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John G. Robb v. United States
Citations: 80 F.3d 884; 1996 U.S. App. LEXIS 5826; 1996 WL 155238Docket: 95-1317
Court: Court of Appeals for the Fourth Circuit; March 29, 1996; Federal Appellate Court
John G. Robb filed an appeal against the United States following the dismissal of part of his Federal Tort Claims Act (FTCA) claim due to the alleged negligence of two physicians, Dr. John F. Stroy and Dr. Richard O'Hagan, who failed to diagnose his lung cancer. Dr. Stroy, employed by F.G.J., provided primary care services to the Air Force under a Memorandum of Understanding (MOU) with the United States, while Dr. O'Hagan provided radiology services through a contract with the Air Force. The district court concluded that both doctors were independent contractors rather than employees of the United States, leading to a lack of subject matter jurisdiction over Robb's claim. The appellate court affirmed this decision, agreeing with the district court's findings. The relationship between the United States and the physicians included a renewal of the MOU for primary care services and a service contract for radiology services. Robb's medical history revealed that after an initial examination and chest x-ray in 1990, the cancerous mass went undiagnosed until 1993, despite subsequent evaluations by various specialists. On March 16, 1994, Robb filed a negligence complaint against the United States in the Eastern District of Virginia, asserting that Drs. Stroy and O'Hagan were negligent. The United States moved to dismiss and for summary judgment. A Magistrate Judge recommended dismissing the complaint against the doctors, classifying them as independent contractors, but denied summary judgment for claims related to active-duty personnel. The district judge adopted this recommendation in full. A trial on the remaining claims occurred on February 1-2, 1995, resulting in a ruling on February 2 that dismissed the claims against the active-duty personnel on the merits. Robb appealed the dismissal concerning Drs. Stroy and O'Hagan, contending they were employees of the United States under the Federal Tort Claims Act (FTCA) and that their negligence should be imputed to the United States under Virginia's continuing treatment rule, arguing that the active-duty personnel's failure to diagnose his cancer continued the alleged negligence. The district court dismissed Robb's claim based on the alleged negligence of the doctors for lack of subject matter jurisdiction. The dismissal under Rule 12(b)(1) is subject to de novo review. The FTCA permits lawsuits against the United States for certain torts by government employees acting within their employment scope, but does not include independent contractors. The waiver of sovereign immunity under the FTCA is narrowly construed, and the independent contractor exception is interpreted broadly. While state law defines the substantive duties under the FTCA, the classification of individuals as contractors or employees is determined by federal law. The test for distinguishing between a contractor and an employee under the Federal Tort Claims Act (FTCA) was established by the Supreme Court in the cases of Logue and Orleans. In Logue, the Court addressed a lawsuit from the parents of a federal prisoner who died in a county jail, concluding that the jail's employees were independent contractors rather than federal employees. This determination was based on the principle that the United States lacked authority to control the physical conduct of the jail’s personnel, despite the jail's obligations to follow certain federal regulations regarding prisoner treatment. The Court emphasized that the government's ability to inspect the jail did not alter its independent contractor status. In Orleans, the Court further developed these principles when a father sued the United States for injuries sustained by his child in an accident involving a community action agency, which received federal funding and had to comply with federal standards. The Orleans Court focused on whether the federal government supervised the agency's day-to-day operations, concluding that the absence of such supervision meant that the agency was not an agent of the United States. The regulations intended to ensure compliance with federal goals did not transform the actions of the agency into federal government actions, thus reinforcing the independent contractor classification. The court has applied principles from Logue and Orleans regarding the status of private physicians in contractual relationships with U.S. medical facilities, particularly in the context of liability under the Federal Tort Claims Act (FTCA). In Wood v. Standard Products Co., the court examined whether a contract physician for the U.S. Public Health Service (PHS) could be considered an "employee" of the United States for negligence claims. The district court initially focused on whether the U.S. retained control over non-treatment areas of the physician's work but concluded incorrectly that this analysis was sufficient. The Wood court clarified that the significant inquiry should center on control over the primary medical services performed, rather than peripheral administrative details. Importantly, the Wood court did not assert that physicians are always independent contractors due to their need for independent judgment. Instead, it considered various factors, including