Kaplan v. Univ. of Louisville

Decision Date18 August 2021
Docket NumberNo. 20-5965,20-5965
Citation10 F.4th 569
CourtU.S. Court of Appeals — Sixth Circuit
Parties Henry J. KAPLAN, M.D., Plaintiff-Appellant, v. UNIVERSITY OF LOUISVILLE ; Toni M. Ganzel, M.D.; Ronald I. Paul, M.D. ; Gregory C. Postel, M.D., Defendants-Appellees.

ARGUED: Kevin L. Chlarson, MIDDLETON REUTLINGER, Louisville, Kentucky, for Appellant. Matthew Barszcz, DINSMORE & SHOHL LLP, Louisville, Kentucky, for Appellees. ON BRIEF: Kevin L. Chlarson, Dennis D. Murrell, Christopher K. Stewart, MIDDLETON REUTLINGER, Louisville, Kentucky, for Appellant. Matthew Barszcz, Donna King Perry, Jeremy S. Rogers, Chase M. Cunningham, DINSMORE & SHOHL LLP, Louisville, Kentucky, for Appellees.

Before: STRANCH, LARSEN, and NALBANDIAN, Circuit Judges.

NALBANDIAN, Circuit Judge.

This appeal concerns the University of Louisville's ("UofL")1 decision to suspend, and eventually to fire, Dr. Henry J. Kaplan. Kaplan served as both a tenured professor and the Chair of UofL's Department of Ophthalmology and Visual Sciences ("DOVS"). In October 2018, UofL informed Kaplan that it was reviewing some of his actions as Chair and considering removing him from that position. These included his signing an unauthorized lease on behalf of DOVS and meeting with private equity firms interested in buying or financing DOVS. One month into the investigation, with no more warning, UofL placed him on paid administrative leave and prohibited him from coming to university grounds and communicating with his colleagues. The university also advised Kaplan that he could lose his tenured position.

When the investigation ended, Kaplan lost his Chair, and the dean of the medical school recommended UofL terminate his tenure, identifying six grounds for dismissal. Kaplan appealed her recommendation to a faculty committee. That committee gave Kaplan a two-day hearing, at which he introduced documents and witnesses supporting his defense. It also upheld four of the six grounds for dismissal, including Kaplan's unauthorized lease and his perceived attempt to sell DOVS's clinical practice to private investors. UofL's Board of Trustees terminated Kaplan's tenure.

Kaplan sued, claiming that UofL terminated him from both positions without due process. He also alleged that UofL violated his Fourteenth Amendment liberty interests in his reputation and career along with his First Amendment right to academic freedom. The district court dismissed all of Kaplan's federal claims on UofL's 12(b)(6) motion. We AFFIRM .


For most of his time at UofL, Kaplan's work was a resounding success. He joined UofL in 2000 as a tenured professor and Chair of DOVS. His most recent five-year review described his performance as "superb." That review credited Kaplan with growing DOVS's clinical practice, characterized anonymous reviews of his performance and demeanor as "nearly universally positive," and credited a third party's description of Kaplan as "one of the strongest clinician scientists in academic medicine right now." As a result, the reviewing committee unanimously recommended Kaplan for another term. UofL followed the recommendation and reappointed Kaplan through 2021.

Kaplan's relationship with UofL soured after the university announced cost-control measures in 2018. DOVS persistently operated at a deficit, although Kaplan had sharply increased the department's revenues in recent years. As part of these reforms, UofL planned to give DOVS's faculty doctors a fifteen percent pay cut. The faculty, predictably, complained to Kaplan, who feared both "an exodus" of doctors and difficulty hiring quality candidates in the future. The salary cuts, in his view, would make DOVS less profitable, less able to care for patients, and less competitive in the pursuit of research grants.

So Kaplan held a meeting with his senior faculty to address these concerns. He suggested pursuing private funding for DOVS. The response was "wholeheartedly positive," and nobody present objected to the idea.

Kaplan explored selling DOVS's clinical practice to a private equity group, which would allow DOVS to maintain its faculty's current salaries. As part of this effort, he secured conditional commitments from nine doctors willing to leave DOVS if Kaplan separated the practice from the medical school. But in considering their options, he and the faculty understood that UofL ultimately would have to approve any outside arrangement. Some of the faculty had noncompete clauses in their contracts, and the practice benefitted from the residency program and emergency room access UofL provided. Kaplan ultimately met with four private equity groups, including one that had recently bought an ophthalmology practice affiliated with the University of Cincinnati.

