Silence Is Golden: Court of Appeal Expands Legal Protections for California Medical Staffs

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Find more information on Bonni v. St. Joseph Health System and Dignity Health v. Mounts.

Key Considerations for Hospitals and Medical Staffs

• Bonni held that statements and other communications in the peer review process are broadly protected from liability by Civil Code Section 47(b)'s litigation privilege, including the following communications:
  • Reports to the Medical Board of California and the National Practitioner Data Bank (NPDB).
  • Initiation of peer review proceedings.
  • Alleged abuse of the peer review process.
  • Alleged defamatory statements and alleged character assassination, such as criticisms of a physician's professional competence.
  • Medical executive committees' disciplinary recommendations to a hospital board of trustees.
  • Medical executive committees' arguments in a medical staff hearing.
  • Appellate review committees' disciplinary recommendations to a hospital board of trustees.
  • Statements made in peer review settlement negotiations, precluding tort liability as well as claims of fraudulent inducement and undue influence.
• Mounts confirms that the litigation privilege also fully protects the following communications:
  • Communications made during a Focused Professional Practitioner Evaluation (FPPE).
  • Communications with a physician under peer review.
  • Communications with other hospitals regarding peer review of practitioners.
• The litigation privilege absolutely protects a medical staff's failure to communicate (i.e., silence) with other hospitals or medical staffs regarding peer review information.

• The Mounts court applied Civil Code Section 47(c)'s "common interest privilege" to protect against claims for retaliation based on reduced operating room time and providing less staff support, holding that the conditions under which a physician performs surgery falls within the Section 47(c) privilege.

The Mounts Decision

Orthopedic surgeon Dr. Mounts practiced at Dignity Health's San Luis Obispo French Hospital Center. Dr. Mounts complained that he was not getting sufficient staff support or adequate time in the operating room to perform complex surgeries. In 2015, the hospital's medical staff leaders became aware of concerns about Dr. Mounts' clinical competence and requested he refrain from operating until they completed an FPPE of his patient care. He voluntarily accepted the restriction on his clinical privileges. Two days later, the Medical Executive Committee (MEC) informed him that the restriction would be reported to the Medical Board and the NPDB if it lasted more than 30 days. By the time Dr. Mount's attorney notified the hospital that he wanted to lift his voluntary restriction, 30 days had passed, and the hospital filed legally mandated reports to the Medical Board and the NPDB.

Several weeks later, the MEC met with Dr. Mounts regarding the ongoing FPPE. After the meeting, the chief of staff called Dr. Mounts advising him that the MEC's decision would likely be unfavorable for him and recommending that he resign. Dr. Mounts resigned in 2016. After his resignation, Dr. Mounts applied for positions at two out-of-state hospitals. Dignity Health declined to provide records relating to the FPPE to either hospital.

Dr. Mounts Sues for Retaliation and Tortious Interference

After Dr. Mounts resigned, Dignity Health sued to recover a recruiting bonus it had paid him. In response, Dr. Mounts filed a cross-complaint, alleging Dignity Health's conduct constituted retaliation in violation of Health and Safety Code Section 1278.5, intentional interference with prospective economic advantage, and unfair competition in violation of Business and Professions Code Section 17200. Dignity Health filed an anti-strategic lawsuit against public participation (anti-SLAPP) motion to strike Dr. Mounts' cross-complaint, arguing that all of Dr. Mounts' claims were based on conduct protected from liability under California law.

Court of Appeal Holds That Hospital's Actions Are Protected by Civil Code Section 47

Dr. Mounts claimed that after he raised patient safety complaints, Dignity Health retaliated against him in nine respects:

1. Reducing Dr. Mounts' scheduled operating room time, providing less operating room support, and requiring him to perform surgeries with an unqualified and unfamiliar second surgeon.
2. Informing another local hospital that one or more of Dr. Mounts' cases had "significant adverse outcomes" before meeting with him about those cases.
3. Obstructing his ability to perform surgeries by rescheduling them for non-medical reasons and referring his patients to other hospitals.
4. Depriving Dr. Mounts of due process by not following the hospital's own bylaws.
5. Not explaining to Dr. Mounts the impact of his agreement to voluntarily restrict his privileges.
6. Rejecting his rescission of the voluntary restriction of privileges.
7. Filing a false 805 report and report to the NPDB.
8. Forcing Dr. Mounts to resign.
9. Interfering with his right to practice his occupation elsewhere by refusing to provide prospective employers with records from the FPPE.

The Court of Appeal held all these acts are protected by Civil Code Section 47. The actions under Categories 1, 2, and 3 are protected by the common interest privilege (Section 47(c)) because the hospital, the medical staff, and Dr. Mounts shared a common interest in his surgical practice. Although the common interest privilege does not protect communications made with malice, Dr. Mounts presented no evidence that Dignity Health communicated with malice about the conditions of his surgical practice.

Additionally, the actions in Categories 2 through 9 are protected by the litigation privilege (Section 47(b)). That privilege protects all communications made as part of an official proceeding, including communications made in connection with peer review. Notably, the court explained that Dignity Health's "failure to communicate with prospective employers by providing those entities with records from the FPPE" was "silence that communicates information related to the FPPE or its conclusion," and thus also privileged.

Based on the analysis showing that the litigation privilege and common interest privilege applied, the Court of Appeal concluded that all Dr. Mounts' claims fail and affirmed the trial court's order granting Dignity Health's anti-SLAPP motion.

ArentFox Schiff represents the defendants in Bonni v. St. Joseph Health System. For more information, contact the authors of this article.

• Debra Albin-Riley

  Partner
• Lowell C. Brown

  Partner
• M.H. Joshua Chiu

  Associate