1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RALPH PETERSON, Case No. 3:21-cv-04908-WHO
8 Plaintiff, ORDER GRANTING MOTION FOR 9 v. SUMMARY JUDGMENT
10 SUTTER MEDICAL FOUNDATION, et Re: Dkt. No. 149 al., 11 Defendants.
12 13 Plaintiff Ralph Peterson filed this case against the defendants—Sutter Bay Medical 14 Foundation and Sutter Bay Hospitals, as well as the three individual physicians Neil Stollman, 15 Rod Perry, and Philip Rich—asserting various claims arising out of his resignation from 16 employment with Sutter in April 2009. After several rounds of motions to dismiss, his remaining 17 claims are for First Amendment and Due Process violations related to the disciplinary proceedings 18 carried out by the defendants before Peterson’s resignation, as well as allegations concerning 19 kickbacks that the defendants accepted but Peterson refused to accept. The defendants filed the 20 pending motion for summary judgment on both of Peterson’s remaining claims. Because there is 21 no genuine dispute of fact contesting that the statute of limitations bars the claims, the defendants 22 did not act under state law, and there was no kickback “scheme” related to Peterson’s employment 23 or resignation, the claims fail, and the motion is GRANTED. 24 BACKGROUND 25 I. FACTUAL BACKGROUND 26 The following facts are undisputed. 27 Peterson was a medical doctor who practiced gastroenterology and worked for Summit 1 to 2009. Declaration of Ralph Peterson (“Peterson Decl.”) [Dkt. No. 154] ¶¶ 4-5, 8. As of 2009, 2 Peterson had “Hospital Consultation” privileges at Sutter, which are similar to outpatient 3 privileges, and well as privileges to perform specific procedures like colonoscopies. Id. ¶ 5; 4 Deposition of Ralph Peterson (“Peterson Depo.”) [Dkt. No. 149-28 Exs. F, G; Dkt. No. 154-6] 5 50:15-51:9; (“Application”) [Dkt. No. 149-2, Dkt. No. 154-1]. The agreement provided that the 6 “exercise of all privileges may occur only in the context of prevailing bylaws, rules and 7 regulations and hospital policies.” Application. Peterson received a copy of those rules and 8 regulations, Peterson Depo. 65:20-23, which provided in part that he was required to find another 9 physician to provide “coverage” for any of his patients that were admitted in-patient, see [Dkt. No. 10 149-20] at -306. 11 In early February 2009, Peterson met with Perry, then Chair of the Department of 12 Medicine, and Stollman, then Chief of Gastroenterology, to discuss concerns about certain patients 13 and practices, including withdrawal times for sedation procedures, whether Peterson should have 14 anesthesiologists during certain procedures, and whether he had sufficient “coverage” for his 15 patients. See Peterson Depo. 83:15-25 (confirming they spoke about patients, withdrawal times, 16 and coverage); [Dkt. Nos. 149-13, 149-18] (letter confirming topics discussed). 17 On March 2, 2009, Perry sent Peterson a letter about their February meeting with Stollman, 18 noting that failure to meet the coverage requirements “constitutes grounds for corrective action” 19 include that Peterson’s staff “membership and clinical privileges may be in jeopardy” if he failed 20 to meet his coverage obligations by the end of March. [Dkt. Nos. 149-13, 149-18]; see also 21 Peterson Depo. 82:9-25. 22 On March 25, 2009, Peterson sent Stollman a letter asking if Stollman’s medical group 23 could help provide coverage for Peterson’s patients. [Dkt. No. 149-19]. 24 On March 15, 24, and 25, 2009, three of Peterson’s patients were admitted to Summit. 25 Peterson Decl. ¶¶ 15-16; see also [Dkt. No. 149-3]. Peterson did not provide care for these 26 patients and did not have coverage in place for another doctor to provide care. Peterson Decl. 27 ¶¶ 16-18; [Dkt. No. 149-3]. 1 those three instances, noting it was “intolerable” that Peterson failed to provide care or coverage 2 for the patients, and requesting that Peterson stipulate to suspending his clinical privileges until he 3 found coverage. [Dkt. No. 149-3]. 4 On March 30, 2009, Peterson sent a letter to Rich acknowledging his prior conversations 5 with and letter from Perry, discussing the three patient incidents, contesting the portrayal of 6 Peterson as (in Peterson’s words) “a physician who does not care for his patient, neglects them and 7 readily abandons them,” and declaring he intended to continue scheduling patients at Summit. 8 [Dkt. No. 149-4]. 9 On April 1, 2009, Rich sent a letter to Peterson, suspending his privileges due to lack of 10 coverage and Peterson’s “unwillingness or inability to understand the problems at issue and your 11 responsibilities toward your patients.” [Dkt. No. 149-5]. The letter stated that the suspension 12 would be considered by the hospital’s Medical Executive Committee on April 6, 2009, that 13 Peterson’s presence was “required” at the meeting, and that Peterson would have an opportunity to 14 make a statement and provide written materials to the committee if he wanted. Id. 15 On April 6, 2009, Peterson sent Rich a letter stating that he resigned at 5:30 p.m. “due to 16 inability to secure coverage.” [Dkt. No. 149-6]. 17 On April 8, 2009, Rich sent Peterson a letter informing him that a report was filed with the 18 Medical Board of California (“MBC”) “as required by law” due to “the circumstances surrounding 19 [his] resignation.” [Dkt. No. 149-7]. Rich attached the report to the letter, which showed a check 20 mark next to the box, “Following notice of an impending investigation based on information 21 indicating medical disciplinary cause or reason . . . Licentiate resigned from staff.” Id. 22 On May 28, 2009, Peterson sent a letter through counsel to Perry, explaining the events 23 from March and stating that the hospital’s conduct undermined Peterson’s reputation, caused him 24 financial damages due to inability to practice, and noting that he would have claims of tortious 25 interference with economic gain as well as federal constitutional claims against the defendants. 