Raakesh Bhan v. Battle Creek Health Sys. ( 2014 )

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File Name: 14a0704n.06
No. 13-1682
FILED
UNITED STATES COURT OF APPEALS Sep 08, 2014
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
RAAKESH C. BHAN, M.D., )
)
Plaintiff-Appellant, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE WESTERN
) DISTRICT OF MICHIGAN
BATTLE CREEK HEALTH SYSTEMS, ET AL., )
) OPINION
Defendants-Appellees. )
)
Before: BOGGS and MOORE, Circuit Judges; BARRETT, District Judge.*
BARRETT, District Judge. At issue in this appeal are claims stemming from Raakesh
Bhan, M.D.’s loss of clinical-staff privileges at the Michigan hospitals of Borgess Medical
Center (“Borgess”) and Battle Creek Health Systems (“BCHS”). Bhan contends that in
depriving him of clinical-staff privileges, Borgess, BCHS, and/or their respective executive
officers tortiously interfered in his business relationships, defamed him, and breached their
contractual relationships with him. All of those claims were dismissed by the district court
pursuant to Fed. R. Civ. P. 12(b)(6), except the defamation claim against Borgess and its
employees which was dismissed pursuant to Fed. R. Civ. P. 56. For the reasons given below, we
affirm the dismissal of those claims.
*
The Honorable Michael R. Barrett, United States District Judge for the Southern District
of Ohio, sitting by designation.
No. 13-1682
Bhan v. Battle Creek Health Systems, et al.
I. BACKGROUND
A. Factual Summary
The two hospitals involved in this case – Borgess and BCHS – provide hospital services
in Michigan. Borgess’s executive officers include President and Chief Executive Paul Spaude,
Chief Medical Officer Terry Baxter, M.D., and Chief Quality Officer Robert Brush, M.D.
BCHS’s executive officers include President and Chief Executive Officer Denise Brooks-
Williams, former Chief Executive Officer Patrick Garrett, and former Chief Medical Officer
Jeffrey Mitchell, M.D.1
Bhan was a critical-care doctor (also called an “intensivist”) of Indian descent who
provided critical-care medical services in Kalamazoo, Michigan and Calhoun, Michigan. He
initially received clinical-staff privileges to provide such medical services at BCHS in 1986 and
at Borgess in 1991. As a practitioner with staff privileges, Bhan was subject to the Medical Staff
Bylaws of the hospitals. The Medical Staff Bylaws are the mechanism through which the Board
of Trustees delegates to the Medical Staff the responsibility of monitoring medical care to assure
quality of care and to make recommendations to the Board of Trustees regarding the evaluation
and monitoring of clinical performance. Included among those numerous bylaws are the
procedures for applying for reappointment, for summary suspension, and for hearings and
appeals. Also included among those bylaws are provisions for immunity and release of liability.
1. Borgess
On February 27, 2007, Bhan suffered a stroke. He alleges that the stroke was caused by
the Borgess Bedside Policy implemented by Baxter and Brush in January 2007 under which a
1
Garrett departed in 2009 at which time Brooks-Williams took over the position.
Mitchell departed in early 2010.
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practitioner was required to be at the bedside of a patient in the Intensive Care Unit within five
minutes of being paged. According to Bhan, he had to sleep at the hospital to comply with the
Bedside Policy because Baxter and Brush interfered with his attempts to obtain assistance from
others in meeting this policy. Baxter is alleged to have interfered because of Bhan’s race and
because Baxter’s wife was a member of a competing intensivist practice at Borgess at that time.
Brush is alleged to have interfered because he received a financial benefit from being a former
member of the competing intensivist practice at Borgess from which he had received a payout
upon his departure.
After more than six months of stroke rehabilitation, Bhan resumed his duties at Borgess
to some extent. According to Bhan, he had fully recovered in so far as his abilities to perform at
the highest level as a critical-care practitioner.
After his return, Bhan’s qualifications for clinical-staff privileges came under scrutiny.
On or about April 14, 2009, Borgess summarily suspended Bhan’s clinical-staff privileges. Bhan
alleges the summary suspension was issued based upon inadequate facts and improper
procedures. The Medical Executive Committee purportedly recommended setting aside the
summary suspension initially, but later approved it as a result of actions taken by Baxter, Brush,
and Spaude. Although Bhan subsequently received a “fair hearing,” he contends that the hearing
was not conducted in accordance with the procedures set forth in the Medical Staff Bylaws.
