Mendocino Coast District Hospital (MCDH) has survived a recount of its narrow victory margin (2/3 vote requirement) for a parcel tax. The revenue from that tax should bring in an additional $1.5 – $1.7 million annually. However, as detailed in the July 4th AVA, the hospital still faces a $3.5 million dollar deficit in its net income. If you want to look at the situation differently, MCDH's current operating loss is approximately $4.5 million.
On top of the financial woes, the hospital, its Chief Executive Officer (CEO), Bob Edwards, the president of its board of directors, Steve Lund, and former Chief Financial Officer (CFO), Wade Sturgeon, are still defendants in an ongoing federal lawsuit filed by MCDH's former Chief Human Resources Officer (CHRO), Ellen Hardin. Her lawsuit alleges fourteen causes of action against the defendants. The allegations are: (1) violations of California Labor Code sections 98.6 and 1102.5; (2) violation of the California False Claims Act, Cal. Gov’t Code §12653; (3) violation of the federal False Claims Act, 31 U.S.C. §3170; (4) violation of the right to free speech under the First Amendment, cognizable through 42 U.S.C. §1983; (5) discrimination based on age and gender, Cal. Gov’t Code §12940(a); (6) associational discrimination, Cal. Gov’t Code §§12940(a), 12926(o); (7)harassment/hostile work environment, Cal. Gov’t Code §12940(j); (8) retaliation (Cal. Gov’t Code §12940(h); (9) failure to prevent harassment, discrimination, and retaliation, Cal. Gov’t Code §12940(k); (10) intentional infliction of emotional distress; (11) negligent infliction of emotional distress; (12) negligent hiring, supervision, and retention; (13) defamation; and (14) a claim under the Private Attorneys General Act, Cal. Labor Code §§2699.et seq.
The fourth, tenth, eleventh, and thirteenth causes of action are asserted against all of the defendants. The seventh is asserted against all Defendants except Lund. All other causes of action are brought only against MCDH.
In court documents released in June, Judge Jon Tigar of the Northern District of California ruled on the defendants' motion to dismiss eight of the causes of action, the second, third, fourth, seventh, tenth, eleventh, twelfth, and thirteenth. One way to read this motion is that, for the time being, the hospital did not contest Ms. Hardin's allegations regarding violations of the state labor code, age and gender discrimination, workplace retaliation, and failure to prevent harassment, discrimination, or retaliation.
In short, the defendants’ motion to dismiss was granted in part and denied in part. The motion was granted, with leave to amend for Ms. Hardin, as to the fourth cause of action for violation of the First Amendment as it related to speech on alleged FEHA (Fair Employment Housing Act) violations; the seventh cause of action for violation of California Government Code section 12940(j); the tenth cause of action for intentional infliction of emotional distress, dismissed for Defendants Lund and Sturgeon only; the eleventh cause of action for negligent infliction of emotional distress; the twelfth cause of action for negligent supervision, hiring, and retention; and the thirteenth cause of action for defamation, as to Defendants Lund and Sturgeon only. The Defendants motion was denied in all other respects.
Relating to the intentional infliction of emotional distress, the judge denied Mr. Edwards' attempt to dismiss. Hardin was also allowed a chance to amend her claim of negligent infliction of emotional distress. The defamation allegations were dismissed against Lund and Sturgeon, but will continue against CEO Edwards. In every cause that Defendants won a dismissal, Plaintiff (Ms. Hardin) was granted a chance to amend the allegation. That means that some or all of the original allegations could eventually be reinstated
As with many questions of legality, a close reading of Judge Tigar's ruling is required to fully comprehend its diverse repercussions. For instance, the attempt to dismiss the United States Code 1983 allegation against Mr. Lund was denied because of his personal involvement in her termination.
Judge Tigar denied the defendants' motion to dismiss the causes of action relating to both federal and state false claims law. The core of these two causes revolves around Hardin alleging that she complained to Edwards about possible Medicare fraud and that she was retaliated against because of raising such questions.
Depositions for the defendants are scheduled to take place during the second week of July, though recent filings have their attorneys fighting this with new motions filed before Judge Tigar. Don't expect any kind of quick resolution here.
Ms. Hardin's attorney is Twila S. White. The Defendants are represented by the law firm of Gordon Rees Scully Mansukhani LLP. Gordon Rees, for brevity's sake, appears to have three attorneys on the MCDH case. Gordon Rees is among the sixty largest law firms in the nation. It employs 135 attorneys in its San Francisco office alone and has offices in most of the major cities throughout the United States. Ms. White appears to be flying solo on behalf of Ms. Hardin. Fifty percent of MCDH's legal fees are paid via their liability insurance.
Thanks Malcolm, for keeping me updated.