GUY M. LERNER, Plaintiff,
ERIC K. SHINSEKI, et al., Defendant.
THOMAS B. RUSSELL, District Judge.
This action is brought pursuant to 38 U.S.C. § 7462(f) for judicial review of the final decision of the Disciplinary Appeals Board relative to the suspension issued against the Plaintiff, Guy M. Lerner, M.D. Plaintiff has submitted his brief, (Docket No. 31), the Defendant, the United States Department of Veterans Affairs, has responded, (Docket No. 32), and Plaintiff has replied, (Docket No. 33). This matter is now ripe for adjudication. For the reasons that follow, the Court will set aside the decision of the Disciplinary Appeals Board and vacate the penalty imposed.
Plaintiff Guy Lerner (Lerner) is a Kentucky-licensed physician employed by the Department of Veterans Affairs (VA) pursuant to 38 U.S.C. § 7401(1) as a full-time permanent physician at the Robley Rex Veterans Administration Medical Center (VAMC) in Louisville, Kentucky. In his Complaint, Lerner named as defendants the VA as well as Edwin Earl Gaar, III, M.D. (Gaar), the VAMC's Chief of Surgery; Wayne L. Pfeffer (Pfeffer), the VAMC's Medical Center Director; Eva M. Egolf (Egolf), who serves as a patient advocate at VAMC and an administrative assistant to Gaar; Christy A. Rowzee, a supervisory human resources specialist at the VAMC; and Jennifer Vaught (Vaught), a human resources specialist at the VAMC. In its April 26, 2013, Memorandum Opinion and Order, the Court dismissed each of Lerner's nine numbered claims against the individual named Defendants; however, the Court concluded that Lerner's appeal of the Disciplinary Appeals Board's (DAB) decision was properly before the Court, reasoning:
VA physicians, such as Lerner, are afforded procedural protections when they experience a "major adverse action" as defined by 38 U.S.C. § 7461. A suspension qualifies as a major adverse action. Id. § 7461(c)(2)(B). Further, the major adverse action was the result of "professional conduct or competence." Id. § 7461(c)(3); (Docket No. 1-1, at 2 ("The action being appealed is a major adverse action. The charge upon which the action is based, in whole or in part, involves an issue of professional conduct and competence...."). Adverse actions involving professional conduct or competence are governed by § 7462, which provides for judicial review. Thus, Lerner's appeal of the DAB decision is properly before this Court for review.
(Docket No. 28.)
Lerner began his employment at the VAMC in early 2007. On February 7, 2011, Gaar issued a notice of proposed reprimand to Lerner for (1) failure to follow instructions and (2) inappropriate conduct. (Admin. R. at 335.) The first reason, referred to as "Charge I, " related to Lerner's failure to properly label syringes, inappropriate completion of post-procedure notes prior to the completion of the procedure,  and failure to follow proper hand-washing procedures. ( See Admin. R. at 335.) These alleged infractions, according to the notice of proposed reprimand, occurred on four dates between February 2010 and June 2010. (Admin. R. at 335.) The second reason, referred to as "Charge II, " related to Lerner's alleged inappropriate conduct toward a patient on July 16, 2010. (Admin. R. at 335.) The "specification" in support of Charge II stated: "Specifically, when the patient began to exhibit disruptive behavior towards you while in clinic, you became increasingly angry and the patient reported you called him an idiot.' You admitted calling him a clown.' Both words are unacceptable and your conduct was inappropriate." (Admin. R. at 335-36.) Lerner provided a written reply to the notice of proposed reprimand on February 25, 2011, insisting that the charges were without merit. (Admin. R. at 110-12.) Lerner further argued that "most of the specified charges occurred almost one year ago and the issues, while extremely minor in nature, were immediately addressed and corrected." (Admin. R. at 110.) Lerner's union representative, Sandra Richardson (Richardson), also submitted further information on Lerner's behalf. ( See Admin. R. at 337.)