Bhan’s clinical-staff privileges at Borgess ultimately were revoked.
2. BCHS
Bhan alleges that on or about January 26, 2010, BCHS suspended his clinical privileges
for primary responsibility of patient care in the Intensive Care Unit based on inadequate facts
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and improper procedures. Subsequently, Brooks-Williams and BCHS provided a report to the
National Practitioner’s Data Bank concerning that suspension. According to Bhan, those actions
were taken even after multiple tests requested by Garrett, Mitchell, and Brooks-Williams
confirmed that he could practice as a critical-care intensivist. Although Bhan received a “fair
hearing,” he contends that the hearing was not conducted in accordance with the procedures set
forth in the Medical Staff Bylaws.
B. Procedural History
Bhan filed his initial Complaint in the Western District of Michigan on February 26,
2010. Thereafter, the district court entered an order staying the case, which was lifted in June
2011 after Bhan exhausted his administrative remedies.
On August 10, 2011, Bhan filed his eighteen-count Second Amended Complaint. All of
the defendants moved to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). The district court granted
the motions as to the claims for tortious interference, defamation against BCHS and its
executives, due-process violations under 42 U.S.C. § 1985, breach of contract, conspiracy, and
injunctive relief. The only remaining claims alleged violations of Michigan’s Elliot-Larsen Civil
Rights Act, violations of the Americans with Disabilities Act, and defamation against Borgess
and its executives. All of those remaining claims were later dismissed pursuant to Fed. R. Civ.
P. 56.
II. JURISDICTION
The district court had federal-question jurisdiction over this case pursuant to 28 U.S.C.
§ 1331. The district court had supplemental jurisdiction over the remaining claims pursuant to
28 U.S.C. § 1367. This court now has jurisdiction because Bhan has appealed from a final
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judgment of a federal district court that disposed of all of his remaining claims. 42 U.S.C.
§ 1291.
III. STANDARD OF REVIEW
All of the issues raised in this appeal are reviewed de novo. Casias v. Wal-Mart Stores,
Inc., 695 F.3d 428 (6th Cir. 2012) (Rule 12(b)(6) dismissal); Donald v. Sybra, 667 F.3d 757, 760
(6th Cir. 2012) (Rule 56 dismissal).
In reviewing the claims pursuant to Fed. R. Civ. P. 12(b)(6), the court must “construe the
complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all
reasonable inferences in favor of the plaintiff.” Bassett v. Nat’l Collegiate Athletics Ass’n,
528 F.3d 426, 430 (6th Cir. 2008). “[T]o survive a motion to dismiss[,] a complaint must contain
1) ‘enough facts to state a claim to relief that is plausible,’ 2) more than ‘a formulaic recitation of
a cause of action’s elements,’ and 3) allegations that suggest a ‘right to relief above a speculative
level.’” Tackett v. M&G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)). A claim has facial plausibility when
the pleaded factual content allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also In re
Sofamor Danek Grp., 123 F.3d 394, 400 (6th Cir. 1997) (stating that a court “need not accept as
true legal conclusions or unwarranted factual inferences”). Although the plausibility standard is
not equivalent to a “‘probability requirement,’ . . . it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).
Under Fed. R. Civ. P. 56, summary judgment is appropriate “if the movant shows that
there is no genuine dispute as to any material fact and the movant is entitled to judgment as a
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matter of law.” Fed. R. Civ. P. 56(a). A court must view the evidence and draw all reasonable
inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986).
IV. ANALYSIS
A. Statutory Immunity
The BCHS Appellees argue that they are entitled to statutory immunity under the Health
Care Quality Improvement Act, 42 U.S.C. § 11101 et seq. BCHS Br., pp. 19-20. Under the Act,
members of a professional-review body “shall not be liable in damages under any law of the
United States or of any State . . . with respect to the action” if the professional-review action was
taken:
(1) in the reasonable belief that the action was in the furtherance of quality
health care,
(2) after a reasonable effort to obtain the facts of the matter,
(3) after adequate notice and hearing procedures are afforded to the
physician involved or after such other procedures as are fair to the physician
under the circumstances, and
(4) in the reasonable belief that the action was warranted by the facts known
after such reasonable effort to obtain facts and after meeting the
requirement of paragraph (3).
