El Paso Healthcare Sys., Ltd. v. Murphy

• Decision Date: 28 April 2017
• Docket Number: No. 15–0575,15–0575
• Parties: EL PASO HEALTHCARE SYSTEM, LTD., d/b/a Las Palmas Medical Center, Petitioner, v. Laura MURPHY, Respondent
• Court: Texas Supreme Court

518 S.W.3d 412

EL PASO HEALTHCARE SYSTEM, LTD., d/b/a Las Palmas Medical Center, Petitioner,

v.Laura MURPHY, Respondent

No. 15–0575

Supreme Court of Texas.

Argued February 8, 2017

Opinion delivered: April 28, 2017

Michael A. Hatchell, Charles R. 'Skip' Watson Jr., Joseph L. Hood Jr., Susan A. Kidwell, for Petitioner.

Enrique Moreno, John P. Mobbs, for Respondent.

Justice Boyd delivered the opinion of the Court.

El Paso Healthcare System, Ltd., d/b/a Las Palmas Medical Center, appeals from a judgment awarding damages to Laura Murphy on her claims for statutory retaliation and tortious interference. The court of appeals affirmed the trial court's judgment based on a jury's findings that El Paso Healthcare retaliated against Murphy and interfered with her employment contract after she reported that a physician failed to obtain a patient's informed consent. We reverse the court of appeals' judgment and render judgment that Murphy take nothing.

I. BACKGROUND

Laura Murphy is a certified registered nurse anesthetist. Beginning in 2001, Murphy worked as an independent practitioner under contract with West Texas OB Anesthesia in El Paso. West Texas OB had a contract to provide medical staff to El Paso Healthcare's Las Palmas Medical Center, where Murphy regularly worked in the labor-and-delivery unit. Murphy was not an employee of El Paso Healthcare or Las Palmas, but she was required to obtain the approval of Las Palmas's credentialing committee before working at the hospital. Under these contractual arrangements, Las Palmas would request staffing for particular assignments, and West Texas OB would offer those shifts to Murphy and its other contractors. Neither Las Palmas nor West Texas OB were required to offer Murphy any assignments, and she was not required to accept any assignments that were offered.

While working an overnight shift at Las Palmas, Murphy interacted with a nineteen-year-old patient who was a first-time expectant mother with gestational diabetes

. This patient was under the care of Dr. Frederick Harlass, a high-risk-delivery specialist. When Murphy arrived that night, the patient's cervix had not sufficiently dilated to allow for a vaginal birth, and her progress appeared to be stalled. Harlass had advised the patient and nurses that he would deliver the baby by Cesarean section if the patient did not dilate further within a particular amount of time. The patient told Murphy that she was worried about having a C-section. Murphy told the patient that she had the right to "ask the doctor what he wants to do and why he wants to do it." She said, "You remember you have the right to do that. You have the right to say who does what to your body."

By 9 p.m., the patient had not further dilated, and Harlass ordered the C-section. The patient asked to speak with Harlass before she signed the consent form for the procedure. Harlass and another nurse, Olivia Juarez, went into the patient's room to talk to her. Murphy remained outside. Murphy estimated that Harlass was in the room with the patient for four or five minutes. When Harlass came back out, he approached Murphy. He was very angry and said, "I don't have to take this crap." He believed that Murphy had discouraged the patient from consenting to the C-section and, in doing so, had hampered a safe and successful delivery. Harlass explained to Murphy that he "just told [the patient] that if she wanted a brain-damaged or dead baby, it wouldn't be his fault." Murphy asked Nurse Juarez if Harlass really said this to the patient. Juarez confirmed that he had, but added that "he wasn't real nasty about it." Murphy conceded not really knowing what Juarez meant by this. After speaking with Harlass, the patient consented to the C-section. Harlass successfully delivered the baby without complications.

Around 8 a.m. the following morning, Murphy visited with Las Palmas's ethics coordinator. Murphy complained about Harlass's behavior around patients, his tendency to order premature inductions and C-sections, and her belief that he failed to obtain the nineteen-year-old patient's informed consent. She also expressed apprehension about making the complaint, stating that she feared doing so "may become the cause for [her] dismissal." Sometime that same morning, Harlass called West Texas OB and complained that Murphy had interfered with his treatment and management of the patient. Shortly before eleven that morning, a West Texas OB partner left a voice mail for Murphy, telling her that because of complaints by Harlass and another Las Palmas physician, she should not return to work at Las Palmas until further notice. The next day, Murphy sent letters to West Texas OB and to Las Palmas's ethics coordinator, memorializing her recollection of these events.

