Youngs v. PeaceHealth

Opinion

Fl LE IN CLERKS OFFICE llJIREME COURT, STATE OF WASHINGTON

/J!ct~~-4 .,l

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

MARC YOUNGS,

Petitioner,

v.

PEACEHEAL TH, a Washington corporation NO. 87811-1 d/b/a PEACEHEALTH ST. JOSEPH MEDICAL CENTER and d/b/a PEACEHEALTH MEDICAL GROUP, and UNKNOWN JOHN DOES, ENBANC Respondents.

Filed JAN 2 3 2014 AOLANI E. GLOVER, a single individual,

Respondent,

THE STATE OF WASHINGTON d/b/a 'HARBORVIEW MEDICAL CENTER; and LULU M. GIZA W, PA-C,

Petitioners. Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

GORDON MCCLOUD, J.- The question presented in this case is whether

Loudon v. Mhyre, 110 Wn.2d 675, 677, 756 P.2d 138 (1988), which prohibits

defense counsel in a personal injury case from communicating ex parte with the

plaintiff's nonparty treating physician, applies to such physicians when they are

employed by a defendant. Specifically, we are asked whether Loudon bars ex parte

communications between a physician and his or her employer's attorney where the

employer is a corporation and named defendant whose corporate attorney-client

privilege likely extends to the physician, at least as to certain subjects. To answer

this question, we must balance the values underlying the attorney-client privilege

against those underlying the physician-patient privilege.

The legislature codified the attorney-client privilege in RCW 5.60.060(2)(a).

"The attorney-client privilege 'is the oldest of the privileges for confidential

communications known to the common law.' Its aim is 'to encourage full and frank

communication between attorneys and their clients and thereby promote broader

public interests in the observance oflaw and administration of justice. "' 1 The United

States Supreme Court's decision in Upjohn Co. v. United States, 449 U.S. 383, 386,

1 United States v. Jicarilla Apache Nation,_ U.S._, 131 S. Ct. 2313,2320, 180 L. Ed. 2d 187 (2011) (citations omitted) (quoting Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981)). 2 Youngs v. Peacehealth, et al./Glover v. State, eta!. No. 87811-1

390, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981) holds that the attorney-client privilege

extends to corporate clients. This remains the law today. 2

The legislature has also enacted a physician-patient privilege statute, RCW

5.60.060(4). That privilege aims to "protect[] the sanctity" of the doctor-patient

relationship; to recognize that the "'relationship between physician and patient is "a

fiduciary one of the highest degree ... involv[ing] every element of trust, confidence

and good faith"'[;] to surround patient-physician communications with a cloak of

confidentiality to promote proper treatment by facilitating full disclosure of

information"; and "to protect the patient from embarrassment or scandal which may

result from revelation of intimate details of medical treatment." 3 Loudon, barring ex

parte contacts, is designed in part to safeguard that privilege. As discussed below,

it survives the 1986 and 1987 amendments to the physician-patient privilege statute.

The physician-patient privilege and the bar on defense counsel's ex parte contacts

2 This court has cited Upjohn favorably on a number of occasions. See, e.g., Wright v. Group Health Hasp., 103 Wn.2d 192, 202, 691 P.2d 564 (1984) ("In enunciating a flexible 'control group' test, the Upjohn Court was expanding the definition of 'clients' so the laudable goals of the attorney-client privilege would be applicable to a greater number of corporate employees."); Sherman v. State, 128 Wn.2d 164, 190, 905 P.2d 355 (1995) (citing Upjohn for the principle that corporate attorney-client privilege might shield certain correspondence from discovery).

3 Smith v. Orthopedics Intern., Ltd., 170 Wn.2d 659, 667, 244 P.3d 939 (2010) (internal quotation marks omitted) (quoting Loudon, 110 Wn.2d at 679 and Carson v. Fine, 123 Wn.2d 206,213, 867 P.2d 610 (1994)). 3 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

with a plaintiff-patient's nonparty treating physician thus also remain the law of our

state.

In these consolidated medical malpractice cases, the Upjohn case, which

defines the scope of the corporate attorney-client privilege, and the Loudon rule,

which creates procedures to protect the physician-patient privilege, conflict. On the

one hand, Upjohn would allow corporate counsel to have privileged (confidential

and private) discussions with corporate employees, including a plaintiffs nonparty

treating physician, to investigate claims and prepare for litigation. On the other

hand, Loudon would bar confidential discussions between defense counsel and the

plaintiffs nonparty treating physicians about the subject of the litigation-Loudon

would require that such preparation take place in the presence of opposing counsel.

This court must resolve that conflict.

We reject the suggestion (of plaintiffs and am1cus Washington State

Association for Justice Foundation (WSAJF)) that the test announced in Wright v.

Group Health Hospital, 103 Wn.2d 192, 691 P.2d 564 (1984), resolves the conflict.

That test was designed to "prevent situations in which a represented party may be

taken advantage of by adverse counsel," id. at 197, not to protect the plaintiffs

physician-patient privilege or the corporation's attorney-client privilege. We also

reject the suggestion (of defendants and amicus Washington Defense Trial Lawyers)

4 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

that Upjohn completely trumps Loudon. It does not. Upjohn decides which

corporate employees' communications with corporate counsel are protected by the

attorney-client privilege; it bases this decision on policy determinations about how

much confidentiality is needed to further the values upon which the attorney-client

privilege is based. Those values are certainly at play in this case-the corporate

defendant has a right to advice, counsel, and litigation expertise. Loudon decides

something different: the manner in which defense counsel may communicate with a

plaintiffs nonparty treating physicians, consistent with the physician-patient

privilege. Loudon bases this decision primarily on the policy concerns underlying

that privilege, that is, the need to protect patient confidentiality and foster the

fiduciary relationship between such physicians and their patients. Those concerns

are also at play in these cases-the plaintiff-patients who may have suffered injury

due the defendants' negligence should not be forced to suffer the additional injury

of a privacy invasion implicating the most intimate details about their bodies and

health.

To protect the values underlying both the physician-patient and the attorney-

client privileges, we adopt a modified version of the Upjohn test in this context.

Under this test, an attorney hired by a defendant health care provider to investigate

or litigate an alleged negligent event may conduct privileged ex parte

5 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

communications with a plaintiff's nonparty treating physician only where the

communication meets the general prerequisites to application of the attorney-client

privilege, 4 the communication is with a physician who has direct knowledge of the

event or events triggering the litigation, and the communications concern the facts

of the alleged negligent incident.

As always, the attorney-client privilege protects the privileged

communications only-not the facts transmitted in those communications. Facts are

proper subjects of investigation and discovery, even if they are also the subject of

privileged communications. Wright, 103 Wn.2d at 195 (citing Upjohn, 449 U.S. at

395-96). Hence, Wright still governs ex parte contacts between plaintiff's counsel

and the corporate-defendant's employees-even if they are the same physician-

employees who might have privileged conversations with corporate counsel.

FACTS

1. Youngs v. PeaceHealth

Plaintiff Marc Youngs was admitted to defendant PeaceHealth' s Bellingham,

Washington, facility, St. Joseph Hospital, for lung surgery in December 2008.

4 See generally Haines v. Liggett Group Inc., 975 F.2d 81, 90 (3d Cir. 1992) ("The privilege extends to verbal statements, documents and tangible objects conveyed by both individual and corporate clients to an attorney in confidence for the purpose of any legal advice."). 6 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

There, he developed sepsis resulting in the loss of both his legs below the knee and

both his hands above the wrist. He brought an action against PeaceHealth for

negligent postoperative care under the "Doctrine of Corporate Negligence," the

"Doctrine of Respondeat Superior," and the "Doctrine of Res Ipsa Loquitur"; and

"for failure to obtain an informed consent." Clerk's Papers (CP) at 214. In his

complaint, he identified Drs. Richard Leone and Donald Berry as physicians whose

conduct gave rise to his lawsuit, but he did not name those doctors as defendants.

