EDWARD P. HAGEN, D.O., Plaintiff,
SIOUXLAND OBSTETRICS & GYNECOLOGY, P.C., an IOWA CORPORATION, PAUL J. EASTMAN, M.D., TAUHNI T. HUNT, M.D., and ANGELA J. ALDRICH, M.D., Defendants.
ORDER CERTIFYING QUESTIONS TO THE IOWA SUPREME COURT
MARK W. BENNETT U.S. DISTRICT COURT JUDGE NORTHERN DISTRICT OF IOWA
TABLE OF CONTENTS
I. INTRODUCTION AND BACKGROUND .............................................. 5
A. Factual Background ............................................................... 5
1. The parties and their relation to each other ........................... 6
2. The facts surrounding Hagen’s firing .................................. 7
B. Procedural Background ........................................................... 9
II. LEGAL ANALYSIS ...................................................................... 1
A. Authorization and Standards for Certification of Questions ............. 11
B. Certification Analysis ............................................................ 13
1. Whether legal issue is unsettled ....................................... 13
a. Question 1: Whether Iowa law recognizes Protected Conduct 3, 4, or 5 as protected activities that can support claims for wrongful discharge in violation of public policy ....................... 14
i. Iowa’s standards for recognizing protected activities ....................................... 14
ii. Protected Conduct 3: A doctor reporting nurses’ malpractice to the hospital where the malpractice occurred ................................................... 15
iii. Protected Conduct 4: A doctor disclosing to a patient’s family that the patient was a victim of medical malpractice ................................................ 20
iv. Protected Conduct 5: A doctor consulting with an attorney about whether that doctor had a legal duty to report another doctor’s medical malpractice to the Iowa Board of Medicine ................................................... 21
b. Question 2: Whether contractual employees can bring claims for wrongful discharge in violation of Iowa public policy ................................ 27
c. Question 3: Whether the lack of an “overriding business justification” is an independent element of a claim for wrongful discharge in violation of public policy ....................... 33
2. Availability of legal resources .......................................... 40
3. Court’s familiarity with state law ...................................... 40
4. Time demands on comparative court dockets ....................... 41
5. Frequency legal issue is likely to reoccur ............................ 42
6. Age of litigation and prejudice from certification .................. 42
7. Whether there is a split in authority .................................. 43
a. Question 1: Whether other courts recognize Protected Conduct 3, 4, or 5 as protected activities that can support claims for wrongful discharge in violation of public policy ....................... 44
i. Protected Conduct 3: A doctor reporting nurses’ malpractice to the hospital where the malpractice occurred ................................................... 44
ii. Protected Conduct 4: A doctor disclosing to a patient’s family that the patient was a victim of medical malpractice ................................................ 54
iii. Protected Conduct 5: A doctor consulting with an attorney about whether that doctor had a legal duty to report another doctor’s medical malpractice to a state board of medicine ................................................... 59
b. Question 2: Whether contractual employees can bring claims for wrongful discharge in violation of public policy ....................................... 63
c. Question 3: Whether the lack of an “overriding business justification” is an independent element of a claim for wrongful discharge in violation of public policy ....................... 68
III. CONCLUSION ............................................................................ 70
This is an order certifying questions to the Iowa Supreme Court following a jury trial in which a jury found Defendants liable for wrongfully discharging the Plaintiff in violation of Iowa public policy. On June 6, 2013, I sua sponte ordered the parties in this case to provide supplemental briefs on the following issue, among others: “Whether the Court should certify to the Iowa Supreme Court the question of whether Iowa law recognizes the public policy exceptions on which the jury found Defendants liable” (docket no. 124). The Plaintiff and Defendants filed their supplemental briefs on July 5, 2013 (docket nos. 134 and 137). The parties presented oral arguments on this issue on August 23, 2013. Like the eight-day jury trial, the oral arguments were vigorously and zealously presented by highly skilled and exceptionally well-prepared counsel. Though their clients obviously disliked each other, counsel demonstrated the utmost professionalism and civility toward each other and to me. It would be wonderful if I could clone these lawyers for other hotly contested federal civil litigation.
