Hermanson v. Multicare Health Sys., Inc. ( 2020 )

FILE THIS OPINION WAS FILED
FOR RECORD AT 8 A.M. ON
IN CLERK’S OFFICE NOVEMBER 12, 2020
SUPREME COURT, STATE OF WASHINGTON
NOVEMBER 12, 2020
SUSAN L. CARLSON
SUPREME COURT CLERK
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
DOUG HERMANSON, an individual, )
)
Respondent/Cross-Appellant, ) No. 97783-6
)
v. ) En Banc
)
MULTICARE HEALTH SYSTEM, INC., a )
Washington Corporation d/b/a TACOMA ) Filed: November 12, 2020
GENERAL HOSPITAL, JANE and JOHN )
DOES 1-10 and their marital communities )
comprised thereof, )
)
Petitioners/Cross-Respondents. )
)
OWENS, J. — This case considers the boundaries of the corporate attorney-
client privilege and how it operates when in conflict with a plaintiff’s physician-
patient privilege. First, we are asked to determine whether the corporate attorney-
client privilege allows a defendant hospital to have ex parte communications with a
plaintiff’s nonparty treating physician who is the hospital’s independent contractor,
but not its employee. We held in Youngs v. PeaceHealth that a defendant hospital
may have ex parte communications with a plaintiff’s nonparty treating physician—
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
who is the hospital’s employee—provided those communications are limited to the
facts surrounding the alleged negligent event. 179 Wash. 2d 645, 671, 316 P.3d 1035
(2014). We now hold that the nonparty physician in this case, while technically an
independent contractor of MultiCare, still maintains a principal-agent relationship
with MultiCare and serves as the “functional equivalent” of a MultiCare employee
such that Youngs would apply in this case; therefore, MultiCare may have ex parte
communications with the physician under the same limitations we set forth in Youngs.
Second, we are asked to determine whether the corporate attorney-client
privilege extends to communications between MultiCare and its nonphysician
employees who treated the plaintiff—specifically, two nurses and a social worker.
Because the nurse-patient privilege and the social worker-client privilege are
essentially identical in purpose to the physician-patient privilege, and because we
already held in Youngs that the corporate attorney-client privilege trumps the
physician-patient privilege when the hospital needs to gather information about the
alleged negligent event, we hold that MultiCare may have ex parte communications
with these nonphysician employees under the limitations we set forth in Youngs.
Accordingly, we reverse the Court of Appeals’ judgment as to MultiCare’s ex
parte communications with the physician, affirm the Court of Appeals’ judgment as to
MultiCare’s ex parte communications with the nurses and the social worker, and
remand to the trial court for further proceedings consistent with this opinion.
2
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
FACTS AND PROCEDURAL HISTORY
On September 11, 2015, Doug Hermanson sideswiped an unoccupied vehicle
and crashed into a utility pole. Hermanson was transported to Tacoma General
Hospital, which is owned by MultiCare Health System Inc. Hermanson was treated
by several MultiCare employees, including two nurses and a crisis intervention social
worker. However, the physician who treated Hermanson, Dr. Patterson, is an
independent contractor of MultiCare pursuant to a signed agreement between
MultiCare and Trauma Trust, his employer. Trauma Trust was created by MultiCare;
Dr. Patterson has his own office at Tacoma General Hospital and is expected to abide
by MultiCare’s policies and procedures.
During Hermanson’s treatment, an unidentified person at Tacoma General
Hospital conducted a blood test on Hermanson that showed a high blood alcohol level.
As a result, someone reported this information to the police, and the police charged
Hermanson with first degree negligent driving and hit and run of an unattended
vehicle.
Based on this disclosure of his blood alcohol results, Hermanson sued
MultiCare and multiple unidentified parties for negligence, defamation/false light,
false imprisonment, violation of Hermanson’s physician-patient privilege under RCW
5.60.060(4), and unauthorized disclosure of Hermanson’s confidential health
information under RCW 70.02.020(1). MultiCare retained counsel to jointly represent
3
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
MultiCare, Dr. Patterson, and Trauma Trust, reasoning that while Dr. Patterson and
Trauma Trust were not identified parties, Hermanson’s initial demand letter
implicated both parties. Hermanson objected to this joint representation and argued
that MultiCare’s ex parte communications with Dr. Patterson violated Hermanson’s
physician-patient privilege. MultiCare subsequently filed a motion for a protective
order to have ex parte communications with Dr. Patterson. In the same motion,
MultiCare sought to protect its ex parte communications with the two nurses and the
social worker who cared for Hermanson. In response, the trial court
1. Denied MultiCare’s motion as to Dr. Patterson,
2. Granted MultiCare’s motion as to the two nurses, and
3. Denied MultiCare’s motion as to the social worker.
The trial court reasoned that based on Youngs, 179 Wash. 2d at 671, Dr. Patterson
is not a MultiCare employee and thus does not fall under the corporate attorney-client
privilege, and the social worker does not fall under any type of medical privilege.
However, the trial court held Hermanson’s nurses qualified under the corporate
attorney-client privilege because they are MultiCare employees.
The trial court further ordered MultiCare to seek leave of court before it spoke
with any other MultiCare employees. Both parties filed a motion for reconsideration,
which the trial court denied.
4
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
MultiCare then filed a motion for discretionary review with the Court of
Appeals, and the Court of Appeals treated Hermanson’s response as a cross motion
for discretionary review. The Court of Appeals affirmed in part and reversed in part.
