Alaa E. Elkharwily, M.D. v. Mayo Holding Company

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 15-1492
___________________________
Alaa E. Elkharwily, M.D.
lllllllllllllllllllll Plaintiff - Appellant
v.
Mayo Holding Company; Mayo Clinic Health System-Albert Lea; Mayo
Foundation; Mark Ciota, M.D.; John Grzybowski, M.D.; Dieter Heinz, M.D.;
Robert E. Nesse, M.D.; Steve Underdahl; Stephen Waldhoff
lllllllllllllllllllll Defendants - Appellees
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Appeal from United States District Court
for the District of Minnesota - Minneapolis
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Submitted: November 19, 2015
Filed: May 20, 2016
[Published]
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Before SMITH, BYE, and BENTON, Circuit Judges.1
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PER CURIAM.
1
This opinion is being filed by Judge Smith and Judge Benton pursuant to 8th
Cir. Rule 47E.
Alaa E. Elkharwily, M.D., sued Mayo Holding Company, Mayo Clinic Health
System-Albert Lea (the Clinic), Mayo Foundation, and Mayo staff2 (collectively
Mayo) for wrongful employment termination and retaliation. The district court3
granted Mayo's motion to dismiss in part and its later motion for summary judgment,
while denying Dr. Elkharwily's motion for reconsideration and motion for additional
time for discovery. Dr. Elkharwily appeals. We affirm.
I
Dr. Elkharwily, a medical doctor certified in internal medicine, worked as a
hospitalist at the Clinic from September 7, 2010, to December 10, 2010. As a
hospitalist, his job duties included providing care for admitted patients and refining
the "hand-off" process for patients released to the care of their primary providers after
hospitalization ended. Dr. Elkharwily reported directly to Dr. Dieter Heinz, Chair of
the Division of Medicine, and indirectly to an administrative team including Dr. Mark
Ciota, Dr. John Grzybowski, Steve Underdahl (Hospital Administrator), and Lori
Routh (Nurse Executive).
Under Clinic policy, new employees–including Dr. Elkharwily–are on
probationary status for 90-days and evaluated in writing before the 90th day. At the
end of this period, the evaluators recommend either continued employment, extension
of probation, or termination. Dr. Elkharwily also participated in Minnesota's Health
Professionals Service Program (HPSP) while employed at the Albert Lea Clinic
because he suffers from bipolar disorder. This program required a work-site monitor
2
The named Mayo medical staff are Mark Ciota, M.D.; John Grzybowski,
M.D.; Dieter Heinz, M.D.; Robert E. Nesse, M.D.; Steve Underdahl; and Stephen
Waldhoff.
3
The Honorable David S. Doty, United States District Judge for the District of
Minnesota.
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to supervise Dr. Elkharwily and submit quarterly reports assessing his job
performance. His work-site monitor at the Clinic was Dr. Ciota.
The Hospital Administrator evaluated Dr. Elkharwily's job performance for his
90-day review. The Administrator solicited information from hospital administration,
nursing staff, physician leadership, and physician colleagues about Dr. Elkharwily's
job performance, detailing the staff's concerns in a November evaluation: difficulty
organizing and prioritizing his work; unreachable to staff; adversarial, resistant to
admitting patients, and unnecessarily generated work for the emergency departments;
untrusted by the nursing staff for his instructions or interpretation of events;
incorrectly informing nursing staff that his contract limits the number of patients he
is required to care for to twelve; and difficulty timely completing documentation.
Despite these concerns, the Hospital Administrator and Dr. Elkharwily's direct
supervisor extended Dr. Elkharwily's employment probationary period by 90 days.
As part of the evaluation, the Hospital Administrator and direct supervisor planned
to discuss the evaluation with Dr. Elkharwily shortly after its completion.
Simultaneously, Dr. Ciota prepared Dr. Elkharwily's confidential HPSP report.
