in Re Memorial Hermann Hospital System Memorial Hermann Physician Network Michael MacRis, M.D. Michael MacRis, M.D., P.A. And Keith Alexander ( 2015 )

IN THE SUPREME COURT OF TEXAS
════════════
NO. 14-0171
════════════
IN RE MEMORIAL HERMANN HOSPITAL SYSTEM; MEMORIAL HERMANN PHYSICIAN
NETWORK; MICHAEL MACRIS, M.D.; MICHAEL MACRIS, M.D., P.A.; AND KEITH
ALEXANDER, RELATORS
════════════════════════════════════════════
ON PETITION FOR WRIT OF MANDAMUS
════════════════════════════════════════════
Argued February 25, 2015
JUSTICE WILLETT delivered the opinion of the Court.
A decade ago, we observed: “While the medical privileges are important in promoting free
discussion in the evaluation of health care professionals and health services, the right to evidence
is also important, and therefore privileges must be strictly construed.”1 In this original
proceeding—involving a heart surgeon who claims his former hospital retaliated against him for
joining a competing hospital—we must determine whether either the medical committee privilege
or the medical peer review committee privilege protects certain documents from disclosure. The
trial court concluded the documents sought were discoverable, and the court of appeals denied
relief, prompting the parties resisting production to seek mandamus relief here. We hold that some
of the documents are protected, and we conditionally grant mandamus relief as to them. But we
are unconvinced that the remainder of the documents are confidential under either privilege.
1
In re Living Ctrs. of Tex., Inc., 175 S.W.3d 253, 258 (Tex. 2005).
2
BACKGROUND
Plaintiffs Miguel A. Gomez, III, M.D. and Miguel A. Gomez, M.D., P.A. (collectively,
“Dr. Gomez”) filed suit against defendants Memorial Hermann Hospital System, 2 Memorial
Hermann Physician Network, Michael P. Macris, M.D., Michael P. Macris, M.D., P.A.,3 and Keith
Alexander4 (collectively, “defendants” or “Memorial Hermann”) on September 17, 2012. Dr.
Gomez’s original petition asserted causes of action for business disparagement, defamation,
tortious interference with prospective business relations, and improper restraint of trade under the
Texas Free Enterprise and Antitrust Act of 1983 (“TFEAA”).
Dr. Gomez is a cardiothoracic surgeon who practiced at Memorial Hermann Memorial City
Medical Center (“Memorial City”)5 from 1998 until 2012 when he resigned his privileges with
Memorial City.6 During his years of practice at Memorial City, Dr. Gomez built a reputation in
the “West Houston and Katy community” for “quality patient care, technical excellence, and
outstanding professionalism in heart and general surgery.”
Dr. Gomez’s “skills and specialized abilities” for patients who require heart and general
surgeries range from “‘basic’ open heart surgery to advanced robotic-assisted surgical
procedures.” Robotic heart surgery “eliminates the need to mechanically crack open a patient’s
chest.” Robotic heart surgery always involves significantly less recovery time than its non-robotic
2
Memorial Hermann Hospital System is a business entity organized under the laws of the State of Texas that
controls and manages a number of hospitals, out-patient facilities, and other health care service centers throughout the
Houston Metropolitan area, including Memorial Hermann Memorial City Medical Center.
3
Michael P. Macris, M.D., P.A. is a professional association organized under the laws of Texas, and Michael
P. Macris, M.D. is its principal officer.
4
Mr. Alexander is the Chief Executive Officer of Memorial Hermann Memorial City Medical Center.
5
Memorial City is one of Memorial Hermann Hospital System’s medical campuses.
6
The facts described in this section are drawn from allegations in Dr. Gomez’s live petition and attached
exhibits. They are presented in the light most favorable to the trial court’s finding.
2
surgical analogue, and depending on the particular procedure, can spare the patient up to six days
of recovery time in the hospital. Robotic heart surgery therefore has the potential to save an
individual patient $50,000 or more in medical expenses.
In the Houston medical community, Dr. Gomez “pioneer[ed] implementation of ‘off-
pump’ surgery and robotic-assisted heart surgeries.” Memorial City heavily promoted robotic heart
surgery as well as Dr. Gomez himself—the only heart surgeon at Memorial City who was capable
of performing robotic heart surgeries. The hospital invested in a million dollar “DA VINCI”
machine, and spent significant advertising dollars promoting the robotic-assisted surgical
procedures.
Referrals from other physicians are extremely important to surgeons and specialists. The
primary means for a physician “to build his practice is . . . actually going out on his own to doctor’s
offices, meeting the doctors, [and] developing relationships” in order to get referrals from
physicians. The success of a surgeon’s practice depends on his ability to attract referrals, and
cardiologists are a cardiovascular surgeon’s primary referral source. In turn, the surgeon’s decision
to perform his surgeries at one hospital over another directly impacts the profitability of the
hospitals.
In 2009, another hospital—Methodist West Houston Hospital—was in the process of
opening, which caused a change in the atmosphere at Memorial City. There was a growing fear at
Memorial City that staff would leave to go to Methodist West. Around this time, the then-CEO of
Memorial City and the Chief of Staff7 met with at least one of Memorial City’s physicians, Dr. Jo
Pollack, in order to express disapproval of Dr. Pollack’s pattern of referring her patients to non-
7
At the time of the meeting, Dave Jones was the CEO of Memorial City and Dr. Joel Abramowitz was the
Chief of Staff. Shortly after the meeting took place, Mr. Alexander became CEO.
3
affiliated facilities and physicians. According to Dr. Pollack’s affidavit, she was told she would be
“committing political suicide” and her practice “could be in jeopardy” if she did not refer her
patients to the Memorial City affiliated medical oncologists, radiation oncologists and imaging.
Memorial City also began holding “Town Hall” meetings in order to “gain information about who
wanted to leave and to attempt to persuade people to stay at Memorial City.”
Of the heart surgeons who practiced at Memorial City, Dr. Gomez was the first to agree to
practice at Methodist West. Dr. Gomez asserts that, because of his complaints about staffing and
equipment dysfunctions as well as Memorial City’s priorities regarding patient care, Memorial
City knew he would perform his surgeries at Methodist West in the future. Consequently, despite
having invested heavily in promoting robotic-assisted heart surgery, Memorial City would no
longer be the sole Houston hospital offering robotic-assisted heart surgeries. Memorial City faced
sharing, or worse, losing that distinction to Methodist West.
When the defendants learned that Dr. Gomez was willing to associate himself with
Methodist West, the defendants began conducting a “whisper campaign” against Dr. Gomez.
According to Dr. Gomez, the purpose of the campaign was “to cast doubt on robotic heart surgery
procedures,” throughout the entire city of Houston and “evaporate” the “robotic heart surgery
market.” If the campaign was successful, it would inoculate Memorial City from the advantage
Methodist West would otherwise gain from the ability to offer the superior procedure.
Rumors began spreading across the Memorial City campus that Dr. Gomez was “having
problems” with his mortality rate, and the marketing director at Memorial City did an “about-face”
regarding Dr. Gomez. Portia Willis, who was then employed in Memorial City’s marketing
department, had scheduled speaking engagements and other promotional engagements for Dr.
Gomez on behalf of Memorial City. But amidst the rumors, Ms. Willis was told not to push forward
4
with any type of marketing or promotion of Dr. Gomez indefinitely. Although the reasons for the
marketing hiatus were not explained, Ms. Willis had the impression that the move was related to
the rumors that Dr. Gomez was “a crappy surgeon.” By this point, rumors had become “rampant”
that Dr. Gomez “wasn’t the surgeon that [the Hospital workers] thought he was,” and the hospital’s
employees began to wonder how much longer Dr. Gomez’s practice could endure.
At a “Cardiovascular and Thoracic CPC” meeting on November 1, 2011, Dr. Macris
displayed “false data and statements regarding Dr. Gomez’s practice and mortality rates of his
patients to an entire room filled with Dr. Gomez’s professional colleagues, intending that it be
thereafter widely disseminated.” The presentation “create[d] the appearance that patients were
more likely to die in Dr. Gomez’s care.” Dr. Macris had “manipulated” the presented data,
eschewing generally accepted methodologies for proper peer review comparison as well as basic
scientific principles. Although the “true” peer review committee at Memorial Hermann8 intervened
and ultimately determined Dr. Macris’s comparative data could not be relied upon for any
legitimate purpose, the defendants continued to disseminate the manipulated data within the
medical community. This spread the false impression of Dr. Gomez’s practice. After Dr. Gomez’s
abilities were assessed in the cardiology section meeting, his “referral patterns were ruined,” and
he lost his status as one of the most sought-after surgeons.
At a January 2012 meeting, Mr. Alexander publicly ridiculed Dr. Gomez’s skills as a heart
surgeon. Mr. Alexander let the physicians, nurses, and administrators in the room “know that he
had targeted Dr. Gomez because of his affiliation with Methodist West.” Mr. Alexander “made
clear . . . he would not tolerate physicians taking business to Methodist West.” Destroying Dr.
8
Dr. Gomez disputes whether the committee to which Dr. Macris presented the data falls within the definition
of a medical peer review committee.
5
Gomez’s reputation “served as a preemptive warning” to other physicians considering an
affiliation with Methodist West.
Dr. Gomez brought suit on the claims described above and moved to compel the production
of certain documents. Memorial Hermann asserted the documents were protected from discovery
under the medical committee privilege and the medical peer review committee privilege.
Following an in camera inspection, the trial court ordered Memorial Hermann to produce certain
documents. After the court of appeals denied Memorial Hermann’s petition for writ of mandamus,9
Memorial Hermann sought mandamus relief in this Court.
