Smith v. Psychiatric Solutions, Inc.

• Decision Date: 30 March 2012
• Docket Number: Case No. 3:08cv3/MCR/EMT.
• Citation: 864 F.Supp.2d 1241
• Parties: Leslie SMITH, Plaintiff, v. PSYCHIATRIC SOLUTIONS, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Florida

864 F.Supp.2d 1241

Leslie SMITH, Plaintiff,

v.PSYCHIATRIC SOLUTIONS, INC., et al., Defendants.

Case No. 3:08cv3/MCR/EMT.

United States District Court,

N.D. Florida,

Pensacola Division.

March 30, 2012.

Andrea Lynn Reino, Richard Errol Johnson, Richard E. Johnson PA, Melissa Ann Horwitz, Law Offices of Richard Johnson, Tallahassee, FL, for Plaintiff.

Mark Warfield Peters, Waller Lansden Dortch, Nashville, TN, Sneha Channabasappa, Corporate Legal, Franklin, TN, for Defendants.

ORDER

M. CASEY RODGERS, Chief Judge.

This cause comes on for consideration upon the magistrate judge's Report and Recommendation dated February 28, 2012 (doc. 309). The parties have been furnished a copy of the Report and Recommendation and have been afforded an opportunity to file objections pursuant to Title 28, United States Code, Section 636(b)(1).

Having fully and carefully considered the Report and Recommendation and having made a de novo determination of all objections filed, the undersigned concludes that the Report and Recommendation should be adopted.

Accordingly, it is now ORDERED as follows:

1. The magistrate judge's Report and Recommendation is adopted and incorporated by reference in this order.

2. Attorneys Reino, Channapasappa, and Avery are permitted to formally withdraw as counsel for their respective clients.

3. Defendants' motion for attorneys' fees and sanctions (Doc. 156), is GRANTED in part and DENIED in part, as follows:

The motion is GRANTED with respect to the request for fees pursuant to Fla. Stat. § 448.104 and DENIED with respect to the request for sanctions pursuant to 28 U.S.C. § 1927.

4. Plaintiff's motion for Rule 11 sanctions (Doc. 294) is DENIED, with Defendants to be awarded attorneys' fees for their expenses incurred in opposing the motion.¹ Defendants shall file proof of attorneys' fees incurred in opposing the Rule 11 sanctions motion within thirty (30) days.

5. Plaintiff is found liable for attorney's fees pursuant to Fla. Stat. § 448.104, and the parties shall immediately commence complying with N.D. Fla. Loc. R. 54.1(E) to determine the amount of fees to be awarded.

ORDER, REPORT AND RECOMMENDATION

ELIZABETH M. TIMOTHY, United States Magistrate Judge.

This case began as an action for retaliatory discharge under state and federal law. It is now before the undersigned upon referral by the district court pursuant to Fed.R.Civ.P. 72(a) and N.D. Fla. Loc. R. 72.3 to conduct evidentiary and such other necessary proceedings and to enter a Report and Recommendation on the motion for attorneys' fees and sanctions filed by Defendants Psychiatric Solutions, Inc. (“PSI”), Premier Behavioral Solutions, Inc. (“PBS”), and Gulf Coast Treatment Center, Inc. (“GCTC”) (collectively, “Defendants”) ( see Doc. 204, referring Doc. 156). Plaintiff Leslie Smith (“Plaintiff”), through her attorney Richard E. Johnson (“Johnson”), filed a response to Defendants' motion, opposing their demand for attorneys' fees pursuant to Fla. Stat. § 448.104; on his own behalf Johnson also opposes Defendants' request for sanctions against counsel pursuant to 28 U.S.C. § 1927 ( see Doc. 160).¹ Additionally pending is Johnson'smotion to file the affidavit of attorney Michael D. Kohn (“Kohn”) (Doc. 286), and Plaintiff's motion for sanctions against Defendants pursuant to Fed.R.Civ.P. 11 (Doc. 294). Defendants oppose both of these motions (respectively, Doc. 287 and Docs. 293, 296). For the reasons that follow, the court denies Johnson's motion for leave to file Kohn's affidavit. Additionally, the court recommends that Defendants' motion for attorneys' fees and sanctions be granted in part and denied in part and that Plaintiff's motion for Rule 11 sanctions be denied.

BACKGROUND²

As an initial matter, the court finds it appropriate to identify the parties' counsel and to discuss the current status of their representation. The docket reflects that Johnson has represented Plaintiff as lead counsel in this case from its commencement in state court. In addition to Johnson, attorneys Andrea Lynn Reino (“Reino”) and Melissa Ann Horwitz (“Horwitz”)—from Johnson's firm, the Law Offices of Richard E. Johnson—have also represented Plaintiff during the course of the litigation. After Defendants filed their motion for sanctions, attorney Marie Mattox (“Mattox”) entered an appearance for Johnson (Doc. 209).³ The docket reflects that no counsel has entered an appearance for either Reino or Horwitz. Attorney Mark Warfield Peters (“Peters”), whose law firm is based in Nashville, Tennessee, has represented Defendants pro hac vice in this case from the time of its initiation. Additionally, attorney Sneha Channapasappa (“Channapasappa”), from Peters' firm, and local attorneys Alfred Benjamin Gordon, III (“Gordon”), and Jamie McEachern Avery (“Avery”) have appeared for Defendants.

