Manion v. Spectrum Healthcare Resources et al

Filing 81

ORDER GRANTING 71 Niteline's Motion for Summary Judgment. The clerk is directed to enter judgment accordingly and close this matter. Signed by US District Judge Terrence W. Boyle on 5/6/2014. (Fisher, M.)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
No: 7:12-CV-247-BO

KERNAN T. MANION, M.D.,
Plaintiff,
V.

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ORDER

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NITELINES KUHANA JV LLC,
Defendant.

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This cause comes before the Court on defendant Nitelines' motion for summary
judgment. Plaintiff has responded, defendant has replied, and the matter is ripe for ruling. For
the reasons discussed below, defendant's motion is granted.
BACKGROUND
Plaintiff is a psychiatrist who formerly provided care to men and women at the
Deployment Health Center at the Naval Hospital Camp Lejeune. Plaintiff was terminated from
his position after he complained of certain practices at the Deployment Health Center (DHC).
Plaintiff filed this action under, inter alia, the Defense Contractor Whistleblower Protection Act
(DCWPA), 10 U.S.C. § 2409, alleging illegal reprisal for protected disclosures. By order entered
August 6, 2013, the Court denied defendants' motions to dismiss and for judgment on the
pleadings. 1 In so doing, the Court determined that plaintiff, as an independent contractor of
defense contractors, has standing to bring an action under 10 U.S.C. § 2409.
The matter has since proceeded through discovery and defendant Nitelines has moved for
summary judgment on all of plaintiffs claims. The relevant factual background which does not

1

Another contractor-defendant through whom plaintiff was employed, Spectrum Healthcare
Resources, has been since been dismissed from this action. [DE 79].

appear to be in dispute is as follows. Nitelines entered into a contract with Naval Medical
Logistics Command on September 7, 2007, to furnish qualified healthcare workers as requested.
Defs Ex. 6. On September 3, 2008, Nitelines and plaintiff entered into an independent
contractor agreement wherein plaintiff would provide psychiatric services at DHC, Naval
Hospital Camp Lejeune to sailors and marines who had recently returned from combat duty
deployments. Defs Ex. 1; Manion Aff.

~~

6-8. Shortly after beginning work, plaintiff

encountered procedures and scenarios that he considered to be unsatisfactory or cause for
concern. Plaintiff witnessed two incidents involving patients or alleged patients exhibiting
violent and potentially self-or-otherwise injurious behavior, in addition to noting a lack of
personnel support, lack of regular clinician meetings, and a lack of appropriately trained support
staff. Manion Aff

at~~

16-34. Plaintiff voiced his concerns to his direct supervisor, Captain

Arnold, as well as to Captain Arnold's supervisors. See e.g. PI's Ex. 4;5.
In June 2009, plaintiff notified the Commanding Officer of the Naval Hospital of his
concerns and his intent to raise his concerns with the Inspector General if necessary; plaintiff
sent a copy ofthis communication to Nitelines. PI's Ex. 7; 1 ~57; 9. The following day,
Nitelines emailed plaintiff and notified him that "it is requested that you Cease and Desist all
further correspondence with the Government!" PI's Ex. 10. In July 2009, plaintiff agreed to be
transferred from the DHC to the Mental Health Clinic (MHC), where the context of his work
would be the same or similar but he would be working in a different setting under different
supervisors. Manion Aff.

~~

69-71; Defs Ex. 8 at 167-168. Also in July 2009, plaintiffs

supervisor Captain Arnold authored a memorandum detailing plaintiffs "sustained pattern of
noncompliance with numerous and specific contract stipulations, and/or, specific supervisory
guidance," including non-compliance with chain of command protocols, non-compliance with

2

payroll/timecard submission deadlines, and non-compliance with contract stipulations regarding
proper respect and professionalism in the workplace. Def s Ex. 9.
After having agreed to transfer to the MHC, plaintiff expressed his intention and concern
that he be permitted to continue to treat at least some of his patients from the DHC. Following a
meeting with his supervisors on August 28, 2009, wherein it was first stated that plaintiffs
patients would not be transferred with him, plaintiff announced his intent to resign. Manion Aff.
~~

