ALEXANDER v. HACKENSACK MERIDIAN HEALTH

Not for Publication

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

FREDERICK ALEXANDER, M.D., and

PEDIATRIC SURGICALCARE, LLC, Civil Action No. 19-18287

Plaintiffs,

OPINION

v.

HACKENSACK MERIDIAN HEALTH, et al.

Defendants,

John Michael Vazquez, U.S.D.J.

This case arises out of Defendant Hackensack Meridian Health’s (“HMH”)1 and Defendant

Hackensack Meridian Health Palisades Medical Center Foundation’s (“PMC” and together with

HMH, the “Hospitals”)2 termination of Plaintiff Dr. Frederick Alexander’s clinical privileges at

their facilities. D.E. 4 (“FAC”). Plaintiffs allege, among other things, that the Hospitals terminated

Dr. Alexander’s privileges in furtherance of a conspiracy to restrain Dr. Alexander’s competition

with another group of physicians. Pending before the Court is Defendants’ motion to dismiss

Plaintiffs’ FAC pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.

Defendants do not challenge the sufficiency of the allegations as to the anticompetitive conduct.

1 Plaintiff pleads HMH as “Hackensack Meridian Health a/k/a HMH Hospitals Corporation a/k/a

Hackensack University Medical Center.” For purposes of this Opinion, reference to HMH shall

refer to each of Hackensack Meridian Health, HMH Hospitals Corporation, and Hackensack

University Medical Center.

2 Plaintiff pleads PMC as “Hackensack Meridian Health Palisades Medical Center Foundation

a/k/a Palisades Medical Center.” For purposes of this Opinion, reference to PMC shall refer to

each of Hackensack Meridian Health Palisades Medical Center Foundation and Palisades Medical

Center.

The Court reviewed the parties’ submissions in support and in opposition3 and decided the motion

without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons

stated below, Defendants’ motion to dismiss is granted in part and denied part.

I. BACKGROUND

A. Introduction

Dr. Alexander is a board-certified pediatric surgeon who was the Chief of Pediatric Surgery

at HMH from 2007 to 2011. FAC ¶ A. Dr. Alexander voluntarily resigned from that position in

June 2011 to pursue private practice. Id. ¶ 65. Dr. Alexander conducts business through Plaintiff

Pediatric Surgicalcare, LLC. Dr. Alexander maintained clinical privileges at HMH until June 9,

2017, when HMH suspended them. Id. PMC, in turn, suspended Dr. Alexander’s clinical

privileges on January 25, 2019. Id.

Plaintiffs claim that the Hospitals improperly suspended Dr. Alexander’s clinical privileges

to eliminate his competition with pediatricians from New York University Langone Medical

Center (the “NYU Group”), who HMH began collaborating with in 2012 after Dr. Alexander left.

See id. ¶ 413. Plaintiffs allege that the process HMH used to suspend and ultimately terminate Dr.

Alexander violated the “Constitution and Bylaws of the Medical and Dental Staff of HUMC” (the

“Bylaws”). See id. ¶ A.

Starting in January 2015 and continuing through September 2016, HMH allegedly

subjected Dr. Alexander to a baseless and retaliatory peer review. Specifically, Defendant Medical

Executive Committee Of Hackensack University Medical Center (the “MEC”)4 charged Dr.

3 Defendant’s brief will be referred to as “Def. Br.” D.E. 8; Plaintiffs’ opposition will be referred

to as “Pl. Opp.” D.E. 11; and Defendants’ reply will be referred to as “Def. Reply” D.E. 12.

4 The MEC is a disciplinary body of individuals empowered to investigate concerns regarding

clinical competence, patient care, and violations of medical center rules. Id. ¶¶ 34-35. The MEC

Alexander with “misuse” of HMH’s ER and subjected him to a peer review (the “ER Peer

Review”) by other physicians at HMH. Id. ¶¶ 102-03. Plaintiffs allege that the MEC’s decision

to conduct the ER Peer Review “in-house” instead of retaining an outside clinician was improper.

Id. ¶ 103. Based on the findings of the ER Peer Review, the MEC appointed a committee (the

“Baker Committee”) to investigate the charge that Dr. Alexander had misused HMH’s ER. Id. ¶

107. After its investigation, the Baker Committee issued a report stating that it did not find “any

clear or demonstrable deviation from an ethical manner of practicing, or of not putting the patient’s

interest first.” Id. ¶¶ 108, 109. As a result, on September 27, 2016, the MEC decided not to revoke

Dr. Alexander’s clinical privileges, but allegedly did order a secret professional performance

evaluation (“FPPE”). Id. ¶ 110. Plaintiffs claim that the MEC did not inform Dr. Alexander of

the Barker Committee’s findings or about the FPPE to keep Dr. Alexander “uninformed” and

“vulnerable.” Id. ¶ 113.

While the Baker Committee’s investigation was underway, Plaintiffs claim that HMH was

simultaneously manipulating HMH’s ER call roster and internal referral system to stifle Dr.

Alexander’s business. Id. ¶ 75. Plaintiffs allege that HMH removed Dr. Alexander from the ER

call roster and placed him and another independent pediatric surgeon on a “secondary sham on-

call schedule” even though the NYU Group did not have enough members to cover the call

schedule. Id. ¶ 76-78. HMH also transferred patients to the NYU Group without notifying Dr.

Alexander and without regard to patient preferences. Id. ¶¶ 81, 85. According to Plaintiffs,

members of the NYU Group also pressured sub-specialist doctors at HMH to refer patients to the

NYU Group and not to Dr. Alexander. Id. ¶ 89. The MEC ultimately reinstated Dr. Alexander to

is also empowered to make staff privilege recommendations at HMH and to take corrective actions.

Id. ¶ 36.

the ER call schedule after determining that the manipulation of the on-call system was “unfair.”

Id. ¶ 79.

B. The Suspension and Termination Proceedings

On June 9, 2017, Defendant Dr. Martin Karpeh told Dr. Alexander that HMH had

summarily suspended Dr. Alexander’s clinical privileges. Id. ¶ 118. A letter informed Dr.

Alexander that HMH based the suspension on “safety issues” related to his care of three patients

(the “Original Cases”). Id. ¶ 119. Pursuant to the Bylaws, Dr. Alexander requested a hearing

before the Defendant Ad Hoc Committee Hearing Panel at Hackensack University Medical Center

(“AHC”). Id. ¶ 120. The AHC consisted of three physicians from the MEC that reviewed the

MEC’s summary suspension of Dr. Alexander. Id. ¶ 40.

