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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-14719
________________________
D.C. Docket No. 1:13-cv-03534-ODE
RONALD E. MOORE, JR.,
Plaintiff - Appellant,
versus
GRADY MEMORIAL HOSPITAL CORPORATION,
FULTON-DEKALB HOSPITAL AUTHORITY,
d.b.a. Grady Health System,
KENNETH J. CARNEY, M.D.,
RAPHEL GERSHON, M.D.,
KELVIN J. HOLLOWAY, M.D., et al.,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(August 19, 2016)
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Before JORDAN and ANDERSON, Circuit Judges, and DALTON, * District
Judge.
JORDAN, Circuit Judge:
Dr. Ronald E. Moore, Jr. appeals the district court’s dismissal of his claims
for race discrimination and retaliation in violation of 42 U.S.C. § 1981. Exercising
plenary review, see Shands Teaching Hospital & Clinics, Inc. v. Beech Street
Corp., 208 F.3d 1308, 1310 (11th Cir. 2000), and with the benefit of oral
argument, we affirm in part and reverse in part.
I
The complaint alleged the following facts.
A
Dr. Moore, an African-American male, is a licensed, board-certified general
surgeon and a specialist in laparoscopic and advanced robotic surgery. Sometime
in 2011, Morehouse School of Medicine recruited him to be part of its faculty.
Prior to his appointment to the MSM faculty, Dr. Moore was required to
obtain clinical privileges at Grady Memorial Hospital. Dr. Moore applied for
privileges at Grady in August of 2012, and was granted them the following month.
Dr. Moore sought privileges to perform various laparoscopic procedures, including
several that are considered to be “foregut surgeries” that Dr. Moore performed to
*
The Honorable Roy B. Dalton, United States District Judge for the Middle District of
Florida, sitting by designation.
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treat reflux disease or to repair hiatal hernias. Grady’s standard application for
surgical privileges “does not contain the type of special surgical procedures [for
which] Dr. Moore sought privileges.” D.E. 1 at ¶ 19. Nevertheless, “Grady never
informed Dr. Moore, either in writing or verbally, that there were any deviations
from the clinical privileges granted,” and “no one ever instructed Dr. Moore to
refrain from any types of surgeries or imposed any limitations to the clinical
privileges granted to him.” Id. at ¶ 28.
In October of 2012, Dr. Moore entered into an employment agreement with
MSM for a position as an assistant professor in the Department of Surgery. In
January of 2013, Grady entered into an affiliation agreement with MSM. The
agreement recognized that “the mission of MSM at Grady is to educate medical
students, train physicians, operate a faculty group medical practice, conduct
medical research and engage in efforts to improve healthcare for sick and injured
individuals.” Id. at ¶ 29. The affiliation agreement outlined how MSM and its
faculty would provide clinical services to Grady. It also set out the faculty’s
teaching responsibilities.
Grady receives approximately $750 million from Fulton County and DeKalb
County, as well as other government and private sources, to sustain a clinical
practice. This money is then divided between Emory University’s School of
Medicine and MSM based on the clinical services these entities provide to Grady.
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Grady also refers uninsured or underinsured patients to outside physicians and
compensates those physicians for procedures as “fee for services.” Decisions
about when and where to send patients is controlled by Dr. Curtis Lewis, Grady’s
Chief Medical Officer and Executive Vice President.
B
In late April of 2013, Timothy Jefferson, Grady’s General Counsel,
approached Dr. Derrick Beech, Associate Dean at MSM, regarding several surgical
procedures performed by Dr. Moore. Grady was not compensated for these
surgeries because they were coded as bariatric procedures, i.e., procedures to
achieve weight loss, which were unauthorized because, according to a summary
suspension letter later received by Dr. Moore, Grady has no program in place to
support bariatric/weight loss surgeries for its patients. See D.E. 18-1.1
Dr. Beech agreed to review the procedures performed by Dr. Moore. With
the exception of one case, Dr. Beech did not believe that Dr. Moore’s surgeries
were bariatric. Grady decided to have the cases examined by an outside reviewer.
