FAHLEN v. SUTTER CENTRAL VALLEY HOSPITALS

Respondent’s Answer to Petition for Review

Cal.October 15, 2012

LIU,J. SUPREME COURT FILED No. $205568 OCT 15 2012 IN THE SUPREME COURT Frank A. McGuire Clerk OF THE STATE OF CALIFORNIA “Deputy MARK T. FAHLEN,M.D. Plaintiffand Respondent, Vv. SUTTER CENTRAL VALLEY HOSPITALS, STEVE MITCHELL,etai. Defendants andAppellants. Court ofAppeal No. F063023 Stanislaus County Superior Court No. 662696 ANSWERTO PETITION FOR REVIEW AND DECLARATIONIN OPPOSITION TO REQUEST FOR STAY STEPHEN D. SCHEAR JUSTICE FIRST, LLP State Bar No. 83806 Jenny C. Huang Law Offices of Stephen Schear State Bar No. 223596 2831 Telegraph Avenue - 180 Grand Avenue, Suite 1300 Oakland, California 94609 Oakland, California, 94612 Telephone: (510) 832-3500 Telephone: (510) 628-0695 Attorneys for Plaintiff and Respondent MARK T. FAHLEN,M.D. CERTIFICATE OF INTERESTED ENTITIES OR PERSONS (Cal. Rules of Court, Rules 8.208, 8.488) This form is submitted on behalf ofthe Plaintiff and Respondent Mark Fahlen, M.D. There are no interested entities or persons that mustbe listed in this certificate under Rule 8.208. sy .~ } Dated: October 14, 2012 Cc&). ee Stephen D. Schear Attorney for Mark Fahlen, M.D. TABLE OF CONTENTS ISSUE PRESENTED FOR REVIEW ...... wee dba Hib eles ele sate WHY REVIEW BY THIS COURT IS UNNECESSARY........... FACTUAL BACKGROUND . 2.2... cece net eee tees PROCEDURAL HISTORY.. 2... oeceeee ed ARGUMEN I boeeaaee ee ee ee ae eee I. THERE ARE NO COMPELLING REASONS TO GRANT REVIEW OF THE DECISION BY THE COURT OF APPEAL 2... ce a bee ne bee eb ee bee eb eee reba A. The Decision Does Not Abrogate Westlake’s Traditional Rule ofExhaustion .... 00.5... c 00 cece ee ee en ee wees B. The Legislature Gave Physician Whistleblowers A Right to File Civil Actions Without Requiring Exhaustion of Administrative or Judicial Remedies ..............00005 C. Legislative History Confirms that the Legislature Decided Not to Require Exhaustion of Administrative Remedies .... D. Arbuckle and Runyon Required the Court of Appeal’s Decision...eeees E. Sutter’s New Federal Argument Is Improper and Meritless ...... F, There is No Conflict Presented by the Decision in Nesson ... G. Sutter’s Policy Arguments Are Unsupported by the Record and Reflect Only the Interests of Healthcare Corporations. wl wl aw, ..8 . 10 _ 10 . 10 .1l . 14 . 16 . 20 20 .. 23 TABLE OF CONTENTS(cont.) IL. IF THIS COURT GRANTSREVIEW,IT SHOULD REVIEW THE COURT OF APPEAL’S DECISION THAT PEER REVIEW ACTIONS CONSTITUTE PROTECTED ACTIVITY UNDER THE ANTI-SLAPP STATUTE AND ITS DECISION REQUIRING DR. FAHLEN TO SPLIT HIS CAUSE OF ACTION 2.0.0 c eeee ee eee es 26 A. Sutter’s Actions Were Not Protected Activities Entitled to the Protections of the Anti-SLAPP Statute .............. 26 B. Sutter’s Retaliatory Actions Were Not Peer Review Activities Protected Under the Anti-SLAPP Statute ................. 28 C. The Court of Appeal Erred by Requiring Dr. Fahlen to Split His Cause ofAction 02.0... 00.20 ceceeee eee 32 Il. SUTTER’S REQUEST TO STAY AND FURTHER DELAY PROCEEDINGSIN THE TRIAL COURT SHOULD BE DENIED ....... 0.0.0. ceceees 33 CONCLUSION oooeenee ee eee 35 CERTIFICATE OF WORD COUNT 2.0... 0.0.0.0 eee 37 -l- TABLE OF AUTHORITIES California Cases: Anton v. San Antonio Community Hospital (1977) 19 Cal.3d 802 ...... 35 Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 16632 ............ 32 City ofCotati v. Cashman (2002) 29 Cal.4th 69 10... 0.0. cece es 27 Crowley v. Katleman (1994) 8 Cal.4th 666, 681-682 ..............4. 32 Hongasathavij v. Queen ofAngels/Hollywood Presbyterian Medical Center (1998) 62 Cal.4th 1123 0.0.0... ccceee 25 Hunt v. Superior Court (1999) 21 Cal.4th 984 ............4......4. 12 In re Marriage ofDavenport (2011) 194 Cal.App.4th 1507 ........... 20 Kibler v. Northern Inyo County Local Hospital District (2006) 39 Cal.4th 192 2...ceeee es ... 28, 30 Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 37 Cal.App.4th 855 0... eene 34 McConnell v. Innovative Artists Talent and Literary Agency, Inc. (2009) 175 Cal.App.4th 169 2.0...eenes 27, 28 Nesson v. Northern Inyo County Local Hospital District (2012) 204 Cal.App.4" 65 0.0.0... cece neces 2, 20-23 Runyon v. Board ofTrustees ofCalifornia State University (2010) 48 Cal.4th 760 2.0.2... ee eee ee 1, 11, 16, 18, 19, 22 Rusheen v. Cohen (2006) 37 Cal.4th 1048 ........... 0.00.00. 0008- 30 Schumpert v. Tishman Co. (1988) 198 Cal. App. 3d 598 ............. 34 Smith v. Adventist Health System/West (2010) 190 Cal.App.4th 40 ......... Le ete eden geen ees 29-31 iii- TABLE OF AUTHORITIES(cont.) State Board ofChiropractic Examiners v. Superior Court (“Arbuckle”) (2009) 45 Cal.4th 963 26.0.ce ee ee eee 1, 11, 16-19, 22 Taus v. Loftus (2007) 40 Cal.4" 683 2.0.0 c ccc ccc ee eee eens 27 Varian Medical Systems v. Delfino (2005) 35 Cal.4th 180 ..........-. 33 Weinberg v. Cedars-Sinai Medical Center (2004) 119 Cal.App.4th 1098 00.2...eeee eee 25 Westlake Community Hospital v. Superior Court (1976) 17 Cal.3d 465 2.0...ene ae 1, 2, 10, 16, 28 California Statutes: California Business and Professions Code section 805 ............+45 13 California Business and Professions Code section 809 to 809.5 ..... 13, 20 California Civil Code section 47 0.00...oeeee 30 California Code of Civil Procedure section 425.16......... 24, 26-27, 34 California Code of Civil Procedure section 1094.5 ........ 00000. 65 25 California Health and Safety Code section 1278.5 ..........0... passim Federal Statutes: 42 U.S.C section 11112, subd.a ........0. 0.00. eee eee 20 ~1V- ISSUE PRESENTED FOR REVIEW The Petition for Review of Appellants Sutter Central Valley Hospitals and Steve Mitchell (hereafter, “Sutter”) challenges whether a whistleblower statute, Health and Safety Code section 1278.5, permits physicians to pursue a civil lawsuit without first exhausting judicial remedies. Sutter’s Petition is premised entirely upon the claim that a physician is required to overturn a termination of hospital privileges through a writ ofmandate before bringing a lawsuit under Section 1278.5. The Court ofAppeals found that the language ofthe statute, its legislative history and California Supreme Court precedent establish that exhaustion of remediesis not a prerequisite to filing a lawsuit under Section 1278.5. WHY REVIEW BY THIS COURT IS UNNECESSARY Sutter’s Petition grossly misrepresents the impact of the Court of Appeal’s decision in this case by repeatedly asserting that it “abrogates” the rule of exhaustion of Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465. The decision below only recognizes an exception to the Westlake rule of exhaustion for cases in which physicians havea statutory retaliation claim under Section 1278.5. In applying this exception,the decision is squarely in line with this Court’s decisions in State Board of Chiropractic Examiners v. Superior Court (“Arbuckle”) (2009) 45 Cal.4th 963 and Runyon v. Board ofTrustees ofCalifornia State University (2010) 48 Cal.4th 760, which recognized an exception to Westlake in analytically identical circumstances. The decision does not overturn Westlake but rather properly applies this Court’s more recent binding precedent. Sutter also attempts to strengthen its Petition by misstating the holding in Nesson v. Northern Inyo County Local Hosp. Dist. (2012), 204 Cal.App.4" 65, in orderto create a conflict between the decision below and Nesson. However, in contrast to the decision below, Nesson never analyzed the specific issue of whether exhaustion is required in an action brought under Section 1278.5. It did not examinethe language,legislative history, or purpose of Section 1278.5. Nordid it even mention the two California Supreme Court cases whichare directly on point. There is no doubt that Fahlen will be considered as authoritative precedent on the issue presented here and Nesson will not. This Court need not expendits time and resources to affirm the validity of a carefully reasoned decision by the Court of Appeal which fully and correctly analyzes the exhaustion issue. FACTUAL BACKGROUND Dr. Fahlen is a highly competent and well-respected Modesto physician. (Clerk’s Transcript (“CT”) 286 at {{] 2-3.) He served onthe medical staff of Memorial Medical Center (“Memorial”)’ from 2003-08 and served as the Vice-Chairmanofthe Department of Nephrology at Memorial ' Defendant Sutter Central Valley Hospitals does business as Memorial Medical Center. (CT 11 at § 3.) 2 from 2007-08. (Id.) From 2005 to 2008, Dr. Fahlen was also employed by the Gould Medical Group. (Id. at § 4) He presently serves as the Chair of the Department ofMedicine at Doctors Medical Center, an elected position in which he has quality assurance and administrative responsibility over 140 physicians. (/d. at {2.) Dr. Fahlen wasalso appointedby the Stanislaus County Board of Supervisors to serve on the Board of Directors of the Stanislaus County Community Health Center. Dr. Fahlen is well- knownfor his exceptional dedication to patients and their families. (CT 459-61, 464, 472-73, 484-86, 569-70.) During his appointment at Memorial, Dr. Fahlen encountered numerous instances in which Memorial nurses provided substandard care which jeopardized the safety of his patients. (CT 287-94 at 4] 7-31.) Dr. Fahlen was an outspoken advocate for his patients in these situations, many ofwhich were life-threatening. (/d.) From January 2004 to April 2008, Dr. Fahlen complained to the hospital administration as many as twenty times regarding substandard or otherwise improper nursing care at Memorial. (CT 287-94at 1] 7-31; CT 407-08 at § 21.) Despite Dr. Fahlen’s complaints, serious nursing errors and insubordination continued. (CT 291-94, 319, 321, 323.) After a nurse prematurely discharged from the ICU a poor young woman who wasin multi-organ failure and in need of emergencydialysis, Dr. Fahlen wrote the hospital administration. He advised the hospital that “premature discharge 3 from the ICU dueto nursing aggression is a common medical error made in this institution. I personally have witnessed injury and death to patients as a result.” (CT 293-94 at | 30; CT 331-32.) Retaliatory Conduct by Memorial Medical Center Thehospital failed to respond to Dr. Fahlen regarding any of his complaints about poor nursing care. (CT 294 at 32; CT 407-08 at § 21.) Instead, Sutter engaged in a campaign ofretaliation against Dr. Fahlen intended to drive him from the practice of nephrology in Modesto. (CT 294-98 at J 33-51.) Defendant Steve Mitchell testified at Dr. Fahlen’s peer review hearing that in May of 2008, he provided the Gould Medical Group (“Gould”) with confidential information regarding unsubstantiated allegations against Dr. Fahlen. Gould then terminated Dr. Fahlen’s employment on May14, 2008, based on the information provided by Mr. Mitchell. (CT 294-95 at 4 34; CT 403 at 9] 5-6; CT 438-46, 449, 453.) Mr. Mitchell testified that he wanted Gould to terminate Dr. Fahlen so that he would leave Modesto andthe hospital would not have to go through the process ofterminating his hospital privileges through a peer review hearing. (CT 438-42.) Contrary to Mr. Mitchell’s intentions, Dr. Fahlen did not leave Modesto after Gould terminated his employment. He instead decided to establish a private practice in Modesto. (CT 295 at ff 37, 38.) On May27, 2008, soon after he was terminated from Gould, Dr. Fahlen requested a meeting with Mr. Mitchell to discuss the status of his hospital privileges at 4 Memorial. (CT 295 at 937.) After receiving Dr. Fahlen’s request, Mr. Mitchell sent an e-mail to Dave Benn, the ChiefExecutive Officer of Memorial, stating that “He doesnot getit!” (CT 499.) Mr. Mitchell testified that in his e-mail to Mr. Benn, he meant that Dr. Fahlen “did not get” that he was goingto lose his privileges at Memorial. (CT 454.) In response, Mr. Benn wrote, “Looks like we need to have the MedicalStaff take some action on his MedQuals!!! Soon!!!” (CT 499.) Dr. Fahlen met with Mr. Mitchell on May 30, 