26 [Dkt. No. 149-22]. Perry responded through counsel, noting that the report to the MBC was 27 required by state law, stating that the defendants would respond to a lawsuit from Perry by filing 1 for damages. [Dkt. No. 149-23]. Peterson’s counsel responded, noting Peterson “believes he was 2 set up in an elaborate conspiracy to terminate his hospital privileges” and that he has “a myriad of 3 . . . federal and state claims that he may bring.” [Dkt. No. 149-24]. 4 Subsequently, in November 2012, Peterson sued the individual doctor defendants for 5 claims related to the end of his employment at Sutter and the disciplinary proceedings, including 6 extensive allegations that the doctor defendants steered low-income patients of color away from 7 Sutter in favor of wealthier white patients, which benefitted the Sutter entities. (“2012 Compl.”) 8 [Dkt. No. 149-28] Ex. 35; Peterson Depo. 180:12-182:21. The defendants filed an anti-SLAPP 9 motion to strike, and in response Peterson submitted an opposition and declaration that stated he 10 cared for underserved, low income, and African American patients using Medi-Cal insurance; the 11 defendants did not want these patients because they provided less compensation for the hospital; 12 and the defendants unfairly subjected him to “peer review” and then “remov[ed]” him from the 13 hospital so that the hospital would not have to serve those patients.1 [Dkt. No. 149-28] Ex. 34. 14 In November 2019, a previously sealed federal court lawsuit against Sutter was made 15 publicly available. [Dkt. No. 154-32]; see also [Dkt. Nos. 154-22, -23]. That whistleblower 16 complaint was initially filed on September 10, 2014, and brought causes of action under the 17 federal and California state False Claims Acts, alleging that Sutter unlawfully paid kickbacks to 18 doctors and entities that referred patients to Sutter. (“Qui Tam Compl.”2) [Dkt. No. 154-20]. It 19 alleged in part that Sutter implemented a “scheme” in which it paid or provided to physicians 20 “unlawful kickbacks, excessive compensation, free employees and other illegal incentives” for 21 referring patients to Sutter. See, e.g., id. ¶ 85. Subsequent media coverage indicated that the case 22 settled. See [Dkt. Nos. 154-22, -23]. 23 On December 13, 2020, the news program “60 Minutes” aired an episode discussing a 24 lawsuit filed by the California Attorney General against Sutter, in which the state declared that 25 1 The defendants state in their motion that the anti-SLAPP motion to strike was granted and the 26 case was dismissed, Mot. 10:8, but they point to no supporting evidence nor do they request judicial notice of relevant court documents. Peterson does not mention the dismissal of that case. 27 1 Sutter merged with and acquired many hospitals, physicians, and clinics to reduce competition, 2 raise prices, and “use its market power to dominate, to dictate” and then to “jack[] up prices.” 3 [Dkt. No. 154-24]. Peterson watched this program. Peterson Decl. ¶ 23. 4 II. PROCEDURAL BACKGROUND 5 Peterson filed this case on June 26, 2021. [Dkt. No. 1]. I granted in part and denied in part 6 the first round of motions to dismiss, dismissing some defendants with prejudice. [Dkt. No. 74]. I 7 subsequently granted in part and denied in part another round of motions to dismiss, dismissing 8 with prejudice all but the remaining defendants here, and dismissing all claims against these 9 defendants except for Peterson’s First Amendment and Due Process claims. [Dkt. No. 102]. That 10 order also granted the defendants’ anti-SLAPP motion to strike. Id. 11 The defendants filed their answers. (“Sutter Answer”) [Dkt. No. 105]; (“Perry Stollman 12 Answer”) [Dkt. No. 106]; (“Rich Answer”) [Dkt. No. 107]. Discovery ensued. 13 Now the defendants move for summary judgment on Peterson’s two remaining claims. 14 (“Mot.”) [Dkt. No. 149]. Peterson opposed. (“Oppo.”) [Dkt. No. 153]. The defendants replied. 15 (“Repl.”) [Dkt. No. 161]. I held a hearing at which counsel for both parties appeared. 16 LEGAL STANDARD 17 Summary judgment on a claim or defense is appropriate “if the movant shows that there is 18 no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of 19 law.” Fed. R. Civ. Proc. 56(a). In order to prevail, a party moving for summary judgment must 20 show the absence of a genuine issue of material fact with respect to an essential element of the 21 non-moving party’s claim, or to a defense on which the non-moving party will bear the burden of 22 persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has 23 made this showing, the burden then shifts to the party opposing summary judgment to identify 24 “specific facts showing there is a genuine issue for trial.” Id. The party opposing summary 25 judgment must then present affirmative evidence from which a jury could return a verdict in that 26 party’s favor. Anderson v. Liberty Lobby, 477 U.S. 242, 257 (1986). 27 On summary judgment, the Court draws all reasonable factual inferences in favor of the 1 determinations, the weighing of the evidence, and the drawing of legitimate inferences from the 2 facts are jury functions, not those of a judge.” Id. However, conclusory and speculative testimony 3 does not raise genuine issues of fact and is insufficient to defeat summary judgment. See 4 Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). 5 DISCUSSION 6 I. STATUTE OF LIMITATIONS 7 The defendants argue that both remaining claims are barred by the statute of limitations 8 and seek summary judgment in their favor for that reason alone. See Mot. 14:7-16:24. Peterson 9 opposes, arguing that the delayed discovery doctrine, continuing violations doctrine, and equitable 10 tolling all apply to delay accrual of his claims or toll the statute of limitations. See Oppo. 9:25- 11 13:7. 