Morice v. Hosp. Serv. Dist. #3
| Decision Date | 27 December 2019 |
| Docket Number | CIVIL ACTION NO. 18-7945 |
| Citation | 430 F.Supp.3d 182 |
| Parties | Natchez J. MORICE, III, M.D. v. HOSPITAL SERVICE DISTRICT #3, et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
Michael R.C. Riess, Thomas Patrick Henican, Riess LeMieux, LLC, New Orleans, LA, Christopher H. Riviere, Todd M. Magee, Riviere Law Firm, Thibodaux, LA, for Plaintiff.
Christopher K. Ralston, Jeremy T. Grabill, Matthew Robert Slaughter, Phelps Dunbar, LLP, Carl Edward Hellmers, III, Dowling Burke Stough, James P. Waldron, Frilot L.L.C., New Orleans, LA, for Defendants.
ORDER & REASONS
Before the Court is a motion to dismiss for failure to state a claim filed by defendants Hospital Service District No. 3 Parish of Lafourche d/b/a Thibodaux Regional Medical Center ("TRMC"), Board of Commissioners of TRMC ("the Board"), Medical Executive Committee of TRMC ("MEC"), Credentials Committee of TRMC ("Credentials Committee"), and Greg Stock ("Stock"), the CEO of TRMC (collectively, "Defendants").1 The plaintiff, Natchez J. Morice, III, M.D. ("Dr. Morice"), opposes the motion.2 Also before the Court is a motion for partial summary judgment filed by Dr. Morice relating to his breach-of-contract claim,3 which Defendants oppose,4 and in further support of which Dr. Morice replies.5 Having considered the parties' memoranda and the applicable law, the Court issues this Order & Reasons.
This litigation arises from TRMC's suspension and denial of Dr. Morice's clinical privileges in obstetrics at TRMC.6 TRMC's Medical Staff Bylaws ("Bylaws") require a physician to apply for renewal of privileges at TRMC every two years.7 As part of the written application, a physician must demonstrate "ability to work cooperatively with others," "provide peer recommendations," agree to continued peer review and quality review, and report any violations assessed by the MEC.8 The Credentials Committee initially reviews the application and makes a recommendation to the MEC, which, in turn, makes a recommendation to the Board, which renders the final decision.9 Under Article VII of the Bylaws, if the MEC makes an "adverse recommendation," the physician may generally initiate the "Hearing Procedure" set out in Article XI, which provides for a hearing conducted by a "Hearing Committee" (or Hearing Panel) and appellate review by the Board.10 According to the Bylaws, the recommendation forming the basis of the hearing and appeal does not become "effective and final" until the Board's determination upon final review.11
TRMC first granted Dr. Morice privileges in obstetrics and gynecology in 2006. Following notice of five violations spanning from late 2014 to early 2017, however, the MEC recommended corrective action in relation to Dr. Morice's privileges in obstetrics.12 The violations, which Dr. Morice maintains were fabricated, involved Dr. Morice's failure to properly attend to his obstetrical patients.13 Dr. Morice then requested a hearing under Article XI,14 which took place on April 24-26, 2018, and May 8, 2018.15 In preparation for the hearing, Dr. Morice alleges that he and TRMC submitted briefing on what burden of proof and evidentiary standard applied.16 On June 13, 2018, the Hearing Panel rendered a decision to affirm the MEC's decision to suspend Dr. Morice.17 Dr. Morice subsequently appealed the MEC's decision to the Board. Dr. Morice alleges that both he and TRMC filed briefs and made oral statements in support of their positions on appeal.18 On August 13, 2018, the Board affirmed the Hearing Panel's decision suspending Dr. Morice's privileges in obstetrics for a period of six months, until February 13, 2019.19
Meanwhile, because Dr. Morice's two-year privileges appointment was set to expire on May 16, 2018, in the midst of the hearing-and-appeal process on his suspension,20 the Board extended his privileges "until the earlier to occur of (i) the expiration of 4 months from May 15, 2018, the date of reappointment, or (ii) such time as the hearing before the ad hoc medical staff committee ... and the appellate review by the Board ... have concluded and a final decision has been rendered as set forth in Article XI of the TRMC Medical Staff Bylaws."21 In this case, the latter term applied. Therefore, in the August 13, 2018 letter that informed Dr. Morice of the Board's final decision concerning his suspension, Stock advised Dr. Morice to "submit your application for reappointment and clinical privileges for review by the Credentials Committee as soon as possible."22 Dr. Morice heeded Stock's instruction to make quick application for reappointment only as to his gynecological privileges. This application was submitted on August 16, 2018,23 and TRMC approved his reappointment application a month later.24 However, Dr. Morice waited to apply for privileges in obstetrics until December 17, 2018.25 On January 14, 2019, the MEC recommended denial of his application for obstetrical privileges, citing a new violation of the professional standard of care and a variance report of unprofessional behavior in addition to the conduct for which Dr. Morice was suspended.26 As of the date of the briefing of this motion to dismiss, Dr. Morice was still pursuing the hearing-and-appeal process as to the denial of his application for obstetrical privileges. TRMC declined to grant Dr. Morice temporary obstetrical privileges during the pendency of his appeal.27
In his first supplemental and amending complaint for injunctive relief and damages,28 Dr. Morice alleges that Defendants violated the Sherman Act (Counts I & II), breached the Bylaws and did so in bad faith (Counts III and IV), tortiously interfered with contractual obligations under the Bylaws (Count V), committed an abuse of rights and negligent misrepresentation (Counts VI and VII), intentionally inflicted emotional distress and defamed him (Count VIII), violated the Louisiana Unfair Trade Practices and Consumer Protection Law ("LUTPA") (Count IX), and violated his due process and equal protection rights (Count X).29 In support of these claims, Dr. Morice's allegations may be grouped into three broad categories: the suspension, the denial of reappointment, and Defendants' purported illegal business practices.
