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Beth A. Rhodes, M.D v. Sutter Health

February 27, 2012

BETH A. RHODES, M.D.,
PLAINTIFF,
v.
SUTTER HEALTH, A CALIFORNIA CORPORATION,
SUTTER GOULD MEDICAL FOUNDATION, A CALIFORNIA CORPORATION,
THE GOULD MEDICAL GROUP, INC., A CALIFORNIA CORPORATION, DEFENDANTS.



ORDER RE: MOTION TO DISMISS AND MOTION FOR A MORE DEFINITE STATEMENT

Plaintiff Beth A. Rhodes brought this action against Sutter Health, Sutter Gould Medical Foundation ("SGMF"), and The Gould Medical Group, Inc. ("GMG") alleging unlawful retaliation, constructive discharge, gender harassment, gender discrimination, failure to prevent discrimination, defamation, and intentional infliction of emotional distress. Currently before the court is the joint motion by Sutter Health and SGMF to dismiss plaintiff's employment-related claims for failure to state a claim pursuant to Rule 12(b)(6) and for a more definitive statement as to plaintiff's claims for defamation and intentional infliction of emotional distress pursuant to Rule 12(e).

I. Factual and Procedural Background

Plaintiff alleges that she was employed by GMG as a radiologist specializing in breast and body imaging from January 2008 through May 2011. (Compl. ¶ 9.) By the summer of 2008, she became concerned that a GMG protocol requiring pre-biopsy surgical consultations was medically unnecessary and delayed proper patient care. (Id. ¶ 11.) She also believed that the protocol was "essentially self-referral to the Group, Foundation and Sutter Health for monetary gain and amounted to Medicare fraud." (Id.) She further claims that, consistent with her obligation to the public to advocate for appropriate health care, she reported her concerns regarding the protocol to GMG's senior partners. (Id.)

According to plaintiff, GMG's chief partner retaliated against her for expressing her misgivings about the protocol by assigning her low value work. (Id. ¶ 13.) Because of this low value work, plaintiff alleges that she was forced to work longer hours, making appear as though she had "developed time-management issues." (Id.) She further contends that this low value work was one of the reasons she was denied an annual performance bonus. (Id. ¶ 34.)

In addition to the protocol requiring pre-biopsy consultations, plaintiff claims that she raised other patient care issues with senior GMG staff. (Id. ¶¶ 14-15, 21, 23.) She further alleges that, due to her advocacy for appropriate patient care, members of GMG engaged in a "campaign of harassment and hostile work environment" against her. (Id. ¶¶ 21-32.) Included in this campaign were threats, (id. ¶¶ 16, 27, 43), false accusations and unfair criticisms, (id. ¶¶ 25, 28, 31), intentional interference with plaintiff's ability to care for patients, (id. ¶¶ 28, 29), and assaultive behavior (id. ¶ 33). Plaintiff also heard that GMG and Sutter Health employees were spreading rumors that plaintiff was guilty of "bad behavior," that there was a "big file" compiled on her, and that she was "on thin ice" and "on the way out." (Id. ¶¶ 30, 37, 43.)

In addition to the hostility directed at her personally, plaintiff also claims that GMG implemented a policy requiring shareholders and associates to live "in the vicinity" of the hospital in a gender discriminatory way, using it to fire two female radiologists but turning a blind eye to male members who lived in Dublin, San Ramon, Los Angeles, and Santa Fe, New Mexico. (Id. ¶¶ 17-18.) This, she alleges, was "typical of the preference given to male members of the Group to the detriment of the female members of the Group." (Id. ¶ 18.)

Plaintiff alleges that she eventually contacted the independent ombudsman service at Sutter Health to complain about "harassment, gender discrimination, Medicare fraud, time care [sic] fraud and inappropriate patient advocacy." (Id. ¶ 35.) She also claims that she sent an email to GMG "that set out in no uncertain terms that the 'Surgical Consult Prior to Breast Needle Biopsy' protocol fraud had to stop as it constituted insurance billing fraud and Medicare and Medi-Cal billing fraud." (Id. ¶ 38.)

Due to the stress of her working environment, plaintiff contends that in December 2010, she was medically excused from work. (Id. ¶ 42.) Initially, her leave was scheduled to last through February 4, 2011, but was extended through May 27, 2011. (Id.) While she was on medical leave, plaintiff alleges that several members of GMG warned her that she would be terminated. (Id. ¶ 43.) Specifically, she alleges that a fellow radiologist informed her that her termination had been announced at meetings and discussed with him by various senior partners. (Id.)

At the end of her medical leave, plaintiff resigned from her position with GMG. (Id. ¶ 44.) She contends that her resignation was due to intolerable and hostile working conditions that caused her both physical and emotional distress. (Id.) In her view, defendants were offering her "a very lucrative salary as a shareholder in exchange for acquiescing in the Group's illegal conduct of fraudulent billing practices and provision of sub-standard patient care." (Id.) Instead, "[s]he chose her patients." (Id.)

Plaintiff brings claims against three defendants: GMG, SGMF, and Sutter Health. She alleges that GMG was her employer, (id. ¶ 9), and that "Sutter Health was her joint employer under the 'integrated enterprise' theory," (id. ¶ 2). She further explains that GMG "is affiliated with Sutter Gould Medical Foundation and Sutter Health. The Foundation runs the business side of the Gould Medical Group and the Group appoints three members to the Foundation boards, and staffs quality assurance, finance and other committees along with administrative members. The Foundation is part of Sutter Health." (Id. ¶ 10.)

Plaintiff has stated claims for (1) retaliation in violation of the federal False Claims Act, (2) retaliation in violation of the California False Claims Act, (3) constructive discharge in violation of public policy, (4) gender harassment in violation of the California Fair Employment and Housing Act ("FEHA"), (5) gender discrimination in violation of FEHA, (6) retaliation in violation of FEHA, (7) failure to prevent discrimination in violation of FEHA, (8) defamation, and (9) intentional infliction of emotional distress. (Docket No. 1.) Defendants Sutter Health and SGMF now move to dismiss claims one through seven on the ground that plaintiff failed to plead an employment relationship or an alternate theory of liability. (Docket No. 7.) They additionally move to dismiss claims four through seven on the ground that plaintiff has failed to properly exhaust administrative remedies. (Id.)

II. Judicial Notice

In general, a court may not consider items outside the pleadings when deciding a motion to dismiss, but it may consider items of which it can take judicial notice. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). A court may take judicial notice of facts "not subject to reasonable dispute" because they are either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201. Judicial notice may properly be taken of matters of public record outside the pleadings. See MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986). The Ninth Circuit has also held that a court may "consider certain materials--documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice--without converting the motion to dismiss into a motion for summary judgment." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).

Sutter Health and SGMF have requested that the court take judicial notice of six documents: (1) the Complaint of Discrimination filed by plaintiff with the California Department of Fair Employment and Housing, (2) the Amended and Restated Articles of Incorporation of Sutter Health, (3) the Amended and Restated Bylaws of Sutter Health, (4) the Amended and Restated Articles of Incorporation of Sutter Group Medical Foundation, (5) the Amended and Restated Bylaws of ...


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