Mr. Youngs did not object to ex parte contacts between PeaceHealth's defense

counsel and Drs. Leone or Berry. But he did object to defense counsel's ex parte

contacts with any other physician who treated him at St. Joseph, even though he had

responded to interrogatories in a manner that suggested he might bring claims

implicating several additional, unidentified physicians. Citing Loudon, Mr. Youngs

moved to prohibit "defense counsel from ex parte contact, directly or indirectly, with

any of plaintiff Marc Youngs' treating health care providers, with the exception of

Dr. Richard Leone, and Dr. Donald Berry." CP at 251. The trial court granted the

motion, and PeaceHealth moved to reconsider. The trial court then reversed, stating

that "counsel for PeaceHealth may have ex parte contact with PeaceHealth

employees who provided health care to plaintiffMarc Youngs." CP at 9.

2. Glover v. State of Washington d/b/a Harborview Medical Center

7 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

Aolani Glover went to the Harborview Medical Center (Harborview)

emergency room on April 2, 2008, after developing chest pain that she said she had

never before experienced. Harborview is owned by defendant Washington State and

managed by the University of Washington (UW) medical system. Ms. Glover was

28 years old when she visited the Harborview emergency room on April 2 and was

apparently otherwise in good health. According to Ms. Glover, she was made to

wait about four hours for treatment. Once she was admitted for treatment, Ms.

Glover contends that she was "parked" on a gurney in the hallway, where she waited

another hour for a nurse to take her vital signs and perform blood work. Resp't's

Br. at 2. The blood work revealed elevated troponin levels, which indicate

myocardial infarction (heart attack). Ms. Glover contends that lab results showing

the elevated troponin levels were available when Lulu Gizaw, a physician's

assistant, first saw her. Mr. Gizaw nevertheless discharged Ms. Glover, telling her

that she was not having a cardiac event. Mr. Gizaw maintains that he had reviewed

another patient's blood work results, mistaking them for Ms. Glover's. When he

discovered his error, Mr. Gizaw tracked Ms. Glover down at Harborview's

outpatient pharmacy and requested that she return to the emergency department. She

returned, was reexamined, and was subsequently taken to Harborview's cardiac

catheterization room. There, doctors discovered that Ms. Glover had suffered a right

8 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

coronary artery dissection. Ms. Glover contends that this condition, if untreated,

"causes myocardial infarction and can later cause sudden cardiac death." Resp't's

Br. at 4 n.3. Immediately after her arrival in the catheterization room, Ms. Glover

had several cardiac arrests.

Cardiac surgeons at Harborview tried to repair the damage to Ms. Glover's

artery using a stent but ultimately had to place a pacemaker and balloon pump. After

receiving the pacemaker and pump, Ms. Glover was transferred to the intensive care

unit, where she remained, unconscious, for three days. She was then transferred,

still unconscious and in critical condition, to UW Medical Center (UWMC), another

facility in the UW medical system, where surgeons placed a temporary ventricular

assist device. UWMC discharged Ms. Glover 17 days later, but she returned after

three weeks, complaining of more chest pains. At that point, UWMC doctors found

further dissection in her coronary arteries. Ms. Glover underwent a heart transplant

on June 27, 2008, at UWMC.

Ms. Glover alleges that the Harborview emergency staff was too slow to

recognize that she was suffering a cardiac event and that they therefore negligently

delayed her transfer to the catheterization room. She makes no allegations of

negligence concerning the care she received after Mr. Gizaw convinced her to return

to the emergency department for readmission.

9 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

Initially, Ms. Glover asserted that Loudon, and its progeny, barred ex parte

communications between defense counsel and Ms. Glover's treating physicians at

Harborview outside the emergency department. Later, however, she indicated that

she did not object to defense counsel's ex parte contacts with "any of the

[Harborview] Emergency Department or Cardiology staff . . . involved in [Ms.

Glover's] care, so long as those individuals were not shown any records of her

subsequent care [at UWMC]." CP at 32. In response to Ms. Glover's motion, the

trial judge issued a protective order stating that "Defense Counsel and the

defendant's risk manager are prohibited from ex parte contact, directly or indirectly,

with any of Plaintiff Aolani Glover's treating physicians at University of

Washington Medical Center." CP at 170.

3. Procedure in Both Cases

In both cases, the trial court certified its order on ex parte contacts for

discretionary review. The Court of Appeals consolidated the cases and transferred

them here pursuant to RCW 2.06.030. We agreed that the cases present issues of

broad public import requiring prompt determination, and we granted review.

Defendant PeaceHealth argues that Loudon was superseded by amendments

to the patient privilege statute in 1986 and 1987; the amendments now make waiver

of the physician-patient privilege automatic "as to all physicians or conditions," 90

10 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

days after a claimant files an action for personal injuries or wrongful death. LAws

OF 1987, ch. 212, § 1501; LAWS OF 1986, ch. 305, § 101; RCW 5.60.060(4)(b).

PeaceHealth contends that the physician-patient privilege is purely statutory, with

no basis in common law, so there is nothing left for Loudon to protect, postwaiver.

Both defendants claim that even if Loudon did survive the statutory amendments,

Loudon's protections still do not apply to the plaintiffs nonparty treating physician

when that physician is employed by the defendant health care provider. The

defendants reason that applying Loudon in that context would conflict with both the

attorney-client privilege and hospital regulatory statutes governing patient

confidentiality and health care quality improvement.

We hold that Loudon's bar on ex parte contacts survived the 1986 and 1987

amendments to Washington's physician-patient privilege statute, and that Loudon's

protections apply to nonparty treating physicians employed by a defendant hospital,

but that where the plaintiffs treating physician is employed by the defendant, the

Loudon rule is limited by the defendant organization's corporate attorney-client

privilege as summarized in the introduction and discussed more fully below. We

also hold that a trial court may not restrict communications between a hospital's

employees and quality improvement committee but that members of the committee

11 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

must be screened from defense counsel m an action against the hospital for

negligence or medical malpractice.

ANALYSIS

1. Loudon surviVes the 1986/1987 amendments to the physician-patient privilege statute

When the Loudon plaintiffs initiated their original action, Washington's

physician-patient privilege statute had no waiver provision. Nevertheless, personal

injury plaintiffs were still deemed to have "waived" the privilege at some point prior

to trial by filing suit. Under that statutory regime, trial courts determined on a case-

by-case basis when the plaintiff had waived the privilege by putting his or her

medical condition in issue. See Phipps v. Sasser, 74 Wn.2d 439, 445 P.2d 624

(1968); Bond v. Indep. Order of Foresters, 69 Wn.2d 879, 421 P.2d 351 (1966);

Randa v. Bear, 50 Wn.2d 415,312 P.2d 640 (1957); McUne v. Fuqua, 42 Wn.2d 65,

253 P.2d 632, 257 P.2d 636 (1953).

In 1986, our legislature amended the physician-patient privilege statute to

provide that "[w ]aiver of the physician-patient privilege for any one physician or

condition constitutes a waiver of the privilege as to all physicians or conditions,

subject to such limitations as a court may impose pursuant to court rules." LAWS OF

1986, ch. 305, § 101(4)(b). In 1987, the legislature further amended it, making

12 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

waiver automatic 90 days after the filing of a claim for personal injury or wrongful

death. LAWS OF 1987, ch. 212, § 1501(1)(b). Defendant PeaceHealth argues that

these waiver amendments supersede the Loudon rule and thus deprive a personal

injury plaintiff of the privilege absolutely, 90 days after he or she files suit.

