Judge Kerry Bensinger, Case Number: 23STCV08736, Date: 2024-03-15 Tentative Ruling

CASE: Sasan Najibi, M.D. v. Providence Valley Service Community Ministry Board, et al.

MOVING PARTY: Defendants Providence Health System-Southern California, et al.

Plaintiff Sasan Najibi, M.D. (“Plaintiff” or “Dr. Najibi”) was a vascular surgeon who was a health care worker, health care practitioner, physician, and member of the medical staff at Providence Health System-Southern California, Providence Health & Services, and Providence Saint Joseph Medical Center (collectively, “Providence”). While employed at Providence, Dr. Najibi served as the chair of the patient optimization committee. The committee initiated ongoing investigations into patient safety issues. As alleged, Dr. Najibi identified patient care and safety issues, reported the issues, and tried to fix them. However, Dr. Najibi’s patient advocacy was met with resistance by Providence and the Providence Valley Service Areas Community Ministry Board (the “Board”), culminating in the suspension of Dr. Najibi’s medical staff privileges.

On April 19, 2023, Plaintiff initiated this action against Defendants Providence Health System – Southern California, Providence Health & Services, Providence Saint Joseph Medical Center, and Providence Valley Service Area Community Ministry Board. On September 11, 2023, Plaintiff filed the operative First Amended Complaint (FAC) against Defendants for (1) Violation of Health & Safety Code §1278.5, (2) Violation of Bus. & Prof. Code § 510 et seq., and § 2056 et seq., (3) Tortious Interference with Economic Relations, (4) Tortious Interference with Contractual Relations, and (5) Wrongful Termination of Hospital Privileges.

On February 22, 2024, Plaintiff dismissed the Fifth Cause of Action for Wrongful Termination of Hospital Privileges.

A demurrer tests the legal sufficiency of the pleadings and will be sustained only where the pleading is defective on its face. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed. [Citation.]” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally construed. (Code Civ. Proc., § 452.) In construing the allegations, the court is to give effect to specific factual allegations that may modify or limit inconsistent general or conclusory allegations. (Financial Corporation of America v. Wilburn (1987) 189 Cal.App.3rd 764, 769.)

A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Where the complaint contains substantial factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty will be overruled or plaintiff will be given leave to amend. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Ibid.)

Defendants filed requests for judicial notice. Defendants request judicial notice of three documents:

1. Verified Petition for Writ of Mandate (CCP § 1085) and Complaint for Injunctive Relief filed by Plaintiff on April 18, 2023 and styled as Sasan Najibi, M.D. v. Providence Valley Service Area Community Ministry Board, et al., bearing case number 23STCP01247 (Request for Judicial Notice (RJN) 1);

2. Ruling on Demurrer to First Amended Petition filed by the Court on February 5, 2024 in the action styled as Sasan Najibi, M.D. v. Providence Valley Service Area Community Ministry Board, et al., bearing case number 23STCP01247 (“Petition”) (RJN 2);

3. Request for Dismissal filed by Plaintiff on March 5, 2024 in the Petition (RJN 3).

Defense counsel has complied with the meet and confer requirement. (See Declaration of Franjo M. Dolenac, ¶¶ 2, 3.)

Defendants advance the following arguments: (1) the First Cause of Action is insufficiently plead; (2) the Second, Third, and Fourth Causes of Action are barred by the exhaustion of remedies doctrine; (3) the Second Cause of Action for Violation of Business and Professions Code sections 510 and 2056 are not cognizable causes of action; and (4) the Third and Fourth Causes of Action are insufficiently plead. The court addresses each in turn.

“Section 1278.5, the health care facility whistleblower statute, was adopted in 1999 and amended in 2007. As currently in effect, it declares “the public policy of the State of California to encourage patients, nurses, members of the medical staff, and other health care workers to notify government entities of suspected unsafe patient care and conditions.” (Id., subd. (a), italics added.) To this end, the statute provides that “[n]o health care facility shall discriminate or retaliate, in any manner, against any patient, employee, member of the medical staff, or any other health care worker ... because that person has ... [¶] ... [p]resented a grievance, complaint, or report to the facility, to an entity or agency responsible for accrediting or evaluating the facility, or the medical staff of the facility, or to any other governmental entity.” (Id., subd. (b)(1)(A), italics added.)⁶ As applicable to a member of the medical staff, “discriminatory treatment” includes “any unfavorable changes in ... the ... privileges of [such] member....” (Id., subd. (d)(2).).” (Fahlen v. Sutter Cent. Valley Hospitals (2014) 58 Cal.4th 655, 667 (Fahlen) (emphasis in original).)

