Custodio v. Parker

Citation65 F.3d 178,1995 WL 523123
PartiesNOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of
Decision Date29 November 1993
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

Before TACHA, LOGAN, and BRISCOE, Circuit Judges.

ORDER AND JUDGMENT 1

LOGAN, Circuit Judge.

After examining the briefs and appellate record, this panel has determined unanimously to grant the parties' request for a decision on the briefs without oral argument. See Fed. R.App. P. 34(f) and 10th Cir. R. 34.1.9. The case is therefore ordered submitted without oral argument.

Plaintiff Joseph M. Custodio appeals the district court's dismissal of his claims arising from his discharge as a civilian doctor practicing at Evans Army Community Hospital (EACH) at Fort Carson, Colorado, under the terms of a memorandum of understanding between plaintiff and EACH. We affirm.

On appeal, plaintiff raises the following issues: (1) whether his agreement with the Civilian Health and Medical Program for the Uniformed Services (CHAMPUS) and EACH, alone and in combination with his hospital staff privileges, constituted a property interest subject to due process protections under the Fifth Amendment; (2) whether the Administrative Procedure Act (APA) is the type of governmental regulatory remedy which constitutes a "special factor" precluding a Bivens claim; (3) whether the complaint alleges a liberty interest subject to due process protections; (4) whether negligence claims are barred by exceptions to the Federal Tort Claims Act; and finally, (5) whether supplemental jurisdiction over a state claim should be reinstated.

In April 1990 plaintiff and EACH entered into a memorandum of agreement whereby plaintiff was to provide medical care to CHAMPUS beneficiaries at the hospital. As part of the agreement, plaintiff was required to meet the licensing and privileging requirements of the hospital. By letter dated May 22, 1991, the commander of the medical corps at Fort Carson informed plaintiff that his agreement with the hospital was terminated as of June 2, 1991, and that he would no longer have hospital privileges at EACH. Plaintiff's request for a hearing was denied. Thereafter, in 1993, plaintiff was convicted of eighteen counts of submitting false claims to the United States under 18 U.S.C. 287 while he was employed at EACH. This court affirmed plaintiff's conviction in United States v. Custodio, 39 F.3d 1121 (10th Cir.1994).

In response to his discharge and related events, plaintiff filed a complaint in federal district court alleging that defendants had violated his procedural due process rights and asserting various negligence claims. Defendants moved to dismiss the complaint under Fed.R.Civ.P. 12(b)(6) or, in the alternative, for summary judgment. The district court dismissed plaintiff's due process claims, finding that plaintiff had failed to demonstrate a viable property interest in the CHAMPUS agreement sufficient to trigger constitutional protections and that the APA provided a meaningful alternative remedy to his Bivens claim based on the hospital privileges. The district court further found that plaintiff had failed to state a liberty deprivation claim, and that plaintiff's negligence claims against the United States were barred by exceptions to the Federal Tort Claims Act. The court then declined to exercise supplemental jurisdiction over the state law claim and dismissed it pursuant to 28 U.S.C. 1367(c)(3).

The district court properly dismissed plaintiff's complaint if it appears that "plaintiff can prove no set of facts in support of the claims that would entitle him to relief." Coosewoon v. Meridian Oil Co., 25 F.3d 920, 924 (10th Cir.1994). " 'The sufficiency of a complaint is a question of law which we review de novo. Accordingly, we apply the same scrutiny to the complaint as did the trial court.' " Hunt v. Bennett, 17 F.3d 1263, 1265 (10th Cir.) (quoting Ayala v. Joy Mfg. Co., 877 F.2d 846, 847 (10th Cir.1989) (citations omitted)), cert. denied, 115 S.Ct. 107 (1994).

I

Plaintiff first argues that the district court erred in finding he had no property interest in continued employment upon which he could base a claim for deprivation of due process. Under the proper circumstances, public employees may have property rights in continued employment. See Board of Regents v. Roth, 408 U.S. 564, 576-78 (1972). Such property rights are not created by the Due Process Clause of the Constitution; "[r]ather, they are created by independent sources such as a state or federal statute, a municipal charter or ordinance, or an implied or express contract." Carnes v. Parker, 922 F.2d 1506, 1509 (10th Cir.1991).