This argument fails. The 1986 and 1987 amendments did not create a new

waiver. Rather, they codified a judge-made waiver that was already well established

when Loudon was decided. 5

5 This court discussed the purpose of the amendments in Carson v. Fine, 123 Wn.2d 206, 213-14, 867 P.2d 610 (1994), where it explained that they did little to change preexisting judge-made rules regarding waiver of the patient privilege. The 1986 amendment codified a rule that prevented physician witness-shopping, while the 1987 amendment did away with the case-by-case waiver analysis, instituting the blanket 90-day waiver rule:

A patient who could select among various physicians' opinions, and claim privilege as to the remainder, would make a mockery of justice. [State v.] Tradewell, 9 Wn. App. [821, 824, 515 P.2d 172 (1973)]; see also State v. Brewton, 49 Wn. App. 589, 591, 744 P.2d 646 (1987) .... This conclusion is now expressly set forth in [the 1986 amendment] ... .

Jd. at 214.

The [1987] amendment is a codification of existing Washington case law which holds that waiver occurs even without plaintiffs express consent. Specifically, this court has held that the introduction by the patient of medical testimony describing the treatment and diagnosis of an illness waives the privilege as to that illness, and the patient's own testimony to such matters has the same effect.

Id. at 213.

13 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

Indeed, the Loudon court devoted a significant portion of its analysis to that

judge-made waiver rule. Its analysis makes clear that a waiver of the patient

privilege triggers, rather than cancels, the Loudon protections:

A patient may waive [the physician-patient] privilege by putting his or her physical condition in issue. See Randa v. Bear, 50 Wn.2d 415, 312 P.2d 640 (1957); Phipps v. Sasser, 74 Wn.2d 439,445 P.2d 624 (1968). Waiver is not absolute, however, but is limited to medical information relevant to the litigation. See CR 26(b )(1 ).

The danger of an ex parte interview is that it may result in disclosure of irrelevant, privileged medical information. . . . The plaintiffs interest in avoiding such disclosure can best be protected by allowing plaintiffs counsel an opportunity to participate in physician interviews and raise appropriate objections.

Loudon, 110 Wn.2d at 677-78 (emphasis added) (footnote omitted). By protecting

against the disclosure of information irrelevant to the litigation, the Loudon rule

furthers a primary purpose of the patient privilege statute-protecting patient

confidentiality-even though the plaintiff has waived the absolute privilege from

discovery about relevant matters. As this court put it in a postamendment case,

"Loudon ... held that a plaintiff-patient's waiver of the physician-patient privilege

does not authorize ex parte communications between the defendant and the

plaintiffs treating physicians." Carson v. Fine, 123 Wn.2d 206, 210-11, 867 P.2d

610 (1994) (emphasis added). That rule remains as valid today, now that such

waiver is codified by statute, as it was when Loudon was decided.

14 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

The existence of preamendment waiver is sufficient by itself to show that

Loudon remains good law. But it should also be noted that Loudon rests on more

than just the patient's confidentiality interest. In addition to furthering that interest,

the Loudon rule serves three distinct functions. First, it protects the doctor-patient

fiduciary relationship:

The relationship between physician and patient is a "fiduciary one of the highest degree ... involv[ing] every element of trust, confidence, and good faith." Lockett v. Goodill, 71 Wn.2d 654, 656, 430 P.2d 589 (1967) .... "[W]e find it difficult to believe that a physician can engage in ex parte conference with the legal adversary of his patient without endangering the trust and faith invested in him by his patient."

Loudon, 110 Wn.2d at 679 (alterations in original) (footnote omitted) (citing Petrillo

v. Syntex Labs., Inc., 148 Ill. App. 3d 581, 595, 499 N.E.2d 952, 102 Ill. Dec. 172

(1986)). Second, it protects the physician's "interest in avoiding inadvertent

wrongful disclosures," which the court "recognize[ d], without deciding," might

trigger the physician's liability to the patient. Id. at 680. Finally, it aids in proper

trial administration, preventing the occasion from arising where defense counsel

might be called to testify as an impeachment witness. Id. 6

6 Three years ago, in Smith v. Orthopedics International, Ltd., 170 Wn.2d 659, 666- 67, 244 P.3d 939 (2010), this court reaffirmed all of Loudon's policy holdings and also emphasized the special problems that ex parte contacts pose in personal injury and medical malpractice cases. Citing reasoning in cases from other jurisdictions, the Smith court noted that in personal injury cases, ex parte contacts might provide defense counsel the opportunity to surprise the plaintiff with information furnished by his treating physician, 15 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

In sum, Loudon clearly establishes a patient-plaintiffs right to supervise his

nonparty physician's communications with opposing counsel. Loudon was a

unanimous decision, which has remained in force for 25 years, and will not be

abandoned absent "a clear showing that [it] is incorrect and harmful." In re Rights

to Waters of Stranger Creek, 77 Wn.2d 649, 653, 466 P.2d 508 (1970). No such

showing has been made here. Amendments to the patient privilege statute have not

diminished Loudon's relevance; it remains binding precedent.

2. The Upjohn privilege survives Loudon, but we limit and clarify the scope of that corporate attorney-client privilege in the Loudon context

The defendants contend that the corporate attorney-client privilege guarantees

their right to communicate ex parte with any of their employees, regardless of the

Loudon rule. For the reasons given below, we reject the defendants' application of

the corporate attorney-client privilege in this context but hold that Loudon must yield

where it would infringe on the privilege as properly construed.

while in medical malpractice cases they might draw the nonparty physician into discussions about the overall merit of malpractice suits. Smith, 170 Wn.2d 669 n.2. (citing Law v. Zuckerman, 307 F. Supp. 2d 705, 711 (D. Md. 2004); Manion v. N.P. W Med. Ctr. ofN.E. Pa., Inc., 676 F. Supp. 585, 594-95 (M.D. Pa.1987)). While there were three opinions in Smith, the court was unanimous that the Loudon rule barred not only ex parte interviews with a plaintiff's nonparty physician, but also any ex parte "contacts" with that physician whatsoever. ld. at 670. 16 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

In Upjohn, 449 U.S. at 386, the United States Supreme Court held that

corporations, like individuals, enjoy the protections of the attorney-client privilege.

It also discussed the privilege's scope. !d. at 391-97. It overruled prior precedent

limiting the privilege to counsel's communications with the corporate "control

group"-upper-level management-and held that the privilege can extend to

communications with certain other employees as well. !d.

The defendants maintain that Upjohn recognized a blanket privilege for

communications between corporate counsel and corporate employees at all levels,

regardless of a given employee's relationship to potential corporate liability. This

perspective-which in the era of rapidly consolidating healthcare systems would all

but eviscerate Loudon-reads too much into the Upjohn decision. Upjohn does not

say that every corporate employee is necessarily a "party" to a lawsuit naming the

employee's corporate employer. Cf Wright, 103 Wn.2d at 202 ("A corporate

employee who is a 'client' under the attorney-client privilege is not necessarily a

'party' for [other] purposes .... "). Nor does it say that every employee is corporate

counsel's "client." The question in Upjohn was whether attorney-client privilege

could ever apply to corporate counsel's communications with nonmanagerial

employees. Upjohn, 449 U.S. at 389. The Court said the answer is yes, largely

17 Youngs v. Peacehealth, et al./Glover v. State, eta!. No. 87811-1

because "protect[ion] against compelled disclosure ... [was c]onsistent with the

underlying purposes of the attorney-client privilege." Id. at 395.

The Upjohn Court also explained these purposes; it stated that the attorney-

client privilege "'facilitates the full development of facts essential to proper

representation of the client [and] . . . encourages laymen to seek early legal

assistance."' I d. at 391 (quoting MODEL CODE OF PROF'L RESPONSIBILITY EC 4-1 ).

