MD’s Appeal in PHP, Medical Board Lawsuit Denied
September 19, 2017
An appeal by a physician whose lawsuit against the North Carolina Physician Health Program (NCPHP) and the North Carolina Medical Board (NCMB) was thrown out by a lower court last November has been denied. But Kernan Manion, MD, is pursuing an “alternate route to justice.”
Following the lower court ruling, Dr Manion, a practicing psychiatrist for some 30 years, appealed his case to the US Court of Appeals for the Fourth Circuit, a court second only to the US Supreme Court. His lawsuit claimed loss of significant and potential earnings as well as public humiliation, irreparable harm to his professional reputation, and severe emotional distress.
The court found that Dr Manion’s appeal exceeded the statute of limitations and therefore could not be heard.
“The court strictly enforces the time limits for filing petitions for rehearing and petitions for rehearing en banc in accordance with Local Rule 40(c). The petition in this case is denied as untimely. The court denies the motion for leave to file the petition for rehearing out of time,” the order reads.
Dr Manion told Medscape Medical News he wasn’t surprised by the decision and maintains that the medical board and NCPHP deliberately employed stall tactics to “eat up the statute of limitations window.
“The law is structured in such a way that automatic deference is given to these licensing bodies ― medical boards and PHPs ― both at the state level and the federal level, and precedent is so greatly in their favor,” said Dr Manion.
He has no plans to pursue his case in the US Supreme Court.
“The bottom line is that it can’t be won in court, anywhere really, when you get right down to it. That’s because these agencies claim sovereign immunity,” he said.
Sovereign Immunity for PHPs
However, Dr Manion is pursuing another route ― allegations of anticompetitive practices.
In light of a US Supreme Court ruling in favor of the Federal Trade Commission (FTC) against the North Carolina Dental Board, he has written to the FTC in the hope that a comprehensive investigation will be launched in his case so that “this harmful anticompetitive civil rights and due process-denying behavior will be halted.”
As previously reported by Medscape Medical News, Dr Manion’s case dates back to September 2009, when he worked as a civilian psychiatrist under contract with the Deployment Health Center at Naval Hospital Camp Lejeune, in Jacksonville, North Carolina. After he raised concerns with the Navy and a personnel contractor about what he believed was dangerously deficient care of active duty service members who had posttraumatic stress disorder, he was dismissed.
He brought a wrongful termination suit under the federal Whistleblower Protection Act alleging retaliatory discharge. He said he was later harassed and followed, actions that prompted him to meet with the local police chief about concerns for his personal safety.
Shortly thereafter, Dr Manion said he was notified by the NCMB that an anonymous police source had expressed concern about his mental health and that, on the basis of these concerns, the NCMB was opening an investigation.
On a recommendation from the NCMB investigator, Dr Manion obtained an independent comprehensive psychological evaluation, which concluded that he did not have any mental disorder or impairment and that there was no basis to take any action that would restrict his medical license.
Despite this, the NCMB ordered its own assessment of Dr Manion. This assessment, carried out by Warren Pendergast, MD, who was then NCPHP chief executive officer and medical director, as well as a staff social worker, concluded that Dr Manion was mentally ill.
In his initial lawsuit, Dr Manion, who had never previously been disciplined by any licensing body, said he was forced to deactivate his medical license after the NCMB acted upon “wrongful and flawed” diagnoses made through the NCPHP.
Dr Manion’s case was originally dismissed in federal district court because the complaint was deemed to be outside of the statute of limitations and because the court considers that as a state institution, the NCPHP has “sovereign immunity” and therefore cannot be sued.
The NCMB said in a statement issued to Medscape Medical News that it “was gratified, but not surprised by the United States Court of Appeals’ decision that affirmed the dismissal of Dr Manion’s lawsuit. That decision, like the decision of the United States District Court, was well-reasoned and well-supported by precedent.
“The North Carolina Physicians Health Program has done much great work to improve the lives of North Carolina physicians who suffer from mental illness and substance abuse. We look forward to continuing that important work with the Physicians Health Program in the future.”
Similarly, Joseph P. Jordan, PhD, clinical director of the NCPHP, said the organization “was pleased that the US Court of Appeals for the Fourth Circuit affirmed the United States District Court’s sound reasoning in its dismissal of Dr Manion’s lawsuit.”
“Alternate Route to Justice”
While his appeal was being considered, Dr Manion studied the decision in the case North Carolina State Board of Dental Examiners v. Federal Trade Commission, which was heard by the US Supreme Court.
In that case, the FTC filed a complaint against the North Carolina State Board of Dental Examiners alleging that the board was preventing entrepreneurs from offering tooth-whitening services in shopping mall kiosks and were claiming that these groups were practicing dentistry without a license.
The FTC argued that the dental examiners board’s actions constituted an unreasonable restraint of trade by stifling market competition under the Sherman Antitrust Act and that its actions constituted unfair restraint of competition under the Federal Trade Commission Act.
Lower courts determined that state immunity did not apply because the action taken by the board was not actively supervised by the state. The case went to the US Supreme Court, which, in 2015, sided with the FTC.
“The Supreme Court ruled that the dental board doesn’t even meet the criteria to be a state agency eligible to claim sovereign immunity,” said Dr Manion.
“That case was seminal in establishing the necessity of state occupational licensing boards having active government oversight, and it also found that [the] NC dental [board] committed antitrust violations.”
He sees parallels with his own case and that of other physicians across the country, many of whom have been “grievously harmed” by the actions of PHPs and related organizations, he claims.
These actions have jeopardized the health and well-being of patients “by wrongfully depriving them of these physicians’ competent and compassionate care,” he wrote in a letter to the FTC.
In the letter, Dr Manion laid out what he called “the strongest argument yet” for challenging “the pattern of severe and harmful anticompetitive activity” being undertaken by the NCMB, the NCPHP, and the North Carolina Medical Society.
“I tried to point out that this isn’t a disciplinary matter. This is an anticompetitive, anticonsumer matter,” said Dr Manion. “What PHPs have done around the country is coalesce around this false AA [Alcoholics Anonymous] model and are sending people to their preferred institutions out of state, and so they’re running a racket.”
Dr Manion hopes this strategy will offer him an “alternate route to justice.”
Dr Jordan said the NCPHP sees “no merit in commenting upon Dr Manion’s effort to draw hypothetical parallels to a case involving other federal and state agencies.”
For its part, the NCMB said that “since we have yet to see or receive a complaint, it’s impossible to comment. And unless or until NCMB receives a complaint, we will not engage in an academic discussion of FTC v Dental Board.”
Those wishing to lodge complaints with the FTC should contact Alan Friedman at AFRIEDMAN@ftc.gov.