Opinion
CIVIL ACTION NO. 18-7945
2019-12-27
Natchez J. MORICE, III, M.D. v. HOSPITAL SERVICE DISTRICT #3, et al.
Michael R.C. Riess, Thomas Patrick Henican, Riess LeMieux, LLC, New Orleans, LA, Christopher H. Riviere, Todd M. Magee, Riviere Law Firm, Thibodaux, LA, for Plaintiff. Christopher K. Ralston, Jeremy T. Grabill, Matthew Robert Slaughter, Phelps Dunbar, LLP, Carl Edward Hellmers, III, Dowling Burke Stough, James P. Waldron, Frilot L.L.C., New Orleans, LA, for Defendants.
Michael R.C. Riess, Thomas Patrick Henican, Riess LeMieux, LLC, New Orleans, LA, Christopher H. Riviere, Todd M. Magee, Riviere Law Firm, Thibodaux, LA, for Plaintiff.
Christopher K. Ralston, Jeremy T. Grabill, Matthew Robert Slaughter, Phelps Dunbar, LLP, Carl Edward Hellmers, III, Dowling Burke Stough, James P. Waldron, Frilot L.L.C., New Orleans, LA, for Defendants.
SECTION M (3)
ORDER & REASONS
BARRY W. ASHE, UNITED STATES DISTRICT JUDGE
Before the Court is a motion to dismiss for failure to state a claim filed by defendants Hospital Service District No. 3 Parish of Lafourche d/b/a Thibodaux Regional Medical Center ("TRMC"), Board of Commissioners of TRMC ("the Board"), Medical Executive Committee of TRMC ("MEC"), Credentials Committee of TRMC ("Credentials Committee"), and Greg Stock ("Stock"), the CEO of TRMC (collectively, "Defendants"). The plaintiff, Natchez J. Morice, III, M.D. ("Dr. Morice"), opposes the motion. Also before the Court is a motion for partial summary judgment filed by Dr. Morice relating to his breach-of-contract claim, which Defendants oppose, and in further support of which Dr. Morice replies. Having considered the parties' memoranda and the applicable law, the Court issues this Order & Reasons.
R. Doc. 77. Before Dr. Morice filed a first supplemental and amending complaint (R. Doc. 64), Defendants had filed a motion to dismiss (R. Doc. 21) the original complaint (R. Doc. 1), to which Dr. Morice filed an opposition (R. Doc. 30), in further support of which Defendants filed a reply (R. Doc. 33), and in further opposition to which Dr. Morice filed a surreply (R. Doc. 36). The Court granted Defendants' motion to dismiss in part for Dr. Morice's failure to seek leave of court to proceed anonymously and directed Dr. Morice to file an amended complaint that disclosed his identity. R. Doc. 52. Dr. Morice did so in his first supplemental and amending complaint, which repeated verbatim the original allegations, but also added certain allegations relating to Defendants' denial of Dr. Morice's application for reappointment of privileges in obstetrics. R. Doc. 64. The Defendants' second motion to dismiss and Dr. Morice's response thereto largely repeat arguments made concerning the original motion to dismiss. The first supplemental and amending complaint supersedes the original complaint and moots the balance of the original motion to dismiss. Nevertheless, to the extent any arguments made concerning the original motion to dismiss are applicable to resolving the instant motion, the Court considers them here.
R. Doc. 82.
R. Doc. 69.
R. Doc. 79.
R. Doc. 85.
I. BACKGROUND
This litigation arises from TRMC's suspension and denial of Dr. Morice's clinical privileges in obstetrics at TRMC. TRMC's Medical Staff Bylaws ("Bylaws") require a physician to apply for renewal of privileges at TRMC every two years. As part of the written application, a physician must demonstrate "ability to work cooperatively with others," "provide peer recommendations," agree to continued peer review and quality review, and report any violations assessed by the MEC. The Credentials Committee initially reviews the application and makes a recommendation to the MEC, which, in turn, makes a recommendation to the Board, which renders the final decision. Under Article VII of the Bylaws, if the MEC makes an "adverse recommendation," the physician may generally initiate the "Hearing Procedure" set out in Article XI, which provides for a hearing conducted by a "Hearing Committee" (or Hearing Panel) and appellate review by the Board. According to the Bylaws, the recommendation forming the basis of the hearing and appeal does not become "effective and final" until the Board's determination upon final review.
R. Doc. 64 at 4.
See R. Docs. 54-7 at 9; 59-1 at 9.
See R. Docs. 54-7 at 8-10, 32-36; 59-1 at 8-10, 32-36.
R. Docs. 54-7 at 28-31; 59-1 at 28-31.
See R. Docs. 54-7 at 6, 22, 29; 59-1 at 6, 22, 29. Although Article VII refers to the "Hearing Procedure as outlined in Article X," Article X addresses "Corrective Action," whereas Article XI addresses the "Hearing and Appellate Review Procedure." It is apparent, then, that this is a typographical error, and the reference in Article VII should be to the "Hearing Procedure as outlined in Article XI ."
R. Docs. 54-7 at 41; 59-1 at 41.
TRMC first granted Dr. Morice privileges in obstetrics and gynecology in 2006. Following notice of five violations spanning from late 2014 to early 2017, however, the MEC recommended corrective action in relation to Dr. Morice's privileges in obstetrics. The violations, which Dr. Morice maintains were fabricated, involved Dr. Morice's failure to properly attend to his obstetrical patients. Dr. Morice then requested a hearing under Article XI, which took place on April 24-26, 2018, and May 8, 2018. In preparation for the hearing, Dr. Morice alleges that he and TRMC submitted briefing on what burden of proof and evidentiary standard applied. On June 13, 2018, the Hearing Panel rendered a decision to affirm the MEC's decision to suspend Dr. Morice. Dr. Morice subsequently appealed the MEC's decision to the Board. Dr. Morice alleges that both he and TRMC filed briefs and made oral statements in support of their positions on appeal. On August 13, 2018, the Board affirmed the Hearing Panel's decision suspending Dr. Morice's privileges in obstetrics for a period of six months, until February 13, 2019.
R. Doc. 54-1 at 10-11.
See R. Doc. 54-8 at 3.
R. Doc. 54-4.
R. Doc. 54-1 at 13.
R. Doc. 64 at 17.
R. Doc. 54-8.
R. Doc. 64 at 18.
R. Doc. 54-3.
Meanwhile, because Dr. Morice's two-year privileges appointment was set to expire on May 16, 2018, in the midst of the hearing-and-appeal process on his suspension, the Board extended his privileges "until the earlier to occur of (i) the expiration of 4 months from May 15, 2018, the date of reappointment, or (ii) such time as the hearing before the ad hoc medical staff committee ... and the appellate review by the Board ... have concluded and a final decision has been rendered as set forth in Article XI of the TRMC Medical Staff Bylaws." In this case, the latter term applied. Therefore, in the August 13, 2018 letter that informed Dr. Morice of the Board's final decision concerning his suspension, Stock advised Dr. Morice to "submit your application for reappointment and clinical privileges for review by the Credentials Committee as soon as possible." Dr. Morice heeded Stock's instruction to make quick application for reappointment only as to his gynecological privileges. This application was submitted on August 16, 2018, and TRMC approved his reappointment application a month later. However, Dr. Morice waited to apply for privileges in obstetrics until December 17, 2018. On January 14, 2019, the MEC recommended denial of his application for obstetrical privileges, citing a new violation of the professional standard of care and a variance report of unprofessional behavior in addition to the conduct for which Dr. Morice was suspended. As of the date of the briefing of this motion to dismiss, Dr. Morice was still pursuing the hearing-and-appeal process as to the denial of his application for obstetrical privileges. TRMC declined to grant Dr. Morice temporary obstetrical privileges during the pendency of his appeal.
See R. Doc. 54-11 at 1.
R. Doc. 59-2; see also R. Doc. 54-3 at 1.
R. Doc. 54-3 at 1.
R. Doc. 59-3. The application was structured as a joint application for GYN and OB privileges, but Dr. Morice scratched out the "Obstetrics" portion of the application.
R. Doc. 59-4.
R. Doc. 59-5.
R. Doc. 59-6.
R. Doc. 54-6. The Court has not been apprised of the disposition, if any, of Dr. Morice's appeal of the denial of his application for obstetrical privileges.
In his first supplemental and amending complaint for injunctive relief and damages, Dr. Morice alleges that Defendants violated the Sherman Act (Counts I & II), breached the Bylaws and did so in bad faith (Counts III and IV), tortiously interfered with contractual obligations under the Bylaws (Count V), committed an abuse of rights and negligent misrepresentation (Counts VI and VII), intentionally inflicted emotional distress and defamed him (Count VIII), violated the Louisiana Unfair Trade Practices and Consumer Protection Law ("LUTPA") (Count IX), and violated his due process and equal protection rights (Count X). In support of these claims, Dr. Morice's allegations may be grouped into three broad categories: the suspension, the denial of reappointment, and Defendants' purported illegal business practices.
The Court previously denied Dr. Morice's application for a temporary restraining order and preliminary injunction. R. Docs. 60 & 78.
R. Doc. 64 at 25-41.
First, Dr. Morice alleges that the peer review process relating to the suspension of his privileges was inherently flawed and designed to eliminate him as a competing provider of OB/GYN services. Dr. Morice alleges that the "trumped up" violations coincided with the success of his private practice. In 2012, Dr. Morice opened an office in Thibodaux operated through his limited liability company, Thibodaux Gynecology and Obstetrics, LLC ("TGO"). Dr. Morice alleges that he does not have staff physician privileges at any tertiary level facility other than TRMC, which he says is the sole community provider of inpatient and outpatient hospital services in Thibodaux. Dr. Morice contends that his entire obstetrical practice is based at TRMC, and all of his privileges in obstetrics are with TRMC. From 2006 until 2013, Dr. Morice says his only other competitors were the Thibodaux Women's Center, an independently-owned OB/GYN group, and TRMC's OB/GYN group. During this time, Dr. Morice alleges that his practice grew dramatically, which he says affected TRMC's market share for ancillary services, in that he was performing all ancillary services within his own medical practice rather than sending these services to TRMC.
Id. at 14.
Id. at 6, 8.
Id. at 6, 25.
See id. at 25.
Id. at 8-9.
In 2014, TRMC purchased the Thibodaux Women's Center. As a result, TRMC employed the Center's physicians in-house and, says Dr. Morice, heightened the competition between TRMC and Dr. Morice's practice. Only after purchasing the Thibodaux Women's Health Center, Dr. Morice contends, did TRMC cite him for numerous bogus violations to potentially restrict, suspend, or remove his privileges at TRMC, reduce competition in the region, and raise the prices TRMC charged its patients and insurers. In the first nine years of Dr. Morice's privileges at TRMC, Dr. Morice received no violations or write-ups. But between December 10, 2014, and January 5, 2017, Dr. Morice was charged with five Level III or IV violations. Given that Dr. Morice and TGO compete with TRMC's OB/GYN physicians, who earn money for TRMC through services (particularly ancillary services, which constitute most of Dr. Morice's revenue as a private physician) and referrals, Dr. Morice contends that TRMC has a substantial motivation for restricting and denying medical staff privileges to independent non-employee physicians like him. Dr. Morice contends that TRMC fabricated the bases for the violations for the purpose of removing Dr. Morice and TGO from competition, thereby allowing the hospital to have a monopoly or near monopoly for OB/GYN services.
Id. at 8, 25-29.
Id. at 10-11, 13.
Id. at 11.
