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1 Eugene D. Lee (SB#: 236812)


LAW OFFICE OF EUGENE LEE
2 555 West Fifth Street, Suite 3100
Los Angeles, CA 90013
3 Phone: (213) 992-3299
Fax: (213) 596-0487
4 email: elee@LOEL.com
5 Attorney for Plaintiff
DAVID F. JADWIN, D.O.
6
7
8 UNITED STATES DISTRICT COURT
9 EASTERN DISTRICT OF CALIFORNIA
10 FRESNO DIVISION
11 DAVID F. JADWIN, D.O., Civil Action No. 1:07-cv-00026 OWW TAG
12 Plaintiff, PLAINTIFF’S SUPPLEMENTAL BRIEF IN
OPPOSITION TO MOTION FOR
13 v. SUMMARY JUDGMENT PURSUANT TO
COURT’S ORDER OF MARCH 2, 2009 (Doc.
14 COUNTY OF KERN, et al., 304)
15 Defendants. TRIAL: March 24, 2009
16 Complaint Filed: January 6, 2007
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On March 2, 2009, this Court issued an Order (Doc. 304, the “Order”) directing the parties to
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submit supplemental briefs addressing the retroactivity of a 2007 amendment to Cal. Health and Safety
27
C. § 1278.5. Plaintiff submits this supplemental brief pursuant to such Order.
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1 I. DOES REVISED § 1278.5 APPLY RETROSPECTIVELY?


2 Health & Safety C. § 1278.5 was enacted by Senate Bill 97 in 1999 (the “Statute”). It was
3 amended (the “Amendment”) by Assembly Bill 632 (“AB 632”) as of January 1, 2008. The Court has
4 asked whether the Amendment should apply retrospectively prior to January 1, 2008. Plaintiff submits
5 that the answer is no. It is well settled that there is a presumption against applying amendments
6 retrospectively. Evangelatos v. Sup. Ct. (1988) 44 Cal.3d 1188, 1218. A review of AB 632 and its
7 legislative history reveals no legislative intent of retrospective effect.
8 II. IF NOT RETROSPECTIVE, DO PLAINTIFF’S § 1278.5 CLAIMS SURVIVE?
9 A. The Pre-Amendment Statute Encompassed Internal Reports to a Health Facility
10 The Court noted that the Statute protects a “grievance or complaint” but does not specify to
11 whom the complaint had to be made, whereas the Amendment protects a “grievance, complaint, or
12 report to the facility. . . or the medical staff of the facility. . . .” (Order at 5:16-22). Since the October
13 Oncology Conference involved an internal report by Plaintiff to the facility, the question becomes
14 whether it was protected under the pre-Amendment Statute.
15 1. The Amendment Is a Clarifying Statute that Does Not Operate Retrospectively
16 A clarifying statute does not operate retrospectively. Colmenares v. Braemar Country Club, 29
17 Cal. 4th 1019, 1022 (2003). “Such a legislative act has no retrospective effect because the true meaning
18 of the statute remains the same.” Western Security Bank v. Sup. Ct., 15 Cal.4th 232, 243 (1997).
19 In Colmenares v. Braemar Country Club, Inc., the California Supreme Court considered the case
20 of an employee who had been terminated 4 years before the enactment of the Poppink Act, an
21 amendment to the Fair Employment & Housing Act (“FEHA”) that significantly broadened the
22 definition of physical disability under FEHA. 29 Cal. 4th 1019, 1022 (Cal. 2003). Prior to the Poppink
23 Act, the Fair Employment and Housing Commission (“FEHC”) had required physical disabilities to
24 “substantially” limit major life activities. The Poppink Act revised the definition of physical disability
25 such that it needed only limit a major life activity. 29 Cal. 4th 1019, 1024 (Cal. 2003). The trial court
26 granted Braemar’s motion for summary judgment against Colmenares after reviewing Colmenares’
27 deposition testimony that his back condition did not substantially limit major life activities and finding
28 that the pre-Poppink Act FEHA included a “substantially limit” requirement. 29 Cal. 4th 1019, 1024

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1 (Cal. 2003). The court of appeal affirmed, holding that the Poppink Act’s later-enacted broader
2 disability standard could not be applied retrospectively to a firing that had occurred 4 years prior. 29
3 Cal. 4th 1019, 1027-1028 (Cal. 2003).
4 The California Supreme Court reversed. The court held that the Poppink Act “merely clarified
5 the existing ‘limits’ test in the FEHA and, contrary to the conclusion of the Court of Appeal here, did
6 not retrospectively change that test”. 29 Cal. 4th 1019, 1031 (Cal. 2003). The court explained:
7 When a statute “merely clarifies, rather than changes, existing law [it] does not operate
retrospectively.” Even a material change in statutory language may demonstrate
8 legislative intent only to clarify the statute’s meaning. (Ibid.) If the legislative intent is to
clarify, an amendment has “no retrospective effect because the true meaning of the
9 statute remains the same.” (Ibid.)”
29 Cal. 4th 1019, 1024 (Cal. 2003) n. 2 (citation omitted).
10
In reaching the conclusion that the legislative intent of the Poppink Act was merely to clarify existing
11
law, the court cited: 1) legislative committee analyses which stated that the Poppink Act “‘standardizes’
12
the definition of physical disability ‘in California civil rights law, clarifying that California’s disability
13
protections are broader than federal protections’”, and 2) the fact that the pre-Poppink FEHA “used the
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term ‘limits,’ not the federal law’s “substantially limits” language, before and after its amendment by
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the Poppink Act.” 29 Cal. 4th 1019, 1027 (Cal. 2003) (citations omitted, emphases in original).
16
In the instant case, analogs of both of these elements exist. First, as in Colmaneres, legislative
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committee analyses for AB 632 unequivocally state that the purpose of the Amendment is to clarify that
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the Statute protects physicians who internally report patient care issues:
19
BACKGROUND AND DISCUSSION: According to the author [of AB 632], existing
20 law does not fully protect physicians and other health professionals from retaliation if
they make a complaint or grievance about a health facility. . . . Complaints about quality
21 of care issues pertaining to health facilities can be raised with a peer review body,
hospital governing board, or accrediting agency. However, the author and sponsor state
22 that, in some cases, physicians who raise a complaint to any of these bodies are not
protected under current law against retaliation and that AB 632 will clarify existing law
23 to prevent abuses against physicians and other health professionals.”
Sen. Health Com. Analysis of Ass. Bill 632, mem. prep. for hearing of June 13, 2007.
24
The legislative committee analyses further confirm that the terms “grievance or complaint” in the pre-
25
Amendment Statute encompassed internal reports:
26
Background: Complaints about the quality of care, services, or conditions of health care
27 facilities [under pre-Amendment § 1278.5] can be submitted in a number of ways. Any
person can present a complaint to the chief administrative officer of the health facility or
28 file a complaint with Department of Health Services’ (DHS) licensing and certification
unit by contacting the district office where that health facility is located.
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Sen. Rules Com. Analysis of Ass. Bill 632, mem. prep. for hearing of Sep. 5, 2007 (see
1 also Sen. Health Com. Analysis of Ass. Bill 632, mem. prep. for hearing of June 13,
2007).
2
The analyses also confirm that the pre-Amendment terms “grievance or complaint” encompassed the act
3
of merely providing information to a governmental entity (such as Kern County and KMC):
4
SB 97 (Burton), Chapter 155, Statutes of 1999 [the bill which enacted the pre-
5 Amendment Statute], extended the whistleblower protections then available to patients
and employees of a long-term health care facility to patients and employees of health
6 facilities (hospitals) for filing a grievance or providing information to a governmental
entity regarding care, services, or conditions at the facility.
7 Sen. Rules Com. Analysis of Ass. Bill 632, mem. prep. for hearing of Sep. 5, 2007
(emphasis added).
8
Second, as in Colmaneres, the pre-Amendment Statute is sufficiently ambiguous that it could be
9
interpreted to encompass internal reports by physicians.1 The pre-Amendment Statute simply stated:
10
“No health facility shall discriminate or retaliate in any manner against any patient or employee of the
11
health facility because that patient or employee, or any other person, has presented a grievance or
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complaint . . . relating to the care, services, or conditions of that facility.” § 1278.5(b)(1). As the Court
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itself observed, “The old version of the statute did not explicitly specify to whom the ‘grievance or
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complaint’ had to be made”. Order at 5:21-22. The Statute also did not define the terms “grievance or
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complaint”. Adding to the ambiguity, the declaratory language contained in § 1278.5(a) includes a
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statement that “it is the public policy of the State of California to encourage patients, nurses, and other
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health care workers to notify government entities of suspected unsafe patient care and conditions” and
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further states that the Legislature encourages this reporting . . . .” (emphasis added). In short, the
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ambiguous language contained in the pre-Amendment Statute is consistent with the clarification
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instituted by AB 632 that physicians who make an internal report to a health facility are protected
21
whistleblowers.
22
It should further be noted that the legislative history makes clear that the Amendment’s inclusion
23
of the critical phrase “to the facility” after the phrase “presented a grievance or complaint” in the Statute
24
was merely a clarifying amendment. The legislative analysis of the Assembly Committee on Health for
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1
See also Carter v. California Dept. of Veterans Affairs, 38 Cal. 4th 914, 924, 926 (Cal. 2006) (finding
27 that a FEHA amendment extending employer liability to sexual harassment committed by nonemployees
28 merely clarified existing law in part based on the fact that former provision was sufficiently ambiguous
to support an interpretation that it imposed liability on employers for harassment by nonemployees).

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1 hearing of April 10, 2007 stated, “this bill would clarify an ambiguity in existing law.” Ass. Com. on
2 Health Analysis of Ass. Bill 632, mem. prep. for hearing of April 10, 2007. That same analysis
3 contained a section called “SUGGESTED AMENDMENTS” which stated, “On page 3, line 11, before
4 the comma add “to the health facility.” Ass. Com. on Health Analysis of Ass. Bill 632, mem. prep. for
5 hearing of April 10, 2007. The phrase “to the facility” language was then added to the actual bill shortly
6 thereafter. Draft AB 632, amended by Senate on June 6, 2007. No controversy or discussion attended the
7 inclusion of the phrase “to the health facility” in the amended bill, which occurred early in the legislative
8 process.
9 Moreover, the uncodified preamble to AB 632 neglects to even mention the addition of the
10 phrase “to the health facility”, underscoring the fact that it was merely a clarifying change.2 AB 632’s
11 uncodified preamble instead highlights the Amendment’s (1) extension of the Statute’s protections to
12 physicians, (2) inclusion of reports to accreditation bodies, and (3) broadening of remedies to include
13 court discretionary remedies. See p. 113/116 of AB 632 legislative history (Lee Dec. Exh. 5).
14 Finally, the clarifying nature of an amendment is indicated where the legislature acts promptly to
15 correct ambiguities revealed through caselaw interpreting the original statute. Carter v. California Dept.
16 of Veterans Affairs (2006) 38 Cal.4th 914, 920, 923. Here, the legislative history specifically cited to
17 Integrated Healthcare Holdings, Inc. v. Fitzgibbons (2006) 140 Cal. App. 4th 515, a case that had
18 occurred only a year before enactment of the Amendment, in which a hospital retaliated against a doctor
19 after he sent an internal email raising concerns whether the hospital was going bankrupt:
20 One way is a direct retaliation for a statement made by a physician regarding concerns of
quality of care. According to CMA, the most recent example occurred at Western
21 Medical Center Santa Ana, when the new owners Integrated Healthcare Holdings Inc.
(IHHI) sued Michael Fitzgibbons, M.D. . . when [he] expressed concerns about the
22 financial viability of the hospital.
Ass. Com. on Health Analysis of Ass. Bill 632, mem. prep. for hearing of April 10,
23 2007.
24 In short, a review of legislative history and the ambiguous language of the pre-Amendment
25
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26 See Carter v. Cal. Dept. of Vet. Aff., 38 Cal. 4th 914, 925 (Cal. 2006) (“An uncodified section is part of
the statutory law. ‘In considering the purpose of legislation, statements of the intent of the enacting body
27 contained in a preamble, while not conclusive, are entitled to consideration. Although such statements in
28 an uncodified section do not confer power, determine rights, or enlarge the scope of a measure, they
properly may be utilized as an aid in construing a statute.’”) (citations and quotations omitted).

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1 Statute establishes that the Amendment’s extension of protections to physicians who make internal
2 reports to a health facility was a clarifying change that has no retrospective effect because the “true
3 meaning” of the pre-Amendment Statute remained the same.
4 2. The Statute Encompassed Plaintiff’s Internal Complaint Even Before Amendment
5 Even if the foregoing discussion on clarification were disregarded, Plaintiff’s internal report to
6 KMC at the October Oncology Conference would still qualify as protected activity under the pre-
7 Amendment Statute. It is undisputed that (A) KMC and Kern County are “governmental entities”.
8 (Response to RFA No. 19-20, Doc. 267-2 at 5:11-17); (B) the October Oncology Conference is a
9 monthly “proceeding” of KMC; and (C) Plaintiff’s report at the conference on a hysterectomy of a
10 patient (no. 1142693) that was almost conducted based on flawed outside pathology reports “initiated”
11 an “investigation” of that patient’s case whereby Kern County Counsel sent her case to a retained expert
12 named William Colburn, M.D. (See Colburn Report, Doc. 277-3 at p. 38 of 191).
13 B. Plaintiff Was at All Times an “Employee” Protected by the Statute Both Before
and After the Amendment
14
As the Court has noted, the Statute in effect at all relevant times prohibited retaliation against
15
any “employee of the health facility”; however, the Court questions whether a physician such as Plaintiff
16
may qualify as an actual employee of the health facility. Order at 6:26-28.
17
Plaintiff submits that he did so qualify. The Scheduling Order establishes that “Plaintiff has
18
continuously been an employee of Defendant Kern County since October 24, 2000.” (Doc. 29 at 7:28-
19
8:1). Defendants have also judicially admitted that KMC is a health facility. (Response to RFA No. 18,
20
Doc. 267-2 at 5:7-10).
21
Moreover, the legislative committee analyses for AB 632 make clear that, even under the pre-
22
Amendment Statute, physicians who work at teaching hospitals like KMC may be deemed employees.
23
Current state law prohibits the employment of physicians by corporations or other
24 entities that are not controlled by physicians. For that reason, most members of the
medical staff are not considered employees of a hospital and must establish contractual
25 relationships with the hospital, either individually or through medical groups. Some
exceptions are teaching hospitals, certain clinics, and hospitals owned and operated by a
26 health care district.
Sen. Rules Com. Analysis of Ass. Bill 632, mem. prep. for hearing of Sep. 5, 2007
27 (emphasis added).
28 Finally, the legislative committee analyses for AB 632 disclose that the “stated need for the bill”

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1 arises from the exploitation by “enterprising attorneys” of the “nebulous term” “or any other person”
2 contained in the pre-Amendment Statute so as to deny protections to physicians by arguing that a
3 physician is neither an “employee” nor a “patient”. The analyses then state: “As such this section must
4 be clarified and strengthened” to close this legal loophole. (Sen. Jud. Com. Analysis of Ass. Bill 632,
5 mem. prep. for hearing of July 10, 2007). A clarifying statute does not operate retrospectively.
6 Colmenares v. Braemar Country Club, 29 Cal. 4th 1019, 1022 (Cal. 2003).
7 In short, Plaintiff clearly qualifies as an “employee” under the Statute, both before and after the
8 Amendment.
9 C. Plaintiff’s § 1278.5 Claims Encompass More than Just the October Oncology
Conference
10
Plaintiff’s § 1278.5 claims involve more than just Plaintiff’s internal complaint at the October
11
Oncology Conference. They also encompass, among other things: A) the decision of Kern Medical
12
Center’s (“KMC”) CEO to force Plaintiff from part-time medical leave onto involuntary full-time
13
medical leave on April 28, 2006 in retaliation for his email to the CEO of April 17, 2006 complaining
14
that KMC was not complying with blood documentation regulations and requesting that the non-
15
compliance be elevated to the Board of Supervisors of Kern County (Plaintiff’s Motion for Summary
16
Judgment (“MSJ”, Doc. 272) at 10:11-11:2); Plaintiff Material Fact (“PMF”) 97, Plaintiff’s Separate
17
Statement (Doc. 272.-2)); as well as B) the decision of KMC’s Chief Medical Officer to place Plaintiff
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on a 10-month administrative leave – restricting him to his home for 5 of those months – 2 to 3 weeks
19
after Plaintiff’s (i) filing of complaints with the California Department of Health Services and various
20
accreditation bodies (MSJ at 11:3-12:9) and (ii) email to KMC leadership complaining about a radical
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prostatectomy that was scheduled to occur based on patently inconclusive pathology findings (MSJ at
22
12:10-13:3). Even if the Court were to summarily dispose of Plaintiff’s § 1278.5 claim with respect to
23
the October Oncology Conference, Plaintiff’s other § 1278.5 claims would survive.
24
D. The Ninth Circuit Has Already Addressed The Instant Issue
25
The exact issue before this Court – whether an internal whistleblowing report pre-dating the
26
Amendment is protected by § 1278.5 – has already been considered by the 9th Circuit. In Mendiondo v.
27
Centinela Hosp. Med. Ctr., a nurse complained internally to the hospital CEO and her supervisor about
28
patient care concerns and then sued under § 1278.5 before the Amendment. 521 F.3d 1097, 1105 (9th
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1 Cir. 2008). Her complaints all pre-dated January 1, 2008 and she never blew the whistle to an outside
2 governmental entity. Centinela’s Answering Brief – which was itself filed well before the enactment of
3 the Amendment – argued that, under the pre-Amendment Statute:
4 Mendiondo cannot deny that she never alleged that she “notif[ied] government entities”
about any “suspected unsafe patient care and conditions” at CHMC. Mendiondo simply
5 is not a whistleblower deserving of protection under California law, and the trial court’s
dismissal of this claim should be affirmed.
6 2006 U.S. 9th Cir. Briefs 55981, 25-26 (9th Cir. Feb. 2, 2007) (citation omitted).
7 The 9th Circuit rejected Centinela’s argument that an external report was required and held that § 1278.5
8 is “intended to encourage medical staff and patients to notify government entities of ‘suspected unsafe
9 patient care and conditions.’ The statute prohibits retaliation against any employee who complains to an
10 employer or a government agency about unsafe patient care or conditions.”
11 III. IF RETROSPECTIVE, WHAT IS THE IMPACT ON DEFENDANTS’ MJOP?
12 Under the California Tort Claims Act, Kern County was required to give timely written notice to
13 Plaintiff of any deficiencies in his submitted claims, such as insufficient disclosures and/or untimely
14 submission. Cal. Gov. C. §§ 910.8; 911.3(a). Failure to give such written notice of deficiencies to
15 Plaintiff waives any associated defenses. Cal. Gov. C. §§ 911; 911.3(b). Here, Kern County never gave
16 Plaintiff any such written notices of deficiencies. Defendants have therefore waived all associated
17 defenses and their Motion for Judgment on the Pleadings should be denied.
18 Moreover, caselaw establishes that employees who allege continuing violations, as Plaintiff is
19 doing, may comply with the Tort Claims Act by filing a series of tort claims, as Plaintiff has done here.
20 In Murray v. Oceanside Unified Sch. Dist., the court considered the case of a plaintiff who had filed tort
21 claims three times regarding continuous alleged harassment that pre-dated the tort claims by more than 6
22 months. 79 Cal. App. 4th 1338, 1360-1361 (2000). The court referenced the “continuing violation”
23 doctrine set forth in Accardi v. Sup. Ct., 17 Cal. App. 4th 341 (1993) in concluding “that the purposes of
24 the Tort Claims Act have been adequately protected by the procedures followed here.” 79 Cal. App. 4th
25 1338, 1360-1361 (2000). Moreover, according to the holding in Morgan v. Regents of the Univ. of Cal.,
26 the plaintiff need only “demonstrate that at least one act [of the continuing violation] occurred within the
27 filing period....” (2000) 88 Cal.App.4th 52, 64.
28

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1 For the foregoing reasons, Plaintiff respectfully requests the Court deny Defendants’ Motion for
2 Judgment on the Pleadings in its entirety.
3
4 RESPECTFULLY SUBMITTED on March 9, 2009.
5
/s/ Eugene D. Lee
6 LAW OFFICE OF EUGENE LEE
555 West Fifth Street, Suite 3100
7 Los Angeles, CA 90013
Phone: (213) 992-3299
8 Fax: (213) 596-0487
email: elee@LOEL.com
9 Attorney for Plaintiff DAVID F. JADWIN, D.O.
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1 Eugene D. Lee (SB#: 236812)


LAW OFFICE OF EUGENE LEE
2 555 West Fifth Street, Suite 3100
Los Angeles, CA 90013
3 Phone: (213) 992-3299
Fax: (213) 596-0487
4 email: elee@LOEL.com
5 Attorney for Plaintiff
DAVID F. JADWIN, D.O.
6
7
8 UNITED STATES DISTRICT COURT
9 EASTERN DISTRICT OF CALIFORNIA
10 FRESNO DIVISION
11 DAVID F. JADWIN, D.O., Civil Action No. 1:07-cv-00026 OWW TAG
12 Plaintiff, DECLARATION OF EUGENE LEE IN
SUPPORT OF SUPPLEMENTAL BRIEF
13 v. PURSUANT TO COURT’S ORDER OF
MARCH 2, 2009
14 COUNTY OF KERN, et al.,
TRIAL: March 24, 2009
15 Defendants.
Complaint Filed: January 6, 2007
16
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19 I, Eugene D. Lee, declare as follows:

20 1. I am an attorney at law duly licensed to practice before the Federal and State Courts of

21 California and admitted to practice before the U.S. District Court for the Eastern District of California. I

22 am counsel of record for Plaintiff David F. Jadwin in this matter.

23 2. I am making this declaration in support of Plaintiff’s Supplemental Brief in Opposition to

24 Defendants’ Motion for Summary Judgment. I have personal knowledge of the matters set forth below

25 and I could and would competently testify thereto if called as a witness in this matter.

26 3. I filed all of the Tort Claims Act claims in this action on Plaintiff’s behalf. In each case, I

27 indicated my law firm address as the desired mailing address for notices from Kern County.

28 4. Kern County never at any time delivered to me any written notices of any deficiencies in
any of Plaintiff’s Tort Claims Act claims which I filed on his behalf. Had it done so, I would have taken

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1 any and all appropriate steps to cure or resolve any such deficiencies or minimize the prejudice to
2 Plaintiff. I was never afforded such opportunity.
3 5. Attached hereto as Exhibits are true and correct copies of the following documents which
4 were either served on me, filed by me or transmitted by me on or around the dates indicated:
5
Exh. Date Description
6
1 7/3/2006 Plaintiff’s Tort Claims Act Claim
7
8 2 9/15/2006 Letter from Kern County to Eugene Lee re Plaintiff’s Tort
Claims Act Claim
9 3 4/23/2007 Plaintiff’s First Supplemented Tort Claims Act Claim
4 10/16/2007 Plaintiff’s Second Supplemented Tort Claims Act Claim
10
11 6. On March 2, 2009, at approximately 4:30 p.m., I navigated my internet browser to the

12 uniform resource locator, http://www.assembly.ca.gov/acs/acsframeset2text.htm. In inputted the bill

13 number “632”, session “2007-2008 PRIOR” and house “Assembly” in the appropriate search fields. I

14 then downloaded and printed out all AB 632 legislative history files that resulted from the search.

15 Attached hereto as Exhibit 5 is a full and accurate computer printout of all such AB 632 legislative

16 history files.

17 7. Attached as Exhibit 6 is a true and correct copy of the answering brief submitted by

18 defendants-appellees to the 9th Circuit in Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1105

19 (9th Cir. 2008). The Lexis-Nexis cite for the brief is 2006 U.S. 9th Cir. Briefs 55981; 2007 U.S. 9th Cir.

20 Briefs LEXIS 46.

21
22 RESPECTFULLY SUBMITTED on March 9, 2009.

23
/s/ Eugene D. Lee
24 LAW OFFICE OF EUGENE LEE
555 West Fifth Street, Suite 3100
25 Los Angeles, CA 90013
Phone: (213) 992-3299
26 Fax: (213) 596-0487
email: elee@LOEL.com
27 Attorney for Plaintiff DAVID F. JADWIN, D.O.

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EXHIBIT 1: Plaintiff’s Tort Claims Act Claim
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CLAIM AGAINST THE COUNTY OF KERN


(Government Code 86 910,910.2 & 910.4)

This claim must be filed with the Clerk of the Board of Supervisors, 1115 Truxtun
A ve., 6 Floor, Bakersfield, California 93301. If it is a claim for death, iniuw to
person, iniury to personal pro~ertyor iniury to growins crops, it must be filed within six
months after the accident or event giving rise to the claim. If it is a claim for any
other cause of action, it must be fled within one year afier the evenf(s) giving rise to the
claim. You must complete both sides and sign the claim form for the claim to be valid.
Complete information must be provided. If the space provided is inadequate, please
use additional paper and identify information by paragraph number.

1. State the name and mailing address of claimant:


David
D a v i d F.
F . Jadwin,
J a d w i n , D.O.,
D . O . , F.C.A.P.,
F . C . A . P . , 3184
3 1 8 4 Beaudry
B e a u d r y Terrace,
T e r r a c e , Glendale,
G l e n d a l e , CA 91208-1745
91208-1745

2. State the mailing address to which claimant desires notices from the County to
be sent:
Law Office
O f f i c e of
o f Eugene
E u g e n e Lee,
L e e , 445
4 4 5 South
S o u t h Figueroa
F i g u e r o a Street,
S t r e e t , Suite
S u i t e 2700,
2 7 0 0 , Los
L o s Angeles,
A n g e l e s , CA 90071
90071

3. State the date, place and other circumstances of the accident or event(s) giving
rise to the claim.
See
See attachment.
attachment.

4. Provide a general description of the injury, damage or loss incurred so far as it


may be known:
See
See attachment.
attachment.
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 5 of 205

5. Provide the name or names of the public employee or employees causing the
injury, damage or loss, if known:
Mr. Peter Bryan, D r . I r w i n H a r r i s , D r . Eugene Kercher, Dr. Scott Ragland,
PS. J e n n i f e r A&ih-m. Dr. W i l l iam Rov. ~t al-

6. Regarding the amount claimed (including estimated amount of any prospective


injury, damage or loss known as of the tims the claim is filed):

If less than ten thousand dollars ($10,000),


state the amount: $

If more than ten thousand dollars, would the claim be a limited civil case (less
than $25,ODO)? (Circle one)

7.
Ye6
@
Please state any additional information which may be helpful in considering this
claim:
Complainant met w i t h Mr. Bernard Barmann with respect to the foregolng on
e b r u a r v 9. 2006.

Claimant must dale and sign below.

B. Signed this ,3 day of ~ u l v .ZOlj_

I F

CLAIMANT'S SIGNATURE

WARNING! IT IS A CRIMINAL OFFENSE .-


TO FILE A FALSE CLAIM (Penal Code $72)
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 6 of 205

ATTACHMENT – CLAIM AGAINST THE COUNTY OF KERN

3. State the date, place and other circumstances of the accident or event(s)
giving rise to the claim.

A. Breach of Contract

Pursuant to an employment contract (“Contract”), Complainant was


formerly Chair of Pathology at Kern Medical Center (“KMC”). On
June 14, 2006, Mr. Peter Bryan (CEO of KMC) summarily informed
Complainant that he was being stripped of chairmanship effective
June 17, 2006, due to his taking excessive sick leaves. As of
June 14, 2006, Complainant had taken 12 weeks of CFRA sick leave
and approx. 3-4 weeks of County sick leave based on doctor’s
certifications which he submitted.

Prior to June 14, Mr. Bryan had not communicated to Complainant


his concerns regarding Complainant’s sick leaves. In fact, Mr.
Bryan had in at least two written communications told Complainant
that Complainant would have until June 16, 2006 to decide whether
to continue or resign his chair position. Ultimately, Mr. Bryan
failed to honor the June 16 deadline.
In addition, the Contract states that Complainant shall be
employed by the County of Kern “pursuant to the terms of
this Agreement and the medical staff bylaws of KMC”. Mr. Bryan
failed to comply with KMC bylaws in stripping Complainant of
chairmanship.
B. Wrongful Demotion/Termination in Violation of Cal. Bus. &
Prof. C. § 2056 & Conspiracy Relating Thereto
The above-referenced demotion of Complainant to a staff
pathologist also constituted a constructive termination. Mr.
Bryan’s email to Complainant of June 14, 2006, strongly intimated
that Complainant was no longer welcome at KMC. On June 26, 2006,
Mr. Bryan reinforced that sentiment when he abruptly informed
Complainant that he was no longer permitted to enter KMC grounds,
contact any KMC employee or faculty member or access any KMC
equipment or networks for any reason for the remainder of his
leave.

The demotion/termination constituted retaliation by Mr. Bryan


against Complainant for raising concerns relating to patient
health care. Previous to June 14, Complainant had apprised Mr.
Bryan and other medical staff leadership in emails and
communications too numerous to count of several crisis issues
which critically jeopardized patient health care at KMC:

i) need for follow-up on failure of a formerly-employed KMC


pathologist to detect cancer diagnoses in numerous
patient prostate biopsies;
ii) chronically incomplete or inaccurate KMC blood component
product chart copies, in violation of state regulations
and accreditation standards of JCAHO, CAP and AABB;
iii) chronically inadequate fine needle aspirations collected
by KMC radiologists leading to incomplete and/or
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 7 of 205

incorrect patient diagnoses and greatly increased expense


for KMC;
iv) need for KMC pathology dept. i) to review outsourced
pathology diagnoses prior to undergoing major therapy in
reliance on those diagnoses and ii) to approve
outsourcing of pathology to outside vendors; and
v) need for effective oversight of blood usage program by
pathology dept.

C. Per Se Libel / Ratification by KMC

In a letter dated October 17, 2005, Drs. Eugene Kercher


(President of KMC Medical Staff), Scott Ragland (President-elect
of KMC Medical Staff), Jennifer Abraham (Past President of KMC
Medical Staff) and Irwin Harris (KMC Chief Medical Officer)
informed Complainant that three letters written by Complainant’s
colleagues at KMC expressing “dissatisfaction” with Complainant
would be “entered into your medical staff file.” When
Complainant asked to see the three letters, he was refused. In
so reprimanding Complainant, Drs. Kercher, Ragland, Abraham and
Harris utterly failed to comply with KMC bylaws.
Finally on January 6, 2006, Complainant received a letter from
Ms. Karen Barnes (Deputy County Counsel for the County of Kern)
to which were attached the above-referenced three letters in
redacted form, one of which maliciously defamed Complainant’s
professional competence. Complainant was later able to determine
that Dr. William Roy was the author of the defamatory letter.
Dr. Roy did not respond to Complainant’s subsequent written
requests for explanation of his defamatory comments.
D. Related Causes of Action

Complainant also seeks to bring claims of intentional infliction


of emotional distress, negligent hiring, negligent supervision
and negligent retention in relation to the foregoing.

4. Provide a general description of the injury, damage or loss incurred so far


as it may be known:

With respect to the County of Kern and each KMC officer or staff
member as appropriate:
Pro rata loss or reduction of employment compensation of approx.
$400,000 per annum for the period from (i) on or about Dec. 2005
to Oct. 4, 2007 (end of current contract employment period) due
to demotion, sick leaves and vacation time, and (ii) from Oct.
2007 until such time as complainant is able to secure comparable
position with comparable pay after engaging in a diligent job
search. Complainant believes his career as a pathologist is
effectively at an end due to his age and the dearth of pathology
chair positions in the US.

Attorney’s fees (approx. $40,000 so far) and other costs.

Loss of reputation.

2
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 8 of 205

Severe emotional distress (and reimbursement of associated


medical expenses of approx. $30,000).
Punitive damages.

3
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 9 of 205

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EXHIBIT 2: Letter from Kern County to Eugene Lee re Plaintiff’s Tort Claims Act Claim
26
27
28

USDC, ED Case No. 1:07-cv-00026 OWW TAG


DECLARATION OF EUGENE LEE IN SUPPORT OF SUPPLEMENTAL BRIEF PURSUANT TO COURT’S ORDER OF
MARCH 2, 2009 4
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 10 of 205
Bernard C. Barmann, Sr. OFFICE OF THE Tom Newell
County Counsel Sewice Representative
COUNTY COUNSEL Reply to (661) 8683867
Stephen D. Schuett Claim Service Unit
Assistant County Cour.sel COUNTY OF KEFW

Administrative Center
1115 Truxtun Avenue, 4th Floor
Bakersfield, CA 93301
Telephone: (661) 8683801
Fax: (661) 8683875

NOTICE OF ACTION TAKEN ON CLAIM

September 15, 2006

EUGENE LEE
LAW OFFICE OF EUGENE LEE
445 SOUTH FIGUEROA ST SUITE 2700
LOS ANGELES CA 90071

Name of Claimant(s): David F. Jadwin, D.O., F. C. A. P.


Date of Incident: 6-14-2006

NOTICE IS HEREBY GIVEN that the claim you submitted to the Clerk of the Kern County
Board of Supervisors on 7-5-2006 was not acted upon by the Board. The claim is deemed
rejected by operation of law forty-five (45) days after the date the claim was so presented.

WARNING

Subject to certain exceptions, you have only six (6) months from the date this notice was
deposited in the mail to file a court action on this claim. (See Government Code 945.6.)

You may seek the advice of an attorney of your choice in connection with this matter. If
you desire to consult an attorney, you should do so immediately.

Very truly yours,

,,
Tom Newell, Service Representative
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 11 of 205

PROOF OF SERVICE BY MAIL

STATE OF CALIFORNIA )
) ss
COUNTY OF KERN )

I am employed in the County of Kern, State of California. I am over the age of


eighteen years and not a party to the within action. My business address is 1I 15 Truxtun
Avenue, Bakersfield, CA 93301.

On 9-15-2006, 1 served the foregoing document described as Notice of Action


Taken on Claim in this action by placing a true copy thereof enclosed in a sealed envelope,
addressed as follows:

Eugene Lee
Law Office of Eugene Lee
445 So. Figueroa St., Suite 2700
Los Angeles, CA. 90071

I am familiar with the firm's practice of collection and processing correspondencefor


mailing. Under that practice, it would be deposited with the U. S. Postal Service on that
same day with postage thereon fully prepaid at Bakersfield, California, in the ordinary
course of business. I am aware that on motion of the party served, service is presumed
invalid if postal cancellation date or postage meter date is more than one day after date of
deposit for mailing in affidavit.

I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.

Tom Newell
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 12 of 205
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 13 of 205

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EXHIBIT 3: Plaintiff’s First Supplemented Tort Claims Act Claim
26
27
28

USDC, ED Case No. 1:07-cv-00026 OWW TAG


DECLARATION OF EUGENE LEE IN SUPPORT OF SUPPLEMENTAL BRIEF PURSUANT TO COURT’S ORDER OF
MARCH 2, 2009 5
04/23/2007 15:35 18182443550 JADWIN CHA PAGE 01/02

Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 14 of 205

SUPPLEMENTED
CLAIM AGAINST THE COUNTY OF KERN
(Government Code §§ 910,910.2 I\; 910.4)

This claim must be filed with the Clerk of the Board of Supervisors, 1115 Truxtun
Ave., 5'" Floor, Bakersfield, California 93301. ff it is a claim for death. injury to
person, iniYrx to personal property or inlurv to growing crops, it must be filed within six
months after the accident or event giving rise to the claim. ff it is a claim for any
other causa of action, it must be filed within one year after the event(sJ giving rise to the
claim. You must complete both sides and sign the claIm form for the cleim to be valid.
Complete information must be provided. If the spece provided is inadequate, please
use additional paper and identify information by paragraph number.

1. State the name and mai ling address of claimant:


David F. Jadwin, D.O., F.e.A.p., 1635 ~eather Ridge Dr, Glendale, eA 91207-1035

2. State the mailing address to which claimant desires notices from the County to
be sent:
Law Office of Eugene Lee, 555 W 5th St, Ste 3100, LOS Angeles, CA 90013

3_ State the date, place and other circumstances of the <lcciqent or event(s} giving
rise to the claim.

See attachment.

4. Provide a general description of th8 injury, damage or loss incurred so far as it


may ba known:
See attachment.

1
04/23/2007 15:35 18182443550 JADWIN CHA PAGE 02/02

Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 15 of 205

5. Provide the name or names of the public employee or employees causing the
injury, damage or loss, if known:
Peter B~yan, Irwin Harris, Eugene Kercher, Scott Ragland, Jennifer Abraham,
William Roy, Toni Smith

6. Regarding the amount claimed (including estimated amount of any prospective


injury, damage or loss known as of the time the daim is filed):

If less than ten thousand dollars ($10,000), state the amount: $, ,

If more than ten thousand dollars, would the claim be a limited civil case (less
than $25,000)7 (Circle one)

Yes

7. Please state any additional information which may be helpful in considering this
claim:

Complainant met with Eernard B~~mann, Kern CQunty Counsel, with respect
to the foregoing on February 9, 2006.

Claimant must date and sign below.

rd /l..-{
B. Signed this 2- ""b day of {'let-, ,2°4.
~~k
SIGN;:A~TU::::R':':E""----
CLAIMANT'S

WARNING! IT IS A CRIMINAL OFFENSE


TO FILE A FALSE CLAIM (Penal Code §72)
(3/OJ)
Doc #896)0
S;~IJ.im.FOIW-doo

2
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 16 of 205

ATTACHMENT – CLAIM AGAINST THE COUNTY OF KERN

3. State the date, place and other circumstances of the accident or event(s)
giving rise to the claim.

Please see the Complaint attached hereto, which contains a


complete description of the dates, places, and other
circumstances of events giving rise to Complainant’s claims.
Complainant originally filed the Complaint with the US District
Court for the Eastern District of California on January 8, 2007.

4. Provide a general description of the injury, damage or loss incurred so far


as it may be known:

With respect to the Defendants named in the Complaint, i.e.,


County of Kern, Peter Bryan, Eugene Kercher, Irwin Harris, Scott
Ragland, Jennifer Abraham, William Roy, and Toni Smith:

Pro rata loss or reduction of annual employment compensation of


approx. $400,000 for the period from (i) on or about Dec. 2005 to
Oct. 4, 2007 (end of current contract employment period) due to
demotion, sick leaves and vacation time, and (ii) from Oct. 2007
until such time as complainant is able to secure comparable
position with comparable pay after engaging in a diligent job
search. Complainant believes his career as a pathologist is
effectively at an end due to his age and the dearth of pathology
chair positions in the US.

General emotional distress (and reimbursement of associated


medical expenses).
Loss of reputation.

Punitive damages.

Attorney fees and other costs.


