Commonwealth, Cabinet for Health & Family Services v. Chauvin

316 S.W.3d 279, 2010 Ky. LEXIS 146

• Court: Kentucky Supreme Court
• Decided: June 17, 2010
• Docket: No. 2008-SC-000509-MR
• Status: Published

Opinions

Opinion of the Court by

Justice NOBLE.

Appellant, the Commonwealth of Kentucky, Cabinet for Health and Family Services, appeals to this Court from an order of the Court of Appeals denying in part and granting in part its petition for a writ of prohibition. For the reasons set forth below, the order of the Court of Appeals is reversed, and the case is remanded with instructions to grant the writ in full as requested by the Cabinet.

I. Background

This case began with a discovery request by Christopher Warner, a defendant in a civil suit at the circuit court. Warner sought discovery of a Kentucky All-Schedule Prescription Electronic Reporting (KASPER) record on the plaintiff in the suit, Matthew Baumler. These records are held by the Cabinet for Health and Family Services, which compiles them pursuant to KRS 218A.202. Subsection (6) of that statute says that these records may be disclosed “only ... to persons and entities authorized to receive that data under this section,” and that “[disclosure to any other person or entity ... is prohibited unless specifically authorized by this section.” Civil litigants are not authorized persons under the statute, nor are their attorneys.

The circuit court saw a conflict between this subsection, which prohibits disclosure, and CR 26.02(1), which allows discovery “regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.” The court resolved this apparent conflict by ruling, via interlocutory order, that the statute violated the separation of powers doctrine in sections 27 and 28 of the Kentucky Constitution, in that it affected practice and procedure of the courts, which falls within the exclusive rulemaking power of this Court, Ky. Const. § 116. After finding that Warner showed good cause that the record was discoverable, the court ordered that Baumler’s record be conditionally released to Warner’s attorney, despite the statutory prohibition.

Appellant sought a writ of prohibition at the Court of Appeals to bar enforcement of the order to disclose the materials. The Court of Appeals denied the writ requested by the Cabinet, agreeing with the circuit court that the records must be released because the statute violated the separation of powers doctrine. However, the Court of Appeals granted a writ in part, albeit not the one the Cabinet requested, requiring the circuit court to first conduct an in camera review to determine what parts of the records, if any, were relevant discovery material before allowing any disclosure to the parties.

The Cabinet now appeals to this Court as a matter of right. Ky. Const. § 115.

II. Analysis

A. Availability of the Writ

“[W]rits of prohibition ... are extraordinary in nature, and the courts of this Commonwealth ‘have always been cautious and conservative both in entertaining petitions for and in granting such relief.’ ” Kentucky Employers Mut. Ins. v. Coleman, 236 S.W.3d 9, 12 (Ky.2007) (quoting Bender v. Eaton, 343 S.W.2d 799, 800 (Ky.1961)). This Court has said that “[e]x-traordinary writs are disfavored, but may be appropriate when a lower court is acting without jurisdiction or acting erroneously within its jurisdiction.” Buckley v. Wilson, 177 S.W.3d 778, 780 (Ky.2005).

The issue here is not whether the circuit court had jurisdiction to rule on the constitutionality of KRS 218A.202(6) or to enter a discovery order; it clearly did. Indeed, the Cabinet does not allege lack of jurisdiction. Rather, this case falls under the second class of writs, and so the question is whether the court acted erroneously within its jurisdiction by allowing discovery of the materials.

To effectuate the policy of granting writs in only extraordinary circumstances, a petitioner claiming that the trial court is acting erroneously within its jurisdiction must show that great and irreparable harm will result, and that there would be no adequate remedy by appeal. Hoskins v. Maricle, 150 S.W.3d 1, 10 (Ky.2004). This test determines whether the remedy of a writ is even available, and only if a petitioner satisfies this test will we turn to the merits. Bender, 343 S.W.2d at 801. In applying this threshold test, the petitioner’s allegations are assumed to be true. Thus, the Court assumes here that the statute creates a privilege, and that the circuit court’s order breaches that privilege.

