B. Vittal Shenoy v. Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas HealthCare System

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-1786
B. VITTAL SHENOY,
Plaintiff – Appellant,
v.
CHARLOTTE-MECKLENBURG HOSPITAL AUTHORITY, d/b/a Carolinas
HealthCare System; MERCY HEALTH SERVICES, INCORPORATED; MERCY
HOSPITAL, INCORPORATED; CAROLINAS PATHOLOGY GROUP, PA,
Defendants – Appellees,
and
JAMES E.S. HYNES; MICHAEL C. TARWATER; PAUL S. FRANZ; C. CURTIS
COPENHAVER; WILLIAM K. BROWN; DENNIS J. PHILLIPS; EDWARD H.
LIPFORD, M.D.; MARIE-CLAIRE C. MARROUM, M.D.; FILMON M. SEXTON,
M.D.; SANFORD P. BENJAMIN, M.D.; THE CHS BOARD OF COMMISSIONERS;
PATHOLOGY ASSOCIATES SERVICES, INCORPORATED,
Defendants.
------------------------------
ASSOCIATION OF AMERICAN PHYSICIANS AND SURGEONS, INCORPORATED,
Amicus Supporting Appellant.
Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Graham C. Mullen,
Senior District Judge. (3:08-cv-00125-GCM-DCK)
Argued: March 22, 2013 Decided: May 13, 2013

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Before SHEDD and FLOYD, Circuit Judges, and Joseph R. GOODWIN,
United States District Judge for the Southern District of West
Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: Mark Jay Prak, BROOKS, PIERCE, MCLENDON, HUMPHREY &
LEONARD, Raleigh, North Carolina, for Appellant. Charles Evans
Johnson, ROBINSON, BRADSHAW & HINSON, PA, Charlotte, North
Carolina; William H. Sturges, SHUMAKER LOOP & KENDRICK, LLP,
Charlotte, North Carolina, for Appellees. ON BRIEF: Julia C.
Ambrose, Eric M. David, BROOKS, PIERCE, MCLENDON, HUMPHREY &
LEONARD, L.L.P., Raleigh, North Carolina, for Appellant. Susan
Miller Huber, ROBINSON, BRADSHAW & HINSON, PA, Charlotte, North
Carolina, for Appellees Charlotte-Mecklenburg Hospital
Authority, d/b/a Carolinas HealthCare System, Mercy Health
Services, Incorporated, and Mercy Hospital, Incorporated.
Frederick M. Thurman, Jr., SHUMAKER LOOP & KENDRICK, LLP,
Charlotte, North Carolina, for Appellee Carolinas Pathology
Group, PA. Andrew L. Schlafly, Far Hills, New Jersey, for
Amicus Curiae.
Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Dr. Vittal Shenoy filed suit against Carolinas Healthcare
Systems (CHS) and Carolinas Pathology Group (CPG), alleging
several claims arising from the termination of his employment.
The district court granted summary judgment to the defendants,
and we affirm.
I.
Because the district court granted summary judgment to CPG
and CHS, we view the facts in the light most favorable to
Shenoy. Glynn v. EDO Corp., 710 F.3d 209, 213 (4th Cir. 2013).
Shenoy is a licensed pathologist in North Carolina. He began
practicing pathology in Charlotte at Mercy Hospital. In 1992,
Shenoy and a partner formed the Medical Laboratory Consultants
of Charlotte, P.A. (MLCC), to provide pathology services to
Mercy Hospital at its two campuses, Main and Pineville. Shenoy
was the resident pathologist at Pineville, and his partner was
stationed at Main. In 1995, CHS purchased Mercy Hospital and
renamed its two campuses Carolinas Medical Center-Mercy (CMC-
Mercy) and Carolinas Medical Center-Pineville (CMC-Pineville).
CHS also operated two other hospitals in the area, CMC-
University and CMC-Main. In addition to MLCC, CHS also
contracted with CPG for pathology services. In 1998, CHS
decided to award pathology services to a single entity and
invited CPG and MLCC to bid for the award. During the bidding

