Dr. Erik Natkin, Do PC v. Am. Osteopathic Ass'n

DR. ERIK NATKIN, DO PC, a Utah corporation;and DR. ERIK NATKIN, DO, an individual, Plaintiffs, v. AMERICAN OSTEOPATHIC ASSOCIATION, et al., Defendants.

Case No. 3:16-cv-01494-SB

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

January 17, 2018

OPINION AND ORDER

Benjamin Natkin, LAW OFFICES OF BENJAMIN NATKIN, 3520 Overland Avenue, Suite A1, Los Angeles, CA 90034; Clark E. Rasche, WATKINSON LAIRD RUBENSTEIN, PC, 101 E Broadway, Suite 200, PO Box 10567, Eugene OR 97440. Of Attorneys for Plaintiffs.

John F. McGrory, Jr. and Blake J. Robinson, DAVIS WRIGHT TREMAINE LLP, 1300 SW Fifth Avenue, Suite 2400, Portland OR 97201. Of Attorneys for Defendants Samaritan Health Services, Inc., Good Samaritan Hospital Corvallis, Albany General Hospital, Mid-Valley Healthcare, Inc., Samaritan Pacific Health Services, Inc., Samaritan North Lincoln Hospital, and Dr. Luis R. Vela, DO.

Michael Porter, MILLER NASH GRAHAM & DUNN LLP, 3400 U.S. Bancorp Tower, 111 SW Fifth Avenue, Portland, OR 97204; Mark H. Meyerhoff and Christopher S. Frederick, LIEBERT CASSIDY WHITMORE, 6033 West Century Boulevard, Fifth Floor, Los Angeles, CA 90045. Of Attorneys for Defendant Western University of Health Sciences.

Michael C. Lewton, COSGRAVE VERGEER KESTER LLP, 888 SW Fifth Avenue, suite 500, Portland, OR 97204; John R. Danos, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP, 555 S. Flower Street, Suite 2900, Los Angeles, CA 90071. Of Attorneys for Defendant American Osteopathic Association.

Thomas R. Rask , III, Kell Alterman & Runstein, LLP, 520 SW Yamhill Street, Suite 600, Portland, OR 97204; Robert P. Johnston, Law Offices of Vera and Barbosa, 223 West Foothill Boulevard, Second Floor, Claremont, CA 91711. Of Attorneys for Defendant Osteopathic Postdoctorial Training Institute, OPTI-West Educational Consortium.

Michael H. Simon, District Judge.

United States Magistrate Judge Stacie Beckerman issued Findings and Recommendation ("F&R") in this case on August 30, 2017. ECF 126. Judge Beckerman recommended that the motions to dismiss filed by Defendants Samaritan Health Services, Inc. ("SHS"), Good Samaritan Hospital Corvallis ("Good Sam"), Albany General Hospital, Mid-Valley Healthcare, Inc., Samaritan Pacific Health Services, Inc., Samaritan North Lincoln Hospital, (collectively, the "Samaritan Entities") and Dr. Luis R. Vela, DO (collectively with the Samaritan Entities, the "Samaritan Defendants"), American Osteopathic Association ("AOA"), and Western University of Health Sciences ("Western") (collectively, the "Moving Defendants") be granted in part and denied in part.

Plaintiffs timely filed an objection (ECF 136), as did the Samaritan Defendants (ECF 135). The Court reviews de novo those portions of Judge Beckerman's F&R to which Plaintiffs and the Samaritan Defendants have objected. In so doing, the Court has considered the objections, the responses, the F&R, the First Amended Complaint ("FAC"), and the underlying briefing before Judge Beckerman. For the reasons discussed below, the Court adopts in part the F&R. The motions to dismiss are granted in part and denied in part.

STANDARDS

A. Review of a Magistrate's Findings and Recommendation

Under the Federal Magistrates Act ("Act"), the Court may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." 28 U.S.C. § 636(b)(1). If a party files objections to a magistrate's findings and recommendations, "the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Id.; Fed. R. Civ. P. 72(b)(3).

