Gregory Sherr v. HealthEast Care System ( 2021 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 19-3272
___________________________
Dr. Gregory Sherr
Plaintiff - Appellant
v.
HealthEast Care System; Dr. Margaret Wallenfriedman; Dr. Mary Beth Dunn; Dr.
Richard Gregory; Dr. Stephen Kolar
Defendants - Appellees
Dr. Jerone D. Kennedy; Archie Defillo; CentraCare Health System
Defendants
____________
Appeal from United States District Court
for the District of Minnesota
____________
Submitted: October 21, 2020
Filed: June 2, 2021
____________
Before BENTON, SHEPHERD, and KELLY, Circuit Judges.
____________
KELLY, Circuit Judge.
In September 2016, Dr. Gregory Sherr filed suit against HealthEast Care
System (HealthEast), CentraCare Health, Dr. Margaret Wallenfriedman, Dr. Mary
Beth Dunn, Dr. Richard Gregory, Dr. Stephen Kolar, Dr. Jerone D. Kennedy, and
Archie Defillo, asserting multiple causes of action. After the district court 1 granted
the defendants’ motions for judgment on the pleadings, three claims remained
against HealthEast and Drs. Wallenfriedman, Dunn, Gregory, and Kolar
(collectively, the Appellees): defamation, tortious interference with prospective
economic relationship, and tortious interference with contract.
The Appellees moved for summary judgment on all of Dr. Sherr’s remaining
claims. The district court granted their motion, and Dr. Sherr now appeals that
decision. We affirm.
I.
Dr. Sherr is a neurosurgeon who practiced medicine in Minnesota from 2010
to 2016. In November 2014, he entered into a one-year employment contract with
Midwest Spine and Brain Institute (MSBI). In January of the following year, Dr.
Sherr applied for clinical privileges to perform surgery at hospitals owned by
HealthEast, a regional healthcare provider and hospital management company.
HealthEast granted Dr. Sherr temporary privileges on February 3, 2015, and full
privileges on April 30, 2015. Dr. Sherr also maintained clinical privileges with
several other Minnesota hospitals during this time.
Two years before Dr. Sherr began his relationship with HealthEast, Drs.
Wallenfriedman, Dunn, and Gregory (collectively, the Neuro Group) entered into
contracts with HealthEast to become in-house neurosurgeons. Under the terms of
these contracts, the doctors’ compensation structures were linked to the number of
procedures they performed. The contracts also stated that HealthEast patients who
required specialized services would be referred to specialists within the HealthEast
1
The Honorable Ann D. Montgomery, United States District Judge for the
District of Minnesota.
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network. All three members of the Neuro Group were working under these contracts
when Dr. Sherr began at HealthEast.
In September 2014, Dr. Wallenfriedman was elected the Chair of HealthEast’s
Spine Council, beginning a three-year term. The Spine Council was one of at least a
dozen clinical councils established at HealthEast. Composed of practitioners with
clinical privileges in designated specialty areas, the councils were responsible for
setting policies for and evaluating the performances of HealthEast members who
worked in those areas. As part of their duties, the Spine Council members held
monthly meetings to review issues related to HealthEast’s spine care practice. The
Spine Council also began generating regular Spine Quality Reports. These reports
tracked the number of spine surgery patients at HealthEast hospitals who were
readmitted for surgical site infections within thirty days after surgery and provided
anonymized information on the doctors associated with those readmissions.
The Spine Council was also responsible for conducting peer review of spine
surgeries performed at HealthEast hospitals. During the period in question, this
review process was dictated by HealthEast’s Practitioner Peer Review Policy (the
Policy). Under the Policy, designated HealthEast staff members, including those
serving on the clinical councils, identified cases for potential peer review from a
number of sources, among them electronic reports and referrals from physicians,
nurses, and other HealthEast employees. Once identified, peer review cases were
assigned to practitioner reviewers, who reviewed the cases and documented their
findings on a Peer Review Form. Based on the reviewer’s recommendation, the
relevant clinical council might then hold a peer review committee meeting to discuss
the cases. The Policy indicated that the Chair of that council “must facilitate the
practitioner peer review committee meetings to ensure a fair and objective
evaluation of individual practitioner performance and to ensure reasonable actions
are taken based on assessment findings.” However, the Policy gave the Chair
discretion for how to ensure a fair process, including whether competitors of the
physician under review could participate in the process, whom to invite to the
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meetings, and whether to request a written or in-person response from the physician
under review.
At the close of a peer review process, the reviewers made a final determination
on next steps, decided by consensus. One option was to refer the case to
HealthEast’s Medical Executive Committee (MEC) for consideration of corrective
action. In its consideration, the MEC was guided by HealthEast’s bylaws, which
stated, in relevant part: “Whenever a practitioner’s conduct requires that immediate
action be taken to . . . reduce the substantial likelihood of immediate injury or
damage to the health or safety of any patient . . . the Chief Executive Officer, or
designee . . . shall have the authority to summarily suspend the . . . clinical privileges
of such practitioner.”
