Allred v. Saunders

• Citation: 2014 UT 43,342 P.3d 204
• Decision Date: 21 October 2014
• Docket Number: No. 20120985.,20120985.
• Court: Utah Supreme Court
• Parties: Lisa W. ALLRED and Marlin P. Allred, Appellees, v. Ronald J. SAUNDERS, M.D.; Ronald J. Saunders, M.D., PC.; IHC Health Services, Inc. dba American Fork Hospital, Appellants.

342 P.3d 204

2014 UT 43

Lisa W. ALLRED and Marlin P. Allred, Appellees

v.Ronald J. SAUNDERS, M.D.; Ronald J. Saunders, M.D., PC.; IHC Health Services, Inc. dba American Fork Hospital, Appellants.

No. 20120985.

Supreme Court of Utah.

Oct. 21, 2014.

Robert D. Strieper, Logan, for appellees.

Robert G. Wright, Brandon B. Hobbs, Zachary E. Peterson, Salt Lake City, for appellant Ronald J. Saunders.

Rodney R. Parker, Brian P. Miller, Adam M. Pace, Salt Lake City, for appellant IHC Health Services, Inc.

David C. Gessel, Tawni J. Anderson, Mark A. Brinton, Salt Lake City, for amici curiae Utah Hospital Association, Utah Medical Association, and American Medical Association.

Justice PARRISH authored the opinion of the Court, in which Chief Justice DURRANT, Associate Chief Justice NEHRING, Justice LEE and Judge RYAN M. HARRIS joined. Having recused herself, Justice DURHAM did not participate herein; District Judge RYAN M. HARRIS sat.

Justice PARRISH, opinion of the Court:

INTRODUCTION

¶ 1 This case comes before us on petition for interlocutory review of two discovery orders in a medical malpractice action. Plaintiffs Lisa and Marlin Allred brought suit against American Fork Hospital (Hospital) and Dr. Ronald J. Saunders, alleging that Dr. Saunders committed malpractice during the course of a lithotripsy

procedure he performed on Ms. Allred. Plaintiffs sought discovery of Dr. Saunders' credentialing file from the Hospital, as well as the Hospital's internal incident file concerning the lithotripsy procedure. The Hospital objected, asserting that the peer-review and care-review privileges protected both the credentialing and incident files from discovery. The district court (1) held that the credentialing file was not privileged and ordered the Hospital to produce it and (2) ordered the Hospital to produce the incident file for in camera review pursuant to the reasoning of our court of appeals in Cannon v. Salt Lake Regional Medical Center, Inc., 2005 UT App 352, 121 P.3d 74. Dr. Saunders and the Hospital petitioned for interlocutory review of the district court's order. We granted the petition for interlocutory review and have jurisdiction pursuant to section 78A–3–102(3)(j) of the Utah Code.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 2 Dr. Saunders performed a lithotripsy

procedure on Ms. Allred, using ultrasound to destroy a kidney stone. Ms. Allred alleges that she sustained second and third-degree burns as a result of the procedure. During discovery, the Allreds served a subpoena on the Hospital, seeking production of Dr. Saunders' credentialing file and the Hospital's incident file.¹ Saunders and the Hospital jointly moved for a protective order and to quash the subpoena, arguing that the documents were privileged pursuant to sections 26–25–1 and 26–25–3 of the Utah Code. The Allreds responded that the statutes on which Dr. Saunders and the Hospital relied were not operative because they had been adopted in violation of the Utah Constitution, which vests the authority to adopt rules of procedure and evidence in the Utah Supreme Court. Utah Const. art. VIII, § 4.

¶ 3 The district court agreed with the Allreds and denied the motion for a protective order. While it recognized that the current version of section 26–25–3, which was enacted in 1994, purported to shield peer-review and care-review records from both discovery and admissibility, it concluded that the 1994 version of section 26–25–3 was inoperative because it had been adopted by the Legislature in an unconstitutional manner.² It thus relied on the former version of the statute, which created a privilege only for care-review records and which did not extend the scope of that privilege to the discovery process.

¶ 4 Several months later, Dr. Saunders and the Hospital filed a motion asking that the district court reconsider its order denying the motion for a protective order. The motion to reconsider was based on the Legislature's amendment to rule 26 of the Utah Rules of Civil Procedure during the time the motion for protective order was under advisement. Specifically, the Legislature had amended rule 26 by a two-thirds majority vote to add a provision creating both peer-review and care-review privileges and extending the scope of those privileges to the discovery process. The relevant portion of the amended rule states:

Privileged matters that are not discoverable or admissible in any proceeding of any kind or character include all information in any form provided during and created specifically as part of a request for an investigation, the investigation, findings, or conclusions of peer review, care review, or quality assurance processes of any organization of health care providers ... for the purpose of evaluating care provided to reduce morbidity and mortality or to improve the quality of medical care, or for the purpose of peer review of the ethics, competence, or professional conduct of any health care provider.

