Toranto v. Jaffurs (297 F. Supp. 3d 1073, 2018)

JOHN A. HOUSTON, United States District Judge

INTRODUCTION

Plaintiff, Jason Toranto, originally filed a complaint on July 1, 2016, and filed a First Amended complaint ("FAC") on August 15, 2016, for conspiracy in restraint of trade (claim 1), monopoly (claim 2), bad faith professional review (claim 3), retaliation (claims 4 and 5), defamation (claim 6), violation of the Labor Code (claim 7), tortious interference with prospective economic advantage (claim 8), and unfair competition (claim 9). He names Daniel Jaffurs, Amanda Gosman, The Regents of the University of California, Rady Children's Hospital-San Diego, Rady Children's Specialists, Rady Children's Medical Staff, Children's Hospital of Orange County ("CHOC") and CHOC Medical Staff as defendants. Plaintiff alleges Defendants conspired to engage in and engaged in illegal, retaliatory, defamatory and anti-competitive conduct against Plaintiff, a pediatric plastic and craniofacial surgeon. See Doc. No. 21.

Defendant CHOC and CHOC Medial Staff ("CHOC Defendants") filed an answer to the FAC on August 31, 2016. See Doc. 29. Rady Children's Hospital-San Diego, Rady Children's Specialist of San Diego, Rady Children's Medical Staff and Gosman ("Rady Defendants") filed a motion to dismiss the FAC on September 1, 2016. See Doc. No. 32. On September 13, 2016, The Regents filed a motion to dismiss the FAC and a joinder in the co-defendants' motions to dismiss, and Jaffurs filed a motion to dismiss the FAC. See Doc. Nos. 36, 37. On October 14, 2016, the Rady Defendants and Defendant Jaffurs filed separate motions to strike ("anti-SLAPP motions"). See Doc. No. 41, 42. Thereafter, Defendant The Regents filed a notice of joinder in the motions to strike and Defendant Jaffurs filed a notice of joinder in the Rady Defendants' motion to dismiss. See Doc. Nos. 43, 45. On October 24, 2016, Plaintiff voluntarily dismissed The Regents from the action without prejudice. See Doc. No. 48.

On October 28, 2016, Plaintiff filed an application seeking leave to conduct discovery relevant to Defendants' anti-SLAPP motions and to continue the hearing and dates to file his opposition. See Doc. No. 49. In light of the application, the Court vacated the hearing date and briefing schedule. See Doc. No. 51. Plaintiff's application for leave to conduct discovery was referred to the Honorable Nita L. Stormes, United States Magistrate Judge.

Plaintiff filed a response to Defendant Jaffurs' motion to dismiss and the Rady Defendants' motion to dismiss on November 2, 2016. See Doc. Nos. 58, 59. Defendants filed replies in support of their motions. See Doc. No. 61, 62. Thereafter, the Court vacated the hearing date on the motions to dismiss. See Doc. No. 63.

On November 23, 2016, Judge Stormes issued an order denying Plaintiff's request not to stay general discovery and granting his request to conduct limited, specific discovery with respect to the claims raised in the anti-SLAPP motions. See Doc. No. 64. On January 23, 2017, Defendant filed an application seeking an order setting the motions to dismiss and anti-SLAPP motions for hearing which Plaintiff opposed. See Doc. Nos. 65, 66. The Court denied the motion. See Doc. No. 67.

On February 3, 2017, Judge Stormes held a status conference regarding discovery and issued an order, following the conference, lifting the stay on discovery and setting a scheduling order for discovery relating to the anti-SLAPP motions. See Doc. No. 71. Plaintiff filed a motion to compel which Judge Stormes granted. See Doc. No. Judge Stormes also set a briefing schedule on the pending motions to dismiss and anti-SLAPP motions. See Doc. No. 77. Defendant Jaffurs and the Rady Defendants objected to Judge Stormes' order granting the motion to compel and requested this Court reverse Judge Stormes' order. See Doc. Nos. 81. The parties briefed the issue upon order of the Court. See Doc. Nos. 84, 85, 86, 87.

On May 2, 2017, Plaintiff filed an application seeking an order vacating the briefing schedule and hearing date on the anti-SLAPP motions pending the resolution of Defendant's objections. See Doc. No. 88. The Rady Defendants opposed the application. See Doc. No. 89. This Court granted Plaintiff's application and vacated the briefing schedule and hearing date for Defendants' anti-SLAPP motions. Thereafter, the Court vacated the hearing on Defendants' motion to dismiss and took the motions under submission without oral argument. See Doc. No. 97.

LEGAL STANDARD

The Rady Defendants and Defendant Jaffurs seek dismissal of the FAC pursuant to Federal Rule of Civil Procedure 12(b)(6). Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984) ; see Neitzke v. Williams, 490 U.S. 319, 326, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989) (" Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law."). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson, 749 F.2d at 534. While a plaintiff need not give "detailed factual allegations," he must plead sufficient facts that, if true, "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 547, 127 S.Ct. 1955 ). A claim is facially plausible when the factual allegations permit "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In other words, "the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief. Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009). "Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe all inferences from them in the light most favorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002) ; Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003) ; Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). When ruling on a motion to dismiss, the Court may consider the facts alleged in the complaint, documents attached to the complaint, documents relied upon but not attached to the complaint when authenticity is not contested, and matters of which the Court takes judicial notice. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). If a court determines that a complaint fails to state a claim, the court should grant leave to amend unless it determines that the pleading could not possibly be cured by the allegation of other facts. See Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995).

DISCUSSION

I. Rady Defendants' Motion to Dismiss

Defendants move to dismiss all causes of action asserted against them, namely, the first, second, third, sixth, eighth and ninth claims. Defendants argue (A) the state law causes of action are premature, (B) Plaintiff fails to allege sufficient facts to support a claim for conspiracy in restraint of trade, (C) Plaintiff fails to allege sufficient facts to support a claim for monopoly, (D) the cause of action for bad faith professional review is not viable, (E) Plaintiff fails to allege sufficient facts to support a claim for defamation, (F) Plaintiff fails to allege sufficient facts to support a claim for tortious interference with prospective economic relations, and (G) Plaintiff fails to allege sufficient facts to support a claim for unfair competition.