42 U.S.C. §§ 11111(a)(1), 11112(a). A professional review is presumed to satisfy these
standards, unless the presumption is rebutted by a preponderance of the evidence. 42 U.S.C.
§§ 11112(a).
We agree with the district court that Bhan pleaded sufficient facts to avoid a Rule
12(b)(6) dismissal based upon statutory immunity, including facts that the BCHS Appellees
relied upon an inadequate set of criticisms and did not afford him adequate notice and hearing
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procedures under the circumstances. Whether and to what extent any of the BCHS Appellees
took part in the peer-review process also is not clear at the initial stage of litigation. Given that
the statute contemplates the receipt of evidence to rebut the presumption of immunity in such
circumstances, dismissing the claims based upon statutory immunity would be premature.
Accordingly, we affirm the district court’s judgment denying statutory immunity to BCHS.2
B. Tortious Interference
In Michigan, the elements of tortious interference with a business relationship are: 1) the
existence of a valid business relationship or expectancy; 2) knowledge of the relationship or
expectancy on the part of the defendant; 3) an intentional interference by the defendant inducing
or causing a breach or termination of the relationship or expectancy; and 4) resultant damage to
the plaintiff. Cedroni Assocs., Inc. v. Tomblinson, Harburn Assocs., Architects & Planners, Inc.,
492 Mich. 40, 45, 821 N.W. 2d 1, 3 (Mich. 2012). “One who alleges tortious interference with a
contractual or business relationship must allege the intentional doing of a per se wrongful act or
the doing of a lawful act with malice and unjustified in the law for the purpose of invading the
contractual rights or business relationship of another.” CMI Int’l, Inc. v. Intermet Int’l Corp.,
251 Mich. App. 125, 131, 649 N.W.2d 808, 812 (Mich. App. 2002) (internal quotations omitted).
“A wrongful act per se is an act that is inherently wrongful or an act that can never be justified
under any circumstances.” Prysak v. R.L. Polk Co., 193 Mich. App. 1, 12-13, 483 N.W.2d 629,
635 (Mich. App. 1992). “If the defendant’s conduct was not wrongful per se, the plaintiff must
demonstrate specific, affirmative acts that corroborate the unlawful purpose of the interference.”
CMI Int’l, 251 Mich. App. at 131, 649 N.W. at 812; see also Pontiac Gen. Hosp. v. Chubb
2
BCHS also argues it is entitled to contractual immunity. BCHS Brief, p. 17. That
argument is addressed infra in regards to the breach of contract claim against BCHS.
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Corp., No. 267234, 2006 Mich. App. LEXIS 2187, at *6-8 (Mich. App. July 18, 2006) (applying
tortious-interference standard on a motion to dismiss).
1. Count 3
In Count 3, Bhan alleges that Baxter, Brush, Spaude, and Borgess tortiously interfered
with Bhan’s patient relationships.3 The district court’s dismissal of Count 3 against Baxter and
Brush primarily focused on the tenuous connection between the allegations concerning their
motives for acts taken in 2007 in relation to the Bedside Policy and their motives for the acts
taken in 2009 in relation to the suspension and revocation of Bhan’s clinical-staff privileges. As
to the dismissal of Count 3 against Spaude, the district court determined that there were
insufficient allegations to state a plausible claim. We agree with the district court.
As the suspension and revocation of staff privileges are not acts that are unlawful per se,
Bhan must sufficiently allege that the otherwise lawful acts were taken with malice and improper
motive for the purpose of interfering with his current and future patients. He has not done so.
Bhan contends that Baxter and Brush had financial motives for their acts in 2009, which
he supports with allegations of financial motives that existed in 2007. Appellant Br., pp. 13-14.
In particular, he alleges Baxter had a financial motive because his wife was a member of the
competing intensivist practice at Borgess in 2007, and Brush had a financial motive because he
was a former member of the competing intensivist practice at Borgess from which he received a
large payout upon his departure. Appellant Br., p. 14. He contends that Baxter and Brush acted
upon their financial motives in 2007 by implementing a Bedside Policy and by precluding Bhan
3
Although Bhan brought Count 3 against Ascension, he does not argue that the district
court improperly dismissed Ascension on the separate and independent basis that it could not be
vicariously liable as the parent corporation of Borgess. Therefore, the court need not consider
the claim against Ascension.