2008, to discuss his hospital privileges at Memorial. Mr. Mitchell testified that during this meeting, he suggested Dr. Fahlen move away from Modesto andpractice nephrology in another community. (CT 437.) Mr. Mitchell admitted that when Dr. Fahlen informed him ofhis plans to stay in Modesto, he threatened Dr. Fahlen with a medicalstaff investigation and a negative report to the Medical Board of California if he did not resign from Memorial. (CT 295 at ¥ 38; CT 436, 451-52.) After Dr. Fahlen refused to succumb to Mr. Mitchell’s threats, Defendants followed through with Mr. Benn’s command and promptly initiated a medical staffpeer review investigation of Dr. Fahlen. (CT 495.) In August 2008, Memorial’s Medical Executive Committee (MEC) recommendedthat Dr. Fahlen’s application for reappointment to the medical staff be denied based onthe hospital administration’s allegation that he had engagedin “disruptive” behavior. (CT 297 at § 44; CT 548.) It is undisputed that Sutter 5 terminated Dr. Fahlen’s privileges because of his complaints about nursing care, althoughit justified the termination based on the alleged manner(or alleged lack of manners) he used whenhestated his concerns aboutpatient care to nurses. (CT 408 at { 22-23.) The Peer Review Hearing On August 26, 2008, the MEC ofMemorial recommendedthedenial ofDr. Fahlen’s reappointmentto the medicalstaff based onthe allegations that he had engagedin “disruptive” behavior. (CT 297 at ¥ 44; CT 548.) Pursuant to Memorial’s Medical StaffBylaws (“Bylaws”), Dr. Fahlen requested a hearing by a Judicial Review Committee (“JRC”) to review the MEC’s recommendation. (CT 297 at § 45; CT 538-39.) Over the course of eight months, from October 2009 to May 2010, the JRC conductedthirteen days of hearings to review the recommendation of the MEC. (CT 563-64.) Undisputed evidence introduced at the hearing showedthat Dr. Fahlen was well-respected for his clinical skills and his exceptional dedication to patients andtheir families by both physicians and nurses. (CT 407 at 4 20; CT 427; CT 466, CT 468-69, 470; CT 477, 479-480) Memorial, on the other hand, was unable to support its charges with competent evidence. It failed to provide any evidence to show that Dr. Fahlen’s conductat any time had any adverse impact on patient care. (CT 407 at § 19; CT 408-09 at §§ 24-26; CT 410 at 730.) The Chief ofthe Medical Staff, Dr. Todd Smith, who wascalled as a witness by Sutter, 6 testified he was not aware ofa single patient whose medical care was adversely affected by Dr. Fahlen’s behavior. (CT 410 at (30; CT 428.) The Chair of the medical staff's Ad Hoc Investigating Committee, Dr. Michael Cadra, also called by Sutter, testified that the investigating committee was not aware ofany instance in which Dr. Fahlen’s alleged difficult behavior adversely affected patient care or had harmedanypatient. (CT 410 at 30; CT 423, 424.) The JRC’s decision of June 14, 2010, concluded that the MEC did not sustain its burden ofproving that the denial ofDr. Fahlen’s reappointment was reasonable and warranted. (CT 550-51.) The MECaccepted the decision of the JRC and decided not to exercise its right to appeal. (CT 72, 100 (Bylaw § 8.5-1).) Pursuantto the Bylaws, the Sutter Board of Directors was required to affirm the decision of the JRC if it was supported by substantial evidence. (CT 513-14 (Bylaw § 4.5-8(b)(2)); CT 101 (Bylaw § 8.5-6(b)).) Nevertheless, on January 7, 2011, the Board terminated Dr. Fahlen’s privileges to practice medicine at Memorial, contrary to the decision reached by the JRC. (CT 71-78.) In its decision the Board conceded that Dr. Fahlen’s conduct had notled to any specific act or omission that compromised patient safety at Memorial. (CT 16.) PROCEDURAL HISTORY On March 9, 2011, Dr. Fahlen filed the complaint in the underlying action, alleging whistleblowerretaliation and other related claims. (CT 10- 27.) The complaint alleged that Sutter and Mr. Mitchell retaliated against Dr. Fahlen for his complaints about nursing and patient care at Memorial by, inter alia: 1. intentionally causing him to be fired by his employer, the Gould Medical Group; 2. threatening him with a peer review investigation and negative reports to the Medical Board of California if he did not leave the Modesto area; 3. causing the medicalstaff to initiate a medical disciplinary action against him whenherefused to leave town; and 4. terminating his hospital privileges at Memorial despite the fact that he won his administrative hearing. (CT 18-20, 547-51.) On April 26, 2011, Sutter filed a demurrer, seeking dismissalofall seven causes of action. (CT 28-32.) The demurrer wasprimarily based on Sutter’s assertion that Dr. Fahlen’s claims were barred for failure to exhaust his judicial remedies by way ofa petition for writ of mandate. (CT 33-48.) On June 30, 2011, the trial court overruled the demurrerin its entirety. (CT 606-07.) On May 26, 2011, Sutter filed a motion to strike (“anti-SLAPP motion”) on six of the seven causes ofaction alleged in the complaint, pursuant to Code ofCivil Procedure section 425.16. (CT 49-66.) Sutter did not moveto strike the fourth cause ofaction for interference with contractual relations, which was based on Sutter’s successful effort to have Dr. Fahlen fired by the Gould Medical Group. (/d.; CT 24.) Sutter’s anti- SLAPP motion againrelied on the argument that Dr. Fahlen’s claims were legally insufficient because hefailed to exhaust his judicial remedies. (CT 49-66.) On June 30, 2011, the trial court denied Sutter’s anti-SLAPP motion in its entirety. (CT 608.) On August 1, 2011, Defendants filed a notice of appeal on the order denyingtheir anti-SLAPP motion. (CT 622- 23.) On December30, 2011, Sutter filed a second writ of supersedeas, seeking a stay ofall discovery proceedings pendingresolution ofthe appeal on the anti-SLAPP motion.’ In response, the Court ofAppealissued a temporary stay ofall trial court proceedings on January 10, 2012. Inits appeal, Sutter argued thatthe trial court erred by denying its anti-SLAPP motion, again relying on its exhaustion ofjudicial remedies argument. In * Sutter later admitted that the stay requested in its second writ of supersedeas was “imprecisely worded” and should have included an exception to allow Dr. Fahlen to proceed with discovery onhis fourth cause of action for interference with contractual relations. (Informal Reply in Support of Second Petition for Writ of Supersedeas,filed Feb. 14, 2011, at p.12.) its decision of August 14, 2012, the Court ofAppealaffirmedthetrial court’s denial ofthe anti-SLAPP motion with respect to Dr. Fahlen’s first and second causes ofaction, but reversed the trial court on the other counts at issue.” The Court of Appealalso lifted its stay on trial court proceedings. On September 25, 2012, Sutter filed a Petition for Review. ARGUMENT I. THERE ARE NO COMPELLING REASONS TO GRANT REVIEW OF THE DECISION BY THE COURT OF APPEAL. A. The Decision Does Not Abrogate Westlake’s Traditional Rule of Exhaustion. To try and persuade this Court to grant review, Sutter has grossly misrepresented the impactofthe Court of Appeal’s decision on the traditional rule of exhaustion described in Westlake. \n its Petition, Sutter repeatedly states that the decision below “abrogated”, “undid”, or “displace[d]” the Westlake rule ofjudicial exhaustion and even goes so far as asserting that Westlake is no longer goodlaw after the Court of Appeal’s decision in this case. (Petition, at pp. 2, 20, 23, 25.) However, the Court of Appeal’s decision simply recognized and applied this Court’s cases establishing an exception to Westlake for certain whistleblower claims. The exception applies when, ashere, individuals have statutory > The court of appeal’s opinion incorrectly noted that the trial court denied the anti-SLAPP motion with respect to the fourth cause of action. (Fahlen v. Sutter, supra, 208 Cal.App.4" at 582.) In fact, the fourth cause of action was not the subject of Sutter’s anti-SLAPP motion and wasnotat issue in the appeal. (CT 49-66.) 10 whistleblower claims and the Legislature acknowledged an administrative remedy but did not require its exhaustion. State Board ofChiropractic Examiners v. Superior Court (“Arbuckle”), supra, 45 Cal.4th 963 and Runyon v. BoardofTrustees ofCalifornia State University, supra, 48 Cal.4th 760. Contrary to Sutter’s representation that the decision below “abrogated” the Westlake rule of exhaustion, the Court ofAppealactually relied on Westlake when it dismissed Dr. Fahlen’s third, fifth, sixth and seventh causes ofaction. (/d. at 580-82.) The Court held that the Westlake rule of exhaustion applies unless there is legislative intent not to require exhaustion, following Arbuckle and Runyon. Sutter’s repeated mischaracterization ofthe decision belowis a deliberate attempt to mislead this Court so it will grant its Petition for Review. B. The Legislature Gave Physician Whistleblowers A Rightto File Civil Actions Without Requiring Exhaustion of Administrative or Judicial Remedies. The Legislature amended Section 1278.5, effective January 1, 2008, to extend the protection of that law to physicians, adding the term “members of the medical staff’ to subdivisions a, b(1), d(1), d(2) and g. (CT 221-23.) Section 1278.5, subd. (d)(2) specifically states that “discriminatory treatmentof [a] . .. memberof the medical staff. . . includes, but is not limited to, unfavorable changesin. . . privileges . . . of the medicalstaff, or 11 the threat of any ofthose actions.” This portion ofthe statute establishes that the Legislature specifically intended to provide a remedy for the types of actions taken by Defendants — threats ofactions against Dr. Fahlen’s privileges and terminatinghis privileges. (See, CT 19 at {fj 33-35.) A hospital may only revoke a physician’s hospital privileges through the peer review processset forth by Business and Professions Code sections 805 through 809.5. The Legislature clearly intended for peer review actions to be subject to a suit under Section 1278.5. The fact that the “threat” of an “unfavorable changein privileges” is sufficient to constitute a retaliatory act establishes that a physician may bring a Section 1278.5 suit before peer review proceedings have been completed. The inclusion of “an unfavorable change in privileges”establishes that a physician can bring a Section 1278.5 action after the conclusion ofpeer review proceedings, as Dr. Fahlen did here. When,as here, there is no ambiguity in the language of a statute, courts are to presumethat “the Legislature meant whatit said, and the plain meaningofthe statute governs.” (Hunt v. Superior Court (1999) 21 Cal. 4" 984, 1000.) Nothing in Section 1278.5 states or implies that a physician cannot bring the action until after winning a writ of mandate on a termination of privileges. To the contrary, Section 1278.5, subd. (h) gives the medical staff of a hospital the right “to petition the court for an injunction to protect a peer review committee from being required to comply with evidentiary 12 demands on a pending peer review hearing from the memberofthe medical staffwho has filed an action pursuantto this section...” Section 1278.5, subd. (h). This subdivision also expressly references a peer review hearing “as authorized in Section 805 and Sections 809 to 809.5, inclusive, of the Business and Professions Code.” It goes onto state that “If it is determined that the peer review hearing will be impeded, the injunction shall be granted until the peer review hearing is completed.” This subdivision unequivocally establishes that the Legislature intended that the superior courts would have concurrent jurisdiction with the hospital’s peer review procedures. In addition, this subdivision indisputably acknowledgestheparallel administrative remedy ofhospital peer review proceedings. As discussed further below, under the rule ofArbuckle and Runyon, the Legislature’s acknowledgmentofa parallel remedy, without requiring exhaustion ofthe remedy, establishes that exhaustion ofjudicial remedies is not required here. (CT 106-07.) Sutter attempts to rely on Section 1278.5, subd.