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Charges Against Coast Hospital/CEO Pile Up

On January 3rd Mendocino Coast Hospital held a special board of directors meeting. The agenda for the meeting appeared straight forward: a short open session to gather public input followed by a closed session regarding a lawsuit filed against the hospital and some of its key, past and present, administrators.

Any number of citizens received the agenda notice regarding this meeting via email. However, during the open session, new board member Amy McColley alleged that Chief Executive Officer Bob Edwards deliberately kept her in the dark about the meeting.

After the meeting McColley stated that she only found out about the meeting because she happened to see a fellow board member while shopping. In the open session, Edwards seemed to hem and haw after McColley's statement. He uttered something about a Brown Act violation.

In further communication on January 4th, McColley said she found out about the meeting on December 28th. She went on to state, “However, it was scheduled and communicated with the BODs [other members of the Board of Directors] on 12/18. I was never polled on my availability and Bob’s intention was always to exclude me from this [meeting].

“I called BBK [ the hospital's law firm] attorney on 12/28 and finally was told at [1 p.m. on January 3rd] to go to the meeting. No one wanted to acknowledge Bob’s egregious behavior.

“I was sworn in on 12/26 and Gayl [Bob Edwards' administrative assistant] asked me in front of Bob if I was coming up for the meeting on 1/3. He corrected Gayl, [saying] 1/10. Next day, 12/27, Karen [fellow board member Karen Arnold] asked me if I was coming to the 1/3 meeting... I met with Bob on 12/28. He didn’t know how to handle the 'special circumstance' and he thought not inviting me was best.”

Edwards made no attempt to deny the gist of McColley's allegation that he (Edwards) had deliberately failed to notice her about the board meeting. Edwards' motivation seems to lie in the fact that McColley was a long time employee of the hospital who resigned her position at or near the time that a disagreement between then Chief Human Resources Officer Ellen Hardin and hospital administration reached a boiling point. McColley went on to work for hospitals in the Bay Area awhile before returning to Fort Bragg.

During the twenty minute public session at the January 3rd meeting, McColley also called for a performance review of Edwards on the board's next regular meeting agenda. Fellow incoming board member John Redding appeared to second this desire. Current board President Steve Lund indicated that such a matter was already scheduled for the January 10th meeting. Such a matter would be noticed to the public, but held in closed session, with a report out afterward.

After more discussion regarding the timing of agenda noticing for board members and some mild blustering from Edwards about his rights being violated, the hospital board moved to closed session to discuss the case of Hardin v. Mendocino Coast District Hospital, Bob Edwards, Wade Sturgeon, and Steve Lund. The case was filed in federal court during September of 2017. The plaintiff, Ellen Hardin, was the Chief Human Resources Officer (CHRO) at Mendocino Coast Hospital (MCDH) until early 2017 (the exact date may be in dispute). Wade Sturgeon was the former Chief Financial Officer (CFO) of the hospital (until autumn, 2017). Edwards is still MCDH's Chief Executive Officer (CEO). Steve Lund has been the President of the MCDH Board of Directors since late 2016.

Hardin's lawsuit alleged fourteen causes of action against the defendants. The allegations are: (1) violations of California Labor Code sections 98.6 and 1102.5; (2) violation of the California False Claims Act, Cal. Gov’t Code §12653; (3) violation of the federal False Claims Act, 31 U.S.C. §3170; (4) violation of the right to free speech under the First Amendment, cognizable through 42 U.S.C. §1983; (5) discrimination based on age and gender, Cal. Gov’t Code §12940(a); (6) associational discrimination, Cal. Gov’t Code §§12940(a), 12926(o); (7) harassment/hostile work environment, Cal. Gov’t Code §12940(j); (8) retaliation (Cal. Gov’t Code §12940(h); (9) failure to prevent harassment, discrimination, and retaliation, Cal. Gov’t Code §12940(k); (10) intentional infliction of emotional distress; (11) negligent infliction of emotional distress; (12) negligent hiring, supervision, and retention; (13) defamation; and (14) a claim under the Private Attorneys General Act, Cal. Labor Code §§ seq.

The fourth, tenth, eleventh, and thirteenth causes of action were asserted against all of the defendants. The seventh was asserted against all Defendants except Lund. All other causes of action were brought only against MCDH.

In court documents released in June, Judge Jon Tigar of the Northern District of California ruled on the defendants' motion to dismiss eight of the causes of action, the second, third, fourth, seventh, tenth, eleventh, twelfth, and thirteenth. That motion was granted in part and denied in part.

