Court Opinion

ID: 3009077
Source: CourtListenerOpinion
Date Created: 2015-10-09 17:01:22.795554+00
Date Added: 2024-06-11T12:23:16.941858
License: Public Domain

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

 
 

JOHN DOE, at £11.,

  
 
    
   

Plaintiffs,

Civil Action No. 12—01229 (TFH)

 
 

v.
JUDITH ROGERS, M.H.A., at all, REDACTED
Defcn dan ts.
MEMORANDUM OPINION

This lawsuit was commenced by Dr. John Doe and Dr. Doe’s limited liability company
(“the plaintiffs”) to recover damages and secure declaratory and injunctive reliefagainst the
Secretary of the Depaltlnent of Health and l-luman Services, the National Practitioner Data Bank,
and three ofﬁcials who administer the National Practitioner Data Bank (collectively “the
defendants”). The plaintiffs allege that the defendants unlawfully accepted, maintained, and
continue to release an inaccurate, fraudulent and untimely Adverse Action Report that was
submitted to the National Practitioner Data Bank by Dr. Doe’s prior employer, Peconic Bay
Medical Center (the “Hospital” or “PBMC”). Pending before the Court are a Motion to Dismiss
or, Alternatively, for Summary Judgment [ECF No. 26] that was filed by the defendants and a
Cross-Motion for SummaIyJudgment [ECF N0. 45 (Sealed)] that was tiled by the plaintiffs. For
the reasons that follow, the Court will grant in part and deny in part the defendants’ Motion to
Dismiss or, Alternatively, for Summary Judgment, and deny the plaintit‘fs’ Cross~Motion for
Summary Judgment. The Court will also remand to the Secretary for further proceedings

consistent with this Opinion.

 

 

 

 

BACKGROUND AND PROCEDURAL POSTURE

I. The Health Care Quality improvement Act

Nearly three decades ago, Congress enacted the Health Care Quality Improvement Act of
[986, 42 U.S.C. §§ I l IOI—I l l52 (West 2014) (the “Act” 01' “I—I'CQIA”), to address the
nati0nwide problem of medical malpractice and the “need to restrict the ability of incompetent
physicians to move from State to State without disclosure or discovery ofthe physician’s
previous damaging or incompetent performance.” 42 U.S.C. § I l 10l(1)-(2). Congress found
that professional review conducted by peers could remedy the medical malpractice problem but
incentives and protections to encourage effective professional peer review needed to be
established. Id. § 1 l IOI(3)-(5). The Health Care Quality Improvement Act promotes effective
professional peer review by prescribing mandatory review and reporting requirements for health
care entities, id. §§ I] 13!, lll32, I i 133, setting standards to govern a professional review
action, id. § I I l 12, and, signiﬁcantly, providing immunity from damages liability to professional
review bodies and designated participants ifthe professional review action complies with certain
standards enumerated in the statute, id. § 11 l I l(a)(l).'

Relevant to this case, the Health Care Quality Improvement Act compels “]'_e:]ach health
care entity which . . . accepts the surrender of clinical privileges ofa physician . . . white the
physician is under an investigation by the entity relating to possible incompetence or imprOper

professional conduct” to report such action or surrender of clinical privileges to the Secretary of

 

 

application ot‘the Health Care Quality improvement Act and the implementing regulations
constitute an unconstitutional Bill ot'Attainder, and (6) the defendants’ interpretation and
application of the Health Care Quality Improvement Act and the‘implementing regulations
violate the Eighth Amendment’s prohibition on cruel and unusual punishments. Id. 111] 102-84.
In lieu of an answer, the defendants moved to dismiss the entirety of the First Amended
Complaint or, alternatively, for summary judgment. Mem. In Support of Defs.’ Mot. to Dismiss
or, Alternatively, for Summ. J. 2—3 [ECF No. 33 (Sealed)]. The plaintiffs countered with a
Cross—Motion for Summary Judgment [ECF No. 45 (Sealed)] and also filed a Motion for Leave
to Supplement the Record ofContinuing Constitutional Deprivation [ECF No. 58], which was
opposed by the defendants.

DISCUSSION

A. Whether the Agency’s Actions Regarding the Adverse Action Report were
Arbitrary, Capricious, an Abuse of Discretion or Unlawful

The plaintiff's’ first cause of action invokes the APA and alleges that the defendants’
actions with regard to the Adverse Action Report should be set aside because (I) there was no
“investigation” by the Hospital, (2) Dr. Doe’s resignation was obtained by fraud and therefore
not “voluntary,” (3) NPDB Guidebook Rule F-S is overly broad, overly inclusive, and contrary
to the purposes ofthe Health Care Quality Improvement Act, (4) the Adverse Action Report was
untimely because it was not ﬁled within 30 days ofthe adverse action as required by 45 C.F.R.
§ 60.5(d), and (5) the Hospital’s quality assurance review was not a reportable event because it
did not result in the suspension of Dr. Doe’s privileges given that he had already resigned. First.
Am. Compl. ﬂ {OZ-l 25. The government moved to dismiss this cause of action on the grounds

that the Secretary’s review is limited to a determination about whether the report accurater

 

 

describes the actions the Hospital took and the reasons for those actions, the scope of the
Secretary’s review does not involve an evaluation of the merits of the Hospital’s ﬁndings, the
administrative record reﬂects that there was an ongoing investigation at the time Dr. Doe

surrendered his surgical privileges and resigned, any errors in the record evidence supplied by

the Hospital were typographical and do not indicate fraud or that an investigation never occurred,

the 30—day reporting deadline is not a legal bar to an otherwise valid adverse report, and there is
no requirement that a physician know that an investigation is occurring before a voluntary
suspension hecoin es reportable and, furthermore, to adopt such a requirement would be
burdensome for the Secretary. Mem. In Support of Defs.’ Mot. to Dismiss or, Alternatively, for
Summ. J. I l-2l [ECF No. 33 (Sealedﬂ.

The APA provides that “[a] person suffering legal wrong because of agency action, or
adversely affected or aggrieved by agency action within the meaning of a relevant statute, is
entitled tojudicial review thereof." 5 U.S.C. § 702. When exercisingjudicial review, “[t]he
reviewing court shall . . . hold unlawful and set aside agency action, ﬁndings, and conclusions
found to be . . . arbitrary, capricious, an abuse of discretion, 01' otherwise not in accordance with
law . . . .” 5 U.S.C. § 706(2)(A).

it is well established that, when confronted with an APA case, “[t]he district court sits as
an appellate tribunal in such a case, and the question whether [the defendants] acted in an
arbitrary and capricious manner is a legal one which the district court can rcsoivo on the agency
record—regardless of whether it is presented in the context of a motion fol‘judgment on the
pleadings or in a motion for summary judgment (or in any other Rule 12 motion under the

Federal Rules of Civil Procedure)” University Med. Ctr. (J‘S. Nevada v. Shaiala, 173 F.3d 438,

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44] :13 (DC. Cir. [999). Moreover, the court’s determination about whether the defendants’
actions were arbitrary and capricious is based 0n the evidence that was provided to the agency
and the court’s “concern is not whether the [defendants] might have reached a different decision
had [they] considered additional evidence, but only whether the decision [they] did reach, based
on the evidence that was before [them], was unreasonable.” Conax Florida Corp. v. United
States, 824 F.2d 1124, 1 I28 (DC. Cir. 1987).

The Court is mindful that “[t]he scope of review under the ‘arbitrary and capricious’
standard is narrow and a court is not to substitute its judgment for that of the agency.
Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation
for its action including a rational connection betwoen the facts found and the choice made.”
Motor Vehicle Mfrs. Ass ’11 oft/(3., Inc. v. State Farm Mitt. Auto. Ins. Co, 463 US. 29, 43
(1983).

1. Whether it was arbitrary and capricious for the Secretary to determine that the

Hospital was conducting an investigation when Dr. Doe suspended his surgical
p. rivileges

When a hospital accepts a physician’s surrender of clinical privileges while the physician
is the subject of a pending investigation relating to possible incompetence or improper conduct
the hospital must report that event to the National Practitioner Data Bank. 42 U.S.C. § I I 134(b);
45 C.F.R. § 60.]2. The Adverse Action Report submitted by the Hospital in this case was
classiﬁed as a “voluntary surrender ofclinical privilege(s), whiie under, or to avoid, investigation
relating to professional competence or conduct.” AR 0002 [ECF No. 19-1 (Sealed)]
(capitalization formatting omitted). Although the plaintiffs concede that surrendering clinical

privileges while under investigation is a reportable event, First Am. Compl. 1] 57, they

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nonetheless challenge the defendants’ actions with respect to the Adverse Action Report on the
ground that there was no evidence that an investigation was occurring either before or at the time
Dr. Doe surrendered his surgical privileges and resigned, id. ﬁﬁf IDS-107. The Secretary
concluded otherwise and found that an investigation commenced on October 5, 2009, as
demonstrated by several documents contained in the Administrative Record. AR 0256 [ECF No.
19—6 (Sealed)].

The term “investigation” is not deﬁned in either the Health Care Quality improvement
Act or the regulations that implement it. Doe v. Leavin‘, 552 F.3d 75, 79-80 (lst Cir. 2009)
(“[T]he secretary has not exercised [the] rulemaking authOrity to set forth [her] interpretation of
the word ‘investigation.’ Instead, the Secretary’s interpretation must be gleaned from (i) an
agency manual, the NPDB Guidebook . . . and (ii) the Secretary’s decision in this case");
Simpkins v. Shalala, 999 F. Supp. 106, I IS (D.D.C. 1998) (“Neither the statute nor the
regulations promulgated in furtherance ofthe HCQI Act deﬁne an investigation”) The 2001
version of the NPDB Guidebook that was in effect at the time of the challenged Secretarial
Review also did not deﬁne the term “investigation,” although it gave the following examples of

types of evidence that might demonstrate that an investigation was occurring: '9

1” During oral arguments counsel for the defendants acknowledged that the NPDB

Guidebook contains “an explanation of how the agency looks at an investigation or what . . .
goes into [here being an investigation” but does not offer “a deﬁnition in sort of a nice one-
sentence kind ofway.” Hr’g 'l‘r. l 1:10-13:18, Oct. 24, 20l3 [ECF No. 57].

As an aside, the recently revised 2015 version ofthe NI’DB Guidebook, see supra n.3,
contains a more fulsome explanation about how the Department of Health and Human Services
interprets the term “investigation.” U.S. DEP’T or l"il£ALTi--I & HUMAN Saws, l-iEAL‘l‘I-i
Resonncns & SliRVS. ADMIN, NPDB GUIDEBOOK 13-34 (2015), availabie at
http:ifwww.npdb.l1rsa.govl’resourcestPDBGuidebookpdf. The 2015 NPDB Guidebook

announces that “NPDB interprets the word ‘investigation’ expansively" and that “[i]t may look
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A health care entity that submits an AAR based on surrender or restriction of a
physician’s . . . privileges while under investigation should have
contemporaneous evidence of an ongoing investigation at the time of surrender . .

The reporting entity should be able to produce evidence that an investigation
was initiated prior to the surrender of clinical privileges by a practitioner.
Examples of acceptable evidence may include minutes or excerpts from
committee meetings, orders from hospital ofﬁcials directing an investigation, and
notices to practitioners ofan investigation.

 

NPDB GUIDEBOOK E— l 9. The 2001 NPDB Guidebook further stated that an investigation “must

 

be carried out by the health care entity, not an individual on the staff," "must be focused on the
practitioner in question,” “must concern the professional competence andr’or professional 
conduct ot‘the practitioner in question,” and “a routine or general review ofa particular
practitioner is not an investigation.” 1d.

The Court‘s consideration begins with the accepted principle that “[t]he views of
agencies charged with implementing a statute are entitled to deference." Bragdon v. Abbott, 524

U.S. 6'24, 626 (E998). With respect to the interpretation of “investigation” found in the NPDB

 

at a health care entity’s byiaws and other documents for assistance in determining whether an
investigation has started or is ongoing, but it retains the ultimate authority to determine whether
an investigation exists." Id. The 2015 NPDB Guidebook also states that:

A routine, formal peer review process under which a health care entity evaluates,
against clearly deﬁned measures, the privilege—speciﬁc competence of all
practitioners is not considered an investigation for the purposes of reporting to the 
NPDB. However, if a formal, targeted process is used when issues related to a 
speciﬁc practitioner’s professional competence or conduct are identiﬁed, this is 
considered an investigation for the purposes of reporting to the NPDB. 

Id. In addition, the 2015 NPDB Guidebook states that “the term ‘investigation’ is not controlled
by how that term may be deﬁned in a heaith care entity’s bylaws or poiicies and procedures.” Id.
13-34-35. Because the Coult applies the 2001 version ofthe NPDB Guidebook, which was in
effect at the time the events at issue took place, the Adverse Action Report was filed, and the
Secretarial Review Decision was issued, the additional interpretations ofthe term “investigation”
found in the 2015 NPDB Guidebook have not been considered and the Court takes no position
about whether these additional interpretations are consistent with prior interpretations.

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Guidebook, the plaintiffs maintain that the Guidebook is not entitled to the deference announced
in Chevron, U.S.A., Inc. v. Natural Res. Def Council, 467 US. 33? (1984), but they offer no
further suggestion about the love! of deference that they argue should be applied, if any. Pls.’
Mem. 1n Opp’n to Defs.’ Mot. to Dismiss 41 [ECF No. 45 (Sealed)]. The defendants do not
contest that Chevron deference is not applicable, Defs.’ Combined Repfy Br. 30 [ECF No. 48],
and they concede that the NPDB Guidebook “do[es] not have the force of law,” but they argue
that the NPDB Guidebook’s interpretation ofthe term “investigation” is entitled to “substantial
deference,” Mom. In Support of Defs.’ Mot. to Dimiss 12 [ECF No. 33 (Sealed)], which is a
reference to the deference that applies to an agencies” interpretation of its own regulations, see,
e.g., Shaiola v. Guernsey Mem ’2' Hosp, 514 US. 87 (1995).

Determining the appropriate level ofdeference to apply to agency interpretations in
certain scenarios can be puzzling, to say the least. The general rule is that, when a statute is
silent about an issue a court will defer to an a gency’s interpretation contained in a regulation if it
is reasonable, based on a permissible construction of the statute, involves a statute the agency
administers, and the regulations were promulgated pursuant to notice and comment so they have
the force of law. Chevron, 467 US. at 842-43. When the agency’s interpretation is derived from
a source other than regulations that have the force of law, however, the landscape of le gai
principles that apply becomes somewhat tangled. 1n Christensen v. Harris County, 529 US. 576
(2012), the Supreme Court cautioned that interpretations contained in “policy statements, agency
manuals, and enforcement guidelines, all of which tack the force oflaw — do not warrant
Chevron-style deference,” albeit such interpretations might be “entitled to respect under [its]

decision in Skidmore v. Swift & Co, 323 US. 134, 140 (1944) . . . .” 529 US. at 587 (internal

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quotation marks and parallel citation omitted). Under Skidmore, the deference owed to an
agency interpretation that does not have the force of law “depend[s] upon the thoroughness
evident in its consideration, the validity of its reasoning, its consistency with earlier and later
pronouncements, and all those factors which give it power to persuade, it‘lacking power to
control.” 323 U.S. at 140. “The Supreme Court later clariﬁed, however, that ‘the fact that [an]
Agency . . . [reaches] its interpretation through means less formal than ‘notice and comment’
rulemaking, see 5 U.S.C.A § 553 (West 20 E4), does not automatically deprive that interpretation
of the judicial deference otherwise its due.” Fox v. Clinton, 684 F.3d 67, 77 (DC. Cir. 20l2)
(quoting Bomber: v. Walton. 535 U.S. 212, 22! (2002)). “Rather. ‘the interstitial nature ofthe
legal question, the related expertise of the Agency, the importance of the question to
administration of the statute, the complexity of that administration, and the careful consideration
the Agency has given the question over a long period oftime [may] indicate that Chevron
provides the appropriate legal lens through which to view the legality of [a disputed] Agency
interpretation’ of its authorizing statute.” Id. (quoting Barnhart, 535 US. at 222). So the legal
pronouncements have, in essence, helpfully advised courts that Chevron. deference does not
apply to agency interpretations that lack the Force ot'law -- except when it does apply.
Additionally, apart from these legal standards, an agency’s interpretation of its own regulations
(versus a statute), is also entitled to a measure of deference, which the Supreme Court has
described as “substantial.” Thomas Jeﬁenson Univ. v. Shalom, 5l2 US. 504, 512 (1994).

Which leads the Court to point out the puzzle in this case. The defendants appear to treat
the NPDB Guidebook interpretation of the term “investigation” as though it is the agency’s

interpretation of its own regulation. Defs.’ Combined Reply In Support of Mot. to Dismiss 30

4?-

 

 

 

[ECF No. 48} (“[A]s subregulatory guidance, the Guidebook should be accorded substantial
deference”). But the regulations’ use ofthe term “investigation” simply carries over the

- language of the statute, and nothing more. Compare 45 C.I5.R. § 60.l_2(a)(l){ii)(A), with 42
U.S.C. § I 1 I 33(a)(1)(B)(i). As a resuit, with respect to the term “investigation,” it seems to the
Court that the NPDB Guidebook interpretation technically constitutes an interpretation ot'the
statue and not an interpretation of the regulation. Thus, it is the Court’s view that the NPDB
Guidebook interpretation of “investigation” would fall under the rubric of Skidmore—style
deference, which is what two federal courts of appeais appear to think as well, although neither
expressly so held. Lani, 620 F.3d at 1282-83 (citing Christensen, 529 US. at 587, as “explaining
that interpretations contained in enforcement guidelines get Skidmore deference”); Doe, 552 F.3d
at 79—80 (ﬁnding that the NPDB Guidebook does not qualify for Chevron deference but
indicating that it might qualify for a lesser degree of deference pursuant to Skidmore). A
resolution about the question of deference is unnecessary in this particular circumstance, though,
because the Court concludes that “the level ofdeference is not determinative here; whether
viewed through the prism of Chevron or the less forgiving prism ofSktdmore, the Secretary’s
interpretation of the word ‘investigation‘ withstands scrutiny.” 1d. at 80. Furthermore, the Court
is not convinced that the 200] NPDB Guidebook actualiy deﬁnes the term “investigation” in any
event.