(1), whichstates that nothingin the statute shall be construed to limit the ability of the medical staff to carry out its legitimate peeractivities in accordance with Sections 809 to 809.5 of the Business and Professions Code. (AOBat 38-39.) However, this subdivision does not support Sutter’s position. It again reflects the Legislature’s decision to have concurrent jurisdiction when a 13 physician files a Section 1278.5 lawsuit. Underthis section, a physician’s filing of a whistleblower suit cannot be used to stop or interfere with the medical staff’s peer review actions. If Sutter was correct, and a physician couldnotfile a Section 1278.5 lawsuit based ona termination ofprivileges until peer review proceedings were completed and fully exhausted, then there would be no needforeither subdivision (h) or subdivision(1), since the peer review process would be completely finished before a physician could file suit. Thus, the Court of Appeal’s decisionis fully supported by the language of Section 1278.5. It also serves the express purposeofthestatute, to protect the public health and safety by encouraging health care workers, including physicians, to report unsafe patient care and conditions. Section 1278.5, subd.( a). C. Legislative History Confirms that the Legislature Decided Not to Require Exhaustion of Administrative Remedies. Whenoriginally introduced as AB 632,the proposedstatute did not contain the full text of current subdivision (h) or the text of current subdivision (1). (CT 226-30.) Hospital groups opposing thebill claimed that it might have a chilling effect on medical peer review andthatit “could stop a peer review processinits tracks by the simple filing of a 1278.5 action .. .” (CT 237.) The Senate Committee’s analysis queried: “Should a 1278.5 action be held in abeyance until a peer review process,ifinitiated, has been completed?” (CT 238.) Thus,the Legislature expressly 14 considered requiring exhaustion of the peer review process as a prerequisite for bringing a 1278.5 action. However, the Legislature rejected that approach. Instead, it strengthened subdivision (h) by amendingthebill to add three additional sentences to the original version ofAB 632 and also added a new subdivision (1) to ensure that a hospital’s peer review process could proceed unimpeded by a 1278.5 action. According to the Senate Judiciary Committee, the amendments madeto this bill on September 5, 2007, were taken to deal with some objections made by the hospitals regarding the impactofthe bill on peer review. This analysis also states: This bill would provide equivalent whistleblower protection to a doctor that is currently available to an employeeor a patient of a hospital facility and to other health care workers. The amendments would provide for an in camera hearing of evidentiary requests by a whistleblower complainant so that a court may determine whetheror not the evidentiary demands would impede a peer review proceeding. The amendments would further clarify that the bill would not be construed to limit the ability of the medicalstaff to carry outits legitimate peer review activities. (CT 242.) Thus, the Legislature knowingly chose concurrentjurisdiction and rejected the approach that the Defendants are asserting here. It instead gave a physician the sameright to bring a whistlebloweraction as any other healthcare worker, while safeguarding the peer review process. Thus, the legislative history as well as the language of Section 1278.5 demonstrates that the decision below is consistent with the Legislature’s intent whenit amendedthe law in 2007. 15 The hospitals lost their battle in the Legislature to require exhaustion of peer review proceedingsas a precondition to a physician’s lawsuit under Section 1278.5. They are now asking this Court to undo that Legislative decision, contrary to the state policy adopted in the statute. This Court does not need to review the Court ofAppeal’s decision that the Legislature’s intent and policy decision should be followed. D. Arbuckle and Runyon Required the Court of Appeal’s Decision. In support of their exhaustion argument, Defendants rely on one sentence from the 1976 decision in Westlake Community Hosp. v. Superior Court, supra, whichstates that the decision of a peer review bodyis considered conclusive unless overturned by a writ of mandate. (See, Petition, pp. 6-7; Defendants’ AOB,pp. 29-30, Defendants’ Reply Brief, p. 22.) In Westlake, the plaintiff physician had only common lawtort claims and no statutory whistleblower claim. (Westlake Community Hosp., supra, 17 Cal.3d at p. 470.) Westlake predated the 2008 amendment of 1278.5 by 32 years. It never considered and cannot constitute authority for the question presented here. The language in Westlakethatis cited by Defendants does nothing more than explain the general rule requiring exhaustion of administrative remedies. The decision below was required by this Court’s decisions in Arbuckle and Runyon. In Arbuckle, the whistleblower statute required the 16 plaintiff to exhaust an internal administrative remedy by submitting her complaint to the administrative agency and obtaining findings by the agency beforefiling suit. Theplaintiff obtained an adverse finding from the defendant Board of Trustees. The Court of Appeal concludedthat the plaintiff had to completely exhaust the internal administrative remedy, by asking for a full hearing before an administrative law judge and then further exhausting judicial remedies, before filing a lawsuit for damages, based on the same analysis advanced by Sutter here. (Arbuckle, supra, 45 Cal.4th at pp. 970-971.) This Court reversed the Court ofAppeal, holding that the plaintiff did not have to overturn the adverse internal determination by the administrative agency before pursuing a whistleblower claim for damages. While recognizing that exhaustion was the generalrule, the Court held that: ... [S]Jection 8547.8(c) lacks language making this administrative exhaustion a prerequisite to bringing the specific type of damages action permitted under that provision. Section 8547.8(c) authorizes, not an action fo review the decision of the State Personnel Board, but a completely separate damagesaction in the superior court in which the employee will enjoy all the procedural guarantees and independentfactfinding that generally accompany such actions. Exhaustion of every possible stage of an administrative processis not particularly necessary where the civil action that Legislature has authorized is not one to review the administrative decision, but rather a completely independent remedy. (Arbuckle, supra, 45 Cal.4th at pp. 972-973 (emphasis in original).) The Arbuckle decision also considered the Court ofAppeal’s holding that the adverse administrative finding of the defendantcollaterally 17 estoppedplaintiff from bringing her lawsuit, unless that finding wasfirst overturned by a writ ofmandate. While recognizing that this contention was “true as a general matter”, it rejected its application in cases where the Legislature had expressly authorized a whistleblower lawsuit: ... [T]he Legislature expressly authorized a damages action in superior court for whistleblower retaliation . . . and in so doing it expressly acknowledged the existence of a the parallel administrative remedy. It did not require that the board’s findings be set aside by way of a mandate action. . . . The barenessofthe statutory language suggests that the Legislature did not intend the State Personnel Board’s findings to have a preclusive effect against the complaining employee. (Arbuckle, supra, 45 Cal.4th at p. 976.) In Runyon, the Supreme Court again addressed whether plaintiff was required to overturn an adverse internal administrative decision before pursuing an action for damages authorized under a whistleblowerstatute. (Runyon, supra, 48 Cal. 4th at p. 773-75.) Government Codesection 8547.12 provided that an employee couldfile a damages action onlyifthe employeefirst filed an internal complaint that was not“satisfactorily addressed” by the administrative agency within 18 months. (/d. at p. 774) This Court held that the employee wasentitled to bring an immediate action for damages unlessthe internal complaint was resolvedto his satisfaction. It reaffirmed its holding in Arbuckle that if the Legislature (1) specifically authorizes a whistleblower damagesaction; (2) acknowledges the existence of a parallel administrative remedy, but (3) does not require reversal of an 18 adverse decision by way of a writ of mandate, then the damages action can proceed without exhaustion ofjudicial remedies. (Runyon, supra, 48 Cal.4th at p. 774-75.) In this case, Section 1278.5 indisputably acknowledgesthe existence of a parallel administrative remedy of hospital peer review proceedings. Yet it does not require exhaustion of any administrative or judicial remedies before filing an action for damages and reinstatement. Pursuant to the decisions by this court in Arbuckle and Runyon, Dr. Fahlenis therefore plainly entitled to proceed with his whistleblower claim without exhausting his judicial remedies. In its Petition for Review, Sutter only discusses this Court’s decisions in Arbuckle and Runyon in a footnote whichvainlytries to distinguish those cases based on an uncleardistinction that has nothing to do with the reasoning in those decisions, (Petition, n. 2, pp. 18-19.) Arbuckle and Runyon were based on both Legislative intent and the policy implications of permitting an internal administrative agency to decideretaliation cases, subject only to a substantial evidence review by the courts. This Court correctly found that to require exhaustion of administrative or judicial remedies would effectively negate the whistleblower statutes. (Arbuckle, supra, 45 Cal.4"at 977; Runyon, supra, 48 Cal.4"at 784.) 19 E. Sutter’s New Federal Argument Is Improper and Meritless. In the same footnote, Sutter also claims that there are some unspecified “constitutional implications” to the decision below. It raises questions concerning federal immunities which were not raised in either the trial court or Court ofAppeal. This new argument is therefore plainly improper and should not be considered. (In re Marriage ofDavenport, (2011) 194 Cal.App.4™ 1507, 1528.) Furthermore, California opted out of the federal Health Care Quality ImprovementAct in 1989 whenit adopted Business and Professions Code section 809 et seq. and the statutes cited by Sutter do not apply in California. (Business and Professions Code Section 809, subd. (a)(9)(A).) Finally, federal immunity does not apply unless a disciplinary action is based on reasonable beliefs. (42 U.S.C. section 11112, subd. a.) Retaliatory actions are not provided immunity under federal law andthere are no “constitutional implications”to the decision below. F. There is No Conflict Presented by the Decision in Nesson. In another attempt to manufacture support for its Petition for Review, Sutter asserts that review by this Court is necessary to resolve a purported conflict between the decision in this case and the decision in Nessonv. Northern Inyo County Local Hosp. Dist., supra. Sutter misstates the holding 20 in Nesson to suggest that the Fourth District specifically considered the question of whether exhaustion is required before filing a claim under Section 1278.5. (Petition, pp. 2, 12-13.) Not so. Nesson held that the Section 1278.5 claim failed because Dr. Nesson could not demonstrate a link betweenhis summary suspension and his complaints. (/d.,204 Cal.App.4" at 87.) Asthe court below noted, the Nesson decision did not separately analyze the exhaustion requirementas it applied to the Section 1278.5 claim. (Fahlen, 208 Cal.App.4™ at 574, n. 6.) The court below correctly concluded that any conclusions made by the Nesson court regarding the application of the exhaustion doctrine to Section 1278.5 were dicta. (/bid.) After granting Dr. Fahlen’s request for judicial notice of the appellate briefs in Nesson, the court also observed that neither party in Nesson focused on the whistleblower claim. (/bid.) Indeed,there is almost no discussion of Section 1278.5 in the plaintiff's briefs and the hospital did not mentionit at all. bid.) Asdicta, Nesson is not binding authority on any other court and there is no significant conflict that needs resolution by this Court. As described above, Nesson analyzed the exhaustion issue presented in that case without any analysis of Section 1278.5. It did not analyze Section 1278.5, subds.