WILLIAM B. SHUBB, District Judge.
Plaintiff Beth A. Rhodes brought this action against Sutter Health, Sutter Gould Medical Foundation ("SGMF"), and The Gould Medical Group, Inc. ("GMG") alleging unlawful retaliation, constructive discharge, gender harassment, gender discrimination, failure to prevent discrimination, violation of California Business and Professions Code section 2056, defamation, and intentional infliction of emotional distress. Presently before the court is SGMF's motion for summary judgment or, alternatively, partial summary judgment, as to plaintiff's fourth through eleventh causes of action pursuant to Federal Rule of Civil Procedure 56. Also before the court is SGMF's motion to strike pursuant to Federal Rule of Civil Procedure 37.
SGMF is a nonprofit corporation that operates healthcare clinics and a clinical research department in California's Central Valley. (Sanders Decl. ¶¶ 2-3 (Docket No. 71).) California prohibits the corporate practice of medicine, which precludes SGMF from employing its own physicians to provide medical services to its patients.
GMG enters into individual employment or independent contractor agreements with each physician. (Id. ¶ 5.) Plaintiff was employed by GMG as a radiologist specializing in breast and body imaging from January 2008 through May 2011. (First Am. Compl. ("FAC") ¶ 14 (Docket No. 30); McClain Decl. in Supp. of Summ. J. Ex. C ("Rhodes Dep.") at 20:1, 40:4-7 (Docket No. 78-2).) Plaintiff provided care to patients at SGMF's healthcare clinics in Modesto and Stockton. (FAC ¶¶ 14-15.)
On April 30, 2010, plaintiff attended a meeting with Dr. Paul Stadelman ("Dr. Stadelman"), Chairman of the Radiology Department, Melinda Knox, another GMG doctor, and Robrta Edge ("Edge"), the SGMF Director of Imaging. (Purtill Decl. Ex. B ("Rhodes Dep. II") at 189-90 (Docket No. 85:1-3), Ex. C ("Edge Dep.") at 201:22-202:21, 298:3-15 (Docket No. 86-1).) At the meeting, plaintiff and Dr. Knox discussed plaintiff's concerns about Dr. Knox's performance, but there was tension between them. (See Rhodes Dep. II at 189-90.) After the meeting, plaintiff
Following that meeting, several incidents involving plaintiff and SGMF staff occurred.
Third, a technician, Carolyn Plante, performed a "Crown-Rump Length Measurement" incorrectly. (Id. ¶ 6.) When plaintiff confronted her about it, Plante said, "`That's the way we measure it here. Why don't you ask a radiologist?'" (Id.) Plaintiff believes Plante and Davis did these things so that plaintiff would have an inappropriate outburst in response and be fired. (Id. ¶¶ 2, 6.) As a result of these incidents, plaintiff felt anger, outrage, anxiety, and humiliation. (Id. ¶¶ 2, 7.) She internalized those feelings and believes that they were a substantial factor in causing her to go on medical disability on or about December 16, 2010. (Id. ¶¶ 4, 8.)
Plaintiff brings claims against three defendants: GMG, SGMF, and Sutter Health. Plaintiff's FAC contains claims for (1) retaliation in violation of the federal False Claims Act, (2) retaliation in violation of the California False Claims Act, (3) violation of California Business and Professions Code section 2056, (4) gender harassment in violation of the California Fair Employment and Housing Act ("FEHA"), (5) sex discrimination in violation of FEHA, (6) retaliation for reporting patient abuse in violation of FEHA, (7) retaliation in violation of FEHA, (8) failure to prevent discrimination in violation of FEHA, (9) constructive discharge in violation of public policy, (10) defamation, and (11) intentional infliction of emotional distress. (Docket No. 30.)
On May 22, 2012, 2012 WL 1868697, the court dismissed all of plaintiff's claims against Sutter Health and plaintiff's first through third claims against SGMF. (Docket No. 51.) The parties then stipulated to dismiss claim six with prejudice as to all defendants. (Docket No. 37.) SGMF now moves for summary judgment on claims four through eleven and contends that plaintiff is not entitled to punitive damages. (Docket No. 68.)
