Safari et al v. Kaiser Foundation Health Plan et al

Filing 68

ORDER DENYING #63 Motion for Attorney Fees. Signed by Judge Jeffrey S. White on July 16, 2012. (jswlc3, COURT STAFF) (Filed on 7/16/2012)

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NOT FOR PUBLICATION

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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HAMID SAFARI, M.D., and MARK
FAHLEN, M.D.,

No. C 11-05371 JSW

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ORDER DENYING MOTION FOR
ATTORNEYS’ FEES

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v.
For the Northern District of California

United States District Court

Plaintiffs,
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KAISER FOUNDATION HEALTH PLAN,
KAISER FOUNDATION HOSPITALS, and
SUTTER CENTRAL VALLEY HOSPITALS,

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Defendants.
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INTRODUCTION
This matter comes before the Court upon consideration of the motion for attorneys’ fees

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filed by Defendant Sutter Central Valley Hospitals (“Sutter”). The Court has considered the

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parties’ papers, relevant legal authority, and the record in this case, and it finds the matter

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suitable for disposition without oral argument. See N.D. Civ. L.R. 7-1(b). The Court

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VACATES the hearing scheduled for July 27, 2012, and it HEREBY DENIES Sutter’s motion.

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BACKGROUND

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On November 7, 2011, Plaintiff, Dr. Mark Fahlen (“Dr. Fahlen”), filed this action

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pursuant to 42 U.S.C. section 1983 (“Section 1983”), asserting facial and as applied challenges

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to the constitutionality of California’s statutory scheme governing medical peer review

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proceedings. Dr. Fahlen alleged that this statutory scheme violated the Due Process Clause of

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the Fourteenth Amendment to the United States Constitution, because it permitted Sutter to

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deprive him of his protected property interest to practice medicine without due process of law.

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Sutter moved to dismiss Dr. Fahlen’s claims.
On May 11, 2012, the Court issued an Order granting, in part, and denying as moot, in

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part, Sutter’s motion, and it granted Dr. Fahlen leave to amend certain claims. Dr. Fahlen stated

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that he did not intend to file an amended complaint, and he asked the Court to dismiss the

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claims with prejudice, so that he could pursue an appeal. (See Docket No. 52.) On May 21,

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2012, the Court issued an Order dismissing the claims with prejudice. On May 25, 2012, Dr.

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Fahlen filed a notice of appeal.
On June 15, 2012, Sutter filed the instant motion for attorneys’ fees.1

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ANALYSIS

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For the Northern District of California

United States District Court

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Sutter moves for attorneys’ fees pursuant to 42 U.S.C. section 1988, which provides that

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in an action to enforce Section 1983, “the court, in its discretion, may allow the prevailing party

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... a reasonable attorney’s fee as part of the costs....” 42 U.S.C. § 1988(b).

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[B]ecause Congress wanted to encourage individuals to seek relief for
violations of their civil rights, [section] 1988 operates asymmetrically.
A prevailing plaintiff may receive attorneys’ fees as a matter of course,
but a prevailing defendant may only recover fees in “exceptional
circumstances” where the court finds that the plaintiff’s claims are
“frivolous, unreasonable, or groundless.”

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Braunstein v. Arizona Dep’t of Transportation, – F.3d –, 2012 WL 2401993, at * 7 (9th Cir.

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June 27, 2012) (quoting Harris v. Maricopa Cnty. Superior Court, 631 F.3d 963, 971 (9th

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Cir.2011) (internal quotations omitted); see also Hughes v. Rowe, 449 U.S. 5, 14 (1980) (to

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award attorneys’ fees to prevailing defendant, “[t]he plaintiff’s action must be meritless in the

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sense that it is groundless or without foundation”).
If a plaintiff asserts a mix of frivolous and non-frivolous claims, “only fees attributable

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exclusively to the plaintiff’s frivolous claims are recoverable.” Braunstein, 2012 WL 2401993,

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at *7; see also Fox v. Vice, –– U.S. ––, 131 S.Ct. 2205, 2215 (2011) (“Section 1988 permits the

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defendant to receive only the portion of his fees that he would not have paid but for the

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The parties agreed to an extension of time to file the motion. (Docket Nos.

58-59.)
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frivolous claim.”). “[W]here a plaintiff in a [section] 1983 action alleges multiple interrelated

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claims based on the same underlying facts, and some of those claims are frivolous and some are

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not, a court may award defendants attorneys fees with respect to the frivolous claims only when

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those claims are not ‘intertwined.’ ” Harris, 631 F.3d at 973 n. 2. Finally, “[t]he fact that a

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plaintiff may ultimately lose his case is not in itself a sufficient justification for the assessment

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of fees.” Hughes, 449 U.S. at 14.

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The Court granted Sutter’s motion to dismiss, and it dismissed the claims against Sutter

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with prejudice. Thus, Sutter is a “prevailing party,” a fact that Dr. Fahlen does not dispute. The

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crux of the parties’ dispute on this motion, as it was below, was whether Dr. Fahlen had a
reasonable basis to assert that Sutter can be considered a state actor. Dr. Fahlen argues that the

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For the Northern District of California

United States District Court

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Court should find that his claims were not groundless or without foundation, because he had

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reasonable grounds to argue that Pinhas v. Summit Health, Ltd., 894 F.2 1024 (9th Cir. 1989)

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should be revisited on the basis that the court did not address Business and Professions Code

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Section 809, which was enacted in 1989. See Cal. Bus. & Prof. Code § 809(a)(9) (“the laws of

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this state provide a more careful articulation of the protections for both those undertaking peer

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review activity and those subject to review, and better integrate public and private systems of

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peer review”).

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Dr. Fahlen also argued that the Ninth Circuit’s decision Chudacoff v. University Medical

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Center of Southern Nevada, 649 F.3d 1149 (9th Cir. 2011), was controlling and supported his

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argument that Pinhas should be revisited. Although this Court ultimately found Dr. Fahlen’s

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arguments unpersuasive and that Pinhas did control the outcome of the case, it cannot say that

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Dr. Fahlen’s arguments were frivolous. In Chudacoff, the Ninth Circuit noted that “[a]lthough

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determining state action can admittedly be an imperfect science,” it did not consider the facts in

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Chudacoff to present a difficult case Id. at 1149. In contrast, the court suggested a more

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difficult case might be presented by the fact pattern at issue in this case, i.e. when it involved “a

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private hospital whose only state link is its subjection to state regulation.” Id. (citing, inter alia,

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Pinhas, 894 F.2d 1024).

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The Court also notes that Sutter argued, in the alternative, that the Court should dismiss

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on the basis of Younger v. Harris, 401 U.S. 37 (1971). Although it did not reach the issue, the

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Court again notes the apparent tension in the parties’ position on state action and abstention

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under Younger.

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For the foregoing reasons, the Court DENIES Sutter’s motion for attorneys’ fees.

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IT IS SO ORDERED.

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Dated: July 16, 2012
JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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