Although the 200i NPDB Guidebook provides examples ofthe types of evidence that

might suggest that an investigation occurred, and presents generalized guidelines about who
must conduct the investigation, who it must be about and what it must be about, it does not

appear to the Court that the Guidebook actually sets forth an interpretative definition ot‘what

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actions taken by a health care entity would, in fact. constitute an “investigation” -- given that the
possibilities vary from the simple act of obtaining medical records to the formalized conduct of
adversarial-type review proceedings, and there might be many stages in between from fact
gathering to deliberations to formal resolution, with numerous individuals involved from nursing
staﬁito executive officials. The Secretarial Review Decision also does not deﬁne the term
“investigation” and, instead, simply identiﬁes the documents that the Secretary deems to
“demonstrate” the start ofan investigation. AR 0256 [ECF No. l9-6 (Sealed)]. Consequently, it
appears to the Court that neither the 200] NPDB Guidebook nor the Secretarial Review Decision
offer an interpretive definition of the term “investigation” that warrants the Court wading into the
legal morass of determining what deference to apply to that interpretation. See Doe, 552 F.3d at
79-80 (noting that “the level ofdeference owing to informal agency interpretations" such as the
NPDB Guidebook and the Secretary‘s decisions “is freighted with uncertainty” and poses “an
interesting legal conundrum”).II

When a statute does not deﬁne a term, the Court “must presume that Congress intended
to give the term its ordinary meaning.” Aid Ass ’12 for Lutherans v. 0.8. Postal Sam, 32l F.3d
1 166, 1 I76 (DC. Cir. 2003). The term “investigation” is ordinarily understood to mean a
systematic examination. Merriam-Webster, http:fr'wwwmerriam—webstercomidictionaryr’
investigation (last visited May 8, 2015). Applying this common meaning of the term

“investigation,” the Court will consider whether the Secretarial Review Decision reasonably

 

H In Leavirt, the United States Court oprpeals for the First Circuit considered when an

“investigation” has concluded for the purpose ofdetermining whether a chailenged investigation
was ongoing, 552 F.3d at 78-79, whereas here the Court is confronted with the question ot‘when
an “investigation” has begun.

_]9..

 

 

 

concludes that the Hospital was conducting a systematic examination of Dr. Doe’s conduct
before or at the time he surrendered his surgical privileges and resigned.

The Secretarial Review Decision states that the Secretary “review[ed] the information
available and the record presented to this office,” AR 0254 [ECF No. 19-6 (Sealedﬂ, and found
that there was an investigation occurring at the time Dr. Doe surrendered his privileges and

resigned, AR 0256 [ECF No. 19-6 (Scaled)]. The Secretarial Review Decision notes that the
following documents lend support to the ﬁnding that an investigation was underway at the time
Dr. Doe voluntarily surrendered his privileges and resigned:

[T]he [Hospital’s] meeting notes dated October 5, 2009 demonstrate the initial
stage of the investigation, as indicated by the Quality Management (QM)
Coordinator‘s handwritten note after a meeting with the Hospital‘s VPMA,
Corporate Compliance Ofﬁcer, Director of QM, and Medical Staff Coordinator.
The notes state that “Dr. [Doe] voluntarily has agreed not to take any new surgical
patients and pts currently on his service will be reassigned until investigation
complete ...” (Exhibit 6). Fu1thermore, the Root Cause Report submitted on
November 3, 2009 confirms that you were under investigation at the time of your
resignation. The Report states “On [0,35 the surgeon voluntariiy suspended his
surgical privileges pe[n]ding completion of the {Hospital’s] iHVestigation. On
10f07f2009, prior to the cornpletion 0f the investigation and the meeting of the
RCA Committee he submitted his resignation from the Medical Staff effective
10(16f2009” (Exhibit l5). It is clear from the documentation provided by PBMC
that the review went beyond a routine or general review of your cases.

AR 0256 [ECF No. l9-6 (Sealed)]. The Court evaluated each ofthese documents, which consist
of exhibits attached to a letter that that Hospital submitted as part of the adversarial Secretarial
review process. See AR 0101-3! [ECF No. 19-3 (Sealed)].

With respect to the question of when the Hospital’s investigation began, the Secretarial
Review Decision states “the [Hospital’s] meeting notes dated October 5, 200.9 demonstrate the
initial stage of the investigation, as indicated by the Quality Management (QM) Coordinator’s

handwritten note after a meeting with the Hospital’s VPMA, Corporate Compliance Officer,

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the Department ofHealth and Human Services' Id. §§ l l l33(a)(|)(B)(i) (quotation), I l l34(b).
The Health Care Quality improvement Act also obligates hospitals to request reported
information about a physician who seeks clinical privileges or applies to join a hospital’s medical
staff, id. § I l 135(a), and establishes a presumption that a hospital knows information that has
been reported about a physician regardless ofwhether the hospital actually obtains the
information as required by the Act, id. § 1 l l35(b). The Health Care Quality Improvement Act
recognizes, however, that there might be disputes about the accuracy of reported information, so
it directs the Secretary of the Department of Health and Human Services to issue regulations that
provide procedures to dispute a report"s accuracy. Id. § l 1 136(2).
H. The National Practitioner Databauk

In accordance with the delegations contained in the Health Care Quality Improvement
Act, the Secretary of the Department of Health and l~luman Services promulgated regulations that
established the National Practitioner Data Bank. 45 C.F.R. § 60.1. The National Practitioner
Data Bank collects and releases information that the Health Care Quality Improvement Act
requires health care entities to report regarding the “professional competence and conduet of
physicians, dentists, and other health care practitioners.” Id.

The Department of Health and Human Services also published an NPDB Guidebook to
“inform the United States health care community about the NPDB and what is required to

comply with the requirements established by Title IV of Public Law 99-660, the Health Care

I “The sanction against a health care entity that fails to substantially comply with this

requirement is significant: the health care entity loses the statutory immunity created in
§ 1 'l ] l l(a)(I) ofthe I-ICQIA.” Straznicky v. Desert Springs Hosp, 642 F. Supp. 2d l23 8, 1245
(D. Nev. 2009) (citing 42 U.S.C. § l l 133(c)(1)).

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Director onM, and Medical StaffCoordinator.” AR 0256 [ECF No. 19-6 (Sealed)]. The cited
meeting notes state that, on October 5, 2009, the medical chart was copied, the patient was
released, and the Vice President ofMedical Affairs and other Hospital officials met at noon to
discuss the case. AR 0105 [ECF No. 19—3 (Sealed)]. The notes also state that the Vice President
of Medical Affairs planned to meet later that day with the physician who assisted Dr. Doe during
the surgery and then with Dr. Doe. AR 0105 [ECF No. 19-3 (Sealed)]. The Secretarial Review
Decision’s quotation of part ofthe notes indicating that Dr. Doe voluntarily suspended his
surgical privileges accurately reﬂects what is stated in the notes. AR 0105 [ECF No. I9-3
(Sealed)], 0256 [ECF No. 19-6 (Sealed)]. The notes also state that the gross pathology report
was received, a report was submitted to NYPORTS, and a physician and another individual were
asked to form an “RCA team," AR 0105 [ECF No. l9-3 (Sealed)]_. which the record evidence
and iegal briefs indicate refers to a Root Cause Analysis given that a contemporaneousemail
from The Joint Commission stated that a Root Cause Analysis and Action Plan regarding the
incident would be due in November, AR 0| I l [ECF No. 19-3 (Sealed)]; Pls.’ Reply Mem. In
Support of Cross-Motion for Summ. J. 18 [ECF No. 56 (Sealed)} (indicating that “Root Cause
Analysis” is abbreviated as “'RCA”).

Taken as a whole, these coincident notes reflect that, on October 5, 2009, Hospital
ofﬁcials12 embarked on a systematic examination of Dr. Doe’s conduct relating to the surgical
incident by gathering the necessary documentation, conferring with the relevant Hospital

executives, meeting with the physicians who were involved, reporting the incident to the state

 

12 The notes state that four Hospital executives attended the meeting, which demonstrates

that the actions were taken by the Hospital as an entity versus an individual.

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health department, and organizing a team to conduct a Root Cause Analysis. These activities on
the part ofthe Hospital strike the Court as fundamental characteristics of an “investigation,” at
least as that term is commonly understood, so it was reason able for the Secretary to conclude that
they demonstrated the beginning ofan investigation by the Hospital. That the Hospital viewed
itseif as conducting an investigation is corroborated by the following contemporaneous
documents: the QM Coordinator’s notes, AR 0l05 [ECF No. l9—3 (Sealed)] (stating “Dr [Doe]
voiuntarily has agreed to not take any new surgical patients and pts currently on his service will
he reassigned until investigation complete”); an October 5, 2009 memorandum memorializing a
meeting of the Vice President for Medical Affairs, Quality Management, and the Medical Staff
Coordinator, AR 0106 [ECF No. 19-3 (Sealed)] (stating “‘[i]t was reported that a meeting took
place this morning” and “[a]t this meeting, Dr. [Doe’s] privileges were suspended while the case
in question is undergoing investigation’); the submitted NYPORTS Short Form, AR 0107-08
[ECF No. 19-3 (Sealed)] (stating “[t]he physician has been placed on suspension pending
completion of the investigation”); and the Sentinel Event Self-Report submitted to the Joint
Commission, AR 0109 [ECF No. 19-3 (Sealed)] (stating “[t]he physician has been placed on
suspension pending completion ofthe investigation”).

The plaintiffs take issue with the Secretary’s reliance on the cited documents and argue
that such reliance was arbitrary and capricious because “the Secretary ruled only on Hospital
created, misdated documents and did not expiain or consider the contrary evidence from Dr. Doe
including that he never received the By—Laws or any other written notice of investigation ‘to the

practitioner.” Pis.’ Mem. [n Opp’n to Defs.’ Mot. to Dismiss 44-45 [ECF No. 45 (Seatedﬂ. In

particular, the plaintiffs contend that the type of evidence submitted by the hospital failed to

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comply with the NPDB Guidebook requirements, several documents were ibrged or otherwise
not bona tide because they contained incorrect dates or parrcted the same language found in the
NYPORTS Short Form Report and Sentinel Even Self-Report, there was no evidence that the
Hospital’s Credentials Committee requested in writing that an investigation be commenced, there
was no documentation ofan October meeting ofthe Root Cause Analysis Committee. and the
plaintiffs submitted evidence that individuals identiﬁed as being in attendance at the Root Cause
Analysis Committee meeting were not there. Pls.’ Reply Mem. In Support of Cross-Motion for
Summ. J. 17-2]. Upon review ofthe administrative record, however, the plaintiffs’ allegations
simply are not well founded or supported.

First, the plaintiffs misconstrue the 2001 NPDB Guidebook as mandating that the
Hospital submit minutes of committee meetings, orders from hospital ofﬁcials, and notices to Dr.
Doe in order to prove that an investigation was taking place. First Am. Compi. 1] 71 [ECF No.
23]; Pls.’ Reply Mem. In Support of Cross-Mot. for Summ. J. I647 [ECF No. 56 (Sealed)]. The
NPDB Guidebook contains no such command. The only source the plaintiffs cite for this
premise is a provision that states “[e]xamples of acceptable evidence may inciude minutes or
excerpts from committee meetings, orders from hospital oﬁiciais directing an investigation, and
notices to practitioners of an investigation.” '3 Pls.’ Reply Mem. In Support of Cross-Motion for
Summ. J. l6 [ECF No. 56 (Sealed)] (citing NPDB GUIDBBOOK E-l9). The terms of this
provision make clear that the identiﬁed evidence serves only as expressed “examples” of what a
hospital my submit, not as the sole requirements regarding what a hospital must submit. The

use of the term f‘may” renders the examples permissive and not exclusive. Consequentiy, there

 

‘3 NPDB GUIDEBOOK E-I 9.

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simply is no basis to assert that it was unreasonable or irrational for the Secretary to consider
other types of evidence in the Administrative Record. In fact, given that the provision identiﬁes
only permissive examples, an argument could be made that it wouid have been unreasonable for

the Secretary to limit her consideration to only those cited examples while excluding other types

of contemporaneous evidence.

Turning to the plaintiffs‘ allegation that several documents were forged or otherwise not

bona tide because they contained incorrect dates or simply echoed the same language found in

the NYPORTS Short Form Report and Sentinel Even Self-Report, the Court ﬁnds that the
Secretary reasonably relied on the challenged documents. The plaintiffs called into question the
minutes of a Medical Staﬁ‘ Performance Improvement Committee meeting because it was dated
September 2009 and not October 2009. as well as a memorandum memorializing a review
meeting that was dated “Monday, October 6, 2009” when, in fact, October 6, 200.9. fell on a

Tuesday. Pls.’ Reply Mem. In Support ofCross-Mot. for Summ. J. 18 [ECF No. 56 (Sealed)];

First Am. Compl. ll 63. The Hospital noted that the two date discrepancies were typographical
errors. AR 0084 n.1, 0085 n.3 [ECF No. l9-2 (Sealed)]. The plaintiffs’ indictment ofthesc
documents as fakes involving “back-dating”"l -- and their refusal to accept that the date errors

might actually be more typographical errors -- is surprising given that Dr. Doe himself submitted

a document that suffered from the very same inﬁrmity. With respect to a letter he wrote to the
American Board of Thoracic Surgery, which he characterized as a “signiﬁcant” piece of

evidence during the Secretarial review process, he noted:

*4 Pts.’ Reply Mem. in Support ofCross-Mot. for Summ. J. 20 [nor No. 56 (Sealed)]
(arguing that the Secretary “never acknowledged or explained these critical inconsistencies.
back-dating and unsigned and ‘retlacted’ documents").

.24-

 

Although this letter was written late on October S, 2009, it mistakenly bears the
date October 6, 2009. While I drafted the letter to Dr. Baum gartner on October 5,
I did not mail it until October 6. Prior to mailing it the next morning, I simply
changed the date on the letter from “5” to “6” without thoroughly proofreading
the letter again. I neglected to change the word “today” to “yesterday.” This
gives the impression that I learned of the ABTS’ ﬁnal decision on October 6, but
it actually happened the day before. '

AR 0l57 n.l [ECF No. 19-4 (Sealedﬂ. in light ofthe plaintiffs own guilt in submitting evidence
with a typographical date error, the plaintitls’ criticism of the Hospital’s documents certainly call
to mind the proverb that he who lives in a glass house should not throw stones. Because there
was no other evidence in the administrative record to buttress the piaintiffs’ allegations that the
defendants’ typographical errors should be attributed to document fabrication, it was not
unreasonable for the Secretary --who was confronted by documents l'i‘orn both parties that
contained typographical date errors -- to accept the parties" explanations for the errors and
otherwise rely on the documents. It would be arbitrary for the Secretary to apply a double
standard whereby typographical errors in the Hospital’s documents would be deemed to be an
indication of fabrication whereas similar errors in Dr. Doe’s documents would be overlooked as
mere mistakes.

The Court also is not troubled by the fact that the minutes ofthe Medical Staff
Performance Improvement Committee meeting were redacted and the discussion is described
using language that is identical to the Summary of Occurrence on the NYPORTS Short Form.
Pls.’ Reply Mem. In Support ofCross-Mot. for Summ. J. 18 [ECF No. 56 (Sealed)]. As far as
the Court can tell, the only thing of any consequence that was redacted in the document was the
identity of Hospital employees, but a review of the administrative record reveals that this was a

consistent practice for all documents submitted by the Hospital during the Secretarial review

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process. See, e.g., AR 0l01, 0103, 0104, 0|09, 0! 15 [ECP No. [9-3 (Sealedﬂ. In addition,
although the “Discussion” section ofthe minutes contain a description that is a verbatim copy of
what is documented in the NYPORTS Short Form, the “Action” section ofthe minutes, which
state that “[t]he physician voluntarily removed himself from surgery pending completion of the

investigation” is not identical, so it is not clear what, if anything, can be inferred from this.

Moreover, even if, as the plaintiff's allege, the minutes were created by simpiy copying the

information contained in the NYPORTS Short Form, that does not, ipso facto, mean that no
meeting actually took place. It could simply mean that the Hospital took a short cut in terms of
documenting the details oi" the discussion that took. place. There was no basis for the Secretary to
conclude, based solely on similarities between the descriptions contained in the meeting minutes
and the NYPORTS Short Form, that no meeting actually occurred.

The piaintiffs also complain that the Secretary improperly relied on documents that
contained hearsay. PIs.’ Reply Mom. in Support oi’Cross-Mot. for Summ. J. 19 [ECF No. 56 
(Seafedﬂ. This is a perplexing position for the plaintiffs to take because Dr. Doe’s own
submissions to the Secretary contained hearsay. See, e.g., AR 0233 [ECF No. i9-5 (Sealed)]
(stating that “Dr. {Richard} Rubenstein has advised Dr. [Doe] that he (Dr. Rubenstein) was not
aware that [an October RCA Committee] meeting was being held”). Regardless, “it has Eong
been settled that the technical rules for the exclusion of evidence applicable in jury trials do not
apply to proceedings before federal administrative agencies in the absence of a statutory
requirement that such rules are to be observed.” Opp Cotton Mills v. Administrator of Wage &

Hour Div. ofDep’t ofLabor, 312 US. 126, 155 (I94l). Accordingly, “[c]ourts, including the

-26..

 

DC. Circuit, have held that hearsay evidence can be considered as part of the administrative
record.” Kodt' v. Geitkner, 42 F. Supp. 3d l, l2 (D.D.C. 2012).

