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Naini v. King County Hospital District No. 2

United States District Court, W.D. Washington, Seattle

October 18, 2019

ALI J. NAINI, Plaintiff,


          John C. Coughenour United States District Judge.

         This matter comes before the Court on Defendants' partial motion to dismiss (Dkt. No. 32). Having considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion in part and DENIES the motion in part for the reasons explained herein.

         I. BACKGROUND

         In early 2012, Plaintiff Ali J. Naini, a neurosurgeon who works at Defendant King County Hospital District No. 2 (“Evergreen”), became concerned that physicians in Evergreen's intensive care unit were improperly advising his elderly patients to consent to Do Not Resuscitate designations or transfers to end-of-life palliative hospice care without his knowledge. (See Id. ¶¶ 32-34.) Plaintiff raised his concerns to Evergreen's administration, telling the hospital that these patients could be saved with more aggressive treatment. (See Id. ¶ 45.) According to Plaintiff, his concerns were not taken seriously. (See Id. ¶ 45.) Instead, specific employees at Evergreen purportedly responded by campaigning to have the hospital revoke Plaintiff's medical staff privileges. (Id. ¶ 220.)

         The campaign against Plaintiff was allegedly spearheaded by Defendant Melissa D. Lee, M.D., the medical director of Evergreen's ICU and the director of the hospital's Quality Assurance Committee. (See Id. ¶¶ 24, 46-60.) In 2013, Dr. Lee urged Evergreen to approve a set of “Neurosurgical Co-Management Guidelines” that would limit Plaintiff's authority over his patients in the ICU. (Id. ¶ 57.) Dr. Lee's efforts proved successful, and Evergreen ultimately adopted the guidelines on January 5, 2016. (Id. ¶ 59.)

         That same year, a conflict arose over the treatment of two of Plaintiff's patients. (Id. ¶ 67.) Plaintiff expressed his concerns regarding those patients' treatment to Defendant Robert E. Geise, M.D., the then-president of Evergreen's medical staff. (Id. ¶ 68.) At the same time, Dr. Lee contacted Dr. Geise and asserted that Plaintiff was breaking Evergreen's new co-management policy. (Id. ¶ 71.) After hearing from Dr. Lee, Dr. Geise met with Defendant James O'Callaghan, M.D., and Dr. Scott Burks on June 23, 2016, to create a “to do” list for Plaintiff. (Id. ¶ 73.) Dr. Geise then held a meeting with Dr. Lee and other ICU staff. (Id. ¶ 76.) At the meeting, Dr. Lee urged Evergreen's administration to act against Plaintiff. (Id. ¶ 77.) Dr. Geise assured Dr. Lee that he had a “plan for formal review.” (Id.)

         The day after the meeting, Dr. Geise initiated an ad hoc process that, according to Plaintiff, was intended to justify a Focused Professional Practice Examination-Concern period for Plaintiff.[1] (Id.) As part of that process, Dr. Geise appointed Dr. Sean Kincaid as head of a committee to investigate Plaintiff's patient care. (Id. ¶ 78.) Dr. Geise also instructed two unidentified Evergreen neurosurgeons to perform internal reviews of the medical records of three patients that Plaintiff admitted to the ICU in the spring of 2016. (Id. ¶ 80.) And when that internal review concluded that Plaintiff had given adequate care to those three patients, Dr. Geise commissioned an external reviewer to assess Plaintiff's care in each case. (Id. ¶¶ 91-92.) Although the reviewer issued a report that was generally favorable towards Plaintiff's clinical competency, the report raised issues relating to documentation and co-management policies. (Id. ¶¶ 92-96.) Given these purported issues, Defendants subsequently informed Plaintiff on September 12, 2016, that they had created an FPPE-C requiring Plaintiff to complete tasks relating to his communication with colleagues and staff. (Id. ¶ 98.)

         On April 3, 2017, Dr. Geise sent a letter demanding that Plaintiff also complete a competency assessment at the University of California in San Diego. (Id. ¶ 102.) When Plaintiff refused to undergo the assessment, Dr. Geise sent Plaintiff another letter on September 27, 2017, stating that if Plaintiff did not go to California, “the Medical Staff will consider your non-compliance as a voluntary resignation.” (Id. ¶ 118.) Dr. Geise's second letter prompted Plaintiff to file the initial complaint in this case in King County Superior Court, requesting a temporary restraining order preventing Evergreen from terminating his privileges. (Id. ¶ 118.) In response to Plaintiff's request, Defendants withdrew the assessment requirement. (Id. ¶ 119.)

