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Irani v. Palmetto Health

United States District Court, D. South Carolina, Columbia Division

November 22, 2016

Afraaz R. Irani, M.D., Plaintiff,
Palmetto Health, University of South Carolina School of Medicine, David E. Koon, M.D., in his individual capacity, and John J. Walsh, M.D., in his individual capacity, Defendants.


          CAMERON MCGOWAN CURRIE, Senior United States District Judge.

         This matter is before the court on Plaintiff's motion to alter or amend judgment pursuant to Rule 59(e) of the Federal Rules of Civil Procedure. ECF No. 198 (“Rule 59(e) Motion”). For reasons set forth below, the motion is denied.


         Through this action, Plaintiff, Afraaz R. Irani, M.D., (“Plaintiff” or “Dr. Irani”), challenges his treatment during and dismissal from the Orthopaedic Surgery Residency Program (“Residency Program”) sponsored by Defendant Palmetto Health (“Palmetto Health”) and operated in conjunction with Defendant University of South Carolina School of Medicine (“USC-SOM”) (collectively “Entity Defendants”). Plaintiff's Amended Complaint asserts six causes of action against the Entity Defendants and an additional seven causes of action against either or both David E. Koon, M.D. (“Dr. Koon”), Director of the Residency Program, and John J. Walsh, IV, M.D. (“Dr. Walsh”), Chair of USC-SOM's Orthopaedic Residency Program.[1]

         Judgment was entered on June 1, 2016, following consideration of Defendants' three separate motions for summary judgment and two related motions. ECF No. 189 (Judgment); ECF No. 188 (“Summary Judgment Order”). While the court did not accept all arguments for summary judgment, it did, ultimately, conclude all Defendants were entitled to judgment as a matter of law on all claims. ECF No. 188.

         On June 28, 2016, Plaintiff moved to extend time to file a memorandum in support of his intended motion to alter or amend. ECF No. 196. This extension was sought based on the length and complexity of the underlying order and counsel's health. Id. The motion stated: “Plaintiff will file his motion to alter or amend the judgment outlining the basic grounds for his request for reconsideration before the 28-day deadline expires; however, Plaintiff requests an additional 28-days to file the supporting memorandum of law.” Id. at 2. The court granted this request. ECF No. 197.

         Plaintiff filed his Rule 59(e) Motion within the deadline for doing so. ECF No. 198. The motion lists nine areas in which Plaintiff believes the court erred. Collectively, the alleged errors challenge the court's determinations Plaintiff failed to raise a genuine issue of material fact on the following issues:

I. Whether Plaintiff was subjected to a hostile environment (id. ¶¶ (1), (2));
II. Whether the Entity Defendants were joint employers and breached contractual obligations to Plaintiff under first and third-party contracts (id. ¶¶ (3)-(6));
III. Whether Defendants violated Plaintiff's contractual and constitutional rights to due process (id. ¶ 7);
IV. Whether the Entity Defendants retaliated against Plaintiff for complaining about racially-charged comments made by Dr. Koon (id. ¶ 8); and
V. Whether Defendants improperly concluded Plaintiff provided substandard care during his residency (id. ¶ 9).

ECF No 198.

         Plaintiff filed his memorandum in support of these arguments on July 27, 2016. ECF No. 210 (“Memorandum in Support”).[2] After seeking and receiving an extension of time to do so, Defendants filed memoranda in opposition on September 7, 2016. ECF Nos. 212, 213. Plaintiff filed a reply on September 19, 2016. ECF No. 214 (“Reply”). The matter is now ripe for resolution.


         The Fourth Circuit recognizes three grounds for altering or amending a judgment pursuant to Rule 59(e): “'(1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct clear error of law or prevent manifest injustice.'” United States ex rel. Becker v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir. 2002) (quoting Pac. Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998)). “Rule 59(e) motions may not be used, however, to raise arguments which could have been raised prior to issuance of the judgment, nor may they be used to argue a case under a novel theory that the party had the ability to address in the first instance.” Pac. Ins. Co., 148 F.3d at 403. Relief under Rule 59(e) is “an extraordinary remedy which should be used sparingly.” Id. (internal marks omitted).


