Case Name: Weber v. County of Santa Clara, et al.
Case No.: 2015-1-CV-287977

I. Factual and Procedural Background

This action arises out of purported retaliatory action taken by doctors Tiffany Ho, M.D. (“Ho”), Michael Meade, M.D. (“Meade”), Jeffrey Arnold, M.D. (“Arnold”), and Paul Russell, M.D. (“Russell”) (collectively the “Individual Defendants”) and the County of Santa Clara (the “County”) (collectively “Defendants”) against plaintiff Jan Weber, M.D. (“Plaintiff”) after he complained of substandard patient care that was occurring at the Santa Clara Valley Medical Center.

As alleged in the Complaint, the County employed Plaintiff as a psychiatrist for a period of around five years. (Complaint, ¶¶ 9, 44.) During this time, Plaintiff informed Ho – his supervisor – that her policies violated a Food and Drug Administration (“FDA”) mandate. (Id. at ¶ 11.) Specifically, Ho was posting him to a juvenile offender facility one day every other week in violation of the FDA requirement that all juvenile patients on antidepressant medications be monitored weekly for suicidal behaviors. (Ibid.) Ho ignored his concerns and retaliated against him by cutting his time at the facility in half. (Ibid.) She also posted him to nine different clinical sites in a period of one and a half years, thereby preventing him from providing continuity of care to his patients. (Id. at ¶ 13.) When Plaintiff questioned this decision, Ho threatened to terminate him. (Id. at ¶ 14.) She also frequently berated him and accused him of being “difficult,” “not a team player” and a “trouble maker.” (Id. at ¶ 15.) After Plaintiff filed a whistleblower complaint, Ho was removed from her supervisory role and he began to report to Meade. (Id. at ¶¶ 17-19.)

While working under Meade, Plaintiff raised concerns about various policies tending to put adult detention facility inmates at higher risk of relapse of their psychiatric conditions. (Id. at ¶ 21.) Meade, however, ignored Plaintiff’s concerns. (Ibid.) Plaintiff also became concerned with his low volume of work. (Id. at ¶ 22.) As such, despite the fact Meade himself did not express concerns about his productivity, Plaintiff made efforts to increase his workload and frequently asked Meade for increased hours. (Id. at ¶¶ 23-26.)

Some time later, Plaintiff became involved in the negotiations between the Union of American Physicians and Dentists (“UAPD”) and the County. (Id. at ¶ 20.) During the negotiations, Plaintiff informed the County that excessive productivity expectations for doctors in the adult psychiatry outpatient clinics compromised patient care and inadequate security in the clinics imperiled staff safety. (Id. at ¶¶ 29, 31.) The County ignored these complaints and retaliated against Plaintiff by reassigning him to the adult inpatient psychiatry unit, causing him to work in a discipline he had not practiced since his residency eight years before. (Id. at ¶¶ 31-33.)

Subsequently, Plaintiff applied for the Behavioral Health Director position and received the support of nearly all the psychiatrists and psychologists in the department. (Id. at ¶ 37.) Despite the overwhelming support, Plaintiff did not even receive an interview for the position. (Ibid.)

Two months later, Russell, the County’s ambulatory care medical director, expressed concern over Plaintiff’s low productivity. (Id. at ¶ 39.) This was the first time anyone other than Plaintiff himself expressed such a concern. (Ibid.) Russell also informed Plaintiff he needed to cut the amount of time he spent with his patients in half. (Id. at ¶ 40.) In addition, he was directed only to provide medication treatment and refer his patients to other providers for psychotherapy, which would compromise care. (Id. at ¶ 41.)

Around this time, Plaintiff was elected Vice-Chairman of the Department of Psychiatry. (Id. at ¶ 42.) However, Arnold, the County’s Chief Medical Officer, refused to appoint him. (Ibid.) A few months later, Plaintiff was summarily terminated for lack of productivity and unprofessional conduct. (Id. at ¶ 44.)

