee.’ The [Sharp] Bylaws section appears
to require that the opportunity to apear before the ‘ad hoc
investigating committee’ be afforded AFTER the final decision is
reached by the [MEC] to not confer an appointment, etc.

“4. In all other aspects other than the apparent discrepancy between
the [Sharp] Medical Staff Bylaws and the [Sharp] Bylaws, the
reporter’s transcript of the [JRC] Hearing reflects that Dr.
Maheshwari was afforded a fair procedure in substantial compliance
with the Medical Staff Bylaws. . . .”

H. Petition to Superior Court

Following the Board’s denial of his appeal, Dr. Maheshwari filed his petition with

the San Diego County Superior Court. In that petition, Dr. Maheshwari asserted that the

Board’s decision constituted a prejudicial abuse of discretion because substantial

evidence established that Dr. Maheshwari was qualified to receive privileges at Sharp.

15

Dr. Maheshwari also asserted that his fair procedure and due process rights were violated

based upon Sharp’s handling of his application. Specifically, Dr. Maheshwari asserted

that Sharp (1) decided to get rid of his application before reviewing the RCH cases; (2)

failed to give him the opportunity to meet with Sharp’s committees; (3) refused to inform

him concerning specific concerns about the RCH cases until after it denied his

application; (4) demanded that he provide private patient information; (5) hired a law

firm to conduct a search for lawsuits involving he and his wife; (6) broke its promise not

to decide his application until additional patient information was forthcoming; and (7)

failed to inform him of his right to seek reconsideration of the MEC’s decision. Dr.

Maheshwari also contended that the hearing officer at the JRC Hearing erred by

excluding the evidence he attempted to submit at that hearing. Finally, Dr. Maheshwari

asserted that the JRC erred by relying on the testimony of Sharp’s expert because he did

not use the proper standard of care in rendering his opinion.

After reviewing the record of Dr. Maheshwari’s application process and hearing

arguments of counsel, the court rejected Dr. Maheshwari’s claim. The court detailed the

evidence in the record and the chronology of the application proceeding and concluded

that the decisions of both the JRC and Board were supported by substantial evidence.

The court also found that Dr. Maheshwari was “afforded a fair procedure in substantial

compliance with the Medical Staff Bylaws in that [he] was afforded the opportunity to

question and challenge committee members at the [JRC] Hearing, he was represented by

counsel at the hearing, a record of the proceedings was made, he was afforded the ability

16

to present evidence and cross-examine witnesses, and he was provided with a decision

based on a majority vote by the [JRC].”

The court found that Sharp did not use “arbitrary or capricious tactics.”

Specifically, the court found that the evidence did not support Dr. Maheshwari’s claim

that Sharp decided to reject his application before it reviewed any medical records. The

court found that there was no evidence that Sharp refused to meet with Dr. Maheshwari

as there was no request by Dr. Maheshwari to meet with any committees. The court also

found that there was no evidence an appearance before the committees would have made

a difference or that Sharp’s alleged refusal to meet with him resulted in a miscarriage of

justice.

The court rejected Dr. Maheshwari’s claim that he was treated differently than

other applicants because Sharp requested confidential information concerning his

patients. The court found that substantial evidence demonstrated that Sharp was only

interested in medical records, not personal confidential information concerning his

patients. The court also found that it was not unusual that Sharp performed a lawsuit

search on Dr. Maheshwari. The court rejected Dr. Maheshwari’s claim that Sharp

allegedly broke “promises” that they would advise him when they had completed review

of certain evidence.

The court also found that the hearing officer at the JRC Hearing properly excluded

the evidence submitted by Dr. Maheshwari for the first time at that hearing. The court

found that the evidence was requested by Sharp during the application process and there

was no showing by Dr. Maheshwari that he could not have produced the records earlier.

17

The court rejected Dr. Maheshwari’s due process and fair procedure claims. Based

upon its previous findings, the court concluded there was no merit to Dr. Maheshwari’s

claims that any “tactics” by Sharp denied him his due process or fair procedure rights.

The court found that Dr. Maheshwari was given notice of Sharp’s decision, he “was

provided with the opportunity to question and challenge committee members at the [JRC]

Hearing, he was represented by counsel at the hearing, a record of the proceedings was

made, he was afforded the ability to present evidence and cross-examine witnesses, and

he was provided with the decision based on a majority vote by the [JRC].”

The court entered judgment in favor of Sharp. This timely appeal follows.

DISCUSSION

On this appeal Dr. Maheshwari, although setting forth facts he contends show

there was substantial evidence that he was qualified for staff privileges at Sharp, does not

directly challenge the finding by the court that substantial evidence supported Sharp’s

rejection of his application. Rather, Dr. Maheshwari asserts that the actions by Sharp

violated his fair procedure and equal protections rights, the JRC erred in excluding

evidence he presented for the first time at the JRC Hearing, and Sharp’s expert failed to

apply the proper standard of care in evaluating his performance. We reject these

assertions.

I. Fair Procedure Claims

Dr. Maheshwari asserts that his right to a fair procedure in the application process

was violated because (1) Sharp acted arbitrarily and capriciously in denying his

application; (2) Sharp violated its own bylaws in the process; and (3) Dr. Ostrander

18

should not have been allowed to participate in the process. We address these contentions

in order.

A. Standard of Review

Section 1094.5, governing petitions for writ of administrative mandamus,

provides in part:

“(a) Where the writ is issued for the purpose of inquiring into the
validity of any final administrative order or decision made as the
result of the proceeding in which by law a hearing is required to be
given, evidence is to be taken, and discretion in the determination of
facts is vested in the inferior tribunal, corporation, board or officer,
the case shall be heard by the court sitting without a jury. . . .

“(b) The inquiry in such a case shall extend to the questions whether
the respondent has proceeded without, or in excess of jurisdiction;
whether there was a fair trial; and whether there was any prejudicial
abuse of discretion. Abuse of discretion is established if the
respondent has not proceeded in the manner required by law, the
order or decision is not supported by the findings, or the finding are
not supported by the evidence.

“(c) Where it is claimed that the findings are not supported by the
evidence, in cases in which the court is authorized by law to exercise
its independent judgment on the evidence, abuse of discretion is
established if the court determines that the findings are not
determined by the weight of the evidence. In all other cases, abuse
of discretion is established if the court determines that the findings
are not supported by substantial evidence in light of the whole
record.

“(d) Notwithstanding subdivision (c), in cases arising from private
hospital boards abuse of discretion is established if the court
determines that the findings are not supported by substantial
evidence in light of the whole record.” (Italics added.)

Thus, ordinarily, the superior court reviews an adjudicatory decision by a private

hospital board (such as here) under the substantial evidence standard. (Huang v. Board of

19

Director (1990) 220 Cal.App.3d 1286, 1293.) However, the question of whether a

physician received a fair hearing in an application for hospital privileges is subject to

independent review by trial courts. (Rosenblit v. Superior Court (1991) 231 Cal.App.3d

1434, 1442.) Our review of a claim of violation of the right to a fair hearing is similarly

de novo. (Ibid.; Duncan v. Department of Personnel Administration (2000) 77

Cal.App.4th 1166, 1174.)

B. Fair Hearing Rights

Private hospitals must observe “fair procedures” in rejecting, revoking or

terminating staff privileges of a physician. (Ezekial v. Winkley (1977) 20 Cal.3d 267,

269-270; Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 468.)

However, hospitals do not have to accord all of the same due process rights guaranteed to

litigants in civil or criminal trials. (Anton v. San Antonio Community Hosp. (1977) 19

Cal.3d 802, 829-830.) A hospital complies with its fair hearing obligation if it gives the

affected physician adequate notice of the charges and a fair opportunity to present his

position. (Id. at p. 830.)

Nevertheless, under its duty to provide a fair procedure, a hospital may not act in

an arbitrary or capricious manner in rejecting a physician’s application for staff

privileges. (Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541, 550,

553.) The right of a physician to a fair hearing must be balanced against the interests of

the hospital in protecting members of the public who receive care at its facility. (Rhee v.

El Camino Hospital Dist. (1988) 201 Cal.App.3d 477, 489 (Rhee).) Because of this,

“courts must not interfere to set aside decisions regarding hospital staff privileges unless

20

it can be shown that a procedure is ‘substantively irrational or otherwise unreasonably

susceptible of arbitrary or discriminatory application.’ [Citations.]” (Ibid.)

C. Analysis

1. Alleged premature decision to “get rid of” Dr. Maheshwari’s application

Dr. Maheshwari first asserts that Sharp decided to “get rid of” his application

before receipt of any medical records regarding the RCH review. We reject this

contention.

In support of this contention Dr. Maheshwari first cites the memo from Grondona

to Dr. Ostrander regarding the review of his cases at RCH and his temporary privileges.

Dr. Maheshwari asserts this document shows that Grondona was advising Dr. Ostrander

how to get rid of Dr. Maheshwari’s application. According to Dr. Maheshwari, the

decision to get rid of him was made at that time and all of Sharp’s actions thereafter were

“designed to justify a decision that it had already made.”

However, the record does not support this contention. First, the memorandum was

concerned about the status of Dr. Maheshwari’s temporary privileges while the

investigation was ongoing. The memo was only advising that to avoid having to report

Dr. Maheshwari he should be given the option to withdraw his application for temporary

privileges pending Sharp’s investigation. The memo says nothing about getting rid of Dr.

Maheshwari’s application and, instead, actually reflects the fact that Sharp was going to

investigate the issue of the RCH cases before making a decision on his application. The

conversation between Dr. Ostrander and Dr. Stuart also reflects that it motivated Sharp to

investigate the RCH cases further, not to summarily deny Dr. Maheshwari’s application.

21

The record reflects that Sharp did investigate the allegations regarding RCH,

requested documents from Dr. Maheshwari, attempted to obtain them on its own when

they were not forthcoming from Dr. Maheshwari, and that Dr. Maheshwari objected to

Sharp reviewing records of additional patients to assist in its review. After the Hoagland

Committee concluded that there were quality-of-care problems with six RCH cases,

Sharp offered to have the matter reviewed by an independent group, the CMA. Dr.

Maheshwari refused this offer. Far from demonstrating that Sharp decided to get rid of

Dr. Maheshwari’s application early on in the application process, the record actually

establishes that Sharp attempted to obtain all relevant information before it made a

decision on his application and that Dr. Maheshwari hindered those efforts.

2. Sharp’s alleged refusal to meet with Dr. Maheshwari

Dr. Maheshwari asserts that Sharp violated his right to a fair hearing by refusing to

meet with him, relying on article X, section 1, subdivision (d) of the Bylaws of Sharp

Memorial Hospital (Sharp Bylaws), which provide in part:

“The Bylaws of the Medical Staff of [Sharp] . . . shall provide
appropriate procedures to insure that all applicants and members of
the staff are afforded a fair and impartial hearing and due process in
any case where an appointment is not to be conferred, is not to be
renewed, or when privileges have been (or are proposed to be)
reduced, suspended or terminated. These procedures shall allow the
affected practitioner the opportunity to make an appearance before
an ad hoc investigating committee of the staff member’s
section/clinical department (in all cases except where summary
corrective action is required). Such hearings shall be conducted
under such procedures adopted by each Medical Staff in its bylaws
and approved by the Board of Trustees, which approval shall not be
unreasonably withheld. In addition, the affected staff member shall
be given the rights to a hearing before a judicial review committee.”
(Italics added.)

22

Sharp in turn argues that this provision only allowed staff members, not applicants

for privileges, to meet with committee members in an evaluation process. However,

although somewhat confusingly worded, it appears that this section of the Sharp Bylaws

was intended to apply to non-staff member applicants for staff privileges at Sharp. The

section does repeatedly refer to the rights of the “staff member,” not those of an applicant.

However, the first sentence states that the rights to be accorded are to apply to both

“applicants and members of the staff.” The term “where an appointment is not to be

conferred, [or] is not to be renewed,” therefore can only be construed as including an

application for staff privileges.3

However, even though this bylaw accords a right to demand a meeting with a

committee evaluating an application for privileges, Dr. Maheshwari still has not shown a

violation of his fair hearing rights. First, the evidence does not show that Dr.

Maheshwari, who was represented by counsel and is himself an attorney, ever made a

demand that this right be honored and that Sharp refused. Dr. Maheshwari relies on two

letters that he sent to Dr. Ostrander after Dr. Ostrander informed Dr. Maheshwari that

Sharp was investigating the RCH cases. Those letters merely stated that Dr. Maheshwari

was willing to meet with any committee or cardiologist at Sharp, if Sharp wanted him to

3
Based upon this conclusion, we need not address Dr. Maheshwari’s assertion that
denying applicants the right to meet with committee members while affording such a
right to staff members violated his equal protection rights.

23

appear and answer questions. There was no request or demand that he be allowed to

meet with committee members made on his own initiative.

Further, even if Sharp should have offered to meet with Dr. Maheshwari in

response to these two letters, the error did not result in any prejudice sufficient to set

aside Sharp’s decision to deny staff privileges. Sharp’s Staff Bylaws, section 8.4-2,

provides that in any appeal from the decision of the JRC, “[i]n no event shall the decision

of the [JRC] be set aside or reversed on the grounds of improper admission or rejection of

evidence, or for any errors in the matter of notice or procedure, unless, after an

examination of the entire cause, including the evidence, the governing body shall be of

the opinion that the error complained of has resulted in a miscarriage of justice.” (Italics

added.)

Here, at the JRC Hearing, Dr. Maheshwari was allowed to testify, explain his

treatment in the RCH cases, and address any other issues he felt important. There is no

suggestion that there was anything further that he would have presented to the MEC or

the Hoagland Committee that was not presented to the JRC. After Dr. Maheshwari’s side

of the story was fully presented, the JRC concluded that there were problems with the

quality of care he rendered in the six RCH cases. Thus, Dr. Maheshwari cannot

demonstrate that the result would have been different had he met with the MEC and/or

the Hoagland Committee.

Indeed, it would have been of a greater benefit if Dr. Maheshwari had provided

complete records of his treatment of those patients and more fully complied with Sharp’s

requests for information. Additionally, following the initial conclusions of the Hoagland

24

Committee, it was Dr. Maheshwari’s position that further information was not necessary

to the decision and that Sharp should make its decision based upon the information it

already had. Based upon all of these facts, Dr. Maheshwari cannot demonstrate that any

miscarriage of justice resulted from any error in procedure in not allowing him to meet

with committee members.

3. The MEC’s request for patient information

Dr. Maheshwari asserts that his fair hearing rights were violated when Dr.

Ostrander requested that he provide a detailed list of all of his cardiology patients for the

prior six months, including the patient’s name, medical records number, diagnosis and the

age of the patient. Dr. Maheshwari objected to this request as a “fishing expedition” that

would “violate the privacy of my patients who have no relationship whatsoever to

[Sharp]. . . .”

In response, Dr. Ostrander wrote to Dr. Maheshwari, stating that the information

was appropriate and necessary to review his application and that if he failed to provide

the requested information, Sharp would deny his application. Dr. Ostrander also clarified

that Sharp was only seeking a “sample” of Dr. Maheshwari’s patients. Dr. Ostrander told

Dr. Maheshwari that such records were appropriately requested under California law to

be used in his review and that Sharp would take precautions to insure the secrecy of the

patient’s information. Dr. Maheshwari continued to refuse to provide the requested

information and told Sharp that if it wanted the information, it would have to obtain it on

its own.

25

Civil Code section 56.10, subdivision (c)(4) provides in part:

“(c) A provider of health care, or a health care service plan may
disclose medical information as follows:

“. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“(4) The information may be disclosed to organized committees and
agents of professional societies or of medical staffs of licensed
hospitals . . . if the committees . . . are engaged in reviewing the
competence or qualifications of health care professionals . . . .”

As part of the application process, Dr. Maheshwari consented to an inspection of

records and documents material to the evaluations and authorized all individuals and

organizations in custody of such records and documents to permit such inspection and

copying.

As these provisions make clear, the disclosure of patient information is permitted

in conjunction with a review of a doctor’s qualifications and competence to receive staff

privileges. The Staff Bylaws contain no proscription on the type of patient information

that may be requested. Dr. Maheshwari cites no law or anything in the Staff Bylaws that

makes Sharp’s request for patient information improper. Indeed, Dr. Maheshwari had

agreed, as part of his application process, to allow hospitals where he treated patients to

release patient information in connection with the review process. In addition, in

response to Dr. Ostrander’s request, Dr. Maheshwari never sought to provide a redacted

version of the patient information, omitting patient names or other information he felt

should not be disclosed. Rather, he simply refused to provide the information. Thus, Dr.

Maheshwari’s refusal to provide the requested patient information was not justified and

26

Sharp was within its rights to consider this lack of cooperation in refusing to grant Dr.

Maheshwari staff privileges at Sharp.

Dr. Maheshwari asserts that Sharp’s request for this patient information was

“unusual.” In support of this contention Dr. Maheshwari cites to testimony from Dr.

Ostrander that in reviewing patient records the patients are usually not identified by name

and that he could not recall another case where Sharp “went through a process like

this . . . .” However, Dr. Ostrander also explained that Dr. Maheshwari’s application was

different than the ordinary situation. He also stated that while in written communications

and recorded proceedings the name of a patient would not be used, in the review process

there was no way the patient’s name could be entirely eliminated. Further, even if Sharp’s

request was “unusual,” that does not mean it was “arbitrary and capricious.” There was

nothing unfair about Sharp’s request for a six-month sampling of Dr. Maheshwari’s

patient care.

4. Lawsuit investigation of Dr. Maheshwari

Dr. Maheshwari asserts that his fair proceeding rights were violated by Sharp’s

hiring of a law firm to search the civil filings index to determine if he had any

malpractice lawsuits filed against him. We reject this contention.

Sharp conducted a review of the civil index of filings to determine the extent of

any medical malpractice lawsuits filed against Dr. Maheshwari after it received

information from his malpractice carrier that he had three malpractice cases that were

repetitious in nature. Patricia Lawson, from Sharp’s medical staff office, testified that

27

this was the normal procedure where Sharp received information that there were a high

number of or repetitious claims of malpractice against an applicant for privileges.

However, although Dr. Maheshwari established that the three cases of malpractice

were dismissed and many of the lawsuits discovered by Sharp had nothing to do with

medical malpractice, he does not indicate why such a search was unfair, arbitrary or

capricious. Further, Dr. Maheshwari does not offer any evidence that this information

had any impact on his application. Indeed, based upon the lack of any detrimental

information found as to Dr. Maheshwari, this information could have only helped his

application for privileges.4

It is reasonable for a hospital reviewing the qualifications and competency of an

applicant for staff privileges to conduct a search of public records to determine if any

medical malpractice actions had been filed against that individual. As discussed, ante, in

reviewing a candidate for privileges, hospitals have a duty to protect members of the

public who receive care at its facility. (Rhee, supra, 201 Cal.App.3d at p. 489.)

5. Sharp’s asserted promise to obtain medical records

Dr. Maheshwari also asserts that Sharp broke a promise to him that it would obtain

medical records concerning his patient care from other hospitals and would not decide his

application until it received those records. We reject this contention

4
Dr. Maheshwari asserts the search for lawsuits also included his wife. However,
the record reveals that Sharp was only searching for lawsuits involving Dr. Maheshwari.
The search merely revealed a lawsuit in which both he and his wife were parties.

28

In support of this contention, Dr. Maheshwari cites Dr. Ostrander’s letter to him

after he refused to obtain patient records from other hospitals. Dr. Maheshwari cites to

Dr. Ostrander’s statement that “[w]e will advise you, should we have any problems with

the hospitals’ provision of this information and would expect that you would help to

facilitate this, if needed.” Dr. Maheshwari also points to the statement that “[w]hen this

information has been received, we will advise you when we have had an opportunity to

review and consider this additional information.” As discussed, ante, the requested

patient information was not forthcoming before the MEC decided that Dr. Maheshwari’s

application for privileges should be denied. The MEC cited Dr. Maheshwari’s failure to

provide requested information as a reason, in addition to the quality of care as to the RCH

patients, as a reason for denying his application.

Sharp’s decision on denying staff privileges without the requested patient

information did not result in an unfair procedure. First, the burden was on Dr.

Maheshwari to provide the requested information. However, Dr. Maheshwari refused.

Indeed, Dr. Maheshwari admitted at the JRC hearing that if Sharp had requested his

assistance in obtaining records from RCH, he would have refused:

“Q. Is it your testimony if after all this process Dr. Ostrander had
come back to you and said, ‘Okay, you know, Dr. Maheshwari, we
tried to get the[] information directly from the hospital up in
Riverside but were unable to,’ is it your testimony to this committee
that you the would then have said, ‘Okay, I’ll get it for you myself?’

“A. No.

“Q. You wouldn’t have, would you?

“A. No.”

29

Dr. Maheshwari cannot persuasively assert that after he refused to obtain the

requested information, Sharp is to blame for deciding his application without obtaining it

themselves. There is nothing unfair, arbitrary or capricious about this decision. Further,

the record demonstrates that after the Hoagland Committee’s report expressing concern

about quality care in the six RCH cases under review, Dr. Maheshwari asserted that no

further review or information was necessary and that Sharp should decide his application

with the information it already had before it. Dr. Maheshwari cannot then fault Sharp for

deciding his application without the patient information from CRMC and RCH.

6. Involvement of Dr. Ostrander in application evaluation

Dr. Maheshwari also asserts that Dr. Ostrander’s involvement in the evaluation of

his application for staff privileges violated his right to a fair procedure because Dr.

Ostrander had decided from the beginning to deny his application and was biased against

Dr. Maheshwari. We reject this contention.

Citing Applebaum v. Board of Directors (1980) 104 Cal.App.3d 648 (Applebaum),

Dr. Maheshwari contends that he was denied a fair hearing because Dr. Ostrander was an

“instigator” of the charges against him and also participated in the process of assessing

his application. In Applebaum, an obstetrician’s privileges were suspended at a hospital

based upon charges initiated by a doctor who received complaints from nurses

concerning his delivery techniques. (Id. at p. 651.) That same doctor later served on an

ad hoc committee investigating the charges against the obstetrician. (Id. at pp. 651-652.)

30

That committee recommended that his privileges be suspended. (Id. at pp. 652-653.) An

appeal committee of the hospital upheld this decision. (Id. at pp. 653-654.)

The superior court granted the obstetrician’s writ of mandate, finding, among other

things, that the presence of the doctor who initiated the charges on the ad hoc committee

that recommended suspension of his privileges violated his due process rights.

(Applebaum, supra, 104 Cal.App.3d at pp. 655-656.) The Court of Appeal upheld this

ruling finding that the process was unfair because (1) the instigator of the charges against

the obstetrician also was on the ad hoc committee; and (2) the ad hoc committee and the

committee that reviewed the decision to suspend his privileges had overlapping

membership. (Id. at pp. 659-660.) However, the court also stated that the fact that some

investigatory, prosecutorial and adjudicatory functions are combined would not constitute

a denial of due process “unless the facts of a case show foreclosure of fairness as a

practical or legal matter.” (Id. at p. 658; Rhee, supra, 201 Cal.App.3d at p. 490.)

The facts of this case are very different from those in Applebaum. Dr. Ostrander

did not “instigate” the charges against Dr. Maheshwari. They were initiated at RCH. Dr.

Ostrander was at most a conduit for that information and an investigator of the

circumstances of the RCH review. He did not sit on any of the committees reviewing Dr.

Maheshwari’s application. Dr. Maheshwari does not allege any overlapping of members

of the Hoagland Committee, MEC and JRC. Dr. Ostrander merely coordinated the

review process in his role as chief of staff and communicated with Dr. Maheshwari

regarding the status of the review and the need for additional information. The facts here

31

do not show a “foreclosure of fairness as a practical or legal matter.” (Applebaum, supra,

104 Cal.App.3d at p. 658.)

In sum, we conclude, upon independent review of the record, that Sharp’s review

of Dr. Maheshwari’s application for staff privileges did not violate his right to a fair

hearing and procedure.

II. Decision To Exclude Evidence at JRC Hearing

Dr. Maheshwari asserts that the hearing officer erred in excluding evidence he

sought to introduce at the JRC Hearing. We reject this contention.

Section 1094.5, subdivision (e) provides in part:

“Where the court finds that there is relevant evidence that, in the
exercise of reasonable diligence, could not have been produced or
that was improperly excluded at the hearing before respondent, it
may enter judgment . . . remanding the case to be reconsidered in the
light of that evidence . . . .”

The hearing officer at the JRC Hearing excluded the new evidence submitted by

Dr. Maheshwari based upon Staff Bylaw, paragraph 8.3-7(2), which provides in part:

“An applicant . . . shall bear the burden of persuading the [JRC], by a
preponderance of the evidence, of his qualifications by producing
information which allows for adequate evaluation and resolution of
reasonable doubts concerning his current qualifications for
membership and privileges. An applicant shall not be permitted to
introduce information requested by the medical staff but not
produced during the application process unless the applicant
establishes that the information could not have been produced
previously in the exercise of reasonable diligence.” (Italics added.)

Dr. Maheshwari does not contend that he had previously provided the disputed

evidence during the application process. Rather, Dr. Maheshwari contends that the

information was not requested or, at least as to the declarations, that he could not have

32

with reasonable diligence submitted the information earlier. The record does not support

this assertion.

In his March 1999 letter, Dr. Ostrander informed Dr. Maheshwari that Sharp had

learned of his review at RCH for quality-of-care concerns, of Sharp’s inability to obtain

information concerning the review, and requested that Dr. Maheshwari provide any

information concerning the situation to Sharp. Thus, there was no limitation on the type

of information requested by Sharp and any information supportive of Dr. Maheshwari’s

position should have been submitted at that time.

Dr. Maheshwari responded by acknowledging that he understood that he was

responsible for supplying Sharp “with details of these cases.” Thus, there is no evidence

that Dr. Maheshwari was confused in any way concerning the scope of what Sharp

wanted to review on his application for privileges.

Dr. Ostrander then communicated to Dr. Maheshwari that he had “received the

documentation you have provided (i.e., copies of medical records and other information

related to the review of these cases at [RCH]).” (Italics added.) Dr. Ostrander further

stated in that letter that Sharp “will proceed with the review of these cases and the

processing of your application. Additionally, if you are able to provide any additional

information regarding the status of the peer review proceedings at [RCH], it will be most

helpful. Should additional information be needed, we will contact you.” (Italics added.)

Dr. Maheshwari asserts that the statement from Sharp that it would contact him if

it needed further information meant that it was satisfied with the information it had and

was not requesting the information he later sought to admit at the JRC Hearing.

33

However, the letter actually indicated Sharp’s belief that Dr. Maheshwari had already

provided all information relevant to the review at RCH, pursuant to its previous request.

The records provided by Dr. Maheshwari to that date were in actuality incomplete and

Dr. Maheshwari did not attempt to submit complete records until the JRC Hearing. The

letter also requested, as did Dr. Ostrander’s previous letter, that if there were any further

information that Dr. Maheshwari felt was relevant, he should provide it. This put the

burden upon Dr. Maheshwari, pursuant to Sharp’s Bylaws, to produce to Sharp any

information he felt relevant. If he wanted Sharp to consider the complete patient files

from the RCH cases and the patient declarations, it was incumbent upon him to do so at

that time.

Dr. Maheshwari asserts the declarations of RCH patients were improperly

excluded as they did not exist during the application process and therefore could not in

the exercise of reasonable diligence have been produced earlier. However, the mere fact

that Dr. Maheshwari did not request declarations from patients until after he was denied

privileges does not mean that they were admissible. Dr. Maheshwari does not provide

any reason why he could not have produced them during the application process. Again,

if Dr. Maheshwari believed that the declarations were supportive of his application it was

incumbent upon him to submit them to Sharp during the application process. The hearing

officer properly excluded the evidence Dr. Maheshwari offered for the first time at the

JRC Hearing.

34

III. Testimony by Sharp’s Expert

Dr. Maheshwari’s last contention is that Sharp’s medical expert, Dr. Phillips,

applied an improper standard of care in opining at the JRC Hearing that Dr. Maheshwari’s

treatment in the six RCH cases fell below the standard of care. We reject this assertion.

Dr. Maheshwari faults Dr. Phillip’s testimony because he did not state specifically

that the proper standard of care is what “reasonable interventional cardiologists would do

in the circumstances of a particular case.” Dr. Maheshwari asserts that Dr. Phillips’s

reference to what a “quorum of physicians” would do, what a “majority of cardiologists”

would do or what he would accept in his laboratories was insufficient to establish the

proper standard of care and therefore his testimony should have been rejected.

However, a review of Dr. Phillips’s testimony demonstrates that although his

testimony was not precise in describing the standard of care for interventional

cardiologists, his testimony did state that the proper standard was what other cardiologists

would do in the same or similar circumstances. Moreover, Dr. Phillips was testifying not

to any new opinion he had as to the propriety of Dr. Maheshwari’s treatment, but rather to

the conclusions reached by the Hoagland Committee that determined that his standard of

care was deficient in six of the seven RCH cases. Whatever he testified was the

appropriate standard of care, the relevant inquiry was whether the Hoagland Committee,

in concluding Dr. Maheshwari’s treatment in the six RCH cases was deficient, actually

employed the appropriate standard of care. There is no assertion that they did not do so.

Finally, the JRC, in upholding the MEC’s denial of Dr. Maheshwari’s application,

relied not only upon Dr. Phillips’s testimony, but also upon the report of the Hoagland

35

Committee and the documentary evidence presented at the JRC Hearing. The JRC then

rendered its own conclusion that Dr. Maheshwari’s treatment fell below the standard of

care. Thus, even if Dr. Phillips’s testimony were disregarded, ample evidence supported

the JRC’s decision to uphold the decision to deny staff privileges to Dr. Maheshwari.

NARES, J.

DISPOSITION

The judgment is affirmed.

WE CONCUR:

HUFFMAN, Acting P. J.

McDONALD, J.

36

MacArthur v. San Juan County — June 2005 (Full Text)

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 1 of 192(cid:10)

IN THE UN ITED STATES D ISTR ICT COURT

FOR THE D ISTR ICT O F UTAH , CENTRAL D IV IS ION
FILED
CLERK, U.S. DISTRICT COURT
June 13, 2005 (2:12pm)
DISTRICT OF UTAH

* * * * * * * * *

C iv il N o . 2 :00 -CV -584 J

M EMORANDUM DEC IS ION &
ORDER

DR . STEVEN MACARTHUR , e t a l.,

P la in t if fs ,

v s .

SAN JUAN COUNTY , e t a l.,

D e fendan ts .

)
)
)
)
)
)
)
)
)

* * * * * * * * *

THE F INAL PRETR IAL CONFERENCE (F ed . R . C iv . P . 16 (c)) . . . . . . . . . . . . . . . 3
F ed . R . C iv . P . 16 (c )(1 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

THE PART I PLA INT IFFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
D r . S teven M acA r thur , M .D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
M s . M iche le L ym an , P .A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
M s . H e len V a ldez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

THE PART I PLA INT IFFS ’ ALLEGAT ION S AGA INST
THE IND IV IDUAL DEFENDANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The C oun ty C omm iss ioner s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
C oun ty A ttorney C ra ig H a lls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SJH SD B oard M em bers: A tc itty , L ew is , H ou sekeeper ,
Ad am s , Shumw ay & H o lliday
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
The SJH SD A dm in istra tor s: W ood , B a iley & B rad ford . . . . . . . . . . . . . . . . . 22
L aur ie Scha fer (a /k /a L aur ie Sha fer ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
M ar ilee B a iley , R .N .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
O ra L ee B lack . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
C ar la G r im shaw . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
G lor ia Y an ito . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Ju lie B ron son . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
L or i W a llace , R .N . a /k /a L aur ie W a lker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
D r . L loyd V a l Jones , M .D .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 2 of 192(cid:10)

D r . M an fred N e lson , M .D .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
D r . Jam es R edd , M .D .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

THE PART I PLA INT IFFS ’ THEOR IES OF L IAB IL ITY . . . . . . . . . . . . . . . . . . . 36
(1 ) P la in t iffs’ C iv il R ICO C la im s (18 U .S .C . §§ 1961 e t seq .)
. . . . . . . . . . . . 39
P red icate A cts o f “R ack eteer ing A ct iv ity” (18 U .S .C . § 1961 (1)) . . . . 39
(a ) 18 U .S .C . § 1341 – M a il F raud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(b ) 18 U .S .C . § 1512 – W itn ess Tam p er ing . . . . . . . . . . . . . . . . . . . . . . 43
(c) 18 U .S .C . § 1951 – In ter feren ce w ith C omm erce by Threa ts . . . . . 46
(2 ) F reedom o f A ccess to C lin ic En trance s A c t o f 1994
(18 U .S .C . § 248 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(3 ) H ea lth C are Qua lity Im provem en t A c t, 42 U .S .C . § 11112 (2000 )
. . . . . 53
(4 ) Em ergency M ed ica l T rea tm en t and A c tive Labor
A c t (EM TALA ) , 42 U .S .C . § 1395dd (2000 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(5 ) “M ed icare Pa tien t B ill o f R igh ts” (42 U .S .C . § 1395a )
. . . . . . . . . . . . . . . 59
(6 ) 42 U .S .C . § 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(7 ) 42 U .S .C . § 1985 (3 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(8 ) 42 U .S .C . § 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
§ 1983 C on sp iracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
L iab i lity o f the SJH SD & San Juan C oun ty . . . . . . . . . . . . . . . . . . . . . 70
P la in tiffs’ § 1983 C la im s Aga in st th e Coun ty
C omm iss ioner s & SJH SD B oard M ember s . . . . . . . . . . . . . . . . . . . . . . 73
V icar iou s L iab ility , R e spond ea t Sup er ior & § 1983 . . . . . . . . . . . . . . . 74
The SJH SD B oa rd & the SJH SD M ed ica l S ta ff ’s
“Po l icy ” re : Phy s ic ian A ss istan ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Q ua lified Imm un ity & P la in tiffs’ § 1983 C la im s . . . . . . . . . . . . . . . . . 79
D r . M acA r thur ’s § 1983 C la im . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
D r . M acA r thur ’s “R igh t” to P rac tice a t SJH SD Fac ilitie s . . . . . . . . . 83
D r . M a cA r thur ’s R equest for P r iv ileges &
P rocedura l Due P rocess
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
M s. L ym an ’s § 1983 C la im . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Sub s tan t ive D ue P rocess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
M isogyny & “H o stile Env ironm en t” und er § 1983 . . . . . . . . . . . . . . . 99
Q ua lified Imm un ity & M s. L ym an ’s § 1983 C la im . . . . . . . . . . . . . . 104
M s. H e len V a ldez ’ § 1983 C la im . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
(9 ) F edera l A n t itru st L aw s (15 U .S .C . §§ 1 e t seq .) . . . . . . . . . . . . . . . . . . . 111
The L oca l G overnm en t A n t itru st A c t (15 U .S .C . §§ 34 -36 ) . . . . . . . . 118
D r . M acA r thur ’s F edera l An titru st L aw C la im . . . . . . . . . . . . . . . . . 119
M s. L ym an ’s F edera l An titru st L aw C la im . . . . . . . . . . . . . . . . . . . . 121

-ii-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 3 of 192(cid:10)

(10 ) U tah C on s titu t ion , ar t. I , §§ 1 , 7 , 25 , 26 , 27 . . . . . . . . . . . . . . . . . . . . . . 125
(11 ) U tah U n fa ir Prac tice s A c t (U tah C ode A nn . §§ 13 -5 -1
e t seq . (2001 )) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
(12 ) U tah C iv il R igh ts A c t (U tah C ode A nn . §§ 13 -7 -1 e t seq . (2001 )) . . . . . 134
(13 ) In ter feren ce w ith C on tra ct and w ith
P rosp ec tiv e Bu s in ess R e la tion s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
(14 ) “ sta te com m on law de fam a tion (a lso a U . S . C on stitu tiona l
r igh t to repu tat ion a s guaran teed by the N inth Am endm en t)” . . . . . . . . . . 139
(a ) U tah L aw o f D e fam a tion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
(b ) D e fama t ion & th e N in th Am endm en t
. . . . . . . . . . . . . . . . . . . . . . 141
(15 ) “F edera l comm on law and U tah con trac t comm on law
and sta tu to ry prov is ion s th a t p roh ib it con trac ts o f adhes ion ,
bad fa ith , and lack o f fa ir d ea l ing . U tah C ode A nn . 78 -12 -25 (1)
(1996 ) ,” in c lud ing th e Im p lied C ovenan t o f G ood Fa ith
and Fa ir D ea ling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
(a ) C on trac ts o f A dhe s ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
( b ) Im p lied C ovenan t o f G ood Fa ith and Fa ir D ea ling . . . . . . . . . . . 146
(16 ) “pr ivacy r igh ts and s ta tu tory en t itlem en ts to have the ir
creden t ia l file s and p a tien t file s accura te ly kep t by the d istr ic t und er
M ed ica id and U tah H ea l th D epar tm en t sta tu tes and regu la t ion s” . . . . . . . 151
(17 ) N eg l igen t and In ten t iona l In f lic t ion o f Em o t iona l D is tress . . . . . . . . . . 156
(a ) In ten t iona l In f lic t ion o f Em o t iona l D is tress
. . . . . . . . . . . . . . . . . 156
(b ) N eg l igen t In f lic t ion o f Em o t iona l D is tress . . . . . . . . . . . . . . . . . . . 157
(c ) T he Par t I P la in tiffs’ Emo tiona l D istress C la im s . . . . . . . . . . . . . 160
(18 ) F raud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Summ ary re : the Par t I P la in t iffs’ C au ses o f A c tion . . . . . . . . . . . . . . . . . . . 165
P re tr ia l D e term ina tion o f the Par t I P la in tiffs’ C la im s . . . . . . . . . . . . . . . . . 168
C la im s A ga in st San Juan Coun ty and th e SJH SD . . . . . . . . . . . . . . . 171
C la im s A ga inst th e Ind iv idu a l D efendan ts . . . . . . . . . . . . . . . . . . . . . 171
D r . M acA r thur ’s S ta te L aw T or t C la im s . . . . . . . . . . . . . . . . . . . . . . 173
M s . L ym an ’s S ta te L aw T or t C la im s . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Summ ary re : the F ina l P re tr ia l C on ference . . . . . . . . . . . . . . . . . . . . 176

PLA INT IFFS ’ MOT ION FOR LEAVE TO F ILE
AN AM ENDED COM PLA INT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

THE PART I PLA INT IFFS ’ MOT IONS FOR RECON SIDERAT ION . . . . . . . . 181

CONCLU SION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

-iii-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 4 of 192(cid:10)

Th is ca se invo lve s a po tpou rri o f ind iv idua l c la im s w ith ind iv idua l h is to rie s and

ind iv idua l tim e s and con tex ts , he ld toge the r, if a t a ll, by a comm on de fendan t, o r comm on

de fendan ts . It ha s an e rra tic p rocedu ra l h is to ry, comp l ica ted by p ro lix p lead ing s and

append ices , evo lv ing argum en ts , and m o t ion s to recon s ide r m a t ters a lready dec ided . In

an e ffo rt to dea l w ith th is m a tte r a s comp le te ly a s w e can— ex tended though it m ay

be— the cou r t in the con tex t o f p re tr ia l has con s ide red in d e ta il each o f the p la in t if fs ’

lega l theo rie s , and the fac tua l a llega tion s advanced a s the ba sis fo r tho se theo rie s , a ll in an

e f fo rt to iden tify any genu ine issues tha t w ou ld requ ire a trial.

The o rig ina l comp la in t f iled in th is ac tion a sse rted c la im s by f if teen ind iv idua l

p la in tif f s aga in s t San Juan Coun ty, the San Juan H ea lth Se rv ice s D is tric t, and va riou s

ind iv idua l de fendan ts . Som e o f tho se c la im s w e re dec ided upon mo t ion , and som e have

been re so lved by ag reemen t; seve ra l o f the o rig ina l p la in tif f s and de fendan ts a re no

longe r p a rt ies to th is case . (See O rde r on M o t ion s H ea rd on Ju ly 2 , 2002 , f iled A ugus t

22 , 2002 (dk t. no . 417 ) ; O rde r on M o t ion o f D e fendan t San Juan Found a tion to D ism iss ,

f iled June 5 , 2002 (dk t. no . 366 ); O rde r o f D ism issa l w ith P re jud ice , f iled M a rch 28 , 2002

(dk t . no . 309 ) ; O rde r of D ism issa l w i th P re jud ice , f i led M arch 25 , 2002 (dk t . no . 306 ) ;

O rde r o f D ism issa l w ith P re jud ice , f iled M a rch 11 , 2002 (dk t. no . 298 ); O rde r, f iled

Feb rua ry 12 , 2002 (dk t. no . 272 ); O rde r, f iled N ovem be r 29 , 2001 (dk t. no . 234 ); see a lso

O rde r, f iled Feb rua ry 15 , 2002 (dk t. no . 279 ) .) Som e o f the que stion s dec ided by the

d istric t judge in itia lly ass igned th is case becam e the sub jec t o f an in ter locu to ry appea l,

-1-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 5 of 192(cid:10)

and a re now back be fo re th is cou rt on rem and . See M acA rthu r v . San Juan C oun ty , 309

F .3d 1216 (10 th C ir. 2002 ) .

B y the t ime o f the F ina l P re tr ia l C on fe rence on N ovem ber 14 -15 , 2002 , there

rema ined six named p la in tif f s, w ho se c la im s fa ll in to tw o d isc re te g roup s : p la in tif f s

D onna S ing e r , F red R igg s and A l D ickson , w ho seek en fo rcem en t o f a judgm en t aga ins t

seve ra l o f the de fendan ts p rev iou s ly ob ta ined in N ava jo T riba l C ou rt— the ma tte r now

be fo re th is cou rt on remand f rom the cou rt o f appea ls— and p la in tif f s D r . S teven

M acA rthu r , M iche lle Lym an and H e len V a ldez , w ho a sse rt ind iv idua l c la im s aga in s t the

de fendan ts a ris ing from va riou s even ts and a lleged ac ts o f one o r m o re o f the de fendan ts .

The c la im s o f the se six rema in ing p la in tif f s w e re de ta iled in a p ropo sed Am ended

C om p la in t subm itted by coun se l a few days be fo re the F ina l P re tr ia l C on fe rence . (See

“Am ended Com p la in t to C on fo rm to the Ev idence & the 10 th C ir . C ou rt 10 -7 -02

O p in ion ,” annexed to “P la in tif f s’ R u le 15 M o tion to Am end and Supp lemen t C om p la in t

to C on fo rm to the Ev idence & the 10 th C ir . C ou rt 10 -7 -02 O p in ion ,” and “M emo randum

o f Fac t and Law in Suppo r t,” f iled N ovembe r 6 , 2002 (dk t. no . 438 ) (he re ina f te r

“P ropo sed Am ended C om p lain t”) .) “Pa rt I” o f the P ropo sed Am ended C om p lain t se ts
1

fo rth the c la im s o f M acA rthu r , Lym an and V a ldez (id . a t 2 -98 ¶¶ 1 -254 ); “Pa rt II” o f the

sam e p lead ing spe lls ou t the re lie f sough t by S inge r, R igg s and D ick son . (Id . a t 98 -120 .)

1
As noted in a November 8, 2002 remark on the docket, the Proposed Amended Complaint was
accompanied by a separate addendum of “Pertinent Parts of the Navajo Court Record as Attachment to the
Amended Complaint,” received by the Clerk of the Court on November 8, 2002 and lodged in the case file.

-2-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 6 of 192(cid:10)

The c la im s and de fen se s invo lv ing the “Pa rt I P la in tif f s,” M acA rthu r , Lym an and

V a ldez , w e re a lso de linea ted in an ag reed fo rm o f p ropo sed P re trial O rde r subm itted six

days la te r a s con tem p la ted by the cou rt’s loca l ru les , see DUC ivR 16 -1 (e ), and by the

schedu le p rev iou s ly e stab lished by the cou rt in th is ca se . (See P ropo sed P re tr ia l O rde r ,
2

rece ived N ovembe r 12 , 2002 . ) O n the eve o f p re tria l, the San Juan H ea lth D is tric t
3

de fendan ts f iled m o tion s to d ism iss tho se p lain tiff s’ R ICO , H ea lth C a re Q ua lity

Im p rovemen t A c t and EM TALA c la im s (dk t. no s . 443 , 445 , 447 ) , fo llow ed the nex t day

by m o t ion s to d ism iss tho se p la in t if fs ’ c la im s o f in te rfe rence w ith comm e rce by th rea ts ,

m a il f raud , w itne ss tampe r ing and fede ra l an titru s t law v io la tion s (dk t. no s . 450 , 452 , 456 ,

454 ) .

THE F INAL PRETR IAL CONFERENCE (F ed . R . C iv . P . 16 (c))

A t the F ina l P re tria l C on fe rence , cou rt and coun se l exp lo red in som e de ta il the

fac tua l foo ting and lega l theo rie s unde rlying the c la im s o f the Pa rt I p la in tif f s, engag ing

in an ex tended co lloquy tha t sough t to iden tify, fo rm u late and sim p lify the issues, and to

p inpo in t any genu ine issues o f m a te ria l fac t issues requ ir ing a tr ia l.

2
(See Minute Entry, dated October 8, 2002 (dkt. no. 427).) At the request of plaintiffs’ counsel, the
dates for subm ission of the draft Pretrial Order (11/1/2002) and the Final Pretrial Conference (11/5/2002) were
reset by amended notice of hearing, with the conference to commence on November 12, then November 14.
(See Motion for a Short Extension of Time to Subm it the Final Pretrial Order for Medical Reasons, filed October
28, 2002 (dkt. no. 434); Notice of Hearing, filed October 31, 2002 (dkt. no. 435); Motion to Extend Time for
Pretrial Proceedings, filed November 8, 2002 (dkt. no. 439); Amended Notice of Hearing, filed November 12,
2002 (dkt. no. 441).)

3
The Proposed Pretrial Order ultimately was neither signed by the court nor docketed and filed in this
case. To ensure a complete record of the Final Pretrial Conference in this action, a copy of the Proposed Pretrial
Order in .pdf file format is annexed to this Memorandum Decision & Order as an Appendix.

-3-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 7 of 192(cid:10)

F ed . R . C iv . P . 16 (c)(1)

A t a p re tria l con ference , “con side ra tion m ay be g iven , and the cou rt m ay take

app rop r ia te ac tion , w ith respec t to (1 ) the fo rmu la tion and s im p l if ica tion o f the issues ,

inc lud ing the e lim ina tion o f f rivo lou s c la im s o r d e fen ses ; . . . .” Fed . R . C iv . P . 16 (c )(1 ).

The re ference in R u le 16 (c )(1 ) to “ fo rm u la tion” is in tended to c la rify
and con f irm the cou rt’s pow e r to iden tify the litigab le issue s . It ha s been
added in the hope o f p rom o ting e f f ic iency and con se rv ing jud ic ia l re sou rce s
by iden tifying the rea l issues p rio r to t ria l, the reby sav ing tim e and exp ense
fo r eve ryone . . . . The no tion is empha s ized by exp re ss ly au tho riz ing the
e l im ina t ion o f f r ivo lou s c la im s o r de fen ses a t a pre tria l con fe rence . There
is no rea son to requ ire tha t th is aw a i t a fo rm a l mo t ion fo r summ ary
judgm en t. N o r is the re any reason fo r the cou rt to w a it fo r the pa rties to
in i tia te the p rocess ca l led fo r in R u le 16 (c)(1) .

Fed . R . C iv . P . 16 adv iso ry comm ittee no te to 1983 amendm en t (c ita tion om itted ). “The

cou rt thu s is d irec ted to de f ine the issue s , fac ts , and theo rie s ac tua lly in con ten tion , w h ich

m ean s tha t ex traneou s issue s shou ld be w eeded ou t . . . .” 6A C ha rle s A . W righ t, A rthu r

R . M ille r & M a ry K . K ane , F edera l P rac tice and P rocedu re § 1525 , a t 242 (2d ed . 1990 )

(foo tno tes om itted ) . A s the cou rt o f appea ls exp la ined som e yea rs ago : “The sa lu ta ry,

indeed the de sirab le and ef f icac iou s , pu rpo se o f a p re tria l con ference is to s if t the

d iscove red and d iscove rab le f ac ts to de term ine the triab le issu es, bo th fac tua l and leg a l,

and to cha rt the cou rse o f the law su it acco rd ing ly.” Lynch v . Ca ll, 261 F .2d 130 , 132

(10 th C ir . 1958 ).

It fo llow s tha t “ [a]s a case take s shape and the cou rt s trugg le s to na rrow and

p inpo in t the issue s , the pa rtie s have an un f lagg ing ob liga tion to spe ll ou t squa re ly and

-4-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 8 of 192(cid:10)

d is tinc tly tho se c la im s they de sire to advance a t the tria l p rope r. G ood -fa ith comp l iance

w ith C iv il R u le 16 p lays an im po rtan t ro le in th is p roce ss .” V e randa B each C lub L im ited

Pa r tne rsh ip v . W e ste rn Su re ty Co ., 936 F .2d 1364 , 1371 (1 s t C ir . 1991 ) (c ita tion om itted ).

R u le 16 (c )(1 ) p laces upon coun se l “a sub stan tial re spon sib ility fo r ass isting the cou rt in

iden tifying the fac tua l issu es w o rthy o f trial.” Fed . R . C iv . P . 16 adv iso ry comm ittee no te

to 1983 am endm en t; c f. E r ff v . M a rkH on Indu s tr ie s , Inc ., 781 F .2d 613 , 617 (7 th C ir.

1986 ) (“A tto rneys a t a p re -tria l con fe rence mu st m ake a fu ll and fa ir d isc losu re o f the ir

v iew s a s to w ha t the rea l issu es o f the trial w ill be .”); see a lso DUC ivR 7 -1(d ) . 4

R u le 16 (c ) has con f irmed the cou r t’s pow e r to iden tify the l itigab le issues ,
and to e lim ina te f rivo lou s c la im s o r de fen se s w ithou t aw a iting the mak ing
o f a summ ary judgm en t o r o the r m o tion by the pa rties . B u t a t the sam e
tim e , coun se l bea r a sub stan tial re spon sib ility in fo rm u lating the triab le
issues in tha t they m u st these issues fo r the cou rt o r they w a ive the righ t to
have them tried .

3 Jam es W . M oo re , e t a l., M oo re ’s F ede ra l P rac tice ¶ 16 .11 , a t 16 -49 (2d ed . R ev . 1994 )

(foo tno tes om itted ).

B o th the P ropo sed Am ended Com p la in t (Pa rt I) and the P ropo sed P re tria l O rde r

rec ite an ex tended litany o f g rievances aga inst S an Ju an C oun ty, the San Ju an H ea lth

4

DUCivR 7-1(d) reads:

(d) Final Pretrial Conference. Trial counsel must attend the final pretrial conference with the
court. Preparation for this final pretrial conference should proceed pursuant to Fed. R. Civ. P.
16 and should include (i) preparation by plaintiff’s counsel of a recommended pretrial order
that is subm itted to other counsel at least five (5) days prior to the final pretrial date, and (ii)
preparation for resolution of unresolved issues in the case.

Our local rules thus anticipate that trial counsel will be fully prepared to participate in the pretrial examination of
the issues contemplated by Fed. R. Civ. P. 16(c).

-5-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 9 of 192(cid:10)

Se rv ice s D is tric t (“S JH SD ” ) and va riou s ind iv idua l de fendan ts , rang ing f rom a llega tion s

o f nepo tism in the adm in is tra tion o f the S JH SD and San Juan Coun ty gove rnm en t to an

ind iv idua l phys ic ian ’s ill-tempe red u se o f deroga to ry language in re ferring to m ed ica l

suppo rt s ta f f and pa tien ts and h is unava ilab ility fo r spec if ic pa tien t em e rg enc ies . (See

P ropo sed Am ended Com p la in t a t 35 ¶ 58 , 35 ¶¶ 50 -52 , 60 ¶ 146 , 63 ¶¶ 156 -58 , 64 ¶ 159 ,
5

66 -67 ¶¶ 163 -164 , 67 -68 ¶¶ 165 -166 ; P ropo sed P re tria l O rde r a t 21 ¶ 58 , 21 ¶¶ 51 -52 , 43

¶ 146 , 44 -45 ¶¶ 156 -59 , 46 ¶¶ 163 -164 , 47 -48 ¶¶ 165 -166 .) Even so , the P ropo sed

Am ended C om p la in t rep resen ted a s ign if ican t na rrow ing o f the scope o f p la in tif fs’ c la im s

f rom tha t o f the o rig ina l comp la in t— a p lead ing tha t a lleged a w ide range o f g rievance s

invo lv ing the ope ra tion o f San Juan Coun ty gove rnm en t and the S JH SD , and sough t the
6

en try o f sw eep ing dec la ra to ry judgm en ts and w ri ts o f m andam u s requ ir ing , in ter a lia , a

GAO aud it o f fede ra l fund s expended in the coun ty in the p rev iou s ten yea rs , an IRS
7

aud it o f payro ll tax w ithho ld ing , the conven ing o f a fede ra l g rand ju ry inve stiga tion , and

5
Part I of the Proposed Amended Complaint includes two series of paragraphs numbered 50 through 58
at pages 34 and 35, and a second sequence of paragraphs 125-168 at pages 54-69; the Proposed Pretrial Order
incorporates two similar sequences at pages 20-21 and 38-48, reflective of the fact that counsel simply reiterated
almost all of the allegations of Part I of the Proposed Amended Complaint as “Plaintiffs’ Statement of Contested
Issues of Fact” in Section 5 of the Proposed Pretrial Order.
In this Memorandum Decision & Order, for the sake of clarity, any citations to these numbered
paragraphs in either document refer to both the page and paragraph number(s) of the reference.

6
(See, e.g., Complaint (Verified), filed July 25, 2000 (dkt. no. 1), at 141 ¶ 472 (“County Comm issioners
have laughed at Taxpayers who sought to have San Juan County Comm issioners account for what they are
spending [and] notice budget items prior to meetings by at least 24 hours.”); id. at 150-151 ¶514 (“San Juan
County has treated the taxpayers with disdain and disrespect and laughed at those taxpayers bringing to the
County Comm ission’s attention the statutory provisions the taxpayers believed the County was violating.”).

7
Apparently referring to the General Accounting Office (now the Government Accountability Office).
See What is GAO?, at http://www .gao.gov/about/what.htm l.

-6-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 10 of 192(cid:10)

the imm ed ia te se izu re o r seque stra tion o f the de fendan t en titie s’ f inanc ia l reco rd s by the

U .S . M a rsha l pend ing tha t inves tiga tion and the GAO and IR S aud its . (See C om p lain t,

f iled Ju ly 25 , 2000 (dk t. no . 1 ), a t 156 ¶¶ 3 , 5 (P raye r fo r R e lie f ).)

A g rievance invo lv ing a gove rnm en ta l un it is still a g rievance , bu t a g rievance
8

m ay o r m ay no t be “a c la im upon w h ich re lie f can be g ran ted” in a jud ic ia l p ro ceed ing .

Fed . R . C iv . P . 12 (b )(6 ). In a ttem p ting to iden tify and de f ine genu ine issues fo r tria l,

cou rt and coun se l a t p re tria l unde rtook to pa rse the Pa rt I P la in tif f s’ a llega tion s in sea rch

o f v iab le lega l c la im s . (See T ran scr ip t of H ea r ing , da ted N ovem ber 14 , 2002 (“T r .

11 /14 /02” ), pa ss im ; T ran scr ip t of H ea r ing , da ted N ovem ber 15 , 2002 (“T r . 11 /15 /02”) ,

pa ss im .)

THE PART I PLA INT IFFS

D r . S teven M acA r thur , M .D .

D r . S teven M acA rthu r , M .D . is a licen sed phys ic ian spec ia liz ing in ob s te tric s and

gyneco logy. B y 1999 , he h ad been in p rac t ice in h is spec ia l ty fo r abou t e igh teen yea rs

(though no t in ac tive p rac tice fo r a t lea st the p rio r yea r ) . O n o r abou t D ecem be r 9 , 1999 ,
9

D r . M acA rthu r reque sted fu ll p rov is iona l one -yea r p riv ilege s to p rac tice med ic ine a t

hea l th ca re fac i li ties opera ted by the S JH SD , inc lud ing the B land ing U rgen t C are C en ter ,

8
Cf. U.S. Const., Amend . I (“Congress shall make no law . . . abridging . . . the right of the people
peaceably to assemble, and to petition the Government for a redress of grievances.”). “The First Amendment . .
. guarantees the right to petition the Government for a redress of grievances.” White v. Lee, 227 F.3d 1214, 1227
(9th Cir. 2000) (internal quotation marks om itted).

9

Tr. 11/14/02, at 6:16-18 (Ms. Rose).)

-7-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 11 of 192(cid:10)

B land ing B irth ing C en te r, M onum en t V a lley C lin ic , M on tice llo C lin ic and San Juan

H o sp ita l, the on ly ho sp ita l fac ility loca ted in San Juan Coun ty.

1 0

The S JH SD d id no t

g ran t D r . M acA rthu r fu ll prov isiona l one -yea r p riv ileg es w ith in th irty days a f ter h is

reques t, as con tem p la ted by the S JH SD m ed ica l s ta f f bylaw s . N o r d id it deny them .

In s tead , S JHSD adm in is tra to rs (de fendan ts B rad fo rd and D r . Jame s Redd ) g ran ted

h im tw o -w eek “ tempo rary” p rac tice p riv ilege s a llow ing h im to trea t a t lea st a lim ited

num be r o f pa tien ts a t S JHSD fac ilitie s , and the se “ tempo rary” p riv ilege s w e re ex tended

tw ice , th rough Feb rua ry 2 , 2000 .

1 1

D r . M acA rthu r exe rc ised h is “ tempo rary” p riv ilege s in p rov id ing ca re to seve ra l

pa tien ts a t S JHSD fac ilitie s; he a lso pa rtic ipa ted w ith ano the r phys ic ian in a de live ry by

caesa rian sec tion in N ovembe r o r D ecem be r o f 1999 . In do ing so , D r . M acA rthu r a llege s

tha t he encoun te red p rob lem s invo lv ing the ava ilab ility, qua lity and ste rility o f m ed ica l

in s trum en ts and equ ipm en t, and som e re sis tance— even an tagon ism— on the pa rt o f

1 0
The next nearest hospital facility to San Juan Hospital in Monticello, U tah is about 65 miles away to
the north (Moab) or the east (Cortez, Colorado), and about 85 miles from Blanding. Shiprock Hospital in
Shiprock, New Mexico, is between 65 to 85 miles from southern San Juan County. (See Proposed Pretrial Order
at 19 ¶ 39.)

1 1
On December 23, 1999, Dr. MacArthur was informed by Cleal Bradford of the SJHSD that he had
been granted “ temporary” privileges, which would last from December 23 through January 5, 2000, while his
request for full provisional privileges was being considered. According to the defendants, when Dr. MacArthur
first discussed his “temporary” privileges with Mr. Bradford, Bradford asked Dr. MacArthur to specify the
number of patients that Dr. MacArthur thought he would treat during the temporary privilege period. When Dr.
MacArthur indicated that it would be difficult to estimate exactly, Bradford told MacArthur to increase his
estimate to cover any potential but unplanned patients. Defendants insist that Dr. MacArthur’s “temporary
privileges” did not carry any lim itation on the actual number of patients that Dr. MacArthur could see during the
“temporary” privileges period—but the same may not be true of the number of patients he could treat at SJHSD
facilities. On January 10, 2000, Dr. MacArthur’s “temporary” privileges were extended from January 5, 2000,
through January 25 , 2000. On January 26 , 2000, Dr. MacArthur was again granted an extension through
February 2, 2000.

-8-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 12 of 192(cid:10)

S JHSD nu rse s and suppo rt s ta f f in trea ting h is pa tien ts . H e w a s fu rthe r troub led by

rum o rs tha t ca st doub t upon h is backg round , p ro fe ss iona l in teg rity and expertise , and a

loca l new spape r repo rt tha t h is p riv ilege s had been “ lif ted”by the S JH SD , w hen in fac t no

fo rm a l de te rm ina tion o f h is reques t had ye t been m ade .

O n o r abou t Feb rua ry 2 , 2000 , the S JH SD d id no t fu rthe r ex tend h is “ tem po ra ry”

p riv ilege s, and had no t ye t ac ted on h is reque sts fo r fu ll p rov is iona l p riv ilege s. A t tha t

po in t, the de lay a s to fu ll p rov is iona l p riv ilege s w a s exp la ined on the ba sis tha t requ ired

docum en tation w as m iss ing f rom h is app lica tion packe t (v iz ., a copy o f h is m ed ica l

licen se and DEA d ispen sing licen se ), documen ta tion w h ich he be lieved had been

fu rn ished and in any even t w as read ily ava ilab le and eas ily ve rif ied .

B y Feb rua ry o f 2000 , D r . M acA rthu r had becom e app rehen sive tha t h is reque st fo r

fu ll p rov is iona l p riv ilege s m ay u ltim a te ly be den ied , a lbe it fo r que stionab le , pe rhap s even

p re tex tua l rea son s , and tha t h is “ tempo rary” p riv ilege s w ou ld soon exp ire and m igh t no t

be fu rthe r ex tended . H e d id no t p re ss the p riv ilege s issue w ith the S JH SD on o r a f te r

Feb rua ry 2 , 2000 . D r . M acA rthu r dec ided to m ove h is m ed ica l p rac tice to E ly, N evada ,

and d id no t furth er pu rsu e h is reques t for fu ll p rov is iona l p rac tice p riv ileg es a t th e S JH SD

fac ilities . (See P ropo sed P re tr ia l O rde r a t 37 ¶ 199 .)

D r . M acA rthu r now con tend s tha t h is reque sts fo r fu ll p rov is iona l one -yea r

p riv ileg es w e re de fe rred in v io lation o f h is con stitu tiona l righ t as a licen sed physic ian to

pu rsue h is p ro fe ss ion th rough u se o f pub lic ly-spon so red med ica l fac ilitie s , and fo r

-9-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 13 of 192(cid:10)

p re tex tua l reason s (v iz ., “m iss ing” docum en ts), the rea l reason s be ing (1) d iscr im ina to ry

in ten t ba sed upon h is age (ove r 40 ) , h is a ssoc ia tion s w ith M s . Lym an (gende r) , and

Jew ish and M ex ican -Am e rican phys ic ian s (D rs . Penn and M ena ), an s h is repo rting o f

rema rk s concern ing D r . Penn ; and (2 ) the in ten t to lim it h is compe tition w ith o the r

S JH SD m ed ica l sta f f and con trac t physic ian s, none o f w hom a re OB /GYN sp ec ialists , in

se rv ing the need s o f w om en pa tien ts in San Juan Coun ty. H e seek s an aw a rd o f “dam age s

in excess o f $3 .5 m illion do lla rs and a tto rney fees” to compen sa te h im fo r the lo ss o f

incom e an ticipa ted f rom an estim a ted ten yea rs’ p rac tice in the San Ju an C oun ty m a rke t,

re su lting f rom the fa ilu re o f the S JH SD de fendan ts to g ran t h im fu ll p rov is iona l p riv ilege s

a s he reque sted , and the conduc t o f tho se ind iv idua ls w ho p ropaga ted rum o rs sp read ing

de fam a to ry fa lsehood s conce rn ing h is backg round , in teg ri ty or p ro fess iona lism .

(P ropo sed Am ended C om p la in t a t 94 -95 .)

M s . M iche le L ym an , P .A .

P la in t if f M iche le Lym an res ides in B land ing , U tah , and has been p rac tic ing as a

licen sed Phys ic ian ’s A ss is tan t s ince 1996 . She in itia lly w o rked fo r the S JH SD a t

M on tezum a C reek in 1995 , com p le ting her p recep torsh ip under the superv is ion o f D r .

L loyd V a l Jone s , M .D . in 1996 . She then became em p loyed by and p rac ticed under the

supe rv is ion o f D r . Jame s Redd , M .D ., w ho w a s in p riva te p rac tice in B land ing ; she

con t inued to be superv ised by D r . Jones a s a “back -up ” a s w e l l. W h i le w o rk ing fo r D r .

R edd , M s . Lym an regu la rly cove ring D r . R edd ’s c lin ic , and p rov id ing som e coverage fo r

-10-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 14 of 192(cid:10)

the B land ing nu rs ing hom e , the B land ing B irth ing C en te r, the San Juan H o sp ita l

eme rgency room , and the B land ing U rgen t C a re C en te r, a S JH SD fac ility w he re she

a llege s she en joyed fu ll S JHSD m ed ica l s ta f f p riv ilege s,

1 2

and w a s pa id by the D is tric t fo r

he r “on -ca ll” se rv ices . (See P ropo sed P re tria l O rde r a t 29 ¶ 132 ; T r . 11 /15 /02 , a t 3 :4 -5 :13

(M s . R o se ).) M s . Lym an cea sed w o rk ing unde r D r . R edd ’s supe rv is ion on o r abou t

O c tob er 7 , 1998 , bu t con t inued p rov id ing coverage fo r the S JH SD through N ovem ber ,

1998 . She a llege s tha t she w a s e f fec tive ly den ied he r s ta f f p riv ilege s a t the B land ing

U rgen t C a re C en te r w ith in th ree days a f te r leav ing D r . R edd , and the rea f te r expe rienced

con side rab le d if f icu lty in exe rc is ing he r p riv ilege s a t S JHSD fac ilitie s , even though she

w a s w o rk ing in M on tice llo unde r the supe rv is ion o f tw o o the r M on tice llo phys ic ian s

1 2
While working under the supervision of Drs. Redd and Jones at the Blanding Urgent Care Center,
plaintiffs allege that “Mrs. Lyman did the following patient procedures:

a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)

Took care of acute head trauma’s; and,
Put in chest tubes; and,
Delivered a couple of babies; and,
Sutured cuts; and,
Dealt with heart attacks; and,
Informed families of tragedies; and,
Ordered tests; and,
Prescribed medications and shots; and,
Prescribed tests to be run on the patients; and,
Adm itted and discharged patients; and,
Consulted other specialists by phone; and,
Treated patients with infectious diseases; and,
Referred patients to the San Juan Hospital and to the other district facilities,

all w ithout a Dr. at her side and w ithout on site supervision, and w ith no Dr. even in town
available for assistance.

(Proposed Amended Complaint at 55-57 ¶ 129.) However, plaintiffs then allege that “Mrs. Lyman and Dr. Key,
before he left, informed Dr. Redd and Dr. Jones that this practice of leaving Mrs. Lyman without either Dr. on
call was wrong, and that the practice should be changed,” (id. at 57 ¶ 130), and now characterize that practice as
a “Violation of Medical ByLaws and State laws and regs.” (Id. at 57.)

-11-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 15 of 192(cid:10)

hav ing S JH SD s ta f f p riv ileges , v iz ., D r. N a than iel P enn , M .D . from N ovem be r 1998 un til

Ju ly 1999 (w hen D r . Penn had moved h is p rac tice to M oab ),

1 3

and D r . R obe rt M ena ,

M .D ., from Ju ly to N ovem ber 1999 (w hen D r . M en a’s S JH SD p r iv i leg es exp ired ) . In

ea r ly 1999 , M s . Lym an and D r . Penn op ened a B land ing Fam ily P rac tice c lin ic ; M s .

Lym an even tua lly pu rcha sed tha t c lin ic f rom D r . Penn and ope ra ted a s a “ sta te -app roved

o f f -s ite independen t ru ra l c lin ic” fo r th ree yea rs , un til she in tu rn so ld he r p rac tice .

(P ropo sed Am ended C om p la in t a t 14 , 96 .)

In D ecem be r 1999 , M s . Lym an reque sted a renew a l o f he r S JHSD s ta f f p riv ilege s

(to be exerc ised unde r supe rv is ion by D r . M acA rthu r) , w h ich reque st w a s de layed ,

pu rpo rted ly becau se o f “m iss ing” docum en ta tion in he r p e rsonne l f ile , e .g ., CPR

ce rtif ica tion ca rd s , tha t M s . Lym an is ce rta in had been p rope rly issued and w e re cu rren t

th rough a t lea st D ecem be r o f 1999 . She fu rn ished cop ie s o f the m iss ing ca rd s , bu t a llege s

tha t the da tes on tho se ca rd s had been a lte red .

B y the end o f M a rch , 2000 , fo rm a l adm in is tra tive ac tion on he r reque st fo r

p riv ilege s w a s s till be ing de ferred by the S JH SD un til the CPR ce rtif ica tion ca rd issue

w a s re so lved . A cco rd ing to the p lead ing s , f rom N ovembe r 1999 un til som e tim e in 2001 ,

M s . Lym an may no t have had a supe rv is ing phys ic ian p rac tic ing in San Juan Coun ty w ho

had sta f f p riv ilege s w ith the S JH SD , excep t fo r the b rie f period be tw een D ecem be r 23 ,

1 3
(See Proposed Amended Complaint at 76 ¶ 203 (In “April, 1999, after working in Monticello under
Dr. Penn, Ms. Lyman began a new practice in Blanding under the off-site direction of Dr. Nathaniel Penn.”);
Proposed Pretrial Order at 52 ¶ 203 (same).)

-12-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 16 of 192(cid:10)

1999 and F eb ru ary 2 , 2000 , w h en D r . M acA rthu r ex erc ised “ tempo ra ry” S JH SD

p riv ileges .

1 4

A t the tim e o f p re tr ia l, she w as aga in be ing supe rv ised by D r. Jones . (See

T r. 11 /15 /02 , a t 24 :9 -25 , 26 :7 -11 (M s . R o se ).)

A cco rd ing to the p la in tif fs ,

The D is tr ic t em p loyee s as a pa t tern sough t to res tra in com pe t it ion , there
w a s inadequa te im pa rtia lity in ‘pee r rev iew ’ o r in issu ing p riv ilege s s ince
the peop le issu ing the p riv ileg es a re u su a lly in econom ic com pe tition w ith
tho se they a re g iv ing p riv ileg es. P riv ileg es fo r M rs. L ym an w e re de fac to
den ied by nu rs ing pe rsonne l and med ica l s ta f f w ithou t any ac tion by the
D is tr ic t gove rn ance boa rd .

(P ropo sed P re trial O rde r a t 14 .) A s M s. Lym an ’s coun se l exp lain ed a t p re trial,

She ’s comp la in ing tha t she cou ld no t ge t the p riv ilege s a t the
ho sp ita l w hen she w a s w o rk ing unde r phys ic ian s tha t had p riv ilege s. H e r
pa tien ts she w ou ld send ove r to the c lin ic , they w ou ld no t ge t sho ts . A t one
po in t she w a s to ld she cou ldn ’t o rde r lab s o r x -rays . A t one po in t she w a s
to ld she cou ldn ’t se t foo t in the fac ility.

(T r. 11 /15 /02 , a t 14 -19 (M s . R o se ).)

In add ition to th e a lleg ed in te rf eren ce w ith he r p rac tice p riv ileg es a t S JH SD

fac ilitie s a f te r O c tobe r 1998 , M s . Lym an a llege s ha ra ssm en t and in tim ida tion o f , and

den ia l o f hea lth ca re se rv ice s to he r pa tien ts by D r . R edd and o the r S JHSD suppo rt s ta f f ,

w h ich she con tend s w a s in tended to inh ib it compe tition by he r w ith the S JH SD m ed ica l

s ta f f and con trac t p rov ide rs . She a lso a llege s a de libe ra te cam pa ign o f ha ra ssm en t

1 4
At pretrial, however, counsel insisted Drs. Penn and Mena continued to supervise Ms. Lyman at a
distance even after Dr. MacArthur left for Nevada—concededly doing do at that point without SJHSD
privileges—and that when Drs. Penn and Mena no longer supervised her, Ms. Lyman “went to work under Dr.
Jones,” and therefore “there was never a time that she wasn’t without a supervising physician.” (Tr. 11/15/02, at
25:1-26:11 (Ms. Rose).)

-13-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 17 of 192(cid:10)

conduc ted aga in s t he r by D r . R edd since she cea sed w o rk ing fo r h im in O c tobe r o f 1998 ,

in tended to h inde r and f ru s tra te he r p ro fe ss iona l p rac tice , and cau se he r seve re emo tiona l

d istress . She con tend s tha t D r. R edd c rea ted a m isogyn istic “ho stile env ironm en t” in h is

ow n m ed ica l o f f ice in B land ing du ring the tim e tha t she w o rked unde r h is supe rv is ion ,

and tha t he r pe rsona l and p ro fe ss iona l repu ta tion ha s su f fered a s a con sequence o f

de fam a to ry rum o rs , in s inua tion s and accu sa tion s pub lished to he r pa tien ts and o the rs by

one o r m o re o f the de fendan ts .

M s . Lym an seek s an aw a rd o f “dam age s in excess o f S ix (6 ) M illion D o lla rs” a s

compen sa tion fo r “un fa ir p rac tice s” in te rfe ring w ith the exerc ise o f her p rac tice p riv ilege s

and he re la tion sh ip w ith he r pa tien ts , the ha ra ssm en t and in tim ida tion o f he r pa tien ts , “ the

te rro rism o f he r ch ild ren , and he rse lf , and the sp read ing o f rum o rs tha t equa te to no th ing

le ss than c rim ina l de fam a tion fo r bo th M iche le Lym an and D r . M acA rthu r .” (P ropo sed

Am ended Com p la in t a t 96 -98 .) She a lso seek s in junc tive re lie f “ to p ro tec t pa tien ts o f

M rs . Lym an and her supe rv is ing phys ic ian , and g ive M rs . Lym an ’s pa tien ts un ifo rm and

con side ra te care w ith D is tric t s ta f f sen sitive to the un ique need s o f the pa tien t,” and

a llow ing M s. Lym an “ to m in im a lly go in to any fac ility to a t lea st speak and assoc iate w ith

he r pa tien t, reg a rd les s o f w he the r sh e has p riv ileg es a t the D istric t.” A cco rd ing to

p la in tif f , “o rde ring the [S JH SD ] gove rnance boa rd to m ake phys ic ian s and ch ie f s o f s ta f f

accoun tab le fo r pa tien t com p lain ts and trea t all m ed ica l p rov iders and physic ian ’s equa lly

and un ifo rm ly is no t con trad ic to ry to good pub lic po licy.” (Id . a t 93 -94 .)

-14-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 18 of 192(cid:10)

M s . H e len V a ldez

The c la im s o f p la in tif f H e len V a ldez arise ou t o f a sing le even t tha t took p lace on

A p ril 14 , 1999 . O n tha t da te , M s . V a ldez , accom pan ied by he r s is te r-in -law , C ha rlene

G onza le s , w en t to the San Juan H o sp ita l eme rgency room a t abou t 8 :08 a .m . A t tha t tim e ,

she w a s su f fering f rom w ha t w a s sub sequen tly d iagno sed a s acu te d ive rticu litis ; she w a s

exper ienc ing sym p tom s inc lud ing vom i ting , cram p ing , d iarrhea and pa in , and fe l t very

w eak and tired . M s . V a ldez to ld the eme rgency room pe rsonne l “ tha t she ’d been sick ,

[and ] needed to see a doc to r .” She a ss is ted in f illing ou t a typed pa tien t adm i ttance
1 5

fo rm , fu rn ish ing iden tif ica tion and hea lth in su rance in fo rm a tion to an eme rgency room

c le rk nam ed Judy K aschea iveaz . She s ign ed the fo rm , as d id the c le rk . A t tha t po in t , M s .

V a ldez had no t desc ribed he r symp tom s to the c lerk .

1 6

M s. V a ldez becam e ill and w en t to

the lav a tory, and w hen she re turned , she ob served a nu rse in the em ergen cy room , Lo r i

W a llace , R .N ., te ll the c le rk tha t “ she cou ld se t bo th he r pa tien ts up in the eme rgency

room fo r the phys ic ian ,” re ferring to M s . V a ldez and M ichae l B a iley, ano the r ind iv idua l

w ho had com e to the em e rgency room w ith an in ju red foo t.

1 7

W h i le M s . V a ldez w en t to the lava to ry a second t im e , he r s is te r -in – law , M s .

G onza le s , says tha t she ove rhea rd the nu rse , M s . W a llace , te ll the c le rk to “ te ll H e len

1 5

1 6

(Deposition of Charleen Gonzales, dated January 7, 2002, at 12:22-25.)

(Deposition of Helen Valdez, dated December 6, 2001, at 18:11-22.)

1 7
(Id. at 17:3-18:10.) At that point, according to Ms. Valdez, she had not spoken with Ms. Wallace and
did not know whether or not the nurse “knew anything about [her] symptoms or what was wrong.” (Id. at 18:11-
22.)

-15-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 19 of 192(cid:10)

[M s . V a ldez ] to go to the doc to r’s o f f ice . D r . Penn ’s o f f ice w ou ld open a t 9 :00 .” M s .
1 8

G onza les d id no t hea r M s. W a llace say anyth ing e lse , and d id no t conve rse d irec tly w ith

M s . W a llace abou t w ha t she had overhea rd .

1 9

M s . G onza lez re la ted the overhea rd conversa t ion to M s . V a ldez upon her re turn

f rom the lava to ry, and w ithou t any fu r the r conve rsa tion w ith M s . W a llace , M s .

K a schea iveaz , o r o the r em ergency room em p loyees , M s . V a ldez le f t the em ergency room ,

aga in accom pan ied by M s . G on za les . Ins tead o f go ing to see he r doc to r a t h is o f f ice , M s .

V a ldez w en t hom e .

2 0

A t the tim e she le f t the eme rgency room , M s . V a ldez had no t

d iscu ssed he r symp tom s w ith M s. W a llace o r M s. K aschea iveaz , w hom sh e had seen in

the em e rg ency room ,

2 1

and had no t yet seen o r b een exam ined by a phys ic ian .

H e r sym p tom s subs ided fo r a day bu t then in tens if ied , and th ree days la te r , M s .

V a ldez w en t to the B land ing U rgen t C a re C lin ic , w he re she w a s exam ined by D r . Jame s

R edd , M .D . D r . R edd d iagno sed he r cond ition a s acu te d ive rticu litis , fo r w h ich he

p resc ribed o ra l an tib io tics and a stric t liqu id d iet.

2 2

1 8

(Deposition of Charlene Gonzales, dated January 7, 2002, at 14:7-17, 20:13-24. )

1 9

(Id.)

2 0
Ms. Valdez testified in deposition that she believes Dr. Penn was already at the San Juan Hospital on
the morning of April 14th, and that Mr. Bailey, the other emergency room patient at that time, subsequently told
her he was examined by Dr. Penn in the emergency room about five minutes after Ms. Valdez had left.
(Deposition of Helen Valdez, dated December 6, 2001, at 19:15-20:18.)

2 1
Ms. Valdez telephoned the emergency room before going there on the morning of April 14th, and
briefly discussed her symptoms with a nurse, someone other than Ms. Wallace. (Id. at 18:14-17.)

2 2

After leaving the San Juan Hospital emergency room on April 14th, Ms. Valdez did not attempt to
(con tinued …)

-16-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 20 of 192(cid:10)

M s . V a ldez ’ cond ition d id no t im p rove sign if ican tly, and tw o days la te r she w en t

to C o rtez , C o lo rado , w he re she w as ho sp ita lized and p laced on IV f lu id s and an tib io tic s .

