John Hays v. HCA Holdings, Incorporated

reasons, however, only special These relate condition requiring the Defen- court’s imposition anger dant-Appellant district man- to participate in of a mental agement counseling, not' mental health program health REMAND further Consequently, treatment. conclude that proceedings we consistent opinion. with this imposition the district court’s of mental reasonably

health condition is not related any factors, nor .can Section

it be inferred an examination Salazar,

record before See us. 743 F.3d at § (citing 3553(a)(l)-(2)). 18 U.S.C. As

such, the plainly district court erred in imposing special'condi- the mental health HAYS, M.D., John T. Plaintiff- García-Carrillo, tion. See Appellant We further conclude that error affect- rights. Gordon’s id. substantial See The imposition of the mental health treatment HOLDINGS, INCORPORATED; HCA present Gordon’s cost will significant Physician Services, HCA Incorpo burden, financial require him to attend rated, Defendants-Appellees multiple treatment, sets and Gordon out, points per- result an unwarranted No. 15-51002 ception requires that he mental health Appeals, United States Court of reasons, treatment. For See id. these we Fifth Circuit. find the of this exercise court’s discretion to correct the error warranted under these September 29, FILED 378-79; circumstances. Id. see United Olano, 725, 736, States v. 507 U.S. (1993) (“The

5.Ct. 123 L.Ed.2d 508

Court of Appeals plain should correct a affecting rights

forfeited error substantial ‘seriously the error fairness, affect[s]

integrity or public reputation judicial ”).

proceedings.’ Accordingly, we vacate special supervised condition of release

imposed by the requiring district

Gordon to participate mental health necessary ap-

treatment as deemed

proved by the probation officer.6

III. Conclusion .light foregoing, AFFIRM judgment imposing court’s imprisonment by 3.-year

months’ followed supervised

term of release. VACATE special imposition Because we vacate the mental health of the condition court’s grounds, judicial condition on impermissible delegation these we need was argument authority. Gordon’s that the reach alternative A, Terrazas,

Kevin Esq., Timothy James Cleveland, Terrazas, P.L.L.C., Cleveland Terrazas, Esq., Janes, Kevin James. Sara Susanne-LeFave, Nicole Spring- Weisbart Austin, TX, L.L.P., Hayes, er for Plaintiff- Appellant. Alvarado, D. Esq.,

Elizabeth Carlos Al- A. Mattioli, Shannon, Jr., George berto Shannon, Martin, Finkelstéin, Alvarado & Dunne, P.C., Jones, Nancy Michael P. Patterson, Lynne Morgan, Lewis Bocki- & us, Houston, L.L.P., TX, for Defendants- Appellees. STEWART, Judge,

Before .Chief and HAYNES, and Circuit CLEMENT Judges. CLEMENT,

EDITH BROWN Circuit Judge: Dr, Hays

Plaintiff-Appellant John T. from After a epilepsy. suffers series seizures, he was stress-related fired cardiology practice. brought He his several against Defendant-Appellees HCA Physician Holdings, Inc. and HCA Ser- “HCA”) vices, (collectively arising Inc: out alleged wrongful his termination. The district court ordered arbitration equitable estoppel. claims based on AFFIRM.

