Copyright © PCBE, Inc. 2003

Article from May 12, 2003 edition of the South Sound Business Examiner (Tacoma, Washington).


Whether you agree with their motives, their methods or the way they reacted to dicey situations, you'll probably admit it might not be paranoia that makes this trio wonder if they're Victims of the System.

By Steve Dunkleberger & Paul Schrag
Business Examiner staff

It has been said that no good deed goes unpunished. And there's plenty of evidence to support that contention, especially when the government gets involved. 

South Sound residents who believe their careers and livelihoods have been altered by government and their own good intentions include a former medical doctor, an office-supply store owner and a lawyer who can't practice for six months. Here are their stories: 

Physician Sarah Reade says she had no reservations about alerting the Medical Quality Assurance Commission (MQAC) to the possibility a colleague's illness might be endangering patients. She now wishes she had kept her mouth shut. 

"Sometimes, I still can't believe what happened," Reade says of her encounter with MQAC, an arm of the state Health Department that enforces standards of competence for a variety of health-related fields and agencies. 

The physician couldn't heal herself

The Olympia residents recalls that it began in 1997. The internal medicine specialist was practicing at Stevens Hospital in Edmonds at the time and growing increasingly concerned by comments from patients. They described odd, sometimes-disturbing behavior on the part of a colleague, she says. When she looked into their allegations, she says, she discovered a disturbing series of misdiagnoses, including one in which her colleague treated a patient with congestive heart failure for pneumonia. 

"Patients were coming to me and asking if there was something wrong," says Reade. 

She points out that her colleague was suffering from Parkinsons Disease, which can manifest itself in abnormal gait, stiffness, tremors, loss of muscular control and, of most concern to her at the time, a form of dementia related to neurological degeneration. 

Reade says she consulted with the MQAC, hoping for help in resolving patient concerns and to resolve issues of liability since the two physicians shared patients and space. MQAC responded by sending investigator Virginia Renz to conduct an informal interview with Reade's colleague, his attorney and staff at the clinic where Reade and her colleague practiced. 

After concluding Reade's concerns were unfounded, Renz scheduled an interview with Reade, who was unaware that the physician she'd raised concerns about, some members of their staff and her ex-husband had turned the tables on her. They described having smelled alcohol on her breath in the medical office on at least two occasions and claimed it was she who'd been exhibiting strange behavior, including late night phone calls in which she allegedly slurred her words. 

Renz concluded Reade had a drinking problem that warranted further action. Her report was forwarded to to the Washington Physicians Health Program (WPHP), which specializes in intervention and treatment of physicians with substance abuse problems or mental illness. The WPHP has counterparts nationwide that collectively claim success rates of 85 to 90 percent -- success being defined as returning the healthcare professional to a healthy, chemical-free lifestyle. WPHP says its primary role is to protect patients from impaired physicians -- that helping physicians clean themselves is a bonus. 

Most physicians avoid suspension of their medical license by cooperating with WPHP, says Director Lynn Hankes. 

"The program really does work," he says. "If a physician works with us, they can usually get back on track without jeopardizing their career." 

Most physicians are eager to do exactly that. In fact, in the vast majority of cases WPHP handles, the physician whose career is at stake is self-referred. They recognize that they have a problem and turn to WPHP for the cure.

Reade was among just 14 percent of the cases that are dropped in MPHP's lap by state agencies or the courts. Hankes concedes that some of these cases turn out to have been based on false reports. It's a fact of life that would do little to mitigate the impact on Reade's practice.

According to official MPHP files made available by Reade, MPHP's inquiries included calls to her father, her ex-husband and colleagues in Edmonds. The files portray Reade as unstable and mentally ill and refer repeatedly to strong suspicions, sometimes even certainty on the part of those who were interviewed and interviewers, that Reade was abusing alcohol. The first entry is typical: "Ms. Renz feels strongly that there is a chemical dependency." 

"The investigations were a joke," says Reade.

She admits that shortly after the death of her mother, which coincided with what she describes as a nasty divorce and legal battles over her mother's estate, she occasionally drank more than she should have in the evening. 

"It was one of the hardest times of my life," says Reade.

But she denies ever drinking before work, while on duty or while on call. She is convinced that this fact was never considered by MPHP, which she says had drawn its conclusions before even interviewing her. During the interview, she says, she was told it was clear she needed treatment and that arrangements were being for her to get it.

Hankes refers to the meeting as benevolent coercion.

"It has to have a coercive element because these individuals are suffering from a disease e that tells them that they are not sick," he says. "We use a loving, compassionate but totally honest approach. It's a tough-love mentality." 

A letter from Hankes to MQAC Lead Attorney Gerald Kelly claims Reade broke down and admitted to having a drinking problem. Reade flatly denies such allegations and claims that she was warned that if she didn't cooperate she faced suspension of her medical license. 

