Sisters of Charity Health Systems, Inc. v. Raikes ( 1999 )

JOHNSTONE, Justice.

These cases were combined and heard together. All three cases come to us on appeal, as a matter of right, from a ruling of the Court of Appeals denying Appellants’ petitions for a writ of prohibition. Specifically, Appellants in each case seek to prohibit the trial court from enforcing an order compelling discovery of peer review records in an underlying medical malpractice suit. The issue presented in all three cases is whether the peer review privilege of KRS 311.377(2) prohibits discovery of peer review records and material in medical malpractice suits. We find that the privilege does not extend to medical malpractice suits and affirm the Court of Appeals.'

The issue before the Court is to be decided as a matter of law. Thus, the facts of the underlying suits are not necessary to our determination of the issue at bar. However, we note one factual difference. Appellant Huxol argues that Judge Raikes did not attach a protective order to the order compelling discovery. On the other hand, Judge McAnulty’s order compelling discovery provides that, “Any and all peer review records shall be kept confidential. Distribution to anyone other than counsel is prohibited. Any such records submitted to [the] court file are to be kept under seal.” We note that Huxol does not argue that Judge Raikes denied a motion to attach a protective order to the order compelling discovery, or that he, Huxol, ever made such a motion. Thus, we clarify that a trial court’s refusal to grant a protective order for peer review material released pursuant to a discovery request is not at issue in any of these cases.

WRIT OF PROHIBITION

Appellees argue that a writ of prohibition is not an appropriate remedy. These cases come to us on appeal from a denial of the writ by the Court of Appeals. The decision whether to grant a writ of prohibition is entrusted to the sound discretion of the court. Southeastern United Medigroup, Inc. v. Hughes, Ky., 952 S.W.2d 195, 199 (1997). However, because the issue presented is one of law, our review of the appropriateness of the writ is not limited to an abuse of discretion standard. Id.

A writ of prohibition is an extraordinary remedy, and we have always been cautious and conservative both in entertaining petitions for and in granting such relief. Bender v. Eaton, Ky., 343 S.W.2d 799, 800 (1961). In order for a writ of prohibition to be appropriate in cases where jurisdiction is not challenged, a petitioner must show that: (1) he would have no adequate remedy on appeal; and (2) he would suffer great and irreparable injury if the trial court is acting in error and the writ is denied. Id. at 801. However, the showing of great and irreparable injury is not absolutely necessary. Id.

[I]n certain special cases this Court will entertain a petition for prohibition in the absence of a showing of specific great and irreparable injury to the petitioner, provided a substantial miscarriage of justice will result if the lower court is proceeding erroneously, and correction of the error is necessary and appropriate in the interest of orderly judicial administration. It may be observed that in such a situation the court is recognizing that if it fails to act the administration of justice generally will suffer great and irreparable injury.

Id. (emphasis in original).

At issue in Bender was whether the defendants-respondents could discover medical records and reports created by physicians, who had been consulted by the plaintiffs-petitioners in preparation for their underlying personal injury suit. Id. at 802. The Bender Court found that the petitioners had no remedy on appeal because, “[t]he injury suffered by petitioners, assuming their adversaries have no right to this disclosure under the Civil Rules, will be complete upon compliance with the order and such injury could not thereafter be rectified in subsequent proceedings in the case.” Id. at 802. Assuming that KRS 311.377 prevents disclosure of peer review material in the case at bar, we find that Appellants likewise have no adequate remedy on appeal. See Adventist Health Systems v. Trude, Ky., 880 S.W.2d 539, 541-42 (1994).

To show that they will suffer great and irreparable harm, Appellants argue that peer reviewers will be less candid if they know their views will be subject to discovery in medical malpractice suits. However, it has been the law of the Commonwealth for the past twenty-five years that peer review material is discoverable in medical malpractice suits. Thus, peer review participants have no present, valid expectation that their input into peer review proceedings will be shielded from discovery in a medical malpractice suit. In essence, Appellants’ arguments show what there is to gain from the granting of the writ, not what there is to lose if the writ is not granted.

