Chaudhry v. Aragon, 68 F.4th 1161 (9th Cir. May 23, 2023)
A patient suffered hypoxic brain injury during open heart surgery at a private hospital. The hospital, California Department of Public Health (CDPH), and Centers for Medicare and Medicaid Services conducted separate investigations and found that the lead surgeon, Dr. Pervaiz Chaudhry, left the operating room before the patient was stable and his chest was closed. The hospital suspended Dr. Chaudhry’s medical staff membership and clinical privileges, revoked his appointment as Medical Director of Cardiac Surgery and Thoracic Services, and declined to renew consulting services agreements with him and his medical group. Several months later, CDPH published a statement of deficiency on its website, which summarized its findings but did not identify Dr. Chaudhry by name. Thereafter, a hospital employee with independent knowledge about the surgery notified the patient’s family of Dr. Chaudhry’s potential malfeasance. The patient’s family sued the hospital and Dr. Chaudhry for malpractice, securing a $60 million jury verdict.
Dr. Chaudhry and his medical group separately sued current and former CDPH employees, alleging a “stigma-plus” due process claim under 42 U.S.C. § 1983. They asserted that CDPH employees violated their Fourteenth Amendment rights by publishing the statement of deficiency without first providing Dr. Chaudhry an opportunity to be heard. They asserted that the publication of the statement of deficiency damaged Dr. Chaudhry’s reputation and deprived him of protected employment-related interests. Following a bench trial, the district court entered judgment for the CDPH employees. Plaintiffs appealed.
The Ninth Circuit affirmed, holding that the record supported the district court’s finding that publishing the statement of deficiency was not the but-for cause of plaintiffs’ loss of positions and contracts with the hospital. The hospital conducted an internal investigation before CDPH began investigating, and the hospital’s internal investigation yielded the same conclusions as CDPH’s statement of deficiency. Therefore, it was plausible that the hospital would have terminated Dr. Chaudhry’s privileges and declined to renew his consulting contract based on those same findings and conclusions. The court rejected plaintiffs’ argument that the publication of the statement of deficiency increased his medical malpractice insurance premiums. The court reasoned that Dr. Chaudhry’s insurance premiums would have increased regardless of CDPH’s publication of the statement of deficiency because there were five unrelated malpractice lawsuits pending against him. The court also rejected plaintiffs’ argument that the patient’s family sued him because CDPH published the statement of deficiency, agreeing with the district court that the family likely would have sued Dr. Chaudhry (and prevailed in that lawsuit) with or without the statement of deficiency because the family received an anonymous tip about the incident and had access to the hospital’s internal findings.