About a month later, Murphy had still not returned to work, and the chairman of Las Palmas's credentialing committee asked Murphy to attend a meeting. When Murphy inquired about the purpose of the meeting, the committee coordinator refused to say. Fearing the committee would revoke her credentials at Las Palmas, Murphy asked if her attorney could attend the meeting. When her request was denied, Murphy refused to attend the meeting and instead filed this suit against El Paso Healthcare a few days later.

At trial, the court submitted jury questions on Murphy's claims against El Paso Healthcare for statutory retaliation and tortious interference with "the continuation of the business relationship between" Murphy and West Texas OB. The jury found El Paso Healthcare liable on both causes of action and found that Murphy sustained damages of $31,000 in lost wages and $600,000 for past and future emotional pain, mental anguish, loss of enjoyment of life, and damage to her reputation. The trial court entered judgment on the jury's verdict, and the court of appeals affirmed. 511 S.W.3d 602 (Tex.App.–El Paso 2015). We granted El Paso Healthcare's petition for review.

II. STATUTORY RETALIATION

Texas Health and Safety Code section 161.135 provides the basis for Murphy's statutory-retaliation claim. It states that hospitals and other health facilities "may not retaliate against a person who is not an employee for reporting a violation of law." TEX. HEALTH & SAFETY CODE § 161.135(a). A plaintiff alleging a violation of this section bears the burden of proof to establish the claim, but the statute provides "a rebuttable presumption that the plaintiff was retaliated against" under specified circumstances. Id. § 161.135(c). One such circumstance arises if, within sixty days "after the date on which the plaintiff made a report in good faith," the hospital "transfers, disciplines, suspends, terminates, or otherwise discriminates against the person." Id. § 161.135(c)(1)(B).¹

Based on these provisions, the trial court submitted Murphy's statutory-retaliation claim by asking the jury whether "Murphy's ethics report to El Paso Healthcare ... [was] made in good faith and [was] a cause of her transfer or adverse employment action." With this question, the court instructed the jury that "good faith" means that: "(1) Laura Murphy believes that the conduct reported was a violation of law; and (2) Her belief was reasonable in light of the training and experience." The court then instructed the jury that, unless rebutted by El Paso Healthcare, the jury could "presume that an adverse personnel action was taken because Laura Murphy reported a violation of the law, if Laura Murphy suffers the adverse employment action within sixty (60) days of making the report." El Paso Healthcare objected to the court's instructions, arguing that the statute requires that Murphy reported conduct that would in fact constitute a "violation of law," not just that she made the ethics report with a reasonable belief that the conduct she complained of violated the law. The trial court overruled the objection, and the jury answered "Yes" to the question.

The court of appeals upheld the judgment based on statutory retaliation, concluding that the record contains "some evidence that Dr. Harlass's conduct violated the law" by failing to obtain the patient's informed consent, and that "Murphy reported a violation of law." 511 S.W.3d 602. Based on these conclusions, the court did not reach El Paso Healthcare's argument that "there is no evidence that Murphy made her report in good faith." 511 S.W.3d 602.

El Paso Healthcare argues that the court of appeals erred by upholding the judgment based on evidence that Harlass violated the law and Murphy reported a violation of law because the trial court never asked the jury those questions. Instead, the court asked the jury whether Murphy made her ethics report in good faith, reasonably believing that Harlass violated the law. According to El Paso Healthcare, the statute requires the plaintiff to prove that she reported conduct that in fact violated the law, not just conduct that she reasonably believed violated the law, and it treats the person's good-faith reasonable belief merely as a basis for a presumption that the defendant retaliated against the plaintiff. Based on this statutory construction, El Paso Healthcare argues that we must reverse the judgment because the court of appeals affirmed based on a theory the trial court never submitted to the jury. Alternatively, El Paso Healthcare argues that, even if the jury question could be construed to ask whether Murphy reported conduct that in fact violated the law, Murphy provided no evidence that Harlass's alleged conduct as reported was in fact a violation of law. Finally, El Paso Healthcare argues that, even if a good-faith belief that Harlass violated the law were sufficient under the statute, no evidence supports the jury's finding that Murphy reported a legal violation in good faith.²

In response, Murphy contends that the statute merely required her to establish that she reported conduct that she reasonably believed in good faith was a violation of law. In support, Murphy relies heavily on this...