DISCUSSION
I. Standard of review
“Mandamus is proper when the trial court erroneously orders the disclosure of privileged
information because the trial court’s error cannot be corrected on appeal.”10 Pleading and
producing evidence establishing the existence of a privilege is the burden of the party seeking to
avoid discovery.11 The party asserting the privilege must establish by testimony or affidavit a prima
facie case for the privilege.12 The party need produce “only the ‘minimum quantum of evidence
necessary to support a rational inference that the allegation of fact is true,’” and tender the
documents to the trial court, at which point, “the trial court must conduct an in camera inspection
9
In re Mem’l Hermann Hosp. Sys., 2014 WL 866069 (Tex. App.—Houston [1st Dist.] March 4, 2014, orig.
proceeding).
10
In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 222 (Tex. 2004).
11
State v. Lowry, 802 S.W.2d 669, 671 (Tex. 1991); Jordan v. Court of Appeals for Fourth Supreme Judicial
Dist., 701 S.W.2d 644, 648–49 (Tex. 1985).
12
In re Living Ctrs. of Tex., Inc., 175 S.W.3d at 261; Lowry, 802 S.W.2d at 671.
6
of [the] documents before deciding to compel production.”13
A reviewing court may not substitute its judgment for that of the trial court regarding “the
resolution of fact issues or matters committed to the trial court’s discretion.”14 “The scope of
discovery and the admission of evidence is principally within the discretion of the trial court.”15
The relator must establish that the trial court failed to reach the only reasonable conclusion on such
matters.16 A less deferential standard applies to the trial court’s determination of the legal
principles governing the discovery, however.17
II. The trial court did not abuse its discretion in holding that the “anticompetitive action”
exception to the medical peer review committee privilege applied.
A. Under certain circumstances, the medical peer review committee privilege
limits the accessibility of the records of, proceedings of, and communications
to a medical peer review committee.
A medical peer review committee includes “a committee of a health care entity [including
a hospital licensed under Chapter 241 or 577 of the Health and Safety Code] . . . or the medical
staff of a health care entity” that (1) “operates under written bylaws” approved by either the policy-
13
In re E.I. DuPont de Nemours & Co., 136 S.W.3d at 222 (quoting Tex. Tech. Univ. Health Scis. Ctr. v.
Apodaca, 876 S.W.2d 402, 407 (Tex. App.—El Paso 1994, writ denied)).
14
Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex. 1992).
15
Flores v. Fourth Court of Appeals, 777 S.W.2d 38, 41 (Tex. 1989).
16
Id.
17
Walker, 827 S.W.2d at 840 (“In determining whether the trial court abused its discretion in the present
case, we treat the trial court’s erroneous denial of the requested discovery on the sole basis of Russell as a legal
conclusion to be reviewed with limited deference to the trial court.”); see also Marathon Oil Co. v. Moye, 893 S.W.2d
585, 589 (Tex. App.—Dallas 1994, orig. proceeding) (“When a trial court’s interpretation of discovery law is at issue,
we treat the trial court’s order as a legal conclusion. We review the legal conclusion with limited deference to the trial
court.”).
7
making or governing board of the health care entity, and (2) “is authorized to evaluate the quality
of medical and health care services or the competence of physicians.”18
“All proceedings and records of a medical peer review committee are confidential, and all
records of, determinations of, and communications to a committee are privileged and are not
discoverable, with certain exceptions. . . .”19 The provision of confidentiality extends to the
committee’s initial and subsequent credentialing decisions,20 as well as to documents “generated”
by a committee or “prepared by or at the direction of the committee for committee purposes.”21
The minutes and recommendations of the committee as well as the committee’s inquiries about a
physician to outside sources and responses thereto are also protected.22 However, “simply passing
a document through a peer review committee does not make it privileged.”23 The privilege does
not prevent a party from discovering from a nonprivileged source material that has been presented
to the committee.24
Texas Occupations Code section 160.007’s provisions “expressly delineate and limit the
circumstances under which the records of and communications to a peer review committee may
[or must] be accessed.”25 The committee may disclose its records and proceedings, and
18
TEX. OCC. CODE § 151.002(a)(8); see also id. § 151.002(a)(5) (defining “Health care entity”).
19
In re Univ. of Tex. Health Ctr. at Tyler, 33 S.W.3d 822, 825 (Tex. 2000); see also TEX. OCC. CODE
§ 160.007(a) (“Except as otherwise provided by this subtitle, each proceeding or record of a medical peer review
committee is confidential, and any communication made to a medical peer review committee is privileged.”).
20
Mem’l Hosp.—The Woodlands v. McCrown, 927 S.W.2d 1, 3–5 (Tex. 1996).
21
Id. at 10; see also In re Living Ctrs. of Tex., Inc., 175 S.W.3d at 257.
22
In re Living Ctrs. of Tex., Inc., 175 S.W.3d at 257.
23
Id.
24
Id. at 260; McCrown, 927 S.W.2d at 10.
25
Irving Healthcare Sys. v. Brooks, 927 S.W.2d 12, 16 (Tex. 1996).
8
communications made by the committee to other medical peer review committees, appropriate
governmental agencies, national accreditation bodies, the Texas Medical Board, and another
state’s board of registration or licensing of physicians. 26 The committee may disclose to a
physician under its review confidential information relevant to the matter without waiving
confidentiality.27 The committee must provide the physician with a written copy of its
recommendation and final decision for certain actions, including those that could result in
“censure, suspension, restriction, limitation, revocation, or denial of membership or privileges in
a health care entity.”28 Certain parties are entitled to use the confidential information in their
defense or in rebuttal to such a defense.29 Otherwise, the records and determinations of a medical
peer review committee, as well as communications to the committee, are “not subject to subpoena
or discovery and [are] not admissible as evidence in any civil judicial or administrative proceeding
without waiver of the privilege of confidentiality executed in writing by the committee.”30
However, under certain circumstances, the information may not be confidential, in which
case it would not be subject to a privilege. For example, the “records made or maintained in the
regular course of business by a hospital . . . [or] medical organization” are not covered by
section 160.007 and therefore are not confidential under that section.31 In addition,
26
TEX. OCC. CODE § 160.007(c); see also id. § 151.002(a)(1)(“‘Board’ means the Texas Medical Board.”).
27
Id. § 160.007(d).
28
Id.
29
See id. § 160.007(f).
30
Id. § 160.007(e).
31
TEX. HEALTH & SAFETY CODE § 161.032(f). However, the fact that a committee reviewed such records is
protected. See In re Living Ctrs. of Tex., 175 S.W.3d at 257 (“The peer review privilege protects the products of the
peer review process: reports, records (including those produced for the committee’s review as part of the investigative
review process), and deliberations.”); Brooks, 927 S.W.2d at 18.
9
section 160.007(b) provides a limited exception to confidentiality for proceedings, records, or
communications that are relevant to an anticompetitive action. The anticompetitive action
exception provides in full:
If a judge makes a preliminary finding that a proceeding or record of a medical peer
review committee or a communication made to the committee is relevant to an
anticompetitive action, or to a civil rights proceeding brought under 42 U.S.C.
Section 1983, the proceeding, record, or communication is not confidential to the
extent it is considered relevant.32
The parties dispute the applicability of this exception.
B. The committees at issue are medical peer review committees.
As an initial matter, Dr. Gomez disputes that Memorial Hermann proved the relevant
committees are medical peer review committees. The trial court found “that the anticompetitive
exception to the medical peer review committee privilege applies,” which inherently implies a
finding that the relevant committees were medical peer review committees. Dr. Gomez argues that
Memorial Hermann failed to establish that the investigations were performed for the purpose of
quality assessment, or that the committee was established by bylaws.
With one exception,33 the medical peer review committee privilege affords confidential
status to the records of, proceedings of, and communications to a medical peer review committee
regardless of whether the individual record, proceeding, or communication relates to a peer review
action.34 Memorial Hermann submitted the committees’ bylaws as well as affidavits stating that
the committees engaged in peer review. Although Dr. Gomez points us to evidence to the contrary,
32
TEX. OCC. CODE § 160.007(b).
33
See id. § 151.002(a)(8)(B).
34
Compare id. § 151.002(a)(7) (defining medical peer review) with id. § 151.002(a)(8) (defining medical
peer review committee).
10
the trial court had sufficient evidence before it to make a reasonable finding that the committees
are medical peer review committees. We will not disturb that finding.
C. An “anticompetitive action” is one that requires proof of a net negative impact
on competition within a defined market.
The trial court found that the documents at issue “are relevant to an anticompetitive action.”
Before we can resolve the parties’ dispute regarding the correctness of this finding, we must first
determine the meaning of the statutory phrase “relevant to an anticompetitive action.”35
Statutory construction is a question of law we review de novo. 36 Our objective is to
determine and give effect to the Legislature’s intent,37 and “the truest manifestation of what
lawmakers intended is what they enacted.”38 Proper construction requires reading the statute as a
whole rather than interpreting provisions in isolation.39 “[C]ourts should not give an undefined
statutory term a meaning out of harmony or inconsistent with other provisions, although it might
be susceptible of such a construction if standing alone.”40 “We presume that the Legislature
chooses a statute’s language with care,” and we will not ignore the statute’s use of a term that
carries a “particular meaning.”41 “Privileges are not favored in the law and are strictly construed.”42
35
TEX. OCC. CODE § 160.007(b).
36
Tex. Dep’t of Transp. v. Needham, 82 S.W.3d 314, 318 (Tex. 2002).
37
Liberty Mut. Ins. Co. v. Garrison Contractors, Inc., 966 S.W.2d 482, 484 (Tex. 1998).
38
Combs v. Roark Amusement & Vending, L.P., 422 S.W.3d 632, 635 (Tex. 2013).
39
Tex. Dep’t of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 642 (Tex. 2004).
40
Needham, 82 S.W.3d at 318.
41
TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011).
42
Jordan, 701 S.W.2d at 647.
