Court Opinion

ID: 3040970
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:04:40.925073+00
Date Added: 2024-06-11T11:48:58.627305
License: Public Domain

United States Court of Appeals
                         FOR THE EIGHTH CIRCUIT
                                 ___________

                                 No. 05-4463
                                 ___________

C. Alan Scott,                          *
                                        *
            Plaintiff - Appellant,       *
                                        *     Appeal from the United States
     v.                                 *     District Court for the Western
                                        *     District of Missouri.
                                        *
Missouri Valley Physicians, P.C.;       *
K. Tom Papreck; Jack Uhrig; Douglas *
Koehn; Mica Newman-Koehn,               *
                                        *
                                        *
            Defendants - Appellees.      *
                                   ___________

                                Submitted: June 14, 2006
                                 Filed: August 17, 2006
                                 ___________

Before MURPHY, MELLOY and COLLOTON, Circuit Judges.
                          ___________

MELLOY, Circuit Judge.

      C. Alan Scott brought this action against his employer, Missouri Valley
Physicians, P.C. (MVP) and his medical partners, Tom Papreck, Jack Uhrig, Douglas
Koehn, and Mica Newman-Koehn, regarding the termination of his employment and
shareholder position. The district court1 granted summary judgment in favor of the
defendants, concluding that Scott did not present evidence of a breach of contract or
demonstrate that his termination was retaliatory in violation of public policy. We
affirm.

      Scott was a physician and shareholder of MVP from 1988 until September
2002. Scott and defendants Uhrig, Papreck, Koehn, and Newman-Koehn constituted
the MVP Board of Directors. Under the terms of his employment agreement, Scott
was an at-will employee of MVP. The agreement stated that his employment could
be “voluntarily terminated, with or without cause, by either the Corporation, upon a
two-thirds [vote] of the Directors of the Corporation . . . or [by the] Employee for any
reason, by the terminating party giving sixty (60) days’ written notice to the other,
which written notice shall state the effective date of Employee’s termination of
employment.”

       Scott alleges that beginning in January 2002 and continuing until his discharge
from employment, he complained to the officers and fellow directors of MVP that
MVP’s compensation formula violated federal anti-referral laws (known as Stark
laws). Stark laws prohibit a physician from having his or her own compensation
directly tied to the volume of self-referrals or laboratory or ancillary services
generated by that physician. Scott also states that he complained about various
proposals to circumvent compliance with Stark laws.

      On July 8, 2002, the Board sent a “Notice of Special Meeting of the Board of
Directors of Missouri Valley Physicians, P.C.” to Scott. The notice stated that the
meeting would occur on July 10, 2002, via conference call. The notice listed the
purpose of the meeting as discussing and voting on whether Scott’s employment with

      1
      The Honorable Dean Whipple, Chief Judge, United States District Court for
the Western District of Missouri.

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MVP should be terminated. At the July 10 meeting, two-thirds of the MVP Board of
Directors voted to terminate Scott’s employment. Scott argues that the July 10
meeting was a sham and that he was actually terminated at a meeting held on June 17,
2002, at Newman-Koehn’s home. Although the defendants contest this assertion, we
consider the facts in the light most favorable to Scott. However, the timing and
procedure surrounding Scott’s termination are not relevant to the issue presented on
appeal as to whether Scott’s termination was retaliatory in violation of public policy.

       Following his termination, Scott filed suit against MVP and the other members
of the MVP Board of Directors. The defendants moved for summary judgment on all
claims. Scott resisted the motion on only two claims: breach of contract and wrongful
discharge in violation of the public policy exception to the employment-at-will
doctrine. The district court granted summary judgment in favor of the defendants.
Scott now brings this timely appeal of the district court’s grant of summary judgment
on his claim for wrongful discharge in violation of public policy.2

       We review the district court’s grant of summary judgment de novo. Bradshaw
v. Brown Group, Inc., 258 F.3d 847, 848 (8th Cir. 2001). Summary judgment is
appropriate when no genuine issue of material fact is present such that the moving
party is entitled to judgment as a matter of law. Fed R. Civ. P. 56(c). In reviewing
a grant of summary judgment, we examine the facts in the light most favorable to the
adverse party and make all reasonable inferences from those facts to the benefit of the
adverse party. Reed v. ULS Corp., 178 F.3d 988, 990 (8th Cir. 1999).