The Complaint alleges causes of action for: (1) violation of Health and Safety Code section 1278.5; (2) violation of Labor Code section 1102.5; (3) violation of Labor Code section 6310; (4) violation of Labor Code sections 923 and 1122; and (5) violation of Business and Professions Code section 2056.

Defendants filed a demurrer to the Complaint in March 2016 on the ground of failure to state facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).) The County’s demurrer to the fourth cause of action was sustained without leave to amend. The Individual Defendants demurred to the first, third, and fifth causes of action. The Court overruled the demurrer to the first and fifth causes of action but sustained the demurrer to the third cause of action with leave to amend. Plaintiff did not file an amended pleading and thus the original Complaint remains the operative pleading in the case.

In January 2018, Defendants filed a motion for summary judgment or, in the alternative, summary adjudication. The Court granted the motion for summary judgment as to the Individual Defendants but denied the motion for summary judgment or, in the alternative, summary adjudication as to the County. Trial is set for August 13, 2018.

The County now moves for judgment on the pleadings as to the second and fifth causes of action for violations of Labor Code section 1102.5 and Business and Professions Code section 2056. Plaintiff opposes the motion.

II. Motion for Judgment on the Pleadings

The County’s motion is brought pursuant to Code of Civil Procedure section 438 on the ground of failure to state facts sufficient to constitute a cause of action. It argues no claim under Labor Code section 1102.5 or Business and Professions Code section 2056 has been stated because these statutes do not create a private right of action.

“A violation of a state statute does not necessarily give rise to a private cause of action.” (Lu v. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 592, 596 (“Lu”), citing Vikco Ins. Services, Inc. v. Ohio Indemnity Co. (1999) 70 Cal.App.4th 55, 62.) Instead, whether a party has a right to sue depends on whether the Legislature has “manifested an intent to create such a private cause of action” under the statute. (Moradi–Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287, 305 (“Moradi–Shalal”); Crusader Ins. Co. v. Scottsdale Ins. Co. (1997) 54 Cal.App.4th 121, 131). To determine if the Legislature intended a statute to create a private right of action, courts may look to the language of the statute itself and its legislative history. (See Moradi–Shalal, supra, 46 Cal.3d at p. 294-295.) In some instances, the statute may contain clear language indicating a legislative intent to create a private cause of action, such as when the Legislature uses the words “cause of action” or includes language relating to a remedy or means of enforcing its substantive provisions. (Lu, supra, 50 Cal.4th at 597 [discussing statutes containing the words “cause of action” or “damages” as examples of a legislative intent to create a private right of action].) “If, however, a statute does not contain such obvious language, resort to its legislative history is next in order.” (Ibid.)

A. Second Cause of Action – Labor Code Section 1102.5

Under Labor Code section 1102.5 (“Section 1102.5”), otherwise known as California’s whistleblowing statute, an employer may not “retaliate against an employee for disclosing information…to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance” if the employee has reasonable cause to believe there is a state or federal statute, rule or regulation that is being violated. (Lab. Code., § 1102.5, subdivision (b).)

Plaintiff alleges the County violated this statute by creating a hostile work environment and eventually terminating his employment after he reported violations of various FDA mandates and county safety regulations to his supervisors. The County argues no private right of action exists under Section 1102.5 because “most of the cases evaluating Section 1102.5 do not involve a public entity”; most plaintiffs utilizing Section 1102.5 have tethered the statute to a Tameny wrongful termination claim; and the “few cases” holding a private right of action exists under the statute relied on a court decision that did not employ the “rigorous analysis” dictated by the California Supreme Court in Lu and Moradi-Shalal. (Mtn. at p. 6:5-15.) Each of these contentions lack merit.