Hermanson v. MultiCare Health Sys., Inc., 10 Wash. App. 2d 343, 346, 448 P.3d 153
(2019). Specifically, the Court of Appeals
1. Affirmed the trial court’s ruling as to Dr. Patterson (no ex parte contact),
2. Affirmed the trial court’s ruling as to the two nurses (permitting contact),
and
3. Reversed the trial court’s ruling as to the social worker (permitting contact).
Id. The Court of Appeals agreed that MultiCare was not authorized to have ex parte
communications with Dr. Patterson because he is not a MultiCare employee. Id. But
using the same reasoning, the Court of Appeals held that MultiCare may have ex parte
communications with the nurses and the social worker who cared for Hermanson
because they are MultiCare employees. Id. at 363-64. Judge Glasgow concurred with
the majority regarding the nonphysician employees, but dissented as to Dr. Patterson;
Judge Glasgow reasoned that the corporate attorney-client privilege does not hinge on
whether the physician is an employee or an agent, and that MultiCare should be
allowed to communicate with Dr. Patterson regarding Hermanson’s injuries at issue
because Dr. Patterson admitted he is MultiCare’s agent and Dr. Patterson is the
“functional equivalent” of a MultiCare employee. Id. at 369, 371 (Glasgow, J.,
concurring in part, dissenting in part).
5
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
Both parties filed petitions for review, which were granted. Hermanson v.
MultiCare Health Sys., Inc., 194 Wash. 2d 1023 (2020). The Washington State
Association for Justice Foundation, the Washington State Hospital Association, the
Washington State Medical Association, and the American Medical Association all
filed amicus briefs.
ANALYSIS
Though we ordinarily review a trial court’s discovery rulings for an abuse of
discretion, a trial court’s interpretations of statutes and judicial decisions constitute
issues of law, which we review de novo. Fellows v. Moynihan, 175 Wash. 2d 641, 649,
285 P.3d 864 (2012). The attorney-client privilege protects clients from disclosure of
confidential communications made between the client and their attorney within the
course of the attorney’s professional employment. RCW 5.60.060(2). This privilege
exists “to encourage full and frank communication between attorneys and their clients
and thereby promote broader public interests in the observance of law and
administration of justice.” Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S. Ct.
677, 66 L. Ed. 2d 584 (1981). This privilege extends to corporations and their hired
counsel and will sometimes apply to midlevel and lower level corporate employees.
Id. at 390, 394, 395; Newman v. Highland Sch. Dist. No. 203, 186 Wash. 2d 769, 777-78,
381 P.3d 1188 (2016).
6
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
However, defense counsel may not engage in ex parte communications with a
plaintiff’s treating physicians. Loudon v. Mhyre, 110 Wash. 2d 675, 676, 756 P.2d 138
(1988) (hereinafter the “Loudon rule”). We promulgated this rule because “[t]he mere
threat that a physician might engage in private interviews with defense counsel would,
for some, have a chilling effect on the physician-patient relationship and hinder
further treatment.” Id. at 679. The Loudon rule further ensures that physicians may
maintain their own ethical duties under the Hippocratic Oath and under the American
Medical Association’s guidelines. Id.
In a medical malpractice lawsuit, a hospital defendant’s corporate attorney-
client privilege often conflicts with the plaintiff’s physician-patient privilege—
specifically when the plaintiff’s treating physician is the defendant’s employee. RCW
5.60.060(4); see Youngs, 179 Wash. 2d at 661. Thus, in Youngs, we reevaluated the
Loudon rule and held, “If Loudon conflicts with a defendant’s corporate attorney-
client privilege . . . it must yield to that privilege.” Id. at 671. Specifically, we held
that a corporate defendant’s attorney “may engage in privileged (ex parte)
communications with the corporation’s physician-employee where the physician-
employee has firsthand knowledge of the alleged negligent event and where the
communications are limited to the facts of the alleged negligent event.” Id.
We are now faced with two new questions that we did not expressly answer in
Youngs: First, can this exception apply to a plaintiff’s treating physician who is an
7
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
independent contractor of the defendant, not an employee? And second, does this
exception extend to a plaintiff’s treating nurses and social worker who are the
defendant’s employees? For the reasons discussed below, we conclude that Youngs
can apply to a plaintiff’s treating physician who is an independent contractor of the
defendant so long as there is a principal-agent relationship between the physician and
the defendant hospital; we conclude this is true for Dr. Patterson and MultiCare. We
further conclude that Youngs does extend to a plaintiff’s treating nurses and social
worker who are employees of the defendant hospital.
1. The Corporate Attorney-Client Privilege Applies to Dr. Patterson, Subject
to the Limitations in Youngs
The physician-patient privilege “prohibits a physician from being compelled to
testify, without the patient’s consent, regarding information revealed and acquired for
the purpose of treatment.” Loudon, 110 Wash. 2d at 677-78; see also RCW 5.60.060(4).
In Youngs, we created an exception to this privilege when it conflicts with the
defendant hospital’s corporate attorney-client privilege. See Youngs, 179 Wash. 2d at
671. In Youngs, the plaintiff objected to the hospital having ex parte interviews with
his treating health care providers, who were the hospital’s employees. Id. at 653-54.