A. Premature

Doctors must exhaust available administrative remedies and succeed in setting aside the decision denying or withdrawing privileges in a mandamus action prior to initiating suit against the hospital and individuals involved in the decision. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646 (9th Cir. 1988) ; Westlake Community Hospital v. Superior Court of Los Angeles County, 17 Cal.3d 465, 131 Cal.Rptr. 90, 551 P.2d 410 (1976).

Defendants argue Plaintiff's state law causes of action are premature because he failed to exhaust administrative remedies. Defendants contend Plaintiff only alleges his application for privileges has been presumptively denied. They maintain, if the application is ultimately denied, Plaintiff must seek relief through an administrative hearing, and after the administrative process is completed, he must successfully have the decision set aside in a mandamus action before bringing a tort action for damages. Because he does not allege any facts to show a final decision was reached or that he complied with the administrative process, they argue, the state law causes of action, bad faith professional review, defamation, tortious interference with prospective economic relations and unfair competition, are premature and must be dismissed.

In opposition, Plaintiff contends he is not required to exhaust his administrative remedies because he was not provided a reason for his rejection or an opportunity to respond and, thereby, was denied basic procedural protections to which he was entitled when his application was presumptively denied. Even if he were required to exhaust administrative remedies, Plaintiff argues, he is excused from doing so because any pursuit would be inadequate and futile. He maintains, at the time his opposition was filed, over a year had passed since his application and nine months since it was presumptively denied, and he has received no adequate explanation for the presumptive denial and no opportunity to respond. Any further attempts to exhaust the remedies would, therefore, be futile. Additionally, he maintains pursuit of administrative remedies would result in irreparable harm because complex pediatric craniofacial plastic surgery procedures must be performed regularly for a surgeon to maintain qualifications to perform them, and Defendants' administrative process has harmed the health and safety of patients with longer wait times and higher costs.

In reply, Defendants argue Plaintiff's claims do not fall under any exception to the exhaustion requirement. Defendants contend Plaintiff cannot allege his application was denied because his application is still pending. They maintain the presumptive denial demonstrates the peer review process has begun and he has not been denied a fair procedure. Even if Plaintiff could allege presumptive denial entitled him to relief, he is still required to bring a writ of mandate to challenge the decision. Additionally, Defendants argue the administrative remedies available are not inadequate or futile because he has not received a final disposition and could possibly receive privileges. They also argue he has adequate remedies after a decision is made and he could provide services to children at other hospitals at which he has privileges.

Plaintiff alleges he received a call from the chair of Rady Children's department of surgery, and was told his application for admitting privileges would presumptively be denied and Rady Children's failed to grant him an interview or hearing despite repeated requests. FAC ¶¶ 33, 87, 88, 94. He further alleges he was advised he would be presumptively reported to the California Medical Board if he did not withdraw his application. Id. ¶ 87. Plaintiff did not withdraw his application and, instead, supplemented it in March and July 2016. Id. ¶¶ 90, 91, 93. Defendants contends the peer review process is ongoing and, therefore, Plaintiff has failed to exhaust his administrative remedies, and, can only do so when he receives a denial and is successful in a mandamus action. Plaintiff maintains he is not required to exhaust prior to bringing a tort action pursuant to the exception in Westlake. The court in Westlake held that a hospital that denies a doctor privileges without basic procedural protection to which he is entitled can be immediately sued in a tort action. 17 Cal.3d at 478, 131 Cal.Rptr. 90, 551 P.2d 410. Plaintiff's allegations that Defendants denied him a hearing or interview after being informed his application was "presumptively denied" and threats to report him to the Medical Board if he does not withdraw his application demonstrate he was denied basic procedural protections. As such, Plaintiff is not required to exhaust the administrative remedies prior to filing suit. Additionally, the court in Westlake specifically rejected the same argument raised by Defendants here, that, under these circumstances, Plaintiff must still obtain mandamus relief prior to filing suit. While the court determined that a doctor must initially succeed in a mandamus action when a hospital excludes or dismisses a doctor pursuant to quasi-judicial proceedings, it found the hospital's conduct in dismissing the doctor without basic procedural protections was not "undertaken pursuant to a quasi-judicial proceeding." Id.

This Court finds Plaintiff's action is not barred for failure to exhaust administrative remedies. As such, Defendants' motion to dismiss the state law claims as premature is denied.

B. Conspiracy in Restraint of Trade

Plaintiff's first claim for relief asserts a violation of Section 1 of the Sherman Act. Section 1 prohibits "[e]very contract, combination...or conspiracy, in restraint of trade or commerce among the several States, or with foreign nationals." 15 U.S.C. § 1. To state a claim under Section 1 of the Sherman Act, a plaintiff must allege "not just ultimate facts but evidentiary facts which, if true, will prove: (1) a contract, combination or conspiracy among two or more persons or distinct business entities; (2) by which the persons or entities intended to harm or restrain trade or commerce among the several States, or with foreign nations; (3) which actually injures competition." Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1047 (9th Cir. 2008).

Defendants argue Plaintiff fails to allege a conspiracy in restraint of trade because the FAC does not properly allege a conspiracy or agreement, Plaintiff fails to allege facts to support an unreasonable restraint of trade, they have the unilateral right to deny Plaintiff privileges and Plaintiff fails to state facts to support an antitrust injury.

1. Conspiracy

Defendants argue Plaintiff fails to properly allege a conspiracy because Section 1 of the Sherman Act requires a contract, combination or conspiracy between two or more legally distinct persons. They maintain the relationships between the Rady Defendants demonstrate they are a single entity, and, thus, legally incapable of concerted action. They further maintain the allegations of the FAC make clear the Rady Defendants acted as agents of each other. Defendants further argue Dr. Gosman cannot conspire with the Rady Defendants because she is an employee of Rady Children's Specialists of San Diego and an employee cannot conspire with her employer. They also contend the FAC alleges she and the Rady Defendants acted as agents of each other.

Additionally, Defendants argue the FAC contains no allegations that support any specific discussion between Gosman and any other person related to the Rady Defendants, and there are no specific facts supporting the content of the conspiratorial exchanges between Defendants Gosman and Jaffurs.