The AHC conducted a hearing on June 13, 2017 (the “AHC Hearing”). Id. ¶ 124. Plaintiffs

allege several improprieties as to the AHC Hearing. First, the MEC failed to provide a specific

rationale for Dr. Alexander’s suspension. Id. ¶ 122. Second, the AHC permitted the MEC to

produce the relevant medical records for the first time on the day of the hearing, thus depriving

Dr. Alexander of the opportunity to review the records to prepare. Id. ¶ 124. Third, the AHC

permitted the hearing to go forward even though the Bylaws obligated the MEC to first investigate

the alleged conduct, which was not done. Id. ¶ 134. Fourth, the AHC improperly failed to issue a

report memorializing its final decision. Id. ¶ 136.

Plaintiffs further claim that witnesses at the AHC Hearing were either unqualified or

biased. Plaintiffs allege that even though Defendant Dr. Keith Kuenzler did not review the medical

records of the “Original Cases” before the suspension was imposed, the AHC still permitted Dr.

Kuenzler to testify as an expert witness against Dr. Alexander at the hearing. Id. ¶ 129. Plaintiffs

add that the AHC should not have permitted Dr. Kuenzler to testify because he directly competed

with Dr. Alexander for patients. Id. ¶ 128.

The AHC decided to uphold Dr. Alexander’s summary suspension. Id. ¶ 136. In light of

the AHC’s decision, the MEC met on June 21, 2017 (the “June MEC Meeting”) to consider further

action against Dr. Alexander. The MEC did not permit Dr. Alexander or his counsel to appear or

present evidence at the meeting, but allegedly took new testimony from another physician at HMH

who did not testify before the AHC. Id. ¶ 143-46. Plaintiffs allege that this new evidence falsely

indicated that the “Patient Safety Committee” had reviewed the Original Cases. Id. ¶ 147. Based

on the AHC’s decision and the new evidence presented at the June MEC Meeting, the MEC

recommended that Dr. Alexander’s medical staff appointment and clinical privileges be revoked

at HMH. Id. ¶ 158. Following the MEC’s recommendation, HMH submitted a Health Care

Professional Responsibility and Reporting Enhancement Act report to the New Jersey Division of

Consumer affairs. Id. ¶ 159. According to Plaintiffs, the report falsely indicated that Dr.

Alexander’s clinical privileges had been revoked due to “incompetency which relates adversely to

patient care or safety” and “professional misconduct which relates adversely to patient care or

safety.” Id. HMH made a similar report to the National Practitioner Data Bank. Id. ¶ 160.

Pursuant to Article IX of the Bylaws, Dr. Alexander appealed the AHC’s determination on

June 27, 2020. Id. ¶ 162. The hearing started on October 9, 2017 and ended on July 12, 2018 (the

“Article IX Hearing”) and was held on fourteen separate evenings. Id. ¶ 171. Defendant Article

IX Hearing Panel At Hackensack University Medical Center (the “Hearing Panel”) presided over

the matter. The Hearing Panel was composed of three unidentified physicians and one attorney,

Defendant Richard J. Webb, Esq. Id. ¶ 45. Under the Bylaws, the Hearing Panel had the power

to review the MEC’s adverse recommendations. Id. ¶ 46.

As with the AHC Hearing and the June MEC Meeting, Plaintiffs allege numerous

deficiencies with the Article IX Hearing. Plaintiffs first take issue with the Hearing Panel’s

decision not to dismiss 23 “new” cases (the “Added Cases”) of alleged misconduct that the MEC

advanced in support of the AHC’s decision to suspend Dr. Alexander’s privileges. Id. ¶ 164. The

Added Cases occurred before the AHC rendered its recommendation yet were not presented during

the AHC Hearing. Id. ¶ 165. In addition, 15 of the Added Cases either occurred before the MEC

assembled the Baker Committee or were formally investigated by the Baker Committee. Id. ¶ 166.

The Hearing Panel denied Dr. Alexander’s motions to dismiss the Added Cases. Id. ¶ 175.

Plaintiffs also allege that the Hearing Panel issued several incorrect procedural decisions –

on the advice of Webb – that rendered the Article IX Hearing unfair. See id. ¶¶ 176-205. Plaintiffs

claim that the Hearing Panel improperly (1) precluded Dr. Alexander from presenting certain

expert testimony, id. ¶ 177; (2) limited Dr. Alexander to one live expert witness for the Original

Cases and prohibited Dr. Alexander from presenting live expert testimony on the Added Cases

while the MEC was permitted to present live expert testimony on all the Added Cases, id. ¶ 178;

(3) barred written expert witness reports, id. ¶ 182; (4) limited Dr. Alexander’s witnesses, while

similar limitations were not placed on the MEC, id. ¶ 183; (5) permitted non-pediatric surgeons to

present expert testimony on pediatric surgery cases, id. ¶¶ 184, 208; (6) limited Dr. Alexander’s

counsel to written cross-examination questions for certain witnesses and altered Dr. Alexander’s

counsel’s proposed written questions, id. ¶¶ 185-86; (7) prohibited Dr. Alexander from

interviewing potentially relevant witnesses, id. ¶¶ 188-89; (8) ordered the sequestration of Dr.

Alexander’s witnesses while the MEC’s witnesses were not sequestered, id. ¶ 195; (9) permitted

the MEC to violate scheduling orders, id. ¶ 196; and (10) permitted the MEC to disclose and

produce documentary and testimonial evidence on a delayed basis, id. ¶ 196.

The Hearing Panel concluded that the MEC had established a sufficient basis, by a

preponderance of the evidence, to suspend and terminate Dr. Alexander’s clinical privileges at

HMH. Id. ¶ 232. As a result, on January 8, 2019, Defendant Executive Committee of the Board

of Governors of HMH (the “Executive Committee”)5 acted to finally revoke Dr. Alexander’s

privileges and appointment to the medical staff at HMH. Id. Pursuant to PMC’s bylaws, on

January 25, 2019, Dr. Alexander’s clinical privileges were also revoked at PMC because of the

Executive Committee’s revocation determination. Id. ¶ A.

On February 4, 2019, Dr. Alexander appealed the Hearing Panel’s decision. Id. ¶ 236. The

panel (the “Appellate Panel”) appointed to review the Hearing Panel’s decision unanimously

rejected and reversed the Hearing Panel’s decision. Id. ¶ 241. The Appellate Panel found that the

MEC failed to engage in collegial intervention in the first instance, as required by the Bylaws. Id.

¶ 243. In addition, the Appellate Panel determined that the Hearing Panel’s decision to permit the

MEC to prosecute the Added Cases at the Article IX Hearing without first presenting those cases

at the AHC Hearing violated Dr. Alexander’s due process rights. Id. ¶ 249-51. The Appellate

Panel also concluded that there was insufficient evidence to support the Hearing Panel’s

recommendation to revoke Dr. Alexander’s clinical privileges. Id. ¶ 257.

