St. Luke's Episcopal Hospital v. Agbor

952 S.W.2d 503, 1997 WL 345334

• Court: Texas Supreme Court
• Decided: October 30, 1997
• Docket: 96-0085
• Status: Published

Opinions

GONZALEZ, Justice,

delivered the opinion of the Court,

in which HECHT, ENOCH, OWEN and BAKER, Justices, join.

This is an appeal from a summary judgment. The sole issue in this case is whether the Texas Medical Practice Act (“the Texas Act”) applies to a patient’s cause of action against a hospital for its credentialing activities. We hold that it does, and reverse the judgment of the court of appeals.

I

Dr. Suzanne Rothchild delivered Dikeh Agbor at St. Luke’s Episcopal Hospital in Houston. During birth, the baby suffered an injury that permanently disabled his left arm. The baby’s parents, Comfort and Kingsley Agbor, sued Dr. Rothchild for medical malpractice, and St. Luke’s for negligent and grossly negligent credentialing. The Agbors allege that the hospital should not have renewed Dr. Rothchild’s staff privileges because she had been the subject of many medical malpractice cases, some involving St. Luke’s, she was not a Texas resident, and was not properly insured for medical malpractice. St. Luke’s moved for summary judgment asserting that the Texas Act, Tex. Rev.Civ. Stat.' ANN. art. 4495b, §§ 1.01-6.13, provides immunity for credentialing decisions by health care entities absent a showing of malice. The trial court granted the hospital’s motion and severed this action against St. Luke’s from the action against Dr. Roth-child. The court of appeals, with one justice dissenting, reversed and held that the trial court incorrectly interpreted the Texas Act to require a showing of malice in credentialing actions brought by patients. 912 S.W.2d 354.

II

The Texas Act provides, in pertinent part, as follows:

(l) A cause of action does not accrue against the members, agents, or employees of a medical peer review committee or against the health-care entity from any act, statement, determination or recommendation made, or act reported, without malice, in the course of peer review as defined by this Act.

(m) A person, health-care entity, or medical peer review committee, that, without malice, participates in medical peer review activity or furnishes records, information, or assistance to a medical peer review committee or the board is immune from any civil liability arising from such an act.

Tex.Rev.Civ. Stat. Ann. art. 4495b, § 5.06(Z), (m) (emphasis added). “Medical peer review committee” means “a committee of a healthcare entity ... authorized to evaluate the quality of medical and health-care services or the competence of physicians.” Id. § 1.03(a)(6). “Medical peer review” means “the evaluation of medical and health-care services, including evaluation of the qualifications of professional health-care practitioners and of patient care rendered by those practitioners.” Id. § 1.03(a)(9). The definitions of “medical peer review committee” and “medical peer review” clearly contemplate, among other things, the process known as “eredentialing”—the granting or retention of a doctor’s hospital privileges.

St. Luke’s argues that the plain language of section 5.06(Z) and (m) bars an action based on a hospital’s eredentialing decision made without malice, regardless of whether the plaintiff is a doctor who was the subject of the decision, or a patient who was injured by a doctor who allegedly should not have been eredentialed. The Agbors argue that section 5.06 should be construed narrowly to protect peer review participants from suits by physicians and not from patients’ negligent eredentialing actions.

When a statute is clear and unambiguous, courts need not resort to rales of construction or extrinsic aids to construe it, but should give the statute its common meaning. Bridgestone/Firestone, Inc. v. Glyn-Jones, 878 S.W.2d 132, 133 (Tex.1994); One 1985 Chevrolet v. State, 852 S.W.2d 932, 935 (Tex.1993). The Legislature’s intent is determined from the plain and common meaning of the words used. Monsanto Co. v. Cornerstones Mun. Util. Dist., 865 S.W.2d 937, 939 (Tex.1993); Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 352 (Tex.1990). This Court has reiterated these principles many times. In RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605, 607 (Tex.1985), we stated:

Courts must take statutes as they find them. More than that, they should be willing to take them as they find them. They should search out carefully the in-tendment of a statute, giving full effect to all of its terms. But they must find its intent in its language and not elsewhere. ... They are not responsible for omissions in legislation. They are responsible for a true and fair interpretation of the written law. It must be an interpretation which expresses only the will of the makers of the law, not forced nor strained, but simply such as the words of the law in their plain sense fairly sanction and will clearly sustain.