Dr. Ciota interviewed five nursing supervisors about his job performance. Although
the Hospital Administrator did not interview these supervisors, their answers reflected
many of the same concerns as the evaluation. Dr. Elkharwily did not answer calls and
was difficult to locate, had very poor organizational skills, did not see patients in a
timely manner, frequently challenged patients' end-of-life choices, became easily
frustrated, did not always provide an accurate interpretation of events, and became
difficult to work with when feeling overworked. Dr. Ciota sent the HPSP report
Minnesota on December 6, 2010.
Before the Hospital Administrator and direct supervisor could discuss the
evaluation results with Dr. Elkharwily, the following events took place. On
December 7, Dr. Elkharwily gave an order to a nurse to give a patient intravenous
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(IV) Tylenol. The nurse questioned Dr. Elkharwily because she had never heard of
IV Tylenol. Dr. Elkharwily insisted he had given IV Tylenol to a patient two days
earlier. The nurse contacted the hospital pharmacist, who verified the formulary did
not carry IV Tylenol.
The next day, a nursing supervisor reported the incident to the Nurse
Executive, Lori Routh. She and the Hospital Administrator discussed the events with
Dr. Elkharwily. Dr. Elkharwily reiterated that he believed IV Tylenol was available
at the Albert Lea Clinic formulary because he had administered it to a patient a few
days earlier. The Administrator explained that IV Tylenol was not available in the
formulary. Dr. Elkharwily immediately changed his story stating, "It would have
been the right medication to use had it been available."
In light of the inconsistent responses, the Hospital Administrator and Nurse
Executive were concerned about patient safety and Dr. Elkharwily's overall
trustworthiness. The Clinic placed Dr. Elkharwily on paid administrative leave
pending further investigation. The Hospital Administrator and Nurse Executive
interviewed nursing staff to assess Dr. Elkharwily's patient safety. The interviews
matched the concerns in his 90-day evaluation and HPSP report, including that he
was disorganized, dishonest, difficult to reach while on duty, and difficult with
patients.
On December 10, the Hospital Administrator outlined his concerns about Dr.
Elkharwily's job performance to Dr. Grzybowski. The Administrator concluded,
"Based on the volume and magnitude of concerns about Dr. Elkhawily and his
performance as a hospitalist, it appears that a majority of team members have lost
confidence in his ability and are very pessimistic about his ability to improve."
Later that day, after consulting with in-house counsel, the Clinic's
administrative team recommended Dr. Ciota end Dr. Elkharwily's employment or
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permit him to resign in lieu of termination. Dr. Ciota agreed. Members of the
administrative team and the Director of Human Resources and Staff Development,
informed Dr. Elkharwily of the decision to end his employment. Disagreeing with
the decision, he said he would consider resigning. On December 11, Dr. Elkharwily
resigned.
Three days later, Dr. Elkharwily sent multiple emails to Dr. Ciota challenging
the basis for his termination and filed an administrative appeal. Mayo denied the
appeal on July 8, 2011. Dr. Elkharwily filed suit, alleging defamation and violations
of the Minnesota Vulnerable Adults Act (MVAA), the Emergency Medical Treatment
and Active Labor Act (EMTALA), the Minnesota Whistleblower Act, and the False
Claims Act.
The MVAA claim derives from his allegation that on December 7, the Clinic
provided substandard care to two patients, endangering their lives. Dr. Elkharwily
claims he reported the incidents to Dr. Ciota on December 11 and 13.
The EMTALA claims were based on two events between December 7 and 8,
2010. First, Dr. Elkharwily submits Dr. Grzybowski, who was on call, refused to
come in and treat two patients within a reasonable period of time. Second, Dr.
Elkharwily refused to transfer an unstabilized patient and argues Mayo terminated his
employment in retaliation for his refusal to transfer the patient. Dr. Elkhawily asserts
he reported these violations to his supervisors.
The Minnesota Whistleblower Act claim derives from an incident on
September 15, 2010, when he thought a treating physician had engaged in "criminal
negligence" by failing to admit a patient whom Dr. Elkhawily believed to be having
a heart attack.
