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Kaki v. Tenet Healthcare Corp.

United States District Court, E.D. Michigan, Southern Division

October 9, 2019

Dr. Amir Kaki, M.D., and Dr. Mahir Elder, M.D., Plaintiffs,
v.
Tenet Healthcare Corporation, et al., Defendants.

          David R. Grand U.S. Magistrate Judge

          OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' RENEWED MOTION TO COMPEL ARBITRATION AND DISMISS OR STAY LITIGATION [25] AND DENYING AS MOOT DEFENDANTS' MOTION TO DISMISS AND COMPEL ARBITRATION [11]

          ARTHUR J. TARNOW, JUDGE

         Plaintiffs, two cardiologists formerly employed by Defendants, allege that Defendants engaged in retaliation within the meaning of the False Claims Act, 31 U.S.C. § 3730 (“FCA”), when they took adverse employment action against them. They also allege a number of state law causes of action, including violations of the Michigan Medicaid False Claims Act, retaliatory discharge in violation of Michigan public policy, retaliatory removal of clinical privileges in violation of Michigan public policy, false light defamation, violation of the Bullard-Plawecki Employee Right to Know Act, tortious interference with prospective economic relationships, and intentional infliction of emotional distress.

         Defendants have moved to dismiss the case and compel arbitration, arguing that many of these claims are subject to mandatory arbitration provisions in contracts signed by the doctors. The Court will grant this motion in part and compel arbitration on the sole cause of action arising under federal law, Count I, but it will decline to exercise supplemental jurisdiction over the state law causes of action.[1]

         Factual Background

         Plaintiff, Dr. Kaki, is a cardiologist specializing nuclear cardiology, internal medicine, and interventional cardiology. He was a clinical associate professor of medicine at Wayne State University School of Medicine and had had staff privileges at the Detroit Medical Center (“DMC”) since 2012. (First Am. Compl. ¶ 16). In January 2014, Dr. Kaki was appointed as Director of the Cardiac Catherization Services Unit at the new “DMC Heart Hospital” located at the VHS Harper-Hutzel Hospital (“VHS”). (Id. at ¶ 17).

         Plaintiff, Dr. Elder, is an interventionalist cardiologist who specializes in cardiology, endovascular cardiology, nuclear cardiology, internal medicine, and interventional cardiology. (Id. at ¶ 24). He served as the Director of the Cardiac Care Unit, Ambulatory Services Program, Cardiac CT Angiogram, PERT Program, Carotid Stenting Program, and Endovascular Medicine at the DMC Heart Hospital. (Id. at. ¶ 25). He has also held a Clinical Professorship at Wayne State Medical School and Michigan State University. (Id. at ¶ 27).

         Defendant Tenet Healthcare Corporation (“Tenet”), a for-profit company, bought Defendants DMC and VHS in 2013, and it owned the DMC Heart Hospital from its July 2014 opening. (Id. at ¶ 36). The other corporate defendants are VHS of Michigan, Inc., and VHS Sinai-Grace Hospital, Inc. Additionally, there are several individual Defendants. Anthony Tedeschi has been the CEO of DMC since 2017 (Id. at ¶ 9). Scott Steiner was the CEO of DMC from 2012 until his retirement on February 8, 2019. (Id. at ¶ 10). Eric Evans was the President of Hospital Operation for Tenet from March 2016 to December 2018. (Id. at ¶ 11). Conrad Mallett, Jr. was the CEO of Sinai Grace Hospital Since August 14, 2017. (Id. at ¶ 12). John Levy is the chair of the Joint Conference Committee at the DMC. (Id. at ¶ 13).

         The First Amended Complaint provides a narrative wherein the two cardiologists refused to participate in the drastic scale-down of quality and safety that Tenet instituted when it purchased DMC in 2013. By their account, the cardiologists continually spoke out against unsafe, unethical, and illegal medical practices, including the maintenance of unsterile surgical tools (¶¶ 49-55), cuts to the life-saving State Blood Lab from the Cardiac Catherization Unit (¶ 57), dangerous and unnecessary medical procedures (¶¶ 60-62), fraud with regard to physician coverage in the Cardiac Team One program (¶¶ 63-68), and fraudulent billing under Medicaid and Medicare (¶ 48). To silence Plaintiffs and retaliate against their insubordination, Defendants hired a law firm - Latham & Watkins - to conduct a review of the doctors in order to provide a pretext to dismiss them and terminate their contracts. (Id. at ¶ 72). On October 1, 2018, Plaintiffs were terminated. DMC sent an email to 5, 000 DMC employees stating that the cardiologists were fired for “violations of our standards of conduct.” (Id. at ¶ 79).

         Procedural History

         Plaintiffs filed suit on March 25, 2019. [Dkt. # 1]. On April 17, 2019, Defendants filed a Motion to Dismiss and Compel Arbitration [11]. Plaintiffs filed an Amended Complaint [20] on June 4, 2019, and Defendants filed a Renewed Motion to Compel Arbitration and Dismiss or Stay Litigation [25] on June 18, 2019. The Court held a hearing on the motions on July 22, 2019. Per the Court's instruction, both parties filed supplemental briefs [31, 32] on August 5, 2019.

         Legal Standard

          Under the Federal Arbitration Act, 9 U.S.C. § 2, (“FAA”), a written agreement to arbitrate disputes which arises out of a contract involving transactions in interstate commerce “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000). “[A]ny doubts regarding arbitrability should be resolved in favor of arbitration.” Fazio v. Lehman Bros., 340 F.3d 386, 392 (6th Cir. 2003) (internal citation omitted). “Despite this strong presumption in favor of arbitration, “arbitration is a matter of contract between the parties, and one cannot be required to submit to arbitration a ...


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