11
Neither section 160.007 nor any other peer review committee privilege that incorporates
the phrase “anticompetitive action” defines the term.43 Black’s Law Dictionary defines
“anticompetitive” as “[h]aving a tendency to reduce or eliminate competition” in contrast to the
term procompetitive.44 Procompetitive is in turn defined as “[i]ncreasing, encouraging, or
preserving competition.”45 Competition itself is defined as “[t]he struggle for commercial
advantage; the effort or action of two or more commercial interests to obtain the same business
from third parties.”46 The dictionary also notes that the term anticompetitive “describes the type
of conduct or circumstances generally targeted by antitrust laws,”47 although the statement is “not
purely definitional.”48
This framework accurately maps out the meaning afforded the term “anticompetitive” in
court decisions in the antitrust context. As noted by the Supreme Court of the United States, to
restrain competition is the “very essence” of every agreement and regulation of trade.49 Therefore,
regarding restraints of trade, “[t]he true test of legality is whether the restraint imposed is such as
merely regulates and perhaps thereby promotes competition or whether it is such as may suppress
or even destroy competition.”50 As such, an “abbreviated or ‘quick-look’ analysis” is appropriate
43
See, e.g., TEX. OCC. CODE §§ 261.051 (dental peer review committee); 202.454(b) (podiatric peer review
committee); 564.103(b) (pharmacy peer review committee).
44
BLACK’S LAW DICTIONARY 113 (10th ed. 2014).
45
Id. at 1400.
46
Id. at 344.
47
Id. at 113.
48
See id. at xxxii (noting that “[b]ullets are used to separate definitional information (before the bullet) from
information that is not purely definitional (after the bullet), such as encyclopedic information or usage notes”).
49
Bd. of Trade of City of Chi. v. United States, 246 U.S. 231, 238 (1918).
50
Id.; see also State Oil Co. v. Khan, 522 U.S. 3, 10 (1997) (“Although the Sherman Act, by its terms,
prohibits every agreement ‘in restraint of trade,’ this Court has long recognized that Congress intended to outlaw only
12
only when “an observer with even a rudimentary understanding of economics could conclude that
the arrangements in question would have an anticompetitive effect on customers and markets.”51
The goal of judicial scrutiny of restraints on trade is to “distinguish[] between restraints with
anticompetitive effect that are harmful to the consumer and restraints stimulating competition that
are in the consumer’s best interest.”52
Judicial scrutiny in other areas of antitrust law confirms that the antitrust laws were
designed as a “consumer welfare prescription” that requires consideration of both anticompetitive
and procompetitive effects.53 Thus, proof that a firm’s dominant position is the “consequence of a
superior product, business acumen, or historic accident”—circumstances that either benefit the
consumer or are outside the firm’s control—will defeat a claim of monopoly.54 Claims of
attempted monopolization require the further showing that the defendant “pose[s] a danger of
monopolization,” because judging unilateral conduct absent actual potential to achieve a monopoly
would “risk that the antitrust laws will dampen the competitive zeal of a single aggressive
unreasonable restraints.”); F.T.C. v. Ind. Fed’n of Dentists, 476 U.S. 447, 459 (1986) (“Absent some countervailing
procompetitive virtue—such as, for example, the creation of efficiencies in the operation of a market or the provision
of goods and services . . .—such an agreement limiting consumer choice by impeding the ‘ordinary give and take of
the market place’ cannot be sustained under the Rule of Reason.”); United States v. Trans-Missouri Freight Ass’n,
166 U.S. 290, 342 (1897) (“The necessary effect of the agreement is to restrain trade or commerce, no matter what
the intent was on the part of those who signed it.”).
51
Cal. Dental Ass’n v. F.T.C., 426 U.S. 756, 770 (1999).
52
Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 886 (2007).
53
Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of Univ. of Ok., 468 U.S. 85, 107 (1984) (internal quotation
marks omitted). See also TEX. BUS. & COMM. CODE § 15.04 (“The purpose of this Act is to maintain and promote
economic competition in trade and commerce occurring wholly or partly within the State of Texas and to provide the
benefits of that competition to consumers in the state.”).
54
United States v. Grinnell Corp., 384 U.S. 563, 570–71 (1966).
13
entrepreneur.”55 Similarly, in scrutinizing a proposed merger, the “economic efficiencies produced
by the merger must be weighed against anticompetitive consequences in the final determination
whether the net effect on competition is substantially adverse.”56 Ultimately, the “use of the word
‘competition’ [is] a shorthand for the invocation of the benefits of a competitive market,”57 and
antitrust law acknowledges that “it is sometimes difficult to distinguish robust competition from
conduct with long-run anticompetitive effects.”58
We have no trouble holding that the Legislature intended the term “anticompetitive” in
section 160.007 to denote an overall substantially adverse effect on competition, rather than the
existence of some negative effects. However, we reject Memorial Hermann’s characterization of
the term “anticompetitive action” as synonymous with “antitrust action.” Although we agree that
the term anticompetitive “describes the type of conduct or circumstances generally targeted by
antitrust laws,”59 the term itself is broader because the law of antitrust does not encompass all
conduct that could substantially lessen competition in a particular market. For example, certain
conduct—regardless of its overall impact on competition—is immune from antitrust law under the
55
Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 767–68 (1984); Swift & Co. v. United States,
196 U.S. 375, 402 (1905) (“Not every act that may be done with intent to produce an unlawful result is unlawful, or
constitutes an attempt. It is a question of proximity and degree.”).
56
F.T.C. v. Procter & Gamble Co., 386 U.S. 568, 597 (1967) (emphasis added).
57
Id.
58
Copperweld Corp., 467 U.S. at 767–68.
59
BLACK’S LAW DICTIONARY 113 (10th ed. 2014) (emphasis added).
14
state action doctrine,60 the exemption for political activity,61 or the exemptions, both implicit and
explicit, for labor unions.62 The terms anticompetitive and antitrust are therefore not inherently
coextensive, and we cannot ignore the Legislature’s use of the broader term, particularly in
juxtaposition to section 160.007(b)’s specificity regarding its application to civil rights
proceedings.63
However, this does not mean that a litigant may successfully rely on subsection (b) simply
by adding a gratuitous allegation that the conduct at issue is anticompetitive. Section 160.007(b)
requires a “preliminary finding that a proceeding or record of a medical peer review committee or
a communication made to the committee is relevant to an anticompetitive action” and provides
that “the proceeding, record, or communication is not confidential to the extent it is considered
60
See, e.g., Cmty. Commc’ns Co. v. City of Boulder, Colo., 455 U.S. 40, 48 (1982) (holding that federal
antitrust law does not “prohibit[] a State, in the exercise of its sovereign powers, from imposing certain anticompetitive
restraints”); E. R. R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 136 (1961) (“[W]here a
restraint upon trade or monopolization is the result of valid governmental action, as opposed to private action, no
violation of the [Sherman] Act can be made out.”); Parker v. Brown, 317 U.S. 341, 351 (1943) (“The Sherman Act
makes no mention of the state as such, and gives no hint that it was intended to restrain state action or official action
directed by a state.”). See also TEX. BUS. & COMM. CODE § 15.05(g) (“Nothing in this section shall be construed to
prohibit activities that are exempt from the operation of the federal antitrust laws . . . except that an exemption
otherwise available under the McCarran-Ferguson Act . . . does not serve to exempt activities under this Act.”).
61
Noerr Motor Freight, Inc., 365 U.S. at 136 (“[T]he Sherman Act does not prohibit two or more persons
from associating together in an attempt to persuade the legislature or the executive to take particular action with respect
to a law that would produce a restraint or a monopoly.”); see also Cal. Motor Transp. Co. v. Trucking Unlimited, 404
U.S. 508, 611 (1972) (extending Noerr to “the approach of citizens . . . to administrative agencies . . . and to courts”).
62
Brown v. Pro Football, Inc., 518 U.S. 231, 237 (1996) (“[T]he implicit exemption recognizes that, to give
effect to federal labor laws and policies and to allow meaningful collective bargaining to take place, some restraints
on competition imposed through the bargaining process must be shielded from antitrust sanctions.”); Connell Constr.
Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616, 621–22 (1975) (holding that certain federal
statutes “declare that labor unions are not combinations or conspiracies in restraint of trade, and exempt specific union
activities, including secondary picketing and boycotts, from the operation of the antitrust laws”).
63
See TEX. OCC. CODE § 160.007(b) (limiting the exception’s application to “civil rights proceeding[s]
brought under 42 U.S.C. Section 1983”).
15
relevant.”64 Relevance cannot be determined in isolation of the elements of an asserted cause of
action.
Dr. Gomez’s contrary construction treats the terms action and conduct as synonymous, 65
but as we have previously noted, this Court has “equated ‘action’ with ‘suit.”66 Although we have
not previously discussed the meaning of the word action in this particular context, we have held
that generally the term is “synonymous with ‘suit,’ which is a demand of one’s rights in court.”67
Had the Legislature intended the focus to be on the defendant’s conduct apart from any asserted
cause of action, it would have been more natural to say “an anticompetitive act” or
“anticompetitive conduct.” But the Legislature chose the term “action,” which is a well-established
legal term of art synonymous with lawsuit.68 This meaning also better fits the parallelism of the
phrases “anticompetitive action”69 and “a civil rights proceeding”70 in subsection (b).
At any rate, the exception’s reference to relevance confirms that the Legislature intended
the term action to refer to a “civil or criminal judicial proceeding.”71 Our rules of evidence provide
64
Id. (emphases added).
See BLACK’S LAW DICTIONARY 35 (10th ed. 2014) (listing “[t]he process of doing something; conduct or
65
behavior” as one definition of action).
66
Thomas v. Oldham, 895 S.W.2d 352, 356 (Tex. 1995).
67
Id.
68
See id. See also BLACK’S LAW DICTIONARY 35 (10th ed. 2014) (“‘The terms ‘action’ and suit’ are nearly
if not quite synonymous. But lawyers usually speak of proceedings in courts of law as ‘actions,’ and those in courts
of equity as ‘suits.’” (quoting Edwin E. Bryant, The Law of Pleading Under the Codes of Civil Procedure 3 (2d ed.
