Marietta Area Healthcare, Inc. v. King

• Decision Date: 23 February 2023
• Docket Number: Civil Action 5:21-CV-25
• Parties: MARIETTA AREA HEALTHCARE, INC., MARIETTA MEMORIAL HOSPITAL, and MARIETTA HEALTHCARE PHYSICIANS, INC., Plaintiffs, v. MICHAEL A. KING and TODD A. KRUGER, Defendants.
• Court: U.S. District Court — Northern District of West Virginia

MARIETTA AREA HEALTHCARE, INC., MARIETTA MEMORIAL HOSPITAL, and MARIETTA HEALTHCARE PHYSICIANS, INC., Plaintiffs, v. MICHAEL A. KING and TODD A. KRUGER, Defendants.

Civil Action No. 5:21-CV-25

United States District Court, N.D. West Virginia, Wheeling

February 23, 2023

MEMORANDUM OPINION AND ORDER

JOHN PRESTON BAILEY DISTRICT JUDGE.

Pending before this Court is Defendants Michael A. King, Michael D Roberts, M.D.,^[1]and Todd Kruger's Motion for Summary Judgment [Doc. 328], filed January 3, 2023. A Response [Doc 356] was filed on February 6, 2023. A Reply [Doc. 420] was filed on February 15, 2023. Having been fully briefed, this matter is ripe for adjudication. For the reasons that follow this Court will deny Defendants Michael A. King, Michael D Roberts, M.D., and Todd Kruger's Motion for Summary Judgment.

BACKGROUND

As this Court laid out in its April 28, 2021 Order:

In November 2016, the defendants filed a qui tam complaint alleging that plaintiffs had violated federal law in recruiting and compensating physicians and had inappropriately submitted claims to federal healthcare programs based on those violations (the “Underlying Action”). The plaintiffs contend that the complaint consisted largely of false and materially misstated allegations, which the defendants knew at the time. According to the plaintiffs, after filing their qui tam complaint, the defendants continued to push their false and malicious accusations against plaintiffs. During the ensuing federal investigation, the defendants perpetuated those accusations, repeating the known falsities and material misstatements. The defendants knew and intended that the qui tam complaint and subsequent process would harm the plaintiffs' business-a healthcare system on the Ohio border that is well known and respected in the Mid-Ohio Valley, including several counties in West Virginia. After numerous extensions, the Government declined to intervene in the action.

“Qui tam is short for ‘qui tam pro domino rege quam pro se ipso in hac parte sequitur,' which means ‘who pursues this action on our Lord the King's behalf as well as his own.'” Rockwell Int'l. Corp. v. United States, 549 U.S. 457, 463 n.2 (2007). The False Claims Act's qui tam provision allows “a private plaintiff, known as a relator, [to] bring[ ] suit on behalf of the Government to recover a remedy for a harm done to the Government.” Woods v. Empire Health Choice, Inc., 574 F.3d 92, 97 (2d Cir. 2009); see 31 U.S.C. § 3730(b). As the “real party in interest” in a qui tam action, United States ex rel. Eisenstein v. City of New York, New York, 556 U.S. 928, 930 (2009), the Government may intervene and take over prosecution of the lawsuit, 31 U.S.C. § 3730(b)(2), (4). In such cases, however, the relator is still entitled to a share of any recovery. 31 U.S.C. § 3730(d). United States v. Quest Diagnostics Inc., 734 F.3d 154, 158 (2d Cir. 2013).

[Doc. 40 at 2-3].

In its Amended Complaint, plaintiffs assert five^[2] causes of action:

Count I - Malicious Prosecution [Doc. 107 at 17-19]

Count II - Tortious Interference with Business Relationships and Expectancies [Id. at 19-20]

Count III - Abuse of Process [Id. at 20-22]

Count IV - Fraudulent Legal Process in Violation of W.Va. Code § 61-5-27a [Id. at 22-23]

Count V - Civil Conspiracy [Id. at 23-24]

On January 3 2023, defendants Michael A. King, Michael D. Roberts, M.D., and Todd A. Kruger (hereinafter “Defendants”) filed a Motion for Summary Judgment [Doc. 328] and accompanying Memorandum of Law in Support [Doc. 329]. Therein, Defendants assert that the evidence adduced in this case shows that plaintiffs' claims “completely lack merit and are barred as a matter of law.” See [Doc. 328 at 1].