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 17 of 205

1 Eugene Lee (SB# 236812)


LAW OFFICE OF EUGENE LEE
2 555 West Fifth St, Suite 3100
Los Angeles, CA 90013
3 Telephone: (213) 992-3299
Facsimile: (213) 596-0487
4 Email: elee@LOEL.com

5 Attorney for Plaintiff


David F. Jadwin, D.O.
6 UNITED STATES DISTRICT COURT

7 EASTERN DISTRICT OF CALIFORNIA

8
DAVID F. JADWIN, D.O. Case No. 1:07-cv-26
9
Plaintiff
vs. FIRST AMENDED COMPLAINT FOR
10 DAMAGES AND INJUNCTIVE RELIEF.
COUNTY OF KERN; PETER BRYAN
11 (both individually and in his former official I. Retaliation [Health & Safety Code §
capacity as Chief Executive Officer Of 1278.5];
Kern Medical Center); IRWIN HARRIS,
12 M.D; EUGENE KERCHER, M.D. (both II. Retaliation [Lab. Code § 1102.5];
individually and in his official capacity as a III. Retaliation [Gov’t Code §§ 12945.1, et
13 President of Medical Staff of Kern Medical seq; 2 C.C.R. § 7297.7(a)];
Center); JENNIFER ABRAHAM, M.D. IV. Interference with FMLA Rights [29
(both individually and in her official
14 capacity as Immediate Past President of U.S.C. §§ 2601, et seq.];
Medical Staff at Kern Medical Center); V. Violation of CFRA Rights. [Gov’t Code
15 SCOTT RAGLAND, M.D. (both §§ 12945.1, et seq.];
individually and in his official capacity as VI. Disability Discrimination [Gov’t. Code
16 President-Elect of Medical Staff of Kern § 12940(a)];
Medical Center); TONI SMITH, (both
individually and in her official capacity as VII. Failure to Provide Reasonable
17 Chief Nurse Executive of Kern Medical Accommodation [Gov’t Code §
Center); WILLIAM ROY, M.D.; and 12940(m)];
18 DOES 1 through 10, inclusive. VIII. Failure to Engage in Good Faith In An
Defendants. Interactive Process [Gov’t Code §
19 12940(n)];
IX. Defamation [Civ. Code §§ 45- 47]; and
20 X. Procedural Due Process Violation [14th
Amendment of U.S. Constitution; 42
21 U.S.C. § 1983].
XI. Violation of FLSA [29 U.S.C. §201 et
22 seq.]

23 JURY TRIAL DEMANDED

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 1/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 18 of 205

1
NATURE OF THE ACTION
2
This is an individual action brought by Plaintiff David F. Jadwin, D.O., a whistleblowing
3
physician with disabilities, against his employer, (i) the County of Kern (“Defendant County” or
4
“the County”); ) (ii) individual Defendants Peter Bryan (“Bryan”), Chief Executive Officer of
5
Kern Medical Center (“KMC”); Eugene Kercher, M.D., President of Medical Staff at KMC
6
(“Kercher”); Jennifer Abraham, M.D., Immediate Past President of Medical Staff at KMC
7
(“Abraham”); Scott Ragland, M.D., President-Elect of Medical Staff at KMC (“Ragland”); and
8
Toni Smith, Chief Nurse Executive of KMC, (“Smith”), both personally and in their official
9
capacities; and (iii) individual Defendants Irwin Harris, M.D., Chief Medical Officer of KMC
10
(“Harris”); William Roy, M.D., Chief of the Division of Gynecologic Oncology at KMC
11
(“Roy”); and DOES 1 through 10.
12
Plaintiff’s claims against his employer, Defendant County, allege violations of section
13
1278.5 of the Health & Safety Code 1 which prohibits retaliation against a health care provider
14
who reports suspected unsafe care and conditions of patients in a health care facility; section
15
1102.5 of the Labor Code which prohibits retaliation against an employee for reporting or
16
refusing to participate in suspected violations of the law; the California Family Rights Act
17
(sections 12945.1, et seq., of the Government Code) (“CFRA”) and the Family and Medical
18
Leave Act (sections 2601, et seq. of the United States Code) (“FMLA”) which prohibit
19
interference with an employee’s right to medical leave and retaliation for an employee’s exercise
20
of the right to medical leave; and the Fair Employment and Housing Act [subdivisions (a), (m) &
21
(n) of section 12940 of the Government Code] (“FEHA”) which prohibits discrimination against
22

23
1
All statutory references are to California Codes unless otherwise specified.
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 2/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 19 of 205

1 an employee with a disability, failure to provide reasonable accommodation, and failure to

2 engage in an interactive process; and recovery of wrongfully deducted wages under the Fair

3 Labor Standards Act (29 U.S.C. §§ 201, et seq.) (“FLSA”).

4 Plaintiff sues Defendants County, Roy, Harris and DOES 1 through 10, for defamation;

5 and also sues each of the individual Defendants except for Roy and Harris, both in their personal

6 capacity and in their official capacity as members of the KMC Joint Conference Committee

7 (“JCC”), for violation of Plaintiff’s 14th Amendment of the United States Constitution right to

8 procedural due process pursuant to 42 U.S.C. § 1983 (“Due Process”).

9 Plaintiff brings this action for general, compensatory, and punitive damages; prejudgment

10 interest, costs and attorneys’ fees; injunctive and declaratory relief; and other appropriate and

11 just relief resulting from Defendants’ unlawful conduct, and as grounds therefor alleges:

12 JURISDICTION AND VENUE

13 1. This Court has federal question jurisdiction over the FMLA, Due Process, and

14 FLSA claims pursuant to 28 U.S.C. § 1331. The Court has supplemental jurisdiction over

15 Plaintiff’s transactionally-related state claims pursuant to 28 U.S.C. § 1367.

16 2. Venue is proper in Fresno in the Eastern District of California, as a substantial

17 part of the events and omissions giving rise to this claim occurred in the County of Kern,

18 California.

19 INTRADISTRICT ASSIGNMENT

20 3. Assignment to Bakersfield is proper pursuant to Civil Local Rule 3-120

21 (Appendix A) because the events giving rise to this civil action occurred in Bakersfield in the

22 County of Kern, California.

23

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 3/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 20 of 205

1 PARTIES

2 4. At all material times herein, Plaintiff David F. Jadwin, D.O. (“Plaintiff”) has

3 continuously been an employee of Defendant County, a citizen of the United States and

4 California; and a resident of Los Angeles County, California.

5 5. At all material times herein, Plaintiff was an individual with disabilities within the

6 meaning of Section 12926(i) & (k) of the Government Code.

7 6. On information and belief, at all material times herein, Defendant County is a

8 local public entity within the meaning of sections 811.2 & 900.4 of the Government Code and is

9 operating in Kern County, California.

10 7. At all material times herein, the County has continuously been an employer

11 within the meaning of FMLA [29 C.F.R. § 825.105(C)], CFRA [Government Code §

12 12945.2(b)(2)], FEHA [Government Code § 12926(d)], and FLSA [29 U.S.C. § 203], engaged in

13 interstate commerce and regularly employing more than fifty employees within seventy-five

14 miles of Plaintiff’s workplace.

15 8. On information and belief, at all material times herein, Defendant Peter Bryan is a

16 citizen of Colorado, and a resident of Denver, Colorado, and was Chief Executive Officer of

17 KMC, and a member of the JCC.

18 9. On information and belief, at all material times herein, Defendant Eugene Kercher

19 is a citizen of California, a resident of Kern County, California, and President of KMC Medical

20 Staff, and a member of the JCC.

21 10. On information and belief, at all material times herein, Defendant Irwin Harris is

22 a citizen of California, and a resident of Kern County, California, and Chief Medical Officer at

23 KMC, and a non-voting member of the JCC.

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 4/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 21 of 205

1 11. On information and belief, at all material times herein, Defendant Jennifer

2 Abraham is a citizen of California, and a resident of Kern County, California and Immediate Past

3 President of KMC Medical Staff, and a member of the JCC.

4 12. On information and belief, at all material times herein, Defendant Scott Ragland

5 is a citizen of California, and a resident of Kern County, California, President-Elect of KMC

6 Medical Staff, and a member of the JCC.

7 13. On information and belief, at all material times herein, Defendant Toni Smith is a

8 citizen of California, and a resident of Kern County, California, and Chief Nurse Executive of

9 KMC, and a member of the JCC.

10 14. On information and belief, at all material times herein, Defendant William Roy is

11 a citizen of California, and a resident of Kern County, California and Chief of the Division of

12 Gynecologic Oncology at KMC.

13 15. The true names and capacities of Defendants DOES 1 through 10, inclusive, are

14 presently unknown to Plaintiff, who therefore sues said Defendants by such fictitious names.

15 Plaintiff will amend this complaint to set forth the true names and capacities of said Defendants

16 when they are ascertained. Plaintiff is informed and believes, and upon such information and

17 belief alleges, that at all times relevant, each of the fictitiously-named Defendants was an agent,

18 employee, or co-conspirator of one or more of the named Defendants, and was acting within the

19 course and scope of said agency or employment. Plaintiff is further informed and believes, and

20 upon such information and belief alleges, that each of the fictitiously named Defendants aided,

21 assisted, approved, acknowledged and/or ratified the wrongful acts committed by Defendants as

22 alleged herein, and that Plaintiff’s damages, as alleged herein, were legally caused by such

23 Defendants.

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 5/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 22 of 205

1 FACTUAL BACKGROUND

2 A. STATEMENT OF THE CASE

3 16. Plaintiff is a highly-qualified and capable pathologist with numerous professional

4 accomplishments that have included leadership roles in national, state and local pathology and

5 medical societies. Plaintiff received extensive education and training at reputable academic and

6 medical institutions. Plaintiff has managed several clinical laboratories and pathology

7 departments that have achieved accreditation by the College of American Pathologists,

8 frequently "with distinction.” Plaintiff has also been recognized by numerous pathologists and

9 physicians for his professional leadership and commitment to set and uphold rigorous and ethical

10 standards for patient care quality and safety.

11 17. In late 2000, Plaintiff was recruited to assume the position of Chair of the

12 Pathology Department at KMC, a teaching hospital owned and operated by Defendant County.

13 Plaintiff was recruited in part to raise standards of patient care quality and safety at KMC.

14 Plaintiff immediately set about implementing, among other things, a best-practices peer review

15 system in the Pathology Department.

16 18. In 2001, Plaintiff began to report concerns to key members of KMC’s medical

17 staff and administration about the unacceptably high levels of unsatisfactory or non-diagnostic

18 fine needle aspirations (“FNA”) – a method of using a needle and syringe to obtain deep internal

19 tissue samples of vital organs – being taken by the Radiology Department at KMC for diagnosis

20 by the Pathology Department. In 2003, Plaintiff began to report concerns to key members of

21 KMC’s medical staff and administration about ineffective and unnecessary blood transfusions

22 and an unacceptably high incidence of lost or incomplete product chart copy certifications

23 (“PCC”) required for accurate tracking of dangerous blood transfusions. In 2004, Plaintiff began

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 6/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 23 of 205

1 to report concerns to key members of KMC’s medical staff and administration about the need for

2 instituting a policy of requiring KMC Pathology Department review prior to undertaking

3 significant surgical procedures based upon the reports of outside pathologists (“Internal

4 Pathology Review”). In 2005, Plaintiff reported a concern to key members of KMC’s medical

5 staff and administration about an inappropriate radical hysterectomy (cancer surgical procedure

6 for removal of all female reproductive organs and regional lymph nodes) performed by Roy on a

7 patient with a benign endometriotic cyst (“Roy Hysterectomy”). Also in 2005, Plaintiff began to

8 report concerns to key members of KMC’s medical staff and administration about the need to

9 review a series of serious diagnostic errors committed by a former KMC pathologist, including

10 the failure to identify invasive adenocarcinoma in several prostate needle biopsies (“Prostate

11 Biopsy Errors”). Also in 2005, Plaintiff reported concerns to KMC administration that KMC

12 physicians had performed surgery on a wrong patient due to an error which Plaintiff believed

13 would have been less likely had KMC implemented Internal Pathology Review per Plaintiff’s

14 recommendation. Plaintiff reported several other concerns about inappropriate patient care and

15 noncompliance with quality control standards. In February of 2006, Plaintiff met with Bernard

16 Barmann, County Counsel for the County of Kern (“Barmann”), to report the foregoing

17 concerns.

18 19. In 2005, Roy began a campaign of making defamatory statements impugning

19 Plaintiff’s professional competence. Events culminated in October of 2005, when Kercher,

20 Harris, Ragland and Abraham harshly reprimanded Plaintiff, based on false allegations, resulting

21 from a 15- to 20-minute presentation given by Plaintiff during a monthly KMC oncology

22 conference that allegedly exceeded conference time limits by approximately ten minutes.

23 Plaintiff’s presentation had attempted to highlight several of Plaintiff’s above-mentioned

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1 concerns regarding Internal Pathology Review and their potential impact upon deciding the

2 correct surgical procedure for the patient under discussion. The presentation was stopped before

3 Plaintiff could present the key diagnostic conclusions of his presentation.

4 20. After the conference, Harris solicited letters of disapprobation from conference

5 participants, including Roy. Roy submitted a letter (“Roy Letter”) containing several false

6 statements of fact which defamed Plaintiff to other members of KMC’s medical staff and

7 administration. On information and belief, Harris and DOES 1 through 10 republished the Roy

8 Letter to third parties. Several KMC medical and administration officers including Bryan and

9 Kercher were aware of Roy’s, Harris’s and DOES 1 through 10’s acts of defamation, but refused

10 to intercede, and possibly approved or encouraged them.

11 21. In December of 2005, Plaintiff began medical leave initially in the form of

12 medically necessary reduced work schedule due to severe depression which was later extended

13 to June 16, 2006. It was not until on or about March 2, 2006, that Plaintiff was finally provided

14 with a Request for Leave of Absence form which he then submitted to KMC’s HR Department.

15 Plaintiff also received a document entitled “Designation of Leave (Serious Health Condition of

16 Employee-Intermittent)” from the HR Department at KMC, which included a written guarantee

17 of Plaintiff’s reinstatement to his same or equivalent position with same pay, benefits and terms

18 and conditions of employment upon his return from his leave.

19 22. During Plaintiff’s sick leave, Bryan issued a series of verbal and written

20 ultimatums to Plaintiff which threatened him with termination or demotion upon return from his

21 leave, thereby giving notice that Plaintiff was not in fact guaranteed reinstatement to his same or

22 equivalent position. In a meeting in April of 2006, Bryan ordered Plaintiff to cease his reduced

23 work schedule and begin full-time leave, despite the fact that just days before, Plaintiff had

24

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1 submitted a written request for extension of his reduced work schedule for an additional six

2 months to one year because of his serious medical condition. On June 14, 2006, two days before

3 Plaintiff’s medical leave was allegedly due to end, Bryan informed Plaintiff that he was denying

4 Plaintiff reinstatement to his same or equivalent position, and that he was in fact demoting

5 Plaintiff to a staff pathologist position, effective June 17, 2006, because Plaintiff had taken

6 excessive sick leaves; Plaintiff’s base salary was also ultimately reduced over $100,000 (over

7 35%) as a result (such demotion and pay reduction are hereinafter referred to collectively as

8 “demotion” or “demoted”).

9 23. Plaintiff resumed full-time work as a staff pathologist on October 4, 2006.

10 Plaintiff continued to suffer a hostile work environment and retaliation. On or about November

11 28, 2006, after almost six years of trying to reform KMC from within, Plaintiff finally blew the

12 whistle on KMC, formally reporting his Concerns to the Joint Commission on Accreditation of

13 Hospital Organizations, the College of American Pathologists, and the California Department of

14 Health Services (“Authorities”). On December 4, 2006, Plaintiff submitted a written complaint to

15 KMC leadership about numerous additional concerns regarding the quality of patient care and

16 the deterioration of the pathology department. On December 7, Plaintiff was placed on

17 involuntary administrative leave allegedly “pending resolution of a personnel matter”.

18 24. On December 13, 2006, Plaintiff sent a letter to David Culberson (“Culberson”),

19 interim Chief Executive Officer of KMC, and carbon-copied to members of KMC’s medical staff

20 leadership, informing him that he had reported his Concerns to the Authorities.

21 25. On March 28, 2007, KMC authorized Plaintiff to access his office in order to

22 retrieve his personal computer files. Upon his arrival, Dr. Dutt informed him that his office was

23 now locked and that Dr. Dutt now had custody of the key, that Plaintiff’s file cabinet and

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1 computer had been physically removed and retasked for other purposes at KMC, and that

2 Plaintiff would not be able to access his personal computer files after all.

3 26. On April 4, 2007, Plaintiff placed Defendant County on notice that (i) he still had

4 yet to be provided any explanation for his involuntary leave or any indication as to whether or

5 when it would end so that he could return to work, (ii) the involuntary leave requiring him to

6 remain at home by his phone during working hours was threatening to erode his pathology skills,

7 jeopardizing his employability and career as a pathologist, (iii) the involuntary leave was

8 denying him the opportunity to earn income from professional fee billing, and (iv) part-time

9 work was deemed therapeutic for him by his physician and that the confinement to his house

10 during working hours was having the opposite effect of severely exacerbating his depression.

11 27. To date, Plaintiff remains on involuntary leave, with no explanation therefore or

12 any indication as to whether or when it will end.

13 B. EMPLOYMENT RELATIONSHIP

14 28. On October 24, 2000, the County entered into an employment contract with

15 Plaintiff (“Initial Contract”), hiring him to a full-time position as Chair of the Pathology

16 Department at KMC and as Medical Director of the KMC clinical laboratory (“Lab Director”)

17 for an employment term ending on November 30, 2006. As Lab Director, Plaintiff’s job duties

18 included Medical Director of KMC’s blood bank and transfusion service.

19 29. On or about November 12, 2002, the County modified Plaintiff’s employment

20 contract to reflect an increase in his compensation and leave accrual rate, among other things.

21 This second employment contract dated as of October 5, 2002 (“Second Contract”) extended

22 Plaintiff’s employment term to October 4, 2007. A true and correct copy of the Second Contract

23 is attached hereto as Exhibit 1, and incorporated by reference herein.

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1 30. The Pathology Department and consequently the Chair of Pathology is

2 customarily referred to as “the conscience of a hospital”, and Plaintiff’s job duties extended

3 “beyond (his) own department and (he was) expected to be an effective contributor to the overall

4 improvement efforts of the hospital as a whole.” Such duties included participation in many

5 hospital committees including KMC’s Quality Management Committee.

6 31. According to Exhibit A of the Initial Contract, the County expected Plaintiff to

7 spend 80 to 90% of his time on clinical duties of a pathologist, and 10 to 20% of his time on

8 administrative duties as Chair of the Department of Pathology (“Chair of Pathology”) and Lab

9 Director.

10 32. Article V.10 of the Second Contract provides that Plaintiff will not be deemed a

11 classified employee, or have any rights or protections under the County's Civil Service

12 Ordinance, rules or regulation.

13 33. Article II.3(B)(1) of the Second Contract guarantees that Plaintiff’s base salary

14 will be based on a benchmark salary in proportion to his full-effort commitment. In turn, the

15 benchmark salary will be based on a national standard with four steps (A-D) with three criteria

16 for step placement: clinical experience, teaching and administrative duties as set forth in the

17 KMC Administrative Policies and Procedures Manual (“KAPP Manual”).

18 34. On information and belief, at the time of his hire, the County placed Plaintiff’s

19 salary level at Step C .

20 35. Article III.4 of the Second Contract entitles Plaintiff to the same right to unpaid

21 leave of absence as those provided to a regular County employee under the County’s policy,

22 including six months cumulative unpaid leave of absence for illness or disability pursuant to

23 Rule 1201.20 of the Rules of the Civil Service Commission for the County of Kern (“CSC

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1 Rules”).

2 36. Article IV.1(B) of the Second Contract requires “cause” for termination of

3 Plaintiff’s employment, which cause is defined as “serious administrative violation and/or

4 unsatisfactory clinical performance.”

5 37. Article IV.3 of the Second Contract entitles Plaintiff to administrative review of

6 any corrective action for unsatisfactory clinical performance pursuant to the Bylaws of the

7 Medical Staff of KMC (“Bylaws”); and for administrative review of any corrective action for

8 violation of administrative policies of the County or KMC pursuant to the KAPP Manual.

9 C. WHISTLEBLOWING

10 38. Throughout the course of his employment by KMC, Plaintiff has advocated for

11 appropriate patient care and compliance with the quality accreditation standards of the Joint

12 Commission for the Accreditation of Hospital Organizations, the College of American

13 Pathologists, the American Association of Blood Banks and the American College of Surgeons

14 Commission on Cancer as well as applicable state and federal regulations designed to ensure safe

15 care and conditions of patients.

16 39. Plaintiff reported his various concerns (“Concerns”) about inappropriate and/or

17 suspected unsafe patient care and conditions and non-compliance with applicable laws and

18 regulations and accreditation standards to Bryan and key members of KMC’s medical staff,

19 including but not limited to the following: (i) beginning in 2001, Plaintiff reported the

20 unacceptably high levels of unsatisfactory or non-diagnostic FNAs being taken by the Radiology

21 Department at KMC; (ii) beginning in 2003, Plaintiff reported the unacceptably high incidence

22 of lost or incomplete PCC; (iii) beginning in 2004, Plaintiff reported the need for Internal

23 Pathology Review; (iv) beginning in 2005, Plaintiff reported the Roy Hysterectomy; (v)

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1 beginning in 2005, Plaintiff reported the need to review the Prostate Biopsy Errors; and (vi)

2 beginning in 2005, Plaintiff reported that KMC physicians had performed surgery on a wrong

3 patient due to an error which Plaintiff believed would have been less likely had KMC

4 implemented Internal Pathology Review. Unfortunately, Plaintiff’s reports not only appeared to

5 fall on deaf ears, but also generated resentment and hostility among his peers at KMC.

6 40. On or about December 12, 2005, Plaintiff’s former attorney, Michael Young

7 (“Young”), sent a letter to Barmann, requesting Barmann meet with Plaintiff to discuss his

8 Concerns.

9 41. On or about February 9, 2006, Barmann and Barnes met with Plaintiff. Plaintiff

10 reported his various Concerns, as well as the retaliation, defamation and hostile work

11 environment Plaintiff was experiencing at KMC.

12 42. Finally, on or about November 28, 2006, after almost six years of trying to reform

13 KMC from within in vain, Plaintiff formally reported his Concerns to the Authorities.

14 43. On December 13, 2006, Plaintiff sent a letter addressed to Culberson, and carbon-

15 copied to members of KMC’s medical staff leadership, informing him that “KMC leadership has

16 left me no choice but to report the above issues to the appropriate state and accrediting

17 agencies”.

18 D. DEFAMATION

19 44. In 2005, Plaintiff had reported the need for Internal Pathology Review to key

20 members of KMC medical staff and administration. Roy refused to submit outside pathology

21 reports for Internal Pathology Review prior to surgery, preferring instead to refer all of his

22 pathology cases to an acquaintance at the University of Southern California without intereference

23 from KMC’s Pathology Department.

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1 45. On or about April 15, 2005, Roy sent a letter which was addressed to Plaintiff and

2 carbon-copied to Dr. Leonard Perez (“Perez”), Chair of the OB-GYN Department at KMC. The

3 letter contained the following statements of fact:

4 Additionally, I cannot institute adjuvant therapy in a timely manner when it takes


weeks and sometimes months to get an accurate diagnosis from your
5 department…. Most importantly, delays in instituting appropriate adjuvant
therapy due to delays in obtaining an accurate diagnosis, or instituting
6 inappropriate therapy based on an inaccurate diagnosis can negatively affect
patient survival.
7
46. Roy’s statements regarding delays of weeks and months were false. Perez
8
reasonably understood that the statements were about Plaintiff. Perez reasonably understood the
9
statements to mean that Plaintiff was not managing the Pathology Department in a competent
10
manner. Roy failed to use reasonable care to determine the truth or falsity of the statements. Roy
11
acted with malice in publishing the false statements. As a consequence, Plaintiff experienced a
12
significant loss of reputation and confidence among his peers at KMC.
13
47. On or about April 20, 2005, Plaintiff sent a letter addressed to Roy and carbon-
14
copied to Perez, Dr. Maureen Martin, Chair of Surgery (“Martin”), Kercher and Bryan. The letter
15
stated: “Please refrain from making statements such as it takes weeks and sometimes months to
16
get an accurate diagnosis from your department without citing specific instances. In my
17
experience, such statements are typically untrue and consequently are unethical if not supported
18
by facts.” As officers of KMC, Kercher and Bryan approved, accepted, and/or failed to intercede
19
to protect Plaintiff from Roy’s defamatory acts, and in so doing, ratified them.
20
48. In May of 2005, Harris informed Plaintiff that Roy had voiced concerns about the
21
Pathology Department and had submitted certain pathology reports for second-level peer review
22
and investigation. Plaintiff requested that Harris identify the pathology reports in question but
23
Harris refused. Later, Plaintiff determined that no second-level peer review ever occurred.
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1 49. On or about June 30, 2005, Martin and Harris told Plaintiff that Roy was making

2 negative comments about the Pathology Department.

3 50. On or about June 30, 2005, Plaintiff sent a letter addressed to Roy and carbon-

4 copied to Perez, Martin, Harris, Kercher and Bryan. The letter stated:

5 It has come to my attention that you are making negative statements to numerous
key members of the medical staff regarding pathology reports issued by this
6 department. You are reported by others to claim that several of KMC pathology
diagnoses do not agree with outside diagnoses rendered by other outside
7 pathologists and that these discrepancies have or would have changed patient
management. It would appear from these actions that you are claiming that our
8 diagnoses are not correct. I do not recollect any true, substantial discrepancies
between diagnoses rendered by this department and outside pathology
9 departments based upon retrospective review of our cases since my arrival in
December 2000. It is reported that you claim to have in your possession several
10 such reports detailing incorrect diagnoses rendered by our department. It is also
my understanding that you have been asked on several occasions to produce
11 examples of these discrepancies, and as of yet have not produced any such reports
to individuals that have made these requests. To demonstrate and support the
12 accuracy of your claims, I request that you produce copies of these reports for my
review by July 15, 2005.
13
51. Roy’s statements of fact regarding incorrect diagnoses by the Pathology
14
Department were false. The key members of the KMC medical staff who heard the statements
15
reasonably understood that the statements were about Plaintiff and reasonably understood the
16
statements to mean that Plaintiff was not managing the Pathology Department in a competent
17
manner. Roy failed to use reasonable care to determine the truth or falsity of the statements. Roy
18
acted with malice in publishing the false statements. As a consequence, Plaintiff experienced a
19
significant loss of reputation and confidence among his peers at KMC. As officers of KMC,
20
Harris, Kercher and Bryan approved, accepted, and/or failed to intercede against Roy’s
21
defamatory acts and in so doing, ratified them.
22
52. On or about July 15, 2005, Roy sent a letter addressed to Plaintiff and carbon-
23
copied to Harris, Bryan and Perez. The letter stated:
24

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1 I was quite surprised to receive your letter of June 5th. The "discrepancies" should
be well known to you as I have brought them to your attention many times, both
2 in the presence of Dr. Perez, and in a letter to you a couple of months ago, as well
as multiple phone conversations. The inaccuracies, delays and refusals to refer
3 specimens for outside review continue. The matter has been appropriately
reported to the administration for a quality assurance review, as I have had no
4 success in my pleadings to you directly.

5 53. Roy’s statements of fact regarding the existence of “discrepancies” and the

6 bringing of them to Plaintiff’s attention “many times” and “in the presence of Dr. Perez” were

7 false. Harris, Bryan and Perez reasonably understood that the statements were about Plaintiff and

8 reasonably understood the statements to mean that Plaintiff was neither managing the Pathology

9 Department in a competent manner nor being truthful about Roy’s disclosures of the facts and

10 circumstances underlying his defamatory statements. Roy failed to use reasonable care to

11 determine the truth or falsity of the statements. Roy acted with malice in publishing the false

12 statements. As a consequence, Plaintiff experienced a significant loss of reputation and

13 confidence among his peers at KMC. As officers of KMC, Harris and Bryan approved, accepted,

14 and/or failed to intercede against Roy’s defamatory acts and in so doing, ratified them.

15 54. Moreover, Roy’s statement of fact that he had reported the matter to KMC

16 administration for quality assurance review was false. Harris, Bryan and Perez reasonably

17 understood that the statement was about Plaintiff and reasonably understood the statements to

18 mean that Plaintiff was not managing the Pathology Department in a competent manner. Roy

19 failed to use reasonable care to determine the truth or falsity of the statements. Roy acted with

20 malice in publishing the false statements. As a consequence, Plaintiff experienced a significant

21 loss of reputation and confidence among his peers at KMC. As officers of KMC, Harris and

22 Bryan approved, accepted, and/or failed to intercede against Roy’s defamatory acts and in so

23 doing, ratified them.

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1 55. On October 12, 2005, Plaintiff gave a presentation at the monthly KMC oncology

2 conference (“Oncology Conference”) highlighting concerns regarding a patient that might need a

3 hysterectomy, and the need for Internal Pathology Review.

4 56. Plaintiff’s presentation lasted approximately 15 to 20 minutes, which exceeded

5 alleged conference time limits by approximately ten minutes. Plaintiff was stopped before he

6 could present his final slides stating his patient care quality conclusions.

7 57. On information and belief, presenters at prior and subsequent Oncology

8 Conferences frequently exceeded time limits without interruption, incident, or reprimand.

9 58. Roy, Bill Taylor, Vice-Chair of Surgery, and Albert McBride, the Cancer

10 Committee Liaison, attended Plaintiff’s presentation at the October 12 Oncology Conference and

11 were requested by Harris to give him letters criticizing Plaintiff’s time infraction.

12 59. In response, Roy sent a letter (“Roy Letter”), dated October 13, 2005, addressed

13 to Harris. The Roy Letter stated in relevant part:

14 With respect, Dr. Jadwin is a small rural community hospital pathologist, with
very limited experience and no specialty training in regard to Gynecologic
15 Oncologic Pathology…. Dr. Jadwin is not a clinician, and has neither the fund of
knowledge nor the experience to make any recommendations regarding the
16 treatment of patients, much less criticize the care provided by those, such as
myself, whose training and experience were attained at some of the highest seats
17 of learning in the U.S and abroad. Additionally, as you are aware, it is not
infrequent that Dr. Jadwin's diagnoses are in err when reviewed by outside
18 specialists, as in this particular case. The management of the patient would have
been inappropriate if we accepted Dr. Jadwin's report, which as you know, was
19 different from two other pathologists in his own department (three different
opinions). I have no confidence in Dr. Jadwin and I am actively pursuing the
20 possibility of having all specimens from the Gynecologic Oncology service
evaluated outside, as is currently done for the Neurosurgery service…. I have
21 discussed these issues with Dr. Perez, Chairman of the Department of Obstectrics
and Gynecology, and he assures me of his full support.
22
60. The Roy Letter contained the following false statements of fact: (i) Plaintiff is a
23
small rural community hospital pathologist, (ii) Plaintiff has very limited experience in
24

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1 Gynecologic Oncologic Pathology, (iii) Plaintiff is not a clinician, (iv) Plaintiff has neither the

2 fund of knowledge nor the experience to make any recommendations regarding the treatment of

3 patients, much less criticize the care given by doctors such as Roy, (v) it is not infrequent that

4 Plaintiff’s diagnoses are in err when reviewed by outside specialists, as in this particular case,

5 (vi) the management of the patient would have been inappropriate if Plaintiff’s report had been

6 accepted, and (vii) Plaintiff’s report was different from two other pathologists in his own

7 department, suggesting the deficiency of his report. Harris reasonably understood that the

8 statements were about Plaintiff and reasonably understood the statements to mean that Plaintiff’s

9 credentials and abilities as a pathologist and physician were deficient. Roy failed to use

10 reasonable care to determine the truth or falsity of the statements. Roy acted with malice in

11 publishing the false statements. The Roy Letter exceeded the scope of Harris’s request. Roy

12 defamed Plaintiff despite Plaintiff’s numerous prior requests to stop defaming him. As a

13 consequence, Plaintiff experienced a significant loss of reputation and confidence among his

14 peers at KMC. As an officer of KMC, Harris approved, accepted, and/or failed to intercede

15 against Roy’s defamatory acts and in so doing, ratified them.

16 61. Plaintiff is informed and believes, and thereupon alleges, that Harris subsequently

17 republished the Roy Letter to DOES 1 through 10, and that DOES 1 through 10 further

18 republished the Roy Letter to other members of KMC staff. Such other members of KMC staff

19 reasonably understood that the statements contained in the Roy Letter were about Plaintiff and

20 reasonably understood such statements to mean that Plaintiff’s credentials and abilities as a

21 pathologist and physician were deficient. Harris and DOES 1 through 10 failed to use reasonable

22 care to determine the truth or falsity of the statements. Harris and DOES 1 through 10 acted with

23 actual malice in publishing the false statements. As a consequence, Plaintiff experienced a

24

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1 significant loss of reputation and confidence among his peers at KMC. As officers of KMC,

2 Harris, and DOES 1 through 10 accepted, and/or failed to intercede against Roy’s defamatory

3 acts or their subsequent republication, and in so doing, ratified them.

4 62. On or about October 17, 2005, Plaintiff was ordered to attend a meeting with

5 Kercher, Harris and Ragland who subjected Plaintiff to humiliating ridicule, yelling and

6 inappropriate questioning regarding Plaintiff’s alleged violation of Oncology Conference time

7 limits. Kercher, Harris and Ragland informed Plaintiff that they had received letters of

8 disapprobation (“Disapprobation Letters”) from three conference participants – one of which was

9 the Roy Letter – and would be issuing a letter of reprimand later that day which would be entered

10 into Plaintiff’s medical staff file. When Plaintiff asked to see the Disapprobation Letters,

11 Kercher, Harris and Ragland refused to provide them. As officers of KMC, Harris, Kercher,

12 Ragland and Abraham approved, accepted, and/or failed to intercede against Roy’s defamatory

13 acts or their subsequent republication by Harris and DOES 1 through 10, and in so doing, ratified

14 such defamatory acts.

15 63. Later that day, Harris, Kercher, Ragland and Abraham issued a formal letter of

16 reprimand addressed to Plaintiff (“Reprimand Letter”). The Reprimand Letter stated: “Your

17 repeated misconduct at the Tumor Conference on October 12, 2005 was noted by numerous

18 attendants, three of which have written letters of their dissatisfaction, which will be entered into

19 your medical staff file.” The three letters to be entered into Plaintiff’s medical staff file included

20 the Roy Letter. As officers of KMC, Harris, Kercher, Ragland and Abraham approved, accepted,

21 and/or failed to intercede against Roy’s defamatory acts or their subsequent republication by

22 Harris and DOES 1 through 10, and in so doing, ratified such defamatory acts.

23 64. During the period from on or about October 17, 2005 to on or about January

24

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1 2007, Plaintiff submitted numerous requests to Harris, Ms. Karen Barnes, Deputy County

2 Counsel for the County of Kern (“Barnes”), and Bryan to see the Disapprobation Letters. He was

3 continuously refused. As officers of KMC, Harris and Bryan approved, accepted, and/or failed to

4 intercede against Roy’s defamatory acts or their subsequent republication by Harris and DOES 1

5 through 10, and in so doing, ratified such defamatory acts.

6 65. On or about December 12, 2005, Young sent a letter to Barmann stating:

7 Recently, Dr. Jadwin was advised that several of the staff physicians had written
letters of dissatisfaction regarding Dr. Jadwin’s professionalism and was advised
8 that these letters were placed into his personnel/medical staff file. When the
doctor asked to see these letters, he was refused access to them and was
9 subsequently told that the letters had not been placed into his file. Dr. Jadwin then
sent an e-mail to Deputy County Counsel, Karen Barnes, copy attached, regarding
10 an opinion with respect to his right to inspect the file. At this juncture, there has
been no reply to his request. Needless to say, Dr. Jadwin is extremely upset and
11 emotionally distraught over the present state of affairs.

12 66. On or about January 6, 2006, Barnes sent a letter on behalf of Barmann and

13 addressed to Young. The letter included as an attachment a copy of the Roy Letter, redacted to

14 conceal Roy’s identity. This letter afforded Plaintiff his first opportunity to see the Roy Letter

15 and the defamatory statements contained therein.

16 67. On or about January 9, 2006, Plaintiff sent a letter addressed to Bryan, stating:

17 I have been victim of professional mistreatment by a few members of medical


staff. You are aware of these instances. I believe this harassment is in response to
18 the many quality management issues that I have raised. This harassment has led
me develop depression, anxiety and insomnia. Most recent issue involving the
19 October Oncology Conference is still unresolved. I request administrative leave
with pay until this issue is resolved.
20
68. On or about February 10, 2006, Plaintiff sent a letter addressed to Roy,
21
challenging the truthfulness of the claims contained in Roy’s letter of July 15, 2005, that Roy had
22
reported certain patient cases handled by the Pathology Department to the KMC administration
23
for quality assurance review. Plaintiff stated “to my knowledge no credible report has been
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1 submitted. As of today, I have not received notice of any deficient reports from you.” Plaintiff

2 further challenged the truthfulness of other defamatory statements contained in the Roy Letter

3 and demanded “immediate proof of these allegations within 14 days”. Plaintiff went on to state

4 that if Roy failed to produce such proof, then Roy should issue an apology meeting Plaintiff’s

5 specifications.

6 69. On or about February 21, 2006, Bryan sent a letter addressed to Plaintiff, stating

7 in relevant part:

8 I received a copy of your letter to Dr. Roy dated February 10, 2006 and I must say
that I am disappointed in your decision to send it… I know that you felt justified
9 in sending the letter. You feel that Dr. Roy besmirched your reputation and
challenged your professional competency. Furthermore, you feel that there is no
10 evidence to support his characterizations of you and you are demanding that he
recant his comments and apologize. All of these things may or may not be as you
11 say. However, your decision to confront the issues this way is not a good one…. It
is not your message that people react to but rather how you deliver it…. Dr. Roy's
12 letter was correspondence submitted through the medical staff structure, and the
staff officers and Chief Medical Officer have the obligation to decide what to do
13 with that input. They can either ignore that correspondence because of a lack of
supporting evidence, call for a review of the quality of your work, or cause a
14 meeting to happen between you and Dr. Roy and Dr. Perez to further clarify the
basis of Dr. Roy's concerns.
15
70. As an officer of KMC, Bryan approved, accepted, and/or failed to intercede
16
against Roy’s defamatory acts or their subsequent republication by Harris and DOES 1 through
17
10, and in so doing, ratified them.
18
71. On or about March 16, 2006, Plaintiff sent an email addressed to Kercher and
19
carbon-copied to Bryan, stating:
20
I am further requesting an investigation of Dr. Roy’s professional behavior by the
21 medical staff… [H]e has made outrageous false statements about the pathology
department and myself, which cause great concern about his ethical integrity…. I
22 think it is outrageous that the medical staff sits by and lets this individual act in
such a pompous, destructive manner. I feel a personal duty to the pathology
23 department (and the hospital) to push the issue of his bad conduct in whatever
venue may be needed to control the actions of this individual.
24

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1
72. On or about March 30, 2006, Young sent a letter addressed to Roy, stating:
2
Dr. Jadwin is very upset with the alleged statements attributable to you regarding
3 his reputation in the medical community. Unless you come forward with facts in
support of your position to show the truth thereof or issue a written apology to Dr.
4 Jadwin, he will have no alternative but to seek recourse against you for damaging
his reputation. While professionals may justifiably have a difference of opinion
5 regarding complex issues in the field of medicine, there is really no place for
publishing statements about a colleague that are not true and intended to tarnish
6 one’s reputation.”