The plaintiffs question the reasonableness of the Secretary’s reliance on hospital
documents stating that an investigation was pending because they contend that Dr. Doe’s “Oct.
5, 2009 letter of resignation.” see AR 0] 10, serves as contrary evidence that “reflects no
‘pending investigation’ or ‘reassignment’ of his cases,just that he would not take new ones
because he would be leaving for the Tennessee fellowrdiip.” Pls.’ Reply Mem. In Support of
Cross-Mot. for Summ. J. 20 [ECF No. 56 (Sealed)]; First Am. Comp]. 1] 60 [IECF N0. 23]. As an
initial observation, the Court ﬁnds itselfcompelled to point out that.just as Dr. Doe‘s October 5,
2009 letter does not state that an investigation was pending, it also does not state that Dr. Doe
would be ieaving for the Tennessee fellowship. AR 0i [0 [ECF No. 19—3 (Sealed)]. The
plaintiff‘s’ characterization ot‘the letter as “contrary” evidence also is unavailing. To reiterate,

the letter at issue stated:

I will not operate at [the Hospital} for the next two weeks effective October 5,
2009 through October l9, 2009, or until mutually agreed upon. I will however,

ﬁnish the follow-up care on patients that I am currently involved with on the
clinical ﬂoors without performing any surgery.
AR 0! 10 [ECF No. 19—3 (Sealed)]. This quotation represents the entire body of the letter, which
by its terms states that Dr. Doe is temporarily surrendering his surgical privileges for two weeks
or until mutually agreed upon. There is nothing in this ietter to suggest that it contemplated a
permanent departure in the nature ofa “resignation” and, again, it is silent about the reason for
the surrender of privileges. The Court also finds it odd that the plaintiffs characterize this letter

as a “resignation” in anticipation ot‘Dr. Doe leaving the Hospital to complete a fellowship in

Tennessee when it is unambiguously temporary and the plaintith claim, on the one hand, that it

.27-

 

was drafted by the Vice President of Medical Affairs [5 while also claiming, on the other hand,
that Dr. Doe drafted it.'{’ Regardless, upon analysis. the October S, 2009 letter in which Dr. Doe
voluntarily surrendered his surgical privileges for two weeks does not actually contradict or
refute any of the matters contained in the documents the Secretary cited as support for the
Secretarial Review Decision. The letter’s silence with respect to whether an investigation was
occurring renders it essentially irrelevant to that point. The Court also is not vexed by the
Secretary’s failure to address in the Secretarial Review Decision every allegation, including this
one, raised by Dr. Doe. It is well established in this Circuit that an agency’s decision need not
“repeat every contention ofthe parties, especially where the argument accepted is mutually
exciusive of the others and the basis for its acceptance is made cEear.” Parent) Rico Mar.
Skipping Audi. v. Federal Mar. Comm ’n, 678 F.2d 327, 352 (D.C. Cir. [982).

The plaintiffs also attempt to undermine the Secretarial Review Decision by arguing that
there was no evidence that the actions taken by the Hospital were consonant with the Hospital’s
internal bylaws setting forth how 01‘ when an investigation would be conducted and there was no
formal request for an investigation by the Hospital’s Credentials Committee. Pls.‘ Mem. In
Opp’n to Defs.’ Mot. to Dismiss 44—45 [ECF No. 45 (Scaledﬂ; Pls.’ Reply Mem. In Support of
Cross-Mot. for Summ. .I. I7 [ECF No. 56 (Seaied)]; First Am. Compl. 1| 107 [ECF No. 23]; First

Am. Compl. 1H] 59, 69 [ECF No. 23]. Nowhere, though, does the Health Care Quality

'5 Pls.’ Statement ofUndisputed Material Facts Pursuant to Local R. 7(h) 1] 9 [ECF No. 45-
2 (Sealed)] (stating that the October 5, 2009 letter “was actually drafted by [the Vice President of
Medical Affaris]").

16 Pls.’ Reply Men}. in Support of Cross-Mot. for Summ. J. H) [ECF No. 56 (Sealed)]
(stating that "Dr. Doe went to [the Vice President ofMedical Affail‘s’] office on October I. 2009
with an unsigned resignation letter . . .").

-23_

 

Improvement Act, the Department of Health and Human Services regulations implementing the
Act, or the NPDB Guidebook state that, to qualify as an “investigation” for the purpose of the
mandatory reporting requirements, the Hospital’s actions must be taken in accordance with its
own internal byiaws or policies. The reportable event is based on an “investigation” as that term
is contemplated by the statute, not as contemplated by a health care entity’s individualized and
internal governing documents. To hold otherwise would result in ad hoc reporting and reporting
inconsistencies across the multitude ofheaith care entities throughout the nation. “The federal
judiciary and the agency to which the interpretive task has been entrusted have independent
responsibilities for fashioning a global deﬁnition, and a hospital cannot frustrate that deﬁnition
through its bylaws.” Doe, 552 F.3d at 85.

The plaintiffs additionally question the occurrence of an October 2009 meeting of the
Root Cause Analysis Committee because there is no evidence in the administrative record that
this meeting occurred other than the statements by the Hospital’s counsel in a ﬁling submitted
during the Secretarial review process. Pls.’ Reply Mem. In Support of Cross-Mot. for Summ. J.
18 [ECF No. 56 (Sealed)]. First, the Court notes that this meeting was not cited in the Secretarial
Review Decision. In addition, the occurrence of this meeting would not be dispositivc ofthe
determination that an investigation was ongoing because there was other evidence in the
administrative record that demonstrated that the Hospital’s investigation continued at least into
November 2009. See AR Ol 14, 0] I5, 0| Iii-30 [ECF No. 19-3 (Sealedﬂ.

The plaintiffs also take exception with the Hospital’s statement that the Root Cause
Analysis Committee met in October and the participants consisted of a number of Hospital

executives, including the Attending Gynecology Oncology Surgeon and Attending

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Generali’l‘horacic Surgeon. Pls.’ Reply Man. In Support ofCross-Mot. for Sumin. J. 18 [ECF
No. 56 (Sealed)]; AR 0085 [EC]: No. 19—2 (Sealedﬂ; First Am. Compl. ii 58 [ECF No. 23].
According to the piaintitis, “documentary evidence in the AR proved that neither the Attending
Gynecology Oncology Surgeon, Dr. [Hannah] Ortiz, nor the Attending Generali’TEioracic
Surgeon, Dr. [Richard] Rtlbenstein attended or even knew of an October 14, 2009 meeting as
alleged at AR 0085.” Id. The documentary evidence cited by the ptaintiffs consists ot‘a letter
ﬁmﬁylmkmmmmmmwﬁnomkmmemmhomymmﬂhmememﬁhmmM%
meetings, AR 0196-97 [ECF N0. l9-4 (Sealedﬂ, the submissions by Dr. Doe, AR 0222, 0233
[ECF No. l9—5 {Sealed)], and a letter from Dr. Ortiz that states only that she does “not recall
being present at any Root Cause Analysis Committee meeting,” aithough she did remember
discussing the surgical incident with the Vice President oi’Medical Affairs, AR 0240 [ECF No.
I9-5 (Sealed)}. The Hospital asserts, however, that another genera lithoracie surgeon -- other
than Dr. Rubenstein -- served on the Root Cause Analysis Committee and the Committee
“received, and reasonably relied, on statements from Dr. Ortiz regarding the appropriateness of
seeking a gynecological consuitation under the circumstances presented during the surgery in
question.” AR 0291 [ECF No. 32—] (Sealed)]. There is nothing in the administrative record that
contradicts these last two points and the Root Cause Report that was tiled by the Hospital on
November 3, 2009 states that an intraoperative gynecological consultation should have been
obtained, which is consistent with Dr. Ortiz's letter stating the same. AR 0] 16 [ECF No. 19-3
(Sealedﬂ; AR 0240 [ECF No. 1.9-5 (Sealed)]. Accordingly, although there might be a factuai
dispute about whether Dr. Ortiz attended an October 2009 Root Cause Analysis Committee

meeting, there is no dispute that she was consulted about the surgicai incident by a member of

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Quality Improvement Act of 1986, as amended.”2 U.S. DEFT OF HEALTH & HUMAN SERVS.,
Heatsn-i RESOURCES & Saws. ADMIN, NPDB GUIDEBOOK A-l (2001 ).3 The NPDB Guidebook
states that “[t]he estabiishrnent of the NPDB represents an important step by the US.
Government to enhance professional review efforts by making certain information concerning
medical malpractice payments and adverse actions available to eligible entities and individuals.”
Id. at A-3. As one federal appellate court explained:

The Data Bank prevents a physician who applies to become a member of a
hospital’s medical staff or for clinical privileges from being able to hide
disciplinary actions that have been taken against him. Information in the Data
Bank is intended “only to alert . . . health care entities that there may be a problem
with a particular practitioner’s professional competence or conduct" because the
practitioner has been the subject ot‘a disciplinary action. The Data Bank contains
not only the hospital’s side of the story but also the physician’s response. What
the requesting hospital does with the information it obtains from the Data Bank is
entirely up to that hospital. It could completely discount the information, or it
could back off from any professional reiationship with the physician, or it could
make further inquiries to determine what had actually happened.

Lea! v. Secretary, US. Dep’t off-leak}: & Human Semis, 620 F.3d IZSO, l283-84 (l lth Cir.

2010).

The review, reporting and disclosure regulations that apply to the National Practitioner

Data Bank are codiﬁed at 45 CPR. §§ 60. I -60.22 and "establish procedures to enable

 

2 The Health Care Quality Improvement Act provides that "‘[t]he Secretaly may establish,

after notice and opportunity for comment, such voluntary guidelines as may assist the
professional review bodies in meeting the standards” for professional review. 42 U.S.C.

§ 11114. The Health Care Quality Improvement Act also requires that “the information required
to be reported” by the Act “shall be reported to the Secretary, or, in the Secretary’s discretion, to
an appropriate private or public agency which has made suitable arrangements with the Secretary
with reSpect to receipt, storage, protection of conﬁdentiality, and dissemination of the
information under this subchapter.” Id. § I l l34(b).

3 The 2001 edition ofthe NPDB Guidebook was in effect at the time of the events at issue
in this case. The NPDB Guidebook was updated in April, however, and that edition is available
at httpﬂwwwnpdbh rsa. govi’resou recs! NPDBGuidebook.pd f.

-4-

 

 

the committee, AR 0233 [ECF No. 19-5 (Sealed)] (identifying the Vice President of Medical
Affairs as a committee member). The fact that she might not have attended the Root Cause
Analysis Committee meeting, alone, is an insufficient basis for the Secretary to conclude that the
meeting was “non-existent” so the Adverse Aetion Report must be stricken, see Pls.’s Reply
Mom. In support ofCross-Mot. for Summ. J. l8 [ECF No. 56 (Sealed)].

in sum, the administrative record suppmts the Secretary’s finding that the Hospital
launched an investigation of Dr. Doe’s conduct relating to the surgical incident on October S,
2009, the same day he was told he was fired but then reinstated, the same day he temporarily
surrendered his surgical privileges for two weeks, and two days before he submitted a letter of
resignation. n The Secretary stated that she reviewed the relevant data, which consisted of the

“information available and the record presented to this ofﬁce." AR 0254 [ECF No. l9-6

'7 The plaintiﬁ‘s‘ admissions that Dr. Doe was ﬁred during an early meeting with Hospital
executives on October S, 2009, belie their argument that the Hospital was not reviewing Dr.
Doe’s professional conduct on that date. AR 0203 [ECF N0. l9-5 (Sealed)] (letter from Dr.
Doe’s girlfriend stating that “[Dr. Doe] called me on my cell phone that morning and told me
that he had just met with [the Vice President of Medical Affairs] and he had been ﬁred from his
position at the hospital as a result ofthis speciﬁc case”); AR 0009 [ECF No. 19-] (Sealed)]
(arguing that “the purported investigation conducted by [the Hospital] relating to the October 2,
2009 procedure was not an inquiry into my professional competence or conduct, but rather a
routine and general review of a very complicated case involving an emergency situation . . 3‘);
AR 0l43 [ECF No. 19-3 (Sealed)] (stating that the Vice President ofMedical Affairs “told the
plaintiffthat he was ﬁred”); First Am. Compl. 1m 6] [ECF No. 23] (asserting that the NYI’ORTS
short form report submitted by the Hospital “was to report an incident under state law, and was
not an ‘investigation’ of the physician”). According to the Hospital:

[T]he Hospital commenced an investigation into what transpired during the
surgery at issue and how [Dr. Doe] inadvertently removed a section ofa l4 year
old patient‘s Fallopian tube. Included in this investigation was whether [Dr. Doe]
exercised the appropriate standard of care and whether he was professionally
competent to continue performing such surgeries at the Hospital. Accordingly,
[Dr. Doe‘s] competence was under investigation prior to his resignation.

AR 0284 [ECF No. 32-1 (Scaled)].

.31-

 

 

(Sealed)]. The referenced information and record consisted of numerous adversarial ﬁlings
setting forth, in detail, both the Hospital’s and Dr. Doe’s respective positions and arguments
about the events reported in the Adverse Action Report and included documentary evidence that
both parties asserted supported and corroborated their arguments. The Secretary’s ﬁnding that
an investigation was commenced on October 5. 2009, was rationally connected to the facts
found, which showed that the Hospital had gathered the relevant documents, conferred with
executive ofﬁcials about the surgical incident and the course of action the Hospital would take,
met with the physicians who were involved, reported the incident to the state health department
and The Joint Commission, and formed a team to conduct a root cause analysis. All ofthese
activities are the trappings of an investigation as that term is commonly understood, so the

Secretary’s conclusion was rationally conceived, regardless ofwhether viewed with deference.

2. Whether it was arbitrary and capricious for the Secretary to conclude that Dr. Doe’s
suspension of privileges was “voluntary” in light of his allegation of fraud

in the Subject Statement disputing the Adverse Action Report, and throughout the
Secretarial Review proceedings, Dr. Doe challenged the accuracy of the report on the ground that
it falsely stated that he had resigned “while under investigation” notwithstanding his contention
that the Hospital’s Vice President of Medical Affairs assured Dr. Doe that there was no such
investigation underway at the time Dr. Doe submitted his resignation. AR 0003, 0009 [ECF No.
l9—l (Sealed)], AR 0154, 0l57, 0161-66, 0] 73 [ECF No. 19-4 (Sealed)], AR 0232 [ECF No. E9-
5 (Sealed)], Pls.’ Mem. In Opp’n to Defs.’ Mot. to Dismiss 43-44 [ECF No. 45 (Sealed)]; Pls.’
Reply Mem. in Support of Cross-Mot. for Sunnn. J. 7—10 [ECF No. 56 (Sealed)]. The Hospital
concedes only that the Vice President ot‘Medical Affairs told “Dr. [Doe] on October 5, 2009 that

ifhe agreed to voluntarily refrain from exercising his privileges, no suspension would be
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imposed and thus no report (other than an incident report) would have to be made at that time.”
AR 0285 [ECF No. 32—] (Sealed)] (emphasis in originai). The Secretarial Review Decision
acknowledges this dispute by stating “[y]ou dispute the report claiming: I. There was no
investigation at the time of your resignation, which you conﬁrmed with the PBMC.” AR 0255
[ECF No. 19-6 (Sealed)] (emphasis added). The decision resolves the dispute by concluding that
the documentary evidence in the Administrative Record demonstrated that an investigation was,
in Fact, taking placo at the time Dr. Doe resigned. AR 0256 [ECF No. l9-6 (Sealed)]. l-loWever,
in a subsequent paragraph addressing Dr. Doe’s other claims that the Adverse Action Report was
submitted without his knowledge, maliciously, in bad faith and without due process, AR 0255
[ECF No. 19—6 (Sealed)] (identifying the diSpute claims), the Secretary stated that “a voluntary
resignation while under investigation is reportable to the NPDB regardless of' whether you were
misinibrmcd as to the investigation’s existence and regardless ot‘whether or not you were aware
ofthe ongoing investigation at the time you resigned,” AR 0257 [ECF No. l9-6 (Sealed)].

in the plaintiffs’ First Amended Complaint they recast the dispute about whether Dr. Doe
was “under investigation” into an allegation that Dr. Doe‘s resignation was not “voluntary”
because it was induced by fraud. First Am. Compt. W 108-09 [ECF No. 23]. According to this
new theory, the plaintiffs assert that the Adverse Action Classification Code documented in the
Adverse Action Report is inaccurate because it states “voluntary surrender of clinical
privilege(s), or to avoid, investigation relating to professional competence or conduct,” AR 0002
[ECF No. l9-l (Sealedil (capitalization formatting omitted emphasis added). Based on their
new formulation of the argument Dr. Doc raised during the Secretarial review process, the

plaintith declare that the “defendants should have concluded that plailitiffdid not ‘voluntarily

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resign’ for purposes of the statute and the AAR should not have been accepted or shouid have 
been voided.” First Am. Compl. 1i l08. I

The Heaith Care Quality Improvement Act and the regulations establishing the National 
Practitioner Data Bank state that a health care entity must report the acceptance ofa physician’s
“surrender” ot‘ciinical privileges while the physician is the subject of an investigation relating to
possible incompetence or improper professional conduct. 42 U § 1 i i33(a)(l)(B); 45
CPR. § 60.12{a)(l)(ii). Neither the statute nor the regulations define or qualify the term
“surrender” in any way or require that the surrender occur with knowledge of the investigation.
One meaning of the term “surrender” is to “yield to the power, control, or possession of another
upon compulsion or demand.” Merriam—Webster, http:ffwwwmcrriam~webster.com/’dictionaryl’
surrender (last visited May 25, 2015). Consequentiy. Congress’s use of the term “surrender”
arguably intimates that it intended the statute to appiy to any reiinquishment of clinical

privileges, whether voluntary or compelled, in which case Dr. Doe’s resignation was reportable

even if it was not, in fact, “voluntary.”lg

in some respects this point might seem unjust. But the Health Care Quality improvement
Act clearly manifests a poiicy that favors strict reporting in the event ol’a resignation during an
investigation to ensure patients are protected and to prevent physicians from skirting peer review.

The Secretary’s interpretation that a resignation while under investigation is reportable whether i

'3 The Court therefore questions why Adverse Action Classiﬁcation Code number I635
includes the term “voluntary.” The regulations refer to “voluntary surrender” only in the context
oflicensing or certiﬁcation. 45 C.F.R. §§ 60.3, 60.9(a)(3), 60.l{)(a)(3), 60.l2(a)(2). Because
there is no statutory or regulatory basis for using the term “voluntary” with respect to a surrender
of clinical privileges while under investigation, it strikes the Court that the term shouid be
removed from the descriptive ianguage for Adverse Action Classification Code number 1635.

-34-

 

or not a physician knew about the investigation furthers this policy and avoids reporting
loopholes that would make it easier for incompetent physicians to dodge (via surrender or
resignation) the peer review that Congress expressly found could remedy the occurrence of
malpractice and improve the quality of medical care. See 42 U.S.C. § I l l l l. Given the nature
and purpose ofthe National Practitioner Data Bank, and the congressional intent and findings
expressed in the statute that authorized it, when the countervailing interests of protecting patients
and protecting physicians cannot be reconciled, the structure and purpose of the statute suggests
that the course to be followed is the one that protects patients, assuming that course to be
Otherwise lawful. So it is not unreasonable for the Secretary to interpret the statute as imposing a
strict reporting requirement in the sense that the physician’s motivations for surrendering clinical
privileges and knowledge ofthe ongoing investigation do not bear on whether the surrender
while under investigation must be reported. The relevant concern is that the surrender or
resignation while under investigation curtails the effective professional peer review that
Congress vieWed as paramount to remedy the probiems the Statute was intended to address.

The defendants raise a fair point that, absent a strict reporting requirement, 2: physician
could cause harm to a patient and then promptly resign before a hospital had the opportunity to -
put the physician on notice that an investigation was underway. Mom. in Support of Defs.’ Mot.
to Dismiss or, Alternatively, for Summ. J. 17 [ECF No. 33 (Sealed)]. The instant case, though,
also could be construed as exemplifying a different reporting loophole.

