Pac. Radiation Oncology, LLC v. Doe
| Decision Date | 22 December 2015 |
| Docket Number | No. 14–17050.,14–17050. |
| Parties | PACIFIC RADIATION ONCOLOGY, LLC, a Hawai'i limited liability corporation; PRO Associates, LLC, a Hawai'i limited liability company; JOhn Lederer, M.D., individually and as manager of the LLC's appearing for the Pacific Radiation Oncology Physicians; Laeton Pang, M.D.; Eva Bieniek, M.D.; Vincent Brown, M.D.; Paul Demare, M.D.; Thanh Huynh, M.D., Plaintiffs–Appellants, v. John and Mary Doe, 1 through 17, Appellant–Intervenor, v. The QUEEN'S MEDICAL CENTER, a Hawai'i non-profit corporation; Queen's Development Corp., a Hawai'i for profit corporation; Noreen D.S.W. Mokuau; William G. Obana, M.D.; Arthur A. Ushijima; Mark H. Yamakawa; Paula Yoshioka; Sharlene K. Tsuda; Richard C. Keene ; Clinton Yee; Naleen M. Andrade, M.D.; Ernest H. Fukeda, Jr.; Robb Ohtani, M.D.; Neil J. Hannahs; Christine M. Gayagas; Peter K. Hanashiro; Robert K. Nobriga; Eric K. Yeaman; Julia C. Wo; Caroline Ward Oda; Peter Halford, M.D.; Barry Weinman, individually and in their capacities as Officers and Trustees of Queen's Medical Center, Defendants–Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Clare E. Connors (argued), Mark S. Davis, and Michael K. Livingston, Davis Levin Livingston, Honolulu, HI, for Plaintiffs–Appellants.
Jerry M. Hiatt (argued), and Mahilani E.K. Hiatt, Hiatt & Hiatt, Honoka'a, HI, for Appellant–Intervenor.
Paul Alston (argued), William S. Hunt, Clyde J. Wadsworth, and Claire Wong Black, Alston Hunt Floyd & Ing, Honolulu, HI; Daniel M. Mulholland III, Horty, Springer & Mattern, P.C., Pittsburgh, PA, for Defendants–Appellees.
Before: DIARMUID F. O'SCANNLAIN, RICHARD C. TALLMAN, and MILAN D. SMITH, JR., Circuit Judges.
A court's equitable power lies only over the merits of the case or controversy before it. When a plaintiff seeks injunctive relief based on claims not pled in the complaint, the court does not have the authority to issue an injunction. During discovery of its unfair trade practices case, Appellant Pacific Radiation Oncology, LLC (PRO) sought injunctive relief against Appellee The Queen's Medical Center (QMC) arguing that QMC's review and use of patient records violated the Health Insurance Portability and Accountability Act of 1996 (HIPAA), 42 U.S.C. § 1320d, and the Hawaii Constitution art. 1, § 6. The district court denied the injunction because PRO's complaint did not contain a claim alleging improper review and use of confidential patient information in violation of HIPAA and the Hawaii Constitution. We affirm.
To understand the motion that is the subject of this appeal, it is necessary to describe the deterioration of a nearly forty-year professional relationship between PRO and QMC and the extended litigation that occurred as a result.
PRO consists of a group of physicians specializing in radiation oncology. PRO provided service to its patients at QMC, and at one of QMC's competitors, The Cancer Center of Hawaii (TCCH), in which some PRO members held a financial interest. But QMC is the only facility on Oahu with an operating room licensed by the Nuclear Regulatory Commission (NRC) for specialized radiation services to treat cancer
. During the course of their nearly forty-year relationship, PRO physicians were allowed to meet with and treat their patients at QMC in order to accommodate patient preferences in choosing the location of treatment. However, this relationship ended in 2011 when QMC decided to transition to a closed-facility model. As a result, PRO physicians could not practice at QMC at all unless they accepted exclusive employment with QMC and divested any interest they held in TCCH. PRO physicians, therefore, would no longer retain hospital privileges that allowed access to the NRC-licensed operating room which they used to treat certain patients.