The False Claims Act claim stems from an email he sent to his supervisors in
November, suggesting the Clinic establish an inpatient wound-care team because not
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having one was "a huge loss of revenue for the hospital." Dr. Elkharwily argues that
this email reported Mayo was providing unlicensed care and unlawfully billing
patients, constituting a complaint of a violation of the False Claims Act.
The defamation claim alleged Mayo made false statements about his job
performance during his initial termination meeting and review meeting. Dr.
Elkharwily asserts Mayo's statements were incorrect, unsubstantiated, and detrimental
to his reputation in the medical community.
Mayo moved to dismiss Dr. Elkharwily's claims. The district court dismissed
Dr. Elkharwily's claims for defamation, violations of MVAA, and part of his
EMTALA claim about terminating his employment for refusing to transfer a patient.
On the remaining claims, Mayo moved for summary judgment. Opposing
summary judgment, Dr. Elkharwily filed a timely but over-length response and
attached a 51-page declaration, incorporated by reference. The district court struck
Dr. Elkharwily's declaration because his submission was already over the acceptable
word limit. The district court also denied Dr. Elkharwily's motion for additional
discovery, the subject of multiple prior unsuccessful motions.
The district court granted Mayo's motion for summary judgment, dismissing
the remaining claims with prejudice. Dr. Elkharwily appeals.
II
A
Dr. Elkharwily argues the district court erred in granting Mayo's motion to
dismiss his claims under the MVAA, for defamation, and under EMTALA.
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"We review de novo a district court's dismissal for failure to state a claim,
taking all facts alleged in the complaint as true." Cuellar-Aguilar v. Deggeller
Attractions, Inc., 812 F.3d 614, 618 (8th Cir. 2015), reh'g denied (Feb. 10, 2016). To
avoid dismissal under Rule 12(b)(6), "a complaint must contain sufficient factual
matter . . . 'to state a claim to relief that is plausible on its face.'" McCaffree Fin.
Corp. v. Principal Life Ins. Co., 811 F.3d 998, 1002 (8th Cir. 2016), reh'g and reh'g
en banc denied (Feb. 17, 2016) (quoting Braden v. Wal-Mart Stores, Inc., 588 F.3d
585, 594 (8th Cir. 2009)). "A claim is plausible on its face 'when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged." Id. (quoting Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009)).
Under the MVAA, if "[a] mandated reporter . . . has reason to believe that a
vulnerable adult is being or has been maltreated . . . [he] shall immediately report the
information . . . ." Minn. Stat. § 626.557, subdiv. 3(a). This requirement is satisfied
either by an oral report to the facility's common entry point or by following the
facility's internal reporting procedure. Id. at subdiv. 4, 4a.
Dr. Elkharwily concedes he did not report the violations to a common entry
point. And, his conclusory allegations do not show compliance with the internal
reporting procedure. Dr. Elkharwily alleged he reported violations under MVAA to
the Clinic staff, including Dr. Ciota, Dr. Grzybowski, his direct supervisor, and the
Hospital Administrator. However, nowhere does he allege his reporting compliance
with the internal reporting procedure. The district court properly dismissed his claim.
B
Dr. Elkharwily alleged Mayo made false statements about his performance
during his initial termination meeting and review meeting, which amount to
defamation. The district court dismissed because Mayo's statements were protected
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by qualified privilege. Dr. Elkharwily argues Mayo did not have reasonable grounds
for believing its false statements. We disagree.
Under Minnesota law, a plaintiff must prove three elements to establish a
defamation claim: "(1) the defamatory statement is communicated to someone other
than the plaintiff, (2) the statement is false, and (3) the statement tends to harm the
plaintiff's reputation and to lower the plaintiff in the estimation of the community."
Bahr v. Boise Cascade Corp., 766 N.W.2d 910, 919-20 (Minn. 2009) (internal
quotation marks omitted) (cited in Chambers v. Travelers Cos., Inc., 668 F.3d 559,
564 (8th Cir. 2012)). However, even if the plaintiff proves the three elements, the
defendant may be entitled to qualified privilege if the statement was "made upon a
proper occasion, from a proper motive, and . . . based upon reasonable or probable
cause." Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 256-57 (Minn. 1980).