Although the plaintiffs maintain that Dr. Doe was fraudulently induced to resign, the
administrative record contains evidence suggesting a mistake on the Hospital’s part about

whether Dr. Doe was under an “investigation” for the purpose of reporting to the National

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Practitioner Data Bank. Assuming, for the sake ofargument, that it is true that Dr. Doe was told
he was not under investigatiori, it is possible that the Vice President for Medical Affairs made
that representation because it was the Vice President ofMedica] Affairs’ beliefthat the
investigation the Hospital commenced was for the purpose of conducting a root cause analysis
consistent with the Hospital’s immediate report to the New York Department of Health and not
for the purpose of reporting to the National Practitioner Data Bank. Dr. Doe concedes that the
Vice President of Medicai Affairs alelted him that the surgical event was being reported to the
New York Department of Health and that such a report would have obligated the Hospital to
conduct an investigation, albeit Dr. Doe contends that the investigation would have been ofthe
“incident” and not of his professional Competence, AR 0168 [ECF N0. 194 (Scaled)] (stating
that “[m]y attorneys have explained to me that the statute and regulations go on to state that the
hospital must conduct an investigation (described on NYPORTS website as a root cause
analysis) ofany of the listed incidents within thirty days ofobtaining knowledge ofany
information which reasonably appears to show that such an incident has occurred . . .")
(emphasis omitted). The possibility that the Hospital was operating under the mistaken belief
that there was no investigation underway for the purpose of reporting to the National Practitioner
Data Bank might also explain the Vice President of Medical Affairs’ later statement that he did
not know that a National Practitioner Data Bank report would be the “final step,” AR 0 I 62, 0166
[ECF No. 19-4 (Sealed)]; AR 0206 [ECF No. 19-5 (Sealed)]. 0r, less innocently, it is also
possible that the Hospital had an interest in avoiding a report to the National Practitioner Data
Bank and believed, erroneousiy, that as long as ofﬁcials did not designate an investigation as

being for the- purposc of reporting to the National Practitioner Data Bank, then no such report

-36-

 

would be required. At some later time, though, the Hospital obviously must have realized that it
was required to report Dr. Doe’s resignation, perhaps while trying to ﬁgure out whether the
quality assurance review results had to be reported.

Speculation aside, though, the point is that a requirement that physicians have knowledge
of an investigation in order for a resignation to be reportable would provide an opportunity for
both physicians and hospitals to game the statute, whether guilelessly or intentionally, and avoid
reporting. Both hospitals and physicians might make mistakes about whether their actions are
causing a reportable event with respect to a surrender of privileges and they might later discover
that the event should have been reported. Or hospitals and physicians might be ignorant, rightly
or wrongly, ot‘all the nuances of the National Practitioner Data Bank’s regulations and rules but
later learn, whether from legal counsel or othelwise, that their activities constituted an
investigation for the purpose of the National Practitioner Data Bank even though a report to the
Data Bank was never foreseen as an objective of the investigation. in any of these
circumstances, a requirement that the physician have knowledge of an investigation would mean
that no reporting would occur, thereby frustrating the very purposes of the statute. 42 U.S.C.
§ 1 l lUl.

In the ﬁnal analysis, the relevant consideration for the purpose of the reporting
requirement under the statute is whether a physician was being investigated and whether that
investigation “related” to possible incompetence or improper professional conduct at the time a
surrender of clinical privileges was accepted. If so, it is reasonable for the agency to interpret the
statute as mandating that hospitals report the surrender of clinical privileges regardless of

whether the surrender was voluntary or not, regardless of whether the physician knew about the

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investigation or not, and regardless of whether a hospital anticipated that an investigation would
result in a report to the National Practitioner Data Bank.

That being said, the question oi‘whether Dr. Doe’s surrender via resignation was i
reportable, even if induced or without knowledge of an investigation, is a different inquiry from
the question ot'whether the Adverse Action Report’s description of the surrender is accurate.
Although the Secretary considered the resignation to be reportable, the Secretary never expressly
addressed Dr. Doc’s allegation that, because the resignation ailegedly was procured by fraud, the
Adverse Action Classiﬁcation code identified in the Adverse Action Report inaccurately stated

that the surrender was “voiuntary.” Pls.’ Reply Mem. In Support of Cross-Motion for Summ. J.

 

7 [ECF No. 56 (Sealed)]. indeed, the standards cited by the Secretary in the Secretarial Review

Decision apply only to reportability and not to the Secretary’s consideration ot‘ accuracy. AR
0257 [ECF No. 19-6 (Sealed)] (stating that, e.g., “a voluntary resignation while under

investigation is reportable,” “[y]ou ofﬁcially resigned before the final closing ot‘PBMC’s

 

review(s) and that is a reportable event,” and “[t]hc fact that you had to work in an unethical
environment has no bearing on PBMC‘s legal responsibility to report your voluntary surrender"). 
The Court expresses some concern that, in this reSpect, the Secretarial Review Decision
abrogated the responsibility to review the accuracy of the Adverse Action Report by addressing
only whether the resignation was reportable to the exclusion of whether it was accurately i
described. On this particular issue, the Secretarial Review Decision almost treats teportability as
determinative of accuracy, which sim ply is not a reasonable approach.

The Court is not, however, sanguine about the plaintiffs’ suggestion that the issue should

be framed as requiring the Secretary “to determine whether Dr. Doe’s resignation was

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‘Voluntary’ or whether in any event . . . it was fraudulently obtained." Id. To the contrary, the
Secretary reasonably stated that the scope of her review is not so broad. AR 0257 [ECF No. 19-6
(Sealed)]. The regulations provide that the Secretary “will . . . review the accuracy of the
reported information” although that review “wilt not consider the merits or appropriateness of
the action or the due process that the subject received." 45 C.F.R. § 60.2 1 (c)( l ). Chapter F of
the NPDB Guidebook likewise states that “[t]he Secretary reviews disputed reports only for
accuracy of factual information and to ensure that the information was required to be reported.”
NPDB GUIDEBOOK F-3. These reguiatory and NPDB Guidebook interpretations of the limited
scope of Secretarial Review are in harmony with the Health Care Quality Improvement Act,
which mandates that the Secretary “by regulation, provide for . . . procedures in the case of
disputed accuracy of the inlhrmation.” 42 U.S.C.A. § 1 l l36(2). Thus, the statute limits the
Secretary’s regulatory authority to providing procedures to dispute the accuracy of the reported
information but nowhere does the statute authorize, or even contemplate, that the Secretary will
actually adjudicate the underlying merits of the events, professional review actions, activities,
ﬁndings, or determinations. The point of the statute is to restrict the ability of incompetent
physicians to move from state to state without disclosing previously damaging or incompetent
performance and it was Congress’s view that this nationwide problem could be remedied by
effective professional peer review that would be conducted by health care entities -- not the
agency. 42 U.S.C.A.§ IIIOI.

The Court agrees with the defendants that the Eleventh Circuit‘s decision in Lea! v.
Secretary, US. Department of Health & Human Services, which is cited by the Court several

times herein, persuasively sets forth the scope of the Secretary’s review for accuracy. In Leaf,

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the United States Court ot‘Appeals for the Eleventh Circuit considered a physician’s claim that it
was arbitrary and capricious for the Secretaly to conclude that an Adverse Action Report was
accurate in the absence ofcorroborating evidence to prove the reported conduct. 620 F.3d at

1283-84. The plaintiff in Lea! was a surgeon who, upon being told that his access to an

 

operating room would be delayed, became enraged, damaged property, verbally abused hospital
staff, and otherwise “pitched a ﬁt.” Id. at 128] (internal quotation marks omitted). The plaintiff 
appealed the district court’sjudgment denying the physician’s Ai’A action and argued that an
Adverse Action-Report could only be deemed accurate if the administrative record inciuded
witness statements to substantiate the reported misconduct because, “[wilithout that requirement
. . . a hospital could unfairly ‘blackiist’ a physician by tiling a report in the Data Bank based on

conduct that never occurred.” Id. at 1283. So similar concerns about fabrication or fraud on the

 

part ofhospitals were raised by the plaintiff in Leaf.

On review, the Eleventh Circuit in Lea} admonished that “[b]ecause information in the 
Data Bank is intended only to fully notify the requesting hospital ofdiscipiinary action against a
physician and the charges on which that action was based, the Secretary’s review of information
in the Data Bank is limited in scope.” Id. at 1284. As the Eleventh Circuit reasoned:

The review process does not provide a physician with a procedure for challenging 
the reporting hospital’s adverse action. Nor does it provide a physician with a 
procedure for challenging the allegations about the conduct that led to the action 
that is reported. The Secretary reviews a report for factual accuracy deciding only

if the report accurately describes the adverse action that was taken against the

physician and the reporting hospital’s explanation for the action, which is the
hospital’s statement of what the physician did wrong. The Secretary does not act

as a factﬁnder deciding whether incidents listed in the report actually occurred or

as an appellate body deciding whether there was sufﬁcient evidence for the

reporting hospital to conciude that those actions did occur.

 

individuals or entities to obtain information from the NPDB or to dispute the accuracy of NPDB
information.” 45 C.F.R. § 60.2. The details ofthe procedures to dispute the accuracy of an
Adverse Action Report are discussed inﬁ'a at part 3(5). With respect to the reievant requirement
for reporting, the National Practitioner Data Bank regulations mirror the Health Care Quality
Improvement Act by stating that hospitals must report to the National Practitioner Data Bank the
“[a]eceptance ofthe surrender ofclinical privileges or any restriction of such privileges by a
physician . . . [w]hile the physician . . . is under investigation by the health care entity relating to
possible incompetence or improper professional conduct . . . .” 45 CFR. § 60.]2(a)(l)(ii).
III. The Surgical Incident and Resulting Adverse Action Report

On Friday, October 2, 2009, Dr. Doe commenced a late-night emergency laparoscopic
appendectomy on a 14-year-old girl who had acute appendicitis. First Am. Comp]. 1H] 48, 49;
Administrative Record (“AR”) 0153 [ECF No. l9—4 (Sealed)]; Pls.’ Statement ofUndisputed
Material Facts Pursuant to Local R. 761) 1} 4 [ECF No. 45-2 (Sealed)]. During the surgery, Dr.
Doe removed what he characterized as-an “inflamed band" but the anesthesiologist protested was
the patient’s Fallopian tube. AR 010] [ECF No. 19—3 (Sealed)] (“During the procedure it was
noted by [the anesthesiologist] that [Dr. Doe} removed segment of® Fallopian tube.”
(capitalization formatting omitted»; AR 0143 [ECF No. 19-3 (Sealed)] (stating that the
anesthesiologist “shouted loudly” at Dr. Doe); AR 0283 [ECF No. 32-] (Sealed)] (stating that
“the error was immediately detected by the anesthesiologist during the procedure”). A
subsequent pathology report conﬁrmed that the “inflamed band” was part of the patient’s right

Fallopian tube. First Am. Compl. 1| 51 [ECF No. 23]; AR 0142-0143 at 1] 85 [ECF No. 19-3

 

Id. (internal citations omitted). With regard to the argument that a hospital might abuse the
National Practitioner Data Bank reporting process to further a fraud that harms a physician’s
career, the Eleventh Circuit reflected that a hospital requesting a report is “free to ignore
information in the Data Bank for purposes of making its hiring decision or to investigate it,” “a
physician who is the subject of a report can add a statement to the report giving his side ot'the
story,” and “the Data Bank is not designed to provide protection to physicians at all costs,
including the cost of not protecting future patients from problematic physicians." Id. at [285.
Even accepting that the scope of the Secretary’s review for accuracy is limited, however,
it is not the case that the Secretary can ignore actual evidence of fraud when considerin g whether
an Adverse Action Report is accurate. Under the APA, the Secretarial Review Decision must be
supported by substantial evidence. 5 U.S.C. § 706(2)(E). “Substantial evidence is more than a
mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.” Consolidated Edison Co. of New York 1:. ML.R.B., 305 U.S. 197, 229
(1938). The DC. Circuit has observed that:
In applying the substantial evidence test, we have recognized that an agency
decision “may be supported by substantial evidence even though a plausible
alternative interpretation of the evidence would support a contrary View."
Robinson v. Nat? Transp. Safety Bat, 28 F.3d 2l0, 2l5 (DC. Cir. I994) (internal
quotation marks omitted). Our function is to determine “whether the agency . . .
could fairiy and reasonably ﬁnd the facts that it did.” Id. (internal quotation
marks omitted). However, the court “may not ﬁnd substantial evidence “merely
on the basis of evidence which in and 0f itselfjustified [the agency’s decision],
without taking into account contradictory evidence or evidence from which
conflicting inferences could be drawn.” Lakeland Bus Lines, Inc. v. NLRB, 347
F.3d 955, 962 (DC. Cir. 2003) (quoting l'Jniversair Camera Corp. v. NLRB, 340
U.S. 474, 487, "ii S.Ct. 456, 95 L. Ed. 456 0951)).

Moral! v. DEA, 4i2 F.3d l65, IT'S (DC. Cir. 2005). ifthe Administrative Record contained

evidence that a reasonable mind might accept as adequate to support the conclusion that Dr.

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Doe‘s resignation was obtained by fraud, then the plaintiffs might have a meritorious claim that
the Secretarial Review Decision failed to properly consider this evidence or set forth the
Secretary’s rationale for rejecting it. The problem here is that Dr. Doe never alleged during the
Secretarial review process that his resignation was not “voluntary” because it was procured by
fraud and, moreover, the Administrative Record is devoid ofevidencc sufﬁcient to establish the
elements of such a claim.
The NPDB Guidebook states that a physician “must . . . [s]tate clearly and brieﬂy in
writing which facts are in dispute and what the subject believes are the facts.” NPDB
GU [DEBOOK F-3. During the Secretarial review process, Dr. Doe identiﬁed the following facts as
being in dispute:
(i) [T]he surgical procedure, a laparoscopic appendectomy, that I performed on a
female patient (“Patient 1].”) on October 2, 2009, (ii) the reaSOn why I left
Peconic, (iii) what is described by Peconic as the pendency of an investigation
arising from that surgical procedure, and Peconic’s attempt to link my resignation
to that investigation, and (iv) Peconic’s statement that its quality assurance review

“indicates departures by the physician from [the] standard of care with regard to
the laparoscopic appendectomy."

AR 0152 [ECF No. 19-4 (Sealedﬂ. Dr. Doe‘s argument that he relied 0n the Vice President of
Medical Affairs’ false representation was proffered only to counter the question of whether an
investigation was, in fact, underway when Dr. Doe resigned, which is identified as disputed fact
number (iii). Cultivating this argument, Dr. Doe sought to distinguish his case from those in
which a physician resigned without knowing that an investigation was pending by stating “I was
not simply unaware of an investigation —- l was aﬁ‘irmativeiy told by [the Hospital’s] senior
medical ofﬁcer that there was no such investigation, that there would not be an investigation, and

that except for the ﬁling of a routine form with the Department of Health, nothing would be

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reported to any regulatory agency.”'9 AR 0163 [ECF No. 19-4 (Sealed):|. As presented, though,
this argument falls short of an allegation of fraud because “[t'lhe essential elements ot‘a D.C.
common~law fraud claim are ‘(l) a false representation (2) made in reference to a material fact,
(3) with knowledge of its falsity, (4) with the intent to deceive, and (5) an action that is taken in
reliance upon the representation."1 In re APA Assessment Fee Litigation, 766 F.3d 39, 55 (DC.
Cir. 20M). The Administrative Record lacks any evidence to suggest that, when the Vice
President ofMedical AiTairs toid Dr. Doe that no investigation was underway, he did so knowing
the statement to be false and with the intent to deceive Dr. Doe.” Importantly, Dr. Doe’s own
admission during the Secretarial review process that “[:t:|his letter is not the place to question the
motives oi" [the Hospital] acting through its Vice President of Medical Attairs, in communicating
to me information that, I learned later, was false” served as a concession that deceit, and
therei‘bre fraud, was not being advanced as an argument during the Secretarial review
proceeding. AR 0162 [EC]? No. 19-4 (Sealed)].

In addition, as best the Court can tell, Dr. Doe never used the word “fraud” in any of the
legai arguments he presented during the Secretarial review process or in the Subject Statement he

originally submitted to place the Adverse Action Report in dispute. He also neVer actually

'9 The only “evidence” to support this assertion of fact is found in Dr. Doe’s own unsworn

statements contained in legal arguments, as well as unsworn hearsay statements by two third
parties who were simply repeating what Dr. Doe had told them. AR 0161, 0200, 0203 [ECF No.

19-4 (Sealed)].

20 To the contrary, as mentioned supra, during the Secretarial review process Dr. Doe

reported that, during a telephone call with the Vice President ot‘Medical Affairs that occurred
after the Adverse Action Report was filed, the Vice President ofMedical Affairs stated “I did not
know that [submission of an Adverse Action Report] would be the ﬁnal step.” AR 0166 [ECF
No. |9~4 (Sealed)]. This statement arguably calls into question the elements ofa knowing
falsehood and intent to deceive.

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i
i

 

argued that the Adverse Action Report’s classiﬁcation as a “voluntary surrender” was inaccurate.
Instead, he repeatedly couched his reliance argument as implicating the accuracy of the statement
that he was “under investigation” when he resigned and not as implicating whether his

resignation was “voluntary” because it was induced by fraud. Sec, e.g., AR 0152 (stating that the

Adverse Action Report is inaccurate “relating to. . . what is described by [the Hospital] as the

pendency of an investigation arising from that surgical procedure, and [the Hospital’s] attempt to
link my resignation to that investigation”), 016i (“The reason I am in my current predicament is
because [the Hospital] claims that I resigned while there was an investigation taking place. I
However, before 1 submitted that resignation. I inquired of [the Vice President ofMedical
Affairs] . . . if there was or would be an investigation”). As a result, the Secretary never
identiﬁed the voluntariness of Dr. Doe’s resignation to be in dispute or addressed fraud as a basis
for Dr. Doe’s claim that the Adverse Action Report was inaccurate.21 “As a general rule, claims

not presented to the agency may not be made for the first time to a reviewing court." Omnipoint

Corp. v. ECG, 78 F.3d 620, 635 (DC. Cir. 1996). “To preserve a legal or factual argument, we

2' Although the Secretarial Review Decision stated that Dr. Doc disputed the Adverse

Action Report by claiming that “[t}he Report to the NPDB was made without your knowledge, in
bad faith, and in a malicious manner by few senior physicians who personally disliked you,” AR
0255 [ECF No. 19-6 (Sealed)], this refers to Dr. Doe’s Subject Statement stating “I intend to
notify the NY Licensure board this action was taken in bad faith and in a malicious manner.” 5
AR 0002 [ECF No. l9—i (Sealed)] (emphasis added). Later in that same Subject Statement Dr.
Doe added that he believed the Report was “an act of vengeance against me by a few senior
physicians who disiiked me personally" and he indicated that two doctors “wished to harm me.”
AR 0003 [ECF N0. l9~1 (Sealed)]. The Vice President of Medical Affairs, who allegedly told
Dr. Doe that he was not under investigation, was not one of those two doctors- Id. (identifying
Drs. 4 and 5 as seeking to harm Dr. Doe, whereas the Vice President of Medical Affairs was
identiﬁed as Dr. 1). So the Secretarial Review Decisions’ reference to bad faith and malice
related to Dr. Doe’s general assertions about the ﬁiing of the Adverse Action Report and not a
speciﬁc argument that the Vice President ofMedical Affairs falsely, and with the intent to
deceive, told Dr. Doe that no investigation was underway when Dr. Doe resigned.

