Lakhanpal, M.D. v. County of Stanislaus et al

Filing 50

ORDER signed by Judge Kimberly J. Mueller on 11/10/14 GRANTING 28 Motion to Remand. CASE REMANDED to Stanislaus County Superior Court. Copy of remand order sent. CASE CLOSED. (Manzer, C)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PRINCY LAKHANPAL, M.D.,

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Plaintiff,

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No. 1:14–cv–01315-KJM- BAM

v.

ORDER

VALLEY CONSORTIUM FOR
MEDICAL EDUCATION, COUNTY OF
STANISLAUS, DOCTORS MEDICAL
CENTER OF MODESTO, INC., KATE
KEARNS, M.D., PETER BRODERICK,
M.D., ELIZABETH WHIPKEY-OLSON,
M.D., AND DOES 1-10, inclusive,

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Defendants.

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This matter is before the court on plaintiff’s motion to remand this case to the

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Superior Court of California, County of Stanislaus. Pl.’s Mot. Remand (“Pl.’s Mot.”), ECF

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No. 28. Defendant Valley Consortium for Medical Education opposes the motion. Def.’s Opp’n

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(“Opp’n”), ECF No. 35. Defendants County of Stanislaus, Kate Kearns, M.D., Peter Broderick,

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M.D., and Elizabeth Whipkey-Olson, M.D. have joined the opposition. ECF No. 42. The motion

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was submitted without argument, and the court now GRANTS the motion.

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I.

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PROCEDURAL BACKGROUND
Plaintiff Princy Lakhanpal, M.D., filed this action in Stanislaus County Superior

Court on June 5, 2014. The original complaint asserted claims for (1) fraud – intentional
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misrepresentation; (2) discrimination – disparate treatment; (3) discrimination – violation of

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42 U.S.C. § 1981; (4) discrimination – violation of California Government Code § 12940(i);

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(5) discrimination – retaliation; (6) defamation; (7) violation of California Civil Code § 43;

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(8) tortious interference with prospective advantage; (9) intentional infliction of emotional

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distress; (10) negligence; (11) unfair business act or practice – California Business & Professions

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Code § 17200; (12) breach of contract; and (13) breach of implied covenant of good faith and fair

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dealing. On August 22, 2014, defendants removed the action to this court based on federal

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question jurisdiction. Notice of Removal, ECF No. 1.

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On August 28, 2014, defendant Doctors Medical Center of Modesto (“DMC”)

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filed a motion to dismiss. ECF No. 7. On August 29th, defendants Valley Consortium for

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Medical Education (“VCME”) filed a motion to dismiss. ECF No. 12. That same day, defendants

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Peter Broderick, M.D., County of Stanislaus, Kate Kearns, M.D., Elizabeth Whipkey-Olson,

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M.D. filed a motion to dismiss. ECF No. 10.

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On September 22, 2014, plaintiff filed a first amended complaint (“FAC”). ECF

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No. 27. In doing so, plaintiff withdrew all of the claims arising under or claiming relief within

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federal law. Specifically, plaintiff withdrew her third cause of action (discrimination under

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Section 1981) and eliminated references to federal law, federal jurisdiction, and federal relief for

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her second cause of action (discrimination – disparate treatment) and fourth cause of action

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(discrimination – retaliation). Twelve causes of action arising under California state law remain.

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Also on September 22nd, plaintiff filed the present motion for remand. ECF No. 28. On

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September 26, 2014, plaintiff filed her oppositions to the three motions to dismiss. ECF Nos. 29,

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30, 31. VCME filed an opposition to plaintiff’s motion for remand (ECF No. 35) which the

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remaining defendants, Peter Broderick, M.D. County of Stanislaus, Kate Kearns, M.D., and

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Elizabeth Whipkey-Olson, M.D., have joined. ECF No. 42.

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In light of the new complaint, all defendants withdrew their motions to dismiss and

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filed new motions, which remain pending. ECF Nos. 39, 41, 43.

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II.

ALLEGATIONS OF THE FIRST AMENDED COMPLAINT
Dr. Lakhanpal was a resident physician enrolled from July 2008 through June

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2010 in the Stanislaus Family Medicine Resident Program (“FMRP”), predecessor to the VCME.

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FAC ¶ 1. VCME is the successor-in-interest to the Stanislaus FMRP, which was a partnership

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between Stanislaus County Health Services Agency and DMC. Id. ¶ 2. As successor-in-interest,

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VCME possesses and maintains all records associated with former residents of the FMRP, and

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communicates with public and private third party entities regarding the status of individual

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residents’ academic history and performance for purposes of determining eligibility of those

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individuals for licenses, board certification, the pursuit of further education, or employment. Id.

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On September 18, 2008, three months into her residency at Stanislaus FMRP,

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Dr. Lakhanpal met with defendant Dr. Whipkey-Olson and received positive feedback. Id. ¶ 14.

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On October 8, 2008, the FMRP House Officers Promotion and Evaluation Committee (the

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“Committee”) met and issued a letter dated October 10, 2008, documenting Dr. Lakhanpal’s

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“below peer performance.” Id. ¶ 15. Dr. Lakhanpal did not receive this letter, but believes it was

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placed in her personnel file. Id. In mid-December 2008, Dr. Lakhanpal received two negative

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evaluations. Id. ¶ 16.