Dr. Sherr began operating at HealthEast hospitals in early 2015. At that time,
Dr. Daniel Sipple was the director of HealthEast’s Spine Center. In this role, Dr.
Sipple referred HealthEast patients to neurosurgeons within the HealthEast network.
Dr. Sipple preferred to refer more complex cases to doctors not in the Neuro
Group—and specifically referred a number of patients to Dr. Sherr. The Neuro
Group was unhappy with Dr. Sipple’s approach and complained to him frequently.
They also made comments about Dr. Sherr specifically, allegedly calling him a
“hack,” “not a good surgeon,” an “asshole,” and “the worst goddamn surgeon.” In
his deposition testimony, Dr. Sherr said that members of the operating room staff at
HealthEast told him that the Neuro Group had made similar comments to them,
calling Dr. Sherr “not a good doctor” and a “dangerous surgeon” and suggesting that
he put patients at risk by operating too quickly, losing excessive amounts of blood
during surgery, and having high infection rates. Dr. Sherr claims these comments
were driven by professional jealousy and anticompetitive motives.
At her deposition, Dr. Wallenfriedman explained that at some point in the first
half of 2015 an operating room nurse approached her to discuss the nurse’s concerns
about Dr. Sherr. The nurse told Dr. Wallenfriedman that the operating room staff
had “filled out multiple safety event reports” concerning Dr. Sherr’s surgeries and
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wanted to ensure that the HealthEast administration was aware of these reports. In
response, Dr. Wallenfriedman sent an email to HealthEast’s head of surgery, Dr.
Andrew Fink, containing a list of cases the nurse identified. The list consisted of six
of Dr. Sherr’s patients from April and May who had suffered post-operative
infections. Between June and early August, Dr. Wallenfriedman sent Dr. Fink four
additional emails, identifying other cases of Dr. Sherr’s in which complications had
arisen. Dr. Fink forwarded all of these emails to Dr. John Kvasnicka, who worked
in HealthEast’s Quality Department, and Nurse Ellen Fletcher, a peer review
specialist.
Similar concerns about Dr. Sherr’s surgeries emerged from two additional
sources that summer. First, on June 11, Nurse Annette Lund, an infection prevention
specialist, emailed Dr. Peter Bornstein, who worked in the Infection Prevention and
Control department. She detailed concerns from members of the operating room
staff about the number of Dr. Sherr’s patients who had developed infections, suffered
blood loss, and required redo procedures. Second, the Spine Quality Report for
February to April 2015 indicated that four out of eighty of Dr. Sherr’s spinal fusion
patients over that period had “deep surgical site infections,” as compared to seven
surgical site infections for spinal fusion at all of HealthEast in 2014. Dr. Bornstein
sent Dr. Sherr a letter with this information on June 18, 2015, though no additional
action was taken at that time.
In light of this information, HealthEast initiated peer review of Dr. Sherr in
August 2015. On August 7, Dr. Wallenfriedman sent Dr. Sherr an email notifying
him that the Spine Council had selected one case for peer review—a case initially
identified in one of Dr. Wallenfriedman’s emails to Dr. Fink. On September 21, Dr.
Wallenfriedman sent another email, informing Dr. Sherr of a second case being sent
to peer review. This case had been identified by a safety event report, as well as
from a referral by HealthEast’s Peer Review and Medical Director, Dr. Peter
Tanghe, and from Dr. Wallenfriedman’s emails to Dr. Fink. Both of Dr.
Wallenfriedman’s emails advised Dr. Sherr that the cases would be discussed at a
peer review meeting on October 6, notified him that his attendance was required at
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that meeting, and requested that he send documents related to the cases to the peer
reviewers.
Meanwhile, on September 1, between the first and second emails Dr.
Wallenfriedman sent to Dr. Sherr, the Spine Council held its regular monthly
meeting. Drs. Dunn and Gregory, who were not members of the Spine Council, also
attended, as did two additional guests. Dr. Sherr (also not a member of the Spine
Council) did not attend. Dr. Wallenfriedman presented a summary of the data from
the Spine Quality Report covering January to June 2015. The data showed that one
of fourteen surgeons tracked over this period, whose identities were anonymized,
had six surgical site infections, while no other surgeon had more than two. The
Spine Council requested further review for this particular surgeon. The surgeon was
later identified as Dr. Sherr.
At some point around this time, and prior to the October 6 peer review
meeting, Dr. Wallenfriedman shared data from the Spine Quality Report with
Kathryn Correia, the Chief Executive Officer of HealthEast. Afterward, Correia
asked Dr. Kolar, the Senior Vice President and Chief Medical Officer of HealthEast,
to be involved in the peer review process for Dr. Sherr.