         After withdrawing the assessment requirement, Evergreen implemented a “Corrective Action Plan” involving an ongoing review of Plaintiff's cases in 2018. (Id. ¶ 122.) That review identified potential issues in three cases, which were then sent for review to the Credentials Committee. (Id. ¶ 130.) The Credentials Committee met on January 9, 2019, and voted-without hearing from Plaintiff-to not renew his privileges. (Id. ¶¶ 131, 135.) Following the Credential Committee's decision, Dr. O'Callaghan, who by that time had become president of Evergreen's medical staff, authored a report purporting to summarize the basis for the decision. (Id. ¶ 137.)

         On January 14, 2019, the Medical Executive Committee met and accepted the Credential Committee's recommendation to suspend Plaintiff's privileges. (Id. ¶ 165.) One day later, Evergreen's Board of Commissioners also held a meeting, which Dr. O'Callaghan attended. (Id. ¶ 168.) Once the meeting concluded, Dr. O'Callaghan told Dr. Geise that the Board had decided to not renew Plaintiff's privileges. (Id. ¶ 169.) Dr. O'Callaghan similarly told Plaintiff in a telephone conversation that “the Board upheld the decision of MEC to not recommend re-credentialing” and that Plaintiff's privileges were therefore terminated. (Id. ¶ 170.) But Plaintiff alleges that Dr. O'Callaghan was incorrect: “the Board had not approved anything.” (Id. ¶ 181.)

         Even though “[Plaintiff's] privileges had never been officially rescinded, ” (id. ¶ 188), Defendants sent a broadcast email on January 17, 2019, “claiming that the Board had approved [Plaintiff's] ‘resignation.'” (Id. ¶ 175.) The email was sent to at least 200 hospital personnel, and news of Plaintiff's alleged resignation circulated quickly throughout the medical community. (Id. ¶¶ 175-82.)

         On February 1, 2019, the Superior Court vacated the suspension of Plaintiff's privileges. (Id. ¶ 186.) Plaintiff subsequently amended his complaint to add nine claims for damages against Dr. Geise, Dr. O'Callaghan, Dr. Lee, EvergreenHealth Medical Center Medical Staff, [2] and Evergreen. (See Id. ¶¶ 192-254.) Because Plaintiff's amended complaint included federal claims under 42 U.S.C. §§ 1983 and 1985(3), Defendants removed the case to this Court. (Dkt. No. 2.) Following removal, Defendants filed the instant partial motion to dismiss. (Dkt. No. 32.)


         A. Federal Rule of Civil Procedure 12(b)(6) Legal Standard

A defendant may move for dismissal when a plaintiff “fails 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 for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). A claim has facial plausibility 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. at 678. Although the court must accept as true a complaint's well-pleaded facts, conclusory allegations of law and unwarranted inferences will not defeat an otherwise proper Rule 12(b)(6) motion. Vasquez v. L.A. Cty., 487 F.3d 1246, 1249 (9th Cir. 2007); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). The plaintiff is obligated to provide grounds for their entitlement to relief that amount to more than labels and conclusions or a formulaic recitation of the elements of a cause of action. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007). “[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. Dismissal under Rule 12(b)(6) “can [also] be based on the lack of a cognizable legal theory.” Balistreri v. Pacifica Police Dep 't, 901 F.2d 696, 699 (9th Cir. 1988).

         B. Exclusivity of Wash. Rev. Code § 7.71.030

         Defendants argue that Wash. Rev. Code § 7.71.030's exclusive remedies provision requires that this Court dismiss Plaintiffs various state-law claims. (See Dkt. No. 32 at 7-8). Plaintiff responds with three reasons why the provision does not preclude those claims. First, Plaintiff contends that federal law, not state law, governs this case. (See Dkt. No. 37 at 9-12). Second, Plaintiff claims that even if state law applies, Defendants cannot avail themselves of Wash. Rev. Code § 7.71.030's protections because Defendants did not comply with the requirements of Wash. Rev. Code § 7.71.050(2). (See Id. at 12.) Finally, Plaintiff argues that some of his claims are unrelated to peer review. (See Id. at 9.) The Court concludes that Wash. Rev. Code § 7.71.030 provides the exclusive state-law remedy in this case and requires that the Court dismiss Plaintiffs state-law claims.

