Beloozerova v. Dignity Health

          ORDER

          David G. Campbell United States District Judge

         Plaintiff Irina Beloozerova filed a complaint in state court against Defendant Dignity Health, doing business at Barrow Neurological Institute (“BNI”), alleging various claims related to Defendant's intention to terminate her employment on July 1, 2018. Doc. 1-1 at 14-32. Defendant removed the action to this Court based on diversity jurisdiction. Doc. 1. At a hearing on June 29, 2018, the Court granted a temporary restraining order (“TRO”) that prevented Defendant from taking any adverse employment action against Plaintiff. Doc. 13. On July 24, 2018, the Court held an evidentiary hearing on Plaintiff's motion for a preliminary injunction. Doc. 31. After considering evidence submitted at the hearing and arguments made in writing and at the hearing, the Court will deny the motion and dissolve the TRO.

         I. Background.

         Plaintiff is a biologist who specializes in brain physiology and has worked as a researcher at BNI since 2000. Doc. 6-1 ¶¶ 3-4. The 1999 letter offering Plaintiff a job at BNI stated that her employment would be “at will.” Ex. 53 at 3. BNI's Appointments and Promotions Policy (the “Policy”) states, however, that Plaintiff and others in her position can eventually obtain “standing, ” and describes procedures BNI must follow to terminate such employees. Ex. 9 at 13-16. Plaintiff and Defendant disagree on whether Plaintiff can be terminated at will or enjoys greater job protections under the Policy.

         As a condition of her research position, Plaintiff is required to obtain external funding in the form of grants from governmental or other research-funding organizations to cover half of her salary, half of her fringe benefits, administrative costs, ^[1] and the full cost of running her laboratory. Court's Livenote Tr. dated July 24, 2018 (“Tr.”) at 54-57; Doc. 6-1 ¶ 12; Doc. 12-2 at 2, ¶ 5. Plaintiff obtained such a grant from the National Institutes of Health (“NIH”) during some years of her employment, but the NIH funding ended in 2012. Doc. 12-2 at 3, ¶¶ 11-12. Since that time, Plaintiff's salary and research have been covered by “gap funding” provided by BNI and related entities. Id. “Gap funding is provided, when available, and when in BNI strategic interests, if an individual who has had sustained, external support should temporarily lose that funding.” Ex. 1 at 1. Gap funding “cannot continue indefinitely.” Id.

         As of August 17, 2017, Plaintiff had not secured external funds to replace the NIH grant. Doc. 12-2 at 3, ¶¶ 11-12. BNI therefore gave Plaintiff notice of its intent to terminate her employment:

In accordance with appointments and promotions and with gap funding policies, and after much deliberation, this letter shall serve as notice that your employment as an Associate Professor in the Division of Neurobiology will end once funds on hand to support your full-time employment have been exhausted (the “Separation Date”), which is projected to be no later than July 1, 2018.

Ex. 1 at 1. Plaintiff initially did not challenge this decision. Indeed, Plaintiff testified at the hearing that Defendant was entitled to terminate her for this reason. See Tr. at 58-59.

         But in December 2017, Plaintiff secured a three-year grant from the National Science Foundation (“NSF”). Doc. 6-1 ¶ 19. The NSF grant totaled $450, 000, payable at the rate of $150, 000 per year. Tr. at 64. Plaintiff immediately informed Defendant of this award in an effort to reverse the termination decision. Doc. 6-1 ¶ 22. Dr. Ronald Lukas, Vice President for Research at BNI, congratulated Plaintiff and suggested that the award appeared to cover Plaintiff's expenses through the end of 2018. Doc. 12-2 at 9. But Dr. Lukas also expressed concern that additional funding would be required to maintain Plaintiff's position. Id. After reviewing the NSF grant, BNI's Research Oversight Committee (“ROC”) concluded that it was not sufficient to “sustain a competitive research program” and that Plaintiff would be terminated as scheduled on July 1, 2018. Doc. 12-2 at 3, ¶ 16. Plaintiff appealed the ROC's decision in March 2018, but Defendant affirmed the decision on May 14, 2018. Ex. 23. Plaintiff then filed this action alleging breach of contract and other wrongs. Plaintiff obtained the TRO, and seeks a preliminary injunction, on the basis of her breach of contract claim.

         II. Legal Standard.

         “A preliminary injunction is ‘an extraordinary remedy never awarded as of right.'” Benisek v. Lamone, 138 S.Ct. 1942, 1943 (2018) (per curiam) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008)). Such an injunction “should not be granted unless the movant, by a clear showing, carries the burden of persuasion.'” Lopez v. Brewer, 680 F.3d 1068, 1072 (9th Cir. 2012) (emphasis in original) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). The movant must “establish that [she] is likely to succeed on the merits, that [she] is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in [her] favor, and that an injunction is in the public interest.” Winter, 555 U.S. at 20.

         “But if a plaintiff can only show that there are ‘serious questions going to the merits' - a lesser showing than likelihood of success on the merits - then a preliminary injunction may still issue if the ‘balance of hardships tips sharply in the plaintiff's favor,' and the other two Winter factors are satisfied.” Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281, 1291 (9th Cir. 2013) (emphasis in original) (quoting Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011)); see Short v. Brown, 893 F.3d 671, 675 (9th Cir. 2018). The Ninth Circuit has explained:

For the purposes of injunctive relief, “serious questions” refers to questions which cannot be resolved one way or the other at the hearing on the injunction and as to which the court perceives a need to preserve the status quo lest one side prevent resolution of the questions or execution of any judgment by altering the status quo. Serious questions are substantial, difficult and doubtful, as to make them a fair ground for litigation and thus for more deliberative investigation. Serious questions need not promise a certainty of success, nor even present a probability of success, but must involve a fair chance of success on the merits.

Rep. of the Phil. v. Marcos, 862 F.2d 1355, 1362 (1988) (en banc) (internal quotation marks and ...