In the meantime, the parties agreed that Dr. Moore would not perform gastric
bypass surgery, but that he could continue to perform sleeve gastrectomy for
1
According to the complaint, “gastric resection surgeries could be viewed as bariatric if
other medical concerns are not present.” D.E. 1 at ¶ 35. But “[b]ariatric procedures consistent
with the standard of care of obese patients and cosmetic weight loss procedures are not the
same.” Id. at ¶ 39.
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patients with morbid obesity and a clear diagnosis of gastroesophageal reflux
disease.
In June of 2013, Dr. Moore met with Dr. Roseanne Pena—the acting
Director of the Operating Room at Grady—and another physician, and expressed
his concern that the Emory doctors were being given greater access to the
operating rooms at Grady as compared to the MSM doctors. For example, even
where the doctors from the two schools had the same number of cases, if there
were 18 operating rooms, the MSM doctors would be allotted two, and the Emory
doctors would be given 16.
C
Dr. Moore received a letter from Dr. Lewis on July 1, 2013, informing him
that his membership on Grady’s medical staff was summarily suspended due to his
continued performance of unauthorized surgical bariatric/weight loss procedures.
According to the letter, Dr. Moore had been advised on several occasions that such
procedures were not authorized at Grady and told to cease performing them. The
letter apprised Dr. Moore that his procedures were being reviewed externally and
that he would be given a hearing and appeal rights in accordance with Grady’s
medical staff bylaws.
A July 5, 2013, letter from Dr. Kevin Holloway—the Deputy Senior Vice
President for Medical Affairs at Grady and an associate professor at MSM—
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confirmed that the basis for Dr. Moore’s summary suspension was the
unauthorized surgical bariatric/weight loss procedures, and outlined the steps that
would follow in the Medical Executive Committee’s review of the suspension.
According to the complaint, Dr. Moore never discussed ceasing bariatric
procedures with anyone at Grady or MSM prior to the specific surgeries referenced
in Dr. Holloway’s July 5 letter.
Dr. Moore was invited to address the MEC when it met, but was not
permitted to be in the room while Dr. Lewis spoke to the MEC. Dr. Lewis
presented a much broader basis for Dr. Moore’s suspension than had been
communicated in the July 1 and July 5 letters, and introduced the results of the
external review of Dr. Moore’s procedures, which had not been shared with Dr.
Moore. By the time Dr. Moore entered the room, “the MEC had clearly decided
his fate.” D.E. 1 at ¶ 54. Further, “during the deliberation process, one or two
[MEC] members . . . made disparaging and unprofessional comments, which
evidence[d] racial animus and malice.” Id.
The MEC decided to continue the suspension of Dr. Moore’s privileges.
Because Dr. Moore refused to resign his privileges at Grady’s urging, one or more
of its physicians filed complaints against him with the Composite State Medical
Board.
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In October of 2013, Dr. Moore sued Grady, the Fulton-Dekalb Hospital
Authority d/b/a Grady Health System, and several individual physicians at Grady
(individually and in their capacities as members of the MEC). He alleged
violations of 42 U.S.C. § 1981 (Counts I & II); 42 U.S.C. § 1983 (Count III); Title
VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq. (Count IV); and 42
U.S.C. § 1986 (Count V). Dr. Moore also asserted two state-law claims, one for
violations of hospital bylaws (Count VI), and the other for intentional infliction of
emotional distress (Count VII). The district court granted the defendants’ Rule
12(b)(6) motion to dismiss the federal claims and declined to exercise jurisdiction
over the state-law claims. Dr. Moore’s appeal concerns only the § 1981 claims
asserted in Counts I and II.
II
To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain
sufficient factual allegations to “state a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The plausibility standard
is not akin to a ‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Twombly, 550 U.S. at 556).
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III
“Among the many statutes that combat racial discrimination, § 1981 . . . has
a specific function: It protects the equal right of ‘[a]ll persons within the
jurisdiction of the United States’ to ‘make and enforce contracts’ without respect to
race.” Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 474–75 (2006) (quoting
§ 1981(a)). The phrase “make and enforce contracts” is defined to include “the
making, performance, modification, and termination of contracts, and the
enjoyment of all benefits, privileges, terms, and conditions of the contractual
relationship.” 42 U.S.C. § 1981(b).
