Roudachevski v. All–am. Care Centers Inc. D/B/A All–am. Care of Little Rock

• Decision Date: 08 August 2011
• Docket Number: No. 11–1768.,11–1768.
• Citation: 648 F.3d 701,32 IER Cases 1088
• Parties: Evgueni ROUDACHEVSKI, D.O., Appellant,v.ALL–AMERICAN CARE CENTERS, INC. d/b/a All–American Care of Little Rock, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

648 F.3d 701

32 IER Cases 1088

Evgueni ROUDACHEVSKI, D.O., Appellant,

v.ALL–AMERICAN CARE CENTERS, INC. d/b/a All–American Care of Little Rock, Appellee.

No. 11–1768.

United States Court of Appeals, Eighth Circuit.

Submitted: June 14, 2011.Filed: Aug. 8, 2011.

Janet Lynn Pulliam, argued, Benjamin D. Brenner, Jamie K. Fugitt, on the brief, Little Rock, AR, for appellant.Edward T. Oglesby, argued, Little Rock, AR, Debby Thetford Nye, Fayetteville, AR, and Timothy A. Steadman, Little Rock, AR, on the brief, for appellee.Before BYE and MELLOY, Circuit Judges, and ERICKSEN,¹ District Judge.ERICKSEN, District Judge.

Evgueni Roudachevski, D.O. (“Dr. Roudachevski”) sought a temporary restraining order and preliminary injunction after All–American Care Centers, Inc. terminated his patient privileges at a residential nursing care facility. The district court ² treated Dr. Roudachevski's motion as one for a preliminary injunction, held an evidentiary hearing, and denied the motion. We granted an expedited appeal, and we affirm.

I. Background

Dr. Roudachevski, a doctor of osteopathic medicine, began practicing at All–American Care Center of Little Rock (“All–American Care”), which then operated under the name Parkview Rehabilitation and Healthcare Center, in 2008. He stopped working with All–American Care in January 2010, when another physician replaced him as medical director. He was rehired to the same position in July 2010. On December 16, 2010, All–American Care provided Dr. Roudachevski with 30 days' notice of his termination. However, after a meeting with Jerry L. Rhoads, the president and CEO of All–American Care Centers, Dr. Roudachevski was not terminated. In early February 2011, he became All–American Care's director of geriatrics and infection control. Another individual replaced Dr. Roudachevski as All–American Care's medical director. Dr. Roudachevski also served on the All–American Care board of clinical advisors and continued to see patients.

On February 23, 2011, following a disagreement over procedures at All–American Care, Dr. Roudachevski resigned his board and director positions. In his letter of resignation, Dr. Roudachevski stated that he would continue to provide medical care for his current patients. On February 24, 2011, Dr. Roudachevski received a letter from Rhoads terminating his practice at All–American Care. The letter claimed that Dr. Roudachevski had failed to comply with All–American Care's internal policies and procedures. For example, the letter alleged that Dr. Roudachevski had “not cleared all decisions on discharge of patients from our facility with nursing administration, including those going to the ER.” This time the termination was effective immediately.

At the time of his termination, Dr. Roudachevski had 68 All–American Care residents under his care. According to testimony presented by All–American Care, it informed residents and their legal guardians that Dr. Roudachevski no longer practiced with it and that they could transfer to another facility if they wanted to continue seeing Dr. Roudachevski. At the preliminary injunction hearing, Dr. Roudachevski testified that he had “received contact from patients” and a copy of a letter from the guardian of a patient, addressed to All–American Care, requesting that Dr. Roudachevski be given permission to continue treating the patient. An administrator at All–American Care testified that after receiving this letter, she spoke with the guardian, who decided to transfer his sister's care to an All–American Care physician. Dr. Roudachevski has not been back to All–American Care since his termination. It is undisputed that all of Dr. Roudachevski's former patients chose to remain at All–American Care.

On March 1, 2011, Dr. Roudachevski commenced this action in Arkansas state court, alleging tortious interference with contract or business expectancy and violation of the Arkansas Deceptive Trade Practices Act (ADTPA). He alleged that termination of his practice at All–American Care caused irreparable harm to his physician-patient relationships and that such harm would continue unless enjoined. In the Verified Complaint, Dr. Roudachevski sought a temporary restraining order directing All–American Care to allow him access to his patients residing at All–American Care and to take all steps necessary “to restore the status quo as it existed between Dr. Roudachevski and his patients ... as of February 23, 2011.” The Verified Complaint also sought preliminary and permanent injunctive relief. On March 14, 2011, All–American Care removed the case to federal court.

