United States District Court, W.D. Virginia, Roanoke Division
March 6, 2014
BURRELL A. McGHEE, Plaintiff
UNITED STATES OF AMERICA, et al., Defendants.
AMENDED MEMORANDUM OPINION
SAMUEL G. WILSON, Chief District Judge.
The plaintiff, Burrell A. McGhee, filed this medical malpractice action against the United States under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671-2680, and LocumTenens.com, LLC ("Locum") (a physician staffing agency) and two doctors under the court's supplemental, 28 U.S.C. § 1367, and/or diversity jurisdiction, 28 U.S.C. § 1332. McGhee asserts claims against the doctors individually and as employees of the United States and Locum. The United States has moved to dismiss claims against it arising out of the doctors' actions because, it asserts, they were independent contractors rather than employees. For the reasons that follow, the court grants the United States' motion.
McGhee filed a complaint in this court, alleging that on March 30, 2011, while a patient at the Veterans Affairs Medical Center in Salem, Virginia ("VAMC"), the doctors negligently performed his arthroscopic shoulder surgery, resulting in permanent nerve damage, continuous pain in his lower body, and scarring on his neck and face.
The United States moved to dismiss pursuant to 12(b)(1) and 12(b)(6), asserting that it was immune from liability for the doctors' actions because they were independent contractors, not VAMC employees, and it has not waived sovereign immunity for the actions of independent contractors. The court held a hearing, took the motion under advisement, and entered an order permitting limited discovery on the issue. After conducting discovery, the United States moved for summary judgment and, in support of its motion, submitted five deposition transcripts and numerous exhibits, and McGhee responded.
According to the undisputed evidence, the doctors began working at the VAMC about a year before McGhee's surgery, under contracts: between the VAMC and Locum; and between Locum and each doctor. The VAMC-Locum contract stated: "It is expressly agreed and understood that this is a non-personal services contract, as defined in Federal Acquisition Regulation (FAR) 37.101,  under which professional services rendered by the Contractor or its health-care providers are rendered in its capacity as an independent contractor." (ECF 64-9 at 27) According to that contract's express provisions, the United States retained "no control over professional aspects of the services rendered, including by example, the Contractor's or its health-care providers' professional medical judgment, diagnosis, or specific medical treatments." (ECF 64-9 at 27) Each Locum-doctor contract, in turn, provided that each doctor would be "at all times acting and performing as an independent contractor of [Locum], " and required to "exercis[e] medical judgment as [he] deem[ed] appropriate." (ECF 64-9 at 1, 3)
The VAMC selected the doctors after Locum pre-screened them and sent their curricula vitae to the VAMC, along with those of other doctors who met the qualifying criteria. (Cuttle Dep. at 13) According to James Cuttle, a former account executive and recruiter for Locum, if the VAMC no longer wanted to work with a particular doctor, Locum would simply fill the vacancy with another doctor. (Cuttle Dep. at 61) When the two doctors began working at the VAMC, the VAMC provided computer training, a dictation system, an ID for navigating the building, and office space that the doctors rarely used. (Roberson Dep. at 45-7, 51; Moitoza Dep. at 38, 41) Although the VAMC scheduled patients, the doctors could supply their own medical tools and refer patients within the VAMC. (Moitoza Dep. at 20) According to Larry Lipscomb, M.D., a VAMC employee, the doctors introduced themselves - and VAMC staff introduced them - to patients as "locums, " a term commonly used at the VAMC to identify non-permanent physicians. (Lipscomb Dep. at 29)
The VAMC did not pay the doctors. Rather, the VAMC paid Locum based on the doctors' timecards,  and then Locum paid the doctors an hourly rate with additional compensation for "on call" time and certain expenses. (Cuttle Dep. at 15) Neither the VAMC nor Locum was responsible for withholding the doctors' taxes. (Moitoza Dep. at 22-3; Roberson Dep. at 18) Locum paid for their medical malpractice liability insurance, and the doctors were responsible for their own worker's compensation benefits, health insurance, and retirement plans. (Moitoza Dep. at 22-3; Roberson Dep. at 18)
The United States has moved to dismiss and for summary judgment, arguing that the doctors were independent contractors, not VAMC employees, because the VAMC did not have the power under the contracts to supervise their day-to-day operations and control the exercise of their medical judgments. The court finds that the relationship between the VAMC and the doctors bears none of the hallmarks of an employer-employee relationship and grants the government's motion to dismiss McGhee's FTCA claims arising out of that relationship.