         Plaintiff does not address the standard applicable to motions to alter or amend judgment either in his motion or memoranda. This is true even of his reply memorandum and despite Defendants noting this in their opposition memoranda. For reasons explained below, Plaintiffs arguments do not, in any event, demonstrate clear error, manifest injustice, or any other basis for altering or amending judgment.

         I. Hostile Environment Arguments

         Specification of Error.

         Plaintiff's first two specifications of error relate to his hostile environment allegations. In his Rule 59(e) Motion, Plaintiff asserts the court “misapplied the Fourth Circuit's holding in Boyer-Liberto v. Fontainbleu Corp., 786 F.3d 264 (4th Cir. 2015) (en banc) and unfairly minimized the severity and hostility of the racial slurs at issue in this case.” ECF No. 198 ¶ 1 (arguing the slurs were “far more intimidating and threatening” than those in Boyer-Liberto, “especially since the racial or ethnic slurs here were made by the program director”). Plaintiff also asserts the court “improperly accepted Defendant Koon's self-serving explanation of the context of the inflammatory slurs” and “unfairly dismissed as cumulative the testimony of independent witnesses who also overheard Defendant Koon make the offensive epithets.” ECF No. 198 ¶ 2.[3]

         In his later-filed Memorandum in Support and Reply, Plaintiff relies on both Boyer-Liberto and Guessous v. Fairview Prop. Investments, LLC, 828 F.3d 208 (4th Cir. 2016), in arguing the court erred in granting judgment on his Hostile Environment Claims. ECF Nos. 210 at 1-6 and 214 at 1-4. Plaintiff also lists six incidents (or categories of incident), which he maintains should be considered in evaluating the totality of the circumstances: (1) a statement Dr. Koon made to Plaintiff that another department was “just happy to have [residents who] can speak English”; (2) assignment of the “How to Swim with Sharks” article to Plaintiff for presentation at a Journal Club meeting in July 2011 and Dr. Koon's comment the article was not assigned randomly; (3) Dr. Koon's statement to Plaintiff during the August 2011 meeting in which Plaintiff was placed on remediation that Dr. Koon had fired residents from the program and would have to sign off on any graduation papers; (4) Dr. Koon's hostile and intimidating November 3, 2011 email and related telephone conversation chastising Plaintiff for his response to a directive to complete dictation on a patient and stating he would have fired Plaintiff on the spot had Plaintiff not been on vacation; (5) a December 5, 2011 faculty meeting in which Plaintiff felt intimidated and threatened by, inter alia, an inquiry whether he was committed to the program and whether he had hired an attorney; and (6) instances in which Dr. Koon referred to Plaintiff as “Achmed the Terrorist” or commented he might blow something up, which occurred sometime in late 2011.


         Plaintiff relied exclusively on the incidents in the sixth item above in opposing summary judgment on his Hostile Environment Claims. Thus, most of the incidents on which Plaintiff now relies were not timely advanced as a basis for these claims.[4]

         Even if timely raised, the additional incidents would fail to support a hostile environment claim. As explained in more detail below, item one is a conceivably-ethnic comment, but there is no connection between the comment and Plaintiff's circumstances or between the comment and any otherwise adverse treatment of Plaintiff. Items two through five may involve adverse treatment, but there is no connection between these alleged actions and any racially or ethnically offensive comments, behavior, or evidence of motivation. The incidents in item six fail for reasons addressed in the Summary Judgment Order. ECF No. 188. at 50-52.