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require its proponent to have given the agency a ‘fair opportunity’ to entertain it in the
administrative forum before raising it in the judicial one.” Nttcl’ear Energy Institute, Inc. v. EPA,
373 F.3d I25 I , 1290 (DC Cir. 2004).

The NPDB Guidebook states that doeumentation submitted to contest the accuracy of a
fact “must . . . substantially contribute to a determination ofthe factual accuracy ot‘the report.”
NPDB GUIDEBOOK F-3. Again, the only evidence Dr. Doe submitted to support his allegation
of fraud consisted of his own statements and third party statements that simply reported what Dr.
Doe said to the third party. When considered in light of the entire Administrative Record, the
evidence submitted by Dr. Doe faiied to substantially contribute to a determination that the
Adverse Action Report’s classiﬁcation as a “voluntary surrender of clinical privileges” was
inaccurate, versus merely disputed. “That the evidence in the record may also sapport other
conclusions, even those that are inconsistent with the [Secretary’s] does not prevent [the Court]
from concluding that [her] decisions were rational and supported by the record.” Lead Indus.
Ass ’n, Inc. v. EPA, 64? F.2d l I30, l l60 (DC. Cir. 1980).

3. Whether NPDB Guidebook Rule 17-8 is overly broad,I overly inclusive, and central}
to the purposes of the Health Care Quality Improvement Act -

The plaintiffs demur to the NPDB Guidebook’s statement that a physician “need not be
aware of an ongoing investigation at the time of the resignation in order for the entity to report
the resignation to the NPDB, since many investigations Start without any formal allegation being
made against the practitioner," NPDB GUIDEBOOK F-8. The NPDB Guidebook adds that “[t}he
reason the practitioner gives for leaving an entity while under investigation is irrelevant to
reportability ofthe resignation.” 1d. The plaintiffs characterize this NPDB Guidebook

interpretation as overly broad and inclusiVe, and argue that it is constitutionally inﬁrm because it
—45-

 

 

stigmatizes physicians and deprives them of a “fundamental” right. First Am. Compl. 1] l 10
[ECF No. 23]. As a result, the plaintiffs argue, the defendants’ “adoption and application ofthis
Guidebook Rule is arbitrary, capricious, an abuse ofdiscretion, and not in accordance with law.”
Id.1[lll [ECF No.23].

Because the Court ﬁnds, infra part B, that the plaintiffs failed to establish a cognizable
substantive due process claim or that the right to practice a chosen profession is a fundamental
right, the Court will decline the plainti'lts’ invitation to hold that the NPDB Guidebook
interpretation is facially invalid. The Court has already pointed out the statutory purposes and
policies that undergird the requirement for strict reporting and that render the NPDB Guidebook

interpretations challenged by the plaintiﬁ‘s to be reasonable.

4. Whether it was arbitrary and capricious for the Secretary to accept an untimely
Adverse Action Report

During the Secretarial review process, Dr. Doe argued that the agency should have
rejected the Adverse Action Report because it was untimely. The Secretary concluded, however,
that “even if the [National Practitioner Data Bank] determined that [the Hospital’s] report was
late, it would not be a basis for voiding the report.” AR. 0257 [ECF No. 19-6 (Sealedﬂ. The
Secretary’s interpretation is consistent with the Health Care Quality Improvement Act’s stated
purpose and structure, which is to insure that a physician’s prior damaging or incompetent
performance is not hidden from a health care entity that might be considering granting clinical
privileges to the physician. 42 U.S.C. § 1 | l0]. Because the statute imposes a signiﬁcant

sanction for the failure to submit a required report -- i.e., the potential loss of immunity pursuant

_46-

 

to 42 U.S.C. § I l l I 1(a) 22 -- the clear message is that Congress intended to compel all reporting
required by the statute, even if late. If Congress intended otherwise, it could have expressly said
so in this same sanction provision or in the statutory provision that covers the “[t}iming and
form” ot‘reportiug, which states only that reporting should occur “regularly (but not less oﬁen

than monthly)” and delegates to the Secretary the authority to prescribe the “form and manner"

ot'such reporting. 42 U.S.C. § 1 l I34(a).

3. Whether it was arbitrar and ca ricious for the Secretar to retain the Hos ital’s

Quality assurance review comment because it was not a reportable event

The plaintiffs also protest the fact that the Adverse Action Report contains the

     

“unreportable” statement that “the Hospital’s quality assurance review of this matter indicates
departures by the physician from standard of care with regard to the laparoseopic appendectomy
that he performed on October 2, 2009." AR 0002 [ECF No. l9-l (Sealed)]; Pls.’ Reply Mem. In
Support of Cross-Motion for Summ. J. 22-23 [ECF No. 56 (Sealed)]. This statement follows a
statement that, because Dr. Doe resigned, “the Hospital took no further action regarding the
physician’s privileges or employment.” AR l l 12 [ECF No. 19-] (Sealed)]. The Secretary did
not address this argument in the Secretarial Review Decision, most likely because Dr. Doe raised
it so obliquely in his submissions during the Secretarial review process that it might not have
seemed apparent.

In Dr. Doe’s April 19, 2011, submission to the Secretary he generally argued that the
investigation by the Hospital was so ﬂawed that it should be disregarded. He did, however,

speciﬁcally question the Root Cause Report and the basis for its conclusion that he violated the

may

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standard of care. AR 0l7U-0l72 [ECF No. 19-4 (Sealed)]. At the conclusion of that argument,
he stated that the “review of the Patient 1.]. case was severely flawed” and “was not even the
type of report that should have served as the predicate for an Adverse Action Report to the Data
Bank . . . ."' AR 01?2 [ECF No. {9-4 (Sealed)].

The Health Care Quality Improvement Act states that “[t]he information to be reported
under this subsection is -- (A) the name of the physician or practitioner involved, (B) a
description of the acts or omissions or other reasons for the action or, if known, for the surrender,
and (C) such other information respecting the circumstances of the action or surrender as the
Secretary deems appropriate.” 42 U.S.C. § l l l33(a)(3). The regulations require additional
identifying information about the physician, the “action taken, date the action was taken, and
effective date of the action, and” other information the Secretary requires after notice and
comment. 45 CPR. § 60. l 2(a)(3). The Court notes that both the statute and the regulations
omit language that would typically indicate that these enumerated categories are not intended to
be exclusive, however, such as by stating that the information to be reported “may include” the
cited categories. So it does appear that the argument could be made that the categories of
information to be reported are exclusive, in which case information that does not fall within the
enumerated categories could be deemed unreportable.

The Court is unable to assess the merit of the plaintiffs” contention, however, because the
Secretary did not consider it. Given that this argument was raised by Dr. Doe during the
Secretarial review process. AR 0172 [ECF No. l9-4 (Sealed)], and he is not an attorney, the
Court will give him the beneﬁt of the doubt and remand to the Secretary to consider whether the

statement that “the Hospital’s quality assurance review of this matter indicates departures by the

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physician from standard of care with regard to the laparoscopic appendectomy that he performed
on October 2, 2009” is reportable. AR 0002 [ECF No. [9-] (Sealed)].
B. Whether the Plaintiffs Established Due Process Violations

The plaintiffs’ second and third causes of action, which are not models ofclarity, allege
that the right to practice a chosen profession is a fundamental right that is violated by the
defendants’ interpretation and application of the Health Care Quality Improvement Act. First
Am. Cornpl. 1H] 127430. The plaintith also claim that, absent procedural safeguards to contest
the accuracy of the facts alleged in the Adverse Action Report, the defendants’ acceptance,
maintenance and dissemination of the report excludes Dr. Doe from the right to employment in
his chosen profession and thereby subjects him to a stigma-plus “disabiiity.” Id. 1] 128. The
plaintiffs take particular issue with the example dispute described in the NPDB Guidebook that
indicates that a physician’s resignation while under investigation is reportable even when the
physician is unaware of the investigation. Id. 111] l3l-134; NPDB GUIDEBOOK F-S. The
plaintiffs also take exception to what they assert is a lack of due process to determine whether
facts in an Adverse Action Report are true. First Am. Cornpl. 1H! E35439 [ECF No. 23].
Although not entirely apparent in either the First Amended Complaint or the plaintiﬂ’s’ legal
briefs, the plaintiffs have launched attacks on both the facial constitutionality of the Health Care
Quality Improvement Act as well as the constitutionality of the statute, regulations and NPDB
Guidebook as they were applied to Dr. Doc. Id. 111] ms, 133, [34, I36, I38, 139, l56.

1. General legal standards that apply to due process challenges

The Supreme Court “has held that the Due Process Clause protects individuals against

two types of government action . . . [s]o-calied ‘substantive due process” prevents the

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government from engaging in conduct that ‘shocks the conscience,’ or interferes with rights
‘impiicit in the concept of ordered liberty?” United States v. Salerno, 48] U.S. ?39, 746 (1987)
(internal citations omitted). “When government action depriving a person oflife, liberty, or
property survives substantive due process scrutiny, it must still be implemented in a fair
manner.” Id. “This requirement has traditionally been referred to as ‘procedural’ due process.”
10'.

With respect to its-applied versus facial challenges, “the distinction between facial and
as—applied challenges . . . goes to the breadth of the remedy employed by the Court, not what
must be pleaded in a complaint.” Citizens United v. FEC, 558 U.S. 3 l 0, 33] (2010). “The
substantive rule of law is the same for both challenges.” Edwards v. District ofCoinmbia, 755
F.3d 996, IOOI (DC. Cir. 2014). The Supreme Court has emphasized, however, that “[t]acial
challenges are disfavored” because, among other reasons, “facial challenges threaten to short
circuit the democratic process by preventing laws embodying the will ofthe peopie from being
implemented in a manner consistent with the Constitution.” Washington State Grange v.
Washington State Reptibiican Party, 552 U.S. 442, 450 (2008). Consequently, “{a} facial
challenge to a legislative Act is . . . the most difficult to mount srtccessfully, since the challenger
must establish that no set of circumstances exists under which the Act would be valid.” Salerno,

48]. U.S. at 745.

2. Whether the ri ht to ractice a chosen rofession is a fundamental ri ht that tri jers
strict scrutiny

The Fifth Amendment states that “[n]o person shall . . . be deprived ofiite, liberty, or

property, without due process oflaw.” U.S. Const. Amend. V. The “threshold requirement ofa

due rocess claim” is “that the overnment has interfered with a co nizable liberty or to ert
P g g P P Y

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(Sealed)l; 4 AR 018i IZECF No. l9-4 (Sealedﬂ; AR 0 | 85 [ECF No. 19-4 (Sealed)]; AR 02“)
[ECF No. l9-5 (Sealed)]; Pls.’ Statement ofUndisputed Material Facts Pursuant to Local R. 7th)
{l 4 [ECF No. 45-2 (Sealed)]. There is no dispute that Dr. Doe failed to recognize the anatomical
identity ofthe “inﬂamed band” before he intentionally cut and removed its Pls.’ Mem. In Opp‘n
to Defs." Mot. to Dismiss 3-4 [ECF No. 45 (Sealed)] (stating that “[t]he surgery included the
surgeon’s considered medical judgment that it was necessary to remove an inflamed band, which
was later conclusiver identified as a damaged Fallopian tube . . .”); AR. 0010 [lilCF No. l9-l
{Sealed)] (asserting that the decision to cut and remove the “inflamed band” was an intentional
exercise ofhis medicaljudgment); AR 0143 [ECF No. l9-3 (Sealedﬂ (“As it turned out, the
pathologist later identiﬁed this inﬂamed band as the right Fallopian tube”); AR 0 | 58 ['ECF No.

4 AR 0140-46 [:ECF No. 19-3 (Sealed)] reproduecs several sections ofa civil complaint
that Dr. Doe tiled in 2010 against the National Practitioner Data Bank, Peconic Bay Medical

Center, named ofﬁcials at Peconic Ba Medical Center, and 10 unidentified individuals. See 
l —. Themctsanegedmme 

complaint were veriﬁed under oath by Dr. Doe. AR 0|46 [ECF No. l9-3 (Sealed)].

 

5 Throughout these proceedings Dr. Doe challenged the notion that cutting and removing

part ol‘the Fallopian tube was “inadvertent” because the decision to proceed with the surgery

was an intentional exercise ofhis medical judgment. AR 0010 [ECF No. 19-] (Sealed)]. His
position seems to be that it would not have mattered whether he knew he was cutting a Fallopian
tube or "an inﬂamed band” because the procedure was necessary in either case to gain access to

the appendix. Id. This is whistling past the graveyard. Although it may be the case that Dr. Doe
intended to cut and remove whatever was there regardless of what it was, as a matter of anatomy
and togic he did not know that what he was cutting was a Fallopian tube so he cannot be said to
have intentionally cut and removed a Fallopian tube as a distinct organ. It therefore is accurate

to say that his removal ofthe Fallopian tube was inadvertent in the sense that he did not know he _
was removing that specific organ. According to the Hospital, "the Hospital committees that |
reviewed this matter concluded that [D12 Doe] removed part of the patient’s fallopian tube 
because he did not recognize the anatomy” and “the anesthesiologist’s intervention prevented

[Dr. Doe] 'l'i‘om removing the patient’s ovary rather than her appendix.” AR 0283 [ECF N0. 32-]
(Sealed)].

 

interest.” Hettinga v. Uniten1 States, 677 F.3d 4?], 428—80 (DC Cir. 2012) (per curiam). “The
Supreme Court has held that the right to hold speciﬁc private employment and to follow a chosen
profession free from unreasonable governmental interference comes within the ‘liberty and
property’ concepts ofthe Fifth Amendment, ‘pi‘operty' being the employment. and ‘liberty’
being the chosen profession.” Fitzgeraid v. Hampton, 467 F.2d 755, 760-61 (DC. Cir. 1972).
The plaintiffs claim that the right to practice a chosen profession is a “fundamental right
under the United States Constitution.” First Am. Colnpi. 1f 127. If the plaintiffs are correct, the
Due Process Clause “provides heightened protection against government interference with
certain fundamental rights and liberty interests.” Washington v. Giucicsberg, 521 U.S. 702, 720
(1997). “Unless legislation infringes a fundamental right,” though, “judicial scrutiny under the
substantive due process doctrine is highlyr deferentiai.” Empresa Cnbana Exporiadom (is
Aiimenios y Prodiicios Varies v. United States, 638 F.3d 794, 800 (DC. Cir. 201 i). So the first
question for the Court is whether the right to practice a chosen profession is a fun dam entai right.
The plaintiffs cite several historical Supreme Court cases they believe establish that the
right to practice a profession is a “fundamental” right that is subject to strict scrutiny. The
plaintiffs ﬁrst seize on Justice Bradley’s concurring opinion in Butchers’ Union Co. v. Crescent
City Co, 1 I 1 [3.8. 746, 762 (1884), which states that “[t]hc right to follow any of the common
occupations of life is an inalienabie right.” But that case involved questions of the Eegality of
state constitutional and New Orieans ordinances that repealed the exclusive right to maintain
slaughterhouses pursuant to the legislature’s and municipality’s police powers and did not
involve a due process challenge. Justice Bradley‘s quoted comment was offered in the context of

analyzing the issue as one ot‘monopolization.

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In the second case cited by the plaintiffs, Dent v. West Virginia, |29 US. i 14 0889), the
Supreme Court upheld a requirement that a person be licensed to practice medicine. Although
the Supreme Court acknowledged that “[ii]t is undoubtedly the right of every citizen ot‘the
United States to follow any lawful calling, business, or profession he may choose,” 129 US. at
I21, the Supreme Court went on to state, signiﬁcantly with respect to the instant case, that “there
is no . . . arbitrary deprivation of such right where its exercise is not permitted because ot‘a
failure to comply with conditions imposed by the state for the protection of society,” id. at l22.
The Supreme Court in Dent stated that the right to pursue a profession cannot be deprived
“arbitrarily.” making clear that no heightened or strict scrutiny was applied. 12.9 U .S. at 12 l.

in the last case cited by the plaintith for their asseition that the right to pursue one’s
chosen profession is a “fundamental” right subject to strict scrutiny, Schwnre v. Board of
Examiners, 353 U.S. 232 (I 957), the question was whether the appellant, who was denied the
right to take the bar examination based on his prior membership in the Communist Party and
arrest record for union activities, was deprived of a license to practice law in violation of the Due
Process Clause. 353 U .S. at 238. On review, the Supreme Court emphasized that “[a] State
cannot exclude a person from the practice of an or from any other occupation in a manner or for
reasons that contravene the Due Process or Equal Protection Clause . . . .” Id. at 239. The
Supreme Court went on to note, however, that a State can require “high standards of
qualification" but “any qualiﬁcation must have a rational connection with the applicant‘s ﬁtness
or capacity to practice law” and no person can be excluded “when there is no basis for [a] ﬁnding

that he fails to meet these standards, or when their action is invidiously discriminatory.” Id.

 

 

None ofthese cases support the plaintiffs’ argument that the right to practice one’s
chosen profession is a fundamental right subject to strict scrutiny. To the contrary, the review
applied in these cases is properly characterized as rational basis review.

