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Victor L. Yu, M.D v. United States Department of

July 5, 2011

VICTOR L. YU, M.D., PLAINTIFF,
v.
UNITED STATES DEPARTMENT OF VETERANS AFFAIRS, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Maureen P. Kelly

MEMORANDUM OPINION

KELLY, Magistrate Judge

Plaintiff, Victor L. Yu, M.D. ("Dr. Yu"), an employee of the United States Department of Veteran Affairs ("the VA") for over 28 years as both the Chief of Infectious Disease and the Head of the Special Pathogens and Clinical Microbiology Laboratory in Pittsburgh ("the Lab"), has brought this civil action against the United States of America, the VA, the Secretary of Veterans Affairs, Michael E. Moreland ("Moreland"), the Director of the VA Pittsburgh Healthcare System, Rajiv Jain ("Jain"), the Chief of Staff of VA Pittsburgh, Ali Sonel ("Sonel"), the Associate Chief of Staff, Research and Development of VA Pittsburgh, Mona Melhem ("Melhem"), Associate Chief of Staff and Vice President of the Clinical Support Service Line of the VA Pittsburgh, and the Associate Chief of Staff for Research and Development for VA Pittsburgh, Steven Graham ("Graham") (collectively, "Defendants"), following the termination of his employment in August of 2006. Dr. Yu contends that Defendants wrongfully terminated him, vindictively closed the Lab, destroyed the isolates that had been collected, and withheld research funds and equipment from him in violation of his constitutional rights and federal law. Dr. Yu has also brought a state law claim for defamation against Jain.

Presently before the Court is Defendants‟ Motion to Dismiss Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(c) or, in the Alternative, Motion for Summary Judgment. For the following reasons, the motion will be granted.

I. Factual and Procedural Background

Dr. Yu, a board certified physician in internal medicine and infectious diseases, was hired in March of 1978 by the VA Pittsburgh Health Care System as a part-time physician.*fn1 [ECF Nos. 50-1, p. 5; 50-3]. Although he eventually became the Chief of the Infectious Disease Section as well as the Head of the Lab, Dr. Yu maintained his status as a part-time employee throughout his employment with the VA. [ECF Nos. 56-2, ¶ 5; 50-1, pp. 17-18; 50-3]. The Lab, which was established in 1981 following the outbreak of Legionnaires disease at various VA hospitals around the country, was created to support the clinical work of the VA by determining the presence of Legionella bacteria in human isolates from VA patients and water samples from VA facilities. [ECF Nos. 56-2, ¶6; 56-3, pp. 67-69; 56-6, Response 3]. According to Dr. Yu, in 1996 the hospital director, Thomas Capello, designated the Lab as a Special Clinical Resource in order to expand its testing and research services to hospitals and public health agencies throughout the country, including non-VA entities. The work, which ultimately involved the collection of approximately 4000 isolates, was purportedly financed by fees charged to those who submitted specimens for testing and from grants and donations within the industry. See [ECF No. 56-2, ¶14].

In January of 2006, Melhem requested a routine review the Lab‟s clinical productivity and financial expenditures. [ECF Nos. 50-9, p. 4; 50-10, p. 2]. According to Defendants, the review not only revealed that the Lab was unproductive and a "drain" on VA resources but that Dr. Yu‟s research far surpassed what had been authorized by the Research and Development Committee to which all research protocols were to be presented and approved by before the research began. [ECF Nos. 50-9, pp. 4-5; 50-18, ¶ 2.b(2); 50-20; 50-22]. More specifically, Defendants contend that instead of operating for the sole benefit of veterans, Dr. Yu had unilaterally expanded the Lab into a repository for the collection and storage of various Legionella strains and that it had evolved into an unauthorized commercial enterprise operating with a significant financial deficit. [ECF No. 50-9, p. 5]. Dr. Yu, however, contends that the expansion of the Lab‟s work was done with the knowledge and encouragement of senior VA officials and that the decision to close the Lab was based on incomplete and flawed information obtained by Defendants during unprecedented investigations into the Lab‟s productivity and his financial accounts. [ECF Nos. 56-2, ¶¶ 15, 24, 25].

Nevertheless, in June of 2006, the decision was made to close the Lab. Dr. Yu was notified that the Lab would be closed and its operations merged into the main clinical lab in a Memorandum dated July 5, 2006. [ECF No. 50-37]. At the same time Dr. Yu was directed to stop all non-clinical activities, including the testing of outside water samples, by July 10, 2006. Id. Dr. Yu requested, and was granted, an extension of time of two weeks to complete the processing of samples that had already been received. [ECF No. 56-16, pp. 22-23]. Although Dr. Yu was reminded in a Memorandum dated July 18, 2006, that no new patient or water samples should be accepted for testing at the Lab, Dr. Yu instructed his technicians to continue processing specimens that continued to arrive from other hospitals and facilities. [ECF Nos. 50-1, pp. 28-29; 50-39; 50-40]. Defendants contend that as a result of this insubordinate conduct, Dr. Yu was placed on non-duty status with pay on July 21, 2006, and was prohibited from entering the VA facility. [ECF No. 50-41].