1899))).
69
TEX. OCC. CODE § 160.007(b).
70
Id.
71
BLACK’S LAW DICTIONARY 28 (7th ed. 1999), quoted in Jaster v. Comet II Constr., Inc., 438 S.W.3d
556, 564 (Tex. 2014) (plurality op.).
16
that evidence is relevant if “it has any tendency to make a fact more or less probable than it would
be without the evidence” and if that “fact is of consequence in determining the action.”72 A purely
voluntary showing that the defendant’s conduct is anticompetitive cannot constitute a fact of
consequence in a lawsuit—the limited waiver of confidentiality for proceedings, records, and
communications “relevant to an anticompetitive action”73 can only apply if the plaintiff asserts a
cause of action that requires proof of anticompetitive conduct or effects.74
In light of the rarity of claims that require proof of a net anticompetitive effect, as a practical
matter, our interpretation will not greatly expand the scope of an “anticompetitive action” beyond
valid antitrust claims. However, our caselaw has already identified at least one cause of action that
potentially falls within the interstice between anticompetitive and antitrust—tortious interference
with prospective business relations.75 As we have previously held, recovery for tortious
72
TEX. R. EVID. 401 (emphasis added).
73
TEX. OCC. CODE § 160.007(b).
74
As already illustrated in our brief review of the meaning of “anticompetitive,” there is no practical
difference between the terms anticompetitive conduct and anticompetitive effects as used in the caselaw, because we
do not deem conduct anticompetitive unless it has a net anticompetitive effect.
75
Memorial Hermann argues that our decision in Irving Healthcare Sys. v. Brooks, 927 S.W.2d 12 (Tex.
1996), forecloses argument that section 160.007(b)’s anticompetitive action exception encompasses routine business
torts, including interference with prospective business relations. In Brooks, we noted that “the statute provides that if
a court makes a preliminary finding that a medical peer review committee’s proceedings, records, or communications
are relevant to an anticompetitive action . . . they are not confidential,” but that “a similar provision for a libel action
in which the plaintiff claims malice” was “[n]oticeably absent from the statute.” 927 S.W.2d at 16. We also held that
the statute did not “explicitly exclude from its confidentiality provisions any of [the plaintiff’s] other causes of action.”
Id.
The plaintiff in Brooks sued for libel, slander, “intentional infliction of mental anguish,” and interference
with business relations. Id. at 14–15. The plaintiff alleged that the defendant had “intentionally and maliciously
supplied false information, thereby damaging or destroying [the plaintiff’s] ability to gain admittance to the medical
staffs of the hospitals to which he applied.” Id. Thus, Brooks did not require us to review the applicability of subsection
(b), because the trial court never made the required preliminary finding of relevance to an anticompetitive action.
Furthermore, although the plaintiff’s “other causes of action,” included an allegation that the defendant tortiously
interfered with prospective business relations, the plaintiff did not allege that the conduct was independently wrongful
because the provision of false information had a negative effect on competition and constituted an antitrust violation.
Our decision today is therefore consistent with our holding in Brooks.
17
interference with a prospective business relation requires a plaintiff to “prove that the defendant’s
conduct was independently tortious or wrongful” as an element of the cause of action.76 Thus, even
without asserting a cause of action under the TFEAA,77 a plaintiff who asserts that a defendant’s
conduct is independently wrongful because it violates the laws of antitrust78 would, as part of
proving the violation, be required to show a negative effect on competition.
Such a plaintiff would still need to plead a valid antitrust violation, however, he would not
need to plead a valid antitrust claim.79 The TFEAA grants a private right of action to bring suit,
but only to persons “whose business or property has been injured by reason of any conduct declared
unlawful” in the Act.80 This requires a plaintiff to prove “antitrust injury, which is to say injury of
the type the antitrust laws were intended to prevent and that flows from that which makes
defendants’ acts unlawful.”81 Furthermore, permissible recovery is limited to “actual damages
sustained” as a result of the unlawful conduct.82 The damages must “reflect the anticompetitive
76
Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2006).
77
TEX. BUS. & COMM. CODE § 15.01 et seq.
78
See Sturges, 52 S.W.3d at 726 (“[A] plaintiff could recover for tortious interference by showing an illegal
boycott, although a plaintiff could not recover against a defendant whose persuasion of others not to deal with the
plaintiff was lawful.”).
79
See generally Phillip Areeda, Antitrust Violations Without Damages Recoveries, 89 HARV. L. REV. 1127
(1976) (discussing “three superficially paradoxical possibilities,” each of which hypothesizes circumstances under
which a plaintiff might be able to prove an antitrust violation, but not be able to recover damages under the antitrust
laws).
80
TEX. BUS. & COMM. CODE § 15.21(a)(1).
81
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977); see also Austin v. Blue Cross &
Blue Shield of Ala., 903 F.2d 1385, 1389–90 (11th Cir. 1990) (“‘The antitrust injury concept . . . requires the private
antitrust plaintiff to show that his own injury coincides with the public detriment tending to result from the alleged
violation. This requirement increases the likelihood that public and private enforcement of the antitrust laws will
further the same goal of increased competition.’” (quoting P. Areeda and H. Hovenkamp, Antitrust Law, 335.1, at 261
(Supp. 1987)).
82
TEX. BUS. & COMM. CODE § 15.21(a)(1).
18
effect either of the violation or of anticompetitive acts made possible by the violation”83—in other
words, “the type of loss that the claimed violations of the antitrust laws would be likely to cause.”84
In contrast, tortious interference with business relations “provides a remedy for injurious
conduct that other tort actions might not reach . . . but only for conduct that is already recognized
to be wrongful under the common law or by statute.”85 Thus, in Wal-Mart Stores, Inc. v. Sturges,
we provided the example of “a defendant who threatened a customer with bodily harm if he did
business with the plaintiff.”86 We stated that such a defendant would be liable because the
defendant’s “conduct toward the customer—assault—was independently tortious,” even though
the plaintiff would not be able to sue the defendant for the assault itself.87
In sum, we hold that the exception to the medical peer review committee privilege for
anticompetitive actions applies when the plaintiff asserts a cause of action that requires proof that
the conduct at issue has “a tendency to reduce or eliminate competition”88 that is not offset by
countervailing procompetitive justifications.89
83
Brunswick Corp., 429 U.S. at 489.
84
Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 125 (1969).
85
Sturges, 52 S.W.3d at 713.
86
Id.
87
Id. Compare Brunswick Corp., 429 U.S. at 488 (rejecting the lower court holding that “once a merger is
found to violate [section 7 of the Clayton Act], all dislocations caused by the merger are actionable, regardless of
whether those dislocations have anything to do with the reason the merger was condemned”).
88
BLACK’S LAW DICTIONARY 113 (10th ed. 2014).
89
Cf. Ind. Fed’n of Dentists, 476 U.S. at 459.
19
D. Subsection (b) requires a plaintiff to plead, not present evidence of, an
anticompetitive action.
We also reject Memorial Hermann’s contention that section 160.007(b) conditions its
exception to confidentiality on the plaintiff’s satisfaction of an evidentiary burden. The Legislature
knows how to provide this type of gatekeeping function,90 and subsection (b) is devoid of any
language indicating intent to do so. The statute does not reference expert reports,91 affidavits,92 or
categories of evidence to be considered.93 Significantly, other than requiring a “preliminary
finding” that the material be “relevant to an anticompetitive action,”94 subsection (b) contains no
indication of a threshold quantum of proof.95 Determinations of potential relevancy or privilege
typically do not require a litigant to produce evidence on the merits of his claim—as opposed to
90
Cf. Bioderm Skin Care, LLC v. Stock, 426 S.W.3d 753, 756 (Tex. 2014) (holding the Texas Medical
Liability Act “requires claimants asserting health care liability claims to substantiate their claims with an expert
report”); Crosstex Energy Srvs., L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 387 (Tex. 2014) (holding that the certificate
of merit statute requires plaintiffs to “file an affidavit . . . [that] substantiate[s] the plaintiff’s claim on each theory of
recovery”).
91
Compare TEX. CIV. PRAC. & REM. CODE §§ 74.351(a) (“In a health care liability claim, a claimant
shall . . . serve on that [defendant] or the [defendant’s] attorney one or more expert reports. . . .”); 128.053(a) (“In a
suit against a sport shooting range . . . a claimant shall . . . serve on each party or the party’s attorney one or more
expert reports. . . .”); see also TEX. HEALTH & SAFETY CODE § 841.101(b) (“In preparation for a judicial review
conducted under Section 841.102, the case manager shall provide a report of the biennial examination to the judge.”).
92
Compare TEX. CIV. PRAC. & REM. CODE §§ 14.004(a) (“An inmate who files an affidavit or unsworn
declaration of inability to pay costs shall file a separate affidavit or declaration. . . .”); 150.002(a) (“In any action or
arbitration proceeding for damages arising out of the provision of professional services by a licensed or registered
professional, the plaintiff shall be required to file with the complaint an affidavit of a third-party licensed architect,
licensed professional engineer, registered landscape architect, or registered professional land surveyor. . . .”).
93
Compare id. § 27.006(a) (“[T]he court shall consider the pleadings and supporting and opposing affidavits
stating the facts on which the liability or defense is based.”).
94
TEX. OCC. CODE § 160.007(b). Compare Md. Am. Gen. Ins. Co. v. Blackmon, 639 S.W.2d 455, 457 (Tex.
1982) (“We will assume for purposes of this opinion that the information ordered to be disclosed is relevant.”).
