Smith v. Williams

MEMORANDUM AND ORDER

ERIC F. MELGREN, UNITED STATES DISTRICT JUDGE

Plaintiff Kolette Smith brings suit against Defendants Brian Williams and Labette County Medical Center d/b/a Labette Health. She asserts two claims under 42 U.S.C. § 1983 for denial of property and liberty interests without due process of law. In addition, she asserts several tort claims. Defendants filed a Motion to Dismiss (Doc. 25) asserting that Plaintiff fails to state a claim. Plaintiff also filed a Motion to Dismiss seeking the dismissal of Counts 3, 6, and 7 (Doc. 37). For the reasons stated in more detail below, the Court grants in part and denies in part Defendants' motion and grants Plaintiff's motion.

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I. Factual and Procedural Background^[1]

Plaintiff is a licensed physician in Kansas. Plaintiff formerly worked for Defendant Labette Health, a public hospital in Labette County, Kansas, as a hospitalist. Plaintiff and Labette Health engaged in negotiations aimed at Plaintiff continuing that role for Labette Health but were unable to reach an agreement. After the end of Plaintiff's relationship with Labette Health, Plaintiff sought employment elsewhere.

Defendant Williams is the President and Chief Executive Officer of Labette Health. Williams became aware that Plaintiff was seeking employment with other medical care entities in the geographic area. He began writing to or calling those entities telling them that Plaintiff had a “non-compete agreement” and that she was breaking it by seeking employment with them. Plaintiff did not have a “non-compete agreement” with Labette Health. In addition, Plaintiff attempted to obtain her medical license in Missouri. Williams falsely told the Missouri Board of Registration for the Healing Arts that Plaintiff had refused to perform call obligations and that Plaintiff was difficult to work with. As a result of Williams' conduct, Plaintiff was forced to hire a lawyer to assist her in obtaining her Missouri license.

Plaintiff asserted seven claims in her Amended Complaint. She, however, filed a Motion to Dismiss three of those claims (Counts 3, 6, and 7) after the briefing on Defendants' Motion to Dismiss concluded. Thus, the Court will not discuss or address those claims.^[2]

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The four remaining claims are: (1) a § 1983 claim for denial of property interests without due process of law; (2) a § 1983 claim for denial of a liberty interest in reputational integrity without due process of law; (4) tortious interference with prospective economic advantage (acts in Missouri); and (5) defamation (acts in Missouri). Defendants seek dismissal of all claims.

II. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move for dismissal of any claim for which the plaintiff has failed to state a claim upon which relief can be granted.^[3] The court must decide “whether the complaint contains ‘enough facts to state a claim to relief that is plausible on its face.' ”^[4] A claim is facially plausible if the plaintiff pleads facts sufficient for the court to reasonably infer that the defendant is liable for the alleged misconduct.^[5] The plausibility standard reflects the requirement in Rule 8 that pleadings provide defendants with fair notice of the nature of claims as well the grounds on which each claim rests.^[6] Under Rule 12(b)(6), the court must accept as true all factual allegations in the complaint, but need not afford such a presumption to legal conclusions.^[7] Viewing the complaint in this manner, the court must decide whether the plaintiff's allegations give rise to more than speculative possibilities.^[8] If the allegations in the complaint are “so general that they encompass a wide swath of conduct, much

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of it innocent, then the plaintiffs ‘have not nudged their claims across the line from conceivable to plausible.' ”^[9] Generally, the Court is constrained by the allegations in the complaint when considering a motion to dismiss. However, “a document central to the plaintiff's claim and referred to in the complaint may be considered in resolving a motion to dismiss, at least where the document's authenticity is not in dispute.”^[10]

III. Analysis

Plaintiff asserts two § 1983 claims. She first asserts the denial of a property interest without due process of law. She next asserts the denial of a liberty interest without due process of law. Defendants state that Plaintiff fails to state a claim under § 1983 because she fails to identify a valid, enforceable property or liberty interest. In addition, Defendant Williams asserts that he is entitled to qualified immunity.^[11]

Plaintiff asserts two additional claims for tortious interference with prospective business advantage and defamation. Defendants contend that Plaintiff fails to state a claim and thus those claims should be dismissed. The Court will address each claim.

