Case: 10-41332    Document: 00511760281         Page: 1     Date Filed: 02/16/2012




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                           FILED
                                                                        February 16, 2012

                                      No. 10-41332                        Lyle W. Cayce
                                                                               Clerk

AJAY GAALLA, M.D., HARISH CHANDNA, M.D., and DAKSHESH
“KUMAR” PARIKH, M.D.,

                                                  Plaintiffs-Appellees

v.

DAVID P. BROWN, DONALD DAY, JOE BLAND, ANDREW CLEMMONS,
M.D., JENNIFER HARTMAN, LUIS GUERRA, and WILLIAM TODD
CAMPBELL, M.D.,

                                                  Defendants-Appellants


              Appeal from the United States District Court for the
                          Southern District of Texas
                             USDC No. 6:10-cv-14


                         ON PETITION FOR REHEARING

Before BENAVIDES, PRADO and GRAVES, Circuit Judges.
BENAVIDES, Circuit Judge:*
        IT IS ORDERED that the petition for rehearing is granted in part and
denied in part. We WITHDRAW our earlier opinion, Gaalla v. Brown, 

(5th Cir. Jan. 13, 2012), in its entirety, and substitute the following:


       *
        Pursuant to FIFTH CIRCUIT RULE 47.5, the Court has determined that this opinion
should not be published and is not precedent except under the limited circumstances set forth
in FIFTH CIRCUIT RULE 47.5.4.
   Case: 10-41332   Document: 00511760281     Page: 2   Date Filed: 02/16/2012




                                 No. 10-41332

      In this case, Defendants-Appellants David P. Brown, Donald Day, Joe
Bland, Andrew Clemmons, M.D., Jennifer Hartman, Luis Guerra, and William
Todd Campbell, M.D. appeal the district court’s denial of summary judgment
against Plaintiffs-Appellees Ajay Gaalla, M.D., Harish Chandna, M.D., and
Dakshesh Parikh, M.D.       For the following reasons, we AFFIRM in part
REVERSE in part, and REMAND with instructions.
                I. FACTUAL AND PROCEDURAL BACKGROUND
      Defendants Day, Bland, Clemmons, M.D., Hartman and Guerra are all
members of the Board of Directors (collectively, “the Board”) of Citizens Medical
Center (“CMC”), a county-owned, non-profit hospital located in Victoria, Texas.
Defendant David Brown (“Brown”) is the administrator or chief executive officer
of CMC, and he reports to the Board. Dr. Campbell is a cardiologist under
contract with CMC.      The defendants were sued by three interventional
cardiologists of Indian origin, Plaintiffs-Appellees Ajay Gaalla, M.D., Harish
Chandna, M.D., and Daksheesh Parikh, M.D. (collectively, “the Cardiologists”).
The Cardiologists allege that Brown and the Board violated their due process
and equal protection rights, in part by passing a resolution (“Resolution”) that
stated that the hospital would only allow cardiologists with contracts with CMC
to exercise clinical privileges in the cardiology department or as part of CMC’s
heart program. The Cardiologists charge Dr. Campbell with state-law claims of
tortious interference with existing and prospective relations and defamation.
      Before 2007, the Cardiologists regularly admitted their patients at CMC
and practiced at the hospital without a problem. However, they claim that
misconduct by CMC and its agents against them began to occur in 2007. The
Cardiologists say that Brown discriminated against them by denying them


                                       2
   Case: 10-41332   Document: 00511760281     Page: 3   Date Filed: 02/16/2012




                                 No. 10-41332

privileges for implantable cardioverter defribillators (“ICD”) in May 2007, while
granting those privileges to less qualified, non-Indian physicians. They also
allege that Brown removed Dr. Chandna from the peer review committee,
allegedly for missing too many meetings, though Dr. Chandna claims to have
attended more meetings than anyone besides the chairman of the committee.
The Cardiologists further state that, in 2009, Brown removed them from the
Chest Pain Center Committee for being disruptive, while other disruptive
doctors were allowed to remain on the committee.              According to the
Cardiologists, Brown amended the Chest Pain Center protocols to exclude them
by instructing staff to notify only the cardiologist “on call” when a patient
presented, even if that patient already had a pre-established relationship with
one of the Cardiologists. They also claim that in at least two instances Brown
initiated peer review proceedings against them when they voiced patient care
concerns regarding Dr. Yusuke Yahagi, the only cardiac surgeon at CMC, rather
than investigating their concerns, and that “this type of reverse-investigation
was never undertaken when other physicians lodged patient care concerns.” In
addition, the Cardiologists allege that Dr. Yahagi refused to provide surgical
standby for their patients, and that Brown enabled Dr. Yahagi to do this for
nearly a month rather than enforcing the bylaws, which require that Dr. Yahagi
provide standby for any cardiologist practicing at the hospital.
      The Cardiologists also describe other instances of discrimination they
allegedly suffered. They say that CMC offered contracts to a group of non-Indian
cardiologists (“contract cardiology group”), but never legitimately offered those
contracts to the Cardiologists. They call CMC and Brown’s offers of contracts to
them “a farce,” and “a mere afterthought by CMC in a veiled attempt to convey