the designation of the physician as a "contract physician," the nature of care provided, lack of government control over medical decisions, and specific contractual obligations related to services, referrals, and office management. Ultimately, these factors led to the conclusion that the physician was an independent contractor. Subsequent appellate court decisions have established that physicians, whether in private practice or contracted to provide medical services to federally operated facilities, are considered independent contractors rather than government employees under the Federal Tort Claims Act (FTCA). Key cases affirming this include Carrillo, Broussard, Leone, Lilly, Lurch, and Bernie. However, there is some ambiguity regarding the appropriate test for determining the employment status of contract physicians under the FTCA. The Tenth Circuit's decision in Lilly suggests a multifactor approach focused on the parties' intent, rather than solely on government control over medical decisions. Factors considered include the physician's ability to see patients, fee structures, control over office space, patient records, contractual obligations, and office hours. The court finds no necessity to deviate from the test applied in Wood, as many evaluative elements overlap with those in Lilly and the Restatement (Second) of Agency. Regarding the Memorandum of Understanding (MOU) between Dr. Stroy's employer, F.G.J., and the United States, F.G.J. was tasked with operating as a standalone clinic within Langley Air Force Hospital, distinctly identified as the F.G.J. Partnership Clinic with civilian staff. No F.G.J. employees received direct compensation from the government; instead, funding came via CHAMPUS prevailing rate fees. Additionally, F.G.J. was responsible for its professional liability insurance, and it is undisputed that the government did not control the clinic's day-to-day medical operations. Robb contends that the Memorandum of Understanding (MOU) indicates an intention for F.G.J. and its employees to be classified as employees of the United States rather than independent contractors. The MOU states its purpose is to integrate resources for providing primary care services, and the cover page highlights a partnership aimed at improving patient access to these services. However, it is argued that this intention does not imply that F.G.J. employees are U.S. employees, as Robb fails to provide compelling reasons to support this conclusion. Robb further claims that the government's need for medical personnel justifies an employer-employee relationship with F.G.J., referencing a precedent in Logue, where a similar argument was dismissed. The court noted that if this reasoning were accepted, the exclusion of contractors from the definition of 'Federal agency' would have little meaning. Additionally, Robb points to F.G.J.'s inability to subcontract without governmental consent as indicative of an employer-employee relationship. Citing Norton v. Murphy, he suggests that such a restriction supports this inference. However, it is concluded that the absence of subcontracting authority does not necessarily imply an employer-employee relationship; rather, it indicates the government's preference to receive services solely from F.G.J. Robb also argues that the MOU gives the Air Force control over F.G.J.'s day-to-day operations, as it allows the Medical Group commander to review performance and qualifications. However, this review authority is viewed as a standard quality assurance measure rather than a basis for classifying F.G.J. employees as government employees. The court emphasizes that contractual safeguards do not inherently diminish the independence of a contractor. The Air Force retained the authority to select practitioners of F.G.J., suggesting an employee-employer relationship; however, it did not specifically request Dr. Stroy's hiring, and all F.G.J. employees were selected and compensated by F.G.J. The Memorandum of Understanding (MOU) required the Air Force to provide facilities, services, and administrative support, indicating some level of oversight. Key factors in distinguishing an employee from an independent contractor include who supplies the tools and working environment. Despite provisions suggesting employment, the overall intent of the MOU established an independent contractor relationship, as F.G.J. operated as a "stand-alone clinic" with its employees not directly compensated by the Air Force. Dr. Stroy's independence was further supported by the Air Force's expectation for its physicians to have liability immunity under the Gonzales Act, while F.G.J. provided malpractice insurance for its physicians. In assessing the liability of the United States for Dr. O'Hagan's actions, his contract with Dr. O'Connell explicitly stated that services would be provided as an independent contractor, with Dr. O'Connell bearing sole liability for any resulting issues. Dr. O'Connell's employees were also hired and paid solely at his discretion, with no direct compensation from the Air Force, which additionally exerted no control over daily activities related to radiologic interpretations. The Air Force's oversight provision allows it to evaluate the quality of professional and administrative services provided by Dr. O'Connell but does not grant it control over his professional judgment, suggesting he is an independent contractor rather than an