The Law Office of Kurt H King

September 5, 2018

Constructive Discharge of Medical Employee Applied to HIPAA Violations

An informative case regarding constructive discharge of pharmaceutical and medical employees is Smith v. LHC Group, No. 17-5850, 2018 WL 1136072 (6th Circuit March 2, 2018).  There the director of nursing reported to management certain health care fraud by co-employees.  However, the profitable fraudulent practices continued, leaving Smith the choice of turning a blind eye which could cause criminal charges against her and the loss of her nursing license, or resign.  The Sixth Circuit held that plaintiff nurse was constructively discharged, in a thorough and reasoned opinion.

The plaintiff’s case of constructive discharge would have been even stronger had she been personally instructed act in violation of law.

Note that HIPAA provides stiff fines and imprisonment for those that violate its provisions.  Under 42 U.S.C. 1320d-6, violation of HIPAA by unauthorized access to PHI carries a maximum $50,000 fine, up to 1 year imprisonment, or both.  If done for commercial advantage, the fine increases to $250,000 with 10 year imprisonment.

Sales representatives, employees, and contract workers who refuse the employer’s directions due to HIPAA violation concerns may find themselves between a rock and a hard place–eventual discharge or criminal law violations.

Kurt H. King, Missouri attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Retaliation & Discrimination, Litigation, General Matters

           

HIPAA Does Not Bar Missouri Common Law Claim For Wrongful Termination In Violation Of Public Policy–Or Other State Common Law Claims

Both federal district courts in Missouri allow state common law claims based upon HIPAA violations.

In Kusgen v. Lake Regional Health System, No. 2:11-CV-4255-FJG (W.D.Mo. June 11, 2012) (Doc 20), Judge Gaitan of the Western District of Missouri dealt with defendant’s motion to dismiss plaintiff’s Missouri common law claim for wrongful termination for violation of public policy based upon HIPAA anti-retaliation regulation 160.316.  Plaintiff alleged she was terminated for reporting unauthorized disclosure of confidential medical information, violating HIPAA’s anti-retaliation regulation–45 C.F.R. 160.316.  Defendant argued HIPAA did not create a private cause of action for violations of the Act.  Plaintiff countered that the claim was not a federal action made directly upon the HIPAA regulation itself, rather a Missouri common law claim for wrongful termination in violation of public policy.

Judge Gaitan acknowledged Missouri’s four exceptions to the at-will employment doctrine: (1) discharge due to a refusal to perform an illegal act; (2) discharge based on an employee’s act of reporting violations of law or public policy to superiors or public authorities; (3) discharge based on an employee’s participation in acts encouraged by public policy; (4) discharge because of an employee filed a workers’ compensation claim.  The court then held plaintiff stated a claim under the second “whistleblowing” exception, denying defendant’s motion to dismiss that claim.

The Eastern District agrees with the Western District.  The case of I.S. v. Washington University, No. 4:11CV235SNLJ (E.D.Mo. June 14, 2011), arose over unauthorized release of confidential medical information to plaintiff’s employer.  Defendant remanded to federal court and moved to dismiss the count alleging a Missouri common law claim of negligence per se based on breach of confidentiality requirements imposed by HIPAA, contending that court was a thinly-disguised attempt to bring a private cause of action under the Act.  Plaintiff, on the other hand, moved for remand to Missouri state court.

District Court Judge Limbaugh denied the motion to dismiss and remanded the case back to state court, despite exclusive reliance upon HIPAA in the negligence per se claim.  Judge Limbaugh found that while there is no dispute that HIPAA does not create a private cause of action, HIPAA does not provide an exclusive federal remedy and does not preempt such a state common law action.

In his opinion, Judge Limbaugh cited with approval the Western District’s opinion in a similar case, K.V.S.V. v. Women’s Healthcare Network, 2007 WL 1655734 (W.D.Mo. June 6, 2007).  Judge Limbaugh also relied upon the Supreme Court’s decision in Merrill Dow Pharmeceuticals v. Thompson, 478 U.S. 804 (1986), holding that a federal statute which does not provide a private cause of action may be a legitimate element of a state law claim.

Moreover, courts in other states hold likewise.  In Rickman v. Premera Blue Cross, No. 91040-5 (Washington Sup. Ct. banc September 17, 2015), the court upheld plaintiff’s claim for a wrongful termination for violation of public policy based upon HIPAA’s anti-retaliation provision.

