Smith v. Northside Hosp., Inc.

• Citation: 820 S.E.2d 758,347 Ga.App. 700
• Decision Date: 23 October 2018
• Docket Number: A15A2303, A15A2304
• Parties: SMITH v. NORTHSIDE HOSPITAL, INC., et al.; and vice versa.
• Court: United States Court of Appeals (Georgia)

347 Ga.App. 700

820 S.E.2d 758

SMITH

v.NORTHSIDE HOSPITAL, INC., et al.; and vice versa.

A15A2303, A15A2304

Court of Appeals of Georgia.

October 23, 2018

Lucas Wade Andrews, Peter Crane Canfield, Atlanta, Samantha Rose Mandell, Rebekah N. Plowman, Daniel J. Conner, Laura Kolesar Gura, Atlanta, for Appellant in A15A2303.

Thurbert E. Baker, Atlanta, Stephen Derek Bauer, Bryan Eugene Bates, Nathan Lewis Garroway, Ian Kyle Byrnside, Atlanta, James Randolph Evans, James C. Rawls, Atlanta, Susan V. Sommers, Charles T. Huddleston, S. Wade Malone, Jessica R. Watson, Jeremy Patrick Burnette, Sidney Summers Welch, Atlanta, Geoffrey M. Raux, Stephen J. Quinlan, Edward C. Konieczny, Atlanta, for Appellee in A15A2303.

Thurbert E. Baker, Atlanta, Stephen Derek Bauer, Bryan Eugene Bates, Ian Kyle Byrnside, Robert Sparks Highsmith Jr., James C. Rawls, Atlanta, Susan V. Sommers, Allen Andre Hendrick, for Appellant in A15A2304.

Lucas Wade Andrews, Peter Crane Canfield, Atlanta, Samantha Rose Mandell, Brian Charles Lea, Rebekah N. Plowman, Daniel J. Conner, Laura Kolesar Gura, Meredith Charlotte Kincaid, Atlanta, for Appellee in A15A2304.

Dillard, Chief Judge.

In Smith v. Northside Hospital, Inc ., 302 Ga. 517, 807 S.E.2d 909 (2017) (" Smith II "), the Supreme Court of Georgia reversed our previous decision in Smith v. Northside Hospital, Inc ., 336 Ga. App. 843, 783 S.E.2d 480 (2016) (" Smith I ") and remanded the case with direction. Specifically, our Supreme Court reversed this Court’s holding affirming the trial court’s dismissal of E. Kendrick Smith’s action to compel Northside Hospital, Inc. and its parent company, Northside Health Services, Inc. (collectively, "Northside") to provide him with access to certain documents in response to his request under the Georgia Open Records Act (the "Act").¹ In doing so, the Supreme Court concluded that the trial court applied the wrong legal standard to the undisputed facts in finding the documents at issue were not public records within the meaning of the Act, and it remanded the case for the trial court to apply the correct legal standard, as set forth in Smith II , in determining whether the documents were public within the meaning of the Act; and if so, whether they may nevertheless be withheld under a statutory exception. Accordingly, we adopt the judgment of our Supreme Court, reverse the trial court’s dismissal of Smith’s action, and remand the case for further proceedings consistent with Smith II . But before doing so, we still have one other issue to address.

Smith I involved cross-appeals, Case Nos. A15A2303 (i.e. , Smith’s primary appeal) and A15A2304 (i.e. , Northside’s cross-appeal), and the Supreme Court of Georgia, in Smith II , only addressed our decision in the primary appeal. In Smith I , we originally agreed with the trial court’s conclusion that the documents at issue were not public documents as a matter of law, and thus, we dismissed Northside’s cross-appeal, which challenged a pre-trial discovery ruling as moot. But given our Supreme Court’s reversal of Smith I , Northside’s cross-appeal is no longer moot, and we will now address it.²

Specifically, Northside argues that the trial court abused its discretion by entering a protective order, prohibiting it from seeking information during discovery regarding the identity and motives of individuals or entities on whose behalf Smith allegedly initiated this action. We disagree.

