James B. Hurwitz, M.D. v. Ahs Hospital Corp.

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5112-12T2
JAMES B. HURWITZ, M.D.,
APPROVED FOR PUBLICATION
Plaintiff-Appellant,
November 24, 2014
v.
APPELLATE DIVISION
1
AHS HOSPITAL CORP. and
OVERLOOK HOSPITAL MEDICAL
STAFF,
Defendants-Respondents.
_________________________________
Argued October 14, 2014 - Decided November 24, 2014
Before Judges Sabatino, Simonelli, and
Leone.
On appeal from the Superior Court of New
Jersey, Law Division, Union County, Docket
No. L-2194-11.
Philip F. Mattia argued the cause for
appellant (Mattia & McBride, P.C.,
attorneys; Mr. Mattia, of counsel and on the
briefs; Alex W. Raybould, on the brief).
Anthony Cocca argued the cause for
respondents (Bubb, Grogan & Cocca, LLP,
attorneys; Mr. Cocca, of counsel and on the
brief; Katelyn E. Cutinello, on the brief).
The opinion of the court was delivered by
SABATINO, P.J.A.D.
1
Improperly pled as Overlook Hospital.
This litigation arises out of a hospital's internal review
and investigation of a surgeon after shortcomings were revealed
in the care that surgeon had provided to certain patients.
After extensive administrative hearings conducted within the
hospital, in which the surgeon and his attorney participated,
the hospital's Board of Trustees revoked the surgeon's clinical
privileges. The surgeon contended that the actions taken
against him by the hospital were arbitrary, unreasonable, and
unduly punitive. He sought relief in the trial court, based on
several legal theories.
The trial court dismissed the surgeon's lawsuit. In doing
so, the court relied upon immunities from monetary damages
conferred by federal and New Jersey statutes upon hospitals and
the participants in peer review processes when evaluating a
physician's performance and in making decisions about that
physician's clinical privileges. See 42 U.S.C.A. §§ 11111 to
11112 and N.J.S.A. 2A:84A-22.10. The court found that plaintiff
had failed to present sufficient evidence or indicia to overcome
those statutory immunities. The court further ruled that
plaintiff had not justified the taking of depositions, or the
pursuit of other additional discovery, before the immunity
issues were adjudicated.
2 A-5112-12T2
For the reasons that follow, we affirm the trial court's
dismissal of plaintiff's complaint, the rejection of his request
to amend his pleadings a third time to amplify his allegations,
and the court's determination that plaintiff had failed to
justify additional discovery. In particular, we concur with the
trial court that the hospital and the participants in the
hospital's internal review processes are statutorily immune in
this case from monetary liability. We further agree with the
court that plaintiff has not identified sufficient grounds to
establish that the hospital conducted its investigation without
a reasonable basis for doing so, or that the hospital's
revocation of plaintiff's privileges was imposed without a
reasonable belief that such action was in furtherance of quality
health care objectives.
Additionally, we sustain the trial court's ruling that
plaintiff's conclusory allegations of wrongdoing by the hospital
and the participants in the internal review process are
insufficient to warrant depositions or the taking of other
additional discovery. We hold that a challenger's right to
obtain discovery, particularly depositions, in cases involving
these immunity statutes is not absolute. Instead, the court may
curtail discovery in its discretion if there are no reasonable
3 A-5112-12T2
indicia that a factual basis to surmount the immunities will be
uncovered.
I.
We derive the following chronology of events from the
record, describing them solely to the extent that they are
pertinent to the case-dispositive immunity questions raised
before us.2 In doing so, we acknowledge that plaintiff disagrees
with some of the hospital's findings3 of his deficient
2
Prior to oral argument on the appeal, we invited counsel, sua
sponte, to submit correspondence addressing confidentiality and
privacy issues bearing upon the disclosure of certain
information in the record. After receiving counsel's
submissions, we granted defendants' motion to seal a
confidential appendix submitted in connection with the appeal,
which contains materials that the trial court had likewise
sealed at defendants' request. Plaintiff did not oppose the
sealing, provided that if the dismissal of his lawsuit were
vacated by this court and the case remanded, the appellate
sealing order would not foreclose his evidential use of the
contents of the confidential appendix in the trial court.
Defense counsel agreed with that proviso. Counsel also agreed
that this court is not required under the applicable privacy or
confidentiality laws to use initials or pseudonyms in this
opinion for plaintiff himself or the names of the persons
involved in the hospital's internal review process. However,
counsel agreed, and we concur, that the names of the patients
who are mentioned in the confidential appendix should be
initialized and not revealed.
3
Counsel agreed that the findings and recommendations contained
within the confidential appendix may be freely quoted and
referred to in this court's opinion. See, e.g., Wahi v.
Charleston Area Med. Ctr., Inc., 562 F.3d 599, 610-11 (4th Cir.
2009) (quoting from various correspondence and peer review
committee findings), cert. denied, 558 U.S. 1158, 130 S. Ct.
1140, 175 L. Ed. 2d 991 (2010); see also Poliner v. Tex. Health
(continued)
4 A-5112-12T2
performance and that he vigorously contests the sanction of
revocation that the Board of Trustees ultimately imposed.
Initial Review of Plaintiff's Performance and the Temporary
Suspension of His Privileges
Plaintiff James B. Hurwitz, M.D., is a board-certified
general surgeon licensed in the State of New Jersey. Plaintiff
has been granted clinical privileges at several hospitals,
including Overlook Hospital ("Overlook" or "the hospital"),
where he first obtained privileges in 1998.
Eventually, concerns arose regarding the care that
plaintiff had provided to certain patients at Overlook. As a
result, in June 2010, the hospital's Chief of Surgery referred
cases of two of plaintiff's patients for review by an outside
(continued)
Sys., 537 F.3d 368, 372-73 (5th Cir. 2008) (summarizing the
findings of an Internal Medicine Advisory Committee and noting
that the appellant doctor was found to have "(1) poor clinical
judgment; (2) inadequate skills . . . ; (3) unsatisfactory
documentation of medical records; and (4) substandard patient
care"), cert. denied, 555 U.S. 1149, 129 S. Ct. 1002, 173 L. Ed.
2d 315 (2009); Gordon v. Lewistown Hosp., 423 F.3d 184, 194 (3d
Cir. 2005) (quoting various findings of the hospital's internal
hearing officer's report as well as other communications
exchanged between the chairman of the credentials committee and
the appellant doctor), cert. denied, 547 U.S. 1092, 126 S. Ct.
1777, 164 L. Ed. 2d 557 (2006); Singh v. Blue Cross/Blue Shield
of Mass., Inc., 308 F.3d 25, 29-30 (1st Cir. 2002) (freely
quoting from an internal "audit" of the appellant doctor's
performance, which stated that "competent expert care was rarely
seen" and that "documented treatment showed evidence of care
somewhat below recognized standards of care").
5 A-5112-12T2
expert, a faculty member at New York University School of
Medicine. The outside reviewer is not affiliated with Overlook.
Plaintiff was not concurrently informed that those cases had
been sent out for review.
The outside reviewer issued a report in August 2010,
opining that, with respect to one of the two patients in
question, plaintiff had not been "proactive in managing [the
patient's] care" and also that he had failed to "intervene when
the clinical situation required." The reviewer reached similar
conclusions with respect to the second patient. The reviewer
recommended "counseling, monitoring, and consideration of
restricting [plaintiff's] clinical privileges[,]" and if such
measures had already been taken, "terminating [plaintiff's]
privileges at Overlook Hospital."
Soon thereafter, on September 29, 2010, the hospital's
Medical Executive Committee ("MEC") convened to consider
authorizing an internal investigation into plaintiff's clinical
competence. On that same day, the twenty-six MEC members in
attendance unanimously voted in favor of commencing such a
formal investigation.
The next day, September 30, 2010, the president of the
hospital's medical staff issued a letter to plaintiff, notifying
him that the MEC had begun the investigation. As a consequence
6 A-5112-12T2
of the pending investigation, the president temporarily
suspended plaintiff's clinical privileges. This temporary
suspension was imposed pursuant to the hospital's bylaws.