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process, Shenoy filed a corporate compliance complaint, alleging
that CPG engaged in improper billing practices. CHS ultimately
chose CPG for its pathology contract, and CPG thereafter offered
employment to Shenoy’s MLCC partner, but not Shenoy. CMC-
Pineville’s director, Curtis Copenhaver, intervened on Shenoy’s
behalf, and CPG eventually hired Shenoy. Shenoy remained at
CMC-Pineville as an employee of CPG and was named the Medical
Director of Laboratory at CMC-Pineville.
While at CMC-Pineville, Shenoy took a leading role on the
hospital’s peer review committees. Committee membership was
voluntary; committee members received no compensation and were
permitted to resign at any time. Neither CPG nor CHS supervised
the committee. Shenoy volunteered to serve on CMC-Pineville’s
Medical Staff Quality Improvement Committee (MSQIC), which was
responsible for peer review, and its Sentinel Events Committee
(SEC), which addressed incidents of patient death or injury
resulting from medical care. Shenoy chaired the MSQIC, and, as
a result, often reported at meetings of the Medical Executive
Committee (MEC).
Shenoy’s relationship with CHS began to deteriorate in
March 2005. At a March 9, 2005, meeting of the MSQIC, which
Copenhaver and several other administrators attended, Shenoy
criticized CMC-Pineville’s administration for what he viewed as
systemic failures leading to an alarming number of sentinel

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events. Shenoy also complained that the administration was
placing too much blame for these events on physicians. Shenoy
next appeared at the March 15, 2005, meeting of the MEC to
repeat his concerns. Several hospital administrators in
attendance felt that Shenoy’s behavior was unprofessional and
damaged his relationship with CHS. Shenoy concedes that he
raised his voice at the meetings, and provided the following
description during his deposition:
[I]t was like a ten minute - you know, it was a bully
pulpit. I was the chairman and, you know, I used the
opportunity to, you know, reprimand individuals who
were interfering with the physician jury process,
trying to absolve themselves of any responsibility for
their own actions.
(J.A. 424-25.)
The day after the MSQIC meeting, Shenoy sent an email to
two associates apologizing for his behavior at the meeting,
explaining:
I am sorry you gals had to witness a mess yesterday. .
. . If you have a lower opinion of me I’m sorry I
could not prevent that—I guess just like the Broadway
tune—I gotta be me, I gotta be me.
(J.A. 457)
After Shenoy’s comments at the meeting, Copenhaver decided
that Shenoy was no longer employable at CMC-Pineville.
Copenhaver thus requested that CPG remove Shenoy from his role
at Pineville due to “personal attacks in open medical staff
meetings on administration and hospital staff and due to lack of

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support of CMC-Pineville and CHS.” (J.A. 284). Copenhaver
verbally requested that Shenoy not be assigned to Pineville or
CMC-Mercy. In response, CPG attempted to reassign Shenoy but
was unable to come to an agreement with him. Shenoy believed
that any reassignment would have also limited his ability to sit
on committees, a result he could not tolerate. Eventually, CPG
terminated Shenoy’s employment.
Unrelated to these events, in October 2003, Shenoy filed a
sealed qui tam action under the False Claims Acts against CPG
for several of its billing practices. Shenoy did not inform
anyone of the complaint and eventually he voluntarily dismissed
it. While there is no evidence in the record that CHS was aware
of the qui tam action, there is some evidence several
administrators were aware that there was an investigation by the
federal Office of the Inspector General (“OIG”) into CPG. OIG
never revealed the nature of the investigation or the
complainant. In February 2005, OIG informed CPG that the
investigation was closed.
Shenoy filed this action in federal court, eventually
pursuing just three claims: (1) a 42 U.S.C. § 1983 claim against
CHS and CPG for First Amendment retaliation; (2) a tortious
interference claim against CHS for disrupting his employment
contract with CPG; and (3) a retaliation claim against CPG under
the False Claims Act, 31 U.S.C. § 3729. Following discovery,

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the district court orally granted CHS’s motion for summary
judgment on all three claims. Shenoy filed a timely appeal, and
we possess jurisdiction under 28 U.S.C. § 1291.
II.
The district court granted summary judgment to CHS and CPG.
We review this decision de novo. Hardwick ex rel. Hardwick v.
Heyward, -- F.3d --, 2013 WL 1189306, *4 (4th Cir. 2013).
Summary judgment is appropriate if the “materials in the
record,” when construed in favor of the nonmoving party, “show[]
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). “In conducting our review, we do not weigh the
evidence, but rather we only determine whether there is a
genuine issue for trial.” Hardwick, -- F.3d at –-, 2013 WL
1189306, at *4 (internal quotation marks omitted). Applying
this standard, we review each of Shenoy’s claims in turn.
A.
Shenoy first contests the grant of summary judgment on his
First Amendment retaliation claim. In this claim, Shenoy
contends that CHS violated his First Amendment rights by
terminating him in retaliation for speaking out during the
committee meetings.