Dr. Moore pursues two theories of liability under § 1981: discrimination by
Grady, the Hospital Authority, and the individual Grady physicians (Count I); and
retaliation by Grady and the Hospital Authority (Count II). We address each
theory in turn.
A
“To state a claim of race discrimination under § 1981, [a] plaintiff[ ] must
allege facts establishing: (1) that [he] is a member of a racial minority; (2) that the
defendant intended to discriminate on the basis of race; and (3) that the
discrimination concerned one or more of the activities enumerated in the statute.”
Jackson v. BellSouth Telecomm., 372 F.3d 1250, 1270 (11th Cir. 2004) (citation
and footnote omitted).
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It is undisputed that the complaint satisfied the first two elements. Dr.
Moore is a member of a racial minority, and, accepting his allegations as true, the
defendants do not challenge the claim that they intentionally discriminated against
him because of his race by, “among other things, diverting cases to white
physicians outside of Grady Hospital, failing to provide operating rooms to the
African American doctors to perform surgery, and by summarily suspending him
under false pretext for discrimination.” D.E. 1 at ¶ 77.
The parties’ dispute centers on the third element. “Any claim brought under
§ 1981 . . . must initially identify an impaired ‘contractual relationship,’ § 1981(b),
under which the plaintiff has rights.” Domino’s Pizza, 546 U.S. at 476 (footnote
call number omitted). Dr. Moore relies on two different contracts to support his
§ 1981 claim: his employment contract with MSM, and the affiliation agreement
between Grady and MSM.
1
The first contractual relationship on which Dr. Moore premises his § 1981
claim is his employment contract with MSM. See D.E. 1 at ¶ 78 (“The
discriminating actions of the Defendants impaired Dr. Moore’s agreement with
Morehouse School of Medicine . . . .”). The defendants do not dispute that this
agreement satisfies the “contractual relationship” requirement of § 1981. Indeed,
as the district court held, Ҥ 1981 allows [Dr. Moore] to state a claim against Grady
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for interference with existing contractual rights with MSM (a third party).” D.E.
44 at 15–16. And at oral argument, the defendants agreed that § 1981 provides a
remedy for a physician who has a contract with a third party if that contract is
impaired as a result of the suspension, revocation, or adjustment of his privileges at
the hospital, as long as the physician sufficiently alleges that the cause of that
impairment is racial animus. The defendants contend, however, that Dr. Moore’s
allegations are conclusory. We disagree.
Because Dr. Moore bases his § 1981 claim on his contract with MSM, our
opinion in Jimenez v. WellStar Health System, 596 F.3d 1304 (11th Cir. 2010),
does not control. Jimenez involved a physician in Georgia who—like Dr. Moore—
believed that the suspension of his medical staff privileges was racially motivated.
The physician brought a § 1981 claim against the administrators, physicians, and
hospitals associated with WellStar Health System. Significantly, however, the
Jimenez physician did not have an actual employment contract with a third party
that was impaired by the defendants’ alleged discriminatory acts. Instead, one of
the contractual theories pursued by the Jimenez physician was that the suspension
of his privileges violated an “implicit contract” that he had with WellStar, whereby
WellStar agreed to grant him privileges and he agreed to treat patients at
WellStar’s hospitals. Id. at 1309. “Under such a theory, the staff privileges . . .
serve[d] as the consideration for the contract; they [did] not themselves create the
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contract.” Id. The revocation of his privileges, the Jimenez physician argued,
amounted to a breach of contract by WellStar, and because the revocation was for
allegedly discriminatory purposes, it violated § 1981. See id.
We rejected this implied contract theory, concluding that WellStar’s policies
made clear that medical staff privileges did not confer any contractual rights upon
a physician, and that “Georgia law agree[d].” Id. We ruled that, “[u]nder Georgia
law, medical staff bylaws, which govern medical staff privileges, do not create a
contractual right to the continuation of those privileges.” Id. (footnote and
citations omitted). Furthermore, “under Georgia law, alleging suspension of
medical staff privileges does not implicate any contractual relationship, and, as
such, cannot be the basis of § 1981 discrimination claim.” Id. at 1310.
