Miller v. Huron Reg'l Med. Ctr.

• Decision Date: 30 August 2019
• Docket Number: No. 18-1522,18-1522
• Citation: 936 F.3d 841
• Parties: Linda A. MILLER, M.D. Plaintiff - Appellee v. HURON REGIONAL MEDICAL CENTER Defendant - Appellant
• Court: U.S. Court of Appeals — Eighth Circuit

936 F.3d 841

Linda A. MILLER, M.D. Plaintiff - Appellee

v.HURON REGIONAL MEDICAL CENTER Defendant - Appellant

No. 18-1522

United States Court of Appeals, Eighth Circuit.

Submitted: June 11, 2019

Filed: August 30, 2019

Counsel who presented argument on behalf of the appellant was Thomas J. Shomaker, of Omaha, NE. The following attorney(s) appeared on the appellant brief; Cheri S. Raymond, of Sioux Falls, SD.

Counsel who presented argument on behalf of the appellee was Kenneth E. Barker, of Belle Fourche, SD. The following attorney(s) appeared on the appellee brief; Michael A. Wilson, of Rapid City, SD.

Before LOKEN, KELLY, and ERICKSON, Circuit Judges.

KELLY, Circuit Judge.

Huron Regional Medical Center (HRMC) appeals the district court’s¹ denial of its motion for remittitur or a new trial following the jury’s award of damages to Dr. Linda A. Miller, one of HRMC’s former physicians. We conclude that the district court did not abuse its discretion and therefore affirm.

I

The Health Care Quality Improvement Act of 1986 (HCQIA), 42 U.S.C. §§ 11101 – 11152 (2012), requires certain information about physicians to be reported to the National Practitioner Data Bank (NPDB). A health care entity such as HRMC must report whenever it "accepts the surrender of clinical privileges of a physician (i) while the physician is under an investigation by the entity relating to possible incompetence or improper professional conduct, or (ii) in return for not conducting such an investigation or proceeding."

§ 11133(a)(1)(B). Another type of report must be filed whenever a medical malpractice claim is settled. See § 11131(a). NPDB reports are not available to the public but are available to state licensing boards and prospective employers. The HCQIA contains an immunity provision that states: "No person or entity ... shall be held liable in any civil action with respect to any report made under this subchapter ... without knowledge of the falsity of the information contained in the report." § 11137(c).

Dr. Miller began working for HRMC as a surgeon in 2004. In 2009, she executed a new three-year contract with HRMC (the Surgical Services Agreement or SSA). The SSA provided for termination without cause by either party on 180 days’ notice. The SSA required Dr. Miller to maintain a valid medical license in South Dakota and full admitting privileges at HRMC. Decisions about physician appointments and privileges are made by HRMC’s Board of Directors based on recommendations by the Medical Executive Committee (MEC). Members of the medical staff, including physicians, are governed by the Medical Staff Bylaws.

While working at HRMC, Dr. Miller settled a number of malpractice lawsuits, each of which triggered a NPDB report. At a regularly scheduled August 24, 2010 Board of Directors meeting, the Board received an update on pending litigation and asked the MEC to conduct a review of Dr. Miller’s medical records "to determine any trends to be addressed, to be reported back to the Board." The MEC met on October 14, 2010, and agreed to conduct a three-month review of Dr. Miller’s charts, followed by a reevaluation. That review ended on January 18, 2011. Although the MEC did not report any concerns with the first review, the Board requested that the MEC conduct a second three-month review.

While the second review was ongoing, Dr. Miller experienced two bad outcomes with patients. On April 25, 2011, the MEC decided to have Dr. Blessinger discuss the cases with Dr. Miller. According to Dr. Miller’s testimony, Dr. Blessinger told her that the MEC recommended a voluntary reduction in her surgical privileges, in the hopes that it would appease the Board and avoid her termination. Dr. Blessinger testified that he did not ask Dr. Miller to reduce her privileges but "discussed with her that reducing her privileges might allow us to continue to have her practice medicine" with HRMC. Dr. Blessinger expressed his belief that a voluntary reduction in her privileges would not trigger a NPDB report.

That same day, Dr. Miller submitted a revised privilege checklist omitting abdominal surgeries. HRMC’s CEO, John Single, consulted with the hospital’s counsel and concluded that if the Board accepted Dr. Miller’s reduction in privileges it would need to be reported to the NPDB. Single showed Dr. Miller a draft of the NPDB report, and Dr. Miller did not attempt to withdraw her privileges request. On April 29, 2011, the Board accepted Dr. Miller’s reduction in privileges, and HRMC filed the NPDB report on May 11, 2011. The report stated: "Dr. Miller voluntarily surrendered a portion of her surgical privileges while the Medical Executive Committee was investigating her quality of care. The Board of Directors approved this surrender of certain privileges April 29, 2011." At the same April 29 meeting, the Board voted to terminate the SSA without cause per the 180-day provision.