In opposition, Plaintiff argues he sufficiently alleges a conspiracy. Plaintiff contends the FAC makes clear that each of the Rady entities is a separate and distinct corporate entity and the Rady foundation is Gosman's only employer. Plaintiff further argues the issue of whether the various Rady Defendants are a single entity is fact specific and cannot be decided in a Rule 12(b)(6) motion. Even if the Rady Defendants and Gosman cannot conspire among themselves, Plaintiff contends the FAC clearly alleges the conspirators include Jaffurs, who is not affiliated with the Rady Defendants. Plaintiff maintains the FAC contains numerous specific facts creating a reasonable inference that Defendants engaged in a conspiracy to deny him privileges at Rady Children's.

In the FAC, Plaintiff alleges Defendant Jaffurs, the chief of plastic surgery of the CHOC medical staff and an employee of University of California, Irvine ("UCI"), made false and defamatory statements about Plaintiff to the Rady Defendants and in concert with Gosman, "who was eager to conspire...because in 2015 she became the sole pediatric craniofacial plastic surgeon at Rady Children's" and she viewed Plaintiff as a competitive threat. FAC ¶¶ 5, 38, 39. He also alleges Gosman is a surgeon and chief of plastic surgery at Rady Children's Hospital, and chief of the Rady Medical Staff and an employee of Rady Children's Specialists. Id. ¶¶ 40-42. Additionally, Plaintiff alleges Defendant Rady Children's Hospital is a California corporation that grants privileges for the performance of medical services through the Rady Children's Medical Staff, a separate unincorporated association composed of physicians and other healthcare providers whom provide medical services to Rady Children's Hospital; Rady Children's Specialists is an unincorporated medical practice foundation closely affiliated with Rady Children's and UCSD who jointly employ the majority of the physicians who have privileges at Rady Children's Hospital; The Regents is a California corporation that governs the University of California systems and jointly with Rady Children's Specialists employs the majority of physicians who have admitting privileges at Rady Children's Hospital. Id. ¶¶ 11-15, 40. The FAC also alleges "[a]ll of the Rady Children's Defendants acted as the agent of each other. Id. ¶ 43.

Additionally, Plaintiff alleges Defendant Jaffurs "commenced an outrageous and vicious campaign against [Plaintiff]" when Plaintiff sought employment at CHOC, including making false and defamatory statements to multiple persons, telling several physicians Plaintiff refused to accept Hispanic and low-income patients, taunting Plaintiff with hostile emails, attempting to prohibit Plaintiff from seeking patients at outpatient clinics, and entering an operating room several times to harass Plaintiff as Plaintiff was performing surgeries. Id. ¶ 70. The FAC also alleges Jaffurs wrote to Plaintiff telling him Plaintiff was not hired by CHOC at Jaffurs' request. Id. ¶ 72. Further, Plaintiff alleges Jaffurs and Gosman made contact, and combined and conspired to prevent him from obtaining privileges at Rady Children's. Id. ¶ 80. The FAC specifically alleges Gosman improperly shared information contained in Plaintiff's confidential application with Jaffurs including the names of physicians whom Plaintiff listed as references and Jaffurs submitted a letter to Rady Children's that disparaged and attacked those physicians. Id. ¶ 82. The FAC also alleges Gosman used her influence to prevent Plaintiff from receiving fair consideration, and both Gosman and Jaffurs made defamatory statements with the intent to professionally harm Plaintiff and prevent him from obtaining employment and privileges. Id. ¶¶ 83, 84, 85.

While the allegations surrounding the relationships between the various Rady Defendants and Gosman suggest an agency relationship which supports Defendants arguments of a single entity, considering the facts in the light most favorable to Plaintiff, Plaintiff clearly alleges an agreement and conspiracy between Gosman and Jaffurs, two distinct individuals. Accordingly, Plaintiff sufficiently alleges a conspiracy to support his claim for conspiracy in restraint of trade claim.

2. Unreasonable Restraint of Trade

Section 1 of the Sherman Act prohibits agreements that unreasonably restrain trade. Thurman Industries, Inc. v. Pay 'N Pak Stores, Inc., 875 F.2d 1369, 1373 (9th Cir. 1989). Reasonableness is evaluated under either per se analysis or the rule of reason. Id. The per se rule applies to a practice that "facially appears to be one that would always or almost always tend to restrict competition and decrease output." National Collegiate Athletic Association v. Board of Regents of Univ. of Oklahoma, 468 U.S. 85, 100, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984). Restraint is presumed unreasonable for practices subject to the per se rule. Id. Other practices are subject to a rule of reason analysis which requires injury to competition in the relevant market. Alliance Shippers, Inc. v. Southern Pacific Trasp. Co., 858 F.2d 567, 570 (9th Cir. 1988).

Defendants contend there is no plainly anti-competitive agreement restraining trade here, so Plaintiff is required, under the rule of reason, to demonstrate anti-competitive harms of the alleged agreement do not outweigh the pro-competitive benefits. Defendant maintains Plaintiff attempts to circumvent this burden by alleging Defendants engaged in a conspiracy to exclude him from Rady Children's Hospital. Even if a conspiracy existed, they argue, it does not restrain trade and Plaintiff's narrow identification of competition and conclusory allegations of wait times and costs leave out other competitive markets in Southern California. They contend Plaintiff fails to allege any agreement that would restrain trade of pediatric craniofacial plastic surgery in Southern California.

Citing Summit Health, Ltd v. Pinhas, 500 U.S. 322, 111 S.Ct. 1842, 114 L.Ed.2d 366 (1991), Plaintiff maintains a conspiracy to exclude a physician from a hospital through misuse of the peer review process is an illegal agreement in restraint of trade. Plaintiff further contends the definition of the relevant market is a question of fact that should not be decided in a 12(b)(6) motion. Plaintiff contends the geographic market defined in the FAC, which spans two large Counties is not facially unsustainable, particularly when the Ninth Circuit has recognized far smaller relevant geographic markets.

