65 Fair empl.prac.cas. (Bna) 750, 1994-1 Trade Cases P 70,648 Denard M. Fobbs, M.D. v. Holy Cross Health System Corporation, a California Corporation, Doing Business as Saint Agnes Hospital and Medical Center Cynthia Bergmann, M.D. James Cahill, M.D. Jay Christensen, M.D. Charles Gavin, M.D. Seung Nam Kim Robert Meltvedt, M.D. Marshall Noel, M.D. Morton Rosenstein, M.D. Roydon Steinke, M.D. Robert Wilson, M.D. Larry E. Nix
Docket: 92-15852
Court: Court of Appeals for the Ninth Circuit; July 19, 1994; Federal Appellate Court
Denard M. Fobbs, M.D. appeals a decision involving the summary suspension of his medical staff privileges at Saint Agnes Hospital, part of Holy Cross Health System Corporation, and various individual physician defendants. Dr. Fobbs, an African American physician, had been granted privileges in 1987 to perform intra-abdominal laser surgery but faced a suspension on September 29, 1989. He filed a complaint alleging civil rights and antitrust violations against the hospital and twenty-seven physician defendants. His claims included violations under the Sherman Antitrust Act, 42 U.S.C. § 1981, Title VI of the Civil Rights Act, and 42 U.S.C. § 1985(3).
The district court dismissed the § 1985 and Title VI claims and later ruled the § 1981 claim as time-barred. On March 17, 1992, the court granted summary judgment for all defendants on the Sherman Antitrust Act claim, citing immunity under the Health Care Quality Improvement Act of 1986 (HCQIA). The Ninth Circuit affirmed the district court's summary judgment, specifically noting that the summary restrictions on Dr. Fobbs' clinical privileges complied with HCQIA provisions, allowing immediate suspension in cases of imminent danger to health, as outlined in 42 U.S.C. § 11112(c)(2).
Dr. Fobbs was the sole physician in California's Central Valley performing laser surgery in obstetrics. Following concerns raised by defendants about irregularities in three cases, the hospital's Supervisory Committee invited him to discuss the matter. Subsequently, Dr. Donald R. Ostergard, an expert in Obstetrics and Gynecology, reviewed the case charts and reported issues with both Dr. Fobbs and hospital staff. He identified improper functioning of laser equipment due to the nursing staff's failure to calibrate it, and criticized Dr. Fobbs for poor judgment in leaving a patient under anesthesia to attend to another. In another case, he found Dr. Fobbs performed an unnecessary procedure, and in the third case, he noted a lack of judgment regarding endometriosis treatment. Additionally, he reported missing medical documentation in the patients' charts.
Following Dr. Ostergard's findings, Dr. Fobbs contested any wrongdoing in a letter to the hospital. The Supervisory Committee recommended monitoring measures to the Medical Executive Committee (MEC), which imposed restrictions that required a second opinion on all admissions, included a monitor during surgeries, and necessitated shared follow-up care, with monitors being members of the Supervisory Committee.
Dr. Fobbs argued that the law necessitated proof of 'imminent danger' before such restrictions could be applied. However, the statute only requires that potential danger may arise without the restrictions. The MEC's decision was supported by prior issues associated with Dr. Fobbs' surgeries, justifying the monitoring measures taken. The district court upheld the defendants' HCQIA immunity regarding these restrictions.
In a separate claim under 42 U.S.C. Sec. 1981, Dr. Fobbs alleged that his staff privileges were suspended without due process. The MEC's summary suspension occurred on August 26, 1987, with notification on August 29, 1987, yet Dr. Fobbs did not file suit until over a year later, which he acknowledged fell under California's one-year statute of limitations for personal injury actions. He presented four theories to preserve his claim, but these were deemed insufficient.
Dr. Fobbs argues that his claim's statute of limitations did not begin until September 30, 1988, when he believes the defendants' improper action was finalized, or alternatively, on October 10, 1988, when he received a letter formalizing his suspension and denying his request for fair hearing conditions. While state statutes of limitation apply to Section 1981 claims, federal law determines when a claim accrues and when the limitation period starts, as established in Chung v. Pomona Valley Community Hospital. The relevant precedent is Delaware State College v. Ricks, where the Supreme Court ruled that a claim accrues upon notification of a tenure denial, not upon the conclusion of subsequent grievance procedures. Dr. Fobbs' assertion that his claim accrued only after the notification of suspension by the St. Agnes Medical Executive Committee is therefore unsupported.