12 The statute of limitations is an affirmative defense and so the defendants bear the burden of 13 proof to warrant summary judgment in their favor. United States v. Real Prop., Titled in the 14 Names of Godfrey Soon Bong Kang & Darrell Lee, 120 F.3d 947, 949 (9th Cir. 1997); Menzel v. 15 Scholastic, Inc., No. 17-CV-05499-EMC, 2019 WL 6896145, at *2 (N.D. Cal. Dec. 18, 2019); 16 Pollock v. Tri-Modal Distrib. Servs., Inc., 11 Cal. 5th 918, 945, 491 P.3d 290, 305 (2021) 17 (California law). The defendants properly asserted the statute of limitations defense in their 18 answers. See Fed. R. Civ. Proc. 8(c)(1); Sutter Answer 41:21-42:13; Stollman Perry Answer 25:7- 19 27; Rich Answer 24:10-25:2. 20 The basis for Peterson’s First Amendment and Due Process claims is 42 U.S.C. § 1983, 21 and the statute of limitations for federal civil rights claims brought under § 1983 is “governed by 22 the forum state’s statute of limitations for personal injury actions.” Bonelli v. Grand Canyon 23 Univ., 28 F.4th 948, 951 (9th Cir. 2022) (citation omitted). As the parties agree, California’s 24 personal injury statute of limitations is two years from the accrual date. Cal. Code Civ. Proc. 25 § 335.1; see also Butler v. Nat’l Cmty. Renaissance of Cal., 766 F.3d 1191, 1198 (9th Cir. 2014). 26 Federal law governs when the claim accrues, which is “when the plaintiff knows or has reason to 27 know of the injury which is the basis of the action.” Bonelli, 28 F.4th at 952 (quoting Lukovsky v. 1 This federal accrual standard mirrors California’s discovery rule, which some courts apply 2 in § 1983 cases,3 that “postpones accrual of a cause of action until the plaintiff discovers, or has 3 reason to discover, the cause of action.” Fox v. Ethicon Endo-Surgery, Inc., 35 Cal. 4th 797, 807, 4 110 P.3d 914, 920 (2005) (citing Norgart v. Upjohn Co., 21 Cal. 4th 383, 397, 981 P.2d 79, 88 5 (1999)). Under California law, “[a] plaintiff has reason to discover a cause of action when he or 6 she ‘has reason at least to suspect a factual basis for its elements,’” and the “suspicion of one or 7 more of the elements of a cause of action, coupled with knowledge of any remaining elements, 8 will generally trigger the statute of limitations period.” Id. (citing Norgart, 981 P.2d at 88-89 & 9 n.3). To employ the discovery rule, the plaintiff “must conduct a reasonable investigation of all 10 potential causes of that injury,” and if that investigation “would have disclosed a factual basis for a 11 cause of action, the statute of limitations begins to run on that cause of action when the 12 investigation would have brought such information to light.” Id. at 921 (citations omitted). 13 Ignorance of the legal theories underlying the cause of action is “irrelevant” to the delayed 14 discovery analysis. Norgart, 981 P.2d at 88 n.2. 15 The federal standard for equitable tolling also borrows the rules from the forum state, and 16 in California equitable tolling applies “when, possessing several legal remedies [the plaintiff], 17 reasonably and in good faith, pursues one designed to lessen the extent of [the plaintiff’s] injuries 18 or damage.” Butler, 766 F.3d at 1204 (quoting Addison v. State, 21 Cal. 3d 313, P.2d 941, 943 19 (1978)). To equitably toll the statute of limitations, “a plaintiff must establish ‘timely notice, and 20 lack of prejudice, to the defendant, and reasonable and good faith conduct on the part of the 21 plaintiff.’” Id. (quoting McDonald v. Antelope Valley Cmty. Coll. Dist., 45 Cal. 4th 88, 194 P.3d 22 1026, 1033 (2008)). 23 To analyze whether the defendants met their burden to establish that summary judgment is 24 warranted in their favor based on the statute of limitations defense, see Real Prop., 120 F.3d at 25 949; Pollock, 491 P.3d at 305, I must first assess when the claim accrued, which requires 26
27 3 See, e.g., James v. Contra Costa Cnty., No. 22-CV-05939-SI, 2023 WL 4410504, at *2 (N.D. 1 determining what injuries Peterson is asserting—something that is not entirely clear from the 2 papers, the record, the hearing, the SAC, or prior litigation in this case. As best I can understand 3 it, and as informed by counsel’s representations at the hearing, Peterson contends that the 4 defendants had a policy in which Sutter paid “kickbacks” to doctors, including the three individual 5 physician-defendants in this suit, who intentionally steered away less profitable patients such as 6 those using Medi-Cal insurance, and that Sutter and the complying physicians punished doctors 7 that refused to steer patients and accept kickbacks. See Oppo. 1:11-9:10, 14:20-25; see also SAC 8 ¶¶ 168-70, 179. Peterson believes that this policy led to the violation of his First Amendment 9 rights because he refused to accept the kickbacks and instead advocated for indigent and low- 10 income patients with Medi-Cal insurance, including by educating them about their medical rights,4 11 for which he was punished and subjected to disciplinary proceedings: by carrying out disciplinary 12 proceedings, Peterson asserts that the defendants interfered with and violated Peterson’s First 13 Amendment rights to advocate for patients. See Oppo. 2:19-3:5, 14:20-25; SAC ¶¶ 166-70, 179- 14 80. And Peterson believes his Due Process rights were violated because, while he voluntarily 15 resigned and gave up his medical privileges, he did so without knowing that the disciplinary 16 processes were instigated by the kickback scheme, and that the proceedings did not provide 17 adequate process because they were marred by fraud and fabrication. See Oppo. 20:12-21:26; 18 SAC ¶¶ 199, 224, 232.5 19 With respect to timing, based on Peterson’s theories of liability, the injuries from these 20 remaining defendants were caused when he was subjected to disciplinary proceedings for 21 advocating for patients instead of participating in the kickback scheme, and when those 22 proceedings were tainted by fabrication and fraud—both of which occurred in April 2009, or 23 would have if he had not first resigned. See [Dkt. Nos. 149-5, -6]. Accordingly, the record shows 24 4 In his deposition, Peterson frames this as his refusal to “upcode” his patients by unnecessarily 25 using and charging for an anesthesiologist, and he asserts that his refusal was motivated in part by his desire to protect the “Medi-Cal budget.” See Peterson Depo. 193:1-24, 195:10-96:14. 26