But here Dr. Moore is not arguing that his medical privileges constitute a
contract with Grady. Nor does he claim that they are the consideration for a
contract with Grady. Dr. Moore instead bases his § 1981 claim on an employment
contract he had with a third party, MSM, and is alleging that the suspension of his
medical privileges by Grady is but one of the discriminatory acts performed by the
defendants that interfered with his performance of his contract with MSM. On the
facts alleged in the complaint, there is no concern that Dr. Moore is
“circumvent[ing] Georgia’s clear rule that medical staff privileges cannot create
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contractual liability.” Id. Accordingly, we find that nothing in Jimenez precludes
Dr. Moore’s § 1981 discrimination claim.
Despite recognizing that Dr. Moore’s contract with MSM constituted a
proper basis for the § 1981 claim, and made Dr. Moore’s case distinct from
Jimenez, the district court dismissed the § 1981 discrimination claim. The district
court relied on an unpublished Eleventh Circuit opinion, Williams v. Columbus
Regional Healthcare Systems, Inc., 499 F. App’x 928 (11th Cir. 2012), and, more
specifically, the underlying opinion from the district court in that case, Williams v.
Columbus Regional Healthcare Systems, Inc., No. 4:11-CV-28 (CDL), 2012 WL
315482 (M.D. Ga. Feb. 1, 2012). That reliance was understandable, but misplaced.
Williams involved a situation, like Dr. Moore’s, where the physician had an
actual employment contract with a third party that was allegedly being impaired by
the defendant’s discriminatory actions. The district court ruled that “each of [the
physician’s] claims has as an essential factual predicate the termination of his
hospital privileges,” 2012 WL 315482 at *5, and, purportedly applying Jimenez,
held that “to survive a motion to dismiss, [the physician’s] claim against [the
defendant] must be based on conduct by [the defendant] that caused the Columbus
Clinic [the third party] to terminate him unrelated to the loss of his hospital
privileges.” Id. at *6 (emphasis added). The district court found the phsyician’s
remaining factual allegations, concerning how defendant interfered with his
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employment contract, too vague and conclusory “‘to raise a right to relief above
the speculative level.’” Id. at *7 (quoting Twombly, 550 U.S. at 555). A panel of
this Court affirmed the result in a brief opinion that did not appear to consider the
actual employment contract that distinguished the case from Jimenez. See
Williams, 499 F. App’x at 929–30.
The district court here, with some hesitation, followed Williams and
essentially ignored all of the factual allegations in the complaint relating to the
suspension of Dr. Moore’s privileges. Focusing only on the remaining
discriminatory practices alleged by Dr. Moore—the assignment of operating rooms
and patient referrals—the district court concluded that Dr. Moore had failed to
sufficiently plead how the defendants’ conduct impaired his contract with MSM.
See D.E. 44 at 17 (“On the face of the Complaint, it is unclear that these practices,
absent the suspension of [Dr. Moore’s] medical privileges, had any effect on his
employment contract with MSM.”) (emphasis added). To the extent either opinion
in Williams (the district court order or the non-binding Eleventh Circuit opinion)
can be read to suggest that Dr. Moore cannot rely, as part of his § 1981 claim, on a
claim that the suspension of his medical privileges was a discriminatory act that
interfered with his contract with MSM, we reject that view as an improper and
unwarranted application of Jimenez.