(h) and (1) which acknowledgetheparallel administrative remedy of a peer review hearing without requiring exhaustion of that remedy. It did not analyze the language in Section 1278.5 which expressly gives a physician a right to sue for a loss ofprivileges. It did not review the legislative history which 2) establishes that the hospitals’ proposal to require exhaustion of peer review proceeding was consideredand rejected by the California Legislature. Nesson contains no discussionat all of either Arbuckle or Runyon, the controlling Supreme Court authority. Sutter’s attempt below to rely on the decision in Nesson was appropriately rejected by the Court of Appeal. Now Sutter contends that a conflict between Nesson and the decision below will lead to confusion and inconsistent judgments. It is evident that Nesson should not be considered authority on the Section 1278.5 exhaustion issue. It is extremely unlikely that any court will follow Nesson rather than the decision below on that question. This is especially true given that the decision below notonly clearly analyzes the Section 1278.5 exhaustion question, but also explains why Nessonis not sound authority on that issue. This Court should reject Sutter’s transparent effort to create a legally significant conflict between Nesson and the decision below. The decision below is the only California case that directly addressestheissue of exhaustion in a Section 1278.5 case. Any future cases in which the same issue is properly analyzed will result in the same decision as the Court below. In the unlikely event that there are inconsistent decisions in the future on the question of exhaustion under Section 1278.5, this Court may grant review at that time. 22 G. Sutter’s Policy Arguments Are Unsupported by the Record and Reflect Only the Interests of Healthcare Corporations. In its policy argument, Sutter claims that “[rJetaliation claims are easy to allege and hard to overcomeshort oftrial.” (Petition, p. 21.) Going outside the record, it makes an unverified claim that unnamedattorneys who represent physicians have opinedthat it might be malpractice notto adviseclients “to position themselvesto allege retaliation claims.” (Petition, pp. 21-22.) In other words, those unknownattorneysallegedly believe that they are boundbythe standardofcare to urge their physician clients to fabricate retaliation claims. Aside from denigrating the integrity of both physicians and the attorneys whorepresent them,this argument flies in the face ofthe realities of modern healthcare. This case and the Nesson caseare the first cases concerning Section 1278.5 brought to the appellate courts since the law was enacted in 1999. The statute was amendedto protect physicians effective January 1, 2008, but there has been noflood ofphysicians alleging retaliation cases. The paucity of lawsuits under Section 1278.5 reflects the truereality confronting an individual faced with the possibility oflitigating against multi-billion dollar healthcare corporations. These corporations have essentially unlimited resources to hire the best lawyers and to employ every proceduralobstaclein the law to delay andfrustrate a whistleblower’s lawsuit. 23 As this case demonstrates, even an exceptionally strong whistleblower lawsuit can be delayed for years by demurrers, discovery disputes, anti-SLAPP motions and appeals. In this case, Sutter hasfiled a demurrer, a motion for judgmenton the pleadings, discovery motions, two writs of supersedeas, one writ of mandate, one appeal and nowa petition for review. It is now one and one-halfyears after Dr. Fahlen filedhiscivil lawsuit and Dr. Fahlen hasyet to receive a single item of discovery. Facing unlimited corporate resources, physicians who havevalid whistleblowerclaimsstill face tremendous obstacles. Virtually every case will take at least four years because of the unlimited right of healthcare corporations to appeala denial of an anti-SLAPP motion, no matter how meritless the motion. (/d., Section 425.15, subd. (i).) A physician who has not actually been a whistleblower is highly unlikely to file a meritless case under Section 1278.5. Under current law, the physician will likely have to pay not only his own attorneys fees, but also the corporation’s,if it prevails on an anti-SLAPP motion. (Code of Civil Procedure section 425.15, subd. (c)(1).) In the opinion of Dr. Fahlen’s counsel, it would be malpractice for an attorney to advise a physician to “position himself” to generate a fabricated retaliation, because such a claim is almost certainly going to lose and will likely cost the physician a minimum of $100,000in attorneys fees, and possibly much more, with almost no chance of success. 24 Anotherreality of current healthcare is that Sutter and other large healthcare corporations have had a nearly invulnerable defense to lawsuits alleging wrongful termination of hospital privileges. Under California law, the healthcare corporations are empowered to makethe rulesofthe hearing, initiate the charges, prosecute the charges and choose the judge and the jury who will make a recommendation on the charges, even if the corporation has an actual bias against the physician. (See, e.g., Hongsathavij v. Queen ofAngels/Hollywood Presbyterian Medical Center (1998) 62 Cal.App.4th 1123, 1142-1143; Weinberg v. Cedars-Sinai Medical Center (2004) 119 Cal.App.4th 1098.) Ifthe result of the “fair hearing”is contrary to the corporation’s agenda,it can disregard the fair hearing decision and terminate the physician’s privileges anyway, as Sutter did with Dr. Fahlen. The corporate decision is then ordinarily subject to only a substantial evidence standard of review. (Code of Civil Procedure section 1094.5, subd. d.) It is no wonderthat Sutter and the California Hospital Association want to keep physician whistleblowers trapped in a peer review cage where they hold all the keys. The Legislature expressly enacted Section 1278.5 becauseit felt the strong remedies contained in the statute were necessary to protect whistleblowers from hospitals’ retaliation. Sutter seeks to destroy the protections of Section 1278.5 for physicians by forcing them tofirst 25 overturn decisions in administrative hearings in whichretaliation is not even an issuethatis litigated. Dr. Fahlen agrees with Sutter that the decision below shouldnot be depublished. Not because depublication wouldbe unfair to Sutter, but because the published decision ofthe Fifth District provides a small amount ofprotection for physicians whorisk their careers to expose unsafe conditions for patients. ll. IF THIS COURT GRANTSREVIEW,IT SHOULD REVIEW THE COURT OF APPEAL’S DECISION THAT PEER REVIEW ACTIONS CONSTITUTE PROTECTED ACTIVITY UNDER THE ANTI-SLAPP STATUTE, AND ITS DECISION REQUIRING DR. FAHLEN TO SPLIT HIS CAUSE OF ACTION. For the reasons stated above, this Court should deny Sutter’s Petition for Review. However, if this Court decides to grant review, Dr. Fahlen requests review ofthe following issues incorrectly decided by the Court below: (1) whethera healthcare corporation’s termination of a physician’s hospital privileges are “protected activity” under the anti-SLAPPstatute; and, (2) whether exhaustion ofjudicial remediesis required for causes of action based on the same facts as a pending retaliation claim under Section 1278.5. A. Sutter’s Actions Were Not Protected Activities Entitled to the Protections of the Anti-SLAPP Statute. To prevail on an anti-SLAPP motion, defendants are required to provethat the challenged causes ofaction arise from “protected activity”. 26 (Code of Civ. Pro. section 425.16(b)(1); Taus v. Loftus (2007) 40 Cal.4" 683, 712.) In this case, the Court ofAppeal incorrectly concluded that a healthcare corporation’s termination of a physician’s hospital privilegesis protected activity entitled to the protectionsofthe anti-SLAPPstatute. (Fahlen v. Sutter, supra, 208 Cal.App.4™ at 570-72.) A cause ofaction arises from protected activity under the anti- SLAPPstatute only if the defendant’s act upon which the causeof actionis based wasin furtherance of the defendant’s constitutional right of petition or free speech in connection with a public issue. (City ofCotati v. Cashman (2002) 29 Cal.4th 69, 78.) In evaluating an anti-SLAPP motion, the court must look to “the substance”ofthe lawsuit to see if it arose from a defendant's protected First Amendmentactivity. (/d.) Dr. Fahlen does not base his claims on anyone’s exercise ofthe right to free speech or other protected activities under the anti-SLAPPstatute. The gravaman of Dr. Fahlen’s complaintis that Sutter tookretaliatory actions against him in response to his whistlebloweractivities. Retaliatory actions taken against a personare not actions in furtherance offree speech, even though they are conveyed through words. (McConnell, McConnell v. Innovative Artists Talent and Literary Agency, Inc. (2009) 175 Cal.App.4th 169, 180.) “No employer action has any effect unless it is communicated, but no one would suggest that a statement or writing firing an employee is 27 protected First Amendmentactivity. A writing, as here, effectively eliminating all job duties is no different.” Ud.) In Westlake, supra, the Court analyzed this precise question in the context of peer review proceedings. Westlake held that peer review actions were not communicative activities subject to protection under Civil Code section 47, sub. 2, as statements duringofficial proceedings, but rather unprivileged actions. (Jd., 17 Cal.3d at 481-482.) Using the Westlake analysis, peer review actionsare also notfree speech activities entitled to protection under the Anti-SLAPPstatute. The fact that Sutter’s threats and the termination of Dr. Fahlen’s privileges were effectuated through words does not make them protected First Amendmentactivity. To the contrary, they wereretaliatory actions which do not meet the standard for protected activity set forth in City ofCotati v. Cashman, supra. B. Sutter’s Retaliatory Actions Were Not “Peer Review Activities” Protected Under the Anti-SLAPP Statute. In Kibler v. Northern Inyo County Local Hospital District (2006) 39 Cal.4th 192, the Court held that hospital peer review activities were “official proceedings” which could come underthe ambit ofthe anti- SLAPPstatute. For purposesofits anti-SLAPP analysis, the Court defined “peer review”as: [T]he process by which a committee comprised oflicensed medical personnelat a hospital “evaluate[s] physicians applying forstaff privileges, establish[es] standards and procedures for patient care, assess[es] the performance of 28 physician currently onstaff,” and reviews other matters critical to the hospital’s functioning. (/d. at p. 199.) Usingthis definition of peer review, none of Sutter’s activities constituted “peer review”, since none of Sutter’s actions were taken by any committee of licensed medical personnel. To the contrary, Dr. Fahlen prevailed in his peer review hearing decided by six physicians andthat decision was not appealed by the Medical Executive Committee of his hospital. (CT 72; CT 410 at 431; CT 411 at { 35; CT 547-51.) Smith v. Adventist Health System/West, (2010) 190 Cal.App.4th 40, examined issues similar to the ones presented here: (1) whether a hospital’s disciplinary action against