The Bender Court found public policy to be the most compelling reason to entertain the writ, even though the petitioners had not met the second prong of the test. “[T]he proper construction and application of the Rule in question ... is important to the orderly administration of our Civil Rules .... Under these circumstances, a decision would be of value to the Bench and Bar of Kentucky.” Id. at 802. We find similar concerns in the issue presented in the cases at bar.

Despite five published cases, which span a quarter of a century and which all hold that peer review material is discoverable in medical malpractice suits, the issue continues to be htigated again and again at both the trial and the appellate levels in the Commonwealth. We find that an unequivocal decision on this issue necessitates a clear expression of our view. See Nazareth Literary & Benevolent Institution v. Stephenson, Ky., 503 S.W.2d 177, 178 (1973).

THE SECTION 51 PROBLEM

The controversy before us in these cases arises from the misreading or the misapplication of our precedent concerning whether KRS 311.377 prevents discovery of peer review documents and records in medical malpractice suits. The confusion stems from our decision in Sweasy v. King’s Daughters Memorial Hospital, Ky., 771 S.W.2d 812 (1989). However, to fully explain the origin of this confusion, we begin with the earlier case of McGuffey v. Hall, Ky., 557 S.W.2d 401 (1977).

In 1976, the General Assembly amended KRS 311.377 in Section 9 of a bih entitled, “AN ACT relating to health care malpractice insurance claims.” 1976 Ky. Acts, ch. 163. These amendments contained a privilege for peer review material and created the statute in substantially its present form.

In two combined declaratory judgment actions, the Franklin Circuit Court declared the 1976 Act unconstitutional. The judgment of the trial court was affirmed in McGuffey, supra. The McGuffey Court found, inter alia, that the subject-matter of Section 9 was not sufficiently related to the title of the Act, and, thus, violated Section 51 of the Kentucky Constitution.¹ McGuffey, 557 S.W.2d at 407.

In its analysis of the Section 51 issue, the McGuffey Court first determined that the title of the Act limited the subject matter of the Act to those subjects which had some reasonable relationship to medical malpractice claims or insurance. Id. at 406. It then construed the statute:

Although conduct that results in a malpractice claim may also eventuate in a peer review proceeding, the relationship between the two is purely coincidental. A peer review is not designed to serve any purpose of a malpractice claim, and to the extent that the confidentiality conferred upon it serves to protect those who participate in the proceedings, it is a protection against suits for defamation, not malpractice.

Id. at 407. Thus, the McGuffey Court’s construction of the statute was that the peer review privilege did not apply to medical malpractice suits. It then found that the statute was unconstitutional on its face because the statute had no reasonable relationship to medical malpractice claims or malpractice insurance. Id.

Presumably in response to the McGuffey decision, in 1980, the General Assembly reenacted KRS 311.377 in Section 33 of a new act entitled, “AN ACT relating to the establishment of certificate of need, licensing and regulation of health facilities and health services.” 1980 Ky. Acts, ch. 135. There were no changes made to the text of the statute. We addressed the issue of whether the peer review privilege of the 1980 version of the statute prevented discovery of peer review material in a medical malpractice suit in Sweasy, supra.

Unlike McGuffey, in which the constitutionality of the 1976 version of the statute was the only issue at bar, at issue in Sweasy were both the constitutionality and the application of the 1980 version of the statute. Sweasy, 771 S.W.2d at 816. It is important to note that the Sweasy Court did not construe the statute as applying to medical malpractice suits. Rather, the Sweasy Court only made the assumption that the statute applied to medical malpractice suits in order to analyze the constitutional issue. Id. at 813. (“With the possible exception of Section 33 (if interpreted to include a patient’s malpractice action), all thirty-five sections of the 1980 Act relate exclusively to the procedures described in the title.”) (Emphasis added). This point is important to understanding the correct interpretation of Sweasy’s holding:

The trial court correctly stated that the language of McGuffey v. Hall must mean either that the confidentiality privilege expressed in Section 2 of KRS 311.377 is limited to suits against peer review entities as referred to and protected against in Section 1 of the statute, or it violates Kentucky Const. Section 51. In either case, the trial court has correctly applied the mandate of our Court in McGuffey v. Hall, and the Court of Appeals ignored that mandate in an Order giving no reasons.