A f te r rece iv ing trea tm en t in the Co rtez ho sp ita l fo r seve ra l days , M s . V a ldez re tu rned

hom e . W ith in a few days , she became ill aga in , and th is tim e w a s adm i tted to the

U n ive rs ity o f U tah H o sp ita l, w he re she w a s d iagno sed a s hav ing an ob struc tion requ iring

imm ed iate su rge ry. She unde rw en t su rge ry, w h ich appa ren tly w as success fu l.

To compen sa te fo r “ the badge o f in fe rio rity she w a s m ade to w ea r a s she le f t the

fac ility she had sough t he lp f rom , no t be ing ab le to see the p rov ide r o f he r cho ice , [and ]

no t be ing ab le to fee l a s though she cou ld re tu rn to a fac ility in M on tice llo fo r fear o f

L au rie W a llace ,” M s . V a ldez seek s an aw ard o f “dam ages o f $350 ,000 and a tto rneys

fees .” (P ropo sed Am ended C om p la in t a t 92 -93 .)

THE PART I PLA INT IFFS ’ ALLEGAT IONS AGA IN ST THE
IND IV IDUAL DEFENDANTS

B e side s the S JH SD and its pa ren t en tity, San Juan Coun ty,

2 3

the Pa rt I P la in tif f s

have nam ed seve ra l ind iv idua l de fendan ts , o rig ina lly and in the P ropo sed Am ended

C om p lain t: Comm iss ione r T yron L ew is, C omm iss ione r B ill R edd , C ra ig H a lls, R e id

( …con tinued )
2 2
contact her physician, Dr. Penn, because she believed he was out of town that weekend. (Id. at 26:15-22.) Nor
did she try to contact Dr . Penn when her symptoms worsened after seeing Dr. Redd because she did not want to
be adm itted to San Juan Hospital for treatment. She chose to go to Cortez, Colorado instead. (Id. at 35:4-21.)

2 3
San Juan County is organized as a political subdivision of the State of Utah under the Utah
Constitution and Utah Code Ann. §§ 17-50-101 et seq. (2001). The SJHSD is organized as a special service
district under the Utah Code Ann. § 17A-2-1301 et seq. (2004), and is funded in part through tax revenues. San
Juan County appoints the members of the SJHSD governance board. See Utah Code Ann. § 17-2A-1326 (2001).

-17-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 21 of 192(cid:10)

W ood , C lea l B rad fo rd , R og e r A tc itty, John L ew is , John H ou sekeepe r , K a ren A dam s ,

Pa tsy Shumw ay, D r . Jam es R edd , D r . L loyd V a l Jones , D r . M an fred N e lson , R icha rd

B a iley, M a rilee B a iley, O ra L ee B lack , G a ry H o lliday, Lau rie Scha fe r a /k /a “L au rie

Sha fe r,” Lo ri W a llace a /k /a “Lau rie W a lke r,” C a rla G rim shaw , G lo ria Y an ito , and
2 4
2 5

Ju lie B ron son .

The C oun ty C omm iss ioner s

B y the tim e o f p re tria l, tw o San Juan Coun ty C omm iss ione rs rema ined a s

de fendan ts in th is ac tion in the ir ind iv idua l capac ities: B ill R edd and Ty L ew is. B o th

app a ren tly w e re a lso nam ed as de fend an ts fo r the i r condu c t as SJH SD B oa rd m em be rs .

2 6

P lain tiff s a lleg e ve ry few sp ec if ic f ac ts conce rn ing C omm iss ione rs R edd o r L ew is

ind iv idua lly;

2 7

in s tead , the ir a llega tion s a re p leaded aga in s t the C omm iss ion o r the

2 4
Ms. Schafer was om itted from the caption of the original Complaint and apparently was added by a
document entitled “Amendments to the Complaint Corrections of Errors,” filed August 1, 2000 (dkt. no. 3). See
Fed. R. Civ. P. 15(a) (“A party may amend the party’s pleading once as a matter of course at any time before a
responsive pleading is served . . . .”). She was again omitted from the captions of both the Proposed Amended
Complaint and the Proposed Pretrial Order, in each instance w ithout explanation. Nevertheless, she appears to
have been included among the defendants represented by Mr. Harrison in preparation of the Proposed Pretrial
Order.

2 5
The captions of the original Complaint, the Proposed Amended Complaint and the Proposed Pretrial
Order refer to a defendant named “Laurie Walker”— in reality, Lori Wallace, R.N., a former SJHSD employee
who was working in the San Juan Hospital emergency room on April 14, 1999 when plaintiff Helen Valdez was
there seeking treatment. (See Answer to Complaint by Laurie Walker (Lori Wallace), filed September 25, 2000
(dkt. no. 46) (name correction noted on docket).)

2 6
Comm issioner Redd was a member of the SJHSD Board for a brief period in late 1998 and early
1999, and Comm issioner Lewis was a member from late 1998 to mid-1999. (Proposed Pretrial Order at 67 ¶ 2.)

2 7
“County Comm issioner Ty Lewis made the statement and determination in a public meeting that the
County would drive out qualified private competitors,” (Proposed Pretrial Order at 29 ¶ 135); “[i]n areas of
health care, Comm issioner Ty Lewis is against a private entity that would or will compete with the District.”
(Id. at 20 ¶ 50; Proposed Amended Complaint at 34 ¶ 50 (same)).

-18-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 22 of 192(cid:10)

C oun ty :

106 . The Coun ty C omm iss ion and D is tric t B oa rd , by no t po lic ing
and supe rv is ing the med ica l s ta f f and leav ing ca rte b lanch [e ] dec is ion s on
w ho ge ts on s ta f f and doe s no t ge t on s ta f f , con tribu te s d irec tly to the
p r iva te use o f the s ta f f ’s use o f the gov e rnm en ta l p rocesses .
* * * *

110 . The lack o f the D istric t Boa rd o r C oun ty C omm iss ion in
tak ing ac tion to supe rcede m ed ica l s ta f f and head o f m ed ica l s ta f f p riv ilege –
g ran ting dec ision s , and de l ibe ra te ind if fe rence to inv es tiga t ing com p la in ts,
ho ld ing hea ring s , and exerc is ing the ir gove rnm en t au tho rity to fo s te r
econom ic com pe tition as m anda ted by sta tu tes , fa lls ou tside any ‘po litica l’
ac tion , and d irec tly is in tended to con tro l the bu sine ss p roce sse s o f
compe tito rs o f D is tric t emp loyee phys ic ian s and P . A .s and tho se med ica l
s ta f f phys ic ian s d irec tly con trac ting w ith the D is tr ic t.

(P ropo sed Am ended Com p la in t a t 42 -43 ¶¶ 106 , 110 ; P ropo sed P re tria l O rde r a t 31 ¶¶

146 , 150 (sam e ). See P ropo sed Am ended Com p la in t a t 34 ¶ 52 (“The C oun ty and D is tric t

had a de fac to po licy o f de libe ra te ind if ference to tho se w ho comp la ined o f su f fering

from D r . R edd and o ther D is tr ic t s taf f m em bers .”) .)

C oun ty A ttorney C ra ig H a lls

A s to San Ju an C oun ty A tto rney C ra ig H a lls, the Pa rt I P lain tiff s no te th a t he “ is

the b ro the r in law o f R ick B a iley, D is tr ic t CEO and C oun ty Comm iss ion adm in is tra to r.”

(P ropo sed P re tria l O rde r a t 21 § 51 .)

2 8

W ith re spec t to ce rta in adm in is tra tive p rob lem s a t

the San Juan H o sp ita l iden tif ied by the U tah D epa rtm en t o f H ea lth a t o r abou t the tim e o f

the even t comp la ined o f by M s . V a ldez , p la in tif f s s ta te tha t “ [ t]he H ea lth D is tric t and

2 8
Plaintiffs assert that “Cleal Bradford and James Redd had access to District board members and
County Comm issioners and the County Attorney as relatives and close friends, in a highly rural and isolated
area,” whereas plaintiffs MacArthur and Lyman did not. (Proposed Pretrial Order at 32 ¶¶ 151-152.)

-19-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 23 of 192(cid:10)

C oun ty C omm iss ione rs w e re in fo rm ed o f the se p rob lem s in a Boa rd m ee ting , w ith an

execu tive se ss ion a ttended by C omm iss ione r B ill R edd and C oun ty A tto rney C ra ig

H a lls .” (Id . a t 60 ¶ 236 ; Propo sed Am ended C om p la in t a t 87 ¶ 236 (sam e) .) M o re

gene ra lly, the Pa rt I P lain tiff s a lleg e tha t the C oun ty C omm iss ione rs, C oun ty

A dm in is tra to r and Coun ty A tto rney “behaved in a de libe ra te ly ind if feren t m anne r, fa iled

to adequa te ly inve stiga te the p rob lem s M rs . Lym an and D r . M acA rthu r iden tif ied in the

D istric t, did no t ho ld hea ring s on the m a tters , d id no t en fo rce , o r take any ac tion s to

rec tify the situa tion s iden tif ied by M rs . Lym an and D r . M acA rthu r .” (P ropo sed Am ended

C om p la in t a t 16 -17 .) “A pa tte rn o f de libe ra ted ind if ference a s a po licy w a s exh ib ited by

the Coun ty C omm ission , C oun ty A tto rney, H ea lth D is tric t boa rd , adm in is tra to rs and

m ed ica l s ta f f .” (Id . a t 17 .)

S JH SD Bo ard M emb ers: A tc itty , L ew is , H ou sek eep er , Adam s , Shumw ay &
H o lliday

D e fendan ts Rog e r A tc itty, John L ew is , John H ou sekeepe r , K a ren A dam s , Pa tsy

Shumw ay and G a ry H o lliday a re o r a t re levan t tim e s w e re mem be rs o f the Boa rd o f

T rus tee s o f the S an Juan H ea l th Serv ices D is tr ic t . (P ropo sed P re tr ia l O rde r a t 67 ¶ 3 .)

D e fendan t C lea l B rad fo rd w as a lso a m em be r o f the S JH SD B oa rd f rom app rox im a tely

Feb rua ry 1999 un til June 1999 , and f rom app rox im a te ly June 22 , 1999 un til A p ril 2001 ,

B rad fo rd se rv ed as execu tive d irec to r o f the S JH SD . (Id .)

In the P ropo sed Am ended Com p la in t, the Pa rt I P la in tif f s p lead very few fac tua l

-20-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 24 of 192(cid:10)

a llega tion s invo lv ing spec if ic S JH SD B oa rd m embe rs .

2 9

The P ropo sed Am ended

C om p lain t alleges no th ing rega rd ing in ten tiona lly d isc rim ina to ry ac ts o r o the r cu lpab le

ind iv idua l conduc t o f de fendan ts A tc itty, Shumw ay, H ou sekeepe r,

3 0

John L ew is , and

A dam s . O the r than no ting h is s ta tu s a s a S JH SD B oa rd m embe r , the P ropo sed Am ended

2 9

Plaintiffs allege that

223.
[On] December 21, 1999 Ms. Lyman Attended San Juan Health Care
Services board Meeting to discuss and attempt to resolve her problems with SJHSD staff with
the SJHSD board. She requested to have a public meeting so the public could fully understand
the issues involved in the health care system their tax dollars support.

224.
SJHSD governance board chairman Roger Atcitty stated that he and SJHSD
Patsy Shumway and SJHSD Karen Adams had discussed the situation before the official
meeting and had decided that the grievance meeting with SJHSD governance board would be
private. Such a decision being made before the meeting and without public input appears to be
in violation of Utah’s Open Meeting law. (cmplt. #162-168).

(Proposed Amended Complaint at 83-84 ¶¶ 223-224; see Proposed Pretrial Order at 57 ¶ 223-224 (same).)

John Housekeeper did do some investigation for Mrs. Lyman, but labeled Dr. MacArthur a
troublemaker because Dr. MacArthur was perceived by him to be associated with his current
counsel in a lawyer/client relationship when Dr. MacArthur appeared at the District Board
meeting in December, 1999.

(Id. at 22.)

Mrs. Valdez, Dr. MacArthur, Mrs. Lyman informed the District of their problems and to no
avail. Dr. MacArthur and others reporting problems to Board member Patsy Shumway and
John Housekeeper were labeled either troublemakers or Dr. Redd detractors.

(Proposed Pretrial Order at 14.)

The Defendant community leaders Rick Bailey, Ty Lewis, John Lewis, Karen Adams, Cleal
Bradford, with the power and authority over the entire district, did nothing to investigate, find
and hold accountable the responsible parties, and carried out a state identified de facto policy
that dim inished the standard of care for the patients.

(Id. at 27 ¶ 112(b).)

3 0
Concerning Mr. Housekeeper, the Proposed Amended Complaint alleges that Ms. Lyman “suffered
from Dr . Redd driving by her home honking his horn,” and relates that “[t]he horn honking subsided notably
when John Housekeeper was notified as board member that it was going on and was asked to tell Dr. Redd to
stop the honking.” (Proposed Amended Complaint at 17, 22-23.) Plainly this scenario would not serve as a
basis for any liability on the part of Mr. Housekeeper.

-21-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 25 of 192(cid:10)

C om p la in t says no th ing a t a ll abou t de fendan t G a ry H o lliday.

R a the r than add re ss ing a lleged conduc t o f ind iv idua l B oa rd m embe rs , the

P la in tif f s appear to be comp la in ing o f a lleged inac tion by the Boa rd as a B oa rd : “The

gove rnance boa rd d isp layed a pa tte rn o f no t ho ld ing doc to rs o r o the rs accoun tab le fo r

in ter fe ring in doc to r /pa tien t re lation s. The C oun ty w as aw a re o f the p rob lem s and d id

no th ing to inves t iga te , ho ld hea r ing s , o r reso lve the p rov ider and pa t ien ts’ and pub l ic’s

concern s a s ev idenced in pe tition s w ith hund red s o f s igna tu re s .” (P ropo sed P re tria l O rde r

a t 14 ; see id . a t 31 ¶ 149 (“D is tric t B oa rd m embe rs and CEO s s ta ted they en tru s ted

m ed ica l s ta f f p r iv i leg ing to the m ed ica l s ta f f o r head o f m ed ica l s ta f f .” ) .) In p la in t if fs ’

v iew :

The D istric t has illeg a lly ope ra ted the d istric t by hav ing C oun ty
C omm iss ione rs a s boa rd m embe rs , by no t ho ld ing doc to rs accoun tab le fo r
v io la tion s o f the law , by no t fo llow ing the ir ow n m ed ica l by-law s , by no t
app lying po lic ie s equa lly ac ro ss the boa rd to a ll pe rson s , by no t ove rrid ing
lette rs o r m em o s o f doc to rs th a t se t po licy, w ithou t board app rova l, wh ile
s tif ling econom ic com pe tition in the a rea .

(Id . a t 74 .)

The SJH SD A dm in istra tor s: W ood , B a iley & B rad ford

L ike the ir a llega t ion s aga ins t the S JHSD B oa rd m em be rs , p la in t if fs ’ c la im s aga ins t

S JHSD adm in is tra to rs W ood , B a iley and B rad fo rd a re la rge ly foo ted upon a llega tion s o f

inac tion in respon se to p la in t if fs ’ g rievan ces :

109 . R e id W ood and R ick B a iley d id no th ing to a ss is t M rs . Lym an
in exe rc is ing p riv ilege s w ith the D is tric t tha t the D is tric t B oa rd neve r
o f f ic ia lly and fo rm a lly te rm ina ted .

-22-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 26 of 192(cid:10)

110 . R e id W ood , C lea l B rad fo rd , and R ick B a iley a s CEO s neve r
he ld the med ica l S ta f f ch ie f s accoun tab le fo r po lic ie s e f fec ting se rv ice s o f
P .A .s , w he the r w ri tten o r d e fac to .

111 . R e id W ood , C lea l B rad fo rd , and R ick B a iley a s CEO s neve r
con trad ic ted the med ica l S ta f f ch ie f s fo r po lic ie s e f fec ting se rv ice s o f
M iche le Lym an , w he the r w ri tten o r d e fac to .

112 .
b .

. . . .
The D e fendan t commun ity leade rs R ick B a iley, Ty
L ew is , John L ew is , K a ren A dam s , C lea l B rad fo rd ,
w ith the pow e r and au tho rity ove r the en tire d istric t,
d id no th ing to investiga te, f ind and ho ld accoun tab le
the respon sib le p a rties , and ca rried ou t a s tate
iden t if ied de fac to po l icy tha t d im in ished the s tand ard
o f ca re fo r the p a tien ts.

* * * *

126 . CEO ’s C lea l B rad fo rd , R e id W ood , and R ick B a iley d id
no th ing to he lp the se doc to rs [M acA rthu r , Penn & M ena ] have im p roved
w o rk ing cond ition s w ith in the d is tr ic t, o r renew the ir licen ses o r p riv ileges .
A ll th ree doc to rs w e re no t em p loyees o f the D is tr ic t w hen supe rv is ing M rs.
Lym an .
* * * *

188 . R e id W ood and a ll o the r CEO ’S in th is comp la in t, igno red
M rs . Lym an ’s a ttem p ts to rec tify he r s itua tion , o r exace rb a ted it.
* * * *

190 . D ecem be r 10 ,1998 – M rs . Lym an ca lled S JH SD adm in is tra to r
R e id W ood tw ice to see if she cou ld re so lve som e o f the issue s she w a s
hav ing w ith the nu rse s a t the ho sp ita l s ince jo in ing D r .Penn and to re so lve
som e o f the p rob lem s w ith the c lin ic . R e id W ood d id no t re tu rn he r ca lls .
The th ird M rs . Lym an ca lled she w a s to ld by C a rla G rim shaw tha t he w a s
ou t o f the o f f ice .

(P ropo sed P re trial O rde r a t 26 -28 ¶¶ 109 -111 , 112 (b ),126 ; id . a t 49 ¶ 188 , 50 ¶ 190 ; see

P ropo sed Am ended C om p la in t a t 71 -72 ¶¶ 188 , 190 (sam e) .)

A s fo r M r . B rad fo rd , the p la in tif f s de sc ribe the p roce ss by w h ich he g ran ted

tempo rary p rac tice p riv ilege s to D r . M acA rthu r, (P ropo sed P re tria l O rde r a t 25 -26 ¶¶ 98 –

-23-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 27 of 192(cid:10)

101 , 104 -105 ), and then asse rt tha t “CEO C lea l B rad fo rd m ade the de term ina tion in

g ran ting D r. M acA rthu r lim ited tem po ra ry p riv ileg es tha t it w as b est fo r the D istric t if

re ferra ls to the D is tric t fac ilitie s came f rom D is tric t doc to rs . D r . M acA rthu r w a s no t

emp loyed by the D is tric t.” (Id . a t 29 ¶ 134 .)

3 1

F ina lly, p lain tiff s a sse rt:

151 .
C lea l B rad fo rd and Jam es R edd had acce ss to D is tr ic t bo ard
m embe rs and Coun ty C omm iss ione rs and the Coun ty A tto rney a s re la tive s
and c lo se f riend s , in a h igh ly ru ra l and iso la ted a rea .

152 . D r . M acA rthu r and M iche le Lym an d id no t have th is fam ilia l
and c lose f r iend re la t ion sh ip w i th C omm iss ioners and D is tr ic t B oard
m em be rs .

153 . C lea l B rad fo rd w ho s igned o f f on p riv ilege s a s the D is tric t
CEO lobb ied the B oa rd and C oun ty C omm iss ion , and m ed ica l sta f f , in
m ee ting s w ith a p lu ra lity o f the dec is ion -m ak ing body, w ithou t M rs . Lym an
o r D r. M acA rthu r be ing p resen t.

(Id . a t 32 ¶¶ 151 -153 ; see P ropo sed Am ended C om p la in t a t 44 ¶¶ 111 -113 (sam e) .)

W ha t conce ivab le cau se o f ac tion the la tte r a llega tion s w ou ld pe rta in to is no t

read i ly apparen t . The b a lance o f the a l leg a t ion s ag a ins t W ood , B a i ley and B rad fo rd

a sse rt a fa ilu re to take af f irm a tive step s to inve stiga te and remedy p la in tif f s’ g rievance s

invo lv ing m em be rs o f the S JH SD m ed ica l and suppo rt sta f f , sim ilar to p lain tiff s’ c laim

aga in s t the ind iv idua l S JH SD B oa rd m em be rs .

L aur ie Scha fer (a /k /a L aur ie Sha fer )

3 1
Plaintiffs also allege that “Dr. MacArthur had an incident report allegedly filed against him by
Marilee Bailey, Julie Bronson , Laurie Shafer, Cleal Bradford that was never discussed with him or placed in his
District file, and is a report that he considers to be untrue.” (Proposed Amended Complaint at 39 ¶ 88;
Proposed Pretrial Order at 25 ¶ 96 (same).)

-24-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 28 of 192(cid:10)

L au rie Scha fe r se rv ed a t re levan t tim es as Pa tien t C a re D irec to r fo r the S JH SD .

P la in t if fs a llege : (1 ) tha t “D r . M acA r thu r had an inc iden t repo r t a lleged ly f iled ag a ins t

h im by M a rilee Ba iley, Ju lie B ron son , L au rie Sha fer , C lea l B rad fo rd tha t w a s neve r

d iscu ssed w ith h im o r p laced in h is D is tric t f ile , and is a repo rt tha t he con side rs to be

un true .” (P ropo sed P re tria l O rde r a t 25 ¶ 96 ); (2 ) tha t “M rs . Sha fe r no ticed the da te s [on

M s . Lym an ’s CPR ca rd s] w e re in e rro r in m ed ica l s ta f f m ee ting ,” tha t “ [ t]he M ed ica l s ta f f

and C lea l B rad fo rd and Lau r ie Sha fer d iscu ssed M rs . Lym an ’s CPR ca rd p rob lem s o f

w rong da tes w i thou t M rs . Lym an be ing p resen t ,” tha t “M rs . Lym an ’s CPR ca rds w ere

rev iew ed and found to be app rop ria te on mo re than one occa sion by C a rla G rim shaw and

L au rie Sha fer ,” and tha t “ [ t]he med ica l s ta f f and C lea l B rad fo rd and Lau r ie Sha fer

unan im ou s ly dec ided to pub lish the a lte red card s to the Am e rican H ea rt A ssoc ia tion by

vo te o f the m ed ica l s ta f f , w ho w as cons ide r ing p r iv i leges fo r M rs. Lym an , w ithou t M rs.

Lym an be ing p re sen t.” (Id . a t 32 ¶ 164 -165 , 34 ¶ 174 ); (3 ) “The m ed ica l s ta f f , C lea l

B rad fo rd , L au rie Sha fer , C a rla G rim shaw fa iled to no tify D r . M acA rthu r o f any m iss ing

documen ts in h is app lica tion packe t.” (Id . a t 35 ¶ 182 ); (4 ) “A f te r D r . M acA rthu r m issed

th is Feb rua ry 2000 m ee ting , C lea l B rad fo rd , L au rie Sha fer , D r . R edd me t w ith San Juan

R eco rd ed i to r B i ll Boyle and d iscu ssed D r . M acA r thu r’s pr iv i leg es w i th M r . B oyle . D r .

M acA rthu r’s p riv ilege s w a s p riva te in fo rm a tion .” (Id . a t 36 ¶ 195 ); (5 ) “M rs . Lym an w a s

to ld tha t he r f riend sh ip w ith L au rie Sha fer w ou ld be ove r a s she knew it if M rs . Lym an

a ssoc ia ted he rse lf w ith D r. Penn .” (Id . a t 47 ¶ 137 ); and (5 ) on one recen t occas ion w hen

-25-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 29 of 192(cid:10)

M s . Lym an w as trea ting a pa t ien t a t the B land ing B ir th ing C en te r unde r D r . Jones ’

supe rv is ion , M s . Sha fe r a lleged ly to ld “M rs . Lym an and ano the r nu rse o f D r . Jone s tha t

they w ou ld have to leave . M rs . Lym an and the nu rse f in ished caring fo r the pa tien t.” (Id .

a t 63 ¶ 254 ). Fu rthe r, they a lleg e tha t on D ecem be r 16 ,1998 , M s. Lym an w as to ld sh e d id

no t hav e S JHSD p r iv i leges and tha t S JHSD s ta f f w e re no t to take o rde rs f rom he r . “M s .

Lym an a sked M s . Y an ito w ho gave her th is o rde r and she sta ted tha t L au rie Scha fe r and

D r . R edd ,” (id . a t 48 -49 ¶ 170 ), and tha t “Lau r ie Scha fe r ca lled la te r in the day and sta ted

tha t M s . Lym an cou ld u se the lab and x ray on ly du r ing D r . P enn ’s o f fice hours , o the rw ise

M s . Lym an d id no t have p riv ilege s.” (Id . a t 49 ¶ 186 (em phas is in o rig ina l) . See

P ropo sed Am ended Com p la in t a t 39 ¶ 88 ; 46 -49 ¶¶ 132 -133 , 138 , 142 , 150 ; 51 ¶ 163 ; 59

¶ 137 ; 69 -71 ¶¶ 170 , 186 ; 91 -92 ¶ 254 (sam e) .)

M ar ilee B a iley , R .N .

A t re levan t tim e s , de fendan t M a rilee Ba iley, R .N ., w o rked a s a nu rse on the

S JH SD suppo r t s taff . P la in t iff s a l leg e tha t M s . B a i ley is the w ife o f d efendan t R icha rd

B a iley, and tha t like L au rie Scha fe r, “D r. M acA rthu r had an inc iden t repo rt a lleg ed ly

f iled aga in s t h im by M a rilee Ba iley, Ju lie B ron son , L au rie Sha fer , C lea l B rad fo rd tha t

w a s neve r d iscu ssed w ith h im o r p laced in h is D is tric t f ile , and is a repo rt tha t he

con side rs to be un true .” (P ropo sed P re trial O rde r a t 25 ¶ 96 ; see P ropo sed Am ended

C om p la in t a t 39 ¶ 88 (sam e) .)

O ra L ee B lack

-26-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 30 of 192(cid:10)

P la in tif f s a llege tha t “O ra Lee B lack , a s m anager o f B land ing c lin ic and b irth ing

cen te r, po s ted a pape r on the w a lls w ith in s ite o f the pa tien ts s ta ting tha t M rs . Lym an had

no p riv ilege s a t S JHSD . L a te r the lim ited p riv ilege s o f lab and ex ray [ s ic ] w e re ex tended

to he r fo r he r pa tien ts a s requ ired by S tate law ,” and tha t S JH SD “S taf f had p rev iou sly

vo ted fo r he r p riv ileg es and then the C oun ty, Boa rd , and m ed ica l sta f f d id no th ing w h ile

D is tric t s ta f f O ra L ee B lack , D r . R edd , G lo ria Y an ito den ied he r the sam e . Som e

p riv ilege s a s to lab s and ex rays [ s ic ] w e re even tua lly re sto red .” (P ropo sed P re tria l O rde r

a t 49 ¶ 187 , 54 ¶ 209 ; see P ropo sed Am ended C om p la in t a t 71 ¶ 187 (sam e) .) Fu r ther ,

Sep tembe r 16 , 1999 -E tta ( M s . Lym an ’s sec re ta ry) w a s to ld by O ra Lee
B lack tha t M s . Lym an w ou ld no t be a llow ed to o rde r lab s un til M s . Lym an
sen t a le tte r to D r . R edd s ta ting w ho he r supe rv is ing phys ic ian w as . ( M s .
Lym an had a lready sen t a le tter to adm in istra tion sta ting tha t the S tate
DO PL had app rov ed D r . Penn in M oab as h er superv is ing phys ic ian and D r .
R obe rt D r . M ena in M on tice llo a s he r back up supe rv is ing phys ic ian a s he
w a s c lo se r tha t D r . Penn and cou ld back up any eme rgenc ie s fo r adm i ts fo r
M s . Lym an a t the San Juan H o sp ita l) . B y then , D r . D r . M ena had qu it the
San Ju an H ea lth C a re Se rv ice s a s an em p loyee and had sta rted a p riva te
p rac t ice . (cm p l t. #149 ) .

(Id . a t 55 ¶ 213 ; see P ropo sed Am ended C om p la in t a t 79 -80 ¶ 213 (sam e) .)

C ar la G r im shaw

C ar la G r im shaw is a S JH SD em p loyee . P la in t iff s a l leg e tha t “[ l]ess than 24 hou rs

p r io r to the F eb rua ry 2 , 2000 m ed ica l s taf f m ee t ing , C ar la G r im shaw ca l led M rs . Lym an ’s

o f f ice to inv ite M rs . Lym an and D r . M acA rthu r to tha t m ee ting” ;

3 2

tha t “C a rla G rim shaw

3 2
On “February 1, 2000 Carla Grimshaw calls Ms. Lyman’s office to say that Ms. Lyman and Dr.
MacArthur need to be at Medical staff Meeting in the a.m . at 0800. Ms. Grimshaw states nothing about their
(con tinued …)

-27-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 31 of 192(cid:10)

de live red cop ies o f M rs. L ym an ’s f ile to he r,” and tha t “M rs. L ym an and C a rla

G rim shaw , cu stod ian fo r the reco rd s , acknow ledge the CPR ca rd s w e re m iss ing f rom

M rs . Lym an ’s cred en t ia l ing f i les w h i le in the D is tr ic t’s cu s tody” ; tha t “M rs . Lym an ’s

CPR ca rd s w e re rev iew ed and found to be app rop ria te on mo re than one occa sion by

C a rla G rim shaw and Lau r ie Sha fer” ; tha t “C a rla G rim shaw , reco rd s cu stod ian , s ta ted tha t

[D r . M acA rthu r’s] m ed ica l licen se and DEA licen se w a s m issing ,” and “a lleged ly w ro te a

no te to M r . B rad fo rd saying D r. M acA rthu r w as m iss ing on ly h is DEA licen se and S tate

o f U tah M ed ica l L icen se ,” bu t tha t “[ t]he m ed ica l s taf f , C lea l B rad fo rd , L au r ie Shafer ,

C a rla G rim sh aw fa iled to no tify D r. M acA rthu r o f any m iss ing docum en ts in h is

app lica tion packe t.” (P ropo sed P re tria l O rde r a t 26 ¶ 102 , 32 ¶ 156 , 33 ¶ 161 , 34 ¶ 170 ,

35 ¶ 182 , 184 , 36 ¶ 191 ; see a lso P ropo sed Am ended Com p la in t a t 44 -50 ¶¶ 114 -159

(“C reden tia ling D ocumen t P rob lem s” ).) P la in tif f s a lso recoun t tha t on M ay 5 , 1999 ,

A nd rea B ian ch in i (M s . Lym an ’s sec re tary) f ax e[d] M s . Lym an ’s ACL S ,
PA LS and BLS hea rt re su sc ita tion Am e rican H ea rt A ssoc ia tion ce rtif ica tion
ca rd s to Judy a t the ho sp ita l a t the adm in is tra tion ’s reque st. D r . Penn and
M s. L ym an have been requesting he r p riv ileg es b e resto red through R e id
W ood . A nd rea a lso ca lled C a rla G rim shaw to m ake su re tha t the
ce rtif ica tion s have reached he r. G rim shaw s ta te [d ] tha t the faxed card s
have arrived and tha t M ed ica l s ta f f rev iew ed the certif ica tion s , found them
in o rde r, and the packe t ha s been p laced in he r pe rsonne l f ile .

(Id . a t 53 ¶ 207 ; see P ropo sed Am ended C om p la in t a t 77 ¶ 207 .)

G lor ia Y an ito

( …con tinued )
3 2
privileges being an agenda item, or that medical staff would making any decisions about those privileges.”
(Proposed Pretrial Order at 58-59 ¶ 229.)

-28-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 32 of 192(cid:10)

P la in tif f s a llege tha t on

D ecem ber 16 , 1998 – O n th is day, M s. Lym an a ttem p ted to send a pa tien t to
the E .R . in B land ing fo r trea tm en t. A s soon a s the pa tien t go t to B land ing ,
C h ris tine S inge r (w ho began wo rk ing fo r D r . Penn in D ecem be r 1998 ) took
a ca ll from G lo ria Y an ito , RN a t the B land ing U rgen t C a re . M s. Y an ito
s ta ted tha t M s . Lym an d id no t have p riv ilege s and tha t M s . Lym an “can no t
g ive o rde rs o f any k ind o r u se any o f the coun ty fac ilitie s” . M s .S inge r then
to ld M s . Lym an , w ith seve ra l w itne sse s s itting in the o f f ice . M s . Lym an
imm ed ia te ly ca lled M s . Y an ito back and a sked Y an ito to repea t the
M e ssage . Y an ito repea ted , “you do no t have p riv ilege s. W e a re no t
suppo sed to tak e any o rde rs f rom you and you a re no t allow ed to se t foo t in
any o f the coun ty fac ilitie s” . M s . Lym an a sked M s . Y an ito w ho gave her
th is o rde r and she sta ted tha t L au rie Scha fe r and D r . R edd . M s . Lym an
then a ttem p ted to ca l l L au r ie S cha fe r and w as to ld she w as no t in . M s .
Lym an spoke w ith C a rla G rim sh aw and to ld he r sh e w an ted th is o rde r in
w r iting , G r im shaw s ta ted tha t she w ou ld le t L au r ie know . M s . Lym an a lso
a ttemp ted to ca ll R e id W ood , he w a s no t in .(Cm p lt. #130 )

(P ropo sed P re tria l O rde r a t 48 -49 ¶ 184 ; P ropo sed Am ended Com p la in t a t 69 -70 ¶ 170

(same ) .) They fu rthe r a llege tha t M s . Lym an had been g ran ted S JH SD p riv ilege s, bu t

“ then the Coun ty, B oa rd , and med ica l s ta f f d id no th ing w h ile D is tric t s ta f f O ra Lee B lack ,

D r . R edd , G lo ria Y an ito den ied he r the same ,” (id . a t 54 ¶ 209 ), appa ren tly re fe rring to

the D ecem be r 16 , 1998 conve rsa tion w ith respec t to M s . Y an ito .

Ju lie B ron son

P la in tif f s a llege tha t Ju lie B ron son , a nu rse emp loyed by the S JH SD , c ircu la ted a

fa lse rum o r tha t D r. M acA rthu r, in ter a lia , had p rev iou s ly lo s t p rac tice p riv ilege s due to a

fe lony conv ic tion :

Janua ry 31 ,2000 – Lou isa Lym an , o f the U tah S ta te Pub lic H ea lth sys tem
ca lls M s . Lym an ’s o f f ice and s ta te s tha t nu rse Ju lie B ron son ha s sa id tha t
D r . M acA rthu r lo s t h is p riv ilege s to pe rfo rm ep idu ra ls due to a fe lony

-29-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 33 of 192(cid:10)

conv ic tion , tha t du ring a de live ry the nu rse cam e to D r . M acA rthu r in the
D r’s lounge and to ld h im tha t the OB w as ready to pu sh and he pu rpo rted ly
sa id ,”I’m go ing to have an o rgasm ” , and tha t D r. M acA rthu r sp en t tim e in
p rison fo r tax evas ion– A ll o f w h ich is to ta lly un true and w ithou t any
founda tion w ha tsoeve r. Lou isa ca lled he r o f f ice and f irs t spoke to C h ris tine .
M s . Lym an ca lled back and Lou isa Lym an repea ted th is s to ry. M s . Lym an
s ta ted the sto ry w a s un true .

(P ropo sed Am ended C om p lain t at 84 -85 ¶ 228 ; see P ropo sed P re tria l O rde r a t 58 ¶ 228

(sam e) .) They a lso a l leg e , as no ted above , tha t “D r . M acA r thu r had an inc iden t repo r t

a lleged ly f iled aga in s t h im by M a rilee Ba iley, Ju lie B ron son , L au rie Sha fer , C lea l

B rad fo rd tha t w as n eve r d iscu ssed w ith h im o r p laced in h is D istric t f ile, and is a repo rt

tha t he con side rs to be un true .” (Id . a t 39 ¶ 88 ; see P ropo sed P re tria l O rde r a t 25 ¶ 96

(sam e) .)

L or i W a llace , R .N . a /k /a L aur ie W a lker

A s summ a rized above , P la in tif f s a llege tha t on A p ril 14 , 1999 , p la in tif f H e len

V a ldez (accom pan ied by he r s is te r-in -law , Cha rleen Gonza le s) came to the San Juan

H o sp ital em e rgency room , seek ing m ed ica l ca re fo r an illness late r d iagno sed as acu te

d ive rticu litis . A t tha t tim e , S JHSD emp loyee Lo r i W a llace , R .N ., w a s w o rk ing in the

em e rgency room . W h i le M s . V a ldez w as in the hosp ita l lava to ry, she a lleges tha t M s .

G onza les overhea rd L o r i W a l lace te l l the em ergen cy room c lerk “ to go to D r . Penn ’s

c lin ic.” (P ropo sed Am ended C om p lain t at 23 ; P ropo sed P re trial O rde r a t 13 ; id . a t 23 ¶

81 (“M rs. V a ldez w as to ld by M rs. G on za les tha t N u rse W a llace had to ld the recep t ion is t

tha t D r . Penn ’s c lin ic w a s open and M rs . V a ldez shou ld go to the c lin ic .” ).) W ithou t any

-30-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 34 of 192(cid:10)

d irec t conve rsa tion w ith L o ri W a llace , M s . V a ldez dec ided to leave the em ergency room ,

aga in accom pan ied by M s . G onza le s , and re tu rn hom e . P la in tif f s a llege tha t M s . V a ldez

“w as tu rned aw ay, w hen accom pan ied by he r M ex ican -Am e rican appea ring s is te r-in -law ,

by nu rse L au rie W a llace” ; at the sam e tim e , p lain tiff s a lleg e tha t “[ t]he w h ite young m a le

w ith no in su rance in the ER w a iting a rea w a s seen by D r . Penn a lm o s t imm ed ia te ly a f te r

M rs. V a ldez lef t.” (P ropo sed Am ended C om p lain t at 86 ¶ 232 -233 ; see P ropo sed P re tria l

O rde r a t 22 ¶ 66 (“M rs . V a ldez ’ ne ighbo r w ho w a s a w h ite young m a le and had no t

in su rance w a s seen imm ed ia te ly.” ).) P la in tif f s p leaded no o the r fac tua l a llega tion s

aga in s t M s . W a llace .

D r . L loyd V a l Jones , M .D .

D r . L loyd V a l Jone s , M .D ., is a licen sed phys ic ian p rac tic ing in B land ing , U tah ,

w ho a t re levan t tim e s ha s p rov ided se rv ice s unde r con trac t w ith the S JH SD . P la in tif f s

a l leg e tha t “Fo r M rs . Lym an ’s c la im s , a t times the [S JH SD ] m ed ica l s taf f con s is ted o f D r .

Penn , D r . M ena , D r . Jone s , D r . N e lson , D r . C ook , D r . R edd .” (P ropo sed Am ended

C om p lain t at 30 -31 ¶ 28 ; see P ropo sed P re trial O rde r a t 18 ¶ 28 (sam e ).

3 3

) A cco rd ing to

p la in t if fs ,

32 . D r . R edd and D r . Jone s and D r . C ook and D r . N e lson d id no t
app rove M rs . Lym an hav ing p riv ilege s un le ss he r doc to r w a s a med ica l
s ta f f m embe r and then on ly if the phys ic ian w as in the sam e tow n as she .

3 3
According to plaintiffs, With the exceptions of Dr. Jones and a Monument Valley clinic doctor, all
other physicians and P.A.’s within San Juan District are employees of San Juan District.” (Proposed Pretrial
Order at 20 ¶ 43.)

-31-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 35 of 192(cid:10)

33 . W h ile the po licy fo r P .A .s appea rs n eu tra l, it ef fec ted on ly
M iche le Lym an in how it w as app lied , m on ito red , and ca rr ied ou t.

34 . M rs . Lym an had no o the r p lace to app ly fo r ho sp ita l
p r iv i leges .

35 . M rs . Lym an ’s pa tien ts a t tim e s s topped go ing to he r a s they
needed to u se the D istric t em e rgency fac ilities fo r a ilm en ts and w e re to ld
they cou ld no t.

(Id . a t 31 ¶¶ 32 -35 .) P la in tif f Lym an a lleged tha t he r p riv ilege s w e re “ seve re ly lim ited by

D r . R edd and D r. Jones w ith no ac tion by the boa rd o f d irec to rs,” recoun ting a sing le

conve rsa tion in m id -1999 :

209 . D r . Penn and M s . Lym an a ttended the M ed ica l s ta f f M ee ting
fo r June , 1999 . D r . Penn and M s . Lym an reque sted fu ll p riv ilege s be
re sto red and D r . R edd and Jone s bo th s ta ted tha t on ly if D r . Penn w a s
w illing to sit in B land ing w ith M s. Lym an w h ile M s. Lym an took ER ca ll
and they w ou ld no t superv ise m e . M r . B ryan t as a P .A . w o rk ing under D r .
Jones w h i le D r . Jones w as no t in B land ing , had no such res tra in ts. M rs.
Lym an po in ted ou t tha t she cove red the ER (B land ing u rgen t ca re c lin ic) in
B land ing by he rse lf on m any occasion s. The re w as no respon se . (Cm p lt.
137 -145 ) S ta f f had p rev iou s ly vo ted fo r he r p riv ileges and then the C oun ty,
B oard , and m ed ica l s taf f d id no th ing w h i le D is tr ic t s taf f O ra L ee B lack , D r .
R edd , G lo ria Y an ito den ied he r the same . Som e p riv ilege s a s to lab s and
ex rays [ s ic ] w e re even tua lly re sto red .

210 . D r . Penn then sugge sted to m ed ica l s ta f f tha t the on ly rea son
tha t D r . R edd w a s aga in s t M s . Lym an ’s p riv ilege s w a s becau se D r . R edd
w as m ad a t M s . Lym an fo r qu itting D r. R edd and D r. R edd cou ldn ’t take it.
To th is D r . R edd re sponded ,”So w ha t” ! D r . Jone s then made the comm en t
tha t M s . Lym an had a ra the r la rge fo llow ing o f pa tien ts and tha t w hen he
w as tak ing ER ca ll he d idn ’t w an t M s. Lym an to be ab le to see he r pa tien ts
a t w ill and thu s “d ip in to h is ER m oney” . They le f t w ith the sta f f’s ed ic t
tha t M s . Lym an cou ld ca ll in to the ER (B land ing U rg en t C a re ) fo r sho ts .
H ow eve r, M s . Lym an tried on seve ra l occas ion s to ca ll in in jec tion s to the
ER (B land ing U rgen t C a re C lin ic ) and w a s den ied every tim e . M s . Lym an
a lw ays h ad to ca ll D r. Penn ’s o f f ice and have h im ca ll the o rde r in . (Cm p lt.

-32-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 36 of 192(cid:10)

146 )

(Id . a t 78 -79 ¶¶ 209 -210 ; see P ropo sed P re tr ia l O rd e r ¶¶ 209 -210 (sam e ). )

C ircum s tances change , and by the tim e o f p re tria l, M s . Lym an w a s w o rk ing fo r

U tah N ava jo H ea lth Sys tem s , once aga in unde r D r . Jone s’ supe rv is ion , (see T r . 11 /15 /02 ,

a t 24 :9 -25 (M s . R ose ) ); she po in ts to two recen t inc iden ts invo lv ing pa t ien ts in D r . Jones ’

and he r ca re :

253 . W ith in the la st 14 o r so days , a pa tien t o f D r . Jone s and
M iche le Lym an ’s w as to ld , when she ca l led the B irth ing C en ter in labo r ,
tha t the B irth ing C en ter w as shu t and sh e w ou ld just have to trave l to
M on tice llo . D r . Jone s’ s ta f f ve rif ied tha t indeed the BCC w a s c la im ing they
w e re SHUT . The pa tien t p re sen ted a t B land ing Fam ily C lin ic , now ow ned
by U tah N ava jo H ea lth System s, and w as found to be too fa r p rog ressed to
trave l anyw he re . T im e w a s o f the e ssence . M rs . Lym an ’s supe rv is ing
phys ic ian w as den ied pa tien t ca re by the D is tr ic t he has fu ll p riv ileges w ith .
The lady de live red in the B land ing Fam ily C lin ic and w a s then tran spo rted
to M on tice llo fo r ob se rva tion . The B land ing Fam ily C lin ic is taxpaye r
suppo rted . The re is no reco rd o f th is type o f pa tien t o f a D r. R edd be ing to ld
the B ir th ing C en te r w as shu t.

254 .
In ano the r in stance , a w om an in labo r w as b leed ing to dea th
and she and the baby w e re in a ve ry dange rou s s itua tion . D r . Jone s and
M rs . Lym an tran spo rted the w om an to the B irth ing C en te r and d id an
imm ed iate c sec tion on the unconc iou s o r nea rly unconc iou s m o the r. Bo th
m om and baby w e re saved . A s D r . Jone s w a s c lean ing up , D r . F ishe r and
L au rie Sha fer w e re te lling M rs . Lym an and ano the r nu rse o f D r . Jone s tha t
they w ou ld have to leave . M rs . Lym an and the nu rse f in ished caring fo r the
pa tien t. Th is inc iden t occu rred p rio r to the C lin ic be ing ‘shu t’ w hen
M iche le ’s nex t pa tien t w a s in labo r and de live red in a c lin ic .

(P ropo sed Am ended C om p lain t at 91 -92 ¶¶ 253 -254 ; see P ropo sed P re tria l O rde r a t 62 -63

¶¶ 253 -254 (sam e) .)

D r . M an fred N e lson , M .D .

-33-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 37 of 192(cid:10)

D r . M an f red N e lson , M .D ., is a licen sed physic ian p rac ticing in San Ju an C oun ty

and a t re levan t tim e s w a s a mem be r o f the S JH SD m ed ica l s ta f f . P la in tif f s’ a llega tion s

aga in s t D r . N e lson— few a s they a re— e ssen tia lly pa ra lle l tho se p leaded aga in s t D r . Jone s

concern ing re stric tion o f M s . Lym an ’s p riv ilege s in m id -1999 , w ith the add ition o f the

a sse rtion tha t “D r . N e lson sen t a le tte r seve re ly c ritic iz ing M rs . Lym an and he is on

M ed ica l S taff and has n ev er m e t he r , spoken to her , or w o rked w i th her . H is w r it ing s are

the be st ev idence o f the type s o f rum o rs he w a s be ing to ld , and the damage s the med ica l

s ta f f w e re seek ing to in f lic t upon M rs . Lym an .” (P ropo sed P re tr ia l O rd e r a t 61 ¶ 248 .)

D r . Jam es R edd , M .D .

A s no ted above , D r . Jame s Redd , M .D ., a B land ing , U tah phys ic ian , m a in ta ined a

p riva te med ica l p rac tice in B land ing un til he became a S JHSD emp loyee in ea rly 1999 ; a t

re levan t tim e s the rea f te r, D r . R edd se rved a s D is tric t m ed ica l s ta f f d irec to r . E a rly in he r

ca ree r, p la in t if f L ym an w o rked a s a Phys ic ian A ss is tan t unde r D r . R edd ’s and D r . Jones ’

supe rv is ion . She ended tha t a rrangemen t in O c tobe r 1998 , and sough t supe rv is ion by

o the r phys ic ian s p rac tic ing in the a rea .

F rom a rev iew o f p la in tif f Lym an ’s a llega tion s a t the tim e o f p re tria l, it become s

p la in ly appa ren t tha t D r . R edd is the p rim a ry focu s o f tho se a llega tion s . P la in tif f s p lead a

litany o f fac tua l a llega tion s aga in s t D r . R edd , recoun ting a se rie s o f inc iden ts invo lv ing

the m ak ing o f de roga to ry rem a rk s o r in f liction o f o the r ve rba l abu se , inte rfe rence w ith

M s. L ym an ’s exe rc ise o f S JH SD sta f f p riv ileg es f rom and a f ter the tim e sh e lef t h is

-34-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 38 of 192(cid:10)

supe rv is ion in O c tobe r 1998 , and ha rassm en t and in tim ida tion o f pa tien ts w ho had som e

re la tion sh ip w ith M s . Lym an and /o r he r supe rv is ing phys ic ian s (D rs . Penn , M ena ,

M acA rthu r and now , Jones). (See P ropo sed P re tria l O rde r a t 41 -45 ¶¶ 133 (D )-(F ) , 138 ,

144 -150 , 153 , 156 -159 ; id . a t 45 -48 ¶¶ 162 -163 , 165 -166 ; id . a t 48 -50 ¶¶ 167 -186 , 193 ;

id . a t 62 -63 ¶¶ 253 -254 (quo ted supra ); see a lso P ropo sed Am ended Com p la in t a t 58 -76

¶¶ 133 (D )-(F ), 138 , 143 -150 , 153 , 156 -195 , 199 -205 ; id . a t 77 -78 ¶¶ 208 (eme rgency

room pa tien t “w a s to ld by D r . R edd tha t she mu s t choo se be tw een M s . Lym an /D r . Penn

and D r . R edd a s a hea lth ca re p rov ide r,” and tha t “ if the pa tien t cho se M s . Lym an , the

pa tien t cou ld neve r u se the E .R . aga in .” ).) P la in tif f s a sse rt tha t “ [ t]he D is tric t m ed ica l

s ta f f d irec to r , D r . R edd ha s a long s tand ing po licy o f an im u s tow a rd w om en bo th a s

emp loyee s and a s pa tien ts ,” (id . a t 20 ¶ 51 ), bo rne ou t in the inc iden ts recoun ted in the ir

p lead ing s , and tha t D r . R edd demeaned and d ispa raged the o the r phys ic ian s w ith w hom

M s . Lym an had assoc ia ted . (Id . a t 56 ¶¶ 215 -216 .) They a lso a llege a pa tte rn o f pe rsona l

ha ra ssm en t and annoyance d irec ted aga in s t M s . Lym an by D r . R edd :

196 . D r . R edd w as w i tnessed by o thers a s d r iv ing by M rs . Lym an ’s
hom e , f requen tly honk ing .

197 . M rs . Lym an repo r ts tha t D r . R edd fo l low ed M rs . Lym an ’s
abou t 10 yea r o ld daugh te r in h is ca r fo r a pe riod o f tim e , f righ ten ing the
daugh te r.

198 . M rs . Lym an and her nu rse Ch ris tine S inge r, expe rienced
num erou s f la t tires ove r a tw o w eek o r so pe riod , w ith no fo re ign item s
found in the tires . These f la t tires occu rred a t the o f f ice and a t the ir hom es .

(Id . a t 51 ¶¶ 196 -198 ; see P ropo sed Am ended C om p la in t a t 73 -74 ¶¶ 196 -198 (sam e) .)

-35-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 39 of 192(cid:10)

THE PART I PLA INT IFFS ’ THEOR IES OF L IAB IL ITY

A s summ a rized in the P ropo sed P re tria l O rde r, Pa rt I o f the P ropo sed Am ended

C om p la in t asse rts an a rray o f cau ses o f ac tion a ris ing unde r fede ra l and U tah s ta te law ,

inc lud ing :

(1 ) R acke tee r In f luenced C o rrup t O rgan iza tion s A c t, 18 U .S .C . §§ 1961 e t seq .

(2000 );

(2) F reedom o f A ccess to C l in ic En tran ce s A c t of 1994 , 18 U .S .C . § 248 (2000 ) ;

(3) H ea l th C are Q ua l ity Imp rov em en t A c t , 42 U .S .C . § 11112 (2000 ) ;

(4 ) Em e rg ency M ed ica l T rea tm en t and A c tive L abo r A c t (EM TALA ), 42 U .S .C . §

1395dd (2000 ) ;

(5) “M ed icare P a t ien t B i ll of R igh ts ,” 42 U .S .C . § 1395a (2000 ) ;

(6 ) 42 U .S .C . § 1981 (2000 );

(7) 42 U .S .C . § 1985 (3) (2000 ) ;

(8 ) 42 U .S .C . § 1983 (2000 );

(9 ) § 4 o f the C layton A c t, 15 U .S .C . § 15 (2000 ) and § 1 o f the She rm an A n ti-

T rus t A c t , 15 U .S .C . § 1 (2000 ) ;3 4

(10 ) U tah Con s titu tion , a rt. I , §§ 1 , 7 , 25 , 26 , 27 ;

(11 ) U tah U n fa ir P rac tice s A c t, U tah Code A nn . §§ 13 -5 -1 e t seq . (2001 ) ;

3 4
More recently, plaintiffs’ counsel has invoked the Utah Antitrust Act, Utah Code Ann. §§ 76-10-911
through 76-10-926 (2003), in addition to the federal antitrust statutes. (Memorandum in Support of Plaintiff
MacArthur’s Motion for the Court to Reconsider its Motion to D ismiss Plaintiff’s Claims and Plaintiffs’ Cross-
Motion for Summary Judgment, filed November 23, 2004 (dkt. no. 670), at 4.)

-36-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 40 of 192(cid:10)

(12 ) U tah C iv il R igh ts A c t, U tah Code A nn . §§ 13 -7 -1 e t seq . (2001 ) ;

(13 ) in te rfe rence w ith con t rac t and w ith p rospec tive bus iness re la tion s ;

(14 ) “ sta te comm on law de fam a tion (a lso a U . S . C on s titu tiona l righ t to repu ta tion

a s gua ran teed by the N in th Am endmen t)” ;

3 5

(15 ) “F ed era l comm on law and U tah con trac t comm on law and s ta tu tory

p rov is ion s tha t p roh ib it con trac ts o f adhes ion , bad fa ith , and lack o f fa ir dea ling .

U tah C ode A nn . 78 -12 -25 (1 ) (1996 ),” in c lud ing the imp lied covenan t o f good fa ith

and fa ir dea ling ;3 6

(16 ) “p rivacy righ ts and sta tu to ry en titlemen ts to have the ir c reden tia l f ile s and

pa tien t f iles accu ra tely kep t by the d istric t unde r M ed ica id and U tah H ea lth

D epa rtm en t sta tu tes and regu lation s” ;

(17 ) neg ligen t and in ten tiona l in f lic tion o f emo tiona l d is tre ss ; and

(18 ) f raud .

(See P ropo sed P re tr ia l O rd e r a t 3 -6 .)

G ene ra lly, a p lead ing m u st con tain “a sho rt and p lain sta tem en t o f the c laim

show ing tha t the p leade r is en titled to re lie f .” Fed .R .C iv .P . 8 (a )(2 ). “A cco rd ing ly, a

p lead ing m u s t ‘g ive [ ] fa ir no tice and s ta te [ ] the e lemen ts o f the c la im p la in ly and

3 5
Plaintiffs’ counsel now refers to “civil and crim inal defamation with malice,” apparently invoking
Utah Code Ann. § 76-9-404 (2003) in addition to the common law theories. (Id.)

3 6
Plaintiffs’ counsel would now extend this theory to reach interference with a plaintiff’s “right to
pursue his profession and business affairs by lack of good faith and fair dealing inheren t and mandated in all
Utah business relations.” (Id.)

-37-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 41 of 192(cid:10)

succ inc tly.’” Jone s v . C omm un ity Redeve lopm en t Agency , 733 F .2d 646 , 649 (9 th C ir.

1984 ) (quo ting 2A J . M oo re & J . Lucas , M oo re ‘s F ede ra l P rac tice ¶ 8 .13 a t 8 -111 (2d

ed .1983 )) . To g ive such no tice , a p lead ing m u s t se t fo rth spec if ic fac ts a s the ba sis fo r the

p lain tiff s’ c laim s, no t m e re ly leg a l conc lusion s. W ithou t spec if ic f ac ts, “c laim s a re little

m o re than conc lu so ry a llega tion s , w h ich a re in su f f ic ien t to s ta te a c la im fo r re lie f .”

Sw oboda v . D ubach , 992 F .2d 286 , 289 -290 (10 th C ir . 1993 ) (c iting H a ll v . B e llm on , 935

F .2d 1106 , 1110 (10 th C ir . 1991 )) .

Th e p arties m ay tes t th e leg a l su ff ic ien cy o f c la im s by mo tion und er F ed . R . C iv . P .

12 (b )(6 ) o r 56 , and a s exp la ined above , “Ru le 16 empow e rs d is tric t cou rts to w eed ou t

f rivo lou s c la im s .” Sm ith v . G u lf O il C o ., 995 F .2d 638 , 644 (6 th C ir . 1993 ) . “The re is no

rea son to requ ire tha t [ the e lim ina tion o f f rivo lou s c la im s] aw a it a fo rm a l m o tion fo r

summ a ry judgm en t,” Fed . R . C iv . P . 16 (c )(1 ) , adv iso ry comm ittee no te to 1983

am endm en t, and it ce rta in ly “ ‘is no t incon sis ten t w ith the gene ra l pu rpo se o f R u le 16 ’ to

u se th is ru le ‘to de te rm ine w he the r the re a re any issue s rema in ing in the case tha t ju s tify

p roceed ing to a fu ll tria l on the me r its .’” C have z v . Illino is S ta te Po lice , 251 F .3d 612 ,

654 (7 th C ir . 2001 ) (quo ting 6A C ha rles A . W righ t, e t a l., F edera l P rac tice & P rocedu re

§ 1529 , a t 301 (2d ed .1990 )) .

In eva lua t ing w he the r the p la in t iff s’ c la im s are m a in ta inab le or a re f r ivo lou s , cou r t

and coun se l m u s t exam ine them w ith in the f ramew o rk o f the ir va riou s lega l theo rie s; the

fac ts a lleged as the ba sis fo r the se c la im s m u s t be con side red in te rm s o f the e ssen tia l

-38-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 42 of 192(cid:10)

e lem en ts o f each cau se o f ac tion .

(1 ) P la in t iffs’ C iv il R ICO C la im s (18 U .S .C . §§ 1961 e t seq .)

In o rde r to s ta te a c iv il R ICO c la im , a p la in tif f mu s t a llege tha t he o r she su f fered

(1 ) an in ju ry to h is o r he r bu siness o r p rope rty becau se the de fendan t(s) , (2 ) w h ile

invo lved in one o r m o re enume ra ted re la tion sh ip s w ith an “en te rp rise ,” (3 ) engaged in a

pa tte rn o f racke tee ring ac tiv ity o r co llec ted an un law fu l deb t. See 18 U .S .C . §§

1961 -1968 (2000 ).

P red icate A cts o f “R ack eteer ing A ct iv ity” (18 U .S .C . § 1961 (1))

Am ong the essen tia l e lem en ts requ ired to es tab lish c iv il liab ility unde r the R ICO

s ta tu te , p la in tif fs m u s t show , in ter a lia , tha t the de fendan ts have conduc ted the a ffa irs o f

an iden tif iab le “en te rp rise” th rough a “pa tte rn o f racke tee ring ac tiv ity,” tha t is , tha t the

de fendan ts have comm itted a con tinuou s se rie s o f re la ted c rim ina l ac ts in v io la tion o f one

o r m o re o f the sta tu te s lis ted in 18 U .S .C . § 1961 (1 ) (“ racke tee ring ac tiv ity” de f ined ). 18

U .S .C . § 1962 . See , e .g ., BancO k lahom a M o r tgage Co rp . v . C ap ita l T itle Co ., 194 F .3d

1089 , 1100 (10 th C ir. 1999 ) (“To es tab l ish a c iv i l R ICO c la im under 18 U .S .C . § 1962 (c) ,

[p la in tif f ] m u s t show tha t the [defendan ts] ‘(1 ) pa rtic ipa ted in the conduc t (2 ) o f an

en terpr ise (3) through a p a t tern (4) o f rack e tee r ing ac t iv i ty.’ R e so lu tion T ru st C o rp . v .

S tone , 998 F .2d 1534 , 1541 (10 th C ir . 1993 ) (c iting Phe lp s v . W ich ita Eag le -B eacon , 886

F .2d 1262 , 1273 (10 th C ir . 1989 )) .” ) D e fendan ts “need no t engage in the ste reo typ ica l

m ob s te r behav io r to come w ith in the bound s o f c iv il R ICO ,” Sm ith v . O u r Lady o f the

-39-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 43 of 192(cid:10)

Lake H o sp ., Inc ., 960 F .2d 439 , 447 (5 th C ir . 1992 ) (c iting U n ited S ta tes v . Tu rke tte , 452

U .S . 576 , 580 -81 , 591 (1981 )) , bu t they m u s t neve rthe le ss be show n to have partic ipa ted

in con tinu ing c rim ina l v io la tion s con stitu ting an iden tif iab le “pa tte rn o f racke tee ring

ac tiv ity.” See H .J . Inc . v . N o r thw e ste rn B e ll Te l. C o ., 492 U .S . 229 , 239 (1989 ) .

3 7

The P ropo sed Am ended C om p la in t po in ts to m a i l fraud (18 U .S .C . § 1341 ) ,

w itne ss tampe r ing (18 U .S .C . § 1512 ) and in te rfe rence w ith comm e rce by th rea ts (18

U .S .C . § 1951 ) as the p red ica te ac ts o f racke tee ring ac tiv ity pe rtinen t to p la in tif fs’ c la im s

asse rted in th is case .

3 8

(P ropo sed Am ended C om p la in t a t 12 .)

(a ) 18 U .S .C . § 1341 – M a il F raud

18 U .S .C . § 1341 (2000 ) reads :

W hoeve r, hav ing dev ised o r in tend ing to dev ise any schem e o r a rtifice to
de f raud , o r fo r ob ta in ing m oney o r p rope rty by m ean s o f fa lse o r f raudu len t
p re ten se s , rep re sen ta tion s , o r p rom ise s, o r to se ll, d ispo se o f , loan ,
exchange , a lte r, g ive aw ay, d is tribu te , supp ly, o r fu rn ish o r p rocu re fo r
un law fu l u se any coun te rfe it o r spu riou s co in , ob liga tion , secu rity, o r o the r
a rtic le , o r anyth ing rep re sen ted to be o r in tim a ted o r he ld ou t to be such
coun te rfe it o r spu riou s a rtic le , fo r the pu rpo se o f execu ting such scheme o r
a rtif ice o r a ttemp t ing so to do , p laces in any po s t o f f ice o r au tho rized
depo sito ry fo r m a il m a tte r, any m a tte r o r th ing w ha teve r to be sen t o r

3 7
The statute of limitations applicable to civil RICO actions is the four-year lim itations period
governing civil enforcement actions under the Clayton Act, 15 U.S.C. § 15b. See, e.g., Agency Holding Corp. v.
Malley-Duff & Assocs., Inc., 483 U.S . 143, 156 (1987); Phelps v. Wichita Eagle-Beacon, 886 F.2d 1262, 1273 n.
12 (10th Cir. 1989).

3 8
“The various acts of racketeering activity described in the statute are often referred to as ‘predicate
acts’ because they form the basis for liability under RICO.” BancOklahoma Mortgage Corp., 194 F.3d at 1102
(citing Bacchus Industr., Inc. v. Arvin Industr., Inc., 939 F.2d 887, 891 (10th Cir. 1991)).
Plaintiffs’ counsel also refers to “(d) illegal destruction or tampering with confidential documents in a
federally contracted facility;” and “(e) intimidation of witnesses for monetary gain,” (Proposed Pretrial Order at
3 ¶ (5)), but these are not found among the offenses enumerated in the statute’s definition of “racketeering
activity” and thus cannot serve as RICO predicate acts. 18 U.S.C. § 1961(1) (“racketeering activity” defined).

-40-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 44 of 192(cid:10)

de live red by the Po s ta l Se rv ice , o r depo sits o r cau se s to be depo sited any
m a tte r o r th ing w ha teve r to be sen t o r de live red by any p riva te o r
comm e rc ia l in te rs ta te carrie r, o r take s o r rece ive s the re f rom , any such
m a tte r o r th ing , o r know ing ly cau se s to be de live red by m a il o r such carrie r
acco rd ing to the d irec tion the reon , o r a t the p lace a t w h ich it is d irec ted to
be de live red by the pe rson to w hom it is add re ssed , any such ma tte r o r
th ing , sha ll be f ined unde r th is title o r im p risoned no t m o re than 20 yea rs , o r
bo th . If the v io la tion a f fec ts a f inanc ia l in s titu tion , such pe rson sha ll be
f ined no t m o re than $1 ,000 ,000 o r im p risoned no t m o re than 30 yea rs , o r
bo th .

In o rde r to p rove the o f fen se de f ined in § 1341 in a c rim ina l p roceed ing , the gove rnm en t

m u s t p rove the fo llow ing e ssen tia l e lemen ts : (1 ) tha t the de fendan t know ing ly dev ised o r

know ing ly pa rtic ipa ted in a scheme o r a rtif ice fo r ob ta in ing m oney o r p rope rty by m ean s

o f fa lse o r f raudu len t p re tenses , rep resen ta tion s , o r p rom ises ; (2 ) tha t the p re tenses ,

rep re sen ta tion s o r p rom ise s w e re ma te ria l, tha t is , they w ou ld rea sonab ly in f luence a

pe rson to pa rt w ith m oney o r p rope rty; (3 ) tha t the de fendan t d id so w ith the in ten t to

de f raud ; and (4 ) tha t in advanc ing , o r fu rthe ring , o r ca rrying ou t th is schem e to ob tain

m on ey o r p rope r ty by m eans o f fa lse o r f raudu len t p re tenses , rep resen ta tion s , o r p rom ises ,

the de fendan t u sed the ma il, o r any p riva te o r comm e rc ia l in te rs ta te carrie r, o r cau sed the

sam e to be u sed by som eone e lse .

To e stab lish m a il f raud a s a p red ica te ac t o f racke tee ring ac tiv ity fo r the pu rpo se s

o f a c iv i l R ICO c la im , p la in t if fs m us t p lead and p rove f ac ts es tab l ish ing each o f these

e ssen tia l e lemen ts a s to each occu rrence , a s to each p red ica te ac t a lleged as pa rt o f the

requ isite “pa ttern o f racke tee ring ac tiv ity.” R u le 9 (b ) o f the Federa l Ru les o f C iv il

P ro cedu re requ ire tha t a llega tion s o f m a il f raud be p leaded w ith pa rt icu la ri ty. See , e .g .,

-41-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 45 of 192(cid:10)

Fa r low v . P ea t, M a rw ick , M itche ll & Co ., 956 F .2d 982 , 989 -90 (10 th C ir . 1992 )

(p red ica te ac ts o f m a il fraud requ ire he igh ten ed p lead ing pu rsu an t to R u le 9 (b )); C aym an

E xp lo ra tion C o rp . v . U n ited G a s P ipe L ine Co ., 873 F .2d 1357 , 1362 (10 th C ir . 1989 )

(R u le 9 (b ) requ ires pa rt icu la ri ty in p lead ing the R ICO p red ica te ac ts o f m a il f raud ).

P la in tif f Lym an a llege s tha t he r CPR ce rtif ica tion ca rd s , “a nece ssa ry componen t

o f he r ab ility to ob ta in p riv ilege s w e re a lte red pu rpo se fu lly,” tha t “ she w a s no t no tif ied

imm ed ia te ly tha t he r ca rd s w e re in som e w ay in e rro r ,” tha t “ the card s w e re sto len f rom

he r f ile a t lea st on tw o if no t th ree occasion s,” tha t “ the forg ed docum en ts w ere m a iled to

the Am e rican H ea rt A ssoc ia tion ,” and tha t “ the doc to rs w ou ld h ave p ro f ited f rom M rs.

Lym an no t be ing ab le to w o rk . . . .” (P ropo sed P re trial O rde r a t 63 ¶ 255 (em phasis

added ); see id . a t 14 (“ fo rged documen ts w e re sen t in the US m a il to ha rm he r repu ta tion

w ith the Am e rican H ea rt A ssoc ia tion w ho ove rsee s the cp r c la ss if ica tion ce rtif ica tion

p rog ram s M rs. L ym an is ob liga ted to pass” ); id . a t 29 ¶¶ 129 -131 (“The U . S . m a il w a s

u sed to m a il the card s w h ile the loca l doc to rs and med ica l p rov ide rs cou ld p ro f it f rom

l im i ting M rs . Lym an ’s com pe t it ion and repu ta tion w i th the Am er ican H ea r t

A ssoc iation” ); id . a t 34 ¶¶ 174 -175 .)

P la in tif f Lym an thu s comp la in s tha t he r CPR ca rd s w e re a lte red and /o r fo rged , and

a l leg es “ the u se o f the m a i l sys tem to send fraudu len t ca rds” to the Am er ican H ea r t

A ssoc ia tion . (Id . a t 66 .) Y e t m a il f raud is no t comm itted s im p ly by send ing fa lse

s ta temen ts th rough the ma il; the ma ils m u s t have been u sed to fu rthe r a scheme to de f raud

-42-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 46 of 192(cid:10)

o r ob ta in m oney o r p rope rty th rough fa lse p re ten ses . See BancO k lahom a M o r tgage

C o rp ., 194 F .3d a t 1102 . H e re , M s . Lym an ’s CPR ca rd s , even if a lte red o r fo rged , and

the reby becom ing fa lse o r “ f raudu len t” rep re sen ta tion s in one sen se , a re no t them se lve s

a lleg ed to be the m ean s o f ob tain ing m oney o r p rope rty, and a re no t such as to

“ rea sonab ly in f luence a pe rson to pa rt w ith m oney o r p rope rty” a s requ ired to p rove a

v io lation o f § 1341 . P lain tiff s a lleg e tha t “th e loca l doc to rs and m ed ica l p rov ide rs cou ld

p rof i t from l im i ting M rs . Lym an ’s com pe t it ion and repu ta tion w i th the Am er ican H ea r t

A ssoc ia tion ,” (P ropo sed P re tria l O rde r a t 29 ¶ 131 ), bu t do no t c la im tha t any o f the

de fendan ts ob ta ined o r schemed to ob ta in m oney o r p rope rty by m ean s o f the a lte red o r

fo rged CPR ca rds .

H e re , the Pa rt I P la in tif f s have fa iled to p lead fac ts e stab lish ing the e ssen tia l

e lem en ts o f m a il f raud (a schem e o r a rt if ice to de f raud , v iz ., to ob tain m oney o r p rope rty

by m ean s o f fa lse o r f raudu len t p re ten se s , rep re sen ta tion s , o r p rom ise s , and the u se o f the

m a ils in fu rthe rance o f the schem e ) a s aga in s t any o f the nam ed de fendan ts .

(b ) 18 U .S .C . § 1512 – W itn ess Tam p er ing

Sec tion 1512 o f T i tle 18 , U n ited S ta te s C ode p roh ib its spec if ic conduc t, inc lud ing

phys ica l fo rce , th rea ts o f phys ica l fo rce , o r in tim ida tion , th rea ten ing , “co rrup t” o r

“m is lead ing” pe rsua sion o r ha ra ssm en t, tha t is in tended to “ in f luence , de lay o r p reven t” a

w itness f rom a ttend ing o r tes tifying in an o f f ic ia l p roceed ing , o r in tended to cau se

te stim ony, reco rd s , documen ts , o r o the r ob jec ts to be w ithhe ld , concea led , a lte red o r

-43-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 47 of 192(cid:10)

des troyed in o rde r to im pa ir the ir ava ilab ility fo r u se in an o f f ic ia l p roceed ing . 18 U .S .C .

§ 1512 (a ), (b ) , (c ), (d ) (2000 ) . Sec tion 1512 p roh ib its on ly the coerc ive conduc t

spec if ica lly desc r ibed in i ts subsec tion s ; the leg is la tive h is to ry re f lec ts Cong ress’

re jec tion o f b road ly inc lusive language in favo r o f “ the sp ec if ic conduc t na rrow ly

de sc ribed in the f ina l ve rs ion o f the sta tu te .” U n ited S ta te s v . D aw le t, 787 F .2d 771 , 774 –

775 (1 s t C ir . 1986 ) (c iting U n ited S ta te s v . Le s te r , 749 F .2d 1288 , 1295 -1297 (9 th C ir.

1984 )); c f. M cAnd rew v . Lockheed M a r tin C o rp ., 206 F .3d 1031 , 1039 -1040 (11 th C ir.

2000 ) (a sse rtion tha t de fendan ts a ttemp ted to de te r p la in tif f by fo rce , in tim ida tion , o r

th rea t f rom te stifying be fo re a fede ra l g rand ju ry abou t emp loye r’s ac tiv itie s by

th rea ten ing h im w ith job – re la ted sanc tion s a lleged a v io la tion unde r the fede ra l w itness

tam pe ring s ta tu te ).

The Pa rt I P la in tif f s a sse rt tha t de fendan t “D r . R edd in fo rm ed the head o f the loca l

nu rs ing hom e tha t the nu rs ing hom e pa tien ts w ou ld no longe r see D r . C ook a s a re su lt o f

m ak ing a w itness sta tem en t,” tha t “[w ]itnesses h ave requested tha t they no t be u sed to

g ive te stim ony due to fear o f re ta lia tion and lo ss o f job s ,” and tha t [o ]ne w itne ss ha s

s ta ted she is pe trif ied he r re la tive s w ill no t s tay emp loyed o r he r ch ild ren w ill no t be seen

a t D is tric t fac ilitie s if she te stif ie s .” (P ropo sed P re tria l O rde r a t 61 ¶¶ 244 -246 ; P ropo sed

Am ended C om p lain t at 88 -89 ¶¶ 244 -246 .) N one o f these a lleg a tion s se t fo rth fac ts

ev idenc ing conduc t by any nam ed de fendan t tha t fa lls w ith in the scope o f the s ta tu te .

P ro spec tive fac t w itne sse s m ay indeed fee l fearfu l, anx iou s o r app rehen sive abou t

-44-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 48 of 192(cid:10)

how the ir tes t im ony m ay be re sponded to by tho se aga ins t whom i t m ay be o ffered . In

som e cases , po ten tia l w itnesses m ay fea r fo r the ir ve ry lives , and w ith good reason .

Fede ra l law a f fo rd s such w itnesses som e deg ree o f p ro tec tion . See genera lly 18 U .S .C . §

1513 ( re ta lia tion aga ins t w itness ); 18 U .S .C . §§ 3521 -3528 (2000 ) (fede ra l w itness

p ro tec tion p rog ram ) . B u t fear , anx ie ty and app rehen sion on the pa rt o f a p ro spec tive

w itne ss a s to a fu tu re lo ss o f emp loym en t, den ia l o f se rv ice s, o r o the r adve rse pe rsona l

con sequence s do no t equa te w ith the cu lpab le c rim ina l conduc t on the pa rt o f a defendan t

tha t v io la te s § 1512 . A de fendan t m u s t do som e th ing— u se phys ica l fo rce , th rea ts o f

phys ica l fo rce , o r in tim ida tion , th rea ten ing , co rrup t o r m is lead ing pe rsua sion o r

ha ra ssm en t— tha t is in tended to “ in f luence , de lay o r p reven t” a w itne ss f rom a ttend ing o r

tes tifying in an o f f ic ia l p roceed ing , o r in tended to cau se tes tim ony, reco rds , do cum en ts,

o r o the r ob jec ts to be w ithhe ld , concea led , alte red o r destroyed in o rde r to impa ir the ir

ava i lab i lity fo r use in an o f f ic ia l p roceed ing , in o rde r to run a fou l o f the w itness

tampe r ing s ta tu te . 18 U .S .C . § 1512 (a )-(d ) .

3 9

The P ropo sed Am ended Com p la in t a llege s

3 9
Section 1512 addresses specific affirmative coercive or m isleading conduct intended to inhibit or
influence future witness testimony or the availability of evidence yet to be offered in a pending or future federal
proceeding. See United States v. Rose, 362 F.3d 1059, 1067-1068 (8th Cir . 2004); United States v. Davis, 357
F.3d 726, 728-729 (8th Cir. 2004), vacated on other grounds, 125 S . Ct. 1049 (2005) (mem .); United States v.
Romero, 54 F.3d 56, 62 (2d Cir. 1995) (“know ing interference with a potential communication between an
individual who might become a witness and federal law enforcement officials falls within the ambit of Section
1512. We have thus previously noted that the statute covers ‘potential’ witnesses. United States v. Hernandez,
730 F.2d 895, 898 (2d Cir. 1984) (‘[section] 1512 explicitly covers “potential” w itnesses’)”); United States v.
Maggitt, 784 F.2d 590, 593 (5th Cir. 1986) (“18 U.S.C. § 1512 punishes only those threats made with the intent
to cause the witness to withhold future testimony”).

-45-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 49 of 192(cid:10)

no th ing o f tha t k ind .

4 0

(c) 18 U .S .C . § 1951 – In ter feren ce w ith C omm erce by Threa ts

The A n ti-R acke tee ring A c t o f 1934 , A c t o f June 18 , 1934 , ch . 569 , 48 S ta t. 979 ,

cod if ied a t 18 U .S .C . § 1951 (2000 ) , m ake s it a fede ra l o f fen se to comm it robbe ry o r

ex to rtion tha t in any w ay o r deg ree ob struc ts comm e rce . To p rove gu ilt, the gove rnm en t

m u s t p rove tha t a de fendan t comm itted ex to rtion o r robbe ry, and tha t such conduc t

in te rfe red w ith in te rsta te comm e rce . Though § 1951 is o f ten re ferred to a s the “Hobb s

A c t,” the H obb s A c t (A c t o f Ju ly 3 , 1946 , ch . 537 , 60 S ta t. 420 ) itse lf amended the 1934

A n ti-R acke tee ring A c t to inc lude ex to rtiona te conduc t by labo r un ion s , w h ich had been

he ld to be exem p t unde r the s ta tu te ’s o rig ina l language . See U n ited S ta te s v . Loca l 807 ,

Team s te rs U n ion , 118 F .2d 684 , 687–88 (2d C ir . 1941 ), a f f’d , 315 U .S . 521 , 539 (1942 ) .

The cou r ts read the leg isla tive h is to ry o f the 1934 A c t to ind ica te tha t Cong ress

enac ted the 1934 leg is la tion to e lim ina te racke tee ring by o rgan ized gang s , w h ich w a s

4 0
More recently, plaintiffs’ counsel has asserted that Dr. MacArthur and Ms. Lyman suffered retaliation
in violation of 18 U.S.C. § 1513 for having informed the SJHSD’s governance board of remarks made by
SJHSD administration and staff concerning Dr. Nathaniel Penn being a “little New York Jew.” (See Plaintiff
MacArthur’s Motion for the Court to Reconsider its Motion to D ismiss Plaintiff’s Claims and Plaintiffs’ Cross-
Motion for Summary Judgment, filed November 23, 2004 (dkt. no. 670), at 17); Memorandum in Support of
Plaintiff Lyman’s Motion for the Court to Reconsider its Motion to Dism iss Plaintiff’s Valdez’ [sic]
Discrimination Claims and Plaintiffs’ Cross-Motion for Summary Judgment, filed December 28, 2004 (dkt. no.
696), at 24.) Section 1513 prohibits violent retaliation (e.g., killing, attempting to kill, causing bodily injury,
damaging tangible property) against any person for attending or furnishing testimony or evidence in a federal
proceeding or providing information to a law enforcement officer “relating to the comm ission or possible
comm ission of a Federal offense . . . .” 18 U.S .C . § 1513(a), (b). Plaintiffs have alleged no federal proceeding,
no reporting of a federal offense, and no violent retaliation. Even § 1513(e), which prohibits “interference with
the lawful employment or livelihood of any person for providing to a law enforcement officer any truthful
information relating to the comm ission or possible comm ission of any Federal offense,” simply cannot be read to
reach the reporting of ethnic remarks to a local hospital’s governance board.
Counsel’s assertion that § 1513 was violated by conduct so plainly outside the clear language of the
statute raises serious concerns under Fed. R. Civ. P. 11.

