United States District Court, D. Oregon
DR. ERIK NATKIN, DO PC, a Utah corporation; and DR. ERIK NATKIN, DO, an individual, Plaintiffs,
AMERICAN OSTEOPATHIC ASSOCIATION, et al., Defendants.
Benjamin Natkin, Law Offices of Benjamin Natkin; Clark E.
Rasche, Watkinson Laird Rubenstein, PC. Of Attorneys for
F. McGrory, Jr. and Blake J. Robinson, Davis Wright Tremaine
LLP, 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; Mark H.
Meyerhoff and Christopher S. Frederick, Liebert Cassidy
Whitmore. Of Attorneys for Defendant Western University of
Michael C. Lewton, Cosgrave Vergeer Kester LLP, John R.
Danos, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, Of
Attorneys for Defendant American Osteopathic Association.
R. Rask, III, Kell Alterman & Runstein, LLP; Robert P.
Johnston, Law Offices of Vera and Barbosa, Of Attorneys for
Defendant Osteopathic Postdoctoral Training Institute,
OPTI-West Educational Consortium.
OPINION AND ORDER
Michael H. Simon United States District Judge.
States Magistrate Judge Stacie Beckerman issued Findings and
Recommendation (“F&R”) in this case on
October 18, 2018. ECF 174. Judge Beckerman recommended that
the motions to dismiss filed by Defendants Samaritan Health
Services, Inc. (“SHSI”), Good Samaritan Hospital
Corvallis (“Good Sam”), Albany General Hospital,
Mid-Valley Healthcare, Inc., Samaritan Pacific Health
Services, Inc., Samaritan North Lincoln Hospital,
(collectively, the “Sister Hospitals”) (SHSI,
Good Sam, and the Sister Hospitals are collectively referred
to as the “Samaritan Entities”) and Dr. Luis R.
Vela, DO (“Vela”) (collectively with the
Samaritan Entities, the “Samaritan Defendants”);
American Osteopathic Association (“AOA”); Western
University of Health Sciences (“Western”); and
Osteopathic Postdoctoral Training Institute, OPTI-West
Educational Consortium (“OPTI-West”) be granted
in part and denied in part.
Dr. Erik Natkin, DO (“Natkin”) and Dr. Erik
Natkin, DO PC (“Natkin PC”) timely filed an
objection (ECF 183), as did each of the Defendants. ECF 180
(OPTI-West); ECF 179 (Samaritan Defendants); ECF 178
(Western); ECF 177 (AOA). The Court reviews de novo
those portions of Judge Beckerman's F&R to which
Plaintiffs and Defendants have objected. In so doing, the
Court has considered the objections, the responses, the
F&R, the Second Amended Complaint (“SAC”),
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.
Review of a Magistrate's Findings and
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).
those portions of a magistrate's findings and
recommendations to which neither party has objected, the Act
prescribes no 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.”
Motion to Dismiss
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 complaint and 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).
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
detailed background was set out in the F&R (ECF 126) on
the motions to dismiss the First Amended Complaint. Most of
the same factual allegations, along with some new factual
allegations, are included in the SAC. Briefly, Plaintiff Dr.
Erik E. Natkin was a resident at Good Sam, a subsidiary of
SHSI and sister-hospital to the other Samaritan Entity
hospitals. Plaintiffs allege that Natkin was unfairly
targeted by Vela, a Residency Program Director and Director
of Medical Education (“DME”) at Natkin's
residency program. After receiving positive performance
reviews, Vela accused Natkin of colluding with another
resident to portray an attending physician in a negative
light. Vela also allegedly violated the bylaws and other
governing documents of the residency program by having Natkin
suspended and ultimately terminated, without appropriate
allegedly conveyed false and misleading information about
Natkin to the Oregon Medical Board, which required Natkin to
undergo a six-month investigation to clear his medical
license. Vela also allegedly conveyed false and misleading
information about Natkin to the Federation of State Medical
Boards' Credential Verification Service
(“FCVS”), which allegedly precluded Natkin from
completing his residency in orthopedic surgery and obtaining
Board certification. These actions also have caused
difficulty for Natkin in obtaining medical licenses in other
states and in practicing as a covered doctor under certain
insurance plans. Finally, Vela allegedly defamed Natkin to
many other doctors throughout the country, preventing Natkin
from obtaining other jobs, including a fourth-year orthopedic
surgical residency specially-created for Natkin in
Philadelphia. The program director in Philadelphia withdrew
the job offer after he contacted Vela, who allegedly conveyed
false and misleading information about Natkin.
object that the F&R: (1) improperly concluded that
Defendants were not engaged in a conspiracy or joint venture
and improperly rejected the alleged agency relationship
between the parties; (2) improperly found that Plaintiffs
alleged no antitrust injury; (3) improperly dismissed
Plaintiffs' fraud claim; (4) improperly dismissed
Plaintiffs' fair procedure claim against AOA; (5)
improperly concluded that Plaintiffs' wrongful
termination claims are not statutory claims; (6) improperly
evaluated the contract claims because AOA, OPTI-West, SHSI,
Good Sam, and the Sister Hospitals were either parties to
certain contracts through agency or conspiracy and are liable
for breach of contract or they are not parties to the
contracts and are liable for interference with contract; (7)
failed properly to evaluate certain aspects of
Plaintiffs' defamation claims and intentional
interference with economic relations based on defamation; (8)
failed to address all the reasons proffered by Plaintiffs in
arguing against OPTI-West's reliance on the
Horowitz doctrine; and (9) improperly dismissed
Plaintiffs' California Fair Practices Act
Claim. Plaintiffs also raise the new argument
that Defendants should be judicially estopped from disputing
their interconnected relationships because they argued this
relationship to their benefit in obtaining a transfer of this
case to the District of Oregon and in defeating
Plaintiffs' motion to retransfer venue back to the
Central District of California.
