Antitrust Law Daily Wrap Up, RICO—D. Nev.: Physician’s racketeering claim against medical board time-barred, (Jul 15, 2016)

By Linda O’Brien, J.D., LL.M.

A physician’s racketeering claim against members of a state medical board for allegedly interfering with the physician’s efforts to regain his medical license after its revocation was time-barred, the federal district court in Las Vegas has decided (Chancellor v. Legarza, July 14, 2016, Dorsey, J.).

In 1998, Dr. Robert Chancellor was charged with substance abuse and medical malpractice by the Nevada Board of Medical Examiners. After Chancellor stipulated to the substance abuse charge, the Board revoked his medical license and dismissed the medical malpractice charge. In 2000, Chancellor applied for reinstatement of his license. The Board, however, refused to reinstate his license, citing the medical malpractice charges as the reason. Following a hearing in 2002, the Board issued Chancellor a five-year diversion program license, which limited his practice to ear, nose, and throat (ENT) medicine and required that he be supervised by a licensed physician. Ultimately, the Board removed the restrictions and approved a plan for Chancellor to be supervised in surgery as well as in medical practice. Chancellor’s full medical license without restrictions was reinstated in September 2014.

In September 2015, Chancellor filed suit against several current and former members of the Board, asserting a claim under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Chancellor alleged that the defendants actively interfered with his ability to regain a full and unrestricted medical license. Before the court was the defendants' motion for judgment on the pleadings.

The court found that it was apparent on the face of the plaintiff’s complaint that his RICO claim was time-barred. The statute of limitations for federal civil RICO claims is four years, the court explained. Under the injury-discovery rule, the limitations period begins to run when the plaintiff knows or should know of the injury which is the basis for the action. Here, the court stated, the first overt act and resulting injury allegedly occurred in 1999 when the Board refused to stipulate to suspend Chancellor’s license and insisted on revoking it instead. A second act occurred in the same year when the Board allegedly discussed and provided a copy of Chancellor’s stipulation to members of the media. A third act occurred when the Board allegedly sent a copy of the dismissed medical malpractice charges to the American Board of Otolaryngology, placing Chancellor’s certification with that board at risk.

According to the court, these allegations constituted a pattern of behavior. Chancellor claimed injuries from the loss of his medical license, harm to his reputation, and lost income. However, it was clear from Chancellor’s complaint that he knew about the alleged acts and injuries when they occurred.

Additionally, Chancellor failed to identify any new and independent injuries that qualified as new causes of action under the separate-accrual rule or any facts to show that the statute of limitations should be tolled. Rejected was Chancellor’s argument that between 2001 and 2014 there were at least seven other overt acts by various Board members to prevent him from acquiring supervision needed to regain his full licensure. The court noted that those subsequent acts were merely reaffirmations of the initial act of revoking his license and did not inflict any new and accumulating injury on Chancellor to qualify as new and independent causes of action.

The case is No. 2:15-cv-01707-JAD-PAL.

Attorneys: E. Brent Bryson (E. Brent Bryson, Ltd.) for Robert Chancellor. Barry L. Breslow (Robison Belaustegui Sharp & Low) for Larry D. Lessly.

Cases: RICO NevadaNews