Applying the test to these facts, “[t]here is no adequate remedy by appeal because privileged information cannot be recalled once it has been disclosed.” St. Luke Hosps., Inc. v. Kopowski, 160 S.W.3d 771, 775 (Ky.2005); accord Bender, 343 S.W.2d at 802 (“Once the information is furnished it cannot be recalled.... The injury suffered by petitioners, assuming their adversaries have no right to this disclosure under the Civil Rules, will be complete upon compliance with the order and such injury could not thereafter be rectified.... Petitioners have no other adequate remedy.”).

As to the second requirement, however, a breach of privilege is usually an insufficient showing of harm, at least under the strict terms of the standard, because the breach is not “a ruinous injury.” St. Luke Hosps., 160 S.W.3d at 775; accord Bender, 343 S.W.2d at 802. Nevertheless, “[w]e have previously held that extraordinary relief is warranted to prevent disclosure of privileged documents.” St. Luke Hosps., 160 S.W.3d at 775; accord McMurry v. Eckert, 833 S.W.2d 828, 830 (Ky.1992); Bender, 343 S.W.2d at 802-03. This Court has done so under a narrow exception to the harm requirement, namely, the “certain special cases” exception where the writ can be granted “in the absence of a showing of specific great and irreparable injury ... provided a substantial miscarriage of justice will result if the lower court is proceeding erroneously, and correction of the error is necessary and appropriate in the interest of orderly judicial administration.” Bender, 343 S.W.2d at 801. The violation of a privilege is such a case. Id. at 802 (stating, regarding a privilege, that “in a certain class of cases, of which this is one, the showing of such grievous injury is not an absolute necessity”); see also Grange Mut. Ins. Co. v. Trude, 151 S.W.3d 803, 808 (Ky.2004) (noting that a writ is proper to stop the “breaching [of] a tightly guarded privilege”).

Thus, because the Cabinet has alleged that the circuit court’s order will violate a privilege, a writ of prohibition is available as a remedy. Having established that the remedy is available, in part by concluding that the “certain special cases” exception to the harm requirement applies, this Court may now turn to the merits of the issues presented. Bender, 343 S.W.2d at 802.

B. Separation of Powers and Statutory Privileges

The issue presented by the Cabinet is whether, in light of KRS 218A.202(6), a trial court can order discovery of a KAS-PER report in a civil case. The Cabinet argues that the statute creates a privilege which bars such discovery. Warner argues that the statute is void as a violation of the separation of powers doctrine in the Kentucky Constitution because it affects practice and procedure of the Court of Justice, and that the statute does not create a privilege.

Before addressing these arguments, it is worth noting that, under the civil rules, privileged material is not subject to discovery, regardless of the source of the privilege. CR 26.02(1) says that a trial court shall allow discovery “regarding any matter, not pnvileged, which is relevant to the subject matter involved in the pending action.” (Emphasis added.) The rule, by its own terms, does not permit discovery of privileged matters. KRE 501 says that privileges can be granted by the Constitution, rules promulgated by this Court, or by statute. Thus, Kentucky rules allow for the creation of statutory privileges. To the extent that the KAS-PER statute creates a privilege, there is no conflict with the rules. The circuit court erred in finding such a conflict.

This, of course, does not resolve the issue, because the statute could still violate the constitution or not actually create a privilege. Turning to those issues, this Court concludes that the legislature has the power to create privileges, both under our rules and as part of its inherent power to enact substantive law, and that the statute indeed creates a privilege.

Kentucky evidentiary rules recognize the ability of the legislature to control their contents, presumably including privileges, limited only by section 116 of the Kentucky Constitution. For example, this Court must report rule amendments to the legislature, which may then disapprove the rules or by inaction allow them to become effective. KRE 1102(a). In addition, the legislature “may amend any proposal reported by the Supreme Court,” and it “may adopt amendments or additions to the Kentucky Rules of Evidence not reported” to them. KRE 1102(b).