In August 2009 Peters filed a notice of withdrawal of counsel for Channapasappa (Doc. 178), in February 2010 Johnson filed a notice of withdrawal for Reino (Doc. 220), and in September 2011 Gordon submitted a notice of withdrawal for Avery (Doc. 306). None of these filings reflects that the requirements set forth in this court's local rules for the withdrawal of counsel have been satisfied. See N.D. Fla. Loc. R. 11.1(F) (stating that attorney may only withdraw by written leave of court obtained after giving ten days notice to the affected party or client and to all other counsel of record). None states that at least ten days notice was given before filing the request to withdraw nor does the docket reflect that the district court has given written leave to withdraw to any of these attorneys. Regrettably, the clerk did not refer the notices to chambers for action, and thus the district court was not given an opportunity to review them and advise the parties of their deficiencies. Regardless, it remains the attorneys' responsibility to comply with the court's local rules and to obtain written leave of court to withdraw.

Having failed to submit appropriate notice and to acquire the court's written authorization to withdraw, Reino, Channapasappa, and Avery remain on the docket as counsel of record in this case (notwithstanding the clerk's erroneous termination of Reino's representation ( see style of case on docket sheet noting termination in February 2010) and discontinuation of electronic noticing to Avery ( see Doc. 307)). Nevertheless, the court notes the passage of time with respect to each attorney's attempted withdrawal and the apparent lack of any objections having been voiced to date by an affected client or other counsel. Accordingly, this court will recommend to the district court that Reino, Channapasappa, and Avery be permitted at this time to formally withdraw as counsel for their respective clients.⁴

The following facts are taken from the district court's March 31, 2009, order granting summary judgment in Defendants' favor on Plaintiff's claims brought pursuant to the Sarbanes–Oxley Act (“SOX”), 18 U.S.C. § 1514A, and the Florida Private Whistleblower Act (“FWA”), Fla. Stat. §§ 448.101, et seq. ( see Doc. 150). Plaintiff is a therapist who worked for less than four months in 2006 at a treatment center—operated by GCTC—that offers a program for juvenile delinquents who have been court-ordered to attend. The program and the physical facility are generally known as the Gulf Coast Youth Academy (“GCYA”), which is operated under contract with the Florida Department of Juvenile Justice (“DJJ”). The DJJ and the Florida Department of Children and Families have regulatory jurisdiction over GCYA. PSI is a publicly traded company. PBS is a subsidiary of PSI and has a contract with the DJJ to operate the GCYA program. The GCYA is located in a Fort Walton Beach, Florida, facility owned by GCTC. Thus, simply put, the corporate structure of the three Defendant entities is that PSI owns PBS, which owns GCTC ( see id. at 2, n. 1).

According to Plaintiff, while working at the treatment center she uncovered serious physical and sexual abuse of juveniles, Medicaid fraud, and a suspiciously altered medication form that suggested to her that a juvenile had been forcibly medicated ( see Doc. 150 at 1). Plaintiff reported some of these incidents to state officials and to GCYA's management ( id. at 2). Immediately after complaining to GCYA about the altered medication form, Plaintiff was escorted from the GCTC premises and within a short time her employment was terminated. Thereafter, asserting that she had been fired in retaliation for whistleblowing activity, Plaintiff filed an administrative complaint, which named PSI only, with the Department of Labor through the Occupational Safety and Health Administration (“OSHA”) concerning her allegations of abuse, fraud, and an altered medication form ( id. at 4). According to Plaintiff's complaint, by reporting and objecting to the complained-of acts she engaged in protected activity as contemplated in Section 806 of the SOX ( id.). See18 U.S.C. § 1514A (prohibiting retaliation against an employee who reports violations of the fraud provisions of SOX, rule or regulation of the Securities and Exchange Commission (“SEC”), and/or any provision of federal law relating to fraud against shareholders). Plaintiff maintained that PSI's investors were effectively defrauded through their unknowing purchase of stock in a company with a potential exposure to significant criminal and civil liability ( id. at 4–5). After an investigation, OSHA dismissed Plaintiff's complaint. It concluded that the complaint did not fall within the scope of the SOX because the allegations concerned youths in a correctional setting, which did not constitute violations of any of the laws or rules enumerated in the statute ( id. at 5). The OSHA ruling also questioned whether Plaintiff's employer, identified as GCTC, was governed by the SOX but it did not reach the issue in light of its conclusion that Plaintiff's conduct was not covered under the statute ( id. at n. 3).

The...