On April 13, 2011, Marylee Rothschild, M.D. (Rothschild), Chief of Staff at the VAMC, reduced the proposed reprimand to an admonishment. (Admin. R. at 337-39.) Rothschild noted that she had reviewed Lerner's work for the period of February 28 through March 3, 2011, and "found complete pre and post medical procedure notes in a timely manner." (Admin. R. at 337.) Rothschild also noted that "during an unannounced accreditation readiness review on March 23, 2011, it was shown that the appropriate hand washing was done prior to donning sterile gloves." (Admin. R. at 337.) Rothschild commented, however, that "during the same review, it was noted that identification of the medication used was still not in compliance." (Admin. R. at 337.) Rothschild concluded:
Last, it is my expectation that you maintain professionalism during any and all interactions with patients. Failure to do so disrupts continuity of care and negatively impacts a patient's perception of the care being provided. Although you reportedly provided additional care to this patient in later productive encounters, the initial interaction was quite unfortunate. This patient encounter contributed to my determination of an admonishment.
(Admin. R. at 337.)
Thereafter, on June 16, 2011, a Weingarten  fact-finding meeting was conducted by Egolf, Gaar's administrative assistant. ( See Admin. R. at 278-86.) Present at that meeting were Egolf, Lerner, and Richardson, Lerner's union representative. In her report of that meeting, Egolf wrote: "I began the meeting by stating that I had been given authority by Dr. Gaar to conduct the Fact Finding review. Sandy Richardson asked what the charges' were; I noted we would be asking questions about the following: time out' process, medication vials, May 13, 2011 incident - interaction with nurse practitioner, and alleged blogging." (Admin. R. at 278.) Apparently, no formal charges or other disciplinary action came about as a result of that meeting. ( See Docket No. 31, at 5.)
Another Weingarten meeting was conducted by Egolf on July 13, 2011. (Admin. R. at 267-74.) By this point, Gaar apparently had delegated to Egolf the authority to conduct an investigation and fact finding relative to Lerner. (Admin. R. at 160 (Hr'g Tr. at 29).) The July 13 meeting addressed several interactions among Lerner and his patients during the two-week period of June 23 through July 7, 2011. The first encounter occurred between Lerner and "Patient A" on June 23, 2011. (Admin. R. at 267.) According to Egolf's notes, Patient A stated that Lerner asked him "something to the effect of are you a real UofL' fan and then made some comment about they couldn't get anyone into the MBA." (Admin. R. at 290.) The second encounter occurred on June 29, 2011 among Lerner, "Patient B, " Patient B's wife, and Patient B's son, all of whom are African American. (Admin. R. at 269.) According to Egolf's notes, Patient B stated that Lerner called Patient B's wife a "dummy, " referred to Patient B's son as a "big gorilla, " and, when Patient B's wife asked questions about Patient B's treatment, Lerner responded, "who's the patient here?" (Admin. R. at 277.) The third encounter occurred between Lerner and "Patient C" on July 7, 2011. (Admin. R. at 272.) According to a note transmitted to Egolf by Patrice Gordon, R.N. (Gordon), Patient C stated "that Dr. Lerner told him to call the surgery department and complain." (Admin. R. at 275.) Gordon's note also reflected that Patient C "stated that Dr. Lerner told him that the surgery dept is trying to get rid of him." (Admin. R. at 275.) The record reflects that Egolf spoke directly with Patient A and Patient B, ( see Admin. R. at 277, 288), but Egolf did not speak directly with Patient C, ( see Admin. R. at 160 (Hr'g Tr. at 31)).
By letter of September 29, 2011, Gaar informed Lerner that he was proposing a ten-day suspension based on six instances of alleged inappropriate conduct, which were labeled as "Specifications" A through F. (Admin. R. 34-36.) Specification A related to Lerner's encounter with Patient B in which Lerner allegedly called Patient B's wife a "dummy" and referred to his son as a "big gorilla." (Admin. R. at 34.) Specification B also related to Lerner's encounter with Patient B, specifically Lerner's alleged statement "who's the patient here?" to Patient B's wife. (Admin. R. at 34.) Specification C related to Lerner's encounter with Patient C and Lerner's alleged statements "the nurse quit" and "the surgery department is trying to get rid of me." (Admin. R. at 34.) Specification D related to Lerner's interaction with Patient A and Lerner's alleged comments about whether Patient A was "a real U of L fan." (Admin. R. at 35.) Specification E appears to relate to Lerner raising his voice to Egolf during the June 16 Weingarten meeting when questioned about his "blogging" activities while at work. (Admin. R. at 35; see Admin. R. at 282-83.) Specification F relates to Lerner's demeanor at the July 13 Weingarten meeting, specifically (1) Lerner's having laughed when questioned whether he notified the staff when he leaves the work area, and (2) Lerner's comments to the Weingarten meeting reporter that she should "not be taking personal calls, or words to that effect, " during the Weingarten meeting. (Admin. R. at 35; see Admin. R. at 274.) Gaar's letter concluded, stating: "I consider these incidents to be very serious... and I consider this professional misconduct to be completely unacceptable." (Admin. R. at 35.)