The Supreme Court has very narrowly construed the rights that qualify as “fundamental”
and stated that “in addition to the specific freedoms protected by the Bill ot‘Rights, the ‘liberty’
specially protected by the Due Process Clause includes the rights to marry; to have children; to I
direct the education and upbringing of one’s children; to marital privacy; to use contraception; to l :
bodily integrity, and to abortion.” Washington v. Glucksberg 52! U 702, 720 (I997)
(Rehnquist, 1.). in addition. the Supreme Court has “also assumed, and strongly suggested, that
the Due Process Clause protects the traditional right to refuse unwanted lifesaving medical
treatment.” Id. The right to pursue one’s chosen occupation, however, has never been
recognized as “fundamental” in federal jurisprudence, so the Court would be creating a new rule
of law if it chose to adopt a heightened standard of review for such cases, which would be
counter to the general principle that “the [Supreme] Court has always been reluctant to expand
the concept of substantive due process because guideposts for responsible decisionmaking in this
unchartered area are scarce and open-ended,” Collins v. City ofHarker Heights, 503 US. l 15,
125 (1992). “By extending constitutional protection to an asserted right or liberty interest, we, to
a great extent, place the matter outside the arena of public debate and legislative action.”
Washington, 521 US. at 720. The Supreme Court therefore cautions that the “utmost care" must
be exercised “whenever we are asked to break new ground in this ﬁeld.” Id. (quoting Collins,

503 US. at IZS).

 

 

 

Furthermore, at least one federal circuit has concluded that “[b]ecause [the Health Care
Quality Improvement Act] does not burden any fundamental right or draw distinctions based on
any suspect criteria, it is subject only to rational basis review.” Freit'ich v. {ﬁrper Chesapeake
Health, Inc, 313 F.3d 205, 2] 1 (4th Cir. 2002). Plus, numerous federal circuit courts have
concluded that the right to engage in a chosen profession is not a fundamental right that triggers
heightened scnltiny under the Equal Protection Clause,23 so the Court will resist the plaintiffs”
attempt to craft a new constitutional rule that declares the right to engage in a chosen profession
to be a fundamental right under the Due Process Clause.

It also is notable that, for more than a century, the Supreme Court has recognized that
“|:n:]o one has a right to practice medicine without having the necessary qualifications of learning
and skill,” Dent, l29 US. at 122. Although the Supreme Court has suggested that a person
cannot be excluded from an occupation like medicine in a manner or for reasons that contravene
the Due Process Clause, it is permissible for the government to “require high standards of
qualiﬁcation” for a profession if the standards have a rational connection to the person’s ﬁtness
or capacity to practice the profession. Schware, 353 US. 232 at 239. if such standards “are.
appropriate to the calling or profession, and attainable by reasonable study or application, no

objection to their validity can be raised because of their stringency or difﬁculty.” Dent, 129 U.S.
33 Lapert v. California, 761 F.2d 1325, 1327 n.2 (9th Cir. 1985) (“There is no basis in law
for the argument that the right to pursue one’s chosen profession is a fundamental right for the
purpose of invoking strict scrutiny under the Equal Protection Clause”); Whittie v. United States,
7 F.3d 1259, 1262 (6th Cir. I993) (same); Hawkins v. Moss, 503 F.2d 1 17], I 177 n.1 1 (4th Cir.
197'4) (declining to apply strict scrutiny analysis to the right to pursue a chosen profession);
Green v. Waterford Bd. ofﬂine, 473 F.2d 629, 632 (2d Cir. 1973) (applying rational basis
review despite the plaintiff‘s asseition that the case involved the "timdamentaP right to work in
one’s chosen profession).

-54-

 

 

 

at 122. So there is a long histOIy ofjurispmdence that recognizes that the right to practice
medicine is qualiﬁed by standards ofskifl. The National Practitioner Data Bank serves to ensure
that peer review actions that call into question whether an individual physician meets those
standards of skill are disclosed to health care entities that are considering extending clinical
priviteges to that physician.

As the entirety ofthis discussion demonstrates, there is no legal basis for the plaintiffs’
assertion that the right to practice a chosen profession is a “fundamental” right. The fact that a
right is acknowledged to be a liberty covered by the Due Process Clause does not automatically
render that right “fundamental” such that any statutory regulation of that right must be subjected

to the highest constitutional scrutiny.

3. Whether the Health Care Quality improvement Act is rationally related to a legitimate
government interest and therefore facially valid

Because the Health Care Quality Improvement Act does not infringe on a fundamental
right. “judicial scrutiny under the substantive due process doctrine is highly deferential.”
Empresa Cabana Expomdora dc Alimemo y Prodactos Varios, 638 F.3d at 800. According to
the highly det‘erential standard ofreview, the Court “ask[s] only whether the legislation is
rationally rotated to a legitimate government interest.” Id. Pursuant to this standard, the
plaintiffs “ha[ve] a claim only if [they] can show that there is no rational relationship between
[the Health Care Quality Improvement Act] and some legitimate governmental purpose.”
Gordon v. Holder, 7.21 F.3d 638, 656 (DC. Cir. 2013). As the DC. Circuit has explained:

This burden “to negative every conceivable basis which might support” the law is

especially difﬁcult to meet. Rational basis review “is not a license for courts to

judge the wisdom, fairness, or logic of legislative choices." Courts must uphold

legislation “[e]ven if the classiﬁcation involved . . . is to some extent both
underinclusive and overinclusive . . . ." In the ordinary case, “a law will be

-55-

 

 

 

sustained if it can be said to advance a legitimate government interest, even ifthe
law seems unwise or works to the disadvantage ofa particular group, or if the
rationale for it seems tenuous.” g

Id. (internal citations omitted). Additionally, “[i]t is irrelevant whether the reasons given
actually motivated the legislature; rather, the question is whether some rational basis exists upon
which the legislature could have based the challenged law." Goodpaster v. Indianapofis, 736
F.3d 1060, 10?! (7th Cir. 2013).

In Freilich v. Upper Chesapeake Heac'th, Leo, the Fourth Circuit applied rational-basis
review to aphysician’s claim that the Health Care Quaiity Improvement Act violated the Fifth
Amendment because it authorized and encouraged a hospital to act irresponsibly in matters of _
credentialing, reappointment, and wrongful denial of privileges. 3l3 F.3d at 2] l . Passing on the

question of whether the Act was rationally related to a legitimate governmental purpose, the 
Fourth Circuit determined that: ,

The legitimacy of Congress’s purpose in enacting the l—lCQlA is beyond question.
Prior to enacting the HCQIA, Congress found that “[t]he increasing occurrence of
medical malpractice and the need to improve the quality of medical care  [had]
become nationwide problems,” especially in light of “the ability of incompetent 
physicians to move from State to State without disclosure or discovery of the 
physician's previous damaging or incompetent performance.” 42 U.S.C. § l l 10!.
The problem, however, could be remedied through effective professional peer
review combined with a national reporting system that made information about I
adverse professional actions against physicians more widely available. However,
Congress also believed that "[t]he threat of private money damage liability under
Federal laws, including treble damage liability under Federal antitrust law,
unreasonably discourage[d] physicians from participating in effective professional !
peer review.” Id. Congress therefore enacted the l-ICQIA in order to “facilitate the 
frank exchange of information among professionals conducting peer review 
inquiries without the fear of reprisals in civil lawsuits. The statute attempts to 
balance the chilling effect of Eitigation on peer review with concerns for
protecting physicians improperly subjected to disciplinaly action." Bryan v.
James E. Holmes Regiona! Med. Can, 33 F.3d l318, 1322 (l lth Cir.l994).

 

 

 

 

 

1d. at 21 1—12. For these same reasons, which are clearly Supported by the Congressional ﬁndings
that preamble the Health Care Quality Improvement Act, 42 U.S.C. § 1 l 101, the Court finds that
the statute is rationally related to a legitimate government interest.

In addition to challenging the statute generally, the plaintiffs also assert that an NPDB
Guidebook interpretation violates substantive due process. The questioned interpretation states
that “the practitioner need not be aware of an ongoing investigation at the time ofthe resignation
in order for the entity to report the resignation to the NPDB, since many investigations start
without any formal allegation being made against the practitioner.” NPDB GUIDEBOOK F—B.
The NPDB Guidebook also states that “[t] he reason the practitioner gives for leaving an entity
while under investigation is irrelevant to reportability ofthe resignation.” Id. According to the
defendants, requiring knowledge ot'an investigation as a prerequisite to reporting would
“impermissiny widen the scope of Secretarial Review beyond what was authorized by
Congress” and “requiring physician knowledge of an investigation runs counter to the central
purposes of the NPDB and would create a large reporting loophole.” Mem. In Support ofDefs.‘
Mot. to Dismiss or, Alternatively, for Summ. J. I? [ECF No. 33 (Sealed)]. The defendants also
note that the agency is not equipped to conduct the type of investigation that would be neCessary
to determine a physician’s knowledge about an investigation and such an investigation would
unduly burden the agency, be difﬁcult to prove, and would be contrary to the goals and
objectives of the statute. Id. at 1748.

The Court ﬁnds the NPDB Guidebook interpretation to be rationally related to the Health
Care Quality Improvement Act’s goals and objectives, which the Court has already determined

serves a legitimate government interest. As already discussed, supra part A(2), the statute’s

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language, structure and purpose evinces a clear policy that favors strict reporting, there are valid

considerations that substantiate that policy, and the NPDB Guidebook interpretation is consistent

with that policy and with the overall statutory scheme.

4. Whether the Health Care Quality Improvement Act violates substantive due process
by subjecting Dr. Doe to a so—cailed “stigma-plus"

In addition to the foregoing claims, the plaintiffs’ second cause of action also advances a
claim that the defendants applied the Health Care Quality Improvement Act to Dr. Doe in such a
way that it “effects, Without due process, a tangible change in plaintiff physician’s and similarly
reported physicians’ status, disquaiifying and foreciosing them from signiﬁcant employment
opportunities, impairing their ability to obtain clinical privileges, and imposes a stigma-plus
disability that foreclose-s their freedom to take advantage ofother employment opportunities.”
First Am. Compl. 1| 128. To support this cause of action the plaintiffs rely on a line of Supreme
Court cases that establish the so-called “stigm a-plus” theory, namely Wisconsin v.
Constantinean, 400 US. 433, 437 ([971), Board ofRegents ofState Colleges v. Roth, 408 US.
564 (1972), Paul v. Davis, 424 U.S. 693 (19%), and Siegert v. Gilley, 500 U.S. 226 (I991). Pls.‘
Mem. In Opp’n to Defs.’ Mot. to Dismiss 12-15 [ECF No. 43]. The stigma—plus theory stands
for the proposition that certain govermnent actions (stigmas) that cause a change in the plaintiffs‘
status under the iaw (plus) and preclude a plaintiff from being able to secure future employment
opportunities may be actionable under the Fifth Amendment. The DC. Circuit has interpreted
this line of cases to hold that “a government action that potentially constrains future employment

opportunities must involve a tangible change in status to be actionable under the due process

clause.” Kortseva v. Dep ’t ofStote, 37 F.3d 1524, 1527 (DC. Cir. 1994). “it‘a government

 

 

action does constitute an adjudication of status under law, the underlying factual and legal

determinations are subject to due process protections.” Id.

To be clear, the DC. Circuit recognizes two categories of“plus” claims that emanate

from the Supreme Court‘s decision in Roth. O’Donnell v. Barry, 148 F.3d l I26, I 139-40 (DC.
Cir. 1998). The first is a “reputation-plus” claim, “in which the plaintiff points to the

conjunction ofofﬁcial defamation and adverse employment action,” and the second is a “stigma- 
plus” claim, which “turns on the combination of an adverse employment action and a stigma or
other disability that foreclosed [the plaintiff‘s] freedom to take advantage of other employment
Opportunities." 1d. at l 140 (internal quotation marks omitted). Although it is not clear whether

the plaintith are asserting the reputation-plus theory, the stigma-plus category, or both, the Court

 

need not concern itself‘with this question because the plaintiff is unable to prevail under either
category.

To succeed on a reputation-plus claim a plaintiff must demonstrate a defamation “that is
“accompanied by a discharge from government employment or at least a demotion in rank and

pay.” Id. (quoting Mosrr'e v. Barry, 718 F.2d I l5 1 , l 16] (DC. Cir. 1998)). “Although the

 

conceptual basis for reputation—plus claims is not fully clear, it presumably rests on the fact that
official criticism will carry much more weight if the person criticized is at the same time 

demoted or fired.” Id. In this case, Dr. Doe was never employed by the government, and the

Adverse Action Report did not accompany Dr. Doe’s termination of his employment with the
H05pital, so the essential elements of a reputation-plus cause of action are lacking.
Under the stigma-plus theory, the plaintiffs must demonstrate “the combination of an

adverse employment action and ‘a stigma or other disability that foreclosed [the plaintiff’s]

-59_

 

 

freed om to take advantage of other employment opportunities.m Id. (quoting Roth, 408 U.S. at
573). The stigma-plus theory “does not depend on official speech, but on a continuing stigma or
disability arising from ofﬁcial action.” Id.

“As the [Supreme] Court made clear in Siegert v. Gilley, 500 US. 226, I 11 S. Ct. 1789,
l 14 L.Ed.2d 2?? (1991). a showing ofreputationai harm alone cannot sufﬁce to demonstrate that
a liberty interest has been infringed” for the purpose ofcstablishing a stigma—plus cause of
action. 1d. at 1 l4]. “Thus, a plaintiff who . . . seeks to make out a claim ofinterl’erence with the
right to follow a chosen trade or profession that is based exclusively on reputational harm must
show that the harm occurred in conjunction with, or flowed from, some tangible change in
status.” 1d. The DC. Circuit has “described two ways that a litigant alleging government
interference with his future employment prospects may demonstrate the tangible change in status

required to prove constitutional injury[:]”

In Kartseva v. Department ofState, 37 F.3d 1524 (D.C.Cir.l994), we held that “if
[the government's] action formally or automatically excludes [the plaintiff] from
work on some category of future [government] contracts or from other
government employment opportunities, that action . . . implicates a iiherty
interest.” Id. at 1528. Alternatively, the plaintiff may demonstrate that the
government’s action precludes him—whether formally or informallymﬁ'om such
a broad range of opportunities that it “interferes with [his] constitutionally
protected ‘right to follow a chosen trade or profession,” In other words,
government action precluding a litigant from future employment opportunities
will infringe upon his constitutionally protected liberty interests only when that
preclusion is either sufﬁciently format or sufﬁciently broad.

Id. (internai citation omitted). The plaintiffs appear to be proceeding under both the “formal or
automatic exclusion” and the “broad range preclusion” theories. Pls.’ Mem. In Opp’n to Defs.’

Mot. to Dismiss lS—lﬁ [ECF No. 45 (Sealed)].

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l9-4 (Sealed)] (“Pathological analysis of the inﬂamed band indicated that it was the right
Fallopian tube”); AR 0169 [ECF No. 19-4 (Sealed)] (stating that he cut “an inﬂamed band”):
AR 0180 [ECF No. 19-4 (Sealed)] (referring to the cut organ as an “adherence”); AR 0219 [ECF
No. 19—5 (Sealedﬂ (stating that the “band was later identiﬁed as a portion ofthe Fallopian
tube”); Pls.’ Statement of Undisputed Material Facts Pursuant to Local R. 7(h) 11 4 [ECF No. 45—
2 (Sealed)] (stating that an “inflamed band . . . was later conclusively identified as a severely
inﬂamed Fallopian tube").

The following Monday, Dr. Doe met with three Hospital officials to discuss the surgical
incident,6 which the Hospital claims was reported by both the anesthesiologist and a nurse who
was present during the surgery.1r Dr, Doe claims that, during that meeting, the Vice President for
Medical Affairs told Dr. Doe that he was being fired. AR 0143 atil 87 [ECF No. 19-3 (Sealed)]
(stating that the Vice President of Medical Affairs “told the plaintiffthat he was fired”); AR
0203 [ECF No. 19-5 (Sealed)] (stating that Dr. Doe “called me a few hours later on October 5th
and told me that he hadjust met with [the Vice president of Medial Affairs} and he had been
fired from his position at the hospital”). The hospital claims that the officials “informed [D11
Doe] that he could not exercise his surgical privileges pending further investigation ofthe care
he provided to [the] patient.” AR 0084 [ECF No. [9-2 (Sealed)]. Regardless of who said what,

it is undisputed that, at some point that day, the Vice President of Medical Affairs told Dr. Doe

5 AR 00143 [ECF No. 19-3 (Sealed)] (stating that Dr. Doe met with the Vice President of
Medical Affairs, the Acting ChiefcfSurgery, and the President of the Medical Staff); AR 0106
[ECF No. 19—3 (Sealed)] (memorializing the meeting‘s occurrence).

l AR 0082 [ECF No. 19-2 (Sealed)] (stating that the “surgical error” was “reported on
Monday morning, October 5, 2009 . . . by the anesthesiologist who was present during the
procedure” and “[t]he operating room nurse also filed an incident report”).

-7-

 

The stigma alleged in the plaintiffs‘ First Amended Complaint appears to be that an
Adverse Action Report citing a resignation while under investigation “brands resigning

physicians as ‘incompeteut’ and makes them unemployable.” First Am. Compl. W 133 (quote),
140. in this Circuit, however, the publication of reasons for an employment termination that
involve unsatisfactorij!) performance “does not carry with it the sort ol’opprobrium su fﬁcient
to constitute a deprivation of liberty.” Harrison v. Bowen, SIS F.2d 1505, lSIS (DC. Cir.
l987). According to the DC. Circuit:
[W]e must discriminate between a dismissal “for dishonesty, for having
committed a serious felony, for manifest racism, for serious mental ilincss, or for
lack of ‘intellectual ability, as distinguished from [ ] performance . . . .”" The
former characteristics imply an inherent or at least a persistent personal condition,
which both the general public and a potential future employer are likely to want to
avoid. Inadequate job performance, in contrast, suggests a situational rather than

an intrinsic difﬁculty; as part of one’s biography it invites inquiry, not
prejudgment.

Id. Thus, “a plaintiff is not deprived of his liberty interest when the employer has alleged merely
improper or inadequate performance, incompetence, neglect of duty or malfeasance.” Ludwig v.
Bd. omestees ofFerris State Univ., 123 F.3d 404, 410 (6th Cir. 1997). The Court sees no
fundamental difference between a governmental publication that states the reasons for an
employment termination and the defendants’ acceptance, maintenance and disclosure of the
Adverse Action Report in this case.