-46-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 50 of 192(cid:10)

found to have a sub stan tial e f fec t on in tersta te comm e rce , pa rticu lar ly the in tersta te

tran spo rta tion indu s try. See U n ited S ta te s v . Loca l 807 , Team s te rs U n ion , 315 U .S . 521 ,

528–530 (1942 ) (c iting H . R ep . N o . 1833 , 73d C ong . 2d Se ss . (1934 )) . The 1934 A c t w a s

f irs t in troduced in the Sena te in re spon se to a Sena te Comm ittee on In te rs ta te Comm e rce

inve stiga tion o f “ racke ts” and “racke tee ring ,” w h ich the Comm ittee def ined a s “an

o rgan ized con sp iracy to comm it the c rim es o f ex to rtion o r coe rc ion , o r a ttem p ts to

comm it ex to rtion o r coe rc ion ,” a s de f ined by “ the pena l law o f the S ta te o f N ew Y o rk and

o the r ju risd ic tion s .” S . R ep . N o . 75–1189 , 75 th C ong ., 1 s t Se ss ., a t 3 (1935 ) . The

C omm ittee repo rted tha t m any bu s ine sse s w e re be ing coe rced to pay “due s” fo r

“p ro tec tion” f rom gang ste rs— m o s t o f w hom w e re ac tua lly a f f ilia ted w ith tho se o f fe ring

the “p ro tec t ion”— w ho w ou ld engag e in the “h i jack ing” o f truck s u sed to tran spo r t

m e rchand ise in in te rs ta te comm e rce , a s w e ll a s p rice -f ix ing and o the r coe rc ive conduc t

ha rm fu l to comm e rce . Id . a t 9 , 21 -23 ; Loca l 807 , Team s te rs U n ion , 315 U .S . a t 529–30

(c iting H .R . R ep . N o . 73 -1833 , a t 2 (1934 ) (the 1934 A c t w a s in tended to m ake un law fu l

racke tee ring “ in connec tion w ith p rice f ix ing and econom ic ex to rtion d irec ted by

p ro fe ss iona l gang ste rs .” )) . A cco rd ing to the 1934 b ill’s spon so r , Sena to r C ope land , the

leg is la tion w a s in tended to “ rende r m o re d if f icu lt the ac tiv itie s o f p reda to ry c rim ina l

gang s.” S . R ep . N o . 73 -1440 , at 1 (1934 ). The sam e w as tru e o f the 1946 leg isla tion :

In a rgu ing fo r the adop tion o f the H obb s A c t, C ong re ssm an H obb s , the
spon so r o f the A c t, em phasized tha t the 1934 A c t w as b e ing am ended to
add ress h ighw ay robbe ry by o rgan ized labo r un ion s and w as in tended to
p ro tec t ind iv idua ls and good s in in te rs ta te comm e rce . A dd itiona l te stim ony

-47-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 51 of 192(cid:10)

du ring the deba te in the H ou se o f Rep re sen ta tive s c lea rly e stab lishe s tha t
the H obb s A c t w as p assed to p ro tec t ind iv idua ls “ trying to de live r food in to
the va riou s b ig c ities in ou r na tion” and tho se “w ho fee l they have a righ t to
d r ive dow n . . . pub l ic h ighw ays and s tree ts . . .” A cco rd ing to M r . H obbs ,
the “so le and sim p le pu rpo se” o f the H obb s A c t is to p ro tec t in tersta te
comm e rce and “ f ree the h ighw ays and stree ts o f th is coun try o f robbe rs .”
Thu s , the H obb s A c t w a s o rig ina lly a sub jec t m a tte r spec if ic sta tu te tha t
app lied on ly to ac tion s o f o rgan ized gang s , and , like o the r sub jec t m a tte r
spec if ic sta tu te s , w a s pa ssed by C ong re ss on ly a f te r f ind ing s tha t the
sp ec if ic type o f c rim e so add ressed p resen ted a na tiona l p rob lem . Th is
in te rp re ta tion o f the H obb s A c t is fu rthe r suppo rted by the in itia l and long
he ld po s ition o f the Ju s tice D epa rtm en t tha t the robbe ry p rov is ion o f the A c t
w a s to be u tilized on ly in in s tances “ invo lv ing o rgan ized crim e , gang
ac tiv ity, o r w ide -rang ing c rim ina l ac tiv ity.”

M ichae l M cG ra il, The H obb s A c t a fte r Lopez , 41 B .C .L . R ev . 949 , 956 -57 (2000 )

(foo tno te s om itted ). S ince its 1946 re -enac tm en t in the H obb s A c t, the Cou rt ha s read §

1951 to “ ‘m an ifes[ t] . . . a pu rpo se to u se a ll the con stitu tiona l pow e r C ong ress has to

pun ish in terfe rence w i th in ters ta te comm erce by ex tor tion , robbery o r phys ica l v io lence .’”

U n i ted S ta tes v . C u lber t, 435 U .S . 371 , 373 (1978 ) (quo ting S tirone v . U n ited S ta te s , 361

U .S . 212 , 215 (1960 )) .

In Sche id le r v . N a tiona l O rgan iza tion fo r W om en , Inc ., 537 U .S . 393 (2003 ) ,

how eve r, the Cou rt read the H obb s A c t’s de f in ition o f “ex to rtion” a s “ the ob ta in ing o f

p rope rty f rom ano the r, w ith h is con sen t, induced by w rong fu l u se o f ac tua l o r th rea tened

fo rce , v io len ce , o r fea r, o r unde r co lo r o f o f f icia l righ t,” 18 U .S .C . § 1951 (b )(2 ), to

requ ire “ tha t a pe rson m u s t ‘ob ta in ’ p rope rty f rom ano the r pa rty to comm it ex to rt ion ,”

tha t is , tha t the re mu s t be “no t on ly the dep riva tion bu t a lso the acqu is ition o f p rope rty.”

537 U .S . a t 404 . The an ti-abo rtion p ro te sto rs in Sche id le r d id no t v io la te § 1951 fo r

-48-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 52 of 192(cid:10)

pu rpo se s o f c iv il R ICO liab ility becau se in phys ica lly ob s truc ting the ope ra tion o f c lin ic s

pe rfo rm ing abo rtion s , they “ne ithe r pu rsued no r rece ived ‘som e th ing o f va lue f rom ’

responden ts tha t they cou ld exe rc ise , tran sfe r o r se ll”; thu s, unde r § 1951 , “m e re ly

in ter fe ring w ith o r dep riv ing som eone o f p rope rty” w as no t “su f f icien t to con stitu te

ex to rtion .” Id . a t 405 .

Even if taken as true in the ir en tire ty, none o f the fac tua l a llega tion s o f Pa rt I o f the

P ropo sed Am ended Com p la in t iden tify any p rope rty ‘ob ta ined ’ o r acqu ired f rom the

p lain tiff s by San Ju an C oun ty, the S JH SD , o r any o f the nam ed ind iv idua l de fendan ts

w ith p la in tif f s’ con sen t “ induced by w rong fu l u se o f ac tua l o r th rea tened fo rce , v io lence ,

o r fear , o r unde r co lo r o f o f f ic ia l righ t.” N o r do any o f the add itiona l fac tua l a sse rtion s
4 1

se t fo rth m o re recen tly in the Pa rt I P la in tif f s’ comb ined mo t ion s fo r recon side ra tion and

summ a ry judgm en t iden tify any p rope rty o r th ing o f va lue ob ta ined and acqu ired by the

de fendan ts f rom these p la in tif fs th rough ex to rt iona te m ean s . (See P la in t iff V a ldez’s

M o tion fo r the Cou rt to R econ side r its M o tion to D ism iss P la in tif f ’s V a ldez ’

D isc rim ina tion C la im s and P la in tif f s’ C ro ss-M o tion fo r Summ a ry Judgm en t, f iled

O c tobe r 26 , 2004 (dk t. no . 664 ); P lain tiff M acA rthu r’s M o tion fo r the C ou rt to

R econ side r its M o tion to D ism iss P la in tif f ’s C la im s and P la in tif f s’ C ro ss-M o tion fo r

4 1
Plaintiffs assert that Ms. Lyman’s patients “were told that even in an emergency they would not be
seen by the District if they continued to visit Mrs. Lyman for health care. Mrs. Lyman believes threatening
patients that emergency care will be denied in an emergency is extortion of the lowest kind.” (Proposed Pretrial
Order at 63 ¶ 255.) A threat of denial of emergency medical care by a public facility may be found to be
improper for a number of reasons, but such a threat does not constitute “extortion” within the meaning of the
Hobbs Act.

-49-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 53 of 192(cid:10)

Summ a ry Judgm en t, f iled N ovembe r 23 , 2004 (dk t. no . 670 ); P la in tif f Lym an ’s M o tion

fo r the Cou rt to R econ side r its M o tion to D ism iss P la in tif f ’s V a ldez ’ D isc rim ina tion

C la im s and P la in tif f s’ C ro ss-M o tion fo r Summ a ry Judgm en t, f iled D ecem be r 28 , 2004

(dk t. no . 695 ) .) Th ese p la in t if fs a re no t eng aged in the in te rs ta te transpo r ta tion o f goods ,

o r in the sa le o f m erchand ise f low ing through in ters ta te comm erce . N o r , fo r tha t m a t ter ,

do any o f p la in tif f s’ a llega tion s de sc ribe conduc t o f the k ind o f “o rgan ized crim e , gang

ac tiv ity, o r w ide -rang ing c rim ina l ac tiv ity” on the pa rt o f the named de fendan ts tha t

C ong re ss had in m ind in enac ting the s ta tu te .

A p riva te c iv il ac tion unde r the fede ra l R ICO s ta tu te rema in s ava ilab le a s a mean s

fo r tho se pe rson s w ho have been “ in ju red in [ the ir] bu s ine ss o r p rope rty” by rea son o f a

v io lation o f R ICO ’s c rim ina l p rov ision s to seek leg a l and equ itab le rem ed ies fo r the ir

in ju ries f rom tho se w ho se ongo ing c rim ina l conduc t has cau sed them ha rm . See 18

U .S .C . § 1964 . H ow eve r, civ il R ICO liab ility does no t se rve m e re ly as a dev ice to

m u ltip ly the m oney dam ages ava ilab le to pa rties em b ro iled in m o re comm onp lace c iv il

litig a tion ,

4 2

o r a s a m ean s to v ilify c iv il lit igan ts by labe ling them as “ racke tee rs ,”

gang s te rs , ex to rt ion is ts and c rim ina ls . See Sed im a , S .P .R .L . v . Im rex Co ., Inc ., 473 U .S .

479 , 496 (1985 ) ((a c iv il R ICO p lain tiff on ly has s tand ing if “he has b een in ju red in h is

4 2
The potential for abuse of the civil RICO remedy was recognized some years ago: “‘Given the
resulting proliferation of civil RICO claims and the poten tial for frivolous suits in search of treble damages,
greater responsibility will be placed on the bar to inquire into the factual and legal bases of potential claims or
defenses prior to bringing such suit or risk sanctions for failing to do so.’” Chapman & Cole v. Itel Container
Int’l, 865 F.2d 676, 685 (5th Cir.), cert. denied, 493 U.S. 872 (1989) (quoting Black & Magenheim , Using the
RICO Act in Civil Cases, Houston Law., Oct. 1984, at 20, 24-25 (Oct. 1984)).

-50-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 54 of 192(cid:10)

bu s iness o r p rope rty by the conduc t con s titu ting the v io la tion” ).

W he re a p la in tif f ’s amended comp la in t fa ils to a llege spec if ic fac ts s ta ting the

e lem en ts essen tia l to he r fede ra l c la im unde r R ICO , d ism issa l w ith p re jud ice is w a rran ted .

See , e .g ., M a r tine z v . M a r tine z , 207 F .Supp .2d 1303 , 1305 -09 (D .N .M . 2002 ) (“[n ]o

reasonab le o r com pe ten t coun se l w ho had read any T en th C ircu it ca ses conce rn ing c iv il

R ICO comp la in ts , and the requ is ite s the reo f , cou ld be lieve tha t the amended comp la in t

f iled in th is case s ta ted a v iab le R ICO c la im .” ), a ff’d in pa rt, vaca ted and rem anded in

pa r t on o the r g round s , 62 Fed .A ppx . 309 , 2003 W L 1904807 (10 th C ir. 2003 ); C ond ic t v .

C ond ic t, 826 F .2d 923 , 929 (10 th C ir . 1987 ) (a f f irm ing d ism issa l o f c iv il R ICO c la im ;

“ th is is bu t an un successfu l e f fo rt to d ress a ga rden -va rie ty f raud and dece it case in R ICO

c lo th ing” ).

(2 ) F reedom o f A ccess to C lin ic En trance s A c t o f 1994 (18 U .S .C . § 248 )

The F reedom o f A ccess to C lin ic En trances A c t o f 1994 , Pub . L . N o . 103 -259 , 108

U .S .C . 694 , cod ified a t 18 U .S .C . §§ 241 , 248 (2000 ) , add re sse s the conduc t o f anyone

w ho “by fo rce o r th rea t o f fo rce o r by phys ica l ob s truc tion , in ten tion a lly in ju res ,

in tim ida te s o r in te rfe re s w ith o r a ttemp ts to in ju re , in tim ida te o r in te rfe re w ith any pe rson

becau se tha t pe rson is o r ha s been , o r in o rde r to in tim ida te such pe rson o r any o the r

pe rson o r any c lass o f pe rson s f rom , ob ta in ing o r p rov id ing rep roduc tive hea lth se rv ices ,”

o r tha t pe rson is “exerc is ing o r seek ing to exe rc ise the F irs t Am endmen t righ t o f re lig iou s

-51-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 55 of 192(cid:10)

f reedom a t a p lace o f re lig iou s w o rsh ip [ .]” Though it is p rim a ri ly a c rim ina l s ta tu te , §
4 3

248 (c )(1 ) p rov ide s tha t “ [a]ny pe rson agg rieved by rea son o f the conduc t p roh ib ited by

sub sec tion (a ) m ay comm ence a c iv il ac tion” seek ing “ tempo rary, p re lim ina ry o r

pe rm anen t in junc tive re lief and com pen sa to ry and pun itive dam ages, as w e ll as the co sts

o f su it and reasonab le f ees fo r a tto rneys and expe rt w itnesses,” o r as an a ltern a tive to

compen sa to ry damage s , “an aw a rd o f s ta tu to ry damage s in the amoun t o f $5 ,000 pe r

v io la tion .” 18 U .S .C . § 248 (c )(1 )(a ), (b ).

The re appea rs little doub t tha t pa tien t acce ss to a ho sp ita l, c lin ic , b irth ing cen te r, o r

phys ic ian ’s o f f ice in San Juan Coun ty tha t o f fers “med ica l, su rg ica l, coun se ling o r

re ferra l se rv ice s re la ting to . . . p regnancy” come s w ith in the scope o f p ro tec tion a f fo rded

by th is s ta tu te . 18 U .S .C . § 248 (e )(1 ) , (5 ) . The p la in tif f s in th is ca se , how eve r, have no t

a lleged tha t the de fendan ts engaged in the spec if ic o f fen se conduc t p roh ib ited by the

sta tu te, tha t is, the u se o f “ fo rce o r th rea t o f fo rce o r . . . physica l ob stru c tion” to

“ in ten tiona lly in ju re [ ], in tim ida te [ ] o r in te rfe re [ ] w ith” pa tien t acce ss to rep roduc tive

hea lth ca re fac ilitie s and se rv ice s. Pa rt I o f the P ropo sed Am ended Com p la in t m ake s no

a lleg a tion o f fac ts show ing tha t any de fendan t has u sed physica l fo rce o r ob stru c tion to

ob s truc t o r in tim ida te anyone seek ing to ob ta in o r p rov ide rep roduc tive hea lth se rv ices .

4 3
Section 248(a)(3) also prohibits conduct which “intentionally damages or destroys the property of a
facility, or attempts to do so, because such facility provides reproductive health services, or intentionally
damages or destroys the property of a place of religious worship.” 18 U.S.C. § 248(a)(3).

-52-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 56 of 192(cid:10)

(3 ) H ea lth C are Qua lity Im provem en t A c t, 42 U .S .C . § 11112 (2000 )

Fo llow ing the P re trial C on fe rence , the Pa rt I P lain tiff s appa ren tly m oved to

d ism iss the ir c la im s unde r the H ea lth C a re Q ua lity Im p rovem en t A c t (HCQ IA ) , 42 U .S .C .

§ 11101 -11152 (2000 ) , and the Em e rgency M ed ica l T rea tm en t and A c tive Labo r A c t

(EM TALA ), 42 U .S .C . § 1395dd (2000 ), on g round s o f m oo tness . (See P la in t if fs ’

M o t ion to D ism iss , f i led N ovem ber 25 , 2002 (dk t . no . 463 ) .) A t the h ea r ing on January

7 , 2003 , the cou rt g ran ted p la in tif fs’ m o tion . (See M inu te En try, da ted Janua ry 7 , 2003

(dk t. no . 480 ).)

4 4

A s the case proceeded, Ms. Valdez’ EMTALA and HCQIA claims were specifically dism issed on
4 4
motion by her own counsel. (See Plaintiffs’ Motion to D ism iss, filed November 25, 2002 (dkt. no. 463).) As
written, that motion moved “for an order dism issing the defendants’ mo tions to dismiss EMTALA and Health
Care Quality Improvement Act claims, due to mootness”—apparently making what amounted to a motion to
strike the defendants’ moving papers. (Id. (emphasis added); see Defendants’ Motion to D ismiss Plantiffs’
EMTALA Claims, filed November 13, 2002 (dkt. no. 447).) The Plaintiffs’ Motion to Dism iss was not
accompanied by an explanatory memorandum.
However, as docketed, calendared and heard, the Plaintiffs’ Motion to Dism iss was treated as a motion
to dism iss Ms. Valdez’ EMTALA and HCQIA claims as moot:

THE COURT : . . . Many of the items that we dealt with before have heretofore been
resolved. I do note that plaintiff’s motion to dismiss the EMTALA and Health Care Quality
Improvement Act Claims, docket number 463 , filed November 25th are now moot and I take it
ought to be, you don’t have any problem w ith that determination, your motion, that is you’re
dismissing those claims?

MS. ROSE: Uh , yes.

THE COURT : Isn’t that right, the EMTALA and Health Care Quality Improvement
Act claims?

MS . ROSE : That would be fine.

THE COURT : It was your motion and I think we can grant that at this point without further ado. . . .

(Transcript of Hearing, dated January 7, 2003, at 4:23-5:10 (emphasis added).) The dism issal of plaintiff’s
EMTALA and HCQIA claims was duly noted in the Minute Entry. (See Minute Entry, dated January 7, 2003
(dkt. no. 480) (“Grants, motion to dismiss (Dkt # 463).” See also Transcript of Hearing, dated February 24,
(con tinued …)

-53-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 57 of 192(cid:10)

A pa rt f rom the question o f m oo tness and the e f fec t o f p lain tiff s’ ow n m o tion , it

appea rs in any even t tha t the Pa rt I P lain tiff s’ c laim w ou ld fa il to sta te a leg a lly

cogn izab le c la im . T itle IV , § 412 o f the HCQ IA , 42 U .S .C . § 11112 , the p rov is ion c ited

by p lain tiff s, does se t standa rd s fo r p ro fess iona l rev iew ac tion s a f fec ting a hea lth

p rac titione r’s p rac tice p riv ilege s,

4 5

bu t it doe s so in the con tex t o f a sta tu to ry scheme tha t

sh ie ld s the rev iew pa rtic ipan ts f rom c iv il liab ility a ris ing f rom the rev iew ac tion if tha t

ac tion sa tisf ie s § 11112 ’s p rocedu ra l c rite ria .

4 6

See 42 U .S .C . § 11111 ; D ecker v . IHC

( …con tinued )
4 4
2003, at 30:19-31:8 (The Court).)

4 5

HCQIA § 412 reads in part:

(a) In general. For purposes of the protection set forth in section 11111 (a) of this title, a
professional review action must be taken—

(1) in the reasonable belief that the action was in the furtherance of quality
health care,

(2) after a reasonable effort to obtain the facts of the matter,

(3) after adequate notice and hearing procedures are afforded to the physician
involved or after such other procedures as are fair to the physician under the
circumstances, and

(4) in the reasonable belief that the action was warranted by the facts known
after such reasonable effort to obtain facts and after meeting the requirement
of paragraph (3).

A professional review action shall be presumed to have met the preceding standards necessary
for the protection set out in section 11111 (a) of this title unless the presumption is reed by
a preponderance of the evidence.

42 U.S.C. §11112(a) (2000).

4 6

Section 411 of HCQIA provides:

(1) Limitation on damages for professional review actions

-54-

(con tinued …)

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 58 of 192(cid:10)

H o sp ita ls , Inc ., 982 F .2d 433 , 436 (10 th C ir . 1992 ).

The cou rt o f appea ls has d e term ined tha t the HCQ IA does no t crea te a p riva te c iv il

cau se o f ac tion in favo r o f p la in tif f s w ho se sta f f p riv ilege s a t a med ica l fac ility have been

adve rse ly af fec ted by a p ro fess iona l o r p ee r rev iew ac tion . See , e .g ., H ancock v . B lue

C ro ss -B lue Sh ield , 21 F .3d 373 , 374 (10 th C ir . 1994 ) . The re fo re , in the con tex t o f a

g rievance by a hea lth ca re p ro fe ss iona l w ho se sta f f p riv ilege s have been lim ited o r den ied

by a peer rev iew p roce ss , the que stion po sed by the HCQ IA is no t w he the r the

pa rtic ipan ts in the rev iew p roce ss a re l iab le under the HCQ IA , bu t whe the r the HCQ IA

ope ra te s to imm un ize tho se pa rtic ipan ts f rom p riva te c iv il liab ility ba sed upon o the r lega l

theo rie s . The re fo re , a s a ma tte r o f law , the Pa rt I P la in tif f s can p lead no c la im “ fo r

v io la tion o f the gua ran tee s found in” the HCQ IA a s such .

( …con tinued )
4 6
If a professional review action (as defined in section 11151 (9) of this title) of a professional
review body meets all the standards specified in section 11112 (a) of this title, except as
provided in subsection (b) of this section—

(A) the professional review body,

(B) any person acting as a member or staff to the body,

(C) any person under a contract or other formal agreement with the body, and

(D) any person who participates with or assists the body with respect to the
action,

shall not be liable in damages under any law of the United States or of any State (or political
subdivision thereof) with respect to the action.

42 U.S.C. § 11111 (2000) (emphasis added). Section 11111 makes an express exception as to liability under
“any law of the Un ited States or any State relating to the civil rights of any person or persons, including the Civil
Rights Act of 1964, 42 U.S.C. 2000e, et seq. and the Civil Rights Acts, 42 U.S.C. 1981, et seq.,” and for actions
by the Attorney General under the federal antitrust laws. Id.

-55-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 59 of 192(cid:10)

(4) Em ergen cy M ed ica l T rea tm en t and A ct ive L abor A ct (EM TALA ) ,
42 U .S .C . § 1395dd (2000 )

The Em e rgency M ed ica l T rea tm en t and A c tive Labo r A c t
(EM TALA ) , a s added by § 9121 (b ) o f the Con so lida ted Om n ibu s B udge t
R econc ilia tion A c t o f 1985 , 100 S ta t. 164 , and as am ended , 42 U .S .C . §
1395dd , p laces ob liga tion s o f sc reen ing and stab iliza tion upon ho sp ita ls and
eme rgency room s tha t rece ive pa tien ts su f fering f rom an “em e rgency
m ed ica l cond ition .”

Robe rts v . G a len o f V irg in ia , Inc ., 525 U .S . 249 , 250 (1999 ) . Am ong o the r p rov ision s ,

EM TALA requ ire s the eme rgency depa rtm en ts o f ho sp ita ls pa rtic ipa ting in the fede ra l

M ed ica re p rog ram to p rov ide app rop ria te med ica l sc reen ing and stab iliz ing trea tm en t fo r

a ll pe rson s w ho p re sen t them se lve s a t the eme rgency room and reque st ca re :

(a) M ed ica l screen ing requ irem en t . In the case o f a ho sp ita l tha t has a
ho sp ital em e rgency depa rtm en t, if any ind iv idua l (w he the r o r no t elig ib le
fo r bene f its unde r th is subchap te r) come s to the eme rgency depa rtm en t and
a reque st is m ade on the ind iv idua l’s beha lf fo r exam ina tion o r trea tm en t fo r
a med ica l cond ition , the ho sp ita l m u s t p rov ide fo r an app rop ria te med ica l
sc reen ing exam ina tion w ith in the capab ility o f the ho sp ita l’s eme rgency
depa rtm en t, inc lud ing anc illa ry se rv ice s rou tine ly ava ilab le to the
eme rgency depa rtm en t, to de te rm ine w he the r o r no t an eme rgency m ed ica l
cond i tion (w ith in the m ean ing o f subsec t ion (e )(1 ) o f th is sec tion ) ex is ts .

(b ) N ecessa ry s tab iliz ing trea tm en t fo r em erg en cy m ed ica l cond ition s
and labor
(1 ) In genera l
If any ind iv idua l (whe the r or no t e lig ib le fo r benef i ts under th is subch ap ter)
come s to a ho sp ita l and the ho sp ita l de te rm ine s tha t the ind iv idua l ha s an
em ergen cy m ed ica l cond i tion , the ho sp i ta l mu s t prov ide e i ther—

(A ) w ith in the sta f f and fac ilitie s ava ilab le a t the ho sp ita l, fo r
such fu rthe r m ed ica l exam ina tion and such trea tm en t a s m ay
be requ ired to s tab ilize the med ica l cond ition , o r

(B ) fo r tran sfe r o f the ind iv idua l to ano the r m ed ica l fac ility in

-56-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 60 of 192(cid:10)

acco rdance w ith sub sec tion (c ) o f th is sec tion .

42 U .S .C . § 1395dd (a ), (b ) (2000 ) . Sub sec tion (c ) o f § 1395dd se ts s tanda rd s gove rn ing

the tran sfe r o f eme rgency room pa tien ts to o the r hea lth ca re fac ilitie s , and sub sec tion (d )

p rov ide s fo r the en fo rcemen t o f § 1395dd ’s requ iremen ts th rough c iv il m one ta ry pena ltie s

co llec ted by the Sec re ta ry o f H ea lth and H um an Se rv ice s and th rough p riva te c iv il ac tion s

by “ [a]ny ind iv idua l w ho su f fers pe rsona l ha rm a s a d irec t re su lt o f a partic ipa ting

ho sp i ta l’s v io la t ion o f a requ irem en t of th is sec t ion .” 42 U .S .C . § 1395dd (d)(2 ) (2000 ) .

4 7

The sta tu te h as b een con stru ed as im po sing stric t liab ility on ho sp itals fo r v io lation s o f its

sc reen ing and s tab iliza tion requ irem en ts . See Abe rc rom b ie v . O s teopa th ic H o sp .

Founders A ss’n , 950 F .2d 676 , 681 (10 th C ir. 1991 ) ; S tev ison v . En id H ea l th S ys tem s ,

Inc ., 920 F .2d 710 , 713 (10 th C ir. 1990 ) .

A ho sp ita l’s du ty to p rov ide the requ ired eme rgency m ed ica l sc reen ing and

s tab iliz ing trea tm en t to pe rson s reque sting such care canno t be de layed by any inqu iry a s

4 7

Subsection (d) of § 1395dd reads:

(2) Civil enforcement
(A) Personal harm Any individual who suffers personal harm as a direct result of a
participating hospital’s violation of a requirement of this section may, in a civil action against
the participating hospital, obtain those damages available for personal injury under the law of
the State in which the hospital is located, and such equitable relief as is appropriate.

(B) Financial loss to other medical facility Any medical facility that suffers a financial loss as
a direct result of a participating hospital’s violation of a requirement of this section may, in a
civil action against the participating hospital, obtain those damages available for financial loss,
under the law of the State in wh ich the hospital is located , and such equitable relief as is
appropriate.

(C) Limitations on actions No action may be brought under this paragraph more than two
years after the date of the violation with respect to which the action is brought.

-57-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 61 of 192(cid:10)

to tha t pe rson ’s “m e thod o f paym en t o r in su rance sta tus.” 42 U .S .C . § 1395dd (h ). N o r is

the p ar t ic ipa t ing ho sp i ta l’s du ty to p rov ide em ergen cy screen ing and trea tmen t under §

1395dd (a ) and (b ) lim ited to tho se pe rson s w ho a re regu la rly in the care o f phys ic ian s o r

hea lth ca re p rov ide rs hav ing cu rren t s ta f f p riv ileges o r p rac tice p riv ileges a t tha t ho sp ita l.

A s to p la in tif f H e len V a ldez , coun se l a t the tim e o f p re tria l a sse rted the “v io la tion

o f M rs . V a ldez ’ en titlemen t to an equa l s tanda rd o f care and to be exam ined upon he r

p re sen ta tion to the em e rg ency room o f the ho sp ita l as m anda ted by 42 U SC 1395dd ,”

appa ren tly invok ing EM TALA ’s p riva te c iv il remedy. (P ropo sed Am ended Com p la in t a t

14 ¶ (22 ) ; P roposed P re tr ia l O rde r a t 5 ¶ (23 ) .)

The even t in que stion occu rred on A p ril 14 , 1999 , ye t p la in tif f V a ldez d id no t

p lead a c la im unde r § 1395dd (d )(2 ) o f EM TALA in the o rig ina l comp la in t in th is ac tion

f iled on Ju ly 25 , 2000 ,

4 8

and d id no t a ttemp t to p lead such a c la im un til the P ropo sed

Am ended Com p la in t, subm itted on N ovembe r 6 , 2002— one w eek befo re p re tria l and

4 8
Plaintiffs’ counsel now points to two paragraphs out of 523 in the original Complaint as invoking the
EMTALA civil remedy:

365.

In violation of EMPTALA [sic] and COBRA violations Mrs. Valdez was not examined,
checked, asked what her problem was, nor had her temperature and blood pressure checked
while Mrs. Valdez was in such a condition.

* * * *
377. Mrs. Valdez had a right to expect an examination by a Dr. Of her choice at San Juan Hospital
at the time of presentment with her malady pursuant to her insurance contracts and EMPTALA
[sic] and COBRA statutes and regulations.

(Complaint (Verified), filed July 25, 2000 (dkt. no. 1), at 108-109 ¶¶ 365, 377.) Besides the fact that neither
paragraph accurately states an EMTALA requirement, the original Complaint makes no reference to EMTALA
or COBRA in its extended statement of the plaintiffs’ “Causes of Action,” (id. at 118-154 ¶¶ 443-523).
Clearly, the original Complaint did not give fair notice to the SJHSD of any claim of liability under
EMTALA, even if one had been intended.

-58-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 62 of 192(cid:10)

“m o re than tw o yea rs a f ter the da te o f the v io lation w ith resp ec t to w h ich the ac tion is

b rough t,” 42 U .S .C . § 1395dd (d )(2 )(C )— a s an a ttachmen t to the “P la in tif f s’ R u le 15

M o t ion to Am end and Supp lem en t Com p la in t to C on fo rm to the Ev iden ce & the 10 th C ir.

C ou rt 10 -7 -02 O p in ion ,” (dk t. no . 438 ).

O n the eve o f p re trial, the S JH SD de fendan ts f iled a R u le 12 (b )(6 ) m o tion to

d ism iss p la in tif f ’s EM TALA c la im a s a sse rted in the P ropo sed P re tria l O rde r on the

g round o f the tw o -yea r s ta tu te o f lim ita tion s . (See D e fendan ts ’ M o t ion to D ism iss

P lain tiff s’ EM TALA C laim s, f iled N ovem be r 13 , 2002 (dk t. no . 447 ); M em o randum in

Suppo r t o f D e fendan ts’ M o tion to D ism iss P la in tif f ’s EM TALA C la im , f iled N ovembe r

13 , 2002 (dk t . no . 448 ) .)

A b sen t leave to amend he r p lead ing s unde r Fed . R . C iv . P . 15 (a ) & (b ) , o r

in co rpo ra tion o f th e c la im a s a triab le issu e in a p re tria l o rd er pu rsu an t to F ed . R . C iv . P .

16 (c ) , ev en tak ing a ll o f M s. V a ldez ’ a lleg ed fac ts a s tru e , the conc lusion w ou ld

necessa rily fo llow tha t he r c la im unde r EM TALA is tim e -ba rred .4 9

(5 ) “M ed icare Pa tien t B ill o f R igh ts” (42 U .S .C . § 1395a )

P la in tif f s’ coun se l po in ts to § 1802 o f T i tle XV III o f the Soc ia l Secu rity A c t, 42

U .S .C . § 1395a , a s an add itiona l foo ting fo r p la in tif f H e len V a ldez ’ c la im s , a lleg ing a

“v io la tion o f M rs . V a ldez ’ M ed ica re Pa tien t B ill o f R igh ts to see the med ica re p rov ide r o f

he r cho ice ,” and a v io la tion o f he r righ t “ to f ree ly con trac t and a ssoc ia te w ith the p rov ide r

4 9

Her EMTALA claim fails on its merits as well. (See infra at 109 & n. 81.)

-59-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 63 of 192(cid:10)

o f he r cho ice as found in 42 U SC 1395a .” (P ropo sed Am ended Com p la in t a t 13 , 14 ¶¶

(19 ) , (24 ) ; P ropo sed P re tr ia l O rde r a t 5 , 6 ¶¶ (20 ) , (25 ) .)

C once rn ing M ed ica re bene f icia ries, § 1395a p rov ides in pa rt:

§ 1395a . F ree cho ice by pa tien t guaran teed

(a ) B a s ic freedom o f cho ice A ny ind iv idua l en titled to insu rance bene f its
unde r th is subchap te r m ay ob ta in hea lth se rv ice s f rom any in s titu tion ,
agency, o r pe rson qua lif ied to pa rtic ipa te unde r th is subchap te r if such
ins titu t ion , agen cy, o r pe rson unde r takes to p rov ide h im such se rv ices .

Th is s ta tu te , the the so -ca lled M ed ica re “ freedom o f cho ice p rov is ion ,” re f lec ts one o f the

fundamen ta l p rinc ip le s upon w h ich the M ed ica re p rog ram w a s founded , and gua ran tee s

M ed ica re benef ic ia rie s the f reedom to choo se hea lth ca re p rov ide rs , w ho w ou ld then be

pa id by M ed ica re a t the p rog ram ’ s p re sc ribed ra te s. Sec tion 1395a (a ) ba rs in te rfe rence by

the Sec re ta ry o f H ea lth and H um an Se rv ice s (o r h is subo rd ina te s in the adm in is tra tion o f

the M ed ica re p rog ram ) w ith a benef ic ia ry’s se lec tion o f a phys ic ian .

5 0

N o th ing in the P ropo sed Am ended Com p la in t o r in coun se l’s p ro f fers a t the

P re tria l C on fe rence sugge sts tha t the Sec re ta ry, M ed ica re p rog ram o f f ic ia ls— o r anyone

e lse invo lved in HH S adm in istra tion o f M ed ica re bene f its— a ttem p ted to in ter fe re w ith

M s. V a ldez ’ cho ice o f hea lth ca re p rov ide rs f rom am ong tho se qua lified to pa rticipa te in

the M ed ica re p rog ram . N o c la im w ha tsoeve r is m ade tha t D r . Penn o r any o the r qua lif ied

p rov ide r w as d en ied M ed ica re paym en t o r re imbu rsem en t fo r m ed ica l ca re p rov ided to

5 0
The remaining language of this section gives lim ited statutory authority for beneficiaries to contract
for health care services, e.g., with managed care networks. 42 U.S.C § 1395a(b).

-60-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 64 of 192(cid:10)

M s . V a ldez as an e lig ib le M ed ica re rec ip ien t.

(6 ) 42 U .S .C . § 1981

Sec tion 1981 o f T itle 42 , U n i ted S ta tes Cod e reads :

(a ) S ta tem en t o f equa l r igh ts. A ll pe rson s w ith in the ju risd ic tion o f the
U n ited S ta te s sha ll have the same r igh t in eve ry S ta te and Te rrito ry to m ake
and en fo rce con trac ts , to sue , be pa rtie s , g ive ev idence , and to the fu ll and
equa l bene f it o f a ll law s and p roceed ing s fo r the secu rity o f pe rson s and
p rope rty a s is en joyed by w h ite c itizen s, and sha ll be sub jec t to like
pun ishm en t, pa in s , pena ltie s , taxe s, licen se s, and exac tion s o f every k ind ,
and to no o ther .

(b ) “M ak e and en fo rce con tra cts” d efin ed . Fo r pu rpo se s o f th is sec tion ,
the te rm “make and en fo rce con trac ts” inc lude s the mak ing , pe rfo rm ance ,
m od if ica tion , and term ina tion o f con trac ts, and the en joym en t o f a ll
bene f its , p riv ilege s, te rm s , and cond ition s o f the con trac tua l re la tion sh ip .

(c) P ro tec t ion aga inst impa irm en t . The righ ts p ro tec ted by th is sec tion
a re p ro tec ted aga in s t im pa irm en t by nongove rnm en ta l d isc rim ina tion and
im pa irm en t unde r co lo r o f S ta te law .

42 U .S .C . § 1981 (2000 ) .

5 1

Sec tion 1981 add re sse s in ten tiona l rac ia l d isc rim ina tion in the

m ak ing and en fo rcem en t o f con trac ts : “A § 1981 . . . p la in tif f m u s t p rove by a

p reponde rance o f the ev idence tha t the de fendan t in ten tiona lly d isc rim ina ted aga inst h im

o r he r on the ba sis o f race .” G u ide s , L td . v . Y a rm ou th G roup P rope rty M gm t., Inc ., 295

5 1
42 U.S.C. § 1981 (2000) was originally enacted as part of the Civil Rights Act of 1866, Act of April
9, 1866, ch. 31, 14 Stat. 27, the first of the Reconstruction Era civil rights acts, and was grounded upon the
Thirteenth Amendment, ratified a year earlier. The provision was re-enacted in 1870, two years after the
ratification of the Fourteenth Amendment. See Act of May 31, 1870, ch. 114, §16, 16 Stat. 144. It was
amended more recently by the Civil Rights Act of 1991, Pub. L. No. 102-166, title I, § 101, 105 Stat. 1071
(1991) (designated then-existing provisions as subsection (a) and added subsections (b) and (c)). See also
Guides, Ltd. v. Yarmouth Group Property Mgmt., Inc., 295 F.3d 1065, 1080 (10th Cir. 2002) (dissenting
opinion) (“The protection afforded by these statutes finds its roots in the Thirteenth and Fourteenth
Amendments. . . .” (citations om itted).)

-61-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 65 of 192(cid:10)

F .3d 1065 , 1073 (10 th C ir . 2002 ) (c iting S tewa r t v . Ado lph C oo rs C o ., 217 F .3d 1285 ,

1288 (10 th C ir . 2000 )) . A s to the scope o f the p ro tec tion a f fo rded by § 1981 :

T he Sup rem e C ou rt has con s trued the language tha t secu res to a ll the sam e
con trac ting righ ts a s “w h ite c itizen s” to re fer on ly to the rac ia l (a s oppo sed
to , say, gende r-ba sed o r re lig iou s) cha rac te r o f the p roh ib ited d isc rim ina tion
. . . . [W ]h i tes a s w e l l as b lack s m ay asse r t con trac t den ia l c la im s under §
1981 on the bas is o f race .

H a ro ld S . L ew is , Jr., C iv il R igh ts and Em p loym en t D isc rim ina tion Law § 1 .2 , a t 3 (1997 )

(foo tno te om i tted ) (c iting M cD ona ld v . San ta F e T ra il T ran sp . C o ., 427 U .S . 273 (1976 ) ;

see a lso G u ide s , L td . v . Y a rm ou th G roup P rope rty M gm t., Inc ., 295 F .3d a t 1081 n .3

(d issen ting op in ion ) (“ In th is C ircu it, a rac ia l iden tity is the co rne rs tone o f a sec tion 1981

and 1982 cau se o f ac tion and a necessa ry e lem en t o f a p la in tif f ’s p rim a fac ie case . See

Shaw l v . D illa rd s , Inc ., N o . 99 – 1409 , 2001 W L 967887 , a t *2 (10 th C ir . A ug .27 , 2001 )

(“To e s tab lish a c la im unde r § 1981 , the p la in tif f s m u s t show tha t (1 ) they a re mem be rs o f

a p ro tec ted c la ss . . . .” (c iting H am p ton v . D illa rd D ep ‘t S to re s, Inc ., 247 F .3d 1091 , 1101

(10 th C ir . 2001 )) ).” ). T he Sup rem e C ou rt unde rs tand s “ race” to inc lude “ances try,”

de f ined a s gene tic mem be rsh ip in an “ ‘e thn ica lly and phys iognom ica lly d is tinc tive

subg roup ing o f hom o sap ien s .’” S t. F ranc is C o lleg e v . A l-K ha zra ji, 481 U .S . 604 , 613

(1987 ) (quo ting A l-K ha zra ji v . Sa in t F ranc is C o llege , 784 F .2d 505 , 517 (3d C ir . 1986 )) .

B a sed on the h is to ry o f § 1981 , w e have little troub le in conc lud ing tha t
C ong re ss in tended to p ro tec t f rom d isc rim ina tion iden tif iab le c la sse s o f
pe rson s w ho a re sub jec ted to in ten tiona l d isc rim ina tion so le ly becau se o f
the ir ances try o r e thn ic charac te ris tic s . Such d isc rim ina tion is rac ia l
d isc rim ina tion tha t Cong ress in tended § 1981 to fo rb id , w he the r o r no t it
w ou ld be c lass if ied as rac ia l in te rm s o f m ode rn sc ien tif ic theo ry.

-62-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 66 of 192(cid:10)

Id . (foo tno te om i tted ). H ow eve r, “ance stry” a s “ race”— a s a p roh ib ited ba sis fo r

d isc rim ina tion fo r pu rpo se s o f § 1981— doe s no t emb race na tiona l o rig in , re lig ion o r

s ta tu s as an a lien . Id . a t 613 (“ If responden t on rem and can p rove tha t he w as sub jec ted to

in ten tiona l d isc rim ina tion based on the fac t tha t he w as bo rn an A rab , rath e r than so lely

on the p lace o r na t ion o f h is or ig in , or h is re l ig ion , he w i ll hav e m ad e ou t a ca se under §

1981 .”); K ing v . Tow n sh ip o f Ea s t Lam pe te r , 17 F .Supp .2d 394 , 417 (E .D .Pa . 1998 )

(“The scope o f § 1981 is no t so b road a s to inc lude d ispa rity in trea tm en t on the ba sis o f

re lig ion , sex , o r n a tiona l o rig in .” ), a ffirm ed , 182 F .3d 903 (3d C ir .) (m em .), ce rt. den ied ,

528 U .S . 951 (1999 ); Vuk sta v . B e th lehem S tee l C o rp ., 540 F .Supp . 1276 , 1281

(E .D .Pa .1982 ), a ffirm ed , 707 F .2d 1405 , ce rt. den ied , 464 U .S . 835 (1983 ) .

Thu s , to s ta te a c la im under § 1981 , the p la in t iff s m u s t show tha t (1) they are

m em be rs o f an iden tifiab le rac ial o r ancestra l g roup ; (2 ) the de fendan t had an in ten t to

d isc rim ina te on the ba sis o f the ir race o r ances try; and (3 ) the d isc rim ina tion concerned

one o r m o re o f the ac tiv itie s enum e ra ted in the s ta tu te , v iz ., the mak ing and en fo rc ing o f a

con trac t. See G reen v . S ta te Ba r o f Texa s , 27 F .3d 1083 , 1086 (5 th C ir. 1994 ); M ian v .

D ona ld son , Lu fk in & Jen re tte Secu r itie s C o rp ., 7 F .3d 1085 , 1087 (2d C ir . 1993 ) . A §

1981 c la im fo r “ in te rfe rence w ith the righ t to m ake and en fo rce a con trac t m u s t a llege the

ac tua l lo ss o f a con trac t in te re st, no t m e re ly the po ss ib le lo ss o f fu tu re con trac t

oppo rtun itie s .” M o rr is v . O ffice M ax , Inc ., 89 F .3d 411 , 414 -15 (7 th C ir . 1996 ) (c iting

Phe lp s v . W ich ita Eag le -B eacon , 886 F .2d 1262 (10 th C ir . 1989 )) . M o reove r, “ It ha s

-63-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 67 of 192(cid:10)

been he ld tha t ‘[p ]ruden tia l lim ita tion s on s tand ing o rd ina rily requ ire tha t an ac tion unde r

sec tion [ ] 1981 . . . be b rough t by the d irec t v ic tim s o f the a l leged d isc r im ina t ion becau se

they a re be st s itua ted to a sse rt the ind iv idua l righ ts in que stion .’” G u ides , L td . , 295 F .3d

a t 1072 (quo ting C lifton Te rrace A s soc s ., L td . v . U n ited Techno log ie s C o rp ., 929 F .2d

714 , 721 (D .C . C ir . 1991 )) .

N one o f the a llega tion s o f the P ropo sed Am ended Com p la in t p lead fac ts tha t

w ou ld se rve as d irec t ev idence o f in ten tiona l d isc rim ina tion aga inst the Pa rt I P lain tiff s in

the m ak ing o r en fo rcem en t o f con trac ts based upon these p la in tif fs’ race o r ances try. See

D u rham v . X e rox Co rp ., 18 F .3d 836 , 841 (10 th C ir .) (“W ithou t p roo f o f p re tex t o r d irec t

ev idence o f d isc rim ina to ry in ten t, D u rham canno t m ee t he r u ltim a te bu rden o f p rov ing

in ten tiona l d isc rim ina tion .” ), ce rt. den ied , 513 U .S . 819 (1994 ) . Seve ra l pa rag raph s

repea t comm en ts a lleged ly m ad e by one d efendan t , D r . R edd , in w h ich h e re fe rred to D r .

N a than ie l Penn a s a “ little N ew Y o rk Jew ,” o r w o rd s to tha t e f fec t. (P ropo sed Am ended

C om p la in t a t 53 ¶ 168 (B ); 58 ¶ 133 (F ) ; 59 ¶ 138 ; 68 -69 ¶ 166 .) Such comm en ts m ay o r

m ay no t add re ss D r. P enn ’s “ances try” fo r pu rpo ses o f § 1981 , c f. Shaa re Te fila

C ong rega tion v . C obb , 481 U .S . 615 (1987 ) (42 U .S .C . § 1982 p ro tec ts p rope rty righ ts o f

Jew ish cong rega tion in synagogue ); S inger v . D enver Sch . D is t. N o . 1 , 959 F . Supp . 1325 ,

1331 (D .C o lo .1997 ) , bu t tha t que stion is no t now be fo re th is cou rt becau se D r . Penn is no

longe r a p la in tif f in th is ac tion . (See M inu te En try, da ted M arch 1 , 2002 (dk t . no . 296 ) .)

-64-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 68 of 192(cid:10)

(7 ) 42 U .S .C . § 1985 (3 )

Sec tion 1985 (3 ) o f T itle 42 , U n i ted S ta tes Cod e reads :

(3 ) D ep r iv ing p erson s o f r igh ts or p r iv i leges . If tw o o r m o re pe rson s in
any S ta te o r T e rrito ry con sp ire o r go in d isgu ise on the h ighw ay o r on the
p rem ise s o f ano the r, fo r the pu rpo se o f dep riv ing , e ithe r d irec tly o r
ind irec tly, any pe rson o r c lass o f pe rsons o f the equ a l p ro tec tion o f the law s ,
o r o f equa l p riv ilege s and imm un itie s unde r the law s ; o r fo r the pu rpo se o f
p reven t ing o r h inder ing the con s t itu ted au tho r it ies o f any S ta te o r T err i to ry
f rom g iv ing o r secu ring to a ll pe rson s w ith in such S ta te o r T e rrito ry the
equa l p ro tec tion o f the law s ; o r if tw o o r m o re pe rson s con sp ire to p reven t
by fo rce , in tim ida tion , o r th rea t, any c itizen who is law fu lly en titled to vo te ,
f rom g iv ing h is suppo rt o r advocacy in a lega l m anne r, tow a rd o r in favo r o f
the e lec tion o f any law fu lly qua lif ied pe rson a s an e lec to r fo r P re siden t o r
V ice P residen t, or as a M em be r o f C ong ress o f the U n ited S tate s; o r to
in ju re any c itizen in pe rson o r p rope rty on accoun t o f such suppo rt o r
advocacy; in any ca se o f con sp iracy se t fo r th in th is sec t ion , if one o r mo re
pe rson s engaged the re in do , o r cau se to be done , any ac t in fu rthe rance o f
the ob jec t o f such con sp iracy, w he reby ano the r is in ju red in h is pe rson o r
p rope rty, o r dep rived o f hav ing and exerc is ing any righ t o r p riv ilege o f a
c itizen o f the U n ited S ta te s , the pa rty so in ju red o r dep rived may have an
ac tion fo r the recovery o f damage s occas ioned by such in ju ry o r
dep r iva t ion , aga ins t any on e o r mo re o f the con sp ira to rs .

42 U .S .C . § 1985 (3) (2000 ) .

5 2

To s ta te a c la im unde r § 1985 , the re “m us t be som e rac ia l, o r pe rhaps o the rw ise

c la ss-ba sed , inv id iou s ly d isc rim ina to ry an im u s beh ind the con sp ira to rs’ ac tion .” G riffin

v . B recken ridge , 403 U .S . 88 , 102 (1971 ) . A p la in tif f w ho fa ils to a llege rac ia l o r

c lass-b ased d isc rim ina tion canno t s ta te a c la im unde r § 1985 (3 ). See Bu rn s v . C oun ty o f

K ing , 883 F .2d 819 , 821 (9 th C ir . 1989 ) (c iting B re tz v . K e lm an , 773 F .2d 1026 , 1028

5 2
Section 1985 was enacted as part of the Ku Klux Klan Act of 1871, Act of April 20, 1871, ch. 22, § 2,
17 Stat. 13.

-65-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 69 of 192(cid:10)

(9 th C ir. 1985 ) (en ban c)) .

In th is case , the Pa rt I P lain tiff s a lleg e “c iv il righ ts v io lation s rega rd ing f reedom to

con trac t, free sp eech , free assoc iation , inc lud ing 1985 con sp iracy,” and a “con sp iracy to

dep rive the P la in tif fs o f the ir lega l en titlem en ts o f due p rocess , equa l p ro tec tion , p rivacy,

righ ts o f assoc iation , righ ts to con trac t,” a s w e ll as “sta te licen se en titlem en ts,” “M ed ica id

en titlemen ts ,” and even an “en titlemen t to a con trac t w ith the D is tric t tha t is ba sed upon

p rinc ip le s o f good fa ith and fa ir dea ling , w ith adequa te con side ra tion ,” (P ropo sed P re tria l

O rde r a t 3 ¶ (1 ) , 4 ¶¶ (9 ) , (10 ) , (12 ) , (13 ) & (14 )) , bu t they do no t a llege d isc rim ina tion

aga in s t any rem a in ing Pa rt I P la in tif f based upon tha t p la in tif f ’s race .

(8 ) 42 U .S .C . § 1983

Sec tion 1983 o f T itle 42 , U n ited S tate s C ode , p rov ides, in pe rtinen t pa rt:

Eve ry pe rson w ho , unde r co lo r o f any s ta tu te , o rd inance , regu la tion ,
cu stom , o r u sage , o f any S ta te . . ., sub jec ts , o r cau se s to be sub jec ted , any
c itizen o f the U n ited S tate s o r o the r person w ith in the ju risd iction the reo f to
the dep riva tion o f any righ ts , p riv ilege s, o r imm un itie s secu red by the
C on s titu tion and law s , sha ll be liab le to the pa rty in ju red in an ac tion a t law ,
su it in equ ity, o r o the r p rope r p ro ceed ing fo r red re ss , . . . .

42 U .S .C . § 1983 (2000 ) .

5 3

“Sec tion 1983 p rov ide s an en fo rcemen t remedy fo r one w ho

is dep rived unde r co lo r o f s ta te law o f ‘any righ ts , p riv ilege s, o r imm un itie s secu red by

the Con s titu tion .’” T ru jillo v . Boa rd o f Coun ty Comm ‘rs o f San ta F e , 768 F .2d 1186 ,

1189 (10 th C ir . 1985 ) . “The re a re tw o e lemen ts to a sec tion 1983 c la im : (1 ) the conduc t

5 3
Like § 1985, § 1983 was originally enacted as part of the Ku Klux Klan Act of 1871, Act of April 20,
1871, ch. 22, 17 Stat. 13.

-66-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 70 of 192(cid:10)

comp la ined o f mu s t have been unde r co lo r o f s ta te law , and (2 ) the conduc t m u s t have

sub jec ted the p la in tif f to a dep riva tion o f con stitu tiona l righ ts ,” o r righ ts p ro tec ted by

fede ra l law . Jone s v . C omm un ity Redeve lopm en t Agency , 733 F .2d 646 , 649 (9 th C ir.

1984 ) (c iting W illiam s v . G o r ton , 529 F .2d 668 , 670 (9 th C ir. 1976 )) .

Sec tion 1983 doe s no t spec ify the sta te o f m ind on the pa rt o f som eone who

“ sub jec ts , o r cau se s to be sub jec ted” a pe rson to a dep riva tion o f c iv il righ ts w h ich a

p lain tiff m u st a lleg e and p rove to estab lish liab ility unde r the sta tu te; the question is “d id

the de fendan t v io late the p lain tiff ’s F ou rteen th Am endm en t righ ts? The de fendan t’s s tate

o f m ind is re levan t on ly to the ex is tence o f the c la im ed Fou rteen th Am endmen t

v io la tion .” 1 She ldon H . N ahm od , C iv il R igh ts and C iv il L ibe rtie s L itiga tion : The Law o f

Sec tion 1983 § 3 :2 (4 th ed . R ev . 2004 ) (foo tno te om i tted) .

A lthough th is sec tion doe s no t requ ire a spec if ic sta te o f m ind fo r
ac tionab ility, see Pa rra tt v . Tay lo r , 451 U .S . 527 , 534 , 101 S .C t. 1908 ,
1912 , 68 L .Ed .2d 420 (1981 ) , a cou rt m u s t exam ine c lo se ly the na tu re o f the
con stitu tiona l righ t a sse rted to de te rm ine w he the r a dep riva tion o f tha t righ t
requ ires any pa rt icu la r s ta te o f m ind , M cKay v . H amm ock , 730 F .2d 1367 ,
1373 (10 th C ir . 1984 ) (en banc) . Fo r in s tance , it is w e ll e stab lished tha t
dep riva tion s o f equa l p ro tec tion requ ire p roo f o f d isc rim ina to ry in ten t on
the pa rt o f the s ta te ac to r, see , e .g ., W a sh ing ton v . D av is , 426 U .S . 229 , 96
S .C t. 2040 , 48 L .Ed .2d 597 (1976 ), w h ile d ep riva tion s unde r the E igh th
Am endm en t requ ire a show ing o f de libe ra te ind if fe rence , see , e .g ., E ste lle
v . G am b le , 429 U .S . 97 , 97 S .C t . 285 , 50 L .Ed .2d 251 (1976 ) . M o reover ,
som e d ep r iva t ion s o f F irs t Am endm en t righ ts requ ire p roo f tha t the s ta te’s
ac tion w a s in tended to rep re ss an ind iv idua l’s p ro tec ted speech o r
assoc ia tion . See , e .g ., M t. H ea lth C ity S choo l D istric t v . D oy le , 429 U .S .
274 , 287 , 97 S .C t. 568 , 576 , 50 L .Ed .2d 471 (1977 ); . . . .

-67-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 71 of 192(cid:10)

T ru jillo , 768 F .2d a t 1189 (som e c i ta t ion s om i tted) .

5 4

In o rde r to sta te a c laim unde r 42 U .S .C . § 1983 , a com p lain t mu st a sse rt a righ t to

recover unde r the Con s titu tion o r o the r federa l law s and no t be w ho lly in sub s tan tia l and

f rivo lou s . See , e.g ., K en sing ton v . Roberts , 717 F .2d 1295 , 1298 (9 th C ir . 1983 ).

“Conc lu s iona ry a llega tion s , un suppo rted by fac ts , [w ill be ] re jec ted a s
in su f f ic ien t to s ta te a c la im unde r the C iv il R igh ts A c t.” She rm an v .
Y akah i, 549 F .2d 1287 , 1290 (9 th C ir . 1977 ) . The p la in tif f mu s t “a llege
w ith a t lea st som e deg ree o f pa rticu lar ity ove rt ac ts w h ich de fendan ts
engaged in” tha t suppo rt the p la in tif f ’s c la im . Id ., quo ting Pow e ll v .
W orkm en ‘s Com pen sa tion Boa rd , 327 F .2d 131 , 137 (2d C ir. 1964 ) .

Jone s, 733 F .2d a t 649 .

H e re , the Pa rt I P lain tiff s a sse rt c iv il righ ts “v io lations rega rd ing f reedom to

con trac t, f ree speech , f ree assoc ia tion ,” and “re ta lia tion fo r speak ing and a ssoc ia tion ,” a s

w e ll a s the den ia l o f due p roce ss gua ran teed by the Fou rteen th Am endmen t . (P ropo sed

P re tria l O rde r a t 3 ¶¶ (1 ) , (2 ) , (3 ) .

5 5

) They a llege “ in te rfe rence w ith the pa tien ts’ and

[p lain tiff s’] ab ility to f ree ly con trac t fo r se rv ice s w ith the D istric t, w ith each o the r, w ith

5 4

See 1 Nahmod, supra, at § 3:2:

Different Fourteenth Amendment violations (and hence Bill of Rights violations)
require different states of mind, apparently because of the language and history of the
applicable constitutional provisions. For example, equal protection violations require
purposeful discrim ination, Eighth Amendment violations require deliberate indifference, and
due process violations require more than mere negligence. The Supreme Court finally made
clear the distinction between § 1983 and the underlying constitutional violation in Parratt v.
Taylor when it held that, as a matter of statutory interpretation, § 1983 imposed no independent
state-of-mind requirement for the prima facie case, in contrast to state-of-mind requirements
for the violation of particular constitutional provisions themselves. [Footnotes omitted.]

5 5
Plaintiffs also assert their reliance upon a due process guarantee in the provisions of the Health Care
Quality Improvement Act, 42 U.S.C. § 11112 (2000), discussed infra.

-68-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 72 of 192(cid:10)

pa tien ts a s gua ran teed by the Fou rteen th Am endmen t , U tah [U ]n fa ir P rac tice s A c t, and

federa l comm on law ,” (id . a t 4 ¶ (8 )) , and a s to p la in tif f H e len V a ldez , a den ia l o f equa l

p ro tec tion o f the law s . (Id . a t 5 ¶ (21 ) .)

W he the r the se a llega tion s a re w ho lly in sub s tan tia l and f rivo lou s , o r w he the r they

ra ise genu ine issue s requ iring a tria l w a s exam ined in de ta il by cou rt and coun se l du ring

the P re tr ia l C on fe rence . See Fed . R . C iv . P . 16 (c)(1) .

§ 1983 C on sp iracy

The Pa rt I P la in tif f s a lso a llege a “con sp iracy to dep rive the P la in tif f s o f the ir lega l

en titlem en ts o f due p rocess , equa l p ro tec tion , p rivacy, righ ts o f assoc iation , righ ts to

con trac t,” (P ropo sed P re trial O rde r a t 4 ¶ (13 )), bu t they do no t p lead sp ec if ic f ac ts

show ing bo th con sp ira to ria l ag reem en t and conce rted ac tion by the nam ed de fendan ts .

In o rde r to p reva il on such a c la im , “a p la in tif f mu s t p lead and p rove no t
on ly a con sp iracy, bu t a lso an ac tua l dep riva tion o f righ ts ; p lead ing and
p roo f o f one w ithou t the o the r w ill be in su f f ic ien t.” [D ixon v . Law ton , 898
F .2d 1443 , 1449 (10 th C ir. 1990 )]; Sne ll v. Tunne ll, 920 F .2d 673 , 701 (10 th
C ir . 1990 ). In p lead ing con sp iracy, a p lain tiff m u st a lleg e “sp ec if ic f ac ts
show ing ag reemen t and conce rted ac tion among [ the a lleged
co -con sp ira to rs] .” H un t v. B enne tt, 17 F .3d 1263 , 1266 (10 th C ir . 1994 ).
“Conc lu so ry a llega tion s o f con sp iracy a re in su f f ic ien t to s ta te a va lid §
1983 c la im .” D u rre v . D em p sey , 869 F .2d 543 , 545 (10 th C ir . 1989 ) . Thu s ,
a p la in tif f fa ils to s ta te a c la im fo r con sp iracy ab sen t spec if ic fac ts show ing
a “m ee ting o f the m ind s” am ong the a lleged co -con sp ira to rs . See Hun t, 17
F .3d a t 1268 .

M a r ino v . M ayge r, 118 Fed .A ppx . 393 , 404 -405 , 2004 W L 2801795 ,**10 (10 th C ir.

2004 ) (unpub lished d ispo s ition ) . The Pa rt I P la in tif f s’ conc lu so ry a sse rtion o f a

con sp iracy, w ithou t m o re , fa ils to s ta te a v iab le c la im unde r § 1983 .

-69-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 73 of 192(cid:10)

L iab i lity o f the SJH SD & San Juan C oun ty

To s ta te a co lo rab le c la im aga in s t San Juan Coun ty o r the S JH SD unde r § 1983 ,

th e P a rt I P la in tif fs each mu s t a lleg e th a t a po licy o r cu stom o f th e Coun ty o r th e S JH SD

w as the p rox im a te cau se o f the p la in tif fs’ con s titu tiona l in ju ry. See M one ll v . D ep t. o f

Soc ia l Se rv ice s, 436 U .S . 658 , 690 (1978 ) (loca l gove rnm en t m ay be liab le unde r § 1983

if “ the ac tion tha t is a lleged to be uncon s titu tiona l im p lem en ts o r execu tes a po licy,

s ta temen t , o rd inance , regu la tion o r dec is ion o f f ic ia lly adop ted and p rom u lga ted by tha t

body’s o f f ice rs.” ) . C ausa tion p resen ts a th resho ld ques tion : “ou r f irst inqu i ry in any case

a lleg ing [ loca l gove rnm en ta l] liab i lity unde r § 1983 is the ques tion w he the r the re is a

d irec t cau sa l link be tw een a [ loca l gove rnm en ta l] po licy o r cu stom and the a lleged

con s t itu t iona l dep r iva t ion ,” b ecau se “ [ i] t is on ly w hen the ‘execu t ion o f the governm en t’s

po licy o r cu stom … inf licts th e in ju ry’” tha t a lo ca l gove rnm en t en tity m ay be he ld liab le

unde r § 1983 . C ity o f Can ton , O h io v . H a rr is , 489 U .S . 378 , 385 (1989 ) (in te rna l c ita tion

om itted ). A ssum ing tha t cau sa tion m ay be show n ,

To sub jec t a gove rnm en ta l en tity to liab ility, “a mun ic ipa l po licy
m u st be a ‘po licy sta tem en t, ord inance , regu lation , o r dec ision o f f icia lly
adop ted and p rom u lga ted by [a mun ic ipa lity’s] o f f ice rs .’” See Lank fo rd v .
C ity o f H obar t, 73 F .3d 283 , 286 (10 th C ir . 1996 ) (quo ting S tarre tt, 876
F .2d a t 818 ); see a lso M on e ll v . N ew Y ork C ity D ep ’ t o f Soc ia l Servs ., 436
U .S . 658 , 98 S .C t. 2018 , 56 L .Ed .2d 611 (1978 ) . A b sen t such an o ff ic ia l
po licy, a mun ic ipa lity m ay a lso be he ld liab le if the d isc rim ina to ry p rac tice
is “ so pe rm anen t and w e ll se ttled as to con stitu te a ‘cu stom o r u sage ’ w ith
the fo rce o f law .” Lan k ford , 73 F .3d a t 286 (quo ting Ad ickes v . S .H . K ress
& Co ., 398 U .S . 144 , 168 , 90 S .C t . 1598 , 26 L .Ed .2d 142 (1970 )) .

M u rre ll v . Schoo l D is t. N o . 1 , D enver , C o lo ., 186 F .3d 1238 , 1249 (10 th C ir . 1999 ).

-70-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 74 of 192(cid:10)

Thu s, ac ts tha t do no t rise to the lev e l o f o f f icia l po licy m ay none the les s c rea te liab ility if

they a re “ su f f ic ien tly w ide sp read and pe rva sive so a s to con stitu te a ‘cu stom .’” Id . a t

1250 . H ow eve r, conduc t d irec ted so le ly a t a p la in tif f may no t “demon s tra te a cu s tom o r

po licy” o f the en tity “ to be de libe ra te ly ind if fe ren t” to tha t conduc t as a gene ra l m a tte r.

Id . (c iting M one ll, 436 U .S . a t 691 & n . 56 ).

[T ]h is de libe ra te ind if ference s tanda rd m ay be sa tisf ied “when the
m un icip a lity has ac tua l o r con stru c tive no tice tha t its ac tion o r fa ilu re is
sub stan tially ce rta in to resu lt in a con stitu tiona l v io lation , and it con sc iou sly
and de libe ra te ly choo se s to d isrega rd the risk o f ha rm .” Ba rney v .
Pu ls iphe r , 143 F .3d 1299 , 1307 (10 th C ir. 1999 ). A lthough a sing le
inc iden t gene ra lly w ill no t g ive rise to liab ility, O k la . C ity v . Tu ttle , 471
U .S . 808 , 823 , 105 S .C t. 2427 , 85 L .Ed .2d 791 (1985 ), “d e libe ra te
ind if ference m ay be found ab sen t a pa tte rn o f uncon stitu tiona l behav io r if a
v io la tion o f fede ra l r igh ts is a ‘h igh ly p red ic tab le ’ o r ‘p la in ly obv ious ’
con sequence o f a m un ic ipa lity’s ac tion .” Ba rney , 143 F .3d a t 1307
(in te rna l c ita tion s om itted ). The o f f ic ia l po s ition m u s t ope ra te a s the
“mov ing fo rce” beh ind the v io la tion , and the p la in tif f mu s t demon s tra te a
“d irec t cau sa l link” be tw een the ac tion and the righ t v io la tion . Bd . o f
C oun ty C omm ’rs v . B row n , 520 U .S . 397 , 399 , 117 S .C t. 1382 , 137 L .Ed .2d
626 (1997 ).

O lsen v . Lay ton H ills M a ll, 312 F .3d 1304 , (10 th C ir . 2002 ).

P la in tif f s con tend tha t “ [ t]he Coun ty and D is tric t had a de fac to po licy o f

de libe ra te ind if ference to tho se w ho comp la ined o f su f fering f rom D r . R edd and o the r

D is tric t s ta f f m embe rs ,” and tha t “ [ t]he Coun ty and D is tric t had a po licy o f ha rm ing the

repu ta tion s o f pe rson s in re ta lia tion fo r cha lleng ing the ir au tho rity.” (P ropo sed P re tria l

O rde r a t 20 -21 ¶ 52 -53 ; see P ropo sed Am ended Com p la in t a t 34 ¶¶ 52 -53 (same )) . In the

P ropo sed Am ended C om p la in t , they a l leg e tha t the S JH SD adm in is tra tors and B oard

-71-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 75 of 192(cid:10)

m em be rs, a s w e ll as the C oun ty C omm iss ione rs, C oun ty A dm in istra to r and C oun ty

A tto rney “behaved in a de libe ra tely ind if feren t m anne r, fa iled to adequa tely investiga te

the p rob lem s M rs. L ym an and D r. M acA rthu r iden tified in the D istric t, did no t ho ld

hea ring s on the ma tte rs , d id no t en fo rce , o r take any ac tion s to rec tify the situa tion s

iden tif ied by M rs . Lym an and D r . M acA rthu r .” (P ropo sed Am ended Com p la in t a t 16 –

17 .) “A pa ttern o f de libe ra ted ind if fe rence as a po licy w as exh ib ited by the C oun ty

C omm iss ion , C oun ty A tto rney, H ea lth D is tric t boa rd , adm in is tra to rs and med ica l s ta f f .”

(Id . a t 17 .)

5 6

O f cou rse , the po licy “cau sa tion” que stion p re suppo se s tha t a dep riva tion o f

con stitu tiona l righ ts has o ccu rred ; if the re w as no dep riva tion , the po licy o r cu stom is

imm a ter ial . B e fo re the Pa rt I P lain tiff s can p lead and p rove an a rguab le lega l cla im

aga in s t San Juan Coun ty o r the S JH SD fo r liab ility unde r § 1983 , they f irs t m u s t a llege

“ the dep riva tion o f [a] righ t[ ], p riv ilege [] , o r imm un it[y] secu red by the Con s titu tion and

law s .” 42 U .S .C . § 1983 .

Fo r the rea son s exp la ined he rea f te r, on the fac tua l a llega tion s now be fo re the

5 6
More recently, counsel argued that “[a] repeated pattern of a government entity’s conduct is a de facto
‘silent’ policy enabling [individual defendants] to ultra vires arbitrarily deny a plaintiff of his liberty and
property rights,” that “[c]areful or heightened scrutiny attaches when these liberty and property rights are
comprom ised by government,” and that the federal civil rights acts are “designed to specifically cure a situation
wherein the officials refuse to enforce provisions of the law.” (Memorandum in Support of Plaintiff
MacArthur’s Motion for the Court to Reconsider its Motion to D ismiss Plaintiff’s Claims and Plaintiffs’ Cross-
Motion for Summary Judgment, filed November 23 , 2004 (dkt. no . 670), at 5 (citing Planned Parenthood of
Southeastern Pa. v. Casey, 505 U. S. 833 (1992), and Monell v. New York City Dept. of Social Servs., 436 U. S.
658 (1978)).)

-72-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 76 of 192(cid:10)

cou rt, D r . M acA rthu r su f fered no a rguab le dep riva tion o f a con s titu tiona l “ libe rty” o r

“p rope rty” in te re s t, o r o the r fede ra lly p ro tec ted righ t. See in fra a t 83 -94 . L ikew ise , fo r

reason s exp la ined he rea f te r, M s . Lym an has no t a lleged fac ts show ing such a dep riva tion .

See in fra a t 94 -105 . F ina l ly, M s V a ldez asse r ts tha t— as a w om an o f adv anc ing yea rs,

m a rried to a M ex ican -Am e rican hu sband— be ing re fu sed exam ina tion and trea tm en t a t an

em e rgency room den ies he r the equa l p ro tec tion o f the law s gua ran teed by the Fou rteen th

Am endmen t; ye t, a s exam ined in g rea te r de ta il be low , the spec if ic fac ts p leaded and

p ro f fe red in suppo rt o f he r c la im show no ac tua l re fu sa l o r den ia l o f exam ina tion o r

trea tm en t on the da te in que stion , and the re fo re p rove in su f f ic ien t to ra ise a genu ine issue

as to con s titu tiona l dep riva tion tha t w ou ld requ ire a tr ia l. See in fra a t 106 -111 .

P la int iffs’ § 1983 C la im s A ga inst th e C oun ty
C omm iss ioner s & SJH SD B oard M ember s

In the P ropo sed Am ended C om p la in t , the p la in t iff s a l leg ed tha t the S JH SD “B oard

m em bers and C oun ty C omm iss ioners . . . beh av ed in a d e l ibera te ly ind iffe ren t manner ,

fa iled to adequa tely investiga te th e p rob lem s M rs. L ym an and D r. M acA rthu r iden tified in

the D istric t, did no t ho ld hea ring s on the m a tters , d id no t en fo rce , o r take any ac tion s to

rec tify the situa tion s iden tif ied by M rs . Lym an and D r . M acA rthu r .” (P ropo sed Am ended

C om p lain t at 16 -17 .) The p lain tiff s cha rac ter ize the S JH SD B oa rd ’s in ac tion on the ir

g rievance s a s “ [a] pa tte rn o f de libe ra ted ind if ference a s a po licy” tha t “w a s exh ib ited by

the Coun ty C omm ission , C oun ty A tto rney, H ea lth D is tric t boa rd , adm in is tra to rs and

m ed ica l s ta f f .” (Id . a t 17 ; see a lso id . a t 21 (“The C oun ty and D is tric t . . . ev idenced a

-73-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 77 of 192(cid:10)

pa ttern o f de libe ra te ind if fe rence to [p lain tiff s’] p ligh t.”); id . a t 87 ¶ 237 (“The H ea lth

D is tric t and the Coun ty d id no t d id no t rep rim and D r . R edd o r any o the r m ed ica l s ta f f

m em be r fo r the ir trea tm en t o f M rs . Lym an o r D r. M acA rthu r , o r H e len V a ldez .” ) .) A s

no ted above , p la in tif f s a lso a sse rted a t p re tria l tha t “ [ t]he Coun ty and D is tric t had a de

fac to po l icy o f d e l ibera te ind iffe rence to tho se w ho com p la ined o f su ffer ing from D r .

R edd and o the r D is tr ic t s ta f f m em be rs .” (P ropo sed P re tr ia l O rd e r a t 21 ¶ 52 .)

V icar iou s L iab ility , R e spond ea t Sup er ior & § 1983

The d e fendan ts respond tha t “ [w ] ith respec t to each o f the p la in t if fs ’

d isc rim ina tion and due p roce ss c la im s , San Juan Coun ty, the H ea lth D is tric t, R oge r

A tc it ty, John L ew is , John H ou sek eeper , K aren A dam s , Pa tsy Shumw ay and G ary

H o lliday a re no t liab le becau se re spondea t supe rio r liab ility doe s no t a ttach fo r pu rpo se s

o f 42 U .S .C . § 1983 un le ss the adverse trea tm en t re su lted f rom a po licy o r cu stom o f the

H ea lth D is tric t, o f w h ich the re is no ev idence in th is ca se .” (P ropo sed P re tria l O rde r a t 7 ¶

v i i.)

It ha s long been unders tood tha t “ the doc trine o f re spondea t supe rio r w a s no t

app licab le to rende r a supe rv iso r o r o the r supe rio r liab le unde r § 1983 fo r the

uncon s titu tiona l conduc t o f h is subo rd ina tes .” 1 She ldon H . N ahm od , C iv il R igh ts and

C iv il L ibe rtie s L itiga tion : The Law o f Sec tion 1983 § 3 :90 , a t 3 -330 (4 th ed . rev . 2004 )

(foo tno tes om itted ); see D raege r v . G rand C en tra l, Inc ., 504 F .2d 142 , 145 (10 th C ir.

1974 ) (“G ene ra lly speak ing , the doc trine o f v ica riou s liab ility o r re spondea t supe rio r ha s

-74-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 78 of 192(cid:10)

been ru led ou t in cases a ris ing unde r the Fede ra l C iv il R igh ts s ta tu tes .” ). M one ll v. D ep t.

o f Soc ia l Se rv ice s, 436 U .S . 658 (1978 ) , c lea rly ho ld s tha t v ica riou s liab ility unde r the

doc trine o f re spondea t supe rio r “canno t be app lied e ithe r to sup e r io rs o r to loca l

gove rnm en t en titie s” unde r § 1983 , unde r any c ircum s tances . 1 N ahm od , supra , at §

3 :91 , a t 3 -332 (em phas is in o rig ina l; foo tno te om itted ). In s tead , M one ll he ld tha t loca l

governm en ta l en t it ies “are suab le pe rson s under § 1983 and can be h e ld l iab le fo r the ir

uncon stitu tiona l po lic ie s , p rac tice s and cu stom s .” Id . (em phas is in o rig ina l) .

C on sequen tly, in ligh t o f M one ll, . . . the supe rio r doe s no t and shou ld no t
inva riab ly have a § 1983 du ty, so le ly by rea son o f po s ition , to compen sa te a
pe rson w ho se con s titu tiona l r igh ts have been v io la ted by subo rd ina tes .
W ha t is cu rren tly requ ired in o rde r fo r the supe rio r to have su ch a du ty is
tha t the supe rio r pe rsona lly e ithe r ac ted uncon stitu tiona lly o r w ith de libe ra te
ind if ference . Tha t is , the supe rio r m u s t have po sse ssed e ithe r the sta te o f
m ind fo r the pa rticu la r con stitu tiona l v io la tion o r de libe ra te ind if ference ,
and m u s t a lso have p layed a cau sa l ro le in p la in tiff’s con stitu tiona l
dep riva tion .

Id . (empha s is added & foo tno te om i tted ). Sec tion 1983 add re sse s conduc t w h ich

“ sub jec ts , o r cau se s to be sub jec ted” the p la in tif f to a dep riva tion o f c iv il righ ts , requ iring

p lead ing and p roo f o f a cau sa l connec tion be tw een a de fendan t’s conduc t and the

con s titu tiona l dep riva tion su f fe red by the p la in tif f . See R izzo v . G oode , 423 U .S . 362 ,

376 -377 (1976 ) (“ the re spon s ib le au tho ritie s had p layed no a ff irm a tive pa rt in dep riv ing

any m em be rs o f the tw o re sponden t c lasses o f any con s titu tiona l r igh ts” ).

Thu s, theo ries o f v ica riou s liab ility a re no t av a ilab le to § 1983 p lain tiff s. “O n ly

the d irec t ac ts o r om iss ion s o f gove rnm en t o f f ic ia ls , no t the ac ts o f subo rd ina te s , w ill g ive

-75-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 79 of 192(cid:10)

rise to ind iv idua l liab ility unde r § 1983 .” C o lem an v . H ou ston Indep . Sch . D ist., 113 F .3d

528 , 534 (5 th C ir . 1997 ) . W he re an o ff ic ia l become s aw a re o f a con stitu tiona l v io la tion

on ly a f te r the fac t, he o r she canno t be h e ld l iab le fo r the v io la tion unde r § 1983 becau se

the v io la tion has a lready occu rred and the o f f ic ia l p layed no cau sa l ro le in it. See Schu ltz

v . Baum ga r t, 738 F .2d 231 , 238 -239 (7 th C ir . 1984 ) . Thu s , “ som e pe rsona l invo lvem en t

o f the supe rv iso ry o f f icia l in the subo rd ina te’s uncon stitu tiona l conduc t — ana logou s to

M one ll’s o f f ic ia l po licy o r cu stom requ iremen t fo r loca l gove rnm en t liab ility — m u s t be

show n fo r § 1983 liab ility.” 1 N ahm od , supra , § 6 .6 , a t 6 -24 (em phas is in o rig ina l) . See

A nno ta tion , V icar iou s L iab i li ty o f Super io r U nder 42 U SC S § 1983 for Subo rd ina te’s

A c ts in D ep riva tion o f C ivil R igh ts , 51 A .L .R . Fed . 285 (1981 & Supp . 2004 ) , and case s

c ited the re in .