On October 2, the Spine Council held a conference call to discuss Dr. Sherr’s
upcoming peer review meeting. The participants on the call were Nurse Fletcher
and Drs. Wallenfriedman, Tanghe, Kvasnicka, Kolar, and Fink. Dr. Wallenfriedman
brought up the six cases from the Spine Quality Report (four of which Dr.
Wallenfriedman had also identified in her previous emails to Dr. Fink) and asked the
other participants for their thoughts on whether they met the criteria for peer review.
Dr. Wallenfriedman advocated for adding the six cases to the October 6 peer review
meeting. While most of the other participants agreed that the six cases should be
addressed soon, some wondered whether October 6 was too early. After further
discussion, the group decided to assign the six cases to reviewers and discuss them
at the October 6 meeting.
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Later in the day on October 2, Dr. Tanghe sent Dr. Sherr an email notifying
him of the six additional cases to be discussed at the October 6 meeting. Guided by
the Peer Review Policy, the Spine Council distributed the cases to different
practitioner reviewers, and the completed Peer Review Forms were consolidated into
case abstracts prior to the October 6 meeting. Dr. Sherr submitted his own written
responses addressing all eight cases—the initial two and the additional six—on
October 5.
On October 6, the Spine Council held its peer review meeting for Dr. Sherr.
Dr. Sherr attended, as did two of his MSBI colleagues on the Spine Council, Drs.
Stefano Sinicropi and Glenn Buttermann. Drs. Dunn and Gregory were also present.
At the meeting, Dr. Wallenfriedman gave a PowerPoint presentation summarizing
the data from the Spine Quality Report and identifying other areas of concern with
Dr. Sherr’s surgeries. Dr. Sinicropi responded, explaining that Dr. Sherr’s infection
rate should be considered in relation to the high-risk population Dr. Sherr treated.
Dr. Sinicropi added that he was willing to work with Dr. Sherr to develop a plan to
reduce the risk of infections for his patients in the future. The Spine Council agreed
to a set of proposed solutions, including mentoring and monitoring Dr. Sherr, and
scheduled a follow-up meeting for October 20.
On October 12, Dr. Tanghe asked Nurse Fletcher to send an invitation to the
October 20 meeting to all attendees of the October 6 meeting except Dr. Sherr.
Nurse Fletcher sent the email, but used a different—and incorrect—email address
for Dr. Sinicropi than the one used for the October 6 meeting. As a result, Dr.
Sinicropi did not receive the invitation (though the meeting minutes list him as
“invited”) and did not attend the meeting. Because Dr. Buttermann, who did receive
the invitation, was unable to attend, no one from MSBI was present during the
October 20 meeting.
On October 20, the Spine Council held their follow-up meeting on Dr. Sherr’s
cases. A number of Spine Council members were in attendance, as were Drs. Kolar,
Dunn, and Gregory. The members discussed the peer review cases and voted by
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secret ballot on whether to suspend Dr. Sherr’s privileges at HealthEast. All of the
Spine Council members present, in addition to one absent member who voted by
email, decided to do so.
Immediately after the meeting, Dr. Kolar imposed a summary suspension of
Dr. Sherr’s privileges and notified Dr. Sherr of his suspension. When Dr. Sinicropi
learned of the meeting and the suspension, he emailed HealthEast, saying “[MSBI]
was never notified of the meeting this morning. This is unacceptable and needs to
be remedied immediately.” Meanwhile, within the local neurosurgery community,
word of Dr. Sherr’s suspension spread quickly.
On October 22, the MEC met to discuss Dr. Sherr’s summary suspension, in
accordance with HealthEast’s bylaws. Dr. Sherr was invited to this meeting but was
asked to remain outside of the room for the beginning. Dr. Kolar explained to the
MEC the reasons behind his decision to impose summary suspension, citing Dr.
Sherr’s “significant outlier status with respect to surgical site infection rate,”
“excessive blood loss during surgery,” and questionable patient selection process.
Dr. Kolar told the MEC that MSBI had proposed a mentoring program to remedy
the issues, but that the Spine Council concluded that such a program would have
been insufficient. Dr. Tanghe then discussed the Spine Quality Report and the
information about Dr. Sherr’s infection rates that it reflected. Finally, Dr.
Wallenfriedman offered a PowerPoint presentation with information on Dr. Sherr’s
peer review cases and a summary of the October 20 meeting. The PowerPoint
indicated that MSBI members were invited to participate in the October 20 meeting
but were not present. The MEC meeting minutes state that Dr. Sinicropi’s absence
was due to a “miscommunication with his email.” After Dr. Wallenfriedman’s
presentation, Dr. Sherr was invited to join the meeting. He explained that his higher
infection rate was due to the fact that his cases and patients were more complex than
those of other surgeons at HealthEast. He also objected to Dr. Wallenfriedman’s
involvement in the peer review process, considering her status as his direct
competitor.