Id. at 816.

Thus, the Sweasy Court’s construction of KRS 311.377(2) is consistent -with the McGuffey Court’s construction of the statute. But unlike the McGuffey Court, the Sweasy Court did not find that the 1980 version of the statute was unconstitutional on its face; rather, it found that the statute would violate Section 51 of the Kentucky Constitution if it was applied to medical malpractice suits.

In response to the Sweasy decision, the General Assembly reenacted KRS 311.377 in 1990 under a new title without changing any of the text of the statute.² Apparently, the General Assembly mistakenly interpreted Sweasy as holding that the statute was unconstitutional on its face. We can find no other explanation to the Preamble of the 1990 Act, which begins, “WHEREAS, the protection afforded to peer review participants for review functions ... has been eliminated by the Supreme Court’s decision in Sweasy v. King’s Daughters Memorial Hospital, Ky., 771 S.W.2d 812 (1989) ....” 1990 Ky. Acts, ch. 271. Sweasy clearly did not eliminate the peer review privilege of KRS 311.377(2). At most, Sweasy limited the scope of the privilege.

Appellants give Sweasy the same mistaken interpretation. At the heart of Appellants’ argument is that McGuffey and Sweasy both held that KRS 311.377 was unconstitutional, and, thus, the 1990 reenactment of KRS 311.377 gives us the opportunity to interpret the statute de novo. However, as shown, Sweasy did not hold that the statute was unconstitutional. Rather, the Sweasy Court relied on the McGuffey Court’s construction of the statute to reach the holding that the privilege of Subsection 2 of the statute was limited to suits against peer review entities described in Subsection 1 of the statute. Thus, in order to reverse the Court of Appeals, we would have to overrule Sweasy and its construction of the statute.

While we disagree with Appellants that McGuffey and Sweasy have no application to the construction of the 1990 version of the statute, we do agree that those cases have no application to the constitutionality of the 1990 version of the statute. Because our decision rests entirely on statutory construction, we have no cause to reach the constitutional question. Rice v. Walls, 213 F.2d 693, 697 (6th Cir.1954).

THE SCOPE OF THE PRIVILEGE CREATED BY KRS 311.377

KRS 311.377(2) clearly creates a privilege for peer review material.³ The issue at bar only concerns the scope of the statute’s privilege.

We begin our analysis with the nearly universal rule that privileges should be strictly construed, because they contravene the fundamental principle that “the public ... has a right to every man’s evidence.” Trammel v. United States, 445 U.S. 40, 45, 100 S.Ct. 906, 912, 63 L.Ed.2d 186 (1980), quoting United States v. Bryan, 339 U.S. 323, 331, 70 S.Ct. 724, 730, 94 L.Ed. 884 (1950). Or, as we have stated recently, “broad claims of ‘privilege’ are disfavored when balanced against the need for litigants to have access to relevant or material evidence.” Meenach v. General Motors Corp., Ky., 891 S.W.2d 398, 402 (1995), citing United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974). Thus, claims of privilege are carefully scrutinized. Nazareth, 503 S.W.2d at 179 (1973). Moreover, the burden of proving that a privilege applies rests on the party claiming its benefit. See Robert G. Lawson, The Kentucky Evidence Law Handbook, § 505, p. 229 (3d ed. Michie 1993).

Another reason for caution in construing the scope of the privilege afforded by KRS 311.377 is that Appellees’ right to bring suit for their underlying medical malpractice claims is protected by Section 14 of the Kentucky Constitution. While the right to discover and present evidence is not likewise expressly protected by the Constitution, significant degradation of these rights could deny litigants, in an action protected by Section 14, due course of law as provided by that section. Appellees did not argue that the peer review privilege violates Section 14, and our holding does not rest on constitutional grounds. Our purpose in making this point is to emphasize that the creation of privilege carries with it potential constitutional implications.