a physician’s privileges is a “communicative” act; and (2) whetherthe actions of hospitals and their employees concerning a physician’s privileges which are not taken during formal peer review proceedingare protected activities under the anti-SLAPPstatute, if those actions are related to peer review. (Smith v. Adventist, supra, 190 Cal.App.4th at pp. 57-64.) In Smith v. Adventist, the defendant hospital had summarily suspended Dr. Smith. After he was reinstated by the courts, the hospital refused to accept and processhis reapplication for privileges. Dr. Smith sued the hospital for intentional interference with his right to pursue a profession and interference with prospective business advantage (twoofthe 29 counts also alleged by Dr. Fahlen) as well as two counts ofunfair competition. His complaint was based on his contentions that his summary suspension andthe hospital’s refusal to accept and consider his reapplication were both unlawful. (/d. at p. 48.) As Sutter conceded below, in Kibler this Court did not find that the summary suspension atissue in that case was protected activity. (AOB,p. 22.) Contrary to Sutter’s argument, the Court in Smith v. Adventist assumed but did not decide that the hospital’s summary suspension was “protected activity” for purposes of its anti-SLAPP analysis. (/d. at p. 56.) The Smith v. Adventist court then analyzed whetherthe “official proceedings” privilege of Civil Code section 47, the foundation of the opinion in Kibler, applied to all conduct related to peer review proceedings. The Court recognized that to so rule would effectively eliminate any damages remedy for a physician who wasinjured by unfair or unlawful peer review proceedings. It found that such an interpretation would be contrary to both California caselaw and Civil Code section 47, subd. (b)(4). The court held that the provisions of the anti-SLAPP statute applicable to peer review proceedings apply only to “communicative” conduct, based on the holdings in Kibler and Rusheen v. Cohen (2006) 37 Cal.4th 1048. (Smith v. Adventist, supra, 190 Cal.App.4th at pp. 57-60.) The facts here are stronger than those in Smith v. Adventist and compel the same conclusion. Mr. Mitchell’s interference with Dr. Fahlen’s 30 employment relationship with Gould occurred before May 14, 2008, the date Gould terminated Dr. Fahlen. (CT 294-95 at | 34; CT 403 at 4 5-6; CT 497.) Mr. Mitchell’s threats to Dr. Fahlen took place on May 30, 2008. (CT 295 at | 38; CT 404 at | 9; CT 436-37; CT 450-51.) The MECdid not decide to commencean investigation ofDr. Fahlen until June 24, 2008. (CT 495.) The medical staffs Judicial Review Committee (IRC) rendered its decision that Dr. Fahlen should retain his hospital privileges on June 14, 2010. (CT 547-51.) The Sutter Board did not terminate Dr. Fahlen’s privileges until January 7, 2011. (CT 71.) The wrongful conductalleged in this case is retaliation for complaints about unsafe hospital practices, conductthatis antithetical to public health and safety and expressly forbidden by statute. Terminating a physician’s privileges because the physician complained about substandard hospital care not only damagesthe physician,it risks the lives of the hospital’s patients. It intimidates other physicians from raising concerns about unsafepractices, for fear of meeting the same fate. The termination of Dr. Fahlen’s privileges for retaliatory purposes was notan action in furtherance of Sutter’s free speech rights and it is not a protected activity. The court in Smith v. Adventist also ruled that the hospital’s refusal to process Dr. Smith’s reapplication for privileges was not protected activity under the anti-SLAPPstatute because the reapplication had never been submitted to a medical staff committee for review. It held that such 31 conduct wasnot part of any “official proceeding” and wasnot a protected activity under the anti-SLAPPstatute. (Smith v. Adventist, supra, 190 Cal.App.4th at pp. 61-64.) Likewise here, Sutter’s retaliatory conduct before the MEC began its investigation on June 24, 2008, was not part of the hospital’s peer review proceedings and cannotbe a protected activity under Code of Civil Procedure section 425.16. C. The Court of Appeal Erred by Requiring Dr. Fahlen to Split His Cause of Action. All of the causes of action alleged by Dr. Fahlen involve the same “primary right” - - namely, his right to be able to practice his profession without facing unlawfulretaliation or other wrongful interference. (Crowley v. Katleman (1994) 8 Cal.4th 666, 681-682.) Dr. Fahlen must allege all of his counts arising from the same primary right to avoid splitting his cause of action. (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1684.) This rule serves judicial economyand ultimately protects defendants from having to face two separate lawsuits arising from the same or overlapping facts and damages. It would be extremely wasteful for both the court and the parties to have to relitigate the same issues in a separate lawsuit years down the road following a writ of mandate. Furthermore, Sutter’s administrative hearing at issue did not consider Dr. Fahlen’s claimsat issue in this lawsuit. Given the Legislature’s decision to grant the Court broad remedial powers in a Section 1278.5 32 action, the Court of Appeal erred by requiring Dr. Fahlen to split his causes of action into separate lawsuits. Il, SUTTER’S REQUEST TO STAY AND FURTHER DELAY PROCEEDINGSIN THE TRIAL COURT SHOULD BE DENIED. Sutter requests that this Court stay all proceedings in the superior court pending a final disposition of its Petition for Review. Sutter argues that without such a stay, it would suffer undue burden because it would be requiredto litigate proceedings that may prove entirely unnecessary. (Pet. for Review at 24-25.) Consistent with its practice in obtaining a blanket stay from the reviewing court below,Sutter failed to inform this Court that Dr. Fahlen has a pending claim against Defendants (for interference with his contractual relations with the Gould Medical Group) that was not subject to their anti-SLAPP motion. This Court ruled in Varian Medical Systems, Inc. v. Delfino, (2005) 35 Cal.4" 180, 189, 195, n.8, that a plaintiff is entitled to proceed in the trial court with causes of action not affected by the appeal of an anti- SLAPP motion denial. Dr. Fahlen is therefore entitled to proceed with discovery in the trial court on his fourth cause of action. Sutter’s deceptive argument for a blanket stay ofproceedings should be rejectedin its entirety. This Court should not issue a stay of Dr. Fahlen’s First and Second Causes ofAction, either. It has been more than a year and one-half since Dr. Fahien filed his action and he has yet to obtain one item of discovery 33 from the Defendants. Another stay of discovery will result in a loss of evidence, as witnesses have actual or claimed loss ofmemory aboutthe events in question. (Schumpert v. Tishman Co. (1988) 198 Cal. App. 3d 598, 606.) Another lengthy delay of discovery would violate Dr. Fahlen’s right to due processand fair trial. (See, Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 37 Cal.App.4th 855, 867-68 (literal application ofthe discovery stay and the 30-day hearing requirement of Code of Civil Procedure section 425.16 could adversely impact a plaintiffs due processrights.) A stay should also be denied because Dr. Fahlen andhis patients are suffering irreparable harm from the unlawful termination ofhis hospital privileges. Although Dr. Fahlen has hospital privileges at Doctors Medical Center, his patients may have to be admitted to Memorial Medical Center in emergencies, or may be admitted to Memorial by physicians in other specialities or because of insurance reasons. Asa result, Sutter’s termination of Dr. Fahlen’s privileges causes an ongoing interference with his treatment ofhis patients. (See Exhibit B, Plaintiff's Motion to Expedite Appeal, pp. 5-7.) Any further delay of the trial court proceedingswill lengthen the time before Dr. Fahlen can obtain reinstatement ofhis privileges at Memorial. Sutter has provided no case law or other authority to support its request for a stay of trial court proceedings. Rather, Sutter relies upon the 34 declaration of Sutter’s counsel, Glenda Zarbock, to support its request for stay. (Petition, Exhibit B.) The declaration by Ms. Zarbock alleges that Dr. Fahlen has “pressed” Sutter to provide discovery. That allegation is untrue. (Exhibit A, Declaration of Stephen D. Schear in Opposition to Defendants’ Motion for a Stay.) More importantly,it is irrelevant to the question ofwhether a stay should be granted. Dr. Fahlen has a fundamental and vested protected property right to practice his profession and cannot fully exercise that right without access to hospitals. (Anton v. San Antonio Community Hospital (1977) 19 Cal.3d 802, 824) Sutter has already wrongfully taken that property right for nearly two years. Dr. Fahlen should be permitted to proceed with his lawsuit in the trial court, especially given the fact that his fourth count was indisputably notat issue in Sutter’s appealor Petition for Review. In the event that this Court decides to grant Sutter’s request for a stay, Dr. Fahlen respectfully requests an expedited appeal before this Court for the reasons stated above and in his Motion for Expedited Appeal, Exhibit B to this Answer. CONCLUSION The decision of the Court of Appeal on the issue of Section 1278.5 exhaustion was well-reasoned and followed this Court’s precedent and does not require review by this Court. This Court should therefore deny review 35 and permit Dr. Fahlen to proceed with his action in Superior Court without further delay. Dated: October 15, 2012 Respectfully submitted, Sk ss= STEPHEN SCHEAR, Bar No.83806 JENNY HUANG,Bar No.223596 Attorneys for Respondent/Plaintiff Mark 36 Fahlen, M.D. CERTIFICATE OF WORD COUNT I, Stephen Schear, am duly licensed to practice before the Courts of California and am the attorney for Respondent Mark Fahlen, M.D.inthis action. I certify that the foregoing Answerto the Petition for Review does not exceed 8,400 words including footnotes. Relying on the computer programusedto prepare the brief, the exact number of words in the Answer to the Petition for Review totals 8,349 words. I declare under penalty ofperjury under the laws ofthe State of California that the foregoing is true and correct. STEPHEN SCHEAR Date: October 14, 2012 37 O o C o 4 H D N H & 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ec ae ae se en en es I, Stephen D.Schear, declare: 1. Iam oneofthe attorneys who represent Dr. Mark Fahlenin this action. This Declaration is submitted in opposition to the Request for Stay made by Defendants Sutter Central Valley Hospital and Steve Mitchell (“Sutter”) in conjunction with the Petition for Review in the Supreme Court. 2. In support of the Request for a Stay, Defendants’ counsel Glenda Zarbock claims that “[o]n August 27, 2012, counsel for Dr. Fahlen pressed for Defendants to respondto special interrogatories and documentrequests that had been pending before imposition of the stay.” 3. This statement by Ms. Zarbock is highly misleading, to the point of being intentionally deceptive. 4. After the Court of Appeal’s decision on August 14, 2012, counsel for Dr. Fahlen did nothing to “press” for discovery. On August 21, 2012, Ms. Zarbock called me and informed methat Sutter had changed attorneys and that she and her law firm HansonBridgett were now representing Sutter. She stated that she had not yet received the case files, but she understood that discovery was pending. Her comments indicated that she knew that the Court ofAppeal hadlifted its stay of trial court proceedings. She stated she wanted to discuss the timing of discovery and Sutter’s response to Dr. Fahlen’s First Amended Complaint which had been outstanding when the Court ofAppeal imposed the stay. I suggested weset a time to meet and confer the following week, so that Ms. Zarbock would have time to review the file and then we could talk about a reasonable schedule for production of discovery. Ms. Zarbock confirmed our phone conversation in a letter dated August 22, 2012, attached as Exhibit C to this declaration. The letter confirms that we had talked about timelines to move the case forward. 