While we reflected that the physician-patient privilege “‘is a fiduciary one of the
highest degree,’” id. at 659 (internal quotation marks omitted) (quoting Loudon, 110
Wash. 2d at 679), we also reasoned that the corporate attorney-client privilege must be
protected. Thus, we adopted a modified version of the corporate attorney-client
8
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
privilege discussed in the United States Supreme Court’s Upjohn decision to permit a
corporate defendant to speak ex parte with its employees who have firsthand
knowledge of the incident, so long as such communications “are limited to the facts of
the alleged negligent event.” Id. at 671.
Hermanson argues, and the lower courts agreed, that Youngs is limited to
nonparty physicians who are the hospital defendant’s employees—not its independent
contractors. However, Youngs was not decided based on this distinction but was,
instead, based on “counsel’s ability to ‘ascertain[ ] the factual background’ of a ‘legal
problem’” and corporate counsel’s ability “‘to determine what happened’ to trigger
the litigation.” Id. at 664 (alteration in original) (internal quotation marks omitted)
(quoting Upjohn, 449 U.S. at 390, 392). As Judge Glasgow correctly stated in her
dissent, Upjohn and Youngs had “the central goal of promoting candid and honest
communication between a corporation’s attorney and the individuals acting as agents
of the corporation who may know the factual details germane to the legal problem.”
Hermanson, 10 Wash. App. 2d at 370 (Glasgow, J., concurring in part, dissenting in
part). Regardless if Dr. Patterson is an independent contractor, both parties state that
Dr. Patterson treated Hermanson for the injuries at issue in their lawsuit and performs
work on behalf of MultiCare. Dr. Patterson has the information to “‘determine what
happened’ to trigger the litigation,” and Youngs does not restrict MultiCare from
consulting Dr. Patterson on these matters because of Hermanson’s physician-patient
9
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
privilege. Id. at 363 (internal quotation marks omitted) (quoting Youngs, 179 Wash. 2d
at 664).
Furthermore, pursuant to our holding in Newman, Dr. Patterson still maintains a
principal-agent relationship with MultiCare such that they should be allowed to have
ex parte communications limited by our holding in Youngs. In Newman, we held the
corporate attorney-client privilege does not extend to former employees because
“[w]ithout an ongoing obligation between the former employee and employer that
gives rise to a principal-agent relationship, a former employee is no different from
other third-party fact witnesses to a lawsuit.” 186 Wash. 2d at 780 (emphasis added).
We did not extend the corporate attorney-client privilege to former employees in
Newman because such former employees “c[ould] no longer bind the corporation and
no longer owe[d] duties of loyalty, obedience, and confidentiality.” Id.
In Newman, we relied on the Restatement (Third) of the Law Governing
Lawyers. See id. Under this restatement, “[t]he concept of agent . . . includes
independent contractors with whom the corporation has a principal-agent
relationship.” RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 73
cmt. d (AM. LAW INST. 2000). When determining if there is a principal-agent
relationship between two parties, “‘the most crucial factor is the right to control the
details of the work.’” Wilcox v. Basehore, 187 Wash. 2d 772, 789, 389 P.3d 531 (2017)
(quoting Larner v. Torgerson Corp., 93 Wash. 2d 801, 804-05, 613 P.2d 780 (1980)).
10
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
In this case, Dr. Patterson’s employer, Trauma Trust, is an organization formed
in part by MultiCare, and even though Dr. Patterson is not a MultiCare employee, he
is expected to abide by MultiCare policies and procedures as a trauma surgeon; he
even has his own office inside Tacoma General Hospital, which is operated by
MultiCare. Based on the relationship that exists between MultiCare and Trauma
Trust, Dr. Patterson still “owes duties of loyalty, obedience, and confidentiality” to
MultiCare regardless of his status as an independent contractor. Newman, 186 Wash. 2d
at 780. The fact that MultiCare and Trauma Trust list Dr. Patterson as an
“independent contractor” in their agreement does not alter the fact that MultiCare
controls Dr. Patterson’s conduct by ensuring he abides by MultiCare’s policies and
procedures.
Finally, Dr. Patterson serves as the “functional equivalent” of MultiCare’s
employee, in line with persuasive authorities from the federal Eighth and Ninth
Circuit Courts of Appeals. See In re Bieter Co., 16 F.3d 929, 938 (8th Cir. 1994); see
also United States v. Graf, 610 F.3d 1148, 1159 (9th Cir. 2010). In Bieter, the Eighth
Circuit held that the corporate attorney-client privilege extended to nonemployees
“who possess a ‘significant relationship to the [client] and the [client]’s involvement
in the transaction that is the subject of legal services.’” 16 F.3d at 938 (alterations in
original) (quoting John E. Sexton, A Post-Upjohn Consideration of the Corporate
Attorney-Client Privilege, 57 N.Y.U. L. REV. 443, 487 (1982)). Similarly, in Graf,
11
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
the Ninth Circuit held that while the defendant was an outside consultant for
Employers Mutual, he was still the “functional equivalent” of an employee because he
“communicated with insurance brokers and agents on behalf of Employers Mutual,
. . . managed company employees . . . [and] was the company’s primary agent in its
communications with corporate counsel.” 610 F.3d at 1159.