Dr. Morice alleges that members of the MEC were biased in weighing his suspension because they were likewise in direct competition with him. In addition, Dr. Morice claims that the violations were groundless because each reviewing TRMC committee merely "rubber stamped" the prior committee's recommendation without reviewing the evidence. For instance, on April 11, 2017, Dr. Morice claims to have met with the MEC, and that its members acknowledged never having before them the medical charts or any other facts or evidence purportedly establishing the Level III and IV violations found by TRMC's administration. Dr. Morice claims that this pattern continued at the hearing, where an independent reviewer, the National Peer Review Committee; the medical review panel composed of three independent OB/GYN physicians; and Dr. Morice's expert, all gave evidence that Dr. Morice complied with the applicable standard of care in relation to Case No. 7954, which charged Dr. Morice with a Level IV violation involving injury. Dr. Morice claims that even some testimony elicited from Defendants' expert supported his exoneration. However, TRMC merely reduced the charge from Level IV to Level III, and in so doing, Dr. Morice claims, the Hearing Panel and Board "rubber stamped" the decision of the MEC. The Hearing Panel and Board confirmed the remaining violations, despite "a wealth of evidence, establishing beyond any reasonable dispute, that a sham review process was conducted, and which completely refuted all of the bogus charges against him." Dr. Morice also claims that TRMC evinced its disparate treatment of TRMC-employed physicians and private physicians like him when testimony at the hearing revealed that a TRMC physician's conduct was even more egregious than Dr. Morice's, but that physician was never charged with a violation.
Id. at 9.
Id. at 12-13.
Id. at 16.
Id. at 15-16.
Dr. Morice further contends that the Bylaws are written to prevent a "fair hearing" because the Bylaws provide no guidance on burden of proof or evidentiary standards. Article XI, section 5(H) of the Bylaws provides in pertinent part: "It will be the obligation of the representative to present appropriate evidence in support of the adverse recommendation. The practitioner will be responsible for supporting his/her challenge to the adverse recommendation or decision." Although Dr. Morice and TRMC submitted briefing on the procedural issues, Dr. Morice contends that TRMC should have been required to prove Dr. Morice's charges by clear and convincing evidence, rather than the preponderance standard that was used.
Id. at 12-13, 37.
R. Doc. 77-3 at 39.
R. Doc. 64 at 17-18, 37.
Second, in relation to the January 2019 denial of his request for privileges, Dr. Morice alleges that TRMC was obligated to reinstate his obstetrical privileges after his suspension lifted, even though TRMC had, in the interim, denied his application for such privileges based on new violations that were consistent with his past violations. Dr. Morice essentially argues that the sense of the word "suspension" implies that his obstetrical privileges should have gone back into effect automatically after the suspension ran, and that, under the Bylaws, the denial of his application for reappointment of his obstetrical privileges does not take effect until the Board's final decision on his appeal of such denial. Therefore, Dr. Morice claims he is entitled to exercise obstetrical privileges until the hearing-and-appeal process is complete. Dr. Morice asserts that the deprivation of privileges violated the Bylaws and his constitutional rights to due process and equal protection, amounted to an abuse of rights and misrepresentation, caused intentional infliction of emotional distress, and defamed him. Dr. Morice further asserts that the Bylaws constitute a contract and that Defendants breached this contract, did so in bad faith, and tortiously interfered with obligations under the Bylaws.
R. Docs. 53-2 at 19-21, 38-40; 54-1 at 18; 73 at 15.
Third, Dr. Morice asserts that TRMC has taken additional illegal actions that violate the Sherman Act and LUTPA. Dr. Morice claims that TRMC intentionally reduced the revenue Dr. Morice earns by "cherry-picking" referrals of higher-paying, non-Medicare/Medicaid patients and rerouting them to hospital-employed physicians, while lower-paying referrals such as uninsured or Medicare/Medicaid patients were sent to non-employee and on-call physicians, such as Dr. Morice. For instance, Dr. Morice alleges that while on call at TRMC during the period from 2006 to 2013, he received average annual referrals of 15 non-Medicaid/Medicare, insured patients, versus 15 uninsured or Medicaid/Medicare patients; however, while on call during the 2013-2018 period, he received referrals of one insured and 20 Medicaid/Medicare or uninsured patients. Dr. Morice alleges that doctors in other medical specialties who have privileges at TRMC but are not employed by TRMC have also experienced such dramatic changes in referrals. Dr. Morice also contends that TRMC has operated and continues to operate and solicit business in St. Mary Parish, without permission from St. Mary's Hospital Service District, another illustration of TRMC's pattern of illegal activity.
R. Doc. 64 at 18.
Id. at 19.
Id. at 18-19.
II. PENDING MOTIONS
A. Defendants' Motion to Dismiss
Defendants seek to dismiss the entirety of Dr. Morice's supplemental and amending complaint. First, Defendants assert that all but TRMC lack the capacity to be sued. Second, Defendants submit two grounds they claim would dispose of all allegations: (1) the complaint improperly relies on conclusory allegations; and (2) Defendants are immune under the Health Care Quality Improvement Act ("HCQIA"), Louisiana law, and the Bylaws. Third, Defendants argue that under the primary jurisdiction doctrine, the suit should be stayed pending the outcome of Dr. Morice's second hearing and appeal. Fourth, Defendants contend that Dr. Morice's individual claims fail for various independent reasons.
R. Doc. 77-1 at 8.
Id. at 7-17.
Id. at 16-17.
Id. at 17-31.
In opposition, Dr. Morice argues that all Defendants have capacity to be sued. Dr. Morice also contends that each claim is supported by sufficiently specific allegations to state plausible claims for relief. When these allegations are taken as true, Dr. Morice says it is clear that Defendants do not qualify for statutory immunity or immunity under the Bylaws. In regard to abstention under the primary jurisdiction doctrine, Dr. Morice asserts that the Court should decline to stay the proceedings because only the single claim relating to his denial of privileges would be affected by any hearing or appeal. Finally, Dr. Morice makes various arguments to rebut dismissal of his individual claims, which the Court will address in detail below.
R. Doc. 82 at 12-15.
Id. at 11-12.
Id. at 16-21.
Id. at 22.
Id. at 23-52.
B. Dr. Morice's Motion for Partial Summary Judgment
In his motion for partial summary judgment, Dr. Morice presents arguments mirroring those he asserted in support of his second motion for preliminary injunction. Essentially, Dr. Morice claims that Defendants violated the Bylaws' provision that adverse recommendations not become effective until the final recommendation of the Board at the end of the hearing-and-appeal process. Accordingly, Dr. Morice says that Defendants should have granted him interim privileges in obstetrics between the denial of his request for reappointment of privileges and the end of the hearing-and-appeal process. Dr. Morice further argues that Defendants impermissibly altered the two-year period of his reappointments (which ran from May to May) by unilaterally extending the period ending on May 16, 2018, to August 13, 2018. In doing so, says Dr. Morice, Defendants created a trap for Dr. Morice's privileges to lapse, so they could shut him out of local competition for obstetrical services. Because Dr. Morice served the entirety of his suspension and complied with all related conditions, he contends that the denial of his reappointment of obstetrical privileges is largely based upon the same "trumped up" allegations for which he was already punished. And, to the extent other instances of substandard and unprofessional conduct formed a basis for the denial of reappointment, Dr. Morice contends that these too were adverse recommendations that should not become binding and effective until the resolution of his hearing and appeal.
Compare bulleted list in R. Doc. 69-1 at 9-14 with bulleted list in R. Doc. 73 at 12-17.
R. Doc. 73 at 12-17.
In opposition, Defendants urge the Court to deny the motion for partial summary judgment on the same grounds that the Court denied the motion for preliminary injunction – namely, Dr. Morice does not have the right to interim privileges because he permitted his privileges to lapse before applying for reappointment. Defendants also submit that the motion for partial summary judgment is premature and should be denied for the same reasons set forth in their motion to dismiss.
R. Doc. 79 at 2, 8-10.
Id. at 1, 6-8.
In reply, Dr. Morice argues that certain representations by a staff member of TRMC and Stock indicated that his privileges did not lapse. Dr. Morice submits an email by staff member Dana Rodrigue, who on December 18, 2018, responded to him about his request for activation of his privileges in obstetrics, advising: "I will need you to resubmit the privilege form and leave the dates blank. Because this is not a new application or reappointment application and just a request for privileges, your dates will be from the date of approval to the end of your current reappointment which is May, 2020." Dr. Morice contends that this correspondence proves that his privileges had not lapsed, or else proves that he could submit an application after the two-year period had expired and enjoy continuous privileges. Dr. Morice further argues that Stock's correspondence gave no indication that his privileges had lapsed and thus implied that Dr. Morice's privileges would be granted. Dr. Morice also questions the legitimacy of one of the two "new" grounds for the denial of his reappointment request, which concerned conduct that occurred in November of 2017.
R. Doc. 85 at 5 (citing R. Doc. 69-3 at 7).
Id. at 5-6.
Id. at 7-10.
Id. at 10 (citing R. Doc. 79-6).
III. LAW & ANALYSIS
A. Rule 12(b)(6) Motion
1. Rule 12(b)(6) Standard
The Federal Rules of Civil Procedure require a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Rule 8 "does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The statement of the claim must " ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ " Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (quoting Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ). A pleading does not comply with Rule 8 if it offers "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or " ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 555-57, 127 S.Ct. 1955 ).
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a party to move to dismiss for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). A claim is plausible on the face of the complaint "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). Plausibility does not equate to probability, but rather "it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). "Where a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility of "entitlement to relief." ’ " Id. (quoting Twombly , 550 U.S. at 557, 127 S.Ct. 1955 ). Thus, if the facts pleaded in the complaint "do not permit the court to infer more than a mere possibility of misconduct, the complaint has alleged – but it has not ‘show[n]’ – ‘that the pleader is entitled to relief.’ " Id. at 679, 129 S.Ct. 1937 (quoting Fed. R. Civ. P. 8(a)(2) ).
In considering a Rule 12(b)(6) motion to dismiss for failure to state a claim, a court employs the two-pronged approach utilized in Twombly . The court "can choose to begin by identifying pleadings that, because they are no more than conclusions [unsupported by factual allegations], are not entitled to the assumption of truth." Iqbal , 556 U.S. at 679, 129 S.Ct. 1937. However, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. "[The] task, then, is to determine whether the plaintiff has stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's likelihood of success." Body by Cook, Inc. v. State Farm Mut. Auto. Ins. , 869 F.3d 381, 385 (5th Cir. 2017) (quoting Doe ex rel. Magee v. Covington Cty. Sch. Dist. , 675 F.3d 849, 854 (5th Cir. 2012) (internal quotation marks and citation omitted)). Motions to dismiss are disfavored and rarely granted. Turner v. Pleasant , 663 F.3d 770, 775 (5th Cir. 2011) (citing Harrington v. State Farm Fire & Cas. Co. , 563 F.3d 141, 147 (5th Cir. 2009) ).
A court's review of a Rule 12(b)(6) motion to dismiss "is limited to the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint." Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC , 594 F.3d 383, 387 (5th Cir. 2010) (citing Collins v. Morgan Stanley Dean Witter , 224 F.3d 496, 498-99 (5th Cir. 2000) ). A court may also take judicial notice of certain matters, including public records and government websites. Dorsey v. Portfolio Equities, Inc. , 540 F.3d 333, 338 (5th Cir. 2008) ; see also Kitty Hawk Aircargo, Inc. v. Chao. , 418 F.3d 453, 457 (5th Cir. 2005). Thus, in weighing a Rule 12(b)(6) motion, district courts primarily look to the allegations found in the complaint, but courts may also consider "documents incorporated into the complaint by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint whose authenticity is unquestioned." Meyers v. Textron, Inc. , 540 F. App'x 408, 409 (5th Cir. 2013) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) ).