The Chancery Division Action
Less than a week later, on October 1, 2010, plaintiff filed
an action in the Chancery Division seeking injunctive relief to
restrain and enjoin the hospital from suspending his privileges.
Plaintiff then filed an amended complaint in the Chancery
action, adding as a co-defendant the hospital's medical staff
("the Medical Staff"). The hospital and the Medical Staff filed
opposition to the injunctive application.
After hearing initial oral argument, the Chancery Division
judge presiding over the matter, Hon. John F. Malone, granted
plaintiff's request for certain expedited discovery and
scheduled further argument on the injunction. Among other
things, Judge Malone directed defendants to provide plaintiff
with a copy of the hospital's bylaws, written notice of the
reasons for any adverse action taken or proposed, results of any
investigation taken, medical charts, records, and any written
report of the hospital's findings, including a "recitation of
the [hospital's] actions and recommendations . . . and the basis
for [plaintiff's] summary suspension without [a] hearing[.]"
The judge declined to issue temporary restraints restoring
7 A-5112-12T2
plaintiff's privileges. Certain paper discovery, including
responses to interrogatories, apparently were thereafter
provided in the Chancery action, but no depositions were taken.
The Investigating Committee's Review
Meanwhile, as a follow-up to the September 2010 MEC
meeting, the hospital created an Ad Hoc Investigating Committee
("the Investigating Committee"), appointed by the Medical Staff,
to undertake the investigation and to submit a report with its
findings and recommendations to the MEC. Five physicians were
named to the Investigating Committee. The Investigating
Committee met several times between October 2010 and December
2010. Plaintiff was invited to provide written submissions, and
he did so in a letter from his counsel and also in his own
separate letter. Plaintiff declined, however, three
opportunities to meet with the Investigating Committee in person
and to answer questions.
On December 20, 2010, the Investigating Committee issued
its report, along with various recommendations. The report
noted that the Committee had reviewed plaintiff's care that he
had provided to six patients over a year-and-a-half period.
Based on its review of those six cases, the Investigating
Committee reached certain unfavorable conclusions. In
particular, its report found that plaintiff's care was "notable
8 A-5112-12T2
for poor documentation of care plans and delays in managing
complications of surgery, which resulted in adverse outcomes."
Given its findings, the Investigating Committee presented the
following recommendation:
Our recommendation is to remove [plaintiff]
from the ER [Emergency Room] call schedule
and to institute ad hoc review of 25
inpatient surgical cases [in which plaintiff
had acted] as primary surgeon by the
Surgical Care Review Committee. If
[plaintiff's] performance of the cases were
felt to be adequate, he would be able to
return to the ER roster.
Dismissal of the Chancery Action
The hospital then filed a motion to dismiss plaintiff's
Chancery action, in lieu of an answer, for failure to state a
claim upon which relief can be granted, pursuant to Rule 4:6-
2(e). That motion was granted on January 21, 2011.4
On the same day that Judge Malone granted the hospital's
motion to dismiss the Chancery action, the MEC issued its
decision based on the Investigating Committee's report. In a
letter dated January 21, 2011, the MEC informed plaintiff that
it had voted to impose a continued suspension of his privileges,
4
The dismissal order recites that the Chancery action was
dismissed "with prejudice," although the parties and the trial
court did not treat the dismissal of the Chancery Division as a
bar to plaintiff's subsequent litigation in the Law Division.
9 A-5112-12T2
subject to various terms and conditions. Specifically, the MEC
stated as follows:
After thoughtful consideration and
deliberation, the MEC voted to impose an
additional suspension of your clinical
privileges commencing upon your receipt of
this notice for a minimum of three (3)
months or until such time as you complete
professional courses at your expense
approved by the MEC addressing Medical
Ethics and Professionalism, Medical Record
Documentation and General Surgical Review.
Upon completion of the suspension, your
clinical privileges will be reinstated at
which time you will be required to undergo a
concurrent review of twenty-five (25) cases
by a supervising surgeon assigned by the
Chairman of the Department of Surgery.
During the concurrent review, you will be
ineligible for the Emergency Department on-
call schedule, you will not be provided
routine resident coverage for your patients,
and any and all elective cases will require
review and approval by the Chairman of the
Department of Surgery prior to scheduling a
patient for the OR [Operating Room] or
otherwise admitting a patient to Overlook
Hospital.
[(Emphasis added).]
A little less than a month later, Judge Malone denied
plaintiff's outstanding motion for a preliminary injunction.5
5
The parties do not explain why the trial court issued an order
denying plaintiff a preliminary injunction after the Chancery
action was already dismissed, although we suspect that denial of
the outstanding motion was issued for housekeeping reasons.
10 A-5112-12T2
Plaintiff's Law Division Complaint
Although it is not entirely clear from the record,
plaintiff apparently filed a new or a reinstated complaint in
the Law Division some time between January 2011 and November
2011. Despite the fact that the Chancery action had already
been dismissed in January 2011, plaintiff obtained an order in
May 2011 "transferring" his case from the Chancery Division to
the Law Division. Plaintiff also requested that his case be
reassigned to the complex commercial track, pursuant to Rule
4:5A-2(b), so as to enable a lengthier period for discovery.
That tracking request was granted.
In November 2011, the hospital moved to dismiss plaintiff's
Law Division complaint, without prejudice, "pending a resolution
or completion of the hospital['s] hearing and appeal process."
The hospital noted that, under its applicable bylaws, plaintiff
was entitled to a formal internal hearing to contest the MEC's
investigative findings and recommendations. In fact, plaintiff
had already requested such an internal hearing under the bylaws,
and that hearing had begun.
Plaintiff did not oppose a without-prejudice dismissal of
his Law Division action at that time. As his counsel
represented to us, plaintiff agreed to such a dismissal to
accommodate the hospital's internal administrative procedures,
11 A-5112-12T2
in light of the costs and burdens of challenging the hospital's
actions in two separate proceedings at the same time.
Consequently, plaintiff and the hospital entered into a
Consent Order on January 19, 2012, dismissing plaintiff's Law
Division action, expressly "without prejudice," pending a
resolution or completion of the hospital's internal hearing and
appeals process. Pursuant to the terms of the Consent Order,
plaintiff was permitted to reinstate his amended complaint in
the Law Division "without regard to any statute of limitations
issues." Aside from this, the Consent Order specified that the
parties "reserve[d] all rights concerning the claims and
defenses."
The Hospital's Internal Hearings
The hospital's internal hearings began in June 2011. After
a substantial delay of eight months due to scheduling conflicts
of plaintiff's counsel, the hearings were resumed and completed
February 2012.
The hearing panel consisted of three physicians and a
presiding member from an outside organization. Both plaintiff
and the MEC were represented by counsel. We are advised that
fact and expert witnesses for both parties presented sworn
12 A-5112-12T2
testimony to the panel, and were subject to cross-examination.6
Documents were presented into evidence, including medical
records of the specific patients whose cases were the subject of
the MEC investigation. The parties submitted post-hearing
briefs for the panel's consideration. A certified shorthand
reporter prepared a verbatim transcript of the hearings.7
On May 2, 2012, the hearing panel issued its report. The
panel concluded that plaintiff had been deficient in his care
and treatment of the four patients whose cases it had reviewed.
With regard to those patients, the panel concluded that
plaintiff "in various respects, demonstrated poor surgical
judgment, a lack of attentiveness to patients, untimely post-
operative management of surgical complications and/or a failure
to document thought processes and plans of care." In addition,
the panel faulted plaintiff for, as it found, entering a note in
6
In particular, we were advised at oral argument that plaintiff
himself testified at the hearing and that he presented his own
expert witness, although the limited record supplied to us is
insufficient to confirm this.
7
We have not been furnished with the hearing transcripts, but,
as we explain, infra, they are not essential to our review of
the legal issues being presented on this appeal.