5. We then had a phone conference on August 27, 2012. In that phonecall, Ms. Zarbock’s statements indicated that she understood that the stay of discovery had been lifted by the Court of Appeal’s opinion. She indicated that she hadstill not received the files from Sutter’s previous attorneys. I suggested that she send me a written proposal for Decl. of Schear Opposing Request for Stay in Fahlen v. Sutter Central Valley Hospitals, et al. B N oO o O o N N HD A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 a timeline for producing discovery and she agreed to do so. | stated that Dr. Fahlen had not yet received any discovery, a year and one-half after the complaint had beenfiled, and we would like to proceed with discovery, but that I also did not want to jamher given that she was newto the case. 6. On August 30, 2012,I received a letter from Ms. Zarbock indicating that Sutter had changedits position and decided that the Court of Appeal’s decisionlifting the stay was not final and that the stay therefore remained in place until September13, 2012, at the earliest. A copy of Ms. Zarbock’sletter is attached hereto as Exhibit D. 7. 1 did not respondto thatletter, because I believed it not worth creating a dispute about discovery before September 13, 2012. I decided to wait andsee if Sutterfiled a Petition for Reviewbefore raising discovery issues. 8. Ms. Zarbock’s claim that Dr. Fahlen has requested “voluminous” documents ts also misleading. As Exhibit 1 to Ms. Zarbock’s declaration demonstrates, Dr. Fahlen only propounded twointerrogatories to Sutter before the first stay took effect. As Exhibit 2 to Ms. Zarbock’s declaration demonstrates, Dr. Fahlen’s First Request for Production of Documents, consisting of 26 requests, is a reasonable and typical initial request for production of documents, focused on the documents necessary to proceed with the litigation. 10. Exhibit C is a true and correct copy of Dr. Fahlen’s Motion to Expedite Appeal which was filed in the Court of Appeal on September 12, 2012. It sets forth facts demonstrating that Dr. Fahlen and his patients are suffering ongoing irreparable harm because of the termination of Dr. Fahlen’s hospital privileges. Dr. Fahlen’s motion to expedite his appeal was denied in the Court of Appeal. 11. If this Court imposes anotherstay on Dr. Fahlen’s superior courtligitation, it will be highly prejudicial toDr. Fahlen. The termination of Dr. Fahlen’s privileges took place in January 7, 2011, 21 months ago. The termination was based on events dating back to 2004, more than 8 years ago. Dr. Fahlen has been unable to obtain any discovery concerning his termination or the events leading up to his terminationdespite filing his Decl. of Schear Opposing Request for Stay in Fahlen v. Sutter Central Valley Hospitals, et al. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 o o e N N DB O U H S e W Y W N lawsuit in superior court on March 9, 2011. Another stay will cause evidenceto be lost as the memories of witnesses fade or because witnesses will be able to more plausibly claim that they have forgotten events even if they do rememberthose events. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on October 14, 2012, at Oakland, California. yANS D. Schear “ Decl. of Schear Opposing Request for Stay in Fahlen v. Sutter Central Valley Hospitals, et al. — O o 6 1 D H A & W H W N 15 16 18 19 20 21 22 23 24 25 26 27 28 STEPHEN D. SCHEAR State Bar No. 83806 | Law Office of Stephen Schear 2831 Telegraph Avenue Oakland, California 94609 (510) 832-3500 JUSTICE FIRST, LLP | Jenny C. Huang | State Bar No. 223596 2831 Telegraph Avenue Oakland, CA 94609 Telephone: (510) 628-0695 Attorneys for Plaintiff MARK T, FAHLEN, M.D. COURT OFap,FIFTH APPELLATE DistrictFILED SEP 12 201 Deputy IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA IN AND FORTHE FIFTH APPELLATE DISTRICT MARK T. FAHLEN,M._D., Vv. 17| SUTTER CENTRAL VALLEY HOSPITALS AND STEVE MITCHELL, Plaintiff and Respondent, i Defendants and Appellants. Appellate No. F063023 Stanislaus Superior Court Case No. 662696 PLAINTIFF DR. MARK FAHLEN’S MOTION TO EXPEDITE APPEAL PLAINTIFF DR. MARK FAHLEN’S MOTION TO EXPEDITE APPEAL Motion to Expedite Appeal in Fahien v. Sutter Central Vailey Hospitals, etal. — O o f o N N D D D H S S W Y W — _ = = m Ne o = & 13 14 15 16 17 18 19 20 21 22 | 23 24 25 26 27 28 NOTICE OF MOTION AND GROUNDSFORMOTION Pursuantto California Rule of Court 8.240, Plaintiffand Respondent Mark Fahlen, M.D. hereby movesfor an order for calendar preference in the Court ofAppeal, because failure to expedite the appeal will jeopardize the health and lives ofDr. Fahlen’s patients, due to Defendants’ interference with Dr. Fahlen’s ability to treat his patients. Plaintiffand Respondent requests an expedited briefing schedule and calendar preference for oral argument. Defendant Sutter Central Valley Hospitals (“Sutter”) owns Memorial Medical Center, a Modesto hospital where Dr. Fahlen had privileges to practice medicine for over seven years, until January 7,2011. Defendant Steve Mitchell is and was the ChiefOperating Officer at Memorial Medical Center. | Dr. Fahlen’s lawsuit contends that Defendants retaliated against him for his complaints i about substandard and dangerous nursing care by (1) having him fired from his medical group; (2) threatening him for the purpose ofcoercing him to leave town; (3) instigating hospital peer review proceedings, and (4) taking away his hospital privileges at Memorial Medical Center (MMC),located in Modesto, California — despite the fact that he won his medical staff Judicial Review Committee hearing. Dr. Fahlen seeks reinstatement ofhis hospital privileges and monetary damages pursuant to Health and Safety Code section 1278.5 and other causes ofaction. (Decl. of Stephen D. Schear, Exhibit A, Dr. Fahlen’s complaintin this action.) Defendants have appealed from the Superior Court’s denial ofan anti-SLAPP motion they filed pursuant to Code of Civil Procedure section 425.16. Under Health and Safety Code section 1278.5, the Legislature has expressly provided the remedy ofreinstatement. However, the effectiveness of that remedy can be eviscerated by the Defendants using the strategy of delay. Sutter’s termination ofDr. Fahlen’s privileges and its delaying tactics interfere with Dr. Fahlen’s legally protected fundamental property interest in practicing medicine. It has already been eight months since Dr. Fahlen's termination and the litigation seeking reinstatement has not even reached the discovery stage. The delay does not only affect Dr. Fahlen’s legally recognized property interestin practicing medicine. Sutter’s termination of Dr. Fahlen’s privileges to practice at MMCis also Motion to Expedite Appeal in Fahien v. Sutter Central Valley Hospitals, et al. — , o w oO o N N B D w e S& S W L Y 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 jeopardizingthe health andlives of severelyill patients and will continue to do so unless and until the courts reinstate Dr. Fahlen’s privileges at MMC. Dr. Fahlen’s current inability to treat his nephrology patients at MMChas already caused significant damage to one patient and | compromised the medical care of other patients. More patients will have their health and safety compromisedifthis Court fails to expedite this appeal. STATEMENT OF FACTS.' Dr. Fahlen’s competence and qualifications are unquestioned, Dr. Fahlen is Board-Certified by the American Board ofInternal Medicine in both internal medicine and nephrology (the sub-specialty which diagnoses and treats kidney problems). He has practiced nephrology for eight years in Modesto, California. He has been elected twice as Chairman ofthe Department ofMedicine at Doctors Medical Center, a hospital in Modesto, and he currently serves in that position, in which he has quality assurance and administrative responsibility for over 140 physicians. He served as the Vice-Chairman ofthe Department of Nephrology at Memorial Medical Center in 2007 until May, 2008. Healso serves on the Board ofDirectors of Stanislaus County’s Community Health Center after being appointed by the Stanislaus County Board of Supervisors to that position. He was recently nominated to serve as Vice-Chairman ofthe Board ofthe Community Health Center. Dr. Fahlen also currently serves as the medical director ofthe Ceres Dialysis Center. He has also served as the medical director ofthe Merced Dialysis Center and Delta Sierra Dialysis in Stockton. Dr. Fahlen’s clinical competence as a physician has never been questioned by Defendants. (Decl. of Schear, Exhibit | B, Testimony of Mitchell, pp. 703, 835; and Exh. J, Decl. ofMark Fahlen, M.D., FJ 1-2.) Factual Background Regarding Sutter’s Termination ofDr. Fahlen’s Privileges. Dr. Fahlen complained about serious nursing errors at Memorial Medical Center (MMC) on numerous occasions over a four year period dating from January 2004 through April 2008. His complaints arose from nurses deliberately disobeying his orders; nurses not following or 1 These facts are presented notto address the merits ofthe appeal ofthe anti-SLAPP motion, but to demonstrate that an expedited appeal is necessary and appropriate to restore as quickly as possible Dr. Fahlen’s ability to treat all of his patients. Motion to Expedite Appeal in Fahlen v. Sutter Central Valiey Hospitals, et al. — te h m p m m e m & W w t o — - © 15 o O f e N B N H H e e W Y W N | changinghis orders without his knowledge or consent; and nurses acting in an insubordinate manner, including refusing to correct problems described by Dr. Fahlen after being told about those problems. (Decl. of Schear, Exh. J, 43.) Details concerning the nature ofDr. Fahlen’s complaints are contained in paragraphs 11 through 27 ofhis Complaint in this action, Exhibit A to Decl. of Schear. Defendants retaliated byfirst getting Dr. Fahlen’s employer, the Gould Medical Group (“Gould”), to terminate Dr. Fahlen, by giving Gould’s leadership unsubstantiated information about alleged behavioral problemsofDr. Fahlen, without his knowledge or consent. At the time that Defendant Mitchell gave Gould information about alleged problems that had occurred with Dr. Fahlen in April, 2008, Dr. Fahlen had not yet even been notified aboutthe incidentreports that had been lodged concerningthose incidents. Most ofthe alleged “behavorial” problems involved incidents in which Dr, Fahlen had complained about nursing errors. Gouldfired Dr. Fahlen “without cause”. Defendant Mitchell admitted in sworn testimony during Dr. Fahien’s Judicial Review Committee (JRC) hearing that he gave Gould negative information about Dr. Fahlen because he wanted to get Dr. Fahlen fired from his job, so that the Defendants would not have to go through a medical staffhearing to get rid ofDr. Fahlen. Mr. Mitchelltestified that 16 physicians that were fired by Gould Medical Group usually left town. (Decl. of Schear, Exh. B, 17 18 19 20 21 22 23 24 25 26 27 28 pp. 739-743; 772-777; Exh. C, Testimony of Gandy, p. 154; Exh. J, 4 4.) WhenDr. Fahlen decided to stay in Modesto after being fired, Mr. Mitchell threatened him with a peer review investigation and a report to the Medical Board ofCaliforniaifhe did not leave town. When Dr. Fahlenstill refused to leave Modesto, Mr. Mitcheli informed MMC’s Chief Executive Officer David Benn in an email that Dr. Fahlen “doesnot get” that he was going to lose his privileges. Mr. Benn then instructed Mr. Mitchell to initiate peer review proceedings against Dr. Fahlen. Mr. Mitchell then encouraged the leadership ofthe medical staff ofMMC to investigate Dr. Fahlen and to recommend the non-renewal ofDr. Fahlen’s