2. Defendants' Capacity to be Sued
Rule 17(b) of the Federal Rules of Civil Procedure defines the capacity of persons to be sued: the capacity of "an individual who is not acting in a representative capacity" is determined "by the law of the individual's domicile," Fed. R. Civ. P. 17(b)(1) ; a corporation's capacity to be sued is determined "by the law under which it was organized," id. 17(b)(2) ; and "for all other parties," the capacity to be sued is determined "by the law of the state where the court is located, except that ... a partnership or other unincorporated association with no such capacity under that state's law may sue or be sued in its common name to enforce a substantive right existing under the United States Constitution or laws." Id. 17(b)(3)(A). The "law" of the state includes the "whole law," that is, both statutes and judicial decisions. Klebanow v. N.Y. Produce Exch. , 344 F.2d 294, 297 (2d Cir. 1965).
Defendants submit that the Board, MEC, and Credentials Committee should be dismissed because they lack the capacity to be sued because they are mere divisions of TRMC, the proper corporate defendant that is vested with the capacity to be sued under La. R.S. 46:1060. Defendants contend that the Board, MEC, and Credentials Committee are not unincorporated associations under Rule 17(b)(3) that have a separate identity from TRMC. Rather, Defendants suggest that these entities only exist as bodies of TRMC. For instance, while the Board acts as the "governing body" of TRMC, it does not "possess a corporate identity, the ability to own property (including any funds used to pay judgments), or the ability to sue or be sued." Instead, say Defendants, those rights are vested in TRMC. Similarly, Defendants contend that "the MEC and Credentials Committee are merely internal committees of TRMC's medical staff and serve as the medical staff's representatives to the Board" with "no legal identity, no capacity to contract or be sued, and no ability to pay any judgment rendered against them." Dr. Morice responds that Louisiana law recognizes that the Board exists independently from a hospital service district such as TRMC as its governing body, and so too the committees that govern and review the credentials of the medical staff. For instance, La. R.S. 46:1053 requires the Board to serve as an independent entity of the hospital service district, and section 46:1055 grants the Board authority to "promulgate rules ... governing the conduct of the hospital," "conduct hearings and pass upon complaints by or against any officer or employee of the district," and appoint a director of the hospital and certain committees. La. R.S. 46:1053 & 1055. Pursuant to the Bylaws, Dr. Morice asserts that the Board also makes the final decision in appointing physicians to the medical staff and granting privileges, after considering recommendations by the Credentials Committee and the MEC. Dr. Morice also cites several Louisiana state cases and two federal cases in which the board of a hospital service district and/or committees were named as defendants. In Giles , for example, the Louisiana Supreme Court issued a writ of mandamus to the board of commissioners of the St. Tammany Parish Hospital District to admit Dr. Giles to active staff membership at the St. Tammany Parish Hospital. 160 So. 2d at 618.
R. Doc. 77-1 at 8.
Id. at 9.
R. Doc. 82 at 12-14.
Id. at 14-15 (citing R. Doc. 77-3 at 7, 37-42).
Id. at 14 n.72 & 15 n.75 (citing Leckelt v. Bd. of Comm'rs of Hosp. Dist. No. 1 , 909 F.2d 820 (5th Cir. 1990) ; Fremaux v. Bd. of Comm'rs of Hosp. Serv. Dist. No. 3 of Lafourche Par. , 1997 WL 159483 (E.D. La. Mar. 26, 1997) ; In re Bd. of Comm'rs of St. Charles Par. Hosp. Serv. Dist., Par. of St. Charles , 232 La. 889, 95 So. 2d 488 (1957) ; Lamm v. Bd. of Comm'rs for Vermilion Hosp. Serv. Dist. No. 1 , 378 So. 2d 919, 922 (La. 1979) ; Giles v. Breaux , 160 So. 2d 608 (La. App. 1964) ; Wash. Par. Police Jury v. Wash. Par.Hosp. Serv. Dist. No. 1 , 152 So. 2d 362 (La. App. 1963) ).
The Board, MEC, and Credentials Committee are not corporations. Thus, these entities fall under the category of "all other parties" in Rule 17(b)(3), and their capacity to be sued is governed by the law of Louisiana, the state in which this Court sits. In Louisiana, "[a]n entity must qualify as a juridical person to have the capacity to be sued." Dejoie v. Medley , 945 So. 2d 968, 972 (La. App. 2006) (citing Dugas v. City of Breaux Bridge Police Dep't , 757 So. 2d 741 (La. App. 2000) ). "A juridical person is an entity to which the law attributes personality, such as a corporation or a partnership. The personality of a juridical person is distinct from that of its members." La. Civ. Code art. 24. The Louisiana Code of Civil Procedure lists specific juridical persons with capacities to be sued, including corporations and unincorporated associations. La. Code Civ. P. arts. 738 & 739. Unincorporated associations are "created in the same manner as a partnership, by a contract between two or more persons to combine their efforts, resources, knowledge or activities for a purpose other than profit or commercial benefit." Ermert v. Hartford Ins. Co. , 559 So. 2d 467, 473 (La. 1990). Political subdivisions of the state are also considered juridical persons with the capacity to be sued. See Roberts v. Sewerage & Water Bd. of New Orleans , 634 So. 2d 341, 347 (La. 1994) ; see also La. Const. art. 12, § 10.
Here, TRMC is a hospital service district created pursuant to Louisiana law, which authorizes and empowers parish police juries to create and form hospital service districts. La. R.S. 46:1051. It is well-established that hospital service districts are political subdivisions of the state. Id. 46:1064(A); Bertrand v. Sandoz , 260 La. 239, 255 So. 2d 754, 756-59 (1971). Louisiana Revised Statute 46:1060 grants corporate powers, such as "perpetual existence," "the power and right to incur debts and contract obligations" and "to sue and be sued," to hospital service districts. See Wash. Par. Police Jury , 152 So. 2d at 367-69 (interpreting La. R.S. 46:1060 to mean that a hospital service district cannot be terminated by a police jury once it is created absent express constitutional or legislative authorization).
Once a hospital district is formed or created, a "board of five commissioners," also referred to as "the commission," is appointed by the police jury of the parish. La. R.S. 46:1053. Each commissioner must be a qualified voter and resident of the district, and each serves varying limited terms. Id. Section 46:1055 sets out duties and authorities of the commission "[i]n addition to the duties defined elsewhere in this Chapter [concerning hospital service districts]," including "[t]o represent the public interest in providing hospital and medical care in the district"; "[t]o advise the police jury and the hospital director on problems concerning the operation of the hospital"; "[t]o make, alter, amend, and promulgate rules and regulations governing the conduct of the hospital"; "[t]o conduct hearings and pass upon complaints by or against any officer or employee of the district"; "[t]o review and modify, or set aside any action of the officers or employees of the district which the commission may determine to be desirable or necessary in the public interest"; "[t]o appoint, with approval of the medical staff, a director of the hospital"; "[t]o appoint necessary standing and special committees which may be necessary to carry out the purposes of this Chapter"; and "[t]o enter into lease agreements with recognized and duly constituted nonprofit associations which are primarily engaged in the operation of hospitals." La. R.S. 46:1055.
Both the "hospital service districts," such as TRMC, "and the governing bodies created under the provisions of this chapter," such as the Board, MEC, and Credentials Committee, have the "objects and purposes" of "own[ing] and operat[ing] hospitals"; "administer[ing] other activities related to rendering care to the sick and injured"; "promot[ing] and conduct[ing] scientific research and training ... in connection with the hospital"; "promot[ing] the general health of the community"; and "cooperat[ing] with other public and private institutions and agencies engaged in providing hospital and other health services to residents of the district." La. R.S. 46:1052.
a. The Board
The Board is plainly not an unincorporated association because it was not created by parties through contract, but by the appointment of a police jury authorized to do so by statute. La. R.S. 46:1053. A slightly more difficult question is whether the Board has capacity to be sued as a juridical person with distinct personality, separate and apart from the political subdivision of TRMC. See La. Civ. Code art. 24. In Roberts , the Louisiana Supreme Court held that "[i]n the absence of positive law to the contrary, a local government unit may be deemed to be a juridical person separate and distinct from other government entities, when the organic law grants it the legal capacity to function independently and not just as the agency or division of another governmental entity." 634 So. 2d at 347. "Such a determination will depend on an analysis of specifically what the entity is legally empowered to do." Id.
Using this "functional approach," the supreme court held that the Sewerage and Water Board of New Orleans had a juridical personality with capacity to be sued under the Louisiana Workers Compensation Act. Id. Despite the fact that the political subdivision of the Sewerage and Water Board was "closely related" to the political subdivision of the City of New Orleans, the supreme court found that the Sewerage and Water Board was "legally independent of the City, state and other governments in its source of revenues; the employment, deployment, direction and control of its work force; and the comprehensive management of its public utility operations." Id. at 346-47. While composed of appointed citizens and local government officials, the Sewerage and Water Board was authorized to "elect an executive director" and general superintendent and fix their salaries; to "employ all ... employees necessary to operate the public sewerage, water and drainage systems"; to "dispense with the services of unnecessary employees"; to establish and regulate employee pension funds; to acquire and expropriate property; to conduct and make rules and regulations regarding underground construction; to enter into consumer contracts; and to fix rates to consumers, some subject to approval by other local governmental entities. Id. at 347-48.
Applying the "functional approach" used in Roberts , this Court concludes that the Board is merely a governing body of TRMC without an independent capacity to be sued. Unlike the Sewerage and Water Board in Roberts , the Board here does not directly employ a staff or manage their pay, acquire or expropriate property, enter into consumer contracts, or set rates for hospital services. Rather, the Board's primary function is to govern the hospital as the representative of the public interest. In so doing, the Board sets regulations for hospital conduct, selects a competent director, and monitors the physicians to ensure that the hospital provides for the public welfare as contemplated in La. R.S. 46:1052. Moreover, as with the police department in Dugas , "[s]tate law is silent on whether [the Board] has the capacity to sue or be sued and no local ordinance was introduced to show that [the Board] is granted this capacity." Dugas , 757 So. 2d at 744. Rather, the power to sue and be sued is explicitly vested in TRMC. La. R.S. 46:1060.
