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UNITED STATES DISTRICT COURT DISTRICT OF MAINE JAMES MURTAGH, M.D., Plaintiffs, vs. ST. MARY'S REGIONAL MEDICAL CENTER a/k/a ST. MARY'S HOSPITAL, ST. MARYS HEALTH SYSTEM, and IRA SHAPIRO, M.D., Defendants. ) ) ) ) ) ) ) ) ) ) ) )

CASE NO. 2:12-CV-00160-NT

DEFENDANTS' MOTION TO DISMISS PLAINTIFFS FIRST AMENDED COMPLAINT AND SUPPORTING MEMORANDUM OF LAW St. Marys Regional Medical Center (St. Marys or Hospital), St. Marys Health System (Health System), and Ira Shapiro, M.D. (Dr. Shapiro) (collectively Defendants) move pursuant to Federal Rule of Civil Procedure 12(b)(6) for dismissal of all claims in the Amended Complaint filed by James Murtagh. M.D. (Dr. Murtagh). I. NATURE OF THE CASE This is a second attempt by a disgruntled physician to state a viable cause of action against St. Mary's Hospital for its 2010 termination of his locum tenens placement1 and temporary clinical privileges after he had been at the facility only twenty days. This attempt, like his first, fails to state a viable cause of action against any of the defendants. II. RELEVANT BACKGROUND FACTS St. Marys is a private, not-for-profit Hospital located in Lewiston, Maine. (Dkt. No.
1

Locum tenens means "one practitioner taking the place of another." Hospitals use physician services for this purpose when a specialty physician is absent or there is a temporary shortage of specialty physician services. Locum tenens physicians are typically placed by a placement services entity.

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22, Am. Complaint, at 2). Dr. Shapiro is its Chief Medical Officer. (Id. at 4). The Health System is the Hospitals parent company. (See id. at 3).2 medicine physician. (Id. at 1, 7). Vista is a business corporation that provides medical staff locum tenens placement services for hospitals and medical practices. (Id. at 6). In April 2010, Vista placed Dr. Murtagh at St. Marys for a ninety day period to provide pulmonary medical services. (Id. at 7, 8; see also id. at 31-33, 55). Vista placed Dr. Murtagh pursuant to a contract (the Vista Contract) entered into with St. Mary's in 2008. (Dkt. No. 22-2, Ex. B to Am. Complaint). It was signed by Vista and St. Mary's only, and it authorized Vista to assist the Hospital in locating independent contractor physicians and arranging for those contractors to provide locum tenens services at the Hospital. (Id. at Preamble). The Hospital paid Vista directly for all amounts due for the service provided by locum tenens physicians.3 (Id. at 5). Under the terms of the contract, the hospital had different options for cancelling or terminating the placement of a locum tenens physician. The first option, set forth in paragraph 7, authorized the Hospital to cancel any placement by giving Vista thirty days written notice. (Id. at 7). This option required the Hospital after giving notice to pay Vista for its unrecoverable expenses and the services scheduled to be performed by the placed physician within thirty days Dr. Murtagh is a pulmonary

The Health System is the corporate parent of St. Mary's Hospital. There are no veil piercing allegations in the Amended Complaint. Allegations of this nature would be necessary to state a cause of action against the Health System. See Bonnar-Vawter, Inc. v. Johnson, 173 A.2d 141, 388 (Me. 1961) (the corporate entity will only be disregarded when used to cover fraud or illegality, or to justify a wrong).
3

Placed physicians are paid pursuant to a separate agreement between Vista and the locum tenens physician. St. Mary's was not a party to that agreement. Dr.Murtagh did not attach a copy of his contract with Vista to the initial Complaint or the Amended Complaint. There are no allegations in either complaint that St. Mary's had knowledge of the terms of the contract entered into between Vista and Dr. Murtagh.

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of the notice. (Id.). The second option, set forth in paragraph 9, authorized the Hospital to terminate a locum tenens physician and remove the physician from the placement if it reasonably found that the performance of the physician was unacceptable for reasons of professional competence or personal conduct. (Id. at 9). Under this option, the Hospital was only required to provide notice to Vista and then pay fees and costs to the date of the removal. (Id.). After he was placed at St. Mary's, Dr. Murtagh was granted temporary clinical privileges by the Hospital. (See Dkt. No. 22-1, Ex. A to Am. Complaint, Medical Staff Bylaws (the Bylaws) at 7.5.1.3). His temporary privileges were terminable at any time . . . and for any reason. (Id. at 7.5.3). And, he was not entitled to any procedural due process if his temporary privileges were terminated. (See id. at 7.5.4) (No practitioner shall be entitled to the procedural rights afforded by Article 9 because of . . . any termination . . . of temporary privileges.). St. Marys terminated Dr. Murtagh's placement and clinical privileges on May 12, 2010. (Am. Complaint at 15). The Amended Complaint reflects that the Hospital advised Vista and other unnamed employers and placement agencies that Dr. Murtagh had been dismissed from the hospital for unsatisfactory performance. (Id. at 22; see also id. at 42, 46). In response to subsequent requests by Dr. Murtagh for additional information concerning the termination of his placement and clinical privileges, Dr. Murtagh was advised by Dr. Shapiro on behalf of the Hospital that (1) his termination was not a corrective action, (2) his placement had been terminated on a contractual basis pursuant to the Hospital's contract with Vista, and (3) because he was a locum tenens physician with temporary privileges he was not entitled to a hearing when his clinical privileges were terminated. (Id. at 20). In his initial Complaint, Dr. Murtagh alleged that the termination of his Vista placement