Gaar's proposal of suspension was then transmitted to Pfeffer, the director of the VAMC, for a final decision. ( See Admin. R. at 36.) On October 21, 2011, Lerner submitted to Pfeffer a written reply to the proposed suspension. (Admin. R. at 37-38.) Lerner maintained that all of the charges relative to interactions with patients "were taken out of context or simply untrue" and that the allegations against him "have no merit, no bearing on patient care, and have only served the purpose to harass [him]." (Admin. R. at 37.) Lerner further insisted that "[t]he temporal nature and escalating quality of these allegations are clearly retaliatory as they occurred exactly one day to the date that Dr. Gaar's superiors were notified of possible violations of resident physician supervision." (Admin. R. at 37.) Lerner met with Pfeffer on November 2, 2011 to discuss Gaar's proposed suspension. Then, on November 21, Pfeffer sustained Gaar's recommendation and issued a ten-day suspension to Lerner. (Admin. R. at 39-40.)
By letter of December 6, 2011, Lerner invoked his right to a hearing before the DAB. (Admin. R. at 41-42.) Lerner again stated that the charges were without merit and were "based on obscure trivial matters, most of which are untrue or taken out of context." (Admin. R. at 41.) In January 2012, while his appeal was pending, Lerner was required to serve his ten-day suspension.
The DAB conducted a two-day hearing on March 13 and 14, 2012. ( See Admin. R. at 153-246.) The DAB heard from eleven witnesses, including Egolf, Gaar, Pfeffer, Vaught, Gordon, and Lerner. ( See Admin. R. at 153 (Hr'g Tr. at 3).) None of the complaining patients or other individuals referenced in Specifications A through D testified. The DAB rendered its decision and submitted its recommendation to the Under Secretary on April 16, 2012. (Admin. R. at 14.) In a roughly three-and-one-half page written decision, the DAB sustained three of the six Specifications and, concluding that the ten-day suspension was excessive, reduced the penalty to a five-day suspension. ( See Admin. R. at 10, 14.) Specifically, the DAB sustained Specifications A, B, and C, but did not sustain Specifications D, E, or F.
In regard to Specification A, the DAB concluded that "the weight of the evidence favored the conclusion that [Lerner] had used the word dummy' with respect to the patient's wife and had used the words big gorilla' with respect to the patient's son." (Admin. R. at 10.) The DAB noted that Lerner did not remember the encounter and denied using the word "dummy" in the context alleged; however, the DAB reasoned that "given [Lerner's] past disciplinary record and lack of expressed remorse during the hearing... it was more likely than not that [Lerner] had used this language with respect to the patient's wife and son." (Admin. R. at 10.)
In regard to Specification B, the DAB found that the weight of the evidence was sufficient to sustain the charge that Lerner used the language "who's the patient here, " language which the DAB found was "demeaning and inappropriate." (Admin. R. at 10.) The DAB noted that Lerner did not remember the encounter and testified that if he had used that language, it was to redirect the dialogue back to the patient. The DAB further acknowledged that circumstances where family members intrude on the physician-patient dialogue "do occur regularly, " but concluded that "there are far better alternatives to the approach used by [Lerner]." (Admin R. at 10.)