Despite the Appellate Panel’s decision, the Executive Committee referred new charges that

Dr. Alexander falsified medical records (the “Falsification Charges”) to the MEC for

consideration. Id. ¶ 262. The MEC, in turn, retained Dr. Jonathan Burroughs to investigate and

evaluate the Falsification Charges. Id. ¶ 268. The MEC did not permit Dr. Alexander to present

evidence or make argument concerning the charges. Id. ¶ 270. Although Dr. Burroughs’ findings

5 The Bylaws empower the Executive Committee to act upon the recommendations of the MEC

concerning suspensions and dismissals. Id. ¶ 52.

were not provided to Dr. Alexander, Dr. Burroughs apparently determined that Dr. Alexander had

falsified medical records. Id. ¶ 293. Based on Dr. Burroughs’ findings, the Executive Committee

upheld the MEC’s recommendation to revoke Dr. Alexander’s clinical privileges and membership

on the staff at HMH. Id. ¶ 295. HMH reported its revocation of Dr. Alexander’s privileges to both

the New Jersey Division of Consumer Affairs and the National Practitioner Data Bank, indicating

that the revocation of privileges was due to “substandard or inadequate care” and “professional

misconduct which relates adversely to patient care or safety.” Id. ¶ 300.

Plaintiffs claim that HMH’s revocation of Dr. Alexander’s privileges harmed Dr.

Alexander’s reputation and deprived him of access to the 17 hospitals that HMH owns,

significantly damaging his business. Id. ¶ 301.

II. PROCEDURAL HISTORY

Dr. Alexander filed his initial Complaint on September 24, 2019. D.E. 1. Plaintiffs then

filed their FAC on October 25, 2019, adding Pediatric Surgicalcare as a Plaintiff. D.E. 4. The

FAC alleges twelve causes of action: (1) restraint of trade under Section 1 of the Sherman Act, 15

U.S.C. § 1; (2) conspiracy to monopolize under Section 2 of the Sherman Act, 15 U.S.C. § 2; (3)

unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125; (4) breach of contract

under New Jersey law; (5) judicial review for fundamental fairness under New Jersey law; (6)

violation of due process under New Jersey law; (7) intentional interference with prospective

business advantage under New Jersey law; (8) defamation under New Jersey law; (9) restraint of

trade under the New Jersey Antitrust Act, N.J.S.A. § 56:9-1, et seq.; (10) intentional infliction of

emotional distress under New Jersey law; (11) violation of the Conscientious Employee Protection

Act, N.J.S.A. 34:19-1, et seq.; and, (12) trade libel under New Jersey law. Id. ¶¶ 410-538. On

December 24, 2019, Defendants filed this motion to dismiss, D.E. 8, which Plaintiffs opposed on

January 17, 2020. D.E. 11. Defendants filed a reply in further support of their motion to dismiss

on January 27, 2020. D.E. 17.

III. STANDARD OF REVIEW

Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a defendant to move to

dismiss a count for “failure to state a claim upon which relief can be granted[.]” To withstand a

motion to dismiss under Rule 12(b)(6), a plaintiff must allege “enough facts to state a claim to

relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A

complaint is plausible on its face when there is enough factual content “that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009). Although the plausibility standard “does not impose a probability

requirement, it does require a pleading to show more than a sheer possibility that a defendant has

acted unlawfully.” Connelly v. Lane Const. Corp., 809 F.3d 780, 786 (3d Cir. 2016) (internal

quotation marks and citations omitted). As a result, a plaintiff must “allege sufficient facts to raise

a reasonable expectation that discovery will uncover proof of [his] claims.” Id. at 789.

In evaluating the sufficiency of a complaint, a district court must accept all well-pleaded

factual allegations in the complaint as true and draw all reasonable inferences in favor of the

plaintiff. Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). A court, however, is

“not compelled to accept unwarranted inferences, unsupported conclusions or legal conclusions

disguised as factual allegations.” Baraka v. McGreevey, 481 F.3d 187, 211 (3d Cir. 2007). If,

after viewing the allegations in the complaint most favorable to the plaintiff, it appears that no

relief could be granted under any set of facts consistent with the allegations, a court may dismiss

the complaint for failure to state a claim. DeFazio v. Leading Edge Recovery Sols., 2010 WL

5146765, at *1 (D.N.J. Dec. 13, 2010).

IV. ANALYSIS

Defendants raise three arguments in support of their motion to dismiss: (1) claims against

Defendants AHC, Hearing Panel, and Webb are subject to either the litigation privilege or quasi-

judicial immunity; (2) Count Eight, for defamation, fails to state a claim; and (3) the trade libel

claim is protected by statutory immunity. Each will be discussed in turn.

A. Litigation Privilege and Related Arguments

Defendants Hearing Panel, AHC, and Webb move to dismiss the FAC based on the

litigation privilege and quasi-judicial immunity. Def. Br. at 11-15. In addition to addressing

Defendants’ arguments, Plaintiffs point to applicable federal and state statutes. The Court

addresses Defendants’ arguments first before turning to the statutory arguments raised by Plaintiff.

1. The Litigation Privilege

New Jersey’s litigation privilege6 applies “‘to any communication (1) made in judicial or

quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve

the objects of the litigation; and (4) that have some connection or logical relation to the action.’”

Hawkins, 141 N.J. at 207. The litigation privilege ensures that “[s]tatements by attorneys, parties

and their representatives made in the course of judicial or quasi-judicial proceedings are absolutely

privileged and immune from liability.” Peterson v. Ballard, 292 N.J. Super. 575 (App. Div. 1996)

(citing Erickson v. Marsh & McLennan Co., Inc., 117 N.J. 539 (1990)). The privilege is absolute

and applies “even if the words are spoken maliciously, without any justification or excuse, and

6 As to the litigation privilege, the parties agree that New Jersey law governs. See Def Br. at 13

(citing Hawkins v. Harris, 141 N.J. 207 (1995); see also Pl. Opp at 17-18 (citing Hawkins, 141

N.J. at 207). Accordingly, the Court will apply New Jersey law. See Manley Toys, Ltd. v. Toys R

Us, Inc., No. 12-3072, 2013 WL 244737, at *2 (D.N.J. Jan. 22, 2013) (“Because the parties have

argued the viability of the remaining claims as though New Jersey substantive law applies, the

Court will assume that to be the case.” (citing USA Mach. Corp. v. CSC, Ltd., 184 F.3d 257, 263

(3d Cir. 1999)).

from personal ill will or anger.” Williams v. Kenney, 379 N.J. Super. 118, 134 (App. Div. 2005)

(internal quotation marks omitted) (citing DeVivo v. Ascher, 228 N.J. Super. 453, 457

(App.Div.1988)).

