Schalk v. Associated Anesthesiology Practice, No. CIV. CCB-03-3393.

Decision Date27 April 2004
Docket NumberNo. CIV. CCB-03-3393.
Citation316 F.Supp.2d 244
CourtU.S. District Court — District of Maryland

Stephen B. Lebau, Anna L. Jefferson, Lebau and Neuworth LLC, Baltimore, MD, Richard P. Neuworth, Lebau and Neuworth PA, Baltimore, MD, for Plaintiff.

Kara Kathleen Mather, Squire Sanders and Dempsey LLP, Washington, DC, for Defendant.


BLAKE, District Judge.

Plaintiff David Schalk brings this action against Defendant Associated Anesthesiology Practice ("AAP") for alleged violations of the Americans with Disabilities Act ("ADA") and the Rehabilitation Act. Schalk claims that AAP refused to hire him solely because of his substance abuse problem. Pending before the court is AAP's motion to dismiss. For the reasons discussed below, the motion will be denied.


Schalk is a board certified and approved anesthesiologist. He has been licensed to practice medicine in Maryland for approximately 14 years. AAP is a professional corporation made up of physicians specializing in anesthesiology. Prior to 1989, Schalk had hospital privileges as an anesthesiologist at Peninsula Regional Medical Center ("the Hospital") in Salisbury, Maryland. In 1989, the Hospital entered into a contract with AAP in which it gave AAP exclusive rights to provide anesthesia services in the Hospital. Because the Hospital did not want to prevent anesthesiologists with existing privileges from working, it required AAP to enter into subcontract agreements with these doctors. Schalk was one such anesthesiologist.

Schalk's arrangement with AAP is documented in two contracts — one entered in 1992, and one entered in 1998.1 The 1992 contract was entitled "Subcontract Agreement for Professional Anesthesiology Services," and the 1998 contract was entitled "Independent Contractor/Subcontract Agreement." Both these contracts specifically stated that Schalk would be deemed an independent contractor of AAP. Moreover, pursuant to these contracts, Schalk billed his patients directly for his services, maintained his own contracts with insurance companies, maintained his own medical and financial records for his patients, and paid for his own malpractice insurance. Schalk did not receive any benefits from AAP, nor did AAP provide him with any equipment or administrative support. Nevertheless, the agreements called for a certain degree of coordination among Schalk, AAP, and the Hospital with respect to the provision of anesthesiology services.

On or about September 20, 2000, AAP was informed by the Hospital that Schalk would be taking medical leave for at least one month, effective that day.2 This was the first and only notice AAP received regarding Schalk's leave; he never asked or received approval for leave from AAP directly. Schalk's leave was for the purpose of seeking treatment for substance abuse. He successfully completed an in-patient treatment program, and in January 2002, was informed that he was capable of returning to the practice of anesthesiology. Around this time, Schalk saw two different internet advertisements that AAP had placed seeking anesthesiologists. The job description of the position offered by AAP was as follows:

Superb opportunity to join a single specialty group practice located on the Eastern Shore of Maryland. Two year partnership tract [sic] opportunity. Group consists of 11 physicians and 5 CRNA's. Call 1-11 with day off after call. Group has exclusive contract with Level 3 hospital/trauma center. Physicians do 90% of their own cases and run 3-4 rooms at one time. Group in process of building a brand new state of the art surgery center. If you are looking for a great location and a superb opportunity this is the practice.

On January 13, 2002, Schalk wrote a letter to Michael Stivelman, President of AAP. This was apparently the first time that AAP had heard from Schalk since his sudden departure in September 2000. The letter read as follows:

I have been informed by Dr. Lawrence [Vice-President of Medical Affairs for the Hospital] that since my leave of absence exceeded one year that I need to reapply for privileges through your group. I have completed extensive treatment for my disabilities and have been informed that I may return to the practice of anesthesia. I am therefor [sic] requesting that I may apply for privileges under your auspices. Please contact me as to when we can discuss this matter.

Stivelman responded to Schalk in a letter dated January 23, 2002, in which he wrote:

In response to your letter dated 13 January 2002, we are not prepared to offer you a position with AAP. If you wish to reapply for privileges, that request should be addressed to the Hospital Medical Staff. If you have any further questions that I may be able to answer, feel free to contact me.