95
Compare TEX. CIV. PRAC. & REM. CODE § 27.005(c) (“The court may not dismiss a legal action under this
standard if the party bringing the legal action establishes by clear and specific evidence a prima facie case for each
essential element of the claim in question.” (emphasis added)); TEX. HEALTH & SAFETY CODE § 841.102(c) (“The
judge shall set a hearing if the judge determines at the biennial review that . . . probable cause exists to believe that
the person’s behavioral abnormality has changed to the extent that the person is no longer likely to engage in a
predatory act of sexual violence.” (emphasis added)).
20
the merits of the privilege.96 Furthermore, it is counter to the notion that “[a]ffording parties full
discovery promotes the fair resolution of disputes by the judiciary,”97 to condition access to
documents that could substantiate a plaintiff’s claim on the plaintiff’s ability to substantiate his
claim without the documents’ aid.
Although Memorial Hermann’s concern that plaintiffs may circumvent the privilege
through artful pleading is a compelling one, defendants are not left without protection. First, by
permitting defendants to recover costs incurred from defending against frivolous or bad faith
pleadings, section 160.008(c) discourages the addition of groundless allegations of injury to
competition.98 Second, nothing in section 160.007 prevents defendants from seeking, as they do in
all civil cases, to limit discovery on the grounds that “the discovery sought is unreasonably
cumulative or duplicative, or is obtain[able] from some other source that is more convenient, less
burdensome, or less expensive.”99 Defendants may also assert that “the burden or expense of the
proposed discovery outweighs its likely benefit, taking into account the needs of the case . . . the
importance of the issues at stake in the litigation, and the importance of the proposed discovery in
96
Cf. TEX. R. CIV. P. 193.4(a) (“The party making the objection or asserting the privilege must present any
evidence necessary to support the objection or privilege.” (emphasis added)); see also Lunsford v. Morris, 746 S.W.2d
471, 473 (Tex. 1988) (“Absent a privilege or specifically enumerated exemption, our rules permit discovery of any
‘relevant’ matter; thus, there is no evidentiary threshold a litigant must cross before seeking discovery.”).
97
See Lowry, 802 S.W.2d at 673 (“[A]ll of the information sought to be discovered was gathered by the State
during the investigation that led to the filing of this antitrust enforcement action. The State has refused to provide
materials requested by the insurers that could lead to evidence supporting their defense. It is difficult for the insurers
to make a more particularized showing of need for these documents, the contents of which are unknown to them.”).
98
See TEX. OCC. CODE § 160.008(c) (“A defendant subject to this section may file a counterclaim in a pending
action or may prove a cause of action in a subsequent action to recover defense costs, including court costs, attorney’s
fees, and damages incurred as a result of the civil action, if the plaintiff’s original action is determined to be frivolous
or brought in bad faith.”).
99
TEX. R. CIV. P. 192.4(a).
21
resolving the issues.”100 Defendants may also seek protective orders to protect themselves “from
undue burden, unnecessary expense, harassment, annoyance, or invasion of personal,
constitutional, or property rights.”101
Finally, because the statute provides that information “is not confidential to the extent it is
considered relevant,”102 the exception’s scope is still narrower than the otherwise applicable scope
of discovery, which permits discovery of information that “appears reasonably calculated to lead
to the discovery of admissible evidence.”103 Defendants may further limit the scope of discovery
through the judicious use of special exceptions, which are “the appropriate vehicle . . . by which
an adverse party may force clarification of vague pleadings,”104 thereby narrowing the range of
facts that will be of consequence in the action.105
As such, we hold that judges are to determine a subsection (b) “preliminary finding” on the
basis of the plaintiff’s pleadings. We now turn to the application of subsection (b) to Dr. Gomez’s
pleadings.
E. Dr. Gomez pleaded an anticompetitive action.
Dr. Gomez alleged that the defendants intentionally interfered with his “longstanding and
continuous relationships with referring physicians in the West Houston and Katy medical
community” and that the defendants’ acts constituted a “concerted effort . . . to restrain competition
100
TEX. R. CIV. P. 192.4(b).
101
TEX. R. CIV. P. 192.6(b).
102
TEX. OCC. CODE § 160.007(b) (emphasis added).
103
TEX. R. CIV. P. 192.3(a) (emphasis added).
104
Fort Bend Cnty. v. Wilson, 825 S.W.2d 251, 253 (Tex. App.—Houston [14th Dist.] 1992, no writ).
105
See Roark v. Allen, 633 S.W.2d 804, 810 (Tex. 1982) (“A petition is sufficient if it gives fair and adequate
notice of the facts upon which the pleader bases his claim. The purpose of this rule is to give the opposing party
information sufficient to enable him to prepare a defense.”).
22
in and monopolize surgical procedures.” Dr. Gomez also asserted that the defendants’ acts
“constitute illegal monopolization, attempted monopolization, and/or conspiracy to monopolize
under applicable Texas law.”
Memorial Hermann does not dispute that Dr. Gomez alleged that Memorial Hermann
violated the TFEAA, but rather, argues Dr. Gomez failed to plead a valid antitrust claim. Memorial
Hermann challenges the sufficiency of Dr. Gomez’s allegations, taken as true, to establish (1) a
legally cognizable injury to competition, and (2) an adverse effect on competition in the relevant
market. The crux of Memorial Hermann’s argument is its contention that caselaw overwhelmingly
establishes that a claim for an injury to a single physician at a single hospital is insufficient. We
disagree with Memorial Hermann’s characterization of Dr. Gomez’s allegations as well as its
characterization of the law.
We “construe the TFEAA in harmony with federal antitrust caselaw to promote
competition for consumers’ benefit.”106 “Because our own caselaw is limited, we rely heavily on
the jurisprudence of the federal courts.”107
The TFEAA declares that “[e]very contract, combination, or conspiracy in restraint of trade
or commerce is unlawful,” and that “it is unlawful for any person to monopolize, attempt to
monopolize, or conspire to monopolize any part of trade or commerce.” 108 As discussed above,
106
Coca-Cola Co. v. Harmar Bottling Co., 218 S.W.3d 671, 688–89 (Tex. 2006); see also TEX. BUS. &
COMM. CODE § 15.04.
107
Coca-Cola Co., 218 S.W.3d at 688–89. Accord Caller-Times Pub. Co. v. Triad Commc’ns, Inc., 826
S.W.2d 576, 580 (Tex. 1992) (“Because section 15.05(b) of the Texas Antitrust Act is comparable to section 2 of the
Sherman Antitrust Act, we look to federal law interpreting section 2 of the Sherman Act for guidance in interpreting
section 15.05(b) of the Texas Antitrust Act.”); DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 687 (Tex. 1990)
(“Section 15.05 is comparable to, and indeed taken from, section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 (1988).
Accordingly, we look to federal judicial interpretations of section 1 of the Sherman Act in applying section 15.05(a)
of our state antitrust law.”).
108
TEX. BUS. & COMM. CODE § 15.05(a)–(b).
23
however, the TFEAA does not operate as a qui tam provision,109 but rather limits the ability to
bring suit under the TFEAA to persons “whose business or property has been injured by reason of
any conduct declared unlawful in Subsection (a), (b), or (c) of Section 15.05 of [the] Act.”110 Thus,
courts have held that standing to pursue an antitrust suit exists only if a plaintiff shows (1) injury-
in-fact, an injury to the plaintiff proximately caused by the defendant’s conduct; (2) antitrust
injury; and (3) proper plaintiff status, which assures that other parties are not better situated to
bring suit.111
On its own, the elimination of a single competitor does not constitute proof of an
anticompetitive effect for every market and context.112 Claims of improper restraint of trade
require a plaintiff to “plead . . . a reduction of competition in the market in general and not mere
injury to their own positions as competitors in the market.”113 However, it is also well established
that the United States Supreme Court has “forb[idden] as a matter of law, a defense based upon a
claim that only one small firm, not competition itself, had suffered injury,”114 because “[m]onopoly
109
Cf. BLACK’S LAW DICTIONARY 1443 (10th ed. 2014) (defining qui tam action as “[a]n action brought
under a statute that allows a private person to sue for a penalty, part of which the government or some specified public
institution will receive”). See, e.g., TEX. HUM. RES. CODE § 36.110.
110
TEX. BUS. & COMM. CODE § 15.21(a)(1).
111
Doctor’s Hosp. of Jefferson, Inc. v. Se. Med. Alliance, Inc., 123 F.3d 301, 305 (5th Cir. 1997); but see
Levine v. Cent. Fla. Med. Affiliates, Inc., 72 F.3d 1538, 1548 (11th Cir. 1996) (“‘When a court concludes that no
violation has occurred, it has no occasion to consider standing . . . An increasing number of courts, unfortunately,
deny standing when they really mean that no violation has occurred.’” (quoting P. Areeda & H. Hovenkamp, Antitrust
Law ¶ 360f, at 202–03 (rev. ed. 1995))).
112
Austin v. McNamara, 979 F.2d 728, 739 (9th Cir. 1992) (emphasis removed); see also Les Shockley
Racing, Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504, 508 (9th Cir. 1989) (“[R]emoval of one or more competing sellers
from any market necessarily has an effect on competitive conditions within that market. But removal of one or a few
competitors need not equate with injury to competition.”).
113
Les Shockley Racing, Inc., 884 F.2d at 508.
114
NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 134–35 (1998) (discussing Klor’s, Inc. v. Broadway-Hale
Stores, Inc., 359 U.S. 207 (1959)); see also Klor’s, Inc., 359 U.S. at 213 (holding that a group boycott was “not to be
24
can as surely thrive by the elimination of such small businessmen, one at a time, as it can by driving
them out in large groups.”115
“In order to successfully allege injury to competition, a . . . claimant may not merely recite
the bare legal conclusion that competition has been restrained unreasonably.”116 At a minimum,
the claimant must “sketch the outline of the antitrust violation with allegations of supporting
factual detail.”117 Whether the practice constitutes an improper restraint of trade will depend upon
whether the plaintiff’s allegations “suggest[] a market in which the removal of [a single
competitor] from the pool of competing sellers would adversely and unreasonably affect overall
competitive conditions.”118 Under the rule of reason,119 courts consider “a variety of factors,
including ‘specific information about the relevant business, its condition before and after the
tolerated merely because the victim is just one merchant whose business is so small that his destruction makes little
difference to the economy”).