For those portions of a magistrate's findings and recommendations to which neither party has objected, the Act does not prescribe any standard of review. See Thomas v. Arn, 474 U.S. 140, 152 (1985) ("There is no indication that Congress, in enacting [the Act], intended to require a district judge to review a magistrate's report to which no objections are filed."); United States. v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (holding that the court must review de novo magistrate's findings and recommendations if objection is made, "but not otherwise"). Although in the absence of objections no review is required, the Magistrates Act "does not preclude further review by the district judge[] sua sponte . . . under a de novo or any other standard." Thomas, 474 U.S. at 154. Indeed, the Advisory Committee Notes to Fed. R. Civ. P. 72(b) recommend that "[w]hen no timely objection is filed," the Court review the magistrate's recommendations for "clear error on the face of the record."

B. Motion to Dismiss

A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaintand construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint "may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

A complaint must contain sufficient factual allegations to "plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Starr, 652 F.3d at 1216. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

BACKGROUND

The Court adopts the Background section of the F&R, including the terms used therein. Briefly, Plaintiff Dr. Erik E. Natkin was a resident at Good Sam, a subsidiary of SHS and sister-hospital to the other Samaritan Entities. Plaintiffs allege that Dr. Natkin was unfairly targeted by Dr. Vela, a Residency Program Director and Director of Medical Education ("DME") at Dr. Natkin's residency program. After receiving positive performance reviews, Dr. Vela accused Dr. Natkin of colluding with another resident to portray an attending physician in a negative light. Dr. Vela also allegedly violated the bylaws and other governing documents of theresidency program by having Dr. Natkin suspended and ultimately terminated, without appropriate process.

Dr. Vela and SHS allegedly conveyed false and misleading information about Dr. Natkin to the Oregon Medical Board, which required Dr. Natkin to undergo a six-month investigation to clear his medical license. Dr. Vela and SHS also allegedly conveyed false and misleading information about Dr. Natkin to the Federation of State Medical Boards' Credential Verification Service ("FCVS"), which allegedly precluded Dr. Natkin from completing his residency in orthopedic surgery and obtaining Board certification. In addition, these actions have caused difficulty for Dr. Natkin in obtaining medical licenses in other states and in practicing as a covered doctor under certain insurance plans. Finally, Dr. Vela allegedly defamed Dr. Natkin to numerous other doctors throughout the country, preventing Dr. Natkin from obtaining other jobs, including a fourth-year orthopedic surgical residency that was specially-created for Dr. Natkin in Philadelphia. The program director in Philadelphia withdrew the job offer after he contacted Dr. Vela, who allegedly conveyed false and misleading information about Dr. Natkin.¹

DISCUSSION

Plaintiffs object to the F&R's analysis and conclusions regarding: (1) sustaining the evidentiary objection to the Declaration of Dr. Natkin submitted in support of Plaintiffs' response brief; (2) dismissing Plaintiffs' antitrust claim; (3) applying Oregon law to, and dismissing, Plaintiffs' breach of fiduciary duty claims against AOA, Osteopathic Postdoctorial Training Institute, OPTI-West Educational Consortium ("Opti-West"), and Western; (4) dismissing Plaintiffs' breach of fiduciary duty claims against the Samaritan Defendants; (5) dismissing the breach of contract claims against the Samaritan Entities other than Good Sam; (6) dismissing Plaintiffs' third-party beneficiary contract claims; (7) dismissing Plaintiffs' defamation claims; and (8) dismissing Plaintiffs' California Fair Practices Act Claim.² The Samaritan Defendants object to the F&R's analysis and conclusions regarding: (1) denying their motion to dismiss Dr. Natkin's breach of contract claim against Good Sam; (2) denying their motion to dismiss Dr. Natkin's claim for breach of the covenant of good faith and fair dealing ("GFFD") against Good Sam; and (3) denying their motion to dismiss Plaintiffs' wrongful termination claim. The Court discusses the objections, organized by the claims as alleged in the FAC, after discussing the portions of the F&R to which no objections were filed and the evidentiary objection of Plaintiffs.

A. Portions of the F&R to which No Objections Were Filed

For the portions of the F&R which no party has objected, the Court follows the recommendation of the Advisory Committee and reviews...