Samaritan Defendants object to the F&R's analyses and
conclusions about: (1) the denial of Vela's and
SHSI's motion to dismiss Plaintiffs' wrongful
termination claims against them because they were not
Natkin's employer; (2) the denial of Vela's motion to
dismiss Plaintiffs' Eighth Claim for intentional
interference with contract because he was an agent of the
contracting party and thus cannot be a third party for
purposes of this type of claim; (3) the denial of Good Sam,
Vela, and SHSI's motion to dismiss Plaintiffs'
defamation claims that rely on the truthful statement that
Natkin was terminated from his fourth year of residency; and
(4) any dismissals of Plaintiffs' claims recommended to
be without prejudice, arguing that they should be with
prejudice. Western objects to the F&R's analysis and
conclusion that Plaintiffs allege sufficient facts from which
it can be inferred that Vela is an employee or nonemployee
agent of Western, and thus that any claims survive against
Western. OPTI-West objects to the F&R's analyses and
conclusions that OPTI-West's motion to dismiss not be
granted against Plaintiffs' Sixth and Eight Claims for
Relief alleging intentional interference with contract, and
that the Horowitz doctrine does not apply. Finally,
AOA objects to the F&R's analysis and conclusion that
Plaintiffs' breach of contract claim against AOA not be
Court discusses the objections, organized by the claims as
alleged in the SAC, after discussing the portions of the
F&R to which no objections were filed and Plaintiffs'
arguments about judicial estoppel and joint action.
Portions of the F&R to which No. Objections Were
portions of the F&R which no party has objected, the
Court follows the recommendation of the Advisory Committee
and reviews those matters for clear error on the face of the
record. No. such error is apparent and the Court adopts these
portions of the F&R. For clarity, the Court sets forth
below these portions:
1. The F&R's recommendation not to dismiss
Plaintiffs' claim for unfair procedure (Third Claim)
2. The F&R's recommendation not to dismiss
Plaintiffs' defamation claims against SHSI, Good Sam, and
Vela that are based on representations that Natkin was on
probation multiple times.
3. The F&R's recommendation not to dismiss
Plaintiffs' intentional interference with prospective
economic advantage claims against SHSI.
4. The F&R's conclusion that there is no agency
relationship between the various entities, other than between
Western and OPTI-West, AOA and OPTI-West, and Good Sam and
the other Samaritan Entities to which Plaintiffs objected.
contend that Defendants should be judicially estopped from
contesting their joint relationship. The decision to impose
judicial estoppel is left to the discretion of the district
court. New Hampshire v. Maine, 532 U.S. 742, 750
(2001). In considering whether to apply the doctrine of
judicial estoppel, district courts may consider several
(1) Is the party's later position “clearly
inconsistent with its earlier position?” (2) Did the
party succeed in persuading a court to accept its earlier
position, creating a perception that the first or second
court was misled? and (3) Will the party seeking to assert an
inconsistent position “derive an unfair advantage or
impose an unfair detriment on the opposing party?”
Baughman v. Walt Disney World Co., 685 F.3d 1131,
1133 (9th Cir. 2012) (quoting New Hampshire, 532
U.S. at 750-51). This is not an exhaustive enumeration of the
factors that a court may consider. New Hampshire,
532 U.S. at 751. The Ninth Circuit has explained that the
“second New Hampshire factor-that one of the
courts has been misled-is often dispositive.”
Baughman, 685 F.3d at 1133. Judicial estoppel is
appropriate where “a party assumes a certain position
in a legal proceeding, and succeeds in maintaining that
argue that Defendants' positions relating to their
interconnected relationships in their motions to dismiss are
clearly inconsistent with their positions taken before the
U.S. District Court in California in litigating their motions
on jurisdiction and venue and before Judge Beckerman in
litigating Plaintiffs' motion to retransfer the case back
to California. Plaintiffs also contend that Defendants
“persuaded” the district court in California and
Judge Beckerman of various positions about Defendants'
interconnected relationship. This is not an accurate
representation of Defendants' arguments or the bases of
the courts' decisions.
the arguments of Defendants before the district court in
California, OPTI-West filed no motion before that court and
thus did not make any representation or
“persuade” that court of anything. The court
instead reviewed Plaintiffs' complaint and underlying
documents and concluded that OPTI-West had consented to
personal jurisdiction in Oregon by accepting the forum
selection clause in the contract it entered with the
Samaritan Entities, which the court noted forms the basis of
Plaintiffs' third-party beneficiary contract claims. AOA
argued that venue was not appropriate in California and that
Plaintiffs failed to state a claim against AOA because the
wrongdoing involved Vela and Good Sam and had nothing to do
with AOA. This is the opposite of arguing that AOA was so
interconnected with Good Sam or the Samaritan Entities that
they were all essentially one entity for liability purposes.
