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Medici v. Lifespan Corp.

United States District Court, D. Massachusetts

March 6, 2017




         Plaintiff Damian Medici filed his complaint on February 17, 2016, alleging that Defendants violated contractual obligations and federal regulations while investigating him for research misconduct, resulting in the loss of his employment and research grants. [ECF No. 1]. On April 8, 2016, Defendants filed a motion to dismiss, arguing that the Court lacks personal jurisdiction over some of the defendants and that Plaintiff failed to exhaust his administrative remedies. [ECF No. 11]. The Court held a hearing on the motion on November 17, 2016. Following the hearing, Plaintiff voluntarily dismissed two individual defendants, Peter Snyder and John Murphy. [ECF No. 33]. For the reasons stated below, the Court grants the motion to dismiss in part. Rhode Island Hospital is dismissed as a defendant, and the case is stayed pending the outcome of the administrative agency review.

         I. BACKGROUND

         A. Factual Background[1]

         Medici is a research scientist in the field of cell biology. He received graduate training at Harvard University and worked in various laboratories at Harvard for ten years. In 2012, Lifespan Corporation recruited Medici from Harvard to take a position at Rhode Island Hospital (“RIH”), which is affiliated with Lifespan. Medici began working for Lifespan in July 2012 as an at-will employee. In this position, he led his own laboratory, researching cell biology and regenerative medicine. Medici subsequently entered into a new employment contract with Lifespan that was to be in effect from January 1, 2014 through June 30, 2019. During the term of the contract, Lifespan was only entitled to terminate Medici's employment “for cause.” In addition to his research position at the hospital, Medici was also appointed as an assistant professor of medicine at Brown University.

         Medici alleges that in early 2014, Michael Susienka, a Brown University graduate student who had been working in Medici's laboratory, attempted to use Medici as a scapegoat for the fact that Susienka, a doctoral student, was struggling. Medici alleges that Susienka broke into Medici's locked office, accessed his computer without authorization, and took unpublished manuscripts and data files without permission. Medici also claims that Susienka tampered with image files to support false allegations of misconduct. Susienka then approached Peter Snyder, the chief research officer of Lifespan, to accuse Medici of misconduct. Susienka's allegations focused on manuscripts describing research that Medici performed at Harvard, in which Medici may have used incorrect images. Medici claims that incorrect images in research papers due to clerical errors are not uncommon in the field.

         In April 2014, Snyder convened a committee to investigate the allegations of misconduct. Medici claims that Snyder was biased against Medici and that he had “enlisted” Susienka to try to “set up” Medici by tampering with activities in his laboratory. On April 9, 2014, Snyder informed Medici that an inquiry committee had been convened and indefinitely suspended Medici pending the results of the inquiry. The committee interviewed Medici on April 21, 2014. On May 6, 2014, Snyder sent Medici a letter with the inquiry committee's report, which recommended a formal investigation.

         An investigation committee was convened in May 2014. The committee interviewed Medici on October 7, 2014. On May 20, 2015, the investigation committee issued its preliminary report, which made a finding that Medici had committed research misconduct. Medici submitted a response on July 3, 2015. On August 18, 2015, Medici received the committee's final report, and he was notified on September 9, 2015 that his employment with Lifespan would be terminated effective September 24, 2015.

         Medici alleges that the inquiry and investigation procedure violated federal regulations and general due process expectations in a number of respects. As examples, Medici asserts that Snyder exercised undue influence over the investigation, that Medici was not given adequate notice of the inquiry nor a sufficient opportunity to respond, that his suspension violated procedural requirements, that the defendants attempted to destroy the audio recording of his April 21, 2014 interview, that the transcripts of his October 7, 2014 interview contained an “overwhelming” number of errors, and that the investigation was not completed within the required 90-day timeframe. Medici also alleges that Snyder and others failed to keep the investigation confidential, in violation of regulatory requirements. Medici claims that the inquiry committee and investigation committee credited fraudulent evidence and ignored exculpatory evidence, and thus, the finding of misconduct was unreasonable.

         Medici further alleges that the suspension, and ultimately termination, of his employment caused serious damage to his career. The grants that Medici had received were reassigned, and he has been unable to perform research. He is also unable to access data to apply for new grants, and does not have a host institution through which to apply for grants. The allegations made against him, and the finding of misconduct, has damaged his reputation to the point that he may not be able to acquire federal funding again. Furthermore, without grant funding, Medici is unlikely to be able to transition to another academic institution.

         Medici's complaint alleges breach of contract and the implied covenant of good faith and fair dealing; defamation; tortious interference with advantageous relations; intentional infliction of emotional distress; and violations of the Stored Communications Act, 18 U.S.C. § 2701 et. seq.

