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Schreiber v. Tenet Healthcare Corp.

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

October 9, 2019

Dr. Theodore Schreiber, M.D., Plaintiff,
Tenet Healthcare Corporation, et al., Defendants.

          Stephanie Dawkins Davis U.S. Magistrate Judge.


          Arthur J. Tarnow Senior United States District Judge.

         Plaintiff, a cardiologist formerly employed by Detroit Medical Center, alleges that Defendants engaged in retaliation within the meaning of the federal False Claims Act (“FCA”) when they took adverse employment actions against him. He also alleges that he was misclassified as an independent contractor when he should have been paid as an employee, in violation of the federal Fair Labor Standards Act (“FLSA”). He further pleads several 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 contractual expectations, intentional infliction of emotional distress, and civil conspiracy.

         Defendants argue that these claims are all subject to arbitration provisions that Dr. Schreiber agreed to in his personal corporation's contract with Defendant VHS Harper Hutzel Hospital, Inc. (“VHS”) on November 8, 2017 and December 11, 2017. The Court will grant this motion in part and compel arbitration on the two causes of action arising under federal law, Count I and VIII, but it will decline to exercise supplemental jurisdiction over the remaining state law causes of action.[1]

         Factual Background

         Dr. Schreiber is a “world-renowned interventional cardiologist” who was recruited and hired by the Detroit Medical Center (“DMC”) in 2004. (Compl. ¶¶ 13-15). He was employed as the President of the DMC Cardiovascular Institute and Specialist-in-Chief of Cardiovascular Medicine at the DMC. (Id. at ¶ 16). Dr. Schreiber also founded Cardio Team One (“CTO”). CTO began operating in 2008 with Dr. Schreiber as Director, and it entailed the 24/7 presence of a medical team available to perform emergency balloon angioplasty and stenting. (Id. at ¶¶ 23-32).

         In 2009, Dr. Schreiber signed a Physician Employment Agreement as the President of the DMC Cardiovascular Institute. That agreement was to be effective on June 1, 2009 and terminate on April 30, 2014. (Dkt. 26-1, Pl. Ex. L). Dr. Schreiber also signed a Physician Independent Contractor Agreement with DMC to be effective from May 1, 2010 to April 30, 2012. (Dkt. 26-1, Pl. Ex. M). DMC was sold to VHS in 2010. (Compl. at ¶ 42). In 2011, VHS signed two Physician Independent Contract agreements with Dr. Schreiber, one to be effective from December 1, 2011 to November 30, 2012, and the other to be effective from July 28, 2011 to December 31, 2013. (Dkt. 26-1, Pl. Ex. J & K). VHS was sold to Tenet Healthcare Corporation (“Tenet”) in 2013. (Compl. at ¶ 43). In 2014, DMC opened its Heart Hospital, which was developed with Dr. Schreiber's assistance. (Id. at ¶¶ 35-38).

         The Complaint alleges that from the beginning Tenet sacrificed patient care for profit-making. Plaintiff observes that after the takeover Tenet made significant budgetary cuts to DMC, including depriving the Cath lab and intensive care unit of sufficient personnel. (Id. at ¶¶ 54-55). Plaintiff further alleges that doctors came to him to voice their concerns that these aggressive cuts were diminishing standards of care. Dr. Schreiber, along with Dr. Kaki and Dr. Elder, brought these complaints to the attention of hospital executives, including Defendants Tedeschi and Steiner. (Id. at ¶¶ 56-59). He also alleges that Tenet was foisting unnecessary and dangerous medical procedures on patients to increase Medicare and Medicaid income, in addition to other misconduct. (Id. at ¶ 62).

         At the end of 2017, allegedly due to his outspoken complaints to hospital administrators, Dr. Schreiber was stripped of his positions as President and Specialist-in-Chief and was demoted to the positions of Executive Director of the Cardiology Service Line and Program Director of the Interventional Cardiology Fellowship. (Id. At ¶ 79). His new positions entailed substantially less authority over budget allocation and the administration of the Heart Hospital. (Id. at ¶ 80). The contracts for these positions contained the arbitration provisions that are the subject of Defendants' motion.

         In May of 2018, Tenet and DMC executives instructed various of their staff to produce “all Harper-Hutzel Cardiology quality & peer review documents from May 1, 2015 to present” for review by outside counsel from the law firm Latham & Watkins. (Id. at ¶ 88). Dr. Schreiber objected to this process as violative of the sanctity of the peer review process and thereby dangerous, and Defendant Tedeschi informed Dr. Schreiber that DMC and Tenet executives were very upset with his objections. (Id. at ¶¶ 89-91). Latham & Watkins began their review in August of 2018. (Id. at ¶ 92). Dr. Schreiber met with Latham & Watkins attorneys for an interview on September 20, 2018. (Id. at ¶ 97). The interviews led to the production of a report, which, at the time of the complaint, had not been provided to Dr. Schreiber. (Id. at ¶¶ 98-99).

         In an October 1, 2018 letter, Defendant Steiner informed Dr. Schreiber that he was terminated from his leadership positions due to an investigation that resulted in a determination that he had violated Tenet Standards of Conduct. (Id. at ¶ 106). That same day, Defendants emailed more than 5, 000 hospital employees that Dr. Schreiber, along with several other cardiologists, had been terminated for unspecified violations of the Tenet Standards of Conduct. (Id. at ¶ 111). Defendants' conduct also forced him to resign from the medical staff at the DMC. (Id. at ¶ 102).

         Procedural History

         Plaintiff filed his complaint on April 1, 2019. [Dkt. # 1]. On May 7, 2019 Defendants filed a Motion to Dismiss and Compel Arbitration [15]. That motion was set for a hearing on July 25, 2019 [22], but, following a status conference on July 17, 2019, the Court adjourned the hearing to give the parties time to conduct limited discovery into whether or not there were other contracts between Defendants and Plaintiff. Plaintiff filed his supplemental brief [26] on September 12, 2019. Defendants filed their Response [27] on September 26, 2019. The Court held a hearing on Defendants' motion on October 3, 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 dispute which it has not agreed to submit to arbitration.” NCR Corp. v. Korala Assocs., Ltd., 512 F.3d 807, 813 (6th Cir. 2008) (quoting Simon v. Pfizer Inc., 398 F.3d 765, 775 (6th Cir.2005)).


         Plaintiff alleges the ...

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