"I was just so intimidated," says Reade. "Their methods were draconian." 

For his part, Hankes denies his agents make such threats. In fact, he says, they are required to emphasize that involvement is strictly voluntary and that the agency has no jurisdiction over licensing. 

Reade says she warily consented to visit treatment facilities for an evaluation, if for no other reason than to assure MPHP the charges against her were groundless and that she was competent to continue practicing medicine.

Reade was sent to Springbrook Northwest in Newberg, Ore., one of several centers used by WPHP for evaluations and treatment of physicians. There, she says, she was prescribed drug withdrawal therapy despite the fact the discharge summary she eventually obtained from Springbrook clearly states that all medical tests administered there to identify physical effects of alcohol abuse were negative. That did not discourage the center from subjecting her to treatment she deemed unnecessary and unwarranted, she says. 

"As soon as I stepped through the doors, I was considered an addict," says Reade. "Any contradictions or anything I said in my own defense just reinforced that I was in denial." 

Springbrook interpreted her intractability as evidence that she needed intensive care and recommended that she spend three months there if she really wanted to get well. Her three-month stay would cost her $35,000, she was told. Reade says she left Springbrook that day.

She returned to Edmonds, hired an attorney and arranged for private evaluations in hopes of obtaining evidence that would contradict the damning reports from Springbrook.

In May 1998 Hankes informed Washington Department of Health Staff Attorney Gerald Kelly that his agency believed Reade had a drinking problem and had refused treatment. Evidence of her denial that she had a problem was the fact that she'd hung up on Hankes when he called to offer help, the letter said. Hankes said it was his opinion that Reade was unsafe to practice medicine. 

On May 12, 1998, Sarah Reade's medical license was suspended by the Medical Quality Assurance Commission under the authority of the Washington State Health Department. 

"I was in shock," says Reade.

Despite assurances by Hankes and MQAC Program Director Lisa Noonan that the WPHP is not the investigatory arm of any state agency, court documents related to the suspension suggest WPHP interviews and notes were the principle evidence in the Health Department's case against Reade.

"If they felt there was someone else they needed to talk to," Noonan says, "they would have."

Yet Noonan also observes that Reade's suspension was uncharacteristic, according to MQAC protocol. Most suspensions require more serious violations, such as sexual misconduct, she says.

The type of sexual misconduct, for example, that Reade's colleague at the Stevens clinic had been found guilty of in 1990. He was on his final year of probation when Reade expressed her concerns about whether Parkinsons was affecting his ability to practice. That doctors license of practice was intact until he suffered a skiing accident in 2002 and voluntarily retired from practice.

"Unless there is a clear danger presented, a substance-abuse case will not usually result in suspension," says Noonan. 

Reade underwent yet another evaluation -- this one ordered by the MQAC -- at McLean Hospital in Massachusetts. There, physician Alan S. Barry conducted a five-day examination before concluding that despite Reade's appearing to have experienced a brief period of difficulty, there was no evidence at all of chronic alcohol abuse. A little more than a year later, Reade included Barry's report in the evidence she presented to a State Medical Board commission and Assistant Atty. Gen. Sharon Eckholm, who had taken over the case from MQAC. They, in turn, concluded that there were no grounds to justify suspension of Reade's medical license. All charges against her were finally dismissed. 

But her ordeal wasn't over.

Earlier this year, Reade gave up medicine and says this time it's probably for good. She launched a practice in Olympia in 2000, she explains, but was forced to shut it down a few months ago when she was informed by her malpractice insurance provider that the cost of her premiums was going up -- from $5,000 a year to $30,000. The insurer had just discovered her license had been suspended, she says. Never mind that she later was exonerated, she adds. 

"I'm just not going to subsidize a broken system anymore," she says. "I just can't afford it." 

She she's still paying off the $200,000 in bills that accumulated as a result of lost income, attorney fees and other expenses she accumulated fighting the battle with the state, she explains. 

Hankes defends his program saying he helps 30 to 40 physicians a year avoid losing their licenses. He remains convinced that there was no impropriety in the handling of Reade's case.

"We really don't rush to judgement," he says. 

Noonan concedes that regardless how judgements are reached, they typically have long-range implications -- even if a physician is exonerated.

"I will admit that the impact on someone's practice can be devastating," says Noonan. "There is really no recourse, though, because reports to our agencies are made in good faith." 

That comes as little consolation to Reade, who has placed all her patient records and medical equipment in storage and accepted a job with Western Institutional Review Board, an agency that reviews human medical experiment practices and research. 

The high cost of spam

The same day it was honored for its hiring practices, Tacoma-based Chuckals Office Products found itself on the sharp end of an allegation that terrifies every business, large or small -- an employee complaint of a hostile work environment.