         B. Parties[2]

         The following facts are relevant to the jurisdictional dispute.

         Defendant Lifespan is a corporation organized under the laws of Rhode Island, with a principal place of business in Providence, Rhode Island. Lifespan's website includes statements indicating that it serves not only Rhode Island, but all of southern New England. For instance, its mission statement is to improve the health status of “the people in Rhode Island and southern New England, ” and that it serves “between 25, 000 and 30, 000 southern New Englanders annually.” Lifespan also describes itself as “a comprehensive health system providing accessible, high-value services to the people of Rhode Island and southeastern New England.” Its website states that Lifespan is a “health system” that was founded by RIH and another hospital.

         Defendant RIH, a Rhode Island non-profit corporation located in and with its principal place of business in Providence, Rhode Island, is a private, 719-bed, acute care hospital. Its only corporate member is Lifespan. On its website, RIH describes itself as “a major trauma center for southeastern New England.” RIH states that it is “a founding partner” of Lifespan. RIH's website also explains that RIH is “home to Hasbro Children's Hospital.” In another area of its website, RIH describes Hasbro as “our pediatric division.” According to the Massachusetts Board of Registration of Medicine, seventeen physicians registered to practice in Massachusetts are affiliated with RIH, four of whom indicate that they practice in Massachusetts.

         Hasbro Children's Hospital is not named as a defendant in this action. The Hasbro website uses a logo directly beneath the Hasbro name which describes Hasbro as “The Pediatric Division of Rhode Island Hospital.” Hasbro opened a multispecialty clinic in Fall River, Massachusetts in September 2014. Hasbro's website states that “[a] team of practitioners” from Hasbro is available to treat patients in the clinic. The website also explains that Hasbro has a partnership with Saint Anne's Hospital in Fall River, Massachusetts and Hasbro physicians care for patients at the Fernandes Center for Children & Families of Saint Anne's Hospital in Fall River.

         Lifespan and RIH share some common officers and directors. Timothy Babineau is the president of Lifespan and a director of both Lifespan and RIH; Mary Wakefield is the treasurer of both Lifespan and RIH; Kenneth Arnold is the secretary for both Lifespan and RIH; Lawrence Aubin, Sr. is the chairman of both Lifespan's and RIH's Board of Directors; and Alan Litwin is the vice chair of both Lifespan's and RIH's Board of Directors.

         Lifespan and RIH were both parties to Medici's employment contract. The institution that received Medici's federal grant money was RIH. Snyder wrote a letter on Lifespan letterhead to the Director of the Division of Investigative Oversight at the Office of Research Integrity (“ORI”) in the U.S. Department of Health and Human Services to inform the office of the initiation of the misconduct investigation concerning Medici. In the letter, Snyder stated that the investigation would occur at RIH. Former defendant John Murphy also used Lifespan letterhead when giving notice to ORI as to the final results of the investigation. The letter has a title referring to “Findings and Actions by Lifespan Corporation/Rhode Island Hospital.” In the letter, Murphy states that he is the “Deciding Official” for Lifespan, of which RIH is “a member hospital.”


         Defendants argue that the Court lacks subject matter jurisdiction over this matter because Medici has failed to exhaust his administrative remedies. When a statutory scheme requires the exhaustion of administrative remedies, a district court lacks jurisdiction to hear the case until the administrative process is complete. See Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 207 (1994) (failure to exhaust administrative remedies “precludes district court jurisdiction”); Ne. Erectors Ass'n of BTEA v. Sec'y of Labor, Occupational Safety & Health Admin., 62 F.3d 37, 39 (1st Cir. 1995). Where Congress has not required exhaustion, the district court may, within its discretion, decline to exercise jurisdiction pending exhaustion. McCarthy v. Madigan, 503 U.S. 140, 144 (1992), superseded by statute on other grounds, 42 U.S.C. § 1997e(a). Medici responds that he has no ability to petition the relevant administrative agency to take additional action, and therefore, he has exhausted the administrative remedies available to him.

         A. Statutory and Regulatory Scheme

         The Office of Research Integrity (“ORI”) within the U.S. Department of Health and Human Services (“HHS”) is tasked with overseeing investigations into allegations of research misconduct pertaining to research supported by federal funding. 42 U.S.C. § 289b. As directed by statute, HHS has developed a detailed regulatory scheme for reviewing allegations of research misconduct.

         Under the regulations, the initial stages of a misconduct investigation occur within the institution that received the funding. The institutional process occurs in two parts. First, if the institution receives a “credible and specific” allegation of research misconduct, the institution initiates an inquiry. 42 C.F.R. § 93.307. The purpose of an inquiry is to “to decide if an allegation warrants an investigation.” Id. The institution is required to complete the ...

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