For the first prong, Defendants argue that the litigation privilege applied during the AHC

Hearing and the Article IX Hearing because they were “quasi-judicial” proceedings. Def. Br. at

14. The privilege “has expanded beyond strictly judicial proceedings” and encompasses “quasi-

judicial” proceedings as well. Zagami, LLC v. Cottrell, 403 N.J. Super. 98, 105 (App. Div. 2008)

(citing Rainier’s Dairies v. Raritan Val. Farms, 19 N.J. 552, 559 (1955)). In Zagami, for example,

the court applied the privilege to immunize statements made in connection with a municipal liquor

license renewal proceeding. Id. at 111. However, the cases Defendants rely on for this point are

inapposite. Nanavati v. Burdette Tomlin Mem’l Hosp. does not discuss the litigation privilege.

See 107 N.J. 240, 249 (1987). Likewise, Zoneraich v. Overlook Hosp. did not mention the

litigation privilege. See 212 N.J. Super. 83, 99 (App. Div. 1986). And the New Jersey Appellate

Division’s unpublished decision in Gasperetti v. Deborah Heart & Lung Ctr. only considered

whether the litigation privilege immunized an attorney’s statement in a report to New Jersey’s

Board of Medical Examiners pursuant to N.J.S.A. § 26:2H–12.2b(a)(3); it did not evaluate whether

the privilege applied during the defendant hospital’s internal hearing procedures. See No. A-0244-

13T2, 2017 WL 5619212, at *10 (App. Div. Nov. 22, 2017).

Thus, Defendants have not carried their burden to demonstrate that the underlying

proceedings were quasi-judicial in nature.7 Yet, even assuming that the ACH Hearing and Article

7 The Court notes Judge Chesler’s decision in Le v. University of Medicine and Dentistry would

seemingly support a finding in favor of Defendants. See No. 08–991 (SRC), 2009 WL 1209233

(D.N.J. May 4, 2009). In Le, Judge Chesler found that a medical university’s disciplinary hearing

(concerning allegations of the plaintiff cheating on an exam) was quasi-judicial in nature and that,

as a result, the litigation privilege applied to the plaintiff’s claims for false light and defamation

IX Hearing were “quasi-judicial,” the Court finds that the litigation privilege is not applicable.

The privilege “protects attorneys not only from defamation actions, but also from a host of other

tort-related claims.” Loigman v. Township Committee of Tp. Of Middletown, 185 N.J. 566 (2006)

(concluding the litigation privilege applied to § 1983 claims); see also Giles v. Phelan, Hallinan

& Schmieg, L.L.P., 901 F. Supp.2d 509, 523 (D.N.J. 2012) (“New Jersey Courts have applied the

litigation privilege to intentional and negligent infliction of emotion distress . . . material

misrepresentation . . . and negligent misrepresentation, fraud, and malicious interference with

prospective economic advantage” claims. (internal citations omitted)).

However, the Third Circuit has found that the litigation privilege does not immunize

“conduct calculated to thwart the judicial process.” Williams v. BASF Catalysts LLC, 765 F.3d

306 (3d Cir. 2014). In Williams, the Third Circuit held that the New Jersey Supreme Court would

not extend the privilege to allegations that the defendants destroyed and fabricated evidence in

connection with several asbestos-based products liability cases. Id. at 320. The Circuit reasoned

that the plaintiff’s complaint described conduct that impaired New Jersey’s goals for the litigation

privilege. Id. at 318. The Williams court stated that the purpose of the privilege is to “afford the

parties ‘an unqualified opportunity to explore the truth of a matter without fear of recrimination,’”

whereas plaintiffs had alleged that the defendant lawyers and litigants actively frustrated the search

for the truth and purposefully misled their adversaries. Id. The Circuit continued that the

plaintiff’s allegations were outside the core design of the litigation privilege – to protect “a witness,

lawyer, or agent” who makes hurtful or defamatory remarks. Id. at 319. The court in Williams

arising out of the hearing. Following Le, the Court would be inclined to find that the ACH Hearing

and Article IX Hearing were “quasi-judicial” such that the litigation privilege applied during those

hearings. But Defendants did not cite to Le, so the Court does not rule on that basis. In any event,

assuming that the litigation privilege was applicable, the Court would find that it does not reach

the allegations here.

reasoned that “the [plaintiff’s] allegations . . . describe[d] conduct calculated to thwart the judicial

process” and were therefore more “akin” to non-privileged “malicious prosecution, perjury, and

spoliation” actions. Id. The Third Circuit further noted that “the New Jersey Supreme Court has

never immunized systematic fraud designed to prevent a fair proceeding.” Id.

Here, accepting as true Plaintiffs’ allegations concerning the AHC Hearing and Article IX

Hearing (and the other related proceedings), Defendants’ arguments fall short because Plaintiffs’

claims “concern [Defendants’] conduct and not [Defendants’] statements.” Williams, 765 F.3d at

319. Plaintiffs are not alleging that Defendants’ statements made in the course of the proceedings

harmed them; rather, Plaintiffs allege that Defendants rigged both the ACH Hearing and Article

IX Hearing to deprive Dr. Alexander of a fair opportunity to adjudicate his suspension as part of a

broader anticompetitive conspiracy to eliminate his privileges at the Hospitals. Among other

things, Plaintiffs allege that the AHC permitted the MEC to produce the relevant medical records

for the first time on the day of the AHC Hearing, FAC ¶ 124; the AHC improperly failed to issue

a report memorializing its final decision, id. ¶ 136; Dr. Alexander was denied the opportunity to

interview witnesses before the AHC Hearing and Article IX Hearing, see id. ¶ 187; Defendants

unfairly leveled new charges of misconduct against Plaintiff Alexander just days before the Article

IX Hearing, id. ¶ 164; the Hearing Panel and Webb improperly limited Dr. Alexander’s ability to

provide expert testimony, id. ¶ 178; the Hearing Panel and Webb unfairly barred Plaintiff

Alexander’s submission of written expert reports, id. ¶ 182; and that the Hearing Panel and Webb

prevented Dr. Alexander’s counsel from cross-examining witnesses, id. ¶ 185. Plaintiffs further

allege that the Appellate Panel found that Dr. Alexander’s due process rights were violated during

both hearings and that there was insufficient evidence to terminate his privileges. Id. ¶ 241.

Despite the Appellate Panel’s finding, the Executive Committee still decided to revoke Dr.

Alexander’s privileges at HMH, based on new charges levied after both the AHC Hearing and

Article IX Hearing. Id. ¶ 295. In sum, Plaintiffs’ claims are essentially that the AHC, Hearing

Panel, and Webb “actively frustrated the search for truth” and that the Defendants conduct was

“calculated to thwart the judicial process.” Williams, 765 F.3d at 318-19. The litigation privilege

does not reach such claims. Id. at 319. Defendants’ motion to dismiss Plaintiffs’ claims against

the AHC, the Hearing Panel, and Webb based on the litigation privilege is denied.

2. Quasi-Judicial Immunity

Defendants also seek dismissal of Plaintiffs’ claims against the AHC, the Hearing Panel,

and Webb based on the doctrine of quasi-judicial immunity. Def. Br. 15-16. However, Defendants

admit that “[i]n our research we have not encountered a decision in which claims have been

asserted against the actual members of the hearing panel or its legal advisor.” Def. Reply at 3-4.