In regard to Specification C, the DAB wrote: "[Lerner] indicated that he did not specifically remember this encounter but testified that it was unlikely that he used the language the nurse quit' or the surgery department is trying to get rid of me' to a patient. The Board noted that the appellant testified on multiple occasions that he had little control over the pain department, that he lacked space and resources and that the nurse practitioner had quit and was not replaced, substantially increasing [Lerner's] workload." (Admin. R. at 11 (internal citations omitted).) The DAB then concluded: "Given [Lerner's] past record and also his demeanor during the hearing the Board determined that the weight of the evidence supported the charge th[at] [Lerner] had used this language during the patient encounter and that the language constituted Inappropriate Conduct." (Admin. R. at 11.)
Then, under the heading "Penalty, " the DAB began by stating that it found the three sustained Specifications "to be serious and warrant discipline." (Admin. R. at 12.) The DAB noted that Lerner had previously received an admonishment and that Lerner "has not shown remorse or admitted to some degree of wrongdoing." (Admin. R. at 12.) The DAB went on to state that there were mitigating factors to be considered:
The Agency conducted a very inadequate fact finding process prior to laying charges. The proposing official, the Chief of Surgery, delegated essentially the fact finding to Eva Egolf and admitted that he knew little or nothing about the results of the fact finding. He relied solely on HR to craft the suspension proposal and it is not clear that he even knew the contents of the letter when he signed it.... The Chief of Surgery stated that Ms. Egolf was an unbiased third party. The Board determined that Ms[.] Egolf was not an unbiased third party since she reported directly to the Chief of Surgery. As a result Ms[.] Egolf was not a good candidate to conduct essentially the entire the fact finding process. The Board also determined that the Agency had alternative fact finding mechanisms such as an administrative investigation. The Board further determined that there was significant conflict between the testimony of the Chief of Surgery and the Medical Center Director regarding the role of the Chief of Surgery in issuing the suspension proposal. This conflict undermines the credibility of the Agency with regard to the suspension. Finally the Board determined that there was no evidence that the Agency had offered [Lerner] any counseling, employee assistance or communication skills training after the admonishment.... The Board considered the Agency had a responsibility to offer such and that the failure to do so constitutes a mitigating factor.
(Admin. R. at 12-13.)
The Under Secretary issued his final decision adopting the DAB's recommendation some four months later on August 10, 2012. (Admin. R. at 6, 14.) This appeal followed.
The Court's review of the DAB's final action is governed by 38 U.S.C. § 7462(f)(2), which provides:
In any case in which judicial review is sought under this subsection, the court shall review the record and hold unlawful and set aside any agency action, finding, or conclusion found to be-
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) obtained without procedures required by law, rule, or regulation having been followed; or
(C) unsupported by substantial evidence.
The standard of review under § 7462(f)(2) "directly mirrors the standard for judicial review of other administrative actions." Rajan v. Principi, 90 F.Appx. 262, 263 n.1 (9th Cir. 2004) (citing 5 U.S.C. § 706(2)).
For purposes of § 7462(f)(A), an agency's decision is "arbitrary and capricious" if "the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Taylor v. Principi, 92 F.Appx. 274, 276-77 (6th Cir. 2004) (quoting Henry Ford Health Sys. v. Shalala, 233 F.3d 907, 911 (6th Cir. 2000)). "Although the court may not supply a reasoned basis for the agency's action that the agency itself has not given, a decision of less than ideal clarity should be upheld if the agency's path may reasonably be discerned." Id. at 277 (citing Lansing Dairy, Inc. v. Espy, 39 F.3d 1339, 1355 (6th Cir. 1994)). Stated differently, "[t]he arbitrary and capricious standard... is met when it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome." Admin. Comm. of the Sea Ray Emps.' Stock Ownership & Profit Sharing Plan v. Robinson, 164 F.3d 981, 989 (6th Cir. 1999) (citation and internal quotation marks omitted). "Consequently, a decision will be upheld if it is the result of a deliberate principled reasoning process...." Evans v. UnumProvident Corp., 434 F.3d 866, 876 (6th Cir. 2006) (citation and internal quotation marks omitted). And while this standard of review is "highly deferential, " it "does not automatically mandate adherence to [an agency's decision]"-that is, it is not "without some teeth." McDonald v. W.-S. Life Ins. Co., 347 F.3d 161, 172 (6th Cir. 2003) (citation omitted). "Deferential review is not no review, and deference need not be abject." Id. (citations omitted) (internal quotation marks omitted). Put another way, "federal courts do not sit in review of the administrator's decisions only for the purpose of rubber stamping those decisions." Moon v. Unum Provident Corp., 405 F.3d 373, 379 (6th Cir. 2005).