As a general proposition, an Adverse Action Report is intended to document a situational
event related tojob performance that “invites inquiry, not prejudgment” by the hospitals to
which the reports are disclosed. Speciﬁc to the case at hand, the Adverse Action Report
documents matters related exclusively to Dr. Doe‘sjob performance, namely a resignation while

under an investigation related to competence or professional conduct in the performance of the

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surgery during which a patient’s Fallopian tube was inadvertently removed. An Adverse Action
Report that documents a resignation while under investigation related to job performance frankly
is less onerous than one that documents a dismissal. It therefore follows that ifa publication of a
dismissal as a result ofjob performance does not result in a deprivation of liberty then it surely is
the case that a publication ofa resignation while merely under investigation forjob performance
likewise does not result in a deprivation ofliberty. The plaintiffs have, therefore, failed to
establish stigma via an injury to a constitutionally-proteeted interest. Hutchinson v. C.I.A., 393
F.3d 226, 23l (DC. Cir. 2005).

Even if, contrary to Circuit law, Dr. Doe could establish that an Adverse Action Report in
the National Practitioner Data Bank qualiﬁed as a stigma for the purpose ofthe substantive due
process analysis, the fact of the matter is that the collection, retention and dissemination of an
Adverse Action Report does not in any way amount to a government act that formally or
automatically excludes the plaintiﬁ's from future employment opportunities. Like the letter at
issue in Siegert, 500 US. at 234, the Adverse Action Report was not collected and retained by
the government incident to any change in legal status. Dr. Doe resigned from the Hospital before
the Adverse Action Report was collected and retained by the government, and the report, in and
of itself, neither formally nor automatically excludes Dr. Doe from any employment.

Indeed, neither the Health Care Quality improvement Act nor its implementing
regulations mandate that health care entities do anything with the information contained in an
Adverse Action Report other than apprise themselves of a physician’s prior disciplinary history
while conducting a credentials review. This point merits emphasis. As the NPDB Guidebook

explains:

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l
l
l

 

NPDB information is an important supplement to a comprehensive and careful
review of a practitioner’s professional credentials. The NPDB is intended to
augment, not replace, traditional forms of credentials review. As a nationwide
flagging system, it provides another resource to assist State licensing boards,
hospitals, and other health care entities in conducting extensive, independent
investigations of the qualiﬁcations of the health care practitioner they seek to
license or hire, or to whom they wish to grant clinical privileges.

*$*

The information in the NPDB should serve only to alert State licensing authorities
and health care entities that there may be a probiem with a particular
practitioner’s professional competence or conduct. NPDB information should be
considered together with other relevant data in evaluating a practitioner’s
credentials (e.g._. evidence of current competence through continuous quality :
improvement studies, peer recommendations, health status, veriﬁcation oftraining
and experience, and relationships with patients and colleagues).

NPDB GUIIZMEBOOK A-3. Thus, the information in the National Practitioner Data Bank is

intended only to add to a health care entities’ “extensive, independent investigation[]” of the

qualiﬁcations of a physician they intend to hire. Id. As stated, the reported information is not
intended to “replace . . . traditional forms of credentials review” or otherwise be treated by
hospitals as an automatic employment bar. Id. “[T]he ofﬁcial purpose ofthe report is to disclose
information, not to reprimand." Roaming v. Dep ’t of Veterans A gram, 725 F.3d 927, 932 (8th
Cir. 20l3).

Assuming, again, that the piaintiffs could establish that an Adverse Action Report in the

Nationai Practitioner Data Bank causes a cognizable stigma, which the Court has concluded they

 

cannot, the only theory that remains available to the plaintiffs provides relief if“thc agency took
informal action against [01: Doc] so broad that it infringed upon his right to follow a chosen
trade or profession[,]” Taylor, 56 F.3d at 1506 (internal quotation marks omitted). “The standard

[the plaintiffs] must meet in this regard—wshowing that the government has seriously affected, if

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not destroyed, [the plaintiffs’} ability to obtain employment in [his] field—is high: the
[defendant’s] misconduct must substantially reduce the value of his human capital, as it would if
his skills were highly specialized and rendered largely unmarketable as a result ofthe agency’s
acts.” Id. at 1506-07.

Dr. Doe’s skills are undoubtedly specialized and the plaintiffs’ First Amended Complaint
generally avers that his skills have been rendered largely unmarkctable as a result of the agency’s
disclosure of the Adverse Action Report. First Am. Comp]. 1m 99-100, l28-129, I33, 139, [4]-
148, 15l-l55. And the agency’s disclosure ofAdverse Action Reports contained in the National
Practitioner Data Bank could be deemed to be broad informal action because all health care
entities considering extending clinical privileges to a physician are required to query the Data
Bank, 42 U.S.C. § l I 135(a).

But the plaintiffs cannot prevail on the broad—action theory because the alleged hami u an
inability to obtain employment — is not the result of a “tangible change of status vis-a-vis the 
government.” Doe v. U. S. Dep’t ofJustice, 7'53 F.2d 1092, | 108-09 (DC. Cir. I985). By way
of relevant example, the email that Dr. Doe received from an ofﬁcial at Reston Hospital Center
states:

I am sorry to have to tell you that we won’t be able to meet with you on June 7m. i

A report from the National Practitioner Data Bank shows a “Voluntary Surrender 

of Clinical Privilege(s), While Under, or to Avoid, Investigation Relating to

Professional Competence or Conduct” for an event that occurred in October,

2009. A resignation under these circumstances would preclude your being
credentialed at Reston Hospital Center.

AR 001'? [ECF No. l9-I (Sealed)]. As expressed, the reason the ofﬁcial canceled the meeting
with Dr. Doe was because the “circumstances” of his resignation “would preclude your being

credentialed at Reston Hospital Center.” Id. It was the reported conduct -- not- the mere

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existence of the report m that prevented Dr. Doe from being employed by Reston Hospital
Center. An email Dr. Doe received in 2013 from the Manager of Medical Staff Services at North
Fulton Hospital in Georgia similarly states that “[r]elinquishment of privileges while under
investigation, whether voluntary or involuntary, does not meet North Fulton Hospital’s medical
staff criteria.” Pls.’ Reply Mem. In Support ofCross-Mot. for Surnm. J. Ex. A [ECF No. 56
(Sealcdﬂ. Notably, the Manager at North Fulton Hospital further stated that “I understand your
circumstances so ifyou can provide a copy ofthe m letter from the University of
Tennessee accepting you into the felIOWShip program and your certificate of completion, it can
be taken into re-consideration and an exception may be made.” Id. (emphasis in original).

As these two examples demOnstrate, although the plaintiffs characterize the existence of
the Adverse Action Report as being the basis for Dr. Doe’s employment difﬁculties and,
therefore, the change in his status (employable to unt-zrnployable),24 the evidence in the record
reﬂects that it is the hospitals’ reactions to the reported conduct (resignation while being
investigated) that has caused the change in his status. The harm in this case, therefore, is the
result of private hospitals responding to information contained in the National Practitioner Data

Bank and not the result of government action that changed Dr. Doe’s status.23 “The reaction of

2“ Pls.’ Opp’n to Deifs.’ Mot. to Dismiss 15 n.16 [ECF No. 45 (Sealed)] (stating that
“hospitals have told Dr. Doe expressly that his employment appiications were rejected because

of the AAR maintained and released by the Government . . .’)

25 For this reason the plaintitfs’ citation to McGinnis v. District QfColambia, W F. Supp.

3d H#_, 2014 WL 4243542, at *6 (D.D.C. 20l4), is inappositc. Pls.’ Mom. of Law in Support of

Mot. for Preliminary Injunction 19 [ECF No. 62-4]. in McGr'nm‘s, the plaintiﬁ'was terminated

from government employment and the court’s analysis was premised on the principle that “[t}he

stigma theory “provides a remedy where the terminating employer imposes upon the discharged

employee a stigma or other disability that foreclosed the plaintiffs freedom to take advantage of
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others to unfavorable publicity about a person is not . . . a change in legal status imposed by the
government ofﬁcials who generated the publicity.” Mosrie, 718 F.2d at l 162. “When a
speciﬁed harm is predicated on voluntary third~party behavior, it cannot serve as a 'plus’ factor”
to establish a stigma-plus substantive due process claim." URI Student Senate v. ibwn of
Narragansett, 631 F.3d I, I l (Ist Cir. 20] I). The hospitals’ decisions to hire or not hire Dr. Doe
are totally independent ofthe governmental act of collecting, maintaining and disclosing
Adverse Action Reports contained in the National Practitioner Data Bank. Even though
hospitals are required to query the National Practitioner Data Bank, 42 U.S.C. § I I [35(a), what
'they choose to do with that information is entirely a product of their own free will. “Even if
catalyzed by government action. harms at the hands of [third] parties cannot serve as ‘pius’

factors . . . .” URI Student Senate, 70? F. Supp. 2d 282, 298 (D.R.I. 2010).

5. Whether the Health Care Quality Improvement Act deprives Dr. Doe of property
without due-process procedural protections

The plaintiffs allege that the defendants3 actions violate procedural due process by failing
to provide an opportunity to challenge the accuracy of an Adverse Action Report’s facts before
or aﬁer it has been accepted, failing to provide prior-notice to a physician before a report is
submitted, and failing to make a determination about whether the Hospital’s due process was
adequate. First Am. Compl. 111] 129, I30, I34, 135, I36, 159, I60. A two-stage analysis applies
to allegations that the government has deprived a person of life, liberty or property without due

process of law. Ingraham v. Wright, 430 US. 651, 672 (I977). The Court “must first ask

 

other employment opportunities.” Id. (emphasis added) (quoting McCormick v. District of
Columbia, 752 F.3d 980, 988 (D.C. Cir. 2014).

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whether the asserted individual interests are encompassed within the [Fifth Amendment‘size
protection of ‘life, liberty or property’; if protected interests are implicated, [the Court] then must
decide what procedures constitute “due process 0flaw.”’ Id. “A cognizable liberty or property
interest is essential because process is not an end in itself. lts constitutional purpose is to protect
a substantive interest to which the individual has a legitimate claim of entitlement.” Roberts v.
United States, 74] F.3d [52, 16] (DC. Cir. 2014) (internal quotation marks, citations and
formatting omitted).

Although the plaintiffs”, First Amended Complaint repeatedly refers to “constitutionally-
protected rights,” the only rights claimed in the document are an asserted liberty and property
interest in the right to practice one’s chosen profession, see First Am. Compl. 1H] 12?, I28, 139,
M9, l56. As far as the liberty interest in the right to practice one’s chosen profession is
concerned, “[o]ne simply cannot have been denied his liberty to pursue a particular occupation
when he admittedly continues to hold ajob . . . in that very occupation.” Aboarian v. McDonald,
6| 7’ F.3d 93 l, 942 (7th Cir. 2010); accord Roberts, 74] F.3d at l62 (ﬁnding that liberty interests
in employment and the freedom to practice a chosen profession “are not implicated" when the
plaintiff remains employed in that profession). Whereas the piaintiffs claimed at the outset of the
litigation that Dr. Doe was unable to secure employment as a physician anywhere in the United
States because of the Adverse Action Report, First Am. Compl. 1| l54, he is now employed at a
hospital in the United States and has been so employed since early 2013. Pls.’ Opp’n to Defs.’

Mot. to Dismiss 18 n.19 [EC]: No. 45 (Sealed)]. Moreover, at least one potential employer.

2‘3 The quotation states “Fourteenth Amendment" and the DC. Circuit has stated that “[t]he
procedural due process protections under the Fifth Amendment and Fourteenth Amendments are

the same . . . .” English v. District ofCoIttmbia, 717 F.3d 968, 972 (DC Cir. 20l3).

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North Fulton Hospital, discussed supra part 4, indicated a willingness to reconsider whether Dr.
Doe’s resignation while under investigation precluded his ability to obtain privileges ifhe
submitted additional speciﬁed documentation, Pls.’ Reply Mem. In Support of Cross-Mot. for
Summ. J. Ex. A [ECF No. 56 (Sealed)].

More to the point, though, and as already explained, the plaintiffs cannot show that Dr.
Doc’s asserted liberty interest was deprived by government action. Dr. Doe’s inability to obtain
hospital privileges is the result of private, third-party hospitals” responses to the Adverse Action
Report. It is the Court’s view that hospitals are treating Adverse Action Reports inconsistently
with the spirit ofthe Health Care Quality Improvement Act ifthey are deeming stlch a report to
be an automatic bar to employment in lieu of conducting the “extensive, independent
investigation{]" of‘a physician’s qualiﬁcations that is anticipated by the policies underlying the
National Practitioner Data Bank, see NPDB GUIDEBOOK A-3. Setting this point aside, though,
the fact ofthe matter is that the defendants’ collection, retention and disclosure ofAdverse
Action Reports, particularly when hospitals are not required in any way at all to act on those
reports, simply does not constitute a federal action that prevents Dr. Doe from pursuing his
profession. As the Supreme Court has made clear, “‘[t]he most familiar ofﬁce of [the Due
Process] Clause is to provide a guarantee of fair procedure in connection with any deprivation of
life, liberty, or property by a State.” Collins, 503 US. at 125 (emphasis added). An Adverse
Action Report does not deprive Dr. Doe of employment. Private hospitals are depriving Dr. Doe
ofemployment by using the reports in a way that is contrary to what was contemplated by
Congress. “Unless there has been a ‘deprivation‘ by ‘state action,’ the question of what process

is required and whether any provided could be adequate in the particular factual context is

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irrelevant.” Stone v. University QfMaryiand Medics! System Corp, 855 F.2d [67, I72 (4th Cir.
l988). "This absence of state action is fatal to [the plaintiffs’] constitutional claim.” Shirvinski
v. US. Coast Guard, 673 F.3d 308, 317 (4th Cir. 2012).

Regarding the plaintiffs claim to a preperty interest in the right to practice a chosen
profession, “[p]ropelty interests are not created by the Constitution; rather, “they are created and
their dimensions are deﬁned by existing rules or understandings that stem from an independent
source such as state law-rules or understandings that secure celtain benefits and that support
claims of entitlement to those benefits.” Ciambrieiio v. County quassan, 292 F.3d 307, 3 | 3
(2d Cir. 2002) (quoting Roth, 408 US. at 57?). Furthermore, “[t]o have a property interest in a
beneﬁt, a person clearly must new: more than an abstract need or desire for it . . . [He must have
a legitimate claim of entitlement to it.” Roth, 408 US. at 57?. Because the plaintiffs omitted to
identify any an, rule or understanding that secures beneﬁts or privileges to Dr. Doe and entities
him to those beneﬁts to a degree sufficient to constitute a property right protected by the
Constitution, the Court ﬁnds that no pronerty right has been adequately pled in the First
Amended Complaint. The plaintiffs’ First Amended Complaint makes a passing reference to
property rights in a professional license to practice medicine and to have Clinical and hospital
staff privileges, First Am. Compl. W 128, 146, but the plaintiffs never allege that Dr. Doe’s
license has been affected (versus his ability to use his license) or the basis for asserting a
property right in clinical and hospital staff privileges that he surrendered by resigning. Again,
too, any harm to Dr. Doe’s license or clinical privileges is the result of actions taken by private
hospitals in response to Dr. Doe’s resignation while under investigation and not the product of

the government’s collection, retention and disclosure of Adverse Action Reports.

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Even ifthe plaintiffs could make out a claim that a liberty or property right has been
implicated, the Cowt ﬁnds that the Health Care Quality lmprOVernent Act and the dispute
procedures provided by the agency’s regulations afford adequate due process for the ptaintith to
challenge an Adverse Action Report. “Beyond the basic requirements of notice and an
opportunity to be heard, the precise requirements ot‘procedural due process are ﬂexible.”
English v. District ofColumbin, 7!? F.3d 968, 9'72 (DC. Cir. 2013). When a plaintit‘fcontests a
stigmatizing report about the circumstances of an employee‘s termination, the Supreme Court
has noted that the due process remedy “is ‘an opportunity to refute the charge.” Codd v. Vei'ger,
429 US. 624, 627 (1977) (per curiam) (quoting Roth, 408 US. at 573).

As a preliminary point, the Court is impelled to emphasize that Congress intended that
procedural due process regarding the merits ol’a hospital’s actions involving a physician remain
the purview of the professional peer review process conducted by health care entities and
hospitals. 42 U.S.C. §§ lil ll, 1 l l 12. That this is so is made clear by the structure of the statute
and the plaintiffs’ own citation to the legislative history of the Health Care Quality improvement
Act. See Pls.’ Mem. In Opp‘n to Det‘s." Mot. to Dismiss 39 [ECF No. 45 (Sealed)]. The
plaintiffs quote a House of Representatives Report and argue that “Congress intended that the
HCQlA allow “physicians [to] receive fair and unbiased review to protect their reputations and
medical practices.m Id. (quoting HR. Rep. 99-903 at *1 l (1986)). This is true; however, the
quoted language is found in the section discussing the Committee on Energy and Commerce‘s
views about what ultimately was codiﬁed as 42 U.S.C. § 1 l 1 l2, setting forth standards for

professional review actions. So the Committee’s comments about ensuring fair and unbiased

review relates to the procedures the statute establishes to encourage hospitals to provide

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that the Hospital was required to report the surgical incident to the New York State Department
of Health and that such a report was necessary “whenever an organ other than the organ operated
is injured.” AR 016] [ECF No. 19-4 (Sealed)]; AR 0203 [ECF No. 19-5 (Sealed)]. The hospital
did, in fact, file a report that day via the New York Patient Occurrence Reporting and Tracking
System (“NYP0RTS”)S and stated in the report that “[t]he physician has been piaeed on
suspension pending completion ofthe investigation and the famiiy notiﬁed." AR 0!08 [ECF No.
[9-3 (Sealed)]. The Hospital also submitted a Sentinel Event Self—Report to The Joint
Commission9 that contained the same statement that “[t]he physician has been placed on
suspension pending completion ofthe investigation and the family notified.” AR 0 l 09 [ECF No.
I9~3 (Sealed)].

Later that same day, Dr. [Joe executed a letter voluntarily suspending his surgical
privileges and stating “I will not operate at Peconic Bay Medical Center for the next two Weeks
effective October 5, 2009 through October 19, 2009, or until mutually agreed upon. I will
however, finish the follow-up care on patients that I am currently involved with on the clinical
ﬂoors without performing any surgery.” AR 0] it} [ECF No. 19—3 (Sealed)]. Dr. Doe claims that
this letter was prompted by his discovery “that he was going to have to return to the University
of Tennessee to complete another year of cardiothoracic surgery fellowship in preparation for his

Board exam.” First Am. Compl.‘1{53.

8 AR 0083 [ECF No. 19-2 (Sealed)] (identifying the acronym).
9 The Joint Commission is a not-for-proﬁt organization that is “the nation’s oldest and

largest standards-setting and accrediting body in health care.” About The Joint Commissiorz,
http:fr'wwaointcommission.orgi'about_usfabout_the_joint_com missionﬁmainaspx (last visited
Aprii I9, 2015).