First, Dr. Morice alleges that the peer review process relating to the suspension of his privileges was inherently flawed and designed to eliminate him as a competing provider of OB/GYN services. Dr. Morice alleges that the "trumped up" violations coincided with the success of his private practice.30 In 2012, Dr. Morice opened an office in Thibodaux operated through his limited liability company, Thibodaux Gynecology and Obstetrics, LLC ("TGO").31 Dr. Morice alleges that he does not have staff physician privileges at any tertiary level facility other than TRMC, which he says is the sole community provider of inpatient and outpatient hospital services in Thibodaux.32 Dr. Morice contends that his entire obstetrical practice is based at TRMC, and all of his privileges in obstetrics are with TRMC.33 From 2006 until 2013, Dr. Morice says his only other competitors were the Thibodaux Women's Center, an independently-owned OB/GYN group, and TRMC's OB/GYN group. During this time, Dr. Morice alleges that his practice grew dramatically, which he says affected TRMC's market share for ancillary services, in that he was performing all ancillary services within his own medical practice rather than sending these services to TRMC.34
In 2014, TRMC purchased the Thibodaux Women's Center. As a result, TRMC employed the Center's physicians in-house and, says Dr. Morice, heightened the competition between TRMC and Dr. Morice's practice.35 Only after purchasing the Thibodaux Women's Health Center, Dr. Morice contends, did TRMC cite him for numerous bogus violations to potentially restrict, suspend, or remove his privileges at TRMC, reduce competition in the region, and raise the prices TRMC charged its patients and insurers. In the first nine years of Dr. Morice's privileges at TRMC, Dr. Morice received no violations or write-ups. But between December 10, 2014, and January 5, 2017, Dr. Morice was charged with five Level III or IV violations. Given that Dr. Morice and TGO compete with TRMC's OB/GYN physicians, who earn money for TRMC through services (particularly ancillary services, which constitute most of Dr. Morice's revenue as a private physician) and referrals, Dr. Morice contends that TRMC has a substantial motivation for restricting and denying medical staff privileges to independent non-employee physicians like him.36 Dr. Morice contends that TRMC fabricated the bases for the violations for the purpose of removing Dr. Morice and TGO from competition, thereby allowing the hospital to have a monopoly or near monopoly for OB/GYN services.37
Dr. Morice alleges that members of the MEC were biased in weighing his suspension because they were likewise in direct competition with him.38 In addition, Dr. Morice claims that the violations were groundless because each reviewing TRMC committee merely "rubber stamped" the prior committee's recommendation without reviewing the evidence. For instance, on April 11, 2017, Dr. Morice claims to have met with the MEC, and that its members acknowledged never having before them the medical charts or any other facts or evidence purportedly establishing the Level III and IV violations found by TRMC's administration.39 Dr. Morice claims that this pattern continued at the hearing, where an independent reviewer, the National Peer Review Committee; the medical review panel composed of three independent OB/GYN physicians; and Dr. Morice's expert, all gave evidence that Dr. Morice complied with the applicable standard of care in relation to Case No. 7954, which charged Dr. Morice with a Level IV violation involving injury. Dr. Morice claims that even some testimony elicited from Defendants' expert supported his exoneration. However, TRMC merely...
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