STANDARD OF REVIEW

Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” The party seeking summary judgment bears the initial burden of showing the absence of any genuine issues of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If the moving party meets this burden, the nonmoving party “may not rest upon the mere allegations or denials of its pleading, but must set forth specific facts showing there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. “The inquiry performed is the threshold inquiry of determining whether there is the need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Id. at 250.

In reviewing the supported underlying facts, all inferences must be viewed in the light most favorable to the party opposing the motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Additionally, the party opposing summary judgment “must do more than simply show that there is some metaphysical doubt as to the material facts.” Id. at 586. That is, once the movant has met its burden to show absence of material fact, the party opposing summary judgment must then come forward with affidavits or other evidence demonstrating there is indeed a genuine issue for trial. Fed.R.Civ.P. 56(c); Celotex Corp., 477 U.S. at 323-25; Anderson, 477 U.S. at 248. “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249 (citations omitted). Although all justifiable inferences are to be drawn in favor of the non-movant, the non-moving party “cannot create a genuine issue of material fact through mere speculation of the building of one inference upon another.” Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). Further, “the plain language of Rule 56(c) mandates the entry of summary judgment . . . against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322.

DISCUSSION

I. Litigation Privilege

Defendants first allege they are entitled to summary judgment as to plaintiffs' causes of action for tortious interference with business relationships (Count II), abuse of process (Count III), and fraudulent legal process (Count IV) as the litigation privilege bars such claims as a matter of law. See [Doc. 329 at 25-26]. In support, defendants state the “litigation privilege would be meaningless if a plaintiff could defeat its protections by simply claiming that the defendant acted in concert with a non-party to the subject litigation.” See [Id. at 26]. Defendants assert the contributions of a non-party to conduct otherwise protected by the litigation privilege applies as a matter of law, regardless of whether defendants acted together. See [id.].

In response, plaintiffs assert that the litigation privilege does not bar any of plaintiffs' claims. See [Doc. 356 at 20-22]. Plaintiffs argue that the record “unambiguously demonstrates that all three Defendants conspired together to plan, initiate, and pursue the underlying action against Plaintiffs.” See [id. at 21]. Plaintiffs further state that defendants do not cite any updated law which would require this Court to change its mind about the applicability of the litigation privilege.

According to Justice Davis' statements in her concurrence in Barefield v. DPIC Companies, Inc., 215 W.Va. 544, 600 S.E.2d 256 (2006):

Under the litigation privilege, “ ‘[a]ny communication, oral or written, uttered or published in the due course of a judicial proceeding is ... privileged and cannot constitute the basis of a civil action[.]' ” Jenevein v. Friedman, 114 S.W.3d 743, 745 (Tex. App. 2003) quoting Reagan v. Guardian Life Ins. Co., 140 Tex. 105, 166 S.W.2d 909, 912 (1942). See also Collins v Red Roof Inns, Inc., 211 W.Va. 458, 461-66, 566 S.E.2d 595, 598-603 (2002) (discussing litigation privilege). “This privilege extends to any statement made by the judge, jurors, counsel, parties or witnesses, and attaches to all aspects of the proceedings, including statements made in open court, pretrial hearings, depositions, affidavits and any of the pleadings or other papers in the case.” James v. Brown, 637 S.W.2d 914, 917-18 (Tex. 1982). The public policies associated with the litigation privilege include: (1) promoting the candid, objective and undistorted disclosure of evidence; (2) placing the burden of testing the evidence upon the litigants during trial; (3) avoiding the chilling effect resulting from the threat of subsequent litigation; (4) reinforcing the finality of judgments; (5) limiting collateral attacks upon judgments; (6) promoting zealous advocacy; (7) discouraging abusive litigation practices; and (8) encouraging settlement.

Matsuura v. E.I. du Pont de Nemours & Co., 102 Hawai'i 149, 73 P.3d 687, 693 (2003). “[T]he litigation privilege extends beyond claims of defamation to claims of abuse of process, intentional infliction of emotional distress, negligent misrepresentation, invasion of privacy, ... and ... interference with contract and prospective economic advantage.” Pacific Gas & Elec. Co. v. Bear Sterns & Co., 50 Cal.3d 1118, 1132, 270 Cal.Rptr. 1, 791 P.2d 587 (1990) (citation omitted). But see Baglini v. Lauletta, 338 N.J.Super. 282, 768 A.2d 825, 833-34 (2001) (“The one tort excepted from the reach of the litigation privilege is malicious prosecution, or malicious use of

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