7 73. To date, Plaintiff is informed and believes and thereupon alleges: (i) Roy has

8 never responded to Plaintiff’s repeated requests for factual substantiation of Roy’s numerous

9 defamatory statements; (ii) KMC never conducted an investigation into Roy’s professional

10 misconduct; and (iii) Harris, Kercher, Bryan and Abraham have approved, accepted, and refused

11 to intercede against Roy’s defamatory acts or their subsequent republication by Harris and DOES

12 1 through 10.

13 E. MEDICAL LEAVE

14 74. As of December 16, 2005, Plaintiff was eligible for twelve weeks of medical

15 leave under FMLA and CFRA pursuant to 29 C.F.R. § 825.110 and 2 C.C.R. § 72970(e),

16 respectively, in that he had been regularly employed by Defendant County for 1,250 hours in the

17 twelve months immediately prior to the start of his leave and had not taken any medical or

18 family leave during that time.

19 75. An eligible employee’s rights under CFRA and FMLA include a “reduced work

20 schedule” pursuant to 29 C.F.R. § 825.203 that is “medically necessary” pursuant to 29 C.F.R.

21 825.117.

22 76. On or about December 16, 2005, Plaintiff submitted to KMC a copy of his

23 psychiatrist’s certification stating that Plaintiff needed a reduced work schedule leave until at

24

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1 least March 16, 2006 because of his serious medical condition.

2 77. Plaintiff’s notice to KMC of his need for medical leave was reasonable under the

3 circumstances.

4 78. On or about December 16, 2005 Plaintiff began his medically necessary reduced

5 work schedule that permitted him to perform all of his duties as Chair of Pathology, and reduced

6 his schedule only as to his duties as a regular pathologist.

7 79. On or about March 2, 2006, Plaintiff was finally provided with a Request for

8 Leave of Absence form which he then submitted to KMC’s HR Department. KMC’s HR

9 Department formally approved the leave on March 13, 2006.

10 80. Also on or about March 2, 2006, Plaintiff received a document entitled

11 “Designation of Leave (Serious Health Condition of Employee-Intermittent)” (“Leave

12 Designation Notice”) from the HR Department at KMC that informed Plaintiff:

13 You also have the right to be reinstated to the same or an equivalent job with the
same pay, benefits and terms and conditions of employment on your return from
14 leave. Please note that the leave provisions for County employees are more
generous than those mandated by FMLA and CFRA and, accordingly, you may be
15 eligible for more than the twelve (12) weeks of unpaid leave described above.”

16 81. On or about April 10, 2006, Plaintiff sent an email to Bryan stating: “I believe

17 that we have a meeting this Thursday at 1500. I can discuss a schedule with you. I have been

18 working only to help out Phil and Savita during periods of shortage, and to keep on top of some

19 administrative work. I am always available for necessary discussions. Just have Arlene or Tracy

20 call me.”

21 82. On or about April 17, 2006, Bryan wrote a letter addressed to Plaintiff,

22 purportedly memorializing Bryan’s April 13, 2006 meeting with Plaintiff in which he

23 acknowledged, “Yes, the Department of Pathology continues to function well as it has for many

24

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1 years, and yes, you have made many positive changes in the department.” Bryan also

2 acknowledged that Plaintiff’s whistleblowing activity had created “the dysfunctional relationship

3 you have with some key members of the staff” and asked for Plaintiff to either cease upsetting

4 staff with his whistleblowing activity or to step down as Chairman on his return from medical

5 leave.

6 83. On or about April 20, 2006, Plaintiff received notice from KMC’s HR

7 Department that his “Intermittent Leave of Absence” had expired on March 15 and that in order

8 to extend his leave, he would need to submit a “Request for Leave of Absence” form to the HR

9 Department by “no later than Tuesday, April 25, 2006”.

10 84. On or about April 26, 2006, Plaintiff submitted a Request for Leave of Absence

11 form to KMC’s HR Department, along with a copy of his psychiatrist’s certification that Plaintiff

12 needed an extension of his reduced work schedule leave for six months to one year because of

13 his serious medical condition.

14 85. However, on or about April 28, 2006, Bryan met with Plaintiff, Barnes and Steve

15 O’Conner of the HR Department (“O’Conner”) and ordered Plaintiff to convert his reduced work

16 schedule to involuntary full-time medical leave despite the fact that Plaintiff was ready, willing,

17 and able to continue working his reduced work schedule (“Forced FT Leave”). Bryan further told

18 Plaintiff that he needed to know by June 16, 2006 whether Plaintiff would resign as Chair; and

19 that if he resigned he would be in the same position as Adam Lang, a former staff pathologist at

20 KMC, who retained only hospital privileges but whose employment contract had been

21 terminated. Hence, Bryan threatened Plaintiff not only with removal from chairmanship, but

22 termination of the Second Contract, thereby giving notice that he would not honor any guarantee

23 of reinstatement to Plaintiff’s same or equivalent position.

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1 86. On or about April 28, 2006, Bryan wrote a letter to Plaintiff purportedly

2 memorializing the April 26, 2006 meeting and stating that he required Plaintiff to go on full-time

3 leave from May 1, 2006 to June 16, 2006 when Plaintiff’s right to medical leave would

4 purportedly expire; and required Plaintiff to either return to work full-time on June 17, 2006 or

5 resign, purportedly because “the hospital needs you here full-time.”

6 87. On or about May 5, 2006, Plaintiff underwent nasal surgery followed by a

7 difficult recovery which limited his ability to breathe and exert himself for approximately one

8 month.

9 88. On or about May 29, 2006, Plaintiff fractured his foot and avulsed a ligament

10 from his ankle in an accident which limited his ability to walk, stand or sit without elevating his

11 ankle for approximately three months.

12 89. On or about June 2, 2006, Plaintiff sent a letter addressed to Bryan, stating:

13 Unfortunately, I underwent sinus surgery in early May which took some time to
recover from. Then last Monday, I suffered a serious fall down a staircase that
14 will require a cast on my left ankle and impose serious restrictions on my mobility
for at least four weeks. I would greatly appreciate an extension of the June 16
15 deadline as my physical ailments of late simply have not permitted me to consider
and render such an important decision nor do they physically permit me to come
16 to the office by June 16.

17 90. On or about June 14, 2006, Bryan sent an email addressed to Plaintiff informing

18 Plaintiff that Bryan was unilaterally removing Plaintiff from his position as Chair of Pathology,

19 thereby denying Plaintiff reinstatement to his same or equivalent position despite written

20 guarantees to the contrary. The email stated:

21 My response to your request for an extension of medical leave has a two part
answer. First, I will extend leave to a Personal Necessity Leave for your
22 employment status only. This means that you have 90 days of extended leave
which will protect your overall employment status. At the end of this 90 day
23 period, you must either return to duty or resign from employment. Second, I will
not extend your leave as it relates to your appointment as Chairman, Department
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1 of Pathology. I am implementing the provisions of paragraph 9.6-4, REMOVAL,


Medical Staff Bylaws, and withdrawing your appointment as Chairman,
2 Department of Pathology. This institution needs to have full-time leadership in the
department and because of your leave you have not been able to provide it.
3 Should you return to work after the completion of your Personal Necessity Leave
then your employment contract will be modified as mutually agreed to reflect that
4 you are still an employed pathologist (should you choose this option), but you will
not retain the duties and appointment of a chairman. My decision to do this, Dr.
5 Jadwin, is based solely on your inability to provide consistent and stable
leadership in the department for most of the past eight to nine months. You have
6 used all of your sick and vacation time in addition to using all available time
under the medical leave provisions of County policy. It is unfortunate that you
7 had your accident which delayed your return but the hospital needs to move on.

8 91. Later, on or about June 14, 2006, Bryan sent a letter addressed to Plaintiff

9 reiterating that Bryan was rescinding Plaintiff’s Chairmanship of the Pathology Department

10 because Plaintiff had “essentially been out on either full or part-time leave for the past eight or

11 nine months” – an inaccurate statement – and because “the Department of Pathology needs a

12 full-time chairman.”

13 92. On information and belief, on or about July 10, 2006, the JCC approved

14 Plaintiff’s removal from Chairmanship by a majority vote.

15 93. Plaintiff’s demotion breached the guarantee of reinstatement contained in the

16 Leave Designation Notice.

17 94. On or about September 18, 2006, Barnes sent Plaintiff’s attorney a proposed

18 amendment (“Amendment”) to the Second Contract which included a base salary reduction of

19 over 35% (“Paycut”), allegedly as a consequence of Plaintiff’s removal from Chairmanship.

20 95. On or about September 18, 2006, Plaintiff sent an email addressed to Barnes

21 protesting the Paycut. The email stated:

22 Mr. Bryan stated in his letter to me that his decision to strip me of my


chairmanship was based on the sick leaves I was taking. KMC's proposed
23 reduction of my base salary seems to have the purpose of punishing me further. I
wish to return to work at KMC, but I believe the proposed drastic reduction in my
24

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1 base salary as benchmarked against Dr. Dutt's is utterly unfair on numerous


levels. I am left feeling that this is simply another retaliatory effort on the part of
2 KMC.

3 96. On or about September 20, 2006, Culberson sent a letter addressed to Plaintiff

4 explaining the Paycut.

5 97. On or about September 22, 2006, Plaintiff executed the Amendment

6 memorializing the Paycut and submitted it to Barnes.

7 98. On or about October 3, 2006, the Board of Supervisors for Defendant County

8 voted to approve the Amendment.

9 99. On October 4, 2006, Plaintiff’s 90-day personal necessity leave ended and

10 Plaintiff returned to work at KMC as a staff pathologist. Plaintiff’s former subordinate, Philip

11 Dutt, MD (“Dutt”), was chosen to replace Plaintiff as Acting Chair of Pathology.

12 100. Between on or about October 4, 2006 until on or about December 7, 2006, Dutt

13 yelled at, harassed, insulted and ridiculed Plaintiff, both verbally and in a series of emails.

14 101. On or about December 4, 2006, Plaintiff sent a letter addressed to Culberson and

15 carbon-copied to key members of KMC’s medical staff and administration, protesting Dutt’s

16 behavior and raising additional concerns about patient care quality, safety and legal

17 noncompliance.

18 102. On or about December 7, 2006, Culberson sent a letter addressed to Plaintiff

19 informing him that he was being placed on involuntary paid administrative leave “pending

20 resolution of a personnel matter”.

21 103. On March 28, 2007, KMC authorized Plaintiff to access his office in order to

22 retrieve his personal computer files. Upon his arrival, Dr. Dutt informed him that his office was

23 now locked and that Dr. Dutt now had custody of the key, that Plaintiff’s file cabinet and

24

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1 computer had been physically removed and retasked for other purposes at KMC, and that

2 Plaintiff would not be able to access his personal computer files after all.

3 104. On April 4, 2007, Plaintiff placed Defendant County on notice that (i) he still had

4 yet to be provided any explanation for his involuntary leave or any indication as to whether or

5 when it would end so that he could return to work, (ii) the involuntary leave requiring him to

6 remain at home by his phone during working hours was threatening to erode his pathology skills,

7 jeopardizing his employability and career as a pathologist, (iii) the involuntary leave was

8 denying him the opportunity to earn income from professional fee billing, and (iv) part-time

9 work was deemed therapeutic for him by his physician and that the confinement to his house

10 during working hours was having the opposite effect of severely exacerbating his depression.

11 105. To date, Plaintiff remains on involuntary leave, with no explanation therefore or

12 any indication as to whether or when it will end.

13 F. DISABILITY DISCRIMINATION

14 106. In 2003, Plaintiff had notified KMC that he suffered from depression due to work-

15 related hostility and KMC’s failure to resolve Plaintiff’s compliance and patient care concerns.

16 KMC subsequently permitted Plaintiff to undertake a medically necessary reduced work

17 schedule leave as a reasonable accommodation.

18 107. By December 16, 2005, Plaintiff was suffering extreme stress from the hostile

19 work environment created by the harassment, defamation, discrimination, and retaliatory adverse

20 actions of Defendants and each of them. Plaintiff’s depression subsequently became disabling in

21 that it limited his ability to enjoy life, without anxiety or insomnia..

22 108. On or about December 16, 2005, Plaintiff submitted to KMC a copy of his

23 psychiatrist’s certification that Plaintiff needed a reduced work schedule leave because of his

24

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1 serious medical condition.

2 109. On or about January 9, 2006, Plaintiff sent a letter addressed to Bryan, stating:

3 “This harassment has led me develop depression, anxiety and insomnia. Most recent issue

4 involving the October Oncology Conference is still unresolved. I request administrative leave

5 with pay until this issue is resolved.”

6 110. On or about January 9, 2006, Plaintiff met with Bryan regarding his request for a

7 medically necessary reduced work schedule, and clarified that it was necessary because of the

8 reoccurrence of his disabling depression. Bryan orally approved Plaintiff’s reduced work

9 schedule.

10 111. Defendants, and each of them, knew or should have known that Plaintiff was an

11 individual with a disability that limited his major life activities of taking pleasure in life, without

12 experiencing anxiety, insomnia or difficulty breathing and moving, and/or was perceived by

13 Defendants as having such limitations.

14 112. On or about March 2, 2006, Plaintiff sent an email to Bryan, repeating his

15 previous verbal request weeks earlier that KMC hire a locum tenens pathologist to assist with the

16 Pathology Department’s workload during Plaintiff’s reduced work leave.

17 113. On or about March 24, 2006, Plaintiff sent an email to Bryan, expressing his

18 disappointment that KMC had not yet hired a locum tenens pathologist to assist with the

19 Pathology Department’s workload during Plaintiff’s reduced work leave, as Plaintiff had

20 previously requested.

21 114. On or about April 10, 2006, Plaintiff sent an email to Bryan, stating that he had

22 not been informed that KMC had finally hired a locum tenens pathologist. The email stated:

23 I don't know of Dr. Bhargava and didn't know that a contract with Dr. Bhargava
was signed. Had I known, I would have placed him on the call schedule for the
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1 coming months. I felt obligated to take some of the call, even though I am off,
because there would not be enough resources for the call schedule.
2
115. On or about April 17, 2006, Bryan wrote a letter addressed to Plaintiff in which
3
he acknowledged that “Yes, the Department of Pathology continues to function well as it has for
4
many years, and yes, you have made many positive changes in the department [emphasis
5
added]”.
6
116. On or about April 26, 2006, Plaintiff submitted a Request for Leave of Absence
7
form to KMC’s HR Department, along with a copy of his psychiatrist’s certification that Plaintiff
8
needed an extension of his reduced work schedule leave for six months to one year because of
9
his serious medical condition.
10
117. Nevertheless, on or about April 28, 2006, Bryan met with Plaintiff, Barnes and
11
O’Conner, and ordered Plaintiff to convert his reduced work schedule to involuntary full-time
12
medical leave despite the fact that Plaintiff was ready, willing, and able to continue working his
13
reduced work schedule, thereby removing an accommodation of Plaintiff’s disability and
14
refusing to engage in good faith in an interactive process with Plaintiff.
15
118. On or about May 5, 2006, Plaintiff underwent nasal surgery followed by a
16
difficult recovery, which limited his ability to breathe and exert himself for approximately one
17
month.
18
119. On or about May 29, 2006, Plaintiff fractured his foot and avulsed a ligament
19
from his ankle in an accident which limited his ability to stand, sit without elevating his ankle, or
20
walk for approximately three months.
21
120. On or about June 2, 2006, Plaintiff sent a letter addressed to Bryan, requesting an
22
extension of Plaintiff’s leave, which was due to expire on June 16, 2006, because of Plaintiff’s
23
nasal surgery and foot injury.
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1 121. On or about June 14, 2006, Bryan sent an email addressed to Plaintiff informing

2 Plaintiff that Bryan was unilaterally removing Plaintiff from his position as Chair of Pathology

3 purportedly because “[t]his institution needs to have full-time leadership in the department and

4 because of your leave you have not been able to provide it.”

5 122. Later, on or about June 14, 2006, Bryan sent a letter address to Plaintiff

6 containing statements similar to those contained in Bryan’s email of earlier that day, and

7 reiterating that “the Department of Pathology needs a full-time chairman.”

8 123. On April 4, 2007, after KMC had placed Plaintiff on involuntary paid leave,

9 Plaintiff placed Defendant County on notice that (i) he still had yet to be provided any

10 explanation for his involuntary leave or any indication as to whether or when it would end so that

11 he could return to work, (ii) the involuntary leave requiring him to remain at home by his phone

12 during working hours was threatening to erode his pathology skills, jeopardizing his

13 employability and career as a pathologist, (iii) the involuntary leave was denying him the

14 opportunity to earn income from professional fee billing, and (iv) part-time work was deemed

15 therapeutic for him by his physician and that the confinement to his house during working hours

16 was having the opposite effect of severely exacerbating his depression.

17 124. To date, Plaintiff remains on involuntary leave, with no explanation therefore or

18 any indication as to whether or when it will end.At all times material here, excluding a portion of

19 the time when he was out on voluntary full-time medical leave, Plaintiff has been able to perform

20 the essential functions of the employment positions he held with Defendants and each of them,

21 with reasonable accommodation.

22 125. Plaintiff requested reasonable accommodation of his disabilities from Defendants,

23 and each of them, in the form of a reduced work schedule and/or recuperative leave.

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1 126. Allowing Plaintiff to take the medical and/or recuperative leave that he requested

2 would have been a reasonable accommodation of Plaintiff’s disabilities.

3 127. Holding open Plaintiff’s position as Chair of Pathology while he was on leave

4 would have been a reasonable accommodation of Plaintiff’s disabilities.

5 128. Holding open Plaintiff’s position as Chair of Pathology while he was on leave

6 would not have been unduly burdensome for the County or KMC.

7 G. DUE PROCESS

8 129. Pursuant to 9.6-4 of the Bylaws, Bryan was not authorized to remove Plaintiff

9 from his position as Chair of Pathology, but could only recommend such removal to the JCC.

10 130. It is customary for the County and/or KMC to remove a Department Chair

11 pursuant to 9.6-4 of the Bylaws only for cause.

12 131. It is customary for the County and/or KMC to provide a hearing and opportunity

13 to be heard before removing a Department Chair of KMC from office, and before a demotion

14 that results in a substantial and/or excessive reduction in compensation

15 132. When necessary, it is customary for the County and/or KMC to appoint a

16 temporary replacement as “Acting” senior manager in the place and stead of a senior manager,

17 such as Plaintiff, when the senior manager’s position is left vacant because of a leave of absence

18 or termination of employment.

19 133. Defendants, and each of them except Roy, demoted and reduced the

20 compensation of Plaintiff without cause or justification.

21 134. Defendants, and each of them except Roy, demoted and the reduced the

22 compensation of Plaintiff without providing him with the customary hearing or notice thereof.

23

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1 H. ADVERSE ACTIONS

2 135. Defendants, and each of them, have taken adverse employment actions against

3 Plaintiff, willfully and intentionally creating a hostile work environment, subjecting him to acts

4 of defamation and ratification thereof, demotion and excessive reduction in pay, disparate

5 treatment, unwarranted criticism and reprimands, threats, requests for his resignation,

6 interference with and denial of his right to medical leave, refusing to engage in good faith in an

7 interactive process and denying him reasonable accommodation and procedural due process

8 because of his protected characteristics and/or activities alleged herein.

9 I. DAMAGES AND CAUSATION

10 136. As a result of Defendants' acts and omissions alleged herein, Plaintiff has suffered

11 pecuniary losses, such as loss of wages and benefits, and has been required to incur medical and

12 legal expenses and to hire attorneys in order (i) to enforce Plaintiff's rights, (ii) to enforce

13 provisions of the law protecting whistleblowers, employees who exercise their right to medical

14 leave under CFRA and FMLA, and employees with disabilities that need reasonable

15 accommodation, and (iii) to take such action both in his own interest and in order to enforce

16 important rights affecting the public interest.

17 137. After Plaintiff’s returned from leave on October 4, 2006, Defendants and each of

18 them except Roy and Harris placed Plaintiff in the position of staff pathologist and excessively

19 reduced his salary by $100,842 or over 35%.

20 138. On information and belief, Plaintiff’s salary for his work as a staff pathologist for

21 KMC is less than the benchmark National Medical Group Association (“NMGA”) median salary

22 for a clinical and anatomic pathologist with Plaintiff’s qualifications and experience, in breach of

23 the Second Contract.

24

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1 139. During the time that Defendants placed Plaintiff on involuntary full-time leave,

2 including the period from December 7, 2006 to date, Defendants effectively denied Plaintiff the

3 opportunity to earn Professional Fees as set forth in Article II of the Second Contract.

4 140. As a further result of Defendants’ acts and omissions alleged herein, Plaintiff has

5 suffered and continues to suffer non-economic damages, such as emotional distress, anxiety,

6 humiliation, and loss of reputation.

7 141. The acts and omissions of Defendants, and each of them, alleged herein were and

8 are a substantial factor in causing Plaintiff's harm.

9 142. The acts and omissions of Defendants Bryan, Harris, and Roy alleged herein are

10 despicable, oppressive and were done in conscious disregard of the rights of individuals and

11 whistleblowers, such as Plaintiff, and of the safety of public patients, and have evidenced actual

12 or implied malicious intent toward Plaintiff, thereby entitling him to an award of punitive

13 damages against Defendants Bryan, Harris and Roy pursuant to §3294 Civil Code in an amount

14 sufficient to make an example of Defendants Bryan, Harris, and Roy and discourage others from

15 conscious disregard for the rights of individuals and whistleblowers and for the safe care and

16 condition of public patients. Plaintiff does not know the financial worth of Defendants Bryan,

17 Harris, or Roy or the amount of punitive damages sufficient to accomplish the public purposes of

18 §3294 Civil Code and will seek leave to amend this complaint when such facts are known or

19 proceed according to proof at trial.

20 143. Plaintiff has mitigated his damages by seeking and maintaining medical and

21 psychiatric treatment and by taking progressive steps to try to protect his reputation and restore

22 confidence in the Pathology Department at KMC.

23

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1 EXHAUSTION OF REMEDIES

2 144. On July 3, 2006, Plaintiff filed a Tort Claims Act complaint with the County of

3 Kern. The complaint disclosed Plaintiff’s claims of defamation against Roy, Harris and

4 Defendants DOES 1 through 10, and of retaliation against Defendant County for engaging in

5 whistleblowing activity concerning unsafe patient care and conditions at KMC and his refusal to

6 participate in activities that he reasonably believed to be unlawful against Defendant County (a

7 true and correct copy of which is attached hereto as Exhibit 2 and incorporated by reference

8 herein). The Office of the County Counsel for the County of Kern sent a letter to Plaintiff’s

9 counsel, dated September 15, 2006 (a true and correct copy of which is attached hereto as

10 Exhibit 3 and incorporated by reference herein), giving notice that Plaintiff’s complaint was

11 deemed rejected by operation of law and informing Plaintiff that he had six months from the date

12 of such notice to file a court action on his claims. Plaintiff continues to be employed by KMC as

13 a staff pathologist and continues to be subject to a hostile work environment and retaliation on an

14 ongoing basis.

15 145. On April 23, 2007, Plaintiff filed a supplemented Tort Claims Act complaint with

16 the County of Kern, supplemented to reflect events occurring after filing of the initial Tort

17 Claims Act complaint on July 3, 2006. A true and correct copy is attached hereto as Exhibit

18 XXX and incorporated by reference herein.

19 146. Plaintiff intends to file amended Tort Claims Act complaints with the County of

20 Kern on a periodic and continuing basis.

21 147. On August 3, 2006, Plaintiff filed a complaint with the California Department of

22 Fair Employment and Housing (“DFEH”), followed by an amended complaint filed on

23 November 14, 2006. The complaint stated claims against Defendant County for discrimination

24

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1 on the basis of disability, as well as failure to engage in good faith in an interactive process,

2 failure to provide reasonable accommodation, violations of Plaintiff’s medical leave rights.

3 Plaintiff received a right-to-sue notice from the DFEH, true and correct copies of which are

4 attached hereto as Exhibit 4 and incorporated by reference herein.

5 148. On April 23, 2007, Plaintiff filed a supplemented complaint with the DFEH,

6 supplemented to reflect events occurring after filing of the initial complaint with the DFEH on

7 August 3, 2006. A true and correct copy is attached hereto as Exhibit XXX and incorporated by

8 reference herein.

9 149. Plaintiff intends to file amended complaints with the DFEH on a periodic and

10 continuing basis.

11 150. Plaintiff filed a notice of intent to sue under Section 1102.5 of the Labor Code,

12 without seeking any penalties, with the Labor and Workforce Development Agency (“LWDA”)

13 on January 5, 2007, a true and correct copy of which is attached hereto as Exhibit 5 and

14 incorporated by reference herein. On February 15, 2007, the LWDA mailed notice to Plaintiff

15 that it was in receipt of Plaintiff’s notice of intent to sue. To date, Plaintiff has not received any

16 citation or notice that LWDA will investigate or pursue this claim.

17 151. On January 24, 2007, Plaintiff gave notice to the U.S. Department of Labor that

18 he had filed a complaint and initiated this action in US district court, alleging interference with

19 Plaintiff’s right to family and medical leave under FMLA. No right-to-sue notice has issued as

20 Plaintiff has a free-standing private right of action under FMLA.

21 STATEMENT OF CLAIMS

22 FIRST CLAIM

23 (Retaliation in Violation of Health & Safety Code § 1278.5)


(Against Defendants County and DOES 1 through 10)
24

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1
152. Plaintiff alleges this first and separate claim for Retaliation in violation of Health
2
& Safety Code § 1278.5 against Defendant County.
3
153. Plaintiff incorporates by reference herein the allegations set forth in Paragraphs 1
4
through 141, inclusive, above.
5
154. At all material times herein, Health & Safety Code § 1278.5 provided protection
6
from discrimination and retaliation for health care workers who reported suspected unsafe care
7
and conditions of patients in health care facilities.
8
155. Defendants and each of them knew of Plaintiff’s whistleblowing activity
9
regarding suspected unsafe care and conditions of patients at KMC.
10
156. Defendants and each of them have violated Section 1278.5 of the Health & Safety
11
Code by engaging in a continuous and ongoing pattern and practice of discrimination and
12
retaliation against Plaintiff because he engaged in whistleblowing activity protected by Section
13
1278.5 of the Health & Safety Code.
14
157. A motivating factor for the acts and omissions of Defendants and each of them
15
described herein was Plaintiff’s reports to his employer, Barmann, and Authorities regarding
16
what he reasonably believed to be unsafe patient care and conditions.
17
WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.
18
SECOND CLAIM:
19
(Retaliation In Violation Of Lab. Code § 1102.5)
20 (Against Defendants County and DOES 1 through 10)

21 158. Plaintiff alleges this second and separate claim for Retaliation in violation of
22 Labor Code § 1102.5 against Defendant County and DOES 1 through 10, inclusive
23 159. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 37/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 54 of 205

1 1 through 141 above, inclusive.

2 160. At all material times herein, Labor Code § 1102.5 was in effect, and provides in

3 pertinent part:

4 1102.5. (a) An employer may not make, adopt, or enforce any rule, regulation, or
policy preventing an employee from disclosing information to a government or
5 law enforcement agency, where the employee has reasonable cause to believe that
the information discloses a violation of state or federal statute, or a violation or
6 noncompliance with a state or federal rule or regulation.
(b) An employer may not retaliate against an employee for disclosing
7 information to a government or law enforcement agency, where the employee has
reasonable cause to believe that the information discloses a violation of state or
8 federal statute, or a violation or noncompliance with a state or federal rule or
regulation.
9 (c) An employer may not retaliate against an employee for refusing to
participate in an activity that would result in a violation of state or federal statute,
10 or a violation or noncompliance with a state or federal rule or regulation.

11 161. Plaintiff reported his reasonable suspicions about illegal, non-compliant, and

12 unsafe care and conditions of patients at KMC to his employer, Barmann, and Authorities.

13 162. Defendants, and each of them, knew of Plaintiff’s whistleblowing reports

14 protected by Section 1102.5 of the Labor Code.

15 163. Defendants, and each of them, engaged in a continuous and ongoing pattern and

16 practice of discrimination and retaliation against Plaintiff because he engaged in activity

17 protected by Section 1102.5 of the Labor Code.

18 164. Plaintiff's activity protected by Section 1102.5 of the Labor Code was a

19 contributing factor in the continuous pattern and practice of discrimination and retaliation of

20 Defendants, and each of them, against Plaintiff described in this complaint.

21 WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.

22

23

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 38/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 55 of 205

1 THIRD CLAIM

2 [Retaliation (CFRA - Gov’t Code §§ 12945.1, et seq.)]


(Against Defendants County and DOES 1 through 10, inclusive.)
3
165. Plaintiff alleges this third and separate claim for violations of Government Code
4
§§ 12945.1, et seq., against Defendants County and DOES 1 through 10, inclusive.
5
166. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
6
1 through 141 above, inclusive.
7
167. At all material times herein, Section 12945.2(a)(1) of the Government Code and 2
8
C.C.R. § 7297.7(a) prohibit any person from discriminating, discharging, or retaliating against an
9
employee for exercising his right to medical leave.
10
168. Pursuant to 2 C.C.R. § 7297.2(a), CFRA requires that upon granting of leave, an
11
employer shall guarantee to reinstate an employee to the same or comparable position, and must
12
do so unless refusal to reinstate is “justified” by the defenses stated in 2 C.C.R. § 72972(c).
13
169. At all material times herein, the County lacked “justification” pursuant to 2
14
C.C.R. § 7297.7(c) for refusing to reinstate Plaintiff to the same or comparable position on his
15
return from medical leave.
16
170. Defendants, and each of them, retaliated against Plaintiff for exercising his right
17
to medical leave, including denying him a medically necessary reduced work schedule;
18
unjustified notice of Defendants’ intent not to reinstate Plaintiff to his former or comparable
19
position on his return from leave; Defendant’s unjustified refusal to reinstate Plaintiff to his
20
former or comparable position on his return from leave; demoting him; and excessively reducing
21
his salary and chance to earn professional fees, bonuses and promotion.
22
171. Plaintiff's exercise of his right to medical leave was a motivating reason for
23
Defendants’ adverse treatment Plaintiff.
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 39/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 56 of 205

1 WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.

2 FOURTH CLAIM

3 [Interference With FMLA Rights in violation of 29 U.S.C. §§ 2601, et seq.]


(Against Defendants County, Bryan, and DOES 1 through 10, inclusive.)
4
172. Plaintiff alleges this fourth and separate claim for violations of 29 U.S.C. §§
5
2601, et seq. against Defendants County, Bryan, and DOES 1 through 10, inclusive, and each of
6
them.
7
173. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
8
1 through 141 above, inclusive.
9
174. At all material times herein, FMLA was in effect and pursuant to 29 U.S.C. §
10
2611(4)(A)(ii)(I) imposed liability on covered employers and “any person who acts directly or
11
indirectly in the interest of the employer to any of the employees of such employer” for
12
interfering, restraining, or denying the exercise of, or attempt to exercise, any right provided
13
under FMLA pursuant to 29 U.S.C. § 2615(a).
14
175. Defendants, and each of them, interfered, restrained, or denied the exercise of, or
15
attempt to exercise, Plaintiff’s rights under FMLA.
16
176. Defendants’ interference, restraint, or denial of the exercise of, or attempt to
17
exercise Plaintiff’s rights under FMLA included interference with and denial of Plaintiff’s right
18
to a medically necessary reduced work schedule; requiring Plaintiff to take full-time medical
19
leave when he was ready, willing, and able to work part-time, exhausting his medical leave more
20
rapidly than permitted; unjustified notice of Defendants’ intent not to reinstate Plaintiff to his
21
former or comparable position on his return from leave; Defendant’s unjustified refusal to
22
reinstate Plaintiff to his former or comparable position on his return from leave; Defendants’
23
excessive reduction in Plaintiff’s salary.
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 40/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 57 of 205

1 177. Plaintiff's exercise of his rights under FMLA was a motivating reason for

2 Defendants’ adverse treatment of Plaintiff.

3 WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.

4 FIFTH CLAIM

5 [Violation of CFRA Rights in violation of Gov’t Code §§ 12945.1, et seq.]


(Against Defendants County and DOES 1 through 10, inclusive.)
6
178. Plaintiff alleges this fifth and separate claim for violations of Government Code
7
§§ 12945.1, et seq., against Defendants County and DOES 1 through 10, inclusive, and each of
8
them.
9
179. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
10
1 through 141 above, inclusive.
11
180. At all material times herein, the CFRA was in effect and made it an unlawful
12
employment practice for an employer to violate an employee’s rights under the CFRA pursuant
13
to section 12945.2(a) of the Government Code.
14
181. At all material times herein, the CFRA imposed strict liability on covered
15
employers who discriminated against an employee for exercising his right to leave or otherwise
16
interfered with an eligible employee’s CFRA rights pursuant to 2 C.C.R. § 7297.1 and Section
17
1615(a)(2) of the United States Code.
18
182. Pursuant to 2 C.C.R.§ 7297.10, CFRA expressly incorporates federal
19
implementing regulations for FMLA that are not inconsistent with CFRA. 29 C.F.R. 825 §
20
825.700(a) provides that “[i]f an employee takes paid or unpaid leave and the employer does not
21
designate the leave as FMLA leave, the leave taken does not count against an employee’s FMLA
22
entitlement.”
23
183. Pursuant to 2 C.C.R. § 7297.4(6), an employer must designate leave as CFRA
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 41/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 58 of 205

1 leave within 10 days of notice of the employee’s need for leave; but the greater protections of 29

2 C.F.R. § 825.208 which require an employer to do so “within two days absent extenuating

3 circumstances” should apply.

4 184. In Bachelder v. America West Airlines, 259 F.3d 1112 (9th Cir. 2001), the court

5 construed 29 C.F.R. Sec. 825.200(e) and held that where an employer does not designate the

6 method used in calculating employees’ entitlement to leave, “the option that provides the most

7 beneficial outcome for the employee will be used.”

8 185. Pursuant to Government Code § 12945.2(a) and 2 C.C.R. § 7297.2(A), medical

9 leave requested is not be deemed to have been granted unless the employer provides the

10 employee, upon granting the leave request, a written guarantee of employment in the same or a

11 comparable position upon the termination of the leave.

12 186. Pursuant to 2 C.C.R. § 7297.2(a), CFRA requires that upon granting of leave, an

13 employer shall guarantee to reinstate an employee to the same or comparable position, and must

14 do so unless refusal to reinstate is “justified” by the defenses stated in 2 C.C.R. § 72972(c).

15 187. At all material times herein, the County lacked “justification” pursuant to 2

16 C.C.R.C § 7297.7(c) for refusing to reinstate Plaintiff to the same or comparable position on his

17 return from medical leave.

18 188. Defendants, and each of them, discriminated against Plaintiff and otherwise

19 interfered with his CFRA rights because he exercised, or tried to exercise, his CFRA rights,

20 including untimely designation of the initial leave as CFRA leave without providing notice of the

21 method of calculation, untimely notice of how KMC calculated Plaintiff’s entitlement to the

22 extension of his CFRA leave; interference with and denial of Plaintiff’s right to a medically

23 necessary reduced work schedule; requiring Plaintiff to take full-time medical leave when he was

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 42/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 59 of 205

1 ready, willing, and able to work part-time which exhausted his medical leave more rapidly than

2 permitted; unjustified notice of Defendants’ intent not to reinstate Plaintiff to his former or

3 comparable position on his return from leave; Defendant’s unjustified refusal to reinstate

4 Plaintiff to his former or comparable position on his return from leave; and Defendants’

5 excessive reduction in Plaintiff’s salary.

6 189. These violations may also mean that Defendant further violated Plaintiff’s CFRA

7 rights by informing him that his medical leave was exhausted as of June 16, 2005, while Plaintiff

8 may have been entitled to medical leave even as of October 4, 2006 when he returned to work.

9 190. Plaintiff's exercise of, or attempt to exercise, his CFRA rights was a motivating

10 reason for Defendants’ adverse treatment of him.

11 WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.

12 SIXTH CLAIM

13 [Disability Discrimination in Violation of Gov’t Code § 12940(a)]


(Against Defendants County and DOES 1 through 10, inclusive)
14 191. Plaintiff alleges this sixth and separate claim for Disability Discrimination in

15 violation of Government Code § 12940(a) against Defendant County and DOES 1 through 10,

16 inclusive.

17 192. Plaintiff incorporates by reference herein the allegations contained in Paragraphs

18 1 through 141 above, inclusive.

19 193. The FEHA prohibits discrimination on the basis of disability in employment.

20 194. Defendants, and each of them, through their course of conduct denied Plaintiff a

21 benefit of employment, in whole or in part, because he is an individual with known disabilities in

22 violation of Government Code 12940(a) and 2 C.C.R. §7293.7.

23 195. In addition to the adverse actions alleged above, Defendants, and each of them,

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 43/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 60 of 205

1 discriminated against Plaintiff, denied him reasonable accommodation, and refused to engage in

2 good faith in an interactive process because of his known disabilities.

3 WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.

4 SEVENTH CLAIM

5 (Failure to Provide Reasonable Accommodation in Violation of Gov’t Code § 12940(m))


(Against Defendants County and DOES 1 through 10, inclusive)
6
196. Plaintiff alleges this seventh and separate claim for Failure to Provide Reasonable
7
Accommodation in violation of Government Code § 12940(m) against Defendant County and
8
DOES 1 through 10, inclusive.
9
197. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
10
1 through 141 above, inclusive.
11
198. Defendants, and each of them, failed to provide reasonable accommodation of
12
Plaintiff's known disabilities in violation of Section 12904(m) of the Government Code and 2
13
C.C.R. § 7293.9.
14
WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.
15
EIGHTH CLAIM
16
(Failure to Engage In Interactive Consultation In Violation of Gov’t Code § 12940(n))
17 (Against Defendants County and DOES 1 through 10, inclusive)

18
199. Plaintiff alleges this Eighth and separate claim for Failure to Engage in Good
19 Faith in an Interactive Consultation in violation of Government Code § 12940(n) against
20
Defendant County and DOES 1 through 10, inclusive.
21
200. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
22
1 through 141 above, inclusive.
23
201. Defendants, and each of them, failed to engage in good faith in a prompt,
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 44/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 61 of 205

1 ongoing, interactive consultation regarding reasonable accommodation of Plaintiff's disabilities

2 in violation of Section 12940(n) of the Government Code.

3 WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.

4 NINTH CLAIM

5 (Violation of Due Process Right under 42 U.S.C. § 1983)


(Against Defendants Bryan both personally and as former CEO of KMC; Kercher both
6 personally and as President of Medical Staff of KMC; Ragland both personally and as
President-Elect of Medical Staff of KMC; Abraham both personally and as Immediate Past
7 President of Medical Staff of KMC; and Smith both personally and as Chief Nurse
Executive of KMC, in their capacity as members of the JCC of KMC)
8
202. Plaintiff alleges this Ninth and separate claim for violation of Plaintiff’s
9
Fourteenth Amendment of the United States Constitution Right of Procedural Due Process under
10
42 U.S.C. § 1983 against Defendants Bryan both personally and as former CEO of KMC;
11
Kercher both personally and as President of Medical Staff of KMC; Ragland both personally and
12
as President-Elect of Medical Staff of KMC; Abraham both personally and as Immediate Past
13
President of Medical Staff of KMC; and Smith both personally and as Chief Nurse Executive of
14
KMC, in their capacity as members of the JCC of KMC.
15
203. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
16
1 through 141 above, inclusive.
17
204. The Fourteenth Amendment of the United States Constitution protects a public
18
employee’s right of procedural due process regarding governmental actions that deprive him of
19
life, liberty, or property interest of constitutional magnitude.
20
205. At all material times herein, Plaintiff had a property interest in his position as
21
Chair of Pathology and in the excessive reduction of his base salary of constitutional magnitude
22
as provided for in the Second Contract.
23
206. Defendants, and each of them, intentionally, or with deliberate indifference to, or
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 45/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 62 of 205

1 with a conscious disregard of, Plaintiff’s Constitutional rights, denied Plaintiff his right to

2 procedural due process guaranteed by the Fourteenth Amendment of the United States

3 Constitution when they decided to demote Plaintiff and substantially and excessively reduced his

4 salary by a sum of constitutional magnitude in breach of the Second Contract.