         As explained in the Summary Judgment Order, a jury could find the comments addressed in item six were unwelcome (offensive), satisfying the first element of a hostile environment claim. The court also assumed for purposes of summary judgment that a jury could find the comments were made because of a protected characteristic (Plaintiff's ethnicity), and imputable to the employer, thus satisfying the second and fourth elements. This left the third element: whether the unwelcome comments were sufficiently severe or pervasive to alter the conditions of Plaintiff's employment. Focusing on the specific incidents on which Plaintiff relied in opposing summary judgment (the comments addressed in item six above), the court found insufficient evidence to raise a genuine issue of material fact as to this element.

         Plaintiff's present argument points to five other incidents of adverse treatment. The first, Dr. Koon's comment that another department was just happy if its residents spoke English, may suggest Dr. Koon harbored some bias against foreign residents, at least those who had difficulty speaking English. The comment did not, however, suggest any hostility towards Plaintiff or any race or ethnicity to which he belonged. By Plaintiff's own description, Dr. Koon characterized residents of the Orthopaedic Surgery Residency Program (a group to which Plaintiff belonged) as superior to residents in other programs (a group to which Plaintiff did not belong), before stating faculty in another program were just happy to have residents who spoke English. Plaintiff has proffered no evidence that either Dr. Koon or Plaintiff himself perceived Plaintiff as having difficulty speaking English or otherwise falling within the category of persons to whom the comment referred. Thus, while the comment had an ethnic component and may have been unwelcome (offensive) in the general sense, there is no evidence it was directed to Plaintiff (or Plaintiff perceived it as directed to him) because of his race or ethnicity (third element).

         For present purposes, the court will assume without deciding that a jury could find the four incidents addressed in items two through five were unwelcome in a general sense, collectively altered the conditions of Plaintiff's employment, and are imputable to the employer (first, third, and fourth elements). However, like the incident addressed above, nothing about these incidents suggest they occurred because of Plaintiff's race or ethnicity (third element). For example, there is no evidence any conceivably-ethnic comment was made in connection with these incidents. Neither is there any evidence the comments, correction, discipline, or inquiries were ethnically or racially motivated or otherwise connected with the conceivably-ethnic comments addressed in the first and sixth item (references to residents who had difficulty speaking English or suggesting a connection to terrorism). The only connection between the conceivably-ethnic comments and adverse treatment is (1) Dr. Koon made the two conceivably-ethnic comments, (2) Dr. Koon is responsible for or was involved in the incidents addressed in items two through five; and (3) most of the incidents (exclusive of the comment in item one) occurred during the same six month period.[5]

         The lack of connection between the ethnically-offensive comments and otherwise adverse treatment distinguishes this case from Boyer-Liberto and Guessous. The infrequency of the conceivably-ethnic comments also distinguishes the comments in the present case from those in Guessous. There the court addressed a course of conduct directed to “an Arab-American Muslim woman from Morocco, ” which occurred over a four-and-a-half year period and was characterized by a supervisor's frequent disparaging remarks about Muslims and people from the Middle East. The supervisor's comments included repeatedly characterizing Muslims as terrorists and people from the Middle East as untrustworthy. The supervisor also directed multiple comments and actions to Guessous personally relating to her ethnicity and exercised an extreme level of supervision over her work, which was consistent with his negative comments about the untrustworthiness of people from the Middle East.[6]

         While Plaintiff complains Dr. Koon interfered with his ability to perform as a resident, the suggested interference has no connection to the ethnically-offensive comments or anything suggesting an ethnically-based motivation.[7] Therefore, even considering the additional incidents Plaintiff now argues support his Hostile Environment Claims, that evidence would not raise a genuine issue of material fact for trial.

         II. Contract and Joint Employment Arguments.

         Plaintiff identifies four alleged errors underlying the grant of summary judgment on his contract claims. He argues the court erred in holding: (1) Plaintiff failed to give adequate notice of documents on which he relied for his third-party beneficiary claim; (2) Plaintiff was, at most, an incidental beneficiary of any third-party contract; (3) the decision of the Accreditation Council for Graduate Medical Education (“ACGME”) precludes a finding Defendants breached ACGME standards; and (4) USC-SOM was not a joint employer with Palmetto Health. These arguments are addressed separately below.[8]

         A. Notice of Documents Relied on for Third-Party Claim

         Specification of Error.