13 A-5112-12T2
the chart of one of those four patients, which "falsely
indicated that [plaintiff] had met with the patient's mother."8
Based on its factual findings, the hearing panel
recommended that the terms of plaintiff's suspension as set
forth by the MEC should be adopted. The panel also indicated
that more stringent sanctions beyond such a suspension were not
warranted. More specifically, the panel recommended in its
written report, in pertinent part:
3. [T]hat the suspension of [plaintiff's]
clinical privileges and other restrictions
imposed by the MEC were fair and reasonably
necessary to protect the health and safety
of patients . . . . [and]
. . . .
5. The record does not support the
imposition of greater sanctions on
[plaintiff] than those imposed by the MEC,
including the revocation of his clinical
privileges.
The Board of Trustees' Revocation of Plaintiff's Privileges
Pursuant to the hospital's bylaws, the hearing panel
forwarded its report to the Board of Trustees. Focusing in
particular upon the hearing panel's discrete finding that
plaintiff had falsified a patient record, the Board of Trustees
8
We were advised at oral argument that the hearing panel
apparently found the testimony of the patient's mother more
credible than that of plaintiff on the disputed question of
whether such consultation had taken place.
14 A-5112-12T2
revoked his clinical privileges, effective immediately. It
conveyed that decision in a letter to plaintiff dated July 26,
2012. Plaintiff did not pursue any further appeal within the
hospital of the Board of Trustees' decision, although the bylaws
entitled him to appeal the decision to a "Review Panel composed
of not fewer than three persons."
Plaintiff's Motion to Reinstate His Law Division Case and
Defendants' Motion to Dismiss
After the Board of Trustees informed him of its decision to
revoke his privileges, plaintiff moved to reinstate his action
in the Law Division but simultaneously moved to file a proposed
Second Amended Complaint. His pleadings, as originally framed
and then revised in the proposed Second Amended Complaint,
asserted several legal theories for the recovery of damages,
including breach of contract, breach of the implied covenant of
good faith and fair dealing, and violation of plaintiff's due
process rights.9 Defendants opposed the reinstatement motion.
They argued, among other things, that the proposed Second
Amended Complaint failed to state a cause of action as a matter
of law because of defendants' federal and state statutory
immunities.
9
In his last proposed amended complaint, plaintiff ultimately
amended this allegation, given the absence of State action by
defendants, to a claim of violation of "fundamental fairness."
15 A-5112-12T2
After hearing oral argument, the Presiding Judge of the Law
Division, Hon. Kenneth J. Grispin, entered an order on March 12,
2013, accompanied by a written Statement of Reasons, denying
plaintiff's reinstatement motion, without prejudice.
Specifically, Judge Grispin found in his Statement of Reasons
that plaintiff's proposed Second Amended Complaint:
[f]ailed to plead malice on the part of the
hospital, or its staff, which was required
to rebut the presumption of reasonableness
pursuant to [42] U.S.C.A. § 11112(a).
Moreover, [plaintiff's] proposed amended
complaint fails to state a cause of action
as to the Board for the very same reasons
. . . . Similarly, [plaintiff's] alleged
"due process" claim, contained in Count
Three of the proposed amended complaint,
cannot be sustained against a non-profit
hospital.
Thereafter, plaintiff filed a motion for reconsideration
and for leave to file a further amendment to his Law Division
complaint. In support of his motion, plaintiff submitted a
proposed Third Amended Complaint naming as defendants "AHS
Hospital Corp.10 Board of Trustees." The proposed pleading also
names various fictitiously-named parties who have yet to be
identified.
Following another round of oral argument, Judge Grispin
denied plaintiff's motion for reconsideration. In a second
10
AHS Hospital Corporation evidently is the legal name of
Overlook Hospital.
16 A-5112-12T2
Statement of Reasons dated May 27, 2013, Judge Grispin concluded
that plaintiff's proposed Third Amended Complaint still "failed
to articulate sufficient facts which would demonstrate malice on
the part of Overlook which unjustly prejudiced [plaintiff] or
that the internal administrative hearing process was arbitrary
or capricious." The judge granted defendants' cross-motion to
dismiss the Law Division action, conclusively, specifying that
the dismissal was "with prejudice."
The Contentions on Appeal
On appeal, plaintiff contends that the trial court acted
prematurely in enforcing defendants' claimed immunities. He
argues that the court should have afforded him an opportunity to
conduct depositions, which he asserts might have uncovered
admissible evidence to overcome the immunities and which
potentially could demonstrate that defendants acted maliciously,
arbitrarily, or unreasonably. Although his counsel acknowledged
at the appellate oral argument that plaintiff had not handled
the patient cases in question "perfectly," and that some degree
of "remediation" of his conduct is appropriate, plaintiff
asserts that the sanction of revocation imposed by the Board of
Trustees is unduly harsh.
Plaintiff argues that the Board of Trustees' imposition of
the sanction of revocation, which is more severe than the
17 A-5112-12T2
conditional suspension recommended by the MEC and the hearing
panel, circumstantially shows that the Board of Trustees engaged
here in arbitrary and unreasonable decision-making. Plaintiff
also contends that the hospital and its agents waived in the
Consent Order their ability to oppose the reinstatement of his
lawsuit.
Plaintiff therefore urges that the trial court's dismissal
order be vacated. In particular, he seeks to have his lawsuit
reinstated for the completion of discovery and for a decision on
the merits with a fuller record.
In response, defendants maintain that the trial court
correctly enforced the terms mandated by and the public policies
reflected in the federal and state immunity statutes. Those
statutes, defendants emphasize, are designed to protect
hospitals and the participants in internal peer reviews from
having monetary liability to doctors who are sanctioned as a
result of such internal processes. Defendants further submit
that they did not waive in the Consent Order their right to
oppose a reinstatement of plaintiff's lawsuit on legal grounds,
here being the substantive immunities they are afforded under
the federal and state statutes.
Defendants further assert that the trial court sensibly
rejected plaintiff's request to conduct depositions and to
18 A-5112-12T2
pursue other discovery. They maintain there is no indication in
the record, apart from plaintiff's conclusory assertions and
suspicions, that the hospital or its representatives engaged
here in the sort of ill-founded or nefarious behavior that could
nullify their statutory immunities.
II.
The critical focus of this appeal centers upon the
application of the federal and state immunities that have been
invoked by defendants. We begin our analysis with an
examination of the federal statutory provisions, 42 U.S.C.A. §§
11111 to 11112.
The federal immunities are part of the larger Healthcare
Quality Improvement Act of 1986 ("HCQIA"), 42 U.S.C.A. §§ 11101to 11152, which provides, in relevant part, that in a
"professional review action of a professional review body . . .
(A) the professional review body, (B) any person acting as a
member or staff to the body, (C) any person under a contract or
other formal agreement with the body, and (D) any person who
participates with or assists the body with respect to the
action" shall not be liable in damages under any law "with
respect to [any review] action," 42 U.S.C.A. § 11111(a)(1), if
the review action is taken:
19 A-5112-12T2
(1) in the reasonable belief that the
action was in the furtherance of quality
health care,
(2) after a reasonable effort to obtain the
facts of the matter,
(3) after adequate notice and hearing
procedures are afforded to the physician
involved or after such other procedures as
are fair to the physician under the
circumstances, and
(4) in the reasonable belief that the
action was warranted by the facts known
after such reasonable effort to obtain facts
and after meeting the requirement of
paragraph (3).
[42 U.S.C.A. § 11112(a).]
A "professional review body," as that term is used in the
HCQIA, is broadly defined. The term encompasses "a health care
entity and the governing body or any committee of a health care
entity which conducts professional review activity, and includes
any committee of the medical staff of such an entity when
assisting the governing body in a professional review activity."