While Dr. Morice cites several cases in which a board of commissioners was named a defendant, these cases are distinguishable or easily explained. First, none of the cases addresses the capacity to be sued, and, indeed, capacity is a waivable defense. Myers v. Manchester Ins. & Indem. Co. , 572 F.2d 134, 134 (5th Cir. 1978) (failure to object to lack of capacity until post-trial conference constituted waiver of challenge to capacity); Kennard v. St. James Par. Sch. Bd. , 218 So. 3d 680, 683-84 (La. App. 2017) (upholding waiver of dilatory exception of lack of procedural capacity not pleaded prior to or in answer). Second, the federal cases do not indicate that the commission was a defendant in the case, even if named in the caption. In Leckelt , the defendants were "the Board of Commissioners of Hospital District No. 1, Terrebone Parish, Louisiana, [and] the individual commissioners." 909 F.2d at 824. Thus, the board was referenced only in relation to the defendant hospital district, the real party in interest. Similarly, in Fremaux , the court treated the named defendant, "the Board of Commissioners of Hospital Service District No. 3 of Lafourche Parish d/b/a Thibodeaux Hospital and Health Centers," as one and the same with the hospital service district for purposes of La. R.S. 46:4064(A). 1997 WL 159483, at *2. Third, the Board here holds the same position with respect to the hospital district (TRMC) as does a board of directors with respect to a corporation. See, e.g., Wells v. Fandal , 136 So. 3d 83, 85 (La. App. 2014) (board of directors and its unnamed secretary and treasurer were "not juridical person[s] and lack[ed] the requisite capacity" to be sued, because Louisiana law defines a "juridical person [as] an entity to which the law attributes personality, such as a corporation"). In sum, the proper Defendant is the political subdivision, TRMC, which has the capacity to be sued, not its governing body.
b. The MEC and Credentials Committee
The MEC and Credentials Committee were created in Article XIV of the Bylaws. Thereunder, "[c]ommittee members and committee chairpersons, unless otherwise so designated, will be appointed by the Chief of Staff for one year terms and approved by the Medical Executive Committee." Section 1 provides that the composition of the MEC "shall consist of the officers of the Medical Staff and two (2) members at large elected by the Medical Staff for one-year terms," and further lists the duties of the MEC, including to act on behalf of the medical staff, coordinate policies of the medical staff, "provide liaison between Medical Staff, Administration, and the Board," "initiate corrective review measures when appropriate," "monitor the effective performance of staff functions as provided in these bylaws or as the Board may reasonably require," and "directly recommends to the ... Board issues relative to performance improvement structure, activities, and participation; through the quality improvement program, practitioners, procedures, and/or diagnoses are reviewed for all patients for provision of the same level of quality patient care by all individuals with delineated clinical privileges."
R. Doc. 77-3 at 46-48.
Id. at 46.
Id. at 46-47.
Section 2 provides that the composition of the Credentials Committee will "consist of five (5) members of the active Medical Staff selected on a basis that will ensure representation of the major clinical specialties of the Staff at large," and lists two duties: (1) "to review the credentials of all applicants and to make recommendations for membership and delineation of clinical privileges"; and (2) "to make a written report to the [MEC] on each applicant for Medical Staff appointment/reappointment, delineation or renewal of clinical privileges." Both committees are required to convene for periodic, members-only meetings and maintain a record of their "recommendations and actions taken."
Id. at 47-48.
Id.
The Bylaws constitute "a contract between two or more persons to combine their efforts, resources, knowledge or activities for a purpose other than profit or commercial benefit" that evinces an intent to create an unincorporated association. Ermert , 559 So. 2d at 473. "[F]or an unincorporated association to possess juridical personality, the object of the contract of association must necessarily be the creation of an entity whose personality ‘is distinct from that of its members.’ " Id. at 474 (citing La. Civ. Code art. 24 ). The Bylaws for TRMC were adopted and approved by its medical staff and Board in part to "provide a means whereby issues concerning the Medical Staff and the medical center may be discussed by the Medical Staff with the [Board] and the Chief Administrative Officer." The Bylaws as a whole do not create the committees as independent unincorporated associations having the capacity to be sued. Rather, as alleged by Dr. Morice, the Bylaws constitute a contract between himself, as a member of the medical staff, and Defendants to govern the rights and obligations between the medical staff and TRMC. The committees merely function to help govern this relationship. Therefore, the committees are not unincorporated associations under Louisiana law.
Id. at 1, 7.
Nor do the committees' powers demonstrate that they are juridical entities capable of being sued under Roberts . While the MEC and Credentials Committee are authorized to take initial actions regarding a physician's grant or denial of privileges, their recommendations are ultimately subject to approval by the Board, acting on behalf of TRMC, which may override any committee recommendation. Thus, the scope of power that the MEC and Credentials Committee wields is narrow and advisory. The Bylaws do not purport to give the MEC or Credentials Committee the ability to acquire or alienate property, enter into contracts, set prices, or act in a way that demonstrates independence from TRMC. Rather, the committees function as administrative units or divisions of TRMC to ensure quality performance of the hospital.
Id. at 28-30, 37-42.
In conclusion, the Board, MEC, and Credentials Committee lack the capacity to be sued. TRMC is the proper defendant.
3. Immunity under HCQIA and La. R.S. 13:3715.3(C)
The HCQIA provides immunity to health care providers against certain claims for money damages brought by participants in professional peer review actions. 42 U.S.C. § 1111, et seq. ; see Poliner v. Tex. Health Sys. , 537 F.3d 368, 376, 381 (5th Cir. 2008) (HCQIA does not apply to claims for injunctive and declaratory relief); Monroe v. AMI Hosps. of Tex., Inc. , 877 F. Supp. 1022, 1028 (S.D. Tex. 1994) (noting that HCQIA does not apply to § 1983 or Title VII claims) (citing Austin v. McNamara , 979 F.2d 728, 733 (9th Cir. 1992) ). Immunity covers claims arising out of "professional review actions" when such action has been 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).
42 U.S.C. § 11112(a). A "professional review action" is defined, in part, as "an action or recommendation of a professional review body which is taken or made in the conduct of professional review activity, which is based on the competence or professional conduct of an individual physician (which conduct affects or could affect adversely the health or welfare of a patient or patients), and which affects (or may affect) adversely the clinical privileges, or membership in a professional society, of the physician." Id. § 11151(9). "A professional review action shall be presumed to have met the preceding standards necessary for the protection [viz. , immunity from monetary liability] set out in section 1111(a) of this title unless the presumption is rebutted by a preponderance of the evidence." Id. § 11112(a)
Section 13:3715.3 of the Louisiana Revised Statutes shares the same legislative purpose and scope as the HCQIA of "promoting effective peer review" by "encourage[ing] the medical profession to police its own activities with minimal judicial involvement." Smith v. Our Lady of the Lake Hosp. , 639 So. 2d 730, 742-43 (La. 1994). Immunity from claims for damages extends to a "committee member act[ing] without malice and in the reasonable belief that such action or recommendation is warranted by the facts known to him." La. R.S. 13:3715.3(C). The Louisiana Supreme Court has interpreted this provision to impose upon the plaintiff the initial burden of establishing lack of malice and good faith. Smith , 639 So. 2d at 746-47, 750. "[L]ack of ‘malice’ and ‘good faith’ exists in this context when the defendants-peer review committee members are shown to have a reasonable basis for their action or recommendation made in the course of the peer review process," a "formulation ... consistent with that set forth in the federal HCQIA counterpart provision." Id. at 749.
Defendants contend that immunity applies because Dr. Morice's complaint acknowledges that a hearing-and-appeal process was conducted by Defendants in response to five instances of allegedly incompetent or unprofessional behavior upon which his suspension was based. While Dr. Morice concedes that Defendants implemented a hearing-and-appeal process, he contends that it was not premised upon competence or professional conduct. Instead, Dr. Morice alleges that his suspension and denial of privileges were based upon fabricated allegations and that the reviewing committees "rubber-stamped" the recommendations and conclusions without considering the evidence before them. Such allegations, when accepted as true, compromise Defendants' satisfaction of the HCQIA's four-element test. Immunity is thus inappropriate at the motion-to-dismiss stage. See, e.g. , Brader v. Allegheny Gen. Hosp. , 64 F.3d 869, 879-80 (3d Cir. 1995) (denying motion to dismiss where plaintiff "alleged that the defendants have failed to satisfy the requirements of HCQIA immunity"); Zamanian v. Jefferson Par. Hosp. Serv. Dist. No. 2 , 2017 WL 3480993, at *4-5 (E.D. La. Aug. 14, 2017) (denying motion to dismiss even where plaintiff's allegations did not rebut presumption of immunity to provide plaintiff " ‘with an opportunity to conduct further discovery’ given that this matter is still in the early stages of litigation and immunity is often invoked on a motion for summary judgment, not a motion to dismiss") (quoting Onel v. Tenet Healthsystems , 2003 WL 22533616, at *2 (E.D. La. Oct. 31, 2003) ).
R. Doc. 77-1 at 11.
See, e.g. , R. Doc. 64 at 13-16. Although Defendants contend that Dr. Morice's allegations are too conclusory to withstand a motion to dismiss, the Court disagrees. Dr. Morice's allegations recite specific instances in the hearing-and-appeal process in which Defendants are said to have ignored evidence exonerating Dr. Morice from the charges brought against him. The Court is compelled to accept these allegations as true at this stage of the case.
4. Immunity under La. R.S. 9:2798.1
Defendants submit that they are also entitled to immunity under La. R.S. 9:2798.1, which provides immunity for public entities for "policymaking or discretionary acts when such acts are within the course and scope of their lawful powers and duties." La. R.S. 9:2798.1(B). However, immunity does not apply "(1) [t]o acts or omissions which are not reasonably related to the legitimate governmental objective for which the policymaking or discretionary power exists; or (2) [t]o acts or omissions which constitute criminal, fraudulent, malicious, intentional, willful, outrageous, reckless, or flagrant misconduct." Id. 9:2798.1(C). As discussed above, even setting to one side Dr. Morice's allegations of Defendants' illegitimate anticompetitive acts, his allegations that TRMC's committees disregarded evidence concerning the charges against him raise plausible concerns of misconduct. Therefore, dismissal is inappropriate at this juncture. 5. Immunity under the Bylaws
Defendants assert that the Bylaws provide immunity from all of Dr. Morice's claims. Defendants contend that Dr. Morice agreed to abide by the Bylaws when he applied for privileges at TRMC, and so waived his right to sue Defendants, as did the plaintiff in Deming v. Jackson-Madison County General Hospital District , 553 F. Supp. 2d 914, 938 (W.D. Tenn. 2008). Dr. Morice does not challenge his assent to the immunity provision, but argues that the Bylaws provide only for immunity from claims related to the disclosure of information. The disputed provision is Article XVII, "Immunity From Liability," which provides in pertinent part:
R. Doc. 77-1 at 14 (citing R. Doc. 77-3 at 10).
R. Doc. 82 at 21.
SECTION 1: Privileged Information
Any act, communication, recommendation, report, or disclosure, with respect to any individual, performed or made in good faith and without malice and at the request of an authorized representative of this or any other health care facility, for the purpose of assuring quality patient care, will be privileged to the fullest extent permitted by law.
...
SECTION 3: Immunity From Liability for Disclosing Information
There will, to the fullest extent permitted by law, be absolute immunity from civil liability arising from any such communication, recommendation, report, or disclosure, even where the information involved would otherwise be deemed privileged.
SECTION 4: Scope of Immunity
Such immunity will apply to all acts, communications, recommendations, reports, or disclosures performed or made in connection with this or any other health care institution's activities related, but not limited to:
a. Application for appointment or clinical privileges;
b. Periodic reappraisals for reappointment or clinical privileges;
c. Corrective action, including summary, temporary, and automatic suspensions;
d. Hearings and/or other reviews ....
R. Doc. 77-3 at 63-65 (emphasis added).
Under Louisiana's rules for contract interpretation, the Bylaws provide for immunity limited to the disclosure of privileged information. This is apparent by reading the provisions together, each being connected by the word "such." Section 1 of Article XVII defines a privileged communication as "[a]ny Act, communication, recommendation, report, or disclosure, with respect to any individual, performed or made in good faith and without malice and at the request of an authorized representative of this or any other health care facility, for the purpose of assuring quality patient care." Section 2 extends absolute immunity to " [a]ny such communication, recommendation, report, or disclosure." But Section 3 limits the scope of " [s]uch immunity " to the disclosure of privileged communications concerning, as relevant here, actions on an application for clinical privileges, the suspension of privileges, or the hearing-and-appeal process. Immunity, then, is limited to claims arising from the disclosure of privileged communications related to the peer review process. Unlike the clause of sweeping immunity in Deming , the immunity conferred by the Bylaws does not apply to the gamut of Dr. Morice's claims. Because "privileged communications" are defined in part as those "made in good faith and without malice," the Court cannot determine at the pleadings stage which, if any, constitute those that may be enforced to bar Dr. Morice's claims related to the disclosure of information. Therefore, Defendants' motion to dismiss on this ground must also be denied at this stage of the case.