Indeed, although a few of the cases that Defendants cite discuss quasi-judicial immunity, none

address the doctrine in the context of a private hospital’s peer review hearings, as here.

Judicial immunity grants judges “absolute immunity from claims for damages arising out

of the performance of their judicial duties.” Savadjian v. Caride, No. CV 18-16381 (FLW), 2019

WL 6975102, at *2 (D.N.J. Dec. 20, 2019) (citing Stump v. Sparkman, 435 U.S. 349, 355-56

(1978)). “Absolute judicial immunity also extends to nonjudicial officers for claims relating to the

exercise of judicial functions.” Id. (citing Butz v. Economou, 438 U.S. 478, 512-13 (1978)).

“Specifically, ‘quasi-judicial’ absolute immunity may extend to individuals tasked with

performing functions that are judicial in nature, such as administrative law judges and agency

hearing officers when performing adjudicative functions within executive agencies.” Id.

Nearly all cases relied on by Defendants involved state actors. Savadjian v. Caride, No.

CV 18-16381 (FLW), 2019 WL 6975102, at *8 (dismissing the plaintiffs’ claims against the

Commissioner of the Department of Banking and Insurance based on the doctrine of quasi-judicial

immunity); Jodeco, Inc. v. Hann, 674 F. Supp. 488, 498 (D.N.J. 1987) (dismissing claims against

the mayor and zoning and planning boards of township); see also Bass v. Attardi, 868 F.2d 45, 49

(3d Cir. 1989). Here, Defendants are not alleged to be state actors. Moreover, Bryan v. James E.

Holmes Reg’l Med. Ctr. – the lone-case Defendants cite not involving claims against a state actor

– did not discuss quasi-judicial immunity at all. See 33 F.3d 1318, 1321 (11th Cir. 1994). Instead,

that case dealt with an assertion of immunity under the Health Care Quality Improvement Act and

Florida law. Id.

In sum, Defendants have failed to cite any authority indicating that quasi-judicial immunity

protects the Hearing Panel, AHC, and Webb. Defendants admit as much. See Def. Reply at 3-4.

Accordingly, the Court denies Defendants’ motion to dismiss as to this argument.

3. Health Care Quality Improvement Act Immunity And New Jersey’s Peer

Review Statute

As to Defendants arguments addressing the litigation privilege and quasi-judicial

immunity, Plaintiffs also point to the Health Care Quality Improvement Act, 42 U.S.C. § 11111 et

seq. (“HCQIA”), and New Jersey’s peer review statute, N.J.S.A. § 2A:84A–22.10. Pl. Opp. at 4

- 5. In addition, certain of the cases cited by Defendants in support of their motion review the

HCQIA and the peer review statute.

In relevant part, the HCQIA provides as follows:

(a) In general

(1) Limitation on damages for professional review actions

If a professional review action (as defined in section 11151(9)

of this title) of a professional review body meets all the standards

specified in section 11112(a) of this title, except as provided in

subsection (b)--

(A) the professional review body,

(B) any person acting as a member or staff to the body,

(C) any person under a contract or other formal agreement

with the body, and

(D) any person who participates with or assists the body with

respect to the action,

shall not be liable in damages8 under any law of the United

States or of any State (or political subdivision thereof) with

respect to the action.

42 U.S.C. § 11111(a)(1). However, to qualify for such protection, a professional review action

must be undertaken in accordance with the following:

(1) in the reasonable belief that the action was in the furtherance of

quality health care,

(2) after a reasonable effort to obtain the facts of the matter,

(3) after adequate notice and hearing procedures are afforded to the

physician involved or after such other procedures as are fair to the

physician under the circumstances, and

(4) in the reasonable belief that the action was warranted by the facts

known after such reasonable effort to obtain facts and after meeting

the requirement of paragraph (3).

42 U.S.C. § 11112(a).

Under the HCQIA, a “professional review body” means “a health care entity and the

governing body or any committee of a health care entity which conducts professional review

activity, and includes any committee of the medical staff of such an entity when assisting the

governing body in a professional review activity.” 42 U.S.C. § 11151(11). A “professional review

action” is, in turn, defined as follows:

[A]n action or recommendation of a professional review body which

is taken or made in the conduct of professional review activity,

which is based on the competence or professional conduct of an

individual physician (which conduct affects or could affect

adversely the health or welfare of a patient or patients), and which

affects (or may affect) adversely the clinical privileges, or

8 The HCQIA does not apply to injunctive and/or declaratory relief. Nahas v. Shore Med. Ctr.,

No. 19-3433, 2020 WL 5587698, -- Fed. App’x -- at *1 fn. 2 (3d Cir. Sept. 18, 2020) (citing

Gordon v. Lewistown Hosp., 423 F.3d 184, 192 fn. 1 (3d Cir. 2005) (“The immunity provided by

the HCQIA for persons engaging in the peer review process is limited to damages liability . . .

Disciplined physicians may still maintain actions for injunctive or declaratory relief.”)).

membership in a professional society, of the physician. Such term

includes a formal decision of a professional review body not to take

an action or make a recommendation described in the previous

sentence and also includes professional review activities relating to

a professional review action.

42 U.S.C. § 11151(9).

The HCQIA further provides that “[a] professional review action shall be presumed to have

met the preceding standards necessary for the protection set out in section [42 U.S.C. §11111(a)]

unless the presumption is rebutted by a preponderance of the evidence.” 42 U.S.C. § 11112(a).

To rebut the presumption, a plaintiff must show “that the defendant took action without a

reasonable belief in initiating the action, failed to provide adequate notice and hearing procedures,

or otherwise took action without a reasonable belief it was warranted by the facts after a reasonable

investigation.” Hurwitz v. AHS Hosp. Corp., 438 N.J. Super. 269, 289 (App. Div. 2014) (citing

42 U.S.C. § 11112(a)).

New Jersey’s peer review statute, N.J.S.A. § 2A:84A-22.10, is similar. Hurwitz, 438 N.J.

Super. at 291 (“Like the federal law, the New Jersey statute provides broad immunity for damages

to qualified persons for actions taken as part of a hospital’s peer review process.”). Relevant here,

N.J.S.A. § 2A:84A-22.10 protects “[a]ny person who serves as a member of, is staff to, under a

contract or other formal agreement with, participates with, or assists with respect to” a

hospital peer-review committee having the responsibility for the

review of the qualifications and credentials of physicians or dentists

seeking appointment or reappointment to the medical or dental staff

of a hospital, or of questions of the clinical or administrative

competence of physicians or dentists so appointed, or of matters

concerning limiting the scope of hospital privileges of physicians or

dentists on the staff, or of matters concerning the dismissal or

discharge of same.