42 U.S.C.A. § 11151(11).
A "professional review action," defined earlier in the
HCQIA, consists of:
an action or recommendation of a
professional review body which is taken or
made in the conduct of professional review
activity, which is based on the competence
or professional conduct of an individual
physician (which conduct affects or could
affect adversely the health or welfare of a
20 A-5112-12T2
patient or patients), and which affects (or
may affect) adversely the clinical
privileges, or membership in a professional
society, of the physician. Such term
includes a formal decision of a professional
review body not to take an action or make a
recommendation described in the previous
sentence and also includes professional
review activities relating to a professional
review action.
[42 U.S.C.A. § 11151(9) (emphasis added).]
Further, the HCQIA defines "professional review activity"
to cover any activity of a health care entity with respect to an
individual physician conducted "(A) to determine whether the
physician may have clinical privileges with respect to, or
membership in, the entity, (B) to determine the scope or
conditions of such privileges or membership, or (C) to change or
modify such privileges or membership." 42 U.S.C.A. § 11151(10).
Significantly, the HCQIA imposes a rebuttable presumption
that an adverse professional review action undertaken by a
hospital against a physician is protected by the immunity. As
the statute recites, "[a] professional review action shall be
presumed to have met the preceding standards necessary for the
protection set out in section [42 U.S.C.A. § 11111(a)] unless
the presumption is rebutted by a preponderance of the evidence."
42 U.S.C.A. § 11112(a). The only specified qualification to
this broad immunity coverage, then, is if a plaintiff
demonstrates, by a preponderance of the evidence, that the
21 A-5112-12T2
defendant took action without a reasonable belief in initiating
the action, failed to provide adequate notice and hearing
procedures, or otherwise took action without a reasonable belief
it was warranted by the facts after a reasonable investigation.
See 42 U.S.C.A. § 11112(a)(1) to -(4).
"HCQIA immunity is a question of law for the court to
decide and may be resolved whenever the record in a particular
case becomes sufficiently developed." Bryan v. James E. Holmes
Reg'l Med. Ctr., 33 F.3d 1318, 1332 (11th Cir. 1994) (emphasis
added), cert. denied, 514 U.S. 1019, 115 S. Ct. 1363, 131 L. Ed.
2d 220 (1995). As the House of Representatives Committee that
took part in the HCQIA's passage explained:
The [immunity] provisions would allow a
court to make a determination that the
defendant has or has not met the standards
specified in section [11112(a)]. The
Committee intends that the court could so
rule even though other issues in the case
remain to be resolved. For example, a court
might determine at an early stage of
litigation that the defendant has met the
[section 11112(a)] standards, even though
the plaintiff might be able to demonstrate
that the professional review action was
otherwise improper. At that point, it would
be in order for the court to rule on
immunity. In such a case, the court could
still proceed to determine whether
injunctive, declaratory, or other relief
would be in order.
[Ibid. (quoting H.R. Rep. No. 99-903, at 12
(1986), reprinted in 1986 U.S.C.C.A.N. 6394
(emphasis added)).]
22 A-5112-12T2
This immunity from monetary liability has been enforced
repeatedly by the federal and state courts, aside from
exceptional instances where the immunity has been overcome.
See, e.g., Osuagwu v. Gila Reg'l Med. Ctr., 850 F. Supp. 2d
1216, 1239 (D.N.M. 2012) (finding that HCQIA immunity should not
apply because plaintiff was not "given a fair opportunity to
confront and cross-examine the anonymous physicians who prepared
the peer-review forms," and because the peer review panel was
not impartial, given that one of the reviewers was an "accuser,
investigator, prosecutor, and one of [the plaintiff's] judges
[at the hearing]"); see also Colantonio v. Mercy Med. Ctr., 901
N.Y.S.2d 370, 374 (App. Div. 2010) (finding that the defendants
were not clearly entitled to immunity because there remained a
"triable issue of fact as to whether, at the meeting of the
Committee, some defendants knowingly provided false
information").
Recognizing the strong legislative policy underlying 42
U.S.C.A. § 11111, the Eleventh Circuit has cautioned that the
proper role of courts on review of peer review decisions "is not
to substitute our judgment for that of the hospital's governing
board or to reweigh the evidence regarding the renewal or
termination of medical staff privileges." Bryan, supra, 33 F.3d
at 1337. Other courts applying the statute have expressed
23 A-5112-12T2
comparable deference to hospitals, their peer reviewers, and
their internal decision-makers. See, e.g., Harris v. Bradley
Mem. Hosp. & Health Ctr., 50 A.3d 841, 858 (Conn. 2012) (noting
that in enacting the HCQIA, Congress intended to "resolve the
question of immunity under the federal act as early as possible
and to reinforce judicial deference to hospital decision-
making"), cert. denied, 133 S. Ct. 1809, 185 L. Ed. 2d 812(2013).
Similar public policies are reflected in our State's
cognate immunity statute, N.J.S.A. 2A:84A-22.10. Like the
federal law, the New Jersey statute provides broad immunity for
damages to qualified persons for actions taken as part of a
hospital's peer review process. As is relevant here, N.J.S.A.
2A:84A-22.10 provides that:
Any person who serves as a member of, is
staff to, under a contract or other formal
agreement with, participates with, or
assists with respect to an action of:
. . . .
d. A hospital peer review committee having
the responsibility for the review . . . of
matters concerning the limiting the scope of
hospital privileges . . .
. . . .
shall not be liable in damages to any person
for any action taken or recommendation made
by him within the scope of his function with
the committee, subcommittee or society in
24 A-5112-12T2
the performance of said peer-review, ethics,
grievance, judicial, quality assurance or
professional relations review function, if
such action or recommendation was taken or
made without malice and in the reasonable
belief after reasonable investigation that
such action or recommendation was warranted
upon the basis of facts disclosed.
[(Emphasis added).]
Although N.J.S.A. 2A:84A-22.10 was adopted in 1979, it has
been cited only infrequently in published case law, at times
just in passing.11 None of those cases has specifically
addressed the legal questions presented here concerning the
evidentiary burden of a party seeking to overcome the immunity,
and what, if any, discovery, such a challenger is entitled to
obtain before the trial court rules on a defendant's motion to
dismiss based upon the New Jersey immunity.12
11
See, e.g., Patel v. Soriano, 369 N.J. Super. 192, 251 n.15
(App. Div.) (noting the statutory immunity provided to a
"hospital performing its credentialing function on applicants
for surgical privileges"), certif. denied, 182 N.J. 141 (2004);
see also Bainhauer v. Manoukian, 215 N.J. Super. 9, 38 (App.
Div. 1987) (mentioning the conditional privilege afforded to
physicians involved in hospital peer review but resolving the
underlying lawsuit on other grounds).
12
If, in fact, the federal immunity protects defendants, then
there is no need to reach the application of the overlapping
state-law immunity.
25 A-5112-12T2
III.
Having canvassed these key aspects of the federal and state
immunity statutes, we now consider the propriety of the trial
court's dismissal of plaintiff's complaint seeking monetary
damages.13 We also examine the related question of whether the
court's enforcement of defendants' immunities, thereby leaving
plaintiff without further discovery, was premature. Before
delving into that analysis, we dispose first of two procedural
matters.
A.
First, we reject plaintiff's argument that the Consent
Order should be construed as a waiver of defendants' right,
based on their federal and state immunities, to oppose
plaintiff's claims. The terms of the Consent Order cannot be
reasonably interpreted to bar defendants from interposing their
immunity arguments. The plain language of the Consent Order
provides that the parties "reserve all rights concerning the
claims and defenses." (emphasis added).
A consent order is, in essence, an agreement of the parties
that has been approved by the court. As the Supreme Court has
13
Plaintiff's complaint in the Law Division deleted his request
that he had made earlier in the Chancery Division for the
equitable relief of reinstatement of his clinical privileges.
Hence, the only specified relief that he now seeks is monetary
damages.
26 A-5112-12T2
consistently noted, one of the "'fundamental canons of contract
construction require that we examine the plain language of the
contract and the parties' intent, as evidenced by the contract's
purpose and surrounding circumstances.'" Highland Lakes Country
Club & Cmty., Ass'n v. Franzino, 186 N.J. 99, 115 (2006)
(quoting State Troopers Fraternal Ass'n v. New Jersey, 149 N.J.