To the extent Plaintiff asserts Summit Health holds the misuse of the peer process is subject to the per se rule, the Court disagrees. The Court in Summit Health addressed whether a claim alleging a conspiracy among members of a peer review committee to abuse the process and deny the plaintiff access to the relevant market has a sufficient nexus to interstate commerce to support federal jurisdiction. 500 U.S. at 333, 111 S.Ct. 1842. Plaintiff's allegations do not suggest Defendants engaged in "manifestly anticompetive" conduct to support a per se analysis. Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877, 886, 127 S.Ct. 2705, 168 L.Ed.2d 623 (2007). As such, the rule of reason analysis is appropriate and requires Plaintiff to allege the "relevant market." See Newcal Industrics, Inc. v. Ikon Office Solution, 513 F.3d 1038, 1044 (9th Cir. 2008). The "relevant market" need not be alleged with specificity and will survive a 12(b)(6) motion to dismiss unless it is facially unsustainable. Id. at 1045.

In the FAC, Plaintiff alleges the anti-competitive conduct has harmed patients in the relevant market and the plastic surgery department at Rady Children's Hospital is among the worse for patient wait times. FAC ¶ 8, 29. He further alleges presumptively denying him privileges wrongly deprives children, babies and their families of physician choice and also prolongs their waits in San Diego and Imperial Counties. Id. Additionally, he asserts Defendants conspired to deny him entry into the market for pediatric craniofacial plastic surgery services in San Diego and Imperial Counties, and, are preventing highly complex pediatric craniofacial plastic surgery from being available to all children in San Diego and Imperial Counties. Id. ¶¶ 100, 102. He alleges his skills and techniques could reduce post-operative stays, and thereby reduce medical costs. Id. ¶ 101.

The Court finds no facial or other defect in Plaintiff's relevant market. Therefore, the FAC's allegations surrounding the relevant market survives the motion to dismiss.

3. Unilateral Right to Deny Plaintiff Privileges

Citing Leegin, Defendants argue they have the unilateral right to decide with whom to do business, and the terms and conditions of its business arrangements without violating Section 1.

In opposition, Plaintiff argues Defendants do not have a right to unilaterally deny him privileges. He contends the case cited by Defendants involved retail pricing policies by manufacturers for their retailers. Relying on Sadeghi v. Sharp Memorial Medical Center Chula Vista, 221 Cal.App.4th 598, 164 Cal.Rptr.3d 420 (2013), Plaintiff maintains the peer review process for physicians seeking admitting privileges exists to protect the health and welfare of the people of California and competent practitioners from being barred for arbitrary or discriminatory reasons, and the unwarranted denial of privileges denies a physician a property interest connected to his livelihood.

The only case cited by Defendants in support of their contention addresses manufacturer's ability to set suggested resale prices and to refuse to deal with retailers that do not follow those prices. They cite to no case suggesting a plaintiff may not assert a claim against a defendant for the allegedly arbitrary denial of privileges that results in a restraint of trade. Accordingly, Defendant's motion to dismiss based upon its unilateral power to deny privileges is denied.

4. Antitrust Injury

To state a claim under section 1 of the Sherman Act, a plaintiff must allege facts showing he was "harmed by the defendant's anti-competitive contract, combination or conspiracy, and that this harm flowed from an 'anti-competitive aspect of the practice under scrutiny.' " Brantley v. NBC Universal, Inc., 675 F.3d 1192, 1197 (9th Cir. 2012) (quoting Atlantic Richfield Company v. USA Petroleum Co., 495 U.S. 328, 334, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990).

Defendants contend because Plaintiff fails to plead sufficient facts to support a plausible claim under Section 1, none of Plaintiff's alleged injuries flow from Section 1.

Plaintiff argues the facts in the FAC sufficiently demonstrate an antitrust injury. He maintains he alleges Defendants' unlawful conduct caused him to be denied procedurally fair consideration of his application for admitting privileges, thus causing him to be restrained from practicing his medical specialty anywhere in San Diego or Imperial Counties. Additionally, Plaintiff maintains he also alleges Defendants' exclusionary conduct resulted in longer patient wait times and higher costs, and prevented certain "highly complex pediatric craniofacial surgery procedures from being available at all" in San Diego and Imperial Counties because Plaintiff is an expert in certain procedures that Gosman does not perform. Pla's Opp. at 13 (citing FAC ¶ 102).

In reply, Defendants argue Plaintiff presents no facts to support his own injury let alone an injury to competition. They contend he cites no case law to support the position that staffing decisions affecting a single hospital can result in antitrust injury. Instead, they contend Plaintiff merely states excluding him from the market has prevented highly complex pediatric craniofacial surgery procedures from being available at all and Defendants' conduct has resulted in longer patient wait times and higher costs. They maintain the allegations are conclusory, and only opinions of Plaintiff. They further maintain the allegations are based upon Plaintiff's incorrect description of the relevant market. Defendants further argue the FAC contains no allegations that other competing hospitals in the alleged geographic market have been prevented from establishing facilities to serve patients.

In the FAC, Plaintiff alleges Defendants Jaffurs and Gosman conspired to prevent him from obtaining privileges to suppress competition to Gosman's professional and economic benefit. FAC ¶ 96. He further alleges the Rady Defendants agreed to support Defendant Gosman because the revenue Defendant Gosman would otherwise generate for them would be diverted to Plaintiff if he were granted privileges. Id. ¶ 97. He further alleges, as a result of the conspiracy, "the public has been deprived of free and open competition in pediatric craniofacial plastic surgery services at Rady Children's and in San Diego and Imperial Counties, and there are longer patient wait times and longer post-operative patient hospital stays and higher payer costs. Id. ¶¶ 100, 101. Plaintiff also alleges his skills and techniques as a pediatric craniofacial plastic surgeon could potentially reduce post-operative length of hospital stays, resulting in reduced medical costs. Id. ¶ 102. Additionally, Plaintiff alleges the conspiracy prevents highly complex pediatric craniofacial plastic surgery procedures from being available to all children of San Diego and Imperial Counties. Id. ¶ 102.

Contrary to Defendants' contention, Plaintiff does more than merely recite bare legal conclusions. He includes factual allegations demonstrating injury to competition sufficient to "raise a reasonable expectation that discovery will reveal evidence of an injury to competition." Brantley, 675 F.3d at 1198 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). Plaintiff sufficiently alleges antitrust injury.