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Dr. Moore alleges that his contract with MSM was impaired by the
defendants’ intentionally discriminatory actions, which included summarily
suspending his privileges, diverting cases to white physicians outside of Grady,
and failing to provide operating rooms for surgery to the African-American doctors
of MSM. Dr. Moore alleges that these discriminatory acts impaired his contract
with MSM because, “[a]s part of his contract and employment with MSM, [he]
must have clinical privileges at a hospital in order to practice medicine and teach
residents.” D.E. 1 at ¶ 87. As Dr. Moore explains, without privileges (and,
presumably, without patients or operating rooms), “[h]e cannot teach residents nor
perform any clinical practice.” Id. Although the complaint is not a model of
clarity, we conclude that, at this stage of the case, it contains sufficient factual
allegations to support Dr. Moore’s § 1981 discrimination claim based on the
alleged impairment of his contract with MSM, and therefore survives the
defendants’ motion to dismiss. See, e.g., Zaklama v. Mt. Sinai Med. Ctr., 842 F.2d
291, 294–95 (11th Cir. 1988) (holding that physician, who was dismissed from one
hospital’s residency program due to adverse recommendations by second hospital,
could sue second hospital under § 1981 on the theory that the adverse
recommendations were based on his race); Faraca v. Clements, 506 F.2d 956, 959
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(5th Cir. 1975) (“a third party’s interference with [contractual] rights guaranteed
under [§§] 1981 and 1982 will subject such a person to personal liability.”). 2
2
Dr. Moore also argues that the affiliation agreement between Grady and
MSM constitutes a second contractual relationship sufficient to support his § 1981
discrimination claim. According to Dr. Moore, “Georgia law requiring hospitals to
abide by their bylaws, and the Agreement between Grady and MSM, in which the
Medical Staff Bylaws are implicated in the disciplinary provisions governing
MSM faculty physicians, create an expectation of due process in the disciplinary
actions that can be undertaken by [d]efendants in regard to [his] property interests
in his hospital privileges.” Br. for Appellant at 33.
The district court (generally adopting the magistrate judge’s report, which
was not objected to) rejected this argument. Because, under Georgia law, medical
staff bylaws do not create a contract or a contractual relationship, see Jimenez, 596
F.3d at 1309, and “physicians do not have a broad property interest in continuing
to practice medicine,” id. at 1310 (citation omitted), the district court concluded
that “the mere fact that the affiliation agreement refers to and incorporates the
2
Because we hold that the allegations in the complaint are sufficient to support a § 1981
claim based on the contract with MSM, we do not address Dr. Moore’s argument that the district
court erred by not allowing him to amend his complaint.
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bylaws does not otherwise create a protected property interest where there is
none.” D.E. 39 at 24; D.E. 44 at 21.
In addition, the district court (again adopting the magistrate judge’s report)
concluded that, even if the affiliation agreement somehow created a protected
property interest in hospital staff privileges, Dr. Moore was not a party to the
affiliation agreement and, based on the terms of that agreement, he was also not a
third-party beneficiary with standing to assert any rights or enforce any terms
under the affiliation agreement. See D.E. 39 at 24–27. Specifically, the district
court relied on a provision in the affiliation agreement for “Third Party
Beneficiaries” that stated: “None of the provisions of this Agreement are or shall
be construed as for the benefit of or enforceable by any person not a Party to this
Agreement, except that [Emory] shall be treated as a third party beneficiary with
respect to the Agreement].” Id. at 26 (quoting the affiliation agreement, D.E. 18-3
at § 13.25).
Dr. Moore did not object to the magistrate judge’s report on this issue.
Although in this particular case we review de novo “the magistrate judge’s
conclusions of law [as] they were accepted and adopted by the district court,”
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Owusu-Ansah v. Coca-Cola Co., 715 F.3d 1306, 1308 (11th Cir. 2013) (citations
omitted), Dr. Moore’s argument merits little discussion.3
The Supreme Court has recognized the possibility that a third-party intended
beneficiary of a contract may have rights protected by § 1981. See Domino’s
Pizza, 546 U.S. at 476 n.3. But this does not eliminate the statutory requirement
that the plaintiff be the one who “has or would have rights under the existing or
proposed contractual relationship.” Id. at 476. In Domino’s Pizza, for example,
the Supreme Court made clear that “[§] 1981 plaintiffs must identify injuries
flowing from a racially motivated breach of their own contractual relationship, not
of someone else’s.” Id. at 480 (emphasis added).
On appeal, Dr. Moore has seemingly abandoned any argument that he is a
third-party intended beneficiary of the affiliation agreement between Grady and
MSM. In any event, “[s]imply because [Dr. Moore] [might have] benefited from
the performance of the contract” between Grady and MSM “does not afford [him]
third party beneficiary status.” Gilmour v. Gates, McDonald and Co., 382 F.3d
1312, 1315 (11th Cir. 2004) (citation omitted). See also AT&T Mobility, LLC v.