Dr. Miller later resigned, but HRMC continued to pay her through October 30, 2011, which was the end of the 180-day period in the SSA. Dr. Miller remained unemployed for six months before accepting a job performing wound

care in Florida. Prior to accepting that job, she had applied for a surgical position and was told she would not be able to get credentials because of the NPDB report filed as a result of her reduction in privileges.

Dr. Miller sued HRMC for breach of contract and defamation.² In her contract claim, Dr. Miller alleged that HRMC’s request to reduce her privileges constituted corrective action, which created a right to a hearing under Sections 10.2(h)(iv), 10.2(i) and 11.2-2 of the Medical Staff Bylaws. On the defamation claim, she alleged that the MEC was not "investigating her quality of care" at the time she surrendered her privileges, making HRMC’s NPDB report knowingly false. Dr. Miller sought compensatory and punitive damages.

At trial, one of Dr. Miller’s experts, Dr. Lawrence Huntoon, presented evidence that HRMC had not complied with the Medical Staff Bylaws because it did not afford Dr. Miller a hearing prior to requesting a reduction in her surgical privileges. He also testified that the review being conducted of Dr. Miller’s cases was not an "investigation" as that term is used in the Bylaws. As Dr. Miller was not "under an investigation ... relating to possible incompetence or improper professional conduct," § 11133(a)(1)(B)(i), no NPDB report needed to be filed. Further, the NPDB report’s statement that Dr. Miller surrendered her privileges while the MEC was "investigating her quality of care" was untrue.

Dr. Huntoon also opined on Dr. Miller’s career prospects. He testified that a NPDB report indicating that a physician voluntarily reduced her privileges while under investigation would be "absolutely devastating" to the physician’s career. Dr. Miller’s credentialing expert, Carol Cairns, reviewed the contents of the NPDB report and called it the "kiss of death." HRMC’s experts testified that what prevented Dr. Miller from working as a surgeon after her resignation was not the NPDB report but other weaknesses in her resume. For instance, Dr. Miller failed her board certification exam four times and was no longer eligible to sit for the exam. She had also accumulated eight malpractice settlements during her career.

Dr. Miller also presented a damages expert, forensic economist Don Frankenfeld. Frankenfeld estimated the amount that Dr. Miller would have earned had she obtained employment as a surgeon following her termination from HRMC and continued working until she was approximately 70. Frankenfeld based his estimates on Dr. Miller’s 2010 tax returns—the last full year she was employed with HRMC—which showed her income as $191,117. Assuming she earned a similar salary, he estimated she would have earned $586,617 more employed as a surgeon between the time of her termination and trial and would have earned an additional $861,278 between trial and retirement.

After the close of Dr. Miller’s case, HRMC moved for judgment as a matter of law on the defamation claim and on the request for punitive damages, but not on the contract claim. HRMC argued, among other things, that the HCQIA immunity provision in 42 U.S.C. § 11137(c) foreclosed liability on the defamation claim. The district court denied the motion after observing that, to find liability for defamation or award punitive damages, the jury would need to first conclude that HRMC had made a knowingly false statement. If it made such a finding, the HCQIA immunity defense would be inapplicable. As there was sufficient evidence to support a jury finding that the NPDB report was knowingly false, the district court denied the motion. It also declined counsel’s passing suggestion to add a jury instruction on the immunity issue, noting that the verdict on the defamation claim turned on "the exact same" question.

At the charging conference the next morning, the parties agreed to a verdict form with a single compensatory damages section comprised of separate subsections for lost past wages, lost future earning capacity, and mental anguish, followed by a separate punitive damages section. The verdict form instructed the jury that, if it found in Dr. Miller’s favor on either the defamation or contract claim, it could award any of the three types of compensatory damages. However, at the conference, Dr. Miller’s counsel clarified that she was seeking only "[p]ast and future wages on the contract claim" because damages for mental anguish are not recoverable for a breach of contract. The parties therefore stipulated that if the jury found in favor of HRMC on the defamation claim and in favor of Dr. Miller on the contract claim, the court would strike any award of damages for mental anguish.

The jury found in favor of Dr. Miller on the contract claim and in favor of HRMC on the defamation claim. It awarded $586,617 in lost wages, $343,640 for lost future earning capacity, and $250,000 for mental anguish. Following the verdict, HRMC did not renew its...