SGMF requests that the court take judicial notice of the legislative history of Assembly Bill 2279, Chapter 133, Statutes of 1980, which amended California Health and Safety Code section 1206. (Req. for Judicial Notice ("RJN") Ex. A (Docket No. 79).) Under Rule 201 of the Federal Rules of Evidence, the court may take judicial notice of the legislative history of state statutes. See Chaker v. Crogan, 428 F.3d 1215, 1223 (9th Cir.2005) (taking judicial notice of legislative history of California statute); Louie v. McCormick & Schmick Rest. Corp., 460 F.Supp.2d 1153, 1155 n. 4 (C.D.Cal.2006) (same). Accordingly,
Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P.56(a).
Once the moving party meets its initial burden, the burden shifts to the non-moving party to "designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. 2548 (quoting then-Fed. R. Civ. P. 56(e)). To carry this burden, the non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "The mere existence of a scintilla of evidence... will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson, 477 U.S. at 252, 106 S.Ct. 2505.
In deciding a summary judgment motion, the court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255, 106 S.Ct. 2505. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment...." Id.
SGMF requests summary judgment on five claims (excluding claim 6, which has been dismissed) that require plaintiff to demonstrate either an employment relationship or an alternate basis for liability. Claims four through eight are all brought under FEHA, "which predicates potential ... liability on the status of the defendant as an `employer.'" Kelly v. Methodist Hosp. of S. Cal., 22 Cal.4th 1108, 1116, 95 Cal.Rptr.2d 514, 997 P.2d 1169 (2000) (quoting Cal. Gov't Code § 12926). Claim nine is a claim for wrongful termination in violation of public policy, and "only an employer can be liable for the tort of wrongful discharge." Khajavi v. Feather River Anesthesia Med. Grp., 84 Cal.App.4th 32, 38, 100 Cal.Rptr.2d 627 (3d Dist.2000).
Plaintiff alleges in her FAC and has repeatedly stated under oath that only GMG was her employer. (See, e.g., FAC § 14 (Docket No. 30); Rhodes Dep. at 19:24-20:4, 30:7-21, 31:1-11.) She gave no indication that she intended to argue that SGMF is her joint employer until her opposition to SGMF's motion for summary judgment repeatedly used the term and
In determining whether a defendant is a joint employer under the FEHA, courts consider the totality of the circumstances bearing on the nature of the work relationship of the parties, with an emphasis on the extent to which the defendant controls the plaintiff's performance of employment duties. Hall v. Apartment Inv. & Mgmt. Co., Civ. No. 08-03447, 2011 WL 940185, at *5 (N.D.Cal. Feb. 18, 2011); Vernon v. State, 116 Cal.App.4th 114, 124, 10 Cal.Rptr.3d 121 (1st Dist.2004). Factors to be taken into account include:
Vernon, 116 Cal.App.4th at 125, 10 Cal.Rptr.3d 121.
"`Of these factors, the extent of the defendant's right to control the means and manner of the workers' performance is the most important.'" Vernon, 116 Cal. App.4th at 126, 10 Cal.Rptr.3d 121 (quoting Lee v. Mobile Cnty. Comm'n, 954 F.Supp. 1540, 1546 (S.D.Ala.1995)). "`A finding of the right to control employment requires... a comprehensive and immediate level of "day-to-day" authority over employment decisions.'" Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 682 (9th Cir.2009) (quoting Vernon, 116 Cal.App.4th at 127-28, 10 Cal.Rptr.3d 121).
Here, it is undisputed that GMG paid plaintiff's salary. (See Pl.'s Stmt. of Genuine Issues & Disputed Facts at 14 (Docket No. 89); see also McClain Decl. in Supp. of Summ. J. Exs. G at 216 (employment contract between GMG and plaintiff, setting plaintiff's salary), K (payroll stub), O, P, Q, R (Docket Nos. 78-4, 78-5).) Although this factor is not dispositive, it "is at least strong evidence that an employment relationship did not exist." Vernon, 116 Cal.App.4th at 126, 10 Cal.Rptr.3d 121. Plaintiff does not contend that SGMF "hired [plaintiff], set h[er] compensation, or maintained any personnel records for [her]."