115
Klor’s Inc., 359 U.S. at 213. Cf. U.S. Healthcare, Inc. v. Healthsource, Inc., 986 F.2d 589, 597 (1st Cir.
1993) (“Ultimately the issue turns upon antitrust policy, where a permanent tension prevails between the ‘no sparrow
shall fall’ concept of antitrust . . . and the ascendant view that antitrust protects ‘competition, not competitors.’”).
116
Les Shockley Racing, Inc., 884 F.2d at 508.
117
Id.
118
Id. at 509. Compare Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 7 (1984) (affirming dismissal
of the claim where the defendant was only one hospital of several in a large metropolitan area) with Full Draw Prods.
v. Easton Sports, Inc., 182 F.3d 745, 754 (10th Cir. 1999) (holding that the loss of one or two competitors alleged an
injury to competition where “[t]he allegation describes the anticompetitive effect of the boycott to be the loss of
competition through the elimination of AMMO’s sole archery trade show competitor and the resultant loss in
exhibition space output”) and Oltz v. St. Peter’s Comm. Hosp., 861 F.2d 1440, 1446–47 (9th Cir. 1988) (exclusion of
a single nurse anesthetist from a single hospital constituted an unreasonable restraint of trade where that hospital
“enjoyed the overwhelming majority of the market for general surgery” and “there was no evidence that patients could
effectively turn outside [the hospital] for alternate sources of anesthesia services”).
119
We note that “[o]nce experience with a particular kind of restraint enables [courts] to predict with
confidence that the rule of reason will condemn it, [courts will] appl[y] a conclusive presumption that the restraint is
unreasonable.” Arizona v. Maricopa Cnty. Med. Soc., 457 U.S. 332, 344 (1982). Dr. Gomez has not alleged that the
conduct at issue falls within a category of behavior deemed unreasonable per se, however.
25
restraint was imposed, and the restraint’s history, nature, and effect.’”120 As such, “the adequacy
of a physician’s contentions regarding the effect on competition is typically resolved after
discovery, either on summary judgment or after trial.”121
A successful claim of monopoly requires proof of “(1) the possession of monopoly power
in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished
from growth or development as a consequence of a superior product, business acumen, or historic
accident.”122 “The term ‘relevant market’ encompasses notions of geography as well as product
use, quality, and description. The geographic market extends to the ‘area of effective
competition’ . . . where buyers can turn for alternate sources of supply.”123 Demonstrating
attempted monopolization requires proof “(1) that the defendant has engaged in predatory or
anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability
of achieving monopoly power.”124
Under either claim, it is “necessary to consider the relevant market and the defendant’s
ability to lessen or destroy competition in that market.”125 However, the disposition of the question
of “a dangerous probability of achieving monopoly power” is “typically one that is not resolved at
120
Ginzburg v. Mem’l Healthcare Sys., Inc., 993 F. Supp. 998, 1009 (S.D. Tex. 1997) (quoting State Oil Co.,
522 U.S. at 10).
121
Brader v. Allegheny Gen. Hosp., 64 F.3d 869, 876 (3d Cir. 1995).
122
Grinnell Corp., 384 U.S. at 570–71.
123
Oltz, 861 F.2d at 1446.
124
Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993).
125
Id.
26
the pleading stage unless it is clear on the face of the complaint that the ‘dangerous probability’
standard cannot be met as a matter of law.”126
Here, Dr. Gomez is not complaining that the defendants have prevented him from obtaining
privileges at any of the hospitals in the area, but rather that the defendants have prevented him
from obtaining referrals.127 According to Dr. Gomez’s petition, the number one source of referrals
for a cardiovascular surgeon is a cardiologist, and his ability to compete—regardless of whether
he has staff privileges with one hospital or another—is contingent upon his reputation with those
cardiologists.128 The alleged injury to Dr. Gomez’s reputation is therefore not confined to a single
hospital,129 particularly if Dr. Gomez is able to show that Memorial Hermann has the capacity to
impact a substantial number of the market’s cardiologists’ willingness to refer patients to him.130
Dr. Gomez also alleges that by disseminating false information about his mortality rate,
Memorial Hermann cast doubt on robotic heart surgery procedures throughout Houston,
126
Brader, 64 F.3d at 876; see also Oltz, 861 F.2d at 1446 (“Defining the relevant market is a factual inquiry
ordinarily reserved for the jury.”).
127
See Brader, 64 F.3d at 877 (“[T]he type of injury alleged by Brader (the loss of income due to an inability
to practice in the relevant market area) is directly related to the illegal activity in which the defendant allegedly
engaged: a conspiracy to exclude Brader from the relevant market.”).
128
See, e.g., Fuentes v. S. Hills Cardiology, 946 F.2d 196, 202 (3d Cir. 1991) (“Fuentes alleges that the
defendants acted in concert to deny Fuentes, a provider of cardiological services, access to the Pittsburgh cardiological
market. Consequently, Fuentes asserts, that by eliminating him as a competitor, the boycott successfully reduced
competition for the defendants’ cardiological services.”). Compare BCB Anesthesia Care, Ltd. v. Passavant Mem’l
Area Hosp. Ass’n, 36 F.3d 664, 668 (7th Cir. 1994) (“The plaintiffs can practice at Passavant or elsewhere—they are
not disabled from practicing wherever they choose.”).
129
Cf. Bolt v. Halifax Hosp. Med. Ctr., 891 F.2d 810, 820 (11th Cir. 1990) (“[A]s the defendants’ own
arguments suggest, a negative decision at one hospital could affect the decision at another hospital; therefore . . . a
negative decision by one hospital could be tantamount to excluding a doctor from the profession as a whole.” (internal
quotation marks omitted)), overruled in part on other grounds by City of Columbia v. Omni Outdoor Adver., 499 U.S.
365 (1991).
130
Compare Coca-Cola Co., 218 S.W.3d at 688 (reversing a jury verdict where “there is only evidence of
harm in relatively isolated instances and no evidence of substantial foreclosure or anti-competitive effect in any
relevant market”).
27
inoculating itself from competition from a medical service that Memorial Hermann could no longer
offer. The deposition excerpts attached to and quoted in Dr. Gomez’s petition suggest that “referral
patterns changed” and that Dr. Gomez used to be the “Number One” physician, but that following
the conduct at issue, another physician, a Dr. Gibson, received more referrals.131 Dr. Gomez also
suggests in his briefing that Dr. Macris may have improperly benefitted from an increase in patients
due to Dr. Gomez’s decrease in patients.
Dr. Gomez alleges that as a result of the loss of trust in robotic heart surgery, patients would
incur $50,000 or more in medical expenses due to longer hospital stays.132 Dr. Gomez also disputes
the existence of any procompetitive justifications for presenting manipulated mortality data.133 As
Dr. Gomez has not yet had an opportunity to obtain full discovery, we are not in a position to
predict whether he will ultimately be able to sustain his burden of proof on these issues, however,
his petition sufficiently alleges an injury to competition under the TFEAA.134
131
Compare id. (“There must be evidence of demonstrable economic effect, not just an inference of possible
effect.” (internal quotation marks omitted)).
132
Cf. Leegin Creative Leather Prods., Inc., 551 U.S. at 886 (holding that the goal of judicial scrutiny is to
“distinguish[] between restraints with anticompetitive effect that are harmful to the consumer and restraints stimulating
competition that are in the consumer’s best interest”).
133
We note that there may be procompetitive justifications for allowing the presentation of even misleading
data, such as allowing for freer and more informed discussions—particularly in light of procedures available to
physicians to challenge the peer review process. For example, ensuring that the data cannot be challenged might delay
the hospital’s ability to respond to concerns raised by the data. It may be that such increased responsiveness is of
greater value than the interim damage to a physician’s reputation.
As we have already discussed, the inclusion and wording of the anticompetitive exception to the medical
peer review committee privilege does not condition the exception on a pre-determination that the behavior at issue is
indeed anticompetitive. It requires only that the action seeks to establish that the behavior is anticompetitive. This case
presents itself to us at the discovery phase rather than summary judgment. The procompetitive value of allowing for
the presentation of false data is a factual determination—one likely requiring the aid of expert reports—and it is not a
determination that we can make as a matter of law.
134
See Brader, 64 F.3d at 876.
28
As for Memorial Hermann’s arguments regarding Dr. Gomez’s identification of a relevant
market in which the alleged injury to competition occurred, we hold that Dr. Gomez’s petition
sufficiently pleads viable markets. It may be unlikely that the relevant market for a valid injury to
competition can be limited to the market for robotic-assisted heart surgery. For example, if
Memorial Hermann does not have a heart surgeon capable of performing those surgeries, then
Memorial Hermann could not have hoped to capture the patients who would otherwise have gone
to Dr. Gomez.135 On the other hand, if those patients are willing to substitute traditional heart
surgery procedures, then a cross-elasticity of demand between the two types of procedures must
exist, in which case review of the competitive impact cannot be limited to robotic-assisted heart
procedures.136
However, although the trial court noted that Dr. Gomez alleged that Memorial Hermann’s
actions “impacted the referral market for heart surgeons specializing in robotic-assisted heart
surgeries in Houston,” the trial court did not base its conclusion that the anticompetitive exception
applied on a finding of a particular market. Dr. Gomez’s petition alleges multiple service markets,
including the market for surgical procedures, the heart surgery market, and the referral market.