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At the close of all of the presentations, the MEC deliberated and voted twelve
to one in favor of upholding Dr. Sherr’s suspension. Dr. Kolar notified Dr. Sherr of
the decision and filed a public report of the suspension with the National Practitioner
Databank.
On November 19, Dr. Sherr requested a hearing on his suspension before
HealthEast’s Judicial Review Committee (JRC). The JRC held its hearing on
February 1, 2016. Finding that Dr. Sherr had proven that “the evidence as relied on
cannot justify imposition of summary suspension as endorsed by the MEC,” the JRC
elected to overturn Dr. Sherr’s suspension on February 4. It added, however, that its
decision was “not an endorsement of the medical care Dr. Sherr provided or his
surgical competence.”
In December 2015, while Dr. Sherr’s summary suspension was still in effect,
Dr. Sherr and MSBI renewed his employment contract for another year. But Dr.
Sherr ultimately determined that his “referral sources had been devastated, and his
ability to continue to be a top revenue producer for MSBI had been destroyed.” He
therefore resigned from MSBI in March 2016 and relocated his practice to Florida.
II.
Dr. Sherr claims that HealthEast and the Neuro Group made a number of
defamatory comments about him over the course of his relationship with HealthEast.
At the district court, Dr. Sherr identified 18 statements in particular that he argues
constitute defamation. He also argues that the Appellees tortiously interfered with
his prospective economic advantage and tortiously interfered with his contracts
under Minnesota law.
After reviewing Dr. Sherr’s arguments, the district court granted summary
judgment for the Appellees. First, it concluded that both federal and state peer
review immunity cover the review process Dr. Sherr experienced at HealthEast. As
such, it found that the Appellees were not liable for defamation or tortious
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interference for anything that occurred during Dr. Sherr’s peer review. 2 As to the
statements made outside of peer review, the district court found that they did not
constitute actionable defamation for several reasons. The court rejected some of the
allegedly defamatory statements because Dr. Sherr did not allege them in his
amended complaint. Others, the district court concluded, relied on inadmissible
hearsay. Finally, the district court found that, even if they had been alleged in the
complaint, some of the statements were not actionable because they were opinions,
rather than assertions of fact. Dr. Sherr appeals the district court’s decision.
III.
We review the district court’s grant of summary judgment de novo. Togerson
v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). When deciding
a motion for summary judgment, a court is required to view disputed facts in the
light most favorable to the nonmoving party, drawing all reasonable inferences in its
favor. Scott v. Harris, 550 U.S. 372, 378 (2007). A court at this stage “does not
weigh the evidence, make credibility determinations, or attempt to discern the truth
of any factual issue.” Morris v. City of Chillicothe, 512 F.3d 1013, 1018 (8th Cir.
2008). Rather, the focus is on whether there are genuine issues of material fact for
trial. Id. Substantive law in the relevant area dictates which facts are material, as
“[o]nly disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A.
Appellees contend that most of the 18 potentially defamatory statements at
issue are not identified in Dr. Sherr’s amended complaint and therefore cannot
provide a factual basis for his defamation claim against them. Dr. Sherr responds
2
The district court also found that Dr. Sherr had not established a genuine
dispute of material fact on the merits of his tortious interference claims and granted
summary judgment on that basis as well.
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that Appellees’ argument relies on a “tortured and overly restrictive view of
applicable precedent” and advocates that we consider all of the identified statements,
even though he did not include them in his amended complaint.
Under Minnesota law, defamation claims must be pleaded with “a certain
degree of specificity.” Thompson v. Campbell, 845 F. Supp. 665, 679 (D. Minn.
1994); see also Stead-Bowers v. Langley, 636 N.W.2d 334, 342 (Minn. Ct. App.
2001) (noting that plaintiffs must “specifically plead the alleged defamatory
statements”). This requirement exists to ensure that complaints “provide sufficient
specificity in order to evaluate whether a privilege applies, as well as to put
defendants on notice of the scope of the defamation claim.” Walker v. Wanner
Eng’g, Inc., 867 F. Supp. 2d 1050, 1056 (D. Minn. 2012) (cleaned up). While
plaintiffs may not have to directly quote the allegedly defamatory words, see
Thompson, 845 F. Supp. at 679 (noting that plaintiff’s failure “to recite the exact
language spoken is not fatal to her defamation claim”); but see Moreno v. Crookston
Times Printing Co., 610 N.W.2d 321, 326 (Minn. 2000) (“Minnesota law has
generally required that in defamation suits, the defamatory matter be set out
verbatim.”), their complaints generally must identify “who made the allegedly
[defamatory] statements, to whom they were made, and where.” Pinto v.