Id. (quoting Simmons v. Arnim, 110 Tex. 309, 220 S.W. 66, 70 (1920)). The court of appeals held that the Texas Act does not unambiguously state that a hospital is immune from liability in all cases for credentialing decisions absent a showing of malice. 912 S.W.2d at 357. We disagree.

The Texas Act expressly provides that “[a] cause of action does not accrue ... against the health-care entity from any ... determination or recommendation made ... without malice, in the course of peer review as defined by this Act”; and “[a] ... health-care entity ... that, without malice, participates in medical peer review activity ... is immune from any civil liability arising from such an act.” Tex.Rev.Civ. Stat. Ann. art. 4495b, § 5.06(£), (m). The statute defines “medical peer review” to include “evaluation of the qualifications of professional health-care practitioners_” Id. § 1.03(a)(9). Thus, the plain meaning of the words used provides immunity from civil liability to a health-care entity for actions in the course of peer review, when such actions are done without malice.

The Agbors argue that because the statute only allows a lawsuit for acts committed with malice, the Legislature did not intend it to apply to patients’ suits. They contend that malice requires proof of “spite, ill will, or intent to injure,” which must be directed toward a known individual. The argument is that a plaintiff could never prove that a credentialing body acted with malice toward a specific patient. However, the Texas Act states that “[a]ny term, word, word of art, or phrase that is used in this Act and not otherwise defined in this Act has the meaning as is consistent with the common law.” Tex.Rev. Crv. Stat. Ann. art. 4495b, § 1.03(b). Under the common law, proof of malice does not necessarily require conduct directed toward a specific person. See Shannon v. Jones, 76 Tex. 141, 13 S.W. 477, 478 (1890) (defining malice as a reckless disregard for the rights of others).

In fact, the Legislature itself has recently defined “malice” for the purpose of recovery of exemplary damages, and that definition does not require an act directed toward a specific person. In the Civil Practice and Remedies Code, the Legislature defines “malice” as:

(A) a specific intent by the defendant to cause substantial injury to the claimant;

or

(B) an act or omission:

(i) which when viewed objectively from the standpoint of the actor at the time of its occurrence involves an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and

(ii) of which the actor has actual, subjective awareness of the risk involved, but nevertheless proceeds with conscious indifference to the rights, safety, or welfare of others.

Tex. Crv. PRAC. & Rem.Code § 41.001(7) (emphasis added). Considering the Legislature’s pronouncement that “malice” need not be directed toward a specific individual in the context of exemplary damages, it does not follow that in the context of peer review, the committee must necessarily act with malice toward a specific patient for that patient to prove his or her case. Therefore, the fact that the Legislature chose to allow suits only for malicious conduct in no way dictates that the statute does not apply to patients’ claims.

The Agbors further contend that the Texas Act does not compel the result we reach because when the Legislature enacted the Act, it incorporated the Health Care Quality Improvement Act of 1986 (“the Federal Act”), 42 U.S.C. §§ 11101-52, and such an interpretation would render the Acts inconsistent with each other. The Federal Act states as follows:

Nothing in this chapter shall be construed as affecting in any manner the rights and remedies afforded patients under any provision of Federal or State Law to seek redress for any harm or injury suffered as a result of negligent treatment or care by any physician, health care practitioner, or health care entity, or as limiting any defense or immunities available to any physician, health care practitioner, or health care entity.

Id. § 11115(d). The Agbors contend that because the Federal Act is incorporated into the Texas Act, section 11115(d) dictates that neither Act affects patients’ suits, including suits for negligent credentialing. They argue such a suit is one for “negligent treatment or care by ... [a] health care entity,” id., which the Federal Act expressly does not affect. Under the Agbors’ view, if the Texas Act provides immunity absent malice in ere-dentialing decisions, it will directly conflict with the Federal Act. This argument fails to persuade us.