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The Supreme Court has recognized that public employees* may
not “constitutionally be compelled to relinquish the First
Amendment rights they would otherwise enjoy as citizens to
comment on matters of public interest.” Pickering v. Bd. of
Educ., 391 U.S. 563, 568 (1968). However, the First Amendment
“does not require a public office to be run as a roundtable for
employee complaints over internal office affairs.” Connick v.
Myers, 461 U.S. 138, 149 (1983). We thus apply a three-part
test for determining whether a public employer has engaged in
unlawful retaliation under the First Amendment. First, we
discern “whether the public employee was speaking as a citizen
upon a matter of public concern or as an employee about a matter
of personal interest.” McVey v. Stacy, 157 F.3d 271, 277 (4th
Cir. 1998). Next, assuming an employee can meet the public
concern prong, we must determine “whether the employee’s
interest in speaking upon the matter of public concern
outweighed the government’s interest” in managing the working
environment. Id. If the employee has satisfied these two
requirements, we then examine “whether the employee’s speech was
a substantial factor” in his termination. Id. at 277–78.
* Although Shenoy is employed by CPG and only has staff
privileges at CHS, we use the public employee framework for
analyzing his claim. See Bd. of County Comm’rs v. Umbehr, 518
U.S. 668, 677 (1996); Braswell v. Haywood Reg’l Med. Ctr., 234
Fed. App’x 47, 53 (4th Cir. 2007) (unpublished).

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The first McVey criterion, whether the speech addressed a
matter of public concern, is “the threshold question.” Rankin
v. McPherson, 483 U.S. 378, 384 (1987). If an employee’s speech
“cannot be fairly characterized as constituting speech on a
matter of public concern, it is unnecessary for us to
scrutinize” the basis for the employee’s termination. Connick,
461 U.S. at 146. We look at the speech’s content, form, and
context to determine if it addresses a matter of public
concern. Id. at 147-48.
In Garcetti v. Ceballos, 547 U.S. 410 (2006), the Court
refined Connick by holding that some speech is never on a matter
of public concern—in that case, an internal memo circulated by a
deputy prosecutor. The Court began by generally concluding that
both Garcetti’s choice to express his views at work and the fact
that the memo related to Garcetti’s employment were not
“dispositive.” Garcetti, 547 U.S. at 420-21. Instead, what was
“dispositive” was the fact that “his expressions were
made pursuant to his duties.” Id. at 421 (emphasis added).
Thus, Garcetti “asked a preliminary question: was the expression
something done pursuant to the employee’s professional duties?
If so, then the First Amendment has no application.” Davis v.
Cook County, 534 F.3d 650, 653 (7th Cir. 2008).
In this case, the district court concluded that Shenoy’s
speech at the committee meetings fell within the ambit

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of Garcetti and is unprotected under the First Amendment. The
court found the statements at issue “were all made pursuant to
his duties as chair of the [MSQIC] at the official meetings of
the MSQIC and the Medical Executive Committee” and were “thus
precisely the sorts of comments made . . . pursuant to official
duties.” (J.A. 838).
We find no error in the district court’s analysis.
Under Garcetti, the “ultimate question in determining whether
speech falls within an employee’s official duties is ‘whether
the employee speaks as a citizen or instead as a government
employee.’” Rohrbough v. Univ. of Colo. Hosp. Auth., 596 F.3d
741, 746 (10th Cir. 2010) (quoting Brammer-Hoelter v. Twin Peaks
Charter Acad., 492 F.3d 1192, 1203 (10th Cir. 2007)). Shenoy
argues that because his committee work was voluntary and unpaid,
it could not be part of his professional duties. We disagree.
Speech that is “‘not explicitly required as part of [an
employee’s] day-to-day job’ may nevertheless fall within the
scope of that employee’s official duties.” Id. at 749
(quoting Green v. Bd. of County Comm’rs, 472 F.3d 794, 800-01
(10th Cir. 2007)). We believe Shenoy’s speech falls within this
category; Shenoy’s statements came at a committee meeting he was
chairing and then at an MEC meeting he attended in his role as
chairman of the MSQIC. The comments were not made in public and
were made to people farther up the chain-of-command at CHS. Id.