To state a statutory retaliation claim, a plaintiff must allege that: (1) he engaged in a protected activity; (2) a health facility subjected him to “discriminatory or retaliatory treatment” as defined by the statute; and (3) a causal link between his protected activity and the discriminatory or retaliatory treatment. (St. Myers v. Dignity Health (2019) 44 Cal.App.5th 301, 314.)

Defendants argue the allegations are insufficient to show (1) that Plaintiff engaged in a protected activity and (2) that Plaintiff demonstrates a causal link between the activity and the suspension of his clinical privileges.

A review of the allegations does not support Defendants’ contentions. Section 1278.5 protects two types of activity: (1) the presentation of a “grievance, complaint, or report” to a health facility, its medical staff, its accrediting entity, or a governmental agency; or (2) initiation, participation, or cooperation in an investigation or proceeding “carried out by an entity or agency responsible for accrediting or evaluating the facility or its medical staff, or a governmental agency.” (Health & Saf. Code, § 1278.5, subd. (b)(1).) Section 1278.5 further provides: “There shall be a rebuttable presumption that discriminatory action was taken by the health facility, or by the entity that owns or operates that health facility, or that owns or operates any other health facility, in retaliation against an employee, member of the medical staff, or any other health care worker of the facility, if responsible staff at the facility or the entity that owns or operates the facility had knowledge of the actions, participation, or cooperation of the person responsible for any acts described in paragraph (1) of subdivision (b), and the discriminatory action occurs within 120 days of the filing of the grievance or complaint by the employee, member of the medical staff or any other health care worker of the facility.” (Health & Saf. Code, § 1278.5, subd. (d)(1).)

Here, Plaintiff alleges he “identified, reported, disclosed, and attempted to correct/eliminate certain suspected unsafe and substandard conditions and services at PROVIDENCE that were a threat to patient care and safety, including, but not limited to, the numerous patient safety issues outlined above (“PATIENT SAFETY ISSUES”). Plaintiff consistently reported and disclosed the PATIENT SAFETY ISSUES to Defendants and their employees, agents and independent contractors in myriad ways for many years…” (FAC, ¶ 8.) Plaintiff adequately pleads having engaged in a protected activity.

Defendants argue this general allegation should be overlooked because it is an improper legal conclusion. The court disagrees. To whom Plaintiff reported patient safety issues is a factual assertion that as alleged is accepted as true at the pleading stage. Defendants argue that the court should focus on the more specific allegation that Plaintiff “initiated, participated and/or cooperated in the INVESTIGATIONS primarily through the optimization of patient care committee” (FAC, ¶ 8) which purportedly shows Plaintiff reported the patient safety issues to the medical staff only. The committee is neither the body which suspended Plaintiff’s hospital privileges nor the hospital itself. However, when construed together, Plaintiff alleges having reported patient safety issues to medical staff and to Defendants. Defendants seek to improperly impose a heightened pleading requirement. (See Dem., p. 20:1-15.) Plaintiff may have to identify the specific reports he made to Defendants at a later stage in this litigation, but for the purposes of a demurrer, the FAC sufficiently alleges a protected activity. Having so found, the court further finds that the FAC sufficiently alleges a causal link. As discussed, Plaintiff alleges having reported the patient safety issues to Defendants. This act of reporting is both a protected activity within the meaning of Section 1278.5 and supports the inference that Defendants knew of Plaintiff’s protected activity. Plaintiff further alleges his hospital privileges were suspended thereafter. The First Cause of Action is sufficiently plead.

