Zawaideh v. Neb. Dep’t of Health and Human Servs. (Summary)

STATE LICENSING ACTIONS

Zawaideh v. Neb. Dep’t of Health and Human Servs., No. S-12-069 (Neb. Jan. 18, 2013)

The Supreme Court of Nebraska affirmed summary judgment in favor of Nebraska’s Attorney General (“AG”) and Department of Health and Human Services’ Regulation and Licensure Department (“DHHS”) in a case brought by a physician who claimed that the AG duped him into agreeing to an “assurance of compliance” agreement by emphasizing that it was not disciplinary in nature, despite the AG having knowledge that such agreements were being interpreted as disciplinary by outside sources and that entering into such an agreement could have negative effects on the physician.

This case involved a physician against whom a disciplinary licensure action was proposed following an investigation of his obstetrical care of a particular patient. After the physician repeatedly refused proposed settlements that included disciplinary actions, the AG offered the physician an “assurance of compliance,” emphasizing that this was not a disciplinary procedure.  The assurance of compliance document required the physician to agree not to practice obstetrics.  Since the physician had already given up obstetrics, he agreed.  As a result of this action becoming part of his profile, the state of Washington (where he also held a license) entered a disciplinary order against the physician and reported him to the National Practitioner Data Bank.  The physician alleged that, as a result, his board certification was terminated.

The physician filed suit against the Nebraska AG and DHHS alleging fraudulent and negligent misrepresentation.  The lower court dismissed the suit, finding that the claim was a contract claim subject to the state Contract Claims Act and, due to the physician’s failure to follow that Act, the AG and DHHS were entitled to sovereign immunity.  On appeal, the Supreme Court of Nebraska affirmed summary judgment, but for a different reason.

First, the court noted that the state (and, in turn, its agencies) is immune from suit unless it has specifically waived its sovereign immunity through some statutory scheme.  Notably, individuals may sue the state of Nebraska under the State Contract Claims Act and the State Tort Claims Act.  In this case, the court found the State Contract Claims Act to be inapplicable, holding that fraudulent and negligent misrepresentations claims are tort claims, rather than contract claims.  The court also found the State Tort Claims Act to be inapplicable since it applied to claims for money only – and the physician in this case was seeking declaratory relief (removal of the assurance of compliance from his record).

Unable to fit the physician’s claims within any other exception to the state’s sovereign immunity, the court upheld summary judgment in favor of the AG and DHHS.