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On or about December 16, 2008, the Committee met and noted Dr. Lakhanpal had

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“failed a medicine rotation.” Id. ¶ 19. It concluded Dr. Lakhanpal met the criteria for probation

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and her performance on her upcoming rotations would be a factor in determining whether

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probation was appropriate. Id. Dr. Lakhanpal had no notice of this meeting or decision until

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receiving her personnel file on June 30, 2010. Id.; see also id. ¶ 46.

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On or about March 2, 2009, Dr. Lakhanpal met with FMRP Program Director

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Dr. Broderick. Id. ¶ 17. He informed Dr. Lakhanpal that her training as a PGY-1 (post-graduate

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year intern) would be extended by six months. As a result, she would not begin her training as a

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PGY-2 until December 2009. Id. Dr. Lakhanpal expressed her disagreement with the

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unsatisfactory evaluations that were submitted in December by the two attending physicians. Id.

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Dr. Broderick offered no other grounds for the extension of her training and offered no other

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explanation beyond saying the additional training should not be viewed as a negative but rather as

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a positive. Id.

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On or about March 3, 2009, the Committee again met to review Dr. Lakhanpal’s

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performance through her PGY-1 year. Id. ¶ 20. Despite Dr. Lakhanpal’s having passed all

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rotations and receiving all satisfactory evaluations since it last met on December 16, 2008, the

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Committee still found that Dr. Lakhanpal had failed a major criterion as a PGY-1 resident. Id. In

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late April 2009, Dr. Lakhanpal met with Dr. Whipkey-Olsen, who was her resident advisor. Id.

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¶ 25. The meeting was positive and at no point did Dr. Lakhanpal or Dr. Whipkey-Olson discuss

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the failed rotation, any denial of academic credit, probation, the below-peer-level evaluation, or

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academic assistance or monitoring. Id.

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On May 4, 2009, Dr. Broderick placed a letter of probation in Dr. Lakhanpal’s

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personnel file. Id. ¶ 26. The letter indicated that Dr. Lakhanpal had been placed on probation

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from May 2009 through December 31, 2009. Id. Probation was the result of (1) a new

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Committee review and (2) her failing a second medicine rotation while on an Academic

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Assistance. Id. Plaintiff was not aware she had failed either medical rotation. Id.

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On July 17, 2009, based on her satisfactory performance, Dr. Lakhanpal was

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offered a PGY-2 contract. Id. ¶ 29. Her training was to begin December 14, 2009, and would

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continue through December 13, 2010. Id. However on November 4, 2009, Dr. Broderick met

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with Dr. Lakhanpal to discuss his plan not to renew her contract. Id. ¶ 31. Dr. Lakhanpal

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appealed the decision to a quorum of the faculty on November 20, 2009. Id. ¶ 33. The quorum of

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the faculty sustained the non-renewal. Id. ¶ 34.

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On March 27, 2010, Dr. Lakhanpal met with Dr. Broderick and requested that he

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reconsider the nonrenewal of her contract. Id. ¶ 42. Dr. Lakhanpal believes Dr. Broderick

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realized she was aware of the probation, denied appeal, and coordinated deception regarding her

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personnel file in order to justify the decision not to renew her contract and that he began to

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influence faculty and attending physicians to compile negative evaluations and complaints against

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Dr. Lakhanpal. Id. ¶ 43.

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At the time of its closure, the Stanislaus FMRP failed to provide Dr. Lakhanpal a

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certificate confirming her completion of PGY-1. Id. ¶ 51. The FMRP also failed to provide her

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an official transcript of her rotations/credits. Id. Dr. Lakhanpal received only twenty-three

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credits from the FMRP, but believes she is entitled to twenty-four. Id. ¶ 49. No reason has been

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provided for the loss of credit. Id. Since the FMRP’s closure, VCME, as successor in interest,

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has taken over the reporting obligations and serves as custodian of records regarding Dr.

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Lakhanpal’s academic record and performance as a resident. Id. ¶ 52. Dr. Lakhanpal believes

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VCME has contributed to the fraudulent accounting of her academic performance. Id. ¶ 54.

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III.

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LEGAL STANDARD
Removal of an action based on federal question jurisdiction does not constitute a

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per se bar to remand. Instead, where the state law claims are not dependent on the federal claims,

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the plaintiff may withdraw the federal claims and seek remand. As the court pointed out in

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Baddie v. Berkeley Farms, Inc., 64 F.3d 487, 491 (9th Cir. 1995), “[t]he defendant is not

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obligated to remove [the originally filed state action]; rather, he has the choice either to submit to

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state court resolution of his claims, or to assert his right to a federal forum. If the defendant

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rejects the plaintiff's offer to litigate in state court and removes the action, the plaintiff must then

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choose between federal claims and a state forum.” In Baddie, “plaintiffs . . . chose the state

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forum [and] dismissed their federal claims and moved for remand with all due speed after

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removal. There was nothing manipulative about that straight-forward tactical decision. . . .”; see

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also Moyles v. Johnson Controls, Inc., 2005 WL 1561519, at *3-4 (E.D. Cal. 2005).