The Court determined that to serve these purposes effectively in a corporate context,

the attorney-client privilege could not be limited to corporate counsel's

communications with high-level employees. If the privilege were so limited, the

Court reasoned, counsel would face a "'Hobson's choice"' between engaging in

potentially incriminating communications with low-level employees, on the one

hand, and foregoing access to the information those employees might provide, on

the other. I d. (citing Diversified Indus., Inc. v. Meredith, 572 F .2d 596, 608 (8th Cir.

1978)). The Court noted that in the context of corporate liability, low- and mid-level

employees might well be the only source of information relevant to legal advice,

since they can, "by actions within the scope of their employment, embroil the

corporation in serious legal difficulties." Id. Without talking to these employees,

the Court reasoned, corporate counsel "may find it extremely difficult, if not

18 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

impossible, to determine what happened" to trigger potential corporate liability. Id.

at 392 (quoting Diversified Indus., 572 F.2d at 608-09).

We adopt this reasoning from Upjohn. In previous cases, this court has

endorsed Upjohn's "flexible ... test," praising it for furthering the "laudable goals

of the attorney-client privilege." Wright, 103 Wn.2d at 201-02; see also Sherman v.

State, 128 Wn.2d 164, 190,905 P.2d 355 (1995) (citing Upjohn for the principle that

"correspondence between an attorney for a corporate entity and that entity's

employees [may be] subject to the attorney-client privilege of the corporate entity").

In this case, however, Upjohn and Loudon conflict. Loudon and Upjohn do

address different types of communication-the Upjohn plaintiffs sought access to

records of past communications, while the Loudon plaintiffs sought to supervise

future interviews-but both cases implicate the same fundamental questions of

attorney-client privilege. The privilege established in Upjohn, protecting certain

communications from after-the-fact discovery, implies a corresponding privilege

from contemporaneous supervision by opposing counsel. Therefore, certain ex parte

communications between a hospital's corporate defense counsel and hospital

employees may be protected by Upjohn but barred by Loudon. Indeed, depriving

counsel of the ability to communicate confidentially with a client damages the

privilege just as much as disclosing a prior communication does. Cf Geders v.

19 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

United States, 425 U.S. 80, 88-91, 96 S. Ct. 1330,47 L. Ed. 2d 592 (1976) (barring

communications between defense counsel and criminal defendant during overnight

trial recess violates Sixth Amendment right to counsel).

We rely upon Upjohn's reasoning to resolve this conflict. The attorney-client

privilege is "'the oldest of the privileges for confidential communications known to

the common law,"' and it '"promote[s] broad[] public interests in the observance of

law and administration of justice."' United States v. Jicarilla Apache Nation, _

U.S._, 131 S. Ct. 2313, 2320, 180 L. Ed. 2d 187 (2011) (quoting Upjohn, 449

U.S. at 389). In keeping with those interests, the Upjohn Court rejected the narrow

"control group" test for corporate attorney-client privilege because that test "makes

it difficult for corporate attorneys to formulate sound advice ... [and] threatens to

limit the valuable efforts of corporate counsel to ensure their client's compliance

with the law." Upjohn, 449 U.S. at 392.

But the Upjohn Court did not articulate a fixed set of criteria by which to

determine what specific conversations with lower-level employees must remain

privileged in order to protect those values. Although the Court identified specific

factors as relevant to its decision in that case/ it expressly "decline[d] to lay down a

7In finding the communications at issue in Upjohn to be privileged, the Court noted that (1) they were made at the direction of corporate superiors, (2) they were made by corporate employees, (3) they were made to corporate counsel acting as such, (4) they 20 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

broad rule ... to govern all conceivable future questions [of corporate attorney-client

privilege]." Id. at 386, 394. Still, Upjohn's reasoning implies a limiting principle.

This principle follows from Upjohn's central policy concern, which is to facilitate

frank communication about alleged wrongdoing. The Upjohn Court sought to

protect counsel's ability to "ascertain the factual background" of a "legal problem,"

and it rejected the narrow "control group" test because that test would frustrate the

lawyer's investigative abilities. Id. at 390 ("[The control group test] overlooks the

fact that the privilege exists to protect not only the giving of professional advice to

those who can act on it, but also the giving of information to the lawyer to enable

him to give sound and informed advice." (emphasis added)). In keeping with these

goals, we hold that the corporate attorney-client privilege tn1mps the Loudon rule

where an ex parte interview enables corporate counsel '"to determine what

happened"' to trigger the litigation. Upjohn, 449 U.S. at 392 (internal quotation

marks omitted) (quoting Diversified Indus., 527 F.2d at 608-09). Under this rule,

corporate defense counsel may have privileged ex parte communications with a

concerned matters within the scope of the employee's duties, (5) they revealed factual information "not available from upper-echelon management," (6) they revealed factual information necessary "to supply a basis for legal advice," (7) the communicating employee was sufficiently aware that he was being interviewed for legal purposes, and (8) the communicating employee was sufficiently aware that the information would be kept confidential. Upjohn, 449 U.S. at 394. 21 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

plaintiffs nonparty treating physician only where the communication meets the

general prerequisites to application of the attorney-client privilege, 8 the

communication is with a physician who has direct knowledge of the event or events

triggering the litigation, and the communications concern the facts of the alleged

negligent incident. The Loudon rule still bars ex parte interviews as to information

about prior and subsequent treatment (i.e., information about the plaintiffs

particular vulnerabilities or the nature of the plaintiffs recovery or disabilities). This

rule strikes the proper balance between the attorney-client and physician-patient

privileges, limiting Loudon's prophylactic protections to the extent necessary to

protect a corporate defendant's right to fully investigate its potential liability.

Finally, in concluding our discussion of the conflict between Loudon and

Upjohn, we make two points. First, we reiterate that the attorney-client privilege

protects communications, but not the facts underlying those communications.

Wright, 103 Wn.2d at 195 (citing Upjohn, 449 U.S. at 395-96). Second, we

acknowledge that the communications actually at issue in Upjohn were written

questionnaires and thus distinguishable from ex parte interviews in certain respects.

But, in the context of the Loudon rule, this court has refused to distinguish between

8 See supra note 4. 22 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

limited, written communications and unlimited ex parte interviews. Smith v.

Orthopedics Intern., Ltd., 170 Wn.2d 659, 665-70, 224 P.3d 939 (20 10).

·Rehabilitating that distinction here would erode rather than strengthen the Loudon

rule, and the limit it would impose on a hospital's attorney-client privilege 1s

unrelated to any of the policy concerns articulated in Upjohn.

3. Hospital Regulatory Law

The defendants also argue that hospital regulatory statutes give them the right

to communicate ex parte with any of their employees at any time. They cite

Washington's Uniform Health Care Information Act (UHCIA), chapter 70.02 RCW,

and Washington's hospital quality improvement (QI) statute, RCW 70.41.200. 9 The

UHCIA authorizes the disclosure of confidential patient information "to the extent

a recipient needs to know the information, if the disclosure is ... to [a] person who

requires [the] information ... to provide ... quality assurance ... or ... legal ...

services to ... the health care provider or health care facility . . . . " RCW

9 The defendants also cite the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which allows disclosure of confidential health care information under certain circumstances. In general, HIP AA supersedes contrary state law, but it does not do so where "the provision of State law . . . relates to the privacy of individually identifiable health information." 42 U.S.C. § 1320d-7(a)(2)(B). HIPAA cannot authorize disclosures prohibited under Washington law. Therefore, to determine whether Loudon applies to the cases at hand, we need not consider arguments related to HIPAA.

