243 N.C. App. 386
N.C. Ct. App.2015Background
- Dr. William Shannon, an ophthalmologist with staff privileges at Gaston Memorial Hospital, was referred for evaluation after two patient incidents; his privileges were temporarily suspended and later not reinstated.
- Shannon underwent psychiatric/psychological evaluations in Charlotte that found no cognitive or psychiatric impairment; Gaston then referred him to North Carolina Physicians Health Program (NCPHP) and two individual evaluators, Testen and Jordan.
- At a November 29, 2010 meeting Shannon identified witnesses and documents; Testen and Jordan did not interview those witnesses or review certain records, according to the complaint.
- Defendants prepared an initial assessment (and a January 4, 2011 follow-up) that Shannon alleges contained factual errors and omissions and recommended further evaluation; defendants also reported Shannon had no substance abuse or psychiatric history and was cooperative.
- Shannon sued NCPHP, Testen, and Jordan for negligence (vicarious liability for NCPHP) and for violation of statutory due process under federal/state peer review laws; defendants moved to dismiss under Rule 12(b)(6) asserting statutory immunity and failure to state a claim.
- The trial court granted the motion to dismiss; the Court of Appeals affirmed, holding Shannon failed to plead bad faith needed to overcome statutory immunity and failed to state a viable statutory due process claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint pleads facts overcoming N.C. Gen. Stat. § 90-21.22(f) immunity (i.e., bad faith) | Shannon says the omissions/errors and failure to interview witnesses permit an inference of bad faith | Defendants say the statute provides immunity for good-faith peer review and plaintiff must plead intentional dishonesty/wrongful motive | Dismissed: complaint alleges negligence or carelessness, not intentional dishonesty; no bad faith pled, so immunity bars the claim |
| Whether a private cause of action exists under the federal HCQIA-based due process language | Shannon contends a state common-law action can enforce federal statutory due-process protections | Defendants contend HCQIA does not create a private right and common law cannot supply one | Dismissed: HCQIA does not provide a private cause of action and Corum does not authorize a state common-law claim to enforce federal statutory rights |
| Whether N.C. Gen. Stat. § 90-21.22(b) supports a private claim against NCPHP/individuals for violating "assuring due process" provision | Shannon argues the statute’s due-process language creates a statutory right enforceable against peer-review actors | Defendants argue the provision regulates agreements the Medical Board must ensure and does not create a private cause of action against third parties | Dismissed: even if actionable, Shannon’s complaint pleads the peer-review memorandum requires NCPHP to act in accordance with due process, so no violation is alleged |
| Whether alleged procedural failures violated administrative/regulatory due process requirements | Shannon points to lack of notice/opportunity to be heard during NCPHP’s inquiry | Defendants point to applicable NCPHP rules and complaint allegations showing cooperation and compliance | Dismissed: complaint shows defendants complied with the regulatory process and does not allege those requirements were violated |
Key Cases Cited
- Thompson v. Waters, 351 N.C. 462 (procedural standard treating complaint allegations as true on motion to dismiss)
- Bridges v. Parrish, 366 N.C. 539 (de novo review of Rule 12(b)(6) dismissal)
- Scadden v. Holt, 222 N.C. App. 799 (plaintiff must be able to prove some set of facts to avoid dismissal)
- Bundy v. Commercial Credit Co., 202 N.C. 604 (bad faith requires false motive/wrongful purpose; distinction from negligence)
- Edwards v. Northwestern Bank, 39 N.C. App. 261 (distinguishing negligence from bad faith)
- Hancock v. Blue Cross Blue Shield of Kan., Inc., 21 F.3d 373 (HCQIA does not create private cause of action)
- Corum v. Univ. of N.C., 330 N.C. 761 (state common law remedies for violations of state constitutional rights; not a basis to enforce federal statutory rights)
- Craig v. New Hanover Cnty. Bd. of Educ., 363 N.C. 334 (limits Corum to state constitutional violations)
- Copper v. Denlinger, 363 N.C. 784 (same)