L estoppel-and court applied direct benefits Hays concluded that arbitrate must cardiologist con- worked as a Hays Hays’s wrongful for As to claim. that HCA accommodate tends failed contract, termination, negli breach workload, for a requests limited which gence, determined an increased number caused him to suffer applied. Rely claims estoppel eventually of stress-related seizures and Industries, ing on Inc. v. Stolt-Niel his'firing. Initially, Hays HCA led to sued sen, (2d 2004), SA, which Cardiology Holdings, Capital Area in In Texas discussed Heart, (“CAC”), PLLC, in Tex- and Austin FSB, re Trust Co. negligence for viola- as state court (Tex. 2007), dis tion of Commission Human trict court found had treated (“TCHRA”). sought- a Rights Act He also Heart, single “as a Austin HAC CAC, and Physician declaratory judgment that pleadings” unit its had raised “vir and (the Agreement “Agree- Employment tually indistinguishable allegations” factual ment”) not was a valid and enforceable against The court all district defendants. Agreement, But the to which contract. Hays’s pleadings concluded satisfied Heart, CAC, Hays signa- and were Austin relationship” for inter the test “close tories,' required any disputes relating estoppel. Because all of twined Agreement to to the be submitted manda- Hays’s subject claims were to arbitration binding tory, arbitration. Because of the equitable estoppel grounds, on the district clause, the granted state court arbitration court and dismissed ordered arbitration to Heart CAC’s motion and dismiss Austin prejudice. timely ap Hays the with case and liti- compel Continuing arbitration. to pealed. Hays HCA gate Holdings, amend- to his state HCA court add petition II. Physician' as a HCA Services defendant. compelling Hays removed the to review “an order case federal court. We arbitration complaint to de novo.” then amended assert Cranford Prof'l Drugs, for v. CVS Caremark wrongful termination in viola- Inc. Cir, (5th 2014). TCHRA, 249, F.3d negligence, tion of review breach of con- We tract, for an the district tortious interference at-will abuse discretion and compel court’s equitable estoppel employment. use Id, “A its arbitration. district court abuses compel HCA and arbi- moved dismiss on premises discretion if it its an decision on equitable tration on all claims based application erroneous the law a clear estoppel. granted The court district the ly assessment of the evidence.” erroneous law, Applying the district motion. Southaven, LLC, Gross v. GGNSC explained to an non-signatory court 2016). “may agreement an arbitration could enforce any judgment court’s on affirm the district pursuant clause equitable estoppel, by re basis the record.” In Com supported explicitly recognized that Texas has direct LLC, plaint Towing, Settoon estoppel and has au- implicitly benefits 268,280 (5th estoppel. intertwined claims thorized Be- liability HCA’s the tortious under cause III. claim could “be deter- interference Physician mined without to the- contends that the reference district Employment compelling court Agreement,” its discretion in the abused equitable claim, on under Heart viability arbitration his claims and CAC. The this however, estoppel.1 on reference to depends Agreement. Inc., Vesta Ins. Grp., Cf. Estoppel Direct A. Benefits (Tex. 2006) (“[T]or- tious signa between interference Hays maintains tory agreement to an arbitration applying court direct benefits es- erred agents or affiliates of other signatory toppel to interference his tortious claim. arise more from than estoppel applies Direct benefits law, and thus fall on side of arbitration on depends when the claim the contract’s scale.”). As the district correctly existence be “unable ‘stand would recognized, employment an at-will relation independently’ the contract.” without G.T. ship if may parties exist even have Builders, Leach S.W.3d at 528 (quot contract, entered into an employment such Root, Inc., ing Kellogg re Brown & C.S.C.S., Carter, Agreement. as the Inc. v. (Tex. 2005)). S.W.3d “Whether App.-Dallas seeks, a claim a con direct benefit (“A pet.) employment no contract of containing tract clause turns for a may agree term still at-will be claim, the substance not artful any reason.”). ment allows termination pleading.” Id. at the sub “‘[W]hen Agreement would Because define the stance of arises from claim relationship, employment even at-will em law, by obligations imposed state including ployment, Hays and Austin between Heart statutes, common torts other law CAC, liability any alleged for tortious law,’ duties, or federal rather than from interference HCA “must be by determined contract, estoppel ‘direct does benefits’ not by Agreement. reference” to the G.T. apply, even if the claim or refers relates Builders, at (quot Leach 528 458 S.W.3d at, (quoting to the contract.” Id. 528 In re Homes, LP, ing In re 180 Weekley S.W.3d Co., Morgan 182, Stanley & 293 S.W.3d 127, (Tex. Thus, 2005)).2 HCA’s liabili (Tex. 2009)). 