I raised this matter sua sponte because this case turns on a number of unresolved questions of Iowa law. The answers to these questions are critical to resolving the Defendants’ post-trial motion for judgment as a matter of law (docket no. 119), which is currently pending before me. Because this case raises issues of first impression under Iowa law that should, under the circumstances, be decided by the Iowa Supreme Court, I conclude that I should certify the following questions to the Iowa Supreme Court:
Does Iowa law recognize any of the following conduct as protected conduct on which a doctor-employee can base a claim for wrongful discharge in violation of Iowa public policy?:
(a) A doctor reporting, stating an intention to report, or stating that he might report, to a hospital, conduct of nurses that the doctor believed may have involved wrongful acts or omissions;
(b) A doctor disclosing to a patient or a patient’s family that the patient may have been the victim of negligent care or malpractice; or
(c) A doctor consulting with an attorney, stating an intention to consult with an attorney, or stating that he might consult with an attorney, about whether another doctor or nurses had committed wrongful acts or omissions that the doctor should report to the Iowa Board of Medicine or a hospital.
Does Iowa law allow a contractual employee to bring a claim for wrongful discharge in violation of Iowa public policy, or is the tort available only to at-will employees?
Under Iowa law, is an employer’s lack of an “overriding business justification” for firing an employee an independent element of a wrongful discharge claim, or is that element implicit in the element requiring that an employee’s protected activity be the determining factor in the employer’s decision to fire the employee?
Whether I grant the Defendants’ post-trial motion for judgment as a matter of law or motion for a new trial will depend, in part, on the answers to these questions.
I. INTRODUCTION AND BACKGROUND
“A certification order shall set forth . . . a statement of facts relevant to the questions certified, showing fully the nature of the controversy in which the questions arose.” Iowa Code § 684A.3. Unless I note otherwise, the following facts are presented “in the light most favorable to the jury verdict, assuming all conflicts in the evidence were resolved in [the Plaintiff’s] favor, and giving Plaintiff the benefit of all reasonable inferences that may be drawn from the evidence . . . .” Craig Outdoor Adver., Inc. v. Viacom Outdoor, Inc., 528 F.3d 1001, 1013 (8th Cir. 2008).
A. Factual Background
In this case, Dr. Edward Hagen (Hagen) sued his former employer, Siouxland Obstetrics & Gynecology, P.C. (Siouxland), and his former partners, Dr. Paul Eastman (Eastman), Dr. Tauhni Hunt (Hunt), and Dr. Angela Aldrich (Aldrich) (collectively “the Siouxland Defendants”) for wrongful discharge in violation of Iowa public policy. In particular, Hagen claims that the Siouxland Defendants ousted him from their medical practice because Hagen reported, or threatened to report, to St. Luke’s hospital and a patient, that Eastman and two nurses committed medical malpractice causing an unborn baby’s death. Hagen also claims that the Siouxland Defendants ousted him for consulting with attorneys about whether Eastman and the nurses had committed malpractice, and whether Hagen should report Eastman to the Iowa Board of Medicine or St. Luke’s.
1. The parties and their relation to each other
Siouxland, an Iowa professional corporation, is located in Sioux City, Iowa, and provides obstetric and gynecologic services to patients. Siouxland expanded into the area of cosmetic surgery and related services, including the development of The Rejuvenation Centre, which provided client services such as Botox treatment, Juviderm treatment, hair removal, liposuction, massage therapy, and weight loss consultation. Siouxland was formed and organized by three physicians, including Hagen’s father, in 1975. At the time of Hagen’s firing, in November 2009, the doctors with an interest in Siouxland were Hagen, Eastman, Hunt, and Aldrich.
Hagen is a doctor of obstetrics and gynecology, presently licensed to practice medicine in Iowa, South Dakota, and Wisconsin. On January 1, 1993, Hagen entered into an employment agreement with Siouxland. Hagen has been an equity owner, president, and director at Siouxland. At the time he was fired, Hagen was the president of Siouxland.
