Opinion
2d Civil B289209
02-23-2022
DIGNITY HEALTH, Plaintiff, Cross-Defendant, and Appellant, v. TROY I. MOUNTS, et al., Defendants, Cross-Complainants, and Respondents.
Manatt, Phelps & Phillips, Barry S. Landsberg, Doreen Wener Shenfeld and Joanna S. McCallum; De Castro Law Group, José-Manuel A. de Castro and Lori V. Minassian for Plaintiff, Cross-Defendant and Appellant. Novian & Novian, Farhad Novian, Andrew B. Goodman; Khouri Law Firm, Michael J. Khouri and Behzad Vahidi for Defendants, Cross-complainants and Respondents.
NOT TO BE PUBLISHED
Superior Court County of San Luis Obispo No. 17CV-0592 Barry T. LaBarbera, Judge
Manatt, Phelps & Phillips, Barry S. Landsberg, Doreen Wener Shenfeld and Joanna S. McCallum; De Castro Law Group, José-Manuel A. de Castro and Lori V. Minassian for Plaintiff, Cross-Defendant and Appellant.
Novian & Novian, Farhad Novian, Andrew B. Goodman; Khouri Law Firm, Michael J. Khouri and Behzad Vahidi for Defendants, Cross-complainants and Respondents.
YEGAN, J.
Dignity Health, doing business as French Hospital Medical Center (Hospital), appeals an order denying its anti-SLAPP motion (Code Civ. Proc., § 425.16) to strike a physician's cross-complaint for Health and Safety Code, section 1278.5 retaliation, intentional interference with prospective economic opportunity, and unlawful business practices (Bus. & Prof. Code, § 17000 et seq.). 1 The cross-complaint alleges that Hospital instituted a retaliatory peer review to pressure Troy I. Mounts, M.D. to resign after Mounts complained about hospital patient care. Hospital's communications and reports with respect to the peer review allegedly interfered with Mounts' ability to obtain staff privileges at other hospitals. The trial court denied the anti-SLAPP motion because it believed a retaliatory hospital peer review was not a protected activity within the meaning of the anti-SLAPP statute.
All statutory references are to the Code of Civil Procedure unless otherwise stated.
After the trial court entered its order denying Hospital's motion, our Supreme Court held in Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 892 (Wilson) that discrimination and retaliation claims are not categorically exempt under the anti-SLAPP statute. "If conduct that supplies a necessary element of a claim is protected, the defendant's burden at the first step of the anti-SLAPP analysis has been carried, regardless of any alleged motivations that supply other elements of the claim." (Ibid.)
Following Wilson, our Supreme Court held in Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995 (Bonni), that, while some forms of alleged retaliation against a physician, "including statements made during and in connection with peer review proceedings and disciplinary reports filed with official bodies - do qualify as protected activity, the discipline imposed through the peer review process does not." (Id. at p. 1004.) Thus, "wholesale dismissal" of a physician's retaliation claims is not mandated by the anti-SLAPP law. Instead, Hospital bears "the burden of showing that each allegation supporting [Mounts'] claim [for] recovery is one that rests on protected activity." (Id. at p. 1012.) 2
Here, the cross-complaint alleges that Hospital accomplished its alleged retaliation by instituting a peer review process and then, during meetings related to the peer review, inducing Mounts to voluntarily restrict, and eventually to resign his staff privileges. Because these allegations describe protected speech activity, rather than unprotected disciplinary actions, we conclude Hospital carried its burden at the first step of the anti-SLAPP analysis. We reverse and remand to the trial court to determine whether Mounts has demonstrated a probability of prevailing on the merits of his cross-complaint. (§ 425.16, subd. (b)(1).)
Facts and Procedural History
Mounts, an orthopedic surgeon, was hired by Hospital to start a spine surgery program at the San Luis Obispo French Hospital Medical Center in 2014. Mounts received temporary clinical privileges in November 2014 and provisional medical staff privileges in January 2015.
In April 2015, Mounts complained that he was not getting staff support or adequate surgery room time to perform complex spine surgeries. In September and October 2015, Mounts had heated email exchanges with Hospital about surgeries and problems with patient care. Hospital's Medical Executive Committee (MEC) requested that Mounts refrain from performing surgeries until it reviewed the patient cases. Mounts agreed to do so and voluntarily restricted his staff privileges. On December 16, 2015, the MEC advised Mounts that if the voluntary restriction lasted more than 30 days, Hospital would have to submit a report under Business and Professions Code section 805 (an 805 Report) to the National Practitioner Data 3 Bank (NPDB). Mounts asked if there was a way to remove the restriction and avoid the 805 Report. Mounts was told he could withdraw the voluntary restriction but if he did so, Hospital could summarily suspend his privileges to preserve the status quo of the on-going peer review investigation. If the summary suspension remained in effect, Hospital would have to file the 805 Report.