The Pa rt I P la in tif f s p lead the language o f “de libe ra te ind if ference ,” “pa tte rn ,” and

“po l icy,” bu t a llege no spec if ic fac ts show ing tha t the ind iv idua l S JH SD B oard m em bers

knew o f o r d irec tly instiga ted any den ial o f con stitu tiona l due p rocess o r o the r ac tionab le

dep riva tion by S JHSD m ed ica l and suppo rt s ta f f m embe rs ; no r do they a sse rt tha t the

a lleged v io la tion s w e re d irec tly e f fec ted pu rsuan t to an ex is ting po licy o r cu stom

in s titu ted by each B oa rd m embe r named a s a de fendan t. In s tead , p la in tif f s con tend tha t

the S JH SD B oa rd m embe rs ow ed an af f irm a tive du ty to p rov ide the p la in tif f s w ith po s t-

dep riva tion re lie f— tha t is , a du ty a f te r the fac t to inve stiga te ma tte rs tha t the p la in tif f s

comp la ined o f , to “ f ind and ho ld accoun tab le the re spon s ib le pa rtie s ,” and to the reby

-76-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 80 of 192(cid:10)

“ re so lve the p rov ide r and pa tien ts’ and pub lic ’s concern s .” C f. 1 N ahm od , supra , § 6 :6 a t

6 -24 (“P lain tiff s m ay be expec ted to try to f it loca l gove rnm en t fa ilu re to ac t ca se s in to

M one ll’s ca tego ry o f o f f ic ia l po licy o r cu stom .” )

P lain tiff s h ave no t cited to pe rtinen t au tho rity estab lish ing su ch an a f f irm a tive du ty

on the pa rt o f sen io r pub lic o f f ic ia ls to v ind ica te p la in tif f s’ in te re sts in tha t fa sh ion— the

b reach o f w h ich w ou ld render the C oun ty C omm iss ioners o r S JH SD B oard m em bers

ind iv idua lly liab le to p la in tif f s unde r § 1983 . A b sen t such au tho rity, the cou rt ha s

d isce rned no ba sis in the law o r po licy o f § 1983 fo r f ind ing the ex is tence o f such an

a f f irm a tive du ty. See genera lly Bake r v . M cCo llan , 443 U .S . 137 (1979 ) (she rif f has no

a f f irm a tive du ty unde r § 1983 to inve stiga te a rre stee ’s c la im s o f innocence and m is taken

iden tity).

Even a ssum ing tha t p la in tif f s’ c la im s o f due p roce ss v io la tion s o r d isc rim ina tion

by S JH SD m ed ica l or suppo r t s taff cou ld be p rov en , ho ld ing the C oun ty C omm iss ioners

and S JHSD B oa rd m em be rs ind iv idua lly liab le fo r fa iling to v ind ica te the p la in t if fs ’

in te res ts a fte r the fac t— fa iling to inve stiga te the ir comp la in ts , “no t ho ld [ ing ] hea ring s on

the m a tte rs,” and no t “ tak [ ing ] any ac tion s to rec tify the s itua t ion s iden tif ied by M rs.

Lym an and D r . M acA rthu r”— w ou ld a ttach § 1983 liab ility to po s t hoc conduc t tha t can

bea r no cau sa l re la tion sh ip to the a lleged con s titu tiona l dep riva tion s them se lves .

R emem be ring tha t § 1983 im po se s liab ility on ly upon one w ho “ sub jec ts , o r cau se s to be

sub jec ted” a p e rson to a cons titu t ion a l dep r iva t ion , the requ irem en t tha t a p la in t if f m us t

-77-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 81 of 192(cid:10)

dem on stra te a “d irec t cau sa l link” be tw een the de fendan t’s conduc t and the c iv il righ ts

v io la tion , B d . o f C oun ty C omm ’rs v . B row n , 520 U .S . 397 , 399 (1997 ), w ou ld appea r to

p rec lude the im po s ition o f § 1983 liab ility upon the Coun ty C omm iss ione rs and the

S JH SD B oa rd m em be rs b ased upon the “ fa ilu re to v ind ica te” theo ry u rged by the Pa rt I

P la in tif fs .

Th e SJH SD Bo ard & th e SJH SD M ed ica l S ta ff’s “Po licy”
re : Phy s ic ian A ss istan ts

R e fe rring to the S JH SD m ed ica l s ta f f ’s a lleged adop tion in 1999 o f a s ta f f “po licy”

requ iring Phys ic ian A ss is tan ts exe rc is ing S JH SD s ta f f p riv ileges to be supe rv ised by a

loca l phys ic ian hav ing S JHSD s ta f f p riv ilege s,

5 7

p la in tif f s comp la in tha t “ [w ]h ile the

5 7

Plaintiff Lyman alleges:

31.
Though Dr. Penn and Dr. Mena were staff members, Michele Lyman did not
enjoy full privileges while supervised by them .

32.
Dr. Redd and Dr . Jones and Dr . Cook and Dr . Nelson did not approve Mrs.
Lyman having privileges unless her doctor was a medical staff member and then only if the
physician was in the same town as she.

33.
While the policy for P.A .s appears neutral, it effected only Michele Lyman in
how it was applied, monitored, and carried out.
* * * *

209. Dr. Penn and Ms. Lyman attended the Medical staff Meeting for June, 1999.
Dr. Penn and Ms. Lyman requested full privileges be restored and Dr . Redd and Jones both
stated that only if Dr. Penn was willing to sit in Blanding with Ms. Lyman while Ms. Lyman
took ER call and they would not supervise me. Mr. Bryant as a P.A. working under Dr. Jones
while Dr. Jones was not in Blanding, had no such restraints. Mrs. Lyman pointed out that she
covered the ER (Blanding urgent care clinic) in Blanding by herself on many occasions. There
was no response. (Cmplt. 137-145) Staff had previously voted for her privileges and then the
County, Board, and medical staff did nothing while District staff Ora Lee Black, Dr. Redd,
Gloria Yanito denied her the same. Some privileges as to labs and exrays were eventually
restored.

(Proposed Amended Complaint at 31 ¶¶ 31-33; 78 ¶ 209; see Proposed Pretrial Order at 18 ¶¶ 31-33; 54 ¶ 209
(same).)

(con tinued …)

-78-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 82 of 192(cid:10)

[Phys ic ian A ss is tan t] po lic ie s in que stion appear to be fac ia lly neu tra l, in app lica tion they

app lied on ly to M rs . Lym an and w e re no t app roved by the D is tr ic t B oa rd . H ow eve r, the

D is tr ic t Boa rd knew o f them and d id no th ing to s top them from be ing u sed to p reven t

M rs . Lym an ’s p rac tice .” (P ropo sed Am ended C om p la in t a t 22 (em phas is added ).)

5 8

M s . Lym an ’s con ten tion tha t the 1999 sta f f “po licy” re : loca l supe rv is ion (o r the

o the r a lleged “den ia ls” o f p riv ilege s o f w h ich she comp la in s) re su lted in a con stitu tiona l

dep riva tion unde r § 1983 p re suppo se s tha t she had a con stitu tiona l righ t to exe rc ise

p rac tice p riv ilege s a t S JHSD fac ilitie s f ree o f any such lim ita tion o r re stra in t im po sed by

the S JH SD m ed ica l s ta f f .

Q ua lified Imm un ity & P la in tiffs’ § 1983 C la im s

In the P ropo sed P re trial O rde r, the de fendan ts a sse rted tha t

[b ]ecau se San Juan Coun ty and the H ea lth D is tric t a re po litica l subd iv is ion s
o f the S tate o f U tah and the a lleg ed ac ts and /o r om iss ion s by C oun ty
comm iss ion e rs, o f f ic ia ls o r emp loyees o r H ea lth D is tr ic t trus tees ,
emp loyee s o r s ta f f m embe rs , abou t w h ich p la in tif f s comp la in , w e re carried
ou t w ith in the scop e o f and pu rsuan t to the ir o f f ic ia l du ties as trus tees ,
em p loyee s o r s taf f m em bers o f the H ea l th D is tr ic t , p la in t iff s ‘ c la im s are
ba rred by the doc trine o f qua lif ied immun ity,

( …con tinued )
5 7
Recounting that the medical staff “pass[ed] a policy saying in order to have privileges your supervising
physician has to be in the same town,” Ms. Lyman’s counsel asserted that she did not see “where the governing
board adopted that policy so it was an action taken by medical staff but under the bylaws the governing board is
the body that sets the policy.” (Tr. 11/15/02, at 15:7-24 (Ms. Rose).) Apparently the argument is that the
SJHSD Board adopted a “policy” of letting the medical staff make “policy” concerning Physician Assistants’
staff privileges, but that it did so without any formal Board action.

5 8
Plaintiffs also allege that “[a]s a policy and pattern of practice, those who inform those in power of
problems are subjected to reputation assassination within the area.” (Id. at 17.)

-79-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 83 of 192(cid:10)

as w e ll a s “ the p rov is ion s o f the U tah G ove rnm en ta l Imm un ity A c t, U tah C ode A nn . §

63 -30 -1 e t seq , inc lud ing bu t no t lim ited to § 63 -30 -3 and § 63 -30 -10 .” (P ropo sed

P re tr ia l O rd e r a t 10 -11 ¶ xxxv i.)

The Sup rem e C ou r t has h e ld tha t “governm en t of f ic ia ls pe rfo rm ing d iscre t ionary

func tion s gene ra lly a re sh ie lded f rom liab ility f rom c iv il damage s in so fa r a s the ir conduc t

does no t v io late c lea rly estab lished sta tu to ry o r con stitu tiona l righ ts o f w h ich a reasonab le

pe rson w ou ld have know n .” H a rlow v . F itzgera ld , 457 U .S . 800 , 818 (1982 ) . Th is g ran t

o f imm un ity is in tended to ba lance tw o compe ting in te re sts . O n the one hand , w hen an

o f f ic ia l abu se s h is o f f ice , “an ac tion fo r damage s m ay o f fer the on ly rea lis tic avenue fo r

v ind ica tion o f con stitu tiona l gua ran tee s.” Id ., 457 U .S . a t 814 . O n the o the r hand ,

expo s ing gove rnm en t o f f ic ia ls to dam ages su its “en ta il[ s] sub s tan tia l soc ia l co s ts ,”

Ande rson v . C re igh ton , 483 U .S . 635 , 638 (1987 ) , such a s “ the expen se s o f litiga tion , the

d ive rs ion o f o f f ic ia l ene rgy f rom p re ss ing pub lic issue s , . . . the de te rrence o f ab le c itizen s

f rom accep tance o f pub lic o f f ice . . . [and the de te rrence o f pub lic o f f ic ia ls f rom ] ‘the

un f linch ing d ischa rge o f the ir du tie s .’” H a r low , 457 U .S . a t 814 . “T he Sup rem e C ou r t

ha s a ttemp ted to s trike the ba lance be tw een the se tw o concern s by sh ie ld ing

gove rnm en t o f f ic ia ls f rom su its fo r c iv il damage s ‘in so fa r a s the ir conduc t doe s no t

v io la te c lea rly e stab lished sta tu to ry o r con stitu tiona l righ ts o f w h ich a rea sonab le pe rson

w ou ld have know n .’” Law rence v . R eed , 406 F .3d 1224 , 1230 (10 th C ir . 2005 ) (quo ting

H a r low , 457 U .S . a t 818 ) . “A lthough cou rts have derived f rom th is s ta temen t a va rie ty o f

-80-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 84 of 192(cid:10)

m u lti-pa rt te sts , the e ssen tia l inqu iry is : w ou ld an ob jec tive ly rea sonab le o f f ic ia l have

know n tha t h is conduc t w a s un law fu l?” Id . (c iting Ande rson v . C re igh ton , 483 U .S . a t

640 ).

In the T en th C ircu it, w e em p loy a th ree -s tep inqu iry. See Ro ska ex re l.
Ro ska v . P e te rson , 328 F .3d 1230 , 1239 -40 , 1247 , 1251 (10 th C ir. 2003 ) .
F irs t, w e a sk “w he the r the p la in tif f ‘s a llega tion s , if true , e stab lish a
con stitu tiona l v io la tion .” Id . a t 1239 -40 . If no t, the su it is d ism issed ; if so ,
w e move to the second step : “w he the r the law w a s c lea rly e stab lished a t the
tim e the a lleged v io la tion s occu rred .” Id . a t 1247 . Th is s tep g ive s the
o f f ic ia l an oppo rtun ity to show tha t he “ne ithe r knew no r shou ld have
know n o f the re lev an t leg a l standa rd” becau se the law w as no t clea rly
es tab lished a t the tim e he ac ted . H a rlow , 457 U .S . a t 819 , 102 S .C t. 2727 .
W he re the law is no t clea rly estab lished , cou rts do no t requ ire o f f icia ls to
an t ic ipa te its fu ture d ev e lopm en ts , and qua l if ied imm un i ty is there fo re
app rop ria te .

If the law w a s c lea rly e stab lished , w e reach the th ird s tep o f the
inqu iry: w he the r, in sp ite o f the fac t tha t the law w a s c lea rly e stab lished ,
“ex trao rd ina ry c ircum s tances” –such a s re liance on the adv ice o f coun se l o r
on a sta tu te–“ so ‘p reven ted ’ [ the o f f ic ia l] f rom know ing tha t h is ac tion s
w e re uncon stitu tiona l tha t he shou ld no t be im pu ted w ith know ledge o f a
c lea rly e stab lished righ t.” Ro ska , 328 F .3d a t 1251 . Th is occu rs on ly
“ ra re ly.” Id .

5 9

Id .

W he the r an o f f ic ia l is p ro tec ted by qua lif ied imm un ity thu s tu rn s upon the ob jec tive

lega l rea sonab lene ss o f the ac tion , in ligh t o f lega l ru le s c lea rly e stab lished a t the tim e the

5 9
Once a defendant raises a the defense of qualified immunity, “the burden shifts to the plaintiff [to]
satisf[y] a heavy two-part burden” to “demonstrate that the defendant violated a constitutional or statutory
right[,]” and “‘that the right at issue was clearly established at the time of the defendant’s unlawful conduct.’”
Gross v. Pirtle, 245 F.3d 1151, 1155, 1156 (10th Cir. 2001). If the plaintiff cannot make both showings, the
defendant is entitled to qualified immunity; if he can, the burden shifts to the defendant “to prove that there are
no genuine issues of material fact and that he or she is entitled to judgment as a matter of law.” Id. at 1156.

-81-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 85 of 192(cid:10)

ac tion w a s taken .

6 0

The con tou rs o f the righ t a lleged ly v io la ted mu s t be su f f ic ien tly c lea r

so tha t a rea sonab le o f f ic ia l w ou ld unde rs tand tha t w ha t he o r she is do ing v io la te s tha t

righ t. Ande rson v . C re igh ton , 483 U .S . 635 , 639 (1987 ) . “ ‘Th is is no t to say tha t an

o f f ic ia l ac tion is p ro tec ted by qua lif ied imm un ity un le ss the ve ry ac tion in que stion ha s

p rev iou s ly been he ld un law fu l, . . . bu t it is to say tha t in ligh t o f p re -ex is ting law tha t

un law fu lne ss m u s t be apparen t.’” H ope v . P e lze r , 536 U .S . 730 , 739 (2002 ) (quo ting

Ande rson v . C re igh ton , 483 U .S . a t 640 ) (in te rna l c ita tion om itted ) . Thu s , if p r io r case

law p rov ides “fa ir w arn ing” tha t an o ff icer’s conduc t w ou ld v io la te the p la in t iff ’s

con stitu tiona l righ ts , “o f f ic ia ls can still be on no tice tha t the ir conduc t v io la te s e stab lished

law even in nove l fac tua l c ircum s tances .” Id . a t 739 -704 , 741 .6 1

It is im po rtan t to no te tha t qua lif ied imm un ity “es tab lishes a righ t no t to be tr ied .”

E llio t v . Thom a s , 937 F .2d 338 , 341 (7 th C ir.1991 ). A cco rd ing ly, the cou rts o f ten f ind it

app rop ria te to m ake a de te rm ina tion on th is issue p rio r to comm encem en t o f tr ia l.

“ [T ]he ‘en titlemen t [ to qua lif ied imm un ity] is an imm un ity f rom su it ra the r
than a m e re de fen se to liab ility; and like an ab so lu te imm un ity, it is
e f fec tive ly lo s t if a ca se is e rroneou sly pe rm itted to go to tria l.’” N a tiona l
C omm od ity and Ba r te r A ssoc ia tion v . A rche r, 31 F .3d 1521 , 1532 n . 8 (10 th
C ir . 1994 ) (quo ting M itch e ll v. Fo rsy th , 472 U .S . 511 , 526 (1985 )) .

6 0
The Supreme Court has expressly held that qualified immunity is governed by an objective
reasonableness standard, and that “[e]vidence concerning the defendant’s subjective intent is simply irrelevant to
that defense.” Crawford-El v. Britton, 523 U.S. 574, 588 (1998).

6 1
According to the court of appeals, “In order for the law to be clearly established there must have been
a Supreme Court or other Tenth Circu it decision on point so that ‘the contours of the right [were] sufficien tly
clear that a reasonable official would understand that what he is doing violates that right.’ Finn [v. New Mexico,
249 F.3d 1241 (10th Cir. 2001)] at 1250 (quoting Anderson v. Creighton, 483 U.S. 635, 640, 107 S.Ct. 3034, 97
L.Ed.2d 523 (1987)).” McFall v. Bednar, ___ F.3d ___, ___, 2005 WL 1023433 (10th Cir. 2005).

-82-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 86 of 192(cid:10)

C have z v . C ity o f A lbuque rque , 402 F .3d 1039 , 1044 (10 th C ir . 2005 ).

D r . M acA r thur ’s § 1983 C la im

D r . M acA r thur ’s “R igh t” to P rac tice a t SJH SD Fac ilitie s

C oun se l as se rts tha t “D r. M acA rthu r’s ab ility to p rac tice m ed icin e en ter ing in to

pa tien t con trac ts w h ich a re p rope rty con stitu te s a libe rty and p rope rty righ t,” re lying on an

o f t-quo ted pa ssage from the D ec la ra tion o f Independence and an exce rp t f rom Ju s tice

B rad ley’s d issen ting op in ion in The S laugh te r-H ou se Ca se s , 83 U .S . (16 W a ll.) 36

(1873 ) , re ferring to the righ t to pu rsue a comm on ca lling .

6 2

(M emo randum in Suppo r t o f

P la in t if f M acA r thu r ’s M o t ion fo r the C ou r t to R econ s ide r its M o t ion to D ism iss

P la in tif f ’s C la im s and P la in tif f s’ C ro ss-M o tion fo r Summ a ry Judgm en t, f iled N ovembe r

23 , 2004 (dk t. no . 670 ), at 4 -5 .) In coun se l’s v iew , this “ libe rty and p rope rty righ t” to

p rac tice med ic ine amoun ts to a ca rte b lanche en titlemen t to fu ll p rac tice p riv ilege s a t

coun ty-spon so red ho sp ita l and c lin ica l fac ilitie s . C oun se l e labo ra ted on th is v iew a t the

P re tria l C on fe rence :

THE COURT : O kay. N ow w ha t’s , w ha t’s D r . M acA rthu r
com p lain ing abou t?

6 2
This right to choose one’s calling is an essential part of that liberty which it is the object of government
to protect; and a calling, when chosen, is a man’s property right. . . . A law which prohibits citizens . . .
from adopting a lawful employment, or from following a lawful employment previously adopted, does
deprive them of liberty as well as property, without due process of law.

83 U.S. (16 Wall.), at 116, 122 (Bradley, J., dissenting); see Tr. 11/14/02 at 28:11-23 (Ms. Rose) (quoting
Justice Bradley’s dissenting opinion, 83 U.S. (16 Wall.) at 120).

-83-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 87 of 192(cid:10)

M S . RO SE : H e ’s comp la in ing abou t one , he had , he had a m ed ica l
license tha t a llow ed h im p r iv i leges .

THE COURT : W e ll you don ’ t ge t p riv i leges as a m a tte r [o f ] cou rse
do you?

M S . RO SE : I th ink tha t w hen you ’ re , I th ink tha t w hen the re is a
C ong re ss iona l po licy fo r encou rag ing peop le , p rov ide rs to go to ru ra l a rea s
to inc rea se compe tition in tho se a rea s and so fo rth .

THE COURT : B u t the ho sp ita l a s a ho sp ita l g ran ts p riv ilege s and
den ies p r iv i leges o r revoke s p r iv i leges?

M S . ROSE : A nd tha t’s , tha t’s the key ques tion he re Y ou r H ono r . H e
ha s , I m ean they’re no t c la im ing tha t I’m aw a re o f tha t he w a s unqua lif ied
to w o rk the re , they’re c la im ing tha t tho se 2 docum en ts w e ren ’t in h is f ile .
D r. R edd sa id he saw the docum en ts .
* * * *

THE COURT : W e ll no one says tha t you ’re en titled to have ho sp ita l
p riv ilege s. Show m e a p rov is ion tha t says tha t you ’re en titled a s a ma tte r o f
r igh t to h ave hosp i ta l p r iv i leges?

M S . RO SE : W e ll he re ’s ano the r w ay o f reph rasing tha t. W he re is
the p rov ision tha t allow s a tax suppo rted pub licly funded d istric t to p roh ib it
an o the rw ise qua lified physic ian f rom u sing the fac ilities fo r these pa tien ts
and I th ink tha t’s m o re o f the c rux o f it.
W e ’ve go t, w e ’ve , you know , the d is tric t’s pow e rs a re lim ited by
s ta tu te . W he re ’s the sta tu te tha t a llow s th is d is tric t to deny and lim it the
pow e rs and righ ts and p riv ilege s tha t D r . M acA rthu r ge ts f rom hav ing tha t
m ed ica l licen se[? ] .
* * * *

THE COURT : Y es . The fac t tha t you hav e a m ed ica l licen se doesn ’ t
g ive you au tom a tica lly ho sp ita l p riv ilege s. Y ou ’ve go t to have a d if feren t
k ind o f re la tion sh ip e stab lished .

M S . RO SE : A nd w ha t righ t, w ha t s ta tu to ry sou rce a llow s the
ho sp ita l to m a in ta in a monopo ly o r a ttemp t to m a in ta in a monopo ly and
rese rve its p riv ileg es to tho se they a rb itrar ily and cap ric iou sly choo se to
bes tow them u pon [? ]
N o th ing , the re is no sou rce fo r a pub lic ly funded tax suppo rted

-84-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 88 of 192(cid:10)

ho sp ita l accep ting M ed ica re and M ed ica id to do so b ecause to do so
dep rives the M ed ica re pa tien ts in the a rea o f the righ t to choo se w ho the ir
p rov ide rs a re .

(T r . 11 /14 /02 , a t 19 :7-23 , 24 :13 -25 :1 , 28 :24 -29 :10 .)

A s coun se l sugge sts , the Fou rteen th Am endmen t’s “ libe rty” gua ran tee inc lude s an

ind iv idua l’s righ t “ ‘to engage in any o f the comm on occupa tion s o f life ’” :

“W h ile th is cou rt has no t a ttem p ted to de f ine w ith exac tness the libe rty . . .
gua ran teed (by the Fou rteen th Am endmen t) , the te rm ha s rece ived much
con side ra tion and som e o f the inc luded th ing s have been de f in ite ly s ta ted .
W ithou t doub t, it deno tes no t m e re ly f reedom f rom bod i ly restra in t bu t a lso
the righ t o f the ind iv idua l to con trac t, to engage in any o f the comm on
occupa tion s o f life , to acqu ire u se fu l know ledge , to m arry, es tab lish a hom e
and b ring up ch ild ren , to w o rsh ip G od acco rd ing to the d ic ta tes o f h is ow n
con sc ience , and genera lly to en joy tho se p riv ilege s long recogn ized . . . a s
e ssen tia l to the o rde rly pu rsu it o f happ ine ss by f ree men .” M eyer v .
N eb ra ska , 262 U .S . 390 , 399 , 43 S .C t. 625 , 626 , 67 L .Ed . 1042 . In a
C on s titu tion fo r a f ree peop le , the re can be no doub t tha t the mean ing o f
‘l ibe rty’ m u s t be b ro ad indeed . See , e .g ., Bo lling v . Sha rpe , 347 U .S . 497 ,
499 –500 , 74 S .C t. 693 , 694 , 98 L .Ed . 884 ; S tan ley v . Illino is , 405 U .S . 645 ,
92 S .C t. 1208 , 31 L .Ed .2d 551 .

Boa rd o f R egen ts o f S ta te C o lleg es v . Ro th , 408 U .S . 564 , 572 (1972 ) (quo ting M eyer v .

N eb ra ska , 262 U .S . 390 , 399 (1923 )).

6 3

A s the F if th C ircu it mo re recen tly e labo ra ted in

M ar tin v . M em or ia l H osp . a t Gu l fpo r t, 130 F .3d 1143 (5 th C ir. 1997 ) :

6 3
2 Thomas M. Cooley, A Treatise on the Constitutional Limitations which rest upon the Legislative
Power of the States of the American Union 824 (8th ed. 1927):

“Liberty” as used in [the Due Process] clause denotes not merely freedom from bodily restraint
but also the right of the individual to contract, to engage in any of the common occupations of
life, to acquire useful knowledge, to marry, to establish a home and bring up children, to
worship God according to the dictates of his own conscience, and generally to enjoy those
privileges long recognized at common law as essential to the orderly pursuit of happiness by
free men. [Footnote omitted.]

-85-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 89 of 192(cid:10)

“T he D ue P rocess C lause . . . p ro tec ts an ind iv idua l’s libe r ty in te res t
w h ich is v iew ed a s inc lud ing an ind iv idua l’s f reedom to w o rk and earn a
liv ing and to e stab lish a home and po s ition in one ’s comm un ity.” C ab ro l v .
Tow n o f Y oung sv ille , 106 F .3d 101 (5 th C ir . 1997 ) , c iting Ro th , supra , 408
U .S . a t 572 , 92 S .C t. a t 2706 -07 . “ It requ ire s no a rgum en t to show tha t the
righ t to w o rk fo r a liv ing in the comm on occupa tion s o f the comm un ity is o f
the ve ry e ssence o f the pe rsona l f reedom and oppo rtun ity tha t it w a s the
pu rpo se o f the [ fou rteen th ] Am endmen t to secu re .” Ph illips v . Vandyg riff,
711 F .2d 1217 , 1222 (5 th C ir . 1983 ) , quo ting T ruax v . Ra ich , 239 U .S . 33 ,
41 , 36 S .C t. 7 , 10 , 60 L .Ed . 131 (1915 ). See a lso : M eyer v . N eb ra ska , 262
U .S . 390 , 399 , 43 S .C t. 625 , 626 , 67 L .Ed . 1042 (1923 ) (“W ithou t doub t,
[ ‘libe rty’ in the fou rteen th amendm en t] deno te s no t m e re ly f reedom f rom
bod ily restra in t bu t also the righ t o f the ind iv idua l to con trac t, to engage in
any o f the comm on occupa tion s o f life . . .” ); and Schwa re v . Boa rd o f Ba r
E xam iners , 353 U .S . 232 , 238 -39 , 77 S .C t. 752 , 756 , 1 L .Ed .2d 796 (1957 )
(“A s ta te canno t exc lude a person f rom the p rac tice o f law o r f rom any
o the r occupa tion … fo r rea son s tha t con travene the D ue P roce ss o r Equa l
P ro tec t ion C lause o f the Fou r teen th Am endm en t .”) .

Id . a t 1148 .

N one the le ss , a phys ic ian ’s “ libe rty” in te re st in pu rsu ing h is o r he r p ro fe ss iona l

p rac tice and estab lish [ ing ] a hom e and po sition in” a pa rticu lar comm un ity does no t pe r

se en title the phys ic ian to exe rc ise p lena ry s ta f f p riv ilege s a t pub lic ho sp ita ls o r m ed ica l

fac ilitie s . To the con tra ry, “Su its by phys ic ian s w ho have been den ied ho sp ita l s ta f f

p riv ilege s a re no t new . It ha s been c lea rly e stab lished fo r yea rs tha t a doc to r ha s no

con stitu tiona l righ t to the sta f f p riv ileg es o f a ho sp ital m e re ly becau se he is licen sed to

p rac tice m ed ic ine . H aym an v . G a lve ston , 1927 , 273 U .S . 414 , 47 S .C t. 363 , 71 L .Ed .

714 .” So sa v . Boa rd o f M anage rs o f Va l V e rde M em . H o sp ., 437 F .2d 173 , 175 (5 th C ir.

-86-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 90 of 192(cid:10)

1971 ) .

6 4

G ene ra lly, a phys ic ian is lim ited to a sse rtion o f a sub s tan tive due p roce ss righ t

no t to be exc luded f rom s ta f f p riv ilege s excep t fo r rea son s re la ted to the ope ra tion o f the

ho sp ita l w h ich a re no t a rb itra ry o r cap r ic iou s , and a r igh t to p rocedu ra l du e p rocess

su f f ic ien t to en su re tha t the phys ic ian ha s an oppo rtun ity to demon s tra te tha t the exc lu s ion

is no t ju s tif ied . See W oodbu ry v M cK innon , 447 F .2d 839 , 842 (5 th C ir. 1971 ); So sa v

Boa rd o f M anag ers o f Va l Verde M em . H osp , 437 F .2d a t 176 -177 ; Sa ra so ta C ty Pub

H o sp B d v Shahaw y , 408 So .2d 644 , 646 -647 (F la . 1981 ) .

A b sen t the recogn ition o f a per se righ t to pu rsue med ica l p rac tice th rough the

ex erc ise o f fu l l s taff p r iv i leg es a t governm en t-spon so red m ed ica l fac i li ties , the S JH SD ’s

exe rc ise o f sup e rv iso ry pow e r to g ran t, lim it o r deny p rac tice p r iv i leges a t tho se

fac ilitie s— by requ iring phys ic ian s to app ly fo r and ob ta in p riv ilege s unde r the med ica l

sta f f bylaw s— d id no t deny a sub stan tive con stitu tiona l “libe rty and p rope rty righ t” to

p rac tice m ed ic ine o r to m ake con t rac ts w ith p a tien ts fo r h is p ro fess ion a l se rv ices.

6 5

6 4

In Hayman , the Court stated that

the only protection claimed here is that of appellant’s privilege to practice his calling. However
extensive that protection may be in other situations, it cannot, we think, be said that all licensed
physicians have a constitutional right to practice their profession in a hospital maintained by a
state or a political subdivision, the use of which is reserved for purposes of medical instruction.
It is not incumbent on the state to maintain a hospital for the private practice of medicine.

Hayman v. City of Galveston, 273 U.S. 414, 416-417 (1927).

6 5
Justice Sutherland’s opinion in Adkins v. Children’s Hospital, 261 U.S. 525 (1923), cited by
plaintiffs, extolls the virtue of freedom of contract, but does so in the context of state legislation prescribing
m inimum wages for women and children in private employment, without reference to the pursuit of a particular
line of employment. See id. at 545-546 (“the right to contract about one’s affairs is a part of the liberty of the
individual protected by this [Due Process] clause,” and although “[t]here is, of course, no such thing as absolute
freedom of contract[,] . . . freedom of contract is, nevertheless, the general rule, and restraint the exception, and
(con tinued …)

-87-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 91 of 192(cid:10)

A phys ic ian ’s libe r ty in te res t in pu rsu ing a p ro fess ion a l p rac tice ra ises p rocedu ra l

due p rocess conce rn s w ith resp ec t to the g ran t o r den ial o f sta f f p riv ileg es a t a pub lic

ho sp ita l o r m ed ica l fac ility once a reques t fo r such p riv ileges has been m ade .

D r . M acA r thur ’s R eque st for Pr iv ilege s & P rocedura l
D ue P rocess

D r . M acA rthu r’s § 1983 c la im a lso a ttemp ts to ra ise an issue o f p rocedu ra l due

p rocess conce rn ing a r igh t to no t ice and hea r ing con ce rn ing h is D ecem be r 1999 reque s t

fo r fu l l p rov ision a l p r iv i leges a t S JHSD fac ilities :

M S . RO SE : A ll righ t. Th is is w ha t the c rux o f it is . The re w a s no
due p ro cess , the re w as no no tice . H e w as neve r to ld the re w as a p rob lem .
H e w a s neve r g iven an oppo rtun ity to rec tify the p rob lem . The re ’s no , by
the bylaw s the re ’s no hea ring p roce ss ava ilab le fo r phys ic ian s tha t have
tem po ra ry p riv ileges . H e w as g iven no hea ring bas is excep t tha t, you know ,
he w a s no t to ld any tim e in advance tha t th is Feb rua ry 2nd hea ring w a s
go ing to b e he ld to d iscuss h is s ta f f p r iv i leges .

(T r . 11 /14 /02 , a t 20 :25 -21 :8 (M s . R o se ).)

6 6

C oun se l re ferred to a Feb rua ry 2 , 2000

( …con tinued )
6 5
the exercise of legislative authority to abridge it can be justified only by the existence of exceptional
circumstances”), overruled by West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937). The Court has long since
abandoned Adkins’ expansive view of freedom of contract. See Planned Parenthood of Southeastern
Pennsylvania v. Casey, 505 U.S. 833, 860 (1992).

6 6
In arguing the denial of procedural due process, Dr. MacArthur’s counsel retreated somewhat from
her substantive due process theory:

THE COURT : Okay. Well your idea is that in rural areas a doctor with a medical
degree and a medical license has unrestricted power to practice in a local hospital?

MS. ROSE: No , Your Honor, it is subject to what is called peer review . It is subject to
notice and due process and that’s verified in 42 U.S.C. 11112 . . . .

(Tr. 11/14/02, at 31:25-32:5.) In counsel’s view, the Health Care Quality Improvement Act, 42 U.S.C. § 11112,
discussed supra, “requires that if you’re going to lim it or deny privileges to a doctor you do it with adequate and
(con tinued …)

-88-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 92 of 192(cid:10)

S JHSD s ta f f m ee ting a t w h ich it is a lleged tha t D r . M acA r thu r ’s D ecem be r 1999 reque s t

fo r p riv ilege s w a s d iscu ssed , bu t no fo rm a l ac tion w a s taken . D r . M acA rthu r w a s no t

p resen t fo r the F eb rua ry 2 m ee t ing ; he h ad accom pan ied h is w ife ou t of tow n fo r a

m ed ica l p ro cedu re . (See T r . 11 /14 /02 , a t 11 :13 -19 (M s . R o se ).) S JHSD ’s execu tive

d irec to r , C lea l B rad fo rd , also w as no t in a ttendance . M r. B rad fo rd ’s s igna tu re w ou ld

hav e b een requ ired fo r any g ran t of p rov is iona l pr iv i leg es o r any fu r ther ex tens ion o f D r .

M acA rthu r’s “ tem po ra ry” p riv ileges beyond the ir Feb rua ry 2 exp ira tion da te . (See T r .

11 /14 /02 , a t 16 :1 -21 , 17 :25 -18 :16 (M s . R o se ).)

A cco rd ing to the fac ts a lleged by the p la in tif f s, the S JH SD had ne ithe r g ran ted no r

den ied D r . M acA rthu r’s reque st fo r fu ll p rov is iona l p riv ilege s a s o f Feb rua ry 2 , 2000 ,

w hen h is “ tempo rary”p riv ilege s exp ired ; the ma tte r w a s tab led pend ing the rece ip t o f

fu rthe r docum en tation . A t tha t po in t, as coun se l exp lain ed , D r. M acA rthu r m oved h is

p rac tice to E ly, N evada . (T r. 11 /14 /02 , a t 18 :17 -19 :6 (M s . R o se ).)

THE COURT : A f te r h is tempo rary ho sp ita l p riv ilege s exp ired w ha t
d id he do in re ference to hav ing tha t issue be exam ined?

M S . RO SE : A t tha t po in t he le f t.

THE COURT : H e w en t to E ly?

( …con tinued )
6 6
fair notice and due process.” (Tr. 11/14/02, at 33:7-9 (Ms. Rose).) As noted above, § 411 of the HCQIA, 42
U.S.C. § 11111, encourages the use of peer review procedures in supervising physicians’ practice privileges by
immunizing the review participants from civil liability arising from a review action (with specific exceptions) if
that action meets § 11112’s procedural criteria. The HCQIA does not impose due process requirements on
hospitals and health care facilities; it provides an incentive for the adoption of notice-and-hearing procedures by
the facilities themselves. Section 11111(a)(1) does not immunize peer review participants from liability under
the federal civil rights acts, including 42 U.S.C. § 1983.

-89-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 93 of 192(cid:10)

M S . RO SE : S ta rting M ay 1 s t I be lieve .

(Id . a t 25 :22 -26 :2 .) A cco rd ing to coun se l, D r . M acA rthu r cho se to go to E ly, N evada ,

becau se the situa tion in San Juan Coun ty “w a s so inho sp itab le .” (Id . a t 26 :12 -21 (M s .

R o se ); see id . a t 37 :8 -38 :8 (M s . C ox ) .) “Th e w o rk ing cond i tion s in the a rea w e re so

ho s tile , no t on ly to h im bu t to h is pa tien ts tha t he fe lt he had no a lte rn a tive bu t to leave . .

. .” (Id . a t 42 :20 -23 (M s . R o se) .)

W he the r an env ironm en t is ho sp itab le o r ho s tile is a ma tte r o f pe rcep tion , ba sed

upon an agg rega tion o f c ircum s tances and even ts . T ak ing p la in tif f s’ fac tua l a llega tion s a s

true , it app ea rs tha t in p rov id ing m ed ica l care to h is pa t ien ts a t S JHSD fac i li ties , D r .

M acA rthu r expe rienced seve ra l unp lea san t and f ru s tra ting in s tances invo lv ing a lack o f

s te rile and func tiona l m ed ica l in s trum en ts ; conduc t on the pa rt o f S JHSD nu rse s o r s ta f f

tha t w a s d isrespec tfu l, ill-m anne red , rude , and a t tim es , unp ro fess iona l; and he becam e

the sub jec t o f d ispa rag ing rum o rs c ircu la ted among the S JH SD suppo rt s ta f f by a few

an tagon is ts , rum o rs tha t th rea tened to in ju re h is pe rsona l repu ta tion and h is p ro fe ss iona l

p rac tice . A ll o f the se fac to rs con tribu ted to h is pe rcep tion tha t the S JH SD env ironm en t

w as inho sp itab le, and led u ltim a tely to h is dec ision in Feb rua ry o f 2000 to fo rsake h is

reques t fo r p riv ileges a t S JH SD and m ove h is p rac tice to N evada .

The e ssence o f Fou r teen th Am endmen t due p roce ss ana lys is is the im p lica tion o f a

libe rty o r p rope rty in te re s t. See Boa rd o f R egen ts v . Ro th , 408 U .S . 564 , 571 -72 (1972 ).

“U nde r the Fou rteen th Am endmen t , p rocedu ra l due p roce ss requ ire s no tice and a

-90-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 94 of 192(cid:10)

p re -dep riva tion hea ring be fo re p rope rty in te re sts a re nega tive ly a f fec ted by gove rnm en ta l

ac to rs .” M a rcu s v . M cCo llum , 394 F .3d 813 , 820 (10 th C ir. 2004 ) . H ea l th ca re

p ro fess iona ls have been he ld to have a p rope rty in te re s t in the ir p ro fess iona l licen ses .

See , e .g ., Seay v . Cam pbe ll, 2005 W L 1023400 (10 th C ir. 2005 ) (“p rope rty” in terest in

licen se to p rac tice den tis try); A nno ta tion , R igh ts a s to no tice and hea r ing in p roceed ing

to revoke o r su spend licen se to p rac tice m ed ic ine , 10 A .L .R . 5 th 1 (1993 ).

Som e cou rts h ave exp ressed the v iew tha t “[h ]o sp ital sta f f p riv ileg es a re gene ra lly

con side red to be a p rope rty o r libe rty in te re st o f the phys ic ian ,” a t lea st w he re they have

a lready been g ran ted by a gove rnm en t-spon so red fac ility. B eyer v . Lakev iew C omm un ity

H o sp ita l, 187 F .3d 634 (T ab le ), 1999 W L 552606 , **3 (6 th C ir. 1999 ) (c iting Fo s te r v .

M ob like Coun ty H o sp . Bd ., 398 F .2d 227 , 229 (5 th C ir . 1968 )) . A lim ita tion , revoca tion

o r te rm ina t ion o f ex is ting ho sp ita l s ta f f p r iv i leges w ou ld thus have du e p rocess

im p lica tion s .

A t lea st tw o c ircu its have he ld tha t “ [ s]eek ing s ta f f p riv ilege s, w h ich en title a

physic ian to adm it pa tien ts to a pa rticu lar ho sp ital, has b een he ld to be a p ro tec ted libe rty

in te re st . . . .” S ilve rs tein v . Gw inne tt H o sp . Au tho rity , 861 F .2d 1560 , 1566 (11 th C ir.

1988 ) (c ita tion s om itted ). See Bu rke tte v . Lu the ran G ene ra l H o sp ita l, 595 F .2d 255 , 255 –

256 (5 th C ir . 1979 ) (“W e have he ld tha t a phys ic ian in p riva te p rac tice den ied sta f f

p riv ilege s in a ho sp ita l tha t is sub jec t to the fou rteen th amendm en t po sse sse s a

p ro tec tib le ‘l ibe rty’ in te re s t tha t can g round a com p la in t on such a den ia l. Shaw v .

-91-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 95 of 192(cid:10)

H o sp ita l Au tho rity , 507 F .2d 625 (5 th C ir. 1975 ) .”) .

6 7

To pu rsue a due p roce ss c la im in the cou rts ba sed upon a den ia l o f ho sp ita l s ta f f

p riv ilege s, how eve r, tho se p riv ilege s m u s t in fact be den ied be fo re the c la im m ay be

pu rsued in the cou rts . See U nnam ed Phy s ic ian v . Boa rd o f T ru stee s o f Sa in t Agne s

M ed ica l C en te r , 113 C a l . R p tr. 2d 309 (C t . A pp . 2001 ) (phys ic ian ch a l leng ing ho sp i ta l’s

den ia l o r w ithd raw a l o f s ta f f p riv ilege s m u s t pu rsue the in te rna l remed ie s a f fo rded by tha t

ho sp ital to a f ina l dec ision on the m e rits be fo re reso rting to the cou rts fo r re lief ); Eu fem io

v Kod iak Is land H o sp ., 837 P2d 95 (A la ska 1992 ) (exhau stion o f adm in is tra tive remed ie s

requ ired ); E ide lson v A rcher , 645 P2d 171 (A la ska 1982 ). The repo rted case s invo lv ing

due p roce ss c la im s and ho sp ita l s ta f f p riv ilege s a rise f rom the ac tua l den ia l, re stric tion ,

non -renew a l o r revoca tion o f s ta f f p riv ileges . See genera lly A nno ta tion , E xc lu s ion O f, o r

D isc rim ina tion Aga in s t, Phy sic ian o r Su rgeon by Ho sp ita l, 28 A .L .R . 5 th 107 (1995 &

Supp . 2004 ), and cases c ited the re in .

In th is in s tance , the S JH SD had ne i ther g ran ted no r den ied D r . M acA r thu r’s

request fo r fu ll one -yea r p rov isiona l p riv ileg es a t the tim e tha t he dec ided to m ove h is

p rac tice to N evada in Feb rua ry o r M a rch o f 2000 . Fo r h is pa rt, D r . M acA rthu r d id no t

p re ss the issue a f te r h is “ tempo rary” p riv ilege s exp ired by the ir ow n te rm s on Feb rua ry 2 ,

6 7
The Utah courts have also entertained contractual “due process” claims involving the lim itation or
revocation of practice privileges at private hospitals based upon notice-and-hearing requirements found in
hospital bylaws. See, e.g., Rees v. Intermountain Health Care, Inc., 808 P .2d 1069 (U tah 1991); Houston v.
Intermountain Health Care, Inc., 933 P .2d 403 , 408 (U tah Ct. App. 1997). In this case, Dr . MacArthur and Ms.
Lyman have not pleaded such claims based upon the SJHSD medical staff bylaws, instead choosing to attack the
validity of the bylaws themselves. See infra note 104.

-92-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 96 of 192(cid:10)

2000— tempo rary p riv ilege s tha t in fac t had a ffo rded D r . M acA rthu r the u se o f the

S JHSD ho sp ita l and B land ing b irth ing cen te r to trea t h is pa tien ts and de live r bab ie s

du r ing m os t o f the tim e tha t h is requ es t fo r fu l l p rov ision a l p r iv i leges w as pend ing . C lose

exam ina tion o f p la in tif f s’ a llega tion s tu rn s up no in s tance in w h ich D r . M acA rthu r w a s

den ied access to S JH SD fac ilities to p rov ide ca re to a pa tien t du ring the tim e tha t h is

reque st fo r fu ll p riv ilege s w a s pend ing and h is tempo rary p riv ilege s— tw ice

ex tended— rem a ined in e f fec t.

T ak ing D r . M acA r thu r’s fac tua l a l leg a t ion s as true , the cou r t conc lud es tha t D r .

M acA rthu r had no t in fac t been den ied acce ss to S JHSD fac ilitie s by any f ina l ac tion o r

de term ina tion by the S JH SD be fo re D r. M acA rthu r de libe ra tely cho se to fo rsake h is

request fo r fu ll one -yea r S JH SD p rov isiona l sta f f p riv ileg es in favo r o f pu rsu ing h is

m ed ica l p rac tice e lsew he re . D r. M acA rthu r’s e lec tion to m ove h is p rac tice ou t o f sta te

w a ived h is request fo r sta f f p riv ileg es a t S JH SD fac ilities , and m oo ted any § 1983 c laim

ba sed upon a den ia l o f such p riv ilege s on due p roce ss g round s . H is c la im o f den ia l o r

exc lu s ion neve r becam e ripe fo r jud ic ia l rev iew p rio r to Feb rua ry 2 , 2000 , the po in t a t

w h ich D r. M acA rthu r e f fec tive ly ab andoned h is reques t fo r S JH SD p riv ileges . See , e .g .,

U n ity V en ture s v . Lake C oun ty , 841 F .2d 770 , 775 -776 (7 th C ir . 1988 ) (ab sen t f ina l

gove rnm en tal ac tion denying in tended u se o f p rope rty, § 1983 due p rocess cha llenge to

loca l land u se regu lation w as no t ripe fo r jud icia l rev iew ); U nnam ed P hys ic ian v . Boa rd

o f T ru stee s o f Sa in t Agne s M ed ica l C en te r , 113 C a l . R p tr. 2d 309 (C t . A pp . 2001 ) .

-93-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 97 of 192(cid:10)

H is § 1983 c la im canno t ra ise a triab le issue , and mu s t the re fo re be d ism issed a s

ag a ins t a ll of the d efendan ts . Fed . R . C iv . P . 16 (c)(1) .

M s. L ym an ’s § 1983 C la im

Sub s tan t ive D ue P rocess

F rom the co lloquy a t the F ina l P re tria l C on fe rence , it becam e ever m o re apparen t

tha t even though p la in tif f s M acA rthu r and Lym an have p leaded m any pa ra lle l a llega tion s

conce rn ing the ques tion o f s ta f f p riv ileges , the ir po s ition s d if fe r in fundam en ta l w ays .

Fo r one th ing , D r . M acA rthu r a s a licen sed phys ic ian w a s f ree to compe te fo r pa tien t

bu siness w ith o the r licen sed physic ian s; M s. Lym an , as a licen sed Physic ian ’s A ss istan t,

is requ ired by U tah law to w o rk unde r the d irec t supe rv is ion o f a phys ic ian . U nde r U tah

law , the scop e o f p rac tice fo r a Phys ic ian A ss is tan t is de f ined in p e r tinen t pa r t as fo llow s :

58 -70a -501 . Scope o f prac tice .

(1 ) A phys ic ian a ss is tan t m ay p rov ide any m ed ica l se rv ice s tha t a re no t
sp ec if ica lly p roh ib ited unde r th is chap ter o r ru les adop ted unde r th is
chap te r, and tha t a re :

(a ) w ith in the phys ic ian a ss is tan t’s sk ills and scope o f
compe tence ;
(b ) w ith in the u sua l scope o f p rac tice o f the phys ic ian
a ss is tan t’s supe rv is ing phys ic ian ; and
(c) p rov ided unde r the supe rv is ion o f a supe rv is ing
phy sic ian and in acco rdance w ith a de lega tion o f se rv ice s
ag reem en t.

U tah C ode A nn . § 58 -70a -501 (2002 ) (em phasis added ).

6 8

S tate A dm in istra tive R u le

6 8

This statutory definition has been in effect since its enactment in 1997. See 1997 Utah Laws ch. 229,
(con tinued …)

-94-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 98 of 192(cid:10)

R 156 -70a , the Phys ic ian A ss is tan t P rac tice A c t R u les, p rov ides :

R 156 -70a -501 . W ork ing R e la t ion sh ip and D e lega t ion o f Du t ies .

In acco rdance w ith Sec tion 58 -70a -501 , the w o rk ing re la tion sh ip and
de lega tion o f du tie s be tw een the supe rv is ing phys ic ian and the phys ic ian
ass is tan t a re spec if ied as fo llow s :

(1 ) The supe rv is ing phys ic ian sha ll p rov ide supe rv is ion to the phys ic ian
a ss is tan t to adequa te ly se rve the hea lth ca re need s o f the p rac tice popu la tion
and en su re tha t the pa tien t ‘s h ea lth , sa fe ty and w e lfa re w ill no t be adve rse ly
comp rom ised . The deg ree o f on -s ite supe rv is ion sha ll be ou tlined in the
D e lega tion o f Se rv ice s A g reemen t m a in ta ined a t the site o f p rac tice .
Phys ic ian a ss is tan ts m ay au then tica te w ith the ir s igna tu re any fo rm tha t m ay
be au then tica ted by a phys ic ian ’s s igna tu re .

(2 ) The re sha ll be a me thod o f imm ed ia te con su lta tion by e lec tron ic mean s
w henever the phys ic ian a ss is tan t is no t unde r the d irec t supe rv is ion o f the
supe rv is ing phys ic ian .

(3) T he superv is ing phys ic ian sha l l rev iew and co -s ign su ff ic ien t num bers
o f pa tien t cha rts and med ica l reco rd s to en su re tha t the pa tien t’s hea lth ,
sa fe ty, and w e lfa re w ill no t be adverse ly comp rom ised . The D e lega tion o f
Se rv ice s A g reem en t, ma in tain ed a t the site o f p rac tice , sha ll ou tline sp ec if ic
pa rame te rs fo r rev iew tha t a re app rop ria te fo r the w o rk ing re la tion sh ip .

(4 ) A supe rv is ing phys ic ian sha ll no t supe rv ise m o re than tw o fu ll tim e
equ iva len t (FTE ) phys ic ian a ss is tan ts w ithou t the p rio r app rova l o f the
d iv is ion and the boa rd , and if pa tien t hea lth , sa fe ty, and w e lfa re w ill no t be
adve rse ly comp rom ised .

U tah A dm in C ode § R 156 -70a -501 (2004 ).

W h ile it is true tha t unde r the se p rov is ion s , a Phys ic ian A ss is tan t m ay p rov ide “any

m ed ica l se rv ice s” no t spec if ica lly p roh ib ited tha t a re w ith in the range o f he r sk ills and

6 8

( …con tinued )

§ 11.

-95-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 99 of 192(cid:10)

scope o f compe tence and the sk ills and scope o f p rac tice o f he r supe rv is ing phys ic ian , she

canno t law fu lly exe rc ise the iden tica l deg ree o f independen t p ro fe ss iona l judgm en t and

d isc re tion tha t a phys ic ian cou ld exe rc ise , and log ica lly she cou ld no t be en titled as a

m a tte r o f con stitu tiona l righ t to exe rc ise p rac tice p riv ilege s a t ho sp ita ls , c lin ic s and

s im ila r fac ilities iden tica l to tho se tha t phys ic ian s m ay en joy. (C f. T r . 11 /15 /02 , a t 34 :21 –

39 :5 (M s . R o se) .)

L im iting a Phys ic ian A ss is tan t’s p rac tice p riv ilege s to take in to accoun t the

s ta tu to ry and regu la to ry requ iremen t o f d irec t supe rv is ion and rev iew by a phys ic ian

canno t ope ra te to d ep r ive the Phys ic ian A ss is tan t o f “ libe r ty” o r “p rope r ty” o the rw ise

gua ran teed by the Fou rteen th Am endm en t. No r is it a rb itrary o r un reasonab le fo r a hea lth

ca re fac ility to requ ire tha t Phys ic ian A ss is tan ts exe rc ise sta f f p riv ilege s unde r the

supe rv is ion o f a phys ic ian w ho cu rren tly has s ta f f p riv ileges a t the sam e fac ility.

The res tr ic tion s on p la in t if f L ym an ’s p rac tice p r iv i leges a t S JHSD fac ilities

de sc ribed in the P ropo sed Am ended Com p la in t and a t p re tria l,

6 9

fa ll sho rt o f a

6 9
Starting from the premise that “[w]hile working for Dr. Redd, Mrs. Lyman applied for and received
privileges with the District, with the same scope of privileges as Dr. Redd,” (Proposed Pretrial Order at 27 ¶
117; see id. at 39 ¶ 127 (“Mrs. Lyman’s scope of privileges was originally for duties equal to Dr. Redd’s.”), Ms.
Lyman alleges that after leaving Dr. Redd’s supervision in October, 1998, her privileges were restricted in
several respects: “Mrs. Lyman could not adm it or discharge patients without first her supervising doctor initially
and officially and physically signing off on the patient’s admit or discharge,” (id. at 48 ¶ 169); she was told on
one occasion in December 1998 that she could not give orders to SJHSD staff, (id. at 48-49 ¶ 170); later that
same day, she was told she ”could use the lab and xray only during Dr. Penn’s office hours, [and that] otherwise
Ms. Lyman did not have privileges,” (id. at 49 ¶ 186 (emphasis in original); “[l]ater the limited privileges of lab
and exray [sic] were extended to her for her patients as required by State law,” (id. at 49 ¶ 187), but in
September 1999, her secretary was told “that Ms. Lyman would not be allowed to order labs until Ms. Lyman
sent a letter to Dr. Redd stating who her supervising physician was.” (Id. at 55 ¶ 213). (See Proposed Amended
Complaint at 55 ¶ 127; 69-70 ¶¶ 169-170; 70-71 ¶¶ 186-187; 79-80 ¶ 213 (same); Tr. 11/15/02, at 8:20-10:25,
(con tinued …)

-96-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 100 of 192(cid:10)

con s t itu t iona l dep r iva t ion ,

7 0

and thu s canno t serve as the fac tua l foo t ing fo r M s . Lym an ’s

§ 1983 c la im aga in s t any o f the ind iv idua l de fendan ts , inc lud ing the S JH SD B oa rd and

San Juan C oun ty Comm iss ione rs . (See T r . 11 /15 /02 , a t 26 :14 -32 :17 , 34 :20 -44 :7 (M s .

R o se ) .) O r, look ing a t it ano the r w ay, p lain tiff s’ a lleg a tion s, taken as tru e , fa il to

e stab lish a v io la tion o f a c lea rly e stab lished con stitu tiona l righ t to un re stric ted p rac tice

( …con tinued )
6 9
17:6-11, 19:2-20:19, 22:15-20, 28:8-19, 30:4-20, 31:9-32:17, 40:22-42:3, 44:22-45:5, 46:7-20, 54:9-20.)
Ms. Lyman also alleges interference with her care for individual patien ts: in one instance, her request
for a Holter monitor for a patient was denied (id. at 49 ¶ 185); on at least two occasions, her request for patient
medical records was refused by Dr. Redd, (id. at 50-51 ¶¶ 189, 193-194); despite an understanding with the
SJHSD medical staff concerning injections, “Ms. Lyman tried on several occasions to call in injections to the . . .
ER (Blanding Urgent Care Clinic) and was denied every time. Ms. Lyman always had to call Dr. Penn’s office
and have him call the order in. requests to the Blanding Urgent Care Center for injections for patients were
denied by SJHSD staff,” (id. at 54-55 ¶ 210). (See Proposed Amended Complaint at 70-73 ¶¶ 185, 189, 193-
194, 210 (same); Tr. 11/15/02, at 16 :10-17:5, 21:19-21, 22:5-14, 26:12-25, 30:4-31:6 , 39:3-40:12; compare
supra n. 12.)

7 0
Substantive due process requires that a termination, suspension, denial or restriction of a plaintiff’s
practice privileges not be “‘arbitrary, capricious, or without a rational basis.’” Tonkovich v. Kansas Bd. of
Regents, 159 F.3d 504, 528 (10th Cir. 1998) (quoting Brenna v. Southern Colo. State College, 589 F.2d 475, 477
(10th Cir. 1978)).

The Tenth Circu it recently reiterated the standards for evaluating substantive due process
claims:

In analyzing plaintiff’s substantive due process claim , the court assumes
plaintiff’s employment was an interest entitled to protection. In Uhlrig v.
Harder, 64 F.3d 567 (10th Cir. 1995), we stated that “the standard for judging
a substantive due process claim is whether the challenged government action
would ‘shock the conscience of federal judges.’” Id. at 573 (quoting Collins
v. City of Harker Heights, 503 U.S. 115, 112 S.Ct. 1061, 117 L.Ed.2d 261
(1992)) (further quotations omitted). To “satisfy the ‘shock the conscience’
standard, a plaintiff must do more than show that the government actor
intentionally or recklessly caused injury to the plaintiff by abusing or
m isusing government power.” Id. at 574. Rather, a plaintiff “must
demonstrate a degree of outrageousness and a magnitude of potential or actual
harm that is truly conscience shocking.” Id.

Babbar v. Ebadi, 2000 WL 702428, at *10 (10th Cir. 2000).

Ferraro v. Board of Trustees of Labette County Medical Center, 106 F.Supp.2d 1195, 1202 (D.Kan. 2000).

-97-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 101 of 192(cid:10)

p r iv i leges as a s ta te – licensed Phys ic ian A ss is tan t a t pub l ic ly-sponso red m ed ica l fac ilities ,

and a s a re su lt, p la in tif f ’s § 1983 c la im aga in s t the ind iv idua l de fendan ts is ba rred by the

doc trine o f qua lified imm un ity. P lain tiff Lym an likew ise fa ils to a lleg e an a rguab le c laim

o f con stitu tiona l dep riva tion re su lting f rom a “po licy” o r “cu stom ” o f the S JH SD o r San

Juan C oun ty, and canno t ho ld e ithe r en tity liab le unde r § 1983 .

P rocedura l Due P rocess

P la in tif f s p lead a “Lack o f N o tice and D ue P roce ss ,” (P ropo sed Am ended

C om p lain t at 46 -52 ¶¶ 129 -167 ; see P ropo sed P re tria l O rde r a t 33 -37 ¶¶ 161 -199

(sam e )), bu t re lative ly few o f the fac tua l allega tion s p leaded unde r tha t head ing pe rta in to

M s . Lym an , and they add re ss the a lleged a lte ra tion o f da te s on he r CPR ce rtif ica tion

ca rd s— ca rd s cu riou s ly d iscove red to be “m issing” f rom he r S JHSD f ile a t the tim e tha t

she reques ted s taff p r iv i leg es to p rac t ice under D r . M acA r thu r’s sup erv is ion in D ecem ber ,

1999 . (See id . a t 46 -48 ¶¶ 129 -140 , 142 -146 .)

7 1

O the r than a lleg ing tha t “ [ t]he M ed ica l

s ta f f and C lea l B rad fo rd and L au rie Sha fe r d iscu ssed M rs . L ym an ’s CPR ca rd p rob lem s

7 1
Ms. Lyman also asserts that she “had sought privileges ever since they were de facto terminated by
district policy after she began working for Dr. Penn, having left the practice of Dr. Redd,”in October 1998,
(Proposed Amended Complaint at 40 ¶ 91), but her specific factual allegations reflect that she con tinued to
exercise her privileges through 1999. The scope of her privileges was the subject of discussion involving Ms.
Lyman, Dr . Penn and the SJHSD medical staff in which it was acknow ledged by the medical staff that Ms.
Lyman could, inter alia, request x-rays, lab work and injections for patients, and could continue to exercise
privileges under local physician supervision. See supra at n. 69. In December of 1999, she requested renewal of
her existing privileges, which had a renewal date of December 22, 1999. (See Tr. 11/15/02, at 49 :6-52:6 (Ms.
Rose).)

Whether certain SJHSD nurses or other employees interfered with the exercise of her existing privileges
is another matter, (see Proposed Pretrial Order at 14 (“Privileges for Mrs. Lyman were de facto denied by
nursing personnel and medical staff without any action by the District governance board.”)), raising potential
claims of breach of contract or the implied covenant of good faith and fair dealing, or interference with contract.

-98-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 102 of 192(cid:10)

o f w rong da te s w ithou t M rs . Lym an be ing p re sen t,” (id . a t 46 -47 ¶ 133 ), and “ [ t]he

m ed ica l s ta f f and C lea l B rad fo rd and Lau r ie Sha fer unan im ou s ly dec ided to pub lish the

a lte red card s to the Am e rican H ea rt A ssoc ia tion by vo te o f the med ica l s ta f f , w ho w a s

con side ring p riv ilege s fo r M rs . Lym an , w ithou t M rs . Lym an be ing p re sen t,” (id . a t 48 ¶

142 ) , M s . Lym an doe s no t p lead spec if ic fac ts show ing a den ia l o f fa ir no tice and an

oppo rtun ity to be hea rd on the CPR ca rd issue . (C f. P ropo sed P re tria l O rde r a t 63 ¶ 255

(“sh e w as no t no tified imm ed iate ly tha t he r ca rd s w e re in som e w ay in e rro r” ).) In fac t,

she a llege s tha t the CPR ca rd p rob lem w a s b rough t to he r a tten tion , tha t she fu rn ished

accu ra te CPR ce rtif ica tion in fo rm a tion to the S JH SD , bu t tha t he r S JHSD p riv ilege s

u ltim a te ly w e re no t renew ed . She d id no t pu rsue the reques t any fu rthe r. (See T r .

11 /15 /02 , a t 52 :3 -53 :17 (M s . R o se ).)

W h ile th e sp ec if ic in stan ces o f in te rf eren ce w ith he r ex erc ise o f h er S JH SD

p riv ileges m ay ra ise con trac t-based c la im s unde r U tah law , see in fra , M s . Lym an ha s no t

a lleged spec if ic fac ts show ing a den ia l o f p rocedu ra l due p roce ss gua ran teed by the

Fou rteen th Am endm en t.

M isogyny & “H o stile Env ironm en t” und er § 1983

M s . Lym an comp la in s tha t D r . R edd , the “Ch ie f o f M ed ica l S ta f f ha s a long

stand ing an imu s tow a rd w om en ,” tha t du ring the tim e sh e w as em p loyed by D r. R edd in

h is p riva te p rac tice from June 1996 un til O c tobe r 1998 , she ob se rved D r . R edd be ing

ang ry and ve rb a lly abu s ive in dea ling w ith h is fem a le em p loyees , e .g ., re fe rr ing to M s .

-99-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 103 of 192(cid:10)

Lym an as an “ id io t” and ano the r em p loyee as an “ incom pe ten t b itch ,” and tha t

149 . M rs . Lym an ob served tha t each nu rse , in o rde r to avo id D r .
R edd ’s tirade s w ou ld tu rn on each o the r o r d isa ssoc ia te w ith the pe rson w ho
D r. R edd ta rg e ted tha t day.

150 . Thu s , an a tm o sphe re o f d is tru s t and ho stility pe rm ea ted the
o f f ice c rea ting a ho s tile w o rk and pa tien t env ironm en t.

(P ropo sed Am ended C om p la in t a t 60 -61 ¶¶ 143 , 149 -150 .)

G ene ra lly, to p lead a v iab le “ho stile env ironm en t” c la im , a p la in tif f mu s t show

“ tha t under the to ta l ity o f the c ircum s tance s (1) the hara ssm en t w as p ervas ive o r severe

enough to a lte r the te rm s , cond ition s , o r p riv ilege o f emp loym en t, and (2 ) the ha ra ssm en t

w as rac ia l or s temm ed from rac ia l an imu s ,” o r o ther fo rb idden c lass-based d iscr im ina to ry

an im u s , such as gende r. Bo lden v . PRC Inc ., 43 F .3d 545 , 551 (10 th C ir . 1994 ) (c ita tion

om itted ). In a case invo lv ing d isc rim ina tion on accoun t o f race , “ [a] p la in tif f canno t m ee t

th is bu rden by dem on stra ting “a few iso lated inc iden ts o f rac ial enm ity” o r “spo rad ic

rac ia l s lu rs ,” o r the like . Id . (quo ting H ick s v . G a te s Rubbe r C o ., 833 F .2d 1406 , 1412 -13

(10 th C ir . 1987 ) . In s tead , “ ‘the re mu s t be a steady ba rrage o f opp rob riou s rac ia l

comm en ts .’” C have z v . N ew M ex ico , 397 F .3d 826 , 832 (10 th C ir . 2005 ) . W he re the

enm i ty is ba sed upon gender , a p la in tif f mu s t likew ise a llege a “ steady ba rrage” o r

“s teady s tream ” o f m isogyn is tic abu se in o rd e r to su s ta in a “ho s tile env ironm en t” c la im .

See , e .g ., G ro ss v . Bu rgg ra f C on s tr . C o ., 53 F .3d 1531 , 1539 (10 th C ir. 1995 ) (“ It is

beyond d ispu te tha t ev idence tha t a w om an w a s sub jec ted to a steady s tream o f vu lga r and

o f fen s ive ep ithe ts becau se o f her gende r w ou ld be su f f ic ien t to e stab lish a c la im unde r

-100-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 104 of 192(cid:10)

T itle V II” ); W in so r v . H inck ley D odge , Inc ., 79 F .3d 996 , 1000 -1001 (10 th C ir . 1996 )

(“O ver the cou rse o f h er em p loym en t , p la in t iff w as ca l led a ‘w ho re ,’ ‘f loo r w ho re ,’ ‘cu rb

w ho re ,’ ‘cu rb s ide cun t,’ and ‘b itch ,’ on a con sis ten t ba sis . The se sexua l ep ithe ts have

been iden tif ied a s ‘in ten se ly deg rad ing ’ to w om en .” (in te rna l quo ta tion & c ita tion

om i tted)) .

“H o s tile w o rk env ironm en t ha ra ssm en t occu rs w hen unw e lcome sexua l conduc t

“ ‘un rea sonab ly in te rfe r[e s] w ith an ind iv idua l’s w o rk pe rfo rm ance o r c rea t[e s] an

in tim ida ting , ho s tile , o r o f fen s ive w o rk ing env ironm en t.’” M e rito r Sav . Bank , FSB v .

V in son , 477 U .S . 57 , 65 (1986 ) (quo ting 29 C .F .R . § 1604 .11 (a )(3 )) . A cco rd ing to the

cou r t o f appea ls,

M e rito r s ta te s tha t “ [ f]o r sexua l ha ra ssm en t to be ac tionab le , it m u s t be
su f f ic ien t ly seve re o r pe rvas ive ‘ to a l te r the cond ition s o f [ the v ic tim ‘s ]
emp loym en t and c rea te an abu s ive w o rk ing env ironm en t.’” Id . a t 67 , 106
S .C t. a t 2405 (c ita tion om itted ). The me re u tte rance o f a sta temen t w h ich
“ ‘engenders o f fen s ive fee ling s in an emp loyee ’ w ou ld no t a f fec t the
cond ition s o f em p loym en t to [a ] su f f icien tly sign if ican t deg ree to v io late
T itle V II .” Id . (quo ting Rogers v . EEOC , 454 F .2d 234 , 238 (5 th C ir.1971 ) ,
ce rt. den ied , 406 U .S . 957 , 92 S .C t . 2058 , 32 L .Ed .2d 343 (1972 )) .

Sm ith v . N o r thw e st F inanc ia l A ccep tance , Inc ., 129 F .3d 1408 , 1412 (10 th C ir. 1997 ) .7 2

7 2
Harris v. Forklift Systems, Inc., 510 U.S. 17 (1993), clarified the elements of a claim for gender
discrim ination resulting from a hostile work environment. The Supreme Court held that conduct within the
purview of Title VII of the 1964 Civil Rights Act, 42 U.S.C. §§ 2000e-1 et seq., must be severe or pervasive
enough to create both “an objectively hostile or abusive work environment–an environment that a reasonable
person would find hostile”–and an environment the victim-employee subjectively perceives as abusive or
hostile. Id. at 21-22. Whether an environment is “hostile” or “abusive” is determ ined by looking at the totality
of circum stances, such as “the frequency of the discrim inatory conduct; its severity; whether it is physically
threatening or humiliating, or a mere offensive utterance; . . . whether it unreasonably interferes with an
employee ‘s work performance”; and the context in which the conduct occurred. Id. at 23. Additionally, the
(con tinued …)

-101-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 105 of 192(cid:10)

In the con tex t o f a ho stile env ironm en t c la im , cou rts m u s t “ f ilte r ou t comp la in ts a ttack ing

the o rd ina ry tribu la tion s o f the w o rkp lace , such a s the spo rad ic u se o f abu sive language ,

gende r-re la ted joke s , and occa siona l tea sing .” Fo rage r v . C ity o f Boca Ra ton , 524 U .S .

775 , 788 (1998 ) ( in te rn a l quo ta tion m a rk s and c ita tion om itted ).

P lain tiff Lym an d id no t p lead and does no t as se rt a “ho stile env ironm en t” c laim

unde r T itle V II o f the 1964 C iv il R igh ts A c t, 42 U .S .C . §§ 2000e -1 e t seq . H ow eve r, the

cou rt o f appea ls ha s he ld tha t, apa rt f rom T itle V II , gende r d isc rim ina tion and sexua l

ha ra ssm en t can re su lt in a v io la tion o f the Fou rteen th Am endmen t righ t to equa l

p ro tec tion o f the law tha t is ac tionab le unde r § 1983 .

7 3

H ow eve r, a p la in tif f mu s t a llege

“ the sta te ac tion necessa ry to suppo rt a § 1983 c la im ,” and each ind iv idua l de fendan t
7 4

( …con tinued )
7 2
Harris Court specifically noted that any relevant factor “may be taken into account, [but] no single factor is
required.” Id.

7 3
If a plaintiff can show a constitutional violation by someone acting under color of state law ,
then the plaintiff has a cause of action under Section 1983, regardless of Title VII’s concurrent
application. See Owens v. Rush, 654 F.2d 1370, 1380 (10th Cir. 1981) (“Title VII did not
impair in any way [plaintiff’s] independent, substantive rights created by the First and
Fourteenth Amendments . . . . ‘[S]ubstantive rights conferred in the 19th Century were not
withdrawn, sub silentio, by the subsequent passage of the modern statutes.’”) (quoting Novotny,
442 U .S . at 377 , 99 S.Ct. at 2351); Day v. Wayne County Bd. of Auditors, 749 F.2d 1199, 1205
(6th Cir . 1984) (“Where an employee establishes employer conduct which violates both T itle
VII and rights derived from another source–the Constitution or a federal statute . . . the claim
based on the other source is independent of the Title VII claim , and the plaintiff may seek the
remedies provided by § 1983 in addition to those created by Title VII.”); cf. Meade v.
Merchants Fast Motorline, Inc., 820 F.2d 1124, 1127 (10th Cir . 1987) (“plaintiff may properly
pursue his cause of action under § 1981 for private employment discrim ination despite the
applicability of Title VII to the same conduct”).

Starrett v. Wadley, 876 F.2d 808, 814 (10th Cir. 1989).

7 4

“To be successful, section 1983 claimants must make two showings to establish that the conduct at
(con tinued …)

-102-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 106 of 192(cid:10)

m u s t ac t unde r co lo r o f s ta te law ; a “ sta te ac to r” mu s t se rve a s the p la in tif f ’s “ supe rv iso r

o r in som e o the r w ay exe rc ise sta te au tho rity ove r he r.” N o land v . M cAdoo , 39 F .3d 269 ,

271 (10 th C ir. 1994 ); see a lso D av id v . C ity & C oun ty o f D enver , 101 F .3d 1344 , 1354

(10 th C ir . 1996 ) (pub lic co -em p loyees m ay ac t unde r co lo r o f law if they exe rc ise de fac to

au tho ri ty ove r v ic tim ), ce rt. den ied , 522 U .S . 858 (1997 ) .

7 5

H e re , the “ sta te ac tion” requ iremen t p rove s som ew ha t p rob lema tic . D u ring the

tim e M s . Lym an w o rked fo r D r . R edd , D r . R edd w a s engaged in p riva te med ica l p rac tice ,

and w as no t a S JH SD em p loyee . H is conduc t in tha t con tex t w ou ld lack the requ isite

“s ta te ac tion ” need ed to sus ta in a § 1983 c la im . The p la in t if fs ’ fac tua l a llega t ion s sugges t

tha t D r . R edd w as sp eak ing to M s . Lym an and h is o the r em p loyee s as a p r iva te em p loyer ,

( …con tinued )
7 4
issue constituted state action. ‘First, the deprivation must be caused by the exercise of some right or privilege
created by the State or by a rule of conduct imposed by the State or by a person for whom the State is
responsible.’ Lugar v. Edmondson Oil Co., 457 U.S. 922, 937, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982).
‘Second, the party charged with the deprivation must be a person who may fairly be said to be a state actor.’ Id.”
Nieto v. Kapoor, 268 F.3d 1208, 1215 (10th Cir. 2001).

7 5
State action under § 1983 can occur when a supervisor “participates in or consciously acquiesces in
sexual harassment . . . by co-workers.” Murrell v. School Dist. No. 1, 186 F.3d 1238, 1250 (10th Cir. 1999)
(quotation marks and citation omitted).

-103-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 107 of 192(cid:10)

and no t in any o f f icia l capac ity.

7 6

Though D r. R edd becam e em p loyed by the S JH SD in

M a rch o f 1999 and w ou ld lik e ly b e h e ld to be a “s ta te ac to r” as to h is conduc t as S JH SD

m ed ica l d irec to r o r “Ch ie f o f M ed ica l S ta f f ,” the p la in tif f s’ p lead ing s speak o f the
7 7

“a tm o sphe re o f d is tru s t and ho stility” tha t “pe rm ea ted” D r . R edd ’s o f f ice in B land ing a t

the tim e M s . Lym an w o rk ed the re . (P ropo sed Am ended C om p la in t a t 61 ¶ 150 .)

7 8

Q ua lified Imm un ity & M s. L ym an ’s § 1983 C la im

Fu rthe r, as no ted above , the de fendan ts con tend tha t becau se “ the a lleg ed ac ts

and /o r om iss ion s by C oun ty comm iss ione rs , o f f ic ia ls o r emp loyee s o r H ea lth D is tric t

tru s tee s, emp loyee s o r s ta f f m embe rs , abou t w h ich p la in tif f s comp la in , w e re carried ou t

w ith in the scope o f and pu rsuan t to the ir o f f ic ia l du tie s a s tru s tee s, emp loyee s o r s ta f f

m embe rs o f the H ea lth D is tric t, p la in tif f s’ c la im s a re ba rred by the doc trine o f qua lif ied

imm un i ty,” (P ropo sed P re tr ia l O rde r a t 10 ¶ xxxv i), a t lea s t to the ex ten t tho se c la im s are

7 6
At that time, Dr. Redd was also a member of the SJHSD medical staff, and at different times in 1996
may have served as chief of staff. (See Tr. 11/15/02, at 3:20-22 (Ms. Rose). Dr. Redd’s conduct as the SJHSD
chief of staff may be state action under § 1983. See, e.g., Nieto v. Kapoor, 268 F.3d 1208, 1215-1217 (10th Cir.
2001) (non-employee medical director of hospital department acted under color of state law for purposes of §
1983 “when undertaking his supervisory duties over plaintiffs’ work” in that department and was “a state actor
for purposes of section 1983.”). Yet plaintiffs do not allege that Dr. Redd was acting as the SJHSD chief of
staff—not as a private employer engaged in a private medical practice—in making the alleged derogatory
remarks to Ms. Lyman and others who worked for him . (See Proposed Amended Complaint at 60-68 ¶¶ 145-
166.)

7 7

(Proposed Amended Complaint at 60 ¶ 143.)

7 8
Ms. Lyman would not have standing to bring a “hostile environment” claim under either Title VII or §
1983 for verbal abuse occurring after October or November of 1998 because at that point she was no longer
employed by Dr. Redd. She was working with and being supervised by Dr. Penn; after she left Dr. Redd’s
supervision in 1998, Dr. Redd’s derogatory remarks— rude, offensive, antagonistic and unprofessional as they
may have been—could not alter the terms, conditions, or privileges of Ms. Lyman’s subsequent employment.

-104-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 108 of 192(cid:10)

a sse rted pu rsuan t to 42 U .S .C . § 1983 . C once rn ing ind iv idua l de fendan ts w ho have

ra ised a c la im o f qua lif ied imm un ity,

The thre sho ld inqu iry is w he the r the a l leg ed fac ts (or , on summ ary
judgm en t, the ev idenced fac ts) taken in the ligh t m o s t favo rab le to the
p la in tif f show a con s titu tiona l v io la tion . Sauc ier v . Ka tz , 533 U .S . 194 ,
201 , 121 S .C t. 2151 , 150 L .Ed .2d 272 (2001 ) . “ If no con stitu tiona l righ t
w ou ld have been v io la ted w e re the a llega tion s e stab lished , the re is no
necess ity fo r fu rthe r inqu irie s concern ing qua lif ied imm un ity.” Id .

S im k in s v . B ruce , 406 F .3d 1239 , 1241 (10 th C ir . 2005 ) .

F rom the fo rego ing summ a ry, it read ily becom es appa ren t tha t the p la in t if fs ’

a llega tion s a s o f the eve o f p re tria l, taken as true and in the ligh t m o s t favo rab le to the

p la in tif f s, fa iled on the ir face to show a con stitu tiona l v io la tion by the ind iv idua l

de fendan ts . “ [A ] de fam a to ry s ta temen t pub lished by s ta te o f f ic ia ls is no t fo r tha t rea son

a lone a Fou rteen th Am endm en t v io la tion ,” 1 N ahm od , supra , § 3 :40 , a t 3 -117 (c iting

Pau l v. D av is , 424 U .S . 693 (1976 )) , and the mak ing o f de roga to ry rema rk s , the in f lic tion

o f ve rba l abu se , the honk ing o f car ho rn s and o the r po ten tia lly to rtiou s conduc t doe s no t

au tom a tica lly im p lica te the D ue P rocess C lau se s im p ly becau se the ac to r is em p loyed by a

loca l hea lth se rv ice s d is tric t o r is a mem be r o f its m ed ica l s ta f f . N o r doe s in te rfe rence

w ith , o r even the b reach o f a d is tric t con trac t w ith a hea lth se rv ices p rov ide r , cau sed by a

d is tric t o f f ic ia l o r s ta f f ac ting unde r h is d irec tion , necessa rily re su lt in a con stitu tiona l

dep riva tion o f “ libe rty” o r “p rope rty” tha t is ac tionab le unde r § 1983 . A b sen t a

con stitu tiona l dep riva tion , qua lif ied imm un ity en title s the ind iv idua l de fendan ts to a

d ism issa l o f p la in tif f Lym an ’s § 1983 c la im s .

-105-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 109 of 192(cid:10)

M s. H e len V a ldez ’ § 1983 C la im

The fac ts unde rlying the c la im o f p la in tif f H e len V a ldez have a lready been

summ a rized he re in . (See supra a t 15 -17 , 30 -31 .) H e r po ten tia l c iv il c la im unde r

EM TALA be ing tim e -ba rred , a t lea st ab sen t leave to amend ,

7 9

the on ly c la im tha t

rema ined pend ing fo r con side ra tion a t the tim e o f p re tria l w a s he r § 1983 c la im o f

pu rpo se fu l na tiona l o rig in , gende r and age d isc rim ina tion in v io la tion o f the Equa l

P ro tec tion C lau se o f the Fou rteen th Am endm en t.