C. Monopoly

Plaintiff seeks relief for violation of Section 2 of the Sherman Act in his second claim for relief. To state a claim for monopolization in violation of Section 2 of the Sherman Act, a plaintiff must allege facts showing the defendants "(1) possessed monopoly power in the relevant market, (2) willfully acquired or maintained that power through exclusionary conduct and (3) caused antitrust injury." MetroNet Services Corp. v. Quest Corp., 383 F.3d 1124, 1130 (9th Cir. 2004).

Defendants argue Plaintiff fails to state a claim for monopolization because he fails to allege a relevant market, monopoly power, exclusionary conduct and facts to support antitrust injury.

1. Relevant Market

Claims under Section 2 of the Sherman Act require a definition of the relevant market. Thurman Industries, Inc. v. Pay'N Pak Stores, Inc., 875 F.2d 1369, 1373 (9th Cir. 1989). Failure to identify a relevant market is a proper ground for dismissing a Sherman Act claim. Tanaka v. University of Southern California, 252 F.3d 1059, 1063 (9th Cir. 2001). "The term 'relevant market' encompasses notions of geography as well as product use, quality, and description." Oltz v. St. Peter's Community Hosp., 861 F.2d 1440, 1446 (9th Cir. 1988) (Citing Moore v. James H. Matthews & Co., 550 F.2d 1207, 1218 (9th Cir. 1977) ). Determination of the relevant market is generally a factual inquiry. Id. However, a claim may be dismissed if the relevant market definition is facially unsustainable. Newcal, 513 F.3d at 1045.

Defendants contend Plaintiff identifies the relevant product/service market as pediatric plastic and craniofacial surgery, and identifies the relevant geographic market as San Diego and Imperial counties. Assuming the relevant product/service market is appropriate, Defendants argue Plaintiff fails to allege a relevant geographic market. Specifically, Defendants argue Plaintiff does not plead any facts to support the conclusion that San Diego and Imperial Counties are the only areas where buyers of pediatric plastic and craniofacial surgery would travel to obtain such specialized services. They maintain nothing in the FAC supports the notion that Los Angeles County, Orange County, Riverside County and San Bernardino County should not be included in the geographic market.

Plaintiff maintains the question of the relevant geographic market does not turn on whether a patient would either obtain the surgery in San Diego and Imperial Counties or go without, as suggested by Defendants, but whether patients in San Diego and Imperial Counties would tolerate a small but significant nontransitory increase in price by the Rady pediatric craniofacial plastic surgery group. Plaintiff maintains this is a question of fact that implicates complicated issues of insurance coverage and in-network benefits versus out-of-network benefits, and cannot be resolved at the pleading stage. He contends the question before the Court is whether a geographic market of San Diego and Imperial Counties is "facially" sustainable, and argues the relevant market defined in the FAC clears this low threshold.

Plaintiff defines the relevant market as pediatric and craniofacial surgery medical services in San Diego and Imperial Counties. FAC ¶¶ 110, 113. For purposes of the motion to dismiss, Defendants do not challenge the product market. They argue Plaintiff fails to plead facts to support the identified geographic market. "The relevant geographic market is the 'area of effective competition' defined in terms of where buyers can turn for alternative sources of supply." Moore, 550 F.2d at 1218. It must "correspond to the commercial realities of the industry and be economically significant" and may be limited to a single metropolitan area. Brown Shoe Co. v. United States, 370 U.S. 294, 366, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962). These determinations are factual in nature and are better tested by a summary judgment motion or at trial. Newcal, 513 F.3d at 1045. At this stage, the Court need only determine whether the market is facially sustainable. The Court finds no fatal legal defect in Plaintiff's alleged market of San Diego and Imperial Counties.

2. Monopoly Power

Defendants argue Plaintiff suggests the Rady Defendants have 100% of the market power by artificially narrowing the geographic market. They further argue the FAC is silent as to any barriers to entry erected by the Rady Defendants to prevent the practice of pediatric plastic and craniofacial surgery throughout San Diego and Imperial Counties.

Plaintiff contends, pursuant to the direction of Newcal, the Court should look to the geographic market actually alleged in the FAC for purposes of a 12(b)(6) motion. He argues Defendants do not dispute their monopoly power in the geographic market as defined in the FAC. Plaintiff also alleges the practice of pediatric craniofacial plastic surgery is viable only for medical facilities dedicated to pediatric patients and Rady Children's is the only hospital serving San Diego and Imperial Counties that offers the practice environment necessary for pediatric craniofacial plastic surgery. Additionally, he maintains, all three major hospital systems in San Diego refer all pediatric craniofacial plastic surgery candidates to Rady Children's.

Monopoly power is "the power to control prices or exclude competition." United States v. Grinnell Corp., 384 U.S. 563, 571, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966) (quoting United States v. E.I. du Pont De Nemours & Co., 351 U.S. 377, 399, 76 S.Ct. 994, 100 L.Ed. 1264 (1956) ). Defendants' challenge to Plaintiff's allegations of monopoly power are based upon their argument that the alleged geographic market is improper. As discussed above, Plaintiff's identified market is facially sustainable, and Plaintiff clearly alleges Defendants have 100% of the market within San Diego and Imperial counties. Accordingly, Plaintiff sufficiently alleges monopoly power to state a claim for monopolization.

3. Exclusionary Conduct

"Anticompetitive conduct is behavior that tends to impair the opportunities of rivals and either does not further competition on the merits or does so in an unnecessarily restrictive way." Cascade Health Solutions v. PeaceHealth, 515 F.3d 883, 894 (9th Cir. 2008).

Defendants contend Plaintiff appears to allege Defendants used a conspiracy as the exclusionary device to monopolize the relevant market. Defendants maintain the conspiracy theory fails for many of the same reasons it argues the conspiracy claim fails under Section 1 including: (1) the Rady Defendants are part of a single entity, incapable of conspiring with one another under antitrust laws; (2) Dr. Gosman was an employee and/or agent of the Rady Defendants, and therefore, cannot conspire with the Rady Defendants for antitrust purposes; and (3) there are no factual allegations to support any conspiratorial communications between Dr. Gosman and the Rady Defendants. Defendants also maintain Plaintiff alleges different participants for the conspiracy of the Section 2 claim and Defendant Jaffurs had no involvement in the Section 2 claim. Defendants argue this difference calls into question the plausibility of both conspiracy theories.

