In re Peer Review Action, No. A07-0813.

CourtCourt of Appeals of Minnesota
Citation749 N.W.2d 822
Docket NumberNo. A07-0813.
Decision Date03 June 2008

Whitney, L.L.P., Minneapolis, MN, for appellants.

Eric J. Magnuson, Briggs & Morgan, P.A., and Margo Struthers, David L. Jordan-Huffman, Oppenheimer Wolff & Donnelly, Minneapolis, MN, for respondent.

Carolin J. Nearing, Geraghty, O'Loughlin & Kenney, P.A., St. Paul, MN, for amici curiae Minnesota Hospital Association, Mayo Health System, Regions Hospital, HealthEast, Children's Health Care, and Park Nicollet Health Services.

Considered and decided by TOUSSAINT, Chief Judge; WRIGHT, Judge; and COLLINS, Judge.


COLLINS, Judge*.

Hospital appeals from a temporary injunction preventing it from professionally disciplining Physician. Hospital conducted a peer-review inquiry of Physician's disruptive behavior, resulting in a 120-day suspension of Physician's privileges and a post-suspension probation. Physician sued to enjoin Hospital from disciplining him. Hospital sought to dismiss the action, claiming immunity under federal and state law. The district court granted the temporary injunction after determining that Hospital's peer-review action leading to discipline of Physician was taken in malice and, therefore, Hospital was not entitled to immunity. Hospital argues on appeal that (1) the factual findings do not support the legal conclusion that Hospital's discipline of Physician was motivated by malice, and (2) the suit is barred because Physician contractually agreed not to sue Hospital for its peer-review actions. Because the district court's factual findings are sufficient to support the conclusion that Hospital's discipline of Physician was motivated by malice, and because a contract cannot limit liability for malicious acts, we affirm.


This case arises from a hospital's disciplinary action against a physician. The events that led to Physician being professionally disciplined began in February 2005, when Hospital's Vice President for Medical Services (VPMS) began investigating Physician's behavior.

The VPMS met with members of Hospital's leadership on March 15, 2005. He reported that Physician was disruptive and that discipline might be necessary. The VPMS had not spoken to Physician about Physician's alleged disruptive behavior but he told the other hospital leaders that he had done so. Hospital's president, the chief of its medical staff, and another member of Hospital's leadership wrote a letter dated July 12, 2005, to Hospital's Credentials Committee alleging disruptive behavior by Physician and requesting the committee to begin a peer-review investigation of Physician.

The VPMS's meeting with Hospital's leadership did not conform to Hospital's policy. Hospital's Disruptive/Abusive Behavior (DAB) Policy sets out a detailed process for communication among administrators, medical-staff leadership, and physicians regarding behavioral conflict. The DAB policy entitles a physician under review to notice of any allegedly disruptive behavior, and an opportunity to modify that behavior and develop conflict-resolution skills. Under Hospital's Credentials and Hearing (Hearing) Policy, when a complaint is filed, the chief of staff, department chief, patient-care-quality committee chair, or the hospital administrator must conduct an inquiry, including discussing the incident with the subject-physician. Hospital did not give Physician an opportunity to modify his behavior and develop conflict-resolution skills. Neither the VPMS nor the authors of the July 12 letter had discussed Physician's behavior with him, as required by the Hearing policy.

The credentials committee sent a letter to Physician on August 3, 2005, notifying him that the committee was conducting an investigation. The letter addressed Physician's disruptive behavior but named none of Physician's accusers and listed the date of only one incident. It did state that Physician, in various surgeries, had been uncompromising with an anesthesiologist, lost his temper, used profane language, and acted disruptively. The letter invited Physician's response to these accusations. After Physician asked for more details, the credentials committee sent him another letter elaborating on the specified events.

On September 7, 2005, Physician met with the credentials committee. He denied the allegations and generally denied that he had engaged in any inappropriate behavior. Physician pointed out that the committee had not followed the DAB policy, which calls for early and gradually increasing intervention. Physician complained that he had not previously been made aware of the allegations and that it was unfair to discipline him for them now.

The credentials committee concluded that Physician's improper conduct had been established and that the improper conduct showed a pattern of unacceptable behavior. To discipline Physician, the committee recommended suspending his privileges for 120 days and requiring him to undergo anger-management training, followed by probation for one year.