Except for the fact that SGMF owns the location where plaintiff works, none of the other facts pointed to by plaintiff provide indicia that SGMF exercised an "immediate level of `day-to-day' authority," Vernon, 116 Cal.App.4th at 128, 10 Cal.Rptr.3d 121, so as to create an employment relationship between it and plaintiff. It is undisputed that Dr. Stadelman, a GMG employee, gave plaintiff her work assignments. (Pl.'s Stmt. of Genuine Issues & Disputed Facts at 13-15.) Moreover, as a physician, plaintiff practiced under her own license and did not have a supervisor. (Rhodes Dep. 54:19-55:10.) She also has the authority to make independent, as well as final, decisions regarding patient care. (Sanders Decl. ¶¶ 6, 10,12; id. Ex. 2 Art. 1.1(a), 2.12, 9.1 (Docket No. 81).) In contrast, GMG physicians may supervise SGMF employees and require their removal from foundation sites. (Purtill Decl. Ex. G at 238:20-239:9.)
SGMF also "had no apparent authority or discretion to discipline, promote, transfer, or terminate" plaintiff. Id. The disciplinary warning plaintiff received was from Dr. Stadelman. (Rhodes Dep. 63:10-65:8.) At most, one SGMF staff member provided evaluations, at the request of GMG, of plaintiff's performance on such issues as timeliness and her demeanor with patients and staff. (See Purtill Decl. Exs. M, O (Docket Nos. 87-3, 87-4.)) Plaintiff points to the fact that Edge reviewed documents relating to incidents between plaintiff and other staff, but this was at the request of Dr. Steven Mitnik, the Medical Director of GMG. (Edge Dep. 291:15; Sanders Decl. ¶ 6.) She also suggests that Edge "was part of the `leadership' team responsible for the sham investigation to develop cause to terminate plaintiff." (Pl.'s Stmt. of Genuine Issues & Disputed Facts at 5; see, e.g., Purtill Decl. Ex. R (records of interviews with SGMF staff regarding GMG physicians) (Docket No. 87-4).) Edge assisted with interviewing her staff to determine if they had any problems with GMG doctors, however, because Dr. Mitnick again requested that she do so. (Edge Dep. 157:19-25.) Plaintiff's harassment and gender discrimination complaints were also conducted as a "joint investigation" by GMG and SGMF. (Purtill Decl. Ex. F at 27:15-17, 108:22-23 (Docket No. 86-4).) Evidence that an employer provided assistance with discrimination complaints and even supported such departments as benefits, diversity, and labor relations for another employer, however, is insufficient to find that it exercised day-to-day control over another employer's employment decisions in general or exercised any control with respect to plaintiff. Ruiz v. Sysco Corp., Civ. No. 09-1824-H MDD, 2011 WL 3300098, at *4 (S.D.Cal. July 29, 2011) (applying integrated enterprise theory).
The only other factor that might even suggest that SGMF had control over the manner and means of plaintiff's performance of her job is the SGMF-GMG joint operating policies. Plaintiff was especially concerned with SGMF's policy that patients be scheduled for a surgical consult prior to any needle biopsy of the breast. (Purtill Decl. Ex. N (Docket No. 87-3).)