Dr. Patterson performs work for MultiCare similar to the parties in Bieter and
Graf. Like the nonemployee in Bieter, Dr. Patterson maintains a “significant
relationship” to MultiCare, as Dr. Patterson performs work on behalf of MultiCare as
a trauma surgeon and reports his work pursuant to MultiCare’s and Trauma Trust’s
agreement. Clerk’s Papers at 475-76. And similar to the nonemployee in Graf who
performed multiple employee-equivalent tasks on behalf of Employers Mutual that
Employers Mutual monitored, Dr. Patterson conducts work on patients in Tacoma
General Hospital under the purview of MultiCare and has his own office inside
Tacoma General Hospital, essentially working on behalf of both MultiCare and
Trauma Trust. Unlike most independent contractors who are hired on a project-by-
project basis, Dr. Patterson constantly performs work in a MultiCare facility that is
consistently monitored by MultiCare, thus making him the “functional equivalent” of
a MultiCare employee.
Therefore, based on Youngs and Newman, and in keeping with the Eighth and
Ninth Circuits’ holdings in Bieter and Graf, we hold that MultiCare may have ex parte
12
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
communications with Dr. Patterson “limited to the facts of the alleged negligent
event.” Youngs, 179 Wash. 2d at 671. Our holding ensures we do not erode the Loudon
rule—recognizing that a patient’s physician-patient privilege must be well
protected—while acknowledging that we must continue to allow corporations to
effectively “‘ascertain[ ] the factual background’” of any alleged incidents that
involve their agents or employees. Id. at 664 (quoting Upjohn, 449 U.S. at 390).
Both parties raise arguments regarding whether MultiCare’s alleged vicarious
liability for Dr. Patterson’s actions affects whether MultiCare and Dr. Patterson
should be allowed to have ex parte communications. MultiCare’s Suppl. Br. at 5-12;
Resp. to MultiCare’s Pet. for Review and Cross-Pet. for Review at 7-8. Both parties
miss the point. Whether there is vicarious liability between two defendants is separate
from whether such parties may have ex parte communications with one another under
evidentiary privilege. See Wright v. Grp. Health Hosp., 103 Wash. 2d 192, 202, 691
P.2d 564 (1984)) (“A corporate employee who is a ‘client’ under the attorney-client
privilege is not necessarily a ‘party’ for purposes of the disciplinary rule.”).
Determining whether a corporate hospital may have ex parte communications with the
plaintiff’s nonparty treating physician does not necessarily answer whether the
13
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
hospital is vicariously liable for the physician’s actions. The trial court has not yet
ruled on vicarious liability here, and we do not rule on it now.1
2. The Corporate Attorney-Client Privilege Applies to the MultiCare Nurses
and the Social Worker Who Treated Hermanson, Subject to the Limitations
in Youngs
In its ruling, the Court of Appeals reasoned that since neither the nurse-patient
privilege nor the social worker-client privilege have “divergent underlying policies”
from the physician-patient privilege, the corporate attorney-client privilege also
trumps these two privileges when the corporation is seeking to gather information
surrounding the alleged negligent event. Hermanson, 10 Wash. App. 2d at 363-64. We
agree. We held in Youngs that the defendant hospital’s attorney-client privilege
trumps the plaintiff’s physician-patient privilege when the physician is the defendant’s
employee; so it follows that unless the nurse-patient privilege or the social worker-
client privilege is more protective than the physician-patient privilege, the corporate
attorney-client privilege also trumps these privileges when applied under similar
circumstances.
1
MultiCare further argues that it should be allowed to have ex parte communications
with a plaintiff’s treating physician if it enters into a representation agreement with the
physician. MultiCare’s Suppl. Br. at 13-15. But MultiCare’s argument would allow any
corporation to circumvent a plaintiff’s physician-patient privilege by entering into a
representation agreement with a treating physician, rendering the physician-patient privilege
moot whenever the corporation chooses. Our holding here is strictly limited to allowing ex parte
communications between MultiCare and Dr. Patterson based on the limitations already set in
Youngs.
14
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
The nurse-patient privilege is codified at RCW 5.62.020, and the social worker-
client privilege is codified at RCW 5.60.060(9); both operate in a similar fashion as
the physician-patient privilege. Compare with RCW 5.60.060(4). The legislature
enacted the nurse-patient privilege because, based on the similar work nurses and
physicians conduct with their patients, “policy considerations . . . dictate[d]
application of a privilege for registered nurses similar to the physician privilege.”
SUBSTITUTE S.B. REP. 4107, 49th Leg., Reg. Sess., at 1 (Wash. 1985). And when the
legislature enacted the social worker-client privilege, it considered clients’ fears that
information they had shared with their social workers would be “divulged in a court of
law,” SUBSTITUTE S.B. REP. 5931, 61st Leg., Reg. Sess., at 2 (Wash. 2009), similar to
patients’ fears of their physicians divulging their information. See Loudon, 110
Wash. 2d at 678 (“The danger of an ex parte interview is that it may result in disclosure
of irrelevant, privileged medical information.”). In other words, both privileges are
identical in their policies to the physician-patient privilege.
The intent behind our decision in Youngs was to ensure “‘full and frank
communication’” between the corporate defendant and its employees and agents to
discover the facts surrounding the alleged negligent event. 179 Wash. 2d at 650 (internal
quotation marks omitted) (quoting United States v. Jicarilla Apache Nation, 564 U.S.
