Posternak Blankstein & Lund LLP is now Arent Fox. Read the press release

Speech v. Actions: California Supreme Court Issues Anti-SLAPP Decision with Significant Effect on Medical Staff Peer Review and Beyond

Health chart
On July 29, 2021, the California Supreme Court issued a major anti-SLAPP decision in Bonni v. St. Joseph Health System et al. The decision is both encouraging and disappointing for California medical staffs and the hospitals where they serve. Arent Fox LLP has represented Defendants, St. Joseph Health System et al., in this matter from its inception through proceedings in the California Supreme Court.
On

What to Know

  • The California Supreme Court’s decision in Bonni v. St. Joseph Health System et al. changes the anti-SLAPP landscape broadly, and specifically for hospitals and medical staffs.
  • The Court held that anti-SLAPP protects peer review statements, but not peer review decisions.
  • Although traditional statutory protections continue to exist for good-faith peer review, medical staffs and hospitals may, in certain instances, have to engage in discovery processes and trials before being able to assert those protections.
  • By removing anti-SLAPP protection in certain instances, the Bonni decision may increase frivolous and retaliatory lawsuits filed solely to chill peer review.

A link to the decision can be found here.

In Bonni, the Court helpfully confirmed that several key elements of medical staff peer review are entitled to legal protections under California’s anti-SLAPP statute. Also, however, and consistent with its decision in Park v. Board of Trustees, the Court held that although peer review speech generally is protected by anti-SLAPP, peer review conduct generally is not. 

California medical staffs conduct peer review to protect the public from dangerous and incompetent doctors, and legitimate peer review activity is protected by the California Civil Code and the federal Health Care Quality Improvement Act. However, although peer review activity remains protected by California and federal law, the decision confirms that in some circumstances, medical staffs may no longer be able to rely on the anti-SLAPP statute to discourage frivolous, retaliatory lawsuits filed by dangerous physicians by having them dismissed early in the process. Instead, depending on the allegations in the complaint, medical staffs may have to proceed to the discovery stages or even to trial before they can effectively assert their statutory protections.

Bonni’s reach may also extend far beyond the hospital sphere. In Bonni, the Court confirmed its view that “discrimination and retaliation claims should ‘rarely, if ever’ be seen as appropriate targets of an anti-SLAPP motion.” The decision reflects the Supreme Court’s increasing tolerance of California’s ongoing tidal wave of discrimination and retaliation lawsuits filed against employers, individuals, and institutions.

Case Holdings: Speech v. Conduct

The anti-SLAPP statute protects defendants from frivolous lawsuits filed primarily to chill participation in matters of public interest. If the anti-SLAPP statute applies, a plaintiff must prove the case has at least “minimal merit” or else the case will be dismissed at an early stage.

  • In Bonni, the Court held that peer review statements are anti-SLAPP protected, including:
    • Reporting physicians to the California Medical Board or National Practitioner Data Bank;
    • Discussing physician qualifications and competence in peer review committee meetings;
    • Testifying in peer review hearings; and
    • Recommending discipline, including a Medical Executive Committee’s recommendation to terminate a physician’s privileges.
  • The Court held that disciplinary decisions imposed through the peer review process are not protected by the anti-SLAPP statute, including:
    • Summarily suspending a physician’s privileges, and
    • A hospital governing body’s final termination of a physician’s privileges.

The Court’s decision relies heavily on its previous watershed anti-SLAPP decisions in Park v. Board of Trustees and Wilson v. CNN, and reemphasizes that the anti-SLAPP statute applies to statements, expressive conduct, and other activity in furtherance of free speech and petitioning. Defendants argued that the reporting to government agencies of peer review decisions, including suspensions and terminations of privileges, is an exercise of free speech and petitioning rights. The Court agreed that reporting is protected petitioning activity, but refused to hold that peer review disciplinary decisions “further” such petitioning, as contemplated by the anti-SLAPP statute.

The Peer Review Context of Bonni

The plaintiff, Aram Bonni, M.D., is a urogynecologist whose allegedly dangerous care seriously injured a string of patients at two different hospitals and nearly caused a patient’s death. After learning of these patient injuries, Bonni’s physician colleagues at two different hospitals voted to summarily suspend his privileges to protect patients from imminent harm. They also recommended terminating his privileges.