employee. The context of this provision reinforces the notion of independence, as it is framed by statements confirming O'Connell's contractor status and his liability for any acts or omissions. Robb's claims regarding government control through contract provisions, such as the requirement to return medical materials to the Medical Treatment Facility, do not support his argument but rather indicate O'Connell's separate practice. Although the government provides certain equipment and services, the contract specifies that O'Connell is responsible for all labor and materials, further supporting his independent contractor status. Additionally, the government's right to refer patients to civilian practitioners illustrates a lack of control over O'Connell's professional judgment, favoring the interpretation of him as an independent contractor. Dr. O'Hagan was determined to be an independent contractor while working for Dr. O'Connell under a service contract with the Air Force. The contract designated Dr. O'Connell as the independent contractor, who accepted full liability for his and his employees' actions, and was required to obtain liability insurance. Dr. O'Connell selected and compensated Dr. O'Hagan directly, provided most necessary equipment, and noted that little film reading occurred at the Langley facility. Consequently, the lack of government control over Dr. O'Hagan's medical decisions confirmed his independent contractor status. Robb contended that the United States should be liable for the alleged negligence of Drs. Stroy and O'Hagan based on Virginia's continuing treatment rule, which delays the statute of limitations for malpractice claims until the end of an uninterrupted course of treatment by the same physician. However, this argument was rejected, as Robb did not demonstrate that his claim was time-barred or that the active-duty personnel were connected to the initial negligence. Furthermore, Robb did not appeal the district court's ruling that found no negligence by the active-duty personnel, rendering the continuing treatment doctrine inapplicable. The district court's decision to dismiss the case due to lack of subject matter jurisdiction was affirmed. Under the Federal Tort Claims Act (FTCA), claims arising from the actions of independent contractors cannot be heard in district court. The FTCA grants exclusive jurisdiction for civil actions against the United States for damages caused by government employees acting within their official capacity, with the caveat that independent contractors do not fall under this jurisdiction. Additionally, while certain government-employed physicians may be considered employees for FTCA purposes, the application of the strict control test typically categorizes them as independent contractors, which complicates their liability status under the FTCA. The Wood court emphasized the importance of contract terms in determining the relationship between a party and whether they are classified as an independent contractor or an employee. The Restatement (Second) of Agency, particularly Section 220, outlines several factors for making this distinction, including: 1. Control exerted by the employer over work details. 2. Whether the individual is engaged in a distinct occupation. 3. The nature of the occupation concerning supervision norms in the locality. 4. Required skill levels for the work. 5. Who supplies tools and work location. 6. Duration of employment. 7. Payment method (time-based or job-based). 8. Whether the work is part of the employer's regular business. 9. The parties' perception of their relationship. 10. Whether the principal is in business. The Restatement has been cited in various cases involving private physician claims under the Federal Tort Claims Act (FTCA). The Lilly court referenced a test from Norton v. Murphy, which includes factors such as party intent, control over methods, equipment usage, insurance provision, social security tax payments, regulations on federal employee contracts, and authority to subcontract. However, Lilly primarily focused on party intent rather than strictly applying the Norton criteria. The district court also considered external evidence, like Colonel Belcher's affidavit, when assessing its subject matter jurisdiction. Additionally, a Memorandum of Understanding (MOU) specifies that the hospital's liability for its employees is governed by Title 10, U.S. Code, Section 1089, which relates to the Medical Malpractice Immunity Act (Gonzales Act). The Gonzales Act grants medical malpractice immunity to medical employees of the armed forces, Department of Defense, Armed Forces Retirement Home, Central Intelligence Agency, and the National Guard while performing training or duty. It establishes the Federal Tort Claims Act (FTCA) as the exclusive remedy for victims of malpractice by these medical employees. The provision implies that the parties did not intend to create an employer-employee relationship under the contract, as informed by the Restatement (Second) of Agency. Robb claims he was unaware of whether he was treated by a contractor or an active duty physician, suggesting that the government should be equitably estopped from denying liability for the actions of a specific physician, F.G.J. However, this claim is rejected due to the absence of any alleged misconduct by the government, referencing relevant case law including United States v. Agubata and Kramer v. United States.