5 To clarify, I cite the allegations in the SAC to understand and explain the framework of 27 Peterson’s theories of liability and injury because these were not well explained by the opposition 1 that Peterson’s civil rights injuries occurred in April 2009 and accrued then. Peterson does not 2 appear to contest this.6 And because there appears to be no evidence in the record suggesting 3 these injuries occurred at a different time, I find that the claims accrued in 2009 and were subject 4 to a two-year statute of limitations, see Butler, 766 F.3d 1191, 1198, and so the defendants met 5 their burden to prove the statute of limitations bars the claims, see Real Prop., 120 F.3d at 949; 6 Pollock, 491 P.3d at 305. 7 Rather than point to evidence in the record that would create a dispute of fact regarding the 8 accrual date, Peterson mostly relies on the discovery doctrine to argue that there is a genuine 9 dispute of fact whether he could have known of these claims and injuries before the unsealing of 10 Qui Tam Case in 2019 and the news show in 2020. He argues that because the qui tam 11 investigations were under seal, he could not have previously discovered the kickback scheme or 12 known that it was the basis of his First Amendment and Due Process injuries. See Oppo. 7:25- 13 9:10; 10:11-12:10. Previously I found that these allegations were sufficiently plausible to deny the 14 defendants’ motion to dismiss based on the statute of limitations because Peterson alleged that the 15 kickback policy was secret and so he could not have known about it and the related injuries earlier. 16 See [Dkt. No. 75] 20:28-21:11. But now, after an opportunity for discovery and with plenty of 17 evidence in the record, I find that this kickback theory—including when Peterson learned of the 18 theory as well as its general existence and relationship with his injuries—cannot delay the accrual 19 date or toll the statute of limitations to allow him to bring his claims now. 20 First, the discovery doctrine does not provide for accrual once the plaintiff knows of all 21 facts and causes of his injury—it accrues when the plaintiff has reason to know of the injury that is 22 the basis for his action. See Bonelli, 28 F.4th at 952. Peterson’s claims accrued when he knew or 23
24 6 To the extent that Peterson argues that his First Amendment rights were violated when he was precluded from “testifying” on behalf of another physician, Dr. Bonner, see Peterson Decl. ¶ 27; 25 Oppo. 19:7-10, he fails to point to any evidence at all that explains either what this injury was or how it affected him, and he likewise fails to explain how that injury is connected to the 26 defendants, see SAC ¶¶ 99, 181, 234 (alleging that the MBC prevented Peterson from testifying on Bonner’s behalf). As the defendants point out, the SAC asserts that this testimony incident 27 occurred in January 2013, see id., so even if this somehow constituted a First Amendment injury, 1 had reason to know of his injuries—being subjected to sham disciplinary proceedings because of 2 his patient advocacy and related refusal to participate in the patient steering and kickback 3 scheme—not when he learned the specific contours of the kickback policy. He sued the individual 4 defendants in 2012 based on similar allegations and explained the role of the entity defendants in 5 that suit:7 in April 2013 he explained in his papers and declaration that he was punished and 6 subject to a “charade” disciplinary process for refusing to participate in the financially-motivated 7 “scheme” perpetrated by the defendants (except Rich) to steer high compensation patients to 8 Sutter and steer low compensation patients—like those treated by Peterson on Medi-Cal 9 insurance—away from Sutter. [Dkt. No. 149-28] Ex. 34 2:10-3:19, 4:21-25, ¶¶ 7-12. At least by 10 April 2013, then, he believed that he was injured by sham disciplinary proceedings and his refusal 11 to participate in the steering scheme, even if he did not know the specific contours of his kickback 12 policy allegations. Therefore, even if Peterson did not or could not have known about the “secret” 13 kickback policy until the unsealing of the AG investigation and related media reports, he knew of 14 the basis for his First Amendment and Due Process injuries, and so the claims accrued two years 15 after the date of his April 2013 declaration. See Bonelli, 28 F.4th at 952. 16 Second, even if I accept that Peterson could not have known the bases for and causes of his 17 injuries until he learned of the kickback policy, the tolling doctrines do not apply because there is 18 nothing in the record that shows there was a kickback scheme, let alone evidence connecting the 19 scheme to Peterson’s injuries. See id.; see also Fox, 110 P.3d at 921 (explaining that under 20 California law, the discovery rule applies only where a reasonable investigation into the causes of 21 the injury “would have disclosed a factual basis for a cause of action” (emphasis added)). To the 22 extent that Peterson relies on the unsealing of the Qui Tam Case or its underlying allegations, or 23 the related media reports as evidence of the kickback policy, see Oppo. 11:10-12:10; [Dkt. Nos. 24 25 7 While the allegations in Peterson’s 2012 complaint focused more on the race-based motivations 26 of the defendants rather than on their financial motivations, it is clear from the complaint that Peterson believed he was injured because the allegedly racist actions in the steering scheme and 27 sham disciplinary processes were motivated by the defendants’ financial incentives to steer away 1 154-11, -20-238], these documents show allegations, not evidence, and so are insufficient to create 2 a genuine dispute of fact concerning the existence of any such policy or any connection to 3 Peterson’s career and resignation. Peterson conceded in his deposition that he did not know if the 4 investigation involved the defendants. See Peterson Depo. 195:7-96:14. And while there was a 5 settlement in the Qui Tam Case, it appears there was no admission of liability or concession of the 6 existence of any policy, see [Dkt. No. 154-23], and Peterson points to no contradictory evidence. 