                                       3
   Case: 10-41332       Document: 00511760281          Page: 4    Date Filed: 02/16/2012




                                       No. 10-41332

an appearance of fairness.” The Cardiologists say that since 2007, various
people at CMC, including Brown, have referred to them as “the Indians,” while
the members of the contract cardiology group have been called “the Cowboys.”2
The most obvious instance of a discriminatory attitude displayed by Brown is an
internal memo he wrote in March 2007:
              I feel a sense of disgust but am more concerned with
              what this means to the future of the hospital as more of
              our middle Eastern born physicians[3] demand
              leadership roles and demand influence over situations
              that are hospital issues. . . . If, however, I am forced to
              acquiesce to their demands at a personal level, it will
              change the entire complexion of the hospital and create
              a level of fear among our employees.

The Cardiologists also cite a comment by CMC’s operating chief about a plan to
“work on getting the Indians off the reservation.” They claim that the Board
member defendants and Brown never disciplined CMC employees for
derogatorily referring to the Cardiologists as “the Indians.” Another physician
of Indian descent at CMC testified that “[i]t was well known . . . that David
Brown did not want physicians of Indian origin in leadership roles at CMC,” and
a former E.R. doctor at the hospital testified to racial tensions between the
Cardiologists and the hospital.
       The Defendants-Appellants respond that CMC entered into contracts with



       2
         There is evidence that the Cardiologists initially jokingly referred to themselves as
“the Indians,” and the cardiologists under contract as “the Cowboys.” However, the
Cardiologists came to feel that CMC staff and administrators were calling them “the Indians”
in a derogatory manner.
       3
        Brown has confirmed that, despite the fact that the Cardiologists are of Indian origin,
he was referring to them when he used the phrase “middle Eastern born physicians.”

                                              4
   Case: 10-41332    Document: 00511760281      Page: 5    Date Filed: 02/16/2012




                                  No. 10-41332

the contract cardiology group to ensure that those doctors’ services remained
available, because they were being recruited by other health organizations.
They also say that their offer of the same contracts to the Cardiologists was
genuine.    According to the Defendants-Appellants, CMC continued to
“experienc[e] significant operational difficulties in its cardiac care program” even
after signing employment contracts with the contract cardiology group, and that
“Plaintiffs were a large part of the problem.” Specifically, the Cardiologists did
not have a good relationship with Dr. Yahagi, the cardiovascular surgeon. The
Defendants-Appellants also cite to admissions by the Cardiologists that they had
“friction with doctors and staff at CMC,” especially Dr. Yahagi. CMC feared that
if the Cardiologists and Dr. Yahagi continued to experience difficulties working
together, Dr. Yahagi would leave Victoria and the hospital would no longer have
a cardiovascular surgeon.
      According to the Cardiologists, the misconduct and discrimination against
them culminated in a Resolution passed by the Board on February 17, 2010. The
Resolution stated that “the Hospital heart program is now experiencing
operational problems and difficulties,” and that CMC “received an opinion from
a qualified and independent consultant that a reasonable solution to correct the
operational problems set forth . . . is to close and limit the Hospital’s cardiology
department exclusively to one group of cardiologists.” Therefore, “[o]nly those
physicians who are contractually committed to the Hospital to participate in the
Hospital’s on-call emergency room coverage program shall be permitted to
exercise clinical privileges in the cardiology department or as part of the
Hospital’s heart program.”      The Resolution also closed the cardiovascular
surgery staff “such that Dr. Yusuke Yahagi is the only member of the medical