In o rde r to s ta te a v iab le equ a l p ro tec tion c la im unde r § 1983 , “a p la in t if f m us t

show tha t the de fendan ts ac ted w ith an in ten t o r pu rpo se to d isc rim ina te aga in s t the

p la in tif f based upon mem be rsh ip in a p ro tec ted c la ss .” Lee v . C ity o f Lo s Ange le s , 250

F .3d 668 , 686 (9 th C ir. 2001 ) (c itation s om itted ); see a lso W a sh ing ton v . D av is , 426 U .S .

229 , 240 (1976 ). To suppo rt he r § 1983 c laim , then , M s. V a ldez m u st com e fo rw a rd w ith

fac ts ind ica ting a d isc rim ina to ry in ten t on the pa rt o f the de fendan ts . See F ire figh ters

Loca l U n ion N o . 1784 v . S to tts, 467 U .S . 561 , 583 n . 16 (1984 ) (§§ 1981 & 1983 ) ;

V illage o f A r ling ton H e igh ts v . M e tropo litan H ou s ing D ev . C o rp ., 429 U .S . 252 , 265

(1977 ) (equa l p ro tec tion ) . She m u s t a lso a llege fac ts show ing tha t a de fendan t “engaged

in spec if ic conduc t tha t den ied he r equa l p ro tec tion o f the law s .” W illiam s v . B ram e r , 180

F .3d 699 , 701 (5 th C ir . 1999 ).

M s . V a ldez is a w h ite fem a le ove r the age o f 60 , m a rried to a M ex ican -Am e rican

7 9

(See supra at 59-60.)

-106-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 110 of 192(cid:10)

hu sband . (P ropo sed P re tria l O rde r a t 69 ¶¶ 14 -15 .) C oun se l a sse rts tha t on A p ril 14 ,

1999 , she w a s “ tu rned aw ay” f rom the San Juan H o sp ita l eme rgency room becau se o f her

age , he r gende r , he r assoc ia tion w ith he r M ex ican -Am e rican hu sband and s is te r-in -law ,

and w ith he r then -p rim a ry ca re phys ic ian , D r. P enn , w ho w as iden tif ied as be ing Jew ish .

(See T r . 11 /15 /02 , a t 59 :1 -15 (M s . R o se ); M emo randum o f Po in ts and A u tho ritie s

Suppo r ting P la in t if f V a ldez ’s M o t ion fo r the C ou r t to R econ s ide r its M o t ion to D ism iss

P la in t iff ’s V a ldez’ D iscr im ina t ion C la im s and P la in t iff s’ C ross -M o t ion fo r Summ ary

Judgm en t, f iled O c tobe r 26 , 2004 (dk t. no . 665 ) , a t 6 -20 .)

8 0

C oun se l re lie s upon a

“d ispa ra te trea tm en t ana lys is ,” c iting M cD ona ld D oug la s C o rp . v . G reen , 411 U .S . 792 ,

802 (1973 ) , ba sed upon a llega tion s tha t M s . V a ldez “w a s tu rned aw ay, w hen

accom pan ied by he r M ex ican -Am e rican appea ring sis ter -in -law , by nu rse L au rie

W a llace ,” wh ile a t the sam e tim e , “ [ t]he wh ite young m a le w i th no in su rance in the ER

w a iting a rea w a s seen by D r . Penn a lm o s t imm ed ia te ly a f te r M rs . V a ldez le f t.” (P ropo sed

Am ended C om p lain t at 86 ¶ 232 -233 ; see P roposed P re tr ia l O rde r a t 22 ¶ 66 (“M rs.

V a ldez ’ ne ighbo r w ho w a s a w h ite young m a le and had no t in su rance w a s seen

imm ed ia te ly.”) .)

C oun se l’s pro ffered inference o f d iscr im ina to ry trea tmen t and d iscr im ina to ry

8 0
Claims of class-based discrimination against a non-m inority plaintiff based upon association with the
plaintiff’s minority spouse have met with mixed results. Compare, e.g., Davis v. Southeastern Pennsylvania
Transp. Authority, 924 F.2d 51 (3d Cir. 1991) (plaintiff white police officer married to African-American spouse
prevailed on § 1983 anti-discrim ination claim arising out of officer’s discharge from employment), with
University Village Music Cen ter v. Seattle School Dist., 844 F.2d 793 (Table), 1988 WL 33365, (9th Cir.1988)
(unpublished disposition) (conclusory allegations that the defendants discrim inated against plaintiff’s business
because his former wife is of Japanese descent insufficient to state a § 1983 claim).

-107-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 111 of 192(cid:10)

pu rpo se f rom the fac t tha t ano the r pa tien t w a iting in the eme rgency room w a s exam ined

by a phys ic ian and M s . V a ldez w a s no t co llide s w ith a key fac t: M s . V a ldez w a s no t

re fu sed sc reen ing , exam ina tion , o r trea tm en t; no r w a s she in s truc ted o r o rde red by any

em e rg ency room pe rsonne l to leave the fac ility. (See sup ra a t 15 -17 .) A t p re trial,

counse l a rgued tha t M s . V a ldez “w as to ld to go”— an asse r tion be l ied by the p la in t if fs ’

ow n p lead ings and M s . V a ldez ’ ow n d epo s ition tes tim ony. (T r . 11 /15 /02 , a t 60 :7 (M s .

R o se) .) M s . V a ldez exp la ined tha t she d ec ided to leav e the em ergen cy room and re turn

hom e a f te r he r s is te r-in -law to ld he r tha t she had overhea rd a nu rse , Lo ri W a llace , te ll the

eme rgency room c le rk w ho had a ss is ted M s . V a ldez in f illing ou t he r pa tien t adm i ttance

fo rm to te ll M s . V a ldez to go to he r phys ic ian ’s c lin ic . (See sup ra a t 15 -16 & nn . 18 -19 ;

T r . 11 /15 /02 , at 57 :1 -4 (M s. R o se ) (“L au rie [sic ] W a llace had to ld the recep tion ist, tell

them to go to the c lin ic, it’s open , som e th ing to tha t ef fec t. The exac t w o rd s w e re tell

them to go to the c l in ic .”) .) Sho r tly befo re tha t , how ev er , M s . V a ldez h ad ob served Lo r i

W a llace te ll the same c le rk tha t “ she cou ld se t bo th he r pa tien ts up in the eme rgency room

fo r the phys ic ian ,” apparen tly re ferring to M s . V a ldez and M ichae l B a iley, the o the r

ind iv idua l then w a iting in the em e rg ency room . (Id .)

Y e t M s . V a ldez d id no t speak d irec tly to e ithe r the nu rse o r the c le rk abou t he r

sym p tom s o r a sk w he the r o r w hen she w ou ld be seen by a doc to r a t the em e rg ency room .

She le f t the fac ility, appa ren tly a ssum ing tha t she w ou ld no t be exam ined . She exp la ined

he r re ticence in he r depo sition :

-108-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 112 of 192(cid:10)

A
W e ll, liv ing in San Juan Coun ty fo r m any yea rs and liv ing in a
M ex ican -Am e rican comm un ity, you k ind o f lea rn to keep you r p lace . Y ou
don ’t ju s t vo lun ta rily speak ou t. Y ou ju s t k ind o f w a it un til spoken to .

Q

A

H ow does tha t app ly to be ing a w om an in San Juan C oun ty?

I be lieve p robab ly abou t the same .

(D epo sition o f H e len V a ldez , da ted D ecem be r 6 , 2001 , a t 52 :17 -24 .) In th is in s tance , she

d id no t w a it to be spoken to ; a ssum ing tha t she w ou ld no t be exam ined a t the eme rgency

room , M s. V a ldez sim p ly lef t. Tak ing the p lain tiff ’s f ac tua l av e rm en ts a s tru e— in

pa rticu la r, the po rtion s o f the depo sition te stim ony o f M s . V a ldez and M s . G onza le s

subm itted to the cou rt by p la in tif f s’ coun se l— it canno t fa irly be sa id tha t M s . V a ldez w a s

“ tu rned aw ay” f rom exam ina tion and trea tm en t a t the San Juan H o sp ita l eme rgency room

on A p ril 14 , 1999 . N o one on the S JH SD s ta f f to ld M s . V a ldez tha t she w ou ld no t be

exam ined by a phys ic ian if she rema ined the re , and bo th M s . V a ldez and M s . G onza le s

acknow ledged tha t no one on the S JH SD s ta f f exp re ss ly in struc ted M s . V a ldez to leave .

8 1

B e fo re Lo r i W a llace m ay be he ld liab le unde r § 1983 fo r a con stitu tiona l

dep r iva t ion pu rpo sefu l ly inf l ic ted upon M s . V a ldez ,

8 2

there need s to be a t lea s t one sw o rn

8 1
This being so, Ms. Valdez was not denied or refused the screening, examination or stabilizing
treatment for an “emergency medical condition” required by EMTALA, 42 U.S.C. § 1395dd(a), and has no
arguable legal claim arising from a violation of that statute. 42 U.S.C. § 1395dd(d). (See supra at 56-58.)

8 2
Counsel now argues the existence of a County “policy or custom” of disparate treatment of “people of
color,” relying largely on hearsay assertions of anecdotal evidence. (See Memorandum of Points and Authorities
Supporting Plaintiff Valdez’s Motion for the Court to Reconsider its Motion to Dism iss Plaintiff’s Valdez’
Discrimination Claims and Plaintiffs’ Cross-Motion for Summary Judgment, filed October 26, 2004 (dkt. no.
665), at xii, 18-19.) This claim was neither pleaded through specific allegations in the Proposed Amended
Complaint nor raised as an issue in the Proposed Pretrial Order.

-109-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 113 of 192(cid:10)

ave rm en t o f spec if ic fac ts in the reco rd show ing tha t M s . W a llace ac ted tha t “w ith an

in ten t or pu rpo se to d iscr im ina te aga ins t the p la in t iff” b ased upon the p la in t iff ’s

m em bersh ip in a p ro tec ted c lass (or a t lea s t he r iden t if ica t ion w i th a p ro tec ted c lass) ,8 3

and tha t M s . W a llace “engaged in spec if ic conduc t tha t den ied he r equa l p ro tec tion o f the

law s .” N one w a s c ited o r p ro f fered a t p re tria l, and none w a s subm itted in connec tion

w ith e ithe r the P ropo sed Am ended C om p la in t o r the P ropo sed P re tr ia l O rd e r.

A t the conc lus ion o f the p re tr ia l co l loquy conce rn ing M s . V a ldez’ c la im , th is cou r t

conc luded :

Look ing a t the sta tu te s re ferred to and pa rticu la rly the sugge stion
tha t im p lic it[ ly] the comp la in t ough t to con fo rm w ith w ha t is sa id to be the
ev idence , nam e ly tha t she w en t to an em e rg ency room and w asn ’t trea ted , I
th ink unde r the fac tua l scenario p re sen ted tha t it is in su f f ic ien t to ju s tify
re fe rr ing the m a tte r to a fac t- f ind e r and und e r the c i rcum s tances tha t cause
o f ac tion as a lleged and as p ro f fe red shou ld a lso b e d ism issed and I w ill so
o rde r .

(T r . 11 /15 /02 , a t 117 :10 -18 ( the C ou r t) .)

“The p re tr ia l con fe rence is neve r to be u sed as a sub s titu te fo r tria l . . . .

N ev er the less , jus t as the C ou r t m ay render judgm en t on imm a ter ia l issue s fo r w h ich there

is no d ispu te o f ma te ria l fac t, ‘judgm en t m ay be o rde red . . . if the re is no triab le issue le f t

a t the end o f the d iscu ss ion .’” P ifcho v . B rew e r , 77 F .R .D . 356 , 357 (M .D . Pa . 1977 )

(quo ting 6 C ha rles A . W righ t & A rthu r R . M ille r, F edera l P rac tice and P rocedu re §

8 3
Muzquiz v. W.A . Foote Memorial Hosp., Inc., 70 F.3d 422, 429 (6th Cir. 1995) (w itness’ “subjective
belief that minorities would be treated differently at the hospital was simply not probative of a discriminatory
animus”).

-110-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 114 of 192(cid:10)

1525 (1971 ).)

(9 ) F edera l A n t itru st L aw s (15 U .S .C . §§ 1 e t seq .)

Sec tion 4 o f the C layton A c t, 15 U .S .C .A . § 15 (1997 ), cited by the Pa rt I

P la in tif f s, p rov ide s in pa rt tha t “any pe rson w ho sha ll be in ju red in h is bu s ine ss o r

p rope rty by rea son o f anyth ing fo rb idden in the an titru s t law s m ay sue the re fo r” in an

app rop ria te f ede ra l d istric t cou rt “and sh a ll recove r th ree fo ld the dam ages by h im

su s ta ined , and the co st o f su it, inc lud ing a rea sonab le a tto rney’s fee ,” exp re ss ly p rov id ing

in ju red pa rtie s w ith a p riva te c iv il treb le damage s remedy fo r v io la tion s o f the fede ra l

an titru st law s. A s a rem ed ial p rov ision , § 4 itse lf does no t p ro sc ribe any sp ec if ic an ti-

compe titive conduc t. C onduc t “ fo rb idden in the an titru s t law s” is de f ined e lsew he re , a s

in the f irs t tw o sec tion s o f the She rm an A n ti-T ru s t A c t. Sec tion 1 o f the She rm an A c t, 15

U .S .C .A . § 1 (1997 ), sta tes in pa rt:

Eve ry con trac t, com b ina tion in the fo rm o f tru s t o r o the rw ise , o r con sp iracy,
in re stra in t o f trade o r comm e rce am ong the seve ra l S ta te s , o r w ith fo re ign
na tion s , is he reby dec la red to be illega l . . . .

Sec tion 2 o f the She rm an A c t, 15 U .S .C .A . § 2 (1997 ), sta tes in pa rt:

Eve ry pe rson w ho sha ll m onopo lize , o r a ttemp t to m onopo lize , o r comb ine
o r con sp ire w ith any o the r pe rson o r pe rson s , to m onopo lize any pa rt o f the
trade o r comm e rce am ong the seve ra l S tate s, o r w ith fo re ign na tion s, sh a ll
be deem ed gu ilty o f a fe lony, . . . .

Sec tion 4 o f the C layton A c t “ requ ire s a p la in tif f to show ac tua l in ju ry,” C a rg ill,

Inc . v . M on fo r t o f C o lo rado , Inc ., 479 U .S . 104 , 111 (1986 ), and “ the p lain tiff m u st s till

-111-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 115 of 192(cid:10)

a llege an in ju ry o f the type the an titru s t law s w e re de signed to p reven t.” Id . (foo tno te

om itted ) . Indeed , “[ s]tand ing and an titru st in ju ry a re essen tial e lem en ts in a p riva te

an titru s t damage s ac tion b rough t unde r sec tion 4 o f the C layton A c t.” R ea zin v . B lue

C ro ss and B lue Sh ie ld o f K an sa s , 899 F .2d 951 , 960 (10 th C ir . 1990 ) (c iting C a rg ill, 479

U .S . at 110 ; A ssoc ia ted G en . C on trac tors , Inc . v . C a l iforn ia S ta te Counc i l o f Carpen ters ,

459 U .S . 519 (1983 )) . A cco rd ing to the cou rt o f appea ls , the fo llow ing fac to rs a re “ to be

con side red in de term in ing an titru st s tand ing :”

the cau sa l connec tion be tw een the an titru s t v io la tion s and p la in tif f ’s in ju ry;
the de fendan t’s in ten t; the na tu re o f the p la in tif f ’s in ju ry; the d irec tne ss o r
ind irec tne ss o f the connec tion be tw een the p la in tif f ’s in ju ry and the
a l leg ed ly un law fu l marke t res tra in t ; the sp ecu la tiven ess o f the p la in t iff ’s
damage s ; and the “ risk o f dup lica tive recoverie s . . . o r the danger o f
comp lex appo rtionm en t o f damage s .” A ssoc ia ted G en . C on trac tors , 459
U .S . a t 544 , 103 S .C t. a t 912 .

Id . a t 962 n .15 .

The “na tu re o f the p la in tif f ’s in ju ry fac to r” is “de signed to im p lemen t the

requ irem en t tha t on ly an titrus t in ju rie s a re red re ssab le unde r sec tion 4 .” Id . (em phasis in

o r ig ina l) . “A n t itru s t in jury” is dem on s tra ted “‘by a cau sa l re la t ion sh ip be tw een the h arm

and the cha llenged aspec t o f the a lleged v io la tion” o f the fede ra l an titru s t law s .’” Id . a t

961 (quo ting A lbe rta G a s C hem s ., L td . v . E .I . D u Pon t de N em ou rs & Co ., 826 F .2d 1235 ,

1240 (3d C ir . 1987 ), ce rt. den ied , 486 U .S . 1059 (1988 ).) .

A n an titru s t v io la tion m ay be expec ted to cau se ripp le s o f ha rm to f low
through the N a t ion ’s econom y; bu t “de sp i te the b road w o rd ing o f § 4 there
is a po in t beyond w h ich the w rongdoe r shou ld no t be he ld liab le.” . . . It is
rea sonab le to a ssum e tha t C ong re ss d id no t in tend to a llow eve ry pe rson

-112-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 116 of 192(cid:10)

tangen tially a f fec ted by an an titru st v io lation to m a in tain an ac tion to
recove r th ree fo ld dam ages fo r the in ju ry to h is bu s iness o r p rope rty.

B lue Sh ie ld o f V irg in ia v . M cC ready , 457 U .S . 465 , 476 -477 (1982 ) (c i ta t ion om i tted) . In

eva lua ting a p riva te p la in tif f ’s s tand ing unde r § 4 , “w e look (1 ) to the phys ica l and

econom ic nexu s be tw een the a l leg ed v io la t ion and the h arm to the p la in t iff ,” and “(2 ) ,

m o re pa rticu la rly, to the re la tion sh ip o f the in ju ry a lleged w ith tho se fo rm s o f in ju ry abou t

w h ich Cong re ss w a s like ly to have been conce rned in m ak ing de fendan t’s conduc t

un law fu l and in p rov id ing a p riva te remedy unde r §4 .” Id . a t 478 .

8 4

The “ in ju ry su f fered

by the p la in tif f mu s t be o f the type the an titru s t law s w e re in tended to fo re sta ll.” Id . a t

484 n .21 , 486 ; see B run sw ick Co rp . v . Pueb lo Bow l-O -M a t, Inc ., 429 U .S . 477 , 489

(1977 ) (an an titru st in ju ry is an “ in ju ry o f the type the an titru st law s w e re in tended to

p reven t and tha t f low s from tha t w h ich m ak es d efendan ts’ ac ts un law fu l”) .

Thu s , to “p reva il, a p riva te p la in tif f mu s t e stab lish bo th (1 ) tha t it ha s s tand ing and

(2 ) the de fendan t ha s v io la ted the an titru s t law s . . . . [T ]he an titru s t in ju ry e lemen t o f

s tand ing demand s tha t the p la in tif f ’s a lleged in ju ry re su lt f rom the th rea t to compe tition

tha t unde rlie s the a lleged v io la tion .” 2 Ph illip E . A reeda , H e rbe rt H ovencam p & R oge r

D . B la ir , An titru s t Law ¶ 335 , a t 297 (2d ed . 2000 ) (foo tno te om itted ) . “O nce i t app ea rs,

8 4
Ms. McCready, a subscriber to a group health care plan who had been denied reimbursement by the
plan for the cost of services of a clinical psychologist, brought her suit under § 4, alleging that the plan had
conspired with a professional association of physicians and psychiatrists to exclude psychologists from receiving
payment under the plan for outpatient treatment of mental disorders, including psychotherapy in violation of § 1
of the Sherman Act. 457 U.S. at 467-70. The Court concluded that “the injury she suffered was inextricably
intertw ined with the in jury the conspirators sought to inflict on psychologists and the psychotherapy market. In
light of the conspiracy here alleged we think that McCready’s injury ‘flows from that which makes defendants’
acts unlawful . . . and falls squarely within the area of congressional concern.” Id. at 484 (footnote omitted).

-113-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 117 of 192(cid:10)

w he the r ea r ly o r la te in the litiga t ion , tha t e ithe r requ irem en t [o f s tand ing o r an titrus t

v io la tion ] is lack ing , the su it m u s t be d ism issed .” Id .

A t the tim e o f the P re tria l C on fe rence , the Pa rt I P la in tif f s a sse rted tha t the

“D istric t em p loyees a s a pa ttern sough t to restra in com pe tition [ ;] the re w as inadequa te

im pa rtia lity in ‘pee r rev iew ’ o r in issu ing p riv ilege s s ince the peop le issu ing the p riv ilege s

a re u sua lly in econom ic compe tition w ith tho se they a re g iv ing p riv ilege s.” (P ropo sed

P re tria l O rde r a t 14 -15 .) The P ropo sed Am ended Com p la in t a lleged tha t “D is tric t

emp loyee docto rs and D r . Jone s w ho w a s con trac ted w ith the D is tric t con stitu ted abou t

80% o r g rea te r o f the compe ting doc to rs in the a rea ,” (P ropo sed Am ended Com p la in t a t

30 ¶ 26 ) , and tha t “[ a ]t a ll tim es, D r. M acA rthu r and M ich e le L ym an w e re sub jec t to

D is tr ic t po l ic ies reg ard ing the ir pr iv i leg es a s w r it ten and accep ted by m ed ica l prov iders

and phys ic ian s w ho econom ica lly compe ted w ith them .” (Id . a t 30 ¶ 27 .)

In th is case , then , the a lleg ed “conduc t fo rb idden by the an titru st law s” a rise s in

the con tex t o f the g ran t, lim itation , o r den ial o f m ed ica l p rac tice p riv ileg es a t a ho sp ital,

c lin ic o r b ir th ing cen te r. (See gene ra lly id . a t 26 -34 ¶¶ 1 -49 (“Spec if ic S ta temen ts o f

Fac ts – A n ti-T ru st C laim s” ); id . a t 34 -58 ¶¶ 50 -168 (“Fac ts fo r 42 U SC 1983 , and

an titru st and R ICO c laim s” ); id . a t 58 -86 ¶¶ 125 -230 (sam e ).)

P lain tiff s a sse rt tha t the geog raph ic m a rke t in w h ich p lain tiff s and the “D istric t”

hea lth ca re se rv ice s p rov ide rs compe te is San Juan Coun ty, U tah , w ith a “ ru ra l” o r

“ f ron tie r” popu la tion o f ove r 13 ,000 peop le ; the bounda rie s o f the S JH SD a re co –

-114-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 118 of 192(cid:10)

ex ten s ive w ith tho se o f the coun ty. (Id . a t 29 -30 ¶¶ 19 -25 .) W ith in tha t geog raphy,

p la in tif f s a sse rt tha t the S JH SD is the so le p rov ide r o f ho sp ita l and b irth ing cen te r

se rv ice s to tha t popu la tion :

San Juan H o sp ita l and B land ing B irth ing C en te r a re the
37 .
on ly fac ilitie s in San Juan Coun ty fo r b irth s and a re ope ra ted so le ly by San
Juan H ea lth Se rv ices D is tr ic t.

38 .
N ea rly a ll eme rgency ambu lance de live rie s a re made to San
Ju an H o sp ital.

39 .
The nex t nea rest ho sp ital fac ility to San Ju an H o sp ital in
M on tice llo , U tah is abou t 65 m iles aw ay in e i the r a no r th (M oab ) o r eas t
(C o rtez , C o .) d irec tion , and abou t 85 m ile s f rom B land ing . Sh ip rock
ho sp ital is b e tw een 65 to 85 m iles f rom sou the rn areas o f San Ju an C oun ty
in Sh ip ro ck , N ew M ex ico .

San Ju an H o sp ital is the so le p rov ide r fo r tho se pe rson s w ith
40 .
insu rance bu t w ithou t tran spo rta tion to go ou tside the coun ty o r w ith
phys ica l cond ition s requ ir ing am bu lance tran spo rta tion .

41 .
A ny physic ian de live ring bab ies in San Ju an C oun ty w ou ld
need to u se the c lo se st San Juan D is tric t fac ilitie s fo r pa tien ts in ac tive
labo r.

(Id . a t 32 -33 ¶¶ 37 -41 .) Fu r ther , acco rd ing to p la in t iff s , “W i th the excep t ion s o f D r .

Jone s and a M onum en t V a lley c lin ic doc to r , a ll o the r phys ic ian s and P .A .’s w ith in San

Juan D is tric t a re emp loyee s o f San Juan D is tric t,” and none o f the se p rov ide rs spec ia lized

in ob s te tric s and gyneco logy du ring the pe riod tha t D r . M acA rthu r— an

ob s te tr ic ian /gyneco log is t— sough t s ta f f p riv ileges a t S JH SD fac ilities . (Id . a t 33 ¶¶ 43 ,

44 .) The Pa rt I P la in tif f s a sse rt tha t “D r . M acA rthu r’s p rac tice w a s in d irec t compe tition

w ith D is tric t and D is tric t a ssoc ia ted G ene ra l P rac t[ it]ione rs w ho de live red bab ie s ,” and

-115-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 119 of 192(cid:10)

rece ived add itiona l com pen sa tion fo r do ing so . (Id . a t 34 ¶ 48 ; see id . a t 33 ¶¶ 45 -47 .)

A cco rd ing to these p la in t if fs , the g ran t o r den ia l o f p r iv i leges to D r . M acA r thu r and M s .

Lym an w a s d riven by con side ra tion s o f compe titive econom ic s ra the r than p ro fe ss iona l

p rac tice conce rn s:

45 . W ithou t D r . M acA rthu r and M iche le Lym an to trea ted
ob s te tric pa tien ts , the pa tien ts if they w ished a loca l de live ry w hen they
w en t in to labo r, had to go to a doc to r no t spec ia lized in the a rea o f
ob s te tr ics .

* * * *

49 .
In m ak ing the de te rm ina tion o f g ran ting p riv ilege s, the
m ed ica l s ta f f and CEO s w ou ld ana lyze the e ffec t o f the independen t
p rac tice s o f D r . M acA rthu r and M iche le Lym an upon the ir income ou ts ide
any fo rm a l ‘pee r rev iew ’ con tex t and in rega rd s to them ob ta in ing
p riv ileges .

(Id . a t 33 -34 ¶¶ 45 , 49 .)

The P ropo sed Am ended Com p la in t speak s o f the “an ti-compe titive e ffec t” o f

lim iting the p riv ilege s o f D r . M acA rthu r and M s . Lym an :

42 . D r. M acA rthu r’s lim ited tem po ra ry p riv ileg es p reven ting h im
f rom fu lly u s ing the D is tric t fac ilitie s p rov ided h is pa tien ts w ith lim ited
op tion s in w he re they cou ld rece ive the ir ca re , and p reven ted som e f rom
becom ing h is pa tien t.
* * * *

The like ly and log ica l per se e f fec t o f no t g ran ting D is tric t
98 .
p riv ilege s to M iche le Lym an and D r . M acA rthu r is tha t pa tien ts w ou ld no t
be ab le to choo se M iche le Lym an o r D r. M acA rthu r a s p rov ide rs if they
w ished to rece ive to rece ive the ir ca re a t the ho sp ital.

(P ropo sed Am ended C om p la in t a t 33 ¶ 42 , 40 -41 ¶ 98 .)

The re stric tion o r den ia l o f ho sp ita l s ta f f p riv ilege s a s a re su lt o f peer rev iew

-116-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 120 of 192(cid:10)

p rocedu res m ay ind eed ra ise an titrus t con ce rns :

Pee r rev iew o f phys ic ian s ho ld ing o r app lying fo r ho sp ita l o r m ed ica l
s ta f f p riv ilege s ha s g iven rise to num e rou s an titru s t c la im s . The cou rts have
recogn ized tha t pee r rev iew ha s the po ten tia l to be p rocompe titive by
en su ring tha t on ly compe ten t, p ro fe ss iona l, and o the rw ise qua lif ied
p rac titione rs a re pe rm itted to p rac tice a t hea lth ca re in s titu tion s . O n the
o the r hand , s ta f f p riv ilege dec is ion s can ra ise a risk o f an ti-compe titive
abu se in so fa r a s they a re typ ica lly m ade upon the recomm enda tion s o f
m embe rs o f the med ica l s ta f f w ho m ay be d irec t o r ind irec t compe tito rs o f
the phys ic ian unde r rev iew . The cou rts have recogn ized tha t a den ia l o r
te rm ina tion o f s ta f f p riv ilege s a rguab ly can in su la te the o the r m ed ica l s ta f f
m em be rs f rom com pe tition by the phys ic ian unde r rev iew . . . .

2 Am e rican B a r A ssoc ia tion Sec tion o f A n titru s t L aw , An titru st Law D eve lopm en ts

(F ifth ) 1326 -1327 (5 th ed . 2002 ) ( foo tno te om itted ).

H ow eve r, c iv il liab ility unde r the fede ra l an titru s t law s fo r “an ticompe titive”

conduc t is no t w ithou t lim it.

A t the ou tse t o f the F ina l P re tria l C on fe rence , the de fendan ts m oved to d ism iss the

Pa rt I P lain tiff s’ an titru st c laim s on the g round s tha t (1 ) the c laim s a re ba rred by the “sta te

ac tion” doc trine announced in P arker v . B row n , 317 U .S . 341 , 351 -353 (1945 ); (2 ) the

c la im s a re ba rred by the Loca l G ove rnm en t A n titru s t A c t o f 1984 , Pub . L . N o . 98 -544 , 98

S ta t. 2750 , cod if ied a t 15 U .S .C . §§ 34 -36 (2000 ); (3 ) the p la in tif f s have fa iled to iden tify

a spec if ic an titru s t law v io la tion o r p lead the e ssen tia l e lemen ts o f such a v io la tion ; and

(4 ) the p lain tiff s h ave fa iled to p lead an e f fec t on in tersta te comm e rce . (M em o randum in

Suppo r t o f D e fendan ts’ M o tion to D ism iss P la in tif f s’ A n titru s t C la im s , f iled N ovembe r

14 , 2002 (dk t.no . 455 ), a t 3 -8 .)

-117-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 121 of 192(cid:10)

The L oca l G overnm en t A n t itru st A c t (15 U .S .C . §§ 34 -36 )

The Loca l G ove rnm en t A n titru s t A c t p rov ide s tha t “ [n ]o damage s , in te re st on

damage s , co sts , o r a tto rney’s fees m ay be recovered unde r sec tion 4 , 4A , o r 4C o f the

C layton A c t (15 U .S .C . 15 , 15a , o r 15c ) f rom any loca l gove rnm en t, o r o f f ic ia l o r

emp loyee the reo f ac ting in an o f f ic ia l capac ity,” 15 U .S .C . § 35 (a ), o r “ba sed on any

o f f ic ia l ac tion d irec ted by a loca l gove rnm en t, o r o f f ic ia l o r emp loyee the reo f ac ting in an

o f f ic ia l capac ity.” 15 U .S .C . § 36 (a ). Fede ra l cou rts a re thu s p rec luded “ from aw a rd ing

m one ta ry re lie f on an titru s t c la im s b rough t aga in st loca l gove rnm en t en titie s .” Tha tche r

En te rp r ise s v . C ache Coun ty Co rp ., 902 F .2d 1472 , (10 th C ir . 1990 ).

A ll tha t the D e fendan ts need show in o rde r to asse rt a
va lid c la im o f imm un ity f rom an titru s t liab ility is tha t they
ac ted in an o f f ic ia l capac ity o r w e re d irec ted by gove rnm en t
o f f icia ls o r em p loyees w ho w e re them se lves ac ting in the ir
o f f ic ia l capac itie s . A s p rev iou s ly d iscu ssed , the se standa rd s
do no t inc lude a cons ide ra tion o f the de fend an t ’s in ten tion s .
The cou r t con s ide rs on ly the ob jec t ive ques t ion s : (i) w he the r ,
in ligh t o f the au tho rity invested in a loca l gove rnm en t, its
o f f ic ia ls o r emp loyee s, the ac tion s comp la ined o f w e re law fu l
and tak en w ith in the scope o f the ir au tho rity, . . . o r (ii)
w he the r, if the de fendan t is no t a loca l gove rnm en t o f f ic ia l o r
emp loyee , the ac tion s w e re d irec ted by a loca l gove rnm en t o r
one o f its o f f icia ls o r em p loyees ac ting w ith in the scope o f h is
au tho ri ty.

Sand cres t, supra , a t 1148 (c i ta t ion s om i tted) .

C ohn v . W ilke s G ene ra l H o sp ., 767 F . Supp . 111 , 113 (W .D .N .C . 1991 ) (quo ting

Sandc re st O u tpa tien t Se rv ice s, P .A . v . C um be rland C oun ty H o sp ita l, 853 F .2d 1139 , 1148

-118-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 122 of 192(cid:10)

(4 th C ir . 1988 )) , a ffirm ed , 953 F .2d 154 (4 th C ir . 1991 ), ce rt. den ied , 505 U .S . 1230

(1992 ) . In C ohn , the cou r t he ld tha t the s ta tu te app lied to ba r a ch irop rac to r ’s an titrus t

c la im aga in s t a mun ic ipa l ho sp ita l, its boa rd o f tru s tee s and med ica l s ta f f a ris ing f rom the

ho sp ita l’s den ia l o f h is reque st fo r ho sp ita l s ta f f p riv ilege s fo r a lleged ly an ti-compe titive

reason s .

A pp lying the Loca l G ove rnm en t A n titru st A c t in the con tex t o f th is ac tion , it

appears to ba r the damage s c la im s o f p la in tif f s M acA rthu r and Lym an a s aga in s t the

S JH SD , San Juan C oun ty, the d efendan t mem bers o f the S JH SD B oard , S JH SD ’s

adm in is tra to rs and med ica l s ta f f , and subo rd ina te emp loyee s. B o th p la in tif f s a llege tha t

the mem be rs o f the S JH SD m ed ica l s ta f f— D rs . R edd , Jone s and N e lson— ac ted upon

p la in tif fs’ reques ts fo r fu ll s ta f f p riv ileges fo r an ti-com pe titiv e pu rpo ses , v iz ., to lim it

com pe tition by D r. M acA rthu r and M s. Lym an w ith the S JH SD m ed ica l sta f f fo r pa tien ts

in the San Juan Coun ty a rea , and tha t o the r de fendan ts a t lea st acqu ie sced in the ir do ing

so , in the ir capac ity as S JH SD B oa rd m em be rs , adm in is tra to rs o r C oun ty Comm iss ione rs .

(See P roposed Am end ed C om p la in t a t 26 -34 ¶¶ 1 -49 (“Spec if ic S ta tem en ts o f F ac ts –

A n ti-T ru st C laim s” ); id . a t 34 -58 ¶¶ 50 -168 (“Fac ts fo r 42 U SC 1983 , and an titru s t and

R ICO c laim s” ); id . a t 58 -86 ¶¶ 125 -230 (sam e) .)

D r . M acA r thur ’s F edera l An titru st L aw C la im

B y the tim e o f p re tria l, D r . M acA rthu r’s federa l an titru s t c la im aga in s t the

de fendan ts sough t on ly an aw a rd o f treb le damage s unde r § 4 o f the C layton A c t, 15

-119-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 123 of 192(cid:10)

U .S .C . § 15 . A pp lying the Loca l G ove rnm en t A n titru st A c t to tha t cla im leaves no v iab le

fede ra l an titru s t c la im rem a in ing .

A pa rt f rom th is s tatu to ry p rec lusion , D r. M acA rthu r’s fede ra l an titru st c laim fa ils

on its ow n fac ts .

P la in tif f s in s is t tha t a den ia l o f the fu ll p rov is iona l S JHSD s ta f f p riv ilege s

requested by D r. M acA rthu r in D ecem be r o f 1999 w ou ld be an ti-com pe titive in bo th

pu rpo se and ef fec t. W ha teve r fo rce tha t a rgum en t m ay have , the fac t rema in s

uncon trove rted tha t the S JH SD d id no t deny p riv ilege s to D r . M acA rthu r be fo re he

e lec ted to m ove h is p rac tice ou t o f s ta te . The S JH SD , unde r the au tho riz ing s igna tu re s o f

M r . B rad fo rd and D r. R edd , g ran ted D r. M acA rthu r “ tem po ra ry” s ta f f p riv ileges tw o

w eek s a f te r he made h is reque st fo r fu ll one -yea r p rov is iona l p riv ilege s, and ex tended

tho se p r iv i leg es tw ice through Feb rua ry 2 , 2000 . D u r ing tha t in ter im per iod , D r .

M acA rthu r exe rc ised h is tempo rary p riv ilege s in p rov id ing ca re fo r h is pa tien ts , and he

doe s no t a llege spec if ic fac ts show ing tha t he w a s unab le to p rov ide care fo r any

pa rt icu la r p a tien t becau se o f any lim ita tion o f tho se p riv ileges by num be r o r du ra tion .

Even tak ing a s true D r . M acA rthu r’s a llega tion tha t h is reque st fo r fu ll p riv ilege s

w a s p laced in the hand s o f o the r S JHSD s ta f f phys ic ian s w ith w hom he w a s compe ting

fo r pa tien ts— compe tito rs w ho w ou ld pu t the ir ow n econom ic in te re sts f irs t in m ak ing

su ch a de term ina tion— he has fa iled to a lleg e any ac tionab le “an titru st in ju ry” to h is

p rac tice du ring the b rie f pe riod o f tim e in w h ich he w as exp lo ring the San Ju an C oun ty

-120-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 124 of 192(cid:10)

m a rke t fo r ob s te tric s and gyneco log ica l ca re . A s exp la ined above , § 4 o f the C layton A c t

“ requ ire s a p la in tif f to show ac tua l in ju ry,” C a rg ill, Inc ., 479 U .S . a t 111 , and “ the

p lain tiff m u st s till allege an in ju ry o f the type the an titru st law s w e re designed to

p reven t.” Id . (foo tno te om itted ).

M o reover , becau se there no f ina l de term ina t ion by the S JH SD to deny D r .

M acA rthu r the p riv ilege s he sough t, h is federa l an titru s t c la im , like h is § 1983 c la im , w a s

no t ripe a t the tim e he e lec ted to m ove h is p rac tice ou t o f the a rea , and , the rea f te r w a s

rende red moo t by h is ab sence f rom the San Juan Coun ty hea lth ca re se rv ice s m a rke t a f te r

M a rch o f 2000 . See U n ity V en ture s v . Lake C oun ty , 841 F .2d a t 776 -777 (ab sen t f ina l

gove rnm en ta l ac tion denying in tended u se o f p rope rty, federa l an titru s t c la im ba sed on

loca l land u se regu la tion w as no t r ipe ).

C on sequen tly, D r . M acA rthu r’s federa l an titru s t law c la im s m u s t be d ism issed a s

aga in s t a ll de fendan ts . Fed . R . C iv . P . 16 (c )(1 ).

M s. L ym an ’s F edera l An titru st L aw C la im

A s exp la ined above , the e f fec t o f the Loca l G ove rnm en t A n titru s t A c t, 15 U .S .C . §

35 (a ), is to ba r p la in tif f Lym an ’s federa l an titru s t c la im fo r treb le damage s aga in s t the

de fendan ts , lim iting tha t c la im to a reques t fo r d ec la ra to ry and in junc tive re lie f .

A s exp la ined above , to on a p riva te c iv il c la im unde r § 4 o f the C layton A c t, 15

U .S .C . § 15 , “a p riva te p la in tif f mu s t e stab lish bo th (1 ) tha t it ha s s tand ing and (2 ) the

de fendan t ha s v io la ted the an titru s t law s . . . .” 2 Ph illip E . A reeda , H e rbe rt H ovencam p &

-121-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 125 of 192(cid:10)

R oge r D . B la ir , An titru s t Law ¶ 335 , at 297 . “O nce it appea rs, w he the r ea rly o r la te in

the litiga tion , tha t eithe r requ irem en t [o f stand ing o r an titru st v io lation ] is lack ing , the su it

m u s t be d ism issed .” Id . L ikew ise , § 16 o f the C layton A c t pe rm its in junc tive re lie f

“aga in s t th rea tened lo ss o r dam age by a v io la tion o f the an titru s t law s .” 15 U .S .C . § 26

(em phas is added ).

P la in tif f Lym an c la im s tha t one o r m o re o f the de fendan ts have v io la ted the

an titru s t law s , bu t does no t a llege the spec if ic na tu re o f tha t v io la tion . (See P ropo sed

Am ended C om p lain t at 26 -34 ¶¶ 1 -49 ; id . a t 34 -58 ¶¶ 50 -168 ; id . a t 58 -86 ¶¶ 125 -230 .)

G lean ing the e lemen ts o f a particu la r an titru s t law v io la tion f rom the den se th icke t o f the

p la in tif fs’ p lead ing s , o rig ina l o r am ended , p roves a daun ting and la rg e ly fru itle ss task .

T ak ing ac tion tha t is in tended to d isadvan tag e a com pe tito r, o r tha t has tha t ef fec t,

in tended o r no t, by itse lf doe s no t v io la te the an titru s t law s . Y e t p la in tif f Lym an ha s

a lleged little mo re than tha t one o r m o re S JH SD m ed ica l s ta f f de fendan ts— D rs . R edd ,

Jone s and N e lson— took the ir ow n econom ic in te re sts in to con side ra tion w hen add re ss ing

m a tte rs invo lv ing the p la in tif f ’s p rac tice p riv ilege s a t S JHSD fac ilitie s in 1999 , o r tha t the

e f fec t o f one o r ano the r lim ita tion upon M s . Lym an ’s p riv ilege s a s a Phys ic ian A ss is tan t

ope ra ted to lim it he r ab ility to compe te d irec tly w ith phys ic ian s in the ma rke t fo r m ed ica l

ca re in the San Juan C oun ty area .

M o reove r , acco rd ing to M s . Lym an ’s coun se l, M s . Lym an d id no t h av e S JH SD

p r iv i leges a f te r D ecem be r 22 , 1999 , the d a te he r ex isting p r iv i leges exp i red , he r requ es t

-122-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 126 of 192(cid:10)

fo r renew a l o f he r p riv ilege s in D ecem be r 1999 u ltim a te ly w a s den ied , and she made no

fu rthe r app lica tion fo r S JHSD p riv ilege s a f te r tha t da te :

THE COURT : D id sh e sub sequen tly app ly aga in fo r p riv ileg es a t the ho sp ital?

M S . RO SE : No , s ir.

THE COURT : The d is tric t, she never app lied aga in?

M S . RO SE : N o , S ir .

(T r . 11 /15 /02 , a t 53 :13 -17 .) Thu s , the re ex is ts no cu rren tly ex is ting con trove rsy be tw een

M s . Lym an and the de fendan ts concern ing he r en titlemen t to exe rc ise o f sta f f p riv ilege s

a t S JHSD fac ilitie s o r the po ten tia l fo r den ia l o f tho se p riv ilege s in v io la tion o f the

federa l an titru s t law s . In th is con tex t, any c la im fo r dec la ra to ry re lie f under 28 U .S .C . §§

2201 -2202 ha s “becom e moo t becau se a dec la ra to ry judgm en t w ou ld no longe r have any

e f fec t on de fendan ts’ b ehav io r. See U tah An im a l R igh ts C oa lition v . Sa lt Lake C ity

C o rp ., 371 F .3d 1248 , 1256 -57 (10 th C ir. 2004 ) (ho ld ing tha t an ac t ion fo r dec lara to ry

re lief w as m oo t w hen the requested dec lara tion invo lved past conduc t no t like ly to

recu r) .” GF G am ing C o rp . v . C ity o f B lack Haw k , C o lo ., 405 F .3d 876 , 883 (10 th C ir .

2005 ); see C ox v . Phe lp s D odge Co rp ., 43 F .3d 1345 , 1348 (10 th C ir . 1994 ) (“ [W ]ha t

m ake s a dec la ra to ry judgm en t ac tion ‘a p rope r jud ic ia l re so lu tion o f a ‘ca se o r

con trove rsy’ rath e r than an adv iso ry op in ion is the se ttling o f som e d ispu te w h ich a f fec ts

the behav io r o f the de fendan t tow a rd the p la in tif f .’” ) (quo ting H ew itt v . H e lm s , 482 U .S .

-123-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 127 of 192(cid:10)

755 , 761 (1987 )) .8 5

S im ila r m oo tness p rob lem s a f f lic t M s . Lym an ’s reques t fo r in juc tive re lie f . See ,

e .g ., Fac io v . Jone s, 929 F .2d 541 , 544 (10 th C ir . 1991 ) (“p la in tif f canno t m a in ta in a

dec la ra to ry o r in junc tive ac tion un le ss he o r she can demon s tra te a good chance o f be ing

likew ise in ju red in the fu tu re” ); M o reove r, if , a s the P ropo sed Am ended Com p la in t

ind ica te s , M s . Lym an seek s in junc tive re lie f “ to p ro tec t pa tien ts o f M rs . Lym an and her

supe rv ising physic ian , and g ive M rs. L ym an ’s p a tien ts un ifo rm and con side ra te ca re w ith

D istric t sta f f sen sitive to the un ique need s o f the pa tien t,” and a llow ing M s. Lym an “ to

m in ima lly go in to any fac ility to a t leas t speak and assoc ia te w ith h e r pa tien t , rega rd less

o f w he the r she ha s p riv ilege s a t the D is tric t,” (P ropo sed Am ended Com p la in t a t 93 ) , tha t

re lie f w ou ld no t be g ran ted a s “aga in s t th rea tened lo ss o r damage by a v io la tion o f the

an titru st law s”as p rov ided by § 16 o f the C layton A c t, 15 U .S .C . § 26 . N o r w ou ld

8 5

As the court of appeals recently elaborated:

It is not enough that a plaintiff wishes to have the moral satisfaction of a judicial ruling
that he was right and his adversary was wrong; the relief sought must have legal effect in
determ ining the present and future rights and obligations of the parties. “The crucial question is
whether ‘granting a present determination of the issues offered . . . will have some effect in the
real world.’” Citizens for Responsible Gov’t State Political Action Comm. v. Davidson, 236
F.3d 1174, 1182 (10th Cir. 2000), quoting Kennecott Utah Copper Corp. v. Becker, 186 F.3d
1261, 1266 (10th Cir .1999); see also Colorado Off-Highway Vehicle Coalition v. United States
Forest Serv., 357 F.3d 1130, 1133 (10th Cir . 2004) (“A ‘case or controversy’ no longer exists
when it is impossible for the court to grant any effectual relief whatsoever to a prevailing
party.”); Air Line Pilots Ass’n v. UAL Corp., 897 F.2d 1394, 1396-97 (7th Cir . 1990) (the test is
whether the relief sought would “make a difference to the legal interests of the parties (as
distinct from their psyches, which might remain deeply engaged with the merits of the
litigation)”).

Utah Animal Rights Coalition v. Salt Lake City Corp., 371 F.3d 1248, 1263 (10th Cir. 2004).

-124-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 128 of 192(cid:10)

“o rde ring the [S JH SD ] gove rnance boa rd to m ake phys ic ian s and ch ie f s o f s ta f f

accoun tab le fo r pa tien t com p lain ts and trea t all m ed ica l p rov iders and physic ian ’s equa lly

and un ifo rm ly,” (P ropo sed Am ended C om p lain t at 94 ), be tailo red to red ress a sp ec if ic

an titru s t v io la tion .

A s f ram ed in p la in t if fs ’ p lead ings , M s . Lym an ’s c la im unde r the fede ra l an t itrus t

law s d id no t as se rt an a rguab le lega l theo ry a t the tim e o f p re trial.

(10 ) U tah C on s titu t ion , ar t. I , §§ 1 , 7 , 25 , 26 , 27

The P a r t I P la in t if fs po in t to seve ra l p rov ision s o f the U tah C on s titu t ion as a

foo ting fo r the ir a llega tion s o f “due p roce ss v io la tion s” o r “v io la tion o f M rs . V a ldez ’

U tah C on s t itu t iona l r igh ts” by the d efendan ts , (P ropo sed Am ended C om p la in t a t 11 ¶ (3 ) ,

14 ¶ (23 )) :

A r tic le I , Sec tion 1 . [Inheren t and ina lienab le r igh ts .]

A ll m en have the inhe ren t and ina lien ab le r igh t to en joy and de fend the ir
lives and libe rties ; to acqu ire , po ssess and p ro tec t p rope rty; to w o rsh ip
acco rd ing to the d ic ta tes o f the ir con sc iences ; to assem b le peaceab ly,
p ro tes t ag a inst w rong s, and pe tition fo r red ress o f g rievances; to
comm un ica te f ree ly the ir though ts and op in ion s , be ing re spon s ib le fo r the
abu se o f tha t r igh t.
* * * *
A r tic le I , Sec tion 7 . [D ue process o f law .]

N o p e rson sha ll be d ep r ived o f l ife , libe r ty o r p rope r ty, w ithou t due p rocess
o f law .
* * * *
A r tic le I , Sec tion 25 . [R igh ts re ta in ed by peop le .]

Th is enume ra tion o f righ ts sha ll no t be con strued to im pa ir o r deny
o the rs re ta ined by the peop le .

-125-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 129 of 192(cid:10)

A r tic le I , Sec tion 26 . [P rov is ion s m anda to ry and proh ib itory .]

The p rov is ion s o f th is C on s titu tion a re m anda to ry and p roh ib ito ry,
un less by exp re ss w o rd s they a re dec la red to be o the rw ise .

A r tic le I , Sec tion 27 . [F undam en ta l r igh ts .]

F requen t recu rrence to fundam en tal p rinc ip les is e ssen tial to the secu rity
o f ind iv idua l r igh ts and the pe rp e tu ity o f f ree gove rnm en t.

U tah C on s t ., ar t . I , §§ 1 , 7 , 25 -27 . The U tah C on s t itu t ion ’s D ue P rocess C lause , A r tic le I ,

§ 7 , p rov ide s a foo ting fo r a d irec t p riva te righ t o f ac tion seek ing a remedy fo r an a lleged

dep riva tion o f life , libe rty o r p rope rty, bu t on ly in “app rop ria te”— tha t is , ex trao rd ina ry—

c ircum s tances :

8 6

8 6

The source of judicial authority to grant relief in “appropriate circumstances” in Utah is the common

law :

20. We begin by identifying the source of our authority to award damages for
constitutional violations. Except for the Takings Clause, the Utah Constitution does not
expressly provide damage remedies for constitutional violations. Thus, aside from the Takings
Clause, there is no textual constitutional right to damages for one who suffers a constitutional
tort. Nor has the legislature enacted any laws authorizing damage claims for constitutional
violations in general, or the violation of the Due Process Clause or the Open Education Clause
in particular. Thus, there is no express statutory right to damages for one who suffers a
constitutional tort. In the absence of applicable constitutional or statutory authority, Utah
courts employ the common law. See Utah Code Ann. § 68-3-1 (1996). Under the common
law, “individuals had access to remedies of money damages for violations of their individual
rights, and these rights, enumerated in fundamental documents, were the forerunners of many
of the provisions adopted in federal and state bills of rights.” Bott, 922 P.2d at 739 (citations
om itted). Hence, a Utah court’s ability to award damages for violation of a self-executing
constitutional provision rests on the common law. The Restatement (Second) of Torts supports
this view. Restatement section 874A states that when no specific remedy is mentioned, a court
may accord an appropriate remedy to one injured from the violation of a constitutional
provision. See Restatement (Second) of Torts § 874A & cm t. a (1979). Comment (g) to section
874A suggests that a court’s authority to do so arises from the common law. See id. cmt. g, at
306-07; see also Jennifer Friesen, State Constitutional Law § 7-5(c) (2d ed.1996) (stating that
section 874A espouses a common law doctrine).

21. This common law ability to award damages for constitutional violations

(con tinued …)

-126-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 130 of 192(cid:10)

22 . To en su re tha t damage ac tion s a re pe rm itted on ly “unde r
app rop r ia te c ircum s tances ,” w e the re fo re ho ld tha t a p la in t if f m us t es tab l ish
the fo llow ing th ree e lem en ts be fo re he o r sh e m ay p roceed w ith a p riva te
su it fo r dam ages .

23 . F irs t, a p la in tif f mu s t e stab lish tha t he o r she su f fered a
“ f lag ran t” v io la tion o f h is o r h e r con stitu tiona l r igh ts . See D ick F ische r
D ev . v . D epa rtm en t o f Adm in ., 838 P .2d 263 , 268 (A laska 1992 ); see a lso
Bo tt, 922 P .2d a t 734 -35 , 739 -40 (desc rib ing the leve l o f d e fendan ts ’
cu lpab ility necessa ry to c rea te damage s liab ility) . In e ssence , th is m ean s
tha t a de fendan t m u s t have v io la ted “c lea rly e stab lished” con s titu tiona l
righ ts “o f w h ich a rea sonab le pe rson w ou ld have known .” H a r low v .
F itzgera ld , 457 U .S . 800 , 818 , 102 S .C t. 2727 , 73 L .Ed .2d 396 (1982 ) . To
be con side red c lea rly e stab lished , “ [ t]he con tou rs o f the righ t m u s t be
su f f icien tly c lea r tha t a reasonab le o f f icia l w ou ld unde rstand tha t w ha t he is
do ing v io la te s tha t righ t.” Ande rson v . C re igh ton , 483 U .S . 635 , 639 -40 ,
107 S .C t. 3034 , 97 L .Ed .2d 523 (1987 ) (c ita tion s om itted ). The requ iremen t
tha t the uncon stitu tiona l conduc t be “ f lag ran t” en su re s tha t a gove rnm en t
em p loyee is a llow ed the o rd ina ry “hum an f ra ilties o f fo rge tfu lness ,
d is trac tib ility, o r m is judgm en t w ithou t rende ring [h im o r he r]se lf liab le fo r
a con stitu tiona l v io la tion .” Bo tt, 922 P .2d a t 739 -40 .

24 . Second , a p la in tif f mu s t e stab lish tha t ex is ting remed ie s do no t
red re ss h is o r h e r in ju ries . See Schw e ike r v . C h ilicky , 487 U .S . 412 , 425 ,
108 S .C t. 2460 , 101 L .Ed .2d 370 (1988 ) (re fu sing to c rea te a dam age s
remedy fo r an a lleged due p roce ss v io la tion w he re Cong re ss had p rov ided
m ean ing fu l sa fegua rd s o r rem ed ies ); Bu sh v . Luca s , 462 U .S . 367 , 378 , 103
S .C t. 2404 , 76 L .Ed .2d 648 (1983 ) (sam e w ith respec t to a l leged F irst
Am endm en t v io lation ); D ick F ische r D ev ., 838 P .2d a t 268 ; Bonner v . C ity

8 6

( …con tinued )
requires policy decisions by the court, and it should be aware of them and
face them candidly. . . . The court is not required to provide the civil remedy,
and yet judicial tradition gives it the authority to do this under appropriate
circumstances. The court has discretion and it must be careful to exercise that
discretion cautiously and soundly.

Restatement § 874A cmt. d, at 303.

Spackman ex rel. Spackman v. Board of Educ. of Box E lder County School Dist., 2000 UT 87, ¶¶ 20-21, 16 P.3d
533, 537-538 (quoting Bott v. DeLand, 922 P.2d 732, 739 (Utah 1996)) (footnotes om itted).

-127-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 131 of 192(cid:10)

o f San ta Ana , 45 C a l.A pp .4 th 1465 , 53 C a l.R p tr .2d 671 , 673 , 676 -78 (1996 )
(refu s ing to crea te dam ag es rem edy fo r a l leg ed due p rocess v io la t ion w here
a ltern a tive comm on law to rt cau se o f ac tion ex isted ); R e sta tem en t (Second )
o f To rts § 874A cm t . h , a t 309 (sugge sting cou rts shou ld con side r the
ad equacy o f ex is ting rem ed ies w hen dec id ing w he the r to p rov ide a tor t
rem edy). Th is second requ irem en t is m ean t to en su re tha t cou rts u se the ir
comm on law rem ed ia l pow e r cau tiou s ly and in favo r o f ex is ting rem ed ies.
See Lynch v . Jacob sen , 55 U tah 129 , 138 -39 , 184 P . 929 , 933 (1919 ) . W e
u rge cau tion in ligh t o f the myriad po licy con side ra tion s invo lved in a
dec ision to aw a rd dam ages aga inst a gove rnm en tal agency and /o r its
em p loyees fo r a con stitu tiona l v io lation . M o reove r, w e u rge de fe rence to
ex is ting rem ed ies ou t of respec t fo r separa t ion o f pow ers ‘ p r inc ip les . In
gene ra l, the leg is la tive b ranch has the au tho rity, and in m any ca se s is be tte r
su ited , to es tab lish app rop ria te rem ed ies fo r ind iv idua l in ju ries . B y
requ iring cou rts to de fer to re levan t leg is la tive de te rm ina tion s o f
app rop ria te remed ie s , w e re spec t the leg is la tu re ‘s im po rtan t ro le in ou r
con s titu tiona l sys tem o f gove rnm en t.

25 . Th ird , a p la in tif f mu s t e stab lish tha t equ itab le re lie f , such a s an
in junc tion , w a s and is w ho lly inadequa te to p ro tec t the p la in tif f ‘s righ ts o r
red re ss h is o r h e r in ju ries . See , e .g ., Bo tt, 922 P .2d a t 739 (sta ting tha t “if
p risone rs’ righ ts unde r a rtic le I, sec tion 9 a re v io la ted , in junc tive re lie f may
no t be adequa te to rem edy p risone rs’ in ju ries” ); see a lso , e .g ., D av is v .
Pa ssm an , 442 U .S . 228 , 245 , 99 S .C t. 2264 , 60 L .Ed .2d 846 (1979 ) (s ta ting
tha t damage s a re an app rop ria te remedy w he re p la in tif f w a s
uncon stitu tiona lly te rm ina ted f rom he r job on a cong re ssiona l s ta f f becau se ,
in pa rt, “equ itab le re lie f in the fo rm o f re in s ta temen t w ou ld be unava iling”
in l igh t of the fac t tha t he r fo rm er em p loyer w as no longer a cong ressm an ) ;
c f. Rockhou se M oun ta in P rope rty Ow ne rs A ss’n , Inc . v . Tow n o f C onw ay ,
127 N .H . 593 , 503 A .2d 1385 , 1388 (1986 ) (s ta ting tha t damage s a re an
inapp rop r ia te rem edy fo r a con s t itu t iona l v io la tion w here the a l leg ed in jury
“can be undone” by the jud ic ia ry) . Th is f ina l requ iremen t is m ean t to take
advan tage o f the mean ing fu l ro le equ itab le re lie f can p lay in red re ss ing
con stitu tiona l in ju rie s , w h ile no t im p lica ting so m any o f the d if f icu lt po licy
con s ide ra tion s ra ised by a dec ision to aw a rd dam ages .

Spackm an ex re l. Spackm an v . Boa rd o f Educ . o f Box E lder C oun ty S choo l D ist., 2000

UT 87 , ¶¶ 22 -25 , 16 P .3d 533 , 538 -539 (foo tno tes om i tted) .

-128-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 132 of 192(cid:10)

The Pa rt I P la in tif f s have no t even a ttemp ted to p lead the se th ree essen tia l

e lemen ts o f a d irec t c iv il ac tion unde r the U tah Con s titu tion in e ithe r the P ropo sed

Am ended Com p la in t and the P ropo sed P re tria l O rde r. They d id no t ra ise them a s issue s

a t the F ina l P re tria l C on fe rence . N o r have they add re ssed them in the lega l m emo randa

subm itted e ithe r p rio r to the F ina l P re trial C on fe rence , o r sin ce . “F a ilu re o f coun se l to

iden tify an issue fo r the cou rt can re su lt in w a ive r: ‘If coun se l fa il to iden tify an issue fo r

the cou r t, the r igh t to hav e the issue tried is w a ived .’ Fed .R .C iv .P . 16 adv isory

comm ittee ‘s no te .” Sm ith v . G u lf O il C o ., 995 F .2d 638 , 644 (6 th C ir. 1993 ) .

B e side s fa iling to add re ss the e ssen tia l e lemen ts o f a d irec t c iv il ac tion unde r the

U tah Con s titu tion , the Pa rt I P la in tif f s have no t iden tif ied the spec if ic con stitu tiona l

righ t(s) tha t come w ith in the scope o f A rtic le I, §§ 1 , 25 , 26 , and 27 , tha t pu rpo rted ly have

been v io la ted by the conduc t o f one o r m o re o f the de fendan ts .

To d a te , the repo r ted case law con s tru ing the A r tic le I , § 25 “ re ta ined r igh ts”

p rov is ion has invo lved pa ren ta l r igh ts issues . See , e .g ., In re J .P ., 648 P .2d 1364 (U tah

1982 ); In re K .B .E ., 740 P .2d 292 (U tah C t. App . 1987 ); T .R .F . v . F e lan , 760 P .2d 906

(U tah C t. App . 1988 ); P .O . v . S .G ., 927 P .2d 202 (U tah C t. App . 1996 ); J .R . v . S ta te o f

U tah , 261 F . Supp . 2d 1268 (D . U tah 2003 ). A rtic le I, §§ 26 and 27 appea r to be

dec la ra to ry o f genera l con stitu tiona l p rinc ip le s ra the r than an enum e ra tion o f ind iv idua l

con s titu tiona l r igh ts as such . See R itch ie v . R icha rd s , 14 U tah 345 , 361 -363 , 47 P . 670

(1896 ) (B a rtch & M ine r, JJ .) (con stitu tiona l p rov is ion s p re sc rib ing fo rm a litie s to be

-129-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 133 of 192(cid:10)

ob se rved in the enac tm en t o f law s a re m anda to ry and b ind ing on the leg isla tu re ); see

genera lly C omm en t, Fundam en ta l P rinc ip les , Ind ividua l R igh ts, and F ree G overnm en t:

D o U tahn s R em em be r H ow to B e F ree? , 1996 U tah L . R ev . 661 (“exp lo ring the mean ing

o f [a rt . I] Sec tion 27 o f the U tah C on s titu tion” ).

H av ing con side red the p lead ing s , p ro f fers , a rgum en ts and mem o randa subm itted

by coun se l, the cou rt canno t “id en tify the litigab le issu es” tha t p lain tiff s b e liev ed w ou ld

a rise unde r these p rov is ion s . See Fed . R . C iv . P . 16 (c )(1 ); see a lso F ed . R . C iv . P .

8 (a )(2 ); Fed . R . C iv . P . 11 (b ); C have z v . N ew M ex ico , 397 F .3d 826 , 839 (10 th C ir . 2005 )

(“ ‘the C ou rt re fu ses to go on a f ish ing exped ition in sea rch o f leg a l an a lysis and fac ts to

suppo r t these c la im s’”) .

(11 ) U tah U n fa ir Prac tice s A c t (U tah C ode A nn . §§ 13 -5 -1 e t seq .
(2001 ))

The U tah U n fa ir P rac t ice s A c t , U tah C ode A nn . §§ 13 -5-1 through 13 -5-18 (2001 ) ,

d isa llow s the u se o f a list o f sp ec if ic un fa ir trade p rac tice s by pe rson s “engaged in

comm e rce ,” inc lud ing an ti-compe titive p rice d isc rim ina tion ,

8 7

adve rtising o r sa le o f good s

8 7

Utah Code Ann. § 13-5-3 (2001). Section 13-5-3(1)(a) provides:

(1) (a) It is unlawful for any person engaged in commerce, in the course of such commerce,
either directly or indirectly, to discrim inate in price between different purchasers of
commodities of like grade and quality, where either or any of the purchasers involved in such
discrim ination are in commerce, where such commodities are sold for use, consumption, or
resale within the state and where the effect of such discrim ination may be substantially to
lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy,
or prevent competition with any person who either grants or knowingly receives the benefit of
such discrim ination, or w ith customers of either of them .

-130-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 134 of 192(cid:10)

a t a p rice le ss than co st,

8 8

and advertis ing good s , w a re s , o r m e rchand ise tha t the advertise r

is no t p repa red to supp ly.

8 9

These fo rb idden p rac tices invo lve trade in “good s ,”

“me rchand ise ,” “artic le s ,” “p roduc ts” and “comm od itie s ,” and se rv ice s o r fac ilitie s

fu rn ished in connec tion w ith such trade , a s w e ll a s the se rv ice s o f som eone “w ho

pe rfo rm s w o rk upon , renova tes , alte rs o r im p roves any pe rsona l p rope rty be long ing to

ano the r pe rson , excep t necessa ry repa irs due to damage in tran sit . . . .” U tah Code A nn .

§ 13 -5 -12 (2 ) (2001 ) . A s the U tah Sup reme C ou rt exp la in s , “The imm ed ia te stim u li fo r

the enac tm en t o f such ac ts w e re in pa rt the rap id rise o f cha in s to re s , and in pa rt the

gene ra l sha rpen ing o f compe titive p rac tice s unde r p re ssu re o f the dep re ss ion .” Bu r t v .

W oo lsu la te , Inc ., 106 U tah 156 , 160 , 146 P .2d 203 (1944 ).

O ne o f the p rac tice s a imed a t by these [U n fa ir
P rac tice s A c ts] s ta tu te s is tha t, comm on in cha in s to re s , o f
se lling a t low e r p rice s in one loca lity than in ano the r and
m ak ing up lo sse s incu rred by p ro f its in o the r s to re s . Even
m o re im po rtan t in the app lica tion o f an ti-d isc rim ina tion
s ta tu te s today is the p reven tion o f d isc rim ina tion sa le s by
m anu fac tu re rs to cu stom e rs w ith unu sua lly s trong ba rga in ing
pow e r w ho can fo rce la rg e p rice concess ion s . . . .

8 8

Utah Code Ann. § 13-5-7(1) (2001):

(1) It is hereby declared that any advertising, offer to sell, or sale of any merchandise, either
by retailers or wholesalers, at less than cost as defined in this act with the intent and purpose of
inducing the purchase of other merchandise or of unfairly diverting trade from a competitor or
otherwise injuring a competitor, impairs and prevents fair competition, injures public welfare,
is unfair competition contrary to public policy and the policy of this act and is declared to be a
violation of this act.

See also Utah Code Ann. § 13-5-9 (2001) (selling goods in quantity below cost); Utah Code Ann. § 13-
5-10 (2001) (advertising and segregation of below-cost goods at forced liquidation or close-out sales).

8 9

Utah Code Ann. § 13-5-8 (2001).

-131-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 135 of 192(cid:10)

O n the w ho le the an ti-d isc rim ina tion p rov is ion s o f the
U n fa ir P rac t ice s A c ts seem bes t f i tted to reach m anu fac ture rs
and p roduce rs w ho , in the past have p laced ce rta in re tail
buye rs in p re ferred compe titive po sition s by g iv ing them
spec ia l reba tes o r o the r p rice favo rs . . . .

Id . (quo ting C omm en t, P roh ib iting P rice D isc rim ina tion and Sa les B e low C o st: The S ta te

U n fa ir P ra c tice s A c ts , 32 Ill. L . R ev . 816 (1938 )); see a lso 54A Am . Ju r . 2d M onopo l ies ,

e tc . §§ 1077 -1106 (1997 ); A nno t., Va lid ity, C on struc tion and App lica tion o f S ta te

S ta tu to ry P rov is ion P roh ib iting Sa le s o f C omm od itie s B e low C o s t–M ode rn C a se s , 41

A .L .R . 4 th 612 (1985 ) .9 0

P la in tif f s a llege “ in te rfe rence w ith the pa tien ts’ and [p la in tif f s M acA rthu r and

Lym an ]’s ab ility to f ree ly con trac t fo r se rv ice s w ith the D istric t, w ith each o the r, w ith

9 0
In Trade Comm . v. Skaggs Drug Centers, Inc., 21 Utah 2d 431, 446 P.2d 958
(Utah 1968), the Utah Supreme Court upheld the constitutionality of the Utah Unfair Practices Act, and
elaborated upon its purpose:

It has been argued that the purpose of statutes such as the Utah Unfair Practices Act is
to preserve a competitive climate by preventing large business concerns through the
unrestrained use of size and resources alone, from overwhelming and destroying their smaller
competitors. These statutes it is claimed seek to preserve the right of a competitor to enter a
market and compete w ith those already operating.

It has been further argued that unrestrained price cutting on a massive scale has had
disastrous effect on the small independent retailer with lim ited resources. That the below cost
selling has become a weapon in the fight for markets and customers, characterized by the
deliberate use of below cost selling to undercut, overwhelm and destroy competition, all to the
benefit and further enrichment of the big interests. It is further claimed that to correct the
unscrupulous conduct of these vested groups it became necessary for government to adopt such
unfair trade practices acts as the one here in question.
* * * *
We do not suggest that a purpose to divert or capture a competitor ‘s business is wrong or
unethical. It is perfectly legitimate so long as it is not carried out unfairly. The legislature
simply has declared it unfair to accomplish it through giving away goods or services or selling
them for less than cost.

Id., 21 Utah 2d at 438, 441, 446 P.2d at 962-963, 965 (footnote omitted).

-132-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 136 of 192(cid:10)

pa t ien ts as gua ran teed by the . . . U tah [U ]n fa ir P rac tices A c t,” am ong o the r law s ,

(P ropo sed P re tr ia l O rd e r a t 4 ¶ (8 )) , and the “v io la tion o f the U tah U n fa ir P rac tices A c t,”

(id . a t 4 ¶ (15 ); P ropo sed Am ended Com p la in t a t 12 ¶ 14 ), bu t now he re in the ir p lead ing s

do they de ta il the na tu re o f tha t a lleged v io la tion . In s tead , p la in tif f s appear to c ite the A c t

fo r its gene ra l po licy s ta temen t “ fo ste ring econom ic compe tition ,” and a s a foo ting fo r
9 1

an aw a rd o f treb le d am ages. (P ropo sed Am ended C om p lain t at 26 ¶ 2 ; id . a t 97 (P raye r

fo r R e lie f ) (“M rs. Lym an is p raying fo r dam ages in ex cess o f S ix (6 ) M illion D o l la rs,

som e o f w h ich is treb le dam ag es , du e to un fa ir p rac t ice s . . . .”) .)

The U tah U n fa ir P rac tice s A c t does p rov ide fo r an aw a rd o f treb le d am ages in

favo r of a p r iva te p la in t iff w ho has b een in jured by “any ac t in v io la t ion o f th is chap ter”

and ha s su s ta ined ac tua l damage s ,

9 2

bu t such ac ts w ou ld be tho se exp re ss ly de f ined by the

A c t as “a v io lation o f th is ac t” o r as “un law fu l.” N e ithe r the A c t’s g ene ra l pu rpo se “ to

sa fegua rd the pub lic aga in s t the c rea tion o r pe rpe tua tion o f monopo lie s and to fo s te r and

9 1

Utah Code Ann. §13-5-17 (2001) reads:

Policy of act.
The Legislature declared that the purpose of this act is to safeguard the public against the
creation or perpetuation of monopolies and to foster and encourage competition, by prohibiting
unfair and discriminatory practices by which fair and honest competition is destroyed or
prevented. This act shall be liberally construed that its beneficial purposes may be subserved.

9 2

Under Utah Code Ann. § 13-5-14 (2001):

Any person or the state of U tah may maintain an action to enjoin a continuance of any act in
violation of this chapter, and, if injured by the act, for the recovery of damages. If, in such
action, the court finds that the defendant is violating or has violated any of the provisions of
this chapter, it shall enjoin the defendant from a continuance of the violation. It is not necessary
that actual damages to the plaintiff be alleged or proved. In addition to such injunctive relief,
the plaintiff is entitled to recover from the defendant three times the amount of the actual
damages sustained or $2,000, whichever is greater, plus court costs.

-133-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 137 of 192(cid:10)

encou rage com pe tition” no r the “ libe ra l con stru c tion” o f its term s can ex tend c iv il

l iab i li ty— o r the A c t’s cr im ina l san c t ion s— beyond the “un fa ir and d iscr im ina to ry

p rac t ice s” exp ress ly “p roh ib i t[ed ]” by the A c t itse lf . U tah C ode A nn . § 13 -5-17 (2001 ) .

W he re , a s he re , the p la in tif f s fa il to p lead o r o the rw ise iden tify ac ts by one o r m o re

de fendan ts tha t v io la te the U tah U n fa ir P rac tice s A c t’s spec if ic p rov is ion s , ne ithe r the

conc luso ry a lleg a tion o f a v io lation no r the gene ra lized asse rtion o f in ter fe rence w ith

f reedom o f con trac t can su s ta in the ir treb le dam ages c la im s unde r tha t A c t.

(12 ) U tah C iv il R igh ts A c t (U tah C ode A nn . §§ 13 -7 -1 e t seq . (2001 ))

U tah C od e A nn . § 13 -7 -3 (2001 ) reads :

13 -7 -3 . Equa l righ t in bu sin ess estab lishm en ts, p laces o f pub lic
accomm oda t ion , and en terpr ise s regu la ted by the sta te .

A l l person s w i th in the jur isd ic tion o f th is s ta te a re f ree and equa l and are
en t itled to fu l l and equ a l accomm od a tion s , adv an tages , fac ilities , p r iv i leges ,
good s and se rv ice s in a ll bu siness estab lishm en ts and in a ll p laces o f pub lic
accomm oda tion , and by a ll en te rp rise s regu la ted by the sta te o f eve ry k ind
w ha tsoeve r, w ithou t d isc rim ina tion on the ba sis o f race , co lo r , sex , re lig ion ,
ances try o r na tiona l o rig in . N o th ing in th is ac t sha ll be con strued to deny
any pe rson the righ t to regu la te the ope ra tion o f a bu sine ss e stab lishm en t o r
p lace o f pub lic accomm oda tion o r an en te rp rise regu la ted by the sta te in a
m anner w h ich app l ies un ifo rm ly to a l l person s w i thou t reg ard to race , co lor ,
sex , re lig ion , ances try, o r na tiona l o rig in ; o r to deny any re lig iou s
o rgan iza tion the righ t to regu late the ope ra tion and p rocedu res o f its
es tab lishm en ts .

Th is exp licit gua ran tee o f equa l trea tm en t re f lec ts U tah ’s pub lic po licy “ to assu re a ll

c itizens fu ll and equ a l ava i lab i lity o f a l l good s se rv ices and fac ilities o f fe red by” bu s iness

e stab lishm en ts , p laces o f pub lic accomm oda tion and sta te -regu la ted en te rp rise s “w ithou t

-134-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 138 of 192(cid:10)

d isc rim ina tion becau se o f race , co lo r , sex , re lig ion , ances try, o r na tiona l o rig in ,” and the

S ta te ’s recogn ition s ince 1965 tha t “ the p rac tice o f d isc rim ina tion on the ba sis o f race ,

co lo r , sex , re lig ion , ances try, o r na tiona l o rig in . . . endangers the hea lth , sa fe ty, and

gen era l w e lfa re o f th is s ta te and i ts inhab i tan ts .” U tah C ode A nn . § 13 -7-1 (2001 ) .

9 3

Sec tion 13 -7 -4 (3 ) p rov ides tha t “[ a ]ny pe rson w ho is den ied the righ ts p rov ided fo r in

Sec tion 13 -7 -3 sh a ll have a c iv il ac tion fo r dam ages and any o the r rem edy ava ilab le in

law o r equ i ty ag a ins t any person w ho den ies h im the r igh ts prov ided fo r in Sec t ion 13 -7-3

o r w ho a id s , inc ite s o r con sp ires to b ring abou t such den ia l.”

P la in tif f s’ p lead ing a llege s the “v io la tion o f M rs . V a ldez ’ s ta te righ t to rece ive

se rv ice s equa lly w ith a ll o the r pa tien ts a s found in U tah Code A nn . 13 -7 -2 ,” (P ropo sed

Am ended Com p la in t a t 13 ¶ (21 )) , bu t she doe s no t a llege spec if ic fac ts show ing

d isc rim ina tion aga in s t he r on the ba sis o f he r race , co lo r , sex , re lig ion , ances try o r

na tiona l o rig in , o r p lead spec if ic fac ts f rom w h ich such d isc rim ina tion m ay rea sonab ly be

in fe rred . N o r doe s she a llege spec if ic fac ts show ing tha t she w a s den ied “ fu ll and equa l

accomm oda tion s , advan tage s, fac ilitie s , p riv ilege s, good s and se rv ice s” in a “p lace[ ] o f

pub lic accomm oda tion ,” as gua ran teed by the U tah s ta tu te .

(13 ) In ter feren ce w ith C on tra ct and w ith P rosp ec tiv e Bu s in ess R e la tion s

The to rt o f “ in ter fe rence w ith con trac t” add resses “conduc t w h ich ‘in ten tiona lly

9 3
This statute was first enacted by the Utah Legislature in 1965, (1965 Utah Laws ch. 174), a watershed
year for civil rights, government reform and other significant Utah legislation. A 1973 amendment added
discrim ination on the basis of sex to the conduct prohibited by the statute. See 1973 Utah Laws ch. 18, § 3.

-135-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 139 of 192(cid:10)

and im p rope rly in te rfe re s w ith the pe rfo rm ance o f a con trac t . . . be tw een ano the r and a

th ird pe rson by induc ing o r o the rw ise cau s ing the th ird pe rson no t to pe rfo rm the

con trac t .’ R esta tem en t (Second ) of To rts § 766 (1979 ). See a lso Bunne ll v. B ills , 13 U tah

2d 83 , 90 , 368 P .2d 597 , 602 (1962 ); W . P ro sse r, H andbook o f the Law o f To rts § 129 a t

929 -30 (4 th ed . 1971 ); Anno t., 26 A .L .R .2d 1227 (1952 ) .” Le igh Fu rn itu re and Ca rpe t

C o . v . Isom , 657 P .2d 293 (U tah 1982 ) .

“The to rt o f in ten tiona l in te rfe rence w ith p ro spec tive econom ic re la tion s reache s

beyond p ro tec tion o f an in terest in an ex isting con trac t and p ro tec ts a pa rty’s in terest in

p ro spec tive re la tion sh ip s o f econom ic advan tage no t ye t reduced to a fo rm a l con trac t (and

pe rhap s no t expec ted to be ).” Le igh , 657 P .2d a t 302 (c iting Bucka loo v . John son , 14

C a l.3d 815 , 537 P .2d 865 , 868 -69 , 122 C a l.Rp tr. 745 , 748 -49 (1975 ); R e sta tem en t

(Second ) of To rts § 766B comm en t c ; P ro sse r, supra , a t § 130 ) . In the Le igh ca se , the

U tah Sup reme C ou rt recogn ized “a comm on -law cau se o f ac tion fo r in ten tiona l

in te rfe rence w ith p ro spec tive econom ic re la tion s ,” and adop ted the O regon de f in ition o f

th is to rt . Id . a t 304 (c iting S traube v . La r son , 287 O r . 357 , 361 , 600 P .2d 371 , 374

(1979 ); Top Se rv ice Body Shop , Inc . v . A lls ta te In su rance Co ., 283 O r . 201 , 205 , 209 , 582

P .2d 1365 , 1368 , 1371 (1978 )) . “U nde r th is de f in ition , in o rde r to recover damage s , the

p la in tif f m u s t p rove (1 ) tha t the de fendan t in ten tiona lly in te rfe red w ith the p la in tif f ‘s

ex is ting o r po ten tia l econom ic re la tion s , (2 ) fo r an im p rope r pu rpo se o r by im p rope r

m ean s, (3 ) cau sing in ju ry to the p la in tif f .” Id .