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was improper because his performance had been satisfactory and further because he was not afforded broad due process rights before the termination pursuant to the Vista Contract and/or the Hospital's Medical Staff Bylaws. (Dkt. No. 1). In his Amended Complaint, he shifts his focus and alleges for the very first time that the termination was related to whistleblowing. Even there, however, his allegations are contradictory: on one hand he alleges that he was terminated in advance retaliation for potential whistleblowing, (Am. Complaint at 23, 26, 28, 36, 41), but on the other, he alleges that he actually observed illegal activity at the Hospital and reported it. (Id. at 12-14, 63-64). And, as will be further explained in the relevant sections, these new allegations can hardly be called factual, as they are entirely bereft of supportive detail. III. STANDARD OF REVIEW The Standard of Review was set forth in the initial Motion To Dismiss. (See Dkt. No. 21). For brevity, it is incorporated by reference. IV. ARGUMENT A. Count One: Breach of Tri-party Contract.

In Count One of his Amended Complaint, Dr. Murtagh asserts a new claim for breach of a purported tri-party contract. In support of this claim, he alleges that the Vista Contract is a three-party agreement between Vista, St. Mary's, and him, (see Am. Complaint at 31), that the Hospital breached the contract, (id. at 34), and that he is entitled to recover damages caused by the breach. (id. at 35). This claim is without merit because Dr. Murtagh is not a party to the contract and did not sign it.4 (See Vista Contract). And, it is black-letter law in Maine, as

The contract was entered into in March of 2008, (Vista Contract at 1), over two years before Dr. Murtagh was placed at the Hospital in April 2010. (Am. Complaint at 7).

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elsewhere, that a contract does not bestow direct enforceable rights on a nonsignatory (i.e., nonparty). Amburgey v. Atomic Ski USA, Inc., Civil No. 06-149-P-S, 2007 WL 4468707, at *5 (D. Me. 2007). See also Stull v. First A. Title Ins. Co., 2000 ME 21, 11, 745 A.2d 975, 979 (nonparty to a contract has no standing to maintain a suit seeking recovery for its breach). For these reasons, Dr. Murtaghs breach of contract claim should be dismissed. B. Count Four: Third Party Beneficiary to the Hospital's Vista Contract.

In Count Four of his Amended Complaint, Dr. Murtagh claims he is a third-party beneficiary of the Hospital's contract with Vista and is, therefore, entitled to assert a breach of contract claim under it. (See Am. Complaint at 52-56). In support of this claim, Dr. Murtagh alleges that the Hospital breached the Vista Contract by: failing or refusing to honor Murtaghs due process rights, make reasonable findings and otherwise denying Murtagh sufficient notice of the reason(s) for suspending, terminating, or revoking his clinical privileges at the Hospital and Murtaghs opportunity to be heard, to confront witnesses against him, to present evidence in his own behalf, and to advocate his position in response to managements proposed action against him . . . . (Id. at 55). An analysis of the Amended Complaint reveals that the source of Dr. Murtagh's alleged third party beneficiary claim is paragraph nine of the Vista Contract, which provides as follows: If Client reasonably finds the performance of any Professional providing Locum Tenens coverage under this Agreement to be unacceptable for reasons of professional competence or personal conduct it shall give notice to Vista and may then remove the physician from the placement. (Vista Contract at 7; see also Am. Complaint at 55 (alleging that Defendants failed to make reasonable findings)). To demonstrate third party beneficiary status, Dr. Murtagh must demonstrate that recognition of his right to enforce the contract is appropriate to effectuate the intention of the 5