See La. Civ. Code arts. 2045 -2057.
Id. art. 2050 ("Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole.").
6. Primary Jurisdiction Doctrine
Defendants next submit that the entirety of the case should be stayed under the primary jurisdiction doctrine pending completion of the hearing-and-appeal process concerning TRMC's decision to deny Dr. Morice's application for reinstatement of his obstetrical privileges. Defendants contend that the circumstances here are similar to those in Rogers v. Columbia/HCA of Central Louisiana , 961 F. Supp. 960, 968 (W.D. La. 1997), where the court stayed, pending exhaustion of his administrative remedies, a physician's suit against a hospital alleging antitrust and defamation claims as well as violations of due process for revoking the physician's privileges. Dr. Morice responds that it would be impractical to "carve out and stay this single claim ... when the claim is closely related to the numerous other claims currently before the Court" that are ripe for decision.
R. Doc. 77-1 at 16-17. Again, the Court has not been apprised whether this process is now complete.
R. Doc. 82 at 22.
" ‘The doctrine of primary jurisdiction ... is a doctrine of judicial abstention whereby a court which has jurisdiction over a matter, nonetheless defers to an administrative agency for an initial decision on questions of fact or law within the peculiar competence of the agency.’ " Occidental Chem. Corp. v. La. Pub. Serv. Comm'n , 810 F.3d 299, 309 (5th Cir. 2016) (quoting REO Indus., Inc. v. Nat. Gas Pipeline Co. of Am. , 932 F.2d 447, 465 (5th Cir. 1991) ). Three prerequisites must exist before a court may exercise its discretion to stay the matter: "(1) the court has original jurisdiction over the claim before it; (2) the adjudication of that claim requires the resolution of predicate issues or the making of preliminary findings; and (3) the legislature has established a regulatory scheme whereby it has committed the resolution of those issues or the making of those findings to an administrative body." Northwinds Abatement, Inc. v. Emp'rs Ins. of Wausau , 69 F.3d 1304, 1311 (5th Cir. 1995). "No fixed formula exists for applying the doctrine of primary jurisdiction. In every case the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation." Occidental Chem. , 810 F.3d at 309 (internal quotation marks and citation omitted). Generally, the court defers to the regulatory forum "based on its determination that the benefits of obtaining aid from that other forum outweigh the need for expeditious litigation." Id. at 302.
For instance, in Rogers , defendants urged that dismissal under the doctrine of administrative exhaustion was appropriate because the plaintiff had not exhausted the internal review procedures available to him in the hospital bylaws. 961 F. Supp. at 964. Finding the doctrine of administrative exhaustion inapplicable, the court applied the doctrine of primary jurisdiction. Id. at 966. The court reasoned that it could not determine whether defendants were immune under the HCQIA and La. R.S. 13:3715.3 until the peer review process was complete. 961 F. Supp. at 966. The court further reasoned that "[t]he exhaustion of the administrative process also will allow for the development of a full factual record" and also "give the defendants a chance to discover and correct their own errors, if any exist," thus promoting judicial economy. Id. at 966, 968. Additionally, the court explained that the HCQIA and its Louisiana counterpart and regulations governing disclosure of information to the National Practitioner Data Bank constituted regulatory schemes that entrusted a professional peer review committee with the responsibility to determine the facts related to the suspension of a physician's privileges. Id. at 967-98. The court noted that "the expertise of professional peer review committees makes them specially qualified to make findings as to the competence of fellow physicians," and that "the evaluation of professional proficiency of physicians is best left to their peers, subject only to limited judicial surveillance." Id. at 968 (citing Sosa v. Bd. of Managers of Val Verde Mem'l Hosp. , 437 F.2d 173, 177 (5th Cir. 1971) ). Finally, the court concluded that no exception existed that would bar the invocation of the primary jurisdiction doctrine. Id.
The posture of this case is distinguishable from Rogers . Here, Dr. Morice asserts claims that relate to at least one completed peer review process. While Dr. Morice's supplemental and amending complaint also asserts claims related to a peer review process that was ongoing at the time Dr. Morice amended his complaint in March 2019, significant time has passed since that filing, and the peer review process is likely complete. Therefore, unlike Rogers , granting a stay here will not promote judicial economy. Additionally, the Court perceives no reason why it cannot resolve this motion to dismiss on the factual allegations in the amended complaint. As discussed above, Dr. Morice has made allegations in his amended complaint that TRMC's reviewing committees ignored evidence when considering his suspension. These allegations may also bear upon the subsequent denial of his application for reinstatement of his obstetrical privileges. Given the procedural posture of the case, the Court declines to apply the primary jurisdiction doctrine at this time. Should any party or parties wish to inform the Court of any proceedings that would materially affect this analysis, they may file a motion for reconsideration.
7. Antitrust Claims (Counts I & II)
Defendants next assert that Dr. Morice fails to properly allege an antitrust claim. Specifically, Defendants argue that Dr. Morice (1) fails to allege an antitrust injury, (2) is not a proper party to assert antitrust claims, (3) fails to allege a restraint of trade, and (4) fails to properly allege a relevant market.
R. Doc. 77-1 at 18-22.
a. Standing under the Sherman Act
"Standing to pursue an antitrust suit exists only if a plaintiff shows: 1) injury-in-fact, an injury to the plaintiff proximately caused by the defendants' conduct; 2) antitrust injury; and 3) proper plaintiff status, which assures that other parties are not better situated to bring suit." Doctor's Hosp. of Jefferson, Inc. v. Southeast Med. All., Inc. , 123 F.3d 301, 305 (5th Cir. 1997). Accordingly, an "[a]ntitrust injury must be established for the plaintiff to have standing under section 1 or section 2 of the Sherman Act." Id. (citing Bell v. Dow Chem. Co. , 847 F.2d 1179, 1182 (5th Cir. 1988) ). The Supreme Court has defined an "antitrust injury" as an "injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendants' acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. , 429 U.S. 477, 489, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). Accordingly, "the standing inquiry ... ensures that the plaintiff's demand for relief ultimately serves the purposes of antitrust law to increase consumer choice, lower prices and assist competition, not competitors." Doctor's Hosp. , 123 F.3d at 306. The Fifth Circuit instructs that "antitrust injury for standing purposes should be viewed from the perspective of the plaintiff's position in the marketplace, not from the merits-related perspective of the impact of a defendant's conduct on overall competition." Id. at 305. The "proper plaintiff" inquiry examines "(1) whether the plaintiff's injuries or their causal link to the defendant are speculative, (2) whether other parties have been more directly harmed, and (3) whether allowing this plaintiff to sue would risk multiple lawsuits, duplicative recoveries, or complex damage apportionment." Norris v. Hearst Tr. , 500 F.3d 454, 465 (5th Cir. 2007) (quoting McCormack v. Nat'l Collegiate Athletic Ass'n , 845 F.2d 1338, 1341 (5th Cir. 1988) ).
Defendants argue that Dr. Morice fails to allege an actionable antitrust injury because he does not allege anything more than personal harm, such as loss of income and loss of patient referrals. Defendants contend that to maintain an antitrust claim, Dr. Morice must allege an injury that "affect[s] the prices, quantity, or quality of goods or services and not just his own welfare." To that end, Defendants also argue that Dr. Morice is not the proper plaintiff to assert antitrust claims against them because he is not a patient or third-party payor, the persons who would be injured by the unlawful anticompetitive conduct he alleges. In opposition, Dr. Morice cites Brader v. Allegheny General Hospital , 64 F.3d 869 (3d Cir. 1995), to contend that dismissal is inappropriate where the pleadings indicate a hospital's termination of privileges excluded a plaintiff-physician from competition in the relevant market. In Brader , the Third Circuit rejected arguments that the plaintiff failed to allege an antitrust injury and was a "poor champion of consumers," arguments nearly identical to Defendants' here, finding that the "type of injury alleged by [the plaintiff] (the loss of income due to an inability to practice in the relevant market area) is directly related to the illegal activity in which the defendant allegedly engaged: a conspiracy to exclude [the plaintiff] from the relevant market." Id. at 877. The court further noted that the existence of an antitrust injury is typically resolved after discovery and not on a motion to dismiss. Id. at 876 (citing Summit Health, Ltd. v. Pinhas , 500 U.S. 322, 111 S.Ct. 1842, 114 L.Ed.2d 366 (1991) ).
R. Doc. 77-1 at 18.
Id.
Id. at 19.
R. Doc. 82 at 23.
On this motion to dismiss, the Court finds Brader persuasive. Dr. Morice alleges that "Defendants are acting in a concerted manner to restrain trade and commerce by seeking to effectively restrict, limit, and terminate Plaintiffs' privileges at TRMC, which will have the effect of eliminating him from the competitive OB/GYN market in the region," and that such termination of privileges will result in the termination of his practice, which "employs dozens of local staff," and that his elimination from the market "will increase the price of OB/GYN services in the region." These allegations are sufficient to state a claim under Brader of an antitrust injury. "If the plaintiff does not eventually produce evidence to create a material fact issue concerning an antitrust violation, then summary judgment should be granted on that basis." Doctor's Hosp. , 123 F.3d at 306.
R. Doc. 64 at 27.
b. Restraint of trade
Section 1 of the Sherman Act prohibits "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations." 15 U.S.C. § 1. To prevail under this section, a plaintiff must show " ‘(1) the defendants engaged in a conspiracy; (2) that restrained trade; (3) in the relevant market.’ " Benson v. St. Joseph Reg'l Health Ctr. , 575 F.3d 542, 549 (5th Cir. 2009) (quoting Golden Bridge Tech., Inc. v. Motorola, Inc. , 547 F.3d 266, 270 (5th Cir. 2008) ).
Invoking Benson , Defendants contend that Dr. Morice's allegations that his suspension and the failure to reinstate his privileges do not amount to actionable "restraint of trade." In Benson , a physician alleged that the hospital's denial of privileges resulted in anticompetitive effects to reduce consumer choice of providers and services. Id. at 549-50. The Fifth Circuit rejected the physician's argument on the merits, reasoning that, despite his inability to practice at the hospital, the physician was "free to provide services at his own clinic" in the same geographic area. Id. at 549. "The inability to service patients at the hospital of [plaintiff's] choice does not demonstrate an unreasonable adverse impact on OB/GYN services for the entire county." Id. (citing Doctor's Hosp. , 123 F.3d at 309 ) (other citation omitted). Thus, the court affirmed summary judgment in favor of the hospital that did not renew the physician's privileges.
R. Doc. 77-1 at 20.
Dr. Morice argues that Benson is inapposite at this motion-to-dismiss stage, and further asserts that his allegations reflect those recognized in Bolt v. Halifax Hospital Medical Center , 891 F.2d 810 (11th Cir. 1990), overruled in part on other grounds by City of Columbia v. Omni Outdoor Advertising, Inc. , 499 U.S. 365, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991). In Bolt , the Ninth Circuit held that the plaintiff should have been permitted to introduce evidence of the hospital and medical staff's conspiracy to deny a physician's privileges on the basis of a sham peer review. Id. at 820. In finding the conspiracy's potential to create an anticompetitive effect under section 1 of the Sherman Act, the court recognized a rational economic motive for the conspiracy was the remaining doctors' ability to charge higher prices and exclude the physician from the profession. Id.