23 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

70.02.050(1 )(b ). 10 The QI statute reqmres that hospitals collect information

concermng their patients' "negative health care outcomes" and protects this

information from civil discovery. RCW 70.41.200(1)(e), (3). 11 The defendants

10The full text of RCW 70.02.050(1)(b) authorizes disclosures of confidential medical information:

To any other person who requires health care information for health care education, or to provide planning, quality assurance peer review, or administrative, legal, financial, actuarial services to, or other health care operations for or on behalf of the health care provider or health care facility; or for assisting the health care provider or health care facility in the delivery of health care and the health care provider reasonably believes that the person:

(i) Will not use or disclose the health care information for any other purpose; and

(ii) Will take appropriate steps to protect the health care information.

11 The full text ofRCW 70.41.200(1) provides:

Every hospital shall maintain a coordinated quality improvement program for the improvement of the quality of health care services rendered to patients and the identification and prevention of medical malpractice. The program shall include at least the following:

(e) The maintenance and continuous collection of information concerning the hospital's experience with negative health care outcomes and incidents injurious to patients including health care-associated infections as defined in RCW 43.70.056, patient grievances, professional liability premiums, settlements, awards, costs incurred by the hospital for patient injury prevention, and safety improvement activities.

RCW 70.41.200(3) provides: 24 Youngs v. Peacehealth, et al./Glover v. State, eta!. No. 87811-1

argue that both statutes preclude the application of the Loudon rule to a defendant

hospital's employees.

With respect to the QI regime, the defendants cite Burger v. Lutheran General

Hospital, 198 Ill. 2d 21, 759 N.E.2d 533, 259 Ill. Dec. 753 (2001), a case in which

the Illinois Supreme Court upheld a hospital licensing statute authorizing unlimited

intrahospital communications, in contravention of Illinois's Loudon-equivalent, the

Information and documents, including complaints and incident reports, created specifically for, and collected and maintained by, a quality improvement committee are not subject to review or disclosure, except as provided in this section, or discovery or introduction into evidence in any civil action, and no person who was in attendance at a meeting of such committee or who participated in the creation, collection, or maintenance of information or documents specifically for the committee shall be permitted or required to testify in any civil action as to the content of such proceedings or the documents and information prepared specifically for the committee. This subsection does not preclude: (a) in any civil action, the discovery of the identity of persons involved in the medical care that is the basis of the civil action whose involvement was independent of any quality improvement activity; (b) in any civil action, the testimony of any person concerning the facts which form the basis for the institution of such proceedings of which the person had personal knowledge acquired independently of such proceedings; (c) in any civil action by a health care provider regarding the restriction or revocation of that individual's clinical or staff privileges, introduction into evidence [of] information collected and maintained by quality improvement committees regarding such health care provider; (d) in any civil action, disclosure of the fact that staff privileges were terminated or restricted, including the specific restrictions imposed, if any and the reasons for the restrictions; or (e) in any civil action, discovery and introduction into evidence of the patient's medical records required by regulation of the department of health to be made regarding the care and treatment received.

25 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

Petrillo doctrine. The statute at issue in Burger permitted communication '"at any

time and in any fashion,"' between a hospital's medical staff and legal counsel

'"concerning ... any care or treatment they provided or assisted in providing to any

patient within the scope of their employment or affiliation with the hospital."'

Burger, 198 Ill. 2d at 26 (quoting 210 ILL. COMP. STAT. 85/6.17(e)). 12 The Illinois

Supreme Court concluded that subordinating the licensing statute to the Petrillo

doctrine "would lead to absurd results":

12The full text of the provisions alleged to violate patient privacy under the Petrillo doctrine states:

"(d) No member of a hospital's medical staff and no agent or employee of a hospital shall disclose the nature or details of services provided to patients, except that the information may be disclosed to the patient, persons authorized by the patient, the party making treatment decisions, if the patient is incapable of making decisions regarding the health services provided, those parties directly involved with providing treatment to the patient or processing the payment for that treatment, those parties responsible for peer review, utilization review, quality assurance, risk management or defense of claims brought against the hospital arising out of the care, and those parties required to be notified under the Abused and Neglected Child Reporting Act, the Illinois Sexually Transmissible Disease Control Act, or where otherwise authorized or required by law."

"(e) The hospital's medical staff members and the hospital's agents and employees may communicate, at any time and in any fashion, with legal counsel for the hospital concerning the patient medical record privacy and retention requirements of this section and any care or treatment they provided or assisted in providing to any patient within the scope of their employment or affiliation with the hospital."

Burger, 198 Ill. 2d at 26 (quoting 210 ILL. COMP. STAT. 85/6.17 (West 2000)). 26 Youngs v. Peacehealth, et al./Glover v. State, eta!. No. 87811-1

[I]f Petrillo prevented the limited intrahospital communications authorized by subsections (d) and (e) of section 6.17 of the Act, hospitals would face the dilemma of having to choose between ceasing to communicate with all hospital caregivers with respect to a hospital patient's treatment, communicating only with those caregivers the hospital assumes were not negligent and risk a subsequent Petrillo violation if the hospital's assumption was incorrect, or deposing all of the patient's hospital caregivers. Further, if we were to accept plaintiffs view, hospitals, which are statutorily obligated to create, maintain and protect private medical records, would be forced to subpoena their own records in the event of litigation.

Burger, 198 Ill. 2d at 58-59.

We do not accept defendants' invitation to adopt the reasoning in Burger.

Washington's QI statute does not contain the Illinois statute's strong language,

permitting hospital employees to communicate "'at any time and in any fashion"'

with hospital counsel. ld. at 26 (quoting 210 ILL. COMP. STAT. 85/6.17(e)). Thus, to

the extent that Burger simply interprets a statute, it is not directly relevant here. To

the extent the defendants argue that Loudon is unworkable in the context of their QI

obligations, this case is not the proper venue in which to address that policy

argument. The plaintiffs and amicus WSAJF contend that litigation defense counsel

can be screened from the QI committee and the record does not contain any

information suggesting that such screening is unworkable. On the contrary, the

Loudon rule and the QI regime have coexisted, apparently successfully, for over 25

years.

27 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

The QI statute precludes restrictions on communications between a hospital's

QI committee and its physicians, but the committee members can be screened from

defense counsel in a malpractice action. Such screening will preserve Loudon's

protections for patient-plaintiffs, while also allowing hospitals to meet statutory

requirements for quality improvement. This screening preserves the integrity of the

QI process, allowing the QI committee to meet its statutory requirement to collect

and maintain information "specifically for" QI purposes. See WSAJF Br. at 24-25.

With respect to the UHCIA, the defendants' argument can be summed up as

follows: the statute allows physicians and hospitals to disclose patients' confidential

medical information where necessary to obtain legal services; when a hospital is

sued for the conduct of one of its employees, it needs to be able to get information

from any of its employees, in order to properly prepare for litigation (i.e., to obtain

"legal services" under RCW 70.02.050(1 )(b)). The plaintiffs counter that there is no

conflict between the UHCIA and Loudon, because a hospital can obtain "legal

services" without violating the physician-patient privilege. We agree: that is

precisely what the Loudon rule was designed to facilitate.

The defendants cite cases from Arizona and Florida, where courts have held

that a hospital's employer status trumps those states' Loudon-equivalents. Florida's

District Court of Appeal found that intrahospital communications were not

28 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

"disclosures" for purposes of the state's patient privilege statute. Estate of Stephens

ex rel. Clark v. Galen Health Care Inc., 911 So. 2d 277, 282 (Fla. Dist. Ct. App.

2005). An Arizona appellate court reasoned that a hospital's right to engage in ex

parte communications with its own employees "exists because the employment

relationship exists" and could not be diminished by the filing of a lawsuit. Phoenix

Children's Hosp., Inc. v. Grant, 228 Ariz. 235, 239, 265 P.3d 417 (Ct. App. 2011).