Indeed, AOA asserted no argument or claim that it was
connected to any other defendant through agency, joint
venture, or conspiracy.
Western argued that Plaintiffs' complaint was
“devoid” of any allegations that Western was
involved in any conspiracy, defamation, unfair business
practice, or breach of contract. Western joined in the other
defendants' motions to transfer venue if the district
court in California decided not to dismiss Plaintiffs'
claims against Western, noting that the underlying contracts
cited by Plaintiffs had Oregon forum selection clauses, most
of the witnesses and documents were in Oregon, and Oregon
provided adequate remedies. Western made no argument that it
was in a conspiracy, joint venture, agency relationship, or
any other interconnected relationship with any other
Samaritan Defendants moved to dismiss the claims against them
because the district court in California lacked personal
jurisdiction over them and venue was improper in California.
In the alternative, they moved to transfer the case to
Oregon. They presented no argument that they were
interconnected with any other defendant.
Judge Beckerman, Defendants made similar arguments. They
argued that Plaintiffs were making an improper motion for
reconsideration, that Plaintiffs' allegations focused on
conduct in Oregon, that venue was proper in Oregon, that all
defendants had consented to jurisdiction in Oregon, that the
district court in California did not have personal
jurisdiction over all defendants, that Plaintiffs had
consented to jurisdiction in Oregon, and that the district
court in California had correctly decided the motion to
transfer. In making these arguments they focused on the
allegations in Plaintiffs' complaint and the attached
documents and the decision of the district court in
California. They did not argue that all the defendants were
interconnected with one another.
do not cite or quote any purported assertion by any defendant
to support Plaintiffs' argument for judicial estoppel.
Plaintiffs cite only portions of the opinions of the courts.
The conclusions cited by Plaintiffs, however, were not
arguments made by Defendants. As the courts stated in their
opinions, the conclusions mainly were based on
Plaintiffs' allegations, not
Defendants' assertions and arguments. The courts
also relied on the documents incorporated by reference into
Plaintiffs' complaint. Accordingly, judicial estoppel is
assert that they allege two conspiracies. Plaintiffs object
that the F&R focuses only on the first alleged
conspiracy, to wrongfully accredit the Samaritan
Entities' residency program, and ignores the second
alleged conspiracy, to wrongfully terminate and uphold
Natkin's termination without providing fair procedure.
Plaintiffs contend that the Court previously found the second
alleged conspiracy sufficient to withstand the first motion
to dismiss. That is not an accurate characterization of the
Court's finding. The Court held that Oregon law would
provide a common law right to fair procedure and that
Plaintiffs' First Amended Complaint sufficiently stated a
claim for this cause of action against Good Sam, Opti-West,
and Vela. The Court expressly found, however, that Plaintiffs
did not sufficiently allege a conspiracy or joint action.
That a plaintiff alleges a particular cause of action against
more than one defendant does not mean that the plaintiff has
alleged a conspiracy involving those defendants. Plaintiffs
do not allege facts plausibly supporting that Defendants
conspired to deprive Natkin of fair procedure, versus
independently being involved in that alleged deprivation. For
the first alleged conspiracy, the Court agrees with and
adopts the reasoning and conclusions of the F&R.
object that the F&R misapplied the law of joint venture
and joint enterprise, and that whether a joint venture or
enterprise exists is generally a question of fact. In a case
involving a hospital residency program, the California Court
of Appeals described when this is an issue fact versus an
issue of law:
Whether the parties to a contract have created a joint
venture or some other relationship involving cooperative
effort, depends upon their actual intention which must be
determined in accordance with ordinary rules governing
interpretation of contracts. Where the evidence bearing on
the issue is conflicting, the existence of a joint venture is
primarily a question of fact. On the other hand, where there
is no conflicting extrinsic evidence concerning the
interpretation of the contract creating the relationship, the
issue is one of law.
Cty. of Riverside v. Loma Linda Univ., 118
Cal.App.3d 300, 313 (Ct. App. 1981) (citations omitted). The
court also explained that “[t]he term ‘joint
venture' usually connotes a commercial objective. It
exists where there is ‘an agreement between the parties
under which they have a community of interest, that is, a
joint interest, in a common business undertaking, an
understanding as to the sharing of profits and losses, and a
right of joint control.'” Id. (quoting
Holtz v. United Plumbing & Heating Co., 49 Cal.
2d 501, 506-507 (1957)).
contracts are unambiguous on this issue, and Plaintiffs'
allegations do not plausibly suggest any extrinsic evidence
concerning the interpretation of the contract. As a result,
at this stage in the litigation whether the parties created a
joint venture is an issue of law. The Court has reviewed the
issue de novo. The Court agrees with and adopts the
reasoning of the F&R.