162, 131 S. Ct. 2313, 180 L. Ed. 2d 187 (2011)). We clearly indicated that this goal
under a corporation’s attorney-client privilege trumps the Loudon rule and the
15
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
plaintiff’s physician-patient privilege. Id. at 664. Since the policies underlying the
nurse-patient and social worker-client privileges reflect that they are just as strong as
the physician-patient privilege, they should also make way for the corporate attorney-
client privilege in this context. Were we to now hold otherwise, such a ruling would
unnecessarily limit a corporate defendant’s ability to prepare for litigation and blur
our holding in Youngs. Therefore, we hold that MultiCare may have ex parte
communications with the nurses and the social worker who cared for Hermanson,
“limited to the facts of the alleged negligent event.” Id. at 671.
MultiCare requests this court to make a blanket statement as to whether Youngs
and Loudon apply to all nonphysician health care employees. MultiCare’s Reply Br.
at 13-15. We will not entertain MultiCare’s request. We decided Youngs by
balancing two significant, historical sets of privileged communications, ultimately
creating an exception to the Loudon rule, 179 Wash. 2d at 662-63, and the present case
reaches only two nonphysician privileges. Other privileges still exist that are not at
issue in this case that could conflict with a hospital’s corporate attorney-client
privilege. See, e.g., RCW 5.60.060(7), (7)(a) (sexual assault advocates who work for
an association that provides medical and/or legal advice); RCW 5.60.060(8), (8)(a)
(domestic violence advocates who work for a human services program); RCW
5.60.060(3) (clergy members, which easily applies in health care settings when such
16
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
members are serving as hospital chaplains). Defining the appropriate interaction of
these various privileges is not germane to this case and is not properly before us.
3. The Court of Appeals Erred by Holding That the Corporate Attorney-Client
Privilege Applies to the Nonphysician Employees on the Basis That They
Are “Named Parties” to Hermanson’s Lawsuit
The Court of Appeals held that because the nurses and the social worker are
“named parties” in Hermanson’s lawsuit, MultiCare is authorized to have ex parte
communications with these nonphysician employees. Hermanson, 10 Wash. App. 2d at
364. The Court of Appeals is incorrect. The nurses and the social worker are not
“named parties” because a plaintiff may list a party as “unknown” only if the plaintiff
does not know that party’s identity, but the plaintiff may then amend the complaint
once the plaintiff discovers the party’s identity. CR 10(a)(2). Based on the record,
Hermanson clearly knows these employees’ identities and has not added their names
to his complaint. Therefore, we reject the Court of Appeals’ reasoning here.
4. We Decline Review of Hermanson’s Miscellaneous Claims Raised in His
Supplemental Brief
Hermanson requests in his supplemental brief that we overrule Youngs.
Resp’t’s/Cross-Appellant’s Suppl. Br. at 1-8. He also argues that the Court of
Appeals erred in reversing the trial court’s order that MultiCare seek leave of court
before engaging in any further ex parte contact with its employees. Id. 13-15;
Hermanson, 10 Wash. App. 2d at 346. Neither issue was raised in his cross petition for
17
Hermanson v. MultiCare Health System, Inc. et al.
No. 97783-6
review (PRV), nor does MultiCare discuss these issues in its PRV or reply brief. 2
When granting review of a Court of Appeals decision, we “will review only the
questions raised in the . . . petition for review and the answer, unless [we] order[]
otherwise upon the granting of the motion or petition.” RAP 13.7(b). Our order
granting the parties’ PRVs did not stipulate that Hermanson may raise these
miscellaneous claims in his supplemental brief, so we do not review them here. See
Hermanson, 194 Wash. 2d 1023.
CONCLUSION
We hold that MultiCare may have ex parte communications with Dr. Patterson
limited to the facts of the alleged negligent event. Additionally, we hold that Youngs
extends to a defendant hospital’s employee nurses and social workers, and MultiCare
may have ex parte communications with the nurses and the social worker who treated
Hermanson under the same limitations. Accordingly, we reverse the Court of
Appeals’ judgment as to ex parte communications with Dr. Patterson, affirm the Court
of Appeals’ judgment as to ex parte communications with the nurses and the social
worker, and remand to the trial court for further proceedings consistent with this
opinion.
2
MultiCare mentions that Hermanson seeks reversal of the Court of Appeals’ decision
striking down this leave of court order, MultiCare’s Reply Br. at 4, but Hermanson makes no
mention of it in his own cross PRV, and MultiCare does not discuss this issue in its PRV or reply
brief.
18
Owens, J.
Gordon McCloud,J.
Yu, J.
Madsen, J. Montoya-Lewis, J.
Chun, J.P.T.
Hermanson v. MultiCare Health System, Inc. et al.
(Stephens, C.J., concurring in part, dissenting in part)
No. 97783-6
STEPHENS, C.J. (concurring in part, dissenting in part)—Six years ago in
Youngs v. PeaceHealth, we created a narrow exception to the bright-line rule that
protection of the physician-patient relationship requires defense counsel may not
engage in ex parte contacts with plaintiff’s physicians. 179 Wash. 2d 645, 673, 316
P.3d 1035 (2014) (Stephens, J., concurring in part/dissenting in part) (citing Loudon
v. Mhyre, 110 Wash. 2d 675, 682, 756 P.2d 138 (1988)). This narrow exception is
rooted in the corporate attorney-client privilege, which requires corporate counsel
be able to investigate the circumstances potentially giving rise to corporate liability.
Id. at 663. I accept that Youngs is now the law, but the balance struck in Youngs
concerned only treating health care providers who are employees of the defendant—
here, it allows MultiCare’s counsel to have ex parte contact with its two employee
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
nurses and social worker who treated Doug Hermanson. With respect to the
plaintiff’s nonemployee treating physician, Dr. Patterson, the policy underlying the
Loudon rule must prevail and require the use of formal discovery processes.
