Court Dismisses McGowan v. Medpace, Inc. As Improvidently Accepted.

On April 12, 2017, by a vote of 4-3, the court dismissed as improvidently accepted McGowan v. Medpace, Inc.,  2017-Ohio-1340. Chief Justice O’Connor and Justices O’Donnell, Kennedy, and French formed the majority. Because Justices Fischer and DeWine sat on this case when it was decided by the First District Court of Appeals, Judges Timothy Cannon of the Eleventh District Court of Appeals and Jennifer Brunner of the Tenth District Court of Appeals sat for them on this appeal. Judge Brunner concurred in part and dissented in part, with an opinion. Justice O’Neill dissented, with an opinion which Judge Brunner joined.  Judge Cannon dissented without opinion. The case was argued February 8, 2017.

Case Background

Dr. Mary McGowan won a jury verdict of $300,000 in compensatory damages, $500,000 in punitive damages, and attorney fees for wrongful discharge in violation of public policy. But the First District reversed, finding that the trial court erred in failing to dismiss Dr. McGowan’s wrongful discharge claim as a matter of law for failure to establish the clarity element. Relying on its precedent in the cases of Hale v. Volunteers of America, 2004-Ohio-4508 (1st Dist.) and Dean v. Consol. Equities Realty #3, L.L.C., 2009-Ohio-2480 (1st Dist.), the appeals court held that to satisfy the clarity element of a wrongful discharge claim, the law had to impose a duty on an employee to report a violation, expressly prohibit retaliation for reporting a violation, or protect public health and safety.

The case went to the Supreme Court of Ohio on the issue of what is needed to satisfy the clarity element of a wrongful termination claim.

A Dismissal, Plus

This was a particularly interesting dismissal because, unusually, the court wrote that it ordered that “the opinion of the court of appeals may not be cited as authority except by the parties inter se.” That’s the part Judge Brunner joined. The dismissal means Dr. McGowan gets nothing, because the court of appeals decision stands, in this case, between these two parties.

I think it is fair to say, as Judge Brunner additionally wrote, that any further reliance on Hale and Dean is “dubious.” That was the essence of her dissent. She criticized the First District for essentially finding that exceptions to the judicially created employment at will doctrine, such as the one established in Greeley v Miami Valley Maintenance Contrs., Inc., should come from the legislature, not the courts, and for following Hale and Dean instead of following Greely.

Justice O’Neill’s Dissent

Justice O’Neill strongly felt Dr. McGowan’s wrongful termination claim on public policy grounds was properly supported. He went into great detail laying out the allegations of patient privacy and confidentiality violations and fraudulent prescription writing practices and insurance fraud that formed the basis of McGowan’s wrongful discharge claims. He criticized the appellate court for misapplying Ohio law and the civil rules governing directed verdicts. He wrote,

“Dismissing this case as improvidently allowed and restricting the precedential value of this erroneous appellate decision does nothing to preserve the law as established in Greely. Likewise, it deprives McGowan of the jury verdict in her favor and the damages awarded by the jury.”

Judge Brunner joined in this dissent.

Concluding Observations

I wrote after the argument that I didn’t think there were four jurists ready to buy the First District’s test that to establish the clarity element, the statute or other provision must contain an anti-retaliation provision, a mandatory reporting requirement, or address health and safety. I also wrote that Justice O’Neill and Judge Brunner were clearly on Dr. McGowan’s side, period, and that they both saw HIPPA and the insurance fraud statute as providing the requisite public policy to support the wrongful termination claim. And finally, I wrote that the matter was further complicated by the fact that two appellate judges were subbing for the two justices who were the ones that reinforced and approved the First District test while on the First District. I think that the First District’s very restrictive test to establish the clarity element is dead for now. It will be interesting to see what happens if the issue comes up again with Justices DeWine and Fischer now on the high court.

Read the oral argument preview in the case here and the analysis of the argument here.

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