More importantly, the legislature has the inherent power to create privileges, as part of its power to enact substantive law. In fact, it has exercised this power many times outside of the Rules of Evidence.¹ The Kentucky Constitution specifically articulates the doctrine of separation of powers, see Ky. Const. §§ 27-28, under which the legislature has the exclusive authority to enact substantive law, see Ky. Const. § 29; Elk Horn Coal Corp. v. Cheyenne Res., Inc., 163 S.W.3d 408, 422 & n. 68 (Ky.2005), whereas this Court has the exclusive authority to enact “rules of practice and procedure for the Court of Justice,” see Ky. Const. § 116; Elk Horn, 163 S.W.3d at 423 & n. 69. It follows, therefore, that if the privilege conferred by the KASPER statute is substantive law rather than a rule of practice or procedure, it does not violate the separation of powers doctrine.

The way the Kentucky Rules of Evidence were enacted avoided determining whether privileges are substantive or procedural. The rules were passed by the legislature, see 1990 Ky. Acts ch. 88; 1992 Ky. Acts ch. 324, and this Court adopted them to the extent that they may have constituted a rule of practice or procedure, see Order, Kentucky Supreme Court, May 12, 1992 (on file with the Clerk of the Court). This Court characterized the adoption of the rules as a “joint effort,” Mullins v. Commonwealth, 956 S.W.2d 210, 211 (Ky.1997), a polite fiction which recognized that some parts of the rules fell within the sole purview of the legislature (substantive law), whereas others fell within the sole purview of this Court (practice and procedure), but avoided fighting over which was which. This was valuable because deciding which branch has the power to pass a given rule is rarely easy, see generally Robert G. Lawson, Modifying the Kentucky Rules of Evidence — A Separation of Powers Issue, 88 Ky. L.J. 525 (2000), and is an issue of constitutional magnitude, see Ky. Const. § 28 (forbidding any branch from “exereis[ing] any power properly belonging to either of the others”). Because of this polite fiction, this Court has rarely needed to speak authoritatively on the subject. Doing so in this case, however, is necessary.

Privileges are ultimately substantive law, at least those that apply outside the courtroom. Although “the bulk of our evidence rules are indeed procedural, fall within the exclusive rulemaking authority of the Kentucky Supreme Court, and may not be amended by independent action of the General Assembly,” Lawson, supra, at 572, privileges are not normal evidentiary rules. They “are unique.” Id. at 576. “In separating evidence law into substance and procedure, the best scholars draw a distinction between rules that predominantly foster accuracy in fact-finding and rules that predominantly foster other objectives. They classify the latter as substantive and place privileges in that category.” Id. at 580. The disclosure restrictions in the KASPER statute fall into this second category; they foster objectives other than fact-finding, namely, protecting privacy given the confidential and sensitive nature of the records; limiting the effort and expense of providing discovery at will that can be obtained from other sources; and fostering the legislative purpose of collecting drug prescription data to use to combat doctor shopping, and thus to ultimately combat drug abuse and addiction. The statutory restriction on disclosure of KASPER records fosters these objectives, and it obviously applies outside of the courtroom, unlike a rule of practice or procedure would.

It has long been assumed that the legislature has the power to create privileges. In fact, “[t]he General Assembly has exercised authority over privileges rules for at least several decades.” Lawson, supra, at 580. When Kentucky reformed its evidence law, various privileges — including the spousal privilege, the religious privilege, and the psychiatrist-patient privilege — were creatures of statute, and their validity is not in doubt. Id. “The fact that most pre-Rules privileges existed in statutes indicates legislative authority to make privileges.” Robert G. Lawson, Kentucky Evidence Law Handbook § 5.00[2], at 330 (4th ed. 2004). Although it is true that the Court rightfully “la[ys] claim to exclusive authority over matters of ‘practice and procedure’ ” under the Kentucky Constitution, it is quite notable “that the court has had hundreds of opportunities to claim exclusive authority over privileges and has never made even a slight movement in that direction.” Id.

The Court has addressed this issue in only a few cases, but they all show respect for the legislature’s power to make privileges. The first case was Mullins v. Commonwealth, 956 S.W.2d 210 (Ky.1997). In Mullins, the Court addressed whether the legislature unconstitutionally encroached on the Court’s rulemaking power by creating an exception to the spousal privilege in child abuse cases. This Court upheld the statute, stating: “We find no constitutional or procedural fault with the legislation.” Id. at 211. Although the Court did not directly say that privileges were substantive law, “its decision and observations seem to chart a course toward the position” and “recognize a most substantial role for the General Assembly in the definition of evidentiary privileges.” Lawson, Modifying the Kentucky Rules of Evidence, supra, at 580.