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from obtaining the assistance of others that he needed to comply with that Bedside Policy.
Appellant Br., p. 13. He asks us to infer that Baxter and Brush acted with the same financial
motives in relation to his suspension and revocation in 2009. Appellant Br., pp. 13-14.
However, we do not find such an inference to be warranted. The two incidents lack temporal
proximity as well as any reasonable connection. There is not a single allegation in the Second
Amended Complaint that connects the purported financial motives of Baxter and Brush in 2007
to their actions in 2009. Reed v. Michigan Metro Girl Scout Council, 201 Mich. App. 10, 13,
506 N.W.2d 231, 233 (Mich. App. 1993) (holding that purpose for interfering was not
sufficiently alleged when allegations as to personal motive stemmed from a prior transaction
between the parties). Those deficiencies make the connection too tenuous to sustain a plausible
tortious interference claim against Baxter and Brush based upon a financial motive.
Likewise, Bhan has not sufficiently alleged a racial motive of Baxter. There is not a
single factual allegation in the Second Amended Complaint that plausibly suggests Baxter acted
with racial animus. Bhan’s threadbare and conclusory allegations as to race do not suffice.
His allegations of tortious interference by Spaude also do not withstand scrutiny. Spaude
is alleged only to have supported the actions of Baxter and Brush. No factual allegations even
remotely suggest that Spaude acted with malice or for an improper purpose.
Accordingly, we affirm the judgment of the district court dismissing Count 3.
2. Count 5 and Count 6
Count 5 and Count 6 allege that Borgess executives Baxter, Brush, and Spaude and
BCHS executive Brooks-Williams tortiously interfered with Bhan’s business relationships with
their respective employers. Under Michigan law, it is well established that a party must show
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that the corporate agent is a third party to a contract or business relationship to maintain a cause
of action for tortious interference. Reed, 201 Mich. App. at 13, 506 N.W. at 233 (granting
dismissal of a tortious interference claim where allegations did not raise an inference that the
corporate agent acted solely for a personal benefit). Corporate agents cannot be liable for
tortious interference with the corporation’s contracts or business relationships unless they acted
solely for their own benefit with no benefit to the corporation. Id.; see also Maiberger v. City of
Livonia, 724 F. Supp. 2d 759, 772-73 (E.D. Mich. 2010) (dismissing tortious interference claim
against agent pursuant to Rule 12(b)(6) where plaintiff failed to set forth allegations that the
agent acted for a personal benefit with no benefit to the corporation); Experts, LLC v. JPMorgan
Chase & Co., No. 13-cv-12550, 2013 U.S. Dist. LEXIS 117428, at *7 (E.D. Mich. Aug. 20,
2013) (applying Michigan law, the court dismissed a tortious interference claim where plaintiff
failed to sufficiently allege in the complaint how the defendant acted outside the scope of his
employment for his own benefit).4
The Second Amended Complaint fails to provide sufficient facts from which it can
reasonably be inferred that any of the executive officers acted solely for their personal benefit.
As explained with respect to Count 3, such allegations as to Baxter, Brush, and Spaude are
inadequate. Further, Bhan’s allegations suggest that Baxter acted at least in part for the benefit
4
Although Bhan contends that the district court improperly relied on the summary-
judgment decision in Cedroni Assocs., Inc. v. Tomblinson, Harburn Assocs., Architects &
Planners, Inc., 290 Mich. App. 577, 606-08, 802 N.W.2d 682, 698-99 (Mich. App. 2010),
reversed on other grounds by Cedroni Assocs., Inc. v. Tomblinson, Harburn Assocs., Architects
& Planners, Inc., 492 Mich. 40, 45, 821 N.W.2d 1, 3 (Mich. 2012), for the above propositions of
law, we disagree. Not only did the Michigan Supreme Court’s subsequent reversal of that
decision not address, much less overrule, those general propositions of law, but caselaw
demonstrates that the standard applies equally on a motion to dismiss.
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of Borgess, as he purportedly viewed Bhan as a “business competitor having adverse interest to
the financial operations of Borgess[.]” R. 51, p. 1417.