Neither the Florida nor the Arizona authority is persuasive. Both courts

essentially concluded that corporate employers have a right to communicate ex parte

with their employees, simply by virtue of the employer-employee relationship. The

Arizona court derived that holding from the '"well established rule in the law of

agency that a corporation is bound by the knowledge acquired by ... its agents or

officers which is within the scope of their authority and ... in reference to a matter

to which their authority extends."' Grant, 228 Ariz. at 239 (quoting Fridena v.

Evans, 127 Ariz. 516, 519, 622 P.2d 463 (1980) and citing Samaritan Found. v.

Goodfarb, 176 Ariz. 497, 503, 862 P.2d 870 (1993)). Similarly, the Florida court

reasoned that a hospital must

be[] able to speak to its agents and employees ... because the hospital . . . can function only through its employees and agents, and its "knowledge" of information like how its standards for nurse training and patient care are being carried out depends solely on information acquired and reported by its agents and employees.

29 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

Clark, 911 So. 2d at 281. Neither a principle of imputed knowledge, nor the self-

evident fact that corporations consist of people, should affect the application of a

Loudon-type rule. Loudon does not prohibit the acquisition of knowledge; it merely

imposes procedural safeguards to prevent improper influence or disclosures.

Moreover, at the conclusion of its opinion, the Arizona court hypothesized some

limits on a corporate defendant's right to communicate ex parte with its employees,

which were not at issue in the case before it. These included court-imposed rules to

prevent the disclosure of irrelevant privileged information or to block

communications with "different employees or departments of a hospital .... " Grant,

228 Ariz. at 240. Such limits are among those that our modified Loudon rule

imposes on the defendants here.

CONCLUSION

Loudon survives the amendments to the patient privilege statute. It remains

good law, and it applies where the defendant employs the plaintiffs nonparty

treating physician. If Loudon conflicts with a defendant's corporate attorney-client

privilege, however, it must yield to that privilege. This means that an attorney hired

by a corporate defendant to investigate or litigate an alleged negligent event may

engage in privileged (ex parte) communications with the corporation's physician-

30 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

employee where the physician-employee has firsthand knowledge of the alleged

negligent event and where the communications are limited to the facts of the alleged

negligent event. We emphasize that "the facts of the alleged negligent incident" do

not encompass health care that was provided before or after the event triggering the

litigation, such as care for preexisting conditions or postevent recovery. This is true

even where such care bears on the issue of damages.

We remand these cases to the trial courts for further proceedings consistent

with this opinion. Because the trial courts' orders differed from one another in key

respects, we address each order separately.

In Ms. Glover's case, the trial court issued a protective order stating that

"Defense Counsel and the defendant's risk manager are prohibited from ex parte

contact, directly or indirectly, with any of Plaintiff Aolani Glover's treating

physicians at University of Washington Medical Center." CP at 170. We affirm the

portion of the trial court's order prohibiting defense counsel from having ex parte

contact with Ms. Glover's treating UWMC physicians. Because these physicians

were not present when the alleged negligent incident occurred at Harborview, they

are covered by the Loudon rule. We reverse that portion of the trial court's order

barring the risk manager from having ex parte contact with UWMC physicians, and

31 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

we remand the trial court to require that the risk manager be screened from the

defense in this case.

In Mr. Youngs' case, the trial court ruled that "counsel for PeaceHealth may

have ex parte contact with PeaceHealth employees who provided health care to

plaintiff Marc Youngs." CP at 9. We affirm the portion of the trial court's order

permitting defense counsel's ex parte communications with Mr. Youngs' nonparty

treating physicians, but only as to those physicians who have firsthand knowledge

of the alleged negligent incident and only as to communications about the facts of

that incident. We reverse the portion of that order permitting ex parte

communications with Mr. Youngs' other nonparty treating physicians (those lacking

firsthand knowledge of the alleged negligent incident) and with any of Mr. Youngs'

nonparty treating physicians on topics other than the facts of the alleged negligent

incident.

32 Youngs v. Peacehealth, et al./Glover v. State, et al. No. 87811-1

WE CONCUR:

33 Youngs v. PeaceHealth, et al.; Glover v. State, et al.

No. 87811-1

STEPHENS, J. (concurring in part/dissenting in part)-The majority fashions

a new rule that allows "an attorney hired by a corporate defendant to investigate or

litigate an alleged negligent event [to] engage in privileged (ex parte)

communications with the corporation's physician-employee where the physician-

employee has firsthand knowledge of the alleged negligent event and where the

communications are limited to the facts of the alleged negligent event." Majority at

30-31. This rule is wholly unworkable. Moreover, it erodes the sound policy

decision made by this court in Loudon v. Mhyre, 110 Wn.2d 675, 756 P.2d 138

(1988), without justification rooted in either the employer-employee relationship or

the attorney-client privilege.

I would hew to our decision in Loudon, recognizing that the risks we were

concerned with there exist equally in the context of a medical malpractice action

against a corporate defendant. The majority properly recognizes that the Loudon Youngs v. PeaceHealth, eta!.; Glover v. State, eta!., 87811-1 (Stephens, J. Concurrence/Dissent)

rule is unaffected by changes in the statutory physician-patient privilege, RCW

5.60.060(4)(b), and coexists with Washington's Uniform Health Care Information

Act (UHCIA), chapter 70.02 RCW, and Washington's hospital quality improvement

statute (QI statute), RCW 70.41.200. 1 Majority at 13, 27-28. It goes astray,

however, by seizing on Upjohn Co. v. United States, 449 U.S. 383, 101 S. Ct. 677,

66 L. Ed. 2d 584 (1981 ), as requiring allowance for ex parte contact between

corporate defense counsel and the plaintiffs nonparty treating physicians employed

by the corporation. For the reasons explained below, I concur in part and dissent in

part from the majority's resolution of these cases.

DISCUSSION

This court in Loudon adopted a bright-line rule prohibiting defense counsel

from engaging in ex parte contact with the plaintiffs nonparty treating physicians. 110 Wn.2d at 682; Smith v. Orthopedics Int'l, Ltd., 170 Wn.2d 659, 670, 244 P.3d

939 (2010) (lead opinion). As the majority recognizes, this rule serves several

important goals: it safeguards the plaintiffs confidentiality interest in not having irrelevant personal health care information disclosed; it protects the physician-

patient fiduciary relationship and serves the physician's interest in avoiding inadvertent disclosures that might give rise to liability to the patient; and it serves

the administration of justice, avoiding the risk that defense counsel may become an

impeachment witness. Majority at 14-15. In the context of medical malpractice

1 I also agree with the majority that the federal Health Insurance Portability and Accountability Act of 1996 has no bearing on this case. Majority at 23 n.9.

-2- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

litigation, the Loudon rule is particularly important to avoid the risk that the

plaintiffs health care providers might be unduly "shaped and influenced by" ex parte

contact or "improperly assume a role akin to that of an expert witness for the

defense." Smith, 170 Wn.2d at 668 (lead opinion). Discussing these risks, the lead

opinion in Smith quoted favorably from State ex rel. Woytus v. Ryan, 776 S.W.2d

389, 395 (Mo. 1989), "acknowledging that ex parte contact in medical malpractice

cases between defense counsel and a nonparty treating physician creates risks that

are not generally present in other types of personal injury litigation, including the

risk of discussing "'the impact of a jury's award upon a physician's professional

reputation, the rising cost of malpractice insurance premiums, [a~d] the notion that

the treating physician might be the next person to be sued,"' among others." 170

Wn.2d at 669 n.2 (lead opinion) (alteration in original) (internal quotation marks

omitted).

Tracing the history of Washington's rule since Loudon, the majority correctly

rejects the argument that the prohibition on ex parte contact rests on the physician-

patient privilege and is thus no longer good law after statutory amendments to the

privilege created a blanket waiver. Majority at 12-14; see Smith, 170 Wn.2d at 665

(lead opinion), 674 (Fairhurst, J., concurring). This was clear from the instant the

issue was stated in Loudon. 110 Wn.2d at 675-76 ("The issue presented is whether

defense counsel in a personal injury action may communicate ex parte with the

plaintiffs treating physicians when the plaintiff has waived the physician-patient

privilege." (emphasis added)).