These decisions were exhaustively reviewed in lengthy trial-like peer review hearings at both hospitals. At Mission Regional Medical Center, a physician hearing committee made a number of findings adverse to Bonni, and concluded that termination of his privileges was reasonable and warranted. The hospital’s Board of Trustees upheld the hearing committee’s decision and denied Bonni’s reappointment application, with findings made in a lengthy and comprehensive written decision. Bonni ultimately settled with St. Joseph Hospital of Orange, signing a general release of his claims, and promising never again to apply for privileges at any St. Joseph Health System facility.

After these administrative hearings concluded, Bonni claimed to be a patient safety whistleblower. He sued Defendants under Health and Safety Code section 1278.5, for allegedly retaliating against him by subjecting him to peer review. In his original pleadings, Bonni named as defendants the health systems, hospitals, medical staffs, and physicians who raised the alarm regarding Bonni’s patient care and who Bonni alleges participated in the peer review proceedings.

Defendants filed an anti-SLAPP motion, which the trial court granted. The trial court found that Bonni’s retaliation claim arose from protected activity—Defendants’ participation in peer review. The trial court then found that Bonni had failed to show that his claims had even “minimal merit.” Bonni appealed the trial court’s decision.

The Supreme Court’s Increasing Disfavor of Anti-SLAPP Claims in Retaliation Cases

Before Bonni, the Court’s last major decision interpreting the anti-SLAPP statute in the peer review context was Kibler v. Northern Inyo County Local Hospital District, issued 15 years ago. In Kibler, the Court recognized the critical role peer review plays in protecting patient safety. The Court held that peer review is an “official proceeding” within the meaning of the anti-SLAPP statute, and thus “statements in connection with” peer review are protected activity.

But over the past 10 years, the California Supreme Court has increasingly expressed its disfavor of anti-SLAPP litigation in retaliation and discrimination cases. In 2017, the Court decided Park, which rejected a public university’s anti-SLAPP challenge to a professor’s discrimination claims, on the grounds that a tenure decision is not a “statement in connection with an official proceeding.” In Park, the Court also dramatically limited Kibler’s scope. The Court disapproved of two Court of Appeal decisions that it found “overread Kibler.” The Court asserted that “Kibler does not stand for the proposition that disciplinary decisions reached in a peer review process, as opposed to statements in connection with that process, are protected.” (Emphasis added.)

Relying on Park and other appellate decisions, the Bonni Court of Appeal ruled that Bonni’s mere allegation of retaliatory animus by Defendants completely removed anti-SLAPP protections for what might otherwise be protected activity, finding that no part of the peer review process enjoyed anti-SLAPP protection.

The Defendants petitioned for review in the California Supreme Court. The Court granted the Petition, and postponed review pending its decision in Wilson. In Wilson, the California Supreme Court found the Court of Appeal in Bonni went too far, and expressly disapproved of the Court of Appeal’s decision. The Wilson Court held “that for anti-SLAPP purposes discrimination and retaliation claims arise from the adverse actions allegedly taken, notwithstanding the plaintiff’s allegation that the actions were taken for an improper purpose.” But it nevertheless cautioned: “We see no realistic possibility that anti-SLAPP motions will become a routine feature of the litigation of discrimination or retaliation claims.”

The Court’s Decision in Bonni Emphasizes Speech v. Actions

After Wilson, litigants knew that merely alleging an improper motive would not remove anti-SLAPP protections. But that holding left open a key question Defendants asked the Supreme Court to decide: What types of peer review speech and conduct are protected by anti-SLAPP? The Court answered this question by holding that peer review speech generally is protected by anti-SLAPP, while peer review conduct generally is not.

The Court confirmed that many aspects of peer review are speech-based, and thus protected by anti-SLAPP. For example, when hospitals report dangerous physicians to the Medical Board, those reports are protected by the anti-SLAPP statute. Likewise, participation in peer review hearings is protected petitioning activity. And importantly, the Court held that when a Medical Executive Committee recommends terminating a physician’s privileges, that recommendation is protected speech, even though it directly relates to and precedes disciplinary action.

Nevertheless, the Court held that peer review conduct—including discipline actually imposed through the peer review process—generally does not qualify for anti-SLAPP protection. Relying on Park, the Court reasoned that disciplinary actions, including summary suspensions and the termination of privileges, do not qualify as “statements in connection with … an official proceeding,” or as “conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech.”

