May 06, 2015
Area(s) of Interest: Licensing & Regulatory Issues
On April 30, 2015, the California Court of Appeal reinstated a $5.7 million jury verdict plus attorneys fees to Michael W. Fitzgibbons, M.D., in the case of Michael W. Fitzgibbons, M.D. v. Integrated Health Care Holdings, Inc. (IHHI), in which the California Medical Association (CMA) filed an amicus brief.
CMA’s brief, filed in March 2014, argued that that a hospital must be held vicariously liable for the intentional, retaliatory actions of the hospital’s CEO against a vocal physician leader on the hospital’s medical staff. It asked the court to reverse the judgment of the trial court and restore the jury verdict in favor of Dr. Fitzgibbons.
In 2005, troubled Tenet Corp. sold Western Medical Center of Santa Ana (WMC) and three other Orange County hospitals to IHHI. Dr. Fitzgibbons, then chief of WMC’s medical staff, became concerned that patient care might suffer due to IHHI's financial condition and the manner in which it undertook the purchase of his hospital. IHHI sued Dr. Fitzgibbons for defamation after he raised this concern among medical staff leadership. A California appellate court dismissed the lawsuit and ordered IHHI to pay Dr. Fitzgibbons' attorneys fees incurred in defending himself. The appellate court, agreeing with an amicus brief that CMA filed in the case, held that IHHI's lawsuit violated Dr. Fitzgibbons' protected speech activity under California's anti-SLAPP (Strategic Lawsuits Against Public Participation) statute.
Two weeks after the appellate court issued its opinion, in June 2006, Dr. Fitzgibbons was arrested by the Santa Ana police after he was reported for allegedly waving a gun in traffic in an act of apparent road rage. It was later discovered that the hospital CEO had laundered hospital funds and used them to hire a thug to plant the gun and drugs in the doctor’s car in an effort to intimidate and discredit him.
In a lawsuit brought against IHHI, a jury in February 2013 awarded Dr. Fitzgibbons $5.7 million in actual and punitive damages for the hospital CEO's actions. But in April of that year, the trial court reversed the jury’s decision, saying it could not hold IHHI legally responsible for paying damages because the outrageous acts committed by the hospital CEO were too “startling and unforeseeable” to fall within the scope of a hospital CEO’s employment.
According to CMA’s brief, the trial court misapplied the law on employer liability over the actions of employees by failing to see the broader context of the actions of the CEO as part of a campaign by a hospital officer to retaliate against a vocal physician leader. The evidence in the case demonstrated that the CEO used his discretion and the authority of the hospital to marshal IHHI funds, under the guise of a hospital project, to wage a campaign of retaliation against the doctor for challenging the manner in which IHHI managed the hospital and for prevailing in IHHI’s slander lawsuit.
In the brief, CMA urged the court to restore the jury verdict in favor of Dr. Fitzgibbons. “The abuses of power by hospitals or their CEOs come in many forms,” the brief said. CMA argues that making the hospital vicariously responsible for its CEO in this case will serve three purposes: to prevent recurrence of the wrongful conduct; to give great assurance of compensation for the victim; and to ensure that the victim’s losses will be born equally by those who stood to benefit from the CEO’s actions.
Contact: CMA Center for Legal Affairs, (800) 786-4262 or email@example.com.