privileges, based primarily on the manner ofDr. Fahlen’s complaints about problems with nursing care. The MMCMedical Executive Committee (MEC) did bring charges against Dr. Fahlen based on those incidents and a medical staff Judicial Review Committee hearing ensued. The charges against Motion to Expedite Appeal in Fahlen v. Sutter Central Valley Hospitals, et al. 18 19 20 21 22 23 24 25 26 27 28 Dr. Fahlen involved claimsof“inappropriate” behavior such as allegations that Dr. Fahlen had “adopted a tone”with a nurse, or “spoke in a condescending manner”and other alleged lapses from gentility. (Decl. of Schear, Exh. B, pp. 783-790, Exh. D, email correspondence between Dave Benn and Steve Mitchell; and Exh.J, J 4.) The California Supreme Court has repeatedly held that a hospital cannot deny a physician’s privileges on behavioral groundsunless it can prove that the physician’s alleged “inability to ‘work with others’ in the hospital setting is such as to present a real and substantial i dangerthat patients treated by him might receive other than a ‘high quality ofmedical care’ at the facility...” (Miller v. Eisenhower Medical Center (1980) 27 Cal.3d 614, 628-629; see also, (Rosner v. Eden Township Hospital Dist. (1962) 58 Cal.2d 592, 598. In 2009, the California Supreme Court affirmed that standard in Mileikowsky v. West Hills Hospital andMedical Center (2009) 45 Cal.4th 1259, 1271.) ... [I]t... is settled that-a physician may not be deniedstaff privileges merely becauise heor she is argumentative or has difficulty getting along with other physicians or hospital staff, when thosetraits do notrelate to the quality of medical care the physician is able to provide. At Dr. Fahlen’s JRC hearing, Dr. Todd Smith, the hospital chief ofstaff, and Dr. Michael Cadra, the Chairman ofthe Ad Hoc Committee that had investigated Dr. Fahlen, and Dr Paul Golden, the former Chair ofthe MMC nephrology department, all testified that no conduct ofDr. Fahlen had ever impaired the quality of care provided to any patient. There was no evidence of any complaint from any nurse about any conduct ofDr. Fahlen for more than two years before the end ofthe hearing. The six physician members of the JRC,all ofwhom had been unilaterally appointed to the JRC by the MMC Medical Executive Committee over Dr. Fahlen’s objections, foand unanimously that Dr. Fahlen’s privileges should not be terminated. The hospital’s Medical Executive Committee accepted that opinion and did not appeal it. The bylawsofthe medical staffofMMC required Defendant Sutter to accept the decision ofthe JRCif it was supported by substantial evidence, which it plainly was. Nonetheless, on January 7, 2011, Defendant Sutter terminated Dr. Fahlen’s privileges at MMC. (Decl. of Schear, ¥ 5; Exh.E,testimony of Smith,p. 633: Exh.F, testimony of Cadra, pp. 283-284; Exh. G,testimony of Golden, p. 986; Exh. H, MMCbylaw section 4.5-8(b)(2); Exh.I, Fahlen Briefto Sutter Board, and Exh.J, 4 4.) Motion to Expedite Appeal in Fahlen v. Sutter Central Valley Hospitals, et al. r w O o f o t N DB D A H D e W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 | Because of Sutter’s action, Dr. Fahlen can no longer provide medical care to those ofhis patients admitted to MMCbyother physicians, in emergencies or due to insurance or other financial issues. As a result, those patients are denied the quality and continuity ofcare that Dr. Fahlen had previously provided to them. As a nephrologist, many of Dr. Fahlen’s patients suffer from chronic life-threatening kidney disease. Because Dr. Fahlen is familiar with the condition and history ofhis patients, he is in the best position to provide high quality nephrology care to them. The following cases will serve as examples ofhow Sutter’s action has endangered and continues to endangerthe health and safety ofpatients. (Decl. of Schear, Exh. J, { 6.) Sutter terminated Dr. Fahlen’s privileges on January 7, 2011, without advance notice or warning of any kind, by delivering a letter to Dr. Fahlen. At the time Sutter terminated his privileges, he had two patients in the hospital under his care and treatment, both ofthem severely j| ill. One ofthem, Michael Banks, was a dialysis patient with kidney failure who was in the intensive care unit with severe multi-system problems which endangeredhislife. When Sutter terminated Dr. Fahlen’s privileges, he was forced to stop giving Mr. Banks medical care, even though he was Mr. Banks’ nephrologist and most familiar with his kidney problems and i treatment. The second patient, Robert Martinez, was hospitalized with a case ofbacterial pneumonia. Because Mr. Martinez is a kidney transplant recipient, he is highly susceptible to both common andrare infections which could cause his death ifnot treated appropriately. Dr. Fahlen admitted Mr. Martinez to the hospital and at the time ofthe admission he was the only physician caring for Mr. Martinez. When Sutter terminated Dr. Fahlen’s privileges, he was forced to stop taking care of Mr. Martinez, even though he had admitted him; he was the physician most familiar with his history, disease, care and treatment; and Mr. Martinez wanted Dr. Fahlen to be his physician during the hospitalization. It was completely unnecessary for Sutter to terminate Dr. Fahlen’s privileges without advance notice while he had twopatients in the hospital, given that there was no question about his competence. By taking that action, Sutter unnecessarilyjeopardized the lives of both Mr. Banks and Mr. Martinez. (Decl. of Schear, Exh J, qf 10-11; and Exhs. K and L, Decls, ofBanks and Martinez.) Patient D.P. who has chronic kidney disease, has been a patient ofDr. Fahlen for three Motion to Expedite Appeal in Fahl/en v. Sutter Central Valley Hospitals, et al. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 years? In August, 2011, he was admitted into MMCbyhis primary care physician. Duringthat admission, Dr. Fahlen could not treat D.P. because of Sutter’s termination of his privileges. D.P. was seen by another nephrologist who placed a stent in D.P.’s kidney, a procedure with no proven benefit and significant risk. As a result ofcomplications from his surgeries, D.P.’s condition ll deteriorated and he had to be admitted to the Intensive Care Unit. He was in the hospital at least 14 days and required multiple blood transfusions. D.P.’s health and safety were adversely impacted by Sutter’s termination ofDr. Fahlen’s privileges. (Decl. of Schear, Exh.J, 7.) Patient J.V. was Dr. Fahlen’s patient for about two years. She was admitted to MMC by her primary care physician following a stroke in July, 2011. Dr. Fahlen was unableto treat J.V. and she ultimately died ofcolitis that was probably caused by the administration ofantibiotics to J.V. | Dr. Fahien’s inability to provide treatment, advice and support to the patient and her family during this patient’s admission at MMC,because ofhis lack ofprivileges, adversely impacted the patient’s care during the hospitalization. (Decl. of Schear, Exh.J, { 8.) Jackie Price is a 66 year old patient with chronic kidney disease that Dr. Fahlen has been | managing medically withoutputting the patient on dialysis. Because Dr. Fahlen has been able to manage Ms.Price withoutdialysis, the patient has been more comfortable, since dialysis is a difficult procedure to endure, especially for long periods oftime. In addition, avoiding dialysis also prevents the potential side effects of dialysis which include pain, bleeding, infection, significantly worsened quality oflife with high rates ofdepression, heart attack, stroke and death. In May, 2011, another physician admitted Ms. Price to MMC. The nephrologistassigned to her case at MMC,who had nopriorrelationship with Ms. Price, tried to persuade her to go on li dialysis (which is highly reimbursed by Medicare) even though dialysis was not indicated. The son of Ms.Price called Dr. Fahlen, who advised him that dialysis did not appear indicated based on the patient’s condition. Ms. Price and her son declined the dialysis treatment. After she was discharged from MMC,she returned to Dr. Fahlen’s care and has been able to avoid dialysis for 2 Fictitious initials are used to protect the confidentiality of “D.P.” and “J.V.”, because Dr. Fahlen has not yet obtained consentto use their names in public documents. The other patients described herein have consentedto the use of their names and medical conditions. Motion to Expedite Appeal in Fahlen y. Sutter Central Valley Hospitals, etal. w o o e N I A A F F Y D N e 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the three months following her admission to MMC.This patient was able to avoid significant harm only because the patient refused the recommendation ofthe nephrologist provided by MMC.(Decl. of Schear, Exh. J, { 9; Exh. M, Decl. ofPrice.) The termination ofDr. Fahlen’s privileges at MMCthreatens the lives ofall ofhis patients, because any ofthem might be taken to MMCin an emergencyor admitted to MMC by another physician, where they will be seen by nephrologists without a prior relationship with the patient, who are unfamiliar with the patients’ conditions and histories, and who are sometimes less competent than Dr. Fahlen. The longer Dr. Fahlen is unable to practice at MMC,the more endangered will be the health andlives ofhis patients. (Decl. of Schear, Exh.J, { 12.) P ural Dela ich Have Alr Occ in this Case: On March 9, 2011, two months after the decision by Sutter’s Board to terminate Dr. || Fablen’s privileges, he filed this action against Defendants pursuant to Health and Safety Code section 1278.5, which authorizes a whistleblower physician to pursue a claim for reinstatement and damagesfor retaliatory actions taken by a health care entities and their employees. Since then, Defendants have taken multiple actions which have delayed the trial court proceedings: 1. Defendants requested a two weekcontinuanceoftheir time to respondto the complaint, to which Plaintiff agreed as a professional courtesy. 2. On April 26, 2011, Defendants demurred to the complaint on the groundthat Dr. Fahlen was required to first obtain a writ of mandate overturning Sutter’s decision terminating his privileges, before filing a suit pursuant to Health and Safety Code section 1278.5. Defendants did not demur to Dr. Fahlen’s Fourth Cause of Action on statute oflimitations groundsat that time. The Superior Court overruled the demurrer on June 30, 2011. 3. On May 9, 2011, Defendants filed the anti-SLAPP motion at issue in this appeal. As a result of Defendants’ motion, Plaintiff's discovery was automatically stayed. The Superior Court denied the anti-SLAPP motion on the grounds that the decision to take away Dr. Fahlen’s privileges was not protected activity and that Dr, Fahlen had established a primafacie case for the challenged causes of action in any event. Pursuant to Code of Civil Procedure sec. 425.16, subd. g, the discovery stay was automatically lifted upon the filing ofthe Notice ofEntry ofOrder on Motion to Expedite Appeal in Fahlen v. Sutter Central Valley Hospitals, et al. “ a D N W n S& S W W K D o C 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Anti-SLAPP motion. 4. On July 8, 2011, Defendants refused to provide any discovery responsive to Plaintiff's First Request for Production ofDocuments and First Set ofInterrogatories, which had been . served on April 5, 2011. Defendants asserted that they were not obligated to provide discovery due to their intention to appeal the denial of their anti-SLAPP motion. Plaintiffthen broughta motion to compel discovery which was filed on July 19, 2011. The motion was set for hearing on | August 24, 2011. 5. On July 26, 2011, Defendants filed their Notice ofAppeal in this matter. They then used the pending appeal as their primary ground for opposing Plaintiff's Motion to Compel Discovery. On or about August 2, 2011, they also filed a motion for a protective order prohibiting Plaintifffrom undertaking discovery on the anti-SLAPP causesofaction based on the same theory. 