         1. The Law of the Case

         As an initial matter, the Court must determine whether the Superior Court already decided that Wash. Rev. Code § 7.71.030 precludes Plaintiffs state-law claims. Defendants contend that on February 1, 2019, the Superior Court “unequivocally ruled” that the provision bars those claims.[3] (See Dkt. No. 32 at 8.) This prior ruling, Defendants argue, is now the “law of the case” and precludes the Court from considering whether Wash Rev. Code § 7.71.030 bars Plaintiff's state-law claims. (See id.) Plaintiff disagrees, arguing that the Superior Court never had the opportunity to consider the issue because Plaintiff did not move to amend his complaint to add state-law claims for damages until May 28, 2019. (See Dkt. No. 37 at 7.) The Court agrees with Plaintiff.

         Under the “law of the case” doctrine, “a court is generally precluded from reconsidering an issue that has already been decided by the same court, or a higher court in the identical case.” See United States v. Alexander, 106 F.3d 874, 876 (9th Cir. 1997) (quoting Thomas v. Bible, 983 F.2d 152, 154 (9th Cir. 1993)). The doctrine applies to state court rulings made prior to a case being removed to federal court. See Payne for Hicks v. Churchich, 161 F.3d 1030, 1037 (7th Cir. 1998) (citing Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers Local No. 70, 415 U.S. 423, 435-36 (1974)). However, “[f]or the doctrine to apply, the issue in question must have been decided explicitly or by necessary implication in [the] previous disposition.” Milgard Tempering, Inc. v. Selas Corp., 902 F.2d 703, 715 (9th Cir. 1990). Consequently, “[a] significant corollary of the doctrine is that dicta have no preclusive effect.” Id.

         Here, the Superior Court neither explicitly nor implicitly decided whether Wash. Rev. Code § 7.71.030 bars the state-law claims now before the Court. True, the Superior Court did say at a hearing on February 1, 2019, that the provision “is the exclusive remedy in any lawsuit by a healthcare provider for any action taken by a professional review body of health-care providers.” (See Dkt. No. 32-1 at 53-54.) But that statement merely repeats verbatim the language of Wash. Rev. Code § 7.71.030(1); it cannot be construed as a ruling on Plaintiff's interpretation of the word “applies” in Wash. Rev. Code § 7.71.030(1), his argument about how that provision interacts with Wash. Rev. Code § 7.71.050(2), or his assertion that some of his claims do not relate to Defendants' professional review action. See Rebel Oil Co., Inc. v. Atl. Richfield Co., 146 F.3d 1088, 1094 (9th Cir. 1998) (declining to apply the law of the case doctrine because prior judicial statements were “better read as descriptions rather than dispositions of Rebel's claims”); (Dkt. No. 38 at 8-13). None of those arguments were before the Superior Court on February 1 because Plaintiff did not amend his complaint to add additional claims for damages until several months later. (See Dkt. No. 28.) Moreover, if the Superior Court had intended to preclude future claims for damages, then it would not have made a point to dismiss Plaintiff's claim under the Washington Consumer Protection Act, Wash. Rev. Code § 19.86.060, “without prejudice to any breach of contract or similar claim he may have.” (See Dkt. No. 32-1 at 52.) The Superior Court's decision to leave open the possibility of future claims for damages shows how up until the February 1 hearing, “[Plaintiff's privileges] ha[d] always been the subject of [the] litigation.” (See Id. at 16-17.)

         Even assuming that the Superior Court did intend to pass judgment on the meaning of Wash. Rev. Code § 7.71.030, the Superior Court's statement would be dicta. When the Superior Court held the February 1 hearing, Plaintiff had raised only a single damages claim-a claim relating to Defendants' decision to reduce Plaintiff's involvement in emergency room call coverage. (See Dkt. No. 13-8 at 28, 34.) In dismissing that claim, the Superior Court did not rely on Wash. Rev. Code § 7.71.030. (See Dkt. No. 32-1 at 33.) Instead, the Superior Court concluded that Defendant's decision did not impact the public interest within the meaning of the CPA. (Id.) It would therefore have been unnecessary for the Superior Court to decide whether Wash. Rev. Code § 7.71.030 might impede Plaintiff's ability to bring claims for damages relating to the suspension of his privileges. Accordingly, the Court declines to treat any such statements as the “law of the case” and will independently evaluate whether and how Wash. Rev. Code § 7.71.030 applies here. See Rebel Oil, 146 F.3d at 1093-94.