In the interim, Dr. Yu spoke to the media contesting the VA‟s decision to close the Lab and to "raise awareness about the effect the closure of the Lab would have on public health." [ECF Nos. 56, p. 17; 56-2, ¶ 30; 56-38]. He also appealed the decision to close the Lab to Moreland in a Memorandum dated July 12, 2006, asking that the reasons for closing the Lab be reduced to writing so that the erroneous information underlying the decision could be refuted. [ECF No. 56-34]. As well, Dr. Yu wrote a letter to Secretary of Veterans Affairs James Nicholson and asked him to intervene. [ECF No. 56-2, ¶ 31]. Both requests, however, apparently went unheeded and the Lab was officially closed on July 21, 2006.

Thereafter it is undisputed that an Administrative Board of Investigation ("ABI") was convened to investigate Dr. Yu and the various concerns associated with the Lab. Notwithstanding Dr. Yu‟s contention that the process by which the ABI was organized and conducted its investigation violated multiple VA policies, the Board‟s report, issued on August 11, 2006, found that Dr. Yu had repeatedly and willfully failed to comply with proper orders of supervisors and that he misrepresented the status of lab projects to a senior VHA official, and recommended that appropriate disciplinary action be taken. [ECF No. 50-33, p. 12]. Dr. Yu‟s employment with the VA was subsequently terminated on August 18, 2006. [ECF No. 56-46, p. 2]. In the letter from Jain advising Dr. Yu of his termination he was also advised that "[i]n accordance with 38 U.S.C. § 7405 (a)(1)(A) you can be involuntarily separated at any time without advanced notice, and you are not entitled to review of the involuntary separation." Id. Dr. Yu alleges that this representation by Jain effectively denied him any right to appeal that he may have had either to the Merit System Protection Board or through internal VA procedures. [ECF No. 56, p. 20].

It is undisputed that after the Lab was closed, Dr. Yu attempted to recover equipment and research funds that he had obtained and "dedicated for use in the Lab." [ECF No. 9, ¶ 52]. Despite Dr. Yu‟s assertion that he maintains an interest in the equipment and funds, Defendants contend that the funds at issue, which were deposited with the Veterans Research Foundation ("VRF"), a nonprofit organization that facilitates medical research and administers funds for VA research, were considered to be the property of the VRF and not any individual investigator. [ECF Nos. 50-26, p. 18; 50-43]. Defendants also represent that the equipment purchased by the VA was transferred to the main clinic lab; that equipment purchased by VRF funds belonged to the VRF and remained with the VA; and that Lab staff members were given the opportunity to transfer off site any other equipment purchased through non-VA funds. [ECF No. 50-9, p. 5].

Dr. Yu also complains that Defendants destroyed his collection of isolates before they could be transferred from the Lab to a laboratory at the University of Pittsburgh despite months of negotiating the necessary steps and proper procedure for doing so. Dr. Yu argues that Defendants‟ actions not only posed a risk to public health but evidences a collective animus toward him. [ECF Nos. 56, p. 22; 56-53; 56-54; 56-57; 56-58]. Defendants, on the other hand, maintain that the staff at the Lab was instructed to provide a complete inventory of the isolates and consolidate them into an ultralow freezer so that they could be moved to the main clinic lab and that the isolates that were properly labeled and stored were, in fact, transferred. [ECF No. 50-45]. Those that were not properly catalogued or were contained in damaged test tubes, were considered bio hazardous material and disposed of accordingly. [ECF Nos. 50-9, p. 5; 50-10, p. 4; 50-12; pp. 10-17; 50-17, pp. 8-9].

Dr. Yu filed a twenty-four count complaint on July 3, 2008, which was amended on August 7, 2008 and again on December 2, 2008. [ECF Nos. 1, 2, 9]. In the Second Amended Complaint ("the Complaint"), Dr. Yu brings a myriad of claims challenging Defendants‟ conduct under the Privacy Act, 5 U.S.C. § 552a(g)(1)(C), the Administrative Procedures Act ("APA"), 5 U.S.C. § 704, and the First and Fifth Amendments to the Constitution, as well as a state law claim for defamation. [ECF No. 9]. Defendants filed a timely Motion to Dismiss Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(c) or, in the Alternative, Motion for Summary Judgment on September 20, 2010, which is now ripe for review.

II. Standard of Review

AFederal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a complaint for lack of jurisdiction over the subject matter, or if the plaintiff lacks standing to bring his claim.@ Samsung Electronics Co. v. ON Semiconductor Corp., 541 F. Supp. 2d 645, 648 (D. Del. 2008). Generally speaking, where the motion presents a facial challenge to the court=s jurisdiction, or one based purely on the allegations in the complaint, the court must accept those allegations as true and may consider only the complaint and any documents upon which it is based. Petruska v. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006). Where, however, subject matter jurisdiction is challenged in fact, i.e., where the challenge is based on the sufficiency of jurisdictional fact, as it is here, the court is not required to attach any presumptive truthfulness to the allegations in the complaint but may consider matters outside the pleadings to satisfy itself that it has jurisdiction. Id. See Carpet Group Int‟l v. Oriental Rug Importers Ass‟n, Inc., 227 F.3d 62, 69 (3d Cir. 2000). In either case, the plaintiff bears the burden of persuasion. Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991).