                                         5
   Case: 10-41332   Document: 00511760281         Page: 6   Date Filed: 02/16/2012




                                  No. 10-41332

staff with cardiovascular surgical privileges.” Because the Cardiologists are not
under contract with CMC, the Resolution prevented them from exercising their
privileges and treating patients at CMC.
      The Cardiologists filed suit on February 24, 2010, the day the Resolution
was to take effect. They also sought a temporary restraining order (“TRO”) and
preliminary and permanent injunctions. The district court granted the TRO,
expressly predicating the grant on the Cardiologists’ substantive due process
claim, as their equal protection claim was not added until their second amended
complaint was filed on August 6, 2010. On March 12, 2010, the district court
issued a preliminary injunction. Defendants appealed, and on January 6, 2011,
this Court reversed the district court’s order.
      In the interim, the district court issued an order on December 22, 2010,
granting in part and denying in part the various motions for summary judgment
filed by the Defendants. The court found that the Cardiologists did not have a
liberty interest in practicing in Victoria that was violated by the Resolution, or
by any other actions perpetrated by the Defendants. However, the district court
held that the Cardiologists had a property interest in their privileges at CMC,
including an interest in receiving phone calls or referrals when their patients
presented at the hospital, and that the Resolution terminated those privileges
without providing due process. The court further found that “[t]here is a
genuine dispute as to whether racial animus was the motivating factor behind
the conduct at issue here,” and cited the parties’ conflicting evidence as to the
reasons for the actions taken against the Cardiologists. Because the district
court held that the Plaintiffs had “provided sufficient facts to make out a
violation of their due process and equal protection rights,” and that those rights


                                        6
   Case: 10-41332      Document: 00511760281        Page: 7     Date Filed: 02/16/2012




                                     No. 10-41332

were clearly established, it denied the Defendants qualified immunity on those
claims.4
       The district court also denied official immunity to Dr. Campbell for the
state-law claims against him. The court found that Dr. Campbell had not proved
that he acted in good faith at all times. Therefore, because he had failed to meet
his burden to establish official immunity under Texas law, Dr. Campbell’s
motion for summary judgment was denied.
                              II. STANDARD OF REVIEW
       “The doctrine of qualified immunity protects government officials ‘from
liability for civil damages insofar as their conduct does not violate clearly
established statutory or constitutional rights of which a reasonable person would
have known.’” Pearson v. Callahan, 

, 231 (2009) (quoting Harlow
v. Fitzgerald, 

, 818 (1982)). When a state actor claims qualified
immunity, a court must make two separate inquiries: “(1) whether the
defendant’s conduct violated a constitutional right, and (2) whether the
defendant’s conduct was objectively unreasonable in light of clearly established
law at the time of the violation.” Terry v. Hubert, 

, 761 (5th Cir.
2010) (citing 

). Judges may decide the order in which
they address the two prongs of the qualified immunity test “in light of the
circumstances in the particular case at hand.” 

.
       A denial of a motion for summary judgment based on qualified immunity,
unlike a denial of summary judgment on other grounds, is immediately
appealable. Kinney v. Weaver, 

, 348 (5th Cir. 2004) (en banc).

      4
        The district court granted qualified immunity to board member Paul Holmes, because
he had abstained from voting on the Resolution, and thus was not personally involved in its
passage.

                                            7
   Case: 10-41332    Document: 00511760281       Page: 8   Date Filed: 02/16/2012




                                   No. 10-41332

However, “[f]or purposes of [an] interlocutory appeal, we are obliged to take, as
given, the facts the district court assumed, and our inquiry is limited to the
narrow question of whether those facts are sufficient to state a claim under
clearly established law.” Coleman v. Hous. Ind. Sch. Dist., 

, 534
(5th Cir. 1997); see also Foley v. Univ. of Hous. Sys., 

, 337 (5th Cir.
2003) (“The district court’s determination that fact issues are genuine is not
appealable. However, his determination that those fact issues are material, that
is, that resolution of them might affect the outcome of the case under governing
law, is appealable . . . .”). “Therefore, [in an interlocutory appeal asserting
qualified immunity,] we do not apply the standard of Rule 56[,] but instead
consider only whether the district court erred in assessing the legal significance
of the conduct that the district court deemed sufficiently supported for purposes
of summary judgment.” 

. This Court “‘can review the
materiality of any factual disputes, but not their genuineness.’” 

(quoting Wagner v. Bay City, 

, 320 (5th Cir. 2000)). However, in
reviewing the district court’s legal conclusions, i.e., the materiality of the facts,
“our review is of course de novo.” 