         In his Rule 59(e) Motion, Plaintiff asserts the court “incorrectly found that Defendants did not have adequate notice of Plaintiff's third-party beneficiary contract theory” because that theory rested on three documents “which were not specifically mentioned in the Amended Complaint.” ECF No. 198 at 2 (emphasis added). Plaintiff asserts his “supplemental discovery responses clearly identified these documents, which were only produced by Defendants in discovery after Plaintiff had already sought leave to amend the complaint.” Id. (asserting he also identified these documents during a discovery hearing before the Magistrate Judge).

         In his subsequent Memorandum in Support and Reply, Plaintiff expands these arguments to apply to both of his contract claims (first-party contract claim in addition to third-party beneficiary claim). He also argues he gave fair notice of his intent to rely on five (rather than three) documents in support of these claims.[9] Plaintiff also expands the sources of alleged notice, asserting he advised Defendants of his intent to rely on these documents by email in mid-April 2015 in addition to reliance on supplemental discovery responses emailed on June 1, 2015. ECF No. 210 at 10-13 (emphasis added); ECF No. 210-1 (April 17-18, 2015 email exchange); ECF No. 210-3 (June 1, 2015 email attaching unsigned supplemental discovery responses).

         Plaintiff attaches the April 17, 2015 email, which reads as follows:

In light of Dr. Taylor's deposition from earlier this week and the new documents I was able to find in preparation for the deposition, I may need to amend the complaint again, because I believe that there are three additional contracts that need to be included in Dr. Irani's claims for breach of contract, third-party beneficiary breach of contract, and tortious interference. Those contracts would be (1) the Affiliation Agreement between Palmetto Health and USC . . ., (2) the Department of Orthopaedic Surgery Residency Manual . . ., and (3) the PLA between Palmetto Health and the University Specialty Clinics-Orthopaedic Surgery . . . . I suppose the causes of action in the Amended Complaint could be read to include these three contracts, but if you disagree, I will need to file a second amended complaint. Please let me know your position on this as soon as possible.”

ECF No. 210-1 (emphasis added).

         Palmetto Health's counsel responded (1) the referenced documents had been produced on February 5, 2015, and (2) none were new to Plaintiff's counsel as they were produced in prior litigation (involving claims by a different resident). Id.[10] Palmetto Health's counsel did not expressly address whether Plaintiff would need to file a second amended complaint if he intended to rely on these documents. According to Plaintiff, USC-SOM's counsel did not respond at all. Plaintiff concedes he did not seek to “file a second amended complaint at that point, because it seemed superfluous and because Defendants' counsel had raised such strenuous objection to the first Amended Complaint.” ECF No. 210 at 13 (emphasis added).

         Plaintiff also proffers evidence his counsel emailed an unsigned version of supplemental discovery responses to defense counsel on June 1, 2015. ECF No. 210-3.[11] The underlying discovery requests ask Plaintiff to identify the documents on which he relies for his claims (1) Palmetto Health had a contract with ACGME, (2) Plaintiff was a third-party beneficiary of a contract between Palmetto Health and ACGME, and (3) Palmetto Health prevented Plaintiff from entering any contract because of his race. ECF No. 210-3. Plaintiff provides the same response to each of these queries, listing a total of five documents (the three documents listed in the April 17, 2015 email and two additional documents) and stating his “breach of contract claims against Defendants are based on” the five listed documents. Id. (emphasis added).[12]

         In addition to arguing Defendants had actual notice of his intent to rely on the five listed documents for his contract claims, Plaintiff argues he was unable to respond to Defendants' arguments regarding lack of notice. He asserts he could not do so because (1) Defendants first raised their notice arguments on reply, (2) the rules of this court “do not allow parties to file ‘surreply briefs, '” and (3) the court resolved the motion without oral argument. ECF No. 210 at 11.

         D ...

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