88-94; Defs Ex. 10. On August 30,2009, plaintiff filed a complaint with the Inspector

General of the Navy, BUMED, the Marine Corps, and the DOD concerning patient safety and
violence response protocol. PI's Ex. 19. In that letter plaintiff stated that he had announced to
his intent to resign "given such grossly unethical circumstances as well as abusive treatment and
retaliatory firing". !d.
On September 1, 2009, Nitelines met with plaintiff and advised him that his independent
contract was terminated without cause and with ninety days' notice pursuant to paragraph 9(b) of
the contract. Defs Ex. 8; PI's Ex. 20. Also on September 1, 2009, plaintiff was notified that the
Inspector General would be sending a senior medical officer to investigate his concerns; the
officer arrived on September 2, 2009.

Manio~

Aff.

~

112. On September 3, 2009, the Navy

contracting officer notified Nitelines that plaintiff did not meet government requirements and
Nitelines was directed to remove plaintiff from any schedules under his contract. Def s Ex. 12.
On September 3, 2009, Nitelines notified plaintiff that his services and any agreements at Camp
Lejeune would terminate at the end of September 3, 2009, pursuant to the request of the Navy
that he no longer provide services and plaintiffs independent contractor agreement at paragraph
9(d)(iii). Defs Ex. 13.

3

On May 9, 2011, the Inspector General ofthe Department of Defense issued a report
based on plaintiffs allegations as well as a request by Representative Walter B. Jones that
plaintiffs allegations be investigated. Defs Ex. 14. The report states that the Inspector General
was unable to substantiate the allegations, that plaintiff was terminated from his position
independent of any concerns or complaints he made to his chain of command or the Inspector
General, and that there was no threat to the lives of patients due to the termination of plaintiff nor
was treatment to patients abruptly terminated upon plaintiffs departure. Id
DISCUSSION
A motion for summary judgment may not be granted unless there are no genuine issues
of material fact for trial and the movant is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56( a). The moving party bears the initial burden of demonstrating the absence of a genuine
issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If that burden has
been met, the non-moving party must then come forward and establish the specific material facts
in dispute to survive summary judgment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574,588 (1986). In determining whether a genuine issue of material fact exists for trial, a
trial court views the evidence and the inferences in the light most favorable to the nonmoving
party. Scott v. Harris, 550 U.S. 372, 378 (2007). However, "[t]he mere existence of a scintilla
of evidence" in support of the nonmoving party's position is not sufficient to defeat a motion for
summary judgment; "there must be evidence on which the [fact finder] could reasonably find for
the [nonmoving party]." Anderson v. LibertyLobby, Inc., 477 U.S. 242,252 (1986).
"Conclusory or speculative allegations do not suffice, nor does a 'mere scintilla of evidence' in
support of his case." Thompson v. Potomac Elec. Power Co., 312 F .3d 645, 649 (4th Cir. 2002)
(citing Phillips v. CSXTransp., Inc., 190 F.3d 285,287 (4th Cir.1999) (per curiam)).

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I.

PRIVATE RIGHT OF ACTION

Nitelines first contends that the applicable version of the DCWPA provides no private right
of action and plaintiff's DCWP A must therefore be dismissed. Prior to 2008, the DCWPA did
not provide for a private right of action. See Pancheo v. Raytheon Co., 777 F. Supp. 1089, 1092
(D.R.I. 1991); Mayo v. Questech, Inc., 727 F. Supp. 1007, 1014 (E.D.Va. 1989). Nitelines
entered into its contract with Naval Medical Logistics Command on September 7, 2007, prior to
the passage of the 2008 amendments to the DCWP A which expressly provide for a private right
of action. The Inspector General in this matter also found that the pre-2008 version of the
DCWP A applied, but noted that it would consider plaintiff's claims under the increased
protections provided after the 2008 amendments irrespective of such finding. Def' s Ex. 14 at 4
n.7.
Plaintiff argues that Nitelines' argument is frivolous as plaintiff's contract with Nitelines was
clearly executed after the 2008 amendments went into effect. The statute is silent, however, as to

whose contract is relevant for purposes of determining which version of the statute to apply. The
only case ofwhich the Court is aware to have addressed this issue, though not directly, relied on
the date that the contractor entered into its contract with the Department of Defense, not the date
of the employment contract of the employee seeking protection under the DCWP A. Micalizzi v.