See too Byrne v. Avery Center for Obstretics and Gynecology, SC 18904 (Connecticut Sup. Ct.  November 11, 2014) (citing TN, DEL, ME, MN, UT, and W.Va cases);  McPadden v. Wal-Mart Stores East, L.P., No. 14-CV-475-SM (D.N.H. September 16, 2016) (upholding verdict for plaintiff on claims including state claims for HIPAA violations).

Courts in Indiana and New Jersey also allow state law claims based upon HIPAA violations:

INDIANA:

In Walgreen Co. v. Hinchy, No. 49A02-1311-CT-950 (Ind. Ct. App. January 15, 2015), the court of appeals upheld a $1.4 million jury verdict for professional negligence against a pharmacist and Walgreen’s as her employer for unauthorized disclosure of confidential medical information in violation of HIPAA.

NEW JERSEY:

New Jersey’s Appellate Division of the Superior Court affirmed the trial court’s denial of defendant’s motion to dismiss, granting plaintiff’s medical malpractice claim against a doctor for referring to plaintiff-patient’s HIV condition while a unknown third person was in the room, violating HIPAA’s prohibition against such unauthorized disclosure of Patient Health Information.  Smith v. Datla, No. A-1339-16T3 (App. Div. July 12, 2017)

The Smith court cited with approval the 1991 case of Estate of Behringer v. The Medical Center at Princeton, 249 N.J. Super 597, 638, 641-42 (Law. Div. 1991), ruling the medical center committed medical malpractice under state law by failing to take reasonable measures as necessary to ensure confidentiality of a patient’s HIV positive test results.

As these courts have ruled, since HIPAA provides no private cause of action, it does not bar state common law claims for wrongful termination, negligence, medical malpractice, invasion of privacy, etc.

Kurt H. King, Missouri Attorney

81`6.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Retaliation & Discrimination, Litigation, General Matters

Missouri’s New Whistleblower Law Not Retroactive

Missouri’s newly enacted whistleblower statute, section 285.575, RSMo, has been held not to be retroactive.

The Whistleblower Protection Act (WPA) became effective August 28, 2017, and is not retroactive according to the court in  Meehan v. PNC Financial Services Group, No. 4:17-CV-2876 PLC, 2018 WL 2117655 (E.D.Mo. May 8, 2018).

Kurt H. King, Missouri Attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Employment Retaliation & Discrimination, Litigation, General Matters

Third Party Beneficiaries in Missouri–Pharmaceuticals and Corporate Integrity Agreements

Under Missouri law, persons not a party to a contract may sue for breach of that contract where the parties to the contract intended the party performing the contract (the promisor) have a duty to third parties.  The intent of the parties to the contract is key:

“The question of intent is paramount in any analysis of an alleged third party beneficiary situation.

*                                  *                                  *

The intent necessary to establish the status of a third-party beneficiary is “not so much a desire or purpose to confer a benefit on the third person, or to advance his interests or promote his welfare, but rather an intent that the promisor assume a direct obligation to him.”

Laclede Inv. Corp. v. Kaiser, 596 S.W.2d 36, 41 (Mo. Ct. App. E.D. 1980), citing Stephens v. Great Southern Savings & Loan Assn, 421 S.W.2d 332 (Mo. Ct. App. S.D. 1967).

“The intention of the parties is to be gleaned from the four corners, and if uncertain or ambiguous, from the circumstances surrounding its execution.”  Drury Company v. Missouri United School Insurance Counsel, 455 S.W.3d 30 (Mo. Ct. App. E.D. 2014) (upheld subcontractor’s right to sue, as an intended beneficiary, an insurer on its property damage policy issued to the owner of property).

“Although it is not necessary that the third party beneficiary be named in the contract, the terms of the contract must express directly and clearly an intent to benefit an identifiable person or class.”  L.A.C. ex rel. B.C. v. Ward Parkway Shopping Center Co., 75 S.W.3d 247, 260 (Mo. 2002) (young girl raped at mall sued security company for breach of its contract with the mall; held she may do so as an intended beneficiary of the contract).