7 Additionally, the news program from 2020 concerned investigations into Sutter’s anticompetitive 8 business practices, including mergers and acquisitions, and is unrelated to Peterson’s kickback 9 allegations. [Dkt. No. 154-24]; [Dkt. No. 149-35] ¶ 3; see also Peterson Dep. 194:12-21 10 (conceding that the individual defendants were not mentioned in the news program). The most 11 that the Qui Tam Case and news show demonstrate is that there were investigations into Sutter’s 12 general practices, which is not enough to create a dispute of material fact whether these practices 13 actually existed, let alone that they caused Peterson’s injuries. Indeed, the documents that 14 Peterson cites suggest that the investigations concerned whether Sutter was paying external 15 doctors to refer patients to Sutter and then paying kickbacks to those external doctors—not 16 whether Sutter was paying kickbacks to its own doctors to refer indigent patients out, as Peterson 17 suggests. See Qui Tam Compl. ¶¶ 85-199; [Dkt. No. 154-23]. 18 Further, no record evidence creates a genuine dispute whether the defendants participated 19 in a kickback policy or whether such a policy caused Peterson’s injuries. Each piece of evidence 20 that Peterson cites shows standard salaries and stipends paid to medical staff.9 Though Peterson’s 21 8 Peterson’s request for judicial notice says that Dkt. No. 154-21 is “an Order filed” in the qui tam 22 case, but he attached a copy of my prior order in this case. At any rate, he does not cite that exhibit as including evidence establishing the existence of kickbacks and their connection to his 23 injuries and the defendants. See generally Oppo.
24 9 See Peterson Depo. 193:1-24 (Peterson stating he refused to “upcode” and use anesthesiologists when unnecessary); Deposition of Rod Perry (“Perry Depo.”) [Dkt. No. 154-4] 35:5-9 (Perry 25 received stipend for role as department chair), 72:8-73:21 (Perry received stipend for role as chief of general medical); Deposition of Neil Stollman (“Stollman Depo.”) [Dkt. No. 154-5] 14:16-20 26 (Stollman received payment for role as department chair), 17:3-7 (Stollman and gastroenterologists received $1,700 for each 24 hour period on call); Deposition of Philip Rich 27 (“Rich Depo.”) [Dkt. No. 154-8] 19:19-21:21 (Rich or his medical group was compensated when 1 declaration asserts these were unlawful kickbacks, there is no other evidence in the record10—that 2 he points to or that I could find—that even alludes to these being anything but valid business 3 payments. See also Bohmker v. Oregon, 903 F.3d 1029, 1044 (9th Cir. 2018) (“A conclusory, 4 self-serving affidavit, lacking detailed facts and any supporting evidence, is insufficient to create a 5 genuine issue of material fact.” (quoting FTC v. Publ’g Clearing House, Inc., 104 F.3d 1168, 1171 6 (9th Cir. 1997) (as amended)). Peterson cannot create a dispute of fact from mere conjecture and 7 speculation that the payments were unlawful or unfair without pointing to a single line in the 8 record that supports that theory. Accordingly, there is no evidence suggesting that the kickback 9 policy or related injuries form the “basis of the action,” see Bonelli, 28 F.4th at 952, and so there is 10 no evidence showing that the discovery of the scheme provides the accrual date for Peterson’s 11 claims. 12 Peterson also argues that his claims should be tolled under the doctrine of equitable tolling 13 because he has been pursuing his rights diligently and because there were extraordinary 14 circumstances that prevented timely filing. See Oppo. 12:19-13:3. This argument is foreclosed 15 for the same reasons that his claims are not saved by discovery doctrine—he knew at least by the 16 filing of his declaration in 2013 of all the facts underlying his injuries and claims, and to the extent 17 that Peterson learned new information in 2019 and 2020, he fails to point to evidence connecting 18 that information to his injuries. Accordingly, there was no new information to discover, and so to 19 the extent that he was pursuing his rights diligently, he already pursued them—in the case he filed 20 in 2012. 21 Finally, Peterson cites the continuing violations doctrine as a reason to toll the statute of 22 limitations but failed to explain in his papers or at the hearing why it applies, given that his 23 injuries arose in 2009 and he knew of them by the latest in 2012, let alone cite record evidence 24 was aware of media reports concerning kickbacks), 87:13-16 (Rich received a salary). 25