The NPDB is a web-based repository of reports of adverse actions relating to health care practitioners and providers. (See 45 C.F.R. §§ 60.1-60.14 (2021); Smith v. Selma Community Hospital (2008) 164 Cal.App.4th 1478, 1483.) An 805 Report can adversely impact a physician's ability to obtain and maintain hospital privileges.
Mounts withdrew the voluntary restriction of hospital privileges, but by the time he did so, it was too late. Hospital submitted an 805 Report to the NPDB, listing the basis for the initial action as "'IMMEDIATE THREAT TO HEALTH OR SAFETY.'"
Mounts met with the MEC to discuss the investigation and, following a February 4, 2016 meeting, was asked to resign his provisional medical staff membership to give the MEC additional time to make a decision. Mounts resigned on February 10, 2016, believing that he had no choice and that Hospital was forcing him out. Mounts lost his privileges at two other hospitals and applied for hospital staff privileges in other states. The applications were denied after Hospital declined to withdraw the 805 Report or provide information to prospective employers evaluating Mounts' application for staff privileges. 4
Hospital's Complaint and Mounts' Cross-Complaint
In October 2017, Hospital sued to recover $300,000+ advanced to Mounts pursuant to a Physician Recruitment Agreement. Mounts and his corporation (Troy I. Mounts, M.D., Inc.) filed a cross-complaint for physician retaliation (Health & Saf. Code, § 1278.5), interference with prospective economic advantage, and unlawful business practices (Bus. & Prof. Code, § 17200). The cross-complaint alleged that Hospital "retaliated against Mounts for his attempts to advocate for patient care" and "undertook [an] abusive peer review process against Mounts for a retaliatory purpose and motive."
The Anti-SLAPP Motion
Hospital responded with a special motion to strike the cross-complaint, arguing that the action arose from a protected peer review activity. (See § 425.16, subds. (b)(1) & (e)(2).) The trial court denied the motion because "Mounts' claim for retaliation arises out of [Hospital's] retaliatory purpose, not out of the protected activity." Relying on Bonni v. St. Joseph Health System (2017) 13 Cal.App.5th 851, a physician retaliation case (Health & Saf. Code, § 1278.5), the trial court denied the anti-SLAPP motion. "[L]ike in Bonni, Mounts does not allege that [Hospital's] statements and writings were wrongful by the fact they were made, but because of their retaliatory purpose and motivation. . . . [¶] . . . Mounts' claim is necessarily dependent on the retaliatory purpose or motive of [Hospital], which may be evidenced by protected communications. Mounts' claim for retaliation arises out of that retaliatory purpose, not out of the protected activity." 5
Discussion
We review the denial of an anti-SLAPP motion de novo, applying the same two-step analysis as the trial court. Because the trial court here did not reach it, there is no ruling on the second step for us to review. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056.)
At the first step, the moving defendant "bears the burden of establishing that the challenged allegations or claims 'aris[e] from' protected activity in which the defendant has engaged." (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1061.) This requires the court to "consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability." (Id. at p. 1063.) It is the defendant's burden "to identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity." (Bonni, supra, 11 Cal.5th at p. 1009.)
In Bonni, our Supreme Court rejected the practice of determining whether the "gravamen" or "principal thrust" of a cause of action arises from protected activity. (Bonni, supra, 11 Cal.5th at pp. 1009-1010.) Relying on Baral v. Schnitt (2016) 1 Cal.5th 376 (Baral), the court explained, "Analysis of an anti-SLAPP motion is not confined to evaluating whether an entire cause of action, as pleaded by the plaintiff, arises from protected activity or has merit. Instead, courts should analyze each claim for relief - each act or set of acts supplying a basis for relief, of which there may be several in a single pleaded cause of action - to determine whether the acts are protected and, if so, whether the claim they give rise to has the requisite degree of merit to 6 survive the motion." (Bonni, supra, at p. 1010.) A moving party will not carry its first-step burden on a claim if that party "fails to identify how the speech or conduct underlying [that claim] is protected activity . . . ." (Id. at p. 1011.)
Hospital peer review proceedings are "official proceedings" within the meaning of the anti-SLAPP statute. (Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192, 201.) "Because peer review proceedings are official proceedings, any statements in connection with issues considered in such proceedings - such as criticism of a doctor's competence supplied to a body reviewing his or her hospital privileges - are protected activity under the anti-SLAPP law." (Bonni, supra, 11 Cal.5th at p. 1016; citing Kibler, supra, at p. 201.) Similarly, communications included in mandatory reports to, for example, the Medical Board of California or the National Practitioner Data Bank are made "'in connection with an issue under consideration'" in an "'official proceeding.'" (Bonni, supra, at p. 1017.) These statements "fall within the scope of protected activity as defined in section 425.16, subdivision (e)(2)." (Id. at p. 1018.)