Precisely because Dr. Gomez alleged so many different potential markets for his claims—as
Memorial Hermann itself complains137—the flaw at this stage can only be with the state of
135
Cf. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 598 (1986) (“[A]s presumably
rational businesses, petitioners had every incentive not to engage in the conduct with which they are charged, for its
likely effect would be to generate losses for petitioners with no corresponding gains.”). But see Boczar v. Manatee
Hosps. & Health Sys., Inc., 993 F.2d 1514, 1518 (11th Cir. 1993) (“The jury could believe that the hospital would
benefit economically by securing its pre-existing ob/gyn staff and revenues. . . .”).
136
See United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 393 (1956) (“Determination of the
competitive market for commodities depends on how different from one another are the offered commodities in
character or use, how far buyers will go to substitute one commodity for another.”).
We note that Memorial Hermann filed special exceptions regarding Dr. Gomez’s allegations of the
137
relevant market. Memorial Hermann has not requested relief regarding the trial court’s denial of those special
29
evidence regarding the relevant market and not with Dr. Gomez’s pleadings. The same criticism
applies to Memorial Hermann’s complaints about Dr. Gomez having alternatively pleaded
different geographies for the relevant market for services.
Finally, Dr. Gomez’s allegations suggest that Memorial Hermann targeted not only his own
ability to compete for surgeries, but also Methodist West’s competitive position. Dr. Gomez claims
the destruction of his reputation served to deter Memorial Hermann’s other physicians from
practicing at Methodist West or from referring patients to physicians who are not affiliated with
Memorial Hermann.138 Dr. Gomez’s allegations, taken as true, suggest that Memorial Hermann
may have attempted to (1) intimidate a number of physicians from making referrals to specialists
at Methodist West, thus cutting off Methodist West’s patient base, and (2) intimidate other
doctors—Methodist West’s “supply” for its services—from practicing at Methodist West.139 Even
if Dr. Gomez himself would not have standing to bring a suit under the TFEAA based on antitrust
injury to Methodist West,140 Dr. Gomez could rely on the violation to show that the interference
with his prospective business relations was independently wrongful.141
We hold that Dr. Gomez’s petition presents multiple viable anticompetitive actions.
exceptions, however, and we do not consider whether pleading these markets in the alternative provides Memorial
Hermann with “information sufficient to enable [it] to prepare a defense.” See Roark, 633 S.W.2d at 810.
See Boczar, 993 F.2d at 1517 (“When Dr. Boczar joined its staff, Manatee Hospital had suffered defections
138
by members of its ob/gyn staff and feared still more ob/gyn departures to a competing hospital.”).
139
Cf. Brown Shoe Co. v. United States, 370 U.S. 294, 323–24 (1962) (“The primary vice of a vertical merger
or other arrangement tying a consumer to a supplier is that, by foreclosing the competitors of either party from a
segment of the market otherwise open to them, the arrangement may act as a ‘clog on competition.’” (emphasis
added)); Klors, Inc., 359 U.S. at 209 (“The concerted refusal to deal with Klor’s has seriously handicapped its ability
to compete and has already caused it a great loss of profits, goodwill, reputation and prestige.”).
140
See Doctor’s Hosp. of Jefferson, Inc., 123 F.3d at 305 (holding that standing to bring suit for antitrust
requires “proper plaintiff status, which assures that other parties are not better situated to bring suit”).
141
See Sturges, 52 S.W.3d at 713.
30
F. The trial court did not abuse its discretion in making a preliminary finding
that the documents in question are relevant to the anticompetitive actions
pleaded by Dr. Gomez.
The trial court ordered Memorial Hermann to produce a number of documents. We review
the trial court’s preliminary finding of relevance to each set of documents in the sealed record for
an abuse of discretion.142
Memorial Hermann argues that the various categories of documents are not relevant to Dr.
Gomez’s alleged anticompetitive action because (1) a number of the documents predate November
2011, which Dr. Gomez identified in his deposition as the relevant time period for the case; (2)
Dr. Gomez’s action involves the purportedly improper publication of false material through
different peer review committees, but he has not alleged that the documents themselves were
publicly disseminated; (3) certain documents do not discuss individual or aggregated physician
mortality rates, instead focusing on physician volume; (4) certain documents do not refer to Dr.
Gomez; and (5) with regard to one particular slide, the slide is not relevant to any actionable
antitrust conduct under Texas law. We conclude that the majority of the documents in the sealed
record are relevant to essential elements of the anticompetitive causes of actions that Dr. Gomez
has asserted.
Before discussing the relevance of otherwise protected documents, however, we note that
some of the documents included in the sealed record do not qualify for protection under the medical
peer review committee privilege. Any affidavits prepared for and submitted to the trial court are
neither records nor proceedings of the committees at issue nor communications to that committee.
They therefore receive no protection under either the medical peer review committee privilege or
the medical committee privilege. The committee bylaws attached as exhibits to the affidavits also
142
All page references in this section are to the sealed record.
31
do not qualify as a record of, proceeding of, or communication to the committee, and are therefore
not protected.143 However, the remaining documents in the sealed record are records or
proceedings of the committees, or communications to the committee.
Dr. Gomez alleges that Memorial Hermann manipulated and disseminated data on his
mortality rates in order to harm his ability to compete for surgical procedures as well as to
intimidate other doctors from defecting to Methodist West. As such, the withheld documents are
relevant if they would tend to make more or less probable Dr. Gomez’s allegations that Memorial
Hermann disseminated manipulated data on Dr. Gomez’s mortality rates, that the dissemination
caused Dr. Gomez’s referral rates to decline, or that other doctors were fearful that they could also
be targeted in such a fashion. These fact issues are at the core of Dr. Gomez’s claims that Memorial
Hermann violated the TFEAA and tortiously interfered with his prospective business relations.
A number of the documents at issue are relevant because they either contain data on
mortality rates of cardiovascular surgeons, discuss obtaining or direct others to obtain mortality
rates of cardiovascular surgeons, establish plans to review mortality data, or reference appropriate
parameters for calculating mortality data. Even if Memorial Hermann never published some of the
documents that contain data on mortality rates, the data could still be relevant to the veracity of
any data that Memorial Hermann did publish, particularly if discrepancies appeared between the
different reports of the data. Similarly, evidence establishing that Memorial Hermann did not
follow what it knew to be the appropriate parameters for calculating mortality data could support
an inference that Memorial Hermann intended to cast doubt on Dr. Gomez’s ability as a surgeon.
143
See Brownwood Reg’l Hosp. v. Eleventh Court of Appeals, 927 S.W.2d 24, 27 (Tex. 1996) (holding “the
bylaws, rules, and regulations of [the hospital’s] medical staff or Board of Trustees . . . are not records, reports, or
proceedings of a hospital or medical peer review committee, nor do they reveal communications to such a committee”).
32
The documents discussing physician volume are relevant. Memorial Hermann’s argument
that these documents lack any discussion of Dr. Gomez’s mortality rates does not negate the
documents’ potential relevance to Dr. Gomez’s allegations that he suffered a loss of referrals. The
documents could also tend to prove or disprove a corresponding increase in referrals to Memorial
Hermann’s other physicians, which could support Dr. Gomez’s allegations that Memorial
Hermann violated the TFEAA. Furthermore, although the data on physician volume predates the
time period in which Dr. Gomez alleges his referral rate declined, such data could still provide a
baseline for measuring the effect of the alleged conduct. Documents relating to referral patterns,
either of particular physicians or Memorial Hermann itself, are also relevant for the same reasons.
We note that the data on mortality and physician volume are associated with assigned
numbers rather than the names of particular physicians in a number of the documents. However,
although Memorial Hermann would be free to present evidence suggesting that the code effectively
concealed the physicians’ identities, the existing overlap between some of the coded and un-coded
documents is sufficient to support a preliminary finding that the presentations’ audiences as well
as a judicial fact finder would be able to understand which physicians’ rates and volumes appear
in the documents.
Other documents are relevant because they discuss Memorial Hermann’s plans to
differentiate itself from other hospitals’ cardiovascular surgery departments. This focus could
make more or less probable the likelihood that Dr. Gomez’s unique services were of sufficient
importance to provide the impetus for the alleged improper conduct.
Another category of relevant documents consists of maps that identify the locations of
doctors or hospitals in the surrounding geographic area, and maps demarcating the geographic
areas from which Memorial Hermann draws its patients. Because they provide a basis for
33
determining the feasibility of alternatives for patients in the area, these documents—in conjunction
with expert testimony—could make a particular geographic market for Dr. Gomez’s claims under
the TFEAA more or less probable.
On the other hand, Exhibit B to E. Leticia Mireles’ affidavit, which consists of an email to
a number of persons, is not relevant to Dr. Gomez’s allegations. The body of the email does not
include any information that would make any of Dr. Gomez’s allegations more or less probable.
Although the email includes an attachment, nothing before us suggests that a record of the sending
of this particular attachment to a number of persons would make Dr. Gomez’s allegations more or
less probable, because the attachment itself does not contain any data about Dr. Gomez or a
relevant competitive market. This email, appearing on pages 365–68 of the sealed record, is
therefore not relevant to an anticompetitive action, and retains its protection under the medical
peer review committee privilege.
In addition, the documents appearing on pages 119, 122–23, 129–30, 135, 138, 140, 142,
145, 154–55, 160–61, 166-67, 174–75, 180–81, 188–89, 195–98, and 243 of the sealed record also
retain their protection under the medical peer review committee privilege. These documents do
not discuss any data on mortality rates, physician volume, or referral pattern. Nor do they discuss
plans to disseminate such data, any staffing concerns of the hospital, or the competitive positions
of the hospital or Dr. Gomez. These documents lack any apparent relevance to Dr. Gomez’s claims,
and we hold the trial court therefore abused its discretion in compelling Memorial Hermann to
produce them.
However, the trial court did not abuse its discretion in making a preliminary finding that
the other materials in the record are relevant to an anticompetitive action. We therefore turn to
whether these documents enjoy any residual protection under the medical committee privilege.
34
III. When both are applicable, the anticompetitive exception to the medical peer review
committee privilege limits the provision of confidentiality under the medical
committee privilege.