5 207. Defendant Bryan, was acting or purporting to act under color of law in the

6 performance of his official duties as Chief Executive Officer of KMC when he unilaterally,

7 arbitrarily, and capriciously demoted Plaintiff and excessively reduced his salary by a sum of

8 constitutional magnitude in violation of the Bylaws and the Second Contract, without providing

9 Plaintiff with the customary notice of hearing and opportunity to be heard to which he was

10 entitled.

11 208. When Plaintiff complained to Bryan that he had been deprived of the customary

12 hearing regarding his demotion and excessive reduction in pay, the JCC met and ratified Bryan’s

13 decision to demote Plaintiff and substantially and excessively reduced his salary in breach of the

14 Second Contract without providing Plaintiff with prior notice of the hearing or an opportunity to

15 be heard.

16 209. Defendants and each of them, were acting or purporting to act under color of law

17 in the performance of their official duties as members of the JCC when they arbitrarily and

18 capriciously decided to demote Plaintiff and substantially and excessively reduced his salary in

19 breach of the Second Contract without providing Plaintiff with the customary notice of hearing

20 and opportunity to be heard to which he was entitled.

21 210. Thereafter, the Kern County Board of Supervisors met and voted to confirm

22 Plaintiff’s demotion and the excessive reduction in Plaintiff’s salary in breach of the Second

23 Contract without providing Plaintiff with notice of the hearing or an opportunity to be heard.

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 46/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 63 of 205

1 211. The conduct of Defendants, and each of them, violated Plaintiff’s 14th

2 Amendment right of procedural due process.

3 212. As a legal result of the conduct of Defendants, and each of them, Plaintiff was

4 harmed.

5 213. Defendants’ denial of Plaintiff’s procedural due process right was a substantial

6 factor in causing Plaintiff’s harm.

7 WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.

8 TENTH CLAIM

9 (Defamation in Violation of Civ. Code §§ 45-47)


(Against Defendants County, Roy, Harris, DOES 1 through 10, and Each of Them)
10
214. Plaintiff alleges this Tenth and separate claim for Defamation in violation of Civil
11
Code §§ 45 to 47 against Defendants Roy, Harris, the County, and DOES 1 through 10,
12
inclusive, and each of them.
13
215. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
14
1 through 141 above, inclusive.
15
216. On information and belief, Plaintiff alleges that Roy made several false statements
16
of fact, both orally and in writing, which defamed Plaintiff’s professional credentials,
17
competence and/or integrity to other members of KMC’s medical staff and administration, and
18
that Harris and DOES 1 through 10 republished such defamatory statements to other members of
19
KMC’s medical staff and administration.
20
217. On information and belief, Plaintiff alleges Defendants, and each of them,
21
included the Roy Letter in papers stored in Plaintiff's personnel file, where they are continuously
22
republished to anyone who consults his personnel file.
23
218. The above-alleged defamatory statements have continuously been false.
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 47/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 64 of 205

1 219. The hearers of the defamatory statements reasonably understood that they were

2 about Plaintiff and understood them to mean that Plaintiff’s professional credentials, competence

3 and/or integrity were deficient.

4 220. As a result of Defendants' wrongful conduct, Plaintiff has suffered harm to his

5 profession, reputation, and experienced feelings of shame, mortification, and hurt

6 221. Defendants' wrongful conduct was a substantial factor in causing harm to

7 Plaintiff's profession and reputation.

8 222. Defendants failed to use reasonable care to determine the truth or falsity of the

9 statements.

10 223. At all material times, Defendants, and each of them, either knew that each

11 statement was false or had serious doubts about the truth of each statement, and that they acted

12 with malice, oppression, or fraud, entitling Plaintiff to an award of punitive damages against the

13 individual Defendants.

14 224. Defendants Harris, Kercher, Bryan and Abraham have approved, accepted, and

15 refused to intercede against Roy’s defamatory acts or their subsequent republication by Harris

16 and DOES 1 through 10, thereby ratifying such acts.

17 WHEREFORE Plaintiff prays for relief as stated in pertinent part hereinafter.

18 ELEVENTH CLAIM

19 (Violation of FLSA)
(Against Defendants County and DOES 1 through 10 inclusive)
20
225. Plaintiff alleges this Eleventh and separate claim for reimbursement of deductions
21
from his salary made in violation of FLSA against Defendant County and DOES 1 through 10,
22
inclusive.
23
226. Plaintiff incorporates by reference herein the allegations contained in Paragraphs
24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 48/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 65 of 205

1 1 through 141 above, inclusive.

2 227. Pursuant to 20 C.F.R. § 541.118(1), an employee will not be considered “on a

3 salary basis” if deductions from his predetermined compensation are made for absences

4 occasioned by the employer.

5 228. Pursuant to 20 C.F.R. § 541.118(6), where a deduction not permitted by these

6 interpretations is inadvertent, or is made for reasons other than lack of work, the exemption will

7 not be considered to have been lost if the employer reimburses the employee for such deductions

8 and promises to comply in the future.

9 229. From April 28 to October 3, 2006, Defendants, and each of them, unlawfully

10 required Plaintiff to take involuntary full-time unpaid leave rather than reduced scheduled leave

11 even though he was occasionally ready, willing, and able to work part-time during that period of

12 time.

13 230. During the period from April 28 to October 3, 2006, clinical pathology work was

14 always available to Plaintiff at KMC.

15 231. Plaintiff is entitled to reimbursement of salary for those periods of time during the

16 period from April 28, 2006 to October 3, 2006 when he was ready, willing, and able to work, and

17 was prevented from doing so by the County; and also entitled to a promise that the County will

18 comply in the future.

19 WHEREFORE Plaintiff prays for relief as stated herein and in pertinent part hereinafter.

20

21 PRAYER FOR RELIEF

22 Plaintiff prays for judgment against Defendants, and each of them, jointly and severally,

23 as follows:

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 49/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 66 of 205

1 1. Reinstatement to his former position as Chair of Pathology and reimbursement for lost

2 wages and work benefits caused by the acts of his employer pursuant to Section

3 1278.5(g) of the Health & Safety Code and Section 12965 of the Government Code.

4 2. Recovery of all reasonable attorneys' fees, litigation expenses and costs incurred,

5 pursuant to Section 2699 of the Labor Code for violation of Section 1102.5 of the Labor

6 Code, 1278.5(g) of the Health & Safety Code, Section 1021.5 of the Code of Civil

7 Procedure, Section 12965 of the Government Code, 29 U.S.C. § 2617(a)(3) [FMLA], and

8 42 U.S.C. § 1988.

9 3. That Defendant County be enjoined from retaliating against whistleblowers in violation

10 of Section 1278.5 of the Health & Safety Code and Section 1102.5 of the Labor Code.

11 4. That Defendant County be required to expunge from Plaintiff's personnel records any and

12 all references to Plaintiff’s having "poor relationships" with staff, displaying poor

13 teamwork or other words of similar effect.

14 5. That Defendant County be required to comply with all of the provisions of the FEHA

15 relating to providing reasonable accommodation and engaging in good faith in an

16 interactive consultation regarding reasonable accommodation [Government Code §§

17 12940 (m) & (n)].

18 6. That Defendant County be required to provide training to the managerial staff at KMC

19 regarding compliance with Section 1278.5 of the Health & Safety Code, Section 1102.5

20 of the Labor Code, Sections 12940(m) and (n) of the Government Code, and CFRA

21 (Government Code §§ 12945.1, et seq.).

22 7. General and compensatory damages according to proof.

23 8. Liquidated damages under FMLA/CFRA and FLSA according to proof.

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 50/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 67 of 205

1 9. Punitive damages against Defendants Roy, Harris, and Bryan pursuant to §3294 Civil

2 Code;

3 10. Pre-judgment interest pursuant to §3291 of the Civil Code.

4 11. For such other and further relief as the court may deem proper.

5
Dated: January 8, 2006 LAW OFFICES OF EUGENE LEE
6

7 By: ___________________________________
Eugene D. Lee
8 Attorney for Plaintiff
DAVID F. JADWIN, D.O.
9

10 DEMAND FOR JURY TRIAL

11
Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff hereby demands
12
trial by jury for all issues and claims triable as of right by a jury.
13
Dated: January 8, 2006 LAW OFFICES OF EUGENE LEE
14

15 By: ___________________________________
Eugene D. Lee
16 Attorney for Plaintiff
DAVID F. JADWIN, D.O.
17

18

19

20

21

22

23

24

FIRST AMENDED COMPLAINT FOR DAMAGES & INJUNCTIVE RELIEF 51/51


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 68 of 205

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
EXHIBIT 4: Plaintiff’s Second Supplemented Tort Claims Act Claim
26
27
28

USDC, ED Case No. 1:07-cv-00026 OWW TAG


DECLARATION OF EUGENE LEE IN SUPPORT OF SUPPLEMENTAL BRIEF PURSUANT TO COURT’S ORDER OF
MARCH 2, 2009 6
10/16/2007 02:46 FAX Il1l 00 1/002

Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 69 of 205

SUPPLEMENTED
CLAIM AGAINST THE COUNTY OF KERN
(Government Code §§ 910,9102 & 810.4)

This claim must be flied with the Clerk of the Board of Supervisors, 1115 Truxtun
Ave" 5 Floor, Bakersfield, California 93301. Iritis a claim for ~ injury to
th

person, inrury to personal property or inrury to growing crops, it must be filed within six
months after the accident or event gIving rise to the claim. If it is a claim for any
other cause of action, it must be filed within one year after the event(s) giving rise to the
claim. You must complete both sides and sign the claim form for the claim to be valid.
Complete information must be provided. If the space provided is inadequate, please
use additional paper and identify information by paragraph number.

1. State the name and mailing address of claimant:


DavId ¥. Jadwin, D.O., F.C.n.P., 1635 Heather Ridge Dr. Glendale, CA 91~a7-103~

2. State the mailing address to which claimant desires notices from the County to
be sent:
Law Office of Eugene Lee, 555 W 5th St, Ste 3100, Los Angeles, CA 90013

3. State the date, place and other circumstances of the accident or event(s) giving
rise to the claim.
See attachment.

4. Provide a general description of the injury, damage or loss incurred so far as it


may be known:
see attachment.

1
10/16/2007 02:46 FAX 141 002/002

Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 70 of 205

5. Provide the name or names of the public employee or employees causing the
injljry, damage or loss, if known:
Peter Bryan, Irwin Barris, Eugene Kcrcher, Scott Ragland, Jennifer Abraham,
william ROy, philip Dutt 1 Toni smith , David Culberson

6. Regarding the amount claimed (including estimated amount of any prospective


injury, damage or loss known as of the time the claim is filed):

If less than ten thousand dollars ($10,000), state the amount: $~_~~~_,

If more than ten thousand dollars, would the claim be a limited civil case (less
than $25,000)? (Circle one)

Yes No

7. Please state any additional information which may be helpful in considering this
claim:

Complainant rn~t with Bernard Ba'l':'lTlann, Kern County CounBe.l., with reapec:::t
to the foregoing on F~bruaLY 9, 2006.

Claimant must date and sign below.

B. Signed this ...l..6,-,;;t""h~_ _ day of October, 20.£2......

,
....
CLAIMANT'S SIGNATURE

WARNING! IT IS A CRIMINAL OFFENSE


TO FILE A FALSE CLAIM (Penal Code §72)
(3103)
Doc 118:9650
S;~laim Itwm,4Qe

2
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Attachment to Dr. David F. Jadwin’s Complaints of Discrimination and Retaliation


Against County of Kern, Kern Medical Center, Mr. Peter Bryan, and Other Persons

Until July 10, 2006, I was Chair of Pathology at Kern Medical


Center (“KMC”), a hospital that is owned and operated by the
County of Kern in California. My employment began in December
2000, pursuant to an employment contract which I executed on
October 24, 2000. On November 12, 2002, I executed a subsequent
employment contract with KMC with a five-year term ending on
October 4, 2007.

I was recruited to rebuild the pathology service. I was able to


dramatically improve the performance of the department and
patient care throughout the hospital. However, I experienced
almost immediate resistance to the changes I made. In 2002, I
began to suffer professional mistreatment and harassment by a few
members of the KMC medical staff in retaliation for my efforts to
address critical deficiencies in the quality of patient care and
inefficiencies at the hospital. The tortious attacks, hostile
work environment and the conduct of the administration eventually
caused me to succumb to debilitating depression, anxiety and
insomnia, etc., for which I sought, and continue to receive,
expert medical help.

Finally, in January 2006, I discussed my disability and my


various grievances with Mr. Peter Bryan, CEO of KMC, and
requested medical leave. Mr. Bryan agreed that I should take at
least six months of time off while continuing on as Chair. I
thus continued to work on a part-time basis, capably managing the
Pathology Department and fulfilling all essential chair duties.
I later submitted a formal application for reduced leave for
medical reasons accompanied by a doctor’s note which certified
that I would need to work on a part-time basis until on or about
September 2006.

On April 28, 2006, I had a meeting with Mr. Bryan, during which
he announced his unilateral decision to revoke my reduced work
schedule medical leave. Discussion was neither invited nor
permitted. I was therefore forced to comply with the order. Mr.
Bryan followed the meeting up with a toned-down memo that stated,
“I also mentioned that after Monday it would be preferable for
you not to have an intermittent work schedule and it would be
easier on the department to just have you on leave until your
status is resolved.” From that point on, I was no longer
permitted to take reduced work schedule medical leave or work
part-time as an accommodation of my disability.

In addition, Mr. Bryan initially stated that I would have until


June 16, 2006 to decide whether or not I would resign my position.
In his April 17, 2006 memo to me, Mr. Bryan stated “When you
return to full time from your medical leave I need for you to
make a decision that you will either accept the conditions and
work on improving your relationships or you will step down as
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 72 of 205

chairman.” In his April 28, 2006 memo to me, Mr. Bryan


reiterated, “Finally, I said that by June 16, 2006 you needed to
give me your decision about your employment status. Your options
were to either return full time or resign your position.” At the
April 28, 2006 meeting, Mr. Bryan orally told me that I would be
fired if I did not choose to return as a chair at the end of my
leave.

On May 5, 2006, I underwent medically necessary sinus surgery to


treat a long-standing medical condition, and on May 29, 2006, I
suffered a serious fall which fractured two bones in my foot and
avulsed a ligament in my ankle. On May 31, 2006, I sent a letter
to Mr. Bryan, requesting an extension of the June 16, 2006
deadline due to my medical difficulties.

On June 13, 2006, 3 days prior to the June 16, 2006 deadline he
had promised me, Mr. Peter Bryan (CEO of KMC) summarily informed
me by email that I was being stripped of chairmanship effective
June 17, 2006, due to my taking excessive
sick/medical/recuperative leaves and my resulting alleged
“inability to provide consistent and stable leadership in the
department for most of the past eight to nine months”. Mr. Bryan
further stated that he was going to grant me 90 days of personal
leave, despite the fact that I had not yet exhausted the 6
months’ of cumulative sick leave permitted under Kern County
rules.

According to the human resources department at KMC, as of June 13,


2006, I had taken, in the aggregate, 12 weeks of CFRA sick leave
and approximately 3-4 additional weeks of County sick leave based
on doctor’s certifications which I submitted.

Prior to June 13, 2006, Mr. Bryan had not communicated to me his
concerns regarding my sick/medical/recuperative leaves. In fact,
as noted above, Mr. Bryan had in at least two written
communications told me that I would have until June 16, 2006 to
decide whether to continue or resign my position at KMC.

On June 26, 2006, Mr. Bryan stated that I had “recently been seen
on the hospital campus” while on leave of absence. He then took
the drastic measure of ordering me to “refrain from entering the
facility for any reason other than seeking medical attention”,
“refrain from contacting any employee or faculty member of Kern
Medical Center for any reason other than seeking medical
attention”, and stated that “usage of any and all equipment as
well as access to any and all systems has been suspended while
[on my] approved personal necessity leave of absence”. I
discovered that this included suspension of my email and voice
mail accounts, to which I require access in order to manage
ongoing patient care issues. Mr. Bryan concluded his letter by
saying that “Failure to comply with the instructions of this
letter, are grounds for disciplinary actions up to and including
termination of your contract with the County of Kern.”

2
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On June 29, 2006, my attorney, Mr. Eugene Lee, sent a letter to


Ms. Karen Barnes, Deputy County Counsel for the County of Kern,
disclosing my intention to pursue legal remedies against KMC and
certain of its officers and employees, and requesting that KMC
preserve all evidence relating to my claims. The letter
specifically stated that I would be pursuing claims for, among
other things, disability discrimination, failure to accommodate
disability, retaliation for taking California Family Rights Act
medical leaves, etc.

On July 3, 2006, I filed a Tort Claims Act form with the County
of Kern, describing my related tort and contractual breach claims.
In that form, I specifically named as potential defendants Mr.
Bryan, Dr. Irwin Harris, Dr. Eugene Kercher, Dr. Scott Ragland,
and Dr. Jennifer Abraham, all KMC officers and employees, and Dr.
William Roy, a contract physician.

I later learned from Deputy County Counsel Karen Barnes in her


reply letter to Mr. Lee of July 18, 2006 that on July 10,2006 the
KMC Joint Conference Committee had formally voted to accept Mr.
Bryan’s recommendation that I be removed as Chair of the
Pathology Department. I had no prior notice of this meeting or
its agenda.

On September 19, 2006, I protested the over 35% reduction in my


base salary KMC was proposing due to the removal of my chair
duties. On September 20, 2006, the interim CEO, Mr. David
Culberson, sent me a letter dismissing my concerns about my pay
reduction.

On October 4, 2006, I resumed working at KMC as a staff


pathologist. My former subordinate, Dr. Philip Dutt (“Dr. Dutt”)
had been appointed the acting Chair of the Pathology Department.
I continued to suffer discrimination, a hostile work environment,
retaliation, and defamation of my professional competence by Dr.
Dutt. I believe the hearers of Dr. Dutt’s defamatory statements
republished them to other members of KMC’s medical staff and
administration.

On or about November 28, 2006, after almost six years of trying


to reform KMC from within, I finally blew the whistle on KMC,
formally reporting my various concerns to the Joint Commission on
Accreditation of Hospital Organizations, the College of American
Pathologists, and the California Department of Health Services
(“Authorities”).

On or about December 4, 2006, I submitted a written complaint to


KMC leadership about numerous additional concerns regarding the
quality of patient care and the deterioration of the pathology
department, as well as the discrimination, harassment and
retaliation to which Mr. Bryan, Dr. Dutt, Dr. Roy, Dr. Ragland,
Dr. Harris, and Mr. Culberson, in particular, subjected me since
my return to work on October 4, 2006, and asked KMC to
investigate. On December 7, 2006, I was placed on involuntary

3
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administrative leave and restricted to my house during working


hours, allegedly “pending resolution of a personnel matter”.

On December 13, 2006, I sent a letter to Mr. Culberson and


carbon-copied to members of KMC’s medical staff leadership,
informing him that I had reported my various concerns to the
Authorities.

On March 28, 2007, KMC authorized me to access my office in order


to retrieve my personal computer files. After driving over 100
miles to Bakersfield and upon arriving at KMC, Dr. Dutt informed
me that my office was now locked, that Dr. Dutt now had custody
of the key, that my file cabinet and computer had been physically
removed and re-tasked for other purposes at KMC, and that I would
not be able to access my personal computer files after all.

On April 4, 2007, I placed Defendant County on notice that (i) I


still had yet to be provided any explanation for my involuntary
leave or any indication as to whether or when it would end so
that I could return to work, (ii) the involuntary leave requiring
me to remain at home by my phone during working hours was
threatening to erode my pathology skills, jeopardizing my
employability and career as a pathologist, (iii) the involuntary
leave was denying me the opportunity to earn income from
professional fee billing, and (iv) part-time work was deemed
therapeutic for me by his physician and that the confinement to
my house during working hours was having the opposite effect of
severely exacerbating my depression.

On April 30, 2007, Defendant County sent a letter to me notifying


me of its decision to lift the home restriction. To date, KMC has
not properly investigated my complaints, and I have not received
any explanation for the involuntary leave or the restriction to
my home.
On May 1, 2007, Defendant County sent an email to me notifying me
of its decision not to renew my employment contract, which was
not due to expire until October 4, 2007, and to “let the contract
run out”. To date, I have not received any explanation for the
decision not to renew this contract as in the past and as
customary at KMC.

On October 4, 2007, Defendant County failed to renew my


employment contract, which therefore expired.

4
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EXHIBIT 5: AB 632 Legislative History
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USDC, ED Case No. 1:07-cv-00026 OWW TAG


DECLARATION OF EUGENE LEE IN SUPPORT OF SUPPLEMENTAL BRIEF PURSUANT TO COURT’S ORDER OF
MARCH 2, 2009 7
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california legislature—2007–08 regular session

ASSEMBLY BILL No. 632

Introduced by Assembly Member Salas

February 21, 2007

An act to amend Section 1278.5 of the Health and Safety Code,


relating to health care facilities.

legislative counsel’s digest


AB 632, as introduced, Salas. Health care facilities: whistleblower
protections.
Existing law provides for the licensure and regulation of health care
facilities, as defined, by the State Department of Public Health. Under
existing law, a health facility is prohibited from retaliating or
discriminating against an employee of a health facility that has presented
or initiated a complaint or initiated, participated, or cooperated in, an
investigation or proceeding of a government entity relating to the care,
services, or conditions of the facility. Existing law makes the violation
of these provisions a crime and subject to the assessment of a civil
penalty.
This bill would additionally prohibit a health facility, or its affiliate,
from retaliating or discriminating against a physician and surgeon on
its medical staff or on the medical staff of its affiliate who has
complained of the care, services, or conditions of the health facility or
its affiliate or assisted, as specified, a governmental agency in the
investigation of those matters.
Because the bill would expand the conduct subject to criminal
prosecution by extending the whistleblower protection to a physician
and surgeon, it would impose a state-mandated local program.

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AB 632 —2—

The California Constitution requires the state to reimburse local


agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.

The people of the State of California do enact as follows:

1 SECTION 1. Section 1278.5 of the Health and Safety Code is


2 amended to read:
3 1278.5. (a)  The Legislature finds and declares that it is the
4 public policy of the State of California to encourage patients,
5 nurses, physicians and surgeons, and other health care workers to
6 notify government entities of suspected unsafe patient care and
7 conditions. The Legislature encourages this reporting in order to
8 protect patients and in order to assist those government entities
9 charged with ensuring that health care is safe. The Legislature
10 finds and declares that whistleblower protections apply primarily
11 to issues relating to the care, services, and conditions of a facility
12 and are not intended to conflict with existing provisions in state
13 and federal law relating to employee and employer relations.
14 (b)  (1)  No health facility shall discriminate or retaliate in any
15 manner against any patient or employee of the health facility
16 because that patient or, employee, or any other person, has
17 presented a grievance or complaint, or has initiated, participated,
18 or cooperated in any an investigation or proceeding of any
19 governmental entity, relating to the care, services, or conditions
20 of that facility. No health facility or its affiliate shall discriminate
21 or retaliate in any manner against a physician and surgeon on the
22 medical staff of the health facility or its affiliate because the
23 physician and surgeon has presented a grievance or complaint,
24 or has initiated, participated, or cooperated in an investigation
25 or proceeding of any governmental entity, relating to the care,
26 services, or conditions of the facility or its affiliate.
27 (2)  A health facility or its affiliate that violates this section shall
28 be subject to a civil penalty of not more than twenty-five thousand
29 dollars ($25,000). The civil penalty shall be assessed and recovered
30 through the same administrative process set forth in Chapter 2.4

99
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—3— AB 632

1 (commencing with Section 1417) for long-term health care


2 facilities.
3 (c)  Any type of discriminatory treatment of a patient by whom,
4 or upon whose behalf, a grievance or complaint has been submitted,
5 directly or indirectly, to any a governmental entity or received by
6 a health facility administrator within 180 days of the filing of the
7 grievance or complaint, shall raise a rebuttable presumption that
8 the action was taken by the health facility in retaliation for the
9 filing of the grievance or complaint.
10 (d)  Any discriminatory treatment of an employee or of a
11 physician and surgeon who has presented a grievance or complaint,
12 or has initiated, participated, or cooperated in any an investigation
13 or proceeding of any governmental entity as specified in
14 subdivision (b), if the health facility had knowledge of the
15 employee’s initiation, participation, or cooperation by the employee
16 or by the physician and surgeon, shall raise a rebuttable
17 presumption that the discriminatory action was taken by the health
18 facility in retaliation, if the discriminatory action occurs within
19 120 days of the filing of the grievance or complaint. For purposes
20 of this section, “discriminatory treatment of an employee or of a
21 physician and surgeon” shall include discharge, demotion,
22 suspension, any other unfavorable changes in the terms or
23 conditions of employment or of the privileges of the physician and
24 surgeon at the health facility or its affiliate, or the threat of any of
25 these actions.
26 (e)  The presumptions in subdivisions (c) and (d) shall be
27 presumptions affecting the burden of producing evidence as
28 provided in Section 603 of the Evidence Code.
29 (f)  Any person who willfully violates this section is guilty of a
30 misdemeanor punishable by a fine of not more than twenty
31 thousand dollars ($20,000).
32 (g)  An employee who has been discriminated against in
33 employment pursuant to this section shall be entitled to
34 reinstatement, reimbursement for lost wages and work benefits
35 caused by the acts of the employer, and the legal costs associated
36 with pursuing the case. A physician and surgeon who has been
37 discriminated against pursuant to this section shall be entitled to
38 reinstatement, reimbursement for lost income resulting from any
39 change in the terms or conditions of his or her privileges caused

99
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AB 632 —4—

1 by the acts of the facility or its affiliate, and the legal costs
2 associated with pursuing the case.
3 (h)  For purposes of this section, “affiliate” means a health
4 facility that is directly or indirectly, through one or more
5 intermediaries, controlled by another health facility.
6 (h)
7 (i)  This section shall not apply to an inmate of a correctional
8 facility or juvenile facility of either the Department of the Youth
9 Authority or the Department of Corrections and Rehabilitation,
10 or to an inmate housed in a local detention facility including a
11 county jail or a juvenile hall, juvenile camp, or other juvenile
12 detention facility.
13 (i)
14 (j)  This section shall not apply to a health facility that is a
15 long-term health care facility, as defined in Section 1418. A health
16 facility that is a long-term health care facility shall remain subject
17 to Section 1432.
18 (j)
19 (k)  Nothing in this section abrogates or limits any other theory
20 of liability or remedy otherwise available at law.
21 SEC. 2. No reimbursement is required by this act pursuant to
22 Section 6 of Article XIIIB of the California Constitution because
23 the only costs that may be incurred by a local agency or school
24 district will be incurred because this act creates a new crime or
25 infraction, eliminates a crime or infraction, or changes the penalty
26 for a crime or infraction, within the meaning of Section 17556 of
27 the Government Code, or changes the definition of a crime within
28 the meaning of Section 6 of Article XIII B of the California
29 Constitution.

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AB 632
Page 1

Date of Hearing: April 10, 2007

ASSEMBLY COMMITTEE ON HEALTH


Mervyn Dymally, Chair
AB 632 (Salas) - As Introduced: February 21, 2007

SUBJECT : Health care facilities: whistleblower protections.

SUMMARY : Provides whistleblower protections to physicians and


surgeons that currently apply to patients and employees of
health facilities. Specifically, this bill :

1)Prohibits a health facility or its affiliate from


discriminating or retaliating in any manner against a
physician and surgeon on the medical staff of the health
facility or its affiliate because the physician and surgeon
has presented a grievance or complaint, or has initiated,
participated, or cooperated in an investigation or proceeding
of any governmental entity, relating to the care, services, or
conditions of the facility or its affiliate.

2)Subjects an affiliate of a health facility that violates


existing whistleblower law to a civil penalty of not more than
$25,000.

3)Requires that any discriminatory treatment of a physician and


surgeon within 120 days of the filing of the grievance or
complaint raises a rebuttable presumption that the action was
taken by the health facility in retaliation, if the health
facility had knowledge of the physician or surgeon's
initiation, participation, or cooperation. Requires
"discriminatory treatment of a physician or surgeon" to
include discharge, demotion, suspension, any other unfavorable
changes in the terms or conditions of the privileges of the
physician and surgeon at the health facility or its affiliate,
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or the threat of any of these actions.


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 81 of 205
4)Entitles a physician and surgeon who has been discriminated
against pursuant to this bill to reinstatement, reimbursement
for lost income resulting from any change in the terms or
conditions of his or her privileges caused by the acts of the
facility or its affiliate, and the legal costs associated with
pursuing the case.

5)Defines "affiliate" as a health facility that is directly or

AB 632
Page 2

indirectly, through one or more intermediaries, controlled by


another health facility.

EXISTING LAW :

1)Prohibits a health facility from discriminating or retaliating


in any manner against any patient or employee of the health
facility because that patient or employee, or any other
person, has presented a grievance or complaint, or has
initiated or cooperated in any investigation or proceeding of
any governmental entity, relating to the care, services, or
conditions of that facility. Health facility does not include
long-term care facility for these purposes.

2)Subjects a health facility that violates #1) above to a civil


penalty of not more than $25,000, and requires the penalty to
be assessed and recovered through a specified administrative
process established for long-term health care facilities.

3)Requires that any discriminatory treatment against a patient


within 180 days of the filing of a grievance or complaint to
raise a rebuttable presumption that the action was taken by
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the health facility in retaliation for the filing of the


Case
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provide that the treatment is not retaliation against a
patient based on the complaint.)

4)Requires that any discriminatory treatment of an employee


within 120 days of the filing of the grievance or complaint
raises a rebuttable presumption that the action was taken by
the health facility in retaliation, if the health facility had
knowledge of the employee's initiation, participation, or
cooperation. Requires "discriminatory treatment of an
employee" to include discharge, demotion, suspension, any
other unfavorable changes in the terms or conditions of
employment, or the threat of any of these actions.

5)Specifies that the presumptions in #3) and #4) above affects


the burden of producing evidence, as specified.

6)Makes any person who willfully violates #1)-4) above guilty of


a misdemeanor punishable by a fine of not more than $20,000.

7)Requires an employee who has been discriminated against in


employment pursuant to #4) above to be entitled to

AB 632
Page 3

reinstatement, reimbursement for lost wages and work benefits


caused by the acts of the employer, and the legal costs
associated with pursuing the case.

8)States that it is the public policy of the State of California


that a physician and surgeon be encouraged to advocate for
medically appropriate health care for his or her patients.
Defines, "to advocate for medically appropriate health care"
to mean to appeal a payor's decision to deny payment for a
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service pursuant to the reasonable grievance or appeal


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association, preferred provider organization, foundation,
hospital medical staff and governing body, or payer, or to
protest a decision, policy, or practice that the physician,
consistent with that degree of learning and skill ordinarily
possessed by reputable physicians practicing according to the
applicable legal standard of care, reasonably believes impairs
the physician's ability to provide medically appropriate
health care to his or her patients.

9)Prohibits a person from terminating, retaliating against, or


otherwise penalizing a physician and surgeon for advocacy
specified in #8) above, or from prohibiting, restricting, or
in any way discouraging a physician and surgeon from
communicating to a patient information in furtherance of
medically appropriate health care.

10)Requires medically appropriate health care in a health


facility that is a hospital to be defined by the hospital
medical staff and approved by the governing body, consistent
with that degree of learning and skill ordinarily possessed by
reputable physicians practicing according to the applicable
legal standard of care.

11)States that #8), #9), and #10) above should not be construed
to prohibit the governing body of a hospital from taking
disciplinary actions against a physician and surgeon as
authorized in the Medical Practice Act, as specified.

12)States that it is in public interest to encourage continued


participation in matters of public significance, and that this
participation should not be chilled through the abuse of the
judicial process (this "abuse of judicial process" refers to
lawsuits that are commonly called Strategic Lawsuit Against
Public Participation or SLAPP suits. The law provides for a

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Page 4

special motion which a defendant can file at the outset of a


SLAPP lawsuit to strike a complaint where the complaint arises
from conduct that falls within the rights of petition or free
speech).

FISCAL EFFECT : Unknown

COMMENTS :

1)PURPOSE OF THIS BILL . According to the author, existing


whistleblower protections in the Health and Safety Code grant
protections from retaliation after a grievance is filed by
hospital employees and patients but not physicians. By
extending the protections to physicians and surgeons this bill
would clarify an ambiguity in existing law. This bill also
tailors the prohibited type of discrimination or discipline
relevant to physicians and surgeons into this code section.

2)PATIENT SAFETY AND MEDICAL ERRORS . The landmark Institute of


Medicine Study To Err is Human focused the nation's attention
to errors in hospitals by revealing that at least between
44,000 and 98,000 individuals may die each year in United
States hospitals as a result of medical errors. In
California, between 1978 and 1999, there were more than
210,000 preventable patient deaths.

3)FRAUD AND FALSE CLAIMS . According to a United States


Department of Justice 2006 press release, the United States
recovered a record amount of more than $3.1 billion in
settlements and judgments in cases involving allegations of
fraud against the government. Seventy-two percent of the
recoveries were in health care. Health care fraud accounted
for $2.2 billion in settlements and judgments, including a
$920 million settlement with Tenet Healthcare Corporation, the
nation's second largest hospital chain. Although Medicare and
Medicaid, under the jurisdiction of the federal Department of
Health and Human Services, bear the brunt of health care
fraud, other programs that were affected include the Federal
Employees Health Benefits Program run by the Office of
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programs run by the Department of Veterans Affairs, the
Department of Labor and the Railroad Retirement Board.

4)RETALIATION . According to this bill's sponsor, the California

AB 632
Page 5

Medical Association (CMA), the issue of retaliation appears in


several ways. One way is a direct retaliation for a statement
made by a physician regarding concerns of quality of care.
According to CMA, the most recent example occurred at Western
Medical Center Santa Ana, when the new owners Integrated
Healthcare Holdings Inc. (IHHI) sued Michael Fitzgibbons, M.D.
a past chief of staff when Dr. Fitzgibbons expressed concerns
about the financial viability of the hospital. Dr.
Fitzgibbons expressed his concern that a hospital's survival
(it was a trauma center) has direct implications on the
ability of physicians to provide quality of care for their
patients. IHHI sued Fitzgibbons, who ultimately won this
SLAPP suit at the appellate level with the help of CMA and the
American Medical Association. According to CMA, while this
suit was going on, physicians on the medical staff at Western
Medical Center Santa Ana, and the other three hospitals owned
by IHHI were silenced for the fear of the hospital suing them.
CMA provided the committee with a list of methods hospitals can
use to suppress whistleblowers. Some of the examples include:

1. Underwriting the salary and/or practice expense of a


competing physician;
2. Recruiting competing physicians to the community in the
absence of a community deficit for that specialty;
3. Establishing a medical care foundation and supporting
its physicians with hospital funds;
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4. Establishing a medical practice administrative service


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rates so that the doctor keeps a higher percentage of
collections and gains a competitive advantage;
5. Buying the medical building with a physician's office
and refusing to renew the physician's lease;
6. Inducing primary care physicians to refer patients to
the hospital outpatient facility for tests bypassing
specialists' office based testing (e.g. imaging and cardiac
tests);
7. Providing special scheduling priorities for hospital
facilities;
8. Underwriting certain physicians and empowering them with
control or influence over the peer review process;
9. Developing investment partnerships with selected
physicians (surgery center, MRI) that provide lucrative
annual returns on investment (e.g. 50% return of investment
or ROI annually); and,
10. Providing special equipment leasing arrangements for

AB 632
Page 6

selected physicians with above market ROI.

3)SUPPORT . According to CMA, this bill clarifies existing law


by extending hospital whistleblower protections to physicians
and surgeons. Currently the law provides protections to
employees and patients and "any other person" who makes
complaints about a health facility. CMA states that some
attorneys have used this same section to deny protections to a
physician who raised concerns by claiming that the physician
was not an employee or patient. CMA believes this bill will
prevent the argument from happening again, since most
physicians are not employees of a hospital. In addition, the
California Alliance for Retired Americans believes it is
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AB 632 Assembly Bill - Bill Analysis

important that physicians in hospital settings feel free to


report Case 1:07-cv-00026-OWW-DLB
conditions Document
which may be unsafe 306-2 care.
for patient Filed 03/09/2009
One Page 87 of 205
physician who wrote in support of this bill, indicates that
the Redding Medical Center (Tenet) disaster is a good example
of what intimidation can do to patients because hundreds of
patients were damaged or killed by doctors at the financial
benefit of Tenet.

4)SUGGESTED AMENDMENTS .
a) The definition of and reference to "affiliate" is vague
and may not be necessary. The author may wish to consider
deleting it.
b) On page 3, line 11, before the comma add "to the health
facility."

REGISTERED SUPPORT / OPPOSITION :

Support

California Medical Association (sponsor)


American Federation of State, County and Municipal Employees,
AFL-CIO
California Academy of Ophthalmology
California Alliance for Retired Americans
California Society of Anesthesiologists
Citizens Commission on Human Rights
San Bernardino Public Employees Association
One physician

Opposition

None on file.

AB 632
Page 7

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Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097

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AB 632 Assembly Bill - Vote Information

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UNOFFICIAL BALLOT
MEASURE: AB 632
AUTHOR: Salas
TOPIC: Health care facilities: whistleblower protect
DATE: 04/10/2007
LOCATION: ASM. HEALTH
MOTION: Do pass as amended and be re-referred to the Committee on
Appropriations.
(AYES 16. NOES 0.) (PASS)

AYES
****

Dymally Nakanishi Bass Berg


De Leon Emmerson Gaines Hancock
Hayashi Hernandez Huff Jones
Lieber Ma Salas Strickland

NOES
****

ABSENT, ABSTAINING, OR NOT VOTING


*********************************

De La Torre

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AMENDED IN ASSEMBLY APRIL 17, 2007


california legislature—2007–08 regular session

ASSEMBLY BILL No. 632

Introduced by Assembly Member Salas

February 21, 2007

An act to amend Section 1278.5 of the Health and Safety Code,


relating to health care facilities.

legislative counsel’s digest


AB 632, as amended, Salas. Health care facilities: whistleblower
protections.
Existing law provides for the licensure and regulation of health care
facilities, as defined, by the State Department of Public Health. Under
existing law, a health facility is prohibited from retaliating or
discriminating against an employee of a health facility that has presented
or initiated a complaint or initiated, participated, or cooperated in, an
investigation or proceeding of a government entity relating to the care,
services, or conditions of the facility. Existing law makes the violation
of these provisions a crime and subject to the assessment of a civil
penalty.
This bill would additionally prohibit a health facility, or its affiliate,
from retaliating or discriminating against a physician and surgeon on
its medical staff or on the medical staffof its affiliate who has
complained of the care, services, or conditions of the health facility or
its affiliate or assisted, as specified, a governmental agency in the
investigation of those matters, and would also prohibit the entity that
owns or operates the facility and any other facility owned or operated
by that entity from retaliating or discriminating against the physician
and surgeon because of taking those actions.