N.J.S.A. § 2A:84A-22.10(d). Such persons “shall not be liable in damages” for their actions or

recommendations made within the scope of their “function[s] with the committee . . . if such action

or recommendation was taken or made without malice and in the reasonable belief after

reasonable investigation that such action or recommendation was warranted upon the basis of

facts disclosed.” N.J.S.A. § 2A:84A-22.10(2) (emphasis added); see also Hurwitz, 438 N.J. Super.

at 291.

While it appears that both the HCQIA and the New Jersey peer review statute are applicable

to the AHC, the Hearing Panel, and Webb the “question of whether Defendants are entitled to

immunity from damages is an issue more appropriately determined at the summary judgment

stage.” Nahas v. Shore Medical Center, No. 13-6537 2016 WL 1029362 at *11 (D.N.J. 2016)

(citing Brader v. Allegheny General Hosp., 64 F.3d 869, 879 (3d Cir. 1995) (reversing district

court’s dismissal of claims based on HCQIA and stating that the HCQIA’s presumption under 42

U.S.C. § 11112(a) “implies some opportunity to discover relevant evidence.”)); see also Bryan, 33

F.3d at 1332-33 (“A district court should consider the issue of HCQIA immunity from damages at

the summary judgment stage”). Instead, at the motion to dismiss stage, the Court evaluates

whether, accepting Plaintiffs’ allegations as true, Defendants would be entitled to immunity under

the HCQIA or N.J.S.A. § 2A:84A-22.10(2). Nahas, No. 13-6537, 2016 WL 1029362 at *11.

Here, the Court finds that Plaintiffs have plausibly alleged that the AHC, the Hearing Panel,

and Webb are not entitled to immunity under the HCQIA or New Jersey’s peer review statute. As

described above, Plaintiffs have alleged, among other things, that (1) Dr. Alexander received

inadequate notice of the misconduct charges against him at both the AHC Hearing and the Article

IX Hearing, FAC ¶¶ 122-123, id. ¶ 166; (2) the procedures in connection with the AHC Hearing

and Article IX Hearing and procedural rulings by the AHC and Hearing Panel were unfair, id. ¶¶

122-36, id. ¶¶ 176-196; and, (3) that the MEC initiated the peer review process without sufficient

evidence to support the charges against Dr. Alexander and for the purpose of eliminating his

competition with the NYU Group, not in the furtherance of quality health care. See e.g., id. ¶¶

260, 404. These allegations are sufficient to defeat HCQIA immunity at the motion to dismiss

stage. Nahas, No. 13-6537, 2016 WL 1029362 at *11 (refusing to dismiss claims based on HCQIA

immunity where the plaintiff alleged, among other things, “he was subject to unfair internal review

procedures”). For the same reasons, the Court finds that Plaintiffs have also sufficiently alleged

that the Hearing Panel, AHC, and Webb did not act “without malice and in the reasonable belief

after reasonable investigation” that their actions were warranted. See N.J.S.A. § 2A:84A–22.10;

see Nahas, No. 13-6537, 2016 WL 1029362 at *11 (“Likewise, Plaintiff’s allegations are sufficient

to overcome Defendants’ presumptive immunity under New Jersey’s analog to the HCQIA,

N.J.S.A. 2A:84A-22.10, which ‘extends a similar form of immunity protection for hospitals, peer

reviewers, and decision-makers,’ because Plaintiff has sufficiently pleaded that Defendants acted

out of malice rather than in the furtherance of health care.”). To the extent that Defendants were

relying on the HCQIA or the New Jersey peer review statute to support their motion to dismiss,

the Court denies the motion.

B. Defamation9

Defendants argue the defamation claims in the Complaint should be dismissed because

“[t]he Complaint is deficient in terms of date, [and] identification of person to whom the statements

were made.” Def. Br. at 17-18. In response, Plaintiffs point to Dr. Kuenzler’s January 2015

statement that Dr. Alexander committed “the crime of insurance fraud” (FAC ¶ 377) and Dr.

9 The parties appear to agree that New Jersey law governs Plaintiffs’ tort claims. See Def Br. at

22; see also Pl. Opp. at 29. Accordingly, for the reasons stated in note 6, the Court will apply New

Jersey law.

Kuenzler’s email to his co-Defendants in which he stated that Dr. Alexander was “driven only by

his own-self-service, without regard for surgical standards,” that Dr. Alexander was “erratic,” and

that he did not believe Dr. Alexander’s practices “ha[d] a place in academic pediatric surgery at a

true Children’s Hospital.” Def. Br. at 23-24; see also FAC ¶ 382. Defendants respond that because

the statements forming the basis for the defamation claims occurred in 2015, Count Eight must be

dismissed based on New Jersey’s one-year statute of limitations for defamation claims. Def.

Reply. at 6-7 (citing N.J.S.A. § 2A:14-3).

Turning to the timeliness issue, the statute of limitations is an affirmative defense which is

not normally decided on a motion to dismiss. See Crump v. Passaic County, 147 F. Supp. 3d 249,

259 (D.N.J. 2015). However, “where the complaint facially shows noncompliance with the

limitations period,” dismissal on statute of limitations grounds may be appropriate. Id. In New

Jersey, defamation claims “shall be commenced within 1 year next after the publication of the

alleged libel or slander.” N.J.S.A. 2A:14-3; see also O'Donnell v. Simon, 362 F. App’x 300, 305

(3d Cir. 2010) (affirming district court’s Rule 12(b)(6) dismissal of defamation claims and stating

that “[i]n New Jersey, the ‘discovery rule’ cannot extend the limitations period for defamation

claims.” (citing Lawrence v. Bauer Publ’g & Printing Ltd., 78 N.J. 371 (1979)).

Here, according to the express allegations in the FAC, Dr. Kuenzler’s alleged defamatory

statement occurred in January 2015. FAC ¶ 377. Thus, N.J.S.A. § 2A:14-3 required Plaintiffs to

bring their defamation claim by January 2016, but their Complaint was filed on September 24,

2019. D.E. 1. Accordingly, Plaintiffs defamation claim arising out of Dr. Kuenzler’s January

2015 statement that Dr. Alexander committed “the crime of insurance fraud,” FAC ¶ 377, is

dismissed because it is time-barred. Nonetheless, the Court dismisses Plaintiffs’ defamation claim

based on these statements without prejudice because it is not clear whether Plaintiffs intend to

argue that some form of tolling applies.

Turning to the plausibility argument, Plaintiffs have failed to plead a claim for defamation

arising out of Dr. Kuenzler’s email to his co-Defendants. FAC ¶ 508. To plead defamation, Dr.

Alexander must allege (1) that a false statement was made concerning him; (2) that the statement

was published to a third party and not otherwise privileged; (3) that the publisher was at least

negligent in publishing the statement; and (4) damages. Robles v. U.S. Environmental Universal

Services, Inc., 469 Fed. Appx. 104, 109 (3d Cir. 2012) (citing DeAngelis v. Hill, 180 N.J. 1 (2004)).

