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Palmer v. University of Medicine and Dentistry of New Jersey

March 27, 2009


The opinion of the court was delivered by: Greenaway, Jr., U.S.D.J.



This matter comes before the Court on the motion of Plaintiff, Douglas Palmer ("Plaintiff"), to remand all of his claims against Defendants, University of Medicine and Dentistry of New Jersey and University Hospital (collectively "UMDNJ"), and Barry C. Esrig, M.D. ("Esrig"), to the Superior Court of New Jersey. (Docket Entry No. 5). UMDNJ opposes the motion. For the reasons stated below, this Court will grant Plaintiff's motion to remand, and will remand sua sponte the entire civil action.


Plaintiff brings this employment retaliation action under New Jersey's Conscientious Employee Protection Act ("CEPA"), N.J. STAT. ANN. §§ 34:19-1 to -8. In his Complaint, Plaintiff alleges that, while he was employed with UMDNJ, he was assigned to supervise the medical billing and coding work for the Division of Cardiothoracic Surgery Group ("CTS"). Esrig and Leonard Schwartz ("Schwartz"), the CTS Administrator, supervised Plaintiff. (Compl. ¶¶ 5, 7-8). During his employment within CTS, Plaintiff discovered an improper billing practice. (Id. at ¶ 13). He brought his concerns to the attention of both Esrig and Schwartz, each of whom continuously directed him to ignore these billing practices. (Id. at ¶¶ 13-14). Plaintiff avers that he would have been fired if he had failed to follow their directions. (Id. at ¶ 15).

In July 2006, Plaintiff contacted UMDNJ's Office of Labor Relations of the Department of Human Resources ("Office of Labor Relations") to report the improper billing practices, as well as a hostile and retaliatory work environment created by Esrig and Schwartz. (Id. at ¶ 23). Esrig's alleged retaliation included threats, intimidation, and unwarranted disciplinary action against Plaintiff. (Id. at ¶¶ 25-30, 34, 40-43, 45-56).

Around that same time, Schwartz reprimanded Plaintiff for failing to bill a patient for services despite Plaintiff's belief that an invoice was not warranted. (Id. at ¶ 24). These events were the first of many that prompted Plaintiff to lodge complaints with the Office of Labor Relations and UMDNJ's Office of Ethics and Compliance ("Office of Ethics and Compliance") about the improper billing practices and retaliatory conduct of both Esrig and Schwartz. (Id. at ¶¶ 31-33).

In August 2006, Plaintiff tendered his first of several resignations from his employment because of the unlawful conduct of both Esrig and Schwartz. (Id. at ¶ 36). Although Plaintiff quickly rescinded his first resignation, (Id. at ¶¶ 37-39), Plaintiff eventually sought other employment because he felt betrayed by UMDNJ management and feared further retaliation by Esrig. (Id. at ¶¶ 56-59).

On November 21, 2006, Plaintiff received an offer for a management position with a cardiology group in Montclair, New Jersey. (Id. at ¶ 60). However, without his knowledge, on December 7, 2006, Esrig spoke with Plaintiff's prospective employer, describing Plaintiff's work performance as substandard. (Id. at ¶¶ 65-67). Later that day, Plaintiff's prospective employer advised him that the offer of employment was withdrawn. (Id. at ¶ 71).

Lacking other employment options, Plaintiff remained employed by UMDNJ. (Id. at ¶ 73). Yet, Esrig and Schwartz continued to harass and retaliate against him. (Id. at ¶ 74). UMDNJ also failed to keep Plaintiff informed about the status of its investigation into his complaints. (Id. at ¶75). Ultimately, in March 2007, a representative of the Office of Ethics and Compliance advised Plaintiff that: "[t]he circumstances surrounding Plaintiff's allegations of retaliation were substantiated; [a]ppropriate action has been taken; and [t]he two (2) sources of retaliation 'no longer exist.'" (Id. at ¶ 84). Nonetheless, Esrig remained employed by UMDNJ. (Id. at ¶ 88).

From January 2007 through approximately May 2007, Plaintiff tendered his resignation two more times, citing the continued retaliation by Esrig and Schwartz, UMDNJ's stalled and ineffective investigation, and UMDNJ's failure to place Plaintiff in a comparable position with different supervisors. (Id. at ¶¶ 73-78; 79, 83-91, 95-99). On May 21, 2007, Plaintiff advised UMDNJ of his intent to file suit based on the alleged retaliation and harassment. (Id. at ¶ 96). Around the same time, Plaintiff requested a severance package from UMDNJ. (Id. at ¶ 97). After UMDNJ failed to respond to his request, Plaintiff tendered his final resignation, claiming to have been constructively discharged. (Id. at ¶¶ 99-100).

On August 23, 2007, Plaintiff filed a complaint in the Superior Court of New Jersey, Law Division, Essex County, against UMDNJ and Esrig. In his complaint, Plaintiff alleges four separate causes of action in violation of New Jersey statutory and common law. In his first count, Plaintiff alleges that after he disclosed the unlawful billing practices of UMDNJ, Esrig, and Schwartz, UMDNJ retaliated against him by terminating his employment in violation of CEPA. In his remaining counts, Plaintiff asserts common law claims for slander, intentional infliction of emotional distress, and intentional interference with prospective economic advantage against Esrig. These latter claims arise from Esrig's negative performance evaluation shared with Plaintiff's then prospective employer.

Both UMDNJ and Esrig filed answers and asserted cross-claims for contribution and indemnification. Esrig also asserted counterclaims against Plaintiff for tortious interference with contract and tortious interference with prospective economic advantage, alleging Plaintiff made false statements about Esrig, including his alleged involvement in illegal activity. (Esrig counter-claims ¶¶ 1-7).

On June 6, 2008, the Superior Court Judge granted Esrig's motion to amend his cross-claim and counterclaims. On June 11, 2008, Esrig filed an amended answer, counterclaims and amended cross-claims against UMDNJ for: (1) indemnification; (2) contribution; (3) CEPA violation; (4) violation of the Constitution of the United ...

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