Supreme Court says hospital doesn’t have qualified immunity in lawsuit with former surgeon

By Kyla Asbury | Dec 15, 2017

CHARLESTON – The West Virginia Supreme Court of Appeals says a hospital doesn't have qualified immunity in a lawsuit involving a former general surgeon who was terminated.

CHARLESTON – The West Virginia Supreme Court of Appeals says a hospital doesn't have qualified immunity in a lawsuit involving a former general surgeon who was terminated.

Dr. Tuan Nguyen filed a third-party complaint against Camden-Clark Memorial Hospital Corporation, alleging it discriminated and retaliated against him for reporting patient safety concerns. The hospital contended that because Nguyen’s claims were linked to its decision to no reappoint him to its medical staff, it enjoyed qualified immunity. The circuit court denied the hospital’s motion and the hospital appealed, according to an opinion filed last month.

Justice Margaret Workman authored the majority opinion. Chief Justice Allen Loughry dissented and filed a separate opinion. Justice Menis Ketchum also dissented and authored a separate opinion.

Justice Beth Walker did not participate in the decision and Judge John A. Hutchison sat on temporary assignment.

“This court finds that physician’s claims are distinguishable from Mahmoodian [v. United Hospital Center] and sufficient to survive the hospital’s…motion,” Workman wrote. “We therefore affirm the order of the circuit court.”

Nguyen completed his residency in 2008 and earned his license to practice medicine in West Virginia. He was employed as a general surgeon at Camden-Clark from 2008 until his employment was terminated in 2013.

For much of his employment, Nguyen was the only general surgeon at the hospital and maintained a demanding schedule with his own patients and was also on call for other physicians, including a vascular surgeon.

Nguyen claimed the arrangement troubled him because he did not have deep-rooted expertise in vascular surgery and he repeatedly expressed patient safety concerns about the situation to administrators.

Administrators told Nguyen that another general surgeon would be added to the hospital’s staff with the understanding that he planned to take some time off to complete his board certification. Three months later, the hospital declined to review his application for reappointment to its medical staff purportedly because he failed to obtain board certification.

Following his termination, Nguyen began working with a physicians’ group at Marietta Memorial Hospital. In October 2014, the hospital filed a claim against Nguyen alleging he breached his employment agreement when he failed to purchase a tail policy of medical professional liability insurance.

“Physician answered the Corporation’s complaint and asserted that it was estopped from pursuing its breach of contract claim because administrators told him the Corporation would not seek any payments from Physician, including the payment of the tail coverage,” the opinion states. “Physician stated that by entering into the 2013 employment agreement with full awareness of his board certification status, the Corporation waived any requirement that he achieve board certification within five years of his initial hire date.”

Nguyen also filed five counterclaims including breach of contract, breach of the covenant of good faith, violations of the Act and retaliatory discharge, as well as a claim for intentional infliction of emotional distress. Physician alleged that the Corporation’s stated reason for his termination was a pretext for retaliation; soon after entering into this employment agreement, he “incurred the wrath” of the corporation and the hospital administrators “due to his expressions of concern regarding patient safety and his friendship with and support of Dr. Roman Petrov.”

Nguyen amended his counterclaim against the corporation to include a third-party complaint against the hospital, and its parent corporation CCHS, which is the subject of this appeal.

In May 2016, Nguyen filed a motion to compel discovery after the corporation, the hospital and CCHS refused to permit any depositions of their employees on the basis of qualified privilege. The following month, the circuit court held a hearing on the hospital’s motion to dismiss and/or for summary judgment.

The circuit court denied the motion and the hospital appealed to the Supreme Court.

“The broad discretion afforded hospitals in their medical staff selection process under Mahmoodian must be tempered with the protections afforded health care workers in our Act, in a manner that serves the common aim of both schemes—the safe and competent care of hospital patients,” Workman wrote. “Thus, it is not necessary to reject the rationale of Mahmoodian to affirm the circuit court’s decision.”

Nguyen’s statutory cause of action under the Act and his other claims may proceed as they stand in stark contrast to the plaintiff’s complaints about a hospital’s disciplinary proceeding in Mahmoodian, according to the majority opinion.

“ The hospital’s wholesale reliance on Mahmoodian is therefore not enough for this Court to dismiss Physician’s claims at this stage of the litigation,” Workman wrote.

Accordingly, the Supreme Court found that Nguyen sufficiently pled his causes of action to survive a motion to dismiss made under Rule 12(b)(6).

“This Court has previously stated that motions to dismiss are generally viewed with disfavor because the complaint is to be construed in the light most favorable to the plaintiff and its allegations are to be taken as true,” Workman wrote. “Obviously, Physician must still develop sufficient facts in order to ultimately prevail on his claims, but it does not appear beyond doubt to the Court at this stage of the proceeding that he can prove no set of facts in support of his claims which would entitle him to relief.”

In his dissent, Loughry said the majority “carelessly gutted” a long-standing and well-established holding of the Supreme Court that gave hospitals a wide berth in granting or denying privileges or staff appointments.

“The majority reasons its way through the weighty issues of this case with the delicacy of a charging rhinoceros, failing to clarify what vestiges remain of this well-ensconced quasi-immunity or to consider that this unwelcome intrusion into hospital staffing issues may actually jeopardize patient safety,” Loughry wrote. “Accordingly, I dissent.”

Loughry said he wholeheartedly supports the patient safety goals which the Patient Safety Act of 2001 is designed to foster and, without question, the safety of patients and quality of care rendered by healthcare professionals is of critical importance to the citizens of West Virginia.

“In fact, it is the paramount importance of those goals that compeIs this dissent,” Loughry wrote. “In reaching its conclusion, the majority implicitly finds that the immunity provided to hospitals for privileges and staff appointments is at odds with those goals and must therefore give way.”

As such, both the Patient Safety Act and Mahmoodian share a common, critically important goal: patient safety and quality assurance, Loughry wrote.

“By blithely dismissing the latter in favor of the former under the dubious facts of this case and without fully considering the effect such holding may have on these goals, the majority has seriously jeopardized patient safety,” Loughry wrote. “Sadly, the majority does so for the negligible purpose of allowing a lone physician, who indisputably failed to comply with the hospital by-laws, to leverage the hospital with a separation-induced financial dispute.”

Also dissenting, Ketchum said Nguyen, by his own admission, failed to meet the minimum eligibility criteria for reappointment to the hospital medical staff as required by the hospital’s bylaws.

“As a result, Dr. Nguyen’s termination of employment was mandated by the Physician Employment Agreement he had with his employer, Camden-Clark Physician Corporation,” Ketchum wrote. “Thus, I believe that the hospital is entitled to a dismissal of Dr. Nguyen’s third party complaint.”

Ketchum said Nguyen never achieved board certification in his primary area of practice and the hospital informed him that he was not eligible for reappointment.

“Requiring a physician on the Hospital medical staff to be board certified in his or her primary area of practice is a reasonable requirement of which Dr. Nguyen was aware when he applied for reappointment,” Ketchum said. “Dr. Nguyen by his own admission having failed to meet that threshold requirement, the action of the Hospital in declining to further consider Dr. Nguyen’s application was clearly non-retaliatory.”

Ketchum said he found no basis for reaching the conclusion that additional, expensive and time-consuming discovery should be permitted in this matter.

“The Hospital complied with its bylaws and is immune from Dr. Nguyen’s claims,” he said. “The Hospital should be granted a dismissal of Dr. Nguyen’s third-party complaint. I therefore respectfully dissent.”

W.Va. Supreme Court of Appeals case number: 17-0834

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