Plaintiff argues the FAC contains numerous factual allegations that, taken as true, sufficiently allege a conspiracy among Jaffurs, Gosman, and the Rady defendants to deny Plaintiff procedurally fair consideration of his application for privileges at Rady Children's and alleges that Gosman and the Rady defendants acted with the specific intent to monopolize, and sets forth their economic rationale for doing so. Plaintiff further argues Defendants misread the FAC and/or misapprehend the Sherman Act. He maintains he alleges a single conspiracy among all Defendants who assisted with Defendants Jaffurs' and Gosman's coordinated efforts to have his application for privileges denied. He contends all Defendants are included in the first claim for relief because Section 1 of the Sherman Act prohibits restraint of trade. Additionally, he contends the second claim for relief details how Gosman and the Rady defendants conspired to maintain their monopoly on pediatric craniofacial plastic surgery in the relevant market. He maintains Defendant Jaffurs is not named in that claim because, athough he is one of the primary actors behind the conspiracy, he is not the monopolist. Plaintiff argues the first and second claims do not allege two separate and independent conspiracies, but rather set forth separate causes of action arising from the same conspiracy.

A review of the FAC supports Plaintiffs contention that he seeks two separate causes of action, restraint of trade and monopoly, against different defendants based upon the same conspiracy. As discussed above in section I.B.1., Plaintiff sufficiently alleges a conspiracy amongst the various defendants.

4. Antitrust Injury

Defendants contend Plaintiff has not alleged any facts to show consumer welfare has been harmed. Additionally, they contend, Plaintiff fails to plead facts supporting a plausible claim under Section 2 and, therefore, none of his alleged injuries flow directly from that provision of the antitrust laws. Thus, Defendants argue, Plaintiff has not suffered antitrust injury under Section 2 and the second claim for relief must be dismissed.

Plaintiff maintains he alleges Defendants' exclusionary conduct prevents certain highly complex pediatric craniofacial surgery procedures from being available at all in San Diego and Imperial Counties because he is an expert in certain procedures that Gosman does not perform, and their exclusionary conduct has resulted in longer patient wait times and higher costs. Taken as true, he argues, these factual allegations show harm to competition.

In reply, Defendants argue Plaintiff's mere frustration to gain access to a hospital does not amount to an antitrust injury. Defendants also argue Plaintiff's allegations of longer patient wait times and higher costs are nothing more than conclusory allegations without any factual support and are based on Plaintiff's incorrect description of the relevant market.

As discussed in section I.B.4. above, Plaintiff's factual allegations sufficiently plead antitrust injury.

D. Bad Faith Professional Review

Defendants seek dismissal of Plaintiff's claim for the alleged violation of California Business & Professions Code 809.05 arguing there is no separate right for civil remedies. They further contend, even if a viable cause of action did exist, any attempt to invoke this section is premature because Plaintiff only alleges his privileges have presumptively been denied.

Plaintiff argues Defendants provide no authority for their contention that a physician cannot bring a civil claim to enforce rights included in section 809. Plaintiff contends section 809 expressly recognizes that physicians are harmed by peer review that is not conducted fairly, and provides the right to a review process that is not arbitrary or capricious and a specific procedure to safeguard the rights of physicians. He maintains the legislation provides for administrative remedies but does not provide a means to enforce the rights contained therein. Citing Jacobellis v. State Farm Fire & Cas. Co., 120 F.3d 171, (9th Cir. 1997), he argues, a private right of action may be implied because it is needed to protect the purpose and assure the effectiveness of section 809. Plaintiff contends he alleges sufficient facts to support a claim for relief for violation of section 809.

In reply, Defendants argue Plaintiff misrepresents Jacobellis and the Restatement test to artificially create an implied private right of action. They contend there is no support for a private right of action under section 809, and plaintiff has provided no authority to show otherwise. They also contend the legislative history confirms the intent of the statute was to provide minimum statutory procedural rights and protections to physicians subject to adverse action in a peer review system.

In Jacobellis, the Ninth Circuit found that "California courts have implied a private right of action where such a right was necessary to enforce a statute that was intended to protect the aggrieved party." 120 F.2d at 174 (citing Faria v. San Jacinto United School Dist., 50 Cal.App.4th 1939, 59 Cal.Rptr.2d 72 (1996). The court determined that the Restatement test for deciding whether a private right of action could be implied is useful in cases where the statute evidences a legislative intent to provide a right to a class of persons and "in the absence of the concerns avoided by the Moradi-Shalal court." Id. at 175. According to the court, the California Supreme Court in Moradi-Shalal v. Fireman's Fund Ins. Cos., 46 Cal.3d 287, 250 Cal.Rptr. 116, 758 P.2d 58 (1988), looked to the text of the statute, legislative analyst and counsel reports, alternative methods of enforcement, adverse consequences of implying a private cause of action and analytical difficulties defining the scope of the cause of action when finding the statute provided no private right of action. Id. at 174. In determining the Earthquake Insurance Act had a private cause of action in Jacobellis, the Ninth Circuit noted that the Earthquake Insurance Act differed from the statute addressed in Moradi-Shalal, the Unfair Practices Act, in that the text of the Unfair Practices Act provided for administrative enforcement while the Earthquake Insurance Act did not provide any administrative remedies. See Id.

Section 809 is the statutory scheme providing a peer review system to preserve high standards for the practice of medicine. Cal. Bus. & Prof. Code § 809(2)(3). It recognizes "[p]eer review that is not conducted fairly results in harm to both patients and healing arts practitioners by limiting access to care" and defines the minimum due process requirements of the process. § 809(a)(4) ; Unnamed Physician v. Board of Trustees of Saint Agnes Medical Center, 93 Cal.App.4th 607, 622, 113 Cal.Rptr.2d 309 (2001). The legislation provides administrative remedies. Accordingly, a private right of action is not necessary to enforce the statute. Looking to the guidance provided by the Ninth Circuit in Jacobellis, the Court finds no implied private right of action in section 809.

E. Defamation

Defendants argue plaintiff's allegations supporting his claim for defamation are devoid of the requisite specificity and are privileged.