184 n.2 Agreement ty depends on the and the Here, Hays pled his not abuse its tortious court did discretion interfer- estoppel Hays’s employment applying ence at-will claim in direct benefits claim. alternative, tortious interference stating the claim applies that only if employ- not found be his HCA is Estoppel B. Intertwined Claims pleading, Hays essentially alleges er. In so tortiously that HCA Hays argues interfered with at- that the district court relationship by claims employment applying will with Austin erred intertwined es- Hays equitable opens by arguing grounds. G.T. estoppel Leach Build- ers, V.P., LP, no because there is be erred Sapphire contract LLC S.W.3d v. compels tween 502, Second, him and HCA arbitra (Tex. 2015). insofar as argument tion. But his is without merit. Agreement validity Hays of the attacks First, although signatory not HCA is a to the whole, validity of the a a determinations Agreement, may to arbitrate contract be are See left to the arbitrator. Brown non-signatory by enforceable authorized 384, Co., (5th v. 462 F.3d Pac. Ins. Life by applicable state law. Crawford Prof'l 2006). Cir. 257; Drugs, 748 F.3d at accord Al Rushaid v. Varco, Inc., 300, Nat'l Oilwell Indeed, "acknowledges Hays alter- here, 2016). governs Texas law Cir. natively pled interference claim tortious recognized have "a non- Texas courts dependent on whether the a determination to, signatory permitted be can bound Agreement is enforceable.” enforce, agreement’’ an arbitration based 194; estoppel. Id. at of intertwined claims. He con- remaining to his toppel Inv. Advisors recognize that In re Banc One see that Texas does tends did, 340507, 01-07-01021-CV, if it and even 2008 WL estoppel, theory No. 2008, (Tex. no inapplicable here. Feb. theory App.-Houston *2 “close relation- (indicating that pet.) in estoppel Intertwined mis- from concerted test is “distinct ship” when “compel[ing] volves conduct”). has a ‘close rela nonsignatory defendant signatories and of the tionship’ with one appeals, after Merrill courts Texas in and ‘intimately founded on whether the Lynch, split have underlying contract with the intertwined recognized Court has ” Lynch, obligations.’ estoppel. Compare Cotton Commer- Thomson-CSF, (quoting 193-94 S.W.3d USA, Indep. Sch. Inc. v. Clear Creek cial Ass’n, 64 F.3d v. Am. Arbitration S.A. (Tex. Dist., App.- 105-06 387 S.W.3d (2d 1995)); v. Denney see BDO (stating pet.) no Dist.] [14th Houston (2d Seidman, LLP, 412 F.3d Supreme Court Merrill that the Texas “tight is a applies It there when intertwined claims es- contracts, and parties, relatedness Drilling (Cy- FD Frontier toppel), and controversies.” JLM Didmon, 688, 695 prus), Ltd. exception this employed 177.3Courts have 2014), reh’g App.-Houston [1st Dist.] that seeks “strategic pleading” to dismiss 29, 2014), review denied (July overruled Lynch, In re Merrill to avoid arbitration. 2014) (“If (Nov. 7, alleged ‘touch the facts at 194. matters,’ relationship’ ‘significant have a notes, correctly the Texas Su- As with, to, or are ‘inextricably enmeshed’ are expressly adopted preme Court has not with the contract ‘factually intertwined’ a valid theo- estoppel as agreement, containing the arbitration Court ry estoppel. Supreme The Texas (quoting Cotton Com- claim is arbitrable.” Lynch that “oth- acknowledged in Merrill USA, 108)), at and 387 S.W.3d mercial signatory estopped circuits have er federal 07-07-00303-CV, Brownlow, v. No. Zars avoiding arbitration with plaintiffs (Tex. 3355660, App.-Amar- *4at 2013 WL using an ‘intertwined- nonsignatories 2013, (same), 28, pet.) no illo June at But the test.” 235 S.W.3d claims’ Res., Ltd., v. Producing Co. Jared Glassell purpose of com- it for the court referenced 68, App.-Texarkana 82 theory with concerted miscon- paring that 2014, (describing direct benefits pet.) no the court went on estoppel, duct which equitable form only “the estoppel as Distinguishing the reject. Id. at 193-95. Texas”). in estoppel recognized two, explained Supreme Court the Texas directly has never ad- And this court estoppel lacks that concerted misconduct Although Hays makes relationship” component the issue.4 limiting “close dressed agreement the es- with the that under intertwined have that 3. "Our cases " party signed.’ JLM 387 topped has non-signatory estoppel, a to an principles of F.3d at 177. may compel signato- agreement a arbitration dispute agreement ry to arbitrate a relationship distinguish- imprecision exists when a review of 'the where careful 4. Some they signed ing and concerted among parties, the between intertwined claims contracts among estoppel. This court used the had arisen' misconduct ... the issues that and Grigson claims” in nonsignato- phrase "intertwined issues the them discloses that 'the LLC, (5th Agency 210 F.3d 524 ry seeking are CreativeArtists to resolve arbitration tions, of Al Rushaid v. National much Oilwell policy concerns.” Cha- Varco, Inc., 11-CV-3390, No. ney v. Dreyfus WL Serv. 595 F.3d (S.D. 7, 2015)—a (5th 2010). Apr. at *5 Tex. Cir. district court decision that criticized Cot In Lynch, the Texas Supreme rejected ton Commercial and intertwined strongly Court implied the validity of this estoppel—this did not decide form of estoppel, particularly counter validity estoppel problem of strategic pleading: “[All- Rushaid, appeal, see Al 814 F.3d lowing litigation to proceed sub- Instead, panel the Al Rushaid explained against signatory stance though in form appellants that the had advanced concert against a nonsignatory would allow indi- estoppel, ed misconduct and direct benefits rectly what cannot be directly.” done language and cited the from Glassell that S.W.3d at 193-94. The court observed that only form of equitable estoppel recog “the estoppel intertwined claims pre- works to nized in Texas” is direct benefits. Id. signatories vent to an arbitration agree- Co., (quoting Producing Glassell avoiding ment from simply by arbitration 82). Conversely, prior panel S.W.3d at suing “nonsignatory principals agents this court relied on Cotton Commercial to for pulling strings.” Id. at 194. To analyze applicability of intertwined illustrate, explained the court that the Sec- Elec., estoppel. Zinante v. Drive “compelled ond Circuit has LLC, (5th Fed.Appx. nonsignatory when defendant has a 2014). The panel Zinante held ‘close relationship’ signato- with one of the theory inapt, question was but did not its and the ‘intimately ries founded legitimacy. in and intertwined with the underlying obligations.’” 