When the doctors joined Siouxland, they agreed not to “engage in the practice of medicine except as an employee of the CORPORATION unless otherwise authorized by the Board of Directors.” The employment agreement states all income generated “for services as a doctor and all activities relating thereto, such as lecturing, writing articles and consulting work, shall belong to the CORPORATION . . . .” A doctor could be terminated by delivering a written notice of cancellation at least 90 days prior to the effective date of cancellation or “discharged by the CORPORATION in the event of embezzlement or other theft; willful contravention of professional ethics; substantial and willful violation of any other terms or conditions of this employment agreement, all subject to determination by the Board of Directors of the CORPORATION.”
2. The facts surrounding Hagen’s firing
Hagen’s claims in this case arise out of an incident that began at St. Luke’s hospital in Sioux City, Iowa, on Thursday, November 5, 2009. On that day, Selvin and Maria Maeda, who were husband and wife, were at St. Luke’s because Maria Maeda was dealing with complications related to her pregnancy. She was 34 weeks pregnant and she was suffering from infections related to a prior liver transplant. Eastman was Maria’s consulting physician and had met her during a prior examination, but he was not at the hospital with Maria on the 5th. In fact, Maria had been admitted to the hospital at around 1:00 pm and Eastman had never gone to St. Luke’s to check on her. Hagen was on call that evening to cover patients at St. Luke’s. At around 4:30 pm, Eastman called Hagen to ask whether Hagen was on call and to explain Maria’s complications. Eastman explained to Hagen that he thought Maria was at a hospital in Omaha, and had only recently learned that she was still at St. Luke’s. Eastman told Hagen that Maria was in labor and going into intensive care based on her complications.
After speaking with Eastman for about 30 minutes, Hagen went to St. Luke’s. Hagen arrived at the hospital at 5:30 pm. He immediately went to see Maria, who was under general anesthesia, and performed an ultrasound, which confirmed that her baby was dead. Hagen began asking two labor and delivery nurses-Peggy Mace and Holly Duerksen-how long the baby had been dead. They could not tell him. Hagen became very upset and asked the nurses: “How the fuck can this happen at St. Luke’s that [nurses] watch a baby die on the monitor, suffocate, and do nothing?” Hagen went on to say to the nurses: “You killed this baby. You watched this baby die on the monitor. I mean, you guys did nothing.” Hagen noted that the nurses had missed the fact that Maria’s baby was dead because they had mistaken Maria’s elevated heart rate for her baby’s and presumed the baby was still alive.
After realizing that Maria’s baby was dead, Hagen determined that he needed to perform a C-section to deliver the dead baby. Before doing so, Hagen called Eastman on the telephone. At trial, Hagen testified that the conversation went as follows: “And I told [Eastman] we got a problem here. We’ve got a mother here that’s had no care. The nurses screwed up. You didn’t come see her, and this baby is dead, and now I’ve gotta do a C-section on a mother and deliver a dead baby.” Eastman offered to help do the C-section, but Hagen declined, telling Eastman: “I don’t need help doing a C-section. I can do that. I needed your help three hours earlier, but I don’t need it now.” Before performing the C-section, Hagen spoke with Selvin, Maria’s husband. They talked for over an hour in the doctor’s lounge. During their conversation, Hagen told Selvin that “things could have been done better” and that Hagen thought “the nurses missed something here.” Hagen then performed the surgery to remove Maria’s baby.
The next day, Hagen went to one of the hospital’s administrators, Dr. Hildebrand (Hildebrand), to report himself for using the F-word to the nurses, and to report the nurses and Eastman for their failure to properly care for Maria. After making these reports to the hospital, Hagen consulted with three different attorneys about various issues, including how Hagen should document what had happened the night before and what Hagen should do personally in response to the incident. During one of these conversations, one of the attorneys reminded Hagen that he had a duty to report malpractice to the Iowa Board of Medicine. Later that day, Hagen told Eastman that “these attorneys are telling me I have to report you to the Iowa state medical board.” Hagen also had a conversation with Hunt and Aldrich in which he told them that Hagen had reported the nurses and Eastman to the hospital, and that Hagen had spoken with attorneys who told him that he might have to turn Eastman in to the Iowa Board of Medicine.