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It is well-settled in the Ninth Circuit “‘that a federal court does have the power to

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hear claims that would not be independently removable even after the basis for removal

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jurisdiction is dropped from the proceedings.’” Swett v. Schenk, 792 F.2d 1447, 1450 (9th Cir.

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1986) (quoting Watkins v. Grover, 508 F.2d 920, 921 (9th Cir. 1974); Murphy v. Kodz, 351 F.2d

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163, 167 (9th Cir. 1965)). But a district court also has discretion to remand to state court a

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removed case involving pendent claims upon a proper determination that retaining jurisdiction

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over the case would be inappropriate. See Price v. PSA, Inc., 829 F.2d 871, 876 (9th Cir. 1987);

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Survival Systems v. U.S. District Court, 825 F.2d 1416, 1419 (9th Cir. 1987). The Supreme Court
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has indicated its disapproval of a district court's retention of jurisdiction and noted that “in the

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usual case” the balance of factors will weigh toward remanding any remaining pendent state

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claims to state court. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988); see

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also Harrell v. 20th Century Ins. Co., 934 F.2d 203, 205 (9th Cir. 1991). The Court emphasized,

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in light of Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966), the district court's decision to

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remand remains discretionary and is dependent upon what “will best accommodate the values of

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economy, convenience, fairness, and comity. . . .” Carnegie-Mellon, 484 U.S. at 351.

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IV.

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DISCUSSION
Plaintiff has withdrawn the federal claims from her complaint, leaving only the

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claims governed by California state law. She argues neither party would be prejudiced by

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remand, as the parties have held only one status conference, and no discovery has commenced.

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Opp’n at 3. She further argues it is her right to regain control of the forum that will address her

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claims. Id. at 4.

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Defendants argue that although plaintiff has withdrawn all federal claims,

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jurisdiction should be analyzed on the basis of pleadings filed at the time of removal. Defs.’ Mot.

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at 2-3. Defendants also argue they would be prejudiced by remand, because they have already

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expended time and energy in filing motions to dismiss based on plaintiff’s federal claims. Id. at

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3. They assert plaintiff is engaging in bad faith tactics in eliminating her federal claims solely to

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return her case to state court. Id. at 4-5.

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Defendants rely on Sparta Surgical Corp. v. Nat'l Ass'n of Sec. Dealers, Inc.,

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159 F.3d 1209, 1212 (9th Cir. 1998) to support their contention plaintiff may not compel remand

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by amending her complaint to eliminate the federal question on which removal was based.

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Sparta is distinguishable from the matter before this court. In Sparta, the court found the federal

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claim was essential to the state law claim and plaintiff was improperly attempting to avoid federal

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jurisdiction. Id. In Sparta, the court observed, “[a] plaintiff may not avoid federal jurisdiction by

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omitting from the complaint federal law essential to his or her claim or by casting in state law

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terms a claim that can be made only under federal law.” Id.; see also Rains v. Criterion Sys., Inc.,

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80 F.3d 339, 344 (9th Cir. 1996). Contrary to defendants’ contention, “Sparta does not hold that
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a court cannot remand a case that was properly removed even if the plaintiffs amend their

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complaint. . . .” Santa Fe Drilling Co. v. Ins. Co. of State of Pa., C 05-4411 CW, 2006 WL

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13090 (N.D. Cal. Jan. 3, 2006).

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Defendants’ argument that the court should look only to the pleadings at the time

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of removal to determine whether a case is suitable for remand is misplaced. They rely on case

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law where federal law was essential to the state law claims, or there was an independent basis for

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federal jurisdiction such as diversity, or addressing the perfecting of removal post-amendment.

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None of those issues is presented here.

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Defendants do not dispute plaintiff timely filed her amended complaint. See FED.

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R. CIV. P. 15(a)(1)(B). In her amendment, plaintiff did not withdraw a substantial number of

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claims, or add any claims, and her state law claims do not rely on federal law. When considering

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the Gibbs factors of comity, judicial economy, convenience and fairness, the court finds these

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factors weigh in favor of plaintiff. This court has only pendent jurisdiction over the claims now

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before it. This case is in its early stages, and the court has played little part in any substantive

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adjudication in the case. The state court is equally competent to hear this case and more familiar

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with the law of its own forum. Defendants addressed plaintiff’s state law claims in their motions

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to dismiss; they may renew these substantive arguments in state court. While defendants argue

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they will be prejudiced by remand because they would be required to re-brief their motions,

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which rely on federal law, there have no new substantive issues to brief. Defendants have not

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demonstrated plaintiff has acted in bad faith in her request to return to state court, nor have they

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shown they would be prejudiced by remand.

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V.

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CONCLUSION
For the foregoing reasons, plaintiff’s motion to remand is GRANTED and the case

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is remanded to the Stanislaus County Superior Court.

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IT IS SO ORDERED.

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DATED: November 10, 2014.

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UNITED STATES DISTRICT JUDGE
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