Under New Jersey law, in a “complaint charging defamation, plaintiff must plead facts sufficient

to identify the defamatory words, their utterer and the fact of their publication.” Zoneraich v.

Overlook Hosp., 212 N.J. Super. 83, 101 (App. Div. 1986). A vague conclusory allegation is

insufficient to plausibly plead defamation. Id.

Here, the Complaint alleges that Dr. Kuenzler wrote to Defendants Dr. Carol Barsky and

Dr. Karpeh that Dr. Alexander was “driven only by his own-self-service, without regard for

surgical standards,” that Dr. Alexander was “erratic,” and that he did not believe Dr. Alexander’s

practices “ha[d] a place in academic pediatric surgery at a true Children’s Hospital.” Def. Br. at

23-24; FAC ¶ 508. Even though Plaintiffs do identify the recipients of the alleged defamatory

statements – Dr. Barsky and Dr. Karpeh – Plaintiffs still “do[] not plausibly allege when10 . . . the

10 Plaintiffs attempted to supplement the allegations in the FAC through their Opposition,

clarifying that the email response containing Dr. Kuenzler’s alleged defamatory statements to Dr.

Barsky and Dr. Karpeh “was dated December 19, 2015.” Pl. Opp. at 24. Putting aside that this

allegation seems to make the claim time barred, the Court cannot consider the allegation because

“a complaint cannot be amended (or supplemented) by way of an opposition brief.” Swift v.

Pandey, No. CIV.A. 13-649 JLL, 2013 WL 6022093, at *2 (D.N.J. Nov. 13, 2013) (citing

Pennsylvania ex rel. v. Zimmerman v. Pepsico, 836 F.2d 173 (3d Cir.1988) (“It is axiomatic that

the complaint may not be amended by the briefs in opposition to a motion to dismiss.”)).

statement was made” and “fail[] to allege that the statement was not privileged.” See Chun v.

Sushi Maru Express Corp., No. CV 17-6411, 2018 WL 3158815, at *5 (D.N.J. June 28, 2018)

(citing Robles v. U.S. Envtl. Universal Servs., Inc., 469 F. App’x 104, 109 (3d Cir. 2012)).

Therefore, the Court finds that Plaintiffs have not sufficiently alleged a defamation claim as to Dr.

Kuenzler.

Count Eight is dismissed without prejudice.

C. Trade Libel

Defendants seek dismissal of Plaintiffs’ trade libel claims that are based on the reports (the

“Reports”) HUMC made to the New Jersey Division of Consumer Affairs (“DCA”) and the

National Practitioner Data Bank (“NPDB”) concerning HUMC’s summary and final suspensions

of Dr. Alexander’s clinical privileges at the Hospitals. Def. Br. at 20-29. Defendants submit that

portions of New Jersey’s Cullen Act, N.J.S.A. § 26:2H-12.2b(g), § 26:2H-12.2c(c), as well as

portions of HCQIA, 42 U.S.C. 11137(c), immunized the Defendants in making the Reports. Id.

Plaintiffs counter that the Cullen Act and the HCQIA do not immunize false or malicious reporting

and maintain that Plaintiffs’ FAC contains allegations from which the Court can conclude that the

Reports were false, and that Defendants knew they were false. Pl. Opp. at 30.

In part, the Cullen Act obligates a “health care entity”11 to notify DCA about certain actions

it takes regarding a “health care professional”12 who “has privileges granted by . . . or who provides

11 In the act, “health care entity” means a “facility or institution, whether public or private, that is

engaged principally in providing services for health maintenance organizations, diagnosis, or

treatment of human disease, pain, injury, deformity, or physical condition[.]” N.J.S.A. § 26:2H-

12.2b(i).

12 In the act, “health care professional” includes a “person licensed or otherwise authorized . . . to

practice a health care profession that is regulated by the Director of the Division of Consumer

Affairs or by one of the following boards: the State Board of Medical Examiners[.]” N.J.S.A. §

26:2H-12.2b(i).

. . . services pursuant to an agreement with a health care services firm or staffing registry” to the

“health care entity.” See generally N.J.S.A. § 26:2H-12.2b. Relevant here, the Cullen Act

obligates a “health care entity” to notify DCA if, “for reasons relating to the health care

professional’s impairment, incompetency, or professional misconduct, which incompetency or

professional misconduct relates adversely to patient care or safety,” a “health care professional . .

. has full or partial privileges summarily or temporarily revoked or suspended, or permanently

reduced, suspended, or revoked” or “[is] discharged from the staff” at the “health care entity.”

N.J.S.A. § 26:2H-12.2b(a)(1). A “health care entity” that fails to provide the requisite notice to

DCA “shall be” subject to penalty. N.J.S.A. § 26:2H-12.2b(f). If a “health care entity” provides

a mandatory report to DCA or other authorized agency “in good faith and without malice” about

a “health care professional,” the entity “is not liable for civil damages in any cause of action arising

out of the provision or reporting of the information.” N.J.S.A. § 26:2H-12.2b(g).

The HCQIA also imposes obligations like those under the Cullen Act. In relevant part, the

HCQIA obligates “health care entities”13 to report “a professional review action that adversely

affects the clinical privileges of a physician for a period longer than 30 days” to the relevant state

Board of Medical Examiners and to the Secretary of Health and Human Services. 42 U.S.C. §§

11133(a)(1), 11134(b). A “health care entity” that fails to meet those reporting requirements is

subject to sanctions. 42 U.S.C. § 11133(c)(1). And, as under the Cullen Act, the HCQIA includes

an immunity provision: “No person or entity . . . shall be held liable in any civil action with respect

13 Under the HCQIA, “health care entity” includes a “hospital that is licensed to provide health

care services by the State in which it is located, . . . an entity . . . that provides health care services

and that follows a formal peer review process for the purpose of furthering quality health care[.]”

42 U.S.C.A. § 11151(4)(A).

to any report made under this subchapter . . . without knowledge of the falsity of the information

contained in the report.” 42 U.S.C. § 11137(c).

Defendants opine that because the Reports are true – i.e., accurately reflect the basis for

HMH’s suspension and termination decisions – they are entitled immunity under the Cullen Act

and the HCQIA and Plaintiffs’ trade libel claim should be dismissed. Def. Br. at 26-29; Def. Reply

at 10. However, the FAC plausibly alleges that the immunity provisions of both the Cullen Act

and the HCQIA are not met. As discussed, the HCQIA provides immunity where a health care

entity issues a report pursuant to the HCQIA and “is without knowledge of the falsity of the

information contained in the report.” 42 U.S.C. § 11137(c); Pal v. Jersey City Med. Ctr., 658 F.