While statements made in a peer review proceeding are protected, the decisions resulting from those proceedings may not be. (Bonni, supra, 11 Cal.5th at p. 1019.) For example, in Bonni, the physician alleged hospitals suspended and eventually terminated his hospital staff privileges in retaliation for his complaints about the quality of patient care. Our Supreme Court explained, "To make their first-step showing with respect to the suspension and termination of Bonni's staff privileges, the hospitals must show that those actions themselves constituted 'act[s] . . . in furtherance of [their] right of petition or free speech 7 under the United States Constitution or the California Constitution in connection with a public issue.' (§ 425.16, subd. (b)(1).)" (Bonni, supra, at p. 1019.)
The hospitals in Bonni contended their disciplinary actions were protected as conduct in furtherance of their speech and petitioning rights because the disciplinary actions were related to patient safety, a matter of public interest. (Bonni, supra, 11 Cal.5th at pp. 1020-1021.) Bonni rejected that contention. "At bottom, disciplining a doctor based on the view that the doctor's skills are deficient is not the same thing as making a public statement to that effect. The latter is, or may be, speech on a matter of public concern. The former is not speech at all." (Id. at p. 1021.)
A disciplinary action may be a protected activity when the action itself "advances the [moving party's] 'ability to speak [or petition] on matters of public concern.'" (Bonni, supra, 11 Cal.5th at p. 1022, quoting Wilson, supra, 7 Cal.5th at p. 897.) To demonstrate that the disciplinary action is entitled to protection under the anti-SLAPP statute, the hospital has to show the action "advanced the Hospitals' ability to speak or to petition on matters of public concern in any substantial way." (Bonni, at p. 1022.)
Here, Hospital contends it is entitled to prevail on the first step of the anti-SLAPP analysis because Mounts' claims for relief are based on protected activities: communicating during a peer review proceeding; conducting a Focused Professional Practitioner Evaluation (FPPE) of Mounts; filing a mandatory 805 report; and communicating with or failing to communicate with other hospitals regarding the peer review proceeding. Mounts contends the anti-SLAPP statute does not apply to his 8 claims because they are based on the "abusive peer review process as a general matter," rather than on specific statements made during that process or in regulatory reports relating to it.
Bonni makes it clear that statements made by Hospital during the peer review and the FPPE, and in the 805 report "fall within the scope of protected activity" as defined by the anti-SLAPP statute. (Bonni, supra, 11 Cal.5th at p. 1018.) Mounts is required to demonstrate that retaliation claims based on these statements have at least minimal merit in order to proceed on them. "If he cannot, these allegations will be stricken from his pleadings." (Id. at p. 1019.)
Bonni further emphasized that actions taken by a hospital, even as a consequence of a peer review or some other protected activity, are not entitled to the same degree of protection under the anti-SLAPP statute. Actions, as opposed to speech, are protected only to the extent they "advance[] the Hospitals' ability to speak or to petition on matters of public concern in any substantial way." (Bonni, supra, 11 Cal.5th at p. 1022.)
Mounts insists that he is not claiming any specific statements made by Hospital in the peer review process were part of the alleged retaliation. Instead, he alleges the Hospital used a "sham" peer review to retaliate against him by fraudulently inducing him to voluntarily restrict his privileges and eventually, to resign. The difficulty here is that the "actions" through which Hospital allegedly accomplished its retaliation are all protected. Mounts alleges that he voluntarily restricted his staff privileges based on statements made during a meeting with the MEC. He resigned after meeting with the same committee and, again, based on statements made during the meeting. 9
In Bonni, the hospital suspended a physician's staff privileges and then terminated those privileges after peer review. Those disciplinary actions were not protected activities. (Bonni, supra, 11 Cal.5th at 1021.) Here, Hospital took no equivalent action because Mounts voluntarily restricted his privileges and then resigned. He alleges the retaliation was accomplished through statements made in the MEC meetings. We conclude these meetings are protected activities and that the anti-SLAPP statute, therefore, applies.
The trial court denied Hospital's anti-SLAPP motion because it concluded Hospital acted with a retaliatory motive or purpose and that actions so motivated are not protected. In doing so, the trial court erroneously conflated communicative conduct (a step one, protected activity) and retaliatory motive (a step two factor that goes to the merits of Mounts' claims). At the first step, "the question is only whether a defendant has made out a prima facie case that activity underlying plaintiff's claims is statutorily protected [citations], not whether it has shown its acts are ultimately lawful." (Wilson, supra, 7 Cal.5th at p. 888.) Because we conclude Hospital has made out that prima facie case, we remand the matter to the trial court for consideration of the second step.
Disposition
We reverse and remand to the trial court to determine whether, under step two of the anti-SLAPP statute, Mounts has demonstrated a probability of prevailing on the merits of his claim. In the exercise of our discretion Hospital is not awarded costs on appeal nor attorney fees at this juncture. No party has yet prevailed on the special motion to strike. Each party to bear their cost on appeal. 10
We concur: GILBERT, P. J., TANGEMAN, J. 11