Chavez v. Lovelace Sandia Health System

• Decision Date: 27 June 2008
• Docket Number: No. 27,425.,27,425.
• Citation: Chavez v. Lovelace Sandia Health System, 189 P.3d 711, 2008 NMCA 104, 144 N.M. 578 (N.M. App. 2008)
• Parties: Willie CHAVEZ and Mary Ellen Chavez, as personal representatives of the Estate of Anita Chavez, Plaintiffs-Appellees, v. LOVELACE SANDIA HEALTH SYSTEM, INC., a New Mexico corporation d/b/a Lovelace Health Plan, Defendant-Appellant, and Dr. J. Jou, Defendant.
• Court: Court of Appeals of New Mexico

189 P.3d 711

2008 NMCA 104

Willie CHAVEZ and Mary Ellen Chavez, as personal representatives of the Estate of Anita Chavez, Plaintiffs-Appellees, v. LOVELACE SANDIA HEALTH SYSTEM, INC., a New Mexico corporation d/b/a Lovelace Health Plan, Defendant-Appellant, and Dr. J. Jou, Defendant.

No. 27,425.

Court of Appeals of New Mexico.

June 27, 2008.

Law Offices of James P. Lyle, P.C., James P. Lyle, Albuquerque, NM, for Appellees.

Rodey, Dickason, Sloan, Akin & Robb, P.A., Ellen Thorne Skrak, Edward Ricco, Jocelyn Drennan, Albuquerque, NM, for Appellant.

OPINION

SUTIN, Chief Judge.

{1} In this medical malpractice action, Defendant Lovelace Sandia Health System, Inc. appeals from a contempt order entered by the district court. We address whether the district court erred in imposing a punitive sanction against Defendant for refusal to comply with a discovery order that required Defendant to produce documents Defendant claimed were immune because they contained information generated and obtained exclusively for peer review purposes. We also address whether the court erred in imposing a punitive sanction against Defendant for seeking interlocutory appellate review through petitions seeking writs in our Supreme Court and in this Court. We hold that the district court erred in entering the contempt order.

BACKGROUND

The Start of the Discovery Dispute

{2} Plaintiffs Willie Chavez and Mary Ellen Chavez, as personal representatives of the Estate of Anita Chavez, sued Defendant asserting medical negligence in the placement of a pulmonary artery catheter as decedent was being prepared for heart surgery. Plaintiffs served Defendant with discovery requests to obtain the personnel and credentialing files of supervisor Roger Hirst, M.D., an anesthesiologist who was involved in treating the decedent. Defendant objected to producing Dr. Hirst's credentialing file. Another discovery request sought documents from Defendant's investigation into decedent's death. Defendant also objected to this discovery. Plaintiffs filed a motion to compel discovery or to require Defendant to submit a log of withheld documents and to submit those documents for in camera review. Defendant claimed that several documents were immune from discovery under the Review Organization Immunity Act (the ROIA), NMSA 1978, §§ 41-9-1 to -7 (1979). Essentially, the ROIA protects peer review material from discovery, as we discuss in more detail later in this opinion. In regard to peer review material, the parties and the district court considered Southwest Community Health Services v. Smith, 107 N.M. 196, 755 P.2d 40 (1988), as the guideline for analyzing the ROIA and the evidentiary burdens placed on the parties when a party claims that documents are immune, confidential peer review material.

{3} Defendant also argued in the district court that certain reports at issue were created pursuant to the federal Health Care Quality Improvement Act of 1986, 42 U.S.C. §§ 11101 to 11152 (1986, as amended through 1989), and that the reports were acquired by Defendant for use in Dr. Hirst's credentialing process. Defendant represents in particular that the documents at issue were responses from the National Practitioner Data Bank to inquiries as to whether any reportable incidents involving Dr. Hirst, such as restrictions on clinical privileges, malpractice judgments, or settlements, were contained in the Data Bank records. Although not significant for our purposes in this appeal, we note that, in addition, Defendant asserted that federal law criminalizes disclosure of the Data Bank reports under the circumstances here. See § 11137(b); 45 C.F.R. §§ 60.10, 60.11, 60.13, 60.14 (1989, as amended through 1990).

{4} The foregoing discovery dispute primarily raised issues of the application of the ROIA and of Smith, as we discuss further in this opinion.