The FTCA provides "a limited waiver of sovereign immunity, making the Federal Government liable to the same extent as a private party for certain torts of federal employees acting within the scope of their employment." United States v. Orleans , 425 U.S. 807, 813 (1976). The plain language of the FTCA precludes imputing liability for actions of independent contractors. Wood v. Standard Products Co., Inc. , 671 F.2d 825, 829 (4th Cir. 1982). Whether an individual is a government employee or an independent contractor is a question of federal law. Logue v. United States , 412 U.S. 521, 528 (1973). The Fourth Circuit has applied a "control test" to physician-contractors, stating: "only where the Government has the power under the contract to supervise a contractor's day-to-day operations' and to control the detailed physical performance of the contractor' can it be said that the contractor is an employee or agent of the United States within the [FTCA]." Wood , 671 F.2d at 829, 832. This does not mean, as that court has stated, "that a physician must always be deemed an independent contractor simply because of the necessity that a physician exercise independent professional judgment in providing medical treatment to his or her patients." Robb v. United States , 80 F.3d 884, 889 (4th Cir. 1996). Rather, the Fourth Circuit has considered a multitude of potentially relevant factors intended to distill the application of the control test in the physician context. Id.
Guided by this framework, the court examines the relationship between the VAMC and the doctors. In that regard, the VAMC had no contract with the doctors, and the doctors had no obligation to the VAMC. Both the VAMC-Locum contract and the Locum-doctor contracts expressly provided that the doctors were independent contractors, and the doctors acted as such by maintaining sole discretion over their medical judgment. There is no evidence suggesting that the VAMC exercised more than minimal control over "the peripheral, administrative details" incidental to the doctors' day-to-day provision of medical services. Robb , 80 F.3d at 888-91 (citing Wood , 671 F.2d at 832); see also Cilecek v. Inova Health Sys. Servs. , 115 F.3d 256, 260 (4th Cir. 1997) (holding that a physician was an independent contractor under Title VII even though the hospital controlled "administrative details").
Apart from lacking control of the doctors' performance of the core aspects of their responsibilities, and also in contrast to a typical employer-employee relationship, the VAMC did not pay the doctors, withhold the doctors' taxes, or provide the doctors with employment benefits like medical malpractice insurance. See Kramer v. United States , 843 F.Supp. 1066, 1070 (E.D. Va. 1994) ("Payment from the government to a health care entity which in turn compensates the individual health care provider on its own terms is an indicator of independent contractor status."); MacDonald v. United States , 807 F.Supp. 775, 779-80 (M.D. Ga. 1992). Because core aspects of an employer-employee relationship were absent, the court finds that the doctors were independent contractors.
McGhee argues that the doctors were employees because the VAMC required the Locum doctors to render medical services during business hours, scheduled their patients, and provided them with surgical facilities, equipment, and a dictation system. This is, however, a myopic view of the minutiae incident to the actual relationship. The VAMC-Locum contract to supply qualified medical personnel to render medical services that would meet the VAMC's needs actually governed the relationship. As such, the doctors essentially performed services that Locum agreed to provide to the VAMC. In any event, the doctors' compliance with the specifications of the VAMC-Locum contract is in no way the kind of meaningful control that is indicative of an employer-employee relationship. Nor, contextually, is the provision of scheduling services, facilities and equipment, and a dictation system. See Cilicek, 115 F.3d at 262 (Use of the hospital's instruments and other resources is "inherent in the provision of medical services and likewise is not a reliable indicator of employee status [because]... he must, in almost every case, use... facilities provided by the hospital in order to render his services.").
McGhee also asserts the doctors were employees because the VAMC required them to comply with its bylaws, policies, and procedures in exchange for medical privileges. But, as one court has noted, "[s]urely, being subject to [a] hospital's rules as a condition of staff privileges does not remotely make a private physician an employee of that hospital." Lilly v. Fieldstone , 876 F.2d 857, 860 (10th Cir. 1989) (holding that a physician was an independent contractor); see also Orleans , 425 U.S. at 815 ("[T]he question here is not whether the [alleged government employee] receives federal money and must comply with federal standards and regulations, but whether its day-to-day operations are supervised by the Federal Government."); Robb , 80 F.3d at 888.
At the end of the day, under the contracts and in practice, the doctors had all of the hallmarks of independent contractors, and McGhee has marshaled nothing substantial to overcome that conclusion.
For the foregoing reasons, the court will grant the government's motion to dismiss McGhee's claims founded on the actions of the two doctors under 12(b)(1).