In Westlake Community Hospital v. Superior Court (1976) 17 Cal.3d 465, 476–477 (Westlake ), our Supreme Court stated, “[T]he exhaustion of remedies doctrine fully applies to actions seeking damages for an allegedly wrongful termination of or exclusion from membership in a private association.” Westlake announced the rule as follows, “[W]e conclude initially that before a doctor may initiate litigation challenging the propriety of a hospital’s denial or withdrawal of privileges, he [or she] must exhaust the available internal remedies afforded by the hospital.” (Id. at p. 469; accord Eight Unnamed Physicians v. Medical Executive Com. (2007) 150 Cal.App.4th 503, 511.) Generally, a physician must exhaust private internal remedies before he may institute a tort action for damages. (Westlake, supra, 17 Cal.3d at p. 469; Nesson v. Northern Inyo County Local Hosp. Dist. (2012) 204 Cal.App.4th 65, 84; Payne v. Anaheim Memorial Medical Center, Inc. (2005) 130 Cal.App.4th 729, 737.) In addition, an aggrieved doctor must first set aside the quasi-judicial decision in a mandate action before initiating litigation. (Ibid.; Shahinian v. Cedars–Sinai Medical Center (2011) 194 Cal.App.4th 987, 1003.) An exhaustion of remedies requirement serves to eliminate or mitigate damages. (Westlake, supra, 17 Cal.3d at p. 476; Nesson v. Northern Inyo County Local Hosp. Dist., supra, 204 Cal.App.4th at p. 85.) But exhaustion of internal remedies doctrine does not apply if the remedy is futile, inadequate or is insufficient. (Mooney v. Bartenders Union Local No. 284 (1957) 48 Cal.2d 841, 844; Payne v. Anaheim Memorial Medical Center, Inc., supra, 130 Cal.App.4th at p. 740.)

Defendants attack the Second Cause of Action (Violation of Bus. & Prof. Code § 510 et seq., and § 2056 et seq.), Third Cause of Action (Tortious Interference with Economic Relations), and Fourth Cause of Action (Tortious Interference with Contractual Relations) for failure to exhaust administrative remedies. As alleged, Plaintiff has not exhausted his administrative remedies. (See FAC, ¶¶ 41, 51.)[1] Indeed, Plaintiff requested a peer review hearing to challenge the suspension of Plaintiff’s clinical privileges, which is pending. (See RJN 1.) Nor has Plaintiff obtained a writ of mandate before pressing these claims in this forum. (See RJN 2.)

Both parties cite Fahlen. If Westlake states the general rule, Fahlen states a narrow exception. The Fahlen Court stated the exception as follows: “We conclude that a hospital staff physician who claims a hospital decision to restrict or terminate his staff privileges was an act in retaliation for his or her whistleblowing in furtherance of patient care and safety need not seek and obtain a mandamus petition to overturn the decision before filing a civil action under section 1278.5.” Fahlen, supra, 58 Cal.4th at 687.

Plaintiff tries to expand the exception beyond section 1278.5 to include other statutory and common law claims. Plaintiff alleges Defendants retaliated against him for engaging in whistleblower activity by suspending his privileges following a hospital proceeding. Using the Fahlen retaliation gateway, Plaintiff argues tort claims predicated upon the whistleblower activity are not subject to the exhaustion doctrine. But the California High Court was careful not to expand its decision beyond section 1278.5.

A review of Fahlen’s procedural posture confirms the point. In addition to his section 1278.5 claim, Fahlen brought causes of action for tortious interference with contract, intentional interference with prospective advantage and for violations of Business and Professions Code sections 510 and 2056 (virtually the same causes of action at issue here.) The Court of Appeal applied Westlake’s rule to these causes of action and barred them. While the California Supreme Court addressed the narrow question related to section 1278.5, the California High Court left in tact and unchanged the Court of Appeal’s decision barring the common law and Business and Profession Code causes of action. There is nothing in Fahlen which expressly disagrees or otherwise challenges the Court of Appeal’s opinion in Fahlen v. Sutter Central Valley Hospitals (2012) 145 Cal.Rptr.3d 491, concerning common law tort claims, including claims predicated on Business and Professions Code sections 510 and 2056. Fahlen, 145 Cal.Rptr.3d 491 is still good law.[2] And is directly on point to the present issue. The Second, Third, and Fourth Causes of Action are therefore barred. Having so concluded, the court does not address Defendants’ additional grounds for demurrer as to these causes of action.

The demurrer to the Second, Third, and Fourth Causes of Action is SUSTAINED. Leave to amend is DENIED.

Defendants are ordered to serve and file their Answer within 10 days of this order.

¿¿¿

¿ Kerry Bensinger¿¿

¿ Judge of the Superior Court¿

[1] Paragraphs 41 and 51 allege: “No judicial or administrative remedies need to be exhausted for this cause of action because the underlying wrongful conduct is Defendant’s violation of Health and Safety Code § 1278.5 and California Business and Professions Code §510 et seq. and 2056 et seq.” As discussed herein, the court disagrees with Plaintiff’s conclusion of law. “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

[2] See California Rules of Court, rules 8.1105(e)(1)(B) and 8.1115(e)(2).