193-94, Id. at Because no decision of the Texas Thomsorir-CSF, S.A., (quoting n.39 64 F.3d Supreme precisely recognizes Court inter collecting Second Circuit cases estoppel, twined claims “must make an apply in- estoppel, guess Erie and determine best we can cluding Denney, F.3d at 70 what the Texas would Industries, And the court Inc., Cty. decide.” Harris v. MERSCORP approvingly noted that the “close relation- 2015) (internal ship” guards requirement omitted). quotation marks and citation “sweeping] independent entities and even making guess, an Erie we use “the sources complete strangers agree- into arbitration highest law the state’s court would ments,” limiting exception the to instances to,” Symetra look Rapid Ins. Co. v. Life strategic pleading.5 Id. at 194. Settlements, Ltd., 2014), including ap Cir. Looking intermediate state to intermediate state court de- decisions, pellate cisions, court “the rule Texas courts of appeals have com- issue, jurisdic- on the from other pelled pursuant decisions arbitration to intertwined 2000), - possibility but did so in reference to 5. It concert- was this of overinclusiveness Court, Supreme Conversely, that led the Texas in estoppel. Merrill misconduct the Texas Lynch, Court, reject estop- concerted misconduct Supreme Lynch, in Merrill differentiat- pel. making guess, In Id. an Erie it is notewor- Grigson’s ed between concerted misconduct thy Lynch Supreme that in Merrill the Texas (which reject) went test it and the theo- distinguished concerted misconduct ry estoppel. of intertwined claims 235 S.W.3d estoppel, explicitly and intertwined claims at 192-93. disallowing noting the former while the rele- vancy and value of the latter. Id. Co., No. v. SM Sys. Int’l Ltd. tration. Star e.g., Commer- estoppel. See Cotton claims 05-15-00669, 2970272, *2 2016 WL at USA, 102; FD Frontier at cial 387 S.W.3d 2016) 695; Ray (citing Royston, May App. Drilling (Cyprus), S.W.3d Williams, zor, Lopez, In LLP v. Zars, Vickery, at *4.6 Cotton WL & (Tex. 2015)). Commercial, a And a school sued after be company, arbitrability the must “questions [also] services property restoration regard 'for the healthy to arbitrate. 387 S.W.3d a company moved addressed with suit, favoring the contractor and policy Prior to the arbitration.” Moses federal subcontractor, on the Mercury who had Hosp. worked v. Constr. H. Mem’l Cone the school, merged surviving 1, 24, to form had 103 S.Ct. U.S. Although (1983). company. restoration property L.Ed.2d 765 into a restoration school had entered the Merrill intimated Because contractor, con- the which agreement with estop- validity at the intertwined arbitration,clause, schooldis- the tained lower, in Texas have pel, because courts compelled argued it be trict could not theory, and because arbitration applied the fraudu- its to arbitrate because fed strongly favored disputes under only subcon- billings the lent were policy, hold eral and state Id, assessing wheth- at 102-04. tractor. Court, if faced with the court of appropriate, er arbitration was adopt intertwined claims question, would a,corporate relationship appeals noted Accordingly, we hold that estoppel. alone, in- standing parties, between TCHRA, negligence, must arbitrate compel arbitration. Id. at sufficient pursuant of contract and breach court, relying on Memll appeals But the estoppel. intertwined applicability of Lynch, nonsigna- claims test “where a Heart, CAC, Hays treats Austin relationship” with one of tory has a “close single pleadings, in a unit and HAC as “inti- signatories virtually indistinguishable factual raising mately founded in against CAC and Austin Heart allegations underlying obligations.” Id. against HCA here. See arbitration (quoting Lynch, 177; F.3d at Smith/En be- The arbitration ordered P’ship Ltd. Smith Co Cogeneration ron relationship and parties’ close cause (2d Inc., 88, 98 generation Int’l billings were because the subcontractor’s 1999) (affirming order agree- intertwined with the restoration plaintiff nonsignatory treated where the ment. Id. at 105-06. signatory assignees as companies and their n com “single complaint”). in its matter, His unit Finally, policy counter-de plaint in this action and his jurisprudence “both federal and state dic identical arbitration use almost contro mand any tate that doubt as to whether of substituting only the names language, in resolved versy is arbitrable should be cor As court Buy the of v. Home defendants. favor arbitration.” McKee recognized, Hays treated Austin Warranty Corp., 45 rectly ers F.3d Heart, CAC, of his and .HAC—affiliates “strongly arbi- Texas favor[s]” . Co., Supreme acknowledged the of Texas Producing Texas court Glassell appeals estoppel rejected concerted mis- only explicitly that direct benefits the stated had only equitable estoppel form of conduct test. Id. in 422 S.W.3d at 82. But the Texas. cardiology practice—as they former estoppel benefits that the Supreme Smith/Enron, See interchangeable. were Court found ineffectual in to do so FSB, Trust 198 F.3d at 97-98. It is Co. undeniable Hays regarded parties (Tex. 2007). relat- closely way, another Put by failing to differentiate his Supreme factual Court made clear that the.Texas Moreover, allegations. Hays’s party claims both cannot avoid the effects of direct here and in alleged arbitration relate to his estoppel by benefits “artful pleading.” Id. termination, wrongful intertwined with the That is what to endeavored do here. underlying obligations law, contractual Existing for of without the need Agreement. “Erie “tight There is a guess,” supports thus relatedness parties, sending contracts controver- court’s all order to these claims sies.” Thus, Hays’s I arbitration. concur in the judgment distinguish amongst current efforts to affirming de- the district court not join but do fendants and claims are .the archetype of discussion estop- intertwined claims strategic pleading pel. intended avoid forum, precisely