The Third Party Beneficiary doctrine may apply in many different situations.  For example, a Corporate Integrity Agreement (CIA), between the pharma company and the government requiring reporting of non-compliance with  laws and regulations, may well protect the employees from retaliation for such reports and for participating in investigations regarding those reports.

Kurt H. King, Missouri Attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Employment Retaliation & Discrimination, Litigation, General Matters

Retaliation against Employee for Participation in Investigation or Other Proceeding

Are employees protected against retaliation for not supporting the employer’s agenda during an internal or governmental investigation or proceeding?  YES, good faith participation or opposition is protected.

The EEOC Enforcement Guidance on Retaliation and Related Issues states at part II.A.2.a:

“It is also opposition when an employee who did not initiate a complaint        answers an employer’s questions about potential discrimination,”

citing at footnote 37 the Supreme Court opinion in Crawford v. Metropolitan Government of Nashville and Davidson County, 555 U.S. 271 (2009).

And, according to the EEOC’s updated guidance of September 2016, a company’s own complaint process “constitutes ‘participation’ protected activity,” noting that in Crawford the Supreme Court did not limit participation to investigations by only governmental agencies.

Furthermore, footnote 35 to the EEOC Guidance cites Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1085 (3rd Cir. 1996), for the rule that:

[Re]fusing to fulfill the employer’s request to gather derogatory information about those who complained [is] protected opposition.”

The law recognizes the need to protect employees so they may speak without retaliation.

Kurt H. King, Missouri attorney

20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

Retaliation and Employment Discrimination, Litigation, General Matters

 

November 16, 2017

Are Damage Caps Constitutional in Missouri’s New MHRA Regarding Discrimination

Missouri’s amendments to the Missouri Human Rights Act (codified in Chapter 213 of the Revised Missouri Statutes) cap employer liability for damages beyond back pay with interest to a scale tied to the number of employees of the employer.  The maximum tier for employers with over 500 employees carries a $500,000 limit on such non-pecuniary damages–a category including punitive damages, pain and suffering, emotional distress, loss of enjoyment of life.  (Section 213.111, RSMo, at subsection 4.)

The question is whether those caps will stand.  Similar damage caps were struck down as to medical malpractice actions in Watts v. Lester E. Cox Medical Centers, 376 S.W.3d 633 (Missouri Supreme Court 2012), as an unconstitutional restriction upon the common law right to trial by jury.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

Personal Injury & Other Litigation, Workers’ Compensation

 

 

November 15, 2017

Missouri’s New Whistleblower Law

As of August 28, 2017, Missouri’s new Whistleblower law–section 285.575, RSMo–took effect.  Most, if not all, would say it is a step back for whistleblowers.

The new law raises the bar in several respects:

1) The new threshold of proof required is that the whistleblowing have been “the motivating factor” behind the employer’s action adverse to the whistleblowing employee.

2) Subsection 4 states only that that it is an unlawful practice for an employer to “discharge” the whistleblower.  Other retaliatory acts are not declared to be unlawful.   So whistleblowers are only protected if they are fired/terminated/discharged?–apparently so.

3) Subsection 3 declares that no cause of action “shall exist” under section 285.575 if the claimant also has a–[similar?]–private right of action under another statutory or regulatory scheme by federal or state law.  Will whistleblower cases under this new law be dismissed if joined with alternative counts based on other whistleblower laws?  What if the application of the other statutory or regulatory scheme depends on disputed facts for jury?  What if the other private right of action allows only a lesser amount of damages to the claimant?  And, what if . . . what if . . .  what if . . .  ?

4) Subsection 5 also prohibits recovery of punitive damages.

5) Subsection 7 allows only (1) back pay, (2) reimbursement of directly related medical bills, and (3) double damages in cases of clear and convincing evidence of “outrageous” conduct by the employer.  No provision for an award of “front pay” damages appears in section 285.575.

6) Subsection 8 does allow court costs and reasonable attorney fees.

7) Subsection 3 states the whistleblower law of section 285.575, along with chapters 213 (employer-employee matters) and 287 (workers’ compensation) shall be “the exclusive remedy” for any and all claims of unlawful employment practices.  May Missouri claimants NOT also make claim under federal law?  Subsection 3 contemplates claimants making claim under federal law, clashing with this “exclusive remedy” provision.