Rumsfeld, 247 F. Supp. 2d 556, 559 (D. Vt. 2003).
Under this view, plaintiff's claim would fall under the pre-2008 version ofthe DCWPA and
plaintiff would be without a private right of action to assert his claim in this Court. However, as
the Inspector General went on to consider plaintiff's claim under the post-2008 amendments, the
Court will also assume without deciding that plaintiff has standing to bring his DCWP A claim
and will address defendant's motion regarding the merits of plaintiff's claim.

5

II.

DEFENDANT'S TERMINATION OF PLAINTIFF'S CONTRACT WAS NOT CONTRARY TO LAW
OR IN VIOLATION OF PUBLIC POLICY

The Defense Contractor Whistle blower Protection Act (DCWP A) provides that:
An employee of a contractor may not be discharged, demoted, or otherwise
discriminated against as a reprisal for disclosing to a Member of Congress, a
representative of a committee of Congress, an Inspector General, the
Government Accountability Office, a Department of Defense employee
responsible for contract oversight or management, or an authorized official of
an agency or the Department of Justice information that the employee
reasonably believes is evidence of gross mismanagement of a Department of
Defense contract or grant, a gross waste of Department of Defense funds, a
substantial and specific danger to public health or safety, or a violation of law
related to a Department of Defense contract (including the competition for or
negotiation of a contract) or grant.
10 U.S.C. § 2409 (2008).
Nitelines' decision to terminate plaintiff based on the Navy's direction that plaintiff be
removed from any schedules under his contract was in accordance with the terms of plaintiff's
independent contractor agreement, and there is no genuine issue of material fact as to whether
Niteline's motivation for its election to terminate plaintiff was in reprisal for plaintiff's
engagement in protected activities under the DCWP A.
Section 9(d)(iii) of plaintiff's independent contractor agreement with Nitelines provides that
Nitelines may terminate plaintiff's employment effective immediately in the event that Nitelines
receives a request that plaintiff not provide services under the contract or any withdrawal,
limitation, or restriction of plaintiff's privileges, access, or approval to provide services. Def' s
Ex. 1 at 7. As noted above, the Navy directed Nitelines by email dated September 3, 2009, to
"remove [plaintiff] from any schedules under this contract and to request Contracting Officer
prior approval prior to submitting him for scheduling under any other Navy Hospital- Camp
Lejeune contract or task order." Def's Ex. 12. Thus, when Nitelines notified plaintiff that it was

6

terminating his contract effective immediately, such action was in accordance with§ 9(d)(iii) of
plaintiff's independent contractor agreement with Nitelines.
There can be no doubt based on the evidence presented and forecast in this case that plaintiff
had serious personal conflicts with his direct supervisor at the DHC and that plaintiff made
numerous complaints regarding the conditions of and protocols applicable to his employment
and the DHC generally. Those complaints relating to the safety and well-being of troops
returning home from deployment raised serious concerns which, if well-founded, should have
been addressed by the Navy and the Department of Defense with the utmost gravity. However,
that the Navy concluded that plaintiff was no longer suitable for employment and directed its
staffing contractor to remove plaintiff from any further duties under his independent contractor
agreement does not appear, in light of the plain language of the statute and the paucity of case
law interpreting it, to raise a claim under the DCWP A. Had plaintiff raised concerns to his
Congressman or the Department of Defense about the activities of Nitelines, and Nitelines had
then terminated him from his position in reprisal for plaintiff's complaints, such action would
clearly be actionable under the statute. 2 Where, however, as here, it was the Navy's decision to
terminate plaintiff, and Nitelines was merely effecting such decision as contemplated by
plaintiff's independent contractor agreement, the Court is constrained to find that Nitelines is
entitled to judgment as a matter oflaw on plaintiff's DCWPA claim.
Nitelines is further entitled to summary judgment in its favor on plaintiff's claim that he was
unlawfully discharged in violation of public policy, specifically the public policy of North