38, 47 (1997) (citations omitted)). The plain language of the
Consent Order here is not ambiguous, nor is it obscured by the
surrounding circumstances. Defendants clearly did not forfeit
in the Consent Order their right to invoke their statutory
immunities, or their right to invoke them as soon as the
litigation was reactivated.
Moreover, our Court Rules explicitly state that a request
to dismiss for failure to state a claim "may be made in any
pleading permitted or ordered or by motion for summary judgment
or at the trial on the merits." R. 4:6-7 (emphasis added).
Thus, by its very terms, Rule 4:6-7 permits a party to raise the
defense of a failure to state a claim as late as trial, as well
as sooner on motion. See Buteas v. Raritan Lodge No. 61 F. &
A.M., 248 N.J. Super. 351 (App. Div. 1991); see also Pressler &
Verniero, Current N.J. Court Rules, cmt. 1 on R. 4:6-7 (2015)
(stating that a defense under Rule 4:6-2(e) "may be raised as
late as trial"). We further note that defendants did, in fact,
27 A-5112-12T2
assert the defense of failure to state a claim in response to
plaintiff's amended verified complaint that he had filed earlier
in the Law Division, albeit in a footnote in their motion
papers, before the Consent Order was entered.
We recognize that defendants agreed in the Consent Order
that plaintiff could reinstate his amended complaint. However,
as plaintiff stated at the appellate argument, he sought to
"reinstate" not his First Amended Complaint but his Second
Amended Complaint. In any event, had defendants acceded to
reinstatement of his First Amended Complaint and then opposed
further amendment or moved to dismiss, the end result would have
been the same.
B.
A second preliminary facet that we must address is the
appropriate procedural context in which to evaluate defendants'
case-dispositive motion. To be sure, defendants' motion was
couched as a motion to dismiss under Rule 4:6-2(e) for failure
to state a claim upon which relief may be granted. However,
both parties in their submissions respecting that motion, as
well as the trial court, made reference to and relied upon
documentary materials from the hospital's internal review
process. Those materials were beyond the four corners of the
complaint, although excerpts of them were quoted or referred to
28 A-5112-12T2
in the complaint. In his ruling, the judge at times referred to
the entire record presented to him, which clearly went beyond
the discrete excerpts quoted and otherwise referred to in the
pleadings. As such, defendants' motion to dismiss most properly
should be conceived as a dismissal motion converted to a motion
for summary judgment under Rule 4:46-1 to -6, as is permitted
under the last sentence of Rule 4:6-2.14
Viewed properly in this more expansive context, we must
evaluate the record before us under the customary standards of
summary judgment practice. See Brill v. Guardian Life Ins. Co.
of Am., 142 N.J. 520, 540 (1995). In particular, we are to read
the record in a light most favorable to plaintiff and accord all
favorable inferences to plaintiff that can be reasonably drawn
from that record. See R. 4:46-2; Brill, supra, 142 N.J. at 540;
see also Murray v. Plainfield Rescue Squad, 210 N.J. 581, 584
(2012) (applying the same Rule 4:46 standards on appellate
review of a summary judgment order). Upon doing so, we are
satisfied, for the reasons we explain, infra, that the trial
14
R. 4:6-2 ("If, on a motion to dismiss based on the defense
numbered (e), matters outside the pleading are presented to and
not excluded by the court, the motion shall be treated as one
for summary judgment and disposed of as provided by R. 4:46, and
all parties shall be given reasonable opportunity to present all
material pertinent to such a motion.").
29 A-5112-12T2
court's entry of final judgment in defendants' favor was sound
and not premature.15
C.
We turn to the substance of the immunity arguments. Even
viewing the record in a light most favorable to plaintiff, we
agree with Judge Grispin that defendants are entitled to
immunity from damages as a matter of federal and New Jersey
statutory law, and that plaintiff has failed to present a
sufficient basis to vault those immunities.
As Judge Grispin correctly found, defendants are clearly
within the presumptive scope of the federal immunity under the
HCQIA. The hospital's internal review of plaintiff's
performance unquestionably comprises a "professional review
activity" under 42 U.S.C.A. § 11151(10). The participants in
the review, including the Medical Staff, the Investigating
Committee, the MEC, the hearing panel, and the Board of Trustees
are all "professional review bodies" within the ambit of the
15
Even if, for the sake of discussion, the standards for
dismissal under Rule 4:6-2(e) are applied here rather than the
summary judgment standards, see, e.g., Printing Mart-Morristown
v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989), we remain
persuaded that the immunity statutes control this case and
mandate dismissal of the lawsuit. "A pleading should be
dismissed if it states no basis for relief and discovery would
not provide one." Rezem Family Assocs., L.P. v. Borough of
Millstone, 423 N.J. Super. 103, 113 (App. Div.), certif. denied,
208 N.J. 366 (2011).
30 A-5112-12T2
statute. See 42 U.S.C.A. § 11151(11). The various
recommendations and decisions to impose sanctions upon plaintiff
—— initially a recommended suspension and ultimately the Board
of Trustees' revocation of plaintiff's clinical privileges ——
comprise "professional review actions" as defined under 42
U.S.C.A. § 11151(9), because they adversely affected plaintiff's
status at the hospital.
As we have already noted, defendants and the other
participants in the hospital's internal review process are
presumptively immune under the HCQIA from monetary damages if
they acted in "the reasonable belief that the[ir] action[s] were
in the furtherance of quality health care," 42 U.S.C.A. §
11112(a)(1), "after a reasonable effort to obtain the facts of
the matter," 42 U.S.C.A. § 11112(a)(2), after "adequate notice
and hearing procedures are afforded to the physician . . . or
after such other procedures as are fair to the physician under
the circumstances," 42 U.S.C.A. § 11112(a)(3), and with a
"reasonable belief that the action was warranted by the facts
known after such reasonable effort to obtain facts" and after
appropriate notice and fair procedures. 42 U.S.C.A. §
11112(a)(4).
More simply stated, the federal immunity presumptively
governs this case, so long as the hospital and its participants
31 A-5112-12T2
proceeded in a fair and reasonable manner and with a reasonable
belief that the actions taken were in furtherance of quality
health care and warranted by the facts. The record provides no
evidence, nor even a plausible indication, that defendants
failed to comport with these norms of fairness and
reasonableness. Plaintiff failed to carry his burden to rebut
the presumption, or even create a material issue of fact.
The judicial power to intervene in disputes over a
physician's clinical privileges is circumscribed. As this court
held almost thirty years ago in an opinion coincidentally
involving another physician whose privileges had been terminated
at Overlook, "[j]udicial review of hospital decisions regarding
admission to medical staff, extent of privileges and termination
is very limited." Zoneraich v. Overlook Hosp., 212 N.J. Super.
83, 90 (App. Div.), certif. denied, 107 N.J. 32 (1986).
"Hospital officials are vested with wide managerial discretion,
to be used to elevate hospital standards and to better medical
care." Ibid. (citing Greisman v. Newcomb Hosp., 40 N.J. 389,
403 (1963)). "So long as hospital decisions concerning medical
staff are reasonable, are consist[e]nt with the public interest,
and further the health care mission of the hospital, the courts
will not interfere." Ibid. (citing Desai v. St. Barnabus Med.
Ctr., 103 N.J. 79 (1986), and Belmar v. Cipolla, 96 N.J. 199,
32 A-5112-12T2
208 (1984)). Although Zoneraich did not involve the HCQIA
(which, as it so happened, was enacted by Congress that same
year), these same general principles pertain in applying that
federal immunity.
That said, our courts have also recognized that "a
physician is entitled to fundamentally fair procedures in a non-
profit hospital's consideration of staff membership, the extent
of privileges and termination." Id. at 91. Accordingly, the
hospital seeking to suspend or oust a physician must provide
notice to the affected physician of the charges or the
hospital's proposed action before an internal hearing. Ibid.