Internationale Set Inc., 650 F. Supp. 306, 309 (D. Minn. 1986). Any statements not
so identified in the complaint are beyond the scope of a plaintiff’s defamation claim.
See Thompson, 845 F. Supp. at 680 (“The scope of [plaintiff’s] defamation claim is
limited to the allegations of the complaint.”); see also Benson v. Nw. Airlines, Inc.,
561 N.W.2d 530, 538 (Minn. Ct. App. 1997).
Dr. Sherr cites Walker v. Wanner Engineering to argue that statements he
identified through discovery but did not incorporate into his complaint may be
considered part of his defamation claim. In Walker, the plaintiff’s complaint
identified the specific statements at issue and the parties who said them, but did not
specify where the statements were made. The court explained that “[a]lthough the
‘where’ is not expressly stated for either defamation claim, the context of both
allegations put [defendant] on notice that the defamatory statements were both made
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within [defendant’s] facility.” Walker, 867 F. Supp. 2d at 1056-57. Walker is thus
better understood as establishing that, in some circumstances, a defamation
complaint need not specify the precise location of the defamatory comments, so long
as the defendant has sufficient notice of the general locale to be able to identify the
statement. We do not read it as upending the general requirements that defamation
must be pleaded with specificity and that defamation claims are limited to what is
identified in the complaint.
Here, though Dr. Sherr’s amended complaint states that members of the Neuro
Group “have made many . . . false and defamatory statements about Plaintiff,” it
specifically describes only three statements. Namely, the complaint alleges (1) that
the Neuro Group “would disparage Dr. Sherr [to operating room nurses] for how
quickly he would complete his surgeries,” claiming that “Dr. Sherr’s speed in
surgery was putting his patients at risk”; (2) that, at the October 6 peer review
meeting, the Neuro Group accused Dr. Sherr of “fail[ing] to order some basic and
necessary imaging in connection with the treatment” of eight patients; and (3) that
Dr. Dunn professed at that same meeting “that Dr. Sherr was known by the operating
room staff to have his patients ‘lose a liter of blood for every level of fusion surgery
Dr. Sherr performed.’” Dr. Sherr could have amended his complaint to incorporate
the additional allegedly defamatory statements identified during discovery, but he
did not do so. 3 And given the requirement that defamation claims be pleaded with
specificity, only the statements included in the amended complaint can form the
basis of Dr. Sherr’s claim. Therefore, these are the only three statements before us
on appeal. 4
3
On April 16, 2019, the same day that Dr. Sherr filed his response to
Appellees’ motion for summary judgment, he also moved to amend his complaint
once again. The magistrate judge denied his motion, reasoning that Dr. Sherr did
not act diligently in seeking leave to amend and that his motion came after the
February 1, 2019 deadline for filing non-dispositive motions.
4
In the list of 18 statements that Dr. Sherr provided, statements seven and nine
are both statements by members of the Neuro Group to operating room physicians
about the speed of Dr. Sherr’s surgeries. Both are properly within the amended
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B.
As to the first remaining statement—the Neuro Group’s alleged comments
about the speed of Dr. Sherr’s surgeries—the district court properly found that this
allegation relied exclusively on inadmissible hearsay and thus cannot provide a
factual basis for a defamation claim. See Firemen’s Fund Ins. Co. v. Thien, 8 F.3d
1307, 1310 (8th Cir. 1993) (“Inadmissible hearsay evidence alone may not defeat a
summary judgment motion.”). Dr. Sherr’s opening brief does not address this aspect
of the district court’s decision. Because “[c]laims not raised in an opening brief are
deemed waived,” Jenkins v. Winter, 540 F.3d 742, 751 (8th Cir. 2008), we will not
review the district court’s rejection of this first statement.
C.
We are thus left with two allegedly defamatory statements, both made by
members of the Neuro Group at the October 6 peer review meeting. Appellees argue
that they are immune from liability for these statements under both federal and state
peer review immunity statutes, while Dr. Sherr claims that neither statute applies.
Minnesota’s peer review immunity statute provides:
[N]o . . . person who is a member . . . of . . . a review organization shall be
liable for damages or other relief in any action brought by a person or persons
whose activities have been or are being scrutinized or reviewed by a review
organization, by reason of the performance by the person of any duty,
function, or activity of such review organization . . . .
Minn. Stat. § 145.63, subdiv. 1. “The clear import of this statute is to encourage the
medical profession to police its own activities with a minimum of judicial
complaint’s claim that “[t]he HealthEast Neuro Group said that Dr. Sherr’s speed in
surgery was putting his patients at risk,” but we will refer to them as a single
“statement” for ease of reference.
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interference.” Campbell v. St. Mary’s Hosp., 252 N.W.2d 581, 587 (Minn. 1977).