-136-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 140 of 192(cid:10)

The “econom ic re la tion s” p ro tec ted by th is theo ry a re d ive rse . “D riv ing aw ay an

ind iv idua l’s ex is ting o r po ten tia l cu stom e rs is the a rche typ ica l in ju ry th is cau se o f ac tion

w as dev ised to rem edy. E .g ., G u illo ry v . G od frey , 134 C a l.A pp .2d 628 , 286 P .2d 474

(1955 ); Tu ttle v . Buck , 107 M inn . 145 , 119 N .W . 946 (1909 ); W . P ro sse r, H andbook o f

the Law o f To rts § 130 (4 th ed . 1971 ); R esta tem en t (Second ) of To rts § 766B (a ),” Le igh ,

657 P .2d a t 306 , bu t p ro tec tion ex tend s to “any p ro spec tive con trac tua l re la tion s . . . if the

po ten tial con trac t w ou ld be o f pecun iary va lue to the p lain tiff” (exc lud ing con trac ts to

m a rry) , a s w e ll a s “a con tinu ing bu s ine ss o r o the r cu stom a ry re la tion sh ip no t amoun t ing

to a fo rm a l con trac t.” R esta tem en t (Second ) of To rts § 766B comm en t c (1979 ).

The ques tion o f in te r fe rence fo r an “ im p rope r pu rpose” o r by an “ imp rope r m eans”

requ ires the w e igh ing o f seve ra l re levan t fac to rs :

In de te rm in ing w he the r an ac to r’s conduc t in in ten tiona lly in te rfe ring w ith a
con trac t o r a p ro sp ec tive con trac tua l re lation o f ano the r is im p rope r o r no t,
con s ide ra tion is g iven to the fo l low ing fac to rs :

(a ) the na tu re o f the ac to r’s conduc t,

(b ) the ac to r’s m o tive ,

(c ) the in te re sts o f the o the r w ith w h ich the ac to r’s conduc t
in te rfe res ,

(d) the in teres ts sough t to be advan ced by the ac tor ,

(e ) the soc ia l in te re sts in p ro tec ting the f reedom o f ac tion o f
the ac tor and the con trac tua l in teres ts of the o ther ,

(f ) the p rox im ity o r remo tene ss o f the ac to r’s conduc t to the
in te rfe rence and

-137-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 141 of 192(cid:10)

(g ) the re la tion s be tw een the pa r ties .

R esta tem en t (Second ) of To rts § 767 (a )-(g ) (1979 ). A s the Le igh cou rt ob se rved :

In the rough and tum b le o f the ma rke tp lace , compe tito rs inev itab ly damage
one ano the r in the strugg le fo r pe rsona l advan tage . The law o f fers no
remedy fo r tho se damage s–even if in ten tiona l–becau se they a re an
inev itab le byp roduc t o f compe tition . P rob lem s inhe ren t in p rov ing
m o tiva tion o r pu rpo se make it p ruden t fo r comm e rc ia l conduc t to be
regu la ted fo r the mo s t pa rt by the im p rope r m ean s a lte rna tive , w h ich
typ ica lly requ ires on ly a show ing o f pa rticu lar conduc t.

The a lte rna tive o f im p rope r pu rpo se w ill be sa tisf ied w he re it can be
show n tha t the ac to r’s p redom inan t pu rpo se w as to in ju re the p la in tif f . . . .

657 P .2d a t 307 (foo tno te & c ita tion s om itted ). A s the R e sta tem en t exp la in s , a

compe tito r’s in te rfe rence w ith a p ro spec tive con trac tua l re la tion is no t im p rope r if , among

o the r th ing s , “h is pu rpo se is a t lea st in pa rt to advance h is in te re st in compe ting w ith the

o the r.” R esta tem en t (Second ) of To rts § 768 (d) (1979 ) .

g . The ac to r’s pu rpo se . The ru le s tated in th is S ec tion deve loped to
advance the ac to r’s com pe titive in terest and the suppo sed so c ial b ene f its
a ris ing f rom it. If h is conduc t is d irec ted , a t lea st in pa rt, to tha t end , the fac t
tha t he is a lso m o t iva ted by o ther impu lses , as , fo r exam p le , ha tred o r a
des ire fo r revenge is no t a lone su ff ic ien t to m ak e h is in terference imp rop er .
B u t if h is conduc t is d irec ted so lely to the sa tisfac tion o f h is sp ite o r ill w ill
and no t a t a ll to the advancemen t o f h is compe titive in te re sts ove r the
pe rson ha rm ed , h is in te rfe rence is he ld to be im p rope r.

Id . § 768 comm en t g .

The fac tua l a l leg a t ion s underp inn ing D r . M acA r thu r’s and M s . Lym an ’s

in te rfe rence c la im s w e re con side red in som e de ta il a t the F ina l P re tria l C on fe rence

-138-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 142 of 192(cid:10)

(14 ) “ sta te com m on law defam a t ion (a lso a U . S . C on st itu t iona l r igh t to
repu tat ion a s guaran teed by the N inth Am endm en t)”

(a ) U tah L aw o f D e fam a tion

“A t its co re , an ac t ion fo r de fam a t ion is in tend ed to p ro tec t an ind iv idua l’s

in te re st in m a in ta in ing a good repu ta tion .” W es t v . Thom son N ew spap ers , 872 P .2d 999 ,

1008 (U tah 1994 ); see Seegm ille r v . K SL , Inc ., 626 P .2d 968 , 973 (U tah 1981 )

(recogn izing tha t “th e in teg rity o f an ind iv idua l’s repu tation is e ssen tial to h is s tand ing in

soc ie ty, in h is voca tion , and even in h is fam ily”).

In o rde r to s ta te a c la im fo r de fam a tion unde r U tah law , a p la in tif f
m u s t show “ tha t de fendan ts pub lished the sta temen ts concern ing h im [e ithe r
in p rin t o r by spoken w o rd s] , tha t the s ta tem en ts w e re fa lse , de fam a to ry,
and no t sub jec t to any p riv ilege , tha t the sta temen ts w e re pub lished w ith the
requ is ite deg ree o f fau lt, and tha t the ir pub lica tion re su lted in dam age .”
W es t, 872 P .2d a t 1007 -08 (foo tno tes om itted ).

W aym en t v . C lea r C hanne l B roadca sting , Inc ., 2005 UT 25 , ¶ 18 n .2 , ___ P .3d ___ , 2005

W L 858167 ; see D eB ry v . G odbe , 1999 UT 111 , ¶ 8 , 992 P .2d 979 , 982 ;

9 4

C ox v . H a tch ,

761 P .2d 556 , 561 (U tah 1988 ); Seegm ille r v . K SL , Inc ., 626 P .2d 968 , 974 , 976 (U tah

1981 ); B e rry v . M oench , 8 U tah 2d 191 , 331 P .2d 814 , 818 -19 , 820 -21 (1958 ); U tah Code

A nn . §§ 45 -2 -2 (1998 ); T racy H . Fow le r, N o te , M ode rn iz ing D e fam a tion Law in U tah ,

9 4

According to DeBry v. Godbe,

To establish her claim for defamation, the plaintiff must demonstrate that (1) the
defendant published the statements in the letter concerning Ms. DeBry; (2) the statements were
false; (3) the statements were not subject to privilege; (4) the statements were published w ith
the requisite degree of fault; and (5) the statements resulted in damages. See West v. Thomson
Newspapers, 872 P.2d 999, 1007-08 (Utah 1994).

-139-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 143 of 192(cid:10)

1980 U tah L . R ev . 535 ; see a lso R esta tem en t (Second ) of To rts § 558 (1972 ) .

9 5

U nde r

U tah law , “a s ta tem en t is de fam a to ry if it im peaches an ind iv idua l ‘s hones ty, in teg rity,

v irtue , o r repu ta tion and the reby expo se s the ind iv idua l to pub lic ha tred , con temp t , o r

rid icu le .” W es t, 872 P .2d a t 1008 (c iting C ox , 761 P .2d a t 561 (c iting U tah C ode A nn . §

45 -2 -2 (1 ))) . “A cou rt s im p ly canno t de te rm ine w he the r a sta temen t is capab le o f

sus ta in ing a de fam a to ry m ean ing by v iew ing ind iv idua l w o rds in iso la tion ; ra the r , it m us t

ca re fu lly exam ine the con tex t in w h ich the sta tem en t w as m ade , g iv ing the w o rd s the ir

m o s t comm on and accep ted mean ing .” Id . a t 1009 (c ita tion s om itted ).

A s de ta iled mo s t recen tly in the W aym en t op in ion , the question o f “ requ isite

deg ree o f fau lt” tha t m us t be show n la rge ly tu rn s upon w he the r the p la in tif f is in som e

sen se a “pub lic f igu re .” 2005 UT 25 , ¶¶ 17 -36 . If a p lain tiff is a non -“pub lic” p riva te

ind iv idua l, “ the necessa ry deg ree o f fau lt w h ich m u s t be show n in a de fam a tion ac tion . . .

is neg ligence .” Seegm ille r , 626 P .2d a t 973 ; acco rd , In re I.M .L . v . S ta te o f U tah , 2002

UT 110 , ¶ 25 , 61 P .3d 1038 , 1045 (“ in a c iv il ac tion fo r libe l ‘ac tua l m a lice ’ is requ ired if

the sta temen t concern s a pub lic o f f ic ia l, w he rea s on ly neg ligence is requ ired if the

sta tem en t conce rn s a p riva te c itizen” ); see 50 Am . Ju r . 2d L ibe l and S lande r § 21

(1995 ).

9 5
The Restatement (Second) of Torts § 558 identifies four elements necessary in order to establish a
cause of action in defamation: (a) a false and defamatory statement concerning another; (b) an unprivileged
publication to a third party; (c) fault amounting at least to negligence on the part of the publisher; and (d) either
actionability of the statement irrespective of special harm or the existence of special harm caused by the
publication.

-140-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 144 of 192(cid:10)

(b ) D e fama t ion & th e N in th Am endm en t

P lain tiff s h ave no t cited and th is cou rt has no t found Sup rem e C ou rt o r T en th

C ircu it ca se au tho rity recogn iz ing “a U .S . C on s titu tiona l righ t to repu ta tion a s gua ran teed

by the N in th Am endm en t ,” (P ropo sed Am end ed C om p la in t a t 12 ¶ (6 )) , a t leas t as a

theo ry o f lega l liab ility fo r in ju ry to repu ta tion independen t o f s ta te de fam a tion law .

G iven tha t “ [ i]t canno t be p re sum ed tha t any c lau se in the con stitu tion is in tended

to be w ithou t e f fec t,” M a rbu ry v . M ad ison , 5 U .S . (1 C ranch ) 137 , 174 (1803 ), the N in th

Am endmen t m u s t be a ffo rded a sta tu re g rea te r than tha t o f a me re “ inkb lo t,” and recen t
9 6

scho larsh ip a rgues v a riou s app roaches to its in terp re tation .

9 7

A t a m in imum , the N in th

Am endmen t se rve s a s a “con s titu tiona l ‘sav ing c lau se ’” avo id ing an ove rly na rrow
9 8

9 6

(in the words of Judge Robert Bork, The Bork Disinformers, Wall St. J., Oct. 5, 1987, at 22.)

9 7
See, e.g., The Rights Retained by the People: The History and Meaning of the Ninth Amendment
(Randy E. Barnett ed. 1989); The Rights Retained by the People: The Ninth Amendment and Constitutional
Interpretation, Volume II (Randy E. Barnett ed. 1993); The Bill of Rights: Original Meaning and Current
Understanding 419-451 (Eugene W. Hickok, Jr., ed. 1991); Congressional Research Service, Library of
Congress, The Constitution of the United States of America: Analysis and Interpretation 1503-1505 (1992 ed.);
Kurt T. Lash, The Lost Jurisprudence of the Ninth Amendment, 83 Tex. L. Rev. 597 (February 2005); Kurt T .
Lash, The Lost Original Meaning of the Ninth Amendment, 83 Tex. L. Rev. 331 (2004); Christopher J. Schm idt,
Revitalizing the Quiet Ninth Amendment: Determining Unenumerated Rights and Eliminating Substantive Due
Process, 32 U. Balt. L. Rev. 169 (2003); Akhil Reed Amar, The B ill of Rights 119-133 (1998); John Hart E ly,
Democracy and Distrust—a Theory of Judicial Review 34-41 (1980); Charles A. Black, Jr., Decision According
to Law (1981); Raoul Berger, The Ninth Amendment, as Perceived by Randy Barnett, 88 Nw. U. L. Rev. 1508
(1994); Raoul Berger, Suzanna And–the Ninth Amendment, 1994 B.Y.U . L. Rev. 51; William Van Alstyne,
Slouching Toward Bethlehem with the Ninth Amendment, 91 Yale L. J. 207 (1981).

9 8

At the time of the adoption of the Bill of Rights,

Madison’s comments in Congress also reveal the perceived need for some sort of constitutional
“saving clause,” which, among other things, would serve to foreclose application to the Bill of
Rights of the maxim that the affirmation of particular rights implies a negation of those not
expressly defined. See 1 Annals of Cong. 438-440 (1789). See also, e.g., 2 J. S tory,
Commentaries on the Constitution of the United States 651 (5th ed. 1891). Madison’s efforts,
(con tinued …)

-141-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 145 of 192(cid:10)

con struc tion o f the B ill o f R igh ts . W h ile it m ay o r m ay no t “con stitu te [ ] an independen t

sou rce o f righ ts p ro tec ted f rom in f ringemen t by e ithe r the S ta te s o r the Fede ra l

G ove rnm en t,” the N in th Am endmen t “ show s a be lie f o f the Con s titu tion ’s au tho rs tha t

fundam en tal righ ts ex ist tha t are no t exp ress ly enum era ted in the f irst e igh t am endm en ts

and an in ten t tha t the lis t o f righ ts inc luded the re no t be deem ed exhau s tive .” G r isw o ld v .

C onnec ticu t, 381 U .S . 479 , 492 (1965 ) (G o ldberg , J ., concu rr ing ) .

[T ]he F if th and Fou rteen th Am endmen ts p ro tec t ce rta in fundamen ta l
pe rsona l libe r ties f rom ab r idgm en t by the F ede ra l G ov e rnm en t o r the S ta tes .
. . . The N in th Am endm en t s im p ly show s the in ten t of the C on s t itu t ion ’s
au tho rs tha t o the r fundamen ta l pe rsona l righ ts shou ld no t be den ied such
p ro tec tion o r d ispa raged in any o the r w ay s im p ly becau se they a re no t
spec if ica lly lis ted in the f i rs t e igh t con s titu t ion a l am endm en ts.

Id . (c ita tion s om itted ).

O ne recen t comm en ta ry a sse rts tha t read ing the N in th Am endmen t in ligh t o f the

o rig ina l in ten t o f the F ram e rs (and in pa rticu lar , Jam es M ad ison ) requ ires the cou rts to

s trike a ba lance be tw een the compe ting con stitu tiona l righ t to f ree speech and non –

con stitu tiona l lega l righ ts to repu ta tion , bu t re jec ts the v iew tha t the N in th Am endmen t

e leva tes the r igh t to repu ta tion to cons titu t ion a l s ta tus . L au rence C laus , P ro tec ting R igh ts

from R igh ts: Enum e ra tion , D ispa ragem en t, and the N in th Am endm en t, 79 No tre D am e L .

R ev . 585 , 587 (2004 ) (the “ righ t to repu ta tion is no t re levan tly den ied o r d ispa raged

( …con tinued )
9 8
culm inating in the Ninth Amendment, served to allay the fears of those who were concerned
that expressing certain guarantees could be read as excluding others.

Richmond Newspapers v. Virginia, 448 U.S. 555, 579–80 & n.15 (1980) (Burger, C.J.) (plurality opinion).

-142-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 146 of 192(cid:10)

un less lis ting ce r ta in r igh ts in the C on s titu t ion is cons trued to leave repu ta tion less

p ro tec ted than it w ou ld o the rw ise have been” unde r sta te law s, a t lea st a s they ex isted in

1789 o r 1791 .) T h is ra ises the ques tion w he the r, e .g ., the v ind ica tion o f F irs t Am endmen t

in te re sts in f ree exp re ss ion a t the expen se o f sta te de fama tion law s p ro tec ting the

repu tation o f “pub lic f igu res” se rves “ to deny o r d ispa rage” unenum e ra ted righ ts

“ re ta ined by the peop le” con tra ry to the N in th Am endm en t. See id . a t 586 , 616 -621 .

H ow ev er , tha t issue does no t ar ise h ere , w here no one h as a sser ted tha t e i ther D r .

M acA rthu r o r M s . Lym an a re “pub lic f igu re s” sub jec t to m o re lim ited p ro tec tion unde r

U tah de fam a tion law . See W aym en t v . C lea r C hanne l B roadca sting , Inc ., 2005 UT 25 , ¶¶

17 -36 .

U n less the Pa rt I P la in tif fs a re a ttem p ting to ex tend the ir c la im s unde r 42 U .S .C . §

1983 to inc lude de fama to ry in ju ry to repu ta tion (a s one among the “ righ ts , p riv ilege s, o r

imm un itie s secu red by the Con s titu tion and law s” o f the U n ited S ta te s) ,

9 9

invok ing the

9 9
The Supreme Court has rejected the assertion of reputation as a discrete interest protected by the Due
Process Clause of the Fourteenth Amendment. Reputation alone—apart from some more tangible interests such
as employment—does not implicate any “liberty” or “property” interests sufficient to invoke the procedural
protection of the Due Process Clause; hence, to establish a claim under § 1983 and the Fourteenth Amendment,
more must be involved than simply defamation by a state official. Paul v. Davis, 424 U.S. 693, 701-712 (1976).

[A plaintiff’s] interest in reputation is simply one of a number which the State may protect
against injury by virtue of its tort law, providing a forum for vindication of those interests by
means of damages actions. And any harm or injury to that interest, even where, as here,
inflicted by an officer of the State, does not result in a deprivation of any “liberty” or
“property” recognized by state or federal law, nor has it worked any change of respondent’s
status as theretofore recognized under the State’s laws. For these reasons, we hold that the
interest in reputation asserted in this case is neither “liberty” nor “property” guaranteed against
state deprivation without due process of law.

Id. at 712.

-143-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 147 of 192(cid:10)

N in th Am endm en t in the con tex t o f the ir de fam a tion c la im s does no t appea r to m ake any

sub s tan tive d if ference to the lega l s tanda rd s to be app lied o r the jud ic ia l remed ie s tha t

m ay be ava ilab le to them .

1 0 0

(15 ) “F ed era l comm on law and U tah con tra ct comm on law and
sta tu to ry p rov is ion s tha t p roh ib it con tra cts o f adh es ion , bad fa ith , and
la ck o f fa ir d ea ling . U tah Cod e Ann . 78 -12 -25 (1 ) (1996 ) ,” in c lud ing th e
Im p lied C ovenan t o f G ood Fa ith and Fa ir D ea ling

P lain tiff s M acA rthu r and Lym an a lleg e “bad fa ith vo id con trac ts tha t lack fa ir

dea ling ,” the “den ia l o f the ir en titlemen t to a con trac t w ith the D is tric t tha t is ba sed upon

p rinc ip le s o f good fa ith and fa ir dea ling , w ith adequa te con side ra tion ,” and “v io la tion s o f

Fede ra l comm on law and U tah con trac t comm on law and sta tu to ry p rov is ion s tha t

p roh ib it con trac ts o f adhes ion , bad fa ith , and lack o f fa ir dea ling . U tah Code A nn . §§ 78 –

1 0 0
Under Utah law, private civil damages action for common-law defamation are subject to a one-year
statute of limitations: “An action may be brought within one year: . . . (4) for libel, slander, assault, battery, false
imprisonment, or seduction; . . . .” Utah Code Ann. § 78-12-29(4) (2002).

“Under Utah law, the statute of lim itations begins to run when the cause of action accrues.”
Retherford v. AT & T Communications of the Mt. States, Inc., 844 P.2d 949, 975 (Utah 1992);
see also Utah Code Ann. § 78-12-1 (2002). “A tort cause of action accrues when all of its
elements come into being and the claim is actionable.” Retherford, 844 P.2d at 975. Pursuant
to Utah Code section 78-12-29(4), “an action may be brought within one year … for libel …
[or] slander.” Utah Code Ann. § 78-12- 29(4) (2002). “[I]n libel cases, the one-year period of
section 78-12-29(4) does not run until the libel is known or is reasonably discoverable by the
plaintiff.” Allen v. Ortez, 802 P.2d 1307, 1314 (Utah 1990).

Christensen v. Drossos, 2005 UT App 170, 2005 WL 851700, *1.
It appears to be uncontroverted that in this case, both Dr. MacArthur and Ms. Lyman became aware of
the false and malicious rumors allegedly being circulated about them by one or more of the individual
defendants contemporaneously with the rumors’ circulation. For Dr. MacArthur, the pertinent events transpired
between October 1999 and March 2000, at which time he relocated to Nevada. Ms. Lyman may have a timely
claim for defamatory falsehoods that were known or reasonably discoverable after July 25, 1999, but some of
the events of which she complains may have taken place before that date.

-144-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 148 of 192(cid:10)

12 -25 (1) (1996 ) .”

1 0 1

(P ropo sed P re tr ia l O rde r a t 4-5 ¶¶ (11 ) , (12 ) & (18 ) .)

(a ) C on trac ts o f A dhe s ion

“A con trac t o f adhes ion is an ag reemen t fo rced on one pa rty by ano the r w ho ha s

supe rio r ba rga in ing s treng th .” Ru ss v . W ood s ide H om e s , Inc ., 905 P .2d 901 , 906 n .1

(U tah C t. A pp . 1995 ) (c iting W agne r v . Fa rm e rs In s . E xch ., 786 P .2d 763 , 766 n . 2 (U tah

C t . A pp . 1990 ) ,

1 0 2

ove rru led on o the r g round s , A llen v . Prud en t ia l Prop er ty and C as . Ins .

C o ., 839 P .2d 798 (U tah 1992 )) . “ In o the r w o rd s , an adhes ion con trac t is one in w h ich

the pa rty ha s no a lte rna tive .” (Id .)

U nde r U tah law , “adhes ion con trac ts” a re no t p roh ib ited per se . In s tead , the U tah

Sup reme C ou rt ha s enume ra ted seve ra l equ itab le doc trine s tha t m ay be app lied to remedy

ove r-reach ing in the m ak ing o f adhesion con trac ts, inc lud ing the doc trines o f estoppe l,

w a ive r, uncon sc ionab ility, b reach o f the im p lied du ty o f good fa ith and fa ir dea ling , and

the ru le tha t am b iguou s language is to be re so lved aga in s t the d ra f te r. A llen v . P ruden tia l

P rope rty and Ca s . In s . C o ., 839 P .2d 798 , 805 -807 & nn . 11 -16 (U tah 1992 ) (re jec ting

p ropo sed ru le th a t am b iguou s in su rance con trac t p rov ision s m u st be in terp re ted to

1 0 1

Utah Code Ann. § 78-12-25(1) (2002) provides that “[a]n action may be brought within four years:”

(1) upon a contract, obligation, or liability not founded upon an instrument in writing; also
on an open account for goods, wares, and merchandise, and for any article charged on a store
account; also on an open account for work, labor or services rendered, or materials furnished;
provided, that action in all of the foregoing cases may be commenced at any time within four
years after the last charge is made or the last payment is received;

1 0 2
Wagner defined an “adhesion contract” as “‘a contract entered into between two parties of unequal
bargaining strength, expressed in the language of a standardized contract, written by the more powerful bargainer
to meet its own needs, and offered to the weaker party on a “take it or leave it basis….”’” 786 P.2d at 766 n.2
(quoting Gray v. Zurich Ins. Co., 65 Cal.2d 263, 54 Cal.Rptr. 104, 107, 419 P.2d 168, 171 (1966)).

-145-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 149 of 192(cid:10)

e f fec tua te th e “ reasonab le expec tation s” o f the insu red ). “[T ]he ex isting equ itab le

doc trine s , such a s w a ive r, e stoppe l, and uncon sc ionab ility, app ly to any con trac tua l

re la tion sh ip rega rd le ss o f con tex t so long a s w a rran ted by the fac ts .” Id . a t 806 n .17 .

( b ) Im p lied C ovenan t o f G ood Fa ith and Fa ir D ea ling

U tah has recogn ized tha t all con trac ts con tain a covenan t o f good fa ith and fa ir

dea ling . B eck v . Fa rm e rs In s . E xchange , 701 P .2d 795 , 798 (U tah 1985 ). A s the U tah

Sup reme C ou rt exp la ined in C h r is tian sen v . Fa rm e rs In s . Exchange , 2005 UT 21 , ___

P .3d ___ , 2005 W L 791117 :

A b reach o f exp re ss con trac t c la im a rise s ou t o f the exp re ss te rm s o f the
con trac t, and the b reach is p roven in re la tion to tho se te rm s . See Fa irbourn
C omm e rc ia l, Inc . v . Am . H ou s . Pa r tne rs , Inc ., 2004 UT 54 , ¶ 11 , 94 P .3d
292 (re lying on a con trac t’s exp re ss te rm s to de te rm ine the in ten t o f the
pa rties ). A c laim fo r b reach o f the imp lied covenan t o f good fa ith and fa ir
dea ling , by con tra st, is ba sed on jud ic ia lly recogn ized du tie s no t found
w ith in the fou r co rn e rs o f the con trac t. See B eck v . Fa rm e rs In s . E xch ., 701
P .2d 795 , 798 (U tah 1985 ). The se du tie s , un like the du tie s exp re ss ly s ta ted
in the con trac t, a re no t sub jec t to a l te ra tion by the p a r ties . They ex ist
w heneve r a con trac t is en te red , see id ., and a re im po sed on the pa rtie s
“con s is ten t w ith the ag reed comm on pu rpo se” o f the con trac t, S t. B ened ic t’s
D ev . C o . v . S t. B ened ic t’s H o sp ., 811 P .2d 194 , 200 (U tah 1991 ) .

2005 UT 21 , a t ¶ 10 . U nde r U tah law , “ the covenan t o f good fa ith and fa ir dea ling

inhe re s in a ll con trac ts ,” id . a t 11 , and

U nde r the covenan t o f good fa ith and fa ir dea ling , bo th pa rtie s to a con trac t
imp l ied ly p rom ise no t to in ten t iona l ly do anyth ing to in jure the o ther p ar ty’s
righ t to rece ive the bene f its o f the con trac t. S t. Bened ict’s D ev . Co . v. S t.
B ened ic t’s H o sp ., 811 P .2d 194 , 199 (U tah 1991 ). A v io la tion o f the
covenan t is a b reach o f the con trac t. Id . a t 200 (c iting B eck v . Farm ers Ins .
E xch ., 701 P .2d 795 , 798 (U tah 1985 )) .

-146-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 150 of 192(cid:10)

Egge tt v . W a sa tch Ene rgy C o rp ., 2004 UT 28 , ¶ 14 , 94 P .3d 193 ,

To de te rm ine the lega l du ty a con trac tua l pa rty has unde r th is covenan t, a
cou rt w ill a sse ss w he the r a “party’s ac tion s [a re ] con sis ten t w ith the ag reed
comm on pu rpo se and the ju s tif ied expec ta tion s o f the o the r pa rty.” Id . a t
200 . Th is cou rt de te rm ine s the “pu rpo se , in ten tion s , and expec ta tion s” by
con side ring “ the con trac t language and the cou rse o f dea ling s be tw een and
conduc t o f the pa rtie s .” Id .

O akwood V illage LLC v . A lbe rtson s , Inc ., 2004 UT 101 , ¶ 43 , 104 P .3d 1226 , 1239 -1240 .

U nde r U tah law , “som e gene ra l p rinc ip les lim it th e scope o f the covenan t,”

inc lud ing the fo llow ing :

F irs t, th is covenan t canno t be read to e stab lish new , independen t righ ts o r
du tie s to w h ich the pa rtie s d id no t ag ree ex an te . B rehany v . N ord s trom ,
Inc ., 812 P .2d 49 , 55 (U tah 1991 ). Second , this covenan t canno t crea te
righ ts and du tie s incon s is ten t w ith exp re ss con trac tua l te rm s . See id .; R io
A lgom C o rp . v . J im co , L td ., 618 P .2d 497 , 505 (U tah 1980 ). Th ird , this
covenan t canno t compe l a con trac tua l pa rty to exe rc ise a con trac tua l righ t
“ to its ow n de trim en t fo r the pu rpo se o f bene f itting ano the r pa rty to the
con trac t.” O lym pu s H ills Shopp ing C tr . v . Sm ith ‘s Food & D rug C trs ., 889
P .2d 445 , 457 n . 13 (U tah C t. App . 1994 ). F ina lly, w e w ill no t use th is
covenan t to ach ieve an ou tcome in ha rm ony w ith the cou rt’s sen se o f ju s tice
bu t incon s is ten t w ith the exp re ss te rm s o f the app licab le con trac t. See
D a lton v . Je rico Con s tr . C o ., 642 P .2d 748 , 750 (U tah 1982 ) .

O a kwood V illage LLC , 2004 UT 101 , ¶ 45 , 104 P .3d a t 1240 ; see B rehany v . N ord s trom ,

Inc ., 812 P .2d 49 , 55 (U tah 1991 ) (the im p lied covenan t o f good fa ith and fa ir dea ling

“canno t be con strued . . . to e stab lish new , independen t righ ts o r du tie s no t ag reed upon

by the pa rtie s .” ). G ene ra lly, “ the deg ree to w h ich a party to a con trac t m ay invoke the

p ro tec tion s o f the covenan t tu rn s on the ex ten t to w h ich the con trac ting pa rtie s have

de f ined the ir expec ta tion s and im po sed lim ita tion s on con trac t te rm s .” Sm ith v . G rand

-147-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 151 of 192(cid:10)

C anyon Exped ition s , 2003 UT 57 , ¶ 20 , 84 P .3d 1154 , 1160 .

1 0 3

In a l l ins tance s , how ev er ,

“ [ t]he reach o f the im p lied covenan t o f good fa ith and fa ir dea ling ex tend s no fu rthe r than

the pu rpo se s and exp re ss te rm s o f the con trac t.” Id ., 2003 UT 57 , ¶ 22 , 84 P .3d a t 1160 .

The “ fede ra l comm on law ” read ing o f th is im p lied covenan t f ind s re f lec tion in

U n ited S ta te s ex re l. N o rbeck v . Ba s in E lec . Pow e r C oop ., 248 F .3d 781 (8 th C ir.2001 ) , in

w h ich the E igh th C ircu it, app lying federa l comm on law , w a s con f ron ted w ith the

app l ica t ion o f the imp l ied coven an t of good fa i th and fa ir dea l ing to a con trac t term

invo lv ing am o rt iza tion o f ce rta in co s ts . Id . a t 794 -97 . Ba sin E lec tric reve rsed a po rtion

1 0 3

According to Justice Nehring, author of the Smith v. Grand Canyon Expeditions opinion:

[T]he implied covenant is by its very nature a pliable doctrine. It is inherently amorphous and
evades definitional precision. These traits place the implied covenant directly at odds with
predictability of conduct, the most basic and cherished characteristic of the contracts which the
implied covenant was created to serve. As one commentator observed, “While the varieties of
good faith are not quite as infinite as those of religious faith, it would be quite extraordinary if
this protean concept were used in the same sense in all … assorted instances.” Farnsworth, E .
Allan, Good Faith Performance and Commercial Reasonableness Under the Uniform
Commercial Code, 30 U. Chi. L.Rev. 666, 668 (1968).

However, this answer is unsatisfactory to many who share the view made evident in
the dissent that the implied covenant can too easily turn away from being an ally of contract
law and become its antagonist. This happens when courts m ishandle the subtle but important
distinction between invoking the implied covenant to compel a contracting party to honor the
“agreed common purpose” and “justified expectations’ of another party to the contract,
Restatement Second of Contracts § 205 cm t. a (1979), and injecting it to “establish new ,
independent rights or duties not agreed upon by the parties” or to “nullify a right granted by a
contract to one of the parties.” Brehany v. Nordstrom, 812 P.2d 49, 55 (Utah 1991).

The parties can reduce the risk that a court will remake their contract and award one
party “benefits for which it did not bargain,” . . . by bargaining for terms that limit the exercise
of unfettered discretion by one party or that otherwise clearly articulate the purposes and
expectations of the parties. In short, the parties to a contract are best served when they fill their
own gaps.

Eggett v. Wasatch Energy Corp., 2004 UT 28, ¶¶ 43-45, 94 P.3d at 204 (Nehring, J., concurring).

-148-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 152 of 192(cid:10)

o f the d istric t cou rt’s judgm en t g ran ted fo r a b reach o f the imp lied covenan t o f good fa ith

and fa ir dea ling , no ting tha t the covenan t “doe s no t im p ly ‘an everf low ing co rnucop ia o f

w ished -fo r lega l du tie s ,’” and “doe s no t im po se a gene ra l requ iremen t tha t a pa rty ac t

rea sonab ly[ ;][ r]a the r, the covenan t ac ts a s a gap f ille r to dea l w ith c ircum s tances no t

con temp la ted by the pa rtie s a t the tim e o f con trac ting .” Id . a t 796 (in te rna l c ita tion s

om itted ). The im p lied covenan t w ou ld no t be app lied in a fash ion tha t necess ita te s

rew riting the con trac t to g ive one party “benef its fo r w h ich it d id no t ba rga in .” Id . a t

797 -98 .

P la in tif f s a sse rt the “den ia l o f the ir en titlemen t to a con trac t w ith the D is tric t tha t

is based upon p rinc ip les o f good fa ith and fa ir dea ling , w ith adequa te con s ide ra tion ,”

(P ropo sed P re tria l O rde r a t 4 ¶ (12 )); “ in ju rie s f rom the de fendan ts’ by w ay o f . . . (12 )

bad fa ith vo id con trac ts tha t lack fa ir dea ling ,” (P ropo sed Am ended Com p la in t a t 11 -12 ¶

(12 )); and tha t as to D r. M acA rthu r, “[ e ]ve ry tim e he w as g iven a con trac t in bad fa ith

w ith am ibu itie s [ s ic ] upon w h ich he re lied , he ha s a c la im .” (Id . a t 95 ; P ropo sed P re tria l

O rde r a t 64 .) Y e t now he re in the P ropo sed Am ended Com p la in t, the P ropo sed P re tria l

O rde r , o r p lain tiff s’ m o re recen t w ritten subm iss ion s do they p lead sp ec if ic f ac ts

iden t ifying the “bad fa i th vo id con trac ts” in ques t ion , o r de ta il ing the b ad fa i th o r ov er-

reach ing invo lved in m ak ing tho se con t rac ts .

1 0 4

1 0 4
If these allegations were intended to refer to the SJHSD medical staff bylaws that govern medical
practice at District facilities, the reference is well-hidden. Under Utah law, it is understood that “[h]ospital
bylaws constitute ‘a contract between the hospital and the physician,’” and that “ the Hospital must comply with
(con tinued …)

-149-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 153 of 192(cid:10)

In stead , it appea rs th a t p lain tiff s’ coun se l is a ttem p ting to w eave the equ itab le

doc trine s enume ra ted in A llen in to an a ff irm a tive lega l du ty o f “ fa ir dea ling” a ffec ting

“a ll U tah bu siness re lation s,” independen t o f the term s o f a sp ec if ic con trac t— a du ty to

m ake a ll con trac ts on te rm s tha t accomm oda te the econom ic expec ta tion s o f the

p la in t iff s . Ind eed , p la in t iff s’ coun se l asse r ts an “ in terference w i th” D r . M acA r thu r’s

“ righ t to pu rsue h is p ro fe ss ion and bu sine ss a f fa irs by lack o f good fa ith and fa ir dea ling

inhe ren t and manda ted in a ll U tah bu sine ss re la tion s .” (M emo randum in Suppo r t o f

P la in t if f M acA r thu r ’s M o t ion fo r the C ou r t to R econ s ide r its M o t ion to D ism iss

P la in tif f ’s C la im s and P la in tif f s’ C ro ss-M o tion fo r Summ a ry Judgm en t, f iled N ovembe r

23 , 2004 (dk t . no . 670 ) , a t 4 .)

The U tah Sup rem e C ou rt has taken the po sition “ tha t the ab ility o f a p lain tiff to

recover in to rt fo r b reach o f the im p lied covenan t o f good fa ith and fa ir dea ling in a

con trac t ‘ha s the po ten tia l fo r d is to rting w e ll-e stab lished p rinc ip le s o f con trac t law and

w ill no t be pe rm itted .’” B e rube v . Fa sh ion C en tre , L td ., 771 P .2d 1033 , 1046 (U tah 1989 )

(D u rham , J .) (quo ting B eck v . Fa rm e rs In su rance Exchange , 701 P .2d 795 , 799 (U tah

( …con tinued )
1 0 4
those bylaws when taking actions which effect its staff.” Houston v. Intermountain Health Care, Inc., 933 P.2d
403, 408 (U tah Ct. App. 1997) (quoting Rees v. Intermountain Health Care, Inc., 808 P.2d 1069, 1076 (Utah
1991)).

In contrast to Rees and Houston, the plaintiffs in this action do not seek to enforce the provisions of the
SJHSD bylaws, or even to enforce the implied covenant of good faith and fair dealing as an implied term of the
bylaws “contract.” They list no claim for breach of contract. Instead, they apparently contend that the SJHSD
“medical staff bylaws in and of themselves are “unconstitutional [unconscionable?], violative of covenants of
good faith and fair dealing.” (Tr. 11/14/02, at 43:5-9 (Ms. Rose).) Yet this view of the medical staff bylaws
would necessarily hold them to be unenforceable and of no legal effect— leaving plaintiffs MacArthur and
Lyman with no procedural mechanism by which they could have obtained or maintained practice privileges at
SJHSD facilities.

-150-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 154 of 192(cid:10)

1985 )) . U tah law thu s doe s no t recogn ize an independen t to rt cau se o f ac tion ba sed upon

“good fa ith and fa ir dea ling” apa rt f rom the pu rpo se s and term s o f an ex isting con trac t,

and in con tra st to equ itab le doc trine s such a s uncon sc ionab ility, the im p lied covenan t

canno t se rv e as a bas is fo r inva lida ting a con trac t.

(16 ) “pr ivacy r igh ts and s ta tu tory en t itlem en ts to have the ir creden tia l
files and pa tien t files a ccura te ly kep t by th e d istr ict under M ed ica id
and U tah H ea l th D epar tm en t sta tu tes and regu la t ion s”

The con f iden tia lity o f ind iv idua l pa tien ts’ m ed ica l in fo rm a tion ha s been a m a tte r

o f long -s tand ing concern , acknow ledged in the H ippoc ra tic O a th (ca . 400 B.C.E.) .

1 0 5

D raw ing f rom its rich h is to ry, con f iden tia lity rema in s w ide ly acknow ledged
as a fundam en tal e th ica l ten e t o f m ed icin e , as pa tien ts m u st be w illing to
con f ide sen s itiv e and pe rsona l in fo rm a tion to hea lth ca re p ro fess iona ls .
The re fo re , its v a lue in the con tex t o f the pa tien t-physic ian re lation sh ip
s tem s pa rtly f rom the need fo r pa tien ts to tru s t the ir phys ic ian s , and fo r
phys ic ian s to exp re ss the ir loya lty to pa tien ts .

C ounc il on E th ica l and Jud ic ia l A f fa irs , Am e rican M ed ica l A ssoc ia tion , P r ivacy in the

C on tex t o f H ea l th C are (CE JA R epo rt 2 -I -01 ), a t 2 (D ecem be r 2001 ), ava ilab le a t

C once rn fo r the

p ro tec tion o f pa tien t con f iden tia lity and p rivacy f ind s cu rren t exp re ss ion in the Am e rican

M ed ica l A ssoc iation ’s P rinc ip les o f M ed ica l E th ics : “A physic ian sh a ll respec t the righ ts

1 0 5

The Oath of Hippocrates, 4th Century, B.C.E., reads in part:

What I may see or hear in the course of the treatment or even outside of the treatment
in regard to the life of men, which on no account one must spread abroad, I will keep to myself,
holding such things shameful to be spoken about.

Ludwig Edelstein, The Hippocratic Oath: Text, Translation, and Interpretation (1943).

-151-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 155 of 192(cid:10)

o f pa tien ts , co lleagues , and o the r hea lth p ro fe ss iona ls , and sha ll sa fegua rd pa tien t

con f idences and p rivacy w ith in the con stra in ts o f the law .” Am e rican M ed ica l

A ssoc ia tion , P r inc ip le s o f M ed ica l E th ic s ¶ IV (2001 ), ava ilab le a t

.

1 0 6

In U tah , the ma in tenance and p ro tec tion o f the con f iden tia lity o f m ed ica l reco rd s

invo lve s the app lica tion o f bo th lega l and e th ica l s tanda rd s . The U tah M ed ica l P rac tice

A c t Ru les (R u le R 156 -67 ) cu rren tly p rov ide :

R 156 -67 -602 . M ed ica l R ecord s .

In acco rdance w ith Sub sec tion 58 -67 -803 (1 ) , m ed ica l reco rd s sha ll be
m a in ta ined to be con sis ten t w ith the fo llow ing :

(1 ) a ll app licab le law s , regu la tion s , and ru le s; and

(2 ) the Code o f M ed ica l E th ic s o f the Counc il on E th ica l and Jud ic ia l
A f fa irs a s pub lished in the AMA Po licy C om pend ium , 2001 ed ition , w h ich
is he reby inco rpo ra ted by re ference .

U tah A dm in . Code § R 156 -67 -602 (2005 ); see U tah Code A nn . § 58 -67 -803 (1 ) (2002 )

(“M ed ica l reco rd s m a in ta ined by a licen see sha ll: (a ) m ee t the standa rd s and e th ic s o f the

p ro fe ss ion ; and (b ) be ma in ta ined in acco rdance w ith d iv is ion ru le s m ade in co llabo ra tion

w i th the board .”) .

The adven t o f e lec tron ic sto rage and compu te r acce ss to pa tien t m ed ica l reco rd s

1 0 6
The terms “confidentiality” and “privacy” address distinct, yet overlapping concerns: “In the context
of health care, emphasis has been given to confidentiality, which is defined as information told in confidence or
imparted in secret. However, physicians also should be m indful of patient privacy, which encompasses
information that is concealed from others outside of the patient-physician relationship.” Privacy in the Context
of Health Care, supra, at 3.

-152-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 156 of 192(cid:10)

and hea lth in fo rm a tion ha s inc rea sed pa tien t p rivacy and con f iden tia lity concern s , a s one

recen t comm en ta ry exp la ins :

[A s] access to m ed ica l in fo rm a tion o f a sen sitive na tu re has g row n , tho se in
the med ica l comm un ity and p rivacy advoca te s began to recogn ize the need
fo r b road p rivacy p ro tec tion s to m ed ica l da ta . The re su lt o f th is campa ign
is the S tanda rd s fo r P r ivacy o f Ind iv idua lly Iden tif iab le H ea lth In fo rm a tion
(the “P rivacy R u le” ), a se t o f regu la tion s p rom u lga ted by the Sec re ta ry o f
H ea lth and H um an Se rv ice s (“HH S” ) . The P rivacy R u le w a s requ ired by
the H ea l th Insu rance Po r tab i li ty & A ccoun tab i l ity A c t of 1996 (“H IPAA ”) ,
then popu la rly know n a s the K ennedy-K a ssenbaum A c t. A t the tim e ,
H IPAA rece ived sign if ican t a tten tion , becau se it m ade it ea sie r fo r an
em p loyee to m a in ta in h ea lth insu rance a f te r leav ing a job . H IPAA a lso
p rov ided tha t if Cong re ss d id no t pa ss leg is la tion pe rta in ing to m ed ica l
p rivacy w ith in a spec if ied tim e , HH S w ou ld p rom u lga te regu la tion s to tha t
a f fec t. HH S issued a p ropo sed ru le in O c tobe r 1999 , and a f ter an unu su a lly
long and con ten tiou s comm en t pe riod and a c ler ica l er ro r tha t nea rly
de ra iled the regu la tion s a t the la st second , the P rivacy R u le w a s
im p lem en ted in ea rly 2001 .

K ev in B . D av is , P r ivacy R igh ts in P e rsona l In fo rm a tion : H IPAA and the P r ivacy G ap

B e tw een Fundam en ta l P r ivacy R igh ts and M ed ica l In fo rm a tion , 19 J . M a rsha l l J .

C om pu ter & Info . L . 535 , 536 (2001 ) (foo tno tes om i tted) .

In enac ting the H ea lth In su rance Po r tab ility and A ccoun tab ility A c t o f 1996

(H IPAA ) , Pub . L . N o . 104 -191 , 110 S ta t. 1936 (1996 ) , C ong re ss m anda ted the

estab lishm en t o f na tiona l standa rd s fo r p ro tec tion o f the p rivacy o f ind iv idua lly

iden tifiab le h ea lth and m ed ica l in fo rm a tion . A s ind ica ted , the U .S . D epa rtm en t o f H ea lth

and H um an Se rv ice s p rom u lga ted such standa rd s in 2001 , and mo s t hea lth p lan s and

hea lth ca re p rov ide rs tha t a re covered by the new ru le w e re requ ired to comp ly w ith the

new s tanda rd s by A p ri l o f 2003 . See S tanda rd s fo r P rivacy o f Ind ividua lly Id en tifiab le

-153-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 157 of 192(cid:10)

H ea lth In fo rm a tion , 65 Fed . R eg . 82462 (D ec . 28 , 2000 ), cod ified a t 45 C .F .R . Pa rts 160 ,

164 (2004 ) .

1 0 7

P r io r to the enac tm en t o f H IPAA , U tah law a lready a f fo rded som e deg ree o f lega l

p ro tec tion fo r the p rivacy and con f iden tia lity o f pa tien t m ed ica l reco rd s . See , e .g .,

H oop i ia ina v . In term oun ta in H ea l th C are , 740 P .2d 270 , 272 (U tah C t. A pp . 1987 )

(“Con f iden tia lity o f pa tien t in fo rm a tion is requ ired by U tah Code A nn . § 78 -25 -25 (1987 )

and C hap ter 7 .404 o f the U tah S tate D epa rtm en t o f H ea lth , H o sp ital and P sych iatric

H o sp i ta l R u les and R egu la tion s , M ed ica l R eco rds D ep ar tm en t (1984 R ev is ion ) .”) .

1 0 8

U tah law m ay a f fo rd som e comm on -law p rivacy p ro tec tion fo r m ed ica l reco rd s a s w e ll .

1 0 9

1 0 7
In mid-2001, HHS released an FAQ-style “Guidance” commentary explaining the new “Privacy
Rule” standards and requirements. HHS Office for Civil Rights, Standards for Privacy of Individually
Identifiable Health Information (2001), at (Ju ly 6, 2001; last
revised January 14, 2002).

1 0 8
Originally adopted in 1971 (1971 Utah Laws ch. 213, § 1), Utah Code Ann. § 78-25-25 (2002)
addressed attorney access to patient medical records, and was repealed and re-enacted in 2003 in light of HIPAA
and the HHS Privacy Rule. See Utah Code Ann. § 78-25-25 (Supp. 2004); 2003 Utah Laws ch. 64, § 2.

1 0 9
Under Utah law, to prevail on a claim of public disclosure of embarrassing private facts, a plaintiff
must establish the fo llow ing essential elements:

(1) the disclosure of the private facts must be a public disclosure and not a private one;

(2) the facts disclosed to the public must be private facts, and not public ones; [and]

(3) the matter made public must be one that would be highly offensive and objectionable to a
reasonable person of ordinary sensibilities.

Shattuck-Owen v. Snowbird Corp., 2000 UT 94 , ¶ 11 , 16 P.3d 555, 558 (quoting Stien v. Marriott Ownership
Resorts, Inc., 944 P.2d 374, 380 (Utah Ct. App. 1997) (quoting W. Page Keeton et al., Prosser and Keeton on
the Law of Torts § 117, at 856-857 (5th ed. 1984) (footnote omitted))). See also Restatement (Second) of Torts §
652D (1977) (“One who gives publicity to a matter concerning the private life of another is subject to liability to
the other for invasion of his privacy, if the matter publicized is of a kind that (a) would be highly offensive to a
reasonable person, and (b) is not of legitimate concern to the public.”) Shattuck-Owen notes that the
Restatement (Second) of Torts § 652D (1977) “contains another element requiring that the matter made public
(con tinued …)

-154-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 158 of 192(cid:10)

A t th is po in t, how eve r, th is cou rt need no t recon struc t the p re -H IPAA U tah law o f

con f iden tia lity o f pa tien t m ed ica l reco rd s ; p la in tif f s a sse rt the b reach o f such

con f iden tia lity, bu t p lead no spec if ic fac ts by w h ich such a b reach cou ld be es tab lished .

P la in tif f s a sse rted a t the tim e o f the P re tria l C on fe rence tha t “M rs . Lym an had pa tien t

f i les d isappea r , and pa t ien ts[’] con f iden t ia l ity b reach ed ,” (P ropo sed P re tr ia l O rde r a t 13 ) ,

tha t “ [p ]a tien ts o f M iche le Lym an w e re sub jec ted to . . . (3 ) b reach o f con f iden tia lity o f

any m ed ica l trea tm en t they d id rece ive in the D is tric t fac ilitie s ,” (id . a t 30 ¶ 139 ), tha t

“ [c]on f iden tia lity o f he r pa tien ts w a s b roken on mo re than one occa sion by m ed ica l s ta f f

and o the r S JHSD pe rsonne l,” (id . a t 51 ¶195 ), bu t w ith no spec if ic fac tua l a llega tion s a s

to pa rticu la r in s tances in w h ich such a b reach o f con f iden tia lity ha s occu rred , o r in w h ich

it is a lleged the re w a s a pub lic d isc lo su re o f a pa tien t’s emba rra ss ing p riva te med ica l

in fo rm a tion .

1 1 0

M o reove r, ab sen t such spec if ic fac tua l a llega tion s , the cou rt need no t

dec ide the th resho ld question w he the r the rem a in ing Pa rt I P lain tiff s h ave the requ isite

s tand ing to a sse rt c la im s fo r a b reach o f con f iden tia lity o r inva sion o f p rivacy a f fec ting

( …con tinued )
1 0 9
not be ‘of legitimate concern to the public,’” but did not “decide whether to adopt this requirement as an element
of the invasion of privacy tort we address today.” 2000 UT 94, ¶ 11 n.1, 16 P.3d at 558 n.1.

1 1 0
The Proposed Amended Complaint asserts that “some of Mrs. Lyman’s patients[] were subjected to
community gossip for conditions that were supposed to be private,” (Proposed Amended Complaint at 17-18), at
least implying some breach of confidentiality. That assertion is omitted from the recitation of contested issues of
fact in the Proposed Pretrial Order, replaced by the equally conclusory assertions that “Patients of Michele
Lyman were subjected to . . . (3) breach of confidentiality of any medical treatment they did receive in the
District facilities, . . . (6) false rumors as to their medical conditions,” still without any reference to particular
instances. (Proposed Pretrial Order at 30 ¶ 139.)

-155-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 159 of 192(cid:10)

th ird pe rson s , v iz ., the ir pa tien ts . C f. S ing leton v . W u lff, 428 U .S . 106 (1976 ) (p lu ra lity

op in ion ); E isens tad t v . Ba ird , 405 U .S . 438 (1972 ); T ile ston v . U llm an , 318 U .S . 44

(1943 ); H en ry P . M onaghan , Th ird Pa r ty S tand ing , 84 C o lum . L . R ev . 277 (1984 ) .

1 1 1

(17 ) N eg l igen t and In ten t iona l In f lic t ion o f Em o t iona l D is tress

(a ) In ten t iona l In f lic t ion o f Em o t iona l D is tress

In D eB ry v . G odbe , 1999 UT 111 , 992 P .2d 979 , the U tah S up rem e C ou r t

re ite ra ted the essen tia l e lem en ts o f a c la im o f in ten t ion a l in f l ic tion o f em o t ion a l d istress :

In Samm s v . E cc le s , w e s ta ted the e lem en ts o f such a c la im :

[A ]n ac tion fo r seve re emo tiona l d is tre ss , though no t
accom pan ied by bod ily im pac t o r phys ica l in ju ry, [m ay lie ]
w he re the de fendan t in ten tiona lly engaged in som e conduc t
tow a rd the p la in tif f , (a ) w ith the pu rpo se o f in f lic ting
em o tiona l d istress , o r, (b ) w he re any reasonab le p e rson w ou ld
have know n tha t such w ou ld re su lt; and h is ac tion s a re o f
su ch a na tu re as to be con side red ou trageou s and in to lerab le
in tha t they o f fend aga in s t the genera lly accep ted standa rd s o f
decency and m o ra lity.

11 U tah 2d 289 , 293 , 358 P .2d 344 , 346 -47 (1961 ) .

1999 UT 111 , ¶ 25 , 992 P .2d a t 986 .

1 1 2

“To p reva il on he r c la im o f in ten tiona l in f lic tion

o f emo tiona l d is tre ss ,” a p la in tif f “m u s t p rove tha t the de fendan ts e ithe r in ten tiona lly o r

1 1 1
Ordinarily, a litigant “‘must assert his own legal rights and interests, and cannot rest his claim to
relief on the legal rights or interests of third parties.’” Valley Forge Christian College v. Americans United for
Separation of Church & State, Inc., 454 U.S . 464, 474 (1982) (quoting Warth v. Seldin, 422 U.S. 490, 499
(1975)).

1 1 2
Godbe affirmed the district court’s conclusion that the plaintiff’s “intentional infliction of emotional
distress claim could not survive summary judgment because Godbe’s conduct was not outrageous and intolerable
under Samms.” Id.

-156-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 160 of 192(cid:10)

reck less ly engag ed in in to lerab le and ou trag eou s conduc t tha t cau sed her severe

emo t iona l d is tre ss .” R e the rfo rd v . AT & T C omm un ica tion s , 844 P .2d 949 , 967 (U tah

1992 ) .1 1 3

(b ) N eg l igen t In f lic t ion o f Em o t iona l D is tress

The U tah Sup reme C ou rt f irs t exp re ss ly recogn ized a cau se o f ac tion fo r neg ligen t

in f lic tion o f emo tiona l d is tre ss in Johnson v . Rog ers , 763 P .2d 771 (U tah 1988 ).

In John son , a f te r su rveying the va riou s te sts tha t cou rts in th is coun try have
deve loped to de te rm ine liab ility fo r the neg ligen t in f lic tion o f emo tiona l
d is tre ss , w e adop ted the po sition taken by sec tion 313 o f the R e sta tem en t
(Second ) of To rts (1965 ) , a s exp la ined in the comm en ts accom panying tha t
sec tion . Sec tion 313 ’s app roach , a lso re ferred to a s the zone o f danger
app roach , a llow s recov e ry to p la in t if fs w ho su f fe r em o t ion a l d istress
becau se o f ano the r’s neg ligence , though they do no t su f fer any phys ica l
im pac t, on ly if the p la in tif f s a re p laced in ac tua l phys ica l pe ril and fea r fo r
the ir ow n sa fe ty. John son , the re fo re , doe s no t p rov ide recovery to p la in tif f s
w ho a re no t w ith in the zone o f dange r c rea ted by a de fendan t’s neg ligence .

Bouche r B y and Th rough Bouche r v . D ix ie M ed ica l C en te r , 850 P .2d 1179 , 1181 (U tah , ,

1992 ) .

1 1 4

The comm en ts to R e sta tem en t § 313 “ re stric t the scope o f a c la im fo r neg ligen t

1 1 3
Intentional infliction of emotional distress, in contrast to negligent infliction of emotional distress,
does not require that plaintiff actually be at risk of bodily harm. See Restatement (Second) of Torts § 312.

1 1 4

Section 313 of the Restatement (Second) of Torts reads:

(1) If the actor unintentionally causes emotional distress to another, he is subject to liability
to the other for resulting illness or bodily harm if the actor

(a) should have realized that his conduct involved an unreasonable risk of
causing the distress, otherwise than by knowledge of the harm or peril of a
third person, and

(b) from facts known to him should have realized that the distress, if it
were caused, m ight result in illness or bodily harm.

-157-

(con tinued …)

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 161 of 192(cid:10)

in f liction o f em o tiona l d istress” [ :]

C omm en t “a” dec la re s tha t the “ ru le sta ted in th is Sec tion doe s no t g ive
p ro tec tion to m en ta l and emo tiona l tranqu illity in itse lf .” R e sta tem en t
(Second ) of To rts § 313 cm t . a (1965 ) . C omm en t “c” a rticu la te s a fo rm o f
“ rea sonab le pe rson” te st by no ting tha t in con tra st to the sec tion 312 ru le fo r
in ten tiona l c rea tion o f emo tiona l d is tre ss , “one who un in ten tiona lly bu t
neg ligen tly sub jec ts ano the r to such em o t ion a l d istress does no t take the r isk
o f any excep tiona l phys ica l sen sitivene ss to emo t ion w h ich the o the r m ay
have un le ss the c ircum s tances know n to the ac to r shou ld app rise h im o f it.”
R esta tem en t (Second ) of To rts § 313 cm t. c (1965 ). These comm en ts
recogn ize the fac t tha t “ [w ]e canno t pe rm it eve ry c la im fo r neg ligen t
in f lic tion o f emo tiona l d is tre ss to go to a ju ry unde r such va rying s tanda rd s
a s each tria l judge may choo se .” John son , 763 P .2d a t 785 (Z imm e rm an , J .,
concu rr ing in par t) .

H a rn iche r v . U n ive rs ity o f U tah M ed ica l C en te r , 962 P .2d 67 , 70 (U tah 1998 ). O ne

re stric tion tha t “p rov ide s a check on fe igned d is tu rbances , the reby en su ring the

genu inene ss o f c la im s”

1 1 5

is the requ iremen t tha t p la in tif f s w ho c la im to be the d irec t

v ictim o f neg ligen t in f liction o f em o tiona l d istress m u st a lleg e resu lting illness o r bod ily

ha rm , inc lud ing c lin ica lly iden tif iab le m en ta l illn ess . See id . a t 71 -72 (a f f irm ing

summ a ry judgm en t aga in s t p la in tif f s w ho “had no t su f fered any bod ily ha rm o r phys ica l

in jury tha t w ou ld suppo r t an ac t ion fo r neg l igen t in f l ic t ion o f em o t iona l d is tress” ) ;

( …con tinued )
1 1 4
(2) The rule stated in Subsection (1) has no application to illness or bodily harm of another
which is caused by emotional distress arising solely from harm or peril to a third person, unless
the negligence of the actor has otherwise created an unreasonable risk of bodily harm to the
other.

Restatement (Second) of Torts § 313 (1965); see also Hansen v. Sea Ray Boats, 830 P.2d 236, 240-241 (Utah
1992) (discussing § 313).

1 1 5

Hansen v. Mountain Fuel Supply Co., 858 P.2d 970, 974 (Utah 1993).

-158-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 162 of 192(cid:10)

H an sen v . M oun ta in Fue l Supp ly Co ., 858 P .2d 970 , 974 (U tah 1993 ) (“emo tiona l

d istu rbance tha t is no t seve re enough to resu lt in illness o r physica l con sequences is like ly

to be in the rea lm o f the triv ia l. Such a d is tu rbance is like ly to be so tempo rary and

sub jec tive tha t to a ttemp t to compen sa te it w ou ld undu ly bu rden de fendan ts and the

cou rts . See R esta tem en t (Second ) of To rts § 436A cm t . b (1965 ) ; . . .”) .

1 1 6

G iven tha t R esta tem en t (Second ) of To rts § 313 (1 ) does no t g ive p ro tec tion to

m en ta l and em o tiona l tranqu ility per se , “ [c]on sequen tly, m uch o f the ‘“emo tiona l

d is tress” w h ich w e endu re . .. is no t com pen sab le .’ Th ing v . La C hu sa , 48 C a l.3d 644 , 257

C a l.R p tr . 865 , 771 P .2d 814 , 829 (1989 ) (denying recovery fo r neg ligen t in f lic tion o f

emo t iona l d is tre ss w he re mo the r o f in ju red ch ild a rrived a t the scene a f te r acc iden t had

a lready occu rred ).” H a rn iche r, 962 P .2d a t 72 . To su s ta in a c la im o f neg ligen t in f lic tion

o f emo tiona l d is tre ss , “ the emo tiona l d is tre ss su f fered mu s t be seve re ; it m u s t be such tha t

‘a rea sonab le [person ,] no rm a lly con stitu ted , w ou ld be unab le to adequa te ly cope w ith the

m en ta l s tre ss engendered by the c ircum s tances o f the case .’” M oun ta in Fue l, 858 P .2d a t

975 (quo ting Rod rigues v . S ta te , 52 H aw . 156 , 472 P .2d 509 , 520 (1970 )) .

1 1 6

As Mountain Fuel explains:

The language used in section 313 of the Restatement provides some guidance. Subsection (1)
allows recovery for “illness or bodily harm.” Restatement (Second) of Torts § 313(1) (1965)
(emphasis added). The drafters’ use of “or” rather than “and” shows an intention to allow a
plaintiff to recover not only where bodily harm results from emotional trauma, but where
“illness” results as well. “Illness” is “an unhealthy condition of body or mind.” Webster’s New
Collegiate Dictionary 566 (1981). From this we conclude that either physical or mental illness
may support the . . . cause of action.

858 P.2d at 974-975.

-159-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 163 of 192(cid:10)

(c ) T he Par t I P la in tiffs’ Emo tiona l D istress C la im s

In ten tiona l and neg ligen t in f lic tion o f em o tiona l d is tress “a re c la im s fo r . . .

d if feren t to rts , each w ith sepa ra te e lemen ts ,” and “[o ]bv iou s ly, [a ] p la in tif f mu s t m ake the

necessa ry a llega tion s in h is comp la in t to suppo rt each sepa ra te c la im , and a t tria l p la in tif f

m u s t p rove a ll o f the e lemen ts o f each c la im to recover fo r tha t cau se o f ac tion ,” each by

a p reponde rance o f the ev idence . H e ine r v . S im p son , 2001 UT 39 , ¶¶ 8 , 9 , 23 P .3d 1041 ,

1043 (foo tno te om itted ); id . 2001 UT 39 ¶ 7 n . 3 , 23 P .3d a t 1043 n .3 .

C ou rt and coun se l rev iew ed the fac tua l allega tion s unde rlying M s. Lym an ’s c laim

o f in ten tiona l in f lic tion o f emo tiona l d is tre ss in ligh t o f th is ana lytica l f ramew o rk a t the

F ina l P re tr ia l C on fe rence . (See in fra a t 174 -176 .)

(18 ) F raud

U nde r U tah law ,

The e lemen ts tha t a pa rty m u s t a llege “ to b ring a c la im sound ing in f raud”
a re (1 ) tha t a rep re sen ta tion w a s m ade (2 ) concern ing a p re sen tly ex is ting
m a te ria l fac t (3 ) w h ich w a s fa lse and (4 ) w h ich the rep re sen to r e ithe r (a )
knew to be fa lse o r (b ) m ade reck le ss ly, know ing tha t the re w a s in su f f ic ien t
know ledge upon w h ich to ba se such a rep re sen ta tion , (5 ) fo r the pu rpo se o f
induc ing the o the r pa rty to ac t upon it and (6 ) tha t the o the r pa rty, ac ting
rea sonab ly and in igno rance o f its fa ls ity, (7 ) d id in fac t re ly upon it (8 ) and
w as the reby induced to ac t (9 ) to tha t pa rty’s in ju ry and dam age . G o ld
S tanda rd , Inc . v . G e tty O il C o ., 915 P .2d 1060 , 1066 -67 (U tah 1996 )
(c itation s om itted ); Edu ca tors M u t . Ins . A ss ’n . v . A llied P rop . & Cas . Ins .
C o ., 890 P .2d 1029 , 1032 (U tah 1995 ); acco rd C rook ston v . F ire In s . E xch .,
817 P .2d 789 , 800 (U tah 1991 ) .

A rm ed Fo rces In s . E xchange v . H a rr ison , 2003 UT 14 , ¶ 16 , 70 P .3d 35 , 40 .

R u le 9 (b ) o f the Fede ra l Ru les o f C iv il P rocedu re requ ires tha t “[ i]n a ll av e rm en ts

-160-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 164 of 192(cid:10)

o f f raud . . ., the c ircum s tances con stitu ting f raud . . . sha ll be sta ted w ith pa rticu la rity.”

“S im p ly s ta ted , a com p la in t mus t ‘se t fo r th the tim e , p lace and con ten ts o f the fa lse

rep re sen ta tion , the iden tity o f the pa rty m ak ing the fa lse sta temen ts and the con sequence s

the reo f .’” Schwa r tz v . C e le stia l Sea son ing s , Inc .,124 F .3d 1246 , 1252 (10 th C ir . 1997 )

(quo ting Law rence N a t ‘l Ban k v . Edm onds (In re Edm onds ), 924 F .2d 176 , 180 (10 th

C ir . 1991 )). A t a m in imum , Ru le 9 (b ) requ ires tha t a p lain tiff se t fo rth the “w ho , w ha t,

w hen , w he re and how ” o f the a lleged f raud . W illiam s v . WM X Tech ., Inc ., 112 F .3d 175 ,

179 (5 th C ir. 1997 )); see a lso H a rr ison v . W e stinghou se Savannah R ive r C o ., 176 F .3d

776 , 784 (4 th C ir.1999 ) (“ [T ]he ‘c ircum stances’ requ ired to be p led w ith pa rticu lar ity

unde r R u le 9 (b ) a re ‘the tim e , p lace , and con ten ts o f the fa lse rep re sen ta tion s , a s w e ll a s

the iden tity o f the pe rson m ak ing the m isrep re sen ta tion s and w ha t he ob ta ined the reby.’” )

(quo ting 5 C ha rles A lan W righ t & A rthu r R . M ille r, F edera l P rac tice and P rocedu re §

1297 , a t 590 (2d ed .1990 )) .

Thu s , w h ile a fede ra l cou rt w ill exam ine sta te law to de te rm ine w he the r the
e lemen ts o f f raud have been p led su f f ic ien tly to s ta te a cau se o f ac tion , the
R u le 9 (b ) requ iremen t tha t the c ircum s tances o f the f raud mu s t be sta ted
w ith pa rticu la rity is a fede ra lly im po sed ru le . O ne o f the ma in pu rpo se s o f
the ru le is to app rise the de fendan t o f f raudu len t c la im s and o f the ac ts tha t
fo rm the ba sis fo r the c la im . . . . In o the r w o rd s , “ [ i]n ca se s in w h ich fraud
lie s a t the co re o f the ac tion , the ru le does no t pe rm it a com p lain an t to f ile
su it f irs t, and sub sequen tly to sea rch fo r a cau se o f ac tion .”

H ayduk v . Lanna , 775 F .2d 441 , 443 (1 s t C ir . 1985 ) (quo ting Lopez v . Bu lova W a tch C o .,

-161-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 165 of 192(cid:10)

Inc ., 582 F .Supp . 755 , 766 (D .R .I .1984 ) (em phas is added )) .

1 1 7

See a lso A nno ta tion ,

C on s truc tion and app lica tion o f p rov is ion o f Ru le 9 (b ), F ede ra l Ru le s o f C iv il P rocedu re ,

tha t circum stances con stitu ting fraud o r m istake be sta ted w ith pa rticu larity , 27A .L .R .

Fed . 407 (1976 & Supp . 2004 ).

A s d iscu ssed above , p la in tif f Lym an a llege s tha t he r CPR ce rtif ica tion ca rd s , “a

necessa ry componen t o f he r ab ility to ob ta in p riv ilege s w e re a lte red pu rpo se fu lly,” tha t

“ the card s w e re sto len f rom he r f ile a t lea st on tw o if no t th ree occa sion s ,” tha t “ the

fo rged docum en ts w ere m a i led to the Am er ican H ea r t A ssoc ia t ion ,” and tha t “ the doc tors

w ou ld have p ro f ited f rom M rs . Lym an no t be ing ab le to w o rk . . . .” (P ropo sed P re tria l

O rde r a t 63 ¶ 255 ; see a lso id . a t 14 , 29 ¶¶ 129 -131 , 34 ¶¶ 174 -175 .) N o le ss than f ive

essen tia l e lem en ts o f f raud a re om itted f rom he r a llega tion s , v iz ., tha t the a lte red card s

w e re sen t to the Am e rican H ea rt A ssoc ia tion “ [1 ] fo r the pu rpo se o f induc ing the o the r

pa rty to ac t upon it and [2 ] tha t the o the r pa rty, ac ting reasonab ly and in igno rance o f its

fa ls ity, [3 ] d id in fac t re ly upon i t [4 ] and w as thereby induced to ac t [5 ] to tha t par ty’s

in ju ry and damage .” Seco r v . K n igh t, 716 P .2d 790 , 794 (U tah 1986 ) (quo ting D ugan v .

Jone s, 615 P .2d 1239 , 1246 (U tah 1980 )) .

1 1 7
evidence:

Once past the pleading stage, a party must then prove the elements of fraud by clear and convincing

“A finding of fraud must be based on the existence of all its essential elements . . . .
‘[F]raud is a wrong of such nature that it must be shown by clear and convincing proof and will
not lie in mere suspicion or innuendo.’” Taylor v. Gasor, Inc., 607 P.2d 293, 294-95 (Utah
1980) (internal citations om itted) (quoting Lundstrom v. Radio Corp. of Am., 17 Utah 2d 114,
117-18, 405 P.2d 339, 341 (1965)).

Armed Forces Ins. Exchange v. Harrison, 2003 UT 14, ¶ 27, 70 P.3d at 43.

-162-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 166 of 192(cid:10)

“ [ I]n o rd e r to p reva il on a c la im o f f raud [o r m isrep re sen ta tion ], a ll the e lem en ts o f

fraud m u s t be e stab lished by c lea r and conv inc ing ev idence .” Id . (em phas is added ).

U nder R u le 9(b ) tho se m iss ing e lem en ts of rea sonab le re l ian ce , cau sa t ion and in jury are

am ong the “c ircum s tances con s titu ting f raud” tha t m u s t be p leaded w ith pa rt icu la ri ty.

A b sen t such p lead ing , p lain tiff s’ f raud c laim rem a ins vu lne rab le to d ism issa l pu rsu an t to

Fed . R . C iv . P . 9 (b ) , independen t o f a mo tion unde r R u le s 12 (b )(6 ) o r 56 .

W ou ld p la in t iff s’ s ta te law fraud c la im fa re be t ter in a U tah s ta te cou r t? In

app lying U tah’s p ara l le l c iv i l ru le , the U tah S up rem e C ou r t has h e ld tha t “ the m ere

rec ita tion by a p la in tif f o f the e lemen ts o f f raud in a comp la in t doe s no t sa tisfy the

pa rticu la rity requ iremen t .” A rm ed Fo rces In s . E xch . v . H a rr ison , 2003 UT 14 ,¶ 16 , 70

P .3d a t 40 . R a the r, U tah Ru le 9 (b ) requ ire s a comp la in t to rec ite “ [ t]he re levan t

su rround ing fac ts ‘“w ith su f f icien t pa rticu lar ity to show w ha t fac ts a re c laim ed to

con stitu te [ the f raud ] cha rge s .” ’” Id . (quo ting W illiam s v . S ta te Fa rm In s . C o ., 656 P .2d

966 , 971 (U tah 1982 ) (quo ting H ea thm an v . H a tch , 13 U tah 2d 266 , 372 P .2d 990 , 991

(1962 ))) . M o reove r, a s the U tah Cou rt o f A ppea ls recen tly ob se rved in C o ro le s v . Sabey ,

2003 UT A pp 339 , 79 P .3d 974 , “ ru le 9 (b ) a lso im po se s a much m o re ba sic and

fundam en tal requ irem en t: a requ irem en t o f c lar ity and conc iseness” :

In H ea thm an [v . H a tch , 13 U tah 2d 266 , 372 P .2d 990 (1962 )] , the U tah
Sup rem e C ou r t a f f i rm ed the d ism issa l o f the p la in t if f ‘s com p la in t because
the com p lain t, w h ich w as “33 leg a l size typew ritten pages” in leng th , d id
no t comp ly w ith ru le 9 (b ) . 372 P .2d a t 991 -92 . The Cou rt s ta ted the
fo llow ing rega rd ing the comp la in t’s noncomp l iance w ith tha t ru le :

-163-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 167 of 192(cid:10)

W i thou t bu rden ing th is op in ion w i th the d e ta i ls o f p la in t iff ’s
m uch too long and invo lved comp la in t, it is su f f ic ien t to say
tha t its sho rtcom ing s a re such tha t it w a s w e ll w ith in the
d isc re tion o f the trial cou rt to conc lude tha t it fa iled to com p ly
w ith [ ru le s 8 (a ) and 9 (b )] , and , acco rd ing ly, to g ran t the
m o t ion to d ism iss . The ob jec t ive o f these ru les is to requ ire
tha t the e ssen tia l fac ts upon w h ich red re ss is sough t be se t
fo rth w ith sim p licity, b rev ity, cla rity and ce rta in ty so tha t it
can be de te rm ined w he the r the re ex is ts a lega l ba sis fo r the
re lief c laim ed ; and , if so , so tha t the re w ill be a c lea rly
de f ined founda tion upon w h ich fu rthe r p roceed ing s by w ay o f
respon sive p lead ing s and /o r tria l can go fo rw a rd in an o rde rly
m anner .

Id . a t 992 .

2003 UT A pp 339 , ¶ 23 , 79 P .3d a t 980 ( foo tno te om itted ) . A s C o ro le s exp la ins ,

p lead ing a f raud c laim w ithou t spec ifying the fac ts upon w h ich it is b ased “essen tially

dum p s upon the tria l cou rt . . . the bu rden o f sif ting th rough the hund red s o f pa rag raph s o f

a lleg ed fac ts to asce rta in w he the r P lain tiff s h ave ‘a lleg e [d ] … fac ts necessa ry to m ake a ll

the ir e lem en ts of fraud .’ D eB ry v . Nob le , 889 P .2d 428 , 443 (U tah 1995 ).”

Such an app roach is unaccep tab le . It is P la in tif f s’ re spon s ib ility, no t the
cou rts’ , to se t fo rth “ [ t]he re levan t su rround ing fac ts” in such a manne r tha t
i t is ev iden t “‘“w ha t fac ts are c la im ed to con s t itu te [ the f raud ] charges .”’”
A rm ed Fo rces , 2003 UT 14 a t ¶ 16 , 70 P .3d 35 (c ita tion s om itted )
(em phas is added ). See A rena Land & Inv . Co . v. P e tty , N o . 94 -4196 , 1995
W L 645678 , a t *1 , 1995 U .S .A pp . LEX IS 31140 , a t *3 (10 th C ir . N ov . 3 ,
1995 ) (“The th ird amended comp la in t is w o rdy, repe titive and fa ils to a llege
the nece ssa ry e lemen ts o f the c la im s it is a sse rting . Ind ica tive o f the
comp la in t ‘s inadequacy is the fac t tha t it ramb le s on fo r s ix ty-fou r page s
be fo re reach ing the f irs t c la im fo r re lie f . It is ne ithe r the cou rt’s no r the
appe llee s’ ro le to s if t th rough a leng thy, conc lu so ry and poo rly w ritten
com p la in t to p iece toge the r the cau se o f ac t ion .”) .

Id . a t ¶ 27 , 79 P .3d a t 980 -81 (foo tno te om i tted) .

-164-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 168 of 192(cid:10)

H e re , th is cou rt is— a s w a s the U tah Cou rt o f A ppea ls in C o ro le s— “unab le to

a sce rta in “ ‘“w ha t fac ts a re c la im ed to con stitu te [ the f raud ] cha rge s .” ’” 2003 UT A pp

339 , ¶ 27 n .12 (quo ting A rm ed Fo rces In su rance Exchange v . H a rr ison , 2003 UT 14 , ¶

16 , 70 P .3d 35 (c i ta t ion s om i tted)) .

Summ ary re : the Par t I P la in t iffs’ C au ses o f A c tion

W he the r the Pa rt I P la in tif f s’ c la im s had any a rguab le lega l m e rit o r ra ised genu ine

issue s fo r tria l— a que stion o f fu rthe r fo rm u la tion o f the issue s fo r tria l unde r Fed . R . C iv .

P . 16 (c )(1 )— w a s add re ssed in som e de ta il a t the F ina l P re tria l C on fe rence . A ccep ting the

P ropo sed Am ended Com p la in t a s the be st a rticu la tion o f the Pa rt I P la in tif f s’ c la im s a s o f

the tim e o f p re tria l,

1 1 8

it become s appa ren t tha t m any o f p la in tif f s’ theo rie s o f liab ility had

a lready fa iled a s a ma tte r o f law— one becau se the sta tu te in que stion s im p ly doe s no t

a f fo rd p la in t if fs a p r iva te c iv i l rem edy, the o the rs because they a re lega l ly m e r itless :

e ithe r the essen tial e lem en ts o f the cau se o f ac tion have no bea ring upon the sp ec if ic f ac ts

a lleg ed by these p lain tiff s (even if tho se fac ts a re tak en as tru e and a ll rea sonab le

in fe rences a re d raw n in the ir favo r), o r becau se the p lain tiff s h ave p leaded the c laim s in

conc lu so ry te rm s , w ithou t a lleg ing any spec if ic fac ts tha t w ou ld p rov ide a v iab le fac tua l

foo ting fo r the se c la im s , tha t is , w ithou t a p la in s ta temen t o f the c la im show ing tha t they

1 1 8
As noted above, almost all of its allegations were repeated verbatim as the “Plaintiffs’ Statement of
Contested Issues of Fact” in Section 5 of the Proposed Pretrial Order.

-165-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 169 of 192(cid:10)

a re en titled to re lie f . See Fed .R .C iv .P . 8 (a )(2 ) .