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parties. DiMillo v. Travelers Prop. Cas. Co. of America, 789 F. Supp. 2d 194, 207 (D. Me. 2011). Only an intended beneficiary not an incidental one has standing to enforce a contract to which the claimant is not a party. Devine v. Roche Biomedical Labs., 659 A.2d 868, 870 (Me. 1995). Thus, for Dr. Murtagh to qualify as an intended beneficiary, the intent to benefit [him] must be clear and definite on the part of the contracting parties. Id. The starting point for determining the parties intent is the language of the contract. Thompson v. Miles, 741 F.Supp.2d 296, 306-07 (D. Me. 2010). Furthermore, the focus is on the nature of the contract itself to determine if the contract necessarily implies an intent on the part of the promisee to give an enforceable benefit to a third party. Devine, 659 A.2d at 870. The contract language does not establish such an intent by Vista and St. Mary's. First, the Hospitals agreement with Vista does not demonstrate a clear intent to benefit any prospective locum tenens physician, including Dr. Murtagh. Indeed, the Vista Contract's

opening paragraph identifies its objective as the facilitation of medical care at the Hospital by locat[ing] and arrang[ing] for independent contractor physicians . . . to provide locum tenens medical services at the [Hospital] for [designated periods]. (Vista Contract at 1). Temporary physicians, like Dr. Murtagh, are simply the means to effectuate that objective. Next, any incidental monetary benefit realized by Dr. Murtagh arising from his separate contract with Vista cannot serve as the foundation for a third party beneficiary claim. Specifically, under the express terms of the Vista Contract, the Hospital made payments to Vista, not to locum tenens physicians like Dr. Murtagh. (Id. at 4). This distinction is critical. Indeed, this Court has recognized that the fact that one contracting partys payment would subsequently be related in part to a payment to a third party makes the third party an incidental beneficiary, absent more. Finance Auth. of Me. v. L.L. Knickerbocker Co., Inc., 106 F. Supp. 2d 44, 50 (D.

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Me. 1999).

In that case, the Court found support in an illustration contained in the

RESTATEMENT (SECOND) OF CONTRACTS 302(1), which can be paraphrased as follows: If Bs promise [to A] is that he will pay C directly, C is an intended beneficiary; however, if the money is to be paid by B to A for A to ultimately pay to C, C is at most an incidental beneficiary. Id. at 51 (citing 302(1) cmt. B, illus. 3 (1981)).5 Thus, because the Hospital paid Vista under one contract and Vista would pay Dr. Murtagh under another contract, Dr. Murtagh is an incidental beneficiary not an intended beneficiary of the Hospitals promise to make payments to Vista. Furthermore, the fact that Dr. Murtagh is not an intended beneficiary of the provisions of paragraph nine of the Vista Contract is particularly demonstrated by the objective of the paragraph. That paragraph requires the Hospital to provide notice to Vista after the Hospital reasonably finds a locums tenens physicians performance to be unacceptable. (Vista Contract at 9).6 It does not call for any findings or notice to be provided to a locum tenens physician. (See id.). Nor does it provide a terminated locum tenens physician any recourse in the event that the Hospital did not reasonably find a locums tenens physicians performance to be unacceptable. (Id.) Thus, although paragraph nine may have given Vista the right to challenge the termination of a placement and seek additional payments, it does not evidence an intent to confer enforceable benefits to the relevant physician. The District Court of Maines opinion in DiMillo is

instructive. There, this Court rejected a condominium owner's argument that he was an intended beneficiary of the condominium associations insurance policy. See DiMillo, 789 F. Supp. 2d at 211-12. That the policy necessarily covered each of the individual units in the condominium,
5

Although this case was decided under Massachusetts law, RESTATEMENT 302 is also controlling under Maine law in determining third-party beneficiary status. Davis v. R C & Sons Paving, Inc., 2011 ME 88, 15, 26 A.3d 787, 791.

Further, paragraph nine does not extend any procedural due process rights to a locum tenens physician to challenge a termination under this provision. (See id.).

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including the plaintiff's, was irrelevant.

Id.

The same is true here.

The Vista Contract

necessarily governs the relationship between Vista and the Hospital as to numerous placements. It does not govern the relationship between the Hospital and Dr. Murtagh. Nor does it mean that each (or any) of the placed physicians is an intended beneficiary of the Vista Contract. In summary, the Amended Complaint and supporting exhibits do not establish that the parties to the Vista Contract intended to give Dr. Murtagh a benefit sufficient to confer third party beneficiary status on him, and his claim fails as a matter of law. Dr. Murtagh's claim is further deficient because the purported contract terms on which he relies do not exist and, therefore, cannot have been breached by St. Mary's. Specifically, Dr. Murtagh alleges that St. Marys could only effectuate a termination of his placement after (1) giving him notice of its intent to terminate his placement, (2) giving him an opportunity to be heard in opposition to the termination, (3) giving him an opportunity to confront witnesses against him, (4) giving him an opportunity to present evidence in his own behalf, and (5) giving him an opportunity to advocate his position. (Am. Complaint at 55). The Vista Contract does not confer any of these alleged rights on anybody let alone Dr. Murtagh or any other locum tenens physician placed by Vista at the Hospital. (See Vista Contract at 7, 9). Ignoring the absence in the governing contract of any of the due process rights he seeks, Dr. Murtagh then alleges that the Vista Contract as a matter of law incorporates the due process standard used to judge all permanent doctors at the hospital as set forth in [the Hospitals Bylaws] . . . . (Am. Complaint at 10). This contention is fundamentally wrong. Dr. Murtagh was a locum tenens physician with temporary clinical privileges placed at the Hospital as an independent contractor for a limited period. His temporary privileges were terminable at any time . . . and for any reason. (Bylaws at 7.5.3). And under the Bylaws, no locum tenens

