Fox v. Hca Holdings, Inc.
| Decision Date | 04 November 2015 |
| Docket Number | Case No. 15-CV-02073-LHK |
| Court | U.S. District Court — Northern District of California |
| Parties | RICHARD B. FOX, Plaintiff, v. HCA HOLDINGS, INC., Defendant. |
Plaintiff Richard B. Fox sues Defendant HCA Holdings, Inc. for allegedly perpetrating a fraud against the U.S. Court of Appeals for the Ninth Circuit, which led to an unfavorable ruling against Plaintiff in Fox v. Good Samaritan Hosp. LP ("Fox I"), 801 F. Supp. 2d 883 (N.D. Cal. 2010), aff'd, 467 Fed. App'x 731 (9th Cir. 2012). ECF No. 6 (First Amended Complaint, or "FAC"). Before the Court is Defendant's Motion to Dismiss. ECF No. 10. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court hereby GRANTS Defendant's motion to dismiss Plaintiff's Rule 60(d) claim with prejudice, and Plaintiff's RICO claim with leave to amend.
In the instant case, Plaintiff alleges that Defendant exerted improper influence to cause a non-random assignment of the Ninth Circuit panel considering the appeal of Fox I, with the result that an allegedly biased judge influenced the outcome of Fox I. FAC ¶ 2. As the factual and procedural history of Fox I are relevant to this action, the Court briefly summarizes that litigation.
On March 4, 2004, Plaintiff sued Good Samaritan Hospital ("GSH"), GSH's corporate parent, HCA, Inc.,1 and others in the U.S. District Court for the Northern District of California. Fox I, 801 F. Supp. 2d at 885-86. Plaintiff alleged retaliation under California law and violations of federal antitrust law based on the suspension of Plaintiff's privileges to practice pediatrics at GSH. Id. U.S. District Judge Richard Seeborg denied Plaintiff's request to add a RICO claim, which allegedly arose out of the Fox I defendants' use of Medicare fraud proceeds to subsidize Plaintiff's competitors. See No. 04-00874, ECF Nos. 69 (), 167 (district court's denial), 574 (first amended complaint). Judge Seeborg then granted summary judgment in favor of the Fox I defendants on the grounds that the defendants were immune from damages under the Health Care Quality Improvement Act of 1986 ("HCQIA"), 42 U.S.C. § 11101. 801 F. Supp. 2d at 892. Additionally, Judge Seeborg granted summary judgment for HCA, Inc. on the independent ground that there was no basis to impose liability on HCA, Inc. for the alleged wrongs of GSH. Id. at 895, 897-98.
Plaintiff appealed the adverse grant of summary judgment to the Ninth Circuit. Fox I, 467 Fed. App'x 731. The case was assigned to a panel of Ninth Circuit Judge Jay Bybee, Ninth Circuit Judge Mary Murguia, and U.S. District Judge James Singleton from the District of Alaska,sitting by designation. No. 10-15989, Dkts. 70, 73. After oral argument, but before any decision, Plaintiff asked Judge Bybee to recuse himself from the panel due to alleged conflicts of interest arising from Judge Bybee's connections to the Fox I defendants' attorneys. No. 10-15989, Dkt. 74. Specifically, Plaintiff argued that Judge Bybee should recuse himself for two reasons. First, Judge Bybee received pro bono legal services from Latham & Watkins LLP, which acted as counsel for the Fox I defendants in Medicare fraud cases brought by the U.S. Department of Justice. No. 10-15989, Dkt. 74. Plaintiff argued that the Medicare fraud cases were related to the RICO claim that Plaintiff attempted to add to the Fox I complaint. No. 10-15989, Dkt. 74. Second, Plaintiff argued that a partner at Ropes and Gray LLP, which represented the Fox I defendants before Judge Seeborg and on appeal, set up a legal expense fund for Judge Bybee. No. 10-15989, Dkt. 74. Judge Bybee denied the motion for disqualification. No. 10-15989, Dkt. 76.
Plaintiff moved for reconsideration. No. 10-15989, Dkt. 77. Plaintiff added allegations that Judge Bybee received over $3 million in pro bono legal services from Latham & Watkins LLP and received over $25,000 from the legal expense fund set up and managed by the partner at Ropes and Gray LLP. No. 10-15989, Dkt. 77. Judge Bybee granted Plaintiff's motion for reconsideration and recused himself from the case. No. 10-15989, Dkt. 78. The Ninth Circuit Clerk replaced Judge Bybee with Ninth Circuit Judge Harry Pregerson. No. 10-15989, Dkt. 79. Oral argument did not recur before the new panel. The panel affirmed Judge Seeborg on the grounds that the defendants were entitled to HCQIA immunity. 467 Fed. App'x at 735. The panel did not address the district court's alternative grounds supporting summary judgment in favor of HCA, Inc. See id.