      Our review of the district court’s subject matter jurisdiction over the state-
law claims against Dr. Campbell is plenary. Griffin v. Lee, 

, 384
(5th Cir. 2010) (per curiam).
                                  III. ANALYSIS
                            A. Due Process Claims
      The Cardiologists’ due process claims relate only to passage of the
Resolution. Unfortunately, in ruling on the Defendants’ motion for summary
judgment in relation to those claims, the district court did not have the benefit


                                         8
   Case: 10-41332   Document: 00511760281      Page: 9   Date Filed: 02/16/2012




                                  No. 10-41332

of our previous ruling reversing the grant of a preliminary injunction. In that
decision, we determined that “the Resolution is a ‘legislative act’ because it
excludes any cardiologist seeking to practice at CMC without a contract with the
hospital.” Citing Jackson Court Condominiums, Inc. v. City of New Orleans, 

, 1078 (5th Cir. 1989), we applied rational-basis scrutiny to determine
whether the Resolution violated the Cardiologists’ substantive due process
rights. We found that “[p]reventing Yahagi from leaving CMC was a conceivable
rational basis for closing the cardiology department,” and “[t]he record provides
ample evidence supporting CMC’s claim that Yahagi’s departure was a
reasonably conceivable possibility.” Therefore, because the Resolution had a
conceivable rational basis, we held that “the Cardiologists’ substantive due
process claim did not have a substantial likelihood of success, and the district
court’s grant of the preliminary injunction was an abuse of discretion.”
      The Defendants-Appellants now argue that our previous ruling is the law
of the case. We have held that a decision on interlocutory appeal of the grant of
a preliminary injunction constitutes law of the case as to legal determinations.
Royal Ins. Co. of Am. v. Quinn-L Capital Corp., 

, 881 (5th Cir. 1993).
Such an appeal of a preliminary injunction usually will not establish law of the
case as to factual determinations, however. 

because “the lesser
standard of review applied during an appeal of a preliminary injunction
necessarily means that the factual issues differ from those on direct appeal.” 

other circuits mirror our holding that conclusions of law made by
a court of appeals regarding a preliminary injunction become the law of the case,
and binding on that court in further proceedings. See, e.g., ACLU v. Mukasey,

, 189-90 (3d Cir. 2008) (stating that “those conclusions [that did not


                                        9
  Case: 10-41332    Document: 00511760281       Page: 10   Date Filed: 02/16/2012




                                  No. 10-41332

depend on the factual record] remain binding on us now”); Naser Jewelers, Inc.
v. City of Concord, N.H., 

, 21 (1st Cir. 2008) (“The precedent
established by the prior panel is not clearly erroneous; it is the law of this case
and the law of this circuit.”); Ranchers Cattlemen Action Legal Fund United
Stockgrowers of Am. v. U.S. Dept. of Agr., 

, 1114 (9th Cir. 2007)
(“Any of our conclusions [at the preliminary injunction phase] on pure issues of
law, however, are binding.”); see also 18 Charles Alan Wright, Arthur R. Miller
& Edward H. Cooper, Federal Practice and Procedure § 4478.5 (2002) (“A fully
considered appellate ruling on an issue of law made on a preliminary injunction
appeal . . . does become the law of the case for further proceedings in the trial
court on remand and in any subsequent appeal.”).
      Based on the foregoing precedent, our previous determinations–that the
Resolution was a legislative act, that rational-basis scrutiny applies, and that
the Defendants-Appellants had a rational basis for passing the Resolution such
that it did not violate the Cardiologists’ substantive due process rights–are all
legal findings that are now binding law of the case. The record on appeal
contains no new facts that substantially change these legal conclusions, nor has
new precedent made our previous decision contrary to the law. See Royal 

(“Under this doctrine, we will follow a prior decision of this court
without reexamination in a subsequent appeal unless (i) the evidence on a
subsequent trial was substantially different, (ii) controlling authority has since
made a contrary decision of the law applicable to such issues, or (iii) the decision
was clearly erroneous and would work manifest injustice.” (internal quotation
marks and citation omitted)). Therefore, the Cardiologists’ claim that the
Resolution violated their substantive due process rights must fail.