Today’s majority disrupts the balance of policy considerations and tips the
scales dramatically in favor of medical corporations by extending Youngs’s logic—
in conflict with our precedent regarding the corporate attorney-client privilege—to
independent contractors. Because I would decline to expand Youngs to allow
ex parte privileged communication between MultiCare and Dr. Patterson, I
respectfully dissent in part.
FACTS
In September 2015, Doug Hermanson received care at Tacoma General
Hospital (owned by MultiCare) following an automobile accident. Hermanson was
primarily treated by Dr. Patterson, an employee of Trauma Trust working as an
independent contractor for MultiCare.1 Hermanson was also treated by a number of
MultiCare employees: two nurses, a crisis intervention social worker, and others not
relevant here.
1
Trauma Trust is a third-party entity created by MultiCare Health System and
Franciscan Health System providing trauma services in the Pierce County area. Clerk’s
Papers at 474. Trauma Trust directly employs physicians and other medical personnel who
deliver trauma care in contract partner hospitals.
-2-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
During the course of Hermanson’s treatment, an unknown worker at Tacoma
General communicated the results of Hermanson’s blood alcohol test to law
enforcement investigating the car crash. Hermanson brought suit against MultiCare
and multiple unidentified parties for unauthorized disclosure of confidential health
information under RCW 70.02.020, violation of physician-patient privilege under
RCW 5.60.060(4), and other claims. MultiCare entered into a joint representation
agreement along with Trauma Trust and Dr. Patterson, even though neither Trauma
Trust nor Dr. Patterson were named in Hermanson’s complaint. Hermanson
opposed the joint representation agreement and objected to MultiCare’s counsel
having ex parte communication with any of the nonparty health care providers
involved with his care. This interlocutory appeal followed.
ANALYSIS
This case requires us to carefully consider the balance struck in Youngs
between the physician-patient privilege and the corporate attorney-client privilege
when the doctor who treated the plaintiff is a nonparty witness in litigation. Unlike
in Youngs, the treating doctor here is not the defendant’s employee. The majority
nonetheless authorizes ex parte attorney-client privileged communications, based on
an imprecise “functional equivalency” test borrowed from federal circuit courts in
conflict with our own precedent. Worse yet, the majority applies this test on a record
-3-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
that fails to establish how Dr. Patterson is in fact the functional equivalent of a
MultiCare employee, especially in the face of a contract between MultiCare and
Trauma Trust describing an independent contractor relationship. As a result, the
majority disrupts the balance struck in Youngs and risks further erosion of the long-
standing Loudon rule⸺a rule essential to the integrity of the physician-patient
relationship.
I. The Majority Needlessly Expands Youngs To Include Agents and Independent
Contractors Based on Inapplicable Federal Cases and an Erroneous
Conclusion That Dr. Patterson Is the “Functional Equivalent” of a MultiCare
Agent
The majority bases its agency determination on curious grounds. It borrows
reasoning from federal cases that expanded the attorney-client privilege to some
independent contractors. Majority at 11 (citing In re Bieter Co., 16 F.3d 929, 938
(8th Cir. 1994); United States v. Graf, 610 F.3d 1148, 1159 (9th Cir. 2010)). But
this court has already rejected such expansion: in Newman v. Highland School
District No. 203 we expressly refused to expand the corporate attorney-client
privilege beyond the employer-employee context. 186 Wash. 2d 769, 776-77, 381 P.3d
1188 (2016) (citing Upjohn Co. v. United States, 449 U.S. 383, 394 n.3, 101 S. Ct.
677, 66 L. Ed. 2d 584 (1981) (“[W]e conclude Upjohn does not justify applying the
attorney-client privilege outside the employer-employee relationship.”)). The
-4-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
majority attempts to distinguish Newman because the specific circumstances of that
case involved former employees. Majority at 10-11. This reasoning misses the
point. Newman did not limit its holding to former employees—it plainly held that
the corporate attorney-client privilege does not apply to nonemployees. 186 Wash. 2d
at 780. Today’s majority is not at liberty to disregard that holding in favor of a
different rule adopted by select federal courts.
Even assuming the majority’s newly adopted rule of agency law applies, it
does not support allowing ex parte contact between MultiCare and Hermanson’s
treating physician here. The majority concludes a principal-agent relationship exists
between MultiCare and Dr. Patterson by relying on a “functional equivalen[cy]” test
from two federal circuit courts. Majority at 11 (citing Bieter, 16 F.3d at 938; Graf,
610 F.3d at 1159). But the Court of Appeals correctly distinguished these federal
cases because they concerned independent contractors who “were enmeshed in the
management structure.” Hermanson v. MultiCare Health Sys., Inc., 10 Wash. App. 2d
343, 360, 448 P.3d 153 (2019). In Bieter, the Eighth Circuit Court of Appeals
observed that the independent contractor was the “sole representative” for the
company at particular meetings and was “intimately involved” in the company’s
attempt to develop farmland. 16 F.3d at 938. Similarly, Graf concerned a
nonemployee who regularly made marketing and management decisions on behalf
-5-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
of the defendant company. 610 F.3d at 1157. In other words, these cases concerned
agents with managerial responsibilities, who often served as spokespersons for the
defendants in question. Bieter, 16 F.3d at 938; Graf, 610 F.3d at 1159.