arbitral what intertwined estoppel designed

claims prevent.

hold that .the district court did not abuse

its discretion applying estoppel compel Hays to arbi-

trate his remaining claims. IV. SIMMS, Plaintiff-Appellant, Patrick

We hold that the district court not did abuse its ordering discretion in Hays’s Specifically, HCA. LOCAL INTERNATIONAL

we hold that properly district court LONGSHOREMEN ASSOCIA applied direct estoppel Hays’s benefits TION, Defendant-Appellee. tortious making claim. And in interference an Erie guess, hold the Texas No. 16-60073 recognize Court would inter- twined claims estoppel Hays’s United Court of Appeals, States remaining subject to arbitration Fifth Circuit. theory.

under that September 29, FILED HAYNES, Judge, concurring: Circuit

I judgment concur in the of the court.

However, I join do not all the under-

lying reasoning. I Specifically, would

reach issue es- (and

toppel addressed in Section III.B. IV)

part of unnecessary because it is to do I

so. all of Hays’s conclude that clearly

either meet the test direct ben- estoppel

efits constitute the kind of pleading” designed

“artful to avoid direct

Case Details

Case Name: John Hays v. HCA Holdings, Incorporated

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Sep 29, 2016

Citation: 838 F.3d 605

Docket Number: 15-51002

Court Abbreviation: 5th Cir.