Dignity Health v. Troy Mounts, M.D., 17CV-0592

Hearing: Motion to Strike

Date: March 22, 2018

Plaintiff and Cross-Defendant Dignity Health, dba French Hospital Medical Center (“Dignity”) filed an action against Defendant and Cross-Complainant Troy I. Mounts, M.D. and Troy I. Mounts, M.D., Inc. (“Mounts”) on October 27, 2017, for breach of contract and money had and received, to recover money provided to Mounts by Dignity for relocation assistance, after Mounts resigned his medical staff privileges at Dignity following a peer-review process and ceased to maintain a full-time medical practice within Dignity’s service area.

On December 21, 2017, Mounts filed a Cross-Complaint against Dignity alleging three causes of action: 1) retaliation pursuant to Health and Safety Code section 1278.5; 2) intentional interference with prospective economic advantage; and 3) unlawful business practices pursuant to Business and Professions Code sections 17200, et seq.

Mounts alleges in his Cross-Complaint that he made grievances, complaints, or reports to Dignity between April 2015 and October 2015, regarding the quality of patient care, and as a result the hospital retaliated against him by instituting an abusive and retaliatory peer review process, forcing him into resign his privileges at Dignity, and actively interfering with his ability to obtain hospital privileges at other hospitals. Mounts alleges that the purported peer review process involved a “Focused Professional Practitioner Evaluation” (“FPPE”) through the peer review committee, as well as an informal meeting regarding purported peer review issues that was characterized as “not a hearing” and at which no attorneys or other guests were allowed to attend. He further alleges that Dignity filed and refuses to withdraw a report under Business and Professions Code section 805 (“805 Report”) with the National Practitioner Data Bank that falsely characterized him as an immediate threat to safety, with a retaliatory motive. All of Mounts’ claims are based upon these allegations.

Dignity responded with a motion to strike the Cross-Complaint pursuant to Code of Civil Procedure section 425.16. Anti-SLAPP motions are evaluated through a two-step process. Initially, the moving defendant bears the burden of establishing that the challenged allegations or claims arise from protected activity in which the defendant has engaged. If the defendant carries its burden, the plaintiff must then demonstrate its claims have at least minimal merit. (Code Civ. Proc., § 425.16; Park v. Bd. of Trustees of California State Univ. (2017) 2 Cal.5th 1057, 1061; Baral v. Schnitt (2016) 1 Cal.5th 376, 396.)

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Dignity argues that Mounts’ Cross-Complaint arises from protected activity. It argues that pursuant to Kibler, a hospital’s peer review proceeding constitutes an “official proceeding authorized by law” within the meaning of the anti-SLAPP statute and that statements made during that official proceeding are protected under subdivision (e)(2) of the anti-SLAPP statute. (Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192, 203-204.) Dignity argues that Mount’s Cross-Complaint is replete with allegations showing that his claims arise from communications related to the peer review process.

Dignity further argues that its filing of an 805 Report is protected under subdivision (e)(1) which protects written statements made before an official proceeding, and that Courts have held that submission of a complaint or report to a government body in connection with an “official proceeding” are protected. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1009.)

Dignity finally argues that initiation of a FPPE is protected under subdivision (e)(4) of the anti-SLAPP statute which protects any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest. Dignity cites Kibler, as well as a string of other cases, to show that peer review of doctors is a matter of public interest. (See, e.g., O’Byrne v. Santa-Monica-UCLA Hosp. (2001) 94 Cal.App. 4th 797, 811; Gilbert v. Sykes (2007) 147 Cal.App.4th 13, 23.24.)

In opposition to Dignity’s motion, Mounts argues that his claims arise from the retaliatory, abusive peer review process, and interference with his ability to obtain privileges at other hospitals, which are not protected activity. He argues that his claim arises not from the protected activity, but on the retaliatory purpose by which it was taken. (Bonni v. St. Joseph Health System (2017) 13 Cal.App.5th 851.1)

Dignity makes a showing that Mounts alleges some protected activity in his CrossComplaint within the meaning of the anti-SLAPP statute.2 However, the Court must still
1 As set forth by both parties, the Court notes that Bonni is currently under review by the California Supreme Court, and therefore is merely persuasive, not binding. However, because it is on point in regard to the current motion, the Court will consider it. The Court further acknowledges that since the Supreme Court’s decision in Park, supra, the Supreme Court has granted review in a series of cases beginning with Wilson v. Cable News Network, Inc., S239686 in which the statement of the issue presented is follows: in deciding whether an employee’s claims for discrimination, retaliation, wrongful termination, and defamation arise from protected activity for purposes of a special motion to strike under Code of Civil Procedure section 425.16, what is the relevance of an allegation that the employer acted with a discriminatory or retaliatory motive? The Supreme Court has not yet issued its ruling on that issue.

2 As the Supreme Court has clarified, the only issue before the court in Kibler was whether the peer review proceeding was an ‘official proceeding’ within the meaning of the anti-SLAPP statute, which it found it was, not whether a particular claim “arises” from that activity. (Kibler v. Northern Inyo
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separately determine whether Mounts’ claims arise from that protected activity. (Park v. Bd. of Trustees of California State Univ., supra, 2 Cal.5th at p. 1069.)