This question is contingent on the extent to which overlapping provisions of two different
statutes can concurrently operate.144 To the extent possible, we will construe the different
provisions in a way that harmonizes rather than conflicts. 145 When the provisions are
irreconcilable, the general rule is that the terms of the later-enacted statute should control.146
However, conflicts between general and specific provisions favor the specific, and when the literal
terms of the two provisions cannot both be true, the terms of the specific provision ordinarily will
prevail.147 We will construe the general provision as controlling only when the manifest intent is
that the general provision will prevail and the general provision is also the later-enacted statute.148
Section 161.031 of the Health and Safety Code broadly defines a “medical committee” to
include “any committee, including a joint committee” of certain types of entities, including “a
hospital” or “a medical organization.”149 Medical committees may be “appointed ad hoc to conduct
144
See City of Waco v. Lopez, 259 S.W.3d 147, 153 (Tex. 2008).
145
TEX. GOV’T CODE §§ 311.025, 311.026(a); Tex. Indus. Energy Consumers v. CenterPoint Energy Hous.
Elec., LLC, 324 S.W.3d 95, 107 (Tex. 2010).
146
TEX. GOV’T CODE § 311.025(a); Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290, 297 (Tex.
2011).
TEX. GOV’T CODE § 311.026(b); TracFone Wireless, Inc. v. Comm’n on State Emergency Commc’ns, 397
147
S.W.3d 173, 181 (Tex. 2013).
148
TEX. GOV’T CODE § 311.026(b); Lopez, 259 S.W.3d at 153.
149
TEX. HEALTH & SAFETY CODE § 161.031(a). The other categories of entities include university medical
schools and health science centers, health maintenance organizations licensed under Chapter 843 of the Insurance
Code, extended care facilities, hospital districts, and hospital authorities. Id. § 161.031(a)(3)–(7).
35
a specific investigation or established . . . under the bylaws or rules of the organization or
institution.”150
The records and proceedings of a medical committee are governed by section 161.032 of
the Health and Safety Code. With the exception of “records maintained in the regular course of
business by a hospital . . . [or] medical organization,”151 medical committees and their members
may use the committee’s records and proceedings “only in the exercise of proper committee
functions.”152 Subject to the same exception,153 the “records and proceedings of a medical
committee are confidential and are not subject to court subpoena.”154
Section 161.032 of the Health and Safety Code suggests that medical committees are at
least potentially distinct from medical peer review committees.155 However, the definitions of the
two committees contain significant overlap. Provided that the other statutory requirements are
met,156 the definition of a medical peer review committee includes committees “of a health care
150
Id. § 161.031(b).
151
Id. § 161.032(f).
152
Id. § 161.032(d).
153
Id. § 161.032(f).
154
Id. § 161.032(a).
155
See id. § 161.032(b)(1) (proving that “a proceeding of a medical peer review committee . . . or medical
committee” may be held in a closed meeting (emphasis added)); id. § 161.032(b)(2) (providing for closed meetings
of the governing board of certain hospitals or health maintenance organizations if at the meeting, “the governing body
receives records, information, or reports provided by a medical committee [or] medical peer review committee”);
id. § 161.032(c) (providing that the “[r]ecords, information, or reports of a medical committee [or] medical peer review
committee” as well as “records, information or reports provided by a medical committee [or] medical peer review
committee . . . to the governing board of a public hospital, hospital district, or hospital authority” are exempt from the
disclosure provisions of Chapter 552 of the Government Code).
156
In order to be considered a medical peer review committee, the committee must (1) “operate[] under
written bylaws approved by the policy-making board or the governing board of the health care entity” and (2) be
“authorized to evaluate the quality of medical and health care services or the competence of physicians.” TEX. OCC.
CODE § 151.002(a)(8).
36
entity, the governing board of a health care entity, or the medical staff of a health care entity.”157
But any “entity . . . that provides or pays for medical care or health services” and “follows a formal
peer review process to further quality medical care or health care” will be considered a health care
entity.158
As such, although the committees of some health care entities may not be medical
committees,159 every committee of every entity listed in the definition of a medical committee that
“follows a formal peer review process to further quality medical care or health care”160 will be
considered a medical peer review committee—unless the committee does not “operate[] under
written bylaws approved by the policy-making board or the governing board of the health care
entity.”161 By extension, no medical committee that satisfies these two additional provisions
necessary to be deemed a medical peer review committee can credibly claim that its records and
proceedings are not governed by section 160.007 of the Occupations Code.162
157
Id.
158
Id. § 151.002(a)(5).
159
By way of example, “a health care collaborative certified under Chapter 848, Insurance Code” is
specifically designated as a health care entity, TEX. OCC. CODE § 151.002(a)(5)(E), but such entities would not fall
neatly within any of the entity categories listed in the definition of a medical committee. Compare id. with TEX.
HEALTH & SAFETY CODE § 161.031(a)(1)–(8). But see Brooks, 926 S.W.2d at 20 (“[T]he statutory definition of
“medical committee” is broad . . . That definition encompasses a medical peer review committee. . . .”).
160
TEX. OCC. CODE § 151.002(a)(5)(B)(ii).
161
Id. § 151.002(a)(8). In other words, any medical committee that both “operates under written bylaws”
approved by either its policy-making or governing board, and follows a formal peer review process will also be
considered a medical peer review committee. Id.
162
There is only one potential exception to this rule, and that exception applies to the records and proceedings
of governing bodies of “public hospital[s] owned or operated by a governmental entity, . . . hospital authorit[ies]
created under Chapter 262 or 264, Health and Safety Code, . . . [or] hospital district[s] created under Article IX, Texas
Constitution.” TEX. OCC. CODE § 151.002(a)(8)(B). These governing bodies are considered to be medical peer review
committees only in relation to their evaluation of the quality of the medical and health care services they provide or a
physician’s competence—and only “to the extent that the evaluation . . . involves discussions or records that
specifically or necessarily identify an individual patient or physician.” Id. § 151.002(a)(8)(B)(i)–(ii). Thus, none of
the governing bodies’ records or proceedings that does not “specifically or necessarily identify an individual patient
37
Here, because Memorial Hermann stipulated that the relevant committees are medical peer
review committees, the documents at issue cannot be considered confidential under section
161.032(a) of the Health and Safety Code without ignoring section 160.007 of the Occupations
Code. Memorial Hermann’s argument that a document should enjoy the combined protection of
all applicable privileges relies on our previous references to section 161.032 of the Health and
Safety Code and section 160.007 of the Occupations Code as “the medical committee privilege”
and “the medical peer review committee privilege,” respectively.163 However, the statutes
themselves confer confidentiality on records and proceedings—not the committee itself.164
Because the records and proceedings here are subject to both sections, both sections’ provisions
regarding confidentiality apply. That the records and proceedings of some medical peer review
committees may not be considered records and proceedings of a medical committee—or the
reverse—has no bearing on the question before us, because such documents would never be subject
to both sections.
Because the documents are subject to both sections, any reconcilable provisions will apply
in concert.165 For example, a medical committee that is also a medical peer review committee could
not use its records or proceedings in the exercise of improper committee functions simply because
or physician,” id. § 151.002(a)(8)(ii), would be subject to section 160.007 of the Occupations Code, although they
would still enjoy the protections of section 161.032 of the Health and Safety Code.
163
See, e.g., In re Living Ctrs. of Tex., Inc., 175 S.W.3d at 256.
164
See TEX. HEALTH & SAFETY CODE § 161.032(a) (“The records and proceedings of a medical committee
are confidential and are not subject to court subpoena.” (emphasis added)); TEX. OCC. CODE § 160.007(a) (“Except as
otherwise provided by this subtitle, each proceeding or record of a medical peer review committee is confidential,
and any communication made to a medical peer review committee is privileged.” (emphasis added)).
165
See Lopez, 259 S.W.3d at 153.
38
section 160.007 does not explicitly forbid it.166 By the same token, a dual medical committee and
medical peer review committee could not rely on the provision of confidentiality in section
161.032(a) to shirk its duty under section 160.007(d) to provide a physician with a written copy of
its recommendation to suspend the physician’s privileges.167
However, a record or proceeding is either confidential or not; it cannot be both. As we have
already discussed at length, the majority of the documents that Dr. Gomez seeks are relevant to an
anticompetitive action. Because Memorial Hermann has stipulated that those documents are the
records and proceedings of a medical peer review committee, section 160.007(b) provides that
those documents are “not confidential to the extent [they are] considered relevant.” 168 It is
impossible to reconcile that provision with a provision stating that the same documents “are
confidential and are not subject to court subpoena.”169 Section 160.007 is both the later enacted
statute as well as the more specific regarding when records and proceedings are confidential. 170
We therefore hold that the records and proceedings of a dual medical committee and medical peer
review committee do not enjoy any greater confidentiality under section 161.032(a) than they do
under section 160.007(b).
CONCLUSION
We hold that the trial court abused its discretion in ordering Memorial Hermann to produce
pages 119, 122–23, 129–30, 135, 138, 140, 142, 145, 154–55, 160–61, 166–67, 174–75, 180–81,
188–89, 195–98, 243, and 365–68 of the sealed record. We conditionally grant Memorial
166
See TEX. HEALTH & SAFETY CODE § 161.032(d).
167
See TEX. OCC. CODE § 160.007(d).
168
Id. § 160.007(b).
169
TEX. HEALTH & SAFETY CODE § 161.032(a).
170
See TEX. GOV’T CODE §§ 311.025(a); 311.026(b).
39
Hermann’s writ of mandamus, directing the trial court to modify its discovery order insofar as the
order compelled production of those documents. We are confident the trial court will comply, and
the writ will issue only if it does not. In all other respects, Memorial Hermann’s petition for writ
of mandamus is denied.
_____________________________
Don R. Willett
Justice
OPINION DELIVERED: May 22, 2015
40