App’x 68, 75 (3d Cir. 2016) (“The only circumstance in which [42 U.S.C. § 11137(c)] immunity

is not triggered is when (1) the report contains false information and (2) the individual or entity

submitting the report knew that the information was false.”). The relevant Third Circuit decisions

that reference Section 11137(c) immunity under the HCQIA do not address the standard governing

Section 11137(c) immunity at the motion to dismiss stage. See Pal, 658 F. App’x at 75; Zheng v.

Quest Diagnostics, Inc., 248 F. App’x 416, 421 fn. 10 (3d Cir. 2007). In other circuits, “a general

consensus has emerged that ‘courts do not evaluate whether the underlying merits of the reported

action were properly determined’ but instead ‘evaluate whether the report itself accurately

reflected the action taken.’” Robinson v. E. Carolina Univ., 329 F. Supp. 3d 156, 177 (E.D.N.C.

2018) (collecting cases) (citation omitted).

In Robinson, the plaintiff asserted a claim for defamation based on the defendant insurer’s

submission of a report to the NPDB that the plaintiff contended was inaccurate. Id. at 167-69. The

court granted the defendant insurer’s motion to dismiss the plaintiff’s claim based on immunity

under Section 11137(c). Id. at 178. The Robinson court reasoned that the “plaintiff’s complaint

d[id] not allege the report contain[ed] false information, only that the information provided rests

on a faulty investigation.” Id. at 177. The district judge continued that the plaintiff had failed to

challenge the accuracy of the report, and instead merely scrutinized “the underlying determination”

made by the insurer. Id. at 178. The court in Robinson concluded that “[b]ecause the report

submitted to the NPDB accurately summarized the leadership team’s decision . . . plaintiff has

failed to allege defendant . . . knowingly submitted a false report.” Id. This case is distinguishable

from Robinson, the cases it relied on, and the cases Defendants cite.

The decisions on which Defendants rely are summary judgment decisions or appeals from

summary judgment decisions. See Davis v. Methodist Hosp., 997 S.W.2d 788, 790 (Tex. App.

1999) (“We address whether the trial court erred by granting summary judgment[.]”); See also Lee

v. Hosp. Auth. of Colquitt Cty., 353 F. Supp. 2d 1255, 1256 (M.D. Ga. 2004). In comparison, this

matter is at the motion to dismiss stage. Moreover, those cases do not suggest that Section

11137(c) prevents a plaintiff from attempting to prove that a health care entity did not actually

reach the conclusions reported to the NPDB, as Plaintiffs allege here. FAC ¶¶ 159-60; id. ¶ 300.

Indeed, in Davis, the trial court permitted the plaintiff to adduce evidence that the defendant

hospital’s reported reason for his suspension was pretextual. Id. at 795. (“[Plaintiff] relied on

affidavits . . . [that] stated . . . no finding of incompetence, negligence, or malpractice was ever

made. [Plaintiff] also relied on an affidavit from one of the Peer Review Committee members, who

stated the Peer Review Committee did not find that Dr. Davis was negligent, incompetent, or guilty

of malpractice.”) The Court will afford Plaintiffs the same opportunity here.

The decision to permit Plaintiffs’ trade libel claim to proceed past a motion to dismiss is in

accord with the court’s determination in Elkharwily v. Franciscan Health Sys. See No. 3:15-CV-

05579-RJB, 2015 WL 7758550, at *1 (W.D. Wash. Dec. 1, 2015). In Elkharwily, the plaintiff

alleged that the defendant hospitals denied the plaintiff’s application for clinical privileges and

revoked the plaintiff’s temporary privileges based on the plaintiff’s “national origin, creed, race,

color, and bipolar mental health status.” Id. In denying plaintiff’s application for clinical

privileges, the defendant hospitals reported that the plaintiff had “failed to demonstrate the scope

and adequacy of his experience or his current clinical skill and competence” to the NPDB. Id.

The plaintiff asserted a defamation claim based on the report and alleged that the defendants’ report

to the NPDB was false because all the information in the defendants’ possession “demonstrated

only that [p]laintiff was competent.” Id. Defendants moved to dismiss the defamation claim under

42 U.S.C. § 11137(c). Id. at *2. The court in Elkharwily denied the motion to dismiss, finding

that the defamation claim survived the “immunity defense raised by defendants.” Id. The district

court reasoned that “[a]ssuming that defendant possessed only the documentation alleged (e.g. –

reports from coworkers declaring Plaintiff’s competence), a reasonable inference could be made

that Defendant had knowledge that the submitted report was ‘false,’ because the documents did

not substantiate the conclusions in the report.” Id.

Here, Plaintiffs similarly allege that the bases provided in the Reports to the NPDB and

DCA were pretextual. See FAC ¶ 300. Plaintiffs allege that the bases for termination provided in

the Reports – that Dr. Alexander exhibited “substandard or inadequate care” and “professional

misconduct which relates adversely to patient safety,” see id. ¶ 533, – were false. See id. ¶¶ 532,

533. Plaintiffs further allege that HMH knew the information in the Reports was false, id. ¶¶ 533,

and that the real reason HMH terminated Dr. Alexander’s privileges was to eliminate his

competition with the NYU Group and ruin Plaintiffs’ business. See e.g., id. ¶¶ A, 404, 409. Putting

forward more support for this theory, Plaintiffs allege that the Appellate Panel effectively

exonerated Dr. Alexander from each of the MEC’s charges. Id. ¶ 241-57. Plaintiffs further allege

that, despite the Appellate Panel’s findings, the Executive Committee circumvented normal

procedures and suspended Dr. Alexander based on the new Falsification Charges without affording

Dr. Alexander the benefit of the multiple hearings ordinarily required under the Bylaws. Id.

262-93; id. §] 300. These allegations support a reasonable inference that the Reports contain

pretextual — i.e., false — justifications for HMH’s termination of Dr. Alexander’s clinical privileges

and that HMH knew such justifications were pretextual. Accordingly, the Court denies

Defendants’ motion to dismiss Plaintiffs’ trade libel claims based on the HCQIA’s reporting

immunity. Moreover, based on the same allegations, the Court finds that a reasonable inference

can be made that the Reports were not made “in good faith and without malice” such that the Court

will also deny Defendants’ motion to dismiss Plaintiffs’ trade libel claims based on the Cullen

Act’s reporting immunity.

V. CONCLUSION

Defendants’ motion to dismiss, D.E. 8, is granted in part and denied in part. Defendants’

motion is denied except for its motion as to defamation under Count Eight. Count Eight is

dismissed without prejudice, and Plaintiffs have thirty (30) days to file an amended complaint that

cures the deficiencies noted herein. If Plaintiffs fail to file an amended complaint within the time

allotted, the Count Eight will be dismissed with prejudice. An appropriate Order accompanies this

Opinion.

Dated: September 29, 2020

Johh Michael Vazquez, U. DJ □

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