The ROIA and Smith

{5} Section 41-9-5 of the ROIA pertains particularly to the peer review issue in this case. The statute provides:

All data and information acquired by a review organization in the exercise of its duties and functions shall be held in confidence and shall not be disclosed to anyone except to the extent necessary to carry out one or more of the purposes of the review organization or in a judicial appeal from the action of a review organization. No person described in Section [41-9-4 of the ROIA] shall disclose what transpired at a meeting of a review organization except to the extent necessary to carry out one or more of the purposes of a review organization or in a judicial appeal from the action of a review organization. Information, documents or records otherwise available from original sources shall not be immune from discovery or use in any civil action merely because they were presented during proceedings of a review organization, nor shall any person who testified before a review organization or who is a member of a review organization be prevented from testifying as to matters within his knowledge, but a witness cannot be asked about opinions formed by him as a result of the review organization's hearings.

{6} In Smith, our Supreme Court stated that "[t]he ROIA establishes a medical peer review process to promote the improvement of health care in New Mexico. Further, it recognizes that candor and objectivity in the critical evaluation of medical professionals by medical professionals is necessary for the efficacy of the review process." Smith, 107 N.M. at 198, 755 P.2d at 42. The Court recognized Section 41-9-5 as "an exercise of the [L]egislature's constitutional authority to enact laws to preserve public health and safety." Smith, 107 N.M. at 198, 755 P.2d at 42. "[I]n the sense that records from the peer review process are excluded from evidence" under Section 41-9-5, "the confidentiality provision establishes an immunity from discovery." Smith, 107 N.M. at 199, 755 P.2d at 43.

{7} Based on its analysis of Section 41-9-5 as a statute whose confidentiality provision was "intended to prevent disclosure in situations extending far beyond the production of evidence in civil litigation," the Court in Smith concluded that the statute did "not purport to create an evidentiary privilege in civil litigation." Smith, 107 N.M. at 199, 755 P.2d at 43. Nevertheless, the Court was met with the difficulty of having to balance the legislative function of promoting the health and welfare of society against an overbroad implementation of confidentiality to the extent it might impinge on the right of litigants to obtain and present relevant and material evidence. Id. at 200, 755 P.2d at 44.

{8} To balance the foregoing competing interests of the legislative and judicial branches, the Court in Smith set up a process to be guided by the exercise of judicial discretion. Id. at 200, 201, 755 P.2d at 44, 45. It is this process that is at the heart of the present dispute. First, the Court plainly held "that all data and information acquired by a review organization in the exercise of its duties and functions, and opinions formed as a result of the review organization's hearings, shall be governed by Section 41-9-5." Id. at 200, 755 P.2d at 44. Then the Court established burdens on parties in a discovery dispute over the production of documents claimed to be immune under the ROIA. We set out those burdens here. First, the party invoking the statute must

prove that the data or information was generated exclusively for peer review and for no other purpose, and that opinions were formed exclusively as a result of peer review deliberations. If the evidence was neither generated nor formed exclusively for or as a result of peer review, it shall not be immune from discovery unless it is shown to be otherwise available by the exercise of reasonable diligence.

Id. Commensurate with the objection to the discovery, the party seeking to compel discovery has the "initial burden of proving relevance to the subject matter." Id. This will require an in camera examination of the information "and, perhaps, an evidentiary hearing to determine whether it properly falls within the parameters of Section 41-9-5." Id. Second, also part and parcel of the process, if the court rules that the information is confidential the party seeking to compel discovery

must then satisfy the trial court that the information constitutes evidence which is critical to the cause of action or defense. If the trial court determines that the success or failure of a litigant's cause of action or defense would likely turn on the evidence adjudged to fall within the scope of Section 41-9-5, then the trial court shall compel production of such evidence.

Id. at 200-01, 755 P.2d at 44-45. The Court in Smith clearly contemplated an in camera inspection and, if need be, an evidentiary hearing to iron out the parties' burdens and whether particular documents are immune from discovery. We will explore this further later in our discussion of the parties' arguments.

Defendant's Document Logs and Indices, and Affidavit Regarding Nature of Documents; In Camera Review

{9} Defendant provided logs of credentialing and quality management documents it claimed were immune. Defendant also provided an affidavit of its former director of quality, Jan Grosse, in support of its position that the documents were protected peer review materials under ROIA that had been generated exclusively for peer review purposes. In the affidavit, Ms. Grosse stated that credentialing files contained "data and information acquired in the exercise of [Defendant's] duties and functions of a review organization," were "generated exclusively to ensure the competence of the medical staff," and were "compiled as part of [Defendant's] internal peer review process." She further stated that Defendant's internal peer review was a process to "monitor and review the performance and qualifications of medical staff" for the purpose of recommending whether any staff member's hospital privileges should be...