A. Count 1 - Denial of a Property Interest Without Due Process Under § 1983

Plaintiff alleges that she had a fundamental right in and protected property interest in her medical license and its concomitant privilege of seeking employment consistent with that license.^[12]

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She claims that after separating from Labette Health, Williams communicated with at least three health care entities informing them that Plaintiff was breaking a non-compete agreement by seeking employment with them. Plaintiff contends that Williams denied her both procedural and substantive due process of law.

1. Procedural Due Process

“Procedural due process is only available to plaintiffs that establish the existence of a recognized property or liberty interest.”^[13] “A license to practice medicine is a property right deserving constitutional protection, including due process.”^[14] In some circumstances, the actual revocation of a license is unnecessary but rather the “effective revocation” of that license has been found to be the deprivation of a liberty interest.^[15] “Actions taken by the State which destroy the value or utility of a protected property interest constitute a Fourteenth Amendment deprivation of that interest for which due process cannot be denied.”^[16]

Here, Plaintiff has a medical license. Defendants argue, however, that although a medical license may be a protected property interest in some scenarios, it is not a valid, enforceable interest

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as applied to Williams or Labette Health because Williams did not have the ability to control or affect her license. Defendants specifically contend that Plaintiff does not state a claim to a valid, protectable property interest because it is only protected from interference by licensing agencies or boards that have the ability to directly and adversely affect a person's license. The Court cannot agree.

“A defendant is liable under 42 U.S.C. § 1983 if, acting under color of state law, []he deprives a plaintiff of any rights, privileges, or immunities secured by the Constitution.”^[17] And “[t]o state a viable § 1983 claim upon which relief may be granted, plaintiffs must allege that: (1) they have been deprived of a federally protected right and (2) the person who has deprived them of that right acted under color of state or territorial law.”^[18] The plain language of the statute and case law simply require that the defendant who deprived the plaintiff of the right or privilege acted under the color of law. There is nothing in the statute stating that it is only applicable to licensing agencies or boards. Here, Plaintiff alleges that Williams, acting under color of state law, impaired and/or deprived her constitutionally protected property interest in her medical license without due process of law. She claims that she was unable to obtain employment with her medical license because Williams informed other health care entities that she could not seek employment with them by falsely claiming that she was violating a non-compete agreement.^[19]

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As noted above, if actions taken under color of state law result in the effective revocation of a license to obtain employment, it may be sufficient to state a claim for the deprivation of a protected property interest.^[20] Here, it appears that Plaintiff's allegations satisfy this standard as she effectively could not use her medical license. Thus, the Court finds that Plaintiff adequately alleges that Williams interfered with a protected property interest in Plaintiff's medical license.^[21]

Courts “examine procedural due process questions in two steps: the first asks whether there exists a liberty or property interest which has been interfered with by the State; the second examines whether the procedures attendant upon that deprivation were constitutionally sufficient.”^[22] In this case, Defendants primarily address that Plaintiff fails to allege a protectable property interest. As to the second step-due process procedures-they simply state that Plaintiff fails to allege what process was owed to her under the law before or after Defendants could communicate with potential employees or medical boards. Yet, Plaintiff alleges that Williams acted without informing Plaintiff of what he was doing and thus did not give her any opportunity to challenge his conduct through any procedural or administrative mechanisms. Although Plaintiff's due process allegations are cursory, the Court finds that Plaintiff adequately alleges that she was not afforded procedural due process with regard to a property interest.

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2. Substantive Due Process

As to Plaintiff's substantive due process claim, “[a] violation of substantive due process may arise in two ways-from (1) legislative acts that infringe on a fundamental right, or (2) official conduct that deprives a person of life, liberty, or property in a manner so arbitrary as...