10 See, e.g., Declaration of Philip Rich (“Rich Decl.”) [Dkt. No. 149-1] ¶ 13 (Rich received stipend 26 from Summit Medical Staff for role as President); Declaration of Rod Perry (“Perry Decl.”) [Dkt. No. 149-11] ¶ 9 (Perry received stipend from Summit Medical Staff for compensation for role as 27 Chair); Declaration of Neil Stollman (“Stollman Decl.) ¶ 11 (Stollman received stipend from 1 showing that there is a genuine dispute of material fact to foreclose summary judgment. See 2 Oppo. 12:11-18; see also Knox v. Davis, 260 F.3d 1009, 1013 (9th Cir. 2001) (“[The] mere 3 ‘continuing impact from past violations is not actionable.’” (citations omitted)). 4 Accordingly, Peterson’s claims ran in April 2015 at the latest. They are barred by the two- 5 year statute of limitations and the defendants’ motion is GRANTED. 6 II. COLOR OF STATE LAW 7 The defendants argue that Peterson’s 42 U.S.C. § 1983 claims also fail because each 8 defendant is a private actor and there is no evidence showing that any defendant acted under color 9 of state law, as required to establish liability under § 1983. See Mot. 17:1-21:4. In opposition, 10 Peterson asserts that the defendants’ private conduct constituted state action under the joint action, 11 governmental compulsion or coercion, and government nexus standards. See Oppo. 13:8-18:10. 12 “A § 1983 plaintiff must demonstrate a deprivation of a right secured by the Constitution 13 or laws of the United States, and that the defendant acted under color of state law.” Kirtley v. 14 Rainey, 326 F.3d 1088, 1092 (9th Cir. 2003) (citing West v. Atkins, 487 U.S. 42, 48 (1988)). 15 “While generally not applicable to private parties, a § 1983 action can lie against a private party 16 when” the private party “is a willful participant in joint action with the State or its agents.” Id. 17 (quoting Dennis v. Sparks, 449 U.S. 24, 27 (1980)). 18 There are four tests that identify whether a private party acted under color of state law: “(1) 19 public function; (2) joint action; (3) governmental compulsion or coercion; and (4) governmental 20 nexus.” Rawson v. Recovery Innovations, Inc., 975 F.3d 742, 747 (9th Cir. 2020) (quoting Kirtley, 21 326 F.3d at 1092). “Satisfaction of any one test is sufficient to find state action, so long as no 22 countervailing factor exists.” Id. (quoting Kirtley, 326 F.3d at 1092). “At bottom, the inquiry is 23 always whether the defendant has exercised power possessed by virtue of state law and made 24 possible only because the wrongdoer is clothed with the authority of state law.” Id. at 748 25 (quoting West, 487 U.S. at 49) (internal quotation marks omitted). 26 Before answering the question of whether the defendants acted under color of law, courts 27 first “must identify the ‘specific conduct of which the plaintiff complains.’” Id. at 747 (quoting 1 discussed above, Peterson complains that his First Amendment rights were violated when he was 2 subjected to disciplinary proceedings for advocating for patients rather than participating in the 3 kickback scheme, and that his Due Process rights were violated when he resigned his privileges 4 without knowing about the scheme and was subjected to disciplinary processes marred by 5 fabrication and fraud. The “relevant inquiry” is therefore whether the defendants’ roles in 6 initiating and carrying out the disciplinary proceedings and related actions constituted state action. 7 See id. 8 a. Joint Action 9 “[T]he joint action test . . . consider[s] whether ‘the state has so far insinuated itself into a 10 position of interdependence with the private entity that it must be recognized as a joint participant 11 in the challenged activity.’” Kirtley, 326 F.3d at 1093 (quoting Parks Sch. of Bus., Inc. v. 12 Symington, 51 F.3d 1480, 1486 (9th Cir. 1995)); see also Rawson, 975 F.3d at 748 (same). “This 13 occurs when the state knowingly accepts the benefits derived from unconstitutional behavior.” 14 Kirtley, 326 F.3d at 1093 (quoting Parks Sch., 51 F.3d at 1486). 15 I previously denied the defendants’ motion to dismiss because I found that Peterson 16 plausibly alleged joint action between the defendants and the MBC by pleading that they engaged 17 in an illicit, improper strategy to subject Peterson to the disciplinary powers of the state agency 18 because he refused to accept kickbacks. See [Dkt. No. 75] at 12-13. But after discovery, the 19 defendants point to evidence showing that their peer review proceedings were initiated by the 20 defendants to address coverage issues and focus on patient safety,11 which suggests no role played 21 by and no connection with the MBC. There is also no evidence showing that the defendants had 22 any role in the MBC’s subsequent investigation besides the initial filing of the statutorily 23 11 See [Dkt. Nos. 149-21-24] (letters between Peterson’s counsel and defendants’ counsel showing 24 that coverage issues led to the inquiries, suspension, and disciplinary hearings); Peterson Depo. 289:14-290:8 (explaining that Peterson and Rich discussed coverage issues on date of resignation, 25 without mentioning MBC); Rich Decl. ¶¶ 25-35 (Rich explaining the initial inquiries and suspension were due to coverage and quality of care issues); [Dkt. Nos. 149-3-5] (letters 26 confirming same, including Peterson confirming the conversations concerned “COVERAGE” issues); Perry Decl. ¶¶ 20-21 (explaining that initial inquiries concerned coverage issues); [Dkt. 27 No. 149-18] (letter confirming same); Stollman Decl. ¶¶ 26-29 (explaining that initial inquiries 1 mandated 805 report.12 2 After discovery and the opportunity to depose the defendants and investigate their 3 documents, Peterson has come up with no contradictory evidence sufficient to show a genuine 4 dispute of fact concerning joint action. Rather, his opposition relies almost entirely on the 5 allegations in the Qui Tam Case, see Oppo. 15:15-17:4, which are not evidence and cannot create 6 a dispute of fact. He also cites records that he says show that none of the defendants have a 7 disciplinary record, see id. 16:20-25, and even if he had not withdrawn some of these records, 8 [Dkt. No. 156], it is unclear how showing the defendants have not been professionally disciplined 9 could create a dispute of fact whether they jointly participated with the MBC to deprive Peterson 10 of his rights. Similarly, noting that a partner at the law firm that represented the defendants is also 11 a member of the MBC, see Oppo. 17:5-9; [Dkt. Nos. 154-29, 30], does not create a dispute of fact 12 concerning joint participation, particularly where that attorney apparently did not join the MBC or 13 the law firm until years after the underlying actions in this case, see Repl. 10 n.21. Even if I credit 14 Peterson’s declaration that Rich submitted a falsified 805 report to the MBC, this is insufficient to 15 show joint action because it does not show that the MBC knowingly accepted benefits derived 16 from any unconstitutional behavior, see Kirtley, 326 F.3d at 1093, in part because Peterson 17 concedes that the MBC cleared him of wrongdoing, and in part because it is not clear what 18 benefits the MBC was deriving, see Peterson Decl. ¶ 35. 