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Babchuk v. Indiana University Health, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

April 30, 2014

WILLIAM I. BABCHUK, M.D., AND WILLIAM I. BABCHUK, M.D., P.C. D/B/A COMPREHENSIVE MEDICAL IMAGING, Plaintiffs,
v.
INDIANA UNIVERSITY HEALTH, INC., INDIANA UNIVERSITY HEALTH TIPTON HOSPITAL, INC., MICHAEL L. HARLOWE, JOELLEN SCOTT, CARL M. PAFFORD, DIANNA ANDREWS, KEVIN W. CONDICT, MICHAEL E. HARPER, AND RICHARD J. YOUNG, Defendants.

ORDER

JANE MAGNUS-STINSON, District Judge.

Presently pending before the Court is Defendants Indiana University Health, Inc. ("IU Health"), Indiana University Health Tipton Hospital, Inc. ("IU Health Tipton"), Michael Harlowe, Joellen Scott, Carl Pafford, Dianna Andrews, Kevin Condict, Michael Harper, and Richard Young's Motion to Dismiss Plaintiffs Dr. William Babchuk and William Babchuk, M.D., P.C.'s ("Comprehensive Medical Imaging") Complaint for lack of subject matter jurisdiction, [Filing No. 22], Plaintiffs' Request for Oral Argument, [Filing No. 32], and Plaintiffs' Motion to Strike, [Filing No. 33]. Although Defendants' Motion to Dismiss sought dismissal solely pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction, in their reply brief, they request that the Court alternatively treat their motion as one for dismissal for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court addresses the propriety of dismissal under each standard. For the reasons explained, the Court DENIES all three of the parties' motions.

I.

STANDARD OF REVIEW

A. Standard for Rule 12(b)(1) Motion

"Federal Rule of Civil Procedure 12(b)(1) allows a party to move to dismiss a claim for lack of subject matter jurisdiction." Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). The burden is on the plaintiff to prove, by a preponderance of the evidence, that subject-matter jurisdiction exists for his or her claims. See Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003).

B. Standard for Rule 12(b)(6) Motion

The Federal Rules of Civil Procedure require that a complaint provide the defendant with "fair notice of what the... claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007)). In reviewing the sufficiency of a complaint, the Court must accept all well-pled facts as true and draw all permissible inferences in favor of the plaintiff. See Active Disposal Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir. 2011). A Rule 12(b)(6) motion to dismiss asks whether the complaint "contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). The Court will not accept legal conclusions or conclusory allegations as sufficient to state a claim for relief. See McCauley v. City of Chicago, 671 F.3d 611, 617 (7th Cir. 2011). Factual allegations must plausibly state an entitlement to relief "to a degree that rises above the speculative level." Munson v. Gaetz, 673 F.3d 630, 633 (7th Cir. 2012). This plausibility determination is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

II.

BACKGROUND

Plaintiffs allege that Defendants wrongfully terminated Dr. Babchuk's clinical privileges with IU Health Tipton without due process. [Filing No. 1, at ECF p. 1-2.] Specifically, IU Health Tipton's Peer Review Committee recommended that Dr. Babchuk be summarily suspended, and the chair of the Patient Care Review Committee, Mr. Pafford, "accepted the recommendation without any investigation." [Filing No. 1, at ECF p. 11-12.] Moreover, Plaintiffs allege that "Defendants' reports of Plaintiffs' summary suspension to the National Practitioner Data Bank and to the Office of the Indiana Attorney General Licensing Enforcement Unit contained false information and each of the Defendants knew the information was false when they submitted the reports." [Filing No. 1, at ECF p. 2.] Plaintiffs have alleged that Defendants are state actors because IU Health is allegedly formed and controlled by the Trustees of Indiana University, [Filing No. 1, at ECF p. 3], and because IU Health Tipton is a public hospital, [Filing No. 1, at ECF p. 3]. Plaintiffs allege the individual defendants are employees of these alleged public entities. [Filing No. 1, at ECF p. 5.] Based on these alleged violations of Dr. Babchuk's due process rights, Plaintiffs brought the instant § 1983 claim against Defendants. [Filing No. 1, at ECF p. 1-2.]

III.

DISCUSSION

Defendants originally sought dismissal of Plaintiffs' § 1983 claim only for lack of subject-matter jurisdiction under Rule 12(b)(1). [ See Filing No. 22; Filing No. 24.] Defendants argue that jurisdiction is lacking because "Defendants are not state actors nor were they acting under color of state law during the peer review process." [Filing No. 24, at ECF p. 5.] Because "[s]tate action is an essential element of a Section 1983 claim" and ...


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