At the outset, the County essentially acknowledges that courts have recognized a private right of action exists under Section 1102.5. For example, it asserts that Gardenhire v. Hous. Auth. (2000) 85 Cal.App.4th 236 is the cornerstone of decisions upholding a right to sue under this statute. Nevertheless, it argues that any such cases should not be followed. With respect to Gardenhire in particular, the County contends it did not analyze the issue in accordance with the principles discussed in Lu and Moradi-Shalal and Section 1102.5 does not otherwise include any language prescribing remedy. This argument is not well-taken.

First, the court in Gardenhire specifically stated in dicta that a right of action exists under Section 1102.5. While the County places much emphasis on the fact the court did not engage in the Lu and Moradi-Shalal analysis, this issue was not central to the holding in that case and the County otherwise neglects to address the numerous cases acknowledging Section 1102.5 creates a private right of action. (See, e.g., Lloyd v. Cty. of Los Angeles (2009) 172 Cal.App.4th 320,332; Hager v. Cty. of Los Angeles (2014) 228 Cal.App.4th 1538, 1548; McVeigh v. Recology San Francisco (2013) 213 Cal.App.4th 443, 471-72.) Moreover, even an examination of the Gardenhire court’s dicta regarding a private right of action under Section 1102.5 reveals that the statute itself contains clear language indicating a legislative intent to create a right to sue. Specifically, as acknowledged by the Gardenhire court, Labor Code section 1105 – which is contained in the same chapter as Section 1102.5 – clearly provides that “[n]othing in this chapter shall prevent the injured employee from recovering damages from his employer for injury suffered through a violation of this chapter.” (Ibid., citing Lab. Code, § 1105, emphasis added.) Under the principles discussed in Lu and Moradi-Shalal, such language relates to a remedy and expresses a legislative intent to create a private cause of action. (See Lu, 50 Cal.4th at 597 [discussing statutes including the word “damages” as examples of a legislative intent to create a right to sue].) Though the County is correct the statute does not explicitly prescribe a remedy, its use of the word “damages” in the statutory scheme is sufficient to indicate a legislative intent to create a private right of action. (See Ibid.)

Next, the County’s reliance on Green v. Ralee Eng’g Co. (1998) 19 Cal.4th 66 (“Green”) for the proposition no private right of action exists under Section 1102.5 is misplaced. The County notes that Green is the most recent California Supreme Court case to analyze the legislative history behind Section 1102.5 and it confirmed the statute could serve as the public policy predicate for a Tameny claim but did not explicitly state it created an independent cause of action. Based on this fact, the County concludes no private right of action exists. This conclusion is erroneous as, in Green, the plaintiff only brought a wrongful termination claim. (Id. at 73.) The court never had before it an occasion to discuss whether a private right of action exists under Section 1102.5. Instead, its analysis centered on discussing which sources could be used to determine if a termination decision violated public policy under Tameny. The court’s silence on whether a private right of action exists under Section 1102.5 cannot therefore be interpreted as a rejection of this right. (See, e.g., In re A.B. (2016) 2 Cal.App.5th 912, 919 [silence cannot be interpreted as reflecting an intention that does not appear from the plain language].)

Turning to its next argument, the County errs in its contention Section 1102.5 may only be utilized as a public policy predicate for a Tameny wrongful termination claim. In support of its argument, the County references only one federal district court case to the exclusion of an entire body of California case law that has treated a cause of action brought under Section 1102.5 as an independent and distinct claim, regardless of whether the plaintiff had also alleged a Tameny claim. (See, e.g., Lloyd, supra, 172 Cal.App.4th at 332; Hager, supra, 228 Cal.App.4th at 1548; McVeigh, supra, 213 Cal.App.4th at 471-72; Patten v. Grant Joint Union High Sch. Dist. (2005) 134 Cal.App.4th 1378, 1384; Edgerly v. City of Oakland (2012) 211 Cal.App.4th 1191, 1199; Mokler v. Cty. of Orange (2007) 157 Cal.App.4th 121, 138.) Though the County may be correct in its assertion that few cases have explicitly discussed the issue of whether or not the statute creates a right to sue, it is apparent that the overwhelming presumption by California courts is that such a right exists.

