Kadlec Medical Center v. Lakeview Anesthesia Associates

Dr. Robert Berry was an anesthesiologist and shareholder in Lakeview Anesthesia Associates (LAA) (defendant), which provided anesthesia services to Lakeview Regional Medical Center (Lakeview Medical). In late 2000, staff at Lakeview Medical became suspicious that Berry was withdrawing excessive amounts of the narcotic Demerol. In early 2001, Berry failed to answer a page while on duty; he was later found groggy and unable to work. Lakeview Medical decided as a patient-safety matter that Berry could no longer practice at the hospital, and LAA terminated Berry. Berry later applied through a traveling-physician-placement agency to work at Kadlec Medical Center (Kadlec) (plaintiff). Two of Berry’s colleagues at LAA sent reference letters to the placement agency describing Berry as “excellent” and highly recommending him. The letters did not mention Berry’s termination or performance issues. In October of 2001, Kadlec requested information about Berry from Lakeview Medical, including detailed questions about Berry’s judgment, behavior, and disciplinary history. Lakeview Medical replied only with a short letter verifying the dates that Berry had been on staff. Kadlec subsequently allowed Berry to begin working at the medical center. On November 12, 2002, Berry botched several anesthetizations while under the influence of Demerol. One patient suffered complications and fell into a permanent vegetative state. The patient’s family sued Kadlec for medical malpractice. Kadlec settled the action and then sued LAA and Lakeview Medical in federal court in Louisiana, asserting claims including intentional and negligent misrepresentation. A jury found in Kadlec’s favor. Lakeview Medical and LAA appealed to the United States Court of Appeals for the Fifth Circuit.