In January of 2012 PRO brought suit against QMC alleging that adopting the closed-facility model was merely a pretext to prevent PRO physicians from competing with QMC. The complaint filed against QMC alleged ten claims for relief: (1) denial of procedural and substantive due process; (2) violation of QMC bylaws and governing regulations; (3) intentional tortious interference with plaintiffs' contractual obligations with competing facilities; (4) intentional and tortious interference with prospective business advantage; (5) intentional and tortious interference with the professional and contractual relationship with plaintiffs' patients; (6) unfair, deceptive, anti-competitive, and illegal trade practices in violation of Hawaii Revised Statutes Chapter 480 arising out of QMC's termination of privileges; (7) unfair, deceptive, anti-competitive, and illegal trade practices in violation of Chapter 480 arising out of QMC's violation of the anti-kickback statute; (8) unfair, deceptive, anti-competitive, and illegal trade practices in violation of Chapter 480 arising out of QMC's attempt at economic credentialing; (9) unfair, deceptive, anticompetitive, and illegal trade practices in violation of Chapter 480 arising out of QMC's breach of its obligations under its corporate integrity agreement between the Office of the Inspector General of the U.S. Department of Health and Human Services; and (10) breach of fiduciary duty and bad faith owed to a partner. PRO initially requested injunctive relief and damages related only to the termination of hospital privileges.
In March 2012 the district court granted a preliminary injunction to allow PRO physicians to continue treating patients who needed access to the NRC-licensed operating room at QMC. Pac. Radiation Oncology, LLC v. Queen's Med. Ctr., 861 F.Supp.2d 1170 (D.Haw.2012). In February 2014 we affirmed that preliminary injunction. Pac. Radiation Oncology, LLC v. Queen's Med. Ctr., 555 Fed.Appx. 730 (9th Cir.2014). Thereafter, QMC brought a counterclaim against PRO alleging that PRO physicians were unlawfully transferring patients from QMC to TCCH by encouraging them to seek treatment there. Additionally, QMC alleged that PRO physicians failed to inform patients of their financial interests in TCCH when making these referrals. Thus, QMC argues that it had a legitimate business interest to move to a closed-facility model.
Prior to the commencement of litigation in 2012, QMC administrators identified 133 relevant patients from the hospital's own electronic record-keeping system who had an initial consultation with a PRO physician at QMC but did not return to QMC for radiation therapy. After bringing its counterclaim, QMC served a subpoena on TCCH seeking documents and information regarding those patients. Included in this subpoena was a list of 132 of the 133 identified patients' names, patient numbers, and treating physicians. However, when QMC filed the return of service with the district court clerk on Thursday, July 10, 2014, it filed the subpoena on the public docket with the complete unredacted list of patient names, numbers, and treating physicians. Upon realizing its error, QMC counsel immediately notified the magistrate judge overseeing discovery, the clerk restricted access to the document the next business day, Monday, July 14, 2014, and the court granted QMC's ex parte motion to seal the document. So far as can be determined, only QMC's attorneys accessed the document through PACER while it was publicly available.
PRO then filed a motion for a temporary restraining order, or alternatively a preliminary injunction. PRO challenged not only the public filing of the patient list, but also QMC's right to review its own medical records that were the basis of the list, and PRO sought to preclude QMC's review of the records sought from TCCH in the subpoena. PRO alleges that QMC's conduct violates HIPAA and the Hawaii Constitution.
The district court denied PRO's motion for injunctive relief. It concluded that PRO's complaint "does not contain a claim alleging improper review and use of confidential patient information in violation of HIPAA and the Hawaii Constitution." Pac. Radiation Oncology, LLC v. Queen's Med. Ctr., 47 F.Supp.3d 1069, 1076 (D.Haw.2014). The court rejected PRO's arguments that the claims for violation of patient privacy are part of its Hawaii Revised Statutes Chapter 480 claims because the allegations in those claims did not refer to improper review and use of patient information. Id. Acknowledging the seriousness of the public disclosure, the court nonetheless held that the motion "simply does not fit within the TRO [temporary restraining order] analysis." Id.
The district court then construed the motion as ultimately presenting a discovery issue. Id. Specifically, the court found that QMC had violated the terms of a previously entered protective order when it publicly disclosed identifiable patient information. Id. at 1078. For that violation, the district court sanctioned QMC with PRO's reasonable attorneys' fees and costs incurred in responding to the public filing.1 Id. at 1080. To the extent that QMC argued that its use of patient information was relevant to its defenses and counterclaims against PRO, the district court instructed the parties to confer on how to access this information in compliance with the protective order, HIPAA, and the Hawaii Constitution through the normal discovery process overseen by the magistrate judge. Id. at 1081.2
PRO appealed the district court's denial of injunctive relief. We have jurisdiction under 28 U.S.C. § 1292(a)(1) to review PRO's appeal of that order.
We review a district court's grant or denial of a preliminary injunction for an abuse of discretion. Pimentel v. Dreyfus, 670 F.3d 1096, 1105 (9th Cir.2012). We employ a two part test: first, determining whether the trial court identified the correct legal rule to apply to the requested relief and second, determining whether the court's application of that rule was illogical, implausible, or without support from inferences that may be drawn from facts in the record. Id. "A...
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