Finally, the County states that even if a private right of action exists, “[m]ost of the cases evaluating Section 1102.5 do not involve a public entity.” (Mtn. at p. 6:5-6.) The significance of this statement is unclear. To the extent the County is suggesting a Section 1102.5 claim cannot be asserted against a public entity, it provides no substantiation for this assertion. As such, this point requires no further discussion from the Court. (See, e.g., People v. Dougherty (1982) 138 Cal.App.3d 278, 282 [a point asserted without argument or citation to authority requires no response from the court].)

For the reasons stated, the County’s contention that there is no private right of action under Section 1102.5 is unsubstantiated.

B. Fifth Cause of Action – Business and Professions Code Section 2056

Business and Professions Code section 2056 (“Section 2056”) states in relevant part that “[n]o person shall terminate, retaliate against, or otherwise penalize a physician and surgeon for that advocacy [for medically appropriate care],” and any decision to “terminate an employment or other contractual relationship with, or otherwise penalize, a physician and surgeon” for such advocacy violates the public policy of the state. (Bus. & Prof. Code, § 2056, subd. (c).) Subdivision (b) of the statute defines “advocate[ing] for medically appropriate health care” as: (1) appealing a third-party payor (e.g. insurance company) decision to deny payment for a medical service; or (2) protesting a decision, policy, or practice the physician reasonably believes impairs his or her ability to provide medically appropriate patient care. (Bus. & Prof. Code, § 2056, subd. (b).)

Plaintiff alleges the County violated this statute when it penalized him and later terminated his employment as a result of his advocacy for medically appropriate care. The County argues that “[n]othing in the language of Section 2056 indicates the Legislature’s intent to create a private right of action” because the statute does not say anything about a cause of action or available remedy. (Mtn. at p. 5:5-26.)

As previously stated, to determine if a statute creates a private cause of action, courts may look to the language of the statute itself and its legislative history. (See Moradi–Shalal, supra, 46 Cal.3d at p. 294-295.)

Beginning with the language of Section 2056, the Court agrees with the County’s contention it is not clear the Legislature intended to create a private right to sue because it did not use the words “cause of action” or refer to available remedies under statute. As such, resort must be made to the statute’s legislative history. (See Lu, supra, 50 Cal.4th at 597.)

According to the County, the legislative history indicates no private right of action exists under Section 2056. In support, it cites Rhodes v. Sutter Health (E.D. Cal. May 22, 2012) No. CIV. 2:12-0013 WBS, 2012 WL 1868697 (“Rhodes”). In Rhodes, the court directly addressed the issue of whether the plaintiff had a right to sue under Section 2056. In doing so, it examined the legislative history behind the statute, as set forth in Khajavi v. Feather River Anesthesia Med. Grp. (2000) 84 Cal.App.4th 32, and concluded the Legislature enacted the statute solely to provide a statutory basis for a wrongful termination tort claim. (Id. at * 7.) The Court finds this decision, which is not binding, unpersuasive.

Looking to the legislative history itself, there is no question Section 2056 was enacted, in part, for the explicit purpose of providing an express statement of public policy that could form the basis of a wrongful termination claim. (Sen. Comm. on Business and Professions, Analysis of Assem. Bill No. 1676 (1993–1994 Reg. Sess.) July 12, 1993, p. 1, original emphasis; Sen. Floor Analysis of Assem. Bill No. 1676 (1993–1994 Reg. Sess.) August 30, 1993, p. 2.) Specifically, the statute was enacted to respond to two court decisions – Wickline v. State of California (1986) 192 Cal.App.3d 1630 (“Wickline”) and Gantt v. Sentry Ins. (1992) 1 Cal.4th 1083, 1095 (“Gantt”), overruled on other grounds by Green v. Ralee Eng’g Co. (1998) 19 Cal.4th 66 – that had left physicians in a position where they had “no legal recourse.” (Assem. Com. on Health, analysis of Assem. Bill No. 1676 (1993-1994 Reg. Sess.) April 20, 1993, p. 2; Sen. Com. on Business and Professions, analysis of Assem. Bill No. 1676 (1993-1994 Reg. Sess.) August 17, 1993, p. 2.)