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AB 632 —2—

Because the bill would expand the conduct subject to criminal


prosecution by extending the whistleblower protection to a physician
and surgeon, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.

The people of the State of California do enact as follows:

1 SECTION 1. Section 1278.5 of the Health and Safety Code is


2 amended to read:
3 1278.5. (a)  The Legislature finds and declares that it is the
4 public policy of the State of California to encourage patients,
5 nurses, physicians and surgeons, and other health care workers to
6 notify government entities of suspected unsafe patient care and
7 conditions. The Legislature encourages this reporting in order to
8 protect patients and in order to assist those government entities
9 charged with ensuring that health care is safe. The Legislature
10 finds and declares that whistleblower protections apply primarily
11 to issues relating to the care, services, and conditions of a facility
12 and are not intended to conflict with existing provisions in state
13 and federal law relating to employee and employer relations.
14 (b)  (1)  No health facility shall discriminate or retaliate in any
15 manner against any patient or employee of the health facility
16 because that patient, employee, or any other person has presented
17 a grievance or complaint, or has initiated, participated, or
18 cooperated in an investigation or proceeding of any governmental
19 entity, relating to the care, services, or conditions of that facility.
20 No health facility or its affiliate shall discriminate or retaliate in
21 any manner against a physician and surgeon on the medical staff
22 of the health facility or its affiliate because the its medical staff
23 because the physician and surgeon has presented a grievance or
24 complaint, or has initiated, participated, or cooperated in an
25 investigation or proceeding of any governmental entity, relating
26 to the care, services, or conditions of the facility or its affiliate,
27 nor shall the entity that owns or operates the health facility or any

98
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—3— AB 632

1 other health facility that is owned or operated by that entity


2 discriminate or retaliate against the physician and surgeon for
3 taking those actions with respect to the facility where he or she is
4 a member of the medical staff.
5 (2)  A health facility or its affiliate that violates this section shall
6 (2)  A violation of this section shall be subject to a civil penalty
7 of not more than twenty-five thousand dollars ($25,000). The civil
8 penalty shall be assessed and recovered through the same
9 administrative process set forth in Chapter 2.4 (commencing with
10 Section 1417) for long-term health care facilities.
11 (c)  Any type of discriminatory treatment of a patient by whom,
12 or upon whose behalf, a grievance or complaint has been submitted,
13 directly or indirectly, to a governmental entity or received by a
14 health facility administrator within 180 days of the filing of the
15 grievance or complaint, shall raise a rebuttable presumption that
16 the action was taken by the health facility in retaliation for the
17 filing of the grievance or complaint.
18 (d)  Any discriminatory treatment of an employee or of a
19 physician and surgeon who has presented a grievance or complaint
20 to the health facility, peer review body, or any other agency or
21 entity responsible for reviewing health care quality, or who has
22 initiated, participated, or cooperated in an investigation or
23 proceeding of any governmental entity as specified in subdivision
24 (b), if the health facility had knowledge of the initiation,
25 participation, or cooperation by the employee or by the physician
26 and surgeon, shall raise a rebuttable presumption that the
27 discriminatory action was taken by the health facility in retaliation,
28 if the discriminatory action occurs within 120 days of the filing of
29 the grievance or complaint. For purposes of this section,
30 “discriminatory treatment of an employee or of a physician and
31 surgeon” shall include discharge, demotion, suspension, any other
32 unfavorable changes in the terms or conditions of employment or
33 of the privileges of the physician and surgeon at the health facility
34 or its affiliate, or the threat of any of these actions.
35 (e)  The presumptions in subdivisions (c) and (d) shall be
36 presumptions affecting the burden of producing evidence as
37 provided in Section 603 of the Evidence Code.
38 (f)  Any person who willfully violates this section is guilty of a
39 misdemeanor punishable by a fine of not more than twenty
40 thousand dollars ($20,000).

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AB 632 —4—

1 (g)  An employee who has been discriminated against in


2 employment pursuant to this section shall be entitled to
3 reinstatement, reimbursement for lost wages and work benefits
4 caused by the acts of the employer, and the legal costs associated
5 with pursuing the case. A physician and surgeon who has been
6 discriminated against pursuant to this section shall be entitled to
7 reinstatement, reimbursement for lost income resulting from any
8 change in the terms or conditions of his or her privileges caused
9 by the acts of the facility or its affiliate the entity that owns or
10 operates a health facility or any other health facility that is owned
11 or operated by that entity, and the legal costs associated with
12 pursuing the case.
13 (h)  For purposes of this section, “affiliate” means a health
14 facility that is directly or indirectly, through one or more
15 intermediaries, controlled by another health facility.
16 (i)
17 (h)  This section shall not apply to an inmate of a correctional
18 facility or juvenile facility of the Department of Corrections and
19 Rehabilitation, or to an inmate housed in a local detention facility
20 including a county jail or a juvenile hall, juvenile camp, or other
21 juvenile detention facility.
22 (j)
23 (i)  This section shall not apply to a health facility that is a
24 long-term health care facility, as defined in Section 1418. A health
25 facility that is a long-term health care facility shall remain subject
26 to Section 1432.
27 (k)
28 (j)  Nothing in this section abrogates or limits any other theory
29 of liability or remedy otherwise available at law.
30 SEC. 2. No reimbursement is required by this act pursuant to
31 Section 6 of Article XIIIB of the California Constitution because
32 the only costs that may be incurred by a local agency or school
33 district will be incurred because this act creates a new crime or
34 infraction, eliminates a crime or infraction, or changes the penalty
35 for a crime or infraction, within the meaning of Section 17556 of
36 the Government Code, or changes the definition of a crime within
37 the meaning of Section 6 of Article XIII B of the California
38 Constitution.

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AB 632
Page 1

Date of Hearing: April 25, 2007

ASSEMBLY COMMITTEE ON APPROPRIATIONS


Mark Leno, Chair

AB 632 (Salas) - As Introduced: April 17, 2007

Policy Committee: Health Vote:


16-0

Urgency: No State Mandated Local Program:


Yes Reimbursable: No

SUMMARY

This bill adds physicians and surgeons to employees of health


facilities and facility affiliates that have "whistleblower"
protection from retaliation or discrimination in specified
circumstances. Specifically, this bill:

1)Adds physicians and surgeons to groups of people in health


care settings provided protected status against retaliation
with regard to cooperation in complaints and investigations.

2)Specifies these protections are not applicable to inmates of a


juvenile correctional facility.

FISCAL EFFECT

Negligible costs for hospitals to comply with the provisions of


this bill.

COMMENTS

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AB 632 Assembly Bill - Bill Analysis

1) Rationale . This bill, sponsored by the California


MedicalCase 1:07-cv-00026-OWW-DLB
Association Documentand
(CMA), adds physicians 306-2 Filed to
surgeons 03/09/2009 Page 96 of 205
classes of people including patients and facility employees
protected from retaliation or discrimination as the result of
submitting a grievance or complaint. The bill clarifies
current law to ensure that physicians and surgeons have these
protections. Under some circumstances these individuals have
been denied protection under current law.

AB 632
Page 2

2) Background . A whistleblower is an informant, usually an


employee, who reports employer misconduct in the hopes of
stopping it. In order to encourage disclosure, many federal
and state statutes prohibit employers from retaliating against
an employee who files complaint or cooperates in an
investigation. Examples of complaints are concerns about
quality of care, hospital financial stability, billing fraud,
and patient neglect. CMA indicates that some of their members
have been sued, bypassed, and targeted by hospitals and health
care facilities after expressing some of these concerns.

3) Related Legislation . SB 97 (Burton), Chapter 155,


Statutes of 1999, created the whistleblower protection for
patients and employees of health care facilities.

Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081

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AB 632 Assembly Bill - Vote Information

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UNOFFICIAL BALLOT
MEASURE: AB 632
AUTHOR: Salas
TOPIC: Health care facilities: whistleblower protect
DATE: 04/25/2007
LOCATION: ASM. APPR.
MOTION: Do pass, to Consent Calendar.
(AYES 15. NOES 0.) (PASS)

AYES
****

Leno Walters Caballero Davis


DeSaulnier Emmerson Huffman Karnette
Krekorian La Malfa Lieu Nakanishi
Nava Sharon Runner Solorio

NOES
****

ABSENT, ABSTAINING, OR NOT VOTING


*********************************

Ma Vacancy

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UNOFFICIAL BALLOT
MEASURE: AB 632
AUTHOR: Salas
TOPIC: Health care facilities: whistleblower protect
DATE: 05/03/2007
LOCATION: ASM. FLOOR
MOTION: AB 632 SALAS Consent Calendar Second Day Regular Session
(AYES 70. NOES 0.) (PASS)

AYES
****

Adams Aghazarian Anderson Bass


Beall Berg Berryhill Blakeslee
Brownley Caballero Charles Calderon Carter
Cook Coto Davis De La Torre
De Leon DeSaulnier DeVore Duvall
Dymally Emmerson Eng Evans
Feuer Fuller Gaines Galgiani
Garcia Garrick Hancock Hayashi
Hernandez Horton Houston Huffman
Jeffries Jones Karnette Keene
Krekorian La Malfa Laird Leno
Levine Lieber Lieu Ma
Maze Mendoza Mullin Nakanishi
Niello Parra Portantino Price
Richardson Salas Saldana Silva
Smyth Solorio Strickland Swanson
Torrico Tran Villines Walters
Wolk Nunez

NOES
****

ABSENT, ABSTAINING, OR NOT VOTING


*********************************

Arambula Benoit Huff Nava

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Plescia Sharon
Case Runner Ruskin
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Document Filed 03/09/2009 Page 100 of 205
Spitzer Vacancy

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AMENDED IN SENATE JUNE 6, 2007


AMENDED IN ASSEMBLY APRIL 17, 2007
california legislature—2007–08 regular session

ASSEMBLY BILL No. 632

Introduced by Assembly Member Salas

February 21, 2007

An act to amend Section 1278.5 of the Health and Safety Code,


relating to health care facilities.

legislative counsel’s digest


AB 632, as amended, Salas. Health care facilities: whistleblower
protections.
Existing law provides for the licensure and regulation of health care
facilities, as defined, by the State Department of Public Health. Under
existing law, a health facility is prohibited from retaliating or
discriminating against an employee of a health facility that has presented
or initiated a complaint or initiated, participated, or cooperated in an
investigation or proceeding of a government entity relating to the care,
services, or conditions of the facility. Existing law makes the violation
of these provisions a crime and subject to the assessment of a civil
penalty.
This bill would additionally prohibit a health facility, from
discriminating or retaliating or discriminating against any patient,
employee, a physician and surgeon on its member of the facility’s
medical staff, or any other health care worker of the facility who has
complained of the care, services, or conditions of the health facility or
assisted, as specified, a governmental agency in the investigation of
those matters, and would also prohibit the entity that owns or operates

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AB 632 —2—

the facility and any other facility owned or operated by that entity from
retaliating or discriminating against the physician and surgeon because
of taking those actions (1) has presented a grievance, complaint, or
report to an entity or agency responsible for accrediting or evaluating
the facility or to any other governmental entity; or (2) has initiated,
participated, or cooperated in an investigation or administrative
proceeding related to the quality of care, services, or conditions at the
facility, as provided.
Because the bill would expand the conduct subject to criminal
prosecution by extending the whistleblower protection to a physician
and surgeon definition of a crime, it would impose a state-mandated
local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.

The people of the State of California do enact as follows:

1 SECTION 1. Section 1278.5 of the Health and Safety Code is


2 amended to read:
3 1278.5. (a)  The Legislature finds and declares that it is the
4 public policy of the State of California to encourage patients,
5 nurses, physicians and surgeons members of the medical staff, and
6 other health care workers to notify government entities of suspected
7 unsafe patient care and conditions. The Legislature encourages
8 this reporting in order to protect patients and in order to assist those
9 government entities charged with ensuring that health care is safe.
10 The Legislature finds and declares that whistleblower protections
11 apply primarily to issues relating to the care, services, and
12 conditions of a facility and are not intended to conflict with existing
13 provisions in state and federal law relating to employee and
14 employer relations.
15 (b)  (1)  No health facility shall discriminate or retaliate in any
16 manner against any patient or employee of the health facility
17 because that patient, employee, or any other person has presented
18 a grievance or complaint, or has initiated, participated, or

97
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—3— AB 632

1 cooperated in an investigation or proceeding of any governmental


2 entity, relating to the care, services, or conditions of that facility.
3 No health facility shall discriminate or retaliate in any manner
4 against a physician and surgeon on its medical staff because the
5 physician and surgeon has presented a grievance or complaint, or
6 has initiated, participated, or cooperated in an investigation or
7 proceeding of any governmental entity, relating to the care,
8 services, or conditions of the facility, nor shall the entity that owns
9 or operates the health facility or any other health facility that is
10 owned or operated by that entity discriminate or retaliate against
11 the physician and surgeon for taking those actions with respect to
12 the facility where he or she is a member of the medical staff.
13 (b)  (1)  No health facility shall discriminate or retaliate, in any
14 manner, against any patient, employee, member of the medical
15 staff, or any other health care worker of the health facility who
16 has done either of the following:
17 (A)  Presented a grievance, complaint, or report to the facility,
18 to an entity or agency responsible for accrediting or evaluating
19 the facility, or the medical staff of the facility, or to any other
20 governmental entity.
21 (B)  Has initiated, participated, or cooperated in an investigation
22 or administrative proceeding related to, the quality of care,
23 services, or conditions at the facility that is carried out by an entity
24 or agency responsible for accrediting or evaluating the facility or
25 its medical staff, or governmental entity.
26 (2)  No entity that owns or operates a health facility, or which
27 owns or operates any other health facility, shall discriminate or
28 retaliate against any person who has taken any actions pursuant
29 to this subdivision.
30 (2)
31 (3)  A violation of this section shall be subject to a civil penalty
32 of not more than twenty-five thousand dollars ($25,000). The civil
33 penalty shall be assessed and recovered through the same
34 administrative process set forth in Chapter 2.4 (commencing with
35 Section 1417) for long-term health care facilities.
36 (c)  Any type of discriminatory treatment of a patient by whom,
37 or upon whose behalf, a grievance or complaint has been submitted,
38 directly or indirectly, to a governmental entity or received by a
39 health facility administrator within 180 days of the filing of the
40 grievance or complaint, shall raise a rebuttable presumption that

97
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AB 632 —4—

1 the action was taken by the health facility in retaliation for the
2 filing of the grievance or complaint.
3 (d)  Any discriminatory treatment of an employee or of a
4 physician and surgeon who has presented a grievance or complaint
5 to the health facility, peer review body, or any other agency or
6 entity responsible for reviewing health care quality, or who has
7 initiated, participated, or cooperated in an investigation or
8 proceeding of any governmental entity as specified in subdivision
9 (b), if the health facility had knowledge of the initiation,
10 participation, or cooperation by the employee or by the physician
11 and surgeon, shall raise a rebuttable presumption that the
12 discriminatory action was taken by the health facility in retaliation,
13 if the discriminatory action occurs within 120 days of the filing of
14 the grievance or complaint. For purposes of this section,
15 “discriminatory treatment of an employee or of a physician and
16 surgeon” shall include discharge, demotion, suspension, any other
17 unfavorable changes in the terms or conditions of employment or
18 of the privileges of the physician and surgeon at the health facility,
19 or the threat of any of these actions.
20 (d)  (1)  There shall be a rebuttable presumption that
21 discriminatory action was taken by the health facility, or by the
22 entity that owns or operates that health facility, or that owns or
23 operates any other health facility, in retaliation against an
24 employee, member of the medical staff, or any other health care
25 worker of the facility, if responsible staff at the facility or the entity
26 that owns or operates the facility had knowledge of the actions,
27 participation, or cooperation of the person responsible for any
28 acts described in paragraph (1) of subdivision (b), and the
29 discriminatory action occurs within 120 days of the filing of the
30 grievance or complaint by the employee, member of the medical
31 staff or any other health care worker of the facility.
32 (2)  For purposes of this section, discriminatory treatment of an
33 employee, member of the medical staff, or any other health care
34 worker includes, but is not limited to, discharge, demotion,
35 suspension, or any other unfavorable changes in the terms or
36 conditions of employment or of the privileges of the employee,
37 member of the medical staff, or any other health care worker of
38 the health care facility, or the threat of any of these actions.

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—5— AB 632

1 (e)  The presumptions in subdivisions (c) and (d) shall be


2 presumptions affecting the burden of producing evidence as
3 provided in Section 603 of the Evidence Code.
4 (f)  Any person who willfully violates this section is guilty of a
5 misdemeanor punishable by a fine of not more than twenty
6 thousand dollars ($20,000).
7 (g)  An employee who has been discriminated against in
8 employment pursuant to this section shall be entitled to
9 reinstatement, reimbursement for lost wages and work benefits
10 caused by the acts of the employer, and the legal costs associated
11 with pursuing the case. A physician and surgeon member of the
12 medical staff who has been discriminated against pursuant to this
13 section shall be entitled to reinstatement, reimbursement for lost
14 income resulting from any change in the terms or conditions of
15 his or her privileges caused by the acts of the facility or the entity
16 that owns or operates a health facility or any other health facility
17 that is owned or operated by that entity, and the legal costs
18 associated with pursuing the case.
19 (h)  For purposes of this section, “health facility” means any
20 facility defined under this chapter, including, but not limited to,
21 the facility’s administrative personnel, employees, boards, and
22 committees of the board, and medical staff.
23 (h)
24 (i)  This section shall not apply to an inmate of a correctional
25 facility or juvenile facility of the Department of Corrections and
26 Rehabilitation, or to an inmate housed in a local detention facility
27 including a county jail or a juvenile hall, juvenile camp, or other
28 juvenile detention facility.
29 (i)
30 (j)  This section shall not apply to a health facility that is a
31 long-term health care facility, as defined in Section 1418. A health
32 facility that is a long-term health care facility shall remain subject
33 to Section 1432.
34 (j)
35 (k)  Nothing in this section abrogates or limits any other theory
36 of liability or remedy otherwise available at law.
37 SEC. 2. No reimbursement is required by this act pursuant to
38 Section 6 of Article XIIIB of the California Constitution because
39 the only costs that may be incurred by a local agency or school
40 district will be incurred because this act creates a new crime or

97
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AB 632 —6—

1 infraction, eliminates a crime or infraction, or changes the penalty


2 for a crime or infraction, within the meaning of Section 17556 of
3 the Government Code, or changes the definition of a crime within
4 the meaning of Section 6 of Article XIII B of the California
5 Constitution.

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SENATE HEALTH
COMMITTEE ANALYSIS
Senator Sheila J . Kuehl, Chair

BILL NO: AB 632


A
AUTHOR: Salas
B
AMENDED: June 6, 2007
HEARING DATE: June 13, 2007
6
REFERRAL: Health and Judiciary
3
FISCAL: Appropriations
2

CONSULTANT:
Diaz/Hansel/cjt

SUBJECT

Health care facilities: whistleblower protections.

SUMMARY

Establishes protections, similar to those in existing law


for employees and patients, for medical staff and other
health care workers who file complaints or grievances
concerning a licensed health care facility, or who initiate
or participate in an investigation or proceeding related to
the quality of care, services, or conditions at the
facility.

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Case 1:07-cv-00026-OWW-DLB Document


CHANGES TO EXISTING LAW 306-2 Filed 03/09/2009 Page 108 of 205

Existing state law


Existing law prohibits a health care facility from
discriminating or retaliating against a patient, employee,
or any other person who presents a grievance or complaint,
or has initiated or cooperated with a government agency in
the investigation about the care, services, or conditions
of the facility. Existing law subjects a health care
facility to a civil penalty of no more than $25,000 for
violations of these provisions, and provides that any
Continued---

STAFF ANALYSIS OF ASSEMBLY BILL 632 (Salas) Page


2

person who willfully violates them is guilty of a


misdemeanor punishable by a fine of no more than $20,000.

Existing law provides that any type of discriminatory


treatment of a patient by whom, or on whose behalf, a
grievance or complaint has been submitted, within 180 days
of the filing of the grievance or complaint, raises a
rebuttable presumption that a retaliatory action was taken.
Existing law also provides that any discriminatory
treatment of an employee who has presented a grievance or
complaint, or has initiated, participated, or cooperated in
an investigation or proceeding, within 120 days of the
filing of the grievance or complaint, shall raise a
rebuttable presumption that a retaliatory action was taken.
Existing law defines discriminatory treatment of an
employee to include the discharge, demotion, suspension,
any unfavorable changes in the terms or conditions of
employment, or the threat of these actions.

Existing law requires that employees who have been

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discriminated against by their employers be reinstated and


Case
reimbursed 1:07-cv-00026-OWW-DLB
for Document
lost wages and benefits and for306-2 Filed 03/09/2009
the legal Page 109 of 205
costs associated with pursuing their case.

Existing law provides similar whistleblower protections for


patients and employees of long-term care facilities and
extends those protections additionally to complainants
generally. Existing law also provides that the protections
do not apply to an inmate of a correctional facility,
juvenile detention facility, or local detention facility.

Existing law also provides that it is the public policy of


the state to encourage physicians and surgeons to advocate
for medically appropriate health for their patients and
provides that no person shall terminate, retaliate against,
or otherwise penalize a physician and surgeon for that
advocacy, nor shall any person prohibit, restrict, or in
any way discourage a physician and surgeon from
communicating to a patient information in furtherance of
medically appropriate health care. For purposes of
existing law, advocating for medically appropriate care is
defined as the appeal of a payer's decision to deny payment
for a service pursuant to the grievance or appeal procedure
established by a medical group, independent practice
association, preferred provider organization, foundation,

STAFF ANALYSIS OF ASSEMBLY BILL 632 (Salas) Page


3

hospital medical staff and governing body, or payer, or to


protest a decision, policy, or practice that a physician
believes impairs his or her ability to provide medically
appropriate health care to his or her patients.

Existing federal law


Existing federal law, the Sarbanes-Oxley Act of 2002,
prohibits a publicly traded company or any officer,
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employee, contractor, subcontractor, or agent of such


company, Case
from 1:07-cv-00026-OWW-DLB
discriminating against Document 306-2 against
or retaliating Filed 03/09/2009 Page 110 of 205
an employee who has provided information or assisted in an
investigation relating to mail, telecommunications, or
shareholder fraud involving the company. Additionally, the
federal Civil False Claims Act provides protections for
persons who are demoted, suspended, threatened, harassed,
or in any manner discriminated against for filing a
complaint or providing information that a person or company
has knowingly submitted false claims for reimbursement to
the federal government.

This bill:
This bill extends the protection from discrimination or
retaliation by a health care facility against persons who
present grievances or complaints, or who initiate an
investigation regarding the facility's quality of care,
services, or conditions, to members of the medical staff
and other health care workers of the facility. This bill
also extends the rebuttable presumption that a retaliatory
action has occurred, if discriminatory treatment occurs
within 120 days of the filing of the grievance or
complaint, to members of the medical staff and other health
care workers.

This bill provides that members of the medical staff who


have suffered from such retaliation or discrimination shall
be reinstated and reimbursed for lost income resulting from
any change in the terms or conditions of their privileges
caused by the acts of the facility or entity that owns the
facility.

The bill additionally clarifies that the prohibition on


discriminatory or retaliatory action by a health facility
extends to the facility's administrative personnel,
employees, boards, and committees of the board, and medical
staff, as well as an entity that owns or operates a health

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4
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Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 111 of 205

care facility.

This bill also clarifies that complaints to and


investigations carried out by entities or agencies
responsible for accrediting or evaluating the facility are
subject to health facility whistleblower protections.

FISCAL IMPACT

The Assembly Appropriations Committee analysis states that


there will be negligible costs for hospitals to comply with
the provisions of this bill.

BACKGROUND AND DISCUSSION

According to the author, existing law does not fully


protect physicians and other health professionals from
retaliation if they make a complaint or grievance about a
health facility. The author states that currently, this
protection only applies to patients, employees, and the
nebulous term, "any other person." The author states that
some attorneys have interpreted this to deny protections to
physicians and other members of the medical staff because
they are not employees or patients of the health facility.
Members of the medical staff, which can include physicians
and surgeons, podiatrists, opthamologists, pathologists,
and radiologists, interact with peer review bodies that
establish by-laws and regulations pertaining to
professional conduct. Complaints about quality of care
issues pertaining to health facilities can be raised with a
peer review body, hospital governing board, or accrediting
agency. However, the author and sponsor state that, in
some cases, physicians who raise a complaint to any of
these bodies are not protected under current law against
retaliation and that AB 632 will clarify existing law to
prevent abuses against physicians and other health
professionals

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Process to file complaints and grievances


Case
Complaints 1:07-cv-00026-OWW-DLB
about the quality of care,Document 306-2
services, or Filed 03/09/2009 Page 112 of 205
conditions of health care facilities can be submitted in a
number of ways. Any person can present a complaint to the
chief administrative officer of the health facility or file
a complaint with Department of Health Services' (DHS)

STAFF ANALYSIS OF ASSEMBLY BILL 632 (Salas) Page


5

licensing and certification unit by contacting the district


office where that health facility is located. A complaint
may also be filed with the Joint Commission on
Accreditation of Healthcare Organizations (JCAHO), which
may conduct an onsite evaluation if the complaint made
about an accredited health facility raises serious concerns
about patient safety or failure to comply with quality
standards of care. The Joint Commission states on its
website that it forbids accredited or certified health care
organizations from taking retaliatory actions against
employees for reporting quality of care concerns.

Employment status of medical staff


Current state law prohibits the employment of physicians by
corporations or other entities that are not controlled by
physicians. For that reason, most members of the medical
staff are not considered employees of a hospital and must
establish contractual relationships with the hospital,
either individually or through medical groups. Some
exceptions are teaching hospitals, certain clinics, and
hospitals owned and operated by a health care district.

Number of complaints regarding health facilities


DHS reports that in 2006 there were a total of 30,287
complaints made about the quality of care, services, or
conditions of health facilities in California. A majority

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of these complaints (70.25 percent) were reported by a


Case 1:07-cv-00026-OWW-DLB
health facility official or employee,Document 306-2percent
while 29.25 Filed 03/09/2009 Page 113 of 205
were reported by patients and other persons. At this time,
however, DHS cannot provide data distinguishing whether the
health facility official who made the complaint was a
physician, nurse, or other health care staff member who is
not an employee.

Arguments in support
CMA, the sponsor of this bill, states that AB 632 is
necessary to clarify existing law to protect physicians
from retaliation or discrimination related to raising
concerns about patient care. According to CMA, hospitals
may use a variety of methods to suppress physician
whistleblowers, including removing a physician from a
referral list, forcing a doctor out of a hospital-owned
complex, or underwriting the salary or practice expense of
a competing physician. As a result, physicians must decide
between reporting allegations of poor patient care and

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6

protecting their practice and livelihood from harm.

CMA cites the case of Integrated Healthcare Holdings, Inc.


(IHHI), the owner of Western Medical Center in Santa Ana,
CA, which sued Dr. Michael Fitzgibbons after he expressed
concerns that the hospital's financial troubles threatened
the ability of physicians to provide quality care for their
patients. According to CMA, during the lawsuit, IHHI
threatened to retaliate against the medical staff at
Western Medical Center and the staff at three other
IHHI-owned hospitals if they participated in the
investigation.
CMA also cites a similar case that occurred when Tenet, one
of the largest for-profit hospital chains, silenced
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physicians at a Redding, CA hospital who knew about


Caseopen-heart
unnecessary 1:07-cv-00026-OWW-DLB
surgeries and Document
Medicare 306-2
billing Filed
fraud03/09/2009 Page 114 of 205
occurring at the hospital.

The California chapter of the American College of Emergency


Physicians and the California Academy of Ophthamology state
that AB 632 would go a long way to help to improve the
quality of care for patients by eliminating the fear of
retribution or retaliation physicians face when reporting
sub-standard patient care, services or facilities. The
American Federation of State, County, and Municipal
Employees (AFSCME) and the San Bernardino Public Employees
Association believe that AB 632 strengthens job security
for health care workers so that they feel encouraged to
report problems in the workplace instead of facing
backlash.

Arguments in opposition
The California Hospital Association (CHA) believes there
are already sufficient whistleblower protections in
existing state and federal law for physicians and surgeons.
In addition, CHA states that there is no evidence that
physicians have been subject to retaliation or that current
statutory protections are inadequate. CHA further argues
that the statute that this bill seeks to amend was designed
to protect patients and employees from retaliation for
raising quality of care concerns, and was not designed to
protect physicians and surgeons. CHA argues that the
relationship between a hospital and physicians and surgeons
who have staff privileges at the hospital differs
significantly from the hospital's relationship with its

STAFF ANALYSIS OF ASSEMBLY BILL 632 (Salas) Page


7

employees. Among other things, the relationship between

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hospitals and physicians is governed by medical staff


Casehospital
by-laws and 1:07-cv-00026-OWW-DLB DocumentIn
peer review processes. 306-2 Filed 03/09/2009
addition, Page 115 of 205
physicians and surgeons already have protections under
state law for instances in which they advocate for
medically appropriate care, and are also protected under
federal statutes for reporting instances of fraud,
overbilling, and violations of Stark and anti-kickback
statutes. Finally, CHA believes that this bill needs
further clarification to ensure that hospitals retain the
right to take disciplinary action with regard to disruptive
behavior by employees, patients and physicians, regardless
of their protected activity.

PRIOR ACTIONS

Assembly Health Committee: 16-0


Assembly Appropriations: 15-0
Assembly Floor: 70-0

POSITIONS

Support: California Medical Association (sponsor)


American College of Emergency Physicians, California
Chapter
American Federation of State, County and Municipal
Employees, AFL-CIO
(AFSCME)
California Academy of Ophthalmology
California Alliance for Retired Americans
California Society of Anesthesiologists
Citizens' Commission on Human Rights
San Bernardino Public Employees Association
One radiologist

Oppose: California Hospital Association

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-- END --

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Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 118 of 205


UNOFFICIAL BALLOT
MEASURE: AB 632
AUTHOR: Salas
TOPIC: Health care facilities: whistleblower protect
DATE: 06/13/2007
LOCATION: SEN. HEALTH
MOTION: Do pass, but re-refer to the Committee on Judiciary.
(AYES 11. NOES 0.) (PASS)

AYES
****

Kuehl Aanestad Alquist Cedillo


Cox Maldonado Negrete McLeod Ridley-Thomas
Steinberg Wyland Yee

NOES
****

ABSENT, ABSTAINING, OR NOT VOTING


*********************************

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UNOFFICIAL BALLOT
MEASURE: AB 632
AUTHOR: Salas
TOPIC: Health care facilities: whistleblower protect
DATE: 07/10/2007
LOCATION: SEN. JUD.
MOTION: Do pass as amended, and re-refer to the Committee on
Appropriations.
(AYES 5. NOES 0.) (PASS)

AYES
****

Corbett Harman Ackerman Kuehl


Steinberg

NOES
****

ABSENT, ABSTAINING, OR NOT VOTING


*********************************

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BILL
ANALYSIS Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 120 of 205

SENATE JUDICIARY COMMITTEE


Senator Ellen M. Corbett, Chair
2007-2008 Regular Session

AB 632 A
Assemblymember Salas B
As Amended June 6, 2007
Hearing Date: July 10, 2007 6
Health and Safety Code 3
GMO:jd 2

SUBJECT

Health Care Facilities: Whistleblower Protection


for Doctors and Other Health Care Workers

DESCRIPTION

The bill would revise and recast portions of the


whistleblower statute that protects patients and employees
of a health facility from discrimination or retaliation for
complaining about the health facility or cooperating in the
investigation of the health facility by a government
entity. These revisions would:

(1) expand coverage of the whistleblower protections to


members of the medical staff (physicians) and other
health care workers who are not employees of the health
facility;
(2) extend the whistleblower protections to complaints or
grievances made to an entity or agency responsible for
accrediting or evaluating the health facility (in
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addition to those made to a government entity under


Case
existing 1:07-cv-00026-OWW-DLB
law) or its medical staff;Document 306-2 Filed 03/09/2009 Page 121 of 205
(3) extend the whistleblower protections to participation
or cooperation in an investigation or administrative
proceeding carried out by an entity or agency responsible
for accrediting or evaluating the health facility (in
addition to those carried out by a governmental entity
under existing law) or its medical staff; and
(4) extend the prohibition against discrimination or
retaliation to any entity that owns or operates a health

(more)

AB 632 (Salas)
Page 2 of ?

facility.

The bill would make conforming changes to provide


appropriate whistleblower protections and remedies to
physicians similar to those provided to employees of the
health facility.

BACKGROUND

Physicians and surgeons are provided protection against


retaliation when they advocate for medically appropriate
health care for their patients. (Business & Professions
Code 2056.) The statute defines "to advocate for
medically appropriate health care" as appealing a payor's
decision to deny payment for a service pursuant to
established rules, or protesting a decision, policy, or
practice that the physician reasonably believes impairs the
physician's ability to provide medically appropriate health
care to his or her patients.

To preserve the highest standards of medical practice in


the state, the Legislature enacted the peer review process

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by which a committee comprised of licensed medical


personnelCase
at a1:07-cv-00026-OWW-DLB Documentapplying
hospital evaluates physicians 306-2 Filed
for 03/09/2009 Page 122 of 205
privileges, establishes standards and procedures for
patient care, assesses the performance of physicians
currently on staff, and reviews other matters critical to
the hospital's functioning and duty to ensure quality care.
(Business & Professions Code 809, 809.5.)

Additionally, to protect patients and in order to assist


those government entities charged with ensuring that health
care is safe, patients and employees of a health facility
are protected from discrimination or retaliation when they
notify governmental entities of suspected unsafe patient
care and conditions at the facility and when they cooperate
in the investigation of the care, services, and conditions
of the health facility by a governmental entity. (Health &
Safety Code 1278.5.) The legislative findings and
declarations contained in the statute specify that these
whistleblower protections are not intended to conflict with
existing provisions in state and federal law relating to
employer-employee relations.

According to the California Medical Association (CMA),

AB 632 (Salas)
Page 3 of ?

sponsor of AB 632, because physicians are generally not


"employees" of a health facility, they do not benefit from
the whistleblower protections afforded by Health & Safety
Code 1278.5. Thus, when they see problems with patient
care beyond their own patients they may actually do nothing
about it, for fear of retaliation or discrimination.

AB 632 is intended to cure this gap in coverage for


whistleblowing in the health care context, and would extend
the whistleblower protection further by making an entity
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that owns or operates a health facility liable for the


unlawful Case
acts 1:07-cv-00026-OWW-DLB
of the health facility.Document 306-2 Filed 03/09/2009 Page 123 of 205

CHANGES TO EXISTING LAW

Existing law prohibits an employer from preventing an


employee from disclosing information to a government or law
enforcement agency when that employee has reasonable cause
to believe that the information discloses employer's
violation of or noncompliance with state or federal law.
It also prohibits an employer from retaliating against an
employee for that disclosure, or for refusing to
participate in an activity that will result in a violation
of or noncompliance with state or federal law. A violation
subjects an employer to civil penalties of up to $10,000 in
addition to actual damages. (Labor Code 1102.5.)

Existing law , the federal Sarbanes-Oxley Act, protects


whistleblowers from retaliatory action by employers and
provides for both injunctive relief and damages for
violations.

Existing law prohibits a health facility from


discriminating or retaliating against a patient, employee,
or any other person who presents a grievance or complaint,
or who has initiated or cooperated with a government agency
in an investigation or proceeding about the care, services,
or conditions of the facility. (Health & Safety Code
1278.5(b).) (All references are to the Health and Safety
Code unless otherwise indicated.)

Existing law establishes a rebuttable presumption that the


discriminatory action was taken in retaliation against an
employee if the discriminatory action was taken within 120
days of the presentation of a complaint or grievance or

AB 632 (Salas)
Page 4 of ?
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Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 124 of 205

cooperation with an investigation, if the health facility


had knowledge of the employee's action. ( 1278.5(d).)

This bill would extend the prohibition against


discrimination or retaliation under 1278.5(b) to an
entity that owns or operates a health facility.

This bill would additionally protect members of the medical


staff or any other health care worker of the health
facility from discrimination or retaliation. This bill
would also extend to the facility's medical staff and other
health care workers the rebuttable presumption that a
discriminatory act was in retaliation for an employee's
whistleblowing action, when the discriminatory act occurs
within 120 days of the employee's action.

This bill would expand the scope of activities for which


the whistleblower protections would apply, to include (1)
presentation of a complaint or grievance or report to an
entity or agency responsible for accrediting or evaluating
the facility or its medical staff, and (2) initiation,
participation, or cooperation in an investigation or
administrative proceeding related to the quality of care,
services, or conditions that is carried out by an entity or
agency accrediting or evaluating the facility or its
medical staff.

This bill would define a "health facility" subject to the


whistleblower prohibitions against discrimination or
retaliation to include the facility's administrative
personnel, employees, boards and committees of the board,
and medical staff.
COMMENT

1. Stated need for the bill

According to the CMA, sponsor of AB 632, "[Health &


Safety Code 1278.5] provides protections to employees
and patients and the nebulous term 'or any other person.'
Unfortunately, enterprising attorneys have used this
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section to deny protections for a physician who raised


Case
concerns of 1:07-cv-00026-OWW-DLB Documentstating
poor patient care by correctly 306-2 Filed 03/09/2009
that Page 125 of 205
the physician was not an employee or patient. This bill
will prevent that argument from happening again. ?Health
and Safety Code 1278.5 is the only section of law that

AB 632 (Salas)
Page 5 of ?

grants protection to members of the medical staff when


they see problems with patient care beyond their own
patients. As such this section must be clarified and
strengthened. ?Often physicians are faced with having to
decide if they should report allegations of poor patient
care or conditions knowing their practice and livelihood
may be harmed. Unfortunately, too often the physician
decides not to report sub-standard or questionable care.
When a physician observes retaliation or discrimination
against another physician who speaks out, it is less
likely that any more will come forward."

The CMA claims that in the case of Integrated Health Care


Holdings, Inc. v. Fitzgibbons (2006) 140 Cal.App.4th 515,
the health facility owner (IHHI) of Western Medical
Center in Santa Ana sued Dr. Fitzgibbons after he
expressed concerns that the hospital's financial troubles
threatened the ability of physicians to provide quality
care for their patients. Dr. Fitzgibbons invoked and
received the protection of the anti-SLAPP statute in that
case. However, according to CMA, during the lawsuit,
IHHI threatened to retaliate against the medical staff at
Western Medical Center and the staff at three other
IHHI-owned hospitals if they participated in the
investigation. CMA also cites a similar case that
occurred when Tenet, one of the largest for-profit
hospital chains, silenced physicians at a Redding,
California hospital who knew about unnecessary open-heart
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surgeries and Medicare billing fraud occurring at the


Case 1:07-cv-00026-OWW-DLB Document 306-2
hospital. Filed 03/09/2009 Page 126 of 205

In response to CMA's arguments, however, the California


Hospital Association (CHA) proposes to amend Business and
Professions Code 2056 instead, to clarify that among
the activities of a physician that are protected against
retaliation (outside of the peer review process) are the
filing of a complaint or the initiation or participation
in an investigation or proceeding. (See Comment 3.)