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physician was entitled to due process. (Id. at 7.5.4) (No practitioner shall be entitled to the procedural rights afforded by Article 9 because of . . . any termination . . . of temporary privileges.). Finally, because the Vista Contract does not provide Dr. Murtagh with any of the rights he seeks to enforce, he is in reality asking the Court to rewrite the parties' contract. There is no legal basis for the Court to accept this overture. See Lincoln Pulp & Paper Co., Inc. v. Dravo Corp., 436 F. Supp. 262, 269 (D. Me. 1997) (The plain language of the contract controls . . . and courts may not rewrite contracts, particularly commercial agreements arrived at following lengthy negotiations between two corporations of equal bargaining strength.); see also Apgar v. Commercial Union Ins. Co., 683 A.2d 497, 500 (Me. 1996) (a court's function is not to enlarge or expand the contracts terms but "to ascertain the meaning and intention of the contract actually made.") (emphasis and marks omitted). For all of these reasons, Dr. Murtagh's third party beneficiary claim should be dismissed. C. Count Six: Retaliation Against Whistleblower & Wrongful Discharge

In Count six, Dr. Murtagh asserts a new claim for retaliatory discharge in violation of Maines Whistleblower Protection Act (the WPA), 26 M.R.S.A. 831, et seq. In support of this claim, he primarily alleges that he reported possible illegal or fraudulent activity taking place at St. Marys in good faith to state and federal agencies and the Defendants [and that] the conduct involved patient care and was a condition or practice related to Pulmonary Medicine and Critical Care that placed the health and safety of patients at risk. (Am. Complaint at 63). This claim is both insufficiently pled and procedurally defective. The WPA makes it illegal for an employer to discriminate against an employee in retaliation for the employees exercise of rights under the statute. Stewart-Dore v. Webber Hosp. Assn, 2011 ME 26, 11, 13 A. 3d 773, 776. It states in pertinent part: 9

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No employer may discharge . . . or otherwise discriminate against an employee regarding the employee's . . . privileges of employment because [the employee]: A. reports orally or in writing to the employer or a public body what the employee has reasonable cause to believe is a violation of a law or rule . . . ; B. reports to the employer or a public body, orally or in writing, what the employee has reasonable cause to believe is a condition or practice that would put at risk the health or safety of that employee or any other individual. . . . ; [or] E. reports to the employer . . . or to the appropriate licensing, regulating or credentialing authority, orally or in writing, what the employee has reasonable cause to believe is an act or omission that constitutes a deviation from the applicable standard of care for a patient by an employer charged with the care of that patient. 26 M.R.S.A. 833(1)(A), (B), (E).7 The Maine Human Rights Act, 26 M.R.S.A. 4551 et seq. (the MHRA), provides a right of action for employees aggrieved by violations of the WPA. Costain v. Sunbury Primary Care, P.A., 2008 ME 142, 6, 954 A.2d 1051, 1053. To plead a prima facie case of retaliation in violation of the WPA, Dr. Murtagh must plausibly allege sufficient facts to demonstrate that: (1) [he] engaged in activity protected by the statute; (2) [he] was the subject of an adverse employment action; and (3) there was a causal link between the protected activity and the adverse employment action. See Costain v. Sunbury Primary Care, P.A., 2008 ME 142 at 6, 954 A.2d at 1053. Dr. Murtaghs claim fails because he insufficiently pleads both the first element (that he engaged in protected activity) and the third element (that there was a causal link between his protected activity and the adverse employment action).
The WPA contains a very broad definition of employee, defining it as a person who performs a service for wages or other remuneration under a contract of hire, written or oral, expressed or implied, but does not include an independent contract engaged in lobster fishing. 26 M.R.S.A. 832. In accordance with this definition, for this Section only, the Hospital refers to him as an employee rather than an independent contractor.
7