2012 Utah Laws 2551 (codified at Utah R. Civ. P. 26(b)(1) ). The Legislature directed that the amendment be effective as to all “matters that are pending on or may arise after the effective date of this amendment, without regard to when the case was filed.” Id. at 2553.

¶ 5 The district court agreed to reconsider the issue, acknowledging that it had been unaware of the 2012 amendments to rule 26 at the time it ruled on the motion for a protective order. However, after considering the amendment, it again denied the motion for a protective order, reasoning that the amended rule 26 was “a rule of procedure and not evidence” and thus could “not create an evidentiary privilege, despite wording that could potentially be read to the contrary.” The district court reasoned that “the statute defines the evidence that is subject to the privilege, and the rule defines the extent of that privilege.” In other words, the court held that the former version of the statute determines the categories of material that are privileged and the amended rule of civil procedure determines whether the privileged material is immune only from admission into evidence or is also immune from discovery. It concluded that the legislative amendment to rule 26 “extend[ed] the scope of the care-review privilege that was created by [the former version of] Utah Code section 26–25–3 ” but did not create a new privilege for peer-review materials.

¶ 6 Applying its ruling to the facts of this case, the district court ruled that Dr. Saunders' credentialing file was not privileged because it did not contain information covered by former section 26–25–3. As to the material contained in the Hospital's incident file, it concluded that the Hospital had made a prima facie showing that the material was privileged under the former version of section 26–25–3, but concluded that “the proper approach for the trial court is to review the incident reports in camera to determine whether the privilege indeed applies to these documents.”

¶ 7 Dr. Saunders and the Hospital sought and obtained interlocutory review of the district court's ruling. They assert that the district court erred when it determined that the amendment to rule 26 did not create a freestanding privilege shielding both the credentialing file and the incident file from discovery. They further argue that the district court abused its discretion when it required the Hospital to submit the incident file for in camera review.

¶ 8 Because of the interplay between sections 26–25–1 and 26–25–3 of the Utah Code and rule 26 of the Utah Rules of Civil Procedure, we first briefly review these sections and their history as they relate to the 2012 amendment to rule 26. We then examine the Hospital's claims of privilege and conclude that the district court erred when it held that the amended rule 26 did not create an evidentiary privilege. Finally, we take this opportunity to clarify the procedure to be followed by the district court on remand when it considers the propriety of conducting in camera review.

I. SECTIONS 26–25–1 AND 26–25–3 OF THE UTAH CODE AND RULE 26 OF THE UTAH RULES OF CIVIL PROCEDURE

¶ 9 Sections 26–25–1 and 26–25–3 of the Utah Code together establish what are commonly referred to as the care-review and peer-review privileges. Section 26–25–1(1) provides that certain types of information, including interviews, reports, statements, memoranda, and “other data relating to the condition and treatment of any person” may be disclosed to persons and entities specified in subsection (2). These entities include “peer review committees,” “professional review organizations,” and “any health facility's in-house staff committee.”

Utah Code § 26–25–1(2). But this information may only be disclosed for the limited purposes of (1) “study and advancing medical research, with the purpose of reducing the incidence of disease, morbidity, or mortality” or (2) “the evaluation and improvement of hospital and health care rendered by hospitals, health facilities, or health care providers.” Id. § 26–25–1(3). And the current version of section 26–25–3 states:

All information, interviews, reports, statements, memoranda, or other data furnished by reason of this chapter, and any findings or conclusions resulting from those studies are privileged communications and are not subject to discovery, use, or receipt in evidence in any legal proceeding of any kind or character.

(Emphasis added). Together, these sections purport to protect information compiled or created during the peer-review or care-review process from both discovery and receipt into evidence.

¶ 10 Statutory privileges such as those contained in section 26–25–3 are incorporated into rule 501 of the Utah Rules of Evidence. Utah R. Evid. 501 advisory committee's note (“Rule 501 also accepts all pre-existing statutory privileges, except those inconsistent with these rules.”). However, the prior version of section 26–25–3 did not protect peer-review materials at all and its protection of care-review materials did not extend to protection...