2. Extending whistleblower protection to medical staff


and to other health care workers

The goal of Health & Safety Code 1278.5 is to protect

AB 632 (Salas)
Page 6 of ?

patients from unsafe care and conditions at a health


facility. Thus, reports or grievances about the care,
services, and conditions of the facility that are made by
either patients or employees are protected. A rebuttable
presumption arises if a retaliatory action occurs against
a patient within 180 days of making a complaint or if a
retaliatory action occurs against an employee within 120
days of making a complaint. The protection extends to
initiation of or participation in an investigation or
proceeding by a government entity.

A violation of this prohibition subjects a health


facility to a civil penalty of not more than $25,000. A
willful violation by a person is a misdemeanor punishable
by a fine of $20,000. An employee who has been
discriminated against is entitled to reinstatement,
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reimbursement for lost wages and work benefits caused by


Case
the acts of 1:07-cv-00026-OWW-DLB
the employer, and legalDocument 306-2 Filed
costs associated 03/09/2009
with Page 127 of 205
pursuing the case.

a. Physicians are not employees; who are "other health


workers" covered by the bill?

SB 97 (Burton), Chapter 155, Statutes of 1999,


extended the whistleblower protections then available
to patients and employees of a long-term health care
facility to patients and employees of health
facilities (hospitals) for filing a grievance or
providing information to a governmental entity
regarding care, services, or conditions at the
facility. That bill was introduced at the behest of
nurses who complained that various forms of
discrimination or retaliation were the normal response
they received when they reported problems regarding
quality of care at their places of employment.

The legislative findings and declarations contained in


SB 97 referred to the state's policy of encouraging
"patients, nurses, and other health care workers" to
notify government entities of suspected unsafe patient
care and conditions. However, the operative part of
the statute that was enacted referred only to
whistleblower protections for "any patient or employee
of the health facility" when "the patient, employee,
or any other person has presented a grievance" or

AB 632 (Salas)
Page 7 of ?

complaint about the facility.

This bill would insert "members of the medical staff"

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into the legislative findings and declarations


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relating Document
to state policy. It would then 306-2 Filed
prohibit a 03/09/2009 Page 128 of 205
health facility from discriminating or retaliating
against "any patient, employee, member of the medical
staff, or any other health care worker of the health
facility," thus expanding the whistleblower
protections of
1278.5 to all health care workers at the facility,
including physicians.

"Medical staff" as used in Business & Professions Code


2282 refers to a group of five or more physicians
permitted to practice in the hospital. Both CMA and
the CHA agree that physicians are generally not
employees of a hospital. Instead, they enjoy
privileges at the hospital and have a relationship
with the hospital that is governed by Medical Staff
By-Laws, a peer review process, the protections of
Business and Professions Code 809, and other
protective measures. (See Comment 3.)

According to the CMA, even though there is no


definition of "other health care workers" used in the
legislative findings, it could be interpreted to
include persons such as blood, organ, and tissue
transporters, emergency medical technicians or
paramedics, and physical therapists. By adding the
phrase "other health care workers" in the protected
class, therefore, these persons would enjoy the
whistleblower protections now enjoyed only by patients
and employees of the health facility.

b. Retaliation: what conduct is prohibited vis a vis


doctor whistleblowers? What remedies do they have?

All of the state's whistleblower statutes apply to


employees who disclose information about their
employer's activities or proposed activities that
violate or will violate the law in some manner. Thus,
these statutes provide for various remedies that only
employees could be entitled to, that are ascertainable
and easily enforced.

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AB 632 (Salas)
Page 8 of ?

Current 1278.5 in fact enumerates various remedies


for an employee who has been discriminated or
retaliated against: reinstatement, reimbursement for
lost wages and work benefits caused by the employer's
actions, and legal costs associated with pursuing the
whistleblower's case under the statute. Because the
physician and medical staff are most likely not
employees of a hospital, the remedies available to
them could be entirely different, depending on the
retaliatory action that was taken.

According to the CMA, examples of actions a hospital


can take to suppress physician-whistleblowers or to
retaliate against them are: (1) underwriting the
salary and/or practice expenses of a competing
physician; (2) establishing a medical care foundation
and supporting its physicians with hospital funds; (3)
recruiting competing physicians to the community in
the absence of a community deficit for that specialty;
(4) establishing a medical practice administrative
service company for selected physicians and charging
below market rates so that the doctor keeps a higher
percentage of the collections and gains a competitive
advantage; (5) buying the medical building with the
physician's office and refusing to renew the
physician's lease; (6) inducing primary care
physicians to refer patients to the hospital
outpatient facility for tests, bypassing the
specialist's office-based testing (e.g., imaging and
cardiac tests); (7) providing special scheduling
priorities for hospital facilities; (8) underwriting
certain physicians and empowering them with control or
influence over the peer review process; (9) developing
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investment partnerships with selected physicians


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(surgery Document
center, MRI center) that provide306-2 Filed 03/09/2009
lucrative Page 130 of 205
annual returns on investment (e.g., 50% return on
investment (ROI) annually); and (10) providing special
equipment leasing arrangements for selected physicians
with above market ROI.

AB 632 however would provide only the following


remedies to a physician who was discriminated or
retaliated against: reinstatement (of privileges?),
reimbursement for lost income resulting from any

AB 632 (Salas)
Page 9 of ?

change in the terms of conditions of his or her


privileges caused by the health facility's acts or
acts of any other facility owned or operated by the
entity, and the legal costs of pursuing the case.

It would seem that none of these remedies would give


adequate redress to a physician who suffered any of
the retaliatory acts named above.

SHOULD THERE BE A CATCH-ALL PROVISION FOR A COURT TO


FASHION WHATEVER REMEDY WOULD FIT THE RETALIATORY ACT?

As to the "other health care workers" - the bill does


not provide for any remedy that would be available to
these workers, should they be the victims of the
employer's discrimination or retaliation.

SHOULD THERE BE A LIST OF REMEDIES FOR THESE OTHER


HEALTH CARE WORKERS TOO?

3. Whistleblower protection and the peer review process

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Peer review is the process by which the medical staff


Casephysicians
evaluates 1:07-cv-00026-OWW-DLB Document
with respect to 306-2 care
the patient Filed 03/09/2009 Page 131 of 205
they provide in a hospital. (Bus. & Prof. C.
809, 809.5.) The peer review process is given great
deference as a means of ensuring safe health care in the
state. Thus, various provisions, such as immunity from
monetary liability and protection from discovery under
Evidence Code 1156 and 1157, were enacted to encourage
participation by physicians in the peer review process
and to ensure their freedom from fear of retribution for
participating.

Opponent California Hospital Association (CHA) contends


that one of the "unintended consequences" of extending
Health & Safety Code 1278.5 to members of the medical
staff is the "chilling effect it would have on peer
review." The CHA claims that the bill could stop a peer
review process in its tracks by the simple filing of a
1278.5 action, or it could compel a peer review committee
to not initiate a peer review process for fear that it
could be considered a retaliatory action and subject the
committee to the misdemeanor penalties of 1278.5. The
CHA also points out the lack of clarity as to when a

AB 632 (Salas)
Page 10 of ?

1278.5 action would have to be filed. [Where there is no


statute of limitations specified, an action upon a
statute for a penalty or forfeiture must be commenced
within one year of the date the event or the action that
gave rise to the cause of action occurred. (C.C.P.
340.)]

The critical question, according to the principal


opponents of AB 632, is what would happen to a pending
peer review action, or to the evidentiary protections and
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immunity from liability that attend peer review actions,


Case
once the 1:07-cv-00026-OWW-DLB
member Document
of the medical staff files a306-2 Filed 03/09/2009
1278.5 Page 132 of 205
action? The hospital, CHA states, could very well be
required to produce evidence in the 1278.5 action even
before that evidence has been fully developed and
presented in a Medical Staff fair hearing under Bus. &
Prof. C. 809 et seq.

The interplay between the whistleblower protection


offered to physicians by this bill and the peer review
process is summarized thus by opponent United Hospital
Association:

?AB 632 would also add burdens to, and perhaps have
a chilling effect on, the critically important
medical staff peer review function within
hospitals. This process is an especially important
and crucial element of a hospital's responsibility.
Under existing California and federal law,
hospital governing boards must work closely with
their medical staff's elected leaders to review the
quality of care provided by physicians who hold
medical staff membership and privileges at the
hospital. That process is already governed by a
complex and well-developed body of law, including
multiple substantial protections for the physicians
who are subjected to discipline by their peers.
The volunteer physicians who participate in peer
review are already concerned about their potential
liability and the other burdens associated with
their involvement in that process. Adding
whistleblower
protections and penalties will
further complicate the process and may tend to
chill the frankness and candor necessary to allow
the peer review process to function effectively.

AB 632 (Salas)
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SHOULD A 1278.5 ACTION BE HELD IN ABEYANCE UNTIL A PEER


REVIEW PROCESS, IF INITIATED, HAS BEEN COMPLETED?

4. Expansion of whistleblower statute in other ways

In addition to expanding the coverage of whistleblower


protections to medical staff and other health care
workers, this bill would extend liability for a violation
to the owner or operator of a health facility. Further,
the bill would define "health facility" to include the
"medical staff" as well as administrative personnel.
According to the opponents, under existing law a hospital
medical staff is required to be a self-governing body and
therefore its actions cannot and should not be imputed to
the hospital.

To the proponents, however, these are simply clarifying


amendments to existing law, and do not in any way
increase the liability of a health facility for its
discriminatory or retaliatory acts against a
whistleblower.

5. Other opponents' concerns; supporters' contentions

To be sure, CHA is not the only hospital group opposing


AB 632. The United Hospital Association, representing
114 investor-owned California hospitals, states that
while its members support the ability of their employees
to raise concerns regarding patient health and safety
free of retaliation, the extension of these protections
to non-employee medical staff ignores the existing
relationship between the hospital on the one hand and the
physicians and other health care practitioners who have
privileges on the hospital's medical staff, on the other.
They point to current state and federal laws that
already provide protections for individuals, including
physicians, who voice their concerns, and are free from
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retaliation by the hospital. They note Bus. & Prof. C.


Case 1:07-cv-00026-OWW-DLB
2056 (protecting Document 306-2
physicians from retaliation for Filed 03/09/2009 Page 134 of 205
advocating for medically appropriate health care for
their patients) and prohibitions against retaliation
under the Stark and anti-kickback statutes (31 U.S.C.

AB 632 (Salas)
Page 12 of ?

3730(h); Gov. C. 12653(a)(b).)

Another opponent points to the intent behind passage of


1278.5: "When this [statute] was added, it was not
intended nor should it apply to physicians as there is no
evidence that they have been subject to retaliation. ?The
current statutory protections are clearly not inadequate
nor is it necessary to extend them at this time."

Some supporters simply state that "[i]ndividuals should


not be threatened into silence when they observe abusive
practices. Failing to protect whistleblowers can result
in costly lawsuits from the victims, as abusive practices
are allowed to continue while those supposed to be
responsible knowingly permit them." (Citizens Commission
on Human Rights, Los Angeles/Hollywood Chapter letter
dated 6/18/07.) Others state that if the opponents
(hospital trade associations) really believe that
existing law already covers physician members of a
hospital medical staff, then AB 632 merely reiterates and
clarifies the law so that no new burden is imposed by the
bill. (California Society of Anesthesiologists, letter
date 6/20/07.)

Finally, a supporter states that "[e]nactment of AB 632


would help provide job security and create a climate in
which health care workers feel encouraged to report
problems in the workplace, instead of feeling that
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raising concerns will result in a backlash." (San


Case Public
Bernardino 1:07-cv-00026-OWW-DLB Document
Employees Association 306-2
letter Filed 03/09/2009
dated Page 135 of 205
April 4, 2007.)

Support: California Society of Anesthesiologists (CSA);


Citizens Commission on Human Rights Los
Angeles/Hollywood; American Academy of Pediatrics -
California; California Chapter of the American
College of Emergency Physicians (CAL/ACEP); American
Federation of State, County and Municipal Employees
(AFSCME), AFL-CIO; California Academy of
Opthalmology; California Alliance for Retired
Americans; San Bernardino Public Employees
Association; California Teamsters Public Affairs
Council; California Podiatric Medical Association;
United Food and Commercial Workers Union, Western

AB 632 (Salas)
Page 13 of ?

States Council; Engineers and Scientists of


California, IFPTE Local 20

Opposition: United Hospital Association; Adventist Health;


Loma Linda University Medical Center; Hospital
Corporation of America; California Hospital
Association

HISTORY

Source: California Medical Association (CMA)

Related Pending Legislation: None Known

Prior Legislation: SB 97 (Burton), Chapter 155, Statutes

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of 1999, established whistleblower


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protections for patients 306-2
and employees Filed
of a 03/09/2009 Page 136 of 205
health facility.

Prior Vote: Assembly Health Committee (Ayes 16, Noes 0)


Assembly Appropriations Committee (Ayes 15, Noes
0)
Assembly Floor (Ayes 70, Noes 0)
Senate Health Committee (Ayes 11, Noes 0)

**************

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AMENDED IN SENATE JULY 17, 2007


AMENDED IN SENATE JUNE 6, 2007
AMENDED IN ASSEMBLY APRIL 17, 2007
california legislature—2007–08 regular session

ASSEMBLY BILL No. 632

Introduced by Assembly Member Salas

February 21, 2007

An act to amend Section 1278.5 of the Health and Safety Code,


relating to health care facilities.

legislative counsel’s digest


AB 632, as amended, Salas. Health care facilities: whistleblower
protections.
Existing law provides for the licensure and regulation of health care
facilities, as defined, by the State Department of Public Health. Under
existing law, a health facility is prohibited from retaliating or
discriminating against an employee of a health facility that has presented
or initiated a complaint or initiated, participated, or cooperated in an
investigation or proceeding of a government entity relating to the care,
services, or conditions of the facility. Existing law makes the violation
of these provisions a crime and subject to the assessment of a civil
penalty.
This bill would prohibit a health facility, from discriminating or
retaliating against any patient, employee, a member of the facility’s
medical staff, or any other health care worker of the facility who because
that person (1) has presented a grievance, complaint, or report to an
entity or agency responsible for accrediting or evaluating the facility
or to any other governmental entity; or (2) has initiated, participated,

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AB 632 —2—

or cooperated in an investigation or administrative proceeding related


to the quality of care, services, or conditions at the facility, as provided.
This bill would provide that an employee who has been discriminated
against in employment in violation of those provisions shall be entitled
to reinstatement, reimbursement for lost wages and work benefits caused
by the acts of the employer, or to any remedy deemed warranted by the
court pursuant to those provisions, or to any applicable provisions of
statutory or common law, as specified. The bill would also entitle a
health care worker who has been discriminated against, in violation of
those provisions, and who prevails in court, to restitution and any legal
costs associated with pursuing the case, or to any remedy deemed
warranted by the court pursuant to those provisions, or any other
applicable statutory or common law.
Because the bill would expand the definition of a crime, it would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.

The people of the State of California do enact as follows:

1 SECTION 1. Section 1278.5 of the Health and Safety Code is


2 amended to read:
3 1278.5. (a)  The Legislature finds and declares that it is the
4 public policy of the State of California to encourage patients,
5 nurses, members of the medical staff, and other health care workers
6 to notify government entities of suspected unsafe patient care and
7 conditions. The Legislature encourages this reporting in order to
8 protect patients and in order to assist those government entities
9 charged with ensuring that health care is safe. The Legislature
10 finds and declares that whistleblower protections apply primarily
11 to issues relating to the care, services, and conditions of a facility
12 and are not intended to conflict with existing provisions in state
13 and federal law relating to employee and employer relations.
14 (b)  (1)  No health facility shall discriminate or retaliate, in any
15 manner, against any patient, employee, member of the medical

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—3— AB 632

1 staff, or any other health care worker of the health facility who
2 because that person has done either of the following:
3 (A)  Presented a grievance, complaint, or report to the facility,
4 to an entity or agency responsible for accrediting or evaluating the
5 facility, or the medical staff of the facility, or to any other
6 governmental entity.
7 (B)  Has initiated, participated, or cooperated in an investigation
8 or administrative proceeding related to, the quality of care, services,
9 or conditions at the facility that is carried out by an entity or agency
10 responsible for accrediting or evaluating the facility or its medical
11 staff, or governmental entity.
12 (2)  No entity that owns or operates a health facility, or which
13 owns or operates any other health facility, shall discriminate or
14 retaliate against any person who has taken any actions pursuant to
15 this subdivision.
16 (3)  A violation of this section shall be subject to a civil penalty
17 of not more than twenty-five thousand dollars ($25,000). The civil
18 penalty shall be assessed and recovered through the same
19 administrative process set forth in Chapter 2.4 (commencing with
20 Section 1417) for long-term health care facilities.
21 (c)  Any type of discriminatory treatment of a patient by whom,
22 or upon whose behalf, a grievance or complaint has been submitted,
23 directly or indirectly, to a governmental entity or received by a
24 health facility administrator within 180 days of the filing of the
25 grievance or complaint, shall raise a rebuttable presumption that
26 the action was taken by the health facility in retaliation for the
27 filing of the grievance or complaint.
28 (d)  (1)  There shall be a rebuttable presumption that
29 discriminatory action was taken by the health facility, or by the
30 entity that owns or operates that health facility, or that owns or
31 operates any other health facility, in retaliation against an
32 employee, member of the medical staff, or any other health care
33 worker of the facility, if responsible staff at the facility or the entity
34 that owns or operates the facility had knowledge of the actions,
35 participation, or cooperation of the person responsible for any acts
36 described in paragraph (1) of subdivision (b), and the
37 discriminatory action occurs within 120 days of the filing of the
38 grievance or complaint by the employee, member of the medical
39 staff or any other health care worker of the facility.

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1 (2)  For purposes of this section, discriminatory treatment of an


2 employee, member of the medical staff, or any other health care
3 worker includes, but is not limited to, discharge, demotion,
4 suspension, or any other unfavorable changes in the terms or
5 conditions of employment or of the privileges of the employee,
6 member of the medical staff, or any other health care worker of
7 the health care facility, or the threat of any of these actions.
8 (e)  The presumptions in subdivisions (c) and (d) shall be
9 presumptions affecting the burden of producing evidence as
10 provided in Section 603 of the Evidence Code.
11 (f)  Any person who willfully violates this section is guilty of a
12 misdemeanor punishable by a fine of not more than twenty
13 thousand dollars ($20,000).
14 (g)  An employee who has been discriminated against in
15 employment pursuant to this section shall be entitled to
16 reinstatement, reimbursement for lost wages and work benefits
17 caused by the acts of the employer, and the legal costs associated
18 with pursuing the case, or to any remedy deemed warranted by
19 the court pursuant to this chapter or any other applicable provision
20 of statutory or common law. A health care worker who has been
21 discriminated against pursuant to this section shall be entitled to
22 restitution and the legal costs associated with pursuing the case,
23 or to any remedy deemed warranted by the court pursuant to this
24 chapter or other applicable provision of statutory or common law.
25 A member of the medical staff who has been discriminated against
26 pursuant to this section shall be entitled to reinstatement,
27 reimbursement for lost income resulting from any change in the
28 terms or conditions of his or her privileges caused by the acts of
29 the facility or the entity that owns or operates a health facility or
30 any other health facility that is owned or operated by that entity,
31 and the legal costs associated with pursuing the case, or to any
32 remedy deemed warranted by the court pursuant to this chapter
33 or any other applicable provision of statutory or common law.
34 (h)  The medical staff of the health facility may petition the court
35 for an injunction to protect a peer review committee from being
36 required to comply with evidentiary demands on pending peer
37 review matters from the complainant in an action pursuant to this
38 section, if the evidentiary demands from the complainant would
39 impede the peer review process or endanger the health and safety
40 of patients of the health facility during the peer review process.

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1 (h)
2 (i)  For purposes of this section, “health facility” means any
3 facility defined under this chapter, including, but not limited to,
4 the facility’s administrative personnel, employees, boards, and
5 committees of the board, and medical staff.
6 (i)
7 (j)  This section shall not apply to an inmate of a correctional
8 facility or juvenile facility of the Department of Corrections and
9 Rehabilitation, or to an inmate housed in a local detention facility
10 including a county jail or a juvenile hall, juvenile camp, or other
11 juvenile detention facility.
12 (j)
13 (k)  This section shall not apply to a health facility that is a
14 long-term health care facility, as defined in Section 1418. A health
15 facility that is a long-term health care facility shall remain subject
16 to Section 1432.
17 (k)
18 (l)  Nothing in this section abrogates or limits any other theory
19 of liability or remedy otherwise available at law.
20 SEC. 2. No reimbursement is required by this act pursuant to
21 Section 6 of Article XIIIB of the California Constitution because
22 the only costs that may be incurred by a local agency or school
23 district will be incurred because this act creates a new crime or
24 infraction, eliminates a crime or infraction, or changes the penalty
25 for a crime or infraction, within the meaning of Section 17556 of
26 the Government Code, or changes the definition of a crime within
27 the meaning of Section 6 of Article XIII B of the California
28 Constitution.

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------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 632|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------

THIRD READING

Bill No: AB 632


Author: Salas (D)
Amended: 7/17/07 in Senate
Vote: 21

SENATE HEALTH COMMITTEE : 11-0, 6/13/07


AYES: Kuehl, Aanestad, Alquist, Cedillo, Cox, Maldonado,
Negrete McLeod, Ridley-Thomas, Steinberg, Wyland, Yee

SENATE JUDICIARY COMMITTEE : 5-0, 7/10/07


AYES: Corbett, Harman, Ackerman, Kuehl, Steinberg

SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8

ASSEMBLY FLOOR : 70-0, 5/3/07 - See last page for vote

SUBJECT : Health care facilities: whistleblower


protections

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SOURCE : California Medical Association


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 143 of 205

DIGEST : This bill establishes protections, similar to


those in existing law for employees and patients, for
medical staff and other health care workers who file
complaints or grievances concerning a licensed health care
facility, or who initiate or participate in an
investigation or proceeding related to the quality of care,
services, or conditions at the facility.

ANALYSIS :
CONTINUED

AB 632
Page
2

Existing Law

1.Prohibits a health care facility from discriminating or


retaliating against a patient, employee, or any other
person who presents a grievance or complaint, or has
initiated or cooperated with a government agency in the
investigation about the care, services, or conditions of
the facility.

2.Subjects a health care facility to a civil penalty of no


more than $25,000 for violations of these provisions,
and provides that any person who willfully violates them
is guilty of a misdemeanor punishable by a fine of no
more than $20,000.

3.Provides that any type of discriminatory treatment of a


patient by whom, or on whose behalf, a grievance or
complaint has been submitted, within 180 days of the
filing of the grievance or complaint, raises a
rebuttable presumption that a retaliatory action was
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taken.
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 144 of 205
4.Provides that any discriminatory treatment of an
employee who has presented a grievance or complaint, or
has initiated, participated, or cooperated in an
investigation or proceeding, within 120 days of the
filing of the grievance or complaint, shall raise a
rebuttable presumption that a retaliatory action was
taken.

5.Defines discriminatory treatment of an employee to


include the discharge, demotion, suspension, any
unfavorable changes in the terms or conditions of
employment, or the threat of these actions.

6.Requires that employees who have been discriminated


against by their employers be reinstated and reimbursed
for lost wages and benefits and for the legal costs
associated with pursuing their case.

7.Provides similar whistleblower protections for patients


and employees of long-term care facilities and extends
those protections additionally to complainants

AB 632
Page
3

generally.

8.Provides that the protections do not apply to an inmate


of a correctional facility, juvenile detention facility,
or local detention facility.

9.Provides that it is the public policy of the state to


encourage physicians and surgeons to advocate for
medically appropriate health for their patients and
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provides that no person shall terminate, retaliate


Caseor1:07-cv-00026-OWW-DLB
against, Document 306-2
otherwise penalize a physician Filed 03/09/2009
and surgeon Page 145 of 205
for that advocacy, nor shall any person prohibit,
restrict, or in any way discourage a physician and
surgeon from communicating to a patient information in
furtherance of medically appropriate health care. For
purposes of existing law, advocating for medically
appropriate care is defined as the appeal of a payer's
decision to deny payment for a service pursuant to the
grievance or appeal procedure established by a medical
group, independent practice association, preferred
provider organization, foundation, hospital medical
staff and governing body, or payer, or to protest a
decision, policy, or practice that a physician believes
impairs his or her ability to provide medically
appropriate health care to his or her patients.

10.Prohibits a publicly traded company or any officer,


employee, contractor, subcontractor, or agent of such
company, from discriminating against or retaliating
against an employee who has provided information or
assisted in an investigation relating to mail,
telecommunications, or shareholder fraud involving the
company. Additionally, the federal Civil False Claims
Act provides protections for persons who are demoted,
suspended, threatened, harassed, or in any manner
discriminated against for filing a complaint or
providing information that a person or company has
knowingly submitted false claims for reimbursement to
the federal government.

This bill:

1. Extends the protection from discrimination or


retaliation by a health care facility against persons

AB 632
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who present grievances or complaints, or who initiate an


investigation regarding the facility's quality of care,
services, or conditions, to members of the medical staff
and other health care workers of the facility.

2. Extends the rebuttable presumption that a retaliatory


action has occurred, if discriminatory treatment occurs
within 120 days of the filing of the grievance or
complaint, to members of the medical staff and other
health care workers.

3. Provides that members of the medical staff who have


suffered from such retaliation or discrimination shall
be reinstated and reimbursed for lost income resulting
from any change in the terms or conditions of their
privileges caused by the acts of the facility or entity
that owns the facility.

4. Clarifies that the prohibition on discriminatory or


retaliatory action by a health facility extends to the
facility's administrative personnel, employees, boards,
and committees of the board, and medical staff, as well
as an entity that owns or operates a health care
facility.

5. Clarifies that complaints to and investigations carried


out by entities or agencies responsible for accrediting
or evaluating the facility are subject to health
facility whistleblower protections.

6. Provides that an employee who has been discriminated


against in employment in violation of those provisions
shall be entitled to reinstatement, reimbursement for
lost wages and work benefits caused by the acts of the
employer, or to any remedy deemed warranted by the court
pursuant to those provisions, or to any applicable
provisions of statutory or common law, as specified.

7. Entitles a health care worker who has been discriminated


against, in violation of those provisions, and who
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prevails in court, to restitution and any legal costs


Case 1:07-cv-00026-OWW-DLB
associated with pursuing the case,Document 306-2
or to any Filed 03/09/2009
remedy Page 147 of 205
deemed warranted by the court pursuant to those
provisions, or any other applicable statutory or common

AB 632
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5

law.

Background

Complaints about the quality of care, services, or


conditions of health care facilities can be submitted in a
number of ways. Any person can present a complaint to the
chief administrative officer of the health facility or file
a complaint with Department of Health Services' (DHS)
licensing and certification unit by contacting the district
office where that health facility is located. A complaint
may also be filed with the Joint Commission on
Accreditation of Healthcare Organizations (JCAHO), which
may conduct an onsite evaluation if the complaint made
about an accredited health facility raises serious concerns
about patient safety or failure to comply with quality
standards of care. The Joint Commission states on its
website that it forbids accredited or certified health care
organizations from taking retaliatory actions against
employees for reporting quality of care concerns.

Current state law prohibits the employment of physicians by


corporations or other entities that are not controlled by
physicians. For that reason, most members of the medical
staff are not considered employees of a hospital and must
establish contractual relationships with the hospital,
either individually or through medical groups. Some
exceptions are teaching hospitals, certain clinics, and
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hospitals owned and operated by a health care district.


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 148 of 205
DHS reports that in 2006 there were a total of 30,287
complaints made about the quality of care, services, or
conditions of health facilities in California. A majority
of these complaints (70.25 percent) were reported by a
health facility official or employee, while 29.25 percent
were reported by patients and other persons. At this time,
however, DHS cannot provide data distinguishing whether the
health facility official who made the complaint was a
physician, nurse, or other health care staff member who is
not an employee.

FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes


Local: Yes

AB 632
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6

SUPPORT : (Verified 8/21/07)

California Medical Association (source)


American College of Emergency Physicians, California
Chapter
American Federation of State, County and Municipal
Employees
California Academy of Ophthalmology
California Alliance for Retired Americans
California Society of Anesthesiologists
Citizens' Commission on Human Rights
San Bernardino Public Employees Association

OPPOSITION : (Verified 8/21/07)

California Hospital Association


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Case
ARGUMENTS IN 1:07-cv-00026-OWW-DLB
SUPPORT : CMA, the Document 306-2
sponsor of Filed 03/09/2009
this bill, Page 149 of 205
states that this bill is necessary to clarify existing law
to protect physicians from retaliation or discrimination
related to raising concerns about patient care. According
to CMA, hospitals may use a variety of methods to suppress
physician whistleblowers, including removing a physician
from a referral list, forcing a doctor out of a
hospital-owned complex, or underwriting the salary or
practice expense of a competing physician. As a result,
physicians must decide between reporting allegations of
poor patient care and protecting their practice and
livelihood from harm.

CMA cites the case of Integrated Healthcare Holdings, Inc.


(IHHI), the owner of Western Medical Center in Santa Ana,
CA, which sued Dr. Michael Fitzgibbons after he expressed
concerns that the hospital's financial troubles threatened
the ability of physicians to provide quality care for their
patients. According to CMA, during the lawsuit, IHHI
threatened to retaliate against the medical staff at
Western Medical Center and the staff at three other
IHHI-owned hospitals if they participated in the
investigation. CMA also cites a similar case that occurred
when Tenet, one of the largest for-profit hospital chains,
silenced physicians at a Redding, CA hospital who knew
about unnecessary open-heart surgeries and Medicare billing
fraud occurring at the hospital.

AB 632
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7

ARGUMENTS IN OPPOSITION : The California Hospital


Association (CHA) believes there are already sufficient
whistleblower protections in existing state and federal law
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for physicians and surgeons. In addition, CHA states that


there is Case 1:07-cv-00026-OWW-DLB
no evidence that physicians Document
have been306-2 Filed
subject to 03/09/2009 Page 150 of 205
retaliation or that current statutory protections are
inadequate. CHA further argues that the statute that this
bill seeks to amend was designed to protect patients and
employees from retaliation for raising quality of care
concerns, and was not designed to protect physicians and
surgeons. CHA argues that the relationship between a
hospital and physicians and surgeons who have staff
privileges at the hospital differs significantly from the
hospital's relationship with its employees. Among other
things, the relationship between hospitals and physicians
is governed by medical staff by-laws and hospital peer
review processes. In addition, physicians and surgeons
already have protections under state law for instances in
which they advocate for medically appropriate care, and are
also protected under federal statutes for reporting
instances of fraud, overbilling, and violations of Stark
and anti-kickback statutes. Finally, CHA believes that
this bill needs further clarification to ensure that
hospitals retain the right to take disciplinary action with
regard to disruptive behavior by employees, patients and
physicians, regardless of their protected activity.

ASSEMBLY FLOOR :
AYES: Adams, Aghazarian, Anderson, Bass, Beall, Berg,
Berryhill, Blakeslee, Brownley, Caballero, Charles
Calderon, Carter, Cook, Coto, Davis, De La Torre, De
Leon, DeSaulnier, DeVore, Duvall, Dymally, Emmerson, Eng,
Evans, Feuer, Fuller, Gaines, Galgiani, Garcia, Garrick,
Hancock, Hayashi, Hernandez, Horton, Houston, Huffman,
Jeffries, Jones, Karnette, Keene, Krekorian, La Malfa,
Laird, Leno, Levine, Lieber, Lieu, Ma, Maze, Mendoza,
Mullin, Nakanishi, Niello, Parra, Portantino, Price,
Richardson, Salas, Saldana, Silva, Smyth, Solorio,
Strickland, Swanson, Torrico, Tran, Villines, Walters,
Wolk, Nunez
NO VOTE RECORDED: Arambula, Benoit, Huff, Nava, Plescia,
Sharon Runner, Ruskin, Soto, Spitzer, Vacancy

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AB 632
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CTW:do 8/21/07 Senate Floor Analyses

SUPPORT/OPPOSITION: SEE ABOVE

**** END ****

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AMENDED IN SENATE SEPTEMBER 5, 2007


AMENDED IN SENATE JULY 17, 2007
AMENDED IN SENATE JUNE 6, 2007
AMENDED IN ASSEMBLY APRIL 17, 2007
california legislature—2007–08 regular session

ASSEMBLY BILL No. 632

Introduced by Assembly Member Salas

February 21, 2007

An act to amend Section 1278.5 of the Health and Safety Code,


relating to health care facilities.

legislative counsel’s digest


AB 632, as amended, Salas. Health care facilities: whistleblower
protections.
Existing law provides for the licensure and regulation of health care
facilities, as defined, by the State Department of Public Health. Under
existing law, a health facility is prohibited from retaliating or
discriminating against an employee of a health facility that has presented
or initiated a complaint or initiated, participated, or cooperated in an
investigation or proceeding of a government entity relating to the care,
services, or conditions of the facility. Existing law makes the violation
of these provisions a crime and subject to the assessment of a civil
penalty.
This bill would prohibit a health facility from discriminating or
retaliating against any patient, employee, a member of the facility’s
medical staff, or any other health care worker of the facility because
that person (1) has presented a grievance, complaint, or report to an

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AB 632 —2—

entity or agency responsible for accrediting or evaluating the facility


or to any other governmental entity; or (2) has initiated, participated,
or cooperated in an investigation or administrative proceeding related
to the quality of care, services, or conditions at the facility, as provided.
This bill would provide that an employee who has been discriminated
against in employment in violation of those provisions shall be entitled
to reinstatement, reimbursement for lost wages and work benefits caused
by the acts of the employer, or to any remedy deemed warranted by the
court pursuant to those provisions, or to any applicable provisions of
statutory or common law, as specified. The bill would also entitle a
health care worker who has been discriminated against, in violation of
those provisions, and who prevails in court, to restitution reimbursement
for lost income and any legal costs associated with pursuing the case,
or to any remedy deemed warranted by the court pursuant to those
provisions, or any other applicable statutory or common law.
Because the bill would expand the definition of a crime, it would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.

The people of the State of California do enact as follows:

1 SECTION 1. Section 1278.5 of the Health and Safety Code is


2 amended to read:
3 1278.5. (a)  The Legislature finds and declares that it is the
4 public policy of the State of California to encourage patients,
5 nurses, members of the medical staff, and other health care workers
6 to notify government entities of suspected unsafe patient care and
7 conditions. The Legislature encourages this reporting in order to
8 protect patients and in order to assist those accreditation and
9 government entities charged with ensuring that health care is safe.
10 The Legislature finds and declares that whistleblower protections
11 apply primarily to issues relating to the care, services, and
12 conditions of a facility and are not intended to conflict with existing

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—3— AB 632

1 provisions in state and federal law relating to employee and


2 employer relations.
3 (b)  (1)  No health facility shall discriminate or retaliate, in any
4 manner, against any patient, employee, member of the medical
5 staff, or any other health care worker of the health facility because
6 that person has done either of the following:
7 (A)  Presented a grievance, complaint, or report to the facility,
8 to an entity or agency responsible for accrediting or evaluating the
9 facility, or the medical staff of the facility, or to any other
10 governmental entity.
11 (B)  Has initiated, participated, or cooperated in an investigation
12 or administrative proceeding related to, the quality of care, services,
13 or conditions at the facility that is carried out by an entity or agency
14 responsible for accrediting or evaluating the facility or its medical
15 staff, or governmental entity.
16 (2)  No entity that owns or operates a health facility, or which
17 owns or operates any other health facility, shall discriminate or
18 retaliate against any person who because that person has taken
19 any actions pursuant to this subdivision.
20 (3)  A violation of this section shall be subject to a civil penalty
21 of not more than twenty-five thousand dollars ($25,000). The civil
22 penalty shall be assessed and recovered through the same
23 administrative process set forth in Chapter 2.4 (commencing with
24 Section 1417) for long-term health care facilities.
25 (c)  Any type of discriminatory treatment of a patient by whom,
26 or upon whose behalf, a grievance or complaint has been submitted,
27 directly or indirectly, to a governmental entity or received by a
28 health facility administrator within 180 days of the filing of the
29 grievance or complaint, shall raise a rebuttable presumption that
30 the action was taken by the health facility in retaliation for the
31 filing of the grievance or complaint.
32 (d)  (1)  There shall be a rebuttable presumption that
33 discriminatory action was taken by the health facility, or by the
34 entity that owns or operates that health facility, or that owns or
35 operates any other health facility, in retaliation against an
36 employee, member of the medical staff, or any other health care
37 worker of the facility, if responsible staff at the facility or the entity
38 that owns or operates the facility had knowledge of the actions,
39 participation, or cooperation of the person responsible for any acts
40 described in paragraph (1) of subdivision (b), and the

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AB 632 —4—

1 discriminatory action occurs within 120 days of the filing of the


2 grievance or complaint by the employee, member of the medical
3 staff or any other health care worker of the facility.
4 (2)  For purposes of this section, discriminatory treatment of an
5 employee, member of the medical staff, or any other health care
6 worker includes, but is not limited to, discharge, demotion,
7 suspension, or any other unfavorable changes in the terms or
8 conditions of employment or of the privileges of the employee,
9 suspension, or any unfavorable changes in, or breach of, the terms
10 or conditions of a contract, employment, or privileges of the
11 employee, member of the medical staff, or any other health care
12 worker of the health care facility, or the threat of any of these
13 actions.
14 (e)  The presumptions in subdivisions (c) and (d) shall be
15 presumptions affecting the burden of producing evidence as
16 provided in Section 603 of the Evidence Code.
17 (f)  Any person who willfully violates this section is guilty of a
18 misdemeanor punishable by a fine of not more than twenty
19 thousand dollars ($20,000).
20 (g)  An employee who has been discriminated against in
21 employment pursuant to this section shall be entitled to
22 reinstatement, reimbursement for lost wages and work benefits
23 caused by the acts of the employer, and the legal costs associated
24 with pursuing the case, or to any remedy deemed warranted by the
25 court pursuant to this chapter or any other applicable provision of
26 statutory or common law. A health care worker who has been
27 discriminated against pursuant to this section shall be entitled to
28 restitution reimbursement for lost income and the legal costs
29 associated with pursuing the case, or to any remedy deemed
30 warranted by the court pursuant to this chapter or other applicable
31 provision of statutory or common law. A member of the medical
32 staff who has been discriminated against pursuant to this section
33 shall be entitled to reinstatement, reimbursement for lost income
34 resulting from any change in the terms or conditions of his or her
35 privileges caused by the acts of the facility or the entity that owns
36 or operates a health facility or any other health facility that is
37 owned or operated by that entity, and the legal costs associated
38 with pursuing the case, or to any remedy deemed warranted by the
39 court pursuant to this chapter or any other applicable provision of
40 statutory or common law.