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at 747 (“speech directed at an individual or entity within an
employee’s chain of command is often found to be pursuant to
that employee’s official duties”).
While Shenoy’s roles on the committees were voluntary, once
he accepted those roles, his service became part of his duties
and his speech became covered by Garcetti. We accordingly
affirm the district court’s grant of summary judgment to CHS and
CPG on this claim.
B.
Next, Shenoy contests the grant of summary judgment on his
tortious interference with contract claim. This claim is only
against CHS, and Shenoy alleges that CHS interfered with his
contract with CPG, ultimately causing CPG to terminate his
employment. The elements of a tortious interference claim in
North Carolina are:
(1) a valid contract between the plaintiff and a third
person which confers upon the plaintiff a contractual
right against a third person; (2) the defendant knows
of the contract; (3) the defendant intentionally
induces the third person not to perform the contract;
(4) and in doing so acts without justification; (5)
resulting in actual damage to [the] plaintiff.
United Lab., Inc. v. Kuykendall, 370 S.E.2d 375, 387 (N.C.
1988).
Although Shenoy was employed by CPG, he served as the
pathologist at CMC-Pineville pursuant to the Pathology Services
Agreement (PSA) between CHS and CPG. The PSA required CPG to

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“provide for each Hospital a Specialist qualified to serve as
the Medical Director of the Department of Pathology.” (J.A.
860). The Director had to be acceptable to the hospital and
“remain satisfactory to Hospital in the performance of his or
her administrative duties,” (J.A. 861). If the hospital
informed CPG that the Director was no longer satisfactory, CPG
was required to “take such action” that was “reasonably
approved” by the hospital. (J.A. 861).
In granting summary judgment to CHS on this claim, the
district court determined that, under the PSA, CHS had the
absolute right to request Shenoy’s removal. The “absolute
rights” theory stems from Kelly v. Int’l Harvester Co., 179
S.E.2d 396, 403 (N.C. 1971).
In Kelly, a general manager at a franchise sued after the
franchisor informed the franchisee that it had to fire the
plaintiff or risk having its franchise terminated. The
franchise contract provided that the franchisor had the
unilateral right to request changes in management. Given this
contractual right, the Kelly court held that any interference by
the franchisor could not be a tort, explaining that “neither the
exercise nor the threat to exercise a legal right may be
considered tortious conduct.” Id. The court then adopted the
following recitation of that standard:

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Absolute rights, including primarily rights incident
to the ownership of property, rights growing out of
contractual relations, and the right to enter or
refuse to enter into contractual relations, may be
exercised without liability for interference without
reference to one’s motive as to any injury directly
resulting therefrom. . . . In other words, acts
performed with such an intent or purpose as to
constitute legal malice and without justification,
which otherwise would amount to a wrongful
interference with business relations, are not tortious
where committed in the exercise of an absolute right.
45 Am.Jur.2d, Interference § 23.
Id.
We agree with the district court that, because CHS’s
contract with CPG gave it the authority to request Shenoy’s
removal if he was no longer “satisfactory” to CHS, CHS’ decision
to “exercise” that “legal right” is not tortious conduct. Id.
On appeal, Shenoy relies on a latter case, Smith v. Ford Motor
Co., 221 S.E.2d 282 (N.C. 1976), that is, as the district court
noted, “highly distinguishable.” (J.A. 843). In Smith, the
contract at issue did not give the defendant the unfettered
right to remove the plaintiff—instead the contract provided for
the plaintiff’s removal only if “unsatisfactory” “from the
standpoint of profits earned or the manner of operation of the
corporation.” Smith, 221 S.E.2d at 285 (emphasis omitted).
Based on this language, the court found that “dissatisfaction
for the stated reasons was intended by the parties to be
the only justification” for the plaintiff’s removal and that,
accordingly, Kelly did not apply. Id. at 291 (emphasis in