Additionally, Dr. Fobbs invokes California's equitable tolling doctrines, arguing that his pursuit of a claim through the Office for Civil Rights from September 1988 to September 1989 should toll the limitation period, as he acted in good faith to seek a legal remedy. He also claims that the limitations period should be tolled during the internal hospital administrative proceedings, as he was legally prevented from protecting his rights during that time. California's equitable tolling doctrine allows for tolling of the statute of limitations when a plaintiff is pursuing multiple legal remedies in good faith, and it applies even if the completion of one remedy is not required before pursuing another. This doctrine suspends the statute of limitations until administrative remedies are exhausted, regardless of whether exhaustion is legally mandated.
To benefit from California's equitable tolling doctrine, a plaintiff must meet three threshold requirements:
1. The tolling must align with federal policy concerning the underlying cause of action.
2. If the plaintiff has pursued a remedy for one distinct wrong, equitable tolling does not apply to other distinct wrongs.
3. The plaintiff must satisfy three core elements: timely notice to the defendant regarding the first claim, absence of prejudice to the defendant in defending the second claim, and good faith and reasonable conduct in filing the second claim.
Dr. Fobbs did not fulfill the thresholds necessary for tolling the statute of limitations during the Office for Civil Rights (OCR) investigation of his claim. Specifically, he failed to show that applying equitable tolling to his Section 1981 claim would be consistent with federal policy and could not demonstrate that his Title VI grievance and Section 1981 claim addressed the same wrongs. The court referenced a precedent where remedies under Title VII and Section 1981 are viewed as separate and independent. Dr. Fobbs's argument that his claims were aimed at the same discrimination was deemed insufficient. Despite potentially meeting California's core elements, his failure to meet the first two threshold requirements precludes him from tolling the statute of limitations based on his OCR complaint.
Dr. Fobbs argued that he needed to complete internal administrative remedies before filing his civil suit; however, this argument was rejected by the Supreme Court in Delaware State College v. Ricks, which stated that the pendency of a grievance does not toll the statute of limitations. Dr. Fobbs claimed that the statute of limitations should be tolled from August 29, 1987, when he was notified of his suspension, until October 10, 1987, when he was informed that no hearing would be held. This claim was also dismissed due to the precedent set in Ricks.
Dr. Fobbs further contended that he experienced a continuing violation of intimidation, harassment, and disparate treatment, culminating in his suspension on October 10, 1988. However, he failed to provide specific allegations of differential treatment after August 26, 1988, and did not demonstrate discrimination based on adherence to St. Agnes bylaws. As a result, any potential continuing violation was deemed to end on August 26, 1988.
Additionally, Dr. Fobbs argued for the application of the estoppel doctrine, claiming he was misled by the defendants’ communications regarding the statute of limitations. The district court found that the communications were not fraudulent or misleading and did not induce him to delay his legal action. The evidence indicated that Dr. Fobbs was not misled by the defendants.
Regarding his Title VI claim under the 1964 Civil Rights Act, the district court dismissed it, ruling that Dr. Fobbs did not adequately allege racial discrimination or establish third-party standing. However, the appellate court reviewed this dismissal under Federal Rule of Civil Procedure 12(b)(6) and decided to reverse the dismissal. Dr. Fobbs contested the requirement to plead that he was an intended beneficiary of a federally funded program to state a claim under the statute.
The district court mistakenly referenced Doe on behalf of Doe v. St. Joseph's Hosp. to assert that 42 U.S.C. § 2000d requires Dr. Fobbs to demonstrate he is an intended beneficiary of a federally funded program at St. Agnes. In contrast, the plaintiff in St. Joseph's argued that she could pursue a claim without being a direct beneficiary, seeking to interpret regulations to allow for a private cause of action. To establish a claim under 42 U.S.C. § 2000d, a plaintiff must show (1) the entity is engaging in racial discrimination and (2) it is receiving federal financial assistance. Intent must be proven at trial but is not required to be pled in the complaint. It is not necessary for the plaintiff to claim intended beneficiary status of the federally funded program involved.