Even if Kaplan had secured private financing, DOVS would have needed to expand its physical space in Louisville. As that office began treating more patients, more doctors requested time there. Kaplan told UofL that his department needed more space and began negotiating a new lease, at $7,000 a month, in March 2018. But circumstances prompted Kaplan to sign the lease before the administration authorized him to do so. First, the property owner was about to begin negotiating with another potential tenant. And second, Kaplan learned that the office housing DOVS's pediatric care practice was closing; that practice would fold unless new space became available. Ten days after he signed the new lease, Kaplan met with UofL's Interim Executive Vice-President Dr. Greg Postel to explain why he had signed it.

In October 2018, Dr. Toni Ganzel (the Dean of the Medical School) and Postel summoned Kaplan to a meeting where they told him they were beginning to investigate his conduct as Chair. The investigation, formally labeled a "special chair review," stemmed from concerns about Kaplan's unauthorized lease agreement, his reneging on an agreement that DOVS would lease space from the medical school despite its having made significant investments in reliance on his representations, his attempt to seek outside funding, and his creating an LLC "to spin-off" DOVS's clinical practice, among other things. Kaplan denied any wrongdoing. Even so, UofL placed him on paid administrative leave from his Chair for the length of the review. Kaplan continued to work as a researcher, educator, and doctor. Depending on the review's conclusions, Kaplan faced disciplinary action up to removal from his chair position. UofL's special chair review would proceed according to the Redbook , the university's internal governing document.

Less than a month later, UofL cancelled Kaplan's scheduled interview with the special chair review committee hours before it was scheduled to begin. Instead, Kaplan was told to meet with Ganzel and Dr. Ron Paul (the Vice-Dean for Faculty Affairs) the next day. At that meeting, they advised Kaplan that the investigation into his conduct was being escalated from the special chair review to UofL's Compliance and Audit Services ("CAS"), that he was being placed on administrative leave with pay from his tenured position effective immediately, and that UofL might terminate his tenure. On leave, Kaplan could "not engage in any activity on behalf of the University, including in [his] role as Chair, faculty member or physician." (R.15-9, Jan. 23, 2019 Letter, at PID#566.) UofL confiscated his desktop and ordered him to return his laptop. This investigation would also follow the Redbook .

Kaplan's suspension stalled his career. He could not complete grant proposals, collaborate on research with faculty members, teach students, or even see his patients. Kaplan saw thirty to forty patients a week before his leave. But because his leave prohibited him from communicating with his colleagues at the hospital, he couldn't ensure they received alternative appointments. He also could no longer contribute to upcoming grant proposals, and UofL removed him from at least one ongoing grant. The university also told multiple organizations that Kaplan was no longer Chair before the investigation concluded.

CAS interviewed Kaplan in February 2019. Kaplan acknowledged that he had shared some of DOVS's patients’ financial data and discussed financing with private equity firms. In part, he felt the administration had implicitly encouraged these conversations by directing DOVS to explore new sources of revenue. But he explained that he never shared HIPAA-protected information with anyone and that he never shared any information at all before the other party had entered a non-disclosure agreement. Plus, Kaplan understood that he could not have accepted any outside financing without UofL's approval. However any potential financing might work out, DOVS's practice would maintain a relationship with UofL. As for the unauthorized lease, Kaplan knew he technically needed approval from the finance committee but signed the lease without it because the finance committee kept postponing its meeting with him.

When the report came out two months later, CAS recommended "appropriate disciplinary action, up to and including termination" of Kaplan's Chair and tenure. (R.15-11, CAS Rep. at PID#572.) That report faulted Kaplan for the unauthorized lease, which it characterized as evidence that he "actively" "worked to undermine the budget reduction plan." (Id. at PID#577.) It also revealed other financial chicanery and mismanagement. Kaplan tried multiple times after the budget reductions were announced to give his faculty doctors raises, which UofL repeatedly vetoed. DOVS also hadn't made certain required payments—known as academic program support payments—to UofL since 2015. These payments were worth as much as $1.1 million a year.

Kaplan had also reneged on an expensive agreement with the medical school. Before signing the unauthorized lease, Kaplan told UofL that he wanted DOVS to have space in the medical school's new pediatrics building. Based on this...

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