In Park v. Bd. Of Trustees, supra, the California Supreme Court recently addressed a FEHA claim where a Korean professor at a California State University was denied tenure after an official grievance proceeding. (Park v. Bd. of Trustees of California State Univ., supra, 2 Cal.5th 1057.) The professor alleged discrimination, and the court held that the claim arose from the alleged discriminatory denial of tenure itself, not from the protected activity. (Id.) “The elements of Park’s claim…depend not on the grievance proceeding, any statements, or any specific evaluations of him in the tenure process, but only on the denial of tenure itself and whether the motive for that action was impermissible…The dean’s alleged comments may supply evidence of animus, but that does not convert the statements themselves into the basis for liability.” (Id. at p. 1068.) The Supreme Court quoted Nam v. Regents of University of California (2016) 1 Cal.App.5th 1176, which stated that “conflating, in the anti-SLAPP analysis, discriminatory decisions and speech involved in reaching those decisions or evidencing discriminatory animus could render the anti-SLAPP statute fatal for most harassment, discrimination and retaliation actions against public employers.” (Park v. Bd. of Trustees of California State Univ., supra, 2 Cal.5th at p. 1067.)

The Supreme Court found that “a claim arises from protected activity when that activity underlies or forms the basis for the claim… The mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute” (Park v. Bd. of Trustees of California State Univ., supra, 2 Cal.5th at pp. 1062-63 (internal citations omitted).) In deciding whether claims arise from protected activity, the court must consider the elements of the plaintiff’s claims and what actions by the defendant supply those elements and consequently form the basis for liability. (Id. at p. 1063.)

To establish a claim for retaliation under Health and Safety Code section 1278.5, Plaintiff needs to show that he (1) “[p]resented a grievance, complaint, or report” to the hospital or medical staff (2) regarding the quality of patient care, and; (3) the hospital retaliated against him for doing so. (Health & Saf. Code, § 1278.5; Fahlen v. Sutter Cent. Valley Hosps. (2014) 58 Cal.4th 655, 667 , fn. 6, [although statute does not explicitly limit the type of “grievance, complaint, or report,” implicit in other provisions of the statute is that it must involve concerns about the quality of patient care].)

In deciding whether a section 1278.5 retaliation claim arose from protected peer review activity, the court in Bonni found that “In the absence of a retaliatory or discriminatory purpose motivating the adverse action, there is simply no liability under Health and Safety Code section 1278.5. Thus, the basis for a retaliation claim under section 1278.5
County Local Hospital Dist. (2006) 39 Cal.4th 192; Park v. Bd. of Trustees of California State Univ., supra, 2 Cal.5th at p. 1069.)
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is the retaliatory purpose or motive for the adverse action, not the adverse action itself. In the language of the anti-SLAPP statute, the claim under section 1278.5 arises from defendants’ retaliatory purpose or motive, and not from how that purpose is carried out, even if by speech or petitioning activity.” (Bonni v. St. Joseph Health Sys. (2017) 13 Cal.App.5th 851, 861.) Further, Bonni holds that “[m]erely because the peer review process serves an important public interest does not make it subject to the anti-SLAPP statute where the process is employed for a retaliatory purpose.” (Bonni, 13 Cal.App.5th 851 at p. 863.)

In Bonni, the court held that “Plaintiff did not allege any specific “written or oral statement or writing” which allegedly formed the basis of his retaliation claim. Instead, he alleged that an abusive peer review process was initiated by the hospitals because he made complaints about unsafe conditions at the hospitals. Thus, his claim was not based merely on defendant’s act of initiating and pursuing the peer review process, or on statements made during those proceedings—but on the retaliatory purpose or motive by which it was undertaken.” (Bonni, supra, 13 Cal.App.5th 851 at p. 863.) Here, Dignity attempts to distinguish Bonni because Mounts does allege some specific statements and writings that were part of the peer review process that form the basis of his retaliation. However, like in Bonni, Mounts does not allege that those statements and writings were wrongful by the fact they were made, but because of their retaliatory purpose and motivation. Communications disparaging, disciplining or otherwise reflecting negatively on Mounts as part of a protected peer review process would not support a claim for retaliation without a retaliatory motive or purpose. (See, e.g., Park v. Bd. of Trustees of California State Univ., supra, 2 Cal.5th at p. 1068.) The Court needs to make “a careful distinction between a cause of action based squarely on a privileged communication, such as an action for defamation, and one based upon an underlying course of conduct evidenced by the communication.” (Park, supra, 2 Cal.5th at p. 1064.)

Here, Mounts’ claim is necessarily dependent on the retaliatory purpose or motive of Dignity, which may be evidenced by protected communications. Mounts’ claim for retaliation arises out of that retaliatory purpose, not out of the protected activity.

Mounts’ claim for intentional interference with prospective economic advantage similarly arises out of his allegations of retaliation. To establish this claim, Mounts needs to show (1) the existence, between the plaintiff and some third party, of an economic relationship that contains the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentionally wrongful acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm proximately caused by the defendant’s action. (Roy Allan Slurry Seal, Inc. v. Am. Asphalt S., Inc. (2017) 2 Cal.5th 505, 512.) To prove such a claim, a defendant’s interference must be wrongful “by some measure beyond the fact of the interference itself.” (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393.) Mounts’ claim arises from the same alleged wrongful acts of Dignity as discussed above, including the abusive and retaliatory peer review and Dignity’s alleged violation of Health and Safety Code section
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1278.5. As above, the retaliatory motive or purpose makes Mounts’ claim for intentional interference with prospective economic advantage actionable. This claim therefore also arises out of non-protected activity. Additionally, because Mounts’ claim for unlawful business practices is derivative of his other causes of action and is based on the same allegations, it arises out of the same non-protected activity.
Dignity fails to establish that Mounts’ claims arise from protected activity, and therefore the Court need not consider the merits of Mounts’ claims at this stage.3 “Only a [claim] that satisfies both prongs of the anti-SLAPP statute—i.e., that arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.) Dignity’s motion is denied.

3 Because the Court did not reach the second step of the analysis, it did not consider Plaintiff’s proffered evidence or Defendants’ evidentiary objections.