The facts here are quite different. Upjohn requires analyzing the scope of
attorney-client privilege on a case-by-case basis. 449 U.S. at 396. Nothing in the
record in this case supports treating Dr. Patterson as the “functional equivalent” of a
MultiCare employee. The majority notes Dr. Patterson had an office in a MultiCare
facility and was monitored by MultiCare. Majority at 12. But these facts alone are
insufficient to demonstrate an employee-like relationship that justifies application of
the attorney-client privilege. There is no evidence Dr. Patterson played a part in
managerial decisions made by MultiCare or was a corporate spokesperson.
To the contrary, the relevant evidence in the record describes an independent
contractor relationship. The contract between MultiCare and Trauma Trust
(Dr. Patterson’s actual employer) unequivocally states that no employee/employer
agency relationship exists between the two: “[E]ach party is an independent
contractor with respect to the others. Except as expressly provided in this agreement,
no party is authorized or permitted to act or to claim to be acting as an agent or
employee of any other party.” Clerk’s Papers (CP) at 479 (emphasis added).
-6-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
Presumably, MultiCare had good reason to structure its contract with Trauma Trust
this way, including to limit its own liability.
The majority makes too much of MultiCare’s current willingness to agree that
Dr. Patterson is an agent.2 We should not allow a party to make an (apparently
conditional) adverse admission to establish a beneficial privilege and thereby avoid
the actual facts in the record. The majority’s willingness to do so results in failing
to meaningfully grapple with the realities of corporate control over medical services
and the pressures the corporate structure puts on both physicians and patients.
II. The Majority’s Expansion of Ex Parte Contact with Treating Health Care
Providers Will Undermine the Physician-Patient Relationship and Disrupt the
Careful Balance Struck in Loudon and Youngs
Even if the record could support treating Dr. Patterson as MultiCare’s agent,
the majority’s decision to depart from Loudon and expand Youngs beyond the direct
employment context is unwise. The relationship between physician and patient is a
“fiduciary one of the highest degree . . . involv[ing] every element of trust,
confidence and good faith.” Lockett v. Goodill, 71 Wash. 2d 654, 656, 430 P.2d 589
(1967). Our adoption of the rule against ex parte contact in Loudon recognized the
importance of protecting this relationship, even in a litigation context in which the
2
The majority states that “Dr. Patterson admitted he is MultiCare’s agent.” Majority
at 5. In fact, it was MultiCare’s chief medical officer who “admitted” Dr. Patterson was
an agent, and the legal effect of this statement, if any, has not been established. CP at 472.
-7-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
plaintiff has waived the evidentiary privilege by putting their medical condition at
issue. 110 Wash. 2d at 677-678. We understood that patients are willing to disclose
the most private details of their lives to their physicians, in large part, because they
trust that this sensitive private information will be held in the utmost confidence and
used only to further their own care. If a patient suspects their physician might betray
this trust in ex parte conversations, the societal benefit of the relationship will be
undermined and fully informed, quality medical care will suffer.
Recognizing the societal benefit of fostering full and frank communication
between patients and their doctors, Washington’s legislature codified the common
law physician-patient privilege to safeguard the confidentiality of those
communications. LAWS OF 1965, ch. 13, § 7(4) (codified at RCW 5.60.060(4)). We
have previously identified two core purposes of the physician-patient privilege: “(1)
to ‘surround patient-physician communications with a cloak of confidentiality to
promote proper treatment by facilitating full disclosure of information’ and (2) ‘to
protect the patient from embarrassment or scandal which may result from revelation
of intimate details of medical treatment.’” Smith v. Orthopedics Int’l, Ltd., PS, 170
Wash. 2d 659, 667, 244 P.3d 939 (2010) (plurality opinion) (internal quotation marks
omitted) (quoting Carson v. Fine, 123 Wash. 2d 206, 213, 867 P.2d 610 (1994)).
-8-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
Safeguarding the confidential relationship between health care providers and
patients is more vital than ever in this modern era of increasingly consolidated
corporate medicine. Though historically most doctors worked in small physician-
owned practices, a shift has taken place in recent years, and today most doctors are
either directly employed by or engaged as independent contractors by hospitals and
other large corporate entities. See CAROL K. KANE, AM. MED. ASS’N, UPDATED
DATA ON PHYSICIAN PRACTICE ARRANGEMENTS: FOR THE FIRST TIME, FEWER
PHYSICIANS ARE OWNERS THAN EMPLOYEES (May 2019), https://www.ama-
assn.org/system/files/2019-07/prp-fewer-owners-benchmark-survey-
2018.pdf.[https://perma.cc/RGU6-T9S9] This shift often places physicians in a
difficult position, with competing allegiances to the patients they serve and to the
corporations that write their paychecks. These allegiances are inevitably tested when
a patient brings a lawsuit against their doctor’s corporate employer. Though the
plaintiff patient waives the evidentiary privilege by putting their medical condition
at issue, the societal interest in protecting the physician-patient relationship remains.