The allegations as to Brooks-Williams are similarly inadequate. The only factual
allegations as to Brooks-Williams are that she ignored conclusive reports that Bhan was fully
recovered from his stroke, ordered him to undergo more testing, designated requirements for
independent proctors, threatened suspension of privileges, and ultimately suspended Bhan’s
privileges in the Intensive Care Unit of BCHS. None of those allegations plausibly show that
Brooks-Williams acted solely for her personal benefit without any benefit to BCHS. Although
Bhan argues that a jury should be permitted to discern whether a personal motive existed, none
of the cases on which he relies involve circumstances where, as here, no facts supporting a
personal motive have been alleged. Appellant Reply, pp. 5-9.5
Accordingly, we affirm the judgment of the district court dismissing Counts 5 and 6.
A. Defamation
To sustain a claim for defamation under Michigan law, a plaintiff must allege: 1) a false
and defamatory statement concerning the plaintiff; 2) an unprivileged communication to a third
party; 3) fault amounting to at least negligence on the part of the publisher; and 4) either
actionability of the statement irrespective of special harm (defamation per se) or the existence of
special harm caused by publication (defamation per quod). Rouch v. Enquirer & News of Battle
Creek, Mich., 440 Mich. 238, 251, 487 N.W.2d 205, 211 (Mich. 1992). “The essentials of a
5
Further, the case Jim-Bob, Inc. v. Mehling, 178 Mich. App. 71, 96-97, 443 N.W.2d 451,
462-63 (Mich. App. 1989), upon which Bhan relies is inapposite. That case addressed whether
the existence of legitimate personal or business reasons for interfering with a contract relieved
the defendant of liability. Id. It did not address the pleading of a personal motive of a corporate
officer to maintain a plausible claim against him for tortious interference with his employer’s
contract.
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cause of action for [defamation] must be stated in the complaint,” including allegations as to the
exact language that the plaintiff contends is defamatory, the connection of the defamatory words
to the plaintiff where such words are not clear or are ambiguous, and the publication of the
alleged defamatory words. Ledl v. Quik Pik Food Stores, Inc., 133 Mich. App. 583, 589, 349
N.W.2d 529, 587 (Mich. App. 1984) (internal quotations omitted) (emphasis added); see also
Thomas M. Cooley Law Sch. v. Doe, 300 Mich. App. 245, 262, 833 N.W.2d 331, 341 (Mich.
App. 2013); Royal Palace Homes, Inc. v. Channel 7 of Detroit, Inc., 197 Mich. App. 48, 53-54,
495 N.W. 2d 392, 395 (Mich. App. 1992). Inherent in those requirements is that the allegations
must set forth where, when, and to whom the alleged statements were published. Hantz Group v.
Haney, No. 292954, 2010 Mich. App. LEXIS 2288, at *14 (Mich. App. Nov. 30, 2010); Rouch,
440 Mich. at 272-73, 487 N.W.2d at 220 (Riley, J., concurring); Hernden v. Consumers Power
Co., 72 Mich. App. 349, 356, 249 N.W.2d 419, 422 (Mich. App. 1976).
1. Count 7
Count 7 alleges defamation against Borgess, Baxter, Brush, and Spaude. Bhan contends
on appeal that the district court erroneously failed to adjudicate that claim on summary
judgment. Appellant Br., pp. 21-22. Yet, in his reply brief, Bhan concedes that the district court
addressed the claim on summary judgment in a footnote that he inadvertently overlooked.
Appellant Reply, pp. 9-10. He specifically concedes that the district court determined that Bhan
had waived the claim by failing to address it in his response to the Borgess Appellees' motion for
summary judgment. Id. Given those concessions and the fact that the district court addressed
the claim on summary judgment, the district court did not error in failing to adjudicate Count 7.
Accordingly, we affirm the district court's judgment dismissing Count 7.
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2. Count 10
Count 10 alleges defamation against BCHS, Mitchell, Garrett, and Brooks-Williams.6
The district court dismissed Count 10 because the allegations as to Mitchell and Garrett were not
identified with specificity and because the allegations as to BCHS and Brooks-Williams that
merely restated the outcome of the Fair Hearing and referenced the National Practitioner Data
Bank report, attached as Exhibit D to the Second Amended Complaint, were insufficient. We
agree with the district court.
The specific factual allegations on which Bhan relies in support of his defamation claim
are:
 “Mitchell and Garrett distributed and published to third-parties orally and in writing
numerous communications contending that the Plaintiff lacked sufficient cognitive
and dexterity skills to adequately perform his functions as a critical care practitioner.”
