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Talley v. Christiana Care Health System

United States District Court, D. Delaware

October 17, 2018

LYNN E. TALLEY, D.O., Plaintiff,

          Michele D. Allen and Catilyn E. Quinn, LAW OFFICES OF MICHELE D. ALLEN, LLC, Hockessin, DE, Attorneys for Plaintiff.

          Joanna J. Cline and James H. S. Levine, PEPPER HAMILTON LLP, Wilmington, DE; Barbara T. Sicalides, Barak A. Bassman, and Megan Morley, PEPPER HAMILTON LLP, Philadelphia, PA, Attorneys for Defendants.



         Plaintiff Lynn Talley ("Plaintiff') filed this action alleging violations of the Sherman Act (Count I), breach of contract (Count II), lack of procedural due process (Counts III and VIII), defamation (Count IV), intentional infliction of emotional distress (Count V), interference with prospective economic advantage (Count VI), tortious interference with contractual relations (Count VII), and breach of the covenant of good faith and fair dealing (Count IX). (D.I. 17) Presently before the Court is Defendants Christiana Care Health System ("Christiana Care"), Matthew K. Hoffman, M.D. ("Dr. Hoffman"), and Kenneth L. Silverstein, M.D.'s ("Dr. Silverstein") (collectively, "Defendants") motion to dismiss Counts I-VIII of the operative First Amended Complaint ("FAC"), filed pursuant to Federal Rule of Civil Procedure 12(b)(6) (the "Motion"). (D.I. 22) In a separate Memorandum Opinion issued on October 11, 2018 (the "October 11 Opinion"), (D.I. 61; D.I. 62), the Court addressed the Motion as to Count Fs Sherman Act claim, and found that Count I should be dismissed with prejudice. This opinion addresses the portion of Defendants' Motion that seeks dismissal of claims other than the Sherman Act claim, and GRANTS-IN-PART and DENIES-IN-PART Defendants' Motion in that regard.


         The Court incorporates by reference the factual and procedural background and the legal standard of review for Rule 12(b)(6) motions, which were set out in the October 11 Opinion. (D, I. 61 at 2-8)


         In dispute here is Defendants' request to dismiss the asserted state law claims contained in Counts II, IV, V, VI, and VII. [1] The Court will address them in turn.

         A. Count II

         Plaintiff brings a claim for breach of contract in Count II against only Defendant Christiana Care. (D.I. 17 at 18-19) This claim is based on Christiana Care's failure "to follow the process [for terminating Plaintiffs privileges at Christiana Care] outlined in the Credentials Manual[ and the Christiana Care Bylaws.]" (D.I. 31 at 14; see D.I. 17 at ¶¶ 139-43) [2] In the FAC, Plaintiff alleges that: (1) "Christiana Care's Bylaws . . . provide[] the procedure for corrective action and appeal rights regarding issues related to physician competence and behavior"; (2) the "Christiana Care Credentials Manual. . . provides additional procedures for corrective action and appeal rights[;]" and (3) "Christiana Care breached its contractual obligations to Plaintiff by failing to adhere to the processes set out in its own Bylaws and Credentials Manual before restricting and then terminating Plaintiffs clinical privileges." (D.I. 17 at ¶¶ 140-43)

         Defendants respond by arguing that "the Credentials Manual precludes physicians, including Plaintiff, from suing Christiana Care or members of its medical staff for any matters relating to a physician's credentialing[.]" (D.I. 23 at 13) In other words, Defendants argue that "Plaintiff has waived her ability to sue [for breach of contract]" and that this is made sufficiently clear in the Credentials Manual itself. (Id.) [3] They point for support to Article 2.C.2(1) of the Credential Manual, titled "Immunity" (the "Immunity subsection"), which provides:

To the fullest extent permitted by law, the individual releases from any and all liability, extends immunity to, and agrees not to sue Christiana Care, any member of the Medical-Dental Staff, their authorized representatives, and third parties who provide information for any matter relating to appointment, reappointment, clinical privileges, or the individual's qualifications for the same. This immunity covers any actions, recommendations, reports, statements, communications, and/or disclosures involving the individual that are made, taken, or received by Christiana Care, its authorized agents, or third parties in the course of credentialing and peer review activities.

(D.I. 23, ex. B at 14-15 (emphasis omitted)) Defendants are interpreting the first sentence of the above provision to extend immunity from suit to Christiana Care without any further qualification, and the second sentence to further explain that this immunity grant relates to "any actions ... involving [Plaintiff] that are made, taken or received by Christiana Care ... in the course of credentialing and peer review activities." (Tr. at 61-64) Since this suit relates to the termination of Plaintiff s privileges, which is a part of the credentialing process, Defendants assert that the above subsection of the Credentials Manual provides Christiana Care with immunity from suit as to Count II. (D.I. 32 at 6-7)

         Plaintiff counters that Defendants overstate the intent of the Immunity subsection. She asserts that the subsection only applies to "information that may have been discussed or disclosed during any alleged purported 'peer review' process." (D.I. 31 at 14) And Plaintiff argues that her claims, instead, are centered on the failure to "follow the procedures laid out in the Credentials Manual for the revocation of her privileges." (Id.) In other words, Plaintiff reads the above contractual language as only extending immunity to people or entities (including Christiana Care) "who provide information for any matter relating to appointment." (Tr. at 76 (emphasis added); see also D.I. 31 at 13) [4] Plaintiff also notes that this reading is supported by the title of the portion of the Credentials Manual in which the Immunity subsection is found: "Grant of Immunity and Authorization to Obtain/Release Information[.]" (D.I. 31 at 13) Because Plaintiffs breach of contract claim is about ...

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