The motion was granted, with leave to amend for Ms. Hardin, as to the fourth cause of action for violation of the First Amendment as it related to speech on alleged FEHA (Fair Employment Housing Act) violations; the seventh cause of action for violation of California Government Code section 12940(j); the tenth cause of action for intentional infliction of emotional distress, dismissed for Defendants Lund and Sturgeon only; the eleventh cause of action for negligent infliction of emotional distress; the twelfth cause of action for negligent supervision, hiring, and retention; and the thirteenth cause of action for defamation, as to Defendants Lund and Sturgeon only. The Defendants' (MCDH and its then key administrative figures) motion was denied in all other respects.

Judge Tigar denied the defendants' motion to dismiss the causes of action relating to both federal and state false claims law. The core of these two causes revolves around Hardin's allegation that she complained to Edwards about possible Medicare fraud and that she was retaliated against because of raising such questions.

Relating to the intentional infliction of emotional distress, the judge denied Mr. Edwards' attempt to dismiss. Hardin was also allowed a chance to amend her claim of negligent infliction of emotional distress. The defamation allegations were dismissed against Lund and Sturgeon, but would continue against CEO Edwards. In every cause that Defendants won a dismissal, Plaintiff (Ms. Hardin) was granted a chance to amend the allegation. That meant that some or all of the original allegations might eventually be reinstated.

Since that June ruling, Hardin's attorney did amend the dismissed allegations and the MCDH defendants' law firm filed a motion to dismiss that second amended complaint (SAC). On December 4, 2018, Judge Tigar ruled on the latest motion by the defendants (MCDH et al). The results: The judge reinstated Hardin's First Amendment retaliation cause of action; reinstated Hardin's claim of defamation in regard to former CFO Sturgeon; dismissed a defamation claim against MCDH Board President Lund (but the judge did leave room for Hardin to re-amend this allegation); denied the defendants' motion to dismiss Hardin's harassment claim; Hardin's claim of intentional infliction of emotional distress (IIED) against Lund was dismissed (but again Judge Tigar granted leave to amend the allegation); Hardin's claim of negligent infliction of emotional distress (NIED) was dismissed without leave to amend; the hospital's attempt to have Hardin's IIED claim against the institution was denied; the NIED claim against the hospital was dismissed with prejudice (meaning it cannot be brought up again); and Hardin's negligent supervision, hiring, and retention cause of action was dismissed.

As of January 3, 2019, the two sides were arguing over a motion to quash subpoenas MCDH et al served on institutions where Hardin worked previously. On Jan. 3rd, U.S. Magistrate Judge Thomas Hixson admonished Hardin's attorney about a filing that violated the court's standing order regarding discovery. However, regarding subpoenas MCDH et al served on Hardin's last two employers, Community Regional Medical Center and Antelope Valley Hospital, Judge Hixson “ORDERS [the judge's emphasis] Defendants [MCDH et al] to produce to Hardin the documents produced by Antelope Valley Hospital and Community Regional Medical Center within 30 days so that Hardin may assert any applicable objections.”

Hardin, Edwards, Sturgeon, and Lund are scheduled to be deposed later this month. If you think that puts this case near its conclusion, guess again. The court has recently set up the following timeline: A mediation deadline of April 5, 2019; if mediation fails then “Fact Discovery” will be cut off on July 5th; a deadline for expert disclosures will occur on July 26th, expert rebuttal deadline will be August 16th; expert discovery will be cut off on August 30th; the deadline to file dispositive motions will be September 20th; pretrial conference statements will be due on December 6th; the pretrial conference will be held on December 13th; and if Hardin v. MCDH et al goes to trial, that proceeding will begin January 6, 2020. The estimated length of that trial: fifteen days. 

At the open session of the January 3rd MCDH Board meeting this writer asked these four questions regarding the Hardin matter:

[1] What are the hospital's legal fees regarding the Hardin case up to this date?

[2] What costs is the board projecting, in legal fees, for the 2019 calendar year?

[3] What are the projected costs for the hospital, and the taxpayers who support it, during the trial in 2020?

[4] What would be the total cost to the hospital, and taxpayers, if the Hardin case was settled now?

Hopefully, this predominantly new board of directors can make those calculations relatively quickly and let the public know where it stands in this legal battle.

One Comment

  1. Joan Hansen January 21, 2019

    What a mess and complicated situation. Sadly for those of us who live here it is costly and detracts from the health cars needs of the community.

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