In Wickline, the court held that physicians could be held liable for failing to protest third party payor decisions they believed were erroneous, thereby creating a policy that required physicians to advocate for appropriate patient care. (192 Cal.App.3d at 1646.) As noted by the California Medical Association (“CMA”), which sponsored and advanced the statute, an increasing number of physicians complained that engaging in such advocacy led to their “terminat[ion] by managed health care plans, physician groups, [and] physician networks.” (Sen. Com. on Business and Professions, analysis of Assem. Bill No. 1676 (1993-1994 Reg. Sess.) August 17, 1993, p. 2.) Moreover, these physicians had no legal recourse in a wrongful termination lawsuit because under Gantt, the court held that any public policy forming the basis of a wrongful termination action must be codified in statute and, at that time, no statute discussed the public policy in favor of physicians advocating for medically appropriate care. (See Ibid.; 1 Cal.4th 1095.) The statute was therefore enacted to “provide physicians with some viable protection” against employment termination in these situations. (Ibid.)

There can be no doubt, therefore, that Section 2056 was intended to provide “legal recourse” to physicians suffering retaliation as a result of their advocacy for medically appropriate care. (Bus. & Prof. Code, § 2056, subd. (a); Assem. Com. on Health, analysis of Assem. Bill No. 1676 (1993-1994 Reg. Sess.) The question presented is whether that legal recourse was intended to be limited to Tameny wrongful termination claims. The Court concludes it was not.

First, the express purpose of the statute was to provide protection to physicians who might suffer retaliatory action as a result of their advocacy and the protection provided was “legal recourse.” (Bus. & Prof. Code, § 2056, subd. (a); Assem. Com. on Health, analysis of Assem. Bill No. 1676 (1993-1994 Reg. Sess.) It also appears the Legislature contemplated that lawsuits would arise under the statute. (Sen. Com. on Business and Professions, analysis of Assem. Bill No. 1676 (1993-1994 Reg. Sess.) For example, the Business and Professions Committee even noted the CMA’s discussion of what burdens of proof would apply “in a lawsuit” brought by a physician who had suffered retaliatory action. (Sen. Com. on Business and Professions, analysis of Assem. Bill No. 1676 (1993-1994 Reg. Sess.) Finally, under the terms of the statute, there are three forms of retaliation the Legislature sought to provide protection against: (1) termination of employment; (2) termination of contractual relationship; or (3) other penalty. (See Bus. & Prof. Code, § 2056, subd. (b).)

However, if the statute was indeed construed as having only been intended to serve as a predicate for a Tameny wrongful termination claim, only physicians who suffered the first type of retaliation – termination of employment – would have legal recourse. Those who suffered termination of a contractual relationship or other penalty as a result of their advocacy would be left with no legal remedy and, therefore, no real protection. In light of the clear legislative intent that physicians be protected against retaliation and have legal recourse to do so, such a result would be incongruous. As such, for situations involving retaliation in the form of termination of a contractual relationship or other penalty, the Legislature must have contemplated that another form of legal recourse – namely, a private right of action under the statute – would be available. Though the specific, initial impetus of the statute might have been to provide a policy predicate for wrongful termination tort claims, that does not limit the scope of the statute when the text itself speaks more broadly to forms of retaliation beyond employment termination. (See Khajavi, supra, 84 Cal.App.4th at 51.)

Accordingly, the County’s assertion no private right of action was created by Section 2056 lacks merit.

C. Conclusion

Based on the foregoing, the motion for judgment on the pleadings to the second and fifth cause of action on the ground of failure to state sufficient facts is DENIED.