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original). In contrast to Smith, but like Kelly, the PSA gave
CHS the right to request Shenoy’s removal if he was no longer
satisfactory in his duties—a broader contractual right than at
issue in Smith.
Moreover, even assuming Kelly does not control, we believe
summary judgment on this count was still appropriate. North
Carolina makes a distinction in tortious interference cases
between defendants who are “outsiders” and “non-outsiders” to
the relevant contract. An outsider is:
one who was not a party to the terminated contract and
who had no legitimate business interest of his own in
the subject matter thereof. Conversely, one who is a
non-outsider is one who, though not a party to the
terminated contract, had a legitimate business
interest of his own in the subject matter.
Id. at 292. “[N]on-outsiders often enjoy qualified immunity
from liability for inducing their corporation or other entity to
breach its contract with an employee,” although this privilege
may be “lost” if it is “exercised for motives other than
reasonable, good faith attempts to protect the non-outsider’s
interests in the contract interfered with.” Lenzer v. Flaherty,
418 S.E.2d 276, 286 (N.C. Ct. App. 1992).
In this case, CHS would be a non-outsider because, while
not a party to CPG’s employment contract with Shenoy, it had a
legitimate business interest of its own in the subject matter.
Given its status as a non-outsider, CHS receives a qualified

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privilege that is lost only if CHS acted with malicious motives.
Shenoy has not produced sufficient evidence to suggest that
CHS’s actions are anything other than a “good faith attempt” to
protect its “interests.” Even accepting Shenoy’s position that
his behavior at the committee meetings was not disruptive,
Shenoy has not put forth evidence to rebut CHS’s argument that
Shenoy’s removal was due to a lack of support at CMC-Pineville
and a concern about maintaining a collegial work environment—
both of which are legitimate business interests. Accordingly,
we affirm the grant of summary judgment on this claim as well.
C.
Finally, Shenoy challenges the grant of summary judgment on
his FCA retaliation claim. To state a claim for FCA
retaliation, a plaintiff must prove “that (1) he took acts in
furtherance of a qui tam suit; (2) his employer knew of these
acts; and (3) his employer discharged him as a result of these
acts.” Zahodnick v. Int’l Bus. Machines Corp., 135 F.3d 911,
914 (4th Cir. 1997). The district court found that Shenoy could
not prove causation (the third element) because, accepting his
evidence, CPG knew that he was a qui tam relator “long before
his date of termination.” (J.A. 848). In the alternative, the
court held that CPG demonstrated a legitimate non-retaliatory
reason for the discharge and Shenoy failed to show that the
justification was “not worthy of belief.” (J.A. 848).

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We affirm the district court’s conclusion. CPG has
consistently argued that no one at CHS or CPG knew that Shenoy
had filed a qui tam complaint. To rebut this argument, Shenoy
pointed out that CPG was aware in 1998 that Shenoy advised CHS
of possible improper billing, that between 1998 and 2002 he told
two CPG physicians that he was concerned about improper billing;
and that in 2000 he told one CPG physician that he was preparing
a possible qui tam action. We have serious doubts that this
evidence is sufficient to show that CPG “knew” of Shenoy’s acts
“in furtherance” of his qui tam suit. Zahodnick, 135 F.3d at
914. Even assuming otherwise, however, these events all
significantly predate Shenoy’s termination in 2005. “The cases
that accept mere temporal proximity between an employer’s
knowledge of protected activity and an adverse employment action
as sufficient evidence of causality. . . uniformly hold that the
temporal proximity must be very close.” Clark County Sch. Dist.
v. Breeden, 532 U.S. 268, 273 (2001). Here, the temporal
proximity is several years, which is simply not “very close” in
time.
To avoid this conclusion, Shenoy argues that the relevant
date is not the filing of his action, but rather the date on
which OIG closed its investigation—February 2005. This argument
is without merit; an employer retaliates under the FCA when it
discharges an employee “as a result of” the employee taking

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actions under the FCA. Zahodnick, 135 F.3d at 914. The focus
is on the employer’s response to Shenoy’s actions, not OIG’s
actions. Accepting Shenoy’s evidence, CPG knew of Shenoy’s
actions by 2002, at the latest, more than three years before his
termination. We thus agree with the district court’s conclusion
that Shenoy cannot show causation and affirm its grant of
summary judgment to CPG on this claim.
III.
For the foregoing reasons, we affirm the district court’s
grant of summary judgment to CHS and CPG.
AFFIRMED

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