1. Specificity

To state a claim for defamation, a plaintiff must allege "intentional publication of a statement of fact that is false, unprivileged, and has natural tendency to injure or which causes special damage." Smith v. Maldonado, 72 Cal. App. 4th 637, 645, 85 Cal.Rptr.2d 397 (1999). "Publication means communication to some third person who understands the defamatory meaning of the statement and its application to the person to whom reference is made." Id.

Defendants argue Plaintiff alleges Defendants forwarded, conveyed, or repeated Defendant Jaffurs' false and defamatory statements but fails to identify which of Jaffurs' statements were forwarded, conveyed, or repeated, which Defendant allegedly made the statements, to whom these statements were made, when these statements were made, and the context of the statements. Thus, they argue, the allegations lack the specificity required to support a defamation cause of action.

Plaintiff argues Defendants contention that he must plead defamation with a high degree of specificity is wrong. He maintains a plaintiff need only allege the substance of the defamatory statement. He further maintains he alleges both libel and slander with sufficient specificity. He contends he identifies the alleged statement, a publication, and defamatory meaning and that each Defendant repeated the statements to others. Plaintiff also maintains he need not identify the specific third person to whom the allegedly defamatory statement was directed and he sufficiently alleges Defendants' wrongful conduct began in approximately July 2015, and continued at least into early 2016.

In reply, Defendants argue Plaintiff fails to identify which false statements were repeated by Defendants and to whom the statements were repeated. They contend he alleges no facts showing they were responsible for any publication to other healthcare providers.

The FAC contains numerous conclusory allegations that Dr. Jaffurs made false oral and written statements to Defendant Gosman and other Rady Defendants "relating to [Plaintiff's] profession, to [Plaintiff's] detriment" which he maintains constitute libel and slander per se. FAC ¶¶ 153-157, 160-161. However, Plaintiff also alleges Defendant Jaffurs made false written statements to Defendant Gosman relating to Plaintiff's profession, including that Plaintiff "is not fit to operate on children." Id. ¶ 152. He further alleges Defendants "forwarded, conveyed, or repeated" Jaffur's allegedly false and defamatory statements to others and knew the statements were false and failed to take reasonable care to determine the truth or falsity of the statements. Id. ¶¶ 162, 163.

While libel requires pleading the exact words, slander may be alleged by asserting the substance of the defamatory statement. Okun v. Superior Court, 29 Cal.3d 442, 458, 175 Cal.Rptr. 157, 629 P.2d 1369 (1981). The alleged defamatory statement that Plaintiff was not fit to operate on children is sufficiently specific to state a claim. Plaintiff also alleges Defendant Jaffurs, in concert with Defendant Gosman, made defamatory statements from October 2015 through January 2016. FAC ¶ 84. He further alleges, Defendants Jaffurs and Gosman conspired to spread false information to various physicians. Id. ¶ 85. While Plaintiff fails to allege specifics as to the time and the third parties to whom Defendants repeated the statements, he provides a timeframe and alleges the statements were repeated to other physicians. "Less particularity is required when it appears that defendant has superior knowledge of the facts, so long as the pleading gives notice of the issues sufficient to enable preparation of a defense." Okun, 29 Cal.3d at 458, 175 Cal.Rptr. 157, 629 P.2d 1369. Plaintiff's allegations give sufficient notice of the claim for slander to permit the Rady Defendants to prepare a defense. Plaintiff, however, fails to sufficiently allege libel against the Rady Defendants. As such, the motion is granted as to Plaintiff's claims for libel and denied as to his claims for slander.

2. Privilege

Defendants argue the statements are privileged under California Civil Code section 47(b). 43.8 and 47(c).

a. Section 47(b)

According to section 47(b), a publication or broadcast made "[i]n any (1) legislative proceedings, (2) judicial proceedings, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceedings authorized by law and reviewable pursuant to Chapter 2 (commencing with Section 1084 ) of Title 1 of Part 3 of the Code of Civil Procedure" is privileged. "[T]he privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relations to the action." Silberg v. Anderson, 50 Cal.3d 205, 212, 266 Cal.Rptr. 638, 786 P.2d 365 (1990).

Defendants argue the alleged statements are privileged under California Civil Code section 47(b) because the California legislature has accorded hospital peer review decisions a status comparable to that of quasi-judicial public agencies whose decisions likewise are reviewable by administrative mandate. They contend the entirety of Plaintiff's lawsuit involves the alleged presumptive denial of privileges at Rady Children's, and therefore, any alleged statements were made as part of the peer review process used to evaluate Plaintiff's application for privileges. They maintain this peer review process must be considered a judicial proceeding, and therefore, any alleged defamatory statements by Defendant Gosman or anyone representing the Rady Defendants during the evaluation of Plaintiff's application for privileges are absolutely privileged under section 47(b).

Plaintiff argues, as a threshold matter, determining whether a defendant is entitled to immunity under Section 47(b) is generally a question of fact. He further argues, even if the Court considers Defendants' fact-based argument now, Defendants are not entitled to immunity under Section 47(b), because defendants have not engaged in the kind of quasi-judicial proceeding that courts have recognized as subject to Section 47(b), and because Gosman's statements were not made in connection with a legitimate peer review process. Plaintiff maintains there was no administrative hearing, much less one conducted in a manner similar to a judicial proceeding, including notice, informal pleading and hearing. Instead, he maintains his application was "screened out." Pla's Opp. at 19. He argues Defendants' cursory screening out of his application, without any legitimate peer review, is not protected activity. He further argues, even if Defendants' conduct could be considered a quasi-judicial process subject to section 47(b), Gosman's unlawful conduct was not entirely related to or connected with that process. He maintains Defendant Gosman's conduct preceded any colorable peer review by several months.

In reply, Defendants argue Plaintiff too narrowly limits the scope and purpose of the litigation privilege. They maintain section 47(b) applies to statements made in the course of, and preparatory to, official proceedings authorized by law. Defendants contend Plaintiff's email inquiring about employment and privileges at Rady Children's, alone, effectively triggers the start of the peer review process. They argue the allegedly defamatory statements are absolutely protected by the litigation privilege of section 47(b), because they were made in connection with an official proceeding that started when Plaintiff emailed Gosman in July 2015.