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1 (h)  The medical staff of the health facility may petition the court
2 for an injunction to protect a peer review committee from being
3 required to comply with evidentiary demands on a pending peer
4 review matters hearing from the complainant in member of the
5 medical staff who has filed an action pursuant to this section, if
6 the evidentiary demands from the complainant would impede the
7 peer review process or endanger the health and safety of patients
8 of the health facility during the peer review process. Prior to
9 granting an injunction, the court shall conduct an in camera review
10 of the evidence sought to be discovered to determine if a peer
11 review hearing, as authorized in Section 805 and Sections 809 to
12 809.5, inclusive, of the Business and Professions Code, would be
13 impeded. If it is determined that the peer review hearing will be
14 impeded, the injunction shall be granted until the peer review
15 hearing is completed. Nothing in this section shall preclude the
16 court, on motion of its own or by a party, from issuing an injunction
17 or other order under this subdivision in the interest of justice for
18 the duration of the peer review process to protect the person from
19 irreparable harm.
20 (i)  For purposes of this section, “health facility” means any
21 facility defined under this chapter, including, but not limited to,
22 the facility’s administrative personnel, employees, boards, and
23 committees of the board, and medical staff.
24 (j)  This section shall not apply to an inmate of a correctional
25 facility or juvenile facility of the Department of Corrections and
26 Rehabilitation, or to an inmate housed in a local detention facility
27 including a county jail or a juvenile hall, juvenile camp, or other
28 juvenile detention facility.
29 (k)  This section shall not apply to a health facility that is a
30 long-term health care facility, as defined in Section 1418. A health
31 facility that is a long-term health care facility shall remain subject
32 to Section 1432.
33 (l)  Nothing in this section shall be construed to limit the ability
34 of the medical staff to carry out its legitimate peer review activities
35 in accordance with Sections 809 to 809.5, inclusive, of the Business
36 and Professions Code.
37 (l)  
38 (m)  Nothing in this section abrogates or limits any other theory
39 of liability or remedy otherwise available at law.

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AB 632 —6—

1 SEC. 2. No reimbursement is required by this act pursuant to


2 Section 6 of Article XIIIB of the California Constitution because
3 the only costs that may be incurred by a local agency or school
4 district will be incurred because this act creates a new crime or
5 infraction, eliminates a crime or infraction, or changes the penalty
6 for a crime or infraction, within the meaning of Section 17556 of
7 the Government Code, or changes the definition of a crime within
8 the meaning of Section 6 of Article XIII B of the California
9 Constitution.

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------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 632|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------

THIRD READING

Bill No: AB 632


Author: Salas (D)
Amended: 9/5/07 in Senate
Vote: 21

SENATE HEALTH COMMITTEE : 11-0, 6/13/07


AYES: Kuehl, Aanestad, Alquist, Cedillo, Cox, Maldonado,
Negrete McLeod, Ridley-Thomas, Steinberg, Wyland, Yee

SENATE JUDICIARY COMMITTEE : 5-0, 7/10/07


AYES: Corbett, Harman, Ackerman, Kuehl, Steinberg

SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8

ASSEMBLY FLOOR : 70-0, 5/3/07 - See last page for vote

SUBJECT : Health care facilities: whistleblower


protections

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SOURCE : California Medical Association


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 160 of 205

DIGEST : This bill establishes protections, similar to


those in existing law for employees and patients, for
medical staff and other health care workers who file
complaints or grievances concerning a licensed health care
facility, or who initiate or participate in an
investigation or proceeding related to the quality of care,
services, or conditions at the facility.

Senate Floor Amendments of 9/5/07 further clarify language


CONTINUED

AB 632
Page
2

of the bill and deal with the effect of a whistleblower


complaint in the context of peer review proceedings.

ANALYSIS :

Existing Law

1.Prohibits a health care facility from discriminating or


retaliating against a patient, employee, or any other
person who presents a grievance or complaint, or has
initiated or cooperated with a government agency in the
investigation about the care, services, or conditions of
the facility.

2.Subjects a health care facility to a civil penalty of no


more than $25,000 for violations of these provisions,
and provides that any person who willfully violates them
is guilty of a misdemeanor punishable by a fine of no
more than $20,000.

3.Provides that any type of discriminatory treatment of a


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patient by whom, or on whose behalf, a grievance or


Case has
complaint 1:07-cv-00026-OWW-DLB Document
been submitted, within 306-2
180 days Filed 03/09/2009
of the Page 161 of 205
filing of the grievance or complaint, raises a
rebuttable presumption that a retaliatory action was
taken.

4.Provides that any discriminatory treatment of an


employee who has presented a grievance or complaint, or
has initiated, participated, or cooperated in an
investigation or proceeding, within 120 days of the
filing of the grievance or complaint, shall raise a
rebuttable presumption that a retaliatory action was
taken.

5.Defines discriminatory treatment of an employee to


include the discharge, demotion, suspension, any
unfavorable changes in the terms or conditions of
employment, or the threat of these actions.

6.Requires that employees who have been discriminated


against by their employers be reinstated and reimbursed
for lost wages and benefits and for the legal costs
associated with pursuing their case.

AB 632
Page
3

7.Provides similar whistleblower protections for patients


and employees of long-term care facilities and extends
those protections additionally to complainants
generally.

8.Provides that the protections do not apply to an inmate


of a correctional facility, juvenile detention facility,
or local detention facility.
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Casethat
9.Provides 1:07-cv-00026-OWW-DLB Document
it is the public policy 306-2
of the state Filed
to 03/09/2009 Page 162 of 205
encourage physicians and surgeons to advocate for
medically appropriate health for their patients and
provides that no person shall terminate, retaliate
against, or otherwise penalize a physician and surgeon
for that advocacy, nor shall any person prohibit,
restrict, or in any way discourage a physician and
surgeon from communicating to a patient information in
furtherance of medically appropriate health care. For
purposes of existing law, advocating for medically
appropriate care is defined as the appeal of a payer's
decision to deny payment for a service pursuant to the
grievance or appeal procedure established by a medical
group, independent practice association, preferred
provider organization, foundation, hospital medical
staff and governing body, or payer, or to protest a
decision, policy, or practice that a physician believes
impairs his or her ability to provide medically
appropriate health care to his or her patients.

10.Prohibits a publicly traded company or any officer,


employee, contractor, subcontractor, or agent of such
company, from discriminating against or retaliating
against an employee who has provided information or
assisted in an investigation relating to mail,
telecommunications, or shareholder fraud involving the
company. Additionally, the federal Civil False Claims
Act provides protections for persons who are demoted,
suspended, threatened, harassed, or in any manner
discriminated against for filing a complaint or
providing information that a person or company has
knowingly submitted false claims for reimbursement to
the federal government.

AB 632
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Page
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This bill:

1.Extends the protection from discrimination or


retaliation by a health care facility against persons
who present grievances or complaints, or who initiate an
investigation regarding the facility's quality of care,
services, or conditions, to members of the medical staff
and other health care workers of the facility.

2.Extends the rebuttable presumption that a retaliatory


action has occurred, if discriminatory treatment occurs
within 120 days of the filing of the grievance or
complaint, to members of the medical staff and other
health care workers.

3.Provides that members of the medical staff who have


suffered from such retaliation or discrimination shall
be reinstated and reimbursed for lost income resulting
from any change in the terms or conditions of their
privileges caused by the acts of the facility or entity
that owns the facility.

4.Defines "discriminating treatment" for these purposes to


include, but not limited to, discharge, demotion,
suspension, or any unfavorable changes in, or breach of,
the terms or conditions of a contract, employment or
privileges of the employee, or the threat of any of
those actions.

5.Clarifies that the prohibition on discriminatory or


retaliatory action by a health facility extends to the
facility's administrative personnel, employees, boards,
and committees of the board, and medical staff, as well
as an entity that owns or operates a health care
facility.

6.Clarifies that complaints to and investigations carried


out by entities or agencies responsible for accrediting
or evaluating the facility are subject to health
facility whistleblower protections.
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Casethat
7.Provides 1:07-cv-00026-OWW-DLB
an employee who has Document 306-2 Filed 03/09/2009
been discriminated Page 164 of 205
against in employment in violation of those provisions
shall be entitled to reinstatement, reimbursement for

AB 632
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5

lost wages and work benefits caused by the acts of the


employer, or to any remedy deemed warranted by the court
pursuant to those provisions, or to any applicable
provisions of statutory or common law, as specified.

8.Entitles a health care worker who has been discriminated


against, in violation of those provisions, and who
prevails in court, to restitution and any legal costs
associated with pursuing the case, or to any remedy
deemed warranted by the court pursuant to those
provisions, or any other applicable statutory or common
law.

9.Provides that the medical staff of the health facility


may petition the court for an injunction to protect a
peer review committee from being required to comply with
evidentiary demands on a pending peer review hearing
from the member of the medical staff who has filed an
action pursuant to this section, if the evidentiary
demands from the complainant would impede the peer
review process or endanger the health and safety of
patients of the health facility during the peer review
process. Prior to granting an injunction, the court
shall conduct an in camera review of the evidence sought
to be discovered to determine if a peer review hearing,
as authorized in Section 805 and Section 809 to 809.5,
inclusive, of the Business and Profession Code, would be
impeded. If it is determined that the peer review
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hearing will be impeded, the injunction shall be granted


until Case 1:07-cv-00026-OWW-DLB
the peer Document 306-2
review hearing is completed. Filed
Nothing in03/09/2009 Page 165 of 205
this section shall preclude the court, on motion of its
own or by a party, from issuing an injunction or other
order under this subdivision in the interest of the
justice for the duration of the peer review process to
protect the person from irreparable harm.

10.The bill provides nothing in this bill shall be


construed to limit the ability of the medical staff to
carry out its legitimate peer review activities in
accordance with Sections 809 to 809.5, inclusive, of the
Business and Profession Code.

Background

AB 632
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6

Complaints about the quality of care, services, or


conditions of health care facilities can be submitted in a
number of ways. Any person can present a complaint to the
chief administrative officer of the health facility or file
a complaint with Department of Health Services' (DHS)
licensing and certification unit by contacting the district
office where that health facility is located. A complaint
may also be filed with the Joint Commission on
Accreditation of Healthcare Organizations (JCAHO), which
may conduct an onsite evaluation if the complaint made
about an accredited health facility raises serious concerns
about patient safety or failure to comply with quality
standards of care. The Joint Commission states on its
website that it forbids accredited or certified health care
organizations from taking retaliatory actions against
employees for reporting quality of care concerns.
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Case 1:07-cv-00026-OWW-DLB
Current state Document
law prohibits the employment of 306-2 Filedby
physicians 03/09/2009 Page 166 of 205
corporations or other entities that are not controlled by
physicians. For that reason, most members of the medical
staff are not considered employees of a hospital and must
establish contractual relationships with the hospital,
either individually or through medical groups. Some
exceptions are teaching hospitals, certain clinics, and
hospitals owned and operated by a health care district.

DHS reports that in 2006 there were a total of 30,287


complaints made about the quality of care, services, or
conditions of health facilities in California. A majority
of these complaints (70.25 percent) were reported by a
health facility official or employee, while 29.25 percent
were reported by patients and other persons. At this time,
however, DHS cannot provide data distinguishing whether the
health facility official who made the complaint was a
physician, nurse, or other health care staff member who is
not an employee.

FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes


Local: Yes

SUPPORT : (Verified 9/6/07)

California Medical Association (source)


American College of Emergency Physicians, California

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7

Chapter
American Federation of State, County and Municipal
Employees
California Academy of Ophthalmology
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California Alliance for Retired Americans


Case
California 1:07-cv-00026-OWW-DLB
Society Document 306-2
of Anesthesiologists Filed 03/09/2009 Page 167 of 205
Citizens' Commission on Human Rights
San Bernardino Public Employees Association

OPPOSITION : (Verified 9/6/07)

California Hospital Association

ARGUMENTS IN SUPPORT : CMA, the sponsor of this bill,


states that this bill is necessary to clarify existing law
to protect physicians from retaliation or discrimination
related to raising concerns about patient care. According
to CMA, hospitals may use a variety of methods to suppress
physician whistleblowers, including removing a physician
from a referral list, forcing a doctor out of a
hospital-owned complex, or underwriting the salary or
practice expense of a competing physician. As a result,
physicians must decide between reporting allegations of
poor patient care and protecting their practice and
livelihood from harm.

CMA cites the case of Integrated Healthcare Holdings, Inc.


(IHHI), the owner of Western Medical Center in Santa Ana,
CA, which sued Dr. Michael Fitzgibbons after he expressed
concerns that the hospital's financial troubles threatened
the ability of physicians to provide quality care for their
patients. According to CMA, during the lawsuit, IHHI
threatened to retaliate against the medical staff at
Western Medical Center and the staff at three other
IHHI-owned hospitals if they participated in the
investigation. CMA also cites a similar case that occurred
when Tenet, one of the largest for-profit hospital chains,
silenced physicians at a Redding, CA hospital who knew
about unnecessary open-heart surgeries and Medicare billing
fraud occurring at the hospital.

ARGUMENTS IN OPPOSITION : The California Hospital


Association (CHA) believes there are already sufficient
whistleblower protections in existing state and federal law

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AB 632
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8

for physicians and surgeons. In addition, CHA states that


there is no evidence that physicians have been subject to
retaliation or that current statutory protections are
inadequate. CHA further argues that the statute that this
bill seeks to amend was designed to protect patients and
employees from retaliation for raising quality of care
concerns, and was not designed to protect physicians and
surgeons. CHA argues that the relationship between a
hospital and physicians and surgeons who have staff
privileges at the hospital differs significantly from the
hospital's relationship with its employees. Among other
things, the relationship between hospitals and physicians
is governed by medical staff by-laws and hospital peer
review processes. In addition, physicians and surgeons
already have protections under state law for instances in
which they advocate for medically appropriate care, and are
also protected under federal statutes for reporting
instances of fraud, over billing, and violations of Stark
and anti-kickback statutes. Finally, CHA believes that
this bill needs further clarification to ensure that
hospitals retain the right to take disciplinary action with
regard to disruptive behavior by employees, patients and
physicians, regardless of their protected activity.

ASSEMBLY FLOOR :
AYES: Adams, Aghazarian, Anderson, Bass, Beall, Berg,
Berryhill, Blakeslee, Brownley, Caballero, Charles
Calderon, Carter, Cook, Coto, Davis, De La Torre, De
Leon, DeSaulnier, DeVore, Duvall, Dymally, Emmerson, Eng,
Evans, Feuer, Fuller, Gaines, Galgiani, Garcia, Garrick,
Hancock, Hayashi, Hernandez, Horton, Houston, Huffman,
Jeffries, Jones, Karnette, Keene, Krekorian, La Malfa,
Laird, Leno, Levine, Lieber, Lieu, Ma, Maze, Mendoza,
Mullin, Nakanishi, Niello, Parra, Portantino, Price,
Richardson, Salas, Saldana, Silva, Smyth, Solorio,
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Strickland, Swanson, Torrico, Tran, Villines, Walters,


Case 1:07-cv-00026-OWW-DLB Document 306-2
Wolk, Nunez Filed 03/09/2009 Page 169 of 205
NO VOTE RECORDED: Arambula, Benoit, Huff, Nava, Plescia,
Sharon Runner, Ruskin, Soto, Spitzer, Vacancy

RJG:do 9/6/07 Senate Floor Analyses

SUPPORT/OPPOSITION: SEE ABOVE

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**** END ****

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UNOFFICIAL BALLOT
MEASURE: AB 632
AUTHOR: Salas
TOPIC: Health care facilities: whistleblower protect
DATE: 09/10/2007
LOCATION: SEN. FLOOR
MOTION: Assembly 3rd Reading AB632 Salas By Aanestad
(AYES 38. NOES 1.) (PASS)

AYES
****

Aanestad Ackerman Alquist Ashburn


Battin Calderon Cedillo Cogdill
Corbett Correa Cox Denham
Ducheny Dutton Florez Harman
Kehoe Kuehl Lowenthal Machado
Maldonado Margett McClintock Migden
Negrete McLeod Oropeza Padilla Ridley-Thomas
Romero Runner Scott Simitian
Steinberg Torlakson Vincent Wiggins
Wyland Yee

NOES
****

Hollingsworth

ABSENT, ABSTAINING, OR NOT VOTING


*********************************

Perata

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UNOFFICIAL BALLOT
MEASURE: AB 632
AUTHOR: Salas
TOPIC: Health care facilities: whistleblower protect
DATE: 09/11/2007
LOCATION: ASM. FLOOR
MOTION: AB 632 Salas Concurrence in Senate Amendments
(AYES 62. NOES 15.) (PASS)

AYES
****

Aghazarian Arambula Bass Beall


Benoit Berg Berryhill Blakeslee
Brownley Caballero Charles Calderon Carter
Cook Coto Davis De La Torre
De Leon DeSaulnier Dymally Emmerson
Eng Evans Feuer Fuentes
Fuller Gaines Galgiani Garcia
Garrick Hancock Hayashi Hernandez
Horton Huffman Jones Karnette
Keene Krekorian Laird Leno
Levine Lieber Lieu Ma
Mendoza Mullin Nakanishi Nava
Parra Portantino Price Ruskin
Salas Saldana Solorio Soto
Spitzer Swanson Torrico Tran
Wolk Nunez

NOES
****

Adams Anderson DeVore Duvall


Houston Huff Jeffries La Malfa
Maze Niello Plescia Silva
Smyth Villines Walters

ABSENT, ABSTAINING, OR NOT VOTING


*********************************

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Sharon Runner Strickland Vacancy

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BILL
ANALYSIS Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 174 of 205

AB 632
Page 1

CONCURRENCE IN SENATE AMENDMENTS


AB 632 (Salas)
As Amended September 5, 2007
Majority vote

-----------------------------------------------------------------
|ASSEMBLY: |70-0 |(May 3, 2007) |SENATE: |38-1 |(September 10, |
| | | | | |2007) |
-----------------------------------------------------------------

Original Committee Reference: HEALTH

SUMMARY : Expands to members of health facility medical staffs,


whistleblower protections currently provided to patients,
employees, and others in health facility settings that prohibit
owners and operators of any health facility from retaliating
because a person from one of these groups has notified
government entities of suspected unsafe patient care and
conditions.

The Senate amendments :

1)Revise the new category of medical professionals to whom


whistleblower protections are extended, from physicians and
surgeons to members of the medical staff. Revise the
definition of members of health facility medical staffs, to
provide equivalent whistleblower protection to a doctor that
is currently available to an employee or patient of a hospital
facility and to other health care workers.

2)Eliminate the application of civil penalties to health


facility affiliates.

3)Expand the definition of discriminatory treatment of an


employee, member of the medical staff, of any other health
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care worker to also include any unfavorable changes in, or


breach Case 1:07-cv-00026-OWW-DLB
of, the terms or conditions Document 306-2
of a contract. Filed 03/09/2009 Page 175 of 205

4)Specify that, for damages to any employee, health care worker,


or member of the medical staff who has been discriminated or
retaliated against, he or she is entitled to any remedy deemed
warranted by the court in lieu of reinstatement, reimbursement
for lost wages and work benefits, and legal costs.

5)Make technical changes in the wording of the list of

AB 632
Page 2

financially related circumstances to be taken under


consideration for remedy when there is a determination that
discrimination has occurred.

6)Require that a health care worker determined to have been


discriminated against is entitled to reimbursement for lost
income rather than restitution.

7)Authorize a member of the medical staff to petition the court


for an injunction to protect a peer review committee from
being required to comply with evidentiary demands on pending
peer review matters if the physician has filed a whistleblower
complaint or if the evidentiary demands would impede the peer
review process or endanger patient health and safety.

8)Require that an in camera review of evidentiary demands be


held to determine if the evidentiary demands will impede the
peer review process.

EXISTING LAW prohibits any health facility from discriminating


or retaliating in any manner against any patient or employee of
any health facility because that patient or employee, or any
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other person, has presented any grievance or complaint, or has


initiatedCase 1:07-cv-00026-OWW-DLB
or cooperated Documentor
in any investigation 306-2 Filed 03/09/2009
proceeding of Page 176 of 205
any governmental entity, relating to the care, services, or
conditions of that facility. "Health facility" does not include
long-term care facility for these purposes. Any health facility
that violates such prohibitions may be subject to a civil
penalty of not more than $25,000, and any person associated with
the facility, as specified, who willfully violates such
prohibitions, may be subject to a misdemeanor punishable by a
fine of not more than $20,000.

AS PASSED BY THE ASSEMBLY , this bill extended to physicians and


surgeons whistleblower protections that currently apply to
patients and employees of health facilities. Specifically, this
bill:

1)Prohibited a health facility or its affiliate from


discriminating or retaliating in any manner against a
physician and surgeon on the medical staff of the health
facility or its affiliate because the physician and surgeon
has presented a grievance or complaint, or has initiated,
participated, or cooperated in an investigation or proceeding
of any governmental entity, relating to the care, services, or

AB 632
Page 3

conditions of the facility or its affiliate.

2)Required that any discriminatory treatment of a physician and


surgeon within 120 days of the filing of the grievance or
complaint raises a rebuttable presumption that the action was
taken by the health facility in retaliation, if the health
facility had knowledge of the physician's initiation,
participation, or cooperation. Specifies that "discriminatory
treatment of a physician or surgeon" includes discharge,
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demotion, suspension, any other unfavorable changes in the


Case
terms or 1:07-cv-00026-OWW-DLB
conditions Document
of the privileges of the306-2 Filedand
physician 03/09/2009 Page 177 of 205
surgeon at the health facility or its affiliate, or the threat
of any of these actions.

3)Entitled a physician and surgeon who has been discriminated


against pursuant to this bill, to reinstatement, reimbursement
for lost income resulting from any change in the terms or
conditions of his or her privileges caused by the acts of the
facility or its affiliate, and the legal costs associated with
pursuing the case.

FISCAL EFFECT : According to the Senate Appropriations


Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS : The Senate amendments clarify that this bill applies


to physicians and surgeons who are on the medical staff of a
health facility. The Senate Judiciary Committee analysis notes
that using the phrase "members of the medical staff" is
consistent with language in the Business and Professions Code.

According to the Senate Judiciary Committee, the Senate


amendment in #3) above was added by their committee to ensure
that the health facility peer review committee continues to
operate as it has under current law. As stated in the Senate
Judiciary Committee analysis:

Peer review is a process by which the medical staff


evaluates physicians with respect to the patient care
they provide.?Thus, the various provisions, such as
immunity from monetary liability and protection from
discovery?were enacted to encourage participation by
physicians in the peer review process and to ensure their
freedom from fear of retribution for participation.

The Senate amendments allowing a physician to petition the court

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AB03/09/2009
632 Page 178 of 205
Page 4

are based on the Senate Judiciary Committee's judgment that a


judge would be the party best suited to determine what specific
items among those actions sought by the health facility would
impact the peer review committee and or patient health and
safety.

Hospitals oppose this bill, as amended, because they argue it


will have a chilling affect on the peer review process. In
addition, they argue this bill is not necessary to protect
physicians against retaliation and discrimination because
existing law provides adequate protection. This bill is
supported by physician organizations that see a need for
clarifying existing law to protect physicians from retaliation
or discrimination, which they argue is expressed in a variety of
methods, including termination of a physician or surgeon's
hospital privileges.

According to the Senate Judiciary Committee, the amendments made


to this bill on September 5, 2007, were taken to deal with some
objections made by the hospitals regarding the impact of the
bill on the peer review. This analysis also states:

This bill would provide equivalent whistleblower protection to


a doctor that is currently available to an employee or patient
of a hospital facility and to other health care workers. The
amendments would provide for an in camera hearing of
evidentiary requests by a whistleblower complainant so that a
court may determine whether or not the evidentiary demands
would impede a peer review proceeding. The amendments would
further clarify that the bill would not be construed to limit
the ability of the medical staff to carry out its legitimate
peer review activities.

Analysis Prepared by : M. Anne Powell / HEALTH / (916)


319-2097

FN: 0003293
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Assembly Bill No. 632

Passed the Assembly September 11, 2007

Chief Clerk of the Assembly

Passed the Senate September 10, 2007

Secretary of the Senate

This bill was received by the Governor this day

of , 2007, at o’clock m.

Private Secretary of the Governor


Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 181 of 205
AB 632 —2—

CHAPTER

An act to amend Section 1278.5 of the Health and Safety Code,


relating to health care facilities.

legislative counsel’s digest


AB 632, Salas. Health care facilities: whistleblower protections.
Existing law provides for the licensure and regulation of health
care facilities, as defined, by the State Department of Public Health.
Under existing law, a health facility is prohibited from retaliating
or discriminating against an employee of a health facility that has
presented or initiated a complaint or initiated, participated, or
cooperated in an investigation or proceeding of a government entity
relating to the care, services, or conditions of the facility. Existing
law makes the violation of these provisions a crime and subject to
the assessment of a civil penalty.
This bill would prohibit a health facility from discriminating or
retaliating against any patient, employee, a member of the facility’s
medical staff, or any other health care worker of the facility because
that person (1) has presented a grievance, complaint, or report to
an entity or agency responsible for accrediting or evaluating the
facility or to any other governmental entity; or (2) has initiated,
participated, or cooperated in an investigation or administrative
proceeding related to the quality of care, services, or conditions
at the facility, as provided.
This bill would provide that an employee who has been
discriminated against in employment in violation of those
provisions shall be entitled to reinstatement, reimbursement for
lost wages and work benefits caused by the acts of the employer,
or to any remedy deemed warranted by the court pursuant to those
provisions, or to any applicable provisions of statutory or common
law, as specified. The bill would also entitle a health care worker
who has been discriminated against, in violation of those
provisions, and who prevails in court, to reimbursement for lost
income and any legal costs associated with pursuing the case, or
to any remedy deemed warranted by the court pursuant to those
provisions, or any other applicable statutory or common law.

94
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 182 of 205
—3— AB 632

Because the bill would expand the definition of a crime, it would


impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by
this act for a specified reason.

The people of the State of California do enact as follows:

SECTION 1. Section 1278.5 of the Health and Safety Code is


amended to read:
1278.5. (a)  The Legislature finds and declares that it is 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. The Legislature encourages this reporting in order to
protect patients and in order to assist those accreditation and
government entities charged with ensuring that health care is safe.
The Legislature finds and declares that whistleblower protections
apply primarily to issues relating to the care, services, and
conditions of a facility and are not intended to conflict with existing
provisions in state and federal law relating to employee and
employer relations.
(b)  (1)  No health facility shall discriminate or retaliate, in any
manner, against any patient, employee, member of the medical
staff, or any other health care worker of the health facility because
that person has done either of the following:
(A)  Presented 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.
(B)  Has initiated, participated, or cooperated in an investigation
or administrative proceeding related to, the quality of care, services,
or conditions at the facility that is carried out by an entity or agency
responsible for accrediting or evaluating the facility or its medical
staff, or governmental entity.
(2)  No entity that owns or operates a health facility, or which
owns or operates any other health facility, shall discriminate or

94
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AB 632 —4—

retaliate against any person because that person has taken any
actions pursuant to this subdivision.
(3)  A violation of this section shall be subject to a civil penalty
of not more than twenty-five thousand dollars ($25,000). The civil
penalty shall be assessed and recovered through the same
administrative process set forth in Chapter 2.4 (commencing with
Section 1417) for long-term health care facilities.
(c)  Any type of discriminatory treatment of a patient by whom,
or upon whose behalf, a grievance or complaint has been submitted,
directly or indirectly, to a governmental entity or received by a
health facility administrator within 180 days of the filing of the
grievance or complaint, shall raise a rebuttable presumption that
the action was taken by the health facility in retaliation for the
filing of the grievance or complaint.
(d)  (1)  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.
(2)  For purposes of this section, discriminatory treatment of an
employee, member of the medical staff, or any other health care
worker includes, but is not limited to, discharge, demotion,
suspension, or any unfavorable changes in, or breach of, the terms
or conditions of a contract, employment, or privileges of the
employee, member of the medical staff, or any other health care
worker of the health care facility, or the threat of any of these
actions.
(e)  The presumptions in subdivisions (c) and (d) shall be
presumptions affecting the burden of producing evidence as
provided in Section 603 of the Evidence Code.
(f)  Any person who willfully violates this section is guilty of a
misdemeanor punishable by a fine of not more than twenty
thousand dollars ($20,000).

94
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—5— AB 632

(g)  An employee who has been discriminated against in


employment pursuant to this section shall be entitled to
reinstatement, reimbursement for lost wages and work benefits
caused by the acts of the employer, and the legal costs associated
with pursuing the case, or to any remedy deemed warranted by the
court pursuant to this chapter or any other applicable provision of
statutory or common law. A health care worker who has been
discriminated against pursuant to this section shall be entitled to
reimbursement for lost income and the legal costs associated with
pursuing the case, or to any remedy deemed warranted by the court
pursuant to this chapter or other applicable provision of statutory
or common law. A member of the medical staff who has been
discriminated against pursuant to this section shall be entitled to
reinstatement, reimbursement for lost income resulting from any
change in the terms or conditions of his or her privileges caused
by the acts of the facility or the entity that owns or operates a health
facility or any other health facility that is owned or operated by
that entity, and the legal costs associated with pursuing the case,
or to any remedy deemed warranted by the court pursuant to this
chapter or any other applicable provision of statutory or common
law.
(h)  The medical staff of the health facility may petition the court
for an injunction to protect a peer review committee from being
required to comply with evidentiary demands on a pending peer
review hearing from the member of the medical staff who has filed
an action pursuant to this section, if the evidentiary demands from
the complainant would impede the peer review process or endanger
the health and safety of patients of the health facility during the
peer review process. Prior to granting an injunction, the court shall
conduct an in camera review of the evidence sought to be
discovered to determine if a peer review hearing, as authorized in
Section 805 and Sections 809 to 809.5, inclusive, of the Business
and Professions Code, would be impeded. If it is determined that
the peer review hearing will be impeded, the injunction shall be
granted until the peer review hearing is completed. Nothing in this
section shall preclude the court, on motion of its own or by a party,
from issuing an injunction or other order under this subdivision in
the interest of justice for the duration of the peer review process
to protect the person from irreparable harm.

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AB 632 —6—

(i)  For purposes of this section, “health facility” means any


facility defined under this chapter, including, but not limited to,
the facility’s administrative personnel, employees, boards, and
committees of the board, and medical staff.
(j)  This section shall not apply to an inmate of a correctional
facility or juvenile facility of the Department of Corrections and
Rehabilitation, or to an inmate housed in a local detention facility
including a county jail or a juvenile hall, juvenile camp, or other
juvenile detention facility.
(k)  This section shall not apply to a health facility that is a
long-term health care facility, as defined in Section 1418. A health
facility that is a long-term health care facility shall remain subject
to Section 1432.
(l)  Nothing in this section shall be construed to limit the ability
of the medical staff to carry out its legitimate peer review activities
in accordance with Sections 809 to 809.5, inclusive, of the Business
and Professions Code.
(m)  Nothing in this section abrogates or limits any other theory
of liability or remedy otherwise available at law.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

94
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Approved , 2007

Governor
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Assembly Bill No. 632

CHAPTER 683

An act to amend Section 1278.5 of the Health and Safety Code, relating
to health care facilities.

[Approved by Governor October 14, 2007. Filed with


Secretary of State October 14, 2007.]

legislative counsel’s digest


AB 632, Salas. Health care facilities: whistleblower protections.
Existing law provides for the licensure and regulation of health care
facilities, as defined, by the State Department of Public Health. Under
existing law, a health facility is prohibited from retaliating or discriminating
against an employee of a health facility that has presented or initiated a
complaint or initiated, participated, or cooperated in an investigation or
proceeding of a government entity relating to the care, services, or conditions
of the facility. Existing law makes the violation of these provisions a crime
and subject to the assessment of a civil penalty.
This bill would prohibit a health facility from discriminating or retaliating
against any patient, employee, a member of the facility’s medical staff, or
any other health care worker of the facility because that person (1) has
presented a grievance, complaint, or report to an entity or agency responsible
for accrediting or evaluating the facility or to any other governmental entity;
or (2) has initiated, participated, or cooperated in an investigation or
administrative proceeding related to the quality of care, services, or
conditions at the facility, as provided.
This bill would provide that an employee who has been discriminated
against in employment in violation of those provisions shall be entitled to
reinstatement, reimbursement for lost wages and work benefits caused by
the acts of the employer, or to any remedy deemed warranted by the court
pursuant to those provisions, or to any applicable provisions of statutory or
common law, as specified. The bill would also entitle a health care worker
who has been discriminated against, in violation of those provisions, and
who prevails in court, to reimbursement for lost income and any legal costs
associated with pursuing the case, or to any remedy deemed warranted by
the court pursuant to those provisions, or any other applicable statutory or
common law.
Because the bill would expand the definition of a crime, it would impose
a state-mandated local program.
The California Constitution requires the state to reimburse local agencies
and school districts for certain costs mandated by the state. Statutory
provisions establish procedures for making that reimbursement.

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Ch. 683 —2—

This bill would provide that no reimbursement is required by this act for
a specified reason.

The people of the State of California do enact as follows:

SECTION 1. Section 1278.5 of the Health and Safety Code is amended


to read:
1278.5. (a)  The Legislature finds and declares that it is 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. The Legislature encourages
this reporting in order to protect patients and in order to assist those
accreditation and government entities charged with ensuring that health care
is safe. The Legislature finds and declares that whistleblower protections
apply primarily to issues relating to the care, services, and conditions of a
facility and are not intended to conflict with existing provisions in state and
federal law relating to employee and employer relations.
(b)  (1)  No health facility shall discriminate or retaliate, in any manner,
against any patient, employee, member of the medical staff, or any other
health care worker of the health facility because that person has done either
of the following:
(A)  Presented 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.
(B)  Has initiated, participated, or cooperated in an investigation or
administrative proceeding related to, the quality of care, services, or
conditions at the facility that is carried out by an entity or agency responsible
for accrediting or evaluating the facility or its medical staff, or governmental
entity.
(2)  No entity that owns or operates a health facility, or which owns or
operates any other health facility, shall discriminate or retaliate against any
person because that person has taken any actions pursuant to this subdivision.
(3)  A violation of this section shall be subject to a civil penalty of not
more than twenty-five thousand dollars ($25,000). The civil penalty shall
be assessed and recovered through the same administrative process set forth
in Chapter 2.4 (commencing with Section 1417) for long-term health care
facilities.
(c)  Any type of discriminatory treatment of a patient by whom, or upon
whose behalf, a grievance or complaint has been submitted, directly or
indirectly, to a governmental entity or received by a health facility
administrator within 180 days of the filing of the grievance or complaint,
shall raise a rebuttable presumption that the action was taken by the health
facility in retaliation for the filing of the grievance or complaint.
(d)  (1)  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

93
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—3— Ch. 683

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.
(2)  For purposes of this section, discriminatory treatment of an employee,
member of the medical staff, or any other health care worker includes, but
is not limited to, discharge, demotion, suspension, or any unfavorable
changes in, or breach of, the terms or conditions of a contract, employment,
or privileges of the employee, member of the medical staff, or any other
health care worker of the health care facility, or the threat of any of these
actions.
(e)  The presumptions in subdivisions (c) and (d) shall be presumptions
affecting the burden of producing evidence as provided in Section 603 of
the Evidence Code.
(f)  Any person who willfully violates this section is guilty of a
misdemeanor punishable by a fine of not more than twenty thousand dollars
($20,000).
(g)  An employee who has been discriminated against in employment
pursuant to this section shall be entitled to reinstatement, reimbursement
for lost wages and work benefits caused by the acts of the employer, and
the legal costs associated with pursuing the case, or to any remedy deemed
warranted by the court pursuant to this chapter or any other applicable
provision of statutory or common law. A health care worker who has been
discriminated against pursuant to this section shall be entitled to
reimbursement for lost income and the legal costs associated with pursuing
the case, or to any remedy deemed warranted by the court pursuant to this
chapter or other applicable provision of statutory or common law. A member
of the medical staff who has been discriminated against pursuant to this
section shall be entitled to reinstatement, reimbursement for lost income
resulting from any change in the terms or conditions of his or her privileges
caused by the acts of the facility or the entity that owns or operates a health
facility or any other health facility that is owned or operated by that entity,
and the legal costs associated with pursuing the case, or to any remedy
deemed warranted by the court pursuant to this chapter or any other
applicable provision of statutory or common law.
(h)  The medical staff of the health facility may petition the court for an
injunction to protect a peer review committee from being required to comply
with evidentiary demands on a pending peer review hearing from the member
of the medical staff who has filed an action pursuant to this section, if the
evidentiary demands from the complainant would impede the peer review
process or endanger the health and safety of patients of the health facility
during the peer review process. Prior to granting an injunction, the court
shall conduct an in camera review of the evidence sought to be discovered
to determine if a peer review hearing, as authorized in Section 805 and

93
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Ch. 683 —4—

Sections 809 to 809.5, inclusive, of the Business and Professions Code,


would be impeded. If it is determined that the peer review hearing will be
impeded, the injunction shall be granted until the peer review hearing is
completed. Nothing in this section shall preclude the court, on motion of
its own or by a party, from issuing an injunction or other order under this
subdivision in the interest of justice for the duration of the peer review
process to protect the person from irreparable harm.
(i)  For purposes of this section, “health facility” means any facility
defined under this chapter, including, but not limited to, the facility’s
administrative personnel, employees, boards, and committees of the board,
and medical staff.
(j)  This section shall not apply to an inmate of a correctional facility or
juvenile facility of the Department of Corrections and Rehabilitation, or to
an inmate housed in a local detention facility including a county jail or a
juvenile hall, juvenile camp, or other juvenile detention facility.
(k)  This section shall not apply to a health facility that is a long-term
health care facility, as defined in Section 1418. A health facility that is a
long-term health care facility shall remain subject to Section 1432.
(l)  Nothing in this section shall be construed to limit the ability of the
medical staff to carry out its legitimate peer review activities in accordance
with Sections 809 to 809.5, inclusive, of the Business and Professions Code.
(m)  Nothing in this section abrogates or limits any other theory of liability
or remedy otherwise available at law.
SEC. 2. No reimbursement is required by this act pursuant to Section 6
of Article XIII B of the California Constitution because the only costs that
may be incurred by a local agency or school district will be incurred because
this act creates a new crime or infraction, eliminates a crime or infraction,
or changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a crime
within the meaning of Section 6 of Article XIII B of the California
Constitution.

93
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EXHIBIT 6: Defendants-Appellee’s Answering Brief in Mendiondo v. Centinela Hosp. Med. Ctr., 521
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USDC, ED Case No. 1:07-cv-00026 OWW TAG


DECLARATION OF EUGENE LEE IN SUPPORT OF SUPPLEMENTAL BRIEF PURSUANT TO COURT’S ORDER OF
MARCH 2, 2009 8
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Page 1

LEXSEE 2006 U.S. 9TH CIR. BRIEFS 55981

View U.S. Circuit Court Opinion

View Original Source Image of This Document

MARIE BERNADETTE MENDIONDO, Plaintiff and Appellant, vs. CENTINELA


HOSPITAL MEDICAL CENTER, et al., Defendants and Appellees.