“Whether a party is entitled to statutory immunity is a question of law.” In re Peer
Review Action, 749 N.W.2d 822, 827 (Minn. Ct. App. 2008).
In keeping with the purpose of Minnesota’s peer review statute, a peer
reviewer loses immunity only if that reviewer was motivated by malice toward the
subject of the review. Minn. Stat. § 145.63, subdiv. 1. In “the context of statutory
immunity,” malice means “nothing more than the intentional doing of a wrongful
act without legal justification or excuse, or, otherwise stated, the willful violation of
a known right.” In re Peer Review, 749 N.W.2d at 827 (cleaned up). The question
of whether a peer review inquiry was motivated by malice is an objective one,
focused not on what the reviewers personally believed, but rather on how the process
was conducted. See id. at 828 (affirming finding of malice where the defendant
“intentionally, and repeatedly, violated its own established procedural safeguards”);
see also Campbell, 252 N.W.2d at 587 (rejecting claims of malice premised on
“unsubstantiated speculation as to the reasons for the revocation of [a doctor’s]
surgical privileges”). Accordingly, in Minnesota, “[j]udicial review of peer-review
actions is properly limited . . . to only whether peer reviewers abided by their own
established procedures.” In re Peer Review, 749 N.W.2d at 829. We will infer
malice only if the peer reviewers did not follow those procedures.
At the time of the investigation into Dr. Sherr’s surgeries, HealthEast’s peer
review process was dictated by its Practitioner Peer Review Policy. The Policy laid
out specific procedures and guidelines for HealthEast employees to follow while
conducting peer review, “to ensure a fair and objective evaluation of individual
practitioner performance and reasonable actions based on assessment findings.” Dr.
Sherr points to a number of features of his peer review process that he claims
deviated from the Policy and support a finding of malice.
First, Dr. Sherr argues that Dr. Wallenfriedman was the “catalyst” behind the
decision to initiate peer review inquiries into all eight of the cases the reviewers
ultimately considered. However, this contention is unsupported by the record, which
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demonstrates that concerns about Dr. Sherr’s surgeries came from a number of
different sources, including the Spine Quality Report and Nurse Lund. In any event,
the Policy makes clear that “[c]ases potentially needing peer review” could be
received from “[r]eferrals from internal sources, such as physicians.” Even if Dr.
Wallenfriedman had been the sole catalyst, Dr. Sherr fails to explain how this would
have violated applicable procedures. 5 Dr. Sherr also takes issue with Dr.
Wallenfriedman’s involvement in the peer review process at all, given her status as
his competitor for patient referrals. However, as Chair of the Spine Council, the
body tasked with conducting the peer review, Dr. Wallenfriedman was permitted but
not required to “limit medical staff attendance for particular case discussions” where
“[c]linical peers may have discriminatory or anti-competitive motives in evaluating
the individual being reviewed.” Dr. Wallenfriedman could have abstained due to a
potential conflict as a competitor of Dr. Sherr’s, but the policy is permissive, not
mandatory. Her choice to participate was thus in compliance with the Policy’s
discretionary approach.
Next, Dr. Sherr claims that Dr. Wallenfriedman “notified [Correia] of Sherr’s
infection rate issues before the peer review process was completed,” in violation of
the Policy’s requirement that all peer review procedures “be held in the strictest
5
Dr. Sherr makes the related claim that HealthEast should have addressed his
cases through the organization’s Focused Professional Practice Evaluation Policy
and Procedure (FPPE), which provides for evaluation of all physicians six months
after they have been granted a new privilege, rather than through formal peer review.
Dr. Sherr argues that HealthEast’s failure to complete the FPPE process provides
evidence of objective malice. Even assuming that the procedures we consider in our
malice inquiry should include ones separate from the peer review process at issue
here, which we are not convinced of, we do not see the procedural irregularity that
Dr. Sherr does. The FPPE policy indicates that an “FPPE will be initiated 6 months
after [a new] privilege was granted” and that “the Clinical Council Chair will be
notified if at any time during a review period, there are concerns regarding a
practitioner’s competency to perform specific clinical privilege(s).” Once notified,
the Chair may refer the practitioner’s cases to peer review, where HealthEast’s
normal peer review processes apply. Here, Dr. Sherr’s cases were elevated to formal
peer review before the FPPE process would even have begun.
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confidence.” Even assuming that Correia, the Chief Executive Officer of
HealthEast, was not properly part of the confidential peer review process, the record
indicates that Dr. Wallenfriedman showed Correia the Spine Quality Report, not any
information from the peer review process itself. The Spine Council generated the
Spine Quality Report in the ordinary course of its work as a clinical council, separate
and distinct from its review of Dr. Sherr. Additionally, the Policy makes clear that
Dr. Wallenfriedman had the discretion to include “any other individuals” in the peer
review meetings. Dr. Sherr also argues that Dr. Wallenfriedman violated applicable
notice policies by adding six additional cases to the October 6 meeting only four
days before that meeting and by not informing Dr. Sinicropi of the October 20
follow-up meeting. However, the Policy contains no such notice requirements, and
Dr. Sherr points to no rules that would have required notice in this situation. Finally,
Dr. Sherr points to a number of “willfully false statements” that he claims Dr.