The tale, which is convoluted by its he-said/she-said nature, didn't become any simpler when it found its way into the legal system, where the company faced a tough decision. Either settle even though it was convinced it was innocent or spend upwards of $150,000 in legal fees and risk a damages award against it. Even a tick in the win column would mean massive attorney's fees and no way to recover them.

Company owners Chuck Hellar and Al Lynden say they did the math. They cut a deal, settling out of court for $25,000. The process has soured them on what they consider to be an inequitable system.

"This society is run by attorneys and insurance companies," Lynden complains.

Chuckals' troubles began in November 2001, when a female employee of more than two years complained to the owners about pornographic spam -- uninvited materials -- arriving through the company's e-mail service. The woman was on the company's computer and server maintenance team, they explain, so she had access to everyone's e-mail systems. 

The partners fostered discussions among the company's entire staff about how to handle the spam. Instead of coming up with a single one-size-fits-all solution to a problem that has defied the best minds of everyone from Microsoft to the federal government, methods of disposing of the offensive materials were shared with everyone. 

The partners say they thought the issue was resolved. They found out how wrong they were when the employee filed a hostile work environment claim with Equal Employment and Opportunity Commission in early 2002. Chuckals learned about it the same day it had received a Better Business Bureau award for customer service and community service for its volunteerism, as well as its willingness to hire welfare-to-work job candidates. It has a shelf full of similar honors and enjoys a reputation solid, well-run place to work.

Chuckals responded to the allegation by opt for the EEOC's mediation program -- a decision it now regrets. 

"Basically, the first communication with the EEOC was, ŒHow do you want to settle this?' " Lynden recalls. "It was all about, ŒWho's your insurance company and how much are you willing to pay?' "

Chuckals didn't have liability insurance, the partners replied. Any damages awarded would come from the company's operating funds -- and a substantial award might have the effect of forcing the firm into bankruptcy, netting neither the plaintiff nor her attorney nothing.

The initial $350,000 claim was immediately dropped to a mere $75,000, but Chuckals refused to settle. 

With no settlement in sight, the mediator issued a right-to-sue letter, despite being presented with evidence that the plaintiff had tampered with materials presented in support of her case. And by the way, Hellar and Lynden were informed, there was no way the evidence they'd gathered and presented at the mediation hearing was automatically going to be forwarded to the legal system -- failure to settle had, for all intents and purposes, pushed the reset button on the legal process.

A bad situation got ugly, the partners contend, as the plaintiff's attorney turned up heat on Chuckals by increasing her list of potential defendants to nine of the company's 25 employees, all of whom had to hire lawyers to defend themselves against the unsavory allegations.

"Everyone was down because they were having to deal with this," says Lynden. "All of our efforts were diverted from growing the business to dealing with it."

It came to an end shortly before Christmas, when Chuckals offered $25,000 to make the claim go away. The offer was accepted. 

"There is no way to defend yourself against what happened to us," Lynden says. "How do you guard against someone who wakes up one morning and says, ŒI'm going to get you?' You can't."

The company continues to have an attorney review its employee handbook every year, just as it did before its recent battle with the system, and to hold regular meetings about employee sensitivities and professional conduct. But now it's also considering a full-time attorney just to monitor such issues.

Lynden doesn't hold as much animosity for the former employee, who quit before filing her claim against his company, as much as he does for her attorney and the system itself. He feels she was as much a victim of the system as Chuckals -- through the welfare-to-work program, she progressed from a low-paying job to one at Chuckals that could have provided her with a $50,000 a year career and allowed her to send her daughter to Tacoma's prestigious Annie Wright School, he says, and from there to a settlement that barely covered her legal expenses.

"She was a capable woman," he says, "and she lost it all on a gamble. It's too bad."

There has to be a better way, he says.

"There just has to be a system that, using logic and reason, an intelligent person can determine the truth," he says.

Asked if the experience will discourage Chuckals from going out of its way to support programs that help those in need, Lynden says even if it would, he'd never say so -- somebody might sue.

Evidence that justice is blind?

When the state Supreme Court suspended Tacoma lawyer Douglas Schafer's license to practice for six months, it vigorously criticized his having violated attorney-client privilege in exposing illegal backroom deals between one of his former clients and an attorney who later became a judge.

"We cannot tolerate for a moment ... any disloyalty on the part of a lawyer to his client," Justice Bobbe Bridge writes for the majority in the 6-3 decision. "In all things he must be true to that trust, or, failing it, he must leave the profession." 

In the same opinion, Bridge concedes that Schafer did indeed provide a public service: 

"Because of Schafer's actions, a corrupt judge was exposed, and the public was served by the judge's removal from office."

But, Bridge adds, Schafer could have accomplished the same ends without violating attorney-client privilege. Bridge does not stipulate how. Given the fact that Schafer claims to have exhausted his alternatives before going public with the case, he considers the Court's failure to suggest what else he could have done a significant oversight. He plans to contest suspension of his license, he adds, but he isn't holding out hope.