Hagen spent the next two days, Saturday and Sunday, in Lincoln, Nebraska, with his children and then returned to Sioux City. The following Monday night, November 9, 2009, Hagen received a 10-day suspension from St. Luke’s hospital. On Tuesday, Hagen was noticeably upset at work because of how the hospital handled the suspension, punishing Hagen without also punishing the nurses or Eastman. Hagen told his medical partners that he was going to tell the patient to sue the hospital, and that he was going to tell the patient to get a lawyer and investigate what happened. Then, on Wednesday night, Hagen called Maria Maeda at the hospital and told her: “You were mistreated, this is malpractice, the nurses missed the boat, Dr. Eastman missed the boat, and I think you should get an attorney.” Finally, on Thursday, Hagen informed his partners that he had spoken with Maria. That was the last day Hagen worked at Siouxland.
The following Monday, while Hagen was out of town at his cabin in Wisconsin, Hagen received a call from Siouxland’s corporate attorney, who told Hagen he needed to be in a meeting at 7:00 pm because he was being fired. Hagen drove back to Sioux City to make the meeting, which was held at Siouxland’s attorney’s law firm. At the meeting, Siouxland’s attorney told Hagen that the partners at Siouxland had decided to fire him. Following his firing, Hagen sued the Siouxland Defendants, claiming a number of causes of action including wrongful discharge in violation of Iowa’s public policy.
B. Procedural Background
On April 19, 2013, the parties went to trial on Count IV of Hagen’s Complaint: Retaliatory Discharge in Violation of Public Policy. The trial lasted eight days and occurred between April 19, 2013, and May 1, 2013.
At the trial’s conclusion, the jury found the Siouxland Defendants liable for wrongfully discharging Hagen in violation of Iowa’s public policy. The verdict form provided five options of protected conduct that the jury could find to support their conclusion that the Siouxland Defendants wrongfully discharged Hagen. The verdict form read, in pertinent part:
If you found in favor of Dr. Hagen in Step 1, which one or more of the following kinds of conduct do you find were determining factor(s) in Siouxland’s decision to terminate Dr. Hagen?
___Dr. Hagen reporting, stating an intention to report, or stating that he might report to the Iowa Board of Medicine conduct of Dr. Eastman that Dr. Hagen believed may have involved wrongful acts, omissions, negligence, or malpractice [Protected Conduct 1]
___Dr. Hagen reporting, stating an intention to report, or stating that he might report to a hospital conduct of Dr. Eastman that Dr. Hagen believed may have involved wrongful acts, omissions, negligence, or malpractice [Protected Conduct 2]
X _Dr. Hagen reporting, stating an intention to report, or stating that he might report to a hospital conduct of nurses that Dr. Hagen believed may have involved wrongful acts or omissions [Protected Conduct 3]
X Dr. Hagen disclosing to a patient or a patient’s family that the patient may have been the victim of negligent care or malpractice [Protected Conduct 4]
X Dr. Hagen consulting with an attorney, stating an intention to consult with an attorney, or stating that he might consult with an attorney about whether Dr. Eastman or nurses had committed wrongful acts or omissions that Dr. Hagen should report to the Iowa Board of Medicine or a hospital [Protected Conduct 5]
(Docket no. 113). The jury marked the last three options-i.e., Protected Conduct 3, 4, and 5-in support of the verdict in favor of Hagen, and awarded Hagen $1, 051, 814 for past lost earnings. The jury awarded Hagen no damages for future lost earnings, and it awarded no punitive damages. The Clerk entered judgment for Hagen in the amount of $1, 051, 814 on May 2, 2013.
Following the verdict, the Siouxland Defendants moved for judgment as a matter of law, or alternatively a new trial. In their post-trial motion, the Siouxland Defendants argue, among other things, that none of the protected activities on which the jury based its verdict are actionable under Iowa law, and that Hagen failed to prove he was an at-will employee and therefore cannot maintain a claim for wrongful discharge in violation of Iowa public policy.
II. LEGAL ANALYSIS
A. Authorization and Standards for Certification of Questions
Both Iowa law and this court’s Local Rules permit me, on the motion of a party or sua sponte, to certify a question of state law to the Iowa Supreme Court. Iowa’s certification statute provides:
The supreme court may answer questions of law certified to it by the supreme court of the United States, a court of appeals of the United States, a United States district court or the highest appellate court or the intermediate appellate court of another state, when requested by the certifying court, if there are involved in a proceeding before it questions of law of this state which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the appellate courts of this state.