Under § 7462(f)(C), the Court also may set aside any agency action unsupported by substantial evidence. "To determine whether the board's findings are supported by substantial evidence, the court must determine whether the board considered such relevant evidence as a reasonable mind might accept as adequate to support the conclusion reached.'" Taylor, 92 F.Appx. at 277 (quoting R.P. Carbone Constr. Co. v. Occupational Safety & Health Review Comm'n, 166 F.3d 815, 818 (6th Cir. 1998)). "Substantial evidence is more than a scintilla, but less than a preponderance, of the evidence." R.P. Carbone, 166 F.3d at 818. In other words, it "must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury." Payne v. Comm'r of Soc. Sec., 402 F.Appx. 109, 111 (6th Cir. 2010) (internal quotation marks omitted) (quoting LeMaster v. Sec'y of Health & Human Servs., 802 F.2d 839, 840 (6th Cir. 1986)). The Court must affirm the agency's decision if it is supported by substantial evidence, even if the Court would have decided the issue differently. Taylor, 92 F.Appx. at 277 (citing Bogle v. Sullivan, 998 F.2d 342, 347 (6th Cir. 1993)).
Finally, the Court notes that "relevant and material hearsay may constitute substantial evidence." R.P. Carbone, 166 F.3d at 819. However, "[m]ere uncorroborated hearsay or rumor does not constitute substantial evidence." Consol. Edison Co. of N.Y. v. N.L.R.B., 305 U.S. 197, 230 (1938). When deciding whether hearsay testimony constitutes substantial evidence, the Sixth Circuit, in applying Richardson v. Perales, 402 U.S. 389 (1971), advises that courts must consider the following eight factors:
(1) the independence or possible bias of the declarant, (2) the type of hearsay material submitted, (3) whether the statements are signed and sworn to as opposed to anonymous, oral, or unsworn, (4) whether the statements are contradicted by direct testimony, (5) whether the declarant is available to testify and, if so, (6) whether the party objecting to the hearsay statements subpoenas the declarant, or whether the declarant is unavailable and no other evidence is available, (7) the credibility of the declarant if a witness, or of the witness testifying to the hearsay, and finally, (8) whether the hearsay is corroborated.
R.P. Carbone, 166 F.3d at 819.
VA physicians, such as Lerner, are afforded procedural protections when they experience a "major adverse action" as defined by 38 U.S.C. § 7461. A suspension qualifies as a major adverse action. Id. § 7461(c)(2)(B). Further, the major adverse action was the result of "professional conduct or competence." Id. § 7461(c)(3); (Docket No. 1-1, at 2 ("The action being appealed is a major adverse action. The charge upon which the action is based, in whole or in part, involves an issue of professional conduct and competence...."). Adverse actions involving professional conduct or competence are governed by § 7462, which provides for judicial review. Thus, Lerner's appeal is properly before this Court for review.
Lerner challenges the DAB's decision as (1) arbitrary and capricious, (2) not supported by substantial evidence, and (3) contrary to due process. Because the Court finds Lerner's first two challenges dispositive of this appeal, the Court need not address in his arguments relative to due process.
I. Substantial Evidence
Lerner chiefly argues that the DAB's decision was not supported by substantial evidence. Accordingly, the Court will begin its discussion there. As noted above "[s]ubstantial evidence is more than a scintilla, but less than a preponderance, of the evidence." R.P. Carbone, 166 F.3d at 818. "It is such relevant evidence as a reasonable mind might accept as adequate to support the conclusion reached, " id., and "must be enough to justify, if the trial were to a jury, a refusal to direct a verdict, " Payne, 402 F.Appx. at 111. Lerner insists that all of the evidence to support any of the charges against him came in the form of hearsay from Egolf. Lerner argues that such evidence, ...