"Under Rule 12(c), judgment will not be granted unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law." Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008), quoting Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290-91 (3d Cir. 1988) (internal quotation marks and citations omitted). Like a motion filed under Fed. R. Civ. P. 12(b)(6), the Court must view the facts presented in the pleadings and the inferences to be drawn therefrom in the lights most favorable to the nonmoving party." Id. Where, however, matters outside the pleadings are presented to and considered by the Court, the motion is properly converted to one for summary judgment. Id. at 225. See Fed. R. Civ. P. 12(d) ("If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56").

Summary judgment is warranted only where Athe pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law.@ Fed. R. Civ. P. 56(c). The moving party bears the initial burden of demonstrating to the court that there is an absence of evidence to support the non-moving party=s case. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). See Conoshenti v. Public Service Electric & Gas Company, 364 F.3d 135, 140 (3d Cir. 2004). When the moving party has met this burden, the burden then shifts to the nonmoving party to Aset forth specific facts showing that there is a genuine issue for trial.@ Fed. R. Civ. P. 56(e) (2). The mere existence of some evidence favoring the non-moving party, however, will not defeat the motion. There must be enough evidence with respect to a particular issue to enable a reasonable jury to find in favor of the non-moving party. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). See McGreevy v. Stroup, 413 F.3d 359, 363-64 (3d Cir. 2005). In evaluating the evidence at the summary judgment stage, the court must view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in its favor. Matreale v. New Jersey Dep‟t of Military & Veterans Affairs, 487 F.3d 150, 152 (3d Cir. 2007).

III. Discussion

A. Subject Matter Jurisdiction

Defendants initially argue that Dr. Yu‟s complaint should be dismissed for lack of subject matter jurisdiction as his claims are governed by the Civil Service Relief Act ("CSRA"), 5 U.S.C. §§ 7101, et seq., which does not provide for judicial review of the type of employment related issues alleged by Dr. Yu concerning the closure of the lab, his termination, the withholding of equipment and funds, and the destruction of isolates.

Recognizing "the haphazard arrangements for administrative and judicial review of personnel action" that often involved appeals of agency decisions to the district courts, Congress enacted the CSRA as a remedial measure so as to "avoid[ ] an unnecessary layer of judicial review in lower federal courts, and [e]ncourage[ ] more consistent judicial decisions . . . . " United States v. Fausto, 484 U.S. 439, 449 (1988). Finding that the CSRA represents a comprehensive and "elaborate remedial scheme that has been constructed step by step, with careful attention to conflicting policy considerations," the Supreme Court has held that the CSRA provides the exclusive remedy to federal employees for claims challenging adverse employment actions. Bush v. Lucas, 462 U.S. 367, 368, 388 (1983) ("Bush"). See Sarullo v. United States Postal Service 352 F.3d 789, 794-95 (3d Cir. 2003) ("Sarullo") ("The CSRA provides a comprehensive statutory scheme which enables federal employees to obtain remedies for prohibited personnel practices engaged in by federal agencies").

It is undisputed that Dr. Yu was hired as a part-time physician under 38 U.S.C. § 4114(a)(1)(A), the predecessor to 38 U.S.C. § 7405 (covering temporary and part-time appointments under Veterans Health Administration statute), and that part-time VA physicians are generally excluded from the protections and remedies afforded to civil servants under the CSRA. As pointed out by Defendants, part-time VA physicians are noticeably excluded from the definition of "employees" who are permitted to challenge adverse employment actions or personnel actions based upon unacceptable job performance under the CSRA. See 5 U.S.C. §§ 4301(2)(C), 7511(b)(10). Under section 2105(f) of the CSRA, however, part-time VA physicians are considered protected employees in certain limited circumstances, i.e., where a "prohibited personnel practice" has been taken against them. Section 2302(b) delineates twelve specific prohibited personnel actions that entitle a part-time VA physician to review.

Defendants contend that none of Dr. Yu‟s challenged actions fall within any of the twelve exceptions but rather all relate to adverse employment actions or personnel actions based upon unacceptable job performance and, thus, are not reviewable. Dr. Yu, however, points to two of the twelve listed exceptions and argues that they encompass his claims revolving around his termination and the closure of the lab. Specifically, § 2302 provides, in relevant part:

(b) Any employee who has authority to take, direct others to take, recommend, or approve any personnel action, shall not, with respect to such authority--

(8) take or fail to take, or threaten to take or fail to take, a personnel action with respect to any employee or applicant for employment because of-- (A) any disclosure of information by an employee or applicant which the employee or applicant reasonably believes evidences--

(ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety,

* * * or (12) take or fail to take any other personnel action if the taking of or failure to take such action violates any law, rule, or regulation implementing, or directly concerning, the merit system principles contained in section 2301 of this title.

5 U.S.C. §§ 2302(b)(8)(A)(ii); 2302(b)(12). The merit system principles contained in § 2301 ...


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