Since Mullins, this Court has continued to recognize the validity of statutory privileges. The next case after Mullins, Sisters of Charity Health Systems., Inc. v. Raikes, 984 S.W.2d 464, 468 (Ky.1998), concerned a privilege for peer review material in medical malpractice suits. This Court upheld the privilege, but decided that because the statute was enacted before the Rules of Evidence, the case did not raise “the issue of whether a statutory privilege enacted after the effective date of the KRE violates the Court’s rule making authority under EIRE 1102.” Id. at 468 n. 3. However, the timing is irrelevant; the exclusive power of this Court over rules of practice and procedure has long been recognized, even before the 1976 Judicial Article. Either the statutory privilege encroached on this Court’s exclusive power or it did not. In Raikes the Court concluded that it did not.

The matter was clarified in Manns v. Commonwealth, 80 S.W.3d 439 (Ky.2002). In Manns, the Court discussed a statutory provision creating a privilege for juvenile records. Id. at 444. The Court noted that “[t]he confidentiality afforded to juvenile records was created by the legislature, KRS 610.340(1), not the judiciary,” id., but did not strike down the provision. However, in the same case, the Court struck down another statutory provision, which mandated that trial courts admit certain impeachment evidence, because that law purported to amend a rule which was “procedural in the purest sense.” Id. at 446. The Manns case thus follows the scholarly consensus: rules that “predominantly foster accuracy in fact-finding” by affecting what happens inside a courtroom (such as mandatory admissibility of impeachment evidence) are procedural and within the exclusive authority of the Court; however, those that “predominantly foster other objectives” and have an out-of-court effect (such as keeping juvenile records confidential due to privacy concerns) are substantive and within the power of the legislature. Lawson, Modifying the Kentucky Rules of Evidence, supra, at 580. Given that the KASPER statute fosters a similar privacy objective and has a similar out-of-court effect to the statute as in Manns, that case supports the holding here that the statutory grant of privilege in KAS-PER is substantive and does not encroach on the Court’s powers over practice and procedure.

This Court disagrees with the Court of Appeals that the legislature showed no intent to create a privilege when it prohibited disclosure of KASPER records. The essence of a privilege is to prohibit disclosure, and thus also discovery. The privileges in the Kentucky Rules of Evidence, with the exception of the husband-wife privilege, refer to the “[gjeneral rule of privilege,” which is defined as the right “to refuse to disclose and to prevent any other person from disclosing” the privileged information.² KRE 503(b), 505(b), 506(b), 507(b); see also KRE 508(a). This is precisely what the KASPER statute does: it expressly prohibits “[disclosure to any person or entity ... unless specifically authorized by this section,” including “disclosure in the context of a civil action where the disclosure is sought either for the purpose of discovery or for evidence.” KRS 218A.202(6).

Although the intent of the legislature certainly would have been more perfectly expressed if the statute specifically described the prohibition on disclosure as a “privilege,” this Court does not generally require statutes to use magic words. See, e.g., Commonwealth ex rel. Conway v. Thompson, 300 S.W.3d 152, 166-67 & n. 41 (Ky.2009). This Court cannot meaningfully distinguish this grant of privilege from many others the courts have long recognized and applied in civil cases, including the clergy-penitent privilege, KRE 505; the counselor-client privilege, KRE 506; and the psychotherapist-patient privilege, KRE 507 — in addition to the many other statutory privileges. The KASPER statute prohibits disclosure and discovery, just as any privilege would.

This Court also disagrees with the Court of Appeals that the exceptions to the prohibition on disclosure raise doubts about the legislature’s intent to create a privilege. Most privileges in the rules of evidence also include exceptions. See KRE 503(d) (listing five exceptions to the attorney-client privilege); KRE 506(d) (listing two exceptions to the counselor-client privilege); KRE 507(d) (listing three exceptions to the psychotherapist-patient privilege). Likewise, almost all statutory privileges include exceptions.³ These privileges should not be cast aside simply because they are not absolute by their own terms.