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The Maine Law Court interprets the first element to limit protection to (1) employees (2) who make a report (3) about a violation (4) committed or practiced by their employer. Id. Dr. Murtagh merely recites the components of this element, alleging in conclusory fashion that he observed a series of unethical and possibly illegal activities taking place in the hospital including unnecessary medical procedures and services. (Am. Complaint at 12). This

formulaic recitation of the first element provides no notice to the Hospital of Dr. Murtaghs basis for his claim and specifically fails because he pleads no facts regarding (1) the alleged violation(s) he observed and (2) his reporting of those violation(s). Dr. Murtaghs utter failure to identify the violation(s) he allegedly observed denies the Hospital any opportunity to evaluate whether his allegations meet the statutory requirements, i.e., whether Dr. Murtagh had a subjective belief that a violation existed and that his belief was objectively reasonable. See Bard v. Bath Iron Works Corp., 590 A.2d 152, 15455 (Me.1991) (WPAs reasonable cause language requires an objectively reasonable belief of illegality). He also provides no information regarding his reporting of those violations. He merely alleges that he reported possible illegal or fraudulent activity to the Hospitals Risk Management Offices and then to state and federal agencies. (Am. Complaint at 62-64). He does not provide any information with regard to the subject matter of the alleged illegal or fraudulent activities, the manner in which he allegedly reported the activities, the dates of the reports, or the identity of the persons to whom he made these reports. With respect to the causal link required by the third element, Dr. Murtagh again fails to provide any factual support for his conclusory and speculative allegations. Instead, he merely alleges that [s]omehow, in a manner unknown to Murtagh, Defendant Shapiro became aware of the [whistleblower] actions of Murtagh, which should have been anonymous, and he reacted by

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retaliating against Murtagh, (Am. Complaint at 14), and that the Defendants retaliated against Murtagh by terminating his employment/assignment through Vista. (Id. at 64).8 These allegations are legal conclusions without any factual support, making dismissal appropriate. See San Geronimo Caribe Proj., Inc. v. Acavedo-Vila, 687 F.3d 465, 471 (1st Cir. 2012) (although the court is bound to draw reasonable inferences in favor of the plaintiff, it is not bound to accept as true a legal conclusion couched as a factual allegation . . . nor [does it] consider naked assertion[s] devoid of further factual enhancement). Notwithstanding the pleading deficiencies, as a matter of law Dr. Murtagh is not entitled to WPA protection because he did not give St. Marys a reasonable opportunity to correct the reported violation, condition or practice before reporting it to a public body. See 26 M.R.S.A. 833(2); Stewart-Dore, 2011 ME at 11, 13 A.3d at 776 (employee is not entitled to protection for 833(1) reports made to a public body unless the employee first brings the violation to the attention of the employer and allows a reasonable opportunity to correct it). An employee is only entitled to the protections of the WPA for reports made to a public body if it first complies with 833(2) of the WPA. Costain, 2008 ME at 7, 954 A.2d at 105354. That section requires employees to report a violation of law first to a supervisor with the employer and allow the employer a reasonable opportunity to correct the violation before it may be reported to any public body. Id. Thus, if Dr. Murtagh reported an alleged violation to the

It is also notable that Dr. Murtagh vacillates on whether he actually engaged in whistleblowing. He alleges that he was retaliated against because he was perceived to be willing to disclose unlawful activities, (id. at 23), and that Shapiro conducted some due diligence and learned that Murtagh had justly acted as a whistleblower in a previous engagement at Emory University Medical School and feared that the illegal activities of St. Mary's, if learned by Murtagh, would be disclosed by him. Thus, Shapiro preemptively terminated Murtagh before any reasonable findings could be made, (id. at 26). However, these allegations concerning preemptive termination are not actionable because the WPA only protects employees who have engaged in activity protected by the statute. See Costain, 2008 ME at 6, 954 A.2d at 1053 (emphasis added).

