Fahlen v. Sutter Central Valley Hospitals

318 P.3d 833, 58 Cal. 4th 655, 168 Cal. Rptr. 3d 165, 37 I.E.R. Cas. (BNA) 1215, 2014 WL 655995, 2014 Cal. LEXIS 1262
CourtCalifornia Supreme Court
DecidedFebruary 20, 2014
DocketS205568
StatusPublished
Cited by85 cases

This text of 318 P.3d 833 (Fahlen v. Sutter Central Valley Hospitals) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fahlen v. Sutter Central Valley Hospitals, 318 P.3d 833, 58 Cal. 4th 655, 168 Cal. Rptr. 3d 165, 37 I.E.R. Cas. (BNA) 1215, 2014 WL 655995, 2014 Cal. LEXIS 1262 (Cal. 2014).

Opinion

Opinion

BAXTER J.

In Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465 [131 Cal.Rptr. 90, 551 P.2d 410] (Westlake), we held that, before *660 a physician may bring a common law tort action directed against a hospital’s quasi-judicial decision to terminate the physician’s staff privileges, he or she must first exhaust all internal hospital procedures to reverse the decision, and, if this fails, must prevail in court in a mandamus proceeding to have the decision set aside. In two more recent decisions, however, we concluded that persons filing damage suits authorized by certain whistleblower statutes— laws forbidding employer retaliation against workers who have reported fraud, danger, corruption, waste, or malfeasance—did not have to exhaust available administrative and mandamus remedies before seeking relief in court. (Runyon v. Board of Trustees of California State University (2010) 48 Cal.4th 760 [108 Cal.Rptr.3d 557, 229 P.3d 985] (Runyon); State Bd. of Chiropractic Examiners v. Superior Court (2009) 45 Cal.4th 963 [89 Cal.Rptr.3d 576, 201 P.3d 457] (Arbuckle); but see Miklosy v. Regents of University of California (2008) 44 Cal.4th 876 [80 Cal.Rptr.3d 690, 188 P.3d 629] (Miklosy).)

Here, as in Westlake, defendant Sutter Central Valley Hospitals, through its quasi-judicial peer review procedures, terminated plaintiff Mark T. Fahlen’s physician’s staff privileges. He sued the hospital and its chief operating officer, seeking damages, reinstatement, and other relief on multiple theories. Among other things, his complaint claims the hospital’s action constituted retaliation for his reports of substandard performance by hospital nurses, and thus violated Health and Safety Code section 1278.5. 1

Defendants moved to dismiss the action on grounds, among others, that plaintiff could not bring a civil suit under section 1278.5 unless he first succeeded by mandamus in overturning the hospital’s action. The trial court denied the motion. In a published decision, the Court of Appeal reversed in part. The appellate court held that plaintiff could pursue those claims based on section 1278.5, rather than on the common law, even though he had not previously sought and obtained a mandamus judgment against the hospital’s decision. This holding conflicted with that of another appellate decision, Nesson v. Northern Inyo County Local Hospital Dist. (2012) 204 Cal.App.4th 65 [138 Cal.Rptr.3d 446] (Nesson). We granted defendants’ petition for review for the sole purpose of resolving the conflict.

We conclude that when a physician claims, under section 1278.5, that a hospital’s quasi-judicial decision to restrict or terminate his or her staff privileges was itself a means of retaliating against the physician “because” he or she reported concerns about the treatment of patients, the physician need not first seek and obtain a mandamus judgment setting aside the hospital’s decision before pursuing a statutory claim for relief. Section 1278.5 declares *661 a policy of encouraging workers in a health care facility, including members of a hospital’s medical staff, to report unsafe patient care. The statute implements this policy by forbidding a health care facility to retaliate or discriminate “in any manner” against such a worker “because” he or she engaged in such whistleblower action. (§ 1278.5, subd. (b).) It entitles the worker to prove a statutory violation, and to obtain appropriate relief, in a civil suit before a judicial fact finder.

Section 1278.5 does not expressly or impliedly condition this right on a prior successful mandamus challenge to a hospital’s quasi-judicial decision to restrict or terminate the whistleblower’s medical staff privileges. Indeed, the statute includes terms indicating the Legislature’s understanding and expectation that a medical staff member’s whistleblower suit might begin and go forward while the hospital’s proceedings against the physician were still pending.

Moreover, such a condition would seriously undermine the Legislature’s purpose to afford a whistleblower on a hospital medical staff the right to sue. A hospital disciplinary proceeding against a member of the medical staff is ostensibly focused on concerns about the physician’s professional fitness, not on redressing his or her claims of whistleblower retaliation. Indeed, plaintiff asserts here that the hospital proceeding was the very means of retaliation. By concluding, on limited mandamus review, that the administrative evidence of the physician’s deficiencies was sufficient to support the hospital’s decision, the mandamus court could thus entirely and permanently foreclose the physician’s statutory right to litigate, in court, his or her distinct claim that whistleblower retaliation was a reason for the exclusionary effort.

The Legislature cannot have intended, sub silentio, to so limit the physician’s statutory right to persuade a judicial fact finder, in the first instance, that the adverse hospital action actually occurred because of, and in retaliation for, his or her efforts to report concerns about the hospital’s quality of care. We thus conclude, as to the narrow issue before us, that there is no such necessary condition to a physician’s statutory medical whistleblower claim.

Of course, both the California Legislature and the United States Congress have recognized that legitimate, properly conducted hospital peer review proceedings are themselves a crucially important means of protecting patients against unsafe hospital medical care. As we discuss below, both state and federal statutes seek to encourage participation in medical peer review activities by providing qualified tort immunity for those involved in reasonably founded medical peer review decisions. Even aside from these statutory limitations, “mixed motive” cases may arise in which such proceedings, though instigated at least in part as retaliation against a whistleblower, *662 nonetheless disclose substantial legitimate medical grounds for restricting or terminating a physician’s hospital staff privileges—reasons that would properly have produced the same decision in the absence of retaliatory animus.

Future litigants may argue that proper attention to these various concerns should affect the trial timing, the issues, and the available remedies in an individual physician’s whistleblower suit under section 1278.5. Such matters, however, are beyond the scope of the narrow question before us here. We pass no final judgment upon them, but await their appropriate future development.

FACTS AND PROCEDURAL BACKGROUND

Plaintiff physician, a kidney specialist, was employed by Gould Medical Group (Gould) in Modesto.

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Bluebook (online)
318 P.3d 833, 58 Cal. 4th 655, 168 Cal. Rptr. 3d 165, 37 I.E.R. Cas. (BNA) 1215, 2014 WL 655995, 2014 Cal. LEXIS 1262, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fahlen-v-sutter-central-valley-hospitals-cal-2014.