California Anti-SLAPP Statute Protection Applies to Hospital's Termination of Physician Staff Contract
Healthcare Law Newsletter
California Code of Civil Procedure section 425.16 – known as the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute – provides a procedural mechanism to test, before costly discovery and pre-trial proceedings, the viability of certain lawsuits. The statute provides for a special motion to strike and dismiss actions determined to have been brought "primarily to chill the valid exercise of constitutional rights of freedom of speech." The California Supreme Court has interpreted Section 425.16 to apply to an action arising after hospital peer review proceedings involving a staff physician because peer review is statutorily mandated, part of California's comprehensive physician-licensing scheme, and subject to judicial review. (Kibler v. Northern Inyo County Local Hospital District, 39 Cal4th 192, 196, 199-200 (2006).) Recently, the California Court of Appeal in Nesson v. Northern Inyo County Local Hospital District, __ Cal.App.4th __ (February 10, 2012), extended Section 425.16 to a hospital's cancellation of a physician's service contract following the summary suspension of his medical privileges by the medical staff's peer review committee.
The plaintiff, a radiologist, contracted with a hospital to administer the hospital's radiology department. The contract required the plaintiff to maintain membership on the hospital's active medical staff. Citing incidents of substandard patient care and episodes of erratic conduct, the medical staff's Medical Executive Committee (MEC) summarily suspended the plaintiff's staff privileges pending the completion of its peer review investigation. The hospital then terminated the plaintiff's contract, finding he could not fulfill the contract without having medical staff privileges. The plaintiff did not pursue an administrative appeal of his suspension. Instead, he filed a civil complaint for damages against the hospital alleging breach of contract, retaliation and discrimination claims based on the hospital's cancellation of his services contract.
The hospital successfully moved to strike the complaint under Section 425.16(e). The plaintiff appealed, arguing his summary suspension and the hospital's subsequent termination of his contract did not constitute statutorily protected activity because the hospital was not involved in the peer review process or his summary suspension. The plaintiff also argued his claims against the hospital were not based on his summary suspension during the peer review process, but on the hospital's separate and distinct conduct terminating his contract.
The Court of Appeal, while acknowledging that the hospital's governing board and the medical staff's MEC were two distinct organizations, rejected the plaintiff's contention that the hospital was not involved in the peer review process. The court found the hospital's termination of the plaintiff's contract was inextricably intertwined with the MEC's summary suspension of his medical staff privileges and, as such, constituted peer review conduct entitled to anti-SLAPP protection (citing Kibler, supra, 39 Cal.4th at 199). The Court of Appeal rejected the plaintiff's attempt to avoid Section 425.16 by characterizing his claims as only seeking redress for the hospital's wrongful cancellation of his contract rather than the summary suspension of his medical privileges. Disregarding the label the plaintiff assigned and focusing on the gravamen of each, the appeals court determined that each claim was based, at its core, on the summary suspension of his medical privileges and, therefore, was protected peer review activity.
Next, the Court of Appeal addressed the statute's second prong, i.e., determining whether the plaintiff had produced evidence to establish a probability of prevailing on his claims. It affirmed the trial court's finding that the plaintiff's failure to exhaust either his internal hospital administrative remedies or his judicial remedies before filing his civil complaint precluded him as a matter of law from prevailing on his claims (in accordance with Westlake Community Hospital v. Superior Court, 17 Cal.3d 465 (1976)).