Plaintiff identifies several possible sources for his alleged property right. Initially, he argues that the express terms of his agreement establish a property right in continued employment. The agreement provided that:

The minimum term of this agreement is 2 years with the option to renew for a 2-year period based upon mutual agreement. Termination of this agreement shall be predicated upon satisfactory written notice to the other party not less than 90 days before the proposed termination date. However, the 90-day notice may be waived by mutual consent of the parties to the agreement or unilaterally for the convenience of [the] government, including its mobilization requirements.

Appellant's App. 19 (emphasis added).

"When an employee bases an expectation of continued employment on an employment contract, we rely on state contract law to determine whether there is a legitimate claim to continued employment under that contract." Carnes, 922 F.2d at 1510. Under Colorado law employment that is terminable at will does not create a property interest. See Holland v. Board of County Comm'rs, 883 P.2d 500, 505 (Colo.Ct.App.), cert. denied, Nov. 7, 1994; cf. Workman v. Jordan, 32 F.3d 475, 479 (10th Cir.1994) (employment terminable only for cause creates a protectable property interest under Colorado law), cert. denied, 115 S.Ct. 1357 (1995). When plaintiff sought to assert his claim under the Contract Disputes Act, the Department of the Army took the position that his "arrangement" was not a contract because it was terminable unilaterally for the convenience of the government. Appellant's App. 22. Plaintiff's complaint referenced this claim denial as a reason he did not sue for breach of contract in the Court of Claims. Id. at 5. Because the agreement could be terminated at any time for the convenience of the government, we agree that this was an at-will employment situation which did not create a property interest. See Holland, 883 P.2d at 505; see also Gallegos v. City & County of Denver, 984 F.2d 358, 363 (10th Cir.) (construing Colorado law), cert. denied, 113 S.Ct. 2962 (1993). 2

Plaintiff next argues that he had a property interest in his hospital privileges created by the provision for extensive grievance procedures combined with substantive restrictions on dismissal contained in the bylaws for the medical staff, the Army regulations, and the Federal Health Care Quality Improvement Act of 1986, 42 U.S.C. 11101-11152. We first note that then Colonel John S. Parker, commander of EACH, took the position that his termination letter stating that plaintiff "will no longer be privileged to practice medicine at Evans Army Community Hospital," see Appellant's App. 207, did not suspend or revoke plaintiff's hospital privileges. Id. at 67; Appellee's Supp.App. 13 (letter from U.S. Attorney). Parker contended that "[t]aking such action would have been pointless because once [plaintiff's] CHAMPUS partnership agreement was terminated he no longer occupied a status that allowed him to treat CHAMPUS patients at EACH. 3 Id.

Even if plaintiff's privileges were terminated we hold that he had no property interest entitled to procedural due process protection. When he was terminated from CHAMPUS plaintiff had not yet been accorded "defined privileges," i.e., "clinical privileges given the individual by the commander upon recommendation of the credentials committee after completion of a satisfactory provisional period." 4 Appellant's App. 54 (Army Regulation (AR) 40-68, Ch. 4, 4-2(a)(5)) (emphasis added). 5 Only practitioners who have secured defined privileges can invoke the provisions for suspension, restriction, and/or revocation of privileges contained in AR40-68 and identified by plaintiff as a source of his property right. Because plaintiff had not completed the provisional period when his privileges were terminated, he had no property interest in his provisional hospital privileges sufficient to trigger due process protections. See Walker v. United States, 744 F.2d 67, 68 (10th Cir.1984) (holding that, as a probationary employee, appellant had no property interest in continued employment); see also Roth, 408 U.S. at 578 (finding no property interest in continued employment where the contract of employment did not provide for renewal after expiration of one-year term). Because there is no genuine issue of material fact regarding this matter and because defendants would have been entitled to judgment as a matter of law, the district court was correct to dismiss this claim. Our resolution of this issue precludes the need to address plaintiff's Bivens /APA argument or his contention that the presence of these...

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