"Communications between an employer's agents made in the course of investigating
or punishing employee misconduct are made upon a proper occasion and for a proper
purpose, as the employer has an important interest in protecting itself and the public
against dishonest or otherwise harmful employees." McBride v. Sears, Roebuck &
Co., 235 N.W.2d 371, 374 (Minn. 1975) (cited in Sherman v. Rinchem Co., 687 F.3d
996, 1008 (8th Cir. 2012)).
Mayo's allegedly defamatory statements are protected by qualified privilege
because they were made in the course of evaluating, investigating, or punishing Dr.
Elkharwily's performance. Mayo's critiques of his performance were made upon
proper occasion and from proper motive as part of two mandatory and independent
evaluations–the HPSP report and 90-day review. Mayo's alleged defamatory
statements were also based on reasonable cause, the confidential opinions of several
colleagues. Likewise, Mayo's allegedly defamatory statements were made during the
course of its investigation of the IV Tylenol incident. Mayo's motive and occasion
for making the allegedly defamatory statements were proper and the criticisms were
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based on reasonable cause. The district court properly dismissed Dr. Elkharwily's
defamation claim.
C
Dr. Elkharwily alleged Mayo terminated his employment in retaliation for his
refusal to authorize the transfer of an unstabilized patient, in violation of the
EMTALA. The district court partially dismissed Dr. Elkharwily's claim because his
January 3, 2011, written statement to the Minnesota Board of Medical Practice
reporting Mayo's violations directly contradicted his EMTALA allegation in his
complaint. Dr. Elkharwily contends that not only did his sworn statement constitute
evidence outside of the pleadings, but also he had expert testimony by Dr. Daniel
Doornink refuting his sworn statement and raising an issue of fact. Dr. Elkharwily
believes that the district court should have converted the motion to dismiss into a
motion for summary judgment.
Because Dr. Elkharwily referenced his January 2011 report in his second
amended complaint, the district court properly considered his testimony and
appropriately decided this issue in the motion to dismiss. Assuming without deciding
the district court erred in dismissing this portion of Dr. Elkhawily's claim under Rule
12(b)(6), such an error is harmless because summary judgment was appropriate, as
Dr. Doornink's declaration does not trump Elkharwily's written statement
contradicting his allegation. Fed. R. Civ. P. 61; see Quinn v. St. Louis Cty., 653 F.3d
745, 750 (8th Cir. 2011) (finding error in dismissing claim under 12(b)(6) was
harmless because summary judgment was appropriate on all claims); Gibb v. Scott,
958 F.2d 814, 816-17 (8th Cir. 1992) (noting the district court's failure to convert
12(b)(6) motion to summary judgment motion when considering matters outside
pleadings may be harmless when record supports summary judgment). Dr.
Elkharwily's signed and notarized statement stated the patient "had been stabilized"
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before being transferred. An EMTALA claim does not apply to patients who are
stabilized. 42 U.S.C. § 1395dd(b)(1).
D
Dr. Elkharwily initially argued Mayo terminated his employment as retaliation
for reporting violations under the Minnesota Whistleblower Act, the EMTALA, and
the False Claims Act. The district court granted summary judgment to Mayo on all
three issues. The court determined Dr. Elkharwily failed to establish pretext for
retaliation under the Minnesota Whistleblower Act and EMTALA, or that Mayo's
decision to terminate his employment was motivated solely by his reports of False
Claims Act violations. Dr. Elkharwily claims the district court's findings were
erroneous because the record does not support its findings.
"We review a district court's grant of summary judgment de novo, viewing the
evidence in the light most favorable to the non-moving party and giving the non-
moving party the benefit of all reasonable inferences." United States v. Dico, Inc.,
808 F.3d 342, 346 (8th Cir. 2015). Summary judgment is proper only if the moving
party satisfies its burden of demonstrating that no genuine issues of material fact
remain for trial. Fed. R. Civ. P. 56(a).