         2. The Applicability of Wash. Rev. Code § 7.71.030

         Washington provides two layers of legal protection for persons who participate in a professional peer review action. The first layer comes from federal law. See 42 U.S.C. § 11111(a); Wash. Rev. Code § 7.71.020. Under that layer of protection, persons who participate in a “professional review action . . . shall not be liable in damages . . . with respect to the action.” 42 U.S.C. § 11111(a)(1). This “peer review immunity” applies only if (1) the professional review action was based on a physician's competence or professional conduct and (2) the action meets four requirements listed in 42 U.S.C. § 11112(a). See 42 U.S.C. §§ 11111(a)(1) (limiting damages “[i]f a professional review action (as defined in section 11151(9) of this title) . . . meets all the standards specified in section 11112(a) of this title”), 11151(9) (“The term ‘professional review action' means an action . . . which is based on the competence or professional conduct of an individual physician.”). If peer review immunity does not apply, then Wash. Rev. Code § 7.71.030 offers a second layer of protection by limiting the state-law remedies that a health care provider can recover “in any lawsuit . . . for any action taken by a professional peer review body of health care providers.” See Wash. Rev. Code § 7.71.030(1). Those remedies are limited “to appropriate injunctive relief, and damages shall be allowed only for lost earnings directly attributable to the action taken by the professional peer review body, incurred between the date of such action and the date the action is functionally reversed by the professional peer review body.” See Id. § 7.71.030(2).

         Wash. Rev. Code § 7.71.030 did not always offer such generous protections. Originally, 42 U.S.C. § 11111(a) and Wash. Rev. Code § 7.71.030 covered different types of professional review actions, with the former covering actions “based on the competence or professional conduct of an individual physician, ” see 42 U.S.C. § 11151(9), and the latter covering actions “based on matters not related to the competence or professional conduct of a health care provider, ” see 1987 Wash. Sess. Laws 969 (emphasis added). But in 2013, the Washington Legislature extended Wash. Rev. Code § 7.71.030's protections to actions related to a physician's competence or professional conduct. See 2013 Wash. Sess. Laws 1716. In doing so, the Legislature added language stating that Wash. Rev. Code § 7.71.030 provides the exclusive remedy in lawsuits relating to a professional review action only “[i]f the limitation on damages under RCW 7.71.020 and [42 U.S.C. § 11111(a)] does not apply.” See id.

         Plaintiff claims that Wash. Rev. Code § 7.71.030's exclusivity provision is inapplicable in this case because 42 U.S.C. § 11111(a) “applies.” (See Dkt. No. 37 at 9-12.) To determine the meaning of a statutory term, a court must first look to the statute's text. See King v. Burwell, 135 S.Ct. 2480, 2489 (2015). “If the statutory language is plain, [a court] must enforce it according to its terms.” Id. (citing Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 251 (2010)). Often, however, the “meaning-or ambiguity-of certain words or phrases may only become evident when placed in context.” FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000). Consequently, courts must read words “in their context and with a view to their place in the overall statutory scheme.” Id. If a statute's language is ambiguous even when read in context, then a court may look to legislative history to shed further light on the statute's meaning. See Wis. Pub. Intervenor v. Mortier, 501 U.S. 597, 611 n.4 (1991).

         In this case, Plaintiff's definition of “apply” is too broad. Under that definition, 42 U.S.C. § 11111(a) “applies”-and Wash. Rev. Code § 7.71.030 does not-whenever a professional review board takes an action based on a physician's competence or professional conduct. (See Dkt. No. 37 at 10.) This definition would render the 2013 amendment a nullity by making Wash. Rev. Code ยง 7.71.030 protect defendants only when a professional review board acted based on something other than a physician's competence or professional conduct. Plaintiff's definition is therefore contrary to the common-sense rule that ...

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