Some federal courts have adopted the integrated enterprise test to determine whether separate corporate entities are a single employer for purposes of liability under statutes prohibiting discrimination, including Title VII. See, e.g., Sandoval v. Am. Bldg. Maint. Indus., Inc., 578 F.3d 787, 796 (8th Cir.2009) ("[T]he traditional four-factor standard is the means by which plaintiffs demonstrate corporate dominance over a subsidiary's operations and establish affiliate liability."); Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235, 1241 (2d Cir. 1995) ("We believe that the
The Ninth Circuit, however, uses the test for a more limited purpose. Under its formulation, "[a] plaintiff with an otherwise cognizable Title VII claim against an employer with less than 15 employees may assert that the employer is so interconnected with another employer that the two form an integrated enterprise, and that collectively this enterprise meets the 15-employee minimum standard [necessary to hold an employer liable under Title VII]." Anderson v. Pac. Mar. Ass'n, 336 F.3d 924, 929 (9th Cir.2003). In other words, "[t]he test does not determine joint liability ..., but instead determines whether a defendant can meet the statutory criteria of an `employer' for Title VII applicability." Id. at 928. If an employer meets the statutory minimum independently, the test is inapplicable. Id. at 929. Employed in this limited manner, the integrated employer test advances the anti-discrimination purpose behind Title VII by preventing employers from artificially dividing themselves into organizations with fewer than fifteen employees in order to escape liability. E.E.O.C. v. Falls Vill. Ret. Cmty., Ltd., Civ. No. 5:05-1973, 2007 WL 756803, at *8 (N.D.Ohio Mar. 7, 2007).
Other courts have recognized the limitations of the test for determining liability in the discrimination context. In declining to apply the integrated enterprise to determine whether two entities should together be liable under Title VII, the Seventh Circuit explained that "[i]f the work forces of two affiliated corporations are integrated,... there is no argument for making one affiliate liable for the other's independent decision to discriminate." Papa, 166 F.3d at 942. "The basic principle of affiliate liability is that an affiliate forfeits its limited liability only if it acts to forfeit it-as by... configuring the corporate group to defeat statutory jurisdiction, or commanding the affiliate to violate the right of one of the affiliate's employees." Id. at 941. "The claim that a group of affiliated corporations is `integrated,' the sort of claim that the four-factor test might be thought to support, not only is vague, but is unrelated to the act requirement ... or to the policy behind the exemption for employers that have very few employees." Id. at 942.
In Laird, the California Court of Appeal adopted the integrated enterprise test in a FEHA and wrongful termination case to determine whether a parent corporation could be liable for the acts of its subsidiary—the plaintiff's employer—as a single employer without discussion of statutory minimums or any act requirement. See Laird, 68 Cal.App.4th at 737, 80 Cal.Rptr.2d 454. Instead, it simply noted that, "[b]ecause California's Fair Employment and Housing Act has the same nature and purpose as the federal law, California courts frequently look to federal case law for guidance in interpreting the FEHA." Id. The Laird court articulated the test in a narrow fashion, framing it in terms of whether a corporate parent could be held liable for the acts of its subsidiary. Courts applying California law have generally followed suit, limiting the test's application to determining whether corporations having a parent-subsidy relationship are interrelated.
Plaintiff does not contend that there is a parent-subsidiary relationship between SGMF and GMG. Instead, she asks that the court extend application of the integrated enterprise test to the relationship between SGMF and GMG, a nonprofit corporation and a medical group. (See Sanders Decl. ¶¶ 2-5.) SGMF's relationship with GMG is designed to comply with California Health and Safety Code section 1206(1), which provides multispeciality clinical groups (known as "foundations") an exemption to licensing requirements. (Id. ¶ 2; Gordon Decl. at 2-3.) While the nonprofit may provide facilities or technical components of care, such as non-physician staff and equipment, under section 1206(1), it must form an arm's length relationship with physicians solely responsible for medical care because California prohibits the corporate practice of medicine.
Plaintiff provides no rationale for extending the integrated enterprise test from affiliated corporations to two separate corporate entities that have merely a
As explained above, the foundation model is intended to create an arm's length relationship between the nonprofit clinic and medical group practice because corporations cannot practice medicine. (Gordon Decl. at 3.) The policy behind imposing liability under the integrated enterprise test is the "`fairness of imposing liability for labor infractions where two nominally independent entities do not act under an arm's length relationship.'" Bowoto v. Chevron Texaco Corp., 312 F.Supp.2d 1229, 1237-38 (N.D.Cal.2004) (quoting Murray v. Miner, 74 F.3d 402, 405 (2d Cir.1996)). Plaintiff does not dispute that the relationship between the parties is organized under that law, nor does she explain why the other tests used by California courts to determine liability under FEHA are insufficient to capture a situation in which the nonprofit group does not in fact have an arm's length relationship with a physicians' group and is actually operating as an employer of a physician. See Bishop v. Wyndham Worldwide Corp., Nos. A122517, A123449, 2011 WL 576571, at *33-34 (Cal.App. 1st Dist. Feb. 18, 2011) (alter ego, agency, equitable estoppel, "totality of the working relationship," and joint employer tests used in FEHA cases to determine an employer).