The road that led to that suspension began in 1992 when South Sound businessman William Hamilton sought Schafer's legal help in purchasing a bowling alley from the estate of Charles Hoffman, who had died several years earlier. It the opportune time to buy, Hamilton told Schafer. The estate's attorney, Grant L. Anderson, had been siphoning funds for his personal use for up to four years, he said, but was becoming a judge, so he had to close the estate quickly. Hamilton said Anderson was giving him a good deal on the bowling alley but that he'd return the favor later on.

Nearly four years later, Schafer used this information, as well as documents he gathered during his own investigation, to seek criminal charges against Anderson. Critics contend Schafer exposed Anderson in retaliation for the Pierce County Superior Court judge's having ruled against him in an unrelated family court case. Some go so far as to suggest he was making good on an "or-else" threat he'd made to Anderson prior to the ruling and use the term "blackmail" to describe the tactic. [Webmaster's note:  Click here to read Schafer's request for a correction of the anonymous critics' unsupportable accusations. Click here to read the corrections printed in the next issue.]  None of those claims have ever been proven, nor has there by (sic) any formal action taken against him by the Washington State Bar Association, which confirms his case has racked up some 8-inches of legal documents, but that there are no other public actions or complaints against Schafer than this suspension.

Schafer dismisses such claims of leveraging the information about Anderson for his own gain, saying he waited until the three-year statute of limitations expired on Hamilton's role in Anderson's shenanigans to protect his client. He also points out that he gathered an assortment of pertinent recorded deeds and other public records and interviewed a number of people before taking his evidence to the Attorney General's office in February 1996. He shared it as well with the IRS Criminal Investigations Division, the Pierce County Prosecuting Attorney's office, the Commission on Judicial Conduct, the FBI and the Washington State Bar Association, he says. None took any action, he says, until he went public with his allegation.

The Judicial Conduct Commission, which put Anderson on trial in 1998, concluded that the Superior Court judge had indeed cheated the Hoffman estate -- and therefore its rightful beneficiaries -- by selling Hamilton a bowling alley below market value. It noted that in return Hamilton made secret payments totaling $31,185 on Anderson's Cadillac. In mid-1999, the state Supreme Court concurred and removed Anderson from the bench, making him the first Superior Court judge in the state's history to be defrocked for an ethics violation. In addition, his license to practice law was suspended for two years as well. But no criminal charges were ever filed, and Anderson has since returned to private practice. 

Though Schafer was vindicated for the allegations he'd been leveling against Anderson, the State Bar wanted his license revoked for a year for revealing information he had obtained from his client. A hearing examiner recommended a six-month suspension. Schafer appealed and argued his case before Washington's highest court last year.

His case has drawn media attention from around the nation, including coverage by Associated Press, New York Lawyer, National Law Journal, New York Times and the Boston Herald.

In issuing its verdict, the Supreme Court observed that the state's ethics rules provide an exception to attorney-client privilege to prevent a crime but not to expose one that has already occurred.

Bridge, who wrote the majority opinion, has since found herself at the center of an ethics controversy of her own. Bridge, who was arrested for drunken driving, has been granted deferred prosecution as long as she enters an alcohol-treatment program and abstains from using alcohol or drugs. 

Some observes have called for her resignation, contending that driving with a blood-alcohol level three as high as the limit allowed by state law cast the judicial system in a less-than-professional light and that deferred prosecution smacked of preferential treatment.

Retired substitute Justice Robert Winsor was among those dissenting from the opinion in Schafer's case, saying: "The ruling sends a clear message that client secrecy is more important than judicial system integrity."

Not surprisingly, Schafer concurs. 

"Sadly, the court rejected my conviction that an honest judiciary is so fundamental to our justice system that preserving it takes priority over keeping secrets of a client," he writes on his website,, which includes extensive documentation from his case. "The ruling virtually ensures that no lawyer ever again will reveal a client's kickback, bribe or other criminal conspiracy involving a sitting judge. I may have broken a code of silence, but not an honorable one."

Schafer says its impossible to calculate the financial toll his more-than-seven-year saga has taken or to gauge the emotional cost -- he and his wife of 25 years divorced two years ago. 

He has occupied himself during his suspension by preparing a petition to the Supreme Court, asking it to reconsider its ruling against him -- or at very least correct what he considers to be actual errors in that opinion. 

"I doubt that they will change their minds," he says. "I'll probably get a one-sentence response denying my motion, but I'll file it anyway."

Schafer is looking for work as a tax, business or human resources manager or consultant in positions relating to his background in laws and regulations affecting businesses but plans to continue speaking out through his website against shortcomings in the "legal fraternity."