Plaintiff, whom Defendant asserts is a licensed attorney, brings the instant case pro se. Mot. at 2. Plaintiff alleges that Defendant "exerted improper influence, by as yet undetermined means, to cause a non-random panel assignment" of Fox I to a panel presided over by Judge Bybee. FAC ¶ 2. Plaintiff's theory is that Defendant "somehow rigged the Ninth Circuit panel sothat Judge Bybee would be named the presiding judge." Mot. at 3.2 After obtaining more financial data, Plaintiff now alleges that Judge Bybee received over $3.2 million in legal services from Latham & Watkins LLP and over $45,000 from the legal expense fund set up by the Ropes & Gray LLP partner. Plaintiff maintains that these connections to the Fox I defendants' attorneys biased Judge Bybee in favor of the Fox I defendants. FAC ¶¶2, 5-6, 13-14, 28. Pursuant to this theory, Plaintiff alleges that the Fox I appeal would have been favorable to Plaintiff had Judge Bybee not presided over the oral argument, even though Judge Bybee recused himself from the case. Id. ¶¶ 6, 34.
Plaintiff points to three indications that the panel assignment to Judge Bybee was not random. First, Plaintiff asserts that non-random panel assignments occur in the Ninth Circuit "for reasons that do not appear on the record." Id. ¶¶ 1, 37, Exs. 1-3 (news articles discussing possible non-random panel assignments). Second, Plaintiff alleges that the Fox I panel assignment occurred only 32 days after the completion of briefing, a short time relative to when other cases are assigned. Id. ¶ 38-41. Additionally, Plaintiff asserts that the Ninth Circuit should have stayed the Fox I appeal until the Ninth Circuit decided a submitted case raising related legal issues. Id. ¶ 42 (citing Chudacoff v. Univ. Med. Ctr., No. 09-17558). From this, Plaintiff concludes that the Fox I appeal was expedited, "although nothing in the record reflects or explains that." Id. Third, Plaintiff asserts that, due to Judge Bybee's relatively junior status among active judges, the odds of being assigned to a panel presided over by Judge Bybee were "around two percent or less." Id. ¶ 43.
Taking these allegations together, Plaintiff concludes that the odds of Fox I being randomly assigned shortly after the completion of briefing to a panel presided over by Judge Bybee were approximately 0.02%. Id. ¶ 44. Plaintiff alleges that given Id. ¶ 46. Plaintiff stipulates that Plaintiff "believes, in other words, but has no facts to support his belief, that HCA Holdings influenced the Ninth Circuit panel selection process." Mot. at 4.
According to Plaintiff, if Fox I had been randomly assigned "to an impartial panel," or had the "post-recusal panel know[n] of HCA's misconduct in the appeal," the appeal would have been decided in Plaintiff's favor. FAC ¶¶ 47, 52. Plaintiff relies on the resolution of the allegedly related case Chudacoff, in which the Ninth Circuit noted in dicta that the Ninth Circuit "would be inclined to affirm the denial of HCQIA immunity" in that case. Id. Plaintiff also relies on allegations that the Fox I decision "closely reflected" comments that Judge Bybee made at oral argument. Id. ¶ 5. It follows, according to Plaintiff, that "the post-recusal panel was heavily influenced by the recused judge," or Judge Bybee "circulated an opinion prior to his recusal that was then substantially adopted by the post-recusal panel." Id. Plaintiff does not allege any improper influence over the proceedings before Judge Seeborg.
Plaintiff filed the complaint in Fox I on March 4, 2004. No. 04-00874, ECF No. 1. On January 1 and 29, 2010, the defendants filed motions for summary judgment. No. 04-00874, ECF Nos. 347, 370. On March 29, 2010, Judge Seeborg granted the defendants' motions for summary judgment and entered final judgment for the defendants. No. 04-00874, ECF Nos. 446, 449.
On April 26, 2010, Plaintiff moved to vacate the judgment. No. 04-00874, ECF No. 469. Two days later, Plaintiff filed a notice of appeal of Judge Seeborg's summary judgment decision. No. 04-00874, ECF No. 476. On April 30, 2010, the defendants filed a motion to dismiss the appeal in the Ninth Circuit due to the pendency of post-judgment motions before Judge Seeborg. No. 10-15989, Dkt. 9. In response, Plaintiff filed a motion for sanctions against the defendants in the Ninth Circuit. No. 10-15989, Dkt. 14. The Ninth Circuit stayed the appeal. No. 10-15989, Dkt. 15. On June 6, 2010, Judge Seeborg denied Plaintiff's post-judgment motion to vacate thejudgment. No. 04-00874, ECF No. 514.
Plaintiff filed an amended notice of appeal on July 2, 2010. No. 04-00874, ECF No. 526. On July 29, 2010, the defendants withdrew the motion to dismiss the appeal because the post-judgment motions were no longer pending in the district court. No. 10-15989, Dkt. 23. On August 27, 2010, the Ninth Circuit denied Plaintiff's ...
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