-3- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

The majority also correctly rejects the argument that the Loudon rule is

incompatible with statutes governing disclosure of personal health care information

and protecting information gathered during internal quality improvement reviews.

Neither the UHCIA nor the QI statute erodes the policy of Loudon. As the majority

observes, "the Loudon rule and the QI regime have coexisted, apparently

successfully, for over 25 years." Majority at 27. It is certainly possible to segregate

litigation activity and quality improvement activity. Indeed, our recent decision in

Lowy v. PeaceHealth, 174 Wn.2d 769, 778, 280 P.3d 1078 (2012), underscores that

the quality improvement statutes are not to be used as a shield to alter the balance of

interests of either party in litigation.

While the majority recognizes the wisdom and continued vitality of the

Loudon rule as against these arguments, it loses its way, in my view, when it posits

a clash between the Loudon rule and the attorney-client privilege. The majority

maintains that a "modified version of the Upjohn test" is needed in the context of

corporate medicine to balance the values underlying the physician-patient privilege

and the attorney-client privilege. Majority at 5. Thus, it crafts a rule that turns a

case about a corporate defendant's right to shield from disclosure internal employee

questionnaires (Upjohn) into an entitlement to interview, ex parte, an opposing

party's treating physician. Ironically, it allows ex parte contact only as to facts

concerning "the alleged negligent event," id. at 31, which are equally available to

both parties. How this rule will play out in practice is hard to describe. Apparently,

both defense counsel and plaintiffs counsel can interview the employee physician

-4- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

ex parte, since the majority would recognize that Wright v. Group Health Hospital,

103 Wn.2d 192, 691 P.2d 564 (1984), governs plaintiffs counsel's contact with the

physician. Majority at 6. But, the corporate defendant can claim attorney-client

privilege as to what the plaintiffs physician tells defense counsel, so the physician

cannot relate to the patient what has been disclosed to a litigation adversary about

the patient's health care. Moreover, the employer's right to interview the employee

seems to be unaffected by whether the employee physician shares the attorney-client

relationship between the employer and its counsel.

This last point is critical. Though the majority acknowledges that a corporate

employee is not necessarily a party or even corporate counsel's client, see id. at 17,

it ultimately concludes Loudon must yield to Upjohn because the protection of

privileged communications implies a "corresponding privilege" to conduct ex parte

communications. Id. at 19. For support, the majority cites only a criminal case

involving a traditional attorney-client relationship, which is quite different from

Upjohn, involving after-the-fact treatment of privileged documents created in a

corporate setting. Jd. at 19-20 (citing Geders v. United States, 425 U.S. 80, 88-91,

96 S. Ct. 1330, 47 L. Ed. 2d 592 (1976)). The lack of supporting authority

underscores that the implication the majority derives from Upjohn is not supportable.

While the attorney-client privilege encompasses past communications between

corporate defense counsel and corporate employees, this does not translate into a

right of defense counsel to engage in ex parte communications with all employees

once litigation commences. Corporate defense counsel represents the defendant

-5- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

corporation, not its employees. Indeed, counsel cannot corepresent an employer and

employee if the duty to one client would be materially limited by the duty to the

other. RPC 1.13(g) (referencing RPC 1.7). Potentially conflicting obligations are

unavoidable in a medical malpractice action where a nonparty treating physician is

both an employee of the defendant and a fiduciary of the plaintiff. If nothing else,

the physician needs guidance on what questions she can answer consistent with her

fiduciary duty to her patient and whether she can discuss her answers with her patient

or the patient's counsel. The situation is so rife with potential conflicts that courts

have recognized the need for corporate counsel to give so-called" Upjohn warnings,"

also known as "corporate Miranda 2 warnings," before questioning employees, to

advise them that the corporation is the client and controls waiver of any attorney-

client privilege and that the employee may need to obtain independent counsel. See

United States v. Ruehle, 583 F.3d 600, 604 n.3 (9th Cir. 2009); RPC 1.13(f) & cmt.

10. Of course, if the employee retains independent counsel, RPC 4.2 prohibits ex

parte contact by corporate defense counsel regardless of the employer-employee

relationship.

To underscore why the attorney-client privilege at issue in Upjohn does not

"trump[] the Loudon rule" as the majority maintains, majority at 21, consider another

situation in which the employee is not a client or a defendant party, but is the plaintiff

bringing suit. Even in a medical malpractice context, a plaintiff may also be an

employee of the defendant corporation. This was the situation in Lowy, and is

2 Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966).

-6- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

increasingly common in this era of large health care organizations that require

employees to receive services inside their system. See 174 Wn.2d at 772 (plaintiff

Dr. Leasa Lowy was the staff physician at the hospital where she was admitted as

patient). The same arguments supporting the corporation's ability to assert attorney-

client privilege over communications between defense counsel and employees

would apply in this context to communications between defense counsel and the

plaintiff-employee. But, no one would suggest that the existence of the attorney-

client privilege somehow implies defense counsel's right to interview the plaintiff

ex parte. This is because the rules limiting ex parte contact do not tum on the

existence or nonexistence of any evidentiary privilege.

Instead, these rules reflect practical distinctions and policy considerations.

Not Upjohn, but Loudon and Wright provide the proper point of reference. These

cases, specific to the litigation context, recognize the distinction between parties and

nonparties and the competing interests oflitigation opponents with respect to certain

nonparty witnesses. Loudon teaches that a nonparty witness who is the plaintiffs

physician cannot be treated the same as any other nonparty witness, whom either

party may freely contact. 110 Wn.2d at 681 ("The unique nature of the physician-

patient relationship and the dangers which ex parte interviews pose justify the direct

involvement of counsel in any contact between defense counsel and a plaintiffs

physician."). Similarly, Wright recognizes that corporate employees authorized to

speak for or otherwise bind the corporation are considered "parties" with whom

opposing counsel cannot have ex parte contact. 103 Wn.2d at 195-202. Other

-7- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

employees outside this "control group" are nonparty witnesses who may be

interviewed by opposing counsel. Id. Importantly, the court in Wright rejected an

argument based on Upjohn that the attorney-client privilege requires restricting the

ability of opposing counsel to speak with all employees, emphasizing that the

policies defining the scope of the privilege differ from those defining when ex parte

contact should be allowed. !d. at 201-02. Subsequently, the court in Loudon

distinguished Wright, emphasizing that policy concerns specific to the physician-

patient relationship required limiting Wright's rule allowing ex parte contact with

nonparty witnesses. 110 Wn.2d at 681.

The question in this case, then, is whether the lines that this court has drawn

must be erased simply because the nonparty treating physician is employed by the

defendant health care entity. It is difficult to see how the physician in this corporate

setting is less connected with her patient's interest as to require a different rule. To

the contrary, just as the lead opinion in Smith recognized the heightened risks of ex

parte contact in the medical malpractice context, 170 Wn.2d at 669 & n.2 (lead

opinion), we should be especially concerned that a physician's duty to a patient may

be compromised when the contact is initiated by the physician's employer's counsel.

The risk that the physician's testimony may be "shaped and influenced," id. at 668 (lead opinion), is perhaps at its highest in this context.

The majority's self-imposed limitation on the ex parte contact it authorizes

offers faint protection against this risk. Under the majority's rule, a plaintiff can do

nothing but blindly trust that opposing counsel and her physician will discuss only

-8- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

"the facts of the alleged negligent event." Majority at 31. The court in Loudon was

skeptical, recognizing the inherent danger that ex parte contact would result in

irreparable harm from the improper disclosure of irrelevant, privileged information.