 “[O]n or about January 26, 2010, Defendant Williams on behalf of BCHS submitted a
report to the National Practitioner Data Bank regarding the suspension of the
Plaintiff's Intensive Care Unit clinical privileges at BCHS, see ‘Exhibit D’.”
 “The information provided to the National Practitioner Data Bank by the
Defendant[s] Williams and BCHS was false.”
Appellant Br., p. 20 (citing R. 51, pp. 1436-37). As to the latter two allegations, Bhan argues
that BCHS and its executives were on notice that he was alleging the falsity of the “entire
report.” Appellant Br., p. 21.
Count 10 fails because Bhan has not alleged defamation with the requisite specificity.
The only allegation as to Mitchell and Garrett concerns oral and written “communications.”
6
Although Bhan brought Count 10 against Trinity, he does not argue that the district
court improperly dismissed Trinity on the separate and independent basis that it could not be
vicariously liable as the parent corporation of BCHS. Therefore, we need not consider the claim
against Trinity.
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That vague allegation does not identify where, when, or to whom the alleged defamatory words
were published, which is fatal to his claim. Also fatal to his claim is that the allegation merely
summarizes the words alleged to be defamatory. That summary does not satisfy the requirement
of setting forth the exact language alleged to be defamatory, and it raises the inference that the
statements at issue were merely un-actionable opinions rather than objective statements of fact
upon which a claim could proceed. Thomas M. Cooley Law Sch., 300 Mich. App. at 262, 833
N.W. at 341-342 (plaintiff must identify the exact language alleged to be defamatory); Ireland v.
Edwards, 230 Mich. App. 607, 617, 584 N.W.2d 632, 637 (Mich. App. 1998) (opinions
generally are not defamatory because they cannot be proven false).
Similarly, the allegations as to Brooks-Williams and BCHS are deficient because they do
not identify the exact language alleged to be defamatory. Although Bhan identifies the National
Practitioner Data Bank as the publication and identifies the approximate date on which it was
published, he baldly asserts that the “entire report” was defamatory. Appellant Br., p. 21. Yet,
the report contains approximately twenty separate propositions, at least some of which are true.
For example, the identities and dates alleged by Bhan in the Second Amended Complaint are
consistent with the parties and dates identified in the report. Likewise, Bhan's allegation in the
Second Amended Complaint that BCHS removed his privilege of primary responsibility for
patients in the Intensive Care Unit is consistent with the action described in the report. Other
statements in the report appear simply to restate the outcome of the proceedings concerning
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Bhan's privileges at BCHS.7 Bhan therefore cannot plausibly demonstrate that the entire report
was false.
Accordingly, we affirm the district court's judgment dismissing Count 10.
B. Breach of Contract
Bhan asserts claims for breach of contract against Borgess in Counts 11 and 12, and
against BCHS in Count 13.8 Those claims are based entirely upon alleged breaches of the
Medical Staff Bylaws of Borgess and BCHS, respectively.9
To proceed with his breach-of-contract claims, Bhan first must show the existence of an
enforceable contract. Miller-Davis Co. v. Ahrens Constr., Inc., 296 Mich. App. 56, 71, 817
N.W.2d 609, 619 (Mich. App. 2012). A valid contract requires parties competent to contract, a
proper subject matter, legal consideration, and mutuality of agreement and obligation. Thomas v.
Leja, 187 Mich. App. 418, 422, 468 N.W.2d 58, 60 (Mich. App. 1991).
We have found no cases in Michigan where a state court held that Medical Staff Bylaws
create a contractual relationship with a physician who applies for or is granted clinical-staff
privileges. See Macomb Hosp. Ctr. Med. Staff v. Detroit-Macomb Hosp. Corp., No. 182394,
7
Several courts have granted immunity for the publication of a National Practitioner Data
Bank report where, as here, the actions reported actually occurred but the plaintiff disputed the
underlying basis for those actions. See Schindler v. Marshfield Clinic, No. 05-C-705-C, 2007
U.S. Dist. LEXIS 1496, at *41-42 (W.D. Wis. Jan. 4, 2007); Odom v. Fairbanks Mem. Hosp.,
999 P.2d 123, 130-31 (Alaska 2000).
8
Count 13 also is brought against Trinity. However, as explained above, Bhan does not
argue that the district court improperly dismissed Trinity on the separate and independent basis
that it could not be vicariously liable as the parent corporation of BCHS. Therefore, we need not
consider the claim against Trinity.