On September 12, 2005, Hospital's Medical Staff Executive Committee reviewed the credentials committee's recommendation. The medical staff executive committee agreed with the recommendation for discipline but suggested increasing the suspension to 180 days and the probation to two years. Physician appealed, triggering a procedural-review hearing under the Hearing policy.

On January 12 and 14, 2006, a procedural-review hearing was conducted. On January 24, the hearing panel recommended suspending Physician for 180 days followed by a two-year probation. The Hearing policy requires a hearing panel to produce a written report that includes a statement of the basis for its conclusions. Instead, the hearing panel's one-page written report simply stated that it found "overwhelming evidence" that Physician engaged in "serious disruptive, demeaning and counterproductive behavior." The report did not describe the behavior or specify the overwhelming evidence. The report also stated that Physician "failed ... to take any responsibility for his poor behavior." And it stated that the panel's decision was "based on behavioral issues," but it did not explain what those issues were. Under the Hearing policy, in order to appeal the hearing panel's ruling, the subject-physician is required to "submit a written statement ... relative to factual or procedural matters with which he ... disagrees." Physician asked the hearing panel to provide him with the factual basis for the cursory conclusions in its written report, so that he could meaningfully appeal. Hospital insisted that the hearing panel's report complied with its Hearing policy and declined to submit factual findings.

Physician then appealed to Hospital's board of trustees. On April 20, 2006, the board imposed a 120-day suspension and a five-year probationary period. On May 2, 2006, Physician sued to enjoin Hospital's discipline. The district court granted the temporary injunction on November 16, 2006. Hospital appeals.


I. Did the district court err in determining that Hospital is not afforded immunity from injunction under federal law?

II. Did the district court err by denying Hospital immunity from injunction under state law?

III. Did the district court err by denying Hospital immunity from injunction by virtue of its contract with Physician?


We review the grant of a temporary injunction for an abuse of discretion. Metro. Sports Facilities Comm'n v. Minn. Twins P'ship, 638 N.W.2d 214, 220 (Minn. App.2002), review denied (Minn. Feb. 4, 2002). On an appeal from the grant of a temporary injunction we view the facts in the light most favorable to the injunction. Bud Johnson Constr. Co., Inc. v. Metro. Transit Comm'n, 272 N.W.2d 31, 33 (Minn.1978).


Hospital argues that it is immune from the temporary injunction by virtue of the Health Care Quality Improvement Act (HCQIA), 42 U.S.C. § 11111(a) (2000), which grants hospitals immunity from a suit for damages if their peer-review actions meet certain standards. But HCQIA only provides immunity from damages, not from injunctions. Sugarbaker v. SSM Health Care, 190 F.3d 905, 911 (8th Cir.1999). Because Hospital appeals the grant of an injunction, HCQIA does not apply; therefore Hospital is not afforded immunity under HCQIA from Physician's action seeking an injunction.


Hospital also claims immunity from Physician's temporary injunction under state law. Whether a party is entitled to statutory immunity is a question of law, which is subject to de novo review. Conlin v. City of St. Paul, 605 N.W.2d 396, 400 (Minn.2000). Minnesota law provides immunity to hospitals from damages or other relief in any action brought by a person subject to a peer-review inquiry. Minn. Stat. § 145.63, subd. 1 (2006). Unlike HCQIA, discussed above, state-law immunity extends to injunctive relief. Compare id. with 42 U.S.C. § 11111(a). However, a hospital forfeits its state-law immunity if its peer-review process was motivated by malice toward the subject of a peer-review inquiry. Minn.Stat. § 145.63, subd. 1. The Minnesota Supreme Court has defined malice in the context of statutory immunity as "nothing more than the intentional doing of a wrongful act without legal justification or excuse, or, otherwise stated, the willful violation of a known right." Rico v. State, 472 N.W.2d 100, 107 (Minn.1991). The conclusion of malice depends on found facts. State ex rel. Beaulieu v. City of Mounds View, 518 N.W.2d 567, 572 & n. 8 (Minn.1994). But whether a district court's factual findings support its legal conclusion is a question of law, reviewed de novo. All Parks Alliance for Change v. Uniprop Manufactured Hous. Cmtys. Income Fund, 732 N.W.2d 189, 193 (Minn. 2007).

At oral argument before this court, Hospital clarified that on this appeal it does not challenge the district...

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