An employer shall not terminate an employee as retaliation for reporting a
violation under the Minnesota Whistleblower Act, EMTALA, or False Claims Act.
See Minn. Stat. § 181.932, subdiv. 1(1) (providing the Minnesota Whistleblowers
Act protects an employee from retaliatory discharge if "the employee . . . in good
faith, reports a violation, suspected violation, or planned violation of any federal or
state law . . . to an employer"); 42 U.S.C. § 1395dd(I) ("A participating hospital may
not penalize or take adverse action against a . . . physician because the . . . physician
refuses to authorize the transfer of an individual with an emergency medical condition
that has not been stabilized or against any hospital employee because the employee
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reports a violation of a requirement of this section."); 31 U.S.C. § 3730(h) (stating the
False Claims Act whistleblower statute protects employees "discharged . . . because
of lawful acts done by the employee" in furtherance of a civil action to stop false
claims). Dr. Elkharwily alleged Mayo engaged in activity that violated the Minnesota
Whistleblower Act, EMTALA, and False Claims Act including: refusing to admit a
patient whom Dr. Elkharwily believed to be having a heart attack, in violation of the
Minnesota Whistleblower Act; an on-call doctor refusing to come in and treat a
patient in violation of the EMTALA; and billing patients fraudulently for unlicensed
care in violation of the False Claims Act. Dr. Elkharwily argues Mayo terminated his
employment in retaliation for reporting these violations.
In the absence of direct evidence of retaliation, courts apply the McDonnell
Douglas burden-shifting framework to the Minnesota Whistleblower Act claims.
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973); see Hilt v. St. Jude Med.
S.C., Inc., 687 F.3d 375, 378 (8th Cir. 2012) (applying McDonnell Douglas analysis
to a Minnesota Whistleblower Act claim). In their briefs, the parties agree the
McDonnell Douglas burden-shifting analysis also applies to a retaliation claim under
EMTALA. See Ritten v. Lapeer Reg'l Med. Ctr., 611 F. Supp. 2d 696, 716 (E.D.
Mich. 2009) (applying McDonnell Douglas analysis to an EMTALA retaliation
claim); Lopes v. Kapiloani Med. Ctr. for Women & Children, 410 F. Supp. 2d 939,
947 (D. Haw. 2005) (same). We assume, without deciding, the McDonnell Douglas
analysis applies. Ritten, 611 F. Supp. 2d at 716 ("As the parties observe, there is no
case law addressing the standards that should govern a claim under the EMTALA's
anti-retaliation provision, so both sides have agreed that it is appropriate to analyze
Plaintiff's claim under the standards that govern Title VII claims of retaliation.").
"Under McDonnell Douglas, the initial burden is on the plaintiff to establish
a prima facie case." Pedersen v. Bio-Med. Applications of Minn., 775 F.3d 1049,
1054 (8th Cir. 2015) (quoting Buytendorp v. Extendicare Health Servs., Inc., 498
F.3d 826, 834 (8th Cir. 2007)). To establish a prima facie case, a plaintiff must
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prove: "(1) conduct by the employee that is protected by the Act, (2) an adverse
employment action directed at the employee, and (3) a causal connection between the
protected conduct and the adverse action." Id. "If the plaintiff establishes a prima
facie case, a burden shifts to the employer to articulate a legitimate reason for the
adverse action." Id. Once a legitimate reason is articulated, the burden then shifts
back to "the plaintiff to prove that the proffered reason is merely a pretext and that
retaliatory animus motivated the adverse action." Id.
Similarly, to establish retaliation under the False Claims Act, the "plaintiff
must prove that (1) the plaintiff was engaged in conduct protected by the [False
Claims Act]; (2) the plaintiff's employer knew that the plaintiff engaged in the
protected activity; (3) the employer retaliated against the plaintiff; and (4) the
retaliation was motivated solely by the plaintiff's protected activity." Schell v.
