Bhan v. Battle Creek Health System, W.D. Mich., No. 1:10-cv-202, 2/14/12
Key Holding: A physician whose privileges were suspended and later revoked by a pair of Michigan hospitals may pursue ADA claims, as well as civil rights and defamation claims under state law, against certain hospital and individual defendants named in his lawsuit.
Key Takeaway: Health system parents are not vicariously liable for acts of subsidiary hospitals without evidence justifying piercing of parents' corporate veils.
A Michigan physician whose privileges were suspended and later revoked by two hospitals may pursue claims under the Americans with Disabilities Act against one of the hospitals and defamation and civil rights claims under state law against the other hospital and its individual officers, a federal trial court ruled Feb. 14 (Bhan v. Battle Creek Health System, W.D. Mich., No. 1:10-cv-202, 2/14/12).
The U.S. District Court for the Western District of Michigan said the majority of the claims brought by Dr. Raakesh Bhan relating to the end of his long-standing relationships with Battle Creek Health System (BCHS) and Borgess Medical Center had to be dismissed.
The court said claims brought against the two hospitals' parents, Trinity Health Services and Ascension Health, respectively, also had to be dismissed because there was no basis for piercing the corporate veils of either hospital to hold its parent liable. Bhan cited no evidence to suggest that the separate corporate existence between the parents and subsidiaries had been “used to subvert justice or cause some other unfair result,” the court said.
The court rejected, however, the hospitals' argument that they enjoyed immunity from contract claims asserted in the case or under the Health Care Quality Improvement Act.
Some Claims Survive
The court, however, allowed claims under Michigan's Elliot Larsen Civil Rights Act against Borgess, its CEO Paul A. Spaude, its chief medical officer Dr. Terry Baxter, and its chief quality officer Robert Brush. It also allowed the ADA claims against BCHS, although it found ADA claims asserted against its current and former officers, Patrick Garrett, Denise Brooks-Williams, and Dr. Jeffrey Mitchell, had to be dismissed.
Finally, the court said the defamation allegations against Borgess, Spaude, and Baxter also could proceed, although those same claims asserted against BCHS and its officers had to be dismissed because of a failure to specify the nature of the alleged statements or allege that they were not privileged. The court noted that no parties had urged dismissal of the civil rights claims and that the Borgess defendants had not joined in BCHS's motion to dismiss the defamation claims.
The court found all of the remaining claims asserted against various parties had to be dismissed. Those claims included tortious interference with Bhan's advantageous business relationships with his patients and with the two hospitals, conspiracy to deny due process, breach of contract, and conspiracy to adversely affect Bhan's medical staff privileges.
ADA Claims Survive
The ADA claims asserted against BCHS related to actions allegedly taken against Bhan after he had, and recovered from, a stroke in 2007. The complaint alleged that Garrett, Mitchell, and Brooks-Williams required Bhan to undergo repeated independent medical exams despite the fact that each time, the examining physician concluded that Bhan was fit to resume his responsibilities at BCHS.
The court said it recognized that the protections of ADA Title III might not extend to a physician in Bhan's position but that it was too soon to dismiss the claim as a matter of law. “This Court recognizes that there are arguments on both sides of the issue of whether Title III of the ADA protects a physician who is seeking, has, or is deprived of staff privileges,” the court said.
“At this point in time, considering the status of the facts and law, this Court will deny BCHS's motion to dismiss,” the court said. “After the record is further developed, the Court will be in a better position to determine what Bhan's actual status is—i.e., whether he is an employee, client, customer, contractor, affiliate, etc.—and, whatever he is, whether he is covered by the ADA.”
Bhan is represented by Kent A. Bieberich and Vern J. Steffel Jr., with Steffel & Steffel, Battle Creek, Mich. The Trinity and BCHS defendants are represented by Benjamin W. Jeffers, with Dykema Gossett PLLC, Detroit, and Daniel J. Bretz, David A. Hardesty, and Jeffrey Allan Steele, with Clark Hill PLC, Detroit. The Ascension and Borgess defendants are represented by Craig H. Lubben, with Miller Johnson PLC, Kalamazoo, Mich.; Janice A. Anderson, with Polsinelli Shughart PC, Kalamazoo; and Matthew C. Hans and S. Jay Dobbs, with Polsinelli Shughart PC, St. Louis.