Case No. 06-55981

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

2006 U.S. 9th Cir. Briefs 55981; 2007 U.S. 9th Cir. Briefs LEXIS 46

February 2, 2007

Appeal from the United States District Court for the Central District Of California, Hon.
Terry J. Hatter, Jr. Case No. CV 03-5757 TJH.

Initial Brief: Appellee-Respondent

VIEW OTHER AVAILABLE CONTENT RELATED TO THIS DOCUMENT: U.S. Circuit Court: Brief(s)

COUNSEL: [**1] Susan S. Azad (Bar No. 145471), Jennifer Blair (Bar No. 222125), LATHAM & WATKINS LLP,
633 West Fifth Street, Suite 4000, Los Angeles, CA 90071-2007, (213) 485-1234 (phone), (213) 891-8763 (fax).

Attorneys for Defendants and Appellees, Tenet Healthcare Corporation and Centinela Hospital Medical Center.

DISCLOSURES: CORPORATE DISCLOSURE STATEMENT

Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure, Defendants and Appellees Tenet Healthcare
Corporation ("Tenet") and Centinela Hospital Medical Center, by and through their undersigned counsel, certify as
follows:

Tenet was the parent corporation of Centinela Hospital Medical Center at the time of the events at issue in this
appeal. Centinela Hospital Medical Center has since been sold to third-party Centinela Freeman HealthSystem, which,
to the best of Tenet's knowledge, owns and operates the hospital today. Another Tenet entity, CVHS Hospital
Corporation, retained liability relating to this lawsuit as part of the sale.

Dated: February 1, 2007

Respectfully submitted,

LATHAM & WATKINS LLP

Susan S. Azad
Case 1:07-cv-00026-OWW-DLB Document 306-2 Filed 03/09/2009 Page 194 of 205
Page 2
2006 U.S. 9th Cir. Briefs 55981, *; 2007 U.S. 9th Cir. Briefs LEXIS 46, **1

Jennifer Blair

By: /s/ [Signature]


Susan S. [**2] Azad
Defendants and Appellees
Tenet Healthcare
Corporation and Centinela
Hospital Medical Center

TITLE: ANSWERING BRIEF OF APPELLEES TENET HEALTHCARE CORPORATION AND


CENTINELA HOSPITAL MEDICAL CENTER

TEXT: I.

STATEMENT OF JURISDICTION

Defendants and Appellees Centinela Hospital Medical Center ("CHMC") and Tenet Healthcare Corporation
("Tenet") (collectively, the "Hospital") concur in Plaintiff and Appellant Marie Bernadette Mendiondo's ("Mendiondo")
jurisdictional statement.

II.

STATEMENT OF THE CASE

Mendiondo and two other relators (whose claims have since been abandoned or dismissed) filed a qui tam
complaint (the "Complaint") premised on alleged violations of the federal and California False Claims Act (the "FCA").
After the United States declined to intervene, Mendiondo voluntarily dismissed her substantive FCA claims with
prejudice. Mendiondo, the sole plaintiff left in the case, is thus left only with claims for wrongful termination under the
FCA, the California Whistleblower Protection Act, and public policy. In the Complaint, Mendiondo alleges she
complained to her supervisors about wrongful conduct by the Hospital. As a result, Mendiondo [**3] claims she was
fired by the Hospital.

[*2] Mendiondo cannot maintain her FCA wrongful termination claims. In order to plead FCA retaliation,
Mendiondo must plead facts demonstrating she was terminated because she was either investigating or pursuing a false
claims action, which was filed or to be filed. This means Mendiondo must be able to plead facts demonstrating four
things: First, that there were colorable false claims to begin with, involving actionable payments by the government;
second, that Mendiondo was investigating or pursuing a false claims action based on these payments; third, that the
Hospital knew Mendiondo was investigating or pursuing such claims; and fourth, that Mendiondo was fired because of
it.

Mendiondo cannot make these factual showings given what she has already pleaded. First, none of the claims
alleged in the Complaint demonstrate that colorable false claims exist or that Mendiondo knew about them. Mendiondo
alleges she signed false medical director timesheets and inventoried defective defibrillators. None of these activities
involve claims for payment by the government. There are no allegations that Mendiondo knew about or investigated any
false [**4] claims for payment made to the government. [*3] Nor does Mendiondo allege facts that demonstrate the
Hospital knew about any such investigation into any such hypothetical false claims.

More fundamentally, the facts Mendiondo alleges, taken in the light most favorable to Mendiondo, demonstrate she
was fired because she complained to her supervisors about, and refused to engage in, cost-cutting measures she felt
were illegal and might affect patient care. Mendiondo has alleged the reason she was fired -because she complained and
refused to do what her employer told her to do. The district court thus properly dismissed her FCA retaliation claims.
Having properly dismissed Mendiondo's FCA claims, the district court was within its discretion to dismiss Mendiondo's
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Page 3
2006 U.S. 9th Cir. Briefs 55981, *3; 2007 U.S. 9th Cir. Briefs LEXIS 46, **4

supplemental state law claims as well.

III.

STATEMENT OF FACTS

A. The Allegations of the Complaint

The Complaint references allegations by three purported relators, two of whom chose not to pursue the action any
further and are thus not involved in this appeal. See Excerpts of Record ("ER") 2, at P 4; Appellant's Opening Brief
("AOB"), at 11 n.3. In addition, all of the FCA allegations (claims 1 [**5] and 2) have been dismissed with [*4]
prejudice. See ER 33-37. Thus, the sole remaining claims in this case are the wrongful termination claims asserted by
Mendiondo against CHMC and its parent corporation, Tenet. See generally AOB.

B. Mendiondo's Employment by the Hospital

Mendiondo alleges that she is a registered nurse who "was recruited by Apex Cardiology to build a new
cardio-vascular practice" at CHMC in March 2000. ER 13, at P 45. CHMC is an acute-care hospital located in Los
Angeles, California. See ER 3, at P 9. The parent corporation of CHMC at the time of Mendiondo's termination, Tenet,
owns and operates a number of hospitals in California and other states. See ER 3, at P 8. Mendiondo alleges that she
"was terminated [from her position at CHMC] by Tenet" on August 19, 2002. ER 14, at P 47; cf. AOB, at 10
("Mendiondo's employment at [CHMC] was terminated.").

C. The Claims: The Hospital's Alleged Conduct

The Complaint contains a section specifically addressing the facts supporting Mendiondo's wrongful termination
claims. This section is entitled "Facts Relating to Wrongful Termination of Mendiondo." ER 13-14, at PP 45-48. The
Complaint [**6] also mentions Mendiondo in two other paragraphs: paragraph 21 (alleging [*5] Mendiondo "signed
[false medical director] timesheets in fear of being fired if she refused") and paragraph 41 (alleging Mendiondo, while
taking inventory of defibrillators at CHMC, found "defibrillators so old they could not provide temporary pacemaker
support for patients in cardiac arrest"). ER 6, at P 21; ER 11-12, at P 41.

In support of her claims, Mendiondo alleges that "from the time Mendiondo started her employ, she was pressured
to cut costs and reduce services" and that she "was fired for her resistance to [Tenet's budget cuts that would jeopardize
patient care]." ER 13, at P 45. Mendiondo alleges that "she went to [CHMC] CEO, Harry Koenig, and warned that she
was 'being set up for failure' by being given mandates that were impossible to meet as to do [sic] would be below the
standard of care . . . and constitute civil and criminal violations." ER 13-14, at P 46. Mendiondo alleges that her
supervisor "demanded on a near daily basis that Mendiondo cut costs advising that if she did not she would be fired."
ER 14, at P 46.

Mendiondo alleges she was fired "for supposed failures to adequately [**7] perform her job," but then alleges this
reason was a ruse and that she was actually fired "because she demanded that minimum [*6] state and federal
standards of health care be maintained, and because of her investigation into facts relating to Tenet and CHMC's
submission of false claims and false records to the government." ER 14, at P 47. Mendiondo contends that the Hospital's
wrongful termination of her employment at CHMC amounts to retaliation against her in violation of (1) the federal
FCA, (2) the California FCA, (3) the California Whistleblower Protection Act, and (4) public policy. See ER 20-22, at
PP 77-93.

Notably, nowhere does Mendiondo allege facts demonstrating that the Hospital knowingly submitted false claims
for payment to the government, that Mendiondo ever investigated the submission of false claims for payment to the
government in furtherance of a potential FCA case or investigation, or that the Hospital ever had any knowledge of such
an investigation on Mendiondo's part. See ER 1-28.
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Page 4
2006 U.S. 9th Cir. Briefs 55981, *6; 2007 U.S. 9th Cir. Briefs LEXIS 46, **7

D. Procedural History

On August 13, 2003, Mendiondo, her fellow nurse Beverly Panaro ("Panaro"), and an unnamed, California-licensed
physician filed a sealed [**8] Complaint as qui tam relators. See ER 1-2. [*7] The three plaintiffs brought eleven
claims for relief n1 against Apex Cardiology, the Arthritis Institute, Tenet, CHMC, and Daniel Freeman Memorial
Hospital ("Freeman"). See ER 1-27. n2

n1 Although the Complaint's caption lists twelve claims (see ER 1), the body of the Complaint only contains
eleven claims for relief (see ER 25-27).
n2 According to Mendiondo, defendants Apex Cardiology, the Arthritis Institute, and Freeman were never
served with the Complaint. See AOB, at 11 n.5. Thus, CHMC and Tenet are the only Appellees in this appeal.

On November 23, 2005, the district court ordered the Complaint unsealed after the United States declined to
intervene in this action. See ER 29-32. Thereafter, Mendiondo served the Hospital with the Complaint and the parties
entered into a stipulation to dismiss the first and second claims (violation of the federal and California FCAs) with
prejudice. The dismissal was entered on April 26, 2006. [**9] See ER 33-37.

The district court's docket reflects Mendiondo's purported filing of an ineffectual first amended complaint on
December 30, 2003, for which no summons was issued. See ER 90. Mendiondo contends that "no such complaint was
located in the court's unsealed records and it was never served on Defendants." [*8] FAOB, at 11 n.4. Hence,
Mendiondo asserts that the only "operative complaint is the original complaint." Id.

On May 22, 2006, the Hospital filed a motion to dismiss the remaining claims (the "Motion") in the Complaint for
failure to state a claim under Federal Rules of Civil Procedure 12(b)(6), 9(b), and 8(e) . See ER 38-55. On June 28,
2006, the district court granted the Hospital's Motion with respect to Mendiondo's wrongful termination claims, and
further "ordered, sua sponte, that the supplemental claims be, and hereby are, dismissed." n3 ER 78-79. Thus, the court
dismissed the remaining third through seventh claims in the Complaint, all of which concerned Mendiondo's former
employment at CHMC and Freeman n4 : wrongful [**10] termination in violation of the federal FCA, wrongful
termination in violation of the California FCA, wrongful termination in violation of the California Whistleblower
Protection Act, wrongful termination in violation of [*9] public policy, and constructive termination in violation of
public policy. See ER 20-23, at PP 77-93. n5 On July 19, 2006, Mendiondo filed a notice of appeal, giving rise to the
present appeal. See ER 80-85.

n3 Mendiondo criticizes the district court's "eight line order," in which the "court gave no explanation for its
decision." AOB, at 3. However, the federal rules explicitly state that conclusions of law and findings of fact are
not required for such decisions on a motion to dismiss. See Fed. R. Civ. P. 52 ("Findings of fact and conclusions
of law are unnecessary on decisions of motions under Rule 12.").
n4 Mendiondo contends that she was constructively terminated from a second nursing position at Freeman. See
ER 14, at P 48.
n5 The district court also dismissed the eighth through eleventh claims in the Complaint, all of which concerned
Panaro's former employment at CHMC: constructive termination, wrongful termination in violation of the
federal FCA, wrongful termination in violation of the California FCA, and wrongful termination in violation of
the California Whistleblower Protection Act. See ER 23-26, at PP 94-115; ER 79. Panaro has not appealed the
dismissal of these claims.

[**11]
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Page 5
2006 U.S. 9th Cir. Briefs 55981, *9; 2007 U.S. 9th Cir. Briefs LEXIS 46, **11

IV.

SUMMARY OF THE ARGUMENT

Mendiondo's FCA claims were properly dismissed by the district court as futile. The federal and state FCAs impose
liability for knowingly submitting a false claim to the government in order to receive payment. Per the language of the
applicable statutes, civil actions under the FCA - including claims for retaliation - may be brought only against alleged
false claimants. Accordingly, an employee bringing a retaliation action must have been acting in furtherance of a
potential or realized FCA action in order to state a claim for relief. Moreover, a successful FCA retaliation claim cannot
[*10] be based on mere violations of laws, rules, or regulations in the absence of an actionable, fraudulent, knowingly
false misrepresentation to the government.

In this case, Mendiondo never alleges the requisite submission of a false claim by the Hospital to the government.
Instead, she alleges irrelevant, general wrongdoing on the part of the Hospital and further alleges that she was
terminated due to her complaints to her supervisors about such purported wrongdoing. Because of the anti-fraud nature
of the FCA, a heightened standard of specificity [**12] in pleading applies. However, the Complaint contains no
allegations that set forth specific facts about Mendiondo's investigation into or reporting of actionable false claims.
Moreover, Mendiondo never alleges that the Hospital was put on notice of her pursuit of an investigation under the
FCA, as is required to maintain this claim.

After the district court dismissed Mendiondo's only federal claim, it rightfully exercised its discretion to dismiss her
supplemental state law claims. Mendiondo's supplemental state law claims were also properly dismissed on the merits.
Mendiondo's California Whistleblower Protection Act claim fails because she does [*11] not and cannot allege any
facts that demonstrate she was terminated because of any complaints she made in connection to activities that
compromised the health and safety of patients at the Hospital. Further, the fate of Mendiondo's claims for wrongful
termination and constructive termination based on public policy depends upon her statement of proper statutory claim.
As Mendiondo failed to state such a claim, her dependent public policy claims likewise fail. Thus, the district court's
decision should be affirmed in its entirety. [**13]

V.

STATEMENT OF THE STANDARD OF REVIEW

A. Finality of Dismissal and Judgment

The Hospital concurs with Mendiondo's argument that the district court fully adjudicated the Motion and
demonstrated its intent to dispose of the entire action. See AOB, at 13-16. The Hospital further concurs with
Mendiondo's argument that the district court's failure to enter judgment does not preclude consideration of this appeal.
See AOB, at 16-17. Like Mendiondo, the Hospital believes that remanding this case for the sole purpose of obtaining
entry of judgment would result in the needless duplication of judicial [*12] efforts. Id. Therefore, the Hospital joins in
Mendiondo's request for a substantive review of this appeal.

B. Legal Standard for Dismissal

Dismissal under Rule 12(b)(6) is proper when a complaint demonstrates a "lack of a cognizable legal theory or the
absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696,
699 (9th Cir. 1990). In considering a motion to dismiss pursuant to Rule 12(b)(6), a court may assume the truth of the
factual allegations in the complaint, [**14] but "'conclusory allegations of law and unwarranted inferences are
insufficient to defeat a motion to dismiss."' In re Daou Sys., Inc. Sec. Litig., 411 F.3d 1006, 1013 (9th Cir. 2005)
(quoting In re VeriFone Sec. Litig., 11 F.3d 865, 868 (9th Cir. 1993)).

In federal court, most pleadings must contain merely "a short and plain statement of the claim showing that the
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pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2); see Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001).
However, Rule 9(b) requires fraud allegations to be "stated with particularity." Fed. R. Civ. P. 9(b). Because the federal
FCA, 31 U.S.C. § 3729 et seq., is an "anti-fraud statute," Rule 9(b)'s heightened pleading standard applies [*13] to
claims for relief brought under both the federal and California FCAs. n6 Bly-Magee, 236 F.3d at 1018. Non-compliance
with Rule 9(b) justifies a court's dismissal of claims "grounded in fraud." Vess v. Ciba-Geigy Corp. USA, 317 F.3d
1097, 1107 (9th Cir. 2003). n7

n6 Mendiondo alleges two wrongful termination claims: one under the federal FCA ("FFCA"), 31 U.S.C. § 3729
et seq., and one under the California FCA ("CFCA"), Cal. Gov't Code § 12651 et seq. Because the CFCA was
"patterned after the federal False Claims Act," it is "appropriate to look to precedent construing [the FFCA]" in
determining CFCA claims. Debro v. Los Angeles Raiders, 112 Cal. Rptr. 2d 329, 333 (Cal. App. 2001);
California v. Altus Finance, 36 Cal. 4th 1284, 1299 (2005). Therefore, the Hospital's analysis herein
encompasses both the FFCA and the CFCA and applies to both of Mendiondo's FCA wrongful termination
claims.
[**15]

n7 Federal Rule of Civil Procedure 8(e) provides another basis to justify the district court's dismissal of the
Complaint. The federal rules require each averment of a pleading to be "simple, concise, and direct." Fed. R.
Civ. P. 8(e); see McHenry v. Renne, 84 F.3d 1172, 1179 (9th Cir. 1996). If a complaint is "confusing,"
"argumentative, prolix, replete with redundancy and largely irrelevant," it can be dismissed under Rule 8(e). See
McHenry, 84 F.3d at 1177-79 (affirming dismissal of a complaint under Rule 8(e) because it was rambling,
confusing, and made "sweeping allegations" against the defendant; such a complaint made it impossible to
"figure out which Appellees were allegedly liable for which wrongs" and did "not make clear connections
between specific allegations and individual Appellees"). The vagueness and unnecessarily confusing nature of
Mendiondo's Complaint makes it impossible for the Hospital to formulate a proper answer or defense; therefore,
Rule 8(e) provides an additional basis for the dismissal of the Complaint.

[**16]

On appeal, this Court reviews de novo a dismissal pursuant to Rules 9(b) or 12(b)(6). See Vess, 317 F.3d at 1102.
[*14] However, "[d]enial of leave to amend is reviewed for an abuse of discretion." Gompper v. VISX, Inc., 298 F.3d
893, 898 (9th Cir. 2002).

VI.

ARGUMENT

A. Mendiondo Failed to State Any Claims

1. Mendiondo Failed to Allege a Viable Claim Under the Federal or California FCA

The federal and state FCAs impose liability for anyone who knowingly submits a false claim to the government in
order to receive payment. 31 U.S.C. § 3729(a)-(c); Cal. Gov't Code § 12651; see also United States ex rel. Hopper v.
Anton, 91 F.3d 1261, 1266 (9th Cir. 1996); Debro v. Los Angeles Raiders, 112 Cal. Rptr. 2d 329, 333 (Cal. App. 2001).
A "claim" under Section 3729 is defined as "any request or demand" for money or reimbursement of monies paid that is
made to an agent of the U.S. government. 31 U.S.C. § 3729(c); Cal. Gov't Code § 12651; see also Hopper, 91 F.3d at
1266 (holding [*15] that the FCA "attaches liability, [**17] not to underlying fraudulent activity, but to the "claim for
payment'"). n8
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n8 Even if Mendiondo's vague, sweeping allegations assert the existence of fraudulent conduct on the part of the
Hospital, dismissal of the FCA claims was proper because Mendiondo's Complaint fails to identify any actual,
specific false claims submitted to the government by the Hospital. Such allegations fail to meet the Rule 9(b)
heightened pleading requirements for FCA claims. See United States ex rel. Lee v. Smithkline Beecham Clinical
Labs., 245 F.3d 1048, 1051-52 (9th Cir. 2001) (affirming dismissal of FCA complaint because the allegations of
violations were too broad); Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 563-64 (6th Cir. 2003) (affirming
dismissal of FCA complaint because plaintiff-employee did not cite a single false claim submitted directly to the
government in his complaint).

The following Section of the FCA provides for civil actions that may be brought against alleged violators [**18] of
Section 3729. See 31 U.S.C. § 3730. Among the possibilities of relief provided by this Section is a remedy for an
"employee who is discharged . . . because of lawful acts done by the employee . . . in furtherance of an action under this
section, including investigation for . . . an action filed or to be filed under this section . . . ." 31 U.S.C. § 3730(h)
(emphasis added); see also Cal. Gov't Code § 12653. To assert an FCA wrongful termination claim, the
plaintiff-employee must prove that: (1) the employee was engaging in conduct protected under the [*16] FCA; (2) the
employer must have known that the employee was engaging such conduct; and (3) the employer must have
discriminated against the employee because of her protected conduct. See Hopper, 91 F.3d at 1269.

a. No FCA claim exists upon which to predicate Mendiondo's claims

In the Complaint, Mendiondo alleges numerous incidents of generally wrongful conduct, including that the
Hospital illegally induced physicians to join CHMC and Apex Cardiology by providing them directorships and reduced
rent on medical office space (see ER [**19] 5-9, at PP 16-34); manipulated patient care and admissions to maximize its
reimbursements (see ER 9-11, at PP 35-38); and attempted to maximize profits at the expense of patient care (see ER
11-13, at PP 39-44). However, Mendiondo never alleges the submission of a false claim by the Hospital to the
government, which is required in order to maintain a claim for relief under the FCA. n9

n9 Mendiondo's best effort at alleging an FCA violation (see ER 10-11, at P 38) states that the Hospital engaged
in billing fraud by placing patients in higher-paying ambulatory categories. However, Mendiondo provides no
facts regarding any actual ambulatory claims submitted by the Hospital to the government. Again, these generic
allegations do not satisfy the heightened pleading standard under Fed. R. Civ. P. 9(b). See Smithkline Beecham,
245 F.3d at 1051-52.

[*17] Mendiondo fails to make any connection between the Hospital's alleged wrongful [**20] conduct and the
actual submission of a false claim to Medicare or any other government program. Instead, Mendiondo relies solely on
broad and vague allegations of misconduct by the Hospital. Specifically, Mendiondo alleges that she was forced to sign
false medical director timesheets (which involve payments by the hospital to physicians) and that she inventoried
defective defibrillators. See ER 6, at P 21; ER 11-12, at P 41. She also makes vague allegations that she refused to abide
by cost-cutting measures that negatively would affect patient care. See ER 13, at P 45. These facts simply do not
demonstrate that a false claim for payment was made by the Hospital to the government.

Because the Complaint fails to allege facts demonstrating there were any colorable false claims for payment by the
Hospital to the government to begin with, Mendiondo does not (and cannot) allege the fraudulent underpinnings of her
case with sufficient particularity under Rule 9(b), on which to predicate her claims of FCA wrongful termination. See
United States ex rel. Lee v. Smithkline [*18] Beecham Clinical Labs., 245 F.3d 1048, 1051-52 (9th Cir. 2001)
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(affirming the dismissal [**21] of a FCA complaint under Fed. R. Civ. P. 9(b) because allegations of FCA violations
were too broad and provided no details of defendant's fraudulent behavior with regard to date, time, or place); Yuhasz v.
Brush Wellman, Inc., 341 F.3d 559, 563-64 (6th Cir. 2003) (affirming the dismissal of a FCA complaint pursuant to
Rules 12(b)(6) and 9(b) where plaintiff employee alleged fraudulent conduct on part of defendant employer, but did not
cite in his complaint a single false claim submitted directly to the government). n10

n10 Mendiondo cites the First Circuit case of United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360
F.3d 220 (1st Cir. 2004), for the proposition that a plaintiff does not need to meet the heightened Rule 9(b)
standard in order to state an FCA retaliation claim under Section 3730(h), as distinguished from claims brought
under the remaining provisions of Section 3730. See id. at 238 n.23. In turn, the Karvelas decision cites only one
ostensibly supporting case, which does not appear to address Rule 9(b). See ibid.; United States ex rel. Barrett v.
Columbia/HCA Healthcare Corp., 251 F. Supp. 2d 28 (D.D.C. 2003). The Hospital has been unable to locate
similar precedent in the Ninth Circuit, and submits that the more reasoned approach would be to require
specificity at least for pleading the underlying FCA violations that support Mendiondo's retaliation action, if not
also for the retaliation.

[**22]

At bottom, Mendiondo utterly fails to allege facts that demonstrate she was acting in furtherance of (investigating
or [*19] reporting) a potential FCA violation - i.e., the Hospital's knowing submission of a false claim for payment to
the government - as opposed to simply complaining to her supervisors. Mendiondo argues that the reach of the FCA
should be broader; however, "[v]iolations of laws, rules, or regulations alone do not create a cause of action under the
FCA" in the absence of an actionable, fraudulent, knowingly false misrepresentation to the government. See Hopper, 91
F.3d at 1266-67.

Thus, while Mendiondo argues that she need not show that a false claim was actually made by the Hospital,
Mendiondo has missed the point. Mendiondo must plead specific facts to demonstrate there was a colorable FCA
investigation in the first place. n11

n11 Mendiondo's citation to the factually inapposite case of Moore v. Cal. Inst. of Tech. Jet Propulsion Lab.,
275 F.3d 838 (9th Cir. 2002), is unavailing. In Moore, a former employee of a government contractor reported
his suspicions to NASA's Office of the Inspector General that his employer was engaged in fraud in connection
with the performance of the contractor's contract with NASA, a government agency. Id. at 846. The reported
fraud directly related to the contractor's right to receive payment under its contract with the government. Ibid.
Accordingly, the Ninth Circuit ruled that a reasonable jury could find an objective and subjective good-faith
belief that the government contractor "was attempting to defraud the government in violation of the False Claims
Act." Ibid. By contrast, Mendiondo complained to her supervisors that she did not want to engage in cost-cutting
measures that would affect patient care. Nothing in Mendiondo's allegations even remotely suggests that she was
pursuing colorable false claims for payment made to the government. Thus, unlike the plaintiff in Moore,
Mendiondo did not (and cannot) allege any facts that would suggest she was terminated because of protected
activity under the FCA.

[**23]

[*20] Mendiondo's conclusory allegation that she was "investigat[ing] . . . facts relating to Tenet and CHMC's
submission of false claims and false records to the government," in the absence of facts from which one could conclude
false claims for payment had been submitted by the Hospital to the government, is insufficient and can be disregarded
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by the court. See In re Daou Sys., Inc. Sec. Litig., 411 F.3d 1006, 1013 (9th Cir. 2005) ("'[C]onclusory allegations of
law and unwarranted inferences are insufficient to defeat a motion to dismiss.'") (citation omitted). Moreover,
Mendiondo's analysis completely ignores the premise of the FCA - and Section 3730, which permits her to bring actions
only in furtherance of the pursuit of a Section 3729 violation. See AOB, at 24-25. Mendiondo's vague allegations are
insufficient to proceed with her retaliatory discharge claims under the FCA. Regardless, the facts Mendiondo did plead
demonstrate that she was fired because she complained to her employer, not because she was investigating or pursuing a
false [*21] claims action. Given these facts, Mendiondo's Complaint cannot be "fixed" to state an FCA retaliation
[**24] claim. Thus, the district court properly exercised its discretion in dismissing Mendiondo's FCA retaliation
claims without leave to amend.

b. Mendiondo's Failure to Plead Notice Is Fatal to her Claims

Even if the Court were to find that Mendiondo properly pleaded that she was engaged in an investigation under the
FCAs, Mendiondo's failure to plead facts demonstrating that the Hospital was on notice of her investigation is fatal to
her claims. See Hopper, 91 F.3d at 1269; see also United States ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d
1514, 1522 (10th Cir. 1996) ("When seeking legal redress for retaliatory discharge under the FCAs, plaintiff has the
burden of pleading facts which would demonstrate that the Hospital had been put on notice that plaintiff was either
taking action in furtherance of a private qui tam action or assisting in an FCA action brought by the government."
(emphasis added)). Mere complaints by employees to employers about suspected fraudulent behavior does not qualify
as putting the employer "on notice" that the employee was acting "in furtherance of an action" under the FCA. [*22]
See Hopper, 91 F.3d at 1269; [**25] see also McKenzie v. BellSouth Telecommunications, Inc., 219 F.3d 508, 518 (6th
Cir. 2000) (citing United States ex rel. Yesudian v. Howard University, 153 F.3d 731, 743 (D.C. Cir. 1998)) ("[A]
plaintiff . . . must show that his employer was aware of his protected activity. Merely grumbling to the employer about
job dissatisfaction or regulatory violations does not satisfy the requirement - just as it does not constitute protected
activity in the first place."). Even if an employee makes numerous complaints, both oral and written, regarding an
employer's lack of compliance with federal and state regulations, such action is not considered sufficient to put an
employer "on notice" of the employee's furtherance of an FCA action. See Hopper, 91 F.3d at 1269.

In this case, Mendiondo fails to show that she put CHMC or Tenet "on notice" that she was acting "in furtherance"
of an FCA action. Instead, Mendiondo alleges only that she told CHMC's CEO that "she was 'being set up for failure' by
being given mandates that were impossible to meet as to do [sic] would be below the standard of care . . . and constitute
civil and criminal violations. [**26] " ER 13-14, at P 46. Mendiondo also alleges that she warned CHMC's Chief
[*23] Nursing Officer that to cut costs "would go below well-established standards of care." ER 13-14, at P 46. Finally,
Mendiondo alleges she "was fired for her resistance to [Tenet's insistence on budget cuts that would jeopardize patient
care]." ER 14, at P 45.

Tellingly, Mendiondo does not allege that she was investigating specific false claims or records submitted to the
government by the Hospital, let alone that the Hospital was aware of her investigation. Nor does Mendiondo allege that
she cooperated with a government investigation, testified in support of such an investigation, or assisted in an action
filed or to be filed under the FCA, and that the Hospital knew about it. Mendiondo's allegations are patently insufficient
to demonstrate the Hospital was on notice that Mendiondo was pursuing an FCA investigation or claim.

In the absence of colorable facts, Mendiondo resorts to making conclusory legal statements that she was fired
"because of her investigation into facts relating to Tenet and CHMC's submission of false claims . . . ." ER 14, at P 47.
This allegation does not provide any detail as [**27] to what specific "facts" or "false claims" Mendiondo was
"investigating," nor is there an allegation that her employer was on notice of any alleged FCA investigation. Because
the allegation in [*24] paragraph 47 is so vague and conclusory, it does not even meet ordinary, let alone heightened,
pleading standards. See In re Daou Sys., Inc. Sec. Litig., 411 F.3d 1006, 1013 (9th Cir. 2005) ("'[C]onclusory
allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.'") (citation omitted). As
such, Mendiondo's FCA wrongful termination claims fail to state a claim on which relief can be granted.
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2. Mendiondo Failed to State a Claim Under the California Whistleblower Protection Act

As recognized by the district court when it granted the Hospital's Motion, Mendiondo failed properly to plead a
claim under the California Whistleblower Protection Act. The California Legislature enacted this law "to encourage
patients, nurses, and other healthcare workers to notify government entities of suspected unsafe patient care and
conditions." Cal. Health & Safety Code § 1278.5(a). In furtherance of this purpose, [**28] "[n]o health facility shall
discriminate or retaliate in any manner against any . . . employee of the health facility because that . . . employee . . . has
presented a grievance or complaint, or has initiated or cooperated in any investigation or proceeding of any
governmental entity, relating to the care, services, [*25] or conditions of that facility." Id. § 1278.5(b)). In other words,
a claim for violation of the California Whistleblower Protection Act requires a causal connection between an employee's
grievance, complaint, or investigation and that employee's job termination. See id. § 1278.5(b), (d).

While Mendiondo alleges that the Hospital performed activities that compromised the health and safety of patients
at CHMC, Mendiondo fails to allege any facts that demonstrate she was terminated because of any complaints she made
in connection with such activities. Rather, Mendiondo expressly alleges that she was terminated "for supposed failures
to adequately perform her job." ER 14, at P 47. Mendiondo's allegations are so vague that it is unclear if Mendiondo
contends that she complained about any specific activities regarding patient safety. n12 Regardless, [**29] Mendiondo
cannot deny that [*26] she never alleged that she "notif[ied] government entities" about any "suspected unsafe patient
care and conditions" at CHMC. Cal. Health & Safety Code § 1278.5(a). Mendiondo simply is not a whistleblower
deserving of protection under California law, and the trial court's dismissal of this claim should be affirmed.

n12 Mendiondo argues that paragraph 47 of the Complaint contains sufficient allegations of an "investigation"
by Mendiondo and her resulting termination. See AOB, at 28-29. Paragraph 47 of the Complaint asserts that
Mendiondo was terminated "because she demanded that minimum state and federal standards of health care be
maintained, and because of her investigation into facts relating to Tenet and CHMC's submission of false claims
and false records to the government." ER 14, at P 47. These allegations fail to specify what standards, what
investigation, which false claims, and which false records.

3. [**30] Because Mendiondo's Statutory Claims Failed, Her Dependent Claims for Termination in
Violation of Public Policy Likewise Failed

Because the trial court concluded that Mendiondo failed to state a claim for wrongful termination under any statute,
Mendiondo's dependent claims for wrongful termination and constructive termination based on public policy
necessarily failed. In order to prevail on a claim for wrongful termination in violation of public policy, a plaintiff must
show that the defendant terminated her employment in violation of a policy that is (1) embodied in a statute or
constitutional provision, (2) beneficial to the public, (3) articulated at the time of discharge, and (4) fundamental. See
Rivera v. Amtrak, 331 F.3d 1074, 1078 (9th Cir. 2003); see also Yuhasz, 341 F.3d at 568-69 (holding that because
plaintiff failed to state a claim for [*27] retaliation with respect to the FCA, plaintiff's common law public policy
claims should also be dismissed). Hence, the fate of Mendiondo's public policy claims must dovetail with her FCA and
California Whistleblower Protection Act claims. As Mendiondo failed properly to allege a violation [**31] of any of
these statutes, her claims for wrongful and constructive termination in violation of public policy rightly were dismissed
by the trial court.

B. The District Court Had Discretion to Dismiss Appellee's Pendent State Law Claims

Because the district court properly dismissed the sole federal claim in Mendiondo's action, it was well within its
discretion to also dismiss the state law claims over which it had only supplemental jurisdiction. See ER 78-79
(dismissing California law claims sua sponte). Thus, the district court's decision to decline jurisdiction serves as an
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independent basis to affirm the dismissal of Mendiondo's state law claims.

The Ninth Circuit's "practice [is] to dismiss state law claims once the federal claim has been resolved." Danner v.
Himmelfarb, 858 F.2d 515, 523 (9th Cir. 1988); see also United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966)
("Needless decisions of [*28] state law should be avoided . . . . Certainly, if the federal claims are dismissed before
trial, . . . the state claims should be dismissed as well."). While a federal court may retain state law claims if doing so
promotes interests [**32] such as judicial economy and convenience, this Court has upheld a district court's discretion
to dismiss state law claims even "after 3 1/2 years of discovery and pretrial wrangling." Danner, 858 F.2d at 524.
Indeed, "Supreme Court and Ninth Circuit precedent teaches us that the district court is in the best position to judge the
extent of resources invested in a case and that, therefore, the district court's discretion ought not be lightly disturbed."
Schneider v. TRW, Inc., 938 F.2d 986, 993-94 (9th Cir. 1991). Accordingly, this Court "review[s] a district court's
decision not to accept pendent jurisdiction for abuse of discretion." Sinaloa Lake Owners Ass'n v. City of Simi Valley, 70
F.3d 1095, 1102 (9th Cir. 1995).

In this case, the district court did not abuse its discretion in dismissing the supplemental state law claims, which
depended upon Mendiondo's ability to state a valid FCA claim. As discussed above, Mendiondo cannot save her only
federal claim; hence, her state law claims should be adjudicated in the California court system. Because this case did not
progress to the point of discovery, much less "pretrial [*29] [**33] wrangling," the interests of judicial economy and
duplication of effort are not implicated. Thus, the district court properly declined to retain the pendent claims, and its
decision should not be disturbed.

VII.

CONCLUSION

For the foregoing reasons, the Hospital respectfully requests that this Court affirm the dismissal of the Complaint
and each alleged claim for relief therein.

Dated: February 1, 2007

Respectfully submitted,

LATHAM & WATKINS LLP

Susan S. Azad
Jennifer Blair

By: /s/ [Signature]


Susan S. Azad
Defendants and Appellees
Tenet Healthcare
Corporation and Centinela
Hospital Medical Center

[*30] STATEMENT OF RELATED CASES

Defendants and Appellees Tenet Healthcare Corporation and Centinela Hospital Medical Center know of no case
pending in this Court that is related to this appeal, as defined in Circuit Rule 28-2.6.

Dated: February 1, 2007


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2006 U.S. 9th Cir. Briefs 55981, *30; 2007 U.S. 9th Cir. Briefs LEXIS 46, **33

Respectfully submitted,

LATHAM & WATKINS LLP

Susan S. Azad
Jennifer Blair

By: /s/ [Signature]


Susan S. Azad
Defendants and Appellees
Tenet Healthcare
Corporation and Centinela
Hospital Medical Center

CERTIFICATION OF COMPLIANCE WITH [**34] FED. R. APP. P. 32(a)(7)(C) AND CIRCUIT


RULE 32-1 (CASE NO. 02-55629)

I certify that pursuant to Federal Rule of Appellate Procedure 32(a)(7)(C) and Ninth Circuit Rule 32-1, the attached
Answering Brief is double-spaced (except for headings and footnotes), proportionately spaced, and has been prepared
using 14-point Times New Roman font. The main portion of this brief, which responds to Appellants' Opening Brief,
contains 5,832 words.

Microsoft Word was used to compute the word count.

Dated: February 1, 2007

LATHAM & WATKINS LLP

Susan S. Azad
Jennifer Blair

By: /s/ [Signature]


Susan S. Azad
Defendants and Appellees
Tenet Healthcare
Corporation and Centinela
Hospital Medical Center

PROOF OF SERVICE

I am employed in the County of Los Angeles, State of California. I am over the age of 18 years and not a party to
this action. My business address is Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, CA
90071-2007.

On February 1, 2007, I served the following document(s) described as:

ANSWERING BRIEF OF APPELLEES TENET HEALTHCARE [**35] CORPORATION AND


CENTINELA HOSPITAL MEDICAL CENTER

by serving a true copy of the above-described document(s) in the following manner:


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of 205
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2006 U.S. 9th Cir. Briefs 55981, *30; 2007 U.S. 9th Cir. Briefs LEXIS 46, **35

I am familiar with the office practice of Latham & Watkins LLP for collecting and processing documents for
mailing with the United States Postal Service. Under that practice, documents are deposited with the Latham & Watkins
LLP personnel responsible for depositing documents with the United States Postal Service; such documents are
delivered to the United States Postal Service on that same day in the ordinary course of business, with postage thereon
fully prepaid. I deposited in Latham & Watkins LLPs' interoffice mail a sealed envelope or package containing the
above-described document(s) and addressed as set forth below in accordance with the office practice of Latham &
Watkins LLP for collecting and processing documents for mailing with the United States Postal Service:

Co-counsel for Appellant


Marcus A. Mancini, Esq.
Christopher Barnes, Esq.
Mancini & Associates
15303 Ventura Blvd., Suite 600
Sherman Oaks, CA 91403

Co-counsel for Appellant


Gerald M. Serlin, Esq.
Douglas G. Benedon, Esq.
Kelly R. Horwitz, Esq.
Benedon & Serlin
21700 [**36] Oxnard Street, Suite 1290
Woodland Hills, CA 91367

I declare that I am employed in the office of a member of the Bar of, or permitted to practice before, this Court at
whose direction the service was made and declare under penalty of perjury that the foregoing is true and correct.

Executed on February 1, 2007, at Los Angeles, California.

/s/ [Signature]
Guadalupe Y. Soriano