Bluebird Media, LLC, 787 F.3d 1179, 1187 (8th Cir. 2015) (quoting Schuhardt v.
Washington Univ., 390 F.3d 563, 566 (8th Cir. 2004)).
Assuming without deciding Dr. Elkharwily established prima facie cases under
the Minnesota Whistleblower Act and EMTALA or that he engaged in protected
conduct under the False Claims Act, he failed to establish his employment
termination was pretext for retaliation or motivated solely by his reports of Minnesota
Whistleblower Act, EMTALA, or False Claims Act violations. Rather, Mayo
articulated a legitimate, nondiscriminatory reason for terminating Dr. Elkharwily's
employment; namely, his poor job performance. Although Dr. Elkharwily argues
Mayo's performance evaluations and IV Tylenol investigation were shams to
terminate his employment, this argument is not supported by the record. Dr.
Elkharwily's performance evaluations were either required for all employees under
the Albert Lea Clinic policy or specifically required for Dr. Elkharwily because of his
participation in the HPSP. Further, the evaluations were confidential, based on
feedback from numerous staff interviews, and performed independently of each other.
Mayo's investigation into the IV Tylenol incident was also the proper protocol in
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response to Dr. Elkharwily's inconsistent version of the events which raised
legitimate patient-safety concerns.
Mayo terminated Dr. Elkharwily's employment for poor job performance.
Nothing in the record suggests pretext of retaliatory motive. Dr. Elkharwily failed to
meet his burden of establishing pretext for retaliation under the Minnesota
Whistleblower Act and EMTALA, or that Mayo's decision to terminate his
employment was "solely motivated" by his reports of False Claims Act violations.
We affirm the grant of summary judgment to Mayo.
E
Dr. Elkharwily argues the district court abused its discretion by denying his
motion for reconsideration of the district court's order striking his 51-page
declaration. Reviewing for abuse of discretion, we disagree. See Lowry ex rel. Crow
v. Watson Chapel Sch. Dist., 540 F.3d 752, 763 (8th Cir. 2008).
The district court did not abuse its discretion by striking Dr. Elkharwily's 51-
page declaration that doubled the word limit under the local rules. See D. Minn. LR
7.1(f)(1). "[T]he district court has considerable leeway in the application of its local
rules." Silberstein v. I.R.S., 16 F.3d 858, 860 (8th Cir. 1994). The district court
accepted Dr. Elkharwily's over-length response brief and acted within its discretion
to deny the 51-page declaration he tried to incorporate by reference. The district
court also did not abuse its discretion in denying the motion to reconsider.
F
Dr. Elkharwily argues the district court abused its discretion in denying his
motion under Rule 56(d) to defer summary judgment for additional discovery.
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Reviewing for abuse of discretion, we disagree. See Toben v. Bridgestone Retail
Operations, LLC, 751 F.3d 888, 895 (8th Cir. 2014) (quoting Stringfellow v. Perry,
869 F.2d 1140, 1143 (8th Cir. 1989)) ("District courts are afforded wide discretion
in their handling of discovery matters.").
The district court was well within its wide discretion to deny Dr. Elkharwily's
motion to defer the summary judgment ruling. By Rule 56(d), a court may defer
considering a motion for summary judgment or allow time for discovery "[i]f a
nonmovant shows by affidavit or declaration that, for specified reasons, it cannot
present facts essential to justify its opposition." Fed. R. Civ. P. 56(d). Dr. Elkharwily
moved to defer the summary judgment ruling in order to conduct more discovery.
However, not only did Dr. Elkharwily engage in exhaustive discovery through two
years of litigation but the district court had already granted him three additional
depositions on top of the ten under the scheduling order. Dr. Elkharwily had no
meritorious justification for additional discovery. The district court did not abuse its
discretion.
III
The judgment is affirmed.4
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4
We have examined the other issues raised by Dr. Elkharwily and find none
merits discussion. We affirm those issues without comment. See 8th Cir. R. 47B.
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