See 110 Wn.2d at 678 (admitting '" [w ]e are concerned ... with the difficulty of

determining whether a particular piece of information is relevant'" (quoting

Roosevelt .Hotel Ltd. P'ship v. Sweeney, 394 N.W.2d 353, 357 (Iowa 1986))).

Additionally, we recognized that "[t]he harm from disclosure of this confidential

information cannot ... be fully remedied by subsequent court sanctions." !d. The

majority seems to brush aside these concerns in formulating a rule that requires

physicians and defense attorneys to determine what constitutes "facts of the alleged

negligent incident." Majority at 32.

The majority's rule not only subjects the physician-plaintiff relationship to the

inherent dangers of inadvertent disclosure but prevents the plaintiff from inquiring

about any such disclosures under the cloak of attorney-client privilege. See RCW

5.60.060(2)(a) (prohibiting examination of attorney regarding attorney-client

communication); State v. Ingels, 4 Wn.2d 676,712, 104 P.2d 944 (1940) (extending

statutory prohibition against examination to client). This is clearly not what we

intended in Loudon when we sought to "protect[] the sanctity" of the physician-

patient relationship, to recognize that '"[t]he relationship between physician and

patient is "a fiduciary one of the highest degree ... involv[ing] every element of

trust, confidence and good faith,""' "to 'surround patient-physician communications

with a "cloak of confidentiality" to promote proper treatment by facilitating full

-9- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

disclosure of information,'" and "'to protect the patient from embarrassment or

scandal which may result from revelation of intimate details of medical treatment."'

Smith, 170 Wn.2d at 667 (quoting Loudon, 110 Wn.2d at 679 (alterations in original)

(quoting Lockett v. Goodwill, 71 Wn.2d 654, 656, 430 P.2d 589 (1967))), and

(quoting Carson v. Fine, 123 Wn.2d 206, 213, 867 P.2d 610 (1994) (lead opinion)

(quoting Dep 't of Soc. & Health Servs. v. Latta, 92 Wn.2d 812, 819, 601 P .2d 520

(1979))). The majority's new rule undermines these goals.

Even worse, many plaintiff-patients have no realistic opportunity to arrange

for their health care outside the corporate setting in a manner that avoids the risks of

the majority's rule. In an age of large health maintenance organizations (HMOs),

the physician-patient relationship is increasingly intertwined with the employer-

employee relationship, and thus vulnerable to employer encroachment. HMOs

generally require their members to use their doctors and facilities; going elsewhere

and paying out-of-pocket is not an option for most. It is no longer a rare instance

that a defendant health care provider is the employer of a plaintiffs physicians, past

or present. As illustrated by Lowy, even the plaintiff may be an employee. The need

to protect the integrity of the physician-patient relationship should be of even greater

concern now than 25 years ago.

While the majority's rule imposes new burdens on plaintiff-patients, applying

the Loudon rule in the corporate medicine context does not unduly limit the ability

of the defendant corporations to protect their interests. Loudon does not restrict the

sort of internal, prelitigation investigations that produced the attorney-client

-10- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

privileged documents at issue in Upjohn. Quality improvement committees are still

able to collect confidential patient information in order to assess legal risks and areas

of improvement, in compliance with RCW 70.41.200(l)(e), so long as QI team

members are later screened from litigation and that information is protected from

civil discovery. Moreover, a corporate defendant remains free to engage in

privileged communications with its employees other than the plaintiff or the

plaintiffs nonparty treating physicians, before and throughout litigation. Loudon

does not prevent hospitals from obtaining legal services in compliance with RCW

70.02.050(l)(b). Even as to the plaintiffs nonparty treating physicians, the

information defense counsel seeks can be obtained through medical records,

depositions by examination or written questions, and informal interviews with both

counsel present. Loudon, 110 Wn.2d at 680. As the majority recognizes, "Loudon

does not prohibit the acquisition of knowledge; it merely imposes procedural

safeguards to prevent improper influence or disclosures." Majority at 30. For good

reason, the court in Loudon was "unconvinced that any hardship caused the

defendants by having to use formal discovery procedures outweighs the potential

risks involved with ex parte interviews." 110 Wn.2d at 680.

A quarter century ago, this court, in Loudon, was presented with the question

of "whether defense counsel in a personal injury action may communicate ex parte

with the plaintiffs treating physicians when the plaintiff has waived the physician-

patient privilege." !d. at 675-76. We resolutely answered "no" and emphasized that

ex parte communications with a patient's physicians are inherently dangerous and

-11- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

against public policy. !d. at 676-78, 681. The potential for inadvertent disclosure

of irrelevant, confidential information and its concomitant erosion of the physician-

patient fiduciary relationship concerned us then and is of even greater concern in the

corporate medicine context. The majority's attempt to find a way to allow ex parte

contact while respecting the policy underlying Loudon is understandable, but

unworkable. It exposes not only the patient-plaintiff, but also the nonparty physician

and defense counsel to the very risks that the court in Loudon considered when it

drew a bright line prohibiting ex parte contact. We should underscore, not blur, that

line.

While I appreciate the majority's attempt to balance the competing interests

at stake, the solution it offers is no solution at all. No one's interests are served by

a rule that allows defense counsel to engage in ex parte communications with the

plaintiffs nonparty treating physicians who are employed by the defendant, but only

as to facts based on their "firsthand knowledge of the alleged negligent event."

Majority at 31; see also id. at 22. This gives very little ground to the defense, as

most physician employees with such knowledge will meet the definition of "party"

in the corporate medicine context. It gives even less solace to the medical

malpractice plaintiff or a court seeking assurance that ex parte communications with

nonparty treating physicians do not exceed this limited scope because the majority

anticipates the communications with defense counsel will be privileged. Id. at 31

(noting defense counsel "may engage in privileged (ex parte) communications").

-12- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

And it creates a precarious situation for the nonparty treating physician, who must

guess right about where to draw the line between providing confidential information

to the employer and breaching a fiduciary duty to the plaintiff.

The better course is to recognize that the Loudon rule applies fully to medical

malpractice cases in which the plaintiffs nonparty treating physicians happen to be

employed by the defendant. The risks sought to be minimized by the Loudon rule

exist equally in this context, and the employer-employee relationship provides

insufficient justification for a different rule. Nor does the attorney-client privilege

necessitate allowing ex parte communications with nonparty treating physicians in

the corporate medicine setting. Any attorney-client relationship exists between the

defendant corporation and its counsel, not its employee physicians whose interests

may materially differ from the corporation's, particularly where the physician owes

a fiduciary duty to the plaintiff. Defense counsel's need '"to determine what

happened,"' id. at 21-22 (quoting Upjohn, 449 U.S. at 392), is not defeated by

respecting the Loudon rule in this context, as the facts remain fully available to both

parties, albeit through normal discovery channels.

Upholding the Loudon rule, I concur in the majority's decision to affirm the

trial court order in Glover prohibiting ex parte contact between defense counsel and

Aolani Glover's treating physicians at the University of Washington Medical Center

(UWMC). 3 I dissent from the majority's decision affirming the trial court order in

3 I agree with the majority's reversal of that portion of the order barring UWMC's risk manager from ex parte contact with Glover's physicians, understanding that litigation

-13- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

Youngs to allow limited ex parte communications with nonparty treating physicians

"who have firsthand knowledge of the alleged negligent incident." !d. at 32. I would

reverse the trial court and remand with instructions to reinstate the prior order

prohibiting ex parte contact with any of Youngs' treating physicians other than Dr.

Richard Leone and Dr. Donald Berry.

defense counsel must be screened from access to such information collected as part of quality improvement efforts.

-14- Youngs v. PeaceHealth, et al.; Glover v. State, et al., 87811-1 (Stephens, J. Concurrence/Dissent)

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