Balanced against a necessarily narrow construction of statutory privilege is “[t]he principal rale of statutory construction ... that the applicability and scope of a statute may be determined by ascertaining the intent and purpose of the legislature and by considering the evil which the law is intended to remedy....” Mitchell v. Kentucky Farm Bureau Company, Ky., 927 S.W.2d 343, 346 (1996), overruled on other grounds, Nantz v. Lexington Lincoln Mercury Subaru, Ky., 947 S.W.2d 36 (1997).

We have no doubt that in creating a peer review privilege, the General Assembly’s intent and purpose was not to hinder an aggrieved patient’s search for the truth in a medical malpractice suit against a negligent physician or hospital. The Preamble to the 1990 Act plainly states that it was enacted for the protection of peer review participants. Appellants, in their capacity in the cases at bar as party-defendants in a medical malpractice suit, are not included in this class because they have not been sued for any action taken in the course of performing a peer review. Simply put, the statute was not enacted for the protection of defendants in a medical malpractice suit. Nonetheless, Appellants argue that the plain language of the statute allows them to use the privilege to their advantage. We disagree.

Subsection 1 of KRS 311.377 provides, inter alia, that any person who applies for, or is granted, staff privileges by certain licensed health service organizations, e.g., a hospital, is deemed to have waived any claim for damages against the hospital or its desig-nees for good faith actions taken pursuant to a peer review proceeding. Thus, the subject matter of Subsection 1 is concerned with: (1) limiting the legal rights and remedies of those persons who apply for or are granted staff privileges; and (2) protecting licensed health services organizations from being sued for good faith actions made in the performance of a peer review function. Therefore, because Appellants have not been sued for any action taken in the course of performing a peer review, Subsection 1 has no application to Appellants. And, obviously, Appel-lees have not waived their right to sue Appellants pursuant to Subsection 1. Thus, KRS 311.377(1) applies to neither Appellants nor Appellees.

Subsection 2 provides, inter alia, that all proceedings, records, opinions, conclusions and recommendations of any entity performing a peer review function referred to in Section 1 of the statute “shall be confidential and privileged and shall not be subject to discovery ... in any civil action in any court.” In light of the purpose and intent of the peer review privilege to protect peer review participants, it is reasonable to conclude that the General Assembly intended that the subject matter of Subsection 2 should be no broader in scope than the subject matter of Subsection 1. That is, the purpose of Subsection 2 is to: (1) further limit the legal rights of those persons who apply for or are granted staff privileges as described is Subsection 1; and (2) provide further legal protection to the entities described in Subsection 1 for good faith actions taken in the performance of a peer review function. Thus, KRS 311.377(2) likewise applies to neither Appellants nor Appellees. And thus, the privilege of Subsection 2 has no application to medical malpractice suits.

Moreover, we have often stated that statutes will not be given a strict or literal reading where to do so would lead to an unreasonable result. Wesley v. Board of Education of Nicholas County, Ky., 403 S.W.2d 28, 30 (1966). Appellants’ construction of the statute is that KRS 311.377(2) creates an absolute privilege for peer review material. In the cases at bar, an absolute privilege tilts the legal playing field against Appellees, who have not waived any rights pursuant to the statute, to the advantage of Appellants, who, as defendants in a medical malpractice suit, were not intended to benefit from the statute’s privilege. Such a result is clearly unreasonable.