                                        10
  Case: 10-41332        Document: 00511760281           Page: 11     Date Filed: 02/16/2012




                                        No. 10-41332

       The district court’s grant of a preliminary injunction was based only on the
Cardiologists’ substantive due process claim, such that this Court’s decision
concerning the previous interlocutory appeal concerned only that claim, as well.
However, a finding that the Resolution is a legislative act also forecloses the
Cardiologists’ procedural due process claim. See Martin v. Mem’l Hosp. at
Gulfport, 

, 1149 (5th Cir. 1997) (“Generally applicable legislative
and quasi-legislative decisions, wherein the competency or integrity of the
individual appellants is not in question, are not subject to procedural due process
constraints, even though they result in a deprivation of a recognized liberty
interest. ”); Jackson Ct. 

(stating that “it is well
established law that once an action is characterized as legislative, procedural
due process requirements do not apply” to the deprivation of a claimed property
interest). Thus, the Cardiologists’ claim that the Resolution violated their
procedural due process rights must fail. This is so regardless of whether the
Cardiologists claim a property or liberty interest in their privileges.5
       “Qualified immunity is applicable unless the defendant’s conduct violated
a clearly established constitutional right.” Ontiveros v. City of Rosenberg, Tex.,

, 382 (5th Cir. 2009). The Defendants-Appellants did not violate the
Cardiologists’ due process rights by passing the Resolution. Therefore, they are
due to receive qualified immunity from suit on this claim. See Terry v. Hubert,




       5
         The district court rejected the Cardiologists’ claim to a liberty interest in their
privileges, but found that they had a valid property interest. The Cardiologists here argue
that the district court was correct as to its ruling that they have a property interest, but erred
in finding that there is no associated liberty interest. Since the Board’s action in passing the
Resolution is not subject to procedural due process constraints, both arguments fail.

                                               11
  Case: 10-41332      Document: 00511760281     Page: 12    Date Filed: 02/16/2012




                                   No. 10-41332

, 762 (5th Cir. 2010) (“The Warden is entitled to qualified immunity
because he did not violate Terry’s right of access to the courts.”).
                          B. Equal Protection Claims
        The Cardiologists allege that the Resolution violated their equal protection
rights under the Fourteenth Amendment. They also claim that a series of other
actions by Brown infringed on those rights. We will address these claims in
turn.
                                1. The Resolution
        According to the Cardiologists, the Resolution violated their equal
protection rights because it was motivated by racial animus. The Defendants-
Appellants, however, claim that the Cardiologists’ disruptive behavior and issues
with Dr. Yahagi led to passage of the Resolution. The district court held that
“[t]here is a serious factual dispute as to the motivation behind nearly every
action taken against Plaintiffs at CMC, up to and including the Board
Resolution,” and thus denied summary judgment.
        “The central purpose of the Equal Protection Clause of the Fourteenth
Amendment is the prevention of official conduct discriminating on the basis of
race.” Washington v. Davis, 

, 239 (1976). “Laws that explicitly
distinguish between individuals on racial grounds fall within the core” of the
Equal Protection Clause’s prohibition, Shaw v. Reno, 

, 642 (1993),
and are subject to strict scrutiny, Hunt v. Cromartie, 

, 547 (1999).
The same principles apply to legislation that is facially neutral but the product
of a racially discriminatory purpose, 

on its face, is “unexplainable on
grounds other than race,” 

(quoting Arlington Hts. v.
Metro. Housing Dev. Corp., 

, 266 (1977)). Similarly, statutes that


                                         12
  Case: 10-41332    Document: 00511760281       Page: 13   Date Filed: 02/16/2012




                                  No. 10-41332

“impinge on personal rights protected by the Constitution” are subject to strict
scrutiny. City of Cleburne, Tex. v. Cleburne Living Ctr., 

, 440
(1985). It is not enough for a law to have only discriminatory effects; it must also
be animated by a discriminatory intent. See, e.g., Washington v. Davis, 

, 243 (1976) (inquiring into the motives underlying a legislative decision
where there were “disproportionate racial consequences”); Arlington 

(stating that Washington v. Davis “made it clear that official
action will not be held unconstitutional solely because it results in a racially
disproportionate impact,” and “[p]roof of racially discriminatory intent or
purpose is required to show a violation of the Equal Protection Clause”); Hunter
v. Underwood, 

, 227 (1985) (applying the test from Arlington
Heights, and holding that “a neutral state law that produces disproportionate
effects along racial lines” was unconstitutional where there was also strong
evidence that it was motivated by racial animus); Johnson v. Rodriguez, 