19 Accordingly, the evidence shows that any injuries were caused by the actions of the 20 defendants alone and the state was not a joint actor; there is no genuine dispute of fact. 21 b. Governmental Compulsion or Coercion 22 “Governmental compulsion or coercion may exist where the State ‘has exercised coercive 23 power or has provided such significant encouragement, either overt or covert, that the choice must 24 12 See Peterson Depo. 303:17-304:17 (Peterson had no information that defendants discussed 25 anything with MBC other than 805 report); Rich Decl. ¶¶ 38-42 (Rich confirming he submitted 805 report as required by law but had no other communication with MBC); [Dkt. Nos. 149-7-8] 26 (letters to Peterson with and about MBC report); Perry Decl. ¶ 25 (no communication with MBC); Stollman Decl. ¶ 33 (no communication with MBC); see also Cal. Bus. & Prof. Code § 805(c)(1) 27 (requiring medical peer review bodies to file 805 report within 15 days after licentiate resigns 1 in law be deemed to be that of the State.’” Rawson, 975 F.3d at 748 (quoting Blum v. Yaretsky, 2 457 U.S. 991, 1004 (1982)). “The compulsion test considers whether the coercive influence or 3 ‘significant encouragement’ of the state effectively converts a private action into a government 4 action.” Kirtley, 326 F.3d at 1094 (citation omitted). 5 Peterson argues that the compulsion and coercion tests apply because when he “refused to 6 participate in upcoding, kickbacks[,] or steering,” he was subjected to disciplinary proceedings 7 through the MBC. But the MBC did not initiate investigations against compliant doctors. See 8 Oppo. 17:20-25. This argument seems to imply that the MBC coerced Peterson’s actions, not 9 those of the defendants; indeed it is not clear how these allegations could show that the state 10 compelled, coerced, or encouraged the private actions carried out by the defendants. See Rawsom, 11 975 F.3d at 748; Kirtley, 326 F.3d at 1094. Generously, it seems possible that Peterson is arguing 12 that the MBC’s general participation in the Medi-Cal/kickback scheme is enough to show it 13 encouraged or compelled the defendants’ participation in the scheme, though Peterson does not 14 explain (or point to evidence showing) why the MBC would do that. But even if this established 15 governmental compulsion or coercion—it does not—there is no evidence that the MBC 16 participated in any such scheme, in part because there is no evidence of such a scheme. Supra Part 17 I. As addressed, supra Part II.A, the evidence shows that the defendants initiated the disciplinary 18 proceedings, but nothing shows that the MBC played a role in the hospital’s processes. And while 19 Rich filed the 805 report, there is no evidence that suggests the filing of that report was caused by 20 the coercive power of the MBC as opposed to the procedure required by law. See Cal. Bus. & 21 Prof. Code § 805. Indeed, because it is legally required, the Ninth Circuit has suggested that the 22 filing of the 805 report alone is “irrelevant” to addressing whether medical defendants acted under 23 color of state law. See Pinhas v. Summit Health, Ltd., 894 F.2d 1024, 1034 (9th Cir. 1989), aff’d, 24 500 U.S. 322 (1991). 25 Accordingly, it is not clear how this theory could support Peterson’s argument, but it is 26 clear that there is no evidence that genuinely disputes that the defendants acted independently and, 27 with respect to the 805 report, were merely following the law. This standard is not met. c. Governmental Nexus 1 Finally, the nexus test is “satisfied where the court finds a sufficiently close nexus between 2 the state and the private actor so that the action of the latter may be fairly treated as that of the 3 State itself.” Rawson, 975 F.3d at 748 (citation and quotation marks omitted); see also Kirtley, 4 326 F.3d at 1094-95 (same). 5 Again, Peterson fails to explain why or how this test applies and he cites no evidence in 6 support. See Oppo. 17:26-18:7. Merely arguing that there is “a factual issue” concerning whether 7 “the Sutter defendants acted in concert or conspiracy with the MBC members” is insufficient to 8 show a nexus between the MBC conduct and that of the defendants. Id. To the extent that 9 Peterson intends to argue that there is a nexus between the MBC’s actions and the defendants’ 10 actions because both participated in the Medi-Cal and kickback scheme, he again fails to cite any 11 evidence showing that the scheme existed, the defendants participated, or that the scheme caused 12 his injuries. 13 * * * 14 For those reasons, there is no genuine dispute of fact suggesting that the defendants acted 15 under color of state law.13 The motion is GRANTED on this basis. 16 III. FIRST AMENDMENT 17 Peterson argues that his First Amendment claim is one for retaliation. See Oppo. 18:13-17. 18 The defendants assert that even if this claim survives the arguments addressed above, it fails 19 because there is no evidence supporting any elements of the claim. 20 To prevail on a First Amendment retaliation claim, a plaintiff must show (1) she was 21 engaged in constitutionally protected speech; and (2) there was “a ‘causal connection’ between the 22 government defendant’s ‘retaliatory animus’ and the plaintiff’s ‘subsequent injury.’” See Nieves 23 v. Bartlett, 139 S. Ct. 1715, 1722 (2019)); Capp v. Cnty. of San Diego, 940 F.3d 1046, 1053 (9th 24 Cir. 2019).14 “Specifically, a plaintiff must show that the defendant’s retaliatory animus was ‘a 25
26 13 Peterson does not argue that the public action test applies.