R. Doc. 82 at 27.
Here, Dr. Morice alleges that Defendants conspired to prevent him from providing obstetrical services in the relevant market by excluding him from the sole facility available in the region to provide such services. He further claims that Defendants benefit from his exclusion because they attain a monopoly on obstetrical services in the Thibodaux/Lafourche region and thus can charge higher prices. These allegations align with those recognized in Bolt .
R. Doc. 64 at 10-13.
c. Relevant market
"To establish Section 2 violations premised on attempt and conspiracy to monopolize, a plaintiff must define the relevant market." Doctor's Hosp. , 123 F.3d at 311. "To define a market is to identify producers that provide customers of a defendant firm (or firms) with alternative sources for the defendant's product or services." Id. (quotation and citation omitted). "Critically, evidence must be offered demonstrating not just where consumers currently purchase the product, but where consumers could turn for alternative products or sources of the product if a competitor raises prices." Id. (citations omitted).
Defendants contend that Dr. Morice's allegations lack "factual support that the relevant product and geographical market is medical entities that offer hospitalized obstetrical care in the Thibodaux/Lafourche region." Defendants imply that Dr. Morice must, at this juncture, introduce evidence to support its allegations that the Thibodaux/Lafourche region is the relevant market for OB/GYN services. The Court disagrees. As Dr. Morice points out, Defendants rely upon cases that define the relevant market at the summary judgment stage. See, e.g. , Doctor's Hosp. , 123 F.3d at 312 (considering plaintiff's expert report in rejecting plaintiff's narrow interpretation of the relevant market); Domed Stadium Hotel, Inc. v. Holiday Inns, Inc. , 732 F.2d 480, 487-88 (5th Cir. 1984) (after discovery, determining that "exceptional market conditions" did not exist to support a conclusion that one brand in a market of competing brands constituted a relevant product market). The decision in PSKS, Inc. v. Leegin Creative Leather Products, Inc. , 615 F.3d 412, 418 (5th Cir. 2010), the only case cited by Defendants involving a motion to dismiss that was granted, is distinguishable in that the court granted the motion after the case had been fully tried on the merits and vacated. In contrast, this Court has no evidence before it to evaluate whether the alleged relevant market for OB/GYN services is properly said to be the Thibodaux/Lafourche region. On this issue, Brader also makes clear that dismissal is inappropriate at the motion-to-dismiss stage where "there is some suggestion in the complaint and in the briefs that [the hospital] may offer unique ... services in the broader geographic ... area served by [the hospital]." 64 F.3d at 878. Dr. Morice's complaint makes such a suggestion by alleging that "TRMC is the sole community provider of both inpatient and outpatient hospital services in Thibodaux, Louisiana. Other than Plaintiff's clinic, where he cannot provide hospitalized obstetrical care, TRMC is the sole provider of OB/GYN services in Thibodaux, Louisiana." In sum, Dr. Morice's antitrust claims survive Defendants' motion to dismiss.
R. Doc. 77-1 at 21.
Id. at 20-21.
R. Doc. 64 at 28.
8. Breach of Contract and Bad Faith Breach of Contract (Counts III & IV)
To succeed on a breach-of-contract claim in Louisiana, a plaintiff must show "(1) the obligor's undertaking an obligation to perform, (2) the obligor failed to perform the obligation (the breach), and (3) the failure to perform resulted in damages to the obligee." Favrot v. Favrot , 68 So. 3d 1099, 1108-09 (La. App. 2011). To prove a bad faith breach of contract, a plaintiff must show the defendant "intentionally and maliciously" failed to perform the obligation. Olympia Minerals, LLC v. HS Resources, Inc. , 171 So. 3d 878, 897 (La. 2014) (quoting cmt. (b) to La. Civ. Code art. 1997 ). The Louisiana Supreme Court recognizes that the bylaws of a hospital's medical staff may form a contract between the physician and the hospital where the elements of a valid contract are met. Granger v. Christus Health Central Louisiana , 144 So. 3d 736, 760-61 (La. 2013). The supreme court further recognizes that a hospital's performance of its obligations under its bylaws is measured by the "substantial compliance" rule. Id. at 762-63 (discussing Smith , 639 So. 2d at 755-56 ). The substantial compliance rule teaches that, when evaluating a hospital's alleged breach of its bylaws, a court should view the hospital's conduct as a whole to determine whether the procedures it used undermined the bylaws' guarantees of fair procedure. Smith , 639 So. 2d at 755-56. " ‘Because the central purpose of the bylaws is to provide procedural fairness in reaching decisions regarding staff privileges, merely ‘technical’ violations or minor deviations in the procedures employed that do not result in material prejudice to the physician or otherwise undermine the result reached by the hospital will not rise to the level of ‘breaches’ of the hospital's obligation to comply with its bylaws.’ " Id. at 756 (quoting Owens v. New Britain Gen. Hosp. , 32 Conn.App. 56, 627 A.2d 1373, 1380 (1993) ).
In neither their motion to dismiss nor their opposition to Dr. Morice's motion for partial summary judgment do Defendants deny the existence of a contract. Therefore, the Court will treat the Bylaws as a contract between Dr. Morice and TRMC for purposes of this motion. Rather, Defendants contend that Dr. Morice's allegations fail to state a breach-of-contract claim because, by alleging that Defendants conducted a hearing and appeal in relation to his suspension, and because it is uncontested that Dr. Morice is entitled to hearing and appeal on a denial of privileges, Dr. Morice has conceded that TRMC substantially complied with the Bylaws. Defendants also assert that these same allegations and circumstances preclude a finding of bad faith because they acknowledge that TRMC attempted to fulfill, rather than circumvent, its obligations. Dr. Morice maintains that the sum of his allegations evinces Defendants' malicious intent to breach the Bylaws and that the peer review process was a "sham." For example, Dr. Morice alleges that Defendants ignored certain evidence in their decisions concerning his suspension because they were motivated economically to exclude him from the market of obstetrical services. Viewed as a whole, the conduct alleged (which the Court must accept as true on a Rule 12(b)(6) motion) involves more than a minor deviation from or technical violation of the Bylaws. The Court finds, then, that these allegations are sufficient to state a cause of action against TRMC for breach of the Bylaws. The merits of this dispute cannot be resolved on a motion to dismiss but must await consideration on a motion for summary judgment or trial.
R. Doc. 77-1 at 22-23.
Id. at 23-24.
R. Doc. 82 at 30-41. Dr. Morice also re-urges the grounds he presented in his motion for preliminary injunction, including the argument that TRMC's failure to reinstate Dr. Morice's privileges upon the end of his suspension violated Article XI of the Bylaws. Id. at 37-40. The Court again rejects Dr. Morice's position because a plain reading of the Bylaws reveals that lapsed privileges are only extended if a physician satisfies certain standards and follows the prescribed application process. Dr. Morice did not. R. Doc. 78 at 8-15.
9. Tortious Interference with Contract (Count V)
Louisiana recognizes a narrow cause of action for tortious interference with contract against a corporate officer where the following elements are met:
(1) the existence of a contract or a legally protected interest between the plaintiff and the corporation; (2) the corporate officer's knowledge of the contract; (3) the officer's intentional inducement or causation of the corporation to breach the contract or his intentional rendition of its performance impossible or more
burdensome; (4) absence of justification on the part of the officer; (5) causation of damages to the plaintiff by the breach of contract or difficulty of its performance brought about by the officer.
9 to 5 Fashions, Inc. v. Spurney , 538 So. 2d 228, 234 (La. 1989). In 9 to 5 , the Louisiana Supreme Court adopted this tort with respect to the limited duty owed by a corporate officer to the corporation "to refrain from intentional and unjustified interference with the contractual relation between his employer and a third person." Id. Louisiana courts have accordingly construed this cause of action narrowly and, in the broadest of constructions, consistently require a plaintiff to "identify a duty existing between it and the alleged tortfeasor, the violation of which would give rise to delictual liability." Taxicab Ins. Store, LLC v. Am. Serv. Ins. Co. , 224 So. 3d 451, 458-60 (La. App. 2017) ; see also Petrohawk Props., L.P. v. Chesapeake La., L.P. , 689 F.3d 380, 395-96 (5th Cir. 2012) (the alleged tortfeasor must owe a "narrow, individualized duty" to the plaintiff). Federal courts are particularly hesitant to expand the scope of the tort beyond that articulated in 9 to 5 . See, e.g. , Am. Waste & Pollution Control Co. v. Browning-Ferris, Inc. , 949 F.2d 1384, 1390-91 (5th Cir. 1991) ("It took the Louisiana Supreme Court almost 90 years to recognize a quite narrow cause of action for tortious contractual interference; it is not for this diversity court to expand that cause of action in the face of Louisiana's expressed unwillingness to do so."); M & D Mineral Consultants, LLC v. Li , 2013 WL 883689, at *4 (W.D. La. Mar. 7, 2013) ("any expansion of Louisiana's tortious interference law is a task properly contemplated by the state supreme court rather than this [c]ourt sitting in diversity"). In light of these considerations, courts find dismissal appropriate where the plaintiff fails to identify a corporate officer or articulate a narrow duty owed by the defendant to the plaintiff. See, e.g. , Petrohawk Props. , 689 F.3d at 395-96 (corporate defendant owed no particular duty to plaintiff); Am.'s Favorite Chicken Co. v. Cajun Enters., Inc. , 130 F.3d 180, 184-85 (5th Cir. 1997) (proper defendant is corporate officer rather than corporations); United States v. Cytogel Pharma, LLC , 2018 WL 5297753, at *15 & n.197 (E.D. La. Oct. 25, 2018) (noting that district court could not apply broad interpretation of 9 to 5 pronounced in Neel v. Citrus Lands of La., Inc. , 629 So. 2d 1299, 1301 (La. App. 1993), which permitted suit against corporation, absent intervening ruling from state supreme court); M & D Mineral Consultants , 2013 WL 883689, at *2-4 (dismissing action against manager of limited liability company).
Defendants contend that Dr. Morice's allegations fail to identify a corporate officer and thus should be dismissed. Dr. Morice responds that his allegations show that "TRMC officers and agents," such as the MEC, acted outside the scope of their authority and contrary to the duty they owed to TRMC. For example, Dr. Morice claims that the MEC breached its fiduciary duty to the corporation by breaching its obligation under the Bylaws to conduct an impartial and empirical peer review. These allegations, however, support no plausible claim for tortious interference cognizable within the limited scope of Louisiana jurisprudence. Because Dr. Morice fails to articulate a "narrow, individualized duty between the plaintiff and the alleged tortfeasor" or name a corporate officer, his claim for tortious interference with contract fails and must be dismissed. See Petrohawk Props. , 689 F.3d at 395-96.
R. Doc. 77-1 at 24.
R. Doc. 82 at 40.
Id. at 40-41.