, 306 (5th Cir. 1997) (“The Supreme Court has instructed us time and
again, however, that disparate impact alone cannot suffice to state an Equal
Protection violation . . . . Thus, a party who wishes to make out an Equal
Protection claim must prove the existence of purposeful discrimination
motivating the state action which caused the complained-of injury.” (internal
quotation marks and citations omitted)).
      Here, the Cardiologists argue that the district court’s finding that the
passage of the Resolution was motivated by racial animus must not be disturbed,
because that is a factual finding. As stated earlier, “we are obliged to take, as
given, the facts the district court assumed, and our inquiry is limited to the
narrow question of whether those facts are sufficient to state a claim under


                                        13
  Case: 10-41332        Document: 00511760281          Page: 14     Date Filed: 02/16/2012




                                        No. 10-41332

clearly established law.” 

. As the standard above
indicates, the district court’s finding that the Resolution was motivated by a
discriminatory purpose dictates that we subject the Resolution to strict scrutiny.
The Board members therefore must show that the Resolution is “narrowly
tailored to further a compelling governmental interest.” 

.
This they have failed to do. They state that “[i]n adopting the Resolution, the
Board of Directors considered the ongoing operational problems in CMC’s
cardiac care program that were being caused by the disruptive behavior of” the
Cardiologists, and they “also considered the value of having an exclusive
arrangement with a smaller number of cardiologists.” We find neither of these
reasons compelling enough to justify a discriminatory legislative act. Thus, the
Resolution does not survive strict scrutiny.6
       Because the Resolution does not withstand strict scrutiny, the
Cardiologists have adequately made out an equal protection claim.
Furthermore, it is without question clearly established that the Cardiologists
have a right to be free from racial discrimination. See, e.g., Piatt v. City of
Austin, 378 F. App’x 466, 469 (5th Cir. 2010) (per curiam) (“[G]enerally, where


       6
          At oral argument, counsel for the Board members argued that because the
Cardiologists were offered the same contracts that were offered to and accepted by the contract
cardiology group, the EP claim against the Board could not survive. Indeed, there is summary
judgment evidence that the Cardiologists were offered the same contracts that were offered
to the contract cardiology group. However, the summary judgment evidence also indicates
that the contracts were never formally offered to the Cardiologists, and that such informal
offers were made three years before the Resolution at issue was passed. Because of the
district court’s factual determination that racial animus motivated the passage of the
Resolution, we need not opine on the effects of the alleged contract offers on the Cardiologists’
claims. Moreover, if there was a refusal of the contracts, this may have a bearing on the
damages, if any, available to the Cardiologists in the event that they prevail on their equal
protection claim.


                                               14
  Case: 10-41332    Document: 00511760281      Page: 15   Date Filed: 02/16/2012




                                  No. 10-41332

the evidence is sufficient to support a claim of intentional gender or race
discrimination, any immunity defense will be foreclosed.”); Jackson v. Hous.
Indep. Sch. Dist., 

, at *7 (5th Cir. 1999) (per curiam) (stating
that “Jackson has a clearly established right to be free from racial discrimination
in employment”). Therefore, the Board members are not entitled to qualified
immunity, and the district court properly denied them summary judgment on
this claim.
                              2. Brown’s Actions
      The Cardiologists also claim that other actions perpetrated by Brown
violated their equal protection rights. Those other acts are:
              1.   In May 2007, CMC and Brown denied privileges,
                   including ICD privileges, to Plaintiffs and gave
                   them to other non-Indian physicians;

              2.   The Plaintiffs’ ability to receive calls when a
                   patient presented was restricted;

              3.   Brown entered into contracts with the other, non-
                   Indian cardiology group;

              4.   Brown kicked the Cardiologists off of the Chest
                   Pain Center Committee, while other cardiologists
                   were permitted to remain;

              5.   Brown amended the protocols for the Chest Pain
                   Center to exclude the Cardiologists;

              6.   Brown initiated reverse investigations of the
                   Cardiologists when they lodged patient-care
                   concerns;

              7.   Dr. Chandna was removed from the peer review
                   committee;

                                        15
  Case: 10-41332      Document: 00511760281         Page: 16    Date Filed: 02/16/2012




                                     No. 10-41332

              8.     Brown allowed Yahagi to refuse to provide the
                     Cardiologists with surgical standby for a month.