"The tribunal must be fair and unbiased." Ibid. The physician
has a qualified right to retain counsel and a right to
disclosure of certain information, "limited by recognition of
competing rights to privilege and confidentiality." Ibid.
(emphasis added) (citing Garrow v. Elizabeth Gen. Hosp. &
Dispensary, 79 N.J. 549, 566-68 (1979)).
As our Supreme Court noted in Garrow and we reiterated in
Zoneraich, "[j]udicial review of a hospital board action 'should
properly focus on the reasonableness of the action taken in
relation to the several interests of the public, the
[physician], and the hospital.'" Zoneraich, supra, 212 N.J.
Super. at 91 (emphasis added) (quoting Garrow, supra, 79 N.J. at
33 A-5112-12T2
565). Because of the internal nature of the hospital's private
hearing, "'[t]he proper standard upon review is not identical
with that customarily applied to administrative agencies, that
is, substantial competent credible evidence.'" Ibid. (quoting
Garrow, supra, 79 N.J. at 565). "'However, the record should
contain sufficient reliable evidence, even though of a hearsay
nature, to justify the result.'" Ibid. (quoting Garrow, supra,79 N.J. at 565).
The HCQIA likewise affords deference to hospitals and their
representatives when they make these difficult decisions
concerning a physician's clinical privileges. That deference is
manifested by the federal law's express presumption that the
immunity from damages applies unless the physician challenging
the hospital's adverse decision proves, by a preponderance of
the evidence, that the decision-makers took action without a
reasonable belief that it was in furtherance of quality health
care, failed to provide adequate notice and hearing procedures,
or took action without a reasonable belief based on the facts
known after a reasonable investigation. See 42 U.S.C.A. §
11112(a).
The "reasonable belief" concepts in subsections (a)(1) and
(a)(4) of Section 11112 are objective standards. In fact, as
the House Committee report explains, the drafters of the federal
34 A-5112-12T2
immunity revised the bill to replace a "good faith" requirement
contained in an earlier version to "a more objective 'reasonable
belief'" standard. H.R. Rep. No. 99-903, at 10 (1986),
reprinted in 1986 U.S.C.C.A.N. 6392-93. The Committee noted
"concerns that 'good faith' might be misinterpreted as requiring
only a test of the subjective state of mind of the physicians
conducting the professional review action." Ibid. The
Committee further declared its intention that the "reasonable
belief" test "will be satisfied if the reviewers, with the
information available to them at the time of the professional
review action, would reasonably have concluded that their action
would restrict incompetent behavior or would protect patients."
Ibid. The Committee also expressed its "belief that this
standard will be met in the overwhelming majority of
professional review actions[.]" Ibid. (emphasis added).
Consistent with the drafters' intent, case law has repeatedly
treated the "reasonable belief" test under the statute as an
objective test.16
16
See, e.g., Cohlmia v. St. John Med. Ctr., 693 F.3d 1269,
1277 (10th Cir. 2012) ("The entity or persons that undertake the
professional review are immune under HCQIA as long as they
substantially comply with a list of objective standards set
forth in the Act."); Poliner, supra, 537 F.3d at 377 ("[T]he
HCQIA's 'reasonableness requirements were intended to create an
objective standard of performance, rather than a subjective good
faith standard.'"); Gordon, supra, 423 F.3d at 205 ("[I]mmunity
(continued)
35 A-5112-12T2
The HCQIA does not specify that a reviewing court must be
provided with transcripts of the hospital's internal hearing in
order to evaluate the adequacy of the hospital's proceedings.
Although we recognize that the trial court in Zoneraich was
apparently supplied with a record of the hospital's internal
proceedings, we do not construe the HCQIA to require that such
transcripts be furnished in every case. The transcripts are not
vital where, as here, the other documents provided to the court
sufficiently establish that the physician was afforded a fair
and reasonable opportunity to be heard, and show that the
hospital's ultimate decision was reasonably attained based upon
factual determinations generated from those internal hearings.
N.J.S.A. 2A:84A-22.10 extends a similar form of immunity
protection for hospitals, peer reviewers, and decision-makers.
(continued)
will be judged by applying the objective standard regarding
whether the Hospital based its actions upon the reasonable
belief that they are in furtherance of quality healthcare.");
Meyers v. Columbia/HCA Healthcare Corp., 341 F.3d 461, 468 (6th
Cir. 2003) ("[The HCQIA] is an objective standard, rather than a
subjective good faith requirement."); Freilich v. Upper
Chesapeake Health, 313 F.3d 202, 212 (4th Cir. 2002) ("[T]he
HCQIA's objective reasonableness standard is a perfectly valid
guide for peer review bodies."); Singh, supra, 308 F.3d at 32("[S]ister circuits have uniformly applied all the sections of §
11112(a) as objective standards"); Sugarbaker v. SSM Health
Care, 187 F.3d 853, 857 (8th Cir. 1999) ("[T]he reasonableness
requirements contained in section 11112(a) necessitate an
objective inquiry."), cert. denied, 528 U.S. 1137, 120 S. Ct.
980, 145 L. Ed. 2d 931 (2000).
36 A-5112-12T2
The provision broadly covers "any person" involved in such
review of a physician "for any action taken or recommendation
made by [that person] within the scope of [that person's]
function" in that role. N.J.S.A. 2A:84A-22.10(e). This state-
law immunity applies, so long as "such action or recommendation
was taken or made without malice and in the reasonable belief
after reasonable investigation that such action or
recommendation was warranted upon the basis of facts disclosed."
N.J.S.A. 2A:84A-22.10(e) (emphasis added).17
Although the term "malice" is not defined within N.J.S.A.
2A:84A-22.10, the conventional meaning of that term suggests
that the sanctioned physician must prove that the hospital
defendants acted, in essence, either with ill will, without just
cause,18 or with a reckless disregard of the truth of the facts
17
Unlike the federal statute, the New Jersey statute does not
contain an express presumption that the state-law immunity
controls and must be overcome by the plaintiff.
18
In other contexts, malice "is defined as 'the intentional
doing of a wrongful act without just cause or excuse.'"
LoBiondo v. Schwartz, 199 N.J. 62, 93-94 (2009) (quoting Jobes
v. Evangelista, 369 N.J. Super. 384, 398 (App. Div.) (defining
malice in the context of a malicious prosecution case), certif.
denied, 180 N.J. 457 (2004)); see also Lamorte Burns & Co. v.
Walters, 167 N.J. 285, 306 (2001) (noting, in the context of
tortious interference, that "malice" means that "harm was
inflicted intentionally and without justification or excuse").
37 A-5112-12T2
regarding the physician's quality of care.19 The "reasonable
belief" aspect of the New Jersey statute is also undefined. We
discern no basis to construe it any differently than the federal
immunity statute's usage of that term.
We have no doubt that plaintiff was provided here with a
procedurally fair opportunity to be heard during the hospital's
internal process. He was given multiple opportunities to
provide written submissions to the hospital's reviewers and
decision-makers. He was advised before the formal hearing
conducted by the hearing panel of the specific patient cases
that would be the subject of review. He was represented in the
internal hearings by able and experienced counsel who is a
certified civil trial attorney. He apparently testified and
also presented his own expert witness. The findings of the
Investigating Committee and, thereafter, of the hearing panel,
were clearly detailed in writing.
By all indications, these procedures comported with the
HCQIA, the New Jersey statute, and case law. It is not as if
plaintiff had been abruptly summoned before the Board of
Trustees without warning and summarily stripped of his
privileges for no articulated reasons. To the contrary, the
19
See, e.g., DeAngelis v. Hill, 180 N.J. 1, 13 (2004) (applying
such a notion of "malice" in the context of a defamation case).
38 A-5112-12T2
Board's final decision was the culmination of a lengthy and
elaborate process, one in which plaintiff had many opportunities
to present opposition and, presumably, to settle the matter on
the terms recommended in succession by the internal reviewers.