Iowa Code § 684A.1. Local Rule 83 of the Northern District of Iowa provides:
When a question of state law may be determinative of a cause pending in this court and it appears there may be no controlling precedent in the decisions of the appellate courts of the state, any party may file a motion to certify the question to the highest appellate court of the state. The court may, on such motion or on its own motion, certify the question to the appropriate state court.
N.D. Ia. L.R. 83.
The United States Supreme Court has recognized that:
Certification procedure . . . allows a federal court faced with a novel state-law question to put the question directly to the State’s highest court, reducing the delay, cutting the cost, and increasing the assurance of gaining an authoritative response.
Arizonans for Official English v. Arizona, 520 U.S. 43, 76 (1997); see Lehman Bros. v. Shein, 416 U.S. 386, 391 (1974) (by certifying a question of state law, the federal court may save “time, energy and resources and hel[p] build a cooperative judicial federalism”). Thus, “[t]aking advantage of certification made available by a State may ‘greatly simplif[y]’ an ultimate adjudication in federal court.” Arizonans for Official English, 520 U.S. at 76 (citing Bellotti v. Baird, 428 U.S. 132, 151 (1976)).
Whether a federal district court should certify a question of state law to the state’s highest court is a matter “committed to the discretion of the district court.” Allstate Ins. Co. v. Steele, 74 F.3d 878, 881-82 (8th Cir. 1996); Schein, 416 U.S. at 391 (“[Certification’s] use in a given case rests in the sound discretion of the federal court.”); see Babinski v. American Family Ins. Group, 569 F.3d 349, 353 (8th Cir. 2009) (“‘Whether a federal court should certify a question to a state court is a matter of discretion.’”) (quoting Johnson v. John Deere Co., 935 F.2d 151, 153 (8th Cir. 1991)); see also Anderson v. Hess Corp., 649 F.3d 891, 891 (8th Cir. 2011); Jung v. General Cas. Co., 651 F.3d 796, 796 (8th Cir. 2011); Packett v. Stenberg, 969 F.2d 721, 726 (8th Cir. 1992).
I previously articulated the following factors to be considered in determining whether to certify a question to a state’s highest court:
(1) the extent to which the legal issue under consideration has been left unsettled by the state courts; (2) the availability of legal resources which would aid the court in coming to a conclusion on the legal issue; (3) the court’s familiarity with the pertinent state law; (4) the time demands on the court’s docket and the docket of the state supreme court; (5) the frequency that the legal issue in question is likely to recur; and (6) the age of the current litigation and the possible prejudice to the litigants which may result from certification.
Leiberkneckt v. Bridgestone/Firestone, Inc., 980 F.Supp. 300, 310 (N.D. Iowa 1997); accord Erickson-Puttmann v. Gill, 212 F.Supp.2d 960, 975 n.6 (N.D. Iowa 2002); see Olympus Alum. Prod. v. Kehm Enters., Ltd., 930 F.Supp. 1295, 1309 n.10 (N.D. Iowa 1996) (citing Rowson v. Kawasaki Heavy Indus., Ltd., 866 F.Supp. 1221, 1225 & n. 5 (N.D. Iowa 1994)). In Leiberkneckt, I also considered a seventh factor; “whether there is any split of authority among those jurisdictions that have considered the issues presented in similar or analogous circumstances.” Leiberkneckt, 980 F.Supp. at 311. I will address each of these factors in turn below.
B. Certification Analysis
1. Whether legal issue is unsettled
The initial certification factor considers whether the issue is “unsettled” by state courts. See Leiberkneckt, 980 F.Supp. at 310; see also Erickson-Puttmann, 212 F.Supp.2d at 975 n.6; Olympus Alum. Prod., 930 F.Supp. at 1309 n.10. As is discussed below, both of the questions that I have chosen to certify are unsettled under Iowa law.
Thus, I find that the first certification factor weighs in favor of certifying to the Iowa Supreme Court the questions of whether Hagen engaged in protected conduct, and whether a contractual employee can sue for wrongful discharge in violation of public policy.
a. Question 1: Whether Iowa law recognizes Protected Conduct 3, 4, or 5 as protected activities that can support claims for wrongful discharge in ...