       The district court found that the “Plaintiffs rely upon direct evidence of
discrimination [in asserting their equal protection claims], and therefore do not
employ the McDonnell Douglas burden shifting test.” (Referring to McDonnell
Douglas Corp. v. Green, 

(1973)). The district court agreed with the
Cardiologists that the evidence of discrimination described above–Brown’s
memo, and reference to his “Indian troubles”–constituted direct evidence of
discrimination. The district court therefore found that the Cardiologists had
made out a prima facie case of discrimination by presenting evidence suggesting
that Brown’s actions were motivated by racial animus.
       “To state a claim of racial discrimination under the Equal Protection
Clause and section 1983, the plaintiff ‘must allege and prove that he received
treatment different from that received by similarly situated individuals and that
the unequal treatment stemmed from a discriminatory intent.’” Priester v.
Lowndes Cnty., 

, 424 (5th Cir. 2004) (quoting Taylor v. Johnson, 

, 473 (5th Cir. 2001) (per curiam)). This discriminatory intent may be
proved through either direct or circumstantial evidence. Jones v. Robinson Prop.
Grp., L.P., 

, 992 (5th Cir. 2005). “Direct evidence [of discriminatory
intent] is evidence which, if believed, proves the fact without inference or
presumption.” 

any statement or document which shows on its
face that an improper criterion served as a basis–not necessarily the sole basis,
but a basis–for the adverse employment action.”7 Fabela v. Socorro Ind. Sch.

      7
       Neither the district court nor the parties address whether the actions taken against
the Cardiologists constitute “adverse employment action[s].” Brown did not argue at the
summary judgment stage that any of his alleged acts were not adverse employment actions.

                                            16
  Case: 10-41332       Document: 00511760281          Page: 17      Date Filed: 02/16/2012




                                       No. 10-41332

Dist., 

, 415 (5th Cir. 2003) (citations omitted), overruled on other
grounds by Smith v. Xerox Corp., 

, 328 (5th Cir. 2010).8
       The district court is correct that direct evidence of discrimination can
negate the need for proving discriminatory purpose with the McDonnell Douglas
test. See Wallace v. Texas Tech Univ., 

, 1047-48 (5th Cir. 1996)
(“Generally, a plaintiff proves a prima facie case through a four-element test that
allows an inference of discrimination. But a prima facie case can also be proven
by direct evidence of discriminatory motive.” (citations omitted)); see also
Ramirez v. Sloss, 

, 168 (5th Cir. 1980). However, none of the
evidence of racial discrimination cited by the district court meets the
aforementioned definitions of “direct evidence.” While Brown’s memo may be
“clearly derogatory,” as the district court stated, it does not prove “without
inference or presumption” that any of his actions were motivated by
discrimination, 

, nor does it “sho[w] on its face that an
improper criterion served as a basis . . . for the adverse employment action,”

. The memo makes no reference to any actions taken or
decisions made by Brown. Instead, it generally refers to the consequences of the
Cardiologists seeking leadership roles at the hospital.                 Similarly, Brown’s
mention of his “Indian troubles” in an email is not made in the context of



Because he failed to make that argument before the district court, it is waived on appeal.
Morgan v. Swanson, 

, 405 (5th Cir. 2011) (en banc) (“Our well-established rule
is that arguments not raised before the district court are waived and will not be considered
on appeal.” (internal quotation marks and citation omitted)).
       8
        While Fabela involved claims brought under Title VII, in cases of alleged employment
discrimination, “Section 1983 and [T]itle VII are parallel causes of action,” Lauderdale v. Tex.
Dep’t of Criminal Justice, Inst. Div., 

, 166 (5th Cir. 2007); see also Irby v.
Sullivan, 

, 1431 (5th Cir. 1984).

                                              17
  Case: 10-41332     Document: 00511760281       Page: 18    Date Filed: 02/16/2012




                                   No. 10-41332

discussing employment matters. Consequently, while Brown’s statements may
serve as circumstantial evidence that his actions were motivated by racial
animus, they do not constitute direct evidence of discrimination. The other
evidence cited by the district court, such as testimony from physicians regarding
racial tensions at the hospital and Brown’s bias against those of Indian origin,
and other CMC employees’ use of the term “the Indians,” also constitutes only
circumstantial evidence of discrimination.
      Because the Cardiologists have not presented direct evidence of
discrimination, the court must analyze their claims utilizing the McDonnell
Douglas burden-shifting framework.            That framework requires that the
plaintiffs establish that they (1) belong to a protected class, (2) were qualified for
the positions from which they were excluded, (3) were subject to an adverse
employment action, and (4) were treated less favorably than similarly situated
employees. Bryan v. McKinsey & Co., Inc., 

