Smith v. Surgery Ctr. at Lone Tree, LLC

Decision Date15 October 2020
Docket NumberCourt of Appeals No. 19CA0186
Citation484 P.3d 745,2020 COA 145 M
Parties Robbin SMITH and Doyle Edward Smith, Jr., Plaintiffs-Appellees and Cross-Appellants, v. SURGERY CENTER AT LONE TREE, LLC, Defendant-Appellant and Cross-Appellee.
CourtColorado Court of Appeals

Levanthal Puga Braley, P.C., Bruce L. Braley, Brian N. Aleinikoff, Benjamin I. Sachs, Denver, Colorado; Constitutional Litigation, P.C., Robert Peck, Washington D.C., for Plaintiffs-Appellees and Cross-Appellants

Wheeler Trigg O'Donnell LLP, Kevin J. Kuhn, Theresa Wardon Benz, Denver, Colorado, for Defendant-Appellant and Cross-Appellee

Burg Simpson Eldredge Hersh & Jardine, P.C., Nelson Boyle, Jessica L. Derakhshanian, Englewood, Colorado, for Amicus Curiae The Colorado Trial Lawyers Association

Davis Graham & Stubbs LLP, Shannon Wells Stevenson, Gabrielle L. Robbie, Denver, Colorado, for Amicus Curiae Coloradans Protecting Patient Access

Greenberg Traurig LLP, Ronald J. Tomassi, Jr., Jennifer M. Little, Denver, Colorado, for Amicus Curiae Colorado Ambulatory Surgery Center Association

Greenberg Taurig LLP, Jenifer Little, Denver, Colorado; Leon Cosgrove, LLP, Ronald Tomassi, Jr., Coral Gables, Florida for Amicus Curiae Colorado Ambulatory Surgery Center Association

Opinion by JUDGE GROVE

¶1 In this negligence action, defendant, Surgery Center at Lone Tree, LLC (SCLT), appeals the judgment entered on a jury verdict in favor of plaintiffs, Robbin Smith and Doyle Edward Smith, Jr. The Smiths cross-appeal, contending that the trial court violated their constitutional rights by reducing the amount of the jury award under Colorado's Health Care Availability Act (HCAA). Applying the corporate practice of medicine doctrine, we conclude that SCLT was entitled to judgment as a matter of law. Accordingly, we reverse the trial court's judgment and remand for entry of judgment in SCLT's favor. Because of our disposition, we do not consider the constitutional challenges that the Smiths raise on cross-appeal.

I. Background

¶2 Ms. Smith visited SpineOne Spine & Sport Medical Clinic (SpineOne) for an evaluation of her back pain. She scheduled a series of transforaminal epidural steroid injections to treat it. After her treating physician, Hashim Khan, M.D., performed an epidural injection

into her spine, Ms. Smith lost all feeling in her lower extremities. She was eventually diagnosed with bilateral lower extremity paraplegia secondary to spinal infarct/ischemia and remains permanently paralyzed below the waist.

¶3 Dr. Khan performed the first procedure, a "bilateral S1, L1-L2 transforaminal steroid injection using the particulate corticosteroid, Kenalog

," at SCLT. He did not note any complications during the procedure, but after a short time in the recovery area, the nurse anesthetist, Stacy Cason, determined that Ms. Smith was unable to move her legs. Dr. Khan examined Ms. Smith and decided to transfer her to another medical center, the first of many transfers that would be required. Ms. Smith never regained feeling in her lower extremities.

¶4 Ms. Smith and her husband filed suit against three defendants: Dr. Khan, SpineOne (Dr. Khan's employer), and SCLT (the ambulatory surgical center (ASC) where Dr. Khan performed the procedure). The Smiths settled their claims against Dr. Khan before trial and the trial court dismissed their claims against SpineOne. Only the claims against SCLT proceeded to trial, and only those are at issue in this appeal.

¶5 The Smiths’ claims against SCLT asserted "corporate negligence," "uninformed consent," and "negligence per se." Following an eight-day trial, the jury found in the Smiths’ favor and awarded them $14,905,000.00 in damages. Applying the HCAA