Wallenfriedman made about him over the course of the peer review process. But
assessing this claim necessarily requires an inquiry into Dr. Wallenfriedman’s
mental state: both what she knew at the time and what her intentions were in making
the statements. This is exactly the sort of subjective analysis foreclosed by
Minnesota’s peer review immunity standards, and we will not consider it as evidence
of malice.
We are sympathetic to Dr. Sherr, who may genuinely have perceived the peer
review process at HealthEast to be unfair or biased against him. However, under
Minnesota law, our focus is not on the perception of the person under peer review
or on the individual motivations of the reviewers. Rather, we are “limited . . . to
only whether peer reviewers abided by their own established procedures.” In re Peer
Review, 749 N.W.2d at 829. Because the record offers no indication that the
reviewers did not so abide, the Appellees are entitled to peer review immunity on
the remaining two statements, and the district court properly dismissed Dr. Sherr’s
defamation claim.
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IV.
Dr. Sherr’s amended complaint also includes claims for tortious interference
with prospective economic advantage and tortious interference with contract. To the
extent these alleged interferences occurred solely through the peer review process
itself, Appellees are entitled to peer review immunity. But in the event peer review
immunity does not fully shield Appellees, we will address each claim.
A.
Under Minnesota law, a plaintiff must prove five elements to establish tortious
interference with prospective economic advantage:
1) The existence of a reasonable expectation of economic advantage;
2) Defendant’s knowledge of that expectation of economic advantage;
3) That defendant intentionally interfered with plaintiff’s reasonable expectation
of economic advantage, and the intentional interference is either
independently tortious or in violation of a state or federal statute or regulation;
4) That in the absence of the wrongful act of defendant, it is reasonably probable
that plaintiff would have realized his economic advantage or benefit; and
5) That plaintiff sustained damages.
Gieseke ex rel. Diversified Water Diversion, Inc. v. IDCA, Inc., 844 N.W.2d 210,
219 (Minn. 2014).
Dr. Sherr identifies two sources of prospective economic advantage that he
claims Appellees interfered with: a referral relationship with Allina Health, another
regional healthcare provider, and his ability to successfully continue on the track to
become a partner at MSBI. As to the Allina relationship, the only evidence Dr. Sherr
provides that Appellees intentionally interfered is a claim that they told Allina about
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his suspension and referred to him as a “dangerous surgeon.” As the district court
correctly pointed out, this claim relies on inadmissible hearsay. Because Dr. Sherr
did not provide admissible evidence in support, Appellees were entitled to summary
judgment on this claim. See Firemen’s Fund Ins. Co., 8 F.3d at 1310.
Regarding his relationship with MSBI, Dr. Sherr cannot meet all of the
elements required for a tortious interference claim. Specifically, he would have to
demonstrate that Appellees’ alleged interference with his expectation of economic
advantage was either independently tortious or in violation of a state or federal
statute. Gieseke, 844 N.W.2d at 219. As we understand it, Dr. Sherr’s argument is
that his relationship with MSBI was ruined because the news of his HealthEast
suspension traveled around the medical community. But HealthEast’s decision to
suspend Dr. Sherr was not itself tortious, and the Appellees were not legally
responsible for the secondary effects of his suspension. Without offering some
evidence that the Appellees independently acted tortiously or illegally as required
by Minnesota law, Dr. Sherr cannot show the district court erred in granting
Appellees’ motion for summary judgment.
B.
Dr. Sherr also alleges that Appellees interfered with two of his contractual
relationships: his clinical privileges with HealthEast and his employment contract
with MSBI.
To prevail on a claim of tortious interference with contract, Dr. Sherr must
establish five elements: “(1) the existence of a contract; (2) the alleged wrongdoer’s
knowledge of the contract; (3) intentional procurement of its breach; (4) without
justification; and (5) damages.” Sysdyne Corp. v. Rousslang, 860 N.W.2d 347, 351
(Minn. 2015) (cleaned up). Additionally, he must “provide evidence that
[defendants’] acts legally caused [him] to lose any contractual rights.” Lee v. Metro.
Airport Comm’n, 428 N.W.2d 815, 822 (Minn. Ct. App. 1988).
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Against this legal standard, there is no genuine issue of material fact as to Dr.
Sherr’s claim. First, Dr. Sherr has provided no evidence that he had a contract with
HealthEast at all or that his privileges should be interpreted as a contract. Second,
Dr. Sherr has not established that Appellees caused a breach of the MSBI contract
in place at the time of his suspension or any loss of his related contractual rights.