First, it is debatable whether a hospital’s alleged acts in credentialing physicians are themselves part of the “treatment and care” of patients. See Richard L. Griffith & Jordan M. Parker, With Malice Toward None: The Metamorphosis of Statutory and Common Law Protection for Physicians and Hospitals in Negligent Credentialing Litigation, 22 Tex. Tech L.Rev. 157, 183 n. 146 (1991) (stating that credentialing impacts, but is not an actual part of, “treatment and care”). We note that the court of appeals’ interpretation of section 11115(d) is based on an improperly broad reading. The court stated that the Federal Act “provides that it does not affect the rights and remedies available to a patient for the negligence of a physician, health-care provider or health-care entity.” 912 S.W.2d at 358. This reading ignores the limitation that the patients’ suits unaffected by the Federal Act are those for “negligent treatment or care,” not merely negligence in general, which undoubtedly would include negligent credentialing. 42 U.S.C. § 11115(d) (emphasis added).

Second, the Federal Act also provides:

Except as specifically provided in this sub-chapter, nothing in this subchapter shall be construed as changing the liabilities or immunities under law or as preempting or overriding any State law which provides incentives, immunities, or protection for those engaged in a professional review action that is in addition to or greater than that provided by this subchapter.

42 U.S.C. § 11115(a). Therefore, even if the Federal Act does not apply to negligent credentialing as the Agbors argue, this provision specifically allows states to implement their own initiatives to provide greater immunities in professional review actions than those the Federal Act provides. No provision of the Federal Act overrides or preempts a state’s efforts in this area. Texas has clearly done what section 11115(a) allows and has provided extra “immunities, or protection for those engaged in a professional review action.” Id. By these express terms, no conflict arises between the two acts; thus, the existence of the Federal Act does not compel a departure from the plain meaning of the Texas Act.

The Agbors also rely on this Court’s decision in Bridgestone/Firestone, which stands for the principle that a statutory provision must be construed in the context of the entire statute of which it is a part. Bridgestone/Firestone, 878 S.W.2d at 133. The statutory provision in that case stated, “Use or nonuse of a safety belt is not admissible evidence in a civil trial.” Tex.Rev.Civ. Stat. Ann. art. 6701d, § 107C(j), repealed by Acts 1995, 74th Leg., ch. 165, § 24(a), 1995 Tex. Gen. Laws 1870, 1871 (current version at Tex. TRANSP. Code § 545.413(g)). This provision was part of the Uniform Act Regulating Traffic on Highways. It was intended to clarify that the sole legal sanction for failure to wear a seat belt is the criminal penalty provided by the statute, and that such a failure could not be used against the injured person in a civil trial. Bridgestone/Firestone, 878 S.W.2d at 134. The defendants in the case argued that the provision should also be read to abolish crashworthiness actions against seat belt manufacturers. The Court disagreed, holding that the meaning of the provision became clear if read consistently with the context of the entire statute. The Court concluded that the Legislature simply could not have intended to create a wholesale exemption from suit in a subsection of a traffic regulation. Id.

The provisions creating peer review immunity are consistent with the rest of the statute in which they are found. In contrast to the traffic statute in Bridgestone/Firestone, which had no apparent application to a products liability suit for defective seat belts, the statute in the present case is part of the “Medical Practice Act,” which deals broadly with “regulating the practice of medicine.” Tex.Rev.Civ. Stat. Ann. art. 4495b, §§ 1.01, 1.02(4). The Texas Act directly concerns immunity from suit for those participating in medical peer review activity. Id. § 5.06(Z), (m). The context of the statute as a whole involves precisely the situation in this suit— regulating the practice of medicine, including “evaluation of the qualifications of professional health-care practitioners.” Id. § 1.03(a)(9). In such a case, we give the statute’s words their common meaning, and the Agbors’ reliance on Bridgestone/Firestone is misplaced.

Ill

In the court of appeals, the Agbors also complained that affording hospitals immunity from negligent credentialing actions absent malice violates the Open Courts Provision of the Texas Constitution. See Tex. Const. art. I, § 18. Because it disposed of the Agbors’ claims solely on statutory construction, the court of appeals expressly reserved this issue. In this Court, both parties have briefed the issue, and for the sake of judicial economy, we consider the question instead of remanding it for the court of appeals’ consideration. See First Baptist Church v. Bexar County Appraisal Review Bd., 833 S.W.2d 108, 111 (Tex.1992).