Likewise, it is no answer that KASPER cannot invoke a privilege because the right to refuse to disclose is held by the Commonwealth, not the person whose privacy is at stake. Our evidentiary rules include the confidential informant privilege, which is exercised not by the informant who seeks to keep his identity secret, but by “the public entity to which the information was furnished.” KRE 508(b). This privilege, like all the others except the spousal privilege, refers to the “general rule of privilege,” indicating that this privilege is the same as the others. Indeed, this Court has never doubted the validity of the confidential informant privilege on this basis.

The exceptions in the statute are rather limited and do not undermine the general prohibition on disclosure. For example, a pharmacist may receive a record only on a certification that it will be used “for the purpose of providing medical or pharmaceutical treatment to a bona fide current patient.” KRS 218A.202(6)(e). As another example, peace officers may receive a record only if they are “engaged in a bona fide specific investigation involving a designated person,” KRS 218A.202(6)(b), and they can only share records with other peace officers if the recipients could get the records on their own, and even then only if both officers document who received the records and when. Id.

Subsection (12) of the statute leaves no doubt that the legislature wanted the disclosure prohibitions to be taken seriously. Under that subsection, any intentional, unauthorized disclosure is a Class D felony fer the first offense and Class C for each subsequent offense. (That a violation of the statute’s disclosure prohibition is a criminal offense further underscores the statute’s substantive nature.) In short, the legislature’s intent to create a privilege in the statute is clear enough, and it obviously found the privilege to be important.

The only way to conclude that the legislature did not have the power to make a privilege here is if it is unconstitutional. As discussed above, the privilege is constitutional under the separation of powers doctrine because it is an enactment of substantive law. However, as this Court has recently held, the privilege may be unconstitutional as applied in some criminal cases. Cabinet v. Bartlett, 311 S.W.3d 224 (Ky.2010). This is because no statute can defeat a criminal defendant’s constitutional rights to exculpatory evidence or to confront witnesses against him. See generally Commonwealth v. Barroso, 122 S.W.3d 554, 558-63 (Ky.2003). To summarize Bartlett, to the extent that the statute purports to prohibit the government from disclosing potentially exculpatory information in a criminal case, it would violate a criminal defendant’s rights under the Fifth, Sixth and Fourteenth Amendments to the U.S. Constitution and Section 11 of the Kentucky Constitution. Bartlett, 311 S.W.3d at 226-28. These constitutional rights must be vigorously protected by courts. However, as noted above, this applies only to certain discovery in criminal cases, and it does not require striking the entire statute down as unconstitutional.

As to civil matters, there is a lesser constitutional protection. Procedural due process in a civil case generally requires only notice, an opportunity to be heard and to present evidence, an impartial tribunal, and a decision on the record for appeal. See generally Goldberg v. Kelly, 397 U.S. 254, 267-71, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). There is no due process right to get all possible evidence in the civil context, which has long been shown by the use of evidentiary privileges, first at common law, then as codified by rule or statute. Consequently, unlike in the criminal context, no constitutional bar precludes courts from applying the KASPER privilege in civil disputes such as this one. In fact, if this Court were to ignore the statutory restrictions in KASPER, this Court would itself violate the separation of powers doctrine by ignoring a valid statutory grant of privilege, which is within the legislature’s purview.

Last, it is worth noting that even if this Court were to find that KRS 218A.202 infringed on this Court’s exclusive authority to promulgate rules of practice and procedure, the statute would nevertheless be entitled to comity. “It is not our disposition to be jealous or hyperteeh-nical over the boundaries that separate our domain from that of the legislature.” Ex parte Farley, 570 S.W.2d 617, 624 (Ky.1978). Thus this Court accepts “reasonable encroachments” on our powers via the “rule of comity.” Commonwealth v. Reneer, 734 S.W.2d 794, 797 (Ky.1987). Any alleged encroachment here would be reasonable. Despite the statute, parties to civil suits may still get information about a person’s prescription drug history from more direct sources: physicians who prescribe drugs, pharmacists who dispense them, or from the drug recipient. What they cannot do is get the more convenient compilation of records the Cabinet has. The statute does not ultimately prevent a civil litigant from getting discovery of drug histories, nor does it ultimately prevent a court from deciding to admit the histories into evidence. This is reasonable.