     On appeal, Scott alleges that the district court erred in granting summary
judgment because he made disclosures that qualified him as a whistleblower. In
Missouri, an at-will employee may be discharged at any time, with or without cause.

      2
       Scott did not appeal the district court’s decision regarding his breach of
contract claim.

                                         -3-
See Luethans v. Wash. Univ., 894 S.W.2d 169, 172 (Mo. 1995). However, Missouri
courts have recognized a public policy exception to the employment-at-will doctrine.
 Faust v. Ryder Commercial Leasing & Servs., 954 S.W.2d 383, 389 (Mo. Ct. App.
1997) (“[W]hen the discharge of an at-will employee violates a clear mandate of
public policy . . . the employee has a wrongful discharge claim.”). The Missouri
courts have recognized four types of cases under this exception: 1) discharge due to
a refusal to perform an illegal act; 2) discharge based on an employee’s act of
reporting violations of law or public policy to superiors or public authorities; 3)
discharge based on an employee’s participation in acts encouraged by public policy,
such as jury duty; and 4) discharge because an employee filed a worker’s
compensation claim. Id. at 390. Scott alleges that his actions fall under the second
exception, commonly referred to as the whistleblowing exception.3

       Scott has brought forth no evidence other than his own deposition and affidavits
to substantiate his claims. Even if we assume, arguendo, that Scott can point to
sufficient evidence to demonstrate that MVP’s compensation formula violated federal
Stark laws, his actions do not constitute whistleblowing under Missouri’s public
policy exception to the employment-at-will doctrine. The public policy exception
exists to encourage employees to report suspected wrongdoing to the proper
authorities to expose the wrongdoing and assist in the prosecution of those committing
the crime. Faust, 954 S.W.2d at 390-91. In this case, Scott complained about the
compensation formula that allegedly violated Stark laws to his fellow members of
MVP’s Board of Directors, the people he alleged were the wrongdoers. The district
court correctly concluded that reporting of possible violations of Stark laws to the
purported wrongdoers does not meet the whistleblowing exception because it does not
further the “clear mandate of public policy.” Id. at 391 (holding that reporting
wrongdoing to the wrongdoer, who is the purported whistleblower’s supervisor, does

      3
       Scott does not argue that his actions fall under any of the other three
recognized categories of cases under the public policy exception.

                                         -4-
not constitute internal whistleblowing sufficient to support a claim of wrongful,
retaliatory discharge under the public policy exception).

       Scott argues that the case at bar is analogous to Dunn v. Enterprise Rent-A-Car
Co., 170 S.W.3d 1 (Mo. Ct. App. 2005). In Dunn, the Missouri Court of Appeals held
that Thomas Dunn made a submissible claim when he asserted that he had been
terminated for internal reporting of conduct he reasonably believed to be a violation
of federal securities laws. Id. at 11. Scott’s reliance on Dunn is misplaced. Although
Dunn and Scott both reported to their respective employers, rather than to an external
authority, Dunn reported the conduct to his immediate supervisor, who was not
involved in the purported wrongdoing. Id. at 4. In contrast, Scott reported his
concerns directly to the purported wrongdoers. Thus, the objectives of the public
policy exception were met in Dunn, but not in Scott’s case. We conclude that Scott
has not demonstrated that his actions constitute whistleblowing under the exception
laid out by the Missouri courts.

     For the forgoing reasons, we affirm the district court’s grant of summary
judgment.
                    ______________________________

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