The facts and procedural history underlying Northside’s cross-appeal are essentially undisputed and are set forth in greater detail in Smith I and Smith II . But to summarize, the record shows that the Commissioners of Roads and Revenues of Fulton County passed a resolution in 1966, creating the Fulton County Hospital Authority (the "Authority"), which would "have and exercise all of the powers granted and prescribed in the Hospital Authority Laws."³ The purpose of creating the Authority was to improve and increase hospital facilities to serve the community.⁴ To that end, the Authority opened Northside Hospital, which it owned and operated for approximately 25 years.⁵ But in the early 1990s, recognizing "the rapidly changing healthcare environment in which it operated," the Authority commissioned a study on the matter and ultimately determined that "the best way to improve the hospital’s performance was to restructure through a long-term lease of the hospital and related assets for operation by a private, charitable, nonprofit corporation."⁶ Thus, on November 1, 1991, the Authority executed a lease and transfer agreement (the "Agreement") with the newly formed Northside Hospital, Inc., a private, nonprofit corporation.⁷ Under the Agreement, the Authority leased the hospital facilities and transferred all of its "Operating Assets" and "Existing Operations" for a term of 40 years in exchange for a yearly rent payment of $100,000.⁸ The leased facilities included the hospital, a surgery center, office buildings, and improvements.⁹ Additionally, the Authority gave Northside the power to act on its behalf and operate the hospital subject to certain restrictions.¹⁰ And each year since the Agreement was executed, the Authority reaffirmed its conclusion that its agreement with Northside promotes the public health needs of the community.¹¹

Particularly relevant to the instant dispute, Northside entered into transactions—between 2011 and 2013—to acquire four privately owned physician groups.¹² Smith learned of these transactions in 2013, and he sent a letter to Northside and the Authority, entitled "Open Records Request," seeking access to financial statements and other documents related to the acquisitions.¹³ In response, the Authority informed Smith that it did not possess any such documents, and Northside declined to comply with the request, contending that it was not subject to the Act because it was a private, nonprofit hospital.¹⁴ Northside also notified Smith that, even if it were subject to the Act, the "highly sensitive" documents he requested would be statutorily exempt under several provisions of the Act, including the trade-secrets exception.¹⁵

Thereafter, Smith—an Atlanta attorney—brought this action to compel Northside to reply with his open records request.¹⁶ Discovery ensued, and on November 18, 2013, Northside sent Smith a letter, requesting the name of the client or clients who engaged him and his law firm to pursue this action. The next day, Smith declined the request, noting that the Act requires public records to be made available to "any person" who requests them. Thus, Smith contended that this matter was focused solely on Northside’s functions, its relationship with the Authority, and the documents in question, "not on anything concerning [him]."

Nevertheless, on December 3, 2013, Northside sent Smith a notice of its intent to depose him on December 11, 2013. And rather than responding to the request, Smith filed a motion for a protective order to nullify Northside’s "improper deposition notice." Specifically, Smith argued that the proposed deposition was irrelevant to the issues in the case because the Act makes public records available to anyone who requests them, and any individualized questioning of the requester is both unnecessary and inappropriate. Discovery continued and before the trial court ruled on his initial motion for a protective order regarding the deposition notice, Smith filed a second motion for a protective order, this time asking the court to prohibit any discovery regarding himself or the identity and purposes of his alleged clients. Following Northside’s response brief in opposition to the motion and a hearing on the matter, the trial court ultimately issued the protective order. Specifically, as requested, the court’s protective order prohibited "any discovery concerning [ ] Smith’s purposes in bringing [this] action, or the identity and purposes of any of his alleged clients." Northside’s cross-appeal, challenging the propriety of that order, follows.¹⁷

The grant or denial of a motion for protective order "lies within the sound discretion of the trial court, and we will reverse the court’s decision in this regard only when it has abused its discretion."¹⁸ This is because a trial court has broad discretion to control all discovery matters.¹⁹ And as to protective orders, a trial court will only abuse its discretion when its ruling is "unsupported by any evidence of record or [when] that ruling misstates or misapplies the relevant law."²⁰ That said, in Georgia, parties may obtain discovery regarding any matter, not privileged, "which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery."²¹ With these guiding principles in mind, we will now address Northside’s claim of error.

Specifically, Northside argues that the trial court abused its discretion by issuing the protective order, thus precluding discovery regarding the identity and purposes of Smith’s alleged client or clients, because doing so was contrary to Georgia law and the discovery sought is relevant to the Act’s trade-secrets exception.²² We find this argument unavailing.

In relevant part, OCGA § 50-18-71 (a) provides that "[a]ll public records shall be open for personal inspection and copying, except those which by order of a court of this state or by law are specifically exempted from disclosure." And our General Assembly codified the public policy underlying the Act as follows:

The General Assembly finds and declares that the strong public policy of this state is in favor of open government; that open government is essential to a free, open, and democratic society; and that public access to public records should be encouraged to foster confidence in government and so that the public can evaluate the expenditure of public funds and the efficient and proper functioning of its institutions. The General Assembly further finds and declares that there is a strong

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