Indeed, after his initial contract expired—and months after the suspension—Dr.
Sherr and MSBI renewed their contractual relationship. Appellees are entitled to
summary judgment on this claim, as well.
V.
Considering the applicable substantive law, Dr. Sherr has not demonstrated
that the record reflects any genuine issue of material fact that might change the
outcome of his suit. The district court properly concluded that Appellees were
entitled to summary judgment on all of Dr. Sherr’s claims, and we affirm its
judgment.
SHEPHERD, Circuit Judge, concurring in part and dissenting in part.
I dissent from Parts III.C and IV.A of the Court’s opinion because I believe
genuine issues of material fact preclude granting summary judgment on Dr. Sherr’s
defamation and tortious interference with a prospective economic advantage claims
arising out of the peer review process. I concur in the Court’s opinion with respect
to Dr. Sherr’s other claims.
I agree with the Court that Dr. Sherr pled the Appellees’ statements made in
the course of the Neuro Group’s October 6 peer review meeting with sufficient
specificity. See Walker v. Wanner Eng’g, Inc., 867 F. Supp. 2d 1050, 1056 (D.
Minn. 2012). However, I would find that there are genuine issues of material fact
concerning whether those statements are entitled to state or federal immunity. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Peer review actions do
not enjoy state statutory immunity if they are motivated by malice, which may be
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inferred when peer reviewers willfully violate their own established procedures. See
In re Peer Review Action, 749 N.W.2d 822, 828-29 (Minn. Ct. App. 2008).6
HealthEast’s Policy required “a fair and objective evaluation” of Dr. Sherr’s
performance. While the peer review organization chair had discretionary authority
to limit review attendance based on “discriminatory or anti-competitive motives,”
the individual empowered with that discretion, Dr. Wallenfriedman, was one of the
individuals allegedly harboring anti-competitive motives. It is axiomatic that a
neutral decisionmaker is a quintessential pillar of a fair and objective process. See
Bracy v. Gramley, 520 U.S. 899, 904-05 (1997) (discussing the presence of a neutral
arbiter as a constitutional floor of due process). Therefore, I would find that whether
this high-level conflict of interest deprived Dr. Sherr of the “fair and objective
evaluation” the Policy required, which in turn would infer malice, is a genuine issue
of material fact.
Further, federal immunity requires “adequate notice and hearing procedures,”
42 U.S.C. § 11112(a)(3), which includes a process conducted by “a hearing
officer . . . who is not in direct competition with the physician involved,” id.§ 11112(b)(3). Because of Dr. Wallenfriedman’s position as the peer review
organization chair, I would find that whether the review process included “adequate
notice and hearing procedures” is a genuine issue of material fact.
6
The Court contends that a jury determination on this issue is improper
because “[w]hether a party is entitled to statutory immunity is a question of law.”
Id. at 827. However, “[t]he conclusion of malice,” a necessary showing to defeat
statutory immunity, “depends on found facts.” Id.; cf. Brooks v. Doherty, Rumble
& Butler, 481 N.W.2d 120, 126 (Minn. Ct. App. 1992) (explaining that whether an
employer abused its qualified privilege by acting with actual malice is “a question
for the jury”). Notably, in In re Peer Review, the appellant “d[id] not challenge the
district court’s factual findings,” but instead argued that the facts, as a matter of law,
did not give rise to malice. Id. Here, Dr. Sherr does challenge the facts, that is,
whether the Neuro Group violated its own procedures by failing to conduct “a fair
and objective evaluation.” In doing so, Dr. Sherr has presented sufficient evidence
for a reasonable jury to infer that the Neuro Group acted with malice; therefore,
whether the Neuro Group is entitled to statutory immunity must be reserved for the
jury’s determination.
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Assuming that Dr. Wallenfriedman’s involvement does bar statutory
immunity, I would find that these “objectively verifiable facts” are actionable
defamatory statements, the truthfulness thereof being a question for the jury.
Thomas v. United Steelworkers Loc. 1938, 743 F.3d 1134, 1142 (8th Cir. 2014)
(citation omitted); see McKee v. Laurion, 825 N.W.2d 725, 730 (Minn. 2013). I
would also find that because this arguably biased review process rendered
Dr. Sherr’s future partnership with MBSI impracticable, there exist genuine issues
of material fact regarding Dr. Sherr’s claim for tortious interference with a
prospective economic advantage. See Gieseke ex rel. Diversified Water Diversion,
Inc. v. IDCA, Inc., 844 N.W.2d 210, 219 (Minn. 2014). Thus, I would find that
Dr. Sherr has demonstrated genuine disputes throughout his claim that should be
resolved by the jury and that make summary judgment inappropriate.
______________________________
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