9
The Medical Staff Bylaws of Borgess and BCHS are attached to the Second Amended
Complaint and are integral to Bhan’s claims. Thus, they are properly considered in ruling on a
motion to dismiss. Com’l Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327, 336 (6th Cir.
2007).
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1996 Mich. App. LEXIS 1680, at *1 (Mich. App. Dec. 20, 1996) (indicating that Medical Staff
Bylaws did not create a contractual relationship); see also Feyz v. Mercy Mem’l Hosp., 264
Mich. App. 699, 705, 692 N.W.2d 416, 420 (Mich. App. 2005) (declining to decide whether
Michigan law recognizes a breach-of-contract claim based on breach of corporate bylaws),
vacated and remanded on other grounds, 475 Mich. 663, 719 N.W.2d 1 (Mich. 2006). Recently,
this Circuit has determined, albeit in non-binding opinions, that Medical Staff Bylaws do not
create a contractual relationship under Michigan law even when the bylaws are silent as to
whether they create a contractual relationship. Brintley v. St. Mary Mercy Hosp., No. 12-2616,
2013 U.S. App. LEXIS 23144, at *7 (6th Cir. Nov. 15, 2013); Grain v. Trinity Health, 431 F.
App’x 434, 450 (6th Cir. 2011).10
We agree with and follow our prior holdings that Medical Staff Bylaws do not create a
contractual relationship in Michigan. Although Bhan may have agreed to abide by the Medical
Staff Bylaws by applying for clinical-staff privileges, there is no language that indicates the
hospitals intended the Medical Staff Bylaws to constitute a contract with individual physicians or
the medical staff. There also is no indication that either Borgess or BCHS provided the requisite
consideration for the Medical Staff Bylaws to create an enforceable contract. The hospitals are
required by state law to adopt bylaws, rules and policies for eligibility and qualifications of
10
Prior to this Circuit’s recent decisions, the Eastern District of Michigan noted the split
of authority as to whether medical staff bylaws constitute a contract and decided to follow the
line of cases that held such bylaws created a contract. Ritten v. Lapeer Reg’l Med. Ctr., 611 F.
Supp. 3d 696, 734-35 (E.D. Mich. 2009) (Rosen, J). Yet, the same district court judge that
decided Ritten also later decided Brintley wherein he followed this Circuit’s Grain decision in
holding that the medical staff bylaws did not constitute a contract. Brintley v. St. Mary Mercy
Hosp., 904 F. Supp. 2d 699, 721 (E.D. Mich. 2012) (Rosen, J.). This Circuit agreed that a
contractual relationship did not exist in that case. Brintley v. St. Mary Mercy Hosp., No. 12-
2616, 2013 U.S. App. LEXIS 23144, at *7 (6th Cir. Nov. 15, 2013).
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No. 13-1682
Bhan v. Battle Creek Health Systems, et al.
medical staff. M.C.L. §§ 331.6. The hospitals’ fulfillment of their statutory obligation to adopt
and conform their actions to the bylaws, rules, and regulations does not constitute the kind of
separate consideration necessary for a contractual relationship. Yerkovich v. AAA, 461 Mich.
732, 740-41, 610 N.W.2d 542, 546 (Mich. 2000) (“Under the preexisting duty rule, it is well
settled that doing what one is legally bound to do is not consideration for a new promise.”). To
carry out that responsibility, the hospitals delegated to the medical staff the responsibilities of
overseeing the care, treatment, and services provided to practitioners with privileges. The
Medical Staff Bylaws primarily describe the manner in which the medical staff is to self-govern
and self-organize. The provisions therein that provide for amendment of the Medical Staff
Bylaws at any time and that indicate the Board of Trustees is not bound by the medical-staff
recommendations further demonstrate a lack of intent to be contractually bound. Accordingly,
an enforceable contract does not exist with BCHS or Borgess based upon the Medical Staff
Bylaws.
Accordingly, we affirm the district court's judgment on Counts 11, 12 and 13.
V. CONCLUSION
For the foregoing reasons, we AFFIRM the district court's dismissal of all of the claims
raised in this appeal.
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