Ryan v. County of Los Angeles (Feb. 28, 2025, B320677) ___ Cal.App.5th ___ [2025 WL 653610]
Dr. Timothy Ryan was a vascular surgeon on the Harbor-UCLA Medical Center’s medical staff. In late 2013, he treated a patient with medication, believing surgery was unnecessary. He was then copied on an email suggesting the patient was coached to return to the emergency room feigning chest pain. The patient did so and underwent surgery, during which she suffered a stroke. Dr. Ryan believed that the Chief of Vascular Surgery had encouraged the surgery because he received financial incentives from a stent manufacturer, and that he falsified the patient’s medical records to justify the surgery. Dr. Ryan reported his concerns to several County of Los Angeles officials. More than a year later, the vascular surgery chief sent a letter to the medical center’s Professional Staff Association (PSA) asking it to take action against Dr. Ryan for engaging in unprofessional, disruptive conduct that was deleterious to Medical Center operations, including improperly seeking confidential medical records of the chief’s patients, attempting to read the chief’s files, and engaging in a “continuing pattern of harassment.” During the ensuing investigation, Dr. Ryan’s staff privileges came up for renewal, but he refused to reapply because the application included release-of-liability provisions. After several extensions of the application deadline, the medical center terminated Dr. Ryan because his staff privileges had lapsed and were not renewed.
Dr. Ryan sued the County for retaliation in violation of Health and Safety Code section 1278.5, Labor Code section 1102.5, and the California False Claims Act (CFCA; Gov. Code, § 12650 et seq.). After the trial court sustained the County’s demurrer to the Health and Safety Code claim, a jury found for the County on Dr. Ryan’s Labor Code claim and for Dr. Ryan on his CFCA claim, awarding him $2.1 million. The trial court awarded Dr. Ryan costs and attorney fees totaling more than $3.2 million. Both Dr. Ryan and the County appealed.
The Court of Appeal affirmed in part and reversed in part. The court held the County was entitled to judgment on Dr. Ryan’s CFCA anti-retaliation claim (Gov. Code, § 12653). The court explained that, under Wells v. One2One Learning Foundation (2006) 39 Cal.4th 1164, public entities may not be sued under the CFCA for submitting false claims. It followed that a section 12653 claim for retaliation based on false claims actionable under the CFCA likewise cannot be pursued against public entities. Because the CFCA claim was the only cause of action Ryan prevailed on, the Court of Appeal also reversed the award of attorney fees and costs.
The court then held that the trial court erred by sustaining the County’s demurrer to Dr. Ryan’s Health and Safety Code section 1278.5 claim. Section 1278.5 prohibits discrimination and retaliation against a whistleblower by a health facility. The statutory definition of “health facilities” includes some public entities while excluding others. These provisions would have been unnecessary if the Legislature had intended to exclude all publicly owned hospitals from section 1278.5 claims, as the trial court ruled. The court therefore remanded for further proceedings on Dr. Ryan’s section 1278.5 claim.
Prepared by H. Thomas Watson and Peder K. Batalden, Horvitz & Levy, LLP
California Society for Healthcare Attorneys
1215 K Street, Suite 700
Sacramento, CA 95814