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outside agencies without first reporting it to a supervisor and allowing the employer a reasonable opportunity to correct that violation, no protection under the WPA is available. Dr. Murtaghs pleading does not support an inference that he afforded St. Marys a reasonable opportunity to correct the alleged violation(s). He only provided services at St. Marys from April 22, 2010, to May 12, 2010 a mere twenty days. (Am. Complaint at 7, 15). During that small window, he alleges that he observed possibly illegal activities, (id. at 12), that he reported his observations first to St. Marys Risk Management Offices and then to state and federal agencies, (id. at 63), and that the Hospital retaliated by terminating him. (Id. at 64). His entitlement to WPA protection thus relies on the acceptance of the premise that he began working at the Hospital, observed illegal activity, reported it to his employer, gave his employer time to correct the violation, then reported the violation to the unidentified agencies, and that the Hospital learned of his reporting and terminated him because of it all within 20 days. These allegations do not support the inference that the Hospital was afforded a reasonable opportunity to correct the alleged allegations, and therefore must be rejected. See Clark v. Boscher, 514 F.3d 107, 112 (1st Cir. 2008) (on a Rule 12(b)(6) Motion to Dismiss, courts reject unsupported conclusions or interpretations of law). Lastly, certain elements of the damages Dr. Murtagh seeks to recover under his whistleblower claim have not been pled with sufficient specificity in light of Dr. Murtagh's failure to exhaust his administrative remedies. The MHRA permits employees to commence a whistleblower action either directly in court pursuant to 5 M.R.S.A. 4621, or after bringing an administrative action with the Maine Human Rights Commission (MHRC) pursuant to 26 M.R.S.A. 834-A. See Thayer Corp. v. Reed, No. 2:10-cv-423-JAW, 2011 WL 2682723 at *18 (D. Me. July 11, 2011). If, however, the plaintiff elects to proceed directly to court, he is not

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entitled as a matter of law to recover attorneys fees, civil penal damages or compensatory damages, and punitive damages. (Id.). Dr. Murtagh has not alleged that he exhausted his administrative remedies by filing a complaint with the MHRC. See 4622 (requiring a plaintiff to allege and establish that he filed a complaint with the MHRC before filing the civil action); Walton v. Nalco Chem. Co., 272 F.3d 13, (1st Cir. 2001) (allowing a general averment that all conditions precedent to suit have been met). Thus, Dr. Murtagh cannot recover civil penal damages, compensatory damages, punitive damages, or attorneys fees, and his prayer for recovery of these damages must be dismissed. For all of these reasons, Dr. Murtaghs whistleblower claim should be dismissed. D. Count Two: Tortious Interference With Contracts Or Prospective Economic Advantage

In the second Count of his Amended Complaint, Dr. Murtagh reurges a claim for tortious interference with contract and prospective economic advantage. (See Am. Complaint at 3844). More specifically, he claims that the Hospital interfered with his placement contract with Vista, (see id. at 38-42),9 and that the Hospital also interfered with other, unnamed potential contracts and potential advantageous relationships (see id. at 43). In support of this claim, he makes two primary allegations. First, he alleges that the Defendants misrepresented to these entities (again, all but one of whom is unspecified) that his temporary privileges were terminated for "unsatisfactory performance," (id. at 22, 41-43), when in fact certain unidentified personnel believed his performance to be "stellar." (See id. at 15), and wanted him to be considered for a staff position. (Id. at 11). Second, he alleges for the first time in this litigation
Although Dr. Murtagh appears to allege that the contract between the Hospital and Vista incorporates various other contracts, he does not allege that his contract with Vista was so incorporated. Thus, it is undisputed that the contract at the center of the tortious interference claim is separate and distinct from his tri-party contract claim and his third party beneficiary claim.
9

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that the unsatisfactory performance rationale was a pretext and that St. Mary's in fact terminated him either because he had observed illegal activity at the Hospital and reported it, or because the Hospital feared he would do so. (Id. at 13-14, 23, 26, 41). To state a viable tortious interference claim, Dr. Murtagh must allege facts sufficient to make plausible "the existence of a valid contract or prospective economic advantage, interference with that contract or advantage through fraud or intimidation, and damages proximately caused by the interference." Sherbert v. Remmell, 2006 ME 116, 4 n.3, 908 A.2d 622, 623 n.3. Dr. Murtagh does not allege that the Hospital intimidated anyone, (see Am. Complaint at 38-44) and he, therefore, is proceeding solely on a fraud theory. (See id.) (formulaically reciting the elements of fraud). To begin with, Dr. Murtagh's claim of interference with unnamed potential contracts and potential advantageous relationships cannot stand because he does not identify who these contracts or prospective advantages were with. Under this Court's precedent, this defeats Dr. Murtagh's claim with respect to those supposed contracts or advantages. See

MyFreeMedicine.com, LLC v. Alpine Investors, 739 F. Supp. 2d 8, 34 (D. Me. 2010) (dismissing tortious interference claim for failure to allege specific current or prospective business relationships); Tri-State Rubbish, Inc. v. Waste Mgmt., Inc., 875 F. Supp. 8, 14 (D. Me. 1994) (dismissing tortious interference claim because "[p]laintiff failed to point to any specific contract or customer with which [the defendant's] activities interfered.") Consequently, the only contract or advantage Dr. Murtagh alleges that could potentially serve as a basis for his tortious interference claim is his placement contract with Vista. But even with respect to that contract, Dr. Murtagh has not provided sufficient facts regarding how the Hospital supposedly tortiously interfered with it to meet Rule 9(b)'s heightened standard. See,