Nat’l Ass’n for Stock Car Auto Racing, Inc., 494 F.3d 1356, 1360 (11th Cir. 2007)
3
This case was decided by the district court before the implementation of Eleventh
Circuit Rule 3–1, which took effect on December 1, 2014, and provides that “[a] party failing to
object to a magistrate judge’s findings or recommendations contained in a report and
recommendation in accordance with the provisions of 28 U.S.C. § 636(b)(1) waives the right to
challenge on appeal the district court’s order based on unobjected-to factual and legal
conclusions[.]”
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(“[T]he parties’ intention to benefit the third party must be evident from the face of
the contract.”) (citations omitted); Monroe v. Bd of Regents of Univ. Sys. of Ga.,
602 S.E.2d 219, 225 (Ga. Ct. App. 2004) (affirming finding that plaintiff was not a
third-party beneficiary because contract contained language that expressly limited
who had rights). Therefore, we affirm the dismissal of Dr. Moore’s § 1981 claim
premised on the affiliation agreement.
B
In Count II, Dr. Moore alleges that he “was retaliated against by . . . Grady
and the [Hospital] Authority in violation of § 1981 because of his opposition to the
discriminatory practices of . . . Grady and the [Hospital] Authority, which included
subjecting him and the other African-American physicians to limited surgery
facilities and support staff and the assignment of certain medical cases to white
Emory Doctors.” D.E. 1 at ¶ 98. “Within days of making his complaint about
[the] racially discriminatory treatment of the African American physicians from
MSM by Grady and the [Hospital] Authority,” his cases were subject to scrutiny
and he was ultimately summarily suspended. Id. at ¶ 97.
“To establish a claim of retaliation under . . . [§] 1981, a plaintiff must prove
that he engaged in statutorily protected activity, he suffered a materially adverse
action, and there was some causal relation between the two events.” Goldsmith v.
Bagby Elevator Co., Inc., 513 F.3d 1261, 1277 (11th Cir. 2008) (citation omitted).
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“As with other statutory retaliation claims, such a claim under § 1981 requires that
the protected activity involve the assertion of rights encompassed by the statute.”
Jimenez, 596 F.3d at 1311 (citations omitted).
Jimenez held that, because the suspension of medical staff privileges in and
of itself does not implicate any rights protected by § 1981, a physician’s charge
with the Equal Employment Opportunity Commission regarding the suspension of
medical staff privileges could not form the basis of a § 1981 retaliation claim. See
id. Jimenez also concluded that none of the physician’s other complaints to
hospital administrators regarding allegations of discriminatory treatment could be
construed to implicate a contract or property interest. See id. at 1311 n.5.
The district court correctly distinguished Jimenez because Dr. Moore had an
independent contract with MSM, and did not assert an independent contractual
right in his medical privileges at Grady. Nonetheless, based on its previous ruling
concerning Dr. Moore’s § 1981 discrimination claim, the district court dismissed
the § 1981 retaliation claim. The district court concluded that Dr. Moore “fail[ed]
to plead sufficient facts to show that his contract [with MSM] was actually
impaired,” and, therefore, that he “necessarily fail[ed] to sufficiently plead that he
engaged in a protected activity when he opposed [d]efendants’ practice.” D.E. 44
at 20.
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Because we hold that Dr. Moore pled sufficient facts to support his § 1981
discrimination claim, we reverse the district court’s dismissal of Dr. Moore’s
§ 1981 retaliation claim. On remand the district court is to re-examine the
retaliation claim.
IV
In sum, we affirm the district court’s grant of the defendants’ motion to
dismiss as to Dr. Moore’s § 1981 discrimination claim based on the affiliation
agreement between Grady and MSM. We reverse as to Dr. Moore’s § 1981
discrimination claim based on the employment contract with MSM and as to Dr.
Moore’s § 1981 retaliation claim. The case is remanded to the district court for
further proceedings consistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
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