As a final note, this Court must make it clear, however, that such information as that which falls under the KASPER privilege is no different than any other privileged material when it comes to the court’s power and ability to obtain that material. The court always has the inherent authority to review any act of the legislature for constitutionality, and the content of materials or data produced based on a statute to determine whether an exception to a privilege applies. Here, however, there is no question that the material at issue is the very report made privileged by the statute, and as the parties admit, no exception applies. Thus there is no need for an in cam,era review in this case.

III. Conclusion

The legislature has the power to create privileges, such as to KASPER records, both from our own rules and from their inherent power to enact substantive law. Thus, the Court of Appeals erred in finding that the statute violated the separation of powers doctrine. The KASPER statute creates a privilege as to KASPER records, which the circuit court’s discovery order would violate. For that reason, the order of the Court of Appeals is reversed and remanded, with instructions to issue the writ requested to bar enforcement of the circuit court’s discovery order.

CUNNINGHAM, SCHRODER and VENTERS, JJ., concur. SCOTT, J., concurs by separate opinion. ABRAMSON, J., dissents by separate opinion in which MINTON, C.J., joins.

1 . There are too many examples to cite in the text. They include: KRS 7.410(3) (privilege for testimony and records relating to investigation by Office of Educational Accountability, even against court subpoena); KRS 17.576 (privilege for communications in sex offender presentence evaluations); KRS 197.440 (privilege for contents of sex offender treatment); KRS 214.556(5), (6) (privilege for all information, data, and findings related to Kentucky Cancer Registry); KRS 224.01-040(2) (privilege for environmental audit reports); KRS 224.71-135 ("privilege of confidentiality” barring disclosure of environmental planning documents of farms); KRS 286.11-033 (certain information the executive director has, under Kentucky Money Transmitters Act, "shall be confidential by law and privileged, and shall not be subject to the Kentucky Open Records Act ... [and] shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any civil action”); KRS 304.9-280(7)(a) (privilege for insurance documents and other material related to termination of insurer's agent, specifically barring subpoena, discovery, and admission in a civil action); KRS 311.619(2), 313.021(3), 314.171(7) 8b 327.045(7) (privilege for information related to impaired physician, dentist, pharmacist, and physical therapist programs, but also barring disclosure in criminal proceedings); KRS 321.185(3) (veterinarian-client privilege); KRS 325.431(1) (privilege for accounting quality review board records and workpapers, barring testimony, discovery, subpoena, or admission).

2 . The husband-wife privilege, in contrast, is the right “to refuse to testify.” KRE 504(a) & (b).

3 . Again, there are too many examples to cite in the text. They include: KRS 7.410(3) (exception for disclosure with permission of Office of Educational Accountability or after investigation); KRS 17.576 (exception for sex offender evaluation communications in sentencing proceedings or if communication relates to ongoing criminal investigation); KRS 197.440 (exception for sex offender treatment applications in sentencing, ongoing criminal investigations, or determining whether offender should continue treatment); KRS 214.556(5) (exception for disclosure to other agencies or clinical facilities); KRS 224.01-040(3), (4) (exceptions for environmental audit reports); KRS 224.71-135 (exception for disclosure to government officials, where the farm is a "bad actor," or after in camera review shows illegal activity); KRS 286.11-033 (exception for disclosure if the head of the Department of Financial Institutions is not prejudiced or in regulatory actions); KRS 304.9-280(7)(b) (exception for disclosure to federal and state insurance authorities); KRS 311.619(3), 313.021(3), 314.171(7), 315.126(8) & 327.045(8) (exceptions for disclosure of privileged information related to impaired physician, dentist, pharmacist, and physical therapist programs for treatment, reporting to professional boards, or with consent, some of which also have exceptions for court orders); KRS 321.185(3) (exception to veterinarian-client privilege for court order or waiver).