For this same reason, the court declines plaintiff's invitation to adopt a new test—what she fashions the "integral enterprise test"—to apply in the specific context of the foundation model. Plaintiff argues that SGMF and GMG not only operate jointly, but are dependent on each other to deliver health care. (Opp'n at 8.) She also notes the legislative history of California Health and Safety Code section 1206(1) explains that foundations operating under the aegis of that statute "should be treated like physicians' offices" and "function like group practices of physicians." (RJN at 7, 14; see Opp'n at 11.) That two entities interact to meet a common end—in this case the provision of healthcare—is not sufficient within itself to hold both liable for each's discriminatory acts when their relationship is merely contractual. Moreover, here there is no question that each employer, SGMF and GMG, is obligated to comply with FEHA for its own employees, as would a physician's office for its employees. Thus, there is no "back door to exempt the [foundations] from their [FEHA] obligations for violations of discrimination laws." (Opp'n at 8:24-25.) If an employee working for a foundation operating under section 1206(1) and facing adverse employment action believes he or she is jointly employed or another employer may be liable for adverse actions against her under a different theory, she may argue as much. Plaintiff did so here and, in addition, she has sought relief against SGMF employees that she believes contributed to her harm under state tort law.
Moreover, as discussed above, the grounds for applying the integrated enterprise test to determine liability under employment discrimination statutes are infirm in the first place. The test was not created to determine whether an entity had control over a particular employee or directed any discrimination. There is also no indication that the reason the test was imported from Title VII into FEHA case law was to enable plaintiffs to meet the statutory minimums of FEHA. The Laird court adopted it explicitly to determine liability rather than coverage. See 68 Cal. App.4th at 737-41, 80 Cal.Rptr.2d 454. FEHA's statutory minimum is a mere five employees; this significantly lessens the concern that firms can organize themselves to avoid liability. See Cal. Gov't Code § 12926(d). There are no allegations here that SGMF and GMG are organized under section 1206(1) for such a purpose.
Finally, also cutting against extension of the test, is the presumption that separate corporate entities have distinct identities. Laird, 68 Cal.App.4th at 737, 80 Cal.Rptr.2d 454. As the Laird court noted in regard to a parent and subsidiary, plaintiffs bear a heavy burden under both California and federal law when they seek to rebut this presumption and hold multiple corporate entities liable as a single employer. Id. A fortiori, corporate entities that are unaffiliated and connected only through contract should not be joined as a single employer without a persuasive reason for doing so. This court discerns none. Without direction from California courts, the court is not inclined to extend the test outside of the parent-subsidiary relationship and does not do so. Accordingly, the court must grant SGMF's motion for summary judgment as to plaintiff's fourth through ninth claims (excluding claim six) for FEHA violations and wrongful termination.
Plaintiff concedes that her claim for defamation should be dismissed with respect to SGMF. (Opp'n at 3:9-10.) Accordingly, the court will dismiss plaintiff's claim for defamation with prejudice as to SGMF.
In support of her opposition to SGMF's motion for summary judgment, plaintiff submitted a declaration from Carol Frazier ("Frazier"). (Docket No. 93.) Plaintiff failed, however, to identify Frazier as a witness in her initial disclosures under Federal Rule of Civil Procedure 26. (Mot. to Strike at 2:4-5 (Docket No. 101).) SGMF moves to strike Frazier's declaration on this ground.