The Open Courts Provision of the Texas Constitution provides, in pertinent part: “All courts shall be open, and every person for an injury done him, in his lands, goods, person or reputation, shall have remedy by due course of law.” Tex. Const. art. I, § 13. To demonstrate that a statute violates this constitutional guarantee, a litigant must show 1) that the statute restricts a well-recognized common law cause of action, and 2) that the restriction is unreasonable or arbitrary when balanced against the purpose of the statute. Baptist Mem’l Hosp. Sys. v. Arredondo, 922 S.W.2d 120, 121 (Tex.1996); Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 355 (Tex.1990). This Court has consistently held that the Open Courts Provision protects only well-defined common law causes of action from legislative restriction. See Moreno, 787 S.W.2d at 356-57.

We have never dealt with the question of whether a common-law cause of action exists for negligent credentialing. In 1987, when the Legislature enacted the Texas Act’s immunity provisions, only two Texas courts had considered the question, reaching opposite results. See Park North Gen. Hosp. v. Hickman, 703 S.W.2d 262, 264-66 (Tex.App.—San Antonio 1985, writ ref'd n.r.e.); Jeffcoat v. Phillips, 534 S.W.2d 168, 172-74 (Tex.Civ.App.—Houston [14th Dist.] 1976, writ ref'd n.r.e.). Park North upheld a cause of action for negligent credentialing and determined that a hospital has a duty to a patient to exercise reasonable care in the selection of its medical staff and in granting privileges to them. Park North, 703 S.W.2d at 266. On the other hand, Jeffcoat held that absent an employer-employee, principal-agent, partnership, or joint venture relationship between a hospital and physician, a hospital is not liable for its credentialing decisions where the patient chooses the physician. Jeffcoat, 534 S.W.2d at 173.

In short, when the Legislature enacted the Texas Act’s immunity provisions, the lower courts were split on the existence of a cause of action for negligent credentialing, and we had not considered the question. Therefore, we cannot conclude that negligent credentialing was a well-recognized common law cause of action. Thus, the Agbors have failed to show an open courts violation. Because it is not necessary to our disposition of this ease, we reserve for another day whether we recognize a common-law cause of action for negligent credentialing.

The dissenting Justices refer to a number of other jurisdictions that recognize in varying degrees a duty to exercise care in credentialing activities. However, their opinions do not indicate whether those negligent credentialing causes of action are based on the common law, or whether they involve restrictions identical, or even similar, to the statutory language that limits our decision. As Chief Justice Phillips acknowledges, at least one court has held that a similar statute enacted to encourage hospitals to actively engage in peer review barred a claim against a medical care facility under a corporate negligence theory for its credentialing decisions involving an independent contractor physician. See Lemuz v. Fieser, 261 Kan. 936, 933 P.2d 134, 140, 145 (1997); McVay v. Rich, 255 Kan. 371, 874 P.2d 641, 645 (1994). The Kansas statute provides:

There shall be no liability on the part of ... any licensed medical care facility because of the rendering of or failure to render professional services within such medical care facility by a person licensed to practice medicine and surgery if such person is not an employee or agent of such medical care facility.

Kan. Stat. Ann. § 65-442(b) (1995). The Kansas Supreme Court concluded that regardless of the reasons favoring liability under a corporate negligence theory, it simply cannot reach the question because the clear, unambiguous language of the statute bars a patient’s claims against a hospital for credentialing or recredentialing activities. See McVay, 874 P.2d at 645. The same is true in our case. The Legislature is free to set a course for Texas jurisprudence different from other states’. Once the Legislature announces its decision on policy matters, we are bound to follow it within constitutional bounds.

Accordingly, we hold that the Texas Act’s immunity provisions prescribe a threshold standard of malice to state a cause of action against a hospital for its eredentialing activities.¹ Further, this standard does not violate the Open Courts Provision of the Texas Constitution.

For the above reasons, we reverse the judgment of the court of appeals and render judgment that the Agbors take nothing from St. Luke’s Hospital.

ABBOTT, Justice, not sitting.

1 . To the extent other decisions conflict with this opinion, they are disapproved. See Lopez v. Central Plains Reg’l Hosp., 859 S.W.2d 600, 602 n. 2 (Tex.App.—Amarillo 1993, no writ); Smith v. Baptist Mem'l Hosp. Sys., 720 S.W.2d 618 (Tex.App.—San Antonio 1986, writ ref'd n.r.e.); Park North Gen. Hosp. v. Hickman, 703 S.W.2d 262 (Tex.App.—San Antonio 1985, writ ref'd n.r.e.).