Finally, the language which the dissenting opinion relies upon, viz: “shall not be subject to discovery, subpoena, or introduction into evidence, in any civil action in any court ...” has been included unchanged in KRS 311.377 since 1976. 1976 Ky. Acts, ch. 163, § 9(2). After we held in a unanimous opinion in McGuffey v. Hall, supra, that the language in question had no application to medical malpractice suits, 557 S.W.2d at 407, the 1980 General Assembly reenacted KRS 311.177(2) verbatim. 1980 Ky. Acts, ch. 135, § 32(2). We reaffirmed the McGuffey Court’s interpretation of the language in question contained in the 1980 statute in Sweasy, 771 S.W.2d at 816. The statute was reenacted in 1988, 1988 Ky. Acts, ch. 224, § 22, and yet again in 1990, 1990 Ky. Acts, ch. 271, § 1, without any changes to the operative language. By thrice reenacting KRS 311.377(2) without any alteration to the language in question, the General Assembly is presumed to have adopted the construction given to that language in McGuffey v. Hall, supra. Butler v. Groce, Ky., 880 S.W.2d 547 (1994); Cawood v. Coleman, 294 Ky. 858, 172 S.W.2d 548 (1943); Ray v. Spiers, 281 Ky. 549, 136 S.W.2d 750 (1940).

While we agree with the dissent that the General Assembly could have enacted a statute extending the peer review privilege to medical malpractice actions, the fact remains that it did not. Rather, on the basis of the authority cited in the preceding paragraph, we conclude that the General Assembly has, in fact, adopted the interpretation given to KRS 311.377(2) by this Court in McGuffey v. Hall.

Therefore, we hold that the peer review privilege created by KRS 311.377(2) is limited to suits against peer review entities as referred to and protected against in Subsection 1 of the statute. This construction of the statute is exemplified by our decision in Adventist Health Systems v. Trude, Ky., 880 S.W.2d 539 (1994).

Adventist concerned a doctor who sued a hospital to rescind his resignation, to obtain reinstatement to the hospital’s medical staff, and to recover damages stemming from the summary suspension of his medical staff privileges. Id. at 540. He sought to discover peer review material from the hospital in the preparation of his case. Id. at 540-41. The trial court ordered discovery of the peer review material. Id. at 541. The hospital filed for a writ of prohibition with the Court of Appeals, which writ was denied. Id. Thus, the underlying suit in Adventist was between a physician, who had waived legal rights under Subsection 1 of KRS 311 .377, and a peer review entity, which was described in and afforded certain legal protections by Subsection 1.

The Adventist Court found that the peer review material was protected from discovery by KRS 311.377 and reversed the Court of Appeals, stating, “[therefore, we find that the statute applies to any civil action, including the pending case.” Id. at 542. In other words, the Adventist Court held that the statute is not limited to defamation cases as was stated by the McGuffey Court. See McGuffey, 557 S.W.2d at 407. In Leanhart v. Humana, Inc., Ky., 933 S.W.2d 820 (1996), we clearly stated that Adventist did not overrule by implication our prior cases that hold that peer review material is discoverable in medical malpractice suits. Id. at 821. Appellants, however, argue forcefully that this discussion in Leanhart was dicta and has no legal effect.

We find no compelling reason to address this issue. However, for the sake of clarity, to the extent it may be inconsistent with this opinion, we, again, overrule Adventist.

For the foregoing reasons, the decisions of the Court of Appeals denying Appellants’ petitions for a writ of prohibition are hereby affirmed.

COOPER, GRAVES, STUMBO, and WINTERSHEIMER, JJ., concur. STEPHENS, C.J., dissents by separate opinion, with Special Justice LARRY NOE joining that dissent. LAMBERT, J., not sitting.

1 . Section 51 provides in relevant part that, "No law enacted by the General Assembly shall relate to more than one subject, and that [subject] shall be expressed in the title .... ”

2 . The prior version of KRS 311.377 reenacted in 1990 was not the 1980 version of the statute. The General Assembly again amended the statute in 1988. However, for the purposes of this discussion, the 1988 amendments to the statute did not create any substantive changes in the text of the statute.

3 . We note that because KRS 311.377 was in effect prior to the effective date of the Kentucky Rules of Evidence, the peer review privilege at issue is clearly a privilege that is "otherwise provided by statute” as referred to in KRE 501. Thus, we are not presented with the issue of whether a statutory privilege enacted after the effective date of the KRE violates this Court's rule making authority under KRE 1102.