, 360 (5th Cir. 2004). If
the plaintiffs make out a prima facie case, it raises the presumption of
discrimination, and the burden shifts to the employer to “articulat[e] a
legitimate, nondiscriminatory reason for its actions.” Meinecke v. H&R Block of
Hous., 

, 83 (5th Cir. 1995) (per curiam). If the employer does so, then
“the presumption disappears, and the plaintiff[s] must prove that the proffered
reasons are a pretext for discrimination.” 

order, the district court did not designate the individual actions by
Brown that the Cardiologists claim violated their rights, nor did it specifically
connect the evidence of discriminatory purpose to each action. Instead, the
district court’s decision concentrated on the Resolution, and only briefly
mentioned the other claimed infringements of the Cardiologists’ rights.


                                         18
  Case: 10-41332    Document: 00511760281      Page: 19   Date Filed: 02/16/2012




                                  No. 10-41332

Therefore, we are not able to analyze the district court’s legal conclusion that
each of Brown’s actions constituted an equal protection violation. “If the district
court’s factual findings are insufficient to allow this Court to review the
judgment below, then we must vacate the judgment and remand for more
detailed findings.” Colonial Penn Ins. v. Mkt. Planners Ins. Agency Inc., 

, 1037 (5th Cir.1998) (citation omitted). Accordingly, we must remand
these claims in order for the district court to analyze the Cardiologists’ equal
protection claims against Brown outside of the Resolution. The district court
should utilize the McDonnell Douglas burden-shifting framework, based on our
finding that the Cardiologists have failed to provide direct evidence that Brown’s
actions were motivated by racial animus.
         C. Supplemental Jurisdiction over State Law Claims
      In their second amended complaint, the Cardiologists asserted a claim for
civil conspiracy against Dr. Campbell and the other defendants, as well as claims
for tortious interference with contractual relations, tortious interference with
prospective relations, and defamation against Dr. Campbell. The district court
dismissed the civil conspiracy claim, and the Cardiologists have not appealed
that dismissal. Dr. Campbell now argues that this Court lacks supplemental
federal jurisdiction over the state-law claims asserted against him because they
did not arise out of the same case or controversy as the federal claims asserted
against the other defendants.
      Dr. Campbell did not make this argument before the district court. He
states that the district court properly exercised jurisdiction over him when the
civil conspiracy claim was pending, and that “the conspiracy claim . . . was not
dismissed until December 22, 2010, and the case was stayed shortly thereafter,”


                                        19
  Case: 10-41332    Document: 00511760281      Page: 20   Date Filed: 02/16/2012




                                  No. 10-41332

such that he did not have the opportunity to raise this jurisdictional challenge
before the district court. Further, he argues that “this court may consider
jurisdictional matters for the first time on appeal.” The Plaintiffs-Appellees
respond that “[t]here is no right to an interlocutory appeal based on a district
court’s exercise of supplemental jurisdiction.”
      Because the district court was not given the opportunity to consider Dr.
Campbell’s challenge to its jurisdiction in the first instance, we also remand this
matter.
                                IV. CONCLUSION
      For the foregoing reasons, in regards to the Plaintiffs-Appellees’ due
process claims, we conclude that the Resolution was a legislative act subject to
rational-basis scrutiny, which it survives. We therefore REVERSE the district
court’s denial of summary judgment on the Plaintiffs-Appellees’ due process
claims, and REMAND with orders to dismiss those claims. We find that the
Plaintiffs-Appellees have stated a valid equal protection claim regarding the
Resolution against Board members Donald Day, Joe Bland, Andrew Clemmons,
M.D., Jennifer Hartman, and Luis Guerra, and that they are not entitled to
qualified immunity. We thus AFFIRM the district court’s denial of summary
judgment on that claim. We further VACATE the district court’s denial of
summary judgment on the Plaintiffs-Appellees’ equal protection claims against
Brown for actions other than passage of the Resolution, and we REMAND those
claims for individual analysis using the McDonnell Douglas burden-shifting
framework.    Finally, we REMAND the state-law claims asserted against
Defendant-Appellant Dr. William Campbell in order for the district court to
determine whether subject matter jurisdiction exists over those claims.


                                        20