Dr. Fobbs proposes three theories for recovery under § 2000d: first, that St. Agnes, receiving federal funds, discriminated against him racially, which could constitute a Title VI claim; second, that he is an intended beneficiary of funding aimed at improving healthcare for his patients, contending that discrimination against his patients diminishes his professional capabilities. However, this positions him as an incidental rather than a primary beneficiary, failing to substantiate a claim. Lastly, Dr. Fobbs claims to represent the rights of his patients, similar to the physician in St. Joseph's Hospital, arguing that discrimination against doctors affects their patients. He contends that St. Agnes' policies favor doctors who do not admit Medi-Cal or uninsured patients, thus restricting access for minority patients who comprise a significant portion of those demographics.
Plaintiff Dr. Fobbs alleges that approximately 60% of his patients, who are members of a minority race, face barriers in accessing St. Agnes hospital due to discriminatory policies. He attempts to distinguish his case from *St. Joseph's Hospital*, where the court ruled that a physician lacked standing to assert third-party rights on behalf of patients due to an indirect relationship. Dr. Fobbs claims that other physicians at St. Agnes cannot admit his patients, thus creating difficulties for them in gaining hospital access. However, the court rejects this theory for two reasons: Dr. Fobbs conceded that other doctors can admit his patients and that St. Agnes does not entirely exclude minority patients. Additionally, he has not justified why he should receive damages for perceived injuries to his patients. While the court reverses the district court’s dismissal of Dr. Fobbs' personal racial discrimination claim under Title VI, it affirms the dismissal of his claims regarding third-party standing and discrimination against his patients.
Regarding Dr. Fobbs’ claim under 42 U.S.C. Sec. 1985(3), the court addresses whether a heightened pleading standard is necessary. It cites the Supreme Court’s decision in *Leatherman*, which rejected heightened pleading requirements for civil rights cases, establishing that sufficient detail must be provided to give defendants fair notice of the claims against them. The complaint must include specific facts regarding the alleged discrimination's timing, nature, and impact.
The district court determined that Dr. Fobbs' conspiracy allegations under Sec. 1985(3) were overly broad and conclusory. Dr. Fobbs claimed that the defendants conspired to deprive him and his minority patients of equal protection based on race, detailing specific overt acts in furtherance of this conspiracy, including attempts to limit his surgical privileges, a suspension of his medical privileges, and damaging actions against his practice. The court dismissed the claim, noting ambiguity regarding the nature of the alleged discrimination, suggesting that Dr. Fobbs may be asserting only one theory of conspiracy.
However, interpreting the allegations in favor of Dr. Fobbs, it appears he is claiming multiple discrimination theories, including that his patients faced discrimination because of his race. The detailed allegations provide fair notice to the defendants about the specific discriminatory acts purportedly aimed at interfering with Dr. Fobbs’ rights to practice medicine. The defendants contested Dr. Fobbs’ claims on several grounds, including that he focused on discriminatory impact rather than intent, failed to specify the rights he was denied, and lacked standing to assert his patients' claims. The court found these contentions unmeritorious, reinforcing that Dr. Fobbs asserted he was targeted due to his race and identified the practice of medicine as a constitutional privilege. Additionally, he presented a plausible claim that his privileges were restricted due to primarily serving patients of color.
Dr. Fobbs has standing to sue under Section 1985 for conspiracy related to racial discrimination against his patients, allowing him to seek declaratory or injunctive relief on their behalf as members of a protected class. He does not, however, have standing to pursue monetary damages for his patients' claims, as his personal standing is limited to harm affecting his financial interests. The court reverses the district court's dismissal of Dr. Fobbs' conspiracy claim under Section 1985(3) but affirms the dismissal of claims alleging racial discrimination against his patients. The court also affirms the district court's summary judgment on Dr. Fobbs' Sherman Antitrust Act and Section 1981 claims, while reversing the dismissal of claims related to racial discrimination against Dr. Fobbs himself, distinguishing between his claims and those of his patients. The excerpt also highlights a discussion between the court and Dr. Fobbs' attorney regarding the basis for Dr. Fobbs' financial claims related to his patients’ inability to access a certain hospital.