27 14 Capp requires that, to state a claim, a plaintiff also allege that “the defendant’s actions would 1 “but-for” cause, meaning that the adverse action against the plaintiff would not have been taken 2 absent the retaliatory motive.’” Capp, 940 F.3d at 1053 (quoting Nieves, 139 S. Ct. at 1722). 3 Even if Peterson’s First Amendment claim survived the statute of limitations, and even if 4 he showed that the injuries were caused by the defendants acting under color of state law, 5 Peterson’s First Amendment claim still fails for many of the same reasons addressed above: he 6 does not point to any evidence supporting his theories of liability. As addressed, he explains his 7 injury as being subjected to disciplinary proceedings for advocating for patients instead of 8 participating in the kickback scheme, and possibly as being precluded from testifying on behalf of 9 Dr. Bonner. Supra n.6. If Peterson’s patient advocacy constituted protected speech—which I do 10 not find, in large part because it is not entirely clear what “advocacy” he did, due to his failure to 11 point to evidence—the claim fails because he points to no evidence that he participated in 12 “advocacy” activities, see Oppo. 18:13-19:17, nor could I find any in the record.15 And there is no 13 evidence of causation, see Capp, 940 F.3d at 1053, because Peterson’s own uncontradicted 14 testimony affirms that he did not tell any of the defendants about his advocacy activities before his 15 resignation, see Peterson Depo. 288:15-290:25;16 see also Rich Decl. ¶ 43 (confirming he did not 16 know of advocacy activities); Stollman Decl. ¶ 35 (same); Perry Decl. ¶ 26 (same). 17 If Peterson’s First Amendment injury was instead caused by being prohibited from 18 testifying on Bonner’s behalf, and even if this constituted protected speech, the claim still fails for 19 lack of evidence of causation. See Nieves, 139 S. Ct. at 1722. Peterson provides only general and 20 vague statements about the Bonner testimony. See Peterson Decl. ¶¶ 26-27. The allegations in the 21 SAC seem to suggest that Peterson believes the MBC prevented him from testifying at Bonner’s 22
23 Nieves, 139 S. Ct. at 1722, but Peterson’s claims fail regardless for the reasons addressed in this section. 24
15 At the hearing, Peterson’s counsel seemed to argue this advocacy was on behalf of patient B.E., 25 but he failed to point to evidence of such advocacy or that this advocacy caused Peterson’s injuries. 26
16 Peterson’s deposition testimony confirms lack of causation because it shows that he believed the 27 disciplinary proceedings and his resignation were caused by the coverage issues, not any advocacy 1 hearing, though it is not entirely clear why. See SAC ¶ 99; see also id. ¶¶ 123-24 (MBC retaliated 2 against Bonner for certain activities and revoked license), ¶ 124 (Medi-Cal terminated Bonner’s 3 provider status), ¶¶ 11, 181, 234 (MBC investigator threatened Peterson with discipline if he 4 testified at Bonner hearing). Of course, the complaint allegations are not evidence and cannot 5 create a dispute of fact, and at any rate there is no evidence connecting the testimony with the 6 defendants as opposed to the MBC, let alone showing the defendants caused the issue. See Nieves, 7 139 S. Ct. at 1722 (requiring a causal connection between the defendant’s “animus” and the 8 plaintiff’s injury). 9 Therefore, the First Amendment claim fails because there is no evidence in the record 10 supporting Peterson’s theories of his injuries. The motion is GRANTED on this basis. 11 IV. DUE PROCESS 12 Peterson’s theory of liability for his Due Process claim is that he did not know of the 13 underlying kickback scheme when he resigned his privileges, so he gave up those rights 14 unknowingly, and that the disciplinary process was unfair because it was marred by fabrication 15 and fraud. See Oppo. 19:18-21:26. 16 To prevail on a due process claim based on deprivation of property, a plaintiff must prove 17 “(1) a property interest protected by the Constitution; (2) a deprivation of the interest by the 18 government; and a (3) lack of required process.” Ulrich v. City & Cnty. of San Francisco, 308 19 F.3d 968, 974 (9th Cir. 2002) (citing Portman v. Cnty. of Santa Clara, 995 F.3d 898, 904 (9th Cir. 20 1993)). 21 I previously found that Peterson sufficiently alleged deprivation of a property interest 22 because he plausibly alleged that any waiver of his rights (meaning relinquishment of his property 23 rights) was not done knowingly. [Dkt. No. 75] 13:24-14:3. I will assume without finding that his 24 medical privileges at Sutter were a constitutionally protected property interest. Even if the 25 deprivation of that interest was caused by the government—which I do not find, supra Part II—the 26 claim still fails because Peterson points to no evidence that there was a lack of required process. 27 His theory appears to be that there was no process because he did not know about the kickback 1 addressed, Peterson points to no evidence showing that kickbacks existed, let alone that his refusal 2 || to accept them, played any role in the disciplinary proceedings. His theory that he relinquished his 3 || rights unknowingly because he did not know of the kickbacks at the time fails because he does not 4 show there were any kickbacks that he could have known about or that affected the proceedings or 5 his decision. His new theory that his consent was vitiated by fraud, see Oppo. 21:3-13, fails for 6 || similar reasons—he points to no such evidence. Nor is there any evidence that the defendants or 7 even the MBC fabricated anything in the proceedings leading up to or after his resignation, or 8 otherwise failed to give him the required process. 9 Accordingly, like his other claims, this one too fails for lack of evidence. The motion is 10 || GRANTED on this basis.!” 11 CONCLUSION 12 For the above reasons, the motion is GRANTED. Judgment will be entered accordingly. 13 IT IS SO ORDERED. 14 Dated: October 6, 2023 3 15 . 16 Wy i 0 5 " Ifiam H. Orrick nited States District Judge 18 19 20 21 22 23 24 25 26 27 '7 Because I grant the defendants’ motion for summary judgment on the above grounds, I need not 28 address their argument concerning specific intent under § 1983 or whether they are a separate entity from the medical staff. See Mot. 23:11-24:19.