As discussed above, Plaintiff's allegations demonstrate there have been no quasi-judicial proceedings. It is clear the privilege is not limited to statements made during judicial or quasi-judicial proceedings, and "may extend to steps taken prior thereto, or afterwards." Rusheen v. Cohen, 37 Cal.4th 1048, 1057, 39 Cal.Rptr.3d 516, 128 P.3d 713 (2006). However, "[a] prelitigation communication is privileged only when it relates to litigation that is contemplated in good faith and under serious consideration." Action Apartment Association, Inc. v. City of Santa Monica, 41 Cal.4th 1232, 1251, 63 Cal.Rptr.3d 398, 163 P.3d 89 (2007). Plaintiff's allegations support the inference his application was "screened out."

The determination of whether the statements were made to achieve the objects of the quasi-judicial proceedings and have a logical relation to the action is a question of fact not suitable for disposition on a motion to dismiss.

b. Sections 43.8 and 47(c)

Section 43.8 provides immunity for communications made "to aid in the evaluation of the qualifications, fitness, character, or insurability of a practitioner of the healing or veterinary arts." The privilege is qualified and "may be defeated by proof that the person or entity asserting the privilege, when it made the communication, knew the information was false or otherwise lacked a good faith intent to assist in the medical practitioner's evaluation." Hassan v. Mercy American River Hosp., 31 Cal.4th 709, 724, 3 Cal.Rptr.3d 623, 74 P.3d 726 (2003).

Under section 47(c), "a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or (3) who is requested by the person interested to give the information" is privileged.

Defendants argue the statements are privileged under California Civil Code section 43.8, because the statements directly concern Plaintiff's qualification for his application for privileges at Rady Children's. They contend Plaintiff has not and cannot show they lacked a good faith intent to aid in Plaintiff's evaluation. Additionally, they contend the allegation that Plaintiff received a call from Dr. Carvalho who told Plaintiff his application was being presumptively denied shows the Rady Defendants and Defendant Gosman were in the process of reviewing Plaintiff's application, and, thus, the alleged defamatory statements fall within the protections of section 43.8.

Defendants also argue the alleged statements are privileged under California Civil Code section 47(c) because the statements were made in the interest of the operation of Rady Children's. Defendants maintain the Rady Defendants and Defendant Gosman, as the Chief of Plastic Surgery at Rady Children's, have a common interest in Plaintiff's application for privileges as a craniofacial plastic surgeon at Rady Children's. Additionally, they contend Plaintiff failed to plead any facts alleging they acted with malice. Instead, they maintain, Plaintiff merely speculates Defendants acted with malice, and, they argue, Plaintiff's conclusory speculation is not supported by any facts. They maintain, if they did make or repeat a statement regarding Plaintiff's job performance with a former employer, it would fall squarely within the scope of common interest under section 47(c).

Plaintiff argues Defendants are not immune under section 43.8 and 47(c) because Defendants' statements were not intended to aid in his evaluation and were made with malice. He maintains section 43.8 provides no immunity if the person asserting the privilege lacked a good faith intent to assist in the evaluation. Plaintiff asserts he extensively pleads Defendants' true intent by alleging Defendant Jaffurs harbored malice toward Plaintiff and viewed Plaintiff as an economic threat to his pediatric plastic and craniofacial surgery practice in Orange County, and Defendant Gosman viewed Plaintiff's arrival as a competitive threat to her status as the sole practicing pediatric craniofacial plastic surgeon at Rady Children's. Thus, he argues, in making the defamatory statements alleged, neither Jaffurs nor Gosman acted with the subjective purpose or goal to assist in Plaintiff's evaluation. Rather, he maintains. Defendant Gosman acted with the purpose of denying him fair consideration of his application for admitting privileges at Rady Children's, and preserving her position as the sole pediatric craniofacial plastic surgeon at Rady Children's. Additionally, the other Rady Defendants similarly acted with the purpose of preventing Plaintiff from obtaining privileges at Rady Children's, to further their economic incentive to exclude physicians who are not employed by the Rady Foundation. Thus, he argues, no defendant acted with the purpose protected by section 43.8.

Plaintiff further maintains sections 43.8 and 47(c) provide only qualified immunities.

He contends Defendants are not entitled to immunity under either section 43.8 or 47(c), because they acted with malice, and without reasonable grounds for belief in the truth of their statements. Plaintiff maintains he alleges all Defendants, including the Rady defendants, knew the statements were false, and the evidence available to them proved the statements were false, and he specifically alleges the Rady defendants failed to take reasonable care to determine the truth or falsity of the statements at issue, as they did not contact Plaintiff or the numerous physicians who sent letters to Rady Children's refuting Defendant Jaffurs' statements and offering support to Plaintiff's application for admitting privileges. He argues Defendants' defamatory and anti-competitive purposes, combined with their deliberate falsehoods and false statements made without reasonable grounds to believe them true, take their conduct outside the scope of the qualified protections otherwise provided by sections 43.8 and 47(c).

In reply, Defendants argue the alleged statements are privileged because they were made in order to evaluate Plaintiff for staff privileges and Defendants would have a strong interest in receiving such information. They further argue there is nothing in the FAC setting forth facts that the alleged statements were motivated by hatred or ill will towards Plaintiff.

In the FAC, Plaintiff alleges

Defendants knew the statements to be false, and the evidence available to defendants proved the statements false. Defendants Dr. Gosman, Rady Children's, Rady Foundation, UCSD and Rady Children's Medical Staff failed to take reasonable care to determine the truth or falsity of the statements, as they did not, for example, contact Dr. Toranto or the numerous physicians who sent letters to Rady Children's refuting Dr. Jaffur's statements and offering unconditional support to Dr. Toranto's application for admitting privileges.

FAC ¶ 163.

Plaintiff also alleges Defendant Gosman viewed Plaintiff as a competitive threat to her status as the sole practicing pediatric craniofacial plastic surgeon at Rady Children's and was motivated by her desire to suppress competition in her local market to her benefit. Id. ¶¶ 5, 96, 116. Assuming the truth of Plaintiff's allegations, Defendants knew the statements were false or lacked the intent to assist in the evaluation, and acted with malice. Accordingly, the statements are not privileged under sections 43.8 or 47(c).

F. Tortious Interference with Prospective Economic Relations

To state a claim for tortious interference with prospective economic advantage, Plaintiff must allege

(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) int