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e.g., Goodman v. President & Trs. of Bowdoin Coll., 135 F. Supp. 2d 40, 59 (D. Me. 2001) (tortious interference plaintiff alleging fraud must satisfy Rule 9(b)). "The elements of interference by fraud are: (1) making a false representation (2) of a material fact (3) with knowledge of its falsity or in reckless disregard of whether it is true or false (4) for the purpose of inducing another to act or refrain from acting in reliance on it, and (5) the other person justifiably relies on the representation as true and acts upon it to the damage of the plaintiff." Rutland v. Mullen, 798 A.2d 1104, 1111 (Me. 2002). For two primary reasons, Dr. Murtagh's complaint does not plausibly allege this standard. First, he has not provided sufficient factual detail to make plausible that Dr. Shapiro's statement to Vista was false. As was explained above, his primary allegation in this respect is now that he was fired for whistleblowing, not for unsatisfactory performance, and any statement to the contrary was simply false. Yet, this allegation is insufficiently specific because Dr. Murtagh fails to identify the individuals at the Hospital who supposedly expressed their satisfaction with his performance; he does not allege that Dr. Shapiro personally deemed his performance satisfactory; and Dr. Murtagh does not explain what illegal activity he supposedly saw at the Hospital, when he saw it, or who, specifically, he reported it to. Finally, he states

only in conclusory fashion that Dr. Shapiro somehow learned that he had engaged in whistleblowing at St. Mary's, or, alternatively, learned of his whistleblowing at other hospitals. These are legal allegations charading as factual ones and are insufficient to satisfy Rule 9(b). For all these reasons, this cause of action should also be dismissed. E. Count Three: Defamation.

In Count Three of his Amended Complaint, Dr. Murtagh continues to allege that Dr. Shapiro defamed him. (See Am. Complaint at 45-51). But and despite having the benefit of

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PageID #: 574

an amended pleading Dr. Murtagh still can identify only one statement Dr. Shapiro made: that his privileges were terminated due to his "unsatisfactory performance." (Id. at 22). For this claim to survive, Dr. Murtagh must have plausibly alleged "(a) a false and defamatory statement . . . ; (b) an unprivileged publication to a third party; (c) fault amounting at least to negligence on the part of the publisher; and (d) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication." Carey v. Mt. Desert Island Hosp., 910 F. Supp. 7, 10 (D. Me. 1995). He has failed to meet this standard in two separate ways. First, the statement is non-defamatory. See, e.g., Cook, Heyward, Lee, Hopper & Feehan, P.C. v. Trump Va. Acquisitions LLC, No. 3:12CV131HEH, 2012 WL 1898616 at *5 (E.D. Va. May 20, 2012) ("[S]tatements of unsatisfactory job performance do not rise to the level of defamation.") (emphasis added); see also Reilly v. Natwest Mkt. Groups, Inc., 181 F.3d 253, 271 (2d Cir. 1999) (same principle). Second, Dr. Murtagh's pleading is insufficient to satisfy Twombly. The factual basis for this claim is now that his privileges were terminated for whistleblowing, not for unsatisfactory performance. (Am. Complaint at 12-14). But, to reiterate, he does identify the illegal activity he saw; when he saw it; who was engaged in it; how he reported it; or when he reported it. His refusal to provide this information renders his allegations "so threadbare or speculative that they fail to cross the line between the conclusory and the factual." See, e.g., Pruell v. Caritas Christi, 678 F.3d 10, 13 (1st Cir. 2012). And, because Dr. Murtagh "certainly knows" these details, he should provide them. See id. at 14-15 (criticizing the plaintiffs' "offer[ing] the barest possible minimum[,]" and failing to plead details that they "certainly know").

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PageID #: 575

And, to reiterate yet again, he also fails to provide any factual support for his conclusory and speculative allegations that "[s]omehow, in a manner unknown to Murtagh, Defendant Shapiro became aware of the [whistleblower] actions of Murtagh, which should have been anonymous, and he reacted by retaliating against Murtagh" (Am. Complaint at 14) and further that "Shapiro conducted some due diligence and learned that Murtagh had justly acted as a whistleblower in a previous engagement at Emory University Medical School and feared that the illegal activities of St. Mary's, if learned by Murtagh, would be disclosed by him. Thus, Shapiro preemptively terminated Murtagh before any reasonable findings could be made." (Id. at 26). These allegations, just like the ones regarding his supposed whistleblowing itself, do not even begin to cross the line between conclusory and factual. Dr. Murtagh's defamation claim should be dismissed because the only statement he identifies is non-defamatory, and further because his insufficiently specific pleading with regard to this claim does not satisfy Twombly. F. Count Three: False Light.