Rule 26(a) requires parties to disclose the names and contact information of individuals "likely to have discoverable information" that the disclosing party may use to support its claims or defenses, as well as the subject of the information known by the individuals. Fed.R.Civ.P. 26(a). Rule 37 gives teeth to that requirement, providing in relevant part that "[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." Fed.R.Civ.P. 37(c)(1). "The party facing sanctions bears the burden of proving that its failure to disclose the required information was substantially justified or is harmless." R & R Sails, Inc. v. Ins. Co. of Penn., 673 F.3d 1240, 1246 (9th Cir.2012).
Although Frazier's name appears to have come up only once in the documents produced by plaintiff (albeit her maiden name), (Mot. to Strike at 4:5-6), she was repeatedly mentioned in the various depositions of other witnesses when discussing plaintiff's contention that a nurse had intentionally harmed Frazier's mother. For example, plaintiff stated during her deposition that she "spoke with the patient and her daughter and they signed something saying that what Ms. Davis had put was incorrect." (Purtill Decl. in Opp'n to Mot. to Strike Ex. A at 150:3-5; see id. at 135:20-136:8, Ex. C at 328:1-25, Ex. D at 232:4-233:17 (Docket No. 102-1).) Plaintiff also referred to the incident involving Frazier's mother in her FAC as a basis of her defamation and intentional infliction of emotional distress claims. (See FAC ¶¶ 144, 156).
Plaintiff represents that her failure to disclose Frazier as a potential witness was an honest mistake. (Purtill Decl. in Opp'n to Mot. to Strike ¶ 8 (Docket No. 102-1).) The court has no reason to doubt that representation. Nevertheless, the court cannot find that her failure to do so was harmless. Parties, aware of the "self-executing" and "automatic" nature of Rule 37(c)(1) sanctions, have a right to expect that only disclosed witnesses will be used to support the disclosing party's claims and defenses. Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir.2001) (citing Fed.R.Civ.P. 37 advisory committee's note (1993)). They should be able to rely on Rule 26 disclosures and not be required to second guess whether a disclosing party has purposefully omitted a potential witness or done so accidently. Thus, even though Frazier had been referenced in the depositions of other witnesses, SGMF was not on sufficient notice that she possessed information that supported plaintiff's claims or defenses such that it could make an informed decision about whether to pursue discovery as to Frazier.
The district court has wide discretion to issue sanctions under Rule 37(c)(1). Yeti by Molly, Ltd., 259 F.3d at 1106; Fed. R.Civ.P. 37(c)(1)(C) (providing that, in addition
Because Frazier's declaration bears only on SGMF's motion for summary judgment with respect to plaintiff's claims for intentional infliction of emotional distress and punitive damages,
IT IS THEREFORE ORDERED that defendant SGMF's motion for summary judgment be, and the same hereby is, GRANTED as to claims four, five, seven, eight, and nine;
IT IS FURTHER ORDERED that plaintiff's tenth claim for defamation be, and the same hereby is, DISMISSED with prejudice as to SGMF;
AND IT IS FURTHER ORDERED that SGMF's motion to strike the declaration of Carol Frazier be, and the same hereby is, DENIED, on the condition that within twenty days of this Order, plaintiff shall make available witness Frazier and bear the costs for SGMF to depose her and receive transcripts of the deposition. Within fourteen days after completion of the deposition, SGMF may file an amended reply to plaintiff's opposition to SGMF's motion for summary judgment with respect to plaintiff's claims for intentional infliction of emotional distress and punitive damages. If SGMF elects not to depose Frazier, it shall so inform the court within twenty days of this Order, and the court will decide plaintiff's intentional infliction of emotional distress and punitive damages claims on the present record.
Plaintiff also states that SGMF represented that she was an employee of SGMF to the Department of Health Care Services and Memorial Hospital. (See Purtill Decl. Exs. Z (Not docketed), CC (Docket No. 88-1).) The court has reviewed these documents, however, and they do not identify plaintiff as an employee. Likewise, Dr. Mitnik is not identified as the authorized agent of SGMF for the "NDNP Query" for plaintiff, but rather is identified as an "authorized submitter." (See Ex. 157 to Mitnik Dep. at Sealed 60-62 (Docket No. 82).)