Physicians working for federal health center immune from malpractice liability

November 14, 2008

The Sixth Circuit found October 16 that two physicians employed by a federally supported health center were protected from liability in a medical malpractice action involving the delivery of a plaintiff's baby.

This material originally appeared in the October 31, 2008, issue of Health Lawyers Weekly, a publication of the American Health Lawyers Association (www.healthlawyers.org).

The Sixth Circuit found October 16 that two physicians employed by a federally supported health center were protected from liability in a medical malpractice action involving the delivery of a plaintiff’s baby.

Despite allegations that one of the physicians had financial motivations for not transferring plaintiff to another physician for a caesarean section, the appeals court concluded in an unpublished decision that the physician was acting within the scope of his employment.

Plaintiff Rene Davey filed a medical malpractice action in Michigan state court against the physicians (Drs. Hindy and O’Brien), their employer (Downriver Community Services), and the hospital (St. John River District Hospital) and its owner (St. John Health) involving the birth of her son.

Davey alleged defendants caused serious brain damage to her baby because of the negligent failure to deliver him by caesarean section and negligent post-delivery treatment.

Davey also alleged that O’Brien was motivated by financial interests in not transferring her to another physician for a caesarean section.

Downriver, which is a recipient of federal funding, and its two employee physicians removed the case to federal district court.

Under the Federally Supported Health Centers Assistance Act (FSHCAA), recipients of federal funding like Downriver and its employees are protected from liability as if they were federal employees. The Act provides the U.S. is substituted as a defendant in a common law action against employees of federally supported health centers for actions within the scope of their employment, subject to the Federal Tort Claims Act (FTCA).

The district court rejected Davey’s argument that the allegedly tortious conduct fell outside defendants’ scope of employment and granted the U.S.’ motion to be substituted for Downriver and the two physicians. The court then granted the government’s motion to dismiss Davey’s complaint for failure to exhaust administrative remedies as required under the FTCA.

Although not entirely clear, the Sixth Circuit concluded that the lower court intended to dismiss the claims against all defendants, including the hospital and St. John Health, which are not federally protected under the FSHCAA, making the order final and appealable.

The appeals court found the district court properly held Davey alleged no wrongdoing outside the scope of the two physicians’ employment, citing Michigan Supreme Court precedent that a decision whether to deliver by caesarean section fell within a physician’s professional duties.

“Delivering plaintiff Davey’s baby was clearly connected with the business of Downriver, even assuming that Dr. O’Brien had a significant financial motive in not calling in another doctor,” the appeals court said.

Moreover, the appeals court continued, choosing to continue normal delivery instead of requesting a caesarean section is simply not “outrageous or abnormal” conduct.

Thus, the Sixth Circuit affirmed the lower court’s order except with respect to the hospital and St. John Health. The appeals court reversed the dismissal as to those defendants and remanded with instructions that the district court consider returning the case against the hospital and St. John Health to state court.

“Remand to the state court appears to be the proper course once the district court dismissed the claims against the defendants protected by the FSHCAA,” the appeals court commented.

Davey v. St. John Health, No. 07-2462 (6th Cir. Oct. 16, 2008).