6. On August 23, 2011, the day before the hearing on Plaintiff's Motion to Compel, Defendants filed a motion forjudgmenton the pleadings on Plaintiff's fourth cause ofaction on a statute of limitations ground. On August 24, 2011, at the hearing on Plaintiff's Motion to Compel Discovery and Defendants’ Motion for a Protective Order, Defendants argued that the hearing should be continued to the same date as their Motion for Judgment on the Pleadings. The Superior Court then agreed to continue the hearing on the Motion to Compel and on the Motion for Protective Order to September 20, 2011. If Defendants’ Motion for a Protective Order and Motion for Judgmenton the Pleadings are granted, Plaintiffwill not receive any discovery until this appeal is completed. Even if Plaintiff's motion to compel discovery is granted, Plaintiffwill not receive any discovery from Defendants before October, 2011, six months after Dr. Fahlen’s discovery requests were served. According to the Court of Appeal’s opinion in Grewal v. Jammu (2011) 191 Cal.App.4th 977, 1003, an appeal takes 19 to 26 months, whatever its lack of merit. Therefore, ifthis motion to expedite is not granted, Dr. Fahlen will be denied his right to treat and care for his patients at MMCfor more than two years, significantly endangering his patients who are admitted to MMC. Motion to Expedite Appeal in Fahlen v. Sutter Central Valley Hospitals,et al. L e p o m i s A E ie sh an pa le as ea x o n e r o n S o w e o S N HO U l U M W A L G U l U C U N w O W M NH N N H NH N P O N D B R R m e t l c o o N N D A OU R U W w D L U N D l l C U r E l C U C O l C l U C O C l C l U O C U C U M N S C O D N I R e O C U M e N D C Dr. Fahlen and other physicians have a fundamental and vested protected property right to practice their profession and cannotfully exercise that right without access to hospitals. (Anton v. San Antonio Community Hospital (1977) 19 Cal.3d 802, 824.) Nonetheless, under California’s current system ofpeer review, Sutter can prevent the reinstatementofDr. Fahlen’s privileges for years by using procedural maneuvers such as Defendants’ pending appeal ofthe denial ofan anti- SLAPP motion,in order to prevent ajudicial decision on the merits of its actions. It has now ‘been seven months since Sutter terminated Dr. Fahlen’s privileges withoutvalid legal grounds for doing so, resulting in danger and damage to Dr. Fahlen’s patients admitted to MMC. Despite filing his lawsuit in March, 2011, Dr. Fahien is hardly out ofthe box in terms ofpursuingthis lawsuit, as a result of Defendants’ various motions and this appeal, as described above. Dr. Fahlen’s problem is not unique. Health Care systems andtheir attorneys have learned that they can effectively get rid of physicians they don’t want with impunity, because even ifthey eventually lose in court, it will take years and years (and the expenditure oflarge amounts oflegal resources) for the physician to regain his privileges. The ongoing litigation in this Appellate District between Brenton Smith and Adventist Health Care System/West is one example of a hospital’s ability to prevent a physician from maintaining hospital privileges despite years of successful litigation by the physician. Dr. Smith was first summarily suspended in 2002 by an affiliate ofAdventist Health Care system. Selma Community Hospital, an Adventist hospital, terminated his privileges in 2005 and it took him three years to have that decision reversed in the Court ofAppeal. See Smith v. Selma Community Hospital (2008) 164 Cal.App.4th 1478,1498- 1499. However, even after winning in the Court ofAppeal, the Selma Hospital continued to refuse to grant him privileges based on positions that were without any legal merit. Dr. Smith was required to obtain a preliminary injunction from the superior court in 2008 in order to regain his privileges and he had to litigate the merits ofthat preliminary injunction in another appeal. Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 734-735. Dr. Smith filed a civil suit for injunctive relief and damages in 2007. As here, the defendants filed an anti-SLAPP motion and appealed the denial ofthat motion. The defendants’ appeal was not rejected by the Motion to Expedite Appeal in Fahlen y. Sutter Central Valley Hospitals, et al. w o o e N N D N U H S F W Y N Y N y N N W w N O N H N O N H H R N O m m m l l t a o S N D H U M F F B W N H & § S F C O B e R Q K H N H & W D P B = O O Court ofAppeal until November 16, 2010. Smith v. Adventists Health System/West (2010) 190 Cal.App.4th 40, 47-49.) Dr. Smith is presumablystill litigating in the superior court, nine years after his first summary suspension, six years after he lost his privileges,after at least four different published appellate decisions in his favor. Although the numberofpublished opinions in Smith may be unique,the ability of a health care system to delay for years ajudicial determination on a denial ofprivileges is not unusual. In the recent case ofEl-Attar v. Hollywood Presbyterian Medical Center (August 19, 2011) 198 Cal.App.4th 664, the hospital unlawfully terminated Dr. El-Attar’s privileges on September8, 2006. He was not granted a new hearing by the Court ofAppeal until August 19, 2011, almost five years later. In Mileikowsky v. West Hills Hospital andMedical Center, supra, 45 Cal.4th at 1266, the physician’s JRC hearing was unlawfully terminated by the hearing officer on March 27, 2003. Dr. Mileikowsky was unable to obtain a decision granting him a new hearing until April 6, 2009, six years later. Private health corporations have developed the ability to devastate or destroy a physician’s career by using legal delay as a primary weapon. Theycantake away a physician’s tight to practice to medicine with impunity, because they know that time andlegal resources are on their side. In the meantime,the patients ofphysicians whose privileges are wrongfully terminated suffer the consequences. In this case, Dr. Fahlen’s competence is unquestioned, he won his JRC hearing, and the termination ofhis privileges was unlawful under the hospital’s own bylaws. Dr. Fahlen’s patients face the prospectofinjuries, unnecessary procedures, disability or death dueto their inability to use him as their physician at Memorial Medical Center. The Court ofAppeal should therefore expedite this appeal in order to reduce the damageto the health and safety ofDr. | Fahlen’s patients that is being caused by Defendants’ actions. Dated: September 9, 2011 Respectfully submitted, oon_ Stephen D.Schear | Jenny Huang Attomeys for Defendant Mark Fahlen, MLD. Motion to Expedite Appeal in Fahlen v. Sutter Central Valley Hospitals, et al. -10- ) HansonBridgett GLENDA M. ZARBOCK PARTNER DIRECT DIAL (415) 995-5088 DIRECT FAX (415) 995-3432 E-MAIL gzarbock@hansonbridgett.com August 22, 2012 VIA E-MAIL to steveschear@gmail.com Stephen D. Schear, Esq. Law Office of Stephen D. Schear 2831 Telegraph Avenue Oakland, CA 94609 Re: Fahlen v. Sutter Central Valley Hospitals, etal. Stanislaus County Superior Court Action No. 662696 Dear Mr. Schear: It was a pleasure to speak with you yesterday. This will confirm that we have scheduled a conferencecall for Monday, August 27, 2012 at 11:00 a.m. to discuss the current status of Dr. Fahlen's state court action in light of the recent appellate court rulings, to review the status of the pleadings and outstanding discovery, and to reach an mutually-acceptable timeline for upcoming due datesin order to movethis matter forward, while affording my colleague Lori Ferguson and metime to familiarize ourselves with this matter, given our substituting into the case as counselthis week. As mentioned, we have yet to receive the casefiles from Arent Fox, but we expect to receive them,or at least someof them,later this week. Thecall-in number and password for the conferencecall are as follows: Access Phone Number: (800) 214-0037 Access Code: 9955088 Thank you for your consideration. | look forward to speaking with you again on Monday. Very truly yours, [ALieWigowieee Glenda M. Zarboc CC: Lori C. Ferguson, Esq. Hanson Bridgett LLP 425 Market Street, 26th Floor, San Francisco, CA 94105 Aansanhridgetticom 4692728 1 GLENDAM. ZARBOCK PARTNER DIRECTDIAL (415) 995-5088 DIRECT FAX (415) 995-3432 E-MAIL gzarbock@hansonbridgett.com )) HansonBridgett August 30, 2012 VIA E-MAIL Stephen D. Schear, Esq. Law Office of Stephen D. Schear 2831 Telegraph Avenue Oakland, CA 94609 Jenny C. Huang, Esq. Justice First, LLP 2831 Telegraph Avenue Oakland, CA 94609 Re: Fahlen v. Sutter Central Valley Hospitals, etal. Stanislaus County Superior Court Action No. 662696 Dear Counsel: Since our telephone call with Mr. Schearthis past Monday, | have spent more time assessing the status of Dr. Fahlen's state court action in light of the appellate court decision filed on August 14, 2012. Under California Rules of Court, rule 8.264(b)(1), the appellate court's decision is notfinal until 30 days after filing. Until that time has run, the decision may be modified. (Rule 8.264(c)(1).) Moreover, during this 30-day period and until the remittitur issues, the trial court lacks jurisdiction to act on the appellate court's decision. Accordingly, the appellate court's decisiontolift the stay will not take effect until after the remittitur issues, which will not occur until September 13, 2012, at the earliest. Based on the above-referenced authorities and the date on whichplaintiff filed the first amended complaint, it appears defendants’ responseto thefirst amended complaint will be due 14 days after the remittitur issues, at which time the stay on thetrial court proceedingswill belifted, absent a petition for Supreme Court review. In light of the foregoing, it would be premature to propose dates on which defendantswill respond to the first amended complaint and to the outstanding discovery. | suggest that we revisit these issues once the remittitur has issued. Until then, the stay ofthe trial court proceedings remainsin effect. Hanson Bridgett LLP 425 Market Street, 26th Floor, San Francisco, CA 94105 hansonbridgcitcom 4707876.1 Stephen D. Schear, Esq. Jenny C. Huang, Esq. August30, 2012 Page 2 If your analysis of these issues differs, please do not hesitate to forward any pertinent authorities and we would be happy to consider them. Thank you. Very truly yours, “ 4 = _. [AldadA)VIZUE. i i Glenda M. Zarbot cc: Lori C. Ferguson, Esq. 4707876.1 PROOF OF SERVICE Re: Sutter Central Valley Hospitals, et al. v. Fahlen, Case No. 8205568 I, the undersigned, hereby declare: 1. Iam citizen ofthe United States ofAmerica over the age of eighteen years. My business address is 2831 Telegraph Avenue, Oakland, California, 94609. I am nota party to this action. 2. On October 15, 2012, I served this documententitled Answerto Petition for Review by depositing a true and correct documentofthis document, with proper postage affixed forfirst class delivery, in an official depository underthe exclusive care and custody ofthe U.S. Postal Service within this State, addressed as follows: HANSON BRIDGETT LLP Attorneys for Appellants/Defendants Joseph M. Quinn Sutter Central Valley Hospitals Glenda Zarbock and Steve Mitchell Lori Ferguson 425 Market Street, 26" Floor San Francisco, CA Court ofAppeal ofthe State ofCA Court ofAppeal Fifth Appellate District 2424 Ventura Street Fresno, CA 93721 The Honorable Timothy Salter Superior Court Department 22 Stanislaus County Superior Court 801 10" Street Modesto, CA 95353 Jana DuBois, VP Legal Counsel Legal Counsel for Amicus Curiae California Hospital Association for Appellant 1215 K Street, Suite 800 Sacramento, CA 95814 Long X. Do Legal Counsel for Amicus Curiae California Medical Association for Respondent 1201 J. Street, Suite 200 Sacramento, CA 95814 I declare under penalty of perjury the foregoing is true and correct. ates Dated: October 15, 2012 Np fad f. TbePP NALA Oakland, California SIGRID HERR