Then, on March 5, 2002, Schalk wrote back to Stivelman. This second letter read:

I just wanted to clarify our prior correspondence. My past communications to you were for the purpose of obtaining work with AAP and not for hospital privileges. I am aware that AAP has been searching for doctors to work for it.

By letter dated January 23rd, you advised me that AAP was "not prepared to offer me a position." I ask that you reconsider this position as I am qualified and able to return to work, as explained and documented previously.

It appears that AAP did not respond to Schalk's second letter. In Stivelman's affidavit, he stated that the reasons AAP did not wish to reestablish a relationship with Schalk were his sudden disappearance, failure to appear to work for fifteen months, and prior unsatisfactory performance.

Subsequently, Schalk filed a charge of discrimination with the Equal Employment Opportunity Commission. He alleged that AAP failed to hire him because of his disability, in violation of the ADA. In August 2003, the EEOC delivered its determination. Preliminarily, it found that Schalk and AAP had an employer-employee relationship prior to Schalk's leave, and therefore that it had jurisdiction over the charge. It then held that there was reasonable cause to believe that AAP violated the ADA by basing its decision not to hire Schalk on his status as a recovered drug addict.

On November 24, 2003, Schalk filed a two-count complaint against AAP in this court, alleging violations of the ADA and the Rehabilitation Act.3 AAP filed a motion to dismiss for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1), claiming that Schalk was not an employee of AAP, but an independent contractor, and as such, could not raise a claim under the ADA or the Rehabilitation Act. In his opposition, Schalk argued that his status prior to his medical leave was irrelevant; what mattered was that after completing his treatment, he was a job applicant seeking a position as an employee of AAP. Moreover, he claimed that he need not establish an employer-employee relationship to state a claim under the Rehabilitation Act. Finally, he argued that discovery was necessary to fully develop the facts surrounding these events, and in support of this argument, filed a Rule 56(f) affidavit outlining the discovery he would need to prove his claims. In its reply, AAP, in addition to responding to Schalk's points, raised the new argument that Schalk's Rehabilitation Act claim was barred by the statute of limitations. This court permitted Schalk to file a surreply to respond to that argument.


AAP has filed a motion to dismiss the ADA claim for lack of subject matter jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(1). There are two ways in which to present this kind of motion. First, a defendant may claim that a complaint simply fails to allege facts upon which subject matter jurisdiction can be based. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). In that case, all the facts alleged in the complaint are assumed to be true and the plaintiff is essentially given the same procedural protection as he would have under a Rule 12(b)(6) motion for failure to state a claim on which relief may be granted. Id. Second, a defendant may claim that the jurisdictional allegations of the complaint are sufficient, but are not true. Id. In that event, the court may go beyond the allegations of the complaint and consider evidence by affidavit, depositions, or live testimony without converting the proceeding to one for summary judgment. Id. The court must then weigh all the evidence to determine if there is jurisdiction. Id.

This case involves the second kind of motion. AAP does not argue that Schalk's complaint is lacking on its face. Schalk clearly raises a claim under the ADA, and he asserts facts that, if proven, would entitle him to relief. The ADA prohibits discrimination against a qualified individual with a disability because of the individual's disability in regard to job applications procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions and privileges of employment. 42 U.S.C. § 12112(a). "Discrimination" includes limiting, segregating, or classifying a job applicant or employee in a way that adversely affects the opportunities or status of such an applicant or employee because of the applicant or employee's disability. § 12112(b)(1). In his complaint, Schalk states that he suffered from a disability of which AAP was aware, that he applied for a job with AAP, that he was qualified to perform the job and had done so successfully in the past, and that AAP still refused to hire him solely because of his disability. If Schalk were to prove all of these elements, he would be able to recover under the statutes.

Thus, instead of challenging the sufficiency of the complaint's allegations, AAP challenges the allegations' veracity. Specifically, it claims that contrary to his assertions, Schalk was neither an "employee" nor a "job applicant" under the ADA, and accordingly, that the court does not have...

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