2

Plaintiff has presented evidence that Spectrum, another staffing contractor that had
authority over plaintiff's contract to provide services to the Navy, was allegedly under pressure
to terminate or otherwise "handle" plaintiff in light of his numerous complaints or else face nonrenewal of its contract with the Navy. Spectrum has been dismissed from this suit however, and
plaintiff has presented no evidence to suggest that Nitelines was under any similar pressure.
7

Carolina as expressed through medical ethics and standards of care. N.C. Gen. Stat. §§ 90-5.1;
126-84(a)(4). 3 The specific actions about which plaintiff complains in his complaint are those
taken by the Navy, specifically by Commander O'Byrne, regarding plaintiff's complaints and
concerns about patient and public safety, and not any action taken by Nitelines. As discussed
above, Nitelines decision to terminate plaintiff's employment was based on a directive from the
Navy as contemplated by plaintiff's independent contractor agreement. Plaintiff has not come
forward with any evidence upon which a factfinder could find that Nitelines acted in any way
that violated the North Carolina's medical ethics guidelines and standards of care, and Nitelines
is entitled to judgment in its favor on this claim.
Ill.

DEFENDANT'S ACTIONS DID NOT BREACH PLAINTIFF'S CONTRACT

Plaintiff's breach of contract claim is based on the allegedly retaliatory actions ofNitelines in
providing plaintiff first with ninety-day notice of termination and second with notice of
immediate termination. [DE 1 ~~ 124- 125]. As discussed above, there is no genuine issue of
material fact regarding whether Nitelines acted in retaliation for protected disclosures when it
terminated plaintiff's independent contractor agreement effective immediately based upon a
directive from the Navy. Nor is there a genuine issue of material fact regarding whether
Nitelines' decision to provide plaintiff with ninety-day notice oftermination was retaliatory. On
August 28, 2008, plaintiff announced his intent to resign. Plaintiff engaged in disclosures
protected by the DCWPA on August 30,2009, 4 when he filed a complaint with the Inspector
General of the Navy, BUMED, the Marine Corps, and the DOD concerning patient safety and

3

The Court notes that N.C. Gen. Stat. § 126-84, though cited in plaintiff's complaint,
concerns only employees ofthe State ofNorth Carolina.
4
While plaintiff lodged numerous complaints during his employment, his disclosure on 28
August 2009 to the IG and DOD was the first revealed in the record to satisfy the protected
disclosure provisions under the DCWPA.
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violence response protocol. In that letter plaintiff also stated that he had announced to his intent
to resign. On September 1, 2009, Nitelines met with plaintiff and advised him that his
independent contract was terminated without cause, with ninety days' notice pursuant to
paragraph 9(b) of the contract.
Plaintiff has stated that Nitelines was unaware of his protected disclosure to the IG when it
informed plaintiffthat it was exercising its option to provide plaintiff with ninety-days' notice.
Defs Ex. 8 at 165. In light of both plaintiffs stated intent to resign and Nitelines' lack of
knowledge ofplaintiffhaving engaged in protected disclosures, Nitelines' action under its
contract to terminate plaintiff without cause cannot constitute illegal reprisal, nor a breach of
plaintiff independent contractor agreement.
As plaintiff has failed to come forward with sufficient evidence to demonstrate that genuine
issues of material fact exist as to his claims against Nitelines, 5 and Nitelines has demonstrated
that it is entitled to judgment as a matter of law, summary judgment pursuant to Rule 56 of the
Federal Rules ofCivil Procedure is appropriate.
CONCLUSION
For the foregoing reasons, Nitelines Kuhana JV's motion for summary judgment [DE 71] is
GRANTED. The clerk is DIRECTED to enter judgment accordingly and to close the file.

SO ORDERED, this_,_ day of May, 2014.

TERRENCE W. BOYLE
UNITED STATES DISTRICT JUD
5

Plaintiffs remaining claim in his complaint for intentional interference with contract was
alleged only against Spectrum.
9