10. Abuse of Rights and Negligent Misrepresentation (Counts VI & VII)
The abuse of rights doctrine is a "civilian concept" enforced sparingly because its application "renders unenforceable one's otherwise judicially protected rights." Truschinger v. Pak , 513 So. 2d 1151, 1154 (La. 1987) ; see also Ill. Cent. Gulf R.R. Co. v. Int'l Harvester Co. , 368 So. 2d 1009, 1013-14 (La. 1979) (explaining origin of doctrine and rarity of application). A plaintiff states a cause of action for abuse of rights "when one of the following conditions is met: (1) the predominant motive for exercise of the right is to cause harm; (2) there is no legitimate motive for exercise of the right; (3) exercise of the right violates moral rules, good faith, or elementary fairness; or (4) exercise of the right is for a purpose other than that for which it was granted." Mixon v. Iberia Surgical, L.L.C. , 956 So. 2d 76, 81 (La. App. 2007) (internal quotation marks and citation omitted). "If a party has a legitimate and serious interest in exercising a [legal] right, he may do so even if it causes harm to another. However, if a party does not have a legitimate and serious interest in the exercise of the right, and to do so would bring unnecessary harm to another, the doctrine of abuse of rights will bar exercise of the right." Mass. Mut. Life Ins. Co. v. Nails , 549 So. 2d 826, 829 (La. 1989) (citing Breland v. La. Hosp. Servs., Inc. , 468 So. 2d 1215, 1223 (La. App. 1984) ).
While Defendants contend that the suspension and denial of Dr. Morice's privileges was exercised in the legitimate and serious interest of patient safety, Dr. Morice contends that Defendants' sole motive was that of financial gain. The Court acknowledges that TRMC's right to regulate physician privileges may be exercised to advance legitimate and serious interests, and evidence of same may be easily developed. But no such record is before the Court, and at this stage, the Court is compelled to limit its review to the allegations in the complaint and, having done so, to deny the Defendants' motion to dismiss Dr. Morice's claim for abuse of rights.
R. Doc. 77-1 at 25.
R. Doc. 82 at 43.
Defendants also assert that Dr. Morice's claim for negligent misrepresentation fails as wholly conclusory. His allegations of negligent misrepresentation are limited to the following: "Alternatively, or in addition, one or more of the Defendants have made negligent misrepresentations, causing harm and damages to Plaintiff. As such, Defendants' actions constitute ... misrepresentation under Louisiana law." Understandably, Dr. Morice makes no argument in opposition to dismissal of this claim. The Court agrees with Defendants that Dr. Morice's negligent misrepresentation claim fails to meet the requisite pleading requirements. Accordingly, it is dismissed.
R. Doc. 77-1 at 25.
R. Doc. 64 at 34.
11. Intentional Infliction of Emotional Distress (Count VIII)
To prove intentional infliction of emotional distress in Louisiana, a plaintiff must show: "(1) that the conduct of the defendant was extreme and outrageous; (2) that the emotional distress suffered by the plaintiff was severe; and (3) that the defendant desired to inflict severe emotional distress or knew that severe emotional distress would be certain or substantially certain to result from his conduct." White v. Monsanto Co. , 585 So. 2d 1205, 1209 (La. 1991). Extreme and outrageous conduct is that which exceeds "all possible bounds of decency" and is "regarded as atrocious and utterly intolerable in a civilized community." Id. "Liability does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities." Id. In the workplace setting, a claim for intentional infliction of emotional distress has been "limited ... to cases which involve a pattern of deliberate, repeated harassment over a period of time." Nicholas v. Allstate Ins. Co. , 765 So. 2d 1017, 1026-27 (La. 2000) (citing White , 585 So. 2d at 1205 ; Maggio v. St. Francis Med. Ctr., Inc. , 391 So. 2d 948 (La. App. 1980) ). "The distress suffered by the employee must be more than a reasonable person could be expected to endure." Id. at 1027 ; see also Goldberg v. Moses , 811 So. 2d 1165, 1167 (La. App. 2002). The distress must be extreme; a "lesser degree of fright, humiliation, embarrassment or worry" is insufficient. Nicholas , 765 So. 2d at 1027 (citing White , 585 So. 2d at 1210 ); see also Smith v. Amedisys, Inc. , 298 F.3d 434, 450 (5th Cir. 2002) (observing that Louisiana jurisprudence sets a high threshold for the severity prong).
Defendants contend that this claim should be dismissed because Dr. Morice's allegations gloss over any factual support for the nature of the harassment and severe emotional distress he allegedly suffered. In response, Dr. Morice offers little more than a repeat of his allegations and the law. His allegations are devoid of facts that would support actionable distress. Instead, Dr. Morice describes his harm in conclusory fashion as "mental anguish, loss of professional reputation," and "embarrassment." It is reasonable for employees to suffer some degree of emotional distress resulting from an employer's corrective review, and without more, Dr. Morice's allegations fall into this unactionable category. See Nicholas , 765 So. 2d at 1030 ("[A]lthough [plaintiff] genuinely felt humiliated, anxious, confused, upset and worried because of the corrective review process, we cannot say that [plaintiff's] emotional distress was more than a reasonable employee might be expected to endure in the workplace"). As a result, the Court dismisses this claim.
R. Doc. 77-1 at 26.
R. Doc. 82 at 43-44.
R. Doc. 64 at 35.
12. Defamation (Count VIII)
To establish a cause of action for defamation in Louisiana, a plaintiff must show: "(1) a false and defamatory statement concerning another; (2) an unprivileged publication to a third party; (3) fault (negligence or greater) on the part of the publisher; and (4) resulting injury." Lusich v. Capital One, ACP, LLC , 198 So. 3d 1272, 1276 (La. App. 2016) (citing Costello v. Hardy , 864 So. 2d 129, 139 (La. 2004) ). "Statements between employees, made within the course and scope of their employment, are not considered publicized for purposes of a defamation claim." Mitchell v. Tracer Constr. Co. , 256 F. Supp. 2d 520, 526 (M.D. La. 2003) (citing Cangelosi v. Schwegmann Bros. Giant Super Mkts. , 390 So. 2d 196, 198 (La. 1980) ). Moreover, to adequately allege a defamation claim, the plaintiff "must set forth in the [complaint] with reasonable specificity the defamatory statements allegedly published by the defendant." Lusich , 198 So. 3d at 1276 (quoting Fitzgerald v. Tucker , 737 So. 2d 706, 713 (La. 1999) ). "It is not necessary for a plaintiff to state verbatim the words on which he bases his cause of action, but he must allege a state of facts or condition of things which would show fault under article 2315." Badeaux v. Sw. Comput. Bureau, Inc. , 929 So. 2d 1211, 1218 (La. 2006).
Defendants argue that Dr. Morice fails to state a claim for defamation because he fails "to identify a single, specific publication" made to a person other than the plaintiff or between employees. Dr. Morice claims to have identified statements made to the National Practitioner Data Bank as defamatory. While the cited portions of his complaint do not indicate that any defendant disclosed information to the National Practitioner Data Bank, the prayer for relief alleges that Defendants have done so or will do so. Moreover, in denying Dr. Morice's motion for preliminary injunction, the Court previously found that Defendants did in fact issue reports to the National Practitioner Data Bank in connection with Dr. Morice's suspension. However, because a report to the National Practitioners Data Bank is made pursuant to HCQIA's statutory reporting requirements and is therefore conditionally privileged, it cannot be made with the requisite malice as would support a claim for defamation under Louisiana law. Cf. Chudacoff v. Univ. Med. Ctr. of S. Nev. , 437 F. App'x 609, 611-12 (9th Cir. 2011) (applying Nevada law; collecting authorities); see also Soriano v. Neshoba Cty. Gen. Hosp. Bd. of Trs. , 486 F. App'x 444, 446 (5th Cir. 2012). As a result, Dr. Morice's defamation claim is dismissed.
R. Doc. 77-1 at 27.
R. 82 at 45.
Id. n.166 (citing R. Doc. 1 at 13, 15-16). The Court has also searched the amended complaint for any such allegation. The only mention of the National Practitioner Data Bank is in the prayer for relief. R. Doc. 64 at 40.
Id. (Plaintiff seeks "[p]reliminary and [p]ermanent [i]njunctive [r]elief against TRMC and the other Defendants from further proceeding with the prosecution or entry of any actions, charges or decisions which adversely affect Plaintiff's clinical or medical staff privileges at TRMC, or reporting any of the pending charges/allegations of violations, or any rulings or decisions relating to any such charges or allegations of violations by Plaintiff, or any other of Defendants' improperly initiated actions, or resulting decisions, against Plaintiff to the National Practitioners Data Bank or any other entity or person.").
R. Doc. 78 at 17 n.60.
The condition on the privilege is that the reporter must not make the report knowing it to be false. 42 U.S.C. § 1111(a)(2). Dr. Morice makes no allegation that the report was known to be false when made to the National Practitioners Data Bank.
Defendants also assert that Dr. Morice waived his right to sue Defendants for "any claims for libel, slander or damages as a result of good faith quality review and peer review activities" in Article III of the Bylaws. R. Doc. 77-3 at 10. As with Article XVII immunity, though, the bar established in Article III applies only upon a determination of "good faith," which cannot be made on the basis of the allegations alone but would have to await the development of an evidentiary record were the defamation claim to otherwise survive the Defendants' motion to dismiss.
13. LUTPA (Count IX)
LUTPA provides a civil cause of action to recover actual damages to "[a]ny person who suffers any ascertainable loss of money or movable property ... as a result of the use or employment by another person of an unfair or deceptive method, act, or practice declared unlawful by R.S. 51:1405." La. R.S. 51:1409. Section 51:1405(A) declares unlawful "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." "Trade" or "commerce" is defined as "the advertising, offering for sale, sale, or distribution of any services and any property, corporeal or incorporeal, immovable or movable, and any other article, commodity, or thing of value wherever situated, and includes any trade or commerce directly or indirectly affecting the people of the state." Id. 51:1402(10). Courts determine "on a case-by-case basis" what conduct constitutes an "unfair trade practice" and "have repeatedly held that, under this statute, the plaintiff must show the alleged conduct offends established public policy and is immoral, unethical, oppressive, unscrupulous, or substantially injurious." Cheramie Servs., Inc. v. Shell Deepwater Prod., Inc. , 35 So. 3d 1053, 1059 (La. 2010) (internal quotation marks and alteration omitted). A trade practice that amounts to fraud, deceit, or misrepresentation is "deceptive" for purposes of LUTPA. Total Safety v. Rowland , 2014 WL 6485641, at *4 (E.D. La. Nov. 18, 2014) (citations omitted).
Defendants argue that Dr. Morice fails to state a claim under LUTPA because no alleged conduct offends public policy. Defendants contend that because the state's public policy encourages peer review, any actions related to Dr. Morice's peer review cannot be found to violate LUTPA. Defendants also cite Knatt v. Hospital Service District No. 1 of East Baton Rouge Parish , 2005 WL 8155168, at *4 (M.D. La. Aug. 4, 2005), adopted by 2006 WL 8432223 (M.D. La. Mar. 7, 2006), for the proposition that Dr. Morice's allegations are too conclusory to state a claim under LUTPA. In opposition, Dr. Morice merely repeats his allegations and the law, offering no substantive response addressing Defendants' argument.
R. Doc. 77-1 at 28.
While Defendants are correct in their assessment that Congress and the Louisiana legislature encourage peer review through the adoption of the qualified immunity in the HCQIA and in La. R.S. 13.3715.3(C), see, e.g., Smith , 639 So. 2d at 742-43 ("The obvious legislative purpose behind this statutory provision is to encourage the medical profession to police its own activities with minimal judicial involvement."), it does not follow that Defendants' conduct, which has not yet been found to merit statutory immunity, cannot fall short of this public policy. Indeed, Dr. Morice alleges that Defendants' "manipulation of the professional review process" deprived him of his right to exercise privileges at TRMC, thereby harming his business which competes with the hospital to provide OB/GYN services. Moreover, Dr. Morice also alleges that "Defendants have attempted to eliminate Plaintiff as a competitor by manipulating referrals of Medicare/Medicaid patients [and] operating outside of their designated hospital service district." For now, these allegations suffice for Dr. Morice's LUTPA claim to avoid dismissal.