1 1 9

The se lega lly m e ritle ss c la im s inc lude

tho se p leaded as a r is ing under ( i) R ICO , 18 U .S .C . §§ 1961 e t seq .; (ii) the F reedom o f

A ccess to C lin ic E n trances A c t o f 1994 , 18 U .S .C . § 248 ; (iii) the H ea lth C a re Q ua lity

Im p rovem en t A c t, 42 U .S .C . § 11112 ; (iv) the Em e rgency M ed ica l T rea tm en t and A c tive

L abo r A c t (EM TALA ), 42 U .S .C . § 1395dd ; (v ) the “M ed ica re Pa tien t B ill o f R igh ts ,”o r

f reedom -o f -cho ice p rov ision , 42 U .S .C . § 1395a ; (v i) 42 U .S .C . § 1981 ; (v ii) 42 U .S .C . §

1985 (3 ); (v iii) 42 U .S .C . § 1983 ; (ix) the federa l an titru st law s; (x ) the U tah Con s titu tion ,

a rt. I , §§ 1 , 7 , 25 , 26 , 27 ; (x i) the U tah U n fa ir P rac tice s A c t, U tah Code A nn . §§ 13 -5 -1 e t

seq .; (x ii) the U tah C iv il R igh ts A c t, U tah Code A nn . §§ 13 -7 -1 e t seq .; (x iii) “Fede ra l

comm on law and U tah con trac t comm on law and sta tu to ry p rov ision s tha t p roh ib it

con trac ts o f adhes ion , bad fa ith , and lack o f fa ir dea ling ,” inc lud ing the im p lied covenan t

o f good fa ith and fa ir dea ling ; (x iv) “p rivacy righ ts and sta tu to ry en titlem en ts to have the ir

c reden tia l f ile s and pa tien t f ile s accu ra te ly kep t by the d is tric t unde r M ed ica id and U tah

H ea lth D epa rtm en t sta tu tes and regu lation s” ; (xv) neg ligen t in f lic tion o f emo tiona l

d is tre ss ; and (xv i) f raud . Tho se c laim s m ay p roperly be d ism issed as f rivo lou s pu rsu an t to

Fed . R . C iv . P . 16 (c )(1 ) becau se they a re ba sed upon an ind ispu tab ly m e ritle ss lega l

theo ry, o r a re foo ted upon conc luso ry asse rtion s ra the r than sp ec if ic f ac ts, as re f lec ted in

1 1 9
Further, absent leave to amend her pleadings in some fashion, plaintiff Valdez’ EMTALA
claim—pleaded as a cause of action for the first time in the Proposed Amended Complaint and m irrored in the
Proposed Pretrial Order—was clearly time-barred. See 42 U.S.C. § 1395dd(d)(2)(C). Plaintiff Lyman’s
defamation claim may be time-barred as to any actionable conduct known of or reasonably discoverable prior to
July 25, 1999.

-166-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 170 of 192(cid:10)

the P ropo sed Am ended C om p la in t and the P ropo sed P re tr ia l O rde r .

1 2 0

C f. N e itzke v .

W illiam s , 490 U .S . 319 , 327 (1989 ) (c la im “ba sed on an ind ispu tab ly m e ritle ss lega l

theo ry”o r founded on “c lea rly ba se le ss” fac tua l con ten tion s m ay be d ism issed a s

“ f rivo lou s” unde r 28 U .S .C . § 1915 ); G reen v . Seymou r , 59 F .3d 1073 , 1077 (10 th C ir.

1995 ) (com p lain t is “ f rivo lou s” unde r 28 U .S .C . § 1915 “ ‘w he re it lack s an a rguab le b asis

e ithe r in fac t o r law .’”) ; O lson v . S to tts, 9 F .3d 1475 , 1476 (10 th C ir. 1993 ) (c laim is

“f r ivo lou s” under 28 U .S .C . § 1915 “ if the fac tua l con ten t ion s suppo r ting the c la im are

‘c lea rly base les s,’ . . . o r the c laim is based on a leg a l theo ry tha t is ‘ind ispu tab ly

m e ritless,’” ); M itche l l v . H orn , 318 F .3d 523 , 530 (3d C ir . 2003 ) (to be “ frivo lou s” unde r

28 U .S .C . § 1915 , “a c la im m u s t re ly on ‘an ind ispu tab ly m er i tless lega l theo ry’ or a

‘c lea rly base les s’ . . . fac tua l scena rio” ); Tay lo r v . John son , 257 F .3d 470 , 472 (5 th C ir.

2001 ) (comp la in t is “ f rivo lou s” if it “ lack s an a rguab le ba sis in law o r fac t, and a

com p la in t lack s such a b as is if it re l ies on an ind ispu tab ly m er i tless lega l theo ry.”) ;

W a lker v . C ity o f Boga lusa , 168 F .3d 237 (5 th C ir . 1999 ) (c la im is “ f rivo lou s” unde r 42

U .S .C . § 1988 if “ it is ‘so lack ing in a rguab le me r it a s to be g round le ss o r w ithou t

1 2 0
Neither Fed. R. Civ. P. 16(c)(1) nor the accompanying advisory comm ittee notes articulate the legal
standard to be applied in determining whether a claim or defense is “frivolous” within the meaning of the rule.
The advisory committee note to the 1983 amendment to Rule 16 makes general reference to a case from the D.C.
Circuit, Meadow Gold Products Co. v. Wright, 108 U .S .App.D .C. 33, 278 F.2d 867 (D .C. Cir. 1960). That case
states that “the primary purpose of the pre-trial procedure is to ‘define the claims and defenses of the parties for
the purpose of eliminating unnecessary proof and issues, lessening the opportunities for surprise and thereby
expediting the trial,’”but does not speak of “frivolous” claims. 278 F.2d at 869 (quoting Rosden v. Leuthold,
107 U.S.App.D .C. 89, 92, 274 F.2d 747, 750 (D.C. Cir. 1960)).
Some guidance may be gleaned from case law construing analogous rule and statutory language, e.g., 28
U.S.C. § 1915(e) (2000). Cf. Fed . R . Civ. P. 11(b)(2) (claims and defenses “warranted by existing law or by a
nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new
law”).

-167-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 171 of 192(cid:10)

founda tion ’” (quo ting P lem e r v . Pa rson s-G ilbane , 713 F .2d 1127 , 1140 (5 th C ir . 1983 )

(con stru ing 42 U .S .C . §2000e -5 (k )) (quo ting Jones v . Texa s T ech U n ive rs ity , 656 F .2d

1137 , 1145 (5 th C ir. 1981 ))); K a ram v . C ity o f Bu rbank , 352 F .3d 1188 , 1195 (9 th C ir.

2003 ) (comp la in t m ay be deem ed “ frivo lou s” unde r 42 U .S .C . § 1988 “on ly w hen the

‘re su lt is obv iou s o r the . . . a rgum en ts o f e rro r a re w ho lly w ithou t m e rit’” (quo ting

M cConne ll v . C r itch low , 661 F .2d 116 , 118 (9 th C ir. 1981 ))); D av is v . Ta rge t S to re s D iv .

o f D ay ton H ud son C o rp ., 87 F . Supp . 2d 492 , 494 (D . M d . 2000 ) (c la im is “ f rivo lou s”

under T i tle V II (42 U .S .C . § 2000e-5 (k)) “ if a p la in t iff p resen ts no ev iden ce to suppo r t

h is c laim o r if he has gone fo rw a rd on the basis o f no co lo rab le lega l theo ry” ); see a lso

A nno ta tion , S tanda rds for de term in ing w he ther proceed ing s in form a pauper is are

fr ivo lou s and thu s sub jec t to d ism issa l unde r 28 U .S .C .A . sec . 1915 (d ), 52 A .L .R . Fed .

679 (1981 & Supp . 2004 ); A nno ta tion , R igh t o f de fendan t in c iv il r igh ts ca se to rece ive

aw a rd o f a tto rney ‘s fee s unde r C iv il R igh ts A tto rney ‘s F ee s Aw a rd s A c t o f 1976 (42

U .S .C .A . sec . 1988 ), 104 A .L .R . Fed .14 (1991 & Supp . 2004 ); B lack ’s Law D ic tionary

601 (5 th ed . 1979 ) (“A p lead ing is ‘f rivo lou s’ w hen it is c lea rly in su f f ic ien t in its face ,

and does no t con trove rt the m a ter ial po in ts o f the oppo site p lead ing , and is p resum ab ly

in te rpo sed fo r m e re pu rpo ses o f de lay o r to em ba rrass the opponen t.” ).

P re tr ia l D e term ina tion o f the Par t I P la in tiffs’ C la im s

Fo r the rea son s exp la ined in som e de ta il above , the F ina l P re tria l C on fe rence

conc luded w ith a bench ru ling d ism iss ing the Pa rt I P la in tif fs’ rem a in ing fede ra l c la im s

-168-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 172 of 192(cid:10)

on the g round s tha t they d id no t have an a rguab le b asis in law and lacked su f f icien t

suppo r t in p la in t if fs ’ fac tua l a llega t ion s to ra ise a tr iab le issue , even w he re tho se

a llega tion s a re taken as true and v iew ed in the ligh t m o s t favo rab le to the p la in tif fs . (See

T r. 11 /15 /02 , a t 113 :9 -118 :7 (the cou rt)) ; F ed . R . C iv . P . 16 (c )(1 ).)

P la in t if fs ’ counse l sub sequen tly ob jec ted to the d ism issa l o f the Pa r t I P la in t if fs ’

c la im s a t the F ina l P re tria l C on fe rence on the g round s tha t (1 ) no summ a ry judgm en t

m o tion w a s pend ing a t the tim e o f the F ina l P re tria l C on fe rence , and p la in tif f s d id no t

rece ive ten days’ no tice tha t summ a ry judgm en t w ou ld be con side red ; (2 ) no no tice w a s

g iven to the p lain tiff s tha t the p re trial hea ring w as in ac tua lity a hea ring o f d ism issa l o f a ll

o f the ir c la im s ; (3 ) seve ra l issue s o f m a te ria l fac t w e re ra ised in the p re tria l con ference ;

and (4 ) d ism issa l w ith p re jud ice , w ithou t leave to amend , ope ra te s a s a “ seve re sanc tion”

tha t shou ld on ly be im po sed in ex trao rd ina ry cases . A cco rd ing to p la in tif fs’ coun se l,

the re a re “ tw o types o f d ism issa l” unde r the Fede ra l Ru les : Ru le 12 (b ) d ism issa l and R u le

56 summ a ry judgm en t— o r th ree , v iz ., a s a d iscove ry sanc tion (R u le 37 (b )(2 )(C ))— a v iew

tha t fa ils to take in to accoun t R u le 16 (c )(1 ) and the func tion o f the f ina l p re tria l

con fe rence . (See supra a t 4 -7 (“The F ina l P re tr ia l C on fe rence (F ed . R .C iv . P . 16 (c ))” ).)

The cou rt’s expec ta tion s concern ing the p ropo sed p re tria l o rde r and the f ina l

p re tr ia l con fe rence w e re spe l led ou t fo r counse l in exp l ic it te rm s a t the h ea r ing on A ugus t

22 , 2002 :

THE COURT : A p re tr ia l o rd e r is a jo in t p roduc t. I’m in terested in
iso la ting the genu ine ly d ispu ted fac tua l issue s . I’m in te re sted in iso la ting

-169-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 173 of 192(cid:10)

the genu ine ly d ispu ted lega l issues if any . I w an t a ro s te r o f a ll you r
w itnesses on a ll sides. I w an t a ro ste r o f a ll you r exh ib its fo r you r case s in
ch ie f .

M S . RO SE : R os te r o f exh ib i ts and w itnesses .

THE COURT : I’m in te re sted in hav ing the a tto rneys s ign o f f on the
sugge sted fo rm o f p re tria l o rde r so tha t I know tha t you ’ve ag reed to it even
if you ag ree to d isag ree as to the iden tif ied issues , and I ’m in te res ted as I
sa id in g iv ing you a little mo re tim e he re .
* * * *

W e ’re in te re sted in iden tify ing the issue s , iden tify ing bo th lega l
p ropo s ition s and fac tua l p ropo s ition s , the w itnesses , the exh ib its .
A nd then a t p re trial I’m in terested in coun se l be ing p repa red to ta lk
theo ry , tha t is lega l theo ry , lega l au tho r ity , s ta tu tory au tho r ity or case
au tho rity and be ab le to ta lk fa c ts , this is w ha t th is w itness is go ing to tell
u s Judge . Tha t w ay w e can try to screen w ha t’s here and see w ha t’s
genu ine ly d ispu ted and wha t genu ine ly de se rve s a fac t finde r tr ia l.

(T ran sc rip t o f H ea ring , da ted A ugu st 22 , 2002 , at 31 :23 -32 :9 , 32 :25 -33 :9 (the cou rt)

(em phasis added ).) A nd th is w as no t the on ly occasion in w h ich the cou rt exp ressed its

expec ta tion s conce rn ing p re tr ia l to coun se l in open cou rt , and on the reco rd . (See M inu te

En try, da ted Ju ly 2 , 2002 (dk t. no . 386 ); M inu te En try, da ted O c tobe r 8 , 2002 (dk t. no .

427 ) .) These exp ressed expec tation s com po rt w ith bo th the pu rpo se and func tion o f R u le

16 (c) and the requ irem en ts of the cou r t’s Loca l Ru les , par t icu lar ly DUC ivR 7 -1(d ) :

“P rep ara tion for th is f in a l p re tria l con f eren ce shou ld p ro ceed pu rsu an t to F ed . R . C iv . P .

16 and shou ld inc lude (i) p repa ra tion by p la in tif f ‘s coun se l o f a recomm ended p re tria l

o rde r . . . , and ( ii) prepa ra tion for reso lu t ion o f unreso lved issues in the case .” (Em phasis

added .)

A s exp lain ed in som e de tail he re in , this cou rt add ressed these p lain tiff s’ c laim s in

-170-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 174 of 192(cid:10)

the con tex t o f the F ina l P re tr ia l C on fe rence , and d id so pu rsuan t to R u le 16 (c)(1) ,

app lying R u le 16 (c )(1 ) s tand a rds , us ing the p a r ties ’ P roposed P re tr ia l O rde r as a

gu ide— no t pu rsu an t to R u le 56 , app lying R u le 56 (c ) standa rd s; no t pu rsu an t to R u le

12 (b )(6 ) , w o rk ing so le ly w ith in the con f ine s o f the w ritten p lead ing s ; and no t in the

con tex t o f the impo sition o f d iscove ry sanc tion s aga inst the p lain tiff s pu rsu an t to R u le

37 (b)(2 ) .1 2 1

C la im s A ga in st San Juan Coun ty and th e SJH SD

A s exp la ined above , the p re tria l exam ina tion o f the Pa rt I P la in tif f s’ cau se s o f

ac tion lead s to the conc lu s ion tha t the se p la in tif f s have no v iab le fede ra l cau se s o f ac tion

aga in s t e ithe r San Juan Coun ty o r the San Juan H ea lth Se rv ice s D is tric t. The rema in ing

s ta te tor t law c la im s invo lve in ten t iona l to r ts a l leg ed ly comm i tted by one o r mo re

ind iv idua l de fendan ts.

C la im s A ga inst th e Ind iv idu a l D efendan ts

The co lloquy a t the F ina l P re tria l C on fe rence con f irm ed tha t a s aga in s t the

ind iv idua l de fendan ts— C omm iss ione r T yron L ew is, C omm iss ione r B ill R edd , Coun ty

A tto rney C ra ig H a lls , R e id W ood , C lea l B rad fo rd , R oge r A tc itty, John L ew is , John

H ou sekeepe r, K a ren A dam s , Pa tsy Shumw ay, D r . L loyd V a l Jone s , D r . M an f red N e lson ,

R ick B a iley, M a rilee B a iley, O ra L ee B lack , G a ry H o lliday, C a rla G rim sh aw , G lo ria

1 2 1
See, e.g., Ehrenhaus v. Reynolds, 965 F.2d 916, 921 (10th Cir . 1992) (district court acted w ithin its
discretion under Fed. R. Civ. P. 37(b)(2)(C) in dismissing complaint with prejudice as sanction for violation of
discovery order when securities fraud plaintiff failed to appear for scheduled deposition notwithstanding court’s
order and warning that court would dism iss complaint if plaintiff did not comply with order).

-171-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 175 of 192(cid:10)

Y an ito , and Ju lie B ron son— the Pa rt I P la in tif f s have fa iled to a llege lega lly v iab le § 1983

c la im s aga in s t the se de fendan ts , even tak ing p la in tif f s’ fac tua l a llega tion s a s true and

trea ting them in the ligh t m os t favo rab le to the p la in t if fs . P la in t if fs ’ fede ra l an t itrus t

c la im s fa il a s aga in s t these de fendan ts as w e ll.

A s aga in s t C oun ty A tto rney C ra ig H a lls , the Pa rt I P la in tif f s have a lleged no

w rong fu l conduc t w ha tsoeve r. E ssen tially the sam e m ay be sa id fo r de fendan t C a rla

G rim shaw . D e fendan ts O ra Lee B lack and G lo ria Y an ito a re a lleged to have

comm un ica ted d irec tion s conce rn ing M s. Lym an ’s s taf f p riv ileg es tha t pu rpo rted ly

o r ig ina ted w i th D r . R edd , the S JH SD m ed ica l d irec to r , o r M s . Sch afer , the p a t ien t care

d irec to r . B y them se lve s , the se a llega tion s do no t s ta te an arguab le lega l c la im unde r the

p lain tiff s’ rem a in ing sta te to rt law theo ries. N o r does it appea r tha t any rem a in ing sta te

law c la im w as p leaded aga in s t de fendan t L o ri W a llace . (See P ropo sed P re tria l O rde r a t

5 -6 ¶¶ (20 )- (25 ).)

L ik ew ise , th e P a rt I P la in tif fs comp la in o f th e Coun ty Comm iss ione rs and S JH SD

B oa rd m em be rs inac tion on the ir beha lf , bu t a llege no in ten tiona lly to rtiou s ac ts by any o f

the se de fendan ts tha t e stab lish any o f the e lemen ts o f the rema in ing s ta te law cau se s o f

ac tion fo r in te rfe rence w ith con t rac t, in te rfe rence w ith p rospec tive bus iness re la tion s ,

de fam a tion and in ten tiona l in f lic tion o f em o tiona l d is tress .

-172-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 176 of 192(cid:10)

D r . M acA r thur ’s S ta te L aw T or t C la im s

A s aga in s t de fendan t Ju lie B ron son (and po ss ib ly M a rilee Ba iley, L au rie Scha fe r

and C lea l B rad fo rd , (see P ropo sed P re trial O rde r a t 25 ¶ 96 )), D r. M acA rthu r a lleg es fac ts

tha t, w hen taken in the ligh t m o s t favo rab le to h im , m ay suppo rt a sta te law de fam a tion

c la im . W he the r he a lleged a non -f rivo lou s c la im o f in te rfe rence w ith con trac t o r

in ter fe rence w ith p ro sp ec tive bu siness re lation s aga inst tho se few ind iv idua l de fendan ts

w ho w ere d irec t ly invo lved w i th h is reques t fo r fu l l p rov is iona l s taf f p r iv i leg es appea rs

m o re doub tfu l. H e d id no t a llege fac ts tha t w ou ld suppo rt a c la im fo r in ten tiona l

in f lic tion o f em o tiona l d is tress aga in s t any defendan t.

D r . M acA rthu r’s f ed era l c la im s hav ing b een d ism issed pu rsu an t to F ed . R . C iv . P .

16 (c )(1 ), th is cou rt dec lines to exe rc ise supp lem en ta l ju risd ic tion pu rsuan t to 28 U .S .C . §

1367 (a ) (2000 ) ove r h is rem a in ing s ta te law to r t c la im s o f de fam a tion aga ins t M s .

B ronson (o r o the rs ), and in te rfe rence w ith con t rac t/p rospec t ive bus iness re la tion s aga ins t

D r . R edd , M r . B rad fo rd o r o thers w ho had d irec t invo lvem en t w i th D r . M acA r thu r’s

D ecemb e r 1999 reques t for fu ll one -yea r p rov is iona l p riv ileg es pu rsu an t to th e S JH SD

m ed ica l s ta f f bylaw s . See 28 U .S .C . § 1367 (c )(3 ) (2000 ) . D r . M acA rthu r ha s p leaded no

o the r non -f rivo lou s s ta te to rt c la im s aga in s t any o the r d e fendan t.

M s . L ym an ’s S ta te L aw T or t C la im s

F rom an exam ina tion o f the P ropo sed Am ended Com p la in t, the P ropo sed P re tria l

O rde r and th rough the co lloquy a t the F ina l P re trial C on fe rence , it becam e inc reasing ly

-173-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 177 of 192(cid:10)

appa ren t tha t M s . Lym an w a s no t c la im ing a den ia l o f p rac tice p riv ilege s a s m uch a s she

w a s a lleg ing in ten tiona l in te rfe rence by som e de fendan ts w ith the exerc ise o f p rac tice

p riv ilege s w h ich M s . Lym an unde rs tood she had a lready been g ran ted by the S JH SD and

w h ich rem a ined in e f fec t un til D ecem be r 22 , 1999 . She a lleg es a se ries o f inc iden ts in

w h ich he r o rde rs fo r labo ra to ry te sts , hea rt m on ito rs , in jec tion s , x -rays and o the r rou tine

p ro cedu re s w ou ld be re fu sed o r igno red , o f ten a t the in s tance o r d irec tion o f D r. R edd .

(See sup ra n . 69 and accom panying tex t.)

W h ile such inc iden ts m ay no t am oun t to a con stitu tiona l dep riva tion ac tionab le

unde r § 1983— and sub jec t to c la im s o f qu a lif ied imm un ity— they m ay con s titu te a t leas t

a co lo rab le sta te to rt c la im . A n exc luded p rac titione r m ay be ab le to avo id the qua lif ied

p r iv i leg e b arr ier to § 1983 c la im s by p lead ing and p rov ing tha t an ind iv idua l de fendan t’s

ac tion s w e re tak en to sa tisfy a pe rsona l g rudge , no t in the best in terests o f the ho sp ital,

and the re fo re con stitu ted an in ten tiona l to rt, such a s in te rfe rence w ith con trac tua l

re la tion s . See , e .g ., S traube v Em anue l Lu theran Char ity Bd ., 287 O r . 375 , 600 P .2d 381

(1979 ), ce rt. den ied , 445 U .S . 996 (1980 ) . In add ition , non -to rt theo rie s such a s b reach o f

con trac t m ay be ava ilab le to rem edy d isc repanc ies be tw een reasonab le expec tation s a s to

p rac tice p riv ileges and re s tr ic tion s im po sed upon the ir ac tua l exe rc ise .

B ecau se the H o sp ita l bylaw s con stitu te “a con trac t be tw een the ho sp ita l and
the phys ic ian ,” R ee s, 808 P .2d a t 1076 , the H osp i ta l m us t com p ly w ith those
bylaw s w hen tak ing ac tion s w h ich e f fec t its s taf f . M o reove r, w e ag ree w ith
the w e igh t o f au tho r ity w h ich g ran ts de fe rence to hosp i ta l o f f ic ia ls ’
p ro fe ss iona l judgm en t. U nde r th is au tho rity, cou rts requ ire tha t a ho sp ita l
on ly “sub s tan tia lly com p ly” w ith its bylaw s . See , e .g ., Ow en s v . N ew

-174-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 178 of 192(cid:10)

B r ita in G en . H o sp . , 627 A .2d 1373 , 1379 -80 (C onn . A pp . 1993 ), a f f’d ,
643 A .2d 233 (C onn . 1994 ); F r iedm an v . M em o r ia l H o sp ., 523 N .E .2d 252 ,
253 (Ind . A pp . 1988 ); Sm ith v . O u r Lady o f the Lake Ho sp ., 639 So . 2d 730 ,
755 (L a . 1994 ); M ahm ood ian v . U n ited H o sp . C tr ., Inc ., 404 S .E .2d 750 ,
755 (W . V a .), ce rt. den ied , 502 U .S . 863 , 112 S . C t. 185 (1991 ); see a lso
P iac ite lli v . Sou the rn U tah S ta te Co llege , 636 P .2d 1063 , 1066 -67 (U tah
1981 ) (f ind ing sub s tan tia l comp l iance w ith po lic ie s in co llege personne l
m anua l su f f icien t to w ithstand due p rocess a ttack ); see genera lly K a th leen
M . D o rr , A nno ta tion , E xc lu s ion o f, o r D isc rim ina tion Aga in s t, Phy sic ian o r
Su rgeon by H o sp ita l, 28 A .L .R . 5 th 107 , §3 , a t 152 -67 (1995 & Supp . 1996 )
(co llec ting case s). Sub stan tial com p lian ce w ith the bylaw s adequa tely
se rve s the ir p rim a ry pu rpo se , w h ich is to en su re fa ir p rocedu re s fo r s ta f f ing
dec is ion s . See , e .g ., Ow en s , 627 A .2d a t 1379 -80 .

H ou s ton v . In te rm oun ta in H ea lth C a re , Inc ., 933 P .2d 403 , 408 (U tah C t . A pp . 1997 ) .

1 2 2

P la in tif f Lym an may a lso have v iab le sta te to rt c la im s aga in s t D r . R edd fo r

de fam a tion and in ten tiona l in f lic tion o f emo tiona l d is tre ss . D e fam a tion c la im s unde r

U tah law a re con stra ined by the one -yea r lim ita tion s s ta tu te , bu t c la im s fo r in ten tiona l

in f liction o f em o tiona l d istress have a m uch longe r tem po ra l reach :

U tah Code sec tion 78 -12 -25 (3 ) pe rm its an ac tion fo r in ten tiona l in f lic tion
o f em o tiona l d is tress to be b rough t w ith in fou r yea rs o f ac tionab ility. See
U tah C ode A nn . § 78 -12 -25 (3 ) (2002 ) (“A n ac tion m ay be b rough t w ith in
fou r yea rs … fo r re lief no t o the rw ise p rov ided by law .”); see a lso
R e ther ford , 844 P .2d a t 975 (app lying sec tion 78 -12 -25 (3 ) to de te rm ine the
s ta tu te o f lim ita tion s fo r the p la in tif f ’s in ten tiona l in f lic tion o f emo tiona l
d is tress c la im ) .
In R e ther ford , the U tah Sup reme C ou rt no ted tha t “ [b ]ecau se o f the
na tu re o f [an in ten tiona l in f liction o f em o tiona l d istress ] cau se o f ac tion , it
can be d if f icu lt to de te rm ine w hen a ll its e lemen ts–in ten tiona l, ou trageou s
conduc t p rox im a te ly cau s ing ex trem e d is tress–have com e in to be ing . O f
pa rticu la r d if f icu lty is the e lemen t o f in ju ry–ex treme em o tiona l d is tre ss .”

1 2 2
In dealing with the enforcement of the terms of written hospital bylaws, presumably the U tah six-
year lim itations statute for actions based upon written contracts would apply. See Utah Code Ann. § 78-12-23(2)
(2002).

-175-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 179 of 192(cid:10)

844 P .2d a t 975 . H ow eve r, the d if f icu lty in de te rm in ing w hen the
emo t iona l d is tre ss occu rred is gene ra lly lim ited to s itua tion s “w he re a
defendan t sub jec ts a p la in t iff no t to a s ing le ou trag eou s ac t , bu t to a p a t tern
o r p rac tice o f ac ts .” Id .

C h r is ten sen v . D ro sso s , 2005 UT A pp 170 , 2005 W L 851700 , *1 . Fu r the rm o re , “ [W ]hen

conduc t tha t w ou ld g ive rise to a c laim o f in ten tiona l in f liction o f em o tiona l d istress is

con tinuou s and ongo ing , and it is unc lea r w hen the p la in tif f su f fered seve re emo tiona l

d is tre ss , the sta tu te o f lim ita tion s beg in s to run f rom the tim e the la st in ju ry is su f fered o r

the to rtiou s conduc t cease s .” H a tch v . D av is , 2004 UT A pp 378 , ¶ 44 , 102 P .3d 774 , 785

(foo tno te om i tted) .

M s . Lym an ’s federa l c la im s hav ing been d ism issed a t the conc lu s ion o f the F ina l

P re tria l C on fe rence , th is cou rt dec line s to exe rc ise supp lemen ta l ju risd ic tion unde r 28

U .S .C . § 1367 (a ) ove r h e r rem a in ing s ta te law to rt c la im s . See 28 U .S .C . § 1367 (c)(3) .

Tho se c la im s , the re fo re , w ill be d ism issed w ithou t p re jud ice .

Summ ary re : the F ina l P re tr ia l C on ference

A s the cou rt exp la ined a t the conc lu s ion o f the F ina l P re tria l C on fe rence , “The

e f fo rt is aga in to so rt ou t a s be st w e can w ha t the con ten tion s a re and the foo ting s fo r

tho se con ten t ion s ,” a p rocess “ resu l ting in the o rde rs tha t the cou r t has ind ica ted .” (T r .

11 /15 /02 , a t 228 :8-10 ( the cou r t) .)

In rev is iting tha t so rting p roce ss in the p roce ss o f p repa ring th is m o re fo rm a l

w ritten d ispo s ition o f the issue s p re sen ted , the cou rt ha s e labo ra ted upon the lega l and

fac tua l base s fo r its bench ru ling in som ew ha t g rea ter de tail. The cou rt has a lso tak en th is

-176-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 180 of 192(cid:10)

oppo rtun ity to c lar ify the ju risd ictiona l d ispo sition o f the p lain tiff s’ f ew rem a in ing sta te

law c la im s in the in te re s t o f avo id ing a t leas t som e con fu s ion conce rn ing tho se m a tte rs .

In i tia lly, the cou r t had ca l led upon coun se l fo r the p reva i ling par t ies to p repare

p ropo sed fo rm s o f o rde r m emo r ia liz ing the cou rt’s bench ru ling a t the p re tria l con ference ,

con s is ten t w i th th is cou r t’s loca l ru le , DUC ivR 54 -1(a ) & (b) :

(a) O rd er s in O pen C ourt . U n les s o the rw ise de term ined by the cou rt,
o rde rs announced in open cou rt in c iv il ca se s m u s t be p repa red in w riting by
the p reva iling pa rty, se rved w ith in f ive (5 ) days o f the cou rt’s ac tion on
oppo s ing coun se l, and subm itted to the cou rt fo r s igna tu re pu rsuan t to the
p rov is ion s o f sec tion (b ) o f th is ru le .

(b ) O rd ers and Judgm en ts. U n les s o the rw ise de term ined by the cou rt,
p ropo sed o rde rs and judgm en ts p repa red by an a tto rney m u s t be se rved
upon oppo s ing coun se l fo r rev iew and app rova l a s to fo rm p rio r to be ing
subm itted to the cou rt fo r rev iew and signa tu re . A pp rova l w ill be deem ed
w a ived if no ob jec tion s a re f iled w ith in f ive (5 ) days a f te r pe rsona l se rv ice
o r e igh t (8 ) days a f ter se rv ice by m a il.

The p repa ra tion o f p ropo sed fo rm s o f o rd e r led to ano the r se ries o f ob jec tion s , rev is ion s ,

hea ring s , and supp lem en ta l m em o randa on the sam e . (See P lain tiff ’s F o rm a l O b jec tion to

the C ou rt ass ign ing the d ra f ting o f the F ina l D ism issa l O rde r to the D e fen se C oun se l,

f iled N ovem be r 20 , 2002 (dk t. no . 458 ); P ropo sed F ina l O rde r o f D ism issa l w ith

P re jud ice , rece ived N ovembe r 22 , 2002 ; P ropo sed O rde r D enying P la in tif f s’ R u le 15

M o tion to Am end , rece ived N ovembe r 26 , 2002 ; P la in tif f s’ O b jec tion to the Fo rm o f the

P ropo sed D ism issa l O rde r, f iled N ovembe r 27 , 2002 (dk t. no . 465 ); P la in tif f s’ O b jec tion

to the D e fendan ts’ P ropo sed O rde r D enying the P la in tif f s’ M o tion to Am end the

C om p la in t , f i led D ecem ber 27 , 2002 (dk t . no . 477 ) ; T ran scr ip t of H ea r ing , da ted Feb rua ry

-177-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 181 of 192(cid:10)

24 , 2003 , a t 26 :17 -31 :15 , 71 :8 -12 ; P ropo sed O rde r o f D ism issa l W ith P re jud ice , rece ived

M a rch 4 , 2003 ; O b jec tion to the D e fendan ts’ P ropo sed O rde r o f D ism issa l W ith

P re jud ice , f iled M a rch 10 , 2003 (dk t. no . 511 ); T ran sc rip t o f H ea ring , da ted D ecem be r

19 , 2003 ; Supp lem en tal O b jec tion s to the F ina l O rde rs o f D ism issa l o f Fede ra l and S tate

L aw C la im s , f iled D ecem be r 29 , 2003 (dk t. no . 585 ).

In p repa ring th is w ritten d ispo s ition o f the Pa rt I P la in tif f s’ c la im s , the cou rt ha s

a lso tak en the oppo rtun ity to add ress seve ra l o f the ob jec tion s ra ised by the p lain tiff s to

the p roposed fo rm s o f o rde r ea r lie r subm itted by counse l,

1 2 3

pa r ticu la rly w he re tho se

ob jec tion s w e re d irec ted aga in s t the sub s tance o f the cou rt’s bench ru ling o r the conduc t

o f the p re tria l con ference , a s oppo sed to the form o f the p ropo sed o rde rs re f lec ting tha t

ru ling . C f. DUC ivR 54 -1(b ) .

PLA INT IFFS ’ MOT ION FOR LEAVE TO F ILE AN AM ENDED
COM PLA INT

It ha s long been unders tood tha t “ [ t]he Fede ra l R u le s encou rage litigan ts to p lead

on ly a sim p le sta temen t , in sequence , o f the even ts w h ich have tran sp ired , coup led w ith a

d irec t c la im by w ay o f demand fo r judgm en t.” M eadow G o ld P roduc ts C o . v . W r igh t,

278 F .2d 867 , 869 (D .C . C ir . 1960 ) (c iting G in s v . M au se r P lum b ing Supp ly Co ., 148

F .2d 974 (2d C ir . 1941 )) . F rom the comm encem en t o f th is litiga tion , p la in tif f s’ coun se l

1 2 3
(See, e.g., Plaintiffs’ Objection to the Form of the Proposed Dism issal Order, filed November 27,
2002 (dkt. no. 465), at 3, 5 (“the Plaintiffs should be allowed to know what legal theories and facts and rules the
Court was relying upon for dism issing each Plaintiffs’ claim in the pretrial setting. Plaintiffs should not be
forced to ferret out by intuition what the Court meant, was thinking at the time, or intended . . . . Plaintiffs
respectfully request the Court itself to identify the claims of the Plaintiffs and the reasons for their dismissal.” ).)

-178-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 182 of 192(cid:10)

ha s taken a d rama tica lly d if feren t app roach to p lead ing the Pa rt I P la in tif f s’ c la im s , a t

tim e s shu f f ling each p la in tif f ’s fac tua l a llega tion s and lega l a sse rtion s toge the r a s one

w ou ld a deck o f p laying ca rd s , sac rif ic ing na rra tive sequence in favo r o f a rgum en ta tive

cha rac te riza tion s and conc lu so ry asse rt ion s .

P la in t iff s’ P ropo sed Am ended C om p la in t w as no ex cep t ion . F i led a w eek befo re

the F ina l P re tria l C on fe rence , “P la in tif f s’ R u le 15 M o tion to Am end and Supp lemen t

C om p la in t to C on fo rm to the Ev idence & the 10 th C ir . C ou rt 10 -7 -02 O p in ion ,” and

“M em o randum o f F ac t and L aw in Suppo r t,” f i led N ovem ber 6 , 2002 (dk t . no . 438 ) ,

sough t leave to f ile the P ropo sed Am ended Com p la in t in o rde r to co rrec t any de f ic ienc ie s

in the p la in tif f s’ p lead ing s re ferred to by the Ten th C ircu it in M acA r thu r v . San Juan

C oun ty , 309 F .3d 1216 (10 th C ir. 2002 ), and to am end p lain tiff s’ p lead ing s to con fo rm to

the ev idence and c la rify the rem a in ing issues . See Fed . R . C iv . P . 15 (b ). The de fendan ts

d id no t have an oppo rtun ity to re spond to tha t m o tion be fo re the F ina l P re tria l C on fe rence

began on N ovem be r 14 , 2002 .

A t the conc lus ion o f the F ina l P re tr ia l C on fe rence on Feb rua ry 15 , 2002 , the cou r t

m ade a bench ru ling denying the mo t ion fo r leave to amend :

M S . RO SE : I’ve pu t in a mo t ion to amend the comp la in t and I
d ra f ted it in 2 pa rts . S ince the se p la in tif f s have been d ism issed is the re any
w ay o f p rocedu ra lly ju s t look ing a t amend ing the comp la in t fo r the second
pa rt?

THE COURT : W e ll I dea lt w ith the im po rtan t a spec t o f the amended
comp la in t, name ly the eme rgency room p rob lem and I’ve dea lt w ith tha t
and I’ ll s im p ly deny the m o tion to am end .

-179-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 183 of 192(cid:10)

M S . RO SE : No , no , I m ean t no , Y ou r H ono r , I’m so rry, I d idn ’ t
m ean fo r these 3 p la in t iff s tha t hav e b een d ism issed , I unders tand they are
gone . W ha t I’m talk ing abou t is I am ended the com p lain t tha t I o rig ina lly
f iled fo r S inge r, R igg s and D ick son and is tha t m o tion fo r amend ing tha t
pa rt o f the comp la in t s till v iab le?

THE COURT : N o , the mo t ion is den ied .

(T r . 11 /15 /02 , a t 119 :8 -23 .) The cou rt aga in add re ssed the ma tte r a t the Feb rua ry 24 ,

2003 hea ring on a ll pend ing m o tion s . (See T ran sc rip t o f H ea ring , da ted Feb rua ry 24 ,

2003 , at 36 :21 -23 (“W e dea lt w ith the question o f am endm en ts and I have ind ica ted to

you tha t a s an amendm en t the an sw e r is no .” (the cou rt) .) A p ropo sed fo rm o f o rde r

denying the mo t ion w a s subm itted to the cou rt, a s w e re ob jec tion s the re to , and the

p ropo sed o rde r ha s no t been en te red .

H av ing rev iew ed the reco rd in th is m a tte r in p repa ring th is w ritten d ispo s ition , the

cou rt ha s aga in exam ined the mo t ion fo r leave to amend a s w e ll a s the P ropo sed

Am ended Com p la in t. The a llega tion s o f the P ropo sed Am ended Com p la in t, p ro lix and

c ircu itou s a s they a re , co rre spond fa r m o re c lose ly to the issues a s f ram ed by coun se l in

the P ropo sed P re trial O rde r than do the even m o re p ro lix and pa rtially ob so lete

a llega tion s o f the o rig ina l C om p la in t, as ea rl ie r am ended . (See C om p la in t (V er if ied ) ,

f iled Ju ly 25 , 2000 (dk t. no . 1 ); “Am endm en ts to the C om p la in t; C o rrec tion o f E rro rs ,”

f i led A ugu s t 1 , 2000 (dk t . no . 3 ) .)

W h i le g en era l ly, m o t ion s to am end a com p la in t to con fo rm to the ev iden ce “a re

m ade a t tr ia l o r in the imm ed ia te a f te rm a th o f tr ia l,” S teven B a icke r-M cK ee , e t a l.,

-180-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 184 of 192(cid:10)

F ede ra l C iv il Ru le s H andbook 337 (2000 ed .) , the exp re ss language o f Ru le 15 (b ) doe s

no t lim it such m o tion s to tha t con tex t.

V iew ing the P roposed Am end ed C om p la in t as the b es t s ta tem en t o f p la in t if fs ’

c la im s a s o f the tim e o f p re tria l, and g iven the c lo se re la tion sh ip be tw een the p ropo sed

p lead ing and the P ropo sed P re tria l O rde r, it like ly w ou ld se rve the in te re sts o f c la rity o f

the reco rd to g ran t the leave to amend a s reque sted , and d irec t the f iling o f the P ropo sed

Am ended C om p lain t nunc p ro tunc to N ovembe r 14 , 2002 , the da te o f the F ina l P re tria l

C on fe rence . G ran ting leave to am end on tha t basis avo ids con fu sion be tw een the Pa rt I

P la in tif f s’ c la im s a s p leaded in the o rig ina l C om p la in t and the ir c la im s a s add re ssed in the

con tex t o f p re tria l, and doe s so w ithou t rev iv ing any c la im s tha t w e re d ispo sed o f in the

cou rse o f the F ina l P re tria l C on fe rence . G ran ting leave to amend a lso se rve s to c la rify the

rema in ing p la in tif f s’ c la im s a s p leaded in Pa r t II o f the P ropo sed Am ended C om p lain t,

concern ing the en fo rcemen t o f certa in o rde rs o f the N ava jo T riba l C ou rt. The re fo re , the

cou rt conc ludes tha t its ea rlier bench ru ling conce rn ing the “P lain tiff s’ R u le 15 M o tion to

Am end and Supp lemen t C om p la in t to C on fo rm to the Ev idence & the 10 th C ir . C ou rt 10 –

7 -02 O p in ion ,” f iled N ovembe r 6 , 2002 (dk t. no . 438 ) , shou ld be vaca ted and the mo t ion

shou ld be g ran ted nunc p ro tunc to N ovem ber 14 , 2002 .

THE PART I PLA INT IFFS ’ MOT IONS FOR RECON SIDERAT ION

In the mon th s s ince the N ovembe r 2002 p re tria l con ference , cou rt and coun se l

hav e add ressed m a t ters conce rn ing the c la im s o f the rem a in ing three p la in t iff s , S inger ,

-181-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 185 of 192(cid:10)

R igg s and D ick son , and the que stion s o f N ava jo T riba l C ou rt ju risd ic tion they have

ra ised . In add ition , the cou rt ha s hea rd , con side red and ru led upon a se rie s o f mo tion s

f iled by the pa rtie s, inc lud ing a reque st fo r a se ttlemen t con ference , w h ich w a s g ran ted ,

(see M inu te En try, da ted Ju ly 6 , 2004 (dk t. no . 657 )) , bu t appa ren tly to no ava il. (See

M inu te En try, da ted Sep tem be r 28 , 2004 (dk t. no . 663 ).)

Sho r tly a f te r the repo r ted fa ilu re o f the se ttlem en t con fe rence , the P a r t I P la in t if fs ’

f iled a se rie s o f mo tion s fo r recon side ra tion o f the cou rt’s bench ru ling s a t the F ina l

P re trial C on fe rence , coup led w ith m o tion s fo r summ a ry judgm en t in favo r o f the Pa rt I

P la in tif fs pu rsuan t to Fed . R . C iv . P . 56 . (See P lain tiff V a ldez ’s M o tion fo r the C ou rt to

R econ side r its M o tion to D ism iss P la in tif f ’s V a ldez ’ D isc rim ina tion C la im s and

P la in t iff s’ C ross -M o t ion fo r Summ ary Judgm en t , f i led O c tob er 26 , 2004 (dk t . no . 664 ) ;

P la in t if f M acA r thu r ’s M o t ion fo r the C ou r t to R econ s ide r its M o t ion to D ism iss

P la in tif f ’s C la im s and P la in tif f s’ C ro ss-M o tion fo r Summ a ry Judgm en t, f iled N ovembe r

23 , 2004 (dk t. no . 670 ); P la in tif f Lym an ’s M o tion fo r the Cou rt to R econ side r its M o tion

to D ism iss P la in tif f ’s V a ldez ’ [ s ic ] D isc rim ina tion C la im s and P la in tif f s’ C ro ss-M o tion

fo r Summ a ry Judgm en t, f iled D ecem be r 28 , 2004 (dk t. no . 695 ) .) R e spon s ive

m emo randa w e re f iled by the de fendan ts , fo llow ed by the p la in tif f s’ rep ly m emo randa

and seve ra l add ition a l m o t ion s .

1 2 4

1 2 4
(See “Plaintiffs’ MacArthur, Lyman, Valdez’ Motion for Sanctions,” filed January 25, 2005 (dkt. no.
703); San Juan County Defendants’ Combined (1) Memorandum in Opposition to Plaintiff Valdez’ Motion to
Reconsider and (2) Motion for an Extension of Time to Respond to Motion for Summary Judgment, filed
(con tinued …)

-182-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 186 of 192(cid:10)

Ex cep t to th e ex ten t th a t a mo tion und er F ed . R . C iv . P . 60 (b ) o r F ed . R . C iv . P .

59 (e ) is d eem ed a “m o tion fo r recon side ra tion ,” the Fede ra l Ru les do no t exp ress ly

p rov ide fo r such mo t ion s . N eve rthe le ss , in th is c ircu it, a “mo tion fo r recon side ra tion”

m ay be m ade on one o r mo re spec if ic g rounds :

G round s w a rran ting a mo t ion to recon side r inc lude (1 ) an in te rven ing
change in the con tro lling law , (2 ) new ev idence p rev iou s ly unava ilab le , and
(3 ) the need to co rrec t c lea r e rro r o r p reven t m an ifes t in ju s tice . See
B rum a rk Co rp . v . Sam son R e sou rce s C o rp ., 57 F .3d 941 , 948 (10 th C ir.
1995 ) . Thu s , a mo t ion fo r recon side ra tion is app rop ria te w he re the cou rt ha s
m isapp rehended the fac ts , a pa rty’s po s ition , o r the con tro lling law .

Servan ts o f the Pa rac le te v . John Do es , I-XV I , 204 F .3d 1005 , 1012 (10 th C ir . 2000 ).

H e re , the Pa rt I P la in tif f s u rge recon side ra tion o f th is cou rt’s N ovembe r 15 , 2002

bench ru ling on m o s t, if no t a ll o f the ava ilab le g round s . (See M em o randum o f Po in ts

and A u tho rities Suppo rting P lain tiff V a ldez ’s M o tion fo r the C ou rt to R econ side r its

M o t ion to D ism iss P la in t if f ’s V a ldez ’ D isc rim ina t ion C la im s and P la in t if fs ’ C ross-

M o tion fo r S umm a ry Judgm en t, f iled O c tober 26 , 2004 (dk t. no . 665 ), pa ss im ; P la in tif f

M acA r thu r’s M o tion fo r the C ou rt to R econ s ide r its M o tion to D ism iss P la in tif f ’s C la im s

( …con tinued )
1 2 4
November 29, 2004 (dkt. no. 673); San Juan County Defendants’ Combined (1) Memorandum in Opposition to
Plaintiff MacArthur’s Motion to Reconsider and (2) Motion for an Extension of T ime to Respond to Cross-
Motion for Summary Judgment, filed December 13, 2004 (dkt. no. 682); Motion for an Extension of T ime to
Respond to MacArthur’s November 29, 2004 Motion for Summary Judgment (Health District), filed December
14, 2004 (dkt. no. 684); Health D istrict Defendants’ Joinder in Motion, filed December 21, 2004 (dkt. no. 690);
Motion for an Extension of Time to Respond to Lyman’s December 26, 2004 Motion for Summary Judgment
(Health District), filed January 14, 2005 (dkt. no. 699); San Juan County Defendants’ Combined (1)
Memorandum in Opposition to Plaintiff Lyman’s Motion to Reconsider and (2) Motion for an Extension of
Time to Respond to Cross-Motion for Summary Judgment, filed January 18, 2005 (dkt. no. 701); Joinder in San
Juan County Defendants’ Combined (1) Memorandum in Opposition to Plaintiff Lyman’s Motion to Reconsider
and (2) Motion for an Extension of Time to Respond to Cross-Motion for Summary Judgment, filed February 3,
2005 (dkt. no. 706).)

-183-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 187 of 192(cid:10)

and P la in tif f s’ C ro ss-M o tion fo r Summ a ry Judgm en t, f iled N ovembe r 23 , 2004 (dk t. no .

670 ), pa ss im ; M em o randum in Suppo rt o f P lain tiff Lym an ’s M o tion fo r the C ou rt to

R econ side r its M o tion to D ism iss P la in tif f ’s V a ldez ’ [ s ic ] D isc rim ina tion C la im s and

P la in t iff s’ C ross -M o t ion fo r Summ ary Judgm en t , f i led D ecem ber 28 , 2004 (dk t . no . 696 ) ,

pa ss im .) Th ey a lso ra ise add i tion a l issues no t add re ssed a t p re tria l, pa rticu la rly a s to the

na tu re o f the re lation sh ips b e tw een va riou s d e fendan ts, the ir liab ility insu re rs and the ir

coun se l o f reco rd .

The cou rt ha s rev iew ed and con s ide red the Pa rt I P la in tif f s’ m o tion s fo r

recon side ra tion and suppo rting m emo randa and exh ib its a s pa rt o f the p roce ss o f

p repar ing th is w r it ten em bod imen t of tha t ben ch ru l ing , and has re fe rred to them m o re

than on ce in the fo rego ing an a lys is o f the p la in t if fs ’ va riou s c la im s . The P a r t I P la in t if fs ’

“new ev idence p rev iou s ly unava ilab le” con s is ts la rge ly o f depo sition te stim ony o f a

S JHSD o f f ice r ob ta ined in ano the r federa l law su it re la ting conve rsa tion s abou t non –

pa rtie s , o r ev idence o f co lla te ra l m a tte rs concern ing the backg round and c red ib ility o f one

o r m o re o f the ind iv idua l de fendan ts , (e .g ., un re la ted p rio r c rim ina l conv ic tion s) . The

p lain tiff s a lso com p lain o f m a ter ials no t p roduced by the de fendan ts in d iscove ry in th is

ac tion . They a lso u se the se mo t ion s a s an oppo rtun ity to ad ju s t the ir lega l con ten tion s and

theo ries o f liab ility.

In large pa rt, how eve r, the Pa rt I P lain tiff s’ m o tion s fo r recon side ra tion sim p ly

rea rgue the same lega l c la im s g rounded upon the same fac tua l a llega tion s a s w e re se t

-184-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 188 of 192(cid:10)

fo rth in the P ropo sed Am ended Com p la in t and the P ropo sed P re tria l O rde r, and d iscu ssed

in som e de ta il a t the F ina l P re tr ia l C on fe rence .

H av ing exam ined the mo t ion s fo r recon side ra tion , the cou rt conc lude s tha t in each

in s tance , the mo t ion p re sen ts no excep tiona l c ircum s tances ju s tifying re lie f from the

cou rt’s p rio r b ench ru ling as it has been fu rthe r exp lica ted he re in . C f. Bud B rook s

T ruck ing , Inc . v . B ill H odge s T ruck ing C o ., 909 F .2d 1437 , 1440 (10 th C ir . 1990 )

(“R e lie f under R u le 60 (b ) is ex trao rd ina ry and may on ly be g ran ted in excep tiona l

c ircum stances.” ). The Pa rt I P lain tiff s h ave fa iled to po in t to “new ev idence p rev iou sly

unava ilab le” tha t m a te ria lly a lte rs the ex is ting fac tua l foo ting fo r the ir c la im s ; no r have

they e stab lished a “need to co rrec t c lea r e rro r o r p reven t m an ife st in ju s tice” a s to any

c la im tha t ha s been d ism issed on its m e rits , a s de ta iled above .

The re fo re , the Pa rt I P la in tif f s’ m o tion s fo r recon side ra tion shou ld in each in s tance

be d en ied in a l l respec ts.

1 2 5

1 2 5
The denial of plaintiffs’ motions for reconsideration renders moot their accompanying motions for
summary judgment. Thus, no further response by the defendants to the latter motions is required. (See Order re:
Pending Motions, filed March 30, 2005 (dkt. no. 718), at 5-6.)
“P laintiffs’ MacArthur, Lyman, Valdez’ Motion for Sanctions,” filed January 25, 2005 (dkt. no. 703),
shall likewise be denied.

-185-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 189 of 192(cid:10)

CONCLU SION

W ith the de te rm ina tion o f the Pa rt I P la in tif f s’ m o tion s fo r recon side ra tion and fo r

sanc tion s , th is cou rt’s con side ra tion o f the se p la in tif f s’ c la im s aga in s t the rema in ing

de fendan ts d raw s to a c lo se . B a sed upon de ta iled exam ina tion in the con tex t o f the F ina l

P re tria l C on fe rence , the Pa rt I P la in tif fs’ c la im s have been d ism issed pu rsuan t to Fed . R .

C iv . P . 16 (c )(1 ) , on the me r its and w ith p re jud ice , w ith the excep tion o f the rema in ing

sta te to rt law c laim s o f p lain tiff s M acA rthu r and Lym an fo r in ter fe rence w ith con trac t,

in te rfe rence w ith p ro spec tive bu sine ss re la tion s , de fam a tion and /o r in ten tiona l in f lic tion

o f emo tiona l d is tre ss a s aga in s t de fendan ts R edd , Jone s , Scha fer , N e lson , and B rad fo rd ,

as w e ll as de fendan ts B ron son and M a rilee B a iley (de fam a tion on ly), ove r w h ich th is

cou rt dec lines to exe rc ise supp lem en ta l ju risd ic tion , see 28 U .S .C . § 1367 (c ); tho se c la im s

sha ll be d ism issed w ithou t p re jud ice .

The c la im s a sse rted and issue s ra ised by the rema in ing p la in tif f s, S inge r, R igg s

and D ickson , and the d e fen ses and issues ra ised by the rem a in ing de f end an ts in respon se

to tho se p la in tif f s’ c la im s , cu rren tly rema in unde r adv isemen t , and w ill be add re ssed in a

sep ara te w r it ten d ispo s i tion to be issued in due cou rse . The c la im s o f p la in t iff s S inger ,

R igg s and D ick son hav ing a lready been subm itted fo r dec ision , the rem a in ing de fendan ts

need no t an sw e r o r o the rw ise re spond to the p la in tif f s’ Am ended Com p la in t, w h ich ha s

been d irec ted to be f iled he re in , nunc p ro tunc to N ovem be r 14 , 2002 .

-186-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 190 of 192(cid:10)

G ood cau se thu s appea r ing there fo r ,

IT IS ORDERED tha t the “P la in tif f s’ R u le 15 M o tion to Am end and Supp lemen t

C om p la in t to C on fo rm to the Ev idence & the 10 th C ir . C ou rt 10 -7 -02 O p in ion ,” and

“M em o randum o f Fac t and L aw in Suppo rt,” f iled N ovem be r 6 , 2002 (dk t. no . 438 ), sha ll

be and he reby is GRANTED nunc p ro tunc to N ovem ber 14 , 2002 ; the C lerk o f the C ou r t

is d irec ted to f ile the p ropo sed Am ended C om p lain t annexed the re to in the reco rd in th is

ac tion (C iv il N o . 2 :00 -CV -584BS J)

1 2 6

and en ter the sam e upon the docke t fo rthw ith ;

IT IS FURTHER ORDERED tha t the c la im s o f p la in tif f D r . S teven M acA rthu r

sh a ll be and he reby a re D ISM ISSED w ith p re jud ice as aga inst a ll o f the de fendan ts

nam ed he re in , ex cep t tha t the cou rt dec lines to exe rc ise supp lem en tal ju risd iction ove r h is

c la im s fo r in ten tiona l in te rfe rence w ith con trac t, in ten tiona l in te rfe rence w ith p ro spec tive

bu s ine ss re la tion s and de fama tion a s aga in s t de fendan ts D r . Jame s Redd , D r . L . V a l

Jone s , L au rie Scha fe r, D r . M an f red N e lson , and C lea l B rad fo rd , Ju lie B ron son and

M a ri lee B a iley, see 28 U .S .C . § 1367 (c ); tho se c la im s a re he reby D ISM ISSED w ithou t

p re jud ice ;

IT IS FURTHER ORDERED tha t the c la im s o f p la in tif f M iche le Lym an sha ll be

and he reby a re D ISM ISSED w ith p re jud ice as aga in s t a ll o f the de fendan ts named he re in ,

excep t tha t the cou rt dec line s to exe rc ise supp lemen ta l ju risd ic tion ove r he r c la im s fo r

in ten tion a l in te rfe rence w ith con t rac t, in ten tion a l in te rfe rence w ith p rospec tive bus iness

1 2 6
The caption of the Proposed Amended Complaint erroneously refers to “civil no. 92-C-1071TS ,” a
case currently assigned to Chief Judge Benson.

-187-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 191 of 192(cid:10)

re lation s, de fam a tion and in ten tiona l in f liction o f em o tiona l d istress as aga inst de fendan ts

D r . Jame s Redd , D r . L . V a l Jone s , L au rie Scha fe r, D r . M an f red N e lson , and C lea l

B rad fo rd , see 28 U .S .C . § 1367 (c ); tho se c la im s a re he reby D ISM ISSED w ithou t

p re jud ice ;

IT IS FURTHER ORDERED tha t the c la im s o f p la in tif f H e len V a ldez sha ll be

and he reby a re D ISM ISSED w ith p re jud ice as aga in s t the de fendan ts named he re in , and

in pa rticu lar de fendan ts L o ri W a llace and the San Ju an H ea lth Se rv ice s D istric t;

IT IS FURTHER ORDERED tha t P lain tiff V a ldez ’s M o tion fo r the C ou rt to

R econ side r its M o tion to D ism iss P la in tif f ’s V a ldez ’ D isc rim ina tion C la im s and

P lain tiff s’ C ro ss -M o tion fo r Summ a ry Judgm en t, filed O c tobe r 26 , 2004 (dk t. no . 664 ) , is

he reby DEN IED ;

IT IS FURTHER ORDERED tha t P lain tiff M acA rthu r’s M o tion fo r the C ou rt to

R econ side r its M o tion to D ism iss P la in tif f ’s C la im s and P la in tif f s’ C ro ss-M o tion fo r

Summa ry Judgm en t, f iled N ovem be r 23 , 2004 (dk t. no . 670 ) , is he reby DEN IED ;

IT IS HEREBY ORDERED tha t P lain tiff Lym an ’s M o tion fo r the C ou rt to

R econ side r its M o tion to D ism iss P la in tif f ’s V a ldez ’ [ s ic ] D isc rim ina tion C la im s and

P la in t iff s’ C ross -M o t ion fo r Summ ary Judgm en t , f i led D ecem ber 28 , 2004 (dk t . no . 695 ) ,

is he reby DEN IED ;

IT IS FURTHER ORDERED tha t “P la in tif f s’ M acA rthu r , Lym an , V a ldez ’

M o tion fo r Sanc tion s ,” f iled Janua ry 25 , 2005 (dk t. no . 703 ) , is he reby DEN IED ; and

-188-

Case 2:00-cv-00584-BSJ Document 742-4 Filed 06/13/2005 Page 192 of 192(cid:10)

Macro v. Independent Health Ass’n

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

CHERYL MACRO and KIM ZASTROW ,
Individually and as Representatives of a
Class of Persons Similarly Situated,

Plaintiffs,

-vs-

01-CV-0504C(SC)

INDEPENDENT HEALTH ASSOCIATION, INC.,
and INDEPENDENT HEALTH CORPORATION,

Defendants.

APPEARANCES: BROWN & KELLY, LLP (LISA T. SOFFERIN, ESQ., of Counsel),
Buffalo, New York, for Plaintiffs.

INDEPENDENT HEALTH ASSOCIATION, INC. (FREDERICK B.
COHEN, ESQ. of Counsel), Buffalo, New York, for Defendants.

INTRODUCTION

Plaintiffs commenced this action in New York State Supreme Court, Erie County,

against defendants Independent Health Association, Inc., and Independent Health

Corporation (referred to collectively herein as “Independent Health” or “defendant”) seeking

to challenge a notice of modification of medical insurance coverage for the treatment of

infertility. The case was removed by defendant to this court pursuant to 28 U.S.C. § 1441

on the basis of original jurisdiction under the Employee Retirement Income Security Act

(“ERISA”). Plaintiffs have moved pursuant to 28 U.S.C. § 1447 to remand the action to

state court, and for alternative relief should the court retain jurisdiction (Item 2). Defendant

has filed a cross-motion to dismiss or for summary judgment pursuant to Fed. R. Civ. P.

12(b) and 56(c) (Item 8). For the following reasons, plaintiffs’ motion to remand is granted.

BACKGROUND

Individual plaintiffs Cheryl Macro and Kim Zastrow are covered by medical insurance

provided under Independent Health’s Encompass Group Health Contract through their

husbands’ employer, the Tonawanda City School District. Both plaintiffs are currently

receiving medical treatment to assist conception, including the prescription drug Repronex

and intrauterine insemination (“IUI”), which is covered by Independent Health. (See Macro

and Zastrow Affs., attached to Item 1, Ex. C).1

Independent Health is a health maintenance organization (“HMO”), certified under

Article 44 of New York Public Health Law to operate in eight counties in the Western New

York region, “through which members of an enrolled population are each entitled to receive

comprehensive health services for an advance or periodic charge . . . .” N.Y. Pub. Health

Law § 4400 (see Item 11, ¶ 1). According to defendant, 80 percent of Independent Health

members are covered under group health contracts offered through their employers and

governed by the substantive provisions of ERISA (id., ¶ 20).2

1Ordinarily on a motion to remand, the court’s determination of removal jurisdiction is confined to
a consideration of the claims set forth in the “well-pleaded” complaint. See, e.g., Metropolitan Life Ins. Co.
v. Taylor, 481 U.S. 58, 63 (1987). However, in a case such as this where ERISA preemption is asserted
as the basis for removal, the court may “look beyond the face of the complaint to determine whether a
plaintiff has artfully pleaded his suit so as to couch a federal claim in terms of state law.” Jass v.
Prudential Health Care Plan, Inc., 88 F.3d 1482, 1488 (7th Cir. 1996); see also 14C Charles A. Wright,
Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3734 at 370 (in practice, federal
courts usually do not limit remand inquiry to face of complaint, but rather consider facts disclosed on
record of case as a whole).

2An “employee welfare benefit plan” governed by ERISA is defined as:

any plan, fund, or program which was heretofore or is hereafter established or maintained
by an employer or by an employee organization, or by both, to the extent that such plan,
fund, or program was established or is maintained for the purpose of providing for its
participants or their beneficiaries, through the purchase of insurance or otherwise, (A)
medical, surgical, or hospital care or benefits . . . .

(continued…)

-2-

In April 2001, Independent Health sent a notice to its group health insurance plan

subscribers advising as follows:

[W]e would like to inform you of a change to the infertility benefit, which will
not become effective until your group health plan’s renewal date, beginning
with groups that renew on July 1, 2001. As some of the other local plans
have done, Independent Health will no longer cover the treatment of infertility
as part of your group health contract, however diagnosis of infertility will be
covered as it has in the past.

(State Court Complaint, Item 2, Ex. A) (emphasis in original). Plaintiffs’ group health plan

renewal date is January 1, 2002 (Item 8, Cohen Aff., ¶ 11).

On June 25, 2001, plaintiffs commenced a proposed class action in state court on

behalf of themselves and all persons similarly situated as insured members of health plans

issued by Independent Health who are being treated for infertility or correctable medical

conditions related to infertility and have received (or will receive) the above notice (see Item

1, Ex. A). The proposed class is alleged upon information and belief to consist of more than

1,200 members (id., ¶ 6). The amended state court complaint, served and filed on July 9,

2001, sets forth eight causes of action challenging the purported exclusion of coverage for

infertility treatment on state statutory and common law grounds (id., Ex. B). Specifically, in

the first cause of action, plaintiffs allege that the exclusion violates several express

provisions of New York Insurance Law, including § 3216(i), which provides as follows:

(A) Every policy which provides coverage for hospital care shall not exclude
coverage for hospital care for diagnosis and treatment of correctable medical
conditions otherwise covered by the policy solely because the medical
condition results in infertility.

(B) Every policy which provides coverage for surgical and medical care shall
not exclude coverage for surgical and medical care for diagnosis and

2(…continued)
29 U.S.C. § 1002(1).

-3-

treatment of correctable medical conditions otherwise covered by the policy
solely because the medical condition results in infertility.

N.Y. Ins. Law § 3216(i)(13)3 (see Item 1, Ex. B, ¶¶ 20-24).

In the second cause of action, plaintiffs challenge the April 2001 notice as

discriminatory in violation of New York Insurance Law and Human Rights Law in that it

results in the provision of diminished health care benefits for persons disabled by infertility

(see Item 1, Ex. B, ¶¶ 25-31). The third cause of action seeks declaratory relief with respect

to the rights and obligations of the parties to the contract (id., ¶¶ 32-36). The fourth cause

of action seeks to enjoin the termination or modification of coverage for the treatment of

infertility or correctable medical conditions related to infertility (id., ¶¶ 37-40). The fifth

cause of action alleges that the April 2001 notice constitutes a breach of contract (id., ¶¶ 41-

44). The sixth cause of action alleges breach of the implied covenant of good faith and fair

dealing (id., ¶¶ 45-52). The seventh cause of action alleges intentional misrepresentation

3Similarly, N.Y. Ins. Law § 3221(k)(6) provides:

(A) Every group policy issued or delivered in this state which provides coverage for
hospital care shall not exclude coverage for hospital care for diagnosis and treatment of
correctable medical conditions otherwise covered by the policy solely because the
medical condition results in infertility.

(B) Every group policy issued or delivered in this state which provides coverage for
surgical and medical care shall not exclude coverage for surgical and medical care for
diagnosis and treatment of correctable medical conditions otherwise covered by the policy
solely because the medical condition results in infertility.

N.Y. Ins. Law § 4303(s) provides:

(1) A hospital service corporation or health service corporation which provides coverage
for hospital care shall not exclude coverage for hospital care for diagnosis and treatment
of correctable medical conditions otherwise covered by the policy solely because the
medical condition results in infertility.

(2) A medical expense indemnity or health service corporation which provides coverage
for surgical and medical care shall not exclude coverage for surgical and medical care for
diagnosis and treatment of correctable medical conditions otherwise covered by the policy
solely because the medical condition results in infertility.

-4-

as to the nature and extent of the coverage offered by defendant for treatment related to

infertility (including conception and pregnancy maintenance), causing plaintiffs to suffer

severe emotional distress (id., ¶¶ 53-62). The eighth cause of action, which was added by

the amended complaint, alleges that the April 2001 notice is deceptive and misleading in

violation of New York General Business Law § 349 (id., ¶¶ 63-71). Plaintiffs seek

compensatory and punitive damages “in a sum according to proof,” in addition to the

specific requests for declaratory and injunctive relief.

Meanwhile, on July 5, 2001, New York State Supreme Court Justice Joseph G.

Makowski granted plaintiffs’ application for an order to show cause why the proposed class

should not be certified and why discovery should not be expedited (Item 1, Ex. C). The

order directed Independent Health to answer the complaint by July 16, 2001, and further

directed the parties to submit responding and reply papers to the court by July 11, 2001

(id.).

On July 13, 2001, defendant served and filed a notice of removal of the action to this

court, asserting original federal jurisdiction and preemption under ERISA, 29 U.S.C. § 1001,

et seq., and/or the Health Insurance Portability and Accountability Act (“HIPAA”), 42 U.S.C.

§ 300gg, et seq. On July 18, 2001, plaintiffs filed a motion to remand the action to state

court on the ground that defendant has failed to establish removal jurisdiction, and in the

alternative for expedited class certification and discovery should the court retain jurisdiction

(see Item 3). In response, Independent Health filed a cross-motion to dismiss or for

summary judgment. Because I find remand to be appropriate, plaintiff’s motion to remand

is granted, and the court is without subject matter jurisdiction to rule on the issues raised

by defendant’s motion.

-5-

DISCUSSION

Plaintiffs contend removal of the action to this court was improper because the

causes of action set forth in the amended state court complaint are based primarily on New

York Insurance Law, and as such are not preempted by ERISA. According to plaintiffs,

because ERISA preemption does not apply, this court has no subject matter jurisdiction and

the case must be remanded to state court.

As an initial matter, when an action is removed from state court, the district court first

must determine whether it has subject matter jurisdiction over the claims before considering

the merits of a motion to dismiss, for summary judgment, or for other relief. See University

of South Alabama v. The American Tobacco Company, 168 F.3d 405, 410 (11th Cir. 1999).

If removal was inappropriate, the court must remand for lack of subject matter jurisdiction,

notwithstanding the pendency of the other motions. Id. at 411; see also Toumajian v.

Frailey, 135 F.3d 648, 655 (9th Cir. 1998) (district court should have remanded for lack of

subject matter jurisdiction and should not have dismissed on grounds of ERISA

preemption).

Under the removal statute, any civil action brought in state court may be removed by

the defendant to federal district court if the district court has original jurisdiction. 28 U.S.C.

§ 1441(a); see Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for

Southern Cal., 463 U.S. 1, 7 (1983). The defendant carries the burden of establishing

removal jurisdiction. See United Food & Commercial Workers Union, Local 919 v.

Centermark Properties Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994). “If at any

time before final judgment it appears that the district court lacks subject matter jurisdiction,

-6-

the case shall be remanded.” 28 U.S.C. § 1447(c); Franchise Tax Bd., 463 U.S. at 7.

Because of its mandatory language, and the significant federalism concerns raised by

removal jurisdiction, the federal courts are directed to construe the removal statute strictly.

See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). All doubts about

jurisdiction should be resolved in favor of remand to state court. See University of South

Alabama, 168 F.3d at 411(presumption in favor of remand is necessary because if federal

court reaches merits of pending motion in removed case where subject matter jurisdiction

is lacking, it deprives state court of its right under Constitution to resolve controversies in

its own courts; citing cases).

District courts have original jurisdiction over cases “arising under the Constitution,

laws, or treaties of the United States.” 28 U.S.C. § 1331. Under the “well-pleaded

complaint” rule, a cause of action is said to arise under federal law only if a federal question

is presented on the face of the plaintiff’s complaint. Metropolitan Life Ins. Co., v. Taylor,

481 U.S. 58, 62 (1987). Because federal preemption is a defense not appearing on the face

of the complaint, a defendant generally may not remove an action on the basis of federal

preemption. Id. However, a narrow exception to this rule exists where the “preemptive

force of a statute is so ‘extraordinary’ that it ‘converts an ordinary state common-law

complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’”

Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987) (quoting Taylor, 481 U.S. at 63-64);

see also Marcus v. AT&T Corp., 138 F.3d 46, 52 (2d Cir. 1998).

ERISA is one such statute. Taylor, 481 U.S. at 65-66. ERISA comprehensively

regulates employee welfare benefit plans, including those that provide medical care

“through the purchase of insurance or otherwise . . . .” 29 U.S.C. § 1002(1); Metropolitan

-7-

Life Ins. Co. v. Massachusetts, 471 U.S. 724, 732 (1985). The statute’s express preemption

clause provides that ERISA “shall supersede any and all State laws insofar as they may now

or hereafter relate to any employee benefits plan” covered by the Act. 29 U.S.C. § 1144(a).

A state law “‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it has

a connection with or reference to such a plan.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85,

96-97 (1983).

Claims falling within ERISA’s civil enforcement provisions4 seeking to recover

benefits, to enforce rights, or to clarify rights to future benefits under a plan covered by

ERISA are said to be “completely pre-empted.” Rubin-Schneiderman v. Merit Behavioral

Care Corp., 2001 W L 363050, at *2 (S.D.N.Y. April 10, 2001) (citing Lupo v. Human Affairs

Int’l, Inc., 28 F.3d 269, 272 (2d Cir. 1994)). That is, even if the complaint on its face makes

only state law claims, those claims are generally considered as claims arising under federal

law and removable to federal court if they seek to enforce or clarify rights under an

employee benefit plan that is covered by ERISA. See, e.g., In the Matter of Applications of

Nuclear Generation Employees Association, 145 F.Supp.2d 291, 297 (S.D.N.Y. 2001).

In support of their motion to remand, plaintiffs primarily contend that the claims in this

case are not preempted, and therefore do not arise under federal law, because they fall

within the exception provided by ERISA’s “saving clause.” Plaintiffs also contend, though

less forcefully, that their claims are not preempted because they do not “relate to” an

4Section 1132(a) provides, in pertinent part:

A civil action may be brought . . . by a participant or beneficiary . . . to recover benefits
due to him under the terms of his plan, to enforce his rights under the terms of the plan,
or to clarify his rights to future benefits under the terms of the plan . . . .

29 U.S.C. § 1132(a)(1)(B).

-8-

employee benefit plan within the scope of ERISA’s preemption clause.5 Because claims

based on state laws which purport to “regulate[ ] insurance” are not preempted “even if they

also ‘relate to’ employee benefit plans,” Shackelton v. Conn. General Life Ins. Co., 817

F.Supp. 277, 281 (N.D.N.Y. 1993), the court’s analysis will focus on the application of the

saving clause (cf., Marcella v. Capital District Physicians Health Plan, Inc., 47 F.Supp.2d

289, 293 (N.D.N.Y. 1999) (citing Shackelton)).

The saving clause, set forth at 29 U.S.C. § 1144(b)(2)(A), provides that “nothing in

[the ERISA statute] shall be construed to exempt or relieve any person from any law of any

State which regulates insurance, banking, or securities.” As explained by the Second

Circuit in Franklin H. Williams Ins. Trust v. Travelers Ins., 50 F.3d 144 (2d Cir. 1995), two

tests have been used by the courts to determine if a state law is one which “regulates

insurance” for the purpose of applying the saving clause. Id. at 150 (citing Metropolitan Life,

471 U.S. at 740 (1985)). Under the so-called “common sense” test, a court considers the

ordinary, common-sense meaning of the term “regulate,” which “lead[s] to the conclusion

that in order to regulate insurance, a law must not just have an impact on the insurance

industry, but must be specifically directed toward that industry.” Id., 50 F.3d at 150 (quoting

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 50 (1987). The second test is borrowed from

cases interpreting the McCarran-Ferguson Act, 15 U.S.C. § 1012, which subjects the

insurance industry to the federal antitrust laws. Under this test, three factors are

5At oral argument, plaintiffs cited New York State Conference of Blue Cross & Blue Shield Plans
v. Travelers Ins. Co., 514 U.S. 645 (1995), and American Drug Stores, Inc. v. Harvard Pilgrim Health
Care, Inc., 973 F.Supp. 60 (D.Mass. 1997), as general caselaw support for their contention that the state
Insurance Law provisions at issue in this case are not preempted because they do not “relate to”
employee benefit plans. Because I find that those provisions fall squarely within ERISA’s saving clause
(as demonstrated in the text infra), and are exempted from preemption even if they also “relate to”
employee benefit plans, I do not find it necessary to directly address the precedential value of these
additional cases cited by plaintiff.

-9-

considered: first, whether the practice has the effect of transferring or spreading

policyholder’s risk; second, whether the practice is an integral part of the policy relationship

between the insurer and the insured; and third, whether the practice is limited to entities

within the insurance industry. Franklin H. Williams, 50 F.3d at 149 (citations omitted).

In the Metropolitan Life case, the Massachusetts Attorney General brought suit in

state court for declaratory and injunctive relief to enforce a state statute which mandated

minimum mental healthcare benefits. Applying both a “common sense” approach and the

McCarran-Ferguson factors, the Supreme Court held that the state statute was not

preempted because it regulated insurance within the meaning of ERISA’s saving clause.

Metropolitan Life, 471 U.S. at 742-45. The Court described Massachusetts’ mandated-

benefit law as “only one variety of a matrix of state laws that regulate the substantive

content of health-insurance policies . . . ,” id. at 729, and noted that while ERISA

“establishes various uniform procedural standards” for employee benefit plans, “[i]t does not

regulate the substantive content of welfare-benefit plans.” Id. at 732 (citing Shaw, 463 U.S.

at 91). The Court also found

[no] contrary case authority suggesting that laws regulating the terms of
insurance contracts should not be understood as laws that regulate
insurance. In short, the plain language of the saving clause, its relationship
to the other ERISA pre-emption provisions, and the traditional understanding
of insurance regulation, all lead us to the conclusion that mandated-benefit
laws such as [the Massachusetts statute] are saved from pre-emption by the
operation of the saving clause.

Id. at 744.

In Franklin H. Williams, an insurance trust sued the Travelers Insurance Company

in state court seeking compensatory and punitive damages for violations of New York

Insurance Law § 3214(c), which requires interest on the proceeds of a life insurance policy

-10-

to be computed from the date of death (as opposed to the date of filing of the claim, which

was the date used by Travelers). The plaintiff also asserted common law causes of action

for breach of contract and conversion. Invoking ERISA preemption, Travelers removed the

action to federal court. Summarizing pertinent Supreme Court precedent, the Second

Circuit explained:

“ERISA preemption, without more, does not convert a state claim into an
action arising under federal law” for removal purposes. . . . [T]he “more” [is]
provided when the state claim falls “within the scope of [ERISA’s civil
enforcement provisions]. But there must first be preemption, which is a
necessary precondition to removal. Thus, when preemption is precluded by
the saving clause, removal is also barred.

Franklin H. Williams, 50 F.3d at 149 (citations omitted). Upon application of both the

“common sense” and McCarran-Ferguson tests, the Second Circuit found that § 3214(c)

was saved from preemption under § 1144(b)(2)(A). Franklin H. Williams, 50 F.3d at 149-51.

The court viewed the state insurance law provision at issue, concerning the amount of

payment to which an insured is ultimately entitled, “similar to the statute addressed in

Metropolitan Life, and . . . precisely the type of statute that Congress intended to save from

ERISA preemption.” Id. at 151. Finding the case improperly removed, the Circuit directed

remand of the entire action–statutory and common law claims alike–to state court.

Other cases decided within this circuit have followed the precedent of Metropolitan

Life and Franklin H. Williams, holding that claims brought under state statutes which

regulate insurance are not subject to ERISA preemption for the purpose of federal court

removal jurisdiction. For example, in Trapanotto v. Aetna Life Insurance Co.-Aetna Health

Plans, 1996 W L 417519 (S.D.N.Y. July 25, 1996), the plaintiff brought an action in state

court against his group health plan insurer to enforce provisions of New York Insurance Law

-11-

§§ 3216 and 3221 (the same general statues relied upon by plaintiffs in this case) which

except certain medical expenses for minors from annual deductibles and coinsurance

payments. The plaintiff also stated claims for breach of contract, common law fraud, and

unfair trade practices under New York General Business Law § 349, and styled the case as

a class action on behalf of all persons similarly situated. The insurer removed the case to

federal court, asserting ERISA preemption. The district court remanded, finding that the

state statutes relied on were not preempted because they did not sufficiently “relate to” an

employee benefits plan; and even if they did, they were exempted from preemption by

ERISA’s saving clause. The court focused primarily on § 3221, which sets forth standard

provisions, guidelines and basic requirements for insurers. First, discussing at length the

impact of the holdings in New York State Conference of Blue Cross & Blue Shield Plans v.

Travelers Ins. Co., 514 U.S. 645 (1995) (“Travelers I”), and Travelers Ins. Co. v. Pataki, 63

F.3d 89 (2d Cir. 1995) (“Travelers II”), the Trapanotto court found as follows:

Section 3221 solely targets the insurance industry. Its effect on employee
benefit plans is no different, and no more acute, than scores of New York
statutes which can be said to indirectly bring some economic pressure to bear
on the costs of health insurance. While doing nothing to further ERISA’s
primary purpose, preempting § 3221 would read the limiting “relate to”
language out of ERISA and invite, without Congressional direction,
preemption in an area traditionally left to the states.

Trapanotto, 1996 W L 417519, at *6. The court then addressed the application of the saving

clause, finding that § 3221 easily passed both the “common sense” and McCarran-Ferguson

tests. Specifically, the Trapanotto court stated that § 3221 “‘does not merely have an

impact on the insurance industry; it is aimed at it. . . .’ Therefore, even if it were sufficiently

‘related to’ employee benefit plans to trigger ERISA’s preemption clause, § 3221 would be

excepted from preemption by ERISA’s saving clause.” Id. at *7.

-12-

More recently, in Natoli v. First Reliance Standard Life Insurance Co., 2001 W L

15673 (S.D.N.Y. January 5, 2001), the plaintiff brought a state court action against his

employer’s long-term disability insurance carrier alleging that the carrier’s policy, which

limited benefits for “mental” disabilities to two years but did not limit benefits for “physical”

disabilities, violated the anti-discrimination provisions of New York Insurance Law § 4224.

