The issue in this case is whether physicians who lose their medical staff privileges for criticizing patient care at a hospital can invoke the California Whistleblower Protection Act, Cal. Health and Safety Code § 1278.5 (WPA), to restore their lost privileges and obtain concomitant monetary damages.
The AMA believes physicians should advocate for their patients’ health care.
Mark Fahlen, MD, was employed at a Sutter Central Valley Hospital. On several occasions, he became embroiled with the hospital nurses regarding the proper care to be provided to his patients. The hospital indicated that it wished to terminate his employment and his medical staff privileges, and the matter was referred to a peer review panel. The peer review panel found that, although Dr. Fahlen had not acted properly in every regard, termination of his employment and medical staff privileges would be unwarranted. Despite this finding, the hospital terminated his employment and refused to renew his privileges.
Dr. Fahlen sued the hospital under the WPA, asserting that his termination had been in retaliation for his complaints about nursing incompetence and substandard care at the hospital. He sought monetary damages as well as a restoration of his medical staff privileges. His WPA suit was in contrast to the usual California procedure for challenging medical staff terminations, which would have been through a common law petition for mandamus.
Based on the California Anti-SLAPP (“Strategic Lawsuit Against Public Participation”) statute, Cal. Code Civ. Proc. § 425.16, the hospital moved to dismiss Dr. Fahlen’s lawsuit. The Anti-SLAPP law was enacted to prevent litigation abuse, which would otherwise chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances (as provided in the Federal First Amendment and in comparable provisions of the state constitution). The trial court denied the Anti-SLAPP motion to dismiss.
The hospital appealed the denial of the Anti-SLAPP motion to the California Court of Appeal. In its decision, the Court of Appeal observed that one requirement of an Anti-SLAPP motion is the plaintiff’s inability to demonstrate that the complaint is supported by prima facie facts sufficient to sustain a favorable judgment if those facts are credited at the actual trial. In this regard, the issue was whether Dr. Fahlen could demonstrate a prima facie case, inasmuch as he had not sought a writ of mandamus to challenge the denial of his medical staff privileges. According to the hospital, Dr. Fahlen could bring a WPA suit only if he had first exhausted his rights through a mandamus action. However, the Court of Appeal rejected the hospital’s argument. Based on its reading of the WPA, it held the trial court had correctly denied the hospital’s Anti-SLAPP motion and Dr. Fahlen’s lawsuit could proceed.
The hospital has now appealed to the California Supreme Court. The sole issue certified before the Supreme Court is whether Dr. Fahlen’s WPA suit should have been foreclosed on account of his failure to seek a mandamus writ.
Litigation Center involvement
The Litigation Center joined the California Medical Association in an amicus brief to the California Supreme Court in support of Dr. Fahlen.
Outcome: Very favorable
The issue in this case was whether a physician should be allowed to make truthful statements about the financial solvency of a publicly held corporation that owned a hospital in which the physician held medical staff privileges.
The AMA believes that physicians should be entitled to express their opinions on matters affecting public health and the health of their patients, without fear that such expression will subject them to the burdens of an unfounded lawsuit.
Michael Fitzgibbons, MD, an infectious disease specialist practicing in Santa Ana, California, was a past chief of staff of the Western Medical Center-Santa Ana (“WMCSA”). He remained on the medical staff executive committee during the incident that led to the lawsuit. Integrated Healthcare Holdings, Inc. (“IHHI”) was a publicly owned investment company, organized to own and manage health care facilities.
During 2004, Tenet Healthcare Corporation, then the WMSCA owner, sought to divest itself of its Orange County, California hospitals, including WMCSA. Tenet entered into an agreement to sell those hospitals to IHHI, which had been incorporated for that purpose. Both the Orange County Board of Supervisors and the California Senate held formal hearings to investigate the proposed acquisitions. These hearings were reported in the Orange County Register, the Orange County Weekly, and the Los Angeles Times. Eventually, the hospitals were sold, the California hospital licensing board approved the acquisitions, and IHHI began to operate them.
Shortly after closing the deal, IHHI reported to the SEC that it had received a notice of default on two loans that it had received to fund the acquisitions. The effects of the claimed defaults were to suspend IHHI's ability to obtain further loans, increase the interest rate on its outstanding loans, and make immediately due and payable almost $64 million in debt. The SEC filing was the subject of a critical article in the May 17, 2005 Orange County Register.
Dr. Fitzgibbons, through an e-mail sent to other physicians on the WMCSA medical staff, criticized the acquisitions and expressed doubts about the financial viability of IHHI. Most of the information in the e-mail came from the Orange County Register article, which in turn came from IHHI's own SEC filing. Ultimately, the e-mail found its way into the hands of IHHI.
Based on Dr. Fitzgibbons' e-mail, IHHI sued him for: (1) defamation, (2) intentional interference with a contractual relationship, (3) negligent interference with a contractual relationship, (4) breach of contract, (5) breach of the duty of good faith and fair dealing, and (6) violation of the California unfair business practices statutes. Dr. Fitzgibbons filed a special motion to strike the complaint under the California anti-SLAPP statute. Cal. Code Civ. Proc. §425.16.
The trial court denied the special motion to strike under the anti-SLAPP statute, and it also awarded IHHI $1,925 in attorney's fees and costs. Dr. Fitzgibbons appealed the denial of his special anti-SLAPP motion.
On June 14, 2006, the Court of Appeal reversed, finding that IHHI had failed to demonstrate a probability of success. It directed the lower court to grant Dr. Fitzgibbons' motion to strike under the anti-SLAPP statute, and it awarded him his costs on appeal.
Litigation Center Involvement
The Litigation Center and the California Medical Association filed an amicus curiae brief in the California Court of Appeal to support Dr. Fitzgibbons.