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procedural due process when engaging in professional review actions. Dr. Doe was unable to
avail himselfof those due process protections because he resigned.

Aside from the procedural due process the Health Care Quality Improvement Act
promotes during professional peer review, the Department of Health and Human Services
regulations. in conjunction with the NI’DB Guidebook, also set forth three procedures to refute
an Adverse Action Report by disputing its accuracy. First, a physician must dispute the report
with the hospital. To do this. the physician must request that the Secretary enter the report into
“disputed status,” which triggers the agency to notify queriers, the reporting entity and the
physician that the report has been disputed. 45 CPR. § 60.21(b)(1)—(2); NPDB GUIDEBOOK F-l.
The physician must then “attempt to enter into discussion with the reporting entity to resolve the
dispute.” 45 CFR. § 60.21(b)(3).

Second, it‘the hospitai does not revise the reported information or respond within 60
days, the physician may request that the Secretary review the report for accuracy. 45 CPR.
§ 60.2](b)(3). To commence Secretarial review, the physician must submit a request asking the
Secretary to review the report for accuracy and include "appropriate materials that support the
[physician’s] position.” 45 C.F.R. § 60.2](c)(l). “The Secretary will only review the accuracy
of the reported information, and will not consider the merits or appropriateness of the action or
the due process that the subject received.” Id. The Secretary will then take various actions with
respect to the Adverse Action Report depending on whether she concludes that the information is
accurate and reportabte, inaccurate, the issues are outside the scope of the agency’s review, or

the adverse acti0n was not reportable. Id.

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A third proeedure permits a physician to add a statement to the Adverse Action Report.
45 CPR. § 60.2](b)(3). A physician “may add a statement to the report at any time.” NPDB
GUIDEBOOK F— l. The statement may be provided directly by the physician or via a designated
representative. 45 C.F.R. § 60.2](b)(3).

The plaintiffs in this case took advantage ofall three dispute procedures. Dr. Doe
requested that the Adverse Action Report be placed into disputed status, attempted to resolve the
dispute with the Hospital, and then requested that the Secretary review the report for accuracy.
Dr. Doe was represented by legal counsel during the Secretarial review process, which was
conducted as an adversariat proceeding during which both parties submitted, via counsei, lengthy
arguments to support their respective positions and respond to the other party’s contentions.
Both parties also submitted documentary evidence to support their respective arguments. The
record reﬂects that the Secretary reviewed “the information available and the record presented to
this office” to arrive at the conclusions stated in the Secretarial Review Decision. AR 0254
[ECF No. 19-6 (Sealed)]. The Secretary also provided Dr. Doe a second opportunity to submit a
statement to append to the Adverse Action Report and replace his prior statement. AR 0258
[ECF No. [9-6 (Sealed'ﬂ. The Adverse Action Report now reflects both the Hospital‘s and Dr.
Doe’s accounts of events, so any hospital Viewing the report wiil have both sides of the story.
The Court ﬁnds that this panoply of procedures provided adequate opportunity to refute the

Adverse Action Report by challenging its accuracy.

 

 

C. Whether the Defendants Violated the Privacy Act
In addition to the APA and due process claims, the plaintiffs also assert a cause of action
seeking to void the Adverse Action Report pursuant to sections 552a(g)(1)(A) and 552a(g)( I )(C)
ofthe Privacy Act. First Am. Comp]. 1] 168. Together, sections SSZa(g)(i)(A) and
5523(g)( l)(C) provide that:
Whenever any agency . . . makes a determination under subsection (d)(3) of this
section not to amend an individual’s record in accordance with his request, or fails
to make such review in conformity with that subsection. . . [or] fails to maintain
any record concerning any individual with such accuracy, relevance, timeliness,
and completeness as is necessary to assure fairness in any determination relating
to the qualiﬁcations, character, rights, or opportunities of, or beneﬁts to the
individual that may be made on the basis of such record, and consequently a
determination is made which is adverse to the individuai . . . the individual may

bring a civil action against the agency, and the district courts of the United States
shall havejurisdiction in the matters under the provisions of this subsection.

5 11.5.0 §§ 552a(g)(l)(A), 552a(g)(l)(C). According to the plaintiffs, the defendants violated
section 552a(g)(1)(A) by issuing the Secretarial Review Decision without amending the Adverse
Action Report, First Am. Compl. 1| HQ, and the defendants violated section 552a(g)(l)(C) by
maintaining and releasing the report without ensuring its accuracy, timeiiness and completeness,
and by accepting the Hospital’s documentary evidence “even though it included on its face
fabricated, backdated, not contemporaneous and false information,” id. 1] 168.

Addressing the last challenge ﬁrst, the plaintiffs cannot state a claim under section
552a(g)(l )(C) of the Privacy Act because “[c]entral to a cause ofaction under subsection
(g)( i )(C) is the existence of an adverse agency determination resulting from inaccurate agency

records.” Chambers v. US. Dep’t ofInterior, 563 F.3d 998, 1007 (DC. Cir. 2009) (emphasis

 

added). The onty adverse agency “determination” at issue is the Secretarial Review Decision

and the alieged inaccurate agency record is the Adverse Action Report. Even if the Adverse

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Action Report is inaccurate, though, the Secretarial Review Decision did not “result from” that
report. The basis for the Secretarial Review Decision was the Administrative Record, which
consisted of extra—agency documents submitted by the Hospital and Dr. Doe. Logically, the
Adverse Action Report could not be the basis for the Secretarial Review Decision because the
whole point of the Secretary’s review was to determine whether that report was accurate. The
plaintiffs point to no inaccurate aw document that was the basis for the adverse Secretarial
Review Decision.

To the extent the plaintiffs are asserting that the defendants’ acts of maintaining and
releasing the Adverse Action Report constitute an “adverse agency determination," the Court is
not so persuaded An adverse determination “is defined as a decision ‘resulting in the denial ot‘a
right, beneﬁt, entitlement, or employment by an agency which the individuai could reasonably
have been expected to have been given if the record had not been deﬁcient.”‘ Dick v. Holder,
_ F. Supp. 3d _, 2014 WL 4450531, at *l l (D.D.C. 20 I4) (quoting Lee v. Goren, 480 F.
Supp. 2d I98, ZIO (D.D.C. 2007)). The maintenance and release of Adverse Action Reports do
notmmﬂththedmﬁm(ﬁarghnbmmﬁnenﬁdmnmnormnmownmnn3whmhthemamaﬂscon
reasonably be expected to have been given under the circumstances. The only agency “decision‘1
that arguably meets this deﬁnition is the Secretarial Review Decision, but, again, the plaintiffs
have not identiﬁed any inaccurate agency report that the Secretary relied on to reach that
decision.

Because the Court is remanding to the Secretary for a determination about the

reportability ofthe Adverse Action Report’s statement that “the Hospital’s quality assurance

review of this matter indicates departures by the physician from standard of care with regard to

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the laparoscopic appendectomy that he performed on October 2, 2009.” the Court will deny the

defendants’ request to dismiss the plaintiffs’ contention that section 552a(g)(1)(A) of the Privacy

Act was violated by the Secretary’s alleged failure to amend the Adverse Action Report.

D. Whether the Health Care Quality Improvement Act is an Unlawful Bill of Attainder
Article 1, section 9 ofthe Constitution provides that “[n]() Bill ofAttainder . . . shall be

passed." U.S. Const. art. I, § 9, c1. 3. “As the Supreme Court explained in United States v.

Brown, 381 US. 437 U965), the Clause was intended to serve as ‘a general safeguard against

19!

legislative exercise of the judicial function, or more simply — trial by legislature. Foreiich v.
US, 351 F.3d 1 198, 12l6 (DC. Cir. 2003). “Today, the prohibition against bills ofattainder
prevents any legislative acts, no matter what their form, that apply either to named individuals or
to easily ascertainable members ot'a group in such a way as to inﬂict punishment on them
without ajudicial trial.” BeiiSouth Corp. v. F. CC, 162 F.3d 673, 683 (DC. Cir. 1998)
(Edwards, L). lmportantly, “only the clearest proof [can] sufﬁce to establish the
unconstitutionality of a statute on such a ground.” Communist Party of US. v. Subversive
Activities Control Board, 367 U.S. l , 83 (1961).

“A law is an impermissible bill ofattainder ‘ifil' (1) applies with specificity, and (2)
imposes punishment.” Emory v. United Air Lines, Inc, 720 F.3d 915, 923 (DC. Cir. 20l3)
(Brown, J.) (quoting Foretich, 351 F.3d at 1218. “Both specificity and punishment must be
shown before a law is condemned as a bill of al‘tainder.” Foreiich, 351 F.3d at 1217 (quotation
marks omitted). “[T]he principal touchstone ot‘a bill of attainder,” however, “is punishment.”

1d. To determine whether a statute imposes punishment, the “Supreme Court has instructed that

a court should pursue a three-part inquiry” that asks “(1).whether the challenged statute falls

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within the historical meaning of legislative punishment; (2) whether the statute, viewed in terms
of the type and severity of burdens imposed, reasonably can be said to further nonpunitive
legislative purposes; and (3) Whether the legislative record evinces a congressional intent to
punish.” Foreffch, 351 F.3d at l218 (quotation marks omitted). “{T]he second factor -- the so-
called functional test -- invariably appears to he the most important of the three.” Id. “Indeed,
compelling proof on this score may be determinative.” Id.

The Health Care Quality Improvement Act “imposes none of the burdens historically
associated with punishment," Selective Service System v. Minnesota Pubitc Interest Research
Groap, 468 U.S. MI, 852 (1984). With the exception of sanctions imposed for a health care
entity’s failure to comply with reporting requirements governed by the Act, see 42 U.S.C.
§§ l l I31(c). I l l33(c), the Act prescribes no punishments or penalties. either expressly or
impliedly. and in no way compels health care entities to treat Adverse Action Reports in any
particular manner, such as by denying employment. In addition, on its face, the Act advances
nonpunitive legislative goals, which are discussed supra part 3(3) and elsewhere in this decision.
Because the Health Care Quality Improvement Act does not inﬂict punishment of any sort
sufﬁcient to be deemed a bill of attainder, the Court will dismiss this cause of action for failure
to state a claim for relief.

E. Whether the Health Ca re Quality Improvement Act Violates the Eighth
Amendment

Although the Supreme Court has never deﬁnitively addressed the question ofwhether the
Eighth Amendment generally, or the Cruel and Unusual Punishmean Clause speciﬁcaily, applies
in civil cases, existing precedent has limited the amendment’s application to criminal cases. 011

a prior occasion the Supreme Court noted that “our concerns in applying the Eighth Amendment

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have been with criminal process and with direct actions initiated by government to inﬂict
punishment.” Browaing—Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc, 492 US.
257, 259 (1989). “Given that the Amendment is addressed to bail, ﬁnes, and punishments, our
cases long have understood it to apply primarily, and perhaps exclusively, to criminal
prosecutions and punishments.” Id. at 262. “Bail. ﬁnes, and punishment traditionally have been
associated with the criminal process, and by subjecting the three to parallel limitations the text of
the Amendment suggests an intention to limit the power of those entrusted with the criminal-law
function of government." Id. at 263.

Although the Supreme Court “lett open in Ingraham ['v. Wright, 430 US. 65] (1972)} the
possibility that the Cruel and Unusual Punishments Clause might ﬁnd application in some civil
cases,” id. at 263 n.3, the Court cautioned that such applicability would inure only ifthe
punishment at issue was “sufﬁciently analogous to criminal punishments in the circumstances in
which they are administered to justify application of the Eighth Amendment,” Ingraham, 430 _
U.S. at 669 n.37. This is not such a case. The Health Care Quality Improvement Act and the
National Practitioner Data Bank contain only two provisions that could be considered punitive,
one ofwhich provides for a civil money penalty for the failure to report medical malpractice
payments, 42 U.S.C. § 1 I I3 l (c), and the other imposes a sanction for noncompliance with the
reporting requirements for professional review actions, id. § 1 | |33(c). Otherwise, both the
statute and the regulations that implement it provide for the collection and limited dissemination
of reports about hospital actions in which the government generally has no involvement and the

government commands no requirement to act on the reports. The statute and regulations

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therefore lack any analogy to criminal punishments sufﬁcient to warrant extending the scope of

the Eighth Amendment to apply to this civil case.

CONCLUSION

The Court has given this case careful and lengthy consideration to arrive at the
conclusions contained herein. Although the Court shares the plaintiffs’ concern that Adverse
Action Reports are being misused by health care entities, the Court cannot conclude that the
Heaith Care Quality Improvement Act, at least as challenged by the plaintiffs in the First
Amended Comptaint, is the source of that problem. Congress had an undeniably rational reason
for enacting the statute and the National Practitioner Databank furthers the statutory intent.

Accordingly, for the reasons Set forth in this opinion, the Court will grant in part and
deny in part the Motion to Dismiss or. Alternatively, for Summary Judgment [ECF No. 26] that
was ﬁred by the defendants and deny the Cross-Motion for Summary Judgment [ECF No. 45
(Sealed)] that was ﬁled by the plaintiffs. Speciﬁcally, the Court will grant the defendants’
motion for summary judgment with respect to the plaintiffs’ First Cause of Action to Set Aside
Report as Arbitrary, Capricious, Abuse of Discretion and not in Accordance with Law, with the
exception of the question of whether the statement that “the Hospital’s quality assurance review
of this matter indicates departures by the physician ﬁ'om standard of care with regard to the
laparoscopic appendectomy that he performed on October 2, 2009” is reportable. The Court will
deny the defendants’ motion for summaryjudgment with respect to that question and remand to
the Secretary of the Department of Health and Human Services for further proceedings
consistent with this opinion. Because the plaintiffs’ Second, Third, Fifth and Sixth Causes of

Action fail to state claims for relief, the Court will grant the defendants’ motion to dismiss those

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claims. As for the Fourth Cause of Action for Defendants’ Violation of the Federal Piivacy Acts
the Court concludes that the plaintiﬁs have failed to state a claim for relief with respect to
section 552a(g)(1)(C}oft11e Privacy Act, so dismissal will be granted for that claim. In light of
the remand to the Secretaly to resolve the reportability issue, though, the Court will deny the
motion to dismiss the section 552a(g)(1)(A) claim. The plaintiffs‘ Cross-Motion for Sunnnaly

Judgment will be denied in its entirety and this case will he stayed pending the Secretaly’s action

on remand.

Jm1e17,2015    

THOMAS F. HOGAN
SENIOR UNITED STATES DISTRIC ' JUDGE

 

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Two days later, on October 7, 2009, Dr. Doe tendered a short letter ofresignation that
stated “]:e]ﬁ’ective October 16, 2009, I resign from Peconic Bay Medical Center.” AR 0] l3
[ECF No. l9-3 (Sealed)].

On December 3, 2009, about two months after Dr. Doe resigned, the Hospital submitted
an Adverse Action Report to the National Practitioner Data Bank. AR 0 I 32 [ECF No. l9—3

(Sealed)]. The Adverse Action Report stated:

In June 2009, the physician commenced practice at the Hospital in thoracic and
general surgery. On Friday, October 2, 2009, the physician performed a
laparoscopic appendectomy on a l4-year-old female. in the course ofpert'orming
the procedure, the physician inadvertently removed part of one of the patient‘s
fallopian tubes. On or about Monday, October 5, 2009, the physician agreed to
refrain from exercising his surgical privileges pending the Hospital’s investigation
of this matter. By letter dated October 7, 2009, the physician advised the Hospital
that he resigned from the Hospital effective October 16, 2009. Accordingly, the
Hospital took no further action regarding the physician’s privileges or
employment. However, the Hospital‘s quality assurance review of this matter
indicates departures by the physician from standard of care with regard to the
laparoscopic appendectomy that he performed on October 2, 2009.

AR 0002 [ECF No. 19-1 (Sealed)].

Dr. Doe contends that he was unaware ofthe Adverse Action Report until June 20] 0,
when a prospective employer cited it as the reason for declining to meet with him. AR 00 | 7
[ECF No. 19-] (Sealed)]; AR 0018 [ECF No. 19-1 (Sealed)l; First Am. Comp]. W 83—86 [ECF
N0. 23]; Pls.’ Statement of Undisputed Material Facts Pursuant to Local R. 7(h)1] 13 {ECF No.
45-2 (Sealed)]. Upon discovering the repert, Dr. Doe contacted the Hospital and requested that it
retract the report because it was factually inaccurate. AR 0008 [ECF No. l9-l (Sealed)]; AR
0013 [ECF No. 19-! (Sealed)]. Dr. Doe also submitted a Subject Statement to the National
Practitioner Data Bank and placed the Adverse Action Report in a disputed status “challenging

both the factual accuracy of the report and whether the report was submitted in accordance with

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the [National Practitioner Data Bank’s] reporting requirements.” First Am. Compi. 1] 89 [ECF
No. 23]; see (der AR 0018-27 [ECF No. 19-1 (Sealed)]. I

When the Hospital refused to revise or void the Adverse Action Report, Dr. Doe
submitted a ietter to the National Practitioner Data Bank requesting that the Secretary of the
Department of Health and Human Services review and remove the report. First Am. Com pl.
1] 9| [ECF No. 23]; AR 0007-17 [ECF N0. l9-l (Sealed)]. On June 25, 2012, Judy Rodgers,
Senior Advisor for the Division of Practitioner Data Banks at the Department of Health and
Human Services, issued a Secretarial Review Decision denying Dr. Doe’s request and stating
that the Secretary found that “[t]here is no basis on which to conclude that the Report should not
have been ﬁled in the NPDB or that it is not accurate, complete, timeiy or relevant.” AR 0268-
73 [ECF No. 19-6 (Sealed)].

One month later, on July 25, 2012, the plaintiffs ﬁled this lawsuit claiming that the
defendants’ acceptance, maintenance, and disclosure of the disputed Adverse Action Report in
the National Practitioner Data Bank “has for the last two and one half years caused all
prospective employers in the United States to reject plaintiff physician’s applications for
employment and medical staff privileges.” First Am. Comp]. 1] 4 [ECF No. 23]. The plaintiffs
advanced six causes of action alleging that (I) the defendants’ actions with respect to the
Adverse Action Report were unlawful and should be set aside in accordance with the
Administrative Procedure Act (the “‘Al’A”), (2) the Health Care Quality improvement Act and
the implementing regulations that apply to the National Practitioner Data Bank violate the Due
Process Clause both facially and (3) as applied by the defendants, (4) the Secretary’s actions

violated §§ 5223(g)(l)(/-\) and (C) of the Privacy Act, (5) the defendants’ interpretation and

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