Also in the Third Count of his Amended Complaint, Dr. Murtagh appears to press a false light claim. (See Am. Complaint at 45-51).10 In support of this claim, he again relies on only the statement made by Dr. Shapiro that his privileges were terminated due to his "unsatisfactory performance." (Id. at 22). To adequately plead false light, Dr. Murtagh must sufficiently allege that the Hospital gave "publicity to a matter concerning [him] that places [him] before the public in a false light" and "(a) the false light . . . would be highly offensive to a reasonable person, and (b) the actor

10

Whether he does so purposefully is unclear, as he styles Count Three as "False Light and Defamation" even though they are separate and independent torts.

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PageID #: 576

[the Hospital] had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which . . . [he] would be placed." Cole, 752 A.2d at 1197. To prove "publicity," a false light plaintiff must factually plead that the statement was made either to the general public, or to so many people that "the matter must be regarded as substantially certain to become . . . public knowledge." Id. Dr. Murtagh has not sufficiently alleged that Dr. Shapiro's statement was made to so broad an audience. Indeed, he alleges only that the statement was made to Vista and certain unnamed potential employers and staffing agencies.11 This audience does not amount to the general public, and it is also too limited to infer that the matter must be regarded as substantially certain to become public knowledge. Therefore, this claim should also be dismissed. G. Count Five: Failure to Explain Termination in Writing.

In Count Five of his Amended Complaint, Dr. Murtagh alleges that he was entitled to a detailed, accurate and truthful statement of the reasons for his termination under 26 M.R.S.A. 630. (Am. Complaint 57-60). This statute provides that an employee is entitled to written reasons for the termination of his employment after the employee has made a written request for such reasons in writing to his former employer. See 26 M.R.S.A. 630. By its plain text Section 630 applies only to employees. This limitation defeats Dr. Murtagh's claim. Under the terms of paragraph 10 of the Vista Contract, all locum tenens physicans placed pursuant to the contract are independent contractor physicians. And notwithstanding Dr. Murtagh's conclusory pleading to the effect that he was also an employee, Maine law distinguishes between an independent contractor and an employee a person cannot

11

The unnamed employers and other staffing agencies are irrelevant since they are not identified. Therefore the audience is Vista.

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PageID #: 577

be both at the same time. See Rainey v. Langen, 2010 ME 56, 15, 998 A.2d 342, 346-47 (vicarious liability); North East Ins. Co. v. Soucy, 1997 ME 106, 13, 693 A.2d, 1141, 1144 (insurance coverage); 26 M.R.S.A. 626 (excluding independent contractors from employer wage payment obligations). In addition, the Maine Legislature has recently further clarified this distinction by amending 26 M.R.S.A. 591 to separately define independent contractors and employees. See P.L. 2011, c. 643, 4 (effective December 31, 2012). In short, the plain language of Section 630 and the indisputable distinction between employees and independent contractors confirm that Dr. Murtagh is not protected by Section 630. V. CONCLUSION Dr. Murtagh's Complaint should be dismissed because each of his claims is noncognizable, subject to a legal defense, or inadequately plead.

Respectfully submitted this 27th day of November, 2012.

/s/ Ronald W. Schneider, Jr. Ronald W. Schneider, Jr., Bar No. 8402 David A. Soley, Bar No. 6799 Travis M. Brennan, Bar No. 4525 BERNSTEIN SHUR 100 Middle Street, P.O. Box 9729 Portland, ME 04104-5029 Telephone: (207) 774-1200 Email: rschneider@bernsteinshur.com dsoley@bernsteinshur.com tbrennan@bernsteinshur.com

/s/ James L. Jones James L. Jones, Bar No. 3214 (pro hac vice) Sterling Kidd, Bar No. 103670 (pro hac vice) Michael Bernier, Bar No. 103960 (pro hac vice) BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC Meadowbrook Office Park, 4268 I-55 North Jackson, Mississippi 39211 Telephone: (601) 351-2400 Email: jjones@bakerdonelson.com mbernier@bakerdonelson.com skidd@bakerdonelson.com Attorneys for Defendants St. Marys Regional Medical Center, a/k/a St. Marys Hospital; St. Marys Health System; and Ira Shapiro, M.D.

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PageID #: 578

CERTIFICATE OF SERVICE This is to certify that on this 27th day of November, 2012, I have on this day served all parties in this case in accordance with the directives from the Electronic Court Filing (ECF) which was generated as a result of electronic filing to all counsel listed below: Brian Mahaney Joseph Bird Bethany Kroe Mahaney & Ertl, LLC 1442 N. Farwell Avenue, Suite 604 Milwaukee, WI 53202 /s/ Ronald W. Schneider, Jr.

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