On March 23, 2011, the district court held an evidentiary hearing and denied Dr. Roudachevski's motion for a preliminary injunction. On March 31, 2011, the district court issued a written order memorializing and expanding upon the denial. The district court found that Dr. Roudachevski had failed to show a threat of irreparable harm because he had demonstrated only potential threats to his patients and his reputation, and only the possibility of liability and disciplinary measures. The district court determined that the balance of the harms weighed against granting injunctive relief because an injunction would “require [All–American Care] to undo acts completed before Dr. Roudachevski filed suit. Even assuming that such an undertaking is possible, it would create a risk of further disruption of patient care and order at [All–American Care].” The district court also concluded that Dr. Roudachevski had not established a likelihood of success on the merits of either his tortious interference claim or his ADTPA claim. Recognizing the public interest in both the physician-patient relationship and All–American Care's ability to enforce its policies, the district court determined that it could not make a finding on the issue of public interest. Dr. Roudachevski appeals, arguing that the district court abused its discretion by denying his motion for a preliminary injunction.

Dr. Roudachevski argues that the abrupt termination of his privileges at All–American Care disrupted his physician-patient relationships and that the termination caused irreparable harm to his practice and his patients. He also asserts that potential liability for malpractice and professional disciplinary measures and possible reputational harms constitute a threat of irreparable harm. At the time of oral argument before this Court, Dr. Roudachevski had not been sued by any of his former patients at All–American Care. On appeal, Dr. Roudachevski produced evidence that the Arkansas State Medical Board is investigating his termination, but the record contains no evidence that the investigation relates to the nature of his departure from All–American Care or its effect on his patients.³ He also argues that he is likely to succeed on the merits of his tortious interference claim and that both the public interest and the balance of the harms weigh in his favor.⁴

All–American Care argues that Dr. Roudachevski has failed to demonstrate a likelihood of success on the merits and that he has shown only economic or speculative harms. All–American Care also contends that restoring Dr. Roudachevski's privileges at All–American Care would cause a disruption to patients that outweighs any harm to Dr. Roudachevski in the absence of an injunction. Finally, All–American Care argues that the public interest in a long-term care facility's ability to ensure quality of care and the facility's right to set standards for physicians who practice in it weigh against the issuance of an injunction in this case.

This suit is before us by virtue of diversity jurisdiction. In a diversity suit, we are bound to apply substantive state law. In re Baycol Prods. Litig., 616 F.3d 778, 785 (8th Cir.2010). The parties agree that Arkansas law governs. The parties disagree on the proper application of a line of cases from the Supreme Court of Arkansas, Baptist Health v. Murphy (Murphy II), 365 Ark. 115, 226 S.W.3d 800 (2006), and Baptist Health v. Murphy (Murphy III), 2010 Ark. 358, ––– S.W.3d –––– (Ark.2010). In the Murphy cases, doctors sought to enjoin implementation of an economic credentialing policy that would terminate their privileges at Baptist Health hospitals solely based on their ownership interests in competing hospitals. Murphy III, ––– S.W.3d at –––– – ––––. Because many of the plaintiffs' patients were covered by insurance or benefit plans that covered treatment only at Baptist Health facilities, the policy would force the doctors to choose between their ownership interests in the other hospitals and the disruption of their physician-patient relationships. Murphy II, 226 S.W.3d at 808. The circuit court granted the plaintiffs' request for a preliminary injunction and the Arkansas Supreme Court affirmed. Murphy III, ––– S.W.3d at –––– (citing Murphy II, 226 S.W.3d at 813). Ultimately, the Arkansas Supreme Court upheld the entry of a permanent injunction and the circuit court's finding that Baptist Health's conduct constituted tortious interference. Id. at ––––. Dr. Roudachevski asserts that principles recognized in the Murphy cases dictate a finding of a threat of irreparable harm in this case and a finding that he is likely to succeed on the merits of his tortious interference claim. All–American Care asserts that the Murphy cases are distinguishable from the instant case.

Similarly, the parties dispute the relevance to this case of Arkansas and federal regulations allowing patients to select their own physicians. See Ark.Code Ann. § 20–10–1204(a)(5)(A) (residents of long-term care facilities have “[t]he right to freedom of choice in selecting a personal physician”); 42 C.F.R. § 483.10(d)(1) (residents of long-term care facilities have a right to choose a personal attending physician). Dr. Roudachevski argues that the district court failed to appropriately consider these regulations in its analysis of the public interest in ...