Some Good News for Medical Staff Executive Committees

Medical Staffs have reason to celebrate some elements of the Bonni decision. Physicians have routinely attempted to sue hospitals and medical staffs for filing legally mandated reports to the Medical Board of California and National Practitioner Data Bank in response to dangerous patient care. The Bonni decision confirms that such reporting activity is clearly protected by the anti-SLAPP statute.

In addition, the Bonni Court recognized that a Medical Staff’s disciplinary recommendations are protected speech. This protection should help to discourage some frivolous lawsuits against Medical Staff leaders. In addition, separating recommended discipline (a Medical Staff function) from final disciplinary action (a hospital board’s function) may help protect Medical Staffs throughout the peer-review process. So, under Bonni, physicians may sue hospital boards for their final termination decisions without fear of an anti-SLAPP motion, but often that final action does not occur until after lengthy peer review hearings have taken place and written decisions have been issued. Thus, Medical Staffs should enjoy anti-SLAPP protection for their recommendations and participation in the peer review proceedings that follow their recommendations and precede final board action.

And, of course, the decision did not eliminate any of the existing federal or state peer review protections. Good faith, non-retaliatory peer review is still protected by the California Civil Code and by HCQIA, regardless of whether the peer review involves speech or action. However, the Bonni decision means that, depending on the allegations in the complaint, a plaintiff may be able to get deep into the discovery process, or even to trial, before those protections can be effectively asserted. Therefore, medical staff attorneys should continue to diligently advise their clients on engaging in fair and appropriate peer review processes.

The Legislature Should Amend Section 1278.5 and the Anti-SLAPP Statute

In addition to those very welcome protections, however, peer review disciplinary decisions like suspensions and terminations deserve anti-SLAPP protection. The public relies on physicians to carefully and thoughtfully police their peers as California and federal law mandates. When physician leaders and medical staff organizations identify dangerous doctors and appropriately suspend or terminate their privileges, the leaders should be protected from having to participate in a protracted civil litigation process brought by the disciplined doctor. Otherwise, appropriately disciplined doctors will use litigation as a tool to intimidate and discourage other hospital medical staff members who are protecting patients by participating in peer review.

When Health & Safety Code Section 1278.5–the statute that protects whistleblowers from retaliation in health facilities–was amended effective 2008 to protect physicians, it was predicted that the statute would be misused as an intimidation tactic by some physicians in order to chill legitimate peer review. Recently, that very use of the statute has surged, with frivolous lawsuits brought by dangerous doctors against peer reviewers. The anti-SLAPP statute is a critical protection against such retaliatory lawsuits. In Bonni, the Supreme Court seemed to acknowledge this problem. The Court’s majority decision and Justice Groban’s concurrence both invite the Legislature to reconsider the language of the anti-SLAPP statute as it relates to peer review activities. In the interests of public safety, the Legislature should accept these clear invitations to amend the anti-SLAPP statute so as to afford peer review the comprehensive protection it needs. If all aspects of peer review enjoy robust anti-SLAPP protection, no harm is done to legitimate whistleblowers. Instead, the only significant result would be that a court could evaluate such lawsuits at an early stage to determine if they are frivolous. This is exactly what peer review needs from the anti-SLAPP statute. After Bonni, however, it is possible that such early review may not be possible in far too many cases, with a dangerous chilling effect.

The anti-SLAPP statute is not the only law that needs the Legislature’s attention. Section 1278.5 itself needs amendment to provide more robust protection for legitimate peer review. In extending Section 1278.5 to apply to physicians, the Legislature clearly intended to protect only true whistleblowers. Instead, the statute has become a weapon for dangerous doctors to use against peer reviewers legitimately seeking to protect patients. Falsely claiming to be whistleblowers, some impaired, incompetent, negligent or otherwise unfit doctors file lawsuits based on Section 1278.5 for the sole purpose of intimidating and preventing their fellow physicians from performing their legally mandated role in protecting patients. The Legislature should revise both the whistleblower statute and the anti-SLAPP statute to adequately balance the statutory protection of peer review on the one hand, and legitimate whistleblowers on the other.

About Arent Fox LLP

Arent Fox is a leader on behalf of hospitals, doctors, and patients in advocating for increased legislative and legal protections for peer-review activity.

Contacts

Continue Reading