Attempting to meet his burden to establish unreasonableness
or other improper conduct, plaintiff points to three aspects of
the chronology that he contends are indicia that defendants'
statutory immunities should be overcome. He specifically
alleges in his reply brief that: (1) defendants did not have a
reasonable belief that their actions as to him were in the
furtherance of quality health care; (2) they failed to provide
him with adequate notice of the first investigation and of the
initial referral to the outside reviewer; and (3) they lacked a
reasonable belief that the sanctions recommended and imposed
were warranted. As to that latter point, plaintiff emphasizes
that the sanction of revocation ultimately imposed by the Board
of Trustees was harsher than the conditional suspension
recommended by both the MEC and the hearing panel. We concur
with the trial court that there is no merit to these contentions
of unfairness.
The record provides an ample basis to justify the
hospital's decision to pursue a review of the care that
plaintiff had provided to several of his patients. Indeed,
39 A-5112-12T2
those concerns were borne out by the adverse findings of the
outside reviewer, the Investigating Committee, and the hearing
panel. The documents in the appendices readily show that
defendants had a reasonable basis to believe that the
professional review and remedial action they took was pursued to
further the quality of health care being provided to the
hospital's patients.
In general, the applicable nexus to the "quality of health
care" will be satisfied under the HCQIA if the reviewing body,
based on the information before it, "would reasonably have
concluded that [its] action would restrict incompetent behavior
or would protect patients." Gordon, supra, 423 F.3d at 202(quoting H.R. Rep. No. 99-903, at 10 (1986), reprinted in 1986
U.S.C.C.A.N. 6393). As the Fifth Circuit has noted, the HCQIA
"does not require that the professional review result in an
actual improvement of the quality of health care, nor does it
require that the conclusions reached by the reviewers were in
fact correct." Poliner, supra, 537 F.3d at 378 (quoting
Imperial v. Suburban Hosp. Ass'n, Inc., 37 F.3d 1026, 1030 (4th
Cir. 1994)). That observation is consistent with the fact that
Congress prescribed, under 42 U.S.C.A. § 11112(c), that a
professional review board may immediately suspend clinical
privileges "where the failure to take such an action may result
40 A-5112-12T2
in an imminent danger to the health of any individual." Ibid.As the Third Circuit has observed, "the good or bad faith of the
reviewers [under the HCQIA] is irrelevant." Brader v. Allegheny
Gen. Hosp., 167 F.3d 832, 840 (3d Cir. 1999) ("Brader II").
At the time its nearly year-long review process began, the
hospital had outstanding concerns regarding plaintiff's
management of his patients and his documentation of their
treatment. Indeed, as the outside reviewer concluded in his
report, plaintiff "either did not understand the appropriate
steps in management or approached the situation too passively.
Neither is acceptable." Moreover, plaintiff himself
acknowledged in his Second Amended Complaint that two of his
patients "had recognized complications associated with their
surgeries." The fact that those patients eventually recovered
is not dispositive. The record manifestly shows that the
hospital's initiation of the review process was reasonable.
We also reject plaintiff's next claim that defendants are
disentitled to immunity because they failed to provide him with
advance notice of the first steps of the outside review and
investigation. As federal case law instructs, "nothing in the
[HCQIA] requires that a physician be permitted to participate in
the review of his [own patient's] care." Singh, supra, 308 F.3d
at 44 (citation omitted). The HCQIA applies to "discrete
41 A-5112-12T2
decisions, not an on-going course of conduct." Wojewski v.
Rapid City Reg'l Hosp., Inc., 730 N.W.2d 626, 636 n.9 (S.D.
2007) (applying the HCQIA's immunities).
Plaintiff's third argument, contending that defendants
lacked a reasonable belief that the sanctions against him were
actually warranted, is similarly flawed. He contends that the
Board of Trustees "consistently and inexplicably disregarded"
the independent recommendations made regarding his performance.
In his view, the Board of Trustees did not possess a reasonable
belief that its decision to revoke his privileges was warranted.
The trial judge rejected this specious assertion, and so do we.
Courts generally agree that "the reversal of a peer review
committee's recommendation of an adverse professional review
action by a higher level peer review panel does not indicate
that the initial recommendation was made without a reasonable
belief that the recommendation would further quality health
care." Singh, supra, 308 F.3d at 41 (citing Austin v. McNamara,
979 F.2d 728, 735 (9th Cir. 1992) (granting immunity in a
situation where a hospital's judicial review committee
overturned a medical executive committee's recommendation of an
adverse professional review action)). The converse is also
true.
42 A-5112-12T2
The mere fact that, as plaintiff's counsel's phrased it at
oral argument before us, the hospital decision-makers "ratcheted
up" the sanctions as the matter progressed does not signify that
the Board of Trustees or the other hospital decision-makers
acted unreasonably or maliciously. In the motion arguments
below, Judge Grispin aptly analogized the present case to
attorney discipline cases, in which the Supreme Court sometimes
imposes a harsher ultimate sanction on a licensee than that
recommended by the Disciplinary Review Board.20 The ultimate
authority to make privilege decisions within the hospital rests
with the Board of Trustees under the hospital's bylaws, and the
Board's selection of a harsher penalty in this case does not
mean that it acted maliciously or unreasonably.
The Board had a reasonable cause for serious concern after
the hearing panel concluded from the testimony it heard that
plaintiff had made a false entry on a patient chart. Whether or
not that discrete finding is actually true is beyond our limited
20
Although the Supreme Court "ordinarily place[s] great weight
on the recommendation of the Disciplinary Review Board," the
Court "[does not] not hesitate to impose a more severe sanction
than that recommended by the Board when circumstances warrant."
In re Kushner, 101 N.J. 397, 403 (1986) (citations omitted)
(finding the attorney's false certification a "grave misconduct"
and elevating the Disciplinary Review Board's recommended one-
year suspension to three years); see also In re Rosen, 88 N.J.
1, 3 (1981) (finding the attorney's subornation of perjury
"inexcusable and reprehensible" and elevating the Disciplinary
Review Board's proposed one-year suspension to three years).
43 A-5112-12T2
scope of review. True or not, the finding alone reasonably
supported the Board of Trustees' discretionary decision to
revoke plaintiff's privileges. Moreover, plaintiff apparently
bypassed numerous opportunities to resolve this matter with the
lesser sanctions recommended by the MEC, the Investigating
Committee, and the hearing panel before the matter reached the
Board level.
D.
As a final matter, we consider plaintiff's argument that
the trial court acted prematurely in dismissing his lawsuit
without further discovery, particularly in denying his request
for the depositions of persons involved in the hospital's
review, investigation, and decision-making process. We are
satisfied that Judge Grispin did not misapply his discretion in
curtailing further discovery and in adjudicating the immunities
of defendants on the law and on the record supplied to him.
Neither the HCQIA nor N.J.S.A. 2A:84A-22.10 specifies what
amount of discovery, if any, is warranted before a trial court
may adjudicate the merits of the immunities invoked by a
hospital or individual defendants who participated in the review
of a physician's clinical privileges. We are mindful, however,
of the House Committee's guidance that the immunity question
under the HCQIA may be resolved at "an early stage of
44 A-5112-12T2
litigation," and that court may do so "even though other issues
in the case remain to be resolved." H.R. Rep. No. 99-903, at 12
(1986), reprinted in 1986 U.S.C.C.A.N. at 6394.
The federal cases display no consistent pattern in the
level of discovery afforded to physicians who challenge hospital
defendants' assertions of HCQIA immunity. In some instances,
the federal courts have found that the plaintiff physician was
entitled to limited discovery of the peer review process. See,
e.g., Wahi v. Charleston Area Med. Ctr., Inc., 453 F. Supp. 2d
942, 948 (S.D. W. Va. 2006) (authorizing limited discovery, in
the form of numerically-capped interrogatories, requests for
admissions, and time-limited depositions), aff'd, 562 F.3d 599(4th Cir. 2009), cert. denied, 558 U.S. 1158, 130 S. Ct. 1140,
175 L. Ed. 2d 991 (2010); Teasdale v. Marin Gen. Hosp., 138
F.R.D. 691, 694 (N.D. Cal. 1991) (authorizing the production of
peer review documents); see also Sugarbaker, supra, 187 F.3d at
857 (noting that the trial court had allowed depositions of
persons involved in the hospital's peer review process, where
the reasonableness of that process, including claims of
antitrust violations by the defendants, had been plausibly
challenged by plaintiff).