Over 30 years ago, we recognized that protecting this societal interest required
adopting a bright-line rule that “defense counsel may not engage in ex parte contacts
with a plaintiff’s physicians.” Loudon, 110 Wash. 2d at 682. This rule recognizes that
“[t]he mere threat that a physician might engage in private interviews with defense
-9-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
counsel would, for some, have a chilling effect on the physician-patient relationship
and hinder further treatment.” Id. at 679. Specifically, we emphasized (1) the need
to ensure physicians maintain their ethical obligations under the Hippocratic Oath
and the guidelines of the American Medical Association, (2) the possibility that
ex parte contact could result in defense counsel being called at trial as an
impeachment witness, and (3) the problematic nature of asking treating physicians—
or defense counsel—to determine the relevancy of a plaintiff’s medical information.
Id. at 678-80. We later identified another significant policy concern: the potential
for defense counsel to utilize ex parte communications to improperly influence the
treating physician. Smith, 170 Wash. 2d at 669 n.2. Any decision addressing
modification of the bright-line Loudon rule must meaningfully engage with each of
these concerns.
In Youngs, we considered the values underlying the Loudon rule in a direct
employment context where the attorney-client privilege also weighed heavily. 179
Wash. 2d at 650. After carefully balancing the competing policy concerns, we held:
[C]orporate defense counsel may have privileged ex parte communications
with a plaintiff’s nonparty treating physician only where the communication
meets the general prerequisites to application of the attorney-client privilege,
the communication is with a physician who has direct knowledge of the event
or events triggering the litigation, and the communications concern the facts
of the alleged negligent incident.
-10-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
Id. at 664 (footnote omitted). This narrow exception to the Loudon rule was
designed to “strik[e] the proper balance between the attorney-client and physician-
patient privileges, limiting Loudon’s prophylactic protections to the extent necessary
to protect a corporate defendant’s right to fully investigate its potential liability.” Id.
at 665.
Today’s majority disrupts this balance, giving undue weight to the interests of
the corporate defendant at the expense of the plaintiff patient—and health care
provider’s—interests. I note the health care provider’s interests because the court in
Youngs recognized the risk that ex parte communications may result in “‘inadvertent
wrongful disclosures’” and present the possibility that defense counsel might be
called at trial as an impeachment witness. Id. at 659-60 (quoting Loudon, 110 Wash. 2d
at 680).
Youngs further recognized that if the corporate attorney-client privilege were
extended too far, it would “all but eviscerate Loudon,” particularly “in the era of
rapidly consolidating health care systems.” Id. at 661. We emphasized that
corporate counsel’s ability to investigate did not encompass health care that was
provided before or after the event triggering the litigation, such as care for
preexisting conditions or postevent recovery. Id. at 671.
-11-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
Our extensive discussion in Youngs grappling with the tensions between
competing evidentiary privileges—and the policies underlying these privileges—
exemplifies the length and depth of analysis necessary to do the meaningful
balancing these questions present. The majority’s analysis here, however, is all too
brief and cursory. The majority relies on a single phrase in Youngs to broadly hold
that the corporate attorney-client privilege essentially “trumps” the Loudon rule.
Majority at 15. But we cannot disregard the additional language that reveals our
holding was far more nuanced. Youngs, 179 Wash. 2d at 652 (“We also reject the
suggestion . . . that Upjohn completely trumps Loudon. It does not.”).
The majority briefly acknowledges—but does not account for—two important
policy concerns raised in Loudon. First, the majority recognizes how the “‘mere
threat that a physician might engage in private interviews with defense counsel
would, for some, have a chilling effect on the physician-patient relationship and
hinder further treatment.’” Majority at 7 (quoting Loudon, 110 Wash. 2d at 679).
Second, the majority describes how the Loudon rule ensures physicians are able to
maintain their own professional ethical duties. Id. These are not trivial concerns.
Without a foundation of trust, the physician-patient relationship crumbles, and health
care outcomes suffer. It must be remembered that what MultiCare seeks, and what
the majority grants, is the ability for defense counsel to have ex parte attorney-client
-12-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
privileged communications with Dr. Patterson about Hermanson’s health care.
Absent will be the protections of formal discovery, where both plaintiff’s and
defense counsel are present to safeguard the parties’ interests. If patients suspect
their physicians are prioritizing their own self-interests—or worse, the interests of
the physicians’ corporate employer—then in all health care settings we can expect
patients to hesitate in speaking candidly and completely.
Youngs intentionally set strict limitations on when and to what extent a
physician employed by the defendant may engage in ex parte communication with
corporate defense counsel for the purposes of investigating an alleged negligent
event. 179 Wash. 2d at 653. The majority offers insufficient justification for
expanding this exception, and the imprecise functional equivalency test it adopts
from federal cases fails to actually establish agency and conflicts with our holding
in Newman. Balancing the competing evidentiary privileges and societal interests
considered in Youngs, I would adhere to the Loudon rule in this case and protect the
integrity of the physician-patient relationship.
CONCLUSION
While the narrow decision in Youngs was justified by the attorney-client
privilege, there is no justification for expanding the allowance of ex parte contact
between defendant corporations and nonemployee treating physicians of the
-13-
Hermanson v. MultiCare Health System, Inc., et al. (Stephens, C.J., concurring in part,
dissenting in part), 97783-6
plaintiff. The protections afforded by the Loudon rule are more important than ever
in our modern era of increasingly consolidated corporate health care delivery. In
Loudon, we were “unconvinced that any hardship caused the defendants by having
to use formal discovery procedures outweighs the potential risks involved with ex
parte interviews.” 110 Wash. 2d at 680. I remain unconvinced today.
6��- �T __________
---�Stephens, C.J. ;
________________
______________________
-14-