8)  In subsection 2, the government that makes this new law takes care to exempt itself and a chosen few from its provisions by excluding from the definition of an “employer”: the “state of Missouri” and its agencies, “instrumentalities,” and political subdivisions; and, entities owned or operated by religious or sectarian organizations.  (Why are religious or sectarian organization entities preferred?  What basis justifies such preferential treatment in this law?)

In short, our new whistleblower law–section 285.575–leaves something to be desired in clarity and fairness.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

Litigation, General Practice

 

November 14, 2017

BASIC SOVEREIGN IMMUNITY IN MISSOURI-2017

Some current basics:

In general, Missouri law prohibits lawsuits against the State itself and its political subdivisions, municipalities/cities, and quasi-governmental bodies (to some extent).  In other words, you can’t sue the King or the government for negligence or other tort acts or omissions unless he/it lets you–a doctrine known as Sovereign Immunity.

Some of the Major Exceptions to Sovereign Immunity

2) Missouri statute 537.600 allows these TORT lawsuits REGARDLESS OF WHETHER THE PUBLIC ENTITY ACTED IN GOVERNMENTAL OR A PROPRIETARY CAPACITY, AND REGARDLESS OF WHETHER THE PUBLIC ENTITY IS COVERED BY LIABILITY INSURANCE IN TORT:

(a) negligent operation of motor vehicles by public employees; and,

(b) for injuries caused by dangerous conditions on property of the public entity.

3)  And, Missouri Revised Statutes section 537.610 waives sovereign immunity as to the State of Missouri and its “political subdivisions” to a limited extent IF insured by liability insurance for tort claims.

4)  Missouri has a similar statute, section 71.185, which waives Sovereign Immunity so as to enable lawsuits against Missouri municipalities that carry liability insurance for tort claims, BUT ONLY in cases where the acts are those of governmental function (for the public good).

5)  If the municipality function which causes personal injury is proprietary–as a private business would act, for profit–then sovereign immunity does not apply.  City maintenance of a park has been held by Missouri appellate courts to be a proprietary function, as is a city’s provision of water to customers; however, airport security falls into the governmental function category.

6) The governmental-proprietary distinction does not apply to the State of Missouri and its political subdivisions–including the police departments of Kansas City and St. Louis  as they now exist under State law to avoid undue city influence and cuts in funding.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

Personal Injury, Missouri Workers’ Compensation, General Litigation

October 26, 2017

ERISA LIENS, MEDICARE SET ASIDES, ETC.

Marci Gordon of Synergy Settlements out of Orlando, Florida, did fine job at recent Clay County, Missouri, CLE on the subject of ERISA liens and some reduction strategies.   Her business card also lists Medicare set aside trusts, lien resolution, pooled trust services, and complex settlement planning and consulting.

Synergy offices at 911 Outer Road, Orlando, Florida 32814, with a Toll Free line 877.242.0022, Direct line 407.279.4812, Cell 407.620.7471.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

Personal Injury, Workers’ Compensation, Litigation, General Matters

August 11, 2017

Merger of Title in Same Owner Extinguishes Easement by Prescription and Defeats Adverse Possession

Take, for example, a fact set where two adjoining but separate tracts of land were bought from different owners by the same husband and wife to form a single farm.  Then the husband and wife sell the farm in the two parts to separate new owners.  One new owner wants to claim an implied easement by prescription over the other new owner.  But did easement by prescription survive the merger of title into the husband and wife who owned both tracts of the real estate?

Answer:  No, the doctrine of merger extinguished easement by prescription (which is closely akin to taking of title by adverse possession in Missouri over ten years).

Long-standing Missouri law holds:

“One who owns the fee can not acquire an easement over it.  The easement, if

one existed, is merged into the fee.”  Marshall v. Callahan, 229 S.W.2d 730, 734-35 (Mo. Ct. App. S.D. 1950).

 

“[A]n easement is in general extinguished when the dominant and servient

estates are owned and possessed by the same owner.”  Maune v. Beste, 356 S.W.3d

225, 230 (Mo. Ct. App. E.D. 2011).

 

This result makes common sense–it would fly in the face of logic for the law to enable a person who owns all of a tract of land to turn on himself and try to claim he has made hostile or adverse use of his own land against his own interests.

 

Kurt H. King

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Litigation, Personal Injury, General Matters

 

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