The insurer removed the case to federal court, and moved to dismiss pursuant to

Rule 12(b)(6) on the basis of ERISA preemption. Recognizing the plaintiff’s apparent

concession that § 4224 “relates to” an employee benefit plan within the meaning of ERISA’s

preemption clause, the court focused on “the crux of the parties’ dispute,” i.e., whether the

statute “‘regulates insurance’ such that it escapes preemption under ERISA’s saving

clause.” Id., 2001 W L 15673, at *2. Upon application of the “common-sense” and

McCarran-Ferguson tests, the court in Natoli found the statute exempt from ERISA

preemption under the saving clause. Id. at *3-*5. The court also found no need to reach

the plaintiff’s alternative argument that his insurance law claim did not come within ERISA’s

civil enforcement provisions, id. at *5 & n. 3, and neither subject matter jurisdiction nor

supplemental jurisdiction to reach the defendant’s arguments for dismissal. Id. at *5 & n. 4.

Selby v. Principal Mutual Life Insurance Company, 2000 WL 178191 (S.D.N.Y.

February 16, 2000), is apparently the only decision thus far to have considered whether

ERISA’s saving clause applies to any of the state insurance law provisions sought to be

enforced by plaintiff in this case. Selby did not involve removal jurisdiction. Instead, the

Selbys brought suit in federal court under both ERISA and the state insurance law after their

health insurance company denied coverage for treatment related to Ms. Selby’s several

miscarriages. Specifically, Count Two of the complaint sought relief pursuant to

-13-

§ 3221(k)(6) of the New York Insurance Law, one of the provisions relied upon by plaintiffs

here. The insurer moved to dismiss Count Two on the ground that it was preempted by

ERISA. Relying on Metropolitan Life and Franklin H. Williams, and based primarily on the

defendant’s concession that § 3221(k)(6) is not preempted by ERISA because it falls within

the scope of the saving clause, the district court denied the motion to dismiss the state law

claim. The court noted in passing, “without deciding, that § 3221(k)(6) is a law regulating

insurance and thus is saved from preemption . . . [and] that the statute may also withstand

preemption because it may not ‘relate to’ employee benefit plans within the meaning of

ERISA’s preemption clause.” Selby, 2000 W L 178191, at *3 n. 6 (citing Trapanotto, 1996

WL 417519, at *5-6).

Based on this precedent, and focusing on “the crux of the parties’ dispute,” Natoli,

2001 W L 15673, at *2, I find that the state law claims set forth in plaintiff’s amended

complaint fall within ERISA’s saving clause, and are exempt from preemption. First of all,

a common-sense reading of the statutory language reveals that the Insurance Law

provisions sought to be enforced by plaintiff are clearly and obviously directed toward the

insurance industry. Each provision contains a mandatory prohibition against an insurance

policy’s exclusion of health insurance coverage for diagnosis and treatment of a correctable

medical condition solely because the condition results in infertility. As noted in the Selby

case, these provisions “regulate[ ] the substantive content of benefit plans by requiring

coverage for correctable medical conditions that result in infertility if those conditions are

otherwise covered by the plan.” Selby, 2000 W L 178191, at *3 n. 4. Under this

straightforward, “common-sense” analysis, the state law relied upon by plaintiff undeniably

regulates insurance. See Trapanotto, 1996 W L 417519, at *7 (N.Y. Ins. Law § 3221 “does

-14-

not merely have an impact on the insurance industry; it is aimed at it.”) (quoting FMC Corp.

v. Holliday, 498 U.S. 52, 61 (1990)).

In addition, the three McCarran-Ferguson factors are met. First, each Insurance Law

provision cited by plaintiff prohibits medical insurance carriers from excluding coverage for

certain conditions, thereby increasing the cost of the policy and ultimately having the effect

of transferring or spreading the cost – and the risk – among policyholders. Second, since

the prohibition is framed in mandatory language, it constitutes “an integral part of the policy

relationship between the insurer and the insured.” In Metropolitan Life, the Supreme Court

held that a statute meets this prong if it “limit[s] the type of insurance that an insurer may

sell to the policyholder.” 471 U.S. at 743. Sections 3216(i)(13), 3221(k)(6) and 4303(s)

satisfy this criterion by prohibiting the exclusion of coverage for treatment of a correctable

medical condition solely because the condition results in infertility. Third, because these

provisions directly regulate the terms of health insurance policies, rather than express a

general rule of law, they are “limited to entities within the insurance industry.” Cf. Franklin

H. Williams, 50 F.3d at 150 (“At a minimum, there is no clear failure to satisfy any

McCarran-Ferguson standard in this case.”). Finally, defendant has cited “[no] contrary

case authority suggesting that [the state insurance laws relied on by plaintiffs] should not

be understood as laws that regulate insurance.” Metropolitan Life, 471 U.S. at 744.

Seeking to bolster the argument for remand, plaintiffs additionally contend that the

group health care plan under which they are covered, maintained for the employees of the

Tonawanda City School District, is a “governmental plan” as defined at 29 U.S.C.

-15-

§ 1002(32),6 and exempt from ERISA’s coverage pursuant to 29 U.S.C. § 1003(b)(1).7

Indeed, this was the holding of United States Magistrate Judge Leslie G. Foshio in Clark v.

Group Plan for Employees of North Tonawanda Public Schools, 845 F.Supp. 117 (W.D.N.Y.

1994), with respect to a self-insured group health plan formed by the North Tonawanda

Public Schools for the benefit of its employees. See id. at 120 (citing Feinstein v. Lewis,

477 F.Supp. 1256 (S.D.N.Y. 1979) (employee benefits plans established under collective

bargaining agreements between union and school districts, funded entirely by employees,

are governmental plans exempted from ERISA), aff’d, 622 F.2d 573 (2d Cir. 1980);

Lovelace v. Prudential Insurance Company of America, 775 F.Supp. 228 (S.D.Ohio 1991)

(same for plan covering city public school system employees, even though plan was issued

and administered by private insurer); see also Opinion of U.S. Department of Labor, Office

of Pension and Welfare Benefit Programs, No. 79-83A (November 20, 1979) (Health and

Welfare Fund of the Philadelphia Federation of Teachers, which provided health, disability,

retirement, and death benefits to employees and their families, held to be a governmental

plan within the meaning of ERISA)).

Despite ample opportunity to do so, defendant has not come forward with any

explanation as to why the group health care plan maintained for the employees of the

629 U.S.C. § 1002(32) provides:

The term “governmental plan” means a plan established or maintained for its
employees by the Government of the United States, by the government of any State or
political subdivision thereof, or by any agency or instrumentality of any of the foregoing.
. . . .

729 U.S.C. § 1003(b)(1) provides:

The provisions of [ERISA] shall not apply to any employee benefit plan if . . . such plan is
a governmental plan (as defined in section 1002(32) of this title) . . . .

-16-

Tonawanda City School District should not be subject to the same exemption from ERISA

as the plan maintained for the employees of the North Tonawanda Public Schools.

Accordingly, based on the authority of Clark v. Group Plan for Employees of North

Tonawanda Public Schools and the cases cited therein, I agree that the group health care

plan under which the individual plaintiffs are covered is a “governmental plan” as defined

at 29 U.S.C. § 1002(32), and is exempt from ERISA’s coverage pursuant to 29 U.S.C.

§ 1003(b)(1).

Plaintiffs also contend their claims are not preempted because Independent Health

is not a “fiduciary” against whom suit can be brought under ERISA, citing Pegram v.

Herdich, 530 U.S. 211 (2000). In light of the court’s finding that the claims fall within the

saving clause, as well as defendant’s concession of this point (see Item 22, p. 3 n. 1), I find

it unnecessary to address this contention.

Finally, defendant argues that even if the claims of the named representative

plaintiffs are not preempted, the amended complaint makes allegations on behalf of

prospective class members that implicate ERISA plans. The same argument was expressly

rejected by the court in Berthelot v. Stallworth, 2000 WL 222155 (E.D.La. February 18,

2000), a case cited by both parties. As noted in Berthelot, prior to class certification

pursuant to Fed. R. Civ. P. 23, the only plaintiff before the court is the representative party.

Id. at *2. “Consequently, a court without jurisdiction over the claims of the named party

likewise has no jurisdiction over the claims as they pertain to the prospective class. Id.

(citing Board of School Comm’rs of City of Indianapolis v. Jacobs, 420 U.S. 128 (1975)).

As stated in Berthelot, “[t]he court’s ability to assert jurisdiction over potential members of

a potential class is irrelevant for purposes of determining whether this court has federal

-17-

question jurisdiction over this matter . . . because none of these individuals with ERISA

plans are before the court.” Id.

Based on this analysis, I find that plaintiffs’ claims are saved from ERISA preemption

under 29 U.S.C. § 1144(b)(2)(A), and are exempt from ERISA regulation under 29 U.S.C.

§ 1003(b)(1). Defendant has therefore failed to meet its burden of establishing removal

jurisdiction based on a cause of action arising under federal law. Accordingly, the court is

without jurisdiction to consider defendant’s motion to dismiss, removal was improper, and

the entire case must be remanded to state court for lack of subject matter jurisdiction.

CONCLUSION

Based on the foregoing, plaintiffs’ motion (Item 2) to remand the case to New York

State Supreme Court is granted. The Clerk of the Court is directed to take whatever steps

may be necessary to cause the remand, and to close the file. Defendant’s cross-motion to

dismiss (Item 8) is hereby rendered moot.

So ordered.

Dated: October 25, 2001

JOHN T. CURTIN
United States District Judge

-18-

Maheshwari v. Governing Bd. of Sharp Mem’l Hosp.

Maheshwari v. Governing Bd. of Sharp Mem’l Hosp.,

No. D039509 (Super. Ct. No. GIC771148) (Cal. Ct. App. Apr. 10, 2003)

A
hospital denied a physician’s application based on concerns about the quality
of care he provided at another hospital, and because the physician did not provide
sufficient information along with his medical staff application to allow the
hospital to perform a complete evaluation of his qualifications. The California
Court of Appeal affirmed the judgment of the Hospital Hearing Panel, Governing
Board, and trial court. The court determined that the hospital did not act arbitrarily
and capriciously in denying the physician’s application, because the hospital
attempted to obtain all relevant information before it made a decision on the
application, and it was the physician’s own noncompliance that hindered these
efforts. The court also held that the physician’s refusal to provide the requested
patient information was not justified, and the hospital was within its rights
to consider this lack of cooperation in refusing to grant privileges.

Machamer v. Hospital of the University of Pennsylvania

Machamer v. Hospital of the University of
Pennsylvania,
No. 98-6109 (E.D. Penn. May 8, 2000)

Plaintiff sustained a back injury while performing her duties
as a nursing assistant. Once she was cleared by a
physician to return to work, she was placed back on
the day shift for training and observation so that
she could successfully complete her post-hiring
probationary period. Shortly thereafter, however,
plaintiff was terminated because of two patient care
incidents that the defendant believed threatened the
well-being of patients. The nurse filed suit under
the Americans with Disabilities Act (ADA) claiming
that she was terminated due to her disability and
that the defendant refused to accommodate her
disability by transferring her to the less rigorous
night shift. The court granted summary judgment to
the defendant holding that the plaintiff did not
prove that she was “disabled” within the
meaning of the ADA, pointing to uncontested evidence
that the plaintiff had been cleared by a physician
to return to work without any restrictions. The
court also held that the plaintiff presented no
evidence to contest the defendant’s position that
she was terminated because of the two incidents in
which her actions threatened the well-being of
patients under her care.

Madsen v. Audrain Health Care

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________

No. 01-3252
___________

Kurt R.E. Madsen, D.O.,

Appellant,

v.

Audrain Health Care, Inc., doing
business as Audrain Medical
Center, Joseph A. Corrado, M.D.,
Michael D. Jones, M.D.,

Appellees.

*
*
*
*
* Appeal from the United States
* District Court for the Eastern
* District of Missouri.
*
*
*
*
*
___________

Submitted: April 18, 2002

Filed: July 18, 2002
___________

Before WOLLMAN, BEAM, and LOKEN, Circuit Judges.
___________

BEAM, Circuit Judge.

Appellant Dr. Kurt Madsen appeals the order of the district court dismissing
each count in his complaint. Upon review de novo, we affirm in part and reverse in
part.

I.

BACKGROUND

For purposes of our review, we accept as true the factual allegations in
Madsen’s complaint. Botz v. Omni Air Int’l, 286 F.3d 488, 490 (8th Cir. 2002). Dr.
Madsen is a licensed physician specializing in orthopedics medicine who worked in
Mexico, Missouri, for Audrain Health Care, Inc. In his complaint, Madsen alleges
that on August 14, 1997, he entered into a contract (“Physician Agreement”) with
Audrain, which provided for Madsen to establish an orthopedic medical practice in
Mexico in return for a guaranteed minimum income paid by Audrain. On September
1, 1998, Madsen applied for and was granted medical staff privileges at the hospital.
On September 24, 1998, Madsen alleges that Dr. Corrado and Dr. Jones, Chief of
Staff and Chief of Surgery at Audrain respectively, contacted him with concerns they
had regarding Madsen’s practice and skills. Madsen further alleges that on November
19, 1998, he was again called to meet with Corrado, Jones, and Garf Thomas,
Audrain’s administrator, to further discuss these concerns. Following these
communications, the hospital brought a complaint against Madsen before the Medical
Staff Executive Committee. Madsen alleges that the Executive Committee made
certain adverse recommendations in response to the complaint and forwarded its
report to Audrain’s Medical Staff Board of Directors for approval.

When Madsen received notice of the Executive Committee’s adverse
recommendations, he requested a hearing before an ad hoc committee of Audrain’s
Medical Staff, as provided for in the Medical Staff Bylaws. At this hearing, held
February 25, 1999, the only evidence presented by Jones, Corrado, and the hospital,
was Jones’ statement. Madsen points out in his complaint that he presented several
witnesses, including a Board Certified Orthopedic Surgeon who reviewed every
patient chart at issue and found no indication of any need to reduce Madsen’s
privileges. Following this hearing, the Executive Committee’s recommendation
remained adverse to Madsen. Madsen sought appellate review before the Board,
which concluded that the recommendations were “justified and not arbitrary or

-2-

capricious” and therefore adopted them as a final decision. Madsen was notified on
May 5, 1999. This final Board action was reported to the Missouri State Board of
Registration for the Healing Arts and the National Practitioner Data Bank.

Madsen alleges that as a direct result of the defendants’ wrongful acts, he was
forced to close his profitable practice in Missouri and relocate to Indiana. Count I of
Madsen’s complaint alleges that Audrain breached the Physician Agreement by
causing his privileges at Audrain to be adversely impacted, thus terminating Audrain’s
obligation to guarantee compensation to Madsen. Madsen brings Count II against all
defendants alleging that they tortiously interfered with his business relationships and
expectancies with his patients. Count III, against Audrain, alleges that Audrain’s
Medical Staff Bylaws constitute a contract between Audrain and Madsen and that
Audrain breached this contract. Count IV, against Jones and Corrado, alleges that
they conspired to cause Audrain to breach and terminate the Physician Agreement.
In Count V, Madsen alleges that Jones and Corrado conspired to cause Audrain to
breach and terminate the Medical Staff Bylaws, which Madsen claims support a
contractual relationship between the parties. Madsen seeks a declaratory judgment
in Count VI, declaring that the adverse decision is unjustified, arbitrary, and
capricious. Madsen further requests that this declaratory judgment be communicated
to the Missouri Board of Registration for the Healing Arts, the National Practitioner
Data Bank, and all other persons or entities to whom such adverse decision was
communicated. Finally, in Count VII, Madsen alleges that all of the defendants
maliciously communicated false information about him to others, including actual and
potential patients and state and federal agencies, damaging his reputation and earning
potential.

II.

DISCUSSION

We review de novo the district court’s grant of the defendants’ 12(b)(6) motion
to dismiss. Omni, 286 F.3d at 491. We construe Madsen’s complaint in the light

-3-

most favorable to him and determine whether he can prove any set of facts that would
entitle him to relief. Id.

A.

Count IV

Before we reach the merits of this appeal, we must first resolve the unique
procedural posture created by the district court’s dismissal of Count IV at Madsen’s
request. Count IV, which survived the defendants’ motion to dismiss, alleges that
defendants Jones and Corrado individually conspired to cause Audrain to breach and
terminate the Physician Agreement with Madsen. Although this count was not
dismissed by the district court in its December 7, 1999, memorandum and order,
Count IV was later dismissed without prejudice per Madsen’s suggestion at a hearing
concerning Madsen’s motion to alter or amend judgment.1 Although the district court
did not clearly articulate the basis for the dismissal of Count IV in its order, we
presume that this dismissal was entered pursuant to Federal Rule of Civil Procedure
41(a) (2), which allows for dismissal of actions by court order. Madsen’s intentions
with respect to Count IV are unclear.

Clearly Madsen sought dismissal of Count IV to allow immediate appeal of the
court’s otherwise interlocutory order when the district court denied Madsen’s request
to amend the earlier dismissal of all other counts. During briefing and at oral
argument, Madsen only sought reinstatement of Counts I, II, III, V, VI and VII. The

1Madsen boldly challenges the “flawed logic” of the district court in that it
dismissed Count I of the complaint, which alleged breach of contract with regard to
the Physician Agreement, while allowing Count IV, which alleged tortious
interference with that same agreement by Drs. Jones and Corrado. Madsen’s own
logic eludes us. Count I was dismissed because a private hospital has discretion
regarding its exclusion of a physician or surgeon from practicing therein. This
certainly does not mean the Physician Agreement is wholly unenforceable in other
respects.

-4-

question before us is whether the district court abused its discretion when it dismissed
Count IV without prejudice for the purpose of allowing Madsen to appeal the
dismissal of the remaining claims. See Great Rivers Coop. v. Farmland Indus., Inc.,
198 F.3d 685, 689 (8th Cir. 1999). Our precedent in this type of case does not bode
well for Madsen. In fact, “[i]n most cases . . . a district court does abuse its discretion
when it frustrates the limitations on federal appellate jurisdiction by entering a Rule
41(a)(2) order dismissing remaining claims without prejudice for the purpose of
facilitating the immediate appeal of an earlier interlocutory order.” Id. at 689-90.

Under these circumstances, the question of remedy looms. “In most cases, the
proper remedy will be to reverse the Rule 41(a)(2) order and remand for completion
of the case, without considering the merits of the earlier interlocutory order(s).” Id.
at 690. We may also deem the ambiguous voluntary dismissal of Count IV to be with
prejudice and go on to consider the appeal from the district court’s dismissal of all
remaining claims. Id.; see also Minnesota Pet Breeders, Inc. v. Schell & Kampeter,
Inc., 41 F.3d 1242, 1245 (8th Cir. 1994). Madsen may not evade the final judgment
requirement of Federal Rule of Civil Procedure 54(b) by seeking a non-prejudicial
dismissal of Count IV. Minnesota Pet Breeders, 41 F.3d at 1245. Under this rubric,
we choose the latter remedy, discussed at oral argument,2 and deem Madsen’s request
for dismissal of Count IV to be with prejudice.

B.

Counts I and II

In addressing Counts I and II of Madsen’s complaint, the district court turned
to Cowan v. Gibson, 392 S.W.2d 307 (Mo. 1965). In Cowan, a physician who had

2Madsen was notified at oral argument of the risk of losing Count IV altogether
if he proceeded under the current procedural posture. He assured the court that
treating Count IV as being dismissed with prejudice would not hurt the case and
proceeded to argue, as he did in briefing, what he considers to be the “meat of the
case.”

-5-

been denied reinstatement to a hospital’s medical staff alleged a wrongful conspiracy
to exclude him and to injure him in the practice of medicine. Id. at 308. The
Missouri Supreme Court reiterated the general rule that “‘the exclusion of a physician
or surgeon from practicing [in a private hospital] is a matter which rests in the
discretion of the managing authorities.'” Id. (quoting Annotation 24 A.L.R.2d 850,
852). However, Cowan was not “a suit between the doctor and the hospital or its
governing board or staff alone in their hospital character and capacities.” Id. at 309.
Because the physician named two doctors in their individual capacity alleging “that
the two doctors in their personal professional capacities conspired with hospital board
members to the end and for the purpose of interfering with Dr. Cowan and his
contractual rights with his patients all to their financial advantage–all of which [was]
outside the operation and government of the hospital,” the allegations fell outside of
the general rule and the case was remanded. Id.

In Count I, Madsen alleges breach of contract by the hospital with respect to
the Physician Agreement. Count II alleges tortious interference with business
relationships against all defendants. As explained by the district court, nothing in
Madsen’s complaint removes it from the general rule that the exclusion of a physician
from practicing in a private hospital is a discretionary matter resting with the
managing authorities. Id. at 308. This is a suit between a doctor and the hospital and
its governing staff in their hospital character and capacities. Further, contrary to
Madsen’s argument, no factual determination is required. The construction of an
unambiguous contract is a question of law for the court. Contract Freighters, Inc. v.
J.B. Hunt Transport, Inc., 245 F.3d 660, 663 (8th Cir. 2001) (applying Missouri law).
The Physician Agreement provides that if Madsen loses staff privileges at Audrain,
such action terminates the agreement. Thus, termination is not a breach of contract,
but instead, is expressly provided for in the contract. The rule from Cowan applies
and Counts I and II were appropriately dismissed.

-6-

C.

Counts III and V

The district court determined that the Medical Staff Bylaws were not
incorporated into the Physician Agreement and dismissed Counts III and V
accordingly. We agree with the reasoning of the district court as to these counts. The
mere reference in the Physician Agreement to the Medical Staff Bylaws does not
create a contractual relationship between Madsen and Audrain with regard to those
Bylaws in their entirety. The Medical Staff Bylaws were not incorporated into the
Physician Agreement, as Madsen argues, and are not part of the terms of the contract
that existed between these parties. Accordingly, there is no basis for Madsen’s claims
of breach of contract or tortious interference with the Medical Staff Bylaws.

In Zipper, D.O. v. Health Midwest, 978 S.W.2d 398 (Mo. Ct. App. 1998), the
Missouri court held that “hospital bylaws cannot be considered a contract under
Missouri law because consideration is lacking.” Id. at 416. Madsen correctly notes
that in some instances a hospital can be subjected to contractual enforcement of its
Medical Staff Bylaws if a contractual relationship is established in a separate
document. Id. at 417. However, like in Zipper, procedures purportedly available to
Madsen through Audrain Bylaws are not set forth in a separate document. The
limited reference to the Bylaws in the Physician Agreement is insufficient to support
the creation of a separate contractual relationship. Madsen alleges that the Medical
Staff Bylaws were incorporated in three ways–by way of the implied terms of the
contractual relationship of the parties, directly incorporated in the Physician
Agreement, and by subsequent agreements of the parties. We disagree.

Any reference to the Bylaws in the Physician Agreement is cursory, and only
then articulates what Madsen’s responsibilities are in relation to his contracted
obligations. For example, the Physician Agreement in section 1.2 states that “[d]octor
shall perform the duties described in this Section 1.2, and such duties shall be
performed, in accordance with the bylaws, policies and rules of the Hospital and the

-7-

Medical Staff.” Requiring that Madsen act in accordance with the Medical Staff
Bylaws is hardly incorporation of the Bylaws in their entirety, binding both parties.
Further, the fact that the Medical Staff Bylaws were specifically binding on Madsen
as part of the contractual relationship, does not necessarily mean that the parties
reciprocally contracted for the same as to Audrain. “There is no necessity ‘that for
each stipulation in a contract binding the one party there must be a corresponding
stipulation binding the other.'” Laclede Gas Co. v. Amoco Oil Co., 522 F.2d 33, 36
(8th Cir. 1975) (quoting James B. Berry’s Sons Co. v. Monark Gasoline & Oil Co.,
32 F.2d 74, 75 (8th Cir 1929). So even recognizing the potential for hospitals to
separately create a contractual relationship with their physicians under their bylaws,
it did not exist in this instance.

Finally, Missouri law in this respect is clear. The expressed policy in Missouri
is the assurance of quality health care, which is unduly impinged by allowing a
physician to seek damages for an alleged failure of a hospital to follow the procedures
established by its bylaws. Zipper, 978 S.W.2d at 417. The district court
appropriately dismissed Counts III and V of Madsen’s complaint.

D.

Counts VI and VII

The district court dismissed Madsen’s Count VI, seeking a declaratory
judgment, and Count VII, which alleges that all defendants committed slander,
holding that the rule in Cowan requires dismissal of both counts. Cowan certainly
addresses Count VI of Madsen’s complaint but we fail to see how Cowan is
instructive on Count VII.

In Count VI, Madsen alleges that the decision adverse to Madsen should be
declared unjustified, arbitrary and capricious, and ordered to be set aside in toto, and
that such finding be communicated to the Missouri Board of Registration for the
Healing Arts, the National Practitioner Data Bank and all other persons or entities to

-8-

whom such adverse decision was communicated. Because we previously determined
that nothing in Madsen’s complaint removes it from the general rule that the exclusion
of a physician from practicing in a private hospital is a discretionary matter resting
with the managing authorities, there is no support for a declaratory judgment in this
regard. As such, we affirm the district court’s dismissal of Count VI.

As to Count VII, we must remember at what stage of the proceedings these
determinations are being made. “In reviewing a motion to dismiss, we construe the
complaint liberally, taking all factual allegations as true, and ‘will affirm only if it
appears beyond doubt that [the plaintiff] cannot prove any set of facts in support of
[the] claim which would entitle [him] to relief.'” Turner v. Holbrook, 278 F.3d 754,
757 (8th Cir. 2002) (quoting Sisley v. Leyendecker, 260 F.3d 849, 850 (8th Cir.
2001)). Further, “[a]t the pleading stage, ‘we “presum[e] that general allegations
embrace those specific facts that are necessary to support the claim.”‘” American
Canoe Ass’n, Inc. v. E.P.A., 289 F.3d 509, 512 (8th Cir. 2002) (quoting Bennett v.
Spear, 520 U.S. 154, 168 (1997) (quoting Lujan v. Defenders of Wildlife, 504 U.S.
555, 561 (1992)). Given the legal standard at this stage in the proceedings, we find
no basis for the dismissal of Count VII. Madsen properly alleges each element of his
slander claim in his complaint. Cowan is wholly inapplicable in this regard and the
district court did not provide any explanation illuminating its conclusion that Cowan
provided the basis for its dismissal of Count VII.

The general rule that “‘the exclusion of a physician or surgeon from practicing
[in a private hospital] is a matter which rests in the discretion of the managing
authorities,'” Cowan, 392 S.W.2d at 308 (quoting Annotation 24 A.L.R.2d 850, 852),
would not dispose of a claim of slander such as that raised by Madsen in Count VII.
At the very least, we cannot state with certainty at this stage that Madsen is unable

-9-

to prove any set of facts that would entitle him to relief.3 Accordingly, we reverse
the district court’s dismissal of Count VII.

III. CONCLUSION

The district court properly dismissed Counts I, II, III, V, and VI of Madsen’s
complaint. We reverse the district court’s dismissal of Count VII and deem Count
IV dismissed with prejudice.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

3Defendants argue that the Health Care Quality Improvement Act, 42 U.S.C.
§ 11101 et seq., grants immunity from any civil liability in this case. However,
“HCQIA immunity is a question of law for the court to decide and may be resolved
whenever the record in a particular case becomes sufficiently developed.” Bryan v.
James E. Holmes Reg’l Med. Ctr., 33 F.3d 1318, 1332 (11th Cir. 1994). We have no
record to speak of on a motion to dismiss, thus any analysis in this regard is
premature.

-10-

Maheshwari v. Vista Hosp. Sys., Inc.

Filed 9/9/03 Maheshwari v. Vista Hospital Systems CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified
for pub l icat ion or ordered pub l ished , e xcept as spec if ied by ru le 977(b) . Th is op in ion has not been cert if ied for
pub l icat ion or ordered pub l ished for purposes of ru le 977 .

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

Plaintiff and Appellant,

B.D. MAHESHWARI,

v.

VISTA HOSPITAL SYSTEMS, INC. et al.,

Defendants and Respondents.

E031768

(Super.Ct.No. RIC296142)

O P I N I O N

APPEAL from the Superior Court of Riverside County. Sharon J. Waters, Judge.

Affirmed.

B.D. Maheshwari in pro. per. and Philip L. Merkel for Plaintiff and Appellant.

Horvitz & Levy, David M. Axelrad, and Tracy L. Turner; LaFollette, Johnson,

DeHaas, Fesler, Silberberg & Ames, and Robert C. Shephard for Defendants and

Respondents Vista Hospital Systems, Inc. et al.

Horvitz & Levy, David M. Axelrad and Tracy L. Turner; D’Antony, Poliquin & Doyle,

and David Tredway; LaFollette, Johnson, DeHaas, Fesler, Silberberg & Ames and Robert C.

Shephard for Defendants and Respondents Richard Rouhe and Terry L. Sanderfer.

1

Plaintiff and appellant B.D. Maheshwari, M.D. (plaintiff) appeals from a judgment

entered in favor of defendants and respondents (1) Vista Hospital Systems, Inc., dba Corona

Regional Medical Center (Vista), (2) Corona Regional Medical Center (the hospital), (3)

Marlene Woodworth, CEO of the hospital, (4) Jan Henderson, Supervisor of the hospital’s

intensive care unit, (5) Nancy Bakewell, Manager/Director of the hospital’s emergency

room, (6) Scott Gross, President and CEO of Primus Management, Inc., which managed the

hospital, (7) Terry L. Sanderfer, M.D., and (8) Richard Rouhe, M.D. We shall affirm the

judgment.

FACTUAL AND PROCEDURAL HISTORY

I. Factual History

Plaintiff is a staff internist and cardiologist at the hospital. At the time of trial, he

was the Chief of the Department of Medicine at the hospital, and headed the medical staff’s

bylaws committee.

On February 27, 1996, nurse Diane Walsh and plaintiff were working together in the

emergency room at the hospital. When plaintiff walked up to t he nurses’ station, Walsh

asked him whether he had brought any “candy and stuff” for the nurses that day. Plaintiff

responded, “I brought myself. I know your needs. I know you love it.” Nancy Bakewell,

Walsh’s supervisor and the nurse manager of the emergency room, overheard plaintiff’s

comment and watched Walsh’s reaction. Walsh appeared embarrassed and upset.

Later that day, Bakewell discussed the incident with Walsh. Walsh told Bakewell

that plaintiff’s comment embarrassed her and that “Dr. Mahe shwari is always making

statements like this when [I’m] in PCU and no one has been able to stop him.” Because

2

plaintiff’s comment had a sexual connotation and had embarrassed Walsh, Bakewell

concluded it was a violation of the hospital’s sexual harassment policy.

Bakewell prepared a written report about the incident, referred to in hospital

documents and throughout this proceeding as a “statement of concern.” Bakewell presented

the statement of concern to her immediate supervisor, Jan Henderson. Henderson told

Bakewell that the human resources department would need to investigate. Bakewell gave

the statement of concern to the human resources department, and it was then forwarded to

the hospital’s chief executive director, Marlene Woodworth.

At Woodworth’s direction, a human resources representative, Diane Cox,

interviewed Bakewell and Walsh. Both Bakewell and Walsh told Cox that they had

repeatedly heard sexually charged comments by plaintiff, and that they were bothered by the

comments. Bakewell al so gave the names of two other female employees who had

complained to Bakewell about plaintiff’s behavior. When Cox interviewed these two

employees, they confirmed that plaintiff frequently made comments containing sexual

innuendoes. For example, one female employee reported that plaintiff had told her, “You

probably want my body.” Cox memorialized these interviews in a written memorandum to

Woodworth. Cox did not have authority to interview plaintiff or recommend action against

him because medical staf f issues are handled by the medical executive committee

(executive committee). Nevertheless, in Cox’s memorandum, she requested that

Woodworth follow up on the statement of concern by discussing it with the Chief of Staff,

Dr. Gupta.

3

Woodworth and Dr. Gupta discussed the statement of concern and Cox’s interviews,

and decided that they should meet with plaintiff. On March 29, 1996, they showed the

statement of concern and the Cox memorandum to plaintiff. (Plaintiff, however, testified

that he was not shown the memorandum until later.) At that meeting, plaintiff denied that he

had made the comments that Bakewell, Walsh and the two other female employees had

attributed to him. Incongruously, however, he also remarked, “Well, Marlene, I’ve made

you blush too,” and reminded Woodworth of comments he had made in the past about her

clothing and jewelry. Although Woodworth had not been offended by the comments at the

time they were made, she was offended when plaintiff raised them at the meeting because

she be lieved plaintiff was trying to make her feel uncomfortable.

Woodworth told plaintiff that his remarks had offended Walsh and the other female

employees, and asked him to refrain from any such behavior in the future. She reminded

him that the employees are entitled to a harassment -free working environment and gave him

a copy of the hospital’s sexual harassment policy. No further action was planned, and

Woodworth and Dr. Gupta considered the matter concluded.

On March 30, 1996, using the letterhead of his law office (plaintiff has been a

lawyer since 1989), plaintiff wrote to Dr. Gupta and accused the nurses of retaliating

against him for complaining about mismanagement in their department. Plaintiff asked Dr.

Gupta to take up “this matter” with the executive committee.

Granting plaintiff’s request, Dr. Gupta called for a special meeting of the executive

committee on April 19, 1996. At the meeting, plaintiff spoke first and requested the

committee to conduct an investigation into the allegations against him. Then, Woodworth

4

related the contents of the statement of concern Bakewell had prepared concerning the

Walsh incident. Woodworth also mentioned that plaintiff had been the subject of similar

complaints in 1992, and recommended that any investigation by the committee include

those incidents as well. The executive committee voted to create an ad hoc committee to

interview the employees and report back to the executive committee.

The members of the ad hoc committee were Drs. Young, Rouhe, Sanderfer,

Plasencia and Silva. Dr. Silva, however, did not participate. The ad hoc committee

interviewed Bakewell, Walsh, Henderson, and Karen Voyer (one of the female employees

who had informed Cox about plaintiff’s inappropriate comments). The committee came to

a consensus that the allegations against plaintiff were credible. The ad hoc committee

reported its findings to the executive committee on June 19, 1996, but it did not

recommend any particular disciplinary action.

After some discussion, the executive committee decided that a letter of reprimand

could be warranted. Before making that decision, however, the committee wanted to hear

from plaintiff. Dr. Gupta invited plaintiff to address the executive committee on June 27,

1996, and provided one week’s notice of the meeting. Plaintiff appeared, but claimed that

he “[did] not remember what happened.” Plaintiff also demanded to see the ad hoc

committee’s documents before responding. The executive committee decided to

reconvene after giving plaintiff an opportunity to review the documents. Because the

executive committee did not want copies of the documents to leave the hospital, it told

plaintiff that he could review the documents in the medical staff office at his convenience.

5

Thereafter, in a letter to Dr. Gupta, plaintiff refused to appear for the rescheduled

meeting unless copies of the documents were sent to his office. Dr. Gupta refused

plaintiff’s demand, but reiterated that plaintiff could review the documents at the hospital.

Plaintiff neve r took advantage of the executive committee’s offer.

Plaintiff did, however, appear at the rescheduled executive committee meeting on

July 17, and received the documents at that time. Plaintiff reviewed the documents prior to

being interviewed by the executive committee. Plaintiff then gave his response to the

allegations — that the nursing staff was “out to get him” and he never made any inappropriate

comments. Thereafter, the executive committee discussed and voted on what action, if any,

to take. The members voted overwhelmingly to send plaintiff a warning letter. The vote

would have been unanimous, except that plaintiff’s son, who was a member of the executive

committee, abstained from voting.

The executive committee needed approval from the hospital’s governing board

before it could send the warning letter to plaintiff. Dr. Gupta and Woodworth presented the

case to the hospital’s governing board. The governing board approved the letter, and it was

sent to plaintiff on July 30, 1996. The letter stated the executive committee’s conclusion

that plaintiff had made offensive comments to hospital personnel and instructed plaintiff as

follows: “You must be more sensitive to what is offensive to other people, and cease

making these types of statements in the future.” Further offensive comments, the letter

warned, would require corrective action. The letter closed with an offer to assist plaintiff in

seeking counseling if necessary.

6

After receiving the letter, plaintiff demanded that all documents relating to the

investigation be sent to him, and that he be informed as to how each member of the ad hoc

committee voted. Plaintiff also demanded a judicial review committee (JRC) hearing,

“[e]ven if such a hearing is not normally provided for in the Medical Staff Bylaws.”

The executive committee discussed plaintiff’s demands at its next meeting. It made

the following findings: (1) plaintiff had been offered the opportunity to review all

documents relating to the investigation prior to the July 17 me eting but he declined to do

so; (2) plaintiff had the opportunity to review the documents at the July 17 meeting prior to

addressing the executive committee; (3) plaintiff had previously received copies of the

human resources documents which summarized the allegations against him; (4) the ad hoc

committee’s interview, discussions and minutes were part of peer review proceedings and,

as such, were protected from discovery under Evidence Code section 1157; and (5) a

written reprimand did not entitle plaintiff to a JRC hearing under the medical staff bylaws.

Plaintiff was informed of these findings in writing on September 3, 1996.

On October 5, 1996, the Vista board asked its Health Care Management Executive,

Scott Gross, to report on the executive committee’s investigation and course of action.

(The hospital is part of Vista’s hospital systems, which has its own governing board. Vista

has the right to ratify the executive committee’s action or require it to undertake further

proceedings.) Gross stated that the executive committee had found substantial evidence of

sexual harassment by plaintiff, but had decided to issue only a “weak” letter of reprimand.

The Vista board concluded that it had an obligation to protect hospital employees from

sexual harassment and decided to send its own, more stern, letter to plaintiff.

7

Vista sent its letter to plaintiff on November 18, 1996. The letter stated that the

Vista board had reviewed the employee complaints against plaintiff and was troubled by

plaintiff’s deni al of the allegations despite overwhelming evidence to the contrary. The

letter explained Vista’s zero tolerance policy on sexual harassment, and warned that, “Vista

has directed management to monitor the situation to assure that your harassment has ceased

. . . . If any further harassment is reported and verified . . . Vista will pursue any and all

rights, remedies and procedures available to it to assure that you are not permitted access to

the Medical Center.”

In response to Vista’s letter, plaintiff demanded that Vista send him the documents

upon which its reprimand was based. Vista responded that the hospital had already provided

him all the necessary documents.

Plaintiff has not received any further warnings or counseling about sexual

harassment, and no disciplinary action has been taken against him. Plaintiff has not lost or

been denied staff privileges at the hospital or any other hospital. Plaintiff has not disclosed

the executive committee’s findings or the two warning letters to any other hospital. As far

as plaintiff is aware, no one outside the hospital has ever seen the executive committee’s

and Vista’s warning letters, except in the course of this litigation.

II. Procedural History

On May 6, 1997, plaintiff filed suit against Vista, the hospital. Woodworth,

Henderson and Bakewell. He later identified Gross, Sanderfer and Rouhe as Doe

defendants. The operative complaint asserts numerous causes of action, including those at

8

issue on appeal — emotional distress, libel, slander per se, and violation of common law fair

procedure and Business and Professions Code section 805 et seq.

In support of his claims, plaintiff alleged that (1) the defendants slandered and

libeled him by making and republishing within the hospital, statements “accusing [him of]

sexually harass[ing] two nurse employees”; (2) these same accusations constitute extreme

and outrageous conduct and caused him severe emotional distress; and (3) the defendants

violated plaintiff’s common law right to fair procedure and t he Business and Professions

Code by implementing a “de facto” loss of privileges, i.e., warning him that future

misconduct might result in termination of staff privileges, without following common law

or the medical staff bylaws.

The defendants moved for summary adjudication on plaintiff’s causes of action for

defamation and emotional distress, invoking Civil Code section 47. Granting the motion in

part, the trial court dismissed both defamation claims against defendant Rouhe and the libel

claim against defendant Sanderfer.

By agreement of the parties, the trial was bifurcated. A bench trial was conducted on

the fair procedure and Business and Professions Code causes of action. On July 26, 2001,

the trial court ruled in defendants’ favor on the following grounds: (1) common law fair

procedure was not required for the executive committee and Vista letters because the

letters did not adversely affect plaintiff’s contract, property or economic rights; (2) the

hospital’s procedure was fair because plaintiff was given notice of the nature of the

complaints against him and an adequate opportunity to respond; (3) there was no evidence

of bias on the part of the ad hoc committee members or the executive committee; (4) in

9

light of plaintiff’s opportunity to review all pertinent documents in the hospital staff office

and at the July 17 executive committee meeting, the mere fact that he was not allowed to

remove the documents from the hospital does not amount to a violation of fair procedure;

(5) the medical staff bylaws did not require that the executive committee grant plaintiff’s

request for a JRC hearing; and (6) the executive committee’s investigation was conducted in

compliance with the bylaws.

After the bench trial, plaintiff’s remaining claims for emotional distress and

defamation were scheduled to go to a jury trial.

Through in limine motions, the defendants again asserted that the absolute privilege

provided by Civil Code section 47 was a defense to the remaining causes of action.

Additional lengthy hearings on the privilege issue followed and the parties stipulated that

the trial court could determine the applicability of the privilege based on the evidence that

had been submitted during the bench trial. The trial court granted judgment in favor of

defendants Rouhe, Sanderfer, Woodworth and Gross on the ground that the remaining

claims against these defendants were based on communications that were absolutely

privileged.

After the trial court’s ruling on the absolute privilege, the only claims left to be tried

before a jury were the defamation and emotional distress claims against Bakewell and

Henderson. Plaintiff stated that he would prove that Bakewell lied in the statement of

concern and in telling other nurses that plaintiff was being investigated for sexual

harassment. Plaintiff further contended that Henderson was liable for republishing the

statement of concern to her superiors at the hospital.

10

The jury trial commenced on January 17, 2002. At the conclusion of the plaintiff’s

case, the de fendants moved for nonsuit. The trial court granted nonsuit in favor of

Henderson because plaintiff failed to produce any evidence that she republished the

statement of concern. The court, however, concluded that the evidence against Bakewell

was “perhaps enough to get past the non-suit” and it would “wait and see how the jury

react[s] to it.” The trial ended on February 1, 2002, and the jury returned a 9 -3 defense

verdict.

On March 12, 2002, judgment was entered in favor of all defendants and notice o f

entry of judgment in the defendants’ favor was served on March 21. On appeal, plaintiff

does not challenge the nonsuit in favor of Henderson or the jury’s verdict in favor of

Bakewell. Plaintiff only challenges the bench trial decision on the fair procedure and

Business and Professions Code causes of actions, and the trial court’s ruling that the tort

claims against Woodworth, Gross, Sanderfer and Rouhe were barred as a matter of law by

the absolute privilege.

ANALYSIS

I. Plaintiff’s Complaint Is Not Barred

Defendants contend that plaintiff’s complaint is barred as a matter of law because

plaintiff has failed to exhaust his judicial remedies. In support of their contention,

defendants cite to Westlake Community Hospital v. Superior Court.1

1 Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465 (Westlake).

11

Under Westlake, a physician seeking to challenge a private hospital’s decision

affecting his or her staff privileges must first exhaust any internal remedies provided by the

hospital. Exhaustion is required even though the physician seeks only damages and not

reinstatement of privileges.2 If the internal challenge is unsuccessful, the physician then

must seek to overturn the decision through a mandamus proceeding pursuant to Code of

Civil Procedure section 1094.5 (section 1094.5). Only if the decision is set aside in a

mandamus proceeding may the physician bring a civil tort action.3 Unless and until it is set

aside, the adverse ruling at the internal level “has the effect of establishing the propriety of

the hospital’s action” and bars any claim based on the pr emise the action was unjustified.4

Moreover, the requirement of filing a mandamus proceeding is independent of the

internal exhaustion requirement. Thus, even if the physician exhausts the hospital’s internal

remedies, he or she cannot bring a civil action without first prevailing on a mandamus

petition.5 The mandamus requirement applies to contract as well as tort claims 6 and applies

not only where a physician’s privileges are completely terminated, but also to any lesser

restrictions on privileges.7

2 Westlake, supra , 17 Cal.3d 465, 475, 476-477.

3 Westlake, supra, 17 Cal.3d 465, 475, 479; DeVaughn Peace, M.D., Inc. v. St.

Francis Medical Center (1994) 28 Cal.App.4th 454, 460.
4 Westlake, supra, 17 Cal.3d 465, 484; accord, Knickerbocker v. City of Stockton

(1988) 199 Cal.App.3d 235, 243.
5 Westlake, supra, 17 Cal.3d 465, 484.

6 Pomona College v. Superior Court (1996) 45 Cal.App.4th 1716, 1728.

7 McNair v. Pasadena Hospital Assn., Ltd. (1980) 111 Cal.App.3d 841, 844-846.

12

In this case, we need not determine whether the hospital’s or Vista’s actions qualify

as a restriction of plaintiff’s privileges as a physician: Even if the Westlake doctrine

applies, plaintiff’s complaint is not barred, because it could be deemed to be a mandamus

petition. In a footnote in Westlake, the Supreme Court recognized that if a “plaintiff’s

complaint could conceivably be found sufficient to warrant treating the complaint as a

petition for writ of mandate [cf. Boren v. State Personnel Board . . .],” the court could

consider the complaint as mandamus petition.8 In Boren, the Supreme Court stated: “[I]t is

unimportant that plaintiff’s pleading was not in form a petition for mandamus or certiorari.

All that is required is that plaintiff state facts entitling him to some type of relief, and if a

cause of action for mandamus or certiorari has been stated, the general demurrer should

have been overruled. [Citations.]”9

Here, the ninth cause of action for violation of common law fair procedure and tenth

cause of action for violation of Business and Professions Code section 805, as alleged in

the operative complaint, can be deemed to be a mandamus petition. First, plaintiff prayed

for mandamus -type relief in these causes of action, including that defendants be required to

provide fair procedures and to expunge his records. Second, the parties in this case

consented to, and the trial court did, try the fair procedure and Business and Professions

Code claims before the tort causes of action as a bench t rial. Therefore, plaintiff’s

complaint is not barred under the Westlake doctrine.

8 Westlake, supra , 17 Cal.3d 465, 485, footnote 10, citing Boren v. State

Personnel Board (1951) 37 Cal.2d 634, 638 ( Boren).
9 Boren, supra , 37 Cal.2d 634, 638.

13

II. Defendants Did Not Violate Common Law Fair Procedure or Business and Professions

Code Section 805 et seq.

Plaintiff contends that the trial court erred in finding the hospital disciplinary

process did not violate common law fair procedure or Business and Professions Code

section 805 et seq. (section 805 et seq.). Specifically, plaintiff contends that: (1) the

bylaws and fair procedure required a JRC hearing; (2) he should have been allowed to

address the ad hoc committee separate from the executive committee; (3) he had a right to

cross-examine the nurses who had complained of sexual harassment; (4) he should have

been provided with copies of the executive committee’s investigation file rather than

allowed to review them in the hospital only; and (5) the ad hoc committee was biased

against him.

A. Standard of Review

Whether a plaintiff’s right to fair procedure was violated is a question of law

reviewed de novo by this court.10 However, to the extent that we must review the factual

determinations made by the trial court in upholding the hospital’s actions, we must apply the

substantial evidence standard, resolving all evidentiary conflicts in favor of the respondents

and indulging all reasonable inferences in support of the judgment.11

B. Strict “Common Law Fair Procedure” Requirements Do Not Apply to

Proceedings Which Do Not Substantially Affect a Fundamental Vested Right

10 Rosenblit v. Superior Court (1991) 231 Cal.App.3d 1434, 1442-1443

(Rosenblit).

14

Fair procedure rules prohibit private associations from acting in any arbitrary

manner, and require that their actions be substantively rational and procedurally fair.12 Fair

procedure is required when a medical staff decision of a hospital “‘substantially affects a

fundamental vested right,’” i.e., a physician’s right to pursue a livelihood.13

In a recent decision, Potvin v. Metropolitan Life Insurance Co.,14 the California

Supreme Court examined the limitation on common law fair procedure rights. In Potvin, a

physician challenged MetLife’s decision to remove him from its provider networks.15 The

court found that an insurer’s relationship with its physician providers affects a public

interest.16 Nonetheless, it held that an insurer does not have to comply with the common

law right of fair procedure unless its decision “significantly impairs the ability of an

ordinary, competent physician to practice medicine or a medical specialty in a particular

geographic area, thereby affecting an important, substantial economic interest.”17

Potvin’s holding is consistent with prior case law holdings that a right to fair

procedure applies to cases involving substantial impairment of a physician’s practice

[footnote continued from previous page]
11 In re Marriage of Mix (1975) 14 Cal.3d 604, 614; Kuhn v. Department of

General Services (1994) 22 Cal.App.4th 1627, 1632-1633.
12 Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541, 550

(Pinsker II).
13 Anton v. San Antonio Community Hosp. (1977) 19 Cal.3d 802, 823 ( Anton).

14 Potvin v. Metropolitan Life Ins. Co. (2000) 22 Cal.4th 1060 ( Potvin).

15 Potvin, supra , 22 Cal.4th 1060, 1064-1066.

16 Potvin, supra , 22 Cal.4th 1060, 1070-1071 .

17 Potvin, supra , 22 Cal.4th 1060, 1071, italics added.

15

resulting from a hospital’s denial, termination or suspension of staff privileges.18 There is

no legal support, however, for plaintiff’s argument that the right to fair procedure should be

expanded to include private warning letters to a physician regarding his misconduct.

Nevertheless, in his opening brief, plaintiff relies on Salkin v. California Dental

Association, to support his fair procedure argument.19 In Salkin, an appellate court applied

the fair procedure doctrine to state and national dental associations’ public censure of the

plaintiff for malpractice.20 The court found that the censure “‘imminently threatened’” the

plaintiff’s dental practice and “‘transcend[ed] the organization itself because it convey[ed]

to the community that the disciplined member was found lacking by his peers.’”21

Salkin is readily distinguishable from the case at hand. First, Salkin involved a

public censure. Here, the letters sent to plaintiff were private and never made public,

except in the context of this lawsuit. Hence, there was never any fear that the public was

made aware of the disciplinary letters. Moreover, plaintiff admitted that, in the five -year

period between his receipt of the letters and his testimony at trial, no one outside of the

hospital had ever seen the letters or learned of their contents, except as a result of his

lawsuit. Second, this case is distinguishable from Salkin because the dentist in Salkin was

censured for his incompetence (malpractice) — a fact that would definitely affect whether a

18 Anton, supra , 19 Cal.3d 802, 823; Cipriotti v. Board of Directors (1983) 147

Cal.App.3d 144; Tiholiz v. Northridge Hospital Foundation (1984) 151 Cal.App.3d 1197,
1202.
19 Salkin v. California Dental Assn. (1986) 176 Cal.App.3d 1118 ( Salkin).

20 Salkin, supra , 176 Cal.App.3d 1118, 1125.

21 Salkin, supra , 176 Cal.App.3d 1118, 1124, 1125.

16

patient would want to be treated by the dentist. Here, the disciplinary letters concerned

social behavior, not plaintiff’s competency to practice medicine. A patient may find

personality characteristics unimportant to a decision whether to be treated by a doctor who

is technically fully competent. In fact, plaintiff did not present any evidence that he lost a

single patient as a result of the hospital’s internal disciplinary action. Therefore, we find

Salkin to be inapplicable to this case.

In sum, there was no evidence that the disciplinary letter “significantly impair[ed]”

plaintiff’s ability to practice medicine, “thereby affecting an important, substantial

economic interest.”22 The full panoply of common law rights to fair procedure was not

required.

C. The Hospital’s Disciplinary Process Did Not Violate Common Law Fair

Procedure

Even if the hospital should have afforded fair procedure before sending the warning

letters to plaintiff, defendants provided fair procedure to plaintiff in this case.

“The common law requirement of a fair procedure does not compel formal

proceedings with all of the embellishments of a court trial [citation], nor adherence to a

single mode of process. It may be satisfied by any one of a variety of procedures which

afford a fair opportunity for [the subject] to present his position. . . . the associations

themselves should retain the initial and primary responsibility for devising a method which

provides [the subject] with adequate notice of the ‘charges’ against him and a reasonable

22 Potvin, supra , 22 Cal.4th 1060, 1071, italics added.

17

opportunity to respond.”23 The hospital’s procedure is reviewed under the abuse of

discretion standard.24

In this case, plaintiff had notice of the sexual harassment allegations against him

before it was reported to the executive committee. In fact, Woodworth and Dr. Gupta were

willing to conclude the investigation with a simple verbal warning to plaintiff. However, at

the request of plaintiff, the executive committee conducted an investigation into the sexual

harassment charges.

When the executive committee conducted its investigation, plaintiff had ample

opportunity to be heard. First, plaintiff presented his version of the events to the executive

committee on April 19, 1996, when he first requested that the committee conduct an

investigation into the sexual harassment allegations. Plaintiff then had a second opportunity

to present his side of the story after the ad hoc committee interviewed the nurses. When

plaintiff claimed that he had forgotten what the nurses said about him, the executive

committee gave him the option of reviewing the investigation file in the medical staff

office of the hospital. Because plaintiff did not take advantage of that offer, the executive

committee allowed plaintiff to review the documents at the next meeting and gave him time

to look them over before giving his response. Then the committee listened to what plaintiff

had to say.

23 Pinsker II, supra , 12 Cal.3d 541, 555; see also Anton, supra 19 Cal.App.3d 802,

830 [fair procedure requires adequate notice of the charges and a fair opportunity to
respond].)
24 Pinsker II, supra , 12 Cal.3d 541, 556.

18

This procedure afforded plaintiff was more than adequate to satisfy fair procedure.

Nevertheless, plaintiff claims that defendants failed to abide by common law fair procedure

because: (1) plaintiff was entitled to, but not given, a JRC hearing; (2) plaintiff was not

permitted to address the ad hoc committee; (3) plaintiff was not permitted to cross-

examine the nurses; (4) plaintiff was unable to remove the investigatory documents from

the hospital; and (5) the ad hoc committee was biased against plaintiff. We shall address

each of plaintiff’s arguments.

1. Plaintiff Was Not Entitled to a Judicial Review Committee Hearing

Plaintiff contends that he was entitled to a JRC hearing under the medical staff

bylaws. We disagree.

Section 13(a)(iii) of the bylaws sets forth the disciplinary actions for which a

physician is entitled to a JRC hearing. It states:

“(iii) GROUNDS FOR HEARING

“Except as otherwise specified in these bylaws, any one or more of the following

actions or recommended actions shall be deemed actual or potential adverse action and

constitute grounds for a hearing in accordance with Article III, Section 13:

“(a)

denial of medical staff membership;

“(b) denial of requested advancement in staff membership status, or category

cause of reason;

“(c) denial of medical staff reappointment;

“(d)

demotion to lower medical staff category or membership status due to

medical disciplinary cause of reason;

19

“(e)

suspension of staff membership;

“(f)

revocation of medi cal staff membership;

“(g)

denial of requested clinical privileges;

“(h)

involuntary reduction of current clinical privileges;

“(i)

suspension of clinical privileges;

“(j)

termination of all clinical privileges; or

“(k)

termination of temporary privileges for medical disciplinary cause or

reason[;]

“(l)

involuntary imposition of significant consultation or monitoring

requirements (excluding monitoring incidental to provisional status and Section 6).”

Although section 13(a)(iii) lists eleven disciplinary actions for which a physician is

entitled to a JRC hearing, warning letters that impose no restrictions are not on the list.

Nevertheless, plaintiff contends that Vista’s warning that it had “directed management to

monitor the situation to assure that [his] harassment has ceased” is a “monitoring

requirement[]” for which he has a right to a hearing under section 13(a)(iii)(l). We agree

with the trial court and reject this strained interpretation of the bylaws.

As stated above, section 13(a)(iii)(l) provides a right to a JRC hearing for the

“involuntary imposition of significant consultation or monitoring requirements.” The clear

language of this section clearly indicates that there must be an “imposition” of significant

monitoring requirements. Plaintiff argues that Vista met this requirement when it sent

plaintiff the second warning letter. The letter stated that “Vista has directed management to

monitor the situation to assure that your harassment has ceased . . . . If any further

20

harassment is reported and verified . . . Vista will pursue any and all rights, remedies and

procedures available to it to assure you are not permitted access to the Medical Center.”

(Italics added.) Seizing on the word “monitor,” plaintiff argues that this letter satisfies the

monitoring requirement in the bylaws. Plaintiff, however, fails to provide what significant

monitoring requirements were imposed on plaintiff by the Vista letter. A plain reading of

the letter only shows that management would be “keeping an eye” on plaintiff to ensure that

the sexual harassment did not continue. This is not what is required under section

13(a)(iii)(l).

Moreover, plaintiff contends that he was entitled to a JRC hearing under section

11(d) and (e) of the bylaws. Plaintiff claims that “[t]he discussion of these sections was

clouded in the trial court because of an obvious typographical error in the Bylaws whereby a

section was misnumbered.” We disagree.

Section 11(d) of the bylaws, entitled “medical executive committee action,”

describes the actions which the executive committee may take once it concludes an

investigation — ranging from serious punishment, such as probation, monitoring, suspension

or revocation or privileges, reduction of membership status, suspension or revocation of

medical staff membership, to less severe punishments, such as letters of admonition,

censure, reprimand or warning.

21

Section 11(e)(i) of the bylaws, entitled “subsequent action,” states: “If corrective

action as set forth in Section 13 d .[25] is recommended by the Medical Executive

Committee, that recommendation shall be transmitted to the Governing Board.” (Italics

added.) Section 11(e)(ii) then states: “The Governing Board shall give great weight to

Medical Executive Committee recommendations and shall not act in an arbitrary or

capricious manner in deciding whether to adopt the committee’s recommendation as a final

recommendation unless the member requests a hearing, in which case the final decision

shall be determined as set forth in Article III, Section 13.” Article III, Section 13 entitled

the member to have a JRC hearing.

In the trial court, plaintiff argued that the “13 d.” referenced in section 11(e)(i)

should be read as “11.d” instead. Plaintiff argued that “[t]his is commonsensical because

Section 11 is entitled ‘Corrective Actions’ and Section 11 d. lists the corrective actions the

[executive committee] may take. Section 13 d., entitled ‘Appeal,’ concerns the procedures

for appealing a JRC hearing panel decision to the [hospital] Governing Board and to the

Vista Board. Section 13 d. has no listing of ‘corrective actions.’” Plaintiff, therefore,

argues that with this “correction,” section 11(e)(ii) gives him a right to a JRC hearing

before the hospital may undertake any of the responses listed in section 11(d), including the

warning letters at issue in this case.

We find plaintiff’s argument to be pure speculation. Plaintiff does not and cannot

cite to any evidence that there was a typographical error in the bylaws. Moreover,

25 Section 13(d) of the bylaws, entitled “appeal,” sets forth procedures for appealing

[footnote continued on next page]

22

plaintiff’s interpretation of section 11(e) directly contradicts section 13(a)(iii)’s express

limitation on the right to a JRC hearing to certain types of corrective action, as stated

above. It is, therefore, in the words of the trial court, “nonsensical and unreasonable.”

Nevertheless, plaintiff argues that he “bolstered his argument by showing that the

Medical Staff Bylaws were amended in 1999.” The amendment, however, does not support

plaintiff’s argument. In 1999, the language in section 11(e)(ii) that “the final decision shall

be determined as set forth in Article III, Section 13” was changed to provide that, “If the

member is entitled to and requests a hearing, the procedure and final decision shall be

determined as set forth in Article VIII.” Plaintiff contends that the added language, “if the

member is entitled to,” would have been unnecessary unless the pre-1999 section 11

provided the right to a hearing for all disciplinary actions. Plaintiff, however, ignores the

possibility that the bylaws we re amended to clarify, rather than change, their original

meaning. As stated by the trial court, “[w]ithout evidence that the intent and purpose behind

the new by-laws was to change, as opposed to merely clarify, the prior by-laws, the 1999

by-laws, shed no light on the interpretation of the 1994 by-laws.” Also, because the new

language refers to Article III, the meaning of the amendment cannot be determined without

reviewing Article VIII — which is not included in the record on appeal. Furthermore, what is

patently absent from the amendments to the bylaws in 1999 is a “correction” to the bylaws

as plaintiff would like it to read — changing section “13 d” to section “11 d” in section

[footnote continued from previous page]
a JRC hearing panel decision.

23

11(e)(i) of the bylaws. Had the intent of the amendment been to change the bylaws to

correct the typographical error — the error should have been corrected. It was not.

We also note that, even if we were to accept plaintiff’s unsupported “correction” of

section 11(e)(i), his argument fails. Section 11(e)(ii) states that if a physician requests a

hearing, the final decision shall be determined as set forth in Article III, Section 13. This

reference incorporates section 13, in its entirety, which includes the limitation set forth in

section 13(a)(iii) on the types of action (excluding warning letters) that give rise to a right

to a JRC hearing.

Therefore, we hold that the trial court properly rejected plaintiff’s claim that he was

entitled to a JRC hearing.

2. Fair Procedure Did Not Require that Plaintiff Be Permitted to Address the Ad

Hoc Committee Established by the Executive Committee

Plaintiff presented his version of the events to the executive committee on two

separate occasions. Plaintiff, however, claims that he had a right to separately address the

ad hoc committee, which consisted of four executive committee members.

In support of his contention, plaintiff relies on section 11(c) of the bylaws, which

provides that a physician shall be “notified that an investigation is being conducted and shall

be given an opportunity to provide information in a manner and upon such terms as the

investigating body deems appropriate.” Plaintiff contends that the ad hoc committee was

the “investigating body” and that section 11(c) therefore required that plaintiff be invited to

provide information to the ad hoc committee, rather than to the executive committee.

Plaintiff’s argument fails.

24

The executive committee delegated the task of interviewing the nurses to the ad hoc

committee. The executive committee, however, reserved the opportunity to hear plaintiff’s

response and decide what, if any, action should be taken. Therefore, the executive

committee remained the “investigative body.” Moreover, the executive committee’s

delegation of a discrete task to the ad hoc committee was consistent with section 11(c),

which gives the executive committee discretion to “conduct the investigation itself, or [to]

assign the task to an appropriate medical staff officer, medical staff department, or standing

or ad hoc committee of the me dical staff.”

Plaintiff’s contention is also unsupported by the law on fair procedure. Fair

procedure requires that the physician be given an opportunity to address the decisionmaker,

in this case, the executive committee.26 In Marmion, a medical education subcommittee

had discussed performance issues with the plaintiff, but the plaintiff claimed that he should

have been invited to address the entire medical education committee.27 The court rejected

the plaintiff’s argument because it found that the ultimate decisionmaker, the director of

medical education, was on the subcommittee and had listened to plaintiff’s response.28

“The hearing before the [subcommittee] provided [the plaintiff] a fair and full opportunity to

respond to the charges in the presence of . . . the final decision-maker.”29 Similarly, in this

26 Marmion v. Mercy Hospital & Medical Center (1983) 145 Cal.App.3d 72, 92-93

(Marmion).
27 Marmion, supra , 145 Cal.App.3d 72, 92-93.

28 Marmion, supra , 145 Cal.App.3d 72, 93.

29 Marmion, supra , 145 Cal.App.3d 72, 93.

25

case, plaintiff gave his response to the allegations to the decisionmaking body — the

executive committee. This was sufficient.

Plaintiff also argues that the ad hoc committee’s report took on s pecial significance

because the executive committee and governing boards relied on it. Plaintiff is correct that

the executive committee relied on the ad hoc committee’s summary of the employee

interviews — the ad hoc committee was asked to interview the nurses so that the entire

executive committee would not have to do so. The ultimate decision to send the warning

letter, however, was made only after the full executive committee heard plaintiff’s

response.

Therefore, we hold that plaintiff’s lack of opportunity to address the ad hoc

committee did not violate fair procedure.

3. Plaintiff Did Not Have a Right to Confront His Accusers

Plaintiff contends that he should have been allowed to cross-examine the nurses who

accused him of sexual harassment. In support of his contention, plaintiff relies on

Hackethal v. California Medical Association.30 Plaintiff’s reliance on Hackethal is

misplaced.

Hackethal addressed fair procedure in the context of formal charges brought before

the California Medical Association (CMA) relating to a physician’s competence to practice

medicine, charges which ultimately resulted in the physician’s expulsion from the CMA. 31

The formal nature of the charges against the physician and his resulting expulsion from the

30 Hackethal v. California Medical Assn. (1982) 138 Cal.App.3d 435 (Hackethal).

26

state medical association required that the physician be allowed to cross-examine his

accusers.32

This case is distinguishable. Here, the executive committee’s investigation was

prompted by plaintiff’s request, rather than formal charges, and the hospital’s privat e

reprimands had no effect on plaintiff’s ability to practice medicine. Had his ability to

practice medicine been challenged, under the bylaws, plaintiff would have had the right to

challenge termination of his privileges in a formal JRC hearing, which would have included

cross-examination of witnesses. However, in this case, neither a formal hearing nor cross-

examination of witnesses were warranted for written warnings which did not impose any

limitation on plaintiff’s staff privileges.

4. Plaintiff Was Given Access to Pertinent Documents

Plaintiff contends that fair procedure was violated because he was not allowed to

make copies of the ad hoc committee’s investigatory file and take them out of the hospital

to his attorney’s office. We disagree.

Plaintiff was informed that he could review the investigatory file in its entirety in the

medical staff office at his convenience. The hospital wanted to avoid circulation of the

confidential material in the investigatory file outside the hospital. Plaint iff and his attorney

could have reviewed the investigatory file, but simply chose not to.

[footnote continued from previous page]
31 Hackethal, supra , 138 Cal.App.3d 435,438-440.

32 Hackethal, supra , 138 Cal.App.3d 435,444.

27

Plaintiff relies on Rosenblit, however, to support his contention that denying

plaintiff copies of his file violated fair procedure. In Rosenblit, a hospital terminated the

physician’s staff privileges based on its review of his medical decisions as reported in 30

medical charts.33 The court held that the hospital violated fair procedure when it denied the

physician copies of the charts so that he could have them reviewed by his expert witnesses

in preparation for his hearing.34

Rosenblit is distinguishable. First, Rosenblit involved termination of staff

privileges, which requires a higher standard of fair procedure.35 This case involved private

warning letters which did not affect plaintiff’s staff privileges. Second, the physician’s need

to have copies of the medical charts in Rosenblit was critical to his ability to defend

himself because of the technical and medical complexity of the issues involved. Here, the

issues were not numerous or complex. The witnesses were few; their statements were

straightforward. No expertise or lengthy review was necessary to understand the issues.

Plaintiff has indicated no manner in which his ability to prepare was affected or impaired.

In sum, plaintiff’s opportunity to review the investigatory file in the medical staff

office of the hospital, at plaintiff’s convenience, afforded plaintiff fair procedure.

5. The Ad Hoc Committee Was Not Biased Against Plaintiff

33 Rosenblit, supra , 231 Cal.App.3d 1438.

34 Rosenblit, supra , 231 Cal.App.3d 1446-1447 .

35 Hackethal, supra , 138 Cal.App.3d 435, 442 [fair procedure requirements vary

according to the action contemplated and its effects on the individual].

28

Plaintiff contends that the members of the ad hoc committee were biased against

him. Because this is a factual questions, the substantial evidence standard applies. We must

resolve all evidentiary conflicts and indulge all reasonable inferences in support of the

judgment.36

Plaintiff has admitted that he did not have any evidence to suggest that Drs. Rouhe,

Plasencia or Young were biased against him. As to Dr. Sanderfer, plaintiff’s only

contention is that in the course of the investigation, Dr. Sanderfer reported that he had

witnessed plaintiff make inappropriate comments to Sanderfer’s wife, who was a nurse at

the hospital at the time.

Substantial evidence supports the trial court’s conclusion that Dr. Sanderfer’s

observation of plaintiff’s inappropriate conduct does not invalidate the ad hoc committee’s

investigation or the executive committee’s warning letter. Dr. Sanderfer explained that

plaintiff’s comments never bothered his wife, and that “[t]hey certainly didn’t offend or

threaten [Dr. Sanderfer] either. [Dr. Sanderfer] felt more embarrassed for [plaintiff].”

Moreover, notwithstanding plaintiff’s comments, Dr. Sanderfer considered plaintiff a

positive acquaintance. Dr. Sanderfer also testified that he could be fair and impartial, he did

not pre-judge whether plaintiff had made the statements alleged in the statement of concern

and Human Resources interview, and he would have disqualified himself if he believed he

was biased.

36 In re Marriage of Mix, supra , 14 Cal.3d 604, 614; Kuhn v. Department of

General Services, supra , 22 Cal.App.4th 1627, 1632-1633.

29

Nevertheless, plaintiff relies on Applebaum v. Board of Directors37 in suppo rt of

his argument that Dr. Sanderfer’s participation in the investigation deprived him of fair

procedure. Plaintiff, however, misconstrues the holding of Applebaum. Plaintiff contends

that Applebaum “establishes that even if any individual cannot prove actual bias, the

overlapping of accusatory, investigative, and adjudicative functions results in the lack of

impartiality in the fact-finding process.” Therefore, plaintiff claims that, because Dr.

Sanderfer served on both the ad hoc committee and the exe cutive committee, plaintiff’s fair

procedure rights were violated. Applebaum, however, does not contain the holding

espoused by plaintiff. Rather, Applebaum held that overlapping functions violated fair

procedure “given the circumstances” of that case.38 The circumstances in Applebaum are

different from the circumstances in this case.

In Applebaum, the court found fair procedure lacking because a committee

investigating a physician’s incompetence included the complaining physician who had

prompted the i nvestigation.39 The court was particularly troubled because the complaining

physician was a specialist in the relevant field to whom the other committee members were

likely to defer.40 In this case, the allegations against plaintiff came from the nurses — not

anyone on the ad hoc or executive committee. Dr. Sanderfer merely offered a personal

observation in the course of discussing the nurses’ complaints. Moreover, Dr. Sanderfer

37 Applebaum v. Board of Directors (1980) 104 Cal.App.3d 648 ( Applebaum) .

38 App lebaum, supra , 104 Cal.App.3d 648, 660.

39 Applebaum, supra , 104 Cal.App.3d 648, 659-660 .

40 Applebaum, supra , 104 Cal.App.3d 648, 660.

30

was not a specialist in sexual harassment issues to whom the other members were likely to

defer. Furthermore, in light of the evidence from Bakewell, Walsh and Voyer that plaintiff

had made sexually suggestive comments in the hospital, there is no reason to conclude that

the other members of the ad hoc committee would have discounted the nurses’ complaints

had Dr. Sanderfer not been on the committee.

Therefore, the trial court’s finding that the ad hoc committee was not biased against

plaintiff is supported by substantial evidence.

D. The Medical Executive Committee Proceedings Did Not Violate the Business

and Professions Code

Plaintiff bases his cause of action under the Business and Professions Code on

section 809.6, subdivision (a), which provides that, “The parties are bound by any additional

notice and hearing requirements” provided in medical staff bylaws. In this case, because

plaintiff has failed to establish a violation of the bylaws as discussed above, he has failed to

establish a violation of section 809.6.

Moreover, section 809.6 is not applicable to this case. Section 809.6 is part of a

statutory scheme governing notice and hearing procedures for actions which require a

report under Business and Professions Code section 805.41 A section 805 report is

required only where a physician is disciplined for a “medical disciplinary cause or reason,”

defined as “that aspect of a licentiate’s competence or professional conduct that is

41 See Business and Professions Code sections 809.1 -809.9.

31

reasonably likely to be detrimental to patient safety or to the delivery of patient care.”42

Also, like the common law right to fair procedure, a section 805 report is only required if

staff privileges are terminated or restricted.43 In this case, because plaintiff was

admonished to avoid sexually harassing employees rather for than creating a risk to patients,

and because his staff privileges were never restricted, the hospital was not required to

submit a section 805 report. Therefore, section 809.6 does not apply.

III. Defendants’ Statements Are Protected Under Civil Code Section 47

Plaintiff contends that the trial court erred in ruling that the absolute privilege under

Civil Code section 47 (section 47), subdivision (b) bars plaintiff’s claims against Drs.

Rouhe, Sanderfer, Woodworth and Gross. We disagree.

A. Standard of Review

“Interpretation of section 47, subdivision (b) is a pure question of law which we

review independently. [Citations.]”44

B. Defendants’ Statements Are Privileged

Section 47, subdivision (b) provides that communications made “(4) in the initiation

or course of any . . . proceeding authorized by law and reviewable [by writ of mandate]

42 Business and Professions Code section 805, subdivision (a)(1)(D)(6).

43 See Business and Professions Code section 805, subdivisions (b)(1) – (b)(3) [a

section 805 report is only required for denial or rejection of an application for staff
privileges; termination or revocation of staff privileges; or restrictions on staff privileges,
membership or employment for 30 days or more than any 12-month period].
44 Rothman v. Jackson (1996) 49 Cal.App.4th 1134, 1139-1140.

32

pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of

Civil Procedure” are absolutely privileged.

Peer review organizations such as the executive committee are authorized — and

required –by law to oversee hospital staff physicians.45 Their decisions are subject to

review by writ of mandate under either section 1094.5 or section 1085 of the Code of Civil

Procedure. If fair procedure is required, the executive committee’s decisions can be

revi ewed under Code of Civil Procedure section 1094.5.46 Otherwise, the executive

committee’s decisions can be reviewed under section 1085.47 Therefore, section 47,

subdivision (b) protects all communications made to initiate action by the executive

committee or made in the course of the executive committee’s proceedings.

The applicability of section 47, subdivision (b) to executive committee

communications is further supported by the statute’s legislative history. Subdivision (b)

was enacted specifically to overturn a Supreme Court decision in Hackethal v.

Weissbein,48 which held that communications to a private medical peer review organization

45 Business and Professions Code section 2282.

46 See Code of Civil Procedure section 1094.5; Anton, supra , 19 Cal.3d 802, 815.

47 See Code of Civil Procedure section 1085; Anton, supra , 19 Cal.3d 802, 815,

footnote 11; Weary v. Civil Service Com. (1983) 140 Cal.App.3d 189, 195 [a city
employee was entitled to writ review under section 1085 of an “improvement needed”
evaluation rating even though a hearing was not required by law]; McGill v. Regents of
University of California (1996) 44 Cal.App.4th 1776, 1785 [“‘[O]rdinary mandate [under
section 1086] is used to review adjudicatory actions or decisions when the agency was not
required to hold an evidentiary hearing’”].
48 Hackethal v. Weissbein (1979) 24 Cal.3d 55.

33

are not privileged.49 “The lesson conveyed by [the enactment of subdivision (b)] appears

clear. By its immediate, unanimous response to Hackethal v. Weissbein [citation], the

Legislature demonstrated a strong conviction that the absolute privilege afforded by section

47 should not be confined narrowly only to . . . peer review proceedings conducted by

governmental agencies, but rather should apply also to . . . analogous peer review

proceedings conducted by private entities because the purposes served by the privilege

apply equally to such proceedings.”50

Plaintiff cites Pettus v. Cole51 and Cuenca v. Safeway San Francisco Employees

Fed. Credit Union52 to support his argument that section 47, subdivision (b) does not apply

to this case. These cases held that an adjudicatory proceeding of a private company is not

“judicial” or “official” under subdivision (b).53 54 Neither of these cases, however,

addressed subdivision (b) clause (4). Hence, they are inapplicable to this case.

Moreover, plaintiff argues that there was no “proceeding” or “trial” because he was

denied a JRC hearing. “Proceeding,” however, as used in section 47 has a broad meaning

and includes any “transaction[].”55 Moreover, in applying section 47, courts have focused

less on what type of proceeding is actually held and more on the authority of the body. For

49 See Moore v. Conliffe (1994) 7 Cal.4th 634, 652.

50 Moore v. Conliffe, supra , 7 Cal.4th 634, 653, italics omitted.

51 Pettus v. Cole (1996) 49 Cal.App.4th 402 ( Pettus).

52 Cuenca v. Safeway San Francisco Employees Fed. Credit Union (1986) 180

Cal.App.3d 985 (Cuenca ).
53 Pettus, supra , 49 Cal.App.4th 402, 436-438 .

54 Cuenca , supra , 180 Cal.App.3d 985, 993-994.

55 Ascherman v. Natanson (1972) 23 Cal.App.3d 861, 865 ( Ascherman).

34

example, in construing the scope of the “official proceeding” privilege under what is now

subdivision (b) clause (3), Ascherman held that the application of the privilege to

communications to an administrative body depends on “(1) whether the administrative body

is vested with discretion based upon investigation and consideration of evidentiary facts, (2)

whether it is entitled to hold hearings and decide the issue by the application of rules of law

to the ascertained facts and, more importantly (3) whether its power affects the personal or

property rights of private persons.”56 Focusing on the authority of the body, rather than the

type of proceeding ultimately held, encourages communication and thereby ensures that the

purpose of the privilege is fulfilled.57

In this case, the executive committee has the authority to conduct formal hearings

and to make decisions which substantially affect a physician’s economic interests.

Therefore, the privilege should apply to its communications regardless of the form its

action takes.58

Plaintiff argues that defendants should not be allowed to argue, on the one hand, that

warning letters do not trigger a right to a JRC hearing, and on the other hand, that the

executive committee proceeding is covered by subdivision (b). Plaintiff’s argument is

based on the erroneous premise that the subdivision (b) privilege applies only to

56 Ascherman, supra , 23 Cal.App.3d 861, 866.

57 Ascherman, supra , 23 Cal.App.3d 861, 866.

58 See Long v. Pinto (1981) 126 Cal.App.3d 946, 949 [an unsolicited letter to a

hospital’s board of directors was absolutely privileged because it was intended to prompt
action]; Brody v. Montalbano (1978) 87 Cal.App.3d 725, 732 [a letter to a school board
was privileged regardless of whether it led to an “official proceeding”].

35

proceedings which are subject to review under Code of Civil Procedure section 1094.5,

i.e., proceedings which are required by law. However, as discussed above, subdivision (b)

expressly includes proceedings subject to review under Code of Civil Procedure section

1085, which includes the voluntary, quasi-judicial proceedings in this case.

Having established that section 47, subdivision (b) applies to executive committee

proceedings, we now turn to the specifics of plaintiff’s defamation and emotional distress

claims against Woodworth, Gross, Sanderfer and Rouhe.

Plaintiff’s emotional distress and defamation claims against Woodworth are based

on her communications with the Chief of Staff, Dr. Gupta, concerning the nurses’

complaints, and her subsequent comments to the executive committee in the course of

investigation plaintiff’s conduct. Woodworth informed Dr. Gupta about the nurses’

complaints because it was Dr. Gupta’s responsibility to decide whether the allegations

required executive committee action or an investigation. The medical staff bylaws

specifically provide for this procedure: section 11(a) states that any person may provide

information to the medical staff about the conduct of a staff physician. Therefore,

Woodworth’s communications with Dr. Gupta and her comments to the executive

committee are protected under section 47, subdivision (b).

Plaintiff’s claims against Drs. Sanderfer and Rouhe are also based entirely on

communications made in the course of the executive committee investigation. These

statements are, therefore, privileged under section 47, subdivision (b).

Plaintiff sued Gross based on his report to Vista regarding the executive committee

proceedings. Vista could either ratify the executive committee’s action or it could require

36

it to undertake further proceedings. Gross’s report, therefore, was still part of the

executive proceeding and is covered by the privilege under section 47, subdivision (b).

Accordingly, we affirm the trial court’s judgment in favor of defendants Woodworth,

Gross, Sanderfer and Rouhe because their communications are absolutely privileged under

Civil Code section 47, subdivision (b).

DISPOSITION

The judgment is affirmed. Defendants shall recover their costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

/s/ Ward

J .

We concur:

/s/ Ramirez

/s/ Richli

P.J.

J .

37