45 A-5112-12T2
Conversely, in some instances, the HCQIA immunity issues
were resolved by the trial court at an early stage by granting a
motion to dismiss for failure to state a claim upon which relief
may be granted. See, e.g., Straznicky v. Desert Springs Hosp.,
642 F. Supp. 2d 1238, 1240 (D. Nev. 2009) (granting dismissal of
plaintiff's damage claims, with prejudice, based solely on the
allegations of the plaintiff's complaint and related documents
that the plaintiff physician had supplied to the court in
connection with his motion for a temporary restraining order);
Sobel v. United States, 571 F. Supp. 2d 1222, 1229 (D. Kan.
2008) (granting the defendants' motion to dismiss under the
HCQIA on the face of the pleadings, finding, among other things,
that the plaintiff physician had not asserted sufficient grounds
to overcome the statute's presumption of immunity).
At the very least, the question of immunity under the HCQIA
may be resolved in appropriate cases at the summary judgment
stage. As the Ninth Circuit has observed, because the
"reasonableness" requirements of 42 U.S.C.A. § 11112(a) were
"intended to create an objective standard, rather than a
subjective standard [of judicial review], this inquiry may be
resolved on summary judgment." Smith v. Ricks, 31 F.3d 1478,
1485 (9th Cir. 1994), cert. denied, 514 U.S. 1035, 115 S. Ct.
1400, 131 L. Ed. 2d 287 (1995). The question then becomes
46 A-5112-12T2
whether a plaintiff has been afforded a sufficient opportunity
to obtain facts that might bear upon that objective assessment.
The sparse case law under the analogous New Jersey immunity
statute is not instructive on the discovery question. As with
the federal statute, it is logical to conclude that a
defendant's entitlement to immunity under N.J.S.A. 2A:84A-22.10
can at times be resolved on a dispositive motion. It is equally
sensible to conclude that a plaintiff's right to discovery on
the state-law immunity issues may be reasonably limited by a
trial judge.
We decline to adopt a per se rule declaring that a
plaintiff physician who has lost his clinical privileges is
always entitled to depositions or other full-blown discovery in
litigating HCQIA immunity issues. Such a blanket right would
conflict with the intent of Congress to permit the HCQIA
immunity to be adjudicated at an "early stage of litigation" in
appropriate cases. Nor do we construe the New Jersey immunity
statute to create such an absolute right.
In some cases, an unfettered right to discovery would
needlessly entangle hospitals and review participants in
depositions and other litigation activities, thereby diluting
the practical benefit of the immunity protection conferred upon
them by statute. Although we are mindful that these statutes
47 A-5112-12T2
provide hospital defendants with immunity from damages rather
than immunity from suit, we also appreciate that protracted
discovery easily can be costly and burdensome for the persons
and entities involved. An appropriate balance can, and should,
be struck.
We therefore adopt a case-by-case approach that reposes
discretion in the trial court to determine to what extent
discovery on the immunity issues should be permitted. See,
e.g., R. 4:46-5 (granting trial judges authority to defer
decisions on summary judgment motions where the party opposing
the summary judgment motion demonstrates, by affidavit, that
additional discovery is needed to respond to the motion). Such
a case-specific approach is consistent with the important role
that our civil trial judges routinely perform in balancing the
needs of litigants to obtain relevant information against the
often significant burdens and costs of the discovery process.
The exercise of wise judicial discretion in striking a proper
balance of those interests is particularly important where, as
here, immunity statutes are involved.
On appeal, we generally will not second-guess a trial
judge's exercise of discretion in discovery matters unless the
appellant demonstrates that such discretion was abused.
Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 371
48 A-5112-12T2
(2011); Bender v. Adelson, 187 N.J. 411, 428 (2006). We must
review the trial court's denial of additional discovery to
plaintiff here through that prism of deference.
Here, plaintiff already received at least some amount of
paper discovery in the Chancery Division action. Plaintiff and
his attorney actively participated in the two hearings before
the hospital's hearing panel. He now demands depositions, on
the conjectural supposition that such adversarial questioning of
the hospital's representatives might reveal a proverbial
"smoking gun" reflecting malice or some form of unreasonable
conduct on their part.
We concur with Judge Grispin that, given the particular
context of this case, there is no need to allow such depositions
to proceed when defendants' entitlement to immunity is so clear.
Even if depositions proceeded, the individual deponents (or the
hospital itself) might assert absolute or qualified privileges
from disclosure under potentially-applicable confidentiality
laws, and might decline to answer some or all of plaintiff's
queries. See, e.g., C.A. v. Bentolila, 219 N.J. 449, 451 (2014)
(involving privileges from disclosure under the New Jersey
Patient Safety Act);21 Christy v. Salem, 366 N.J. Super. 535,
21
Although defendants have cited to the Patient Safety Act,
N.J.S.A. 26:2H-12.23 to -12.25, we make no conclusive
(continued)
49 A-5112-12T2
541-45 (App. Div. 2004) (recognizing a qualified privilege from
disclosure under a hospital's peer review privilege). As the
Supreme Court recently underscored in C.A., there are strong
public policies recognized by the Legislature in encouraging the
free flow of evaluative communications within a hospital made in
an effort to improve future patient care. C.A., supra, 219 N.J.
at 473. We need not and do not resolve the applicability of
these confidentiality laws and public policies, but simply
acknowledge that they might well limit the scope of any
additional discovery if it had been allowed.
Other than his vague suppositions that his circumstances
were unfairly considered by the hospital and its
representatives, plaintiff has not set forth a proffer, in a
sworn affidavit pursuant to Rule 4:46-5 or otherwise, that
specifies what information he would intend to elicit from the
hospital's representatives at their depositions. If plaintiff
wants to ask them why they did what they did, the reasons are
self-evident from the written findings of the Investigating
(continued)
determination that the Act applies to the communications in this
case. See N.J.A.C. 8:43E-10.9(b)(1) (limiting the protection of
the Patient Safety Act to documents, materials, and information
developed by a health care facility "exclusively" during the
process of self-critical analysis); see also, C.A., supra, 219
N.J. at 467-68. At the very least, the potential applicability
of that statute would no doubt complicate the discovery process.
50 A-5112-12T2
Committee, the hearing panel, and the Board of Trustees —— all
of which he already has in his possession.
In addition, this is not a case in which antitrust
violations have been alleged, which has been true in some of the
federal cases where more extensive discovery was permitted.
See, e.g., Brader v. Allegheny Gen. Hosp. 64 F.3d 869, 876 (3d
Cir. 1995) ("Brader I") (reversing the district court's
dismissal of the plaintiff's complaint, in part, because "the
adequacy of a physician's contentions regarding the effect on
competition is typically resolved after discovery, either on
summary judgment or after trial"); see also Sugarbaker, supra,187 F.3d at 857 (likewise involving discovery completed of a
case involving antitrust claims). Where such colorable
antitrust claims are present, the factual and legal complexity
of the case may be greater and the justification for plenary
discovery may be heightened.
Plaintiff's complaint, which he has amended multiple times,
makes several conclusory allegations that defendants acted
"maliciously" and "arbitrarily" in taking away his clinical
privileges. As Judge Grispin correctly recognized, the mere
inclusion of such normative adverbs within a physician's
complaint does not justify a free-wheeling discovery mission
51 A-5112-12T2
delving into a hospital's internal review and investigation of
that physician's poor performance.
The trial court reasonably concluded that plaintiff already
had been provided with enough information to attempt to surmount
the statutory immunities. Because the court did not abuse its
discretion, we sustain its sensible decision to curtail
additional discovery and to disallow depositions of the
hospital's representatives.
Affirmed.
52 A-5112-12T2