R. Doc. 64 at 36.
Id.
14. Procedural Due Process (Count X)
To bring a claim for violation of procedural due process under the U.S. Constitution, a plaintiff must first prove the government's deprivation of a constitutionally-protected interest in one's "life, liberty, or property." Cleveland Bd. of Educ. v. Loudermill , 470 U.S. 532, 538-41, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985). "[O]nce it is determined that the Due Process Clause applies, ‘the question remains what process is due.’ " Id. (quoting Morrissey v. Brewer , 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972) ). "The essential requirements of procedural due process under the Constitution are notice and an opportunity to respond." Finch v. Fort Bend Indep. Sch. Dist. , 333 F.3d 555, 562 (5th Cir. 2003) (citing Loudermill , 470 U.S. at 542, 105 S.Ct. 1487 ).
Defendants concede that for the sake of this motion, Dr. Morice had a constitutionally-protected property interest in the obstetric privileges he once had at TRMC. See Darlak v. Bobear , 814 F.2d 1055, 1061 (5th Cir. 1987) (doctor had protected property interest in medical staff privileges that would not be revoked absent cause or hearing and such revocation would prevent plaintiff from practicing in area due to harm to reputation and lack of comparable facilities). As to the suspension of his privileges, though, Defendants assert that Dr. Morice received all the process that was due. Defendants emphasize that his suspension was "reviewed by two separate committees, a panel of physicians over a four-day hearing, and the hospital's Board of Directors, and [he] was allowed to present his arguments to the different committees and panels and was afforded a hearing before the ultimate determination regarding his privileges." Indeed, Dr. Morice's allegations support this summary of the proceedings.
R. Doc. 77-1 at 29. But Defendants deny that Dr. Morice has any property interest in staff privileges that lapsed. Id. at 31. To the extent necessary, the Court holds that there can be no constitutionally-protected property interest in lapsed privileges. Therefore, for this reason and the reasons stated for denying Dr. Morice's motion for partial summary judgment, see section III(B)(2), infra , the Court dismisses Dr. Morice's claim for violation of due process as to the denial of his reappointment of privileges.
Id. at 30.
R. Doc. 64 at 17.
Numerous courts in the Fifth Circuit have found such procedures, even when conducted post-deprivation, to be adequate. See, e.g. , Soriano , 486 F. App'x at 446 (no violation of due process where hospital afforded physician "a multi-step peer review and appeal process pursuant to the hospital's medical staff by-laws"); Darlak , 814 F.2d at 1062-64 (no violation of due process for suspension pending full hearing and opportunity for appeal); Zamanian v. Jefferson Par. Hosp. Serv. Dist. No. 2 , 2017 WL 3480993, at *3-4 (E.D. La. Aug. 14, 2017) (no violation of due process where physician's "suspension was reviewed by two separate committees, a panel of physicians over a three-day hearing, and the hospital's Board of Directors" and physician "conducted discovery, presented and cross-examined witnesses, submitted affidavits, and gave his statement of the incident through writing and before the different committees/panels"), aff'd , 747 F. App'x 982 (5th Cir. 2019).
In opposition, Dr. Morice contends that the hearing process was fatally flawed because the Bylaws did not contain provisions governing the burden of proof and evidentiary standards, but left these matters to be established by the hospital's peer review committees. Nonetheless, Dr. Morice alleges that he had the opportunity to submit briefing on what burden of proof and evidentiary standard applied and to advocate for his position on these procedural matters. He argued that Defendants should have been required to prove the charges against him by clear and convincing evidence. Having had his position heard, but not having it adopted, amounts to a due process violation, in Dr. Morice's view. This is a stilted view of due process. To be sure, the Fifth Circuit has expressly found that requiring a physician to bear the burden of proof by clear and convincing evidence in the context of professional peer review does not violate due process. Johnson v. Spohn , 334 F. App'x 673, 684 (5th Cir. 2009). Moreover, Dr. Morice cites no case law in support of his position that the absence of these provisions in a hospital's bylaws would cause the hearing and appeals process itself to violate due process. For these reasons, the Court finds that Dr. Morice had failed to state a due process claim as to his suspended privileges.
R. Doc. 82 at 48. Other than these two matters of procedure, Dr. Morice identifies no other alleged violation of due process. Instead, the balance of Dr. Morice's due process allegations are conclusory.
R. Doc. 64 at 17.
R. Doc. 82 at 48-49.
15. Equal Protection (Count X)
The Equal Protection Clause of the Fourteenth Amendment guarantees that no person be denied equal protection of the law by any state. Unless the challenged action involves a suspect classification or impinges on a fundamental right, the Court applies minimal scrutiny under the rational basis test. See San Antonio Indep. Sch. Dist. v. Rodriguez , 411 U.S. 1, 55, 93 S.Ct. 1278, 36 L.Ed.2d 16 (1973). A state actor satisfies the rational basis test where "the challenged state action rationally furthers a legitimate state purpose or interest." Id.
Dr. Morice alleges that Defendants treated similarly-situated, but TRMC-employed physicians differently than him by not bringing charges against them even though, Dr. Morice claims, their conduct was supposedly worse than his, falling below the standard of care. Defendants urge the court to dismiss Dr. Morice's equal protection claim under the rational basis test because Defendants were justified in undergoing the peer review process as to Dr. Morice out of concern for quality patient care, without regard to the conduct of other physicians. In support of his claim for equal protection, Dr. Morice contends that Defendants' financial motives spurred the Defendants' different treatment of him and the other physicians because they were employed by TRMC. But, even assuming that Dr. Morice was treated differently than other similarly-situated physicians, it is enough that Defendants have articulated a rational basis for having pursued charges against Dr. Morice – namely, concern for patient care. See Hayman v. City of Galveston , 273 U.S. 414, 417, 47 S.Ct. 363, 71 L.Ed. 714 (1927) (exclusion of some physicians from hospital privileges did not violate equal protection where "selection ... was based upon a classification not arbitrary or unreasonable on its face"); Shaw v. Hosp. Auth. of Cobb Cty. , 507 F.2d 625, 628 (5th Cir. 1975) (rational basis test applies to eligibility requirements for hospital staff privileges).
R. Doc. 64 at 16.
R. Doc. 77-1 at 31.
R. Doc. 82 at 50-51.
Therefore, Dr. Morice's claim for equal protection fails under the rational basis test.
B. Motion for Partial Summary Judgment
1. Summary Judgment Standard
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citing Fed. R. Civ. P. 56(c) ). " Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial." Id. A party moving for summary judgment bears the initial burden of demonstrating the basis for summary judgment and identifying those portions of the record, discovery, and any affidavits supporting the conclusion that there is no genuine issue of material fact. Id. at 323, 106 S.Ct. 2548. If the moving party meets that burden, then the nonmoving party must use evidence cognizable under Rule 56 to demonstrate the existence of a genuine issue of material fact. Id. at 324, 106 S.Ct. 2548.
A genuine issue of material fact exists if a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The substantive law identifies which facts are material. Id. Material facts are not genuinely disputed when a rational trier of fact could not find for the nonmoving party upon a review of the record taken as a whole. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ; Equal Emp't Opportunity Comm'n v. Simbaki, Ltd. , 767 F.3d 475, 481 (5th Cir. 2014). "[U]nsubstantiated assertions," "conclusory allegations," and merely colorable factual bases are insufficient to defeat a motion for summary judgment. See Anderson , 477 U.S. at 249-50, 106 S.Ct. 2505 ; Hopper v. Frank , 16 F.3d 92, 97 (5th Cir. 1994). In ruling on a summary judgment motion, a court may not resolve credibility issues or weigh evidence. See Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co. , 530 F.3d 395, 398-99 (5th Cir. 2008). Furthermore, a court must assess the evidence, review the facts, and draw any appropriate inferences based on the evidence in the light most favorable to the party opposing summary judgment. See Tolan v. Cotton , 572 U.S. 650, 656, 134 S.Ct. 1861, 188 L.Ed.2d 895 (2014) ; Daniels v. City of Arlington , 246 F.3d 500, 502 (5th Cir. 2001). Yet, a court only draws reasonable inferences in favor of the nonmovant "when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp. , 37 F.3d 1069, 1075 (5th Cir. 1994) (citing Lujan v. Nat'l Wildlife Fed'n , 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) ).
After the movant demonstrates the absence of a genuine dispute, the nonmovant must articulate specific facts and point to supporting, competent evidence that may be presented in a form admissible at trial. See Lynch Props., Inc. v. Potomac Ins. Co. of Ill. , 140 F.3d 622, 625 (5th Cir. 1998) ; Fed. R. Civ. P. 56(c)(1)(A) & (c)(2). Such facts must create more than "some metaphysical doubt as to the material facts." Matsushita , 475 U.S. at 586, 106 S.Ct. 1348. When the movant will bear the burden of proof at trial on the dispositive issue, the movant "must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial." Int'l Shortstop, Inc. v. Rally's, Inc. , 939 F.2d 1257, 1264-65 (5th Cir. 1991) (quotation omitted). Then, the nonmovant may defeat the motion by showing a genuine dispute of material fact or by "showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party." Id. at 1265. When the nonmovant will bear the burden of proof at trial on the dispositive issue, the moving party may simply point to insufficient admissible evidence to establish an essential element of the nonmovant's claim in order to satisfy its summary judgment burden. See Celotex , 477 U.S. at 322-25, 106 S.Ct. 2548 ; Fed. R. Civ. P. 56(c)(B). Unless there is a genuine issue for trial that could support a judgment in favor of the nonmovant, summary judgment must be granted. See Little , 37 F.3d at 1075-76.
2. Analysis
Dr. Morice's motion for summary judgment on his breach-of-contract claims presents substantially the same argument that the Court rejected in denying his second motion for preliminary injunction. For the same reasons the Court rejected it then, the Court rejects it now. See Morice v. Hosp. Serv. Dist. #3 , 2019 WL 1517954, at *4-7 (E.D. La. Apr. 8, 2019). To the extent Dr. Morice presents new argument in his reply, the Court need not resolve these arguments because courts in the Fifth Circuit may decline to consider arguments first raised in a reply. See Murillo v. Coryell Cty. Tradesmen, LLC , 2017 WL 1155166, at *3 n.48 (E.D. La. Mar. 28, 2017) (collecting cases). But even if the Court were to consider the merits of these new arguments, none raises legal issues that would change the Court's interpretation of the Bylaws, but instead present facts that Defendants dispute, thereby precluding summary judgment. Thus, Dr. Morice's motion for partial summary judgment is DENIED.
Compare R. Doc. 73 at 12-17 with R. Doc. 69-1 at 9-14.
R. Doc. 78.
IV. CONCLUSION
Accordingly, for the foregoing reasons,
IT IS ORDERED that the motion to dismiss (R. Doc. 77) is GRANTED IN PART, insofar as it seeks to dismiss the Board, Credentials Committee, and MEC as defendants for lack of capacity; and to dismiss Dr. Morice's claims for tortious interference with contract (Count V), negligent misrepresentation (Count VII), intentional infliction of emotional distress and defamation (Count VIII), and procedural due process and equal protection (Count X); and it is DENIED IN PART in all other respects.
IT IS FURTHER ORDERED that the Defendants' first motion to dismiss (R. Doc. 21) is DENIED AS MOOT.
IT IS FURTHER ORDERED that Dr. Morice's motion for partial summary judgment (R. Doc. 69) is DENIED.