In re Christus Santa Rosa Health Sys.

• Decision Date: 27 May 2016
• Docket Number: NO. 14–1077,14–1077
• Citation: 492 S.W.3d 276
• Parties: In re Christus Santa Rosa Health System, d/b/a Christus Santa Rosa Hospital–New Braunfels, Relator
• Court: Texas Supreme Court

492 S.W.3d 276

In re Christus Santa Rosa Health System, d/b/a Christus Santa Rosa Hospital–New Braunfels, Relator

NO. 14–1077

Supreme Court of Texas.

Argued December 9, 2015

OPINION DELIVERED: May 27, 2016

Diana L. Faust, Kyle M. Burke, R. Brent Cooper, Cooper & Scully, P.C., Austin Richard John Kasson, Gonzales, Chiscano, Angulo & Kasson, PC, San Antonio, for Real Parties in Interest.

Edward John Kroger, Leah Ann Greene, Meredith Massey, Kroger / Burrus, Houston, for Relators.

Justice GREEN

delivered the opinion of the Court.

In this mandamus proceeding, Christus Santa Rosa Health System (Christus) challenges the trial court's order compelling production of its medical peer review committee's records pertaining to a surgery performed by Dr. Gerald Marcus Franklin. Christus contends that the documents are protected from production by the medical peer review committee privilege, provided in section 160.007(a) of the Texas Occupations Code

, and that the trial court abused its discretion in ordering Christus to produce the documents to Dr. Franklin. Dr. Franklin contends that the documents are subject to disclosure under the exception to the medical peer review committee privilege provided in section 160.007(d)

. We hold that the trial court abused its discretion in ordering the documents produced without a proper in camera inspection to determine whether the exception in section 160.007(d) applies. Accordingly, we conditionally grant mandamus relief and direct the trial court to inspect the documents at issue to determine whether Dr. Franklin is entitled to the medical peer review committee documents pursuant to section 160.007(d).

I. Facts and Procedural History

The relevant facts are undisputed. In March 2012, Dr. Franklin performed surgery on Leslie Baird to remove the left lobe of her thyroid.¹ Originally, Dr. Franklin was going to remove only a sample of tissue from the left lobe so he could have it diagnosed during surgery using a cryostat

machine. Once diagnosed, he would remove the rest of the lobe if necessary. The surgery was unsuccessful, however, because Dr. Franklin removed thymus gland tissue instead of thyroid tissue. As a result, Baird needed to undergo a second surgery to remove the left lobe of her thyroid.² After the failed surgery, Christus convened a medical peer review committee to review Dr. Franklin's performance in the surgery. Ultimately, the committee did not recommend discipline or any other action.

In March 2013, Baird filed suit against Dr. Franklin and his medical group for medical malpractice as a result of the failed surgery. Soon after, Dr. Franklin filed a motion to designate Christus as a responsible third party, alleging that Christus was responsible for the surgery's failure because it had failed to inform him that the cryostat

machine, a critical piece of equipment, was unavailable. Dr. Franklin argued that he needed a cryostat machine to diagnose the removed tissue intraoperatively. Because the machine was unavailable, Dr. Franklin contends, he could not complete the surgery and had to end the operation without removing the left lobe of Baird's thyroid. Baird named Christus as a defendant.

On March 7, 2014, Dr. Franklin served his first request for production on Christus, asking for, among other things, documents from Christus's medical peer review file. Christus timely served responses and objections and filed a motion for protective order and a privilege log listing all of the documents withheld based on an assertion of privilege. Christus argued that it was not required to produce the requested documents because those documents were privileged under the medical peer review committee privilege. See Tex. Occ. Code § 160.007(a)

. After Dr. Franklin filed a motion to compel, Christus sent the documents listed in the privilege log to the trial court for an in camera inspection.³

After a hearing, the trial court ordered Christus to produce the documents to Dr. Franklin under a protective order, requiring that the documents remain confidential.⁴ The protective order mandated that the documents be disclosed only to Dr. Franklin and his attorney and not disseminated to any other parties. Christus then filed a motion to reconsider, but the motion was denied.⁵

Christus filed a petition for writ of mandamus in the court of appeals, which was also denied. 487 S.W.3d 599, 600 (Tex.App.–Austin 2014)

(mem.op.). Christus subsequently filed a petition for writ of mandamus in this Court.

II. Standard of Review

“Mandamus relief is proper to correct a clear abuse of discretion when there is no adequate remedy by appeal.” In re Frank Kent Motor Co., 361 S.W.3d 628, 630 (Tex.2012)

. “A trial court clearly abuses its discretion if ‘it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law.’ ” Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (quoting Johnson v. Fourth Ct.

App., 700 S.W.2d 916, 917 (Tex.1985) ). Furthermore, the trial court abuses its discretion when it fails to adequately inspect documents tendered for an in camera inspection before compelling production “when such review is critical to the evaluation of a privilege claim.” In re Living Ctrs. of Tex., Inc., 175 S.W.3d 253, 261 (Tex.2005).

We have long held that “a party will not have an adequate remedy by appeal when the appellate court would not be able to cure the trial court's discovery error.” Walker, 827 S.W.2d at 843

. If the trial court issues an erroneous order requiring the production of privileged documents, the party claiming the privilege is left without an adequate appellate remedy. In re Mem'l Hermann Hosp. Sys., 464 S.W.3d 686, 697–98 (Tex.2015) ; In re Living Ctrs., 175 S.W.3d at 256 ; Mem'l Hosp.—The Woodlands v. McCown, 927 S.W.2d 1, 12 (Tex.1996) ; Walker, 827 S.W.2d at 843. If the documents at issue are alleged to be privileged, “mandamus is appropriate if we conclude that they are privileged and have been improperly ordered disclosed.” In re Living Ctrs., 175 S.W.3d at 256.

III. Medical Peer Review Committee Privilege

Christus argues that the trial court abused its discretion when it erroneously ordered production of documents protected from discovery by the medical peer review committee privilege. See Tex. Occ. Code § 160.007(a)

. “Pleading and producing evidence establishing the existence of a privilege is the burden of the party seeking to avoid discovery. The party asserting the privilege must establish by testimony or affidavit a prima facie case for the privilege.” In re Mem'l Hermann Hosp., 464 S.W.3d at 698 (internal citations omitted). If the party asserting the privilege establishes a prima facie case for the privilege and “tenders documents to the trial court, the trial court must conduct an in camera inspection of those documents before deciding to compel production.” In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex.2004) (per curiam). Once the party claiming privilege presents a prima facie case that the documents are privileged, the burden shifts to the party seeking production to prove that an exception to the privilege applies. See Granada Corp. v. Hon. First Ct.App., 844 S.W.2d 223, 227–28 (Tex.1992)

(recognizing that the crime—fraud exception to the attorney—client privilege applies only if a prima facie case of contemplated fraud is made by the party seeking discovery); In re Park Cities Bank, 409 S.W.3d 859, 868–69 (Tex.App.–Tyler 2013, orig. proceeding) (“Once the party resisting discovery establishes a prima facie case that the documents are privileged, the burden shifts to the discovering party to refute the privilege claim.”); In re Small, 346 S.W.3d 657, 662–63 (Tex.App.–El Paso 2009, orig. proceeding) (same); Coats v. Ruiz, 198 S.W.3d 863, 876 (Tex.App.–Dallas 2006, no pet.) (explaining that “[t]he party claiming the exception to the privilege bears the burden of establishing a prima facie case” that an exception applies); In re AEP Tex. Cent. Co., 128 S.W.3d 687, 692 (Tex.App.–San Antonio 2003, orig. proceeding) (same). Because the documents at issue are alleged to be privileged, we first consider whether the party asserting the privilege presented a prima facie case for privilege; if so, we then consider whether the party seeking discovery has met its burden to prove that an exception to the privilege applies. See

In re Mem'l Hermann Hosp., 464 S.W.3d at 698 ; Granada Corp., 844 S.W.2d at 227.

Whether a discovery privilege applies is a matter of statutory construction. See In re Mem'l Hermann Hosp., 464 S.W.3d at 700–01

(using the rules of statutory construction to determine whether the anticompetitive action exception to the medical peer review privilege applied). Privileges are disfavored in the law because they “contravene the fundamental principle that the public ... has a right to every man's evidence,” and should, therefore, be strictly construed. Jordan v. Ct.App. for the Fourth Sup. Jud. Dist., 701 S.W.2d 644, 647 (Tex.1985) (omission in original) (internal quotations omitted). “Statutory construction is a question of law we review de novo.” In re Mem'l Hermann Hosp., 464 S.W.3d at 700. When construing a statute, we look to the plain language to determine the intent of the Legislature. State v. Shumake, 199 S.W.3d 279, 284 (Tex.2006). If the statute is unambiguous, we apply the words according to their common meaning, but we may consider the objective of the law and the consequences of a particular construction. Id.

In section 160.007 of the Texas Occupations Code

, the Legislature provided a privilege for records made by a medical peer review committee in the course of its review. Tex. Occ. Code § 160.007(a). Under section 160.007(a), “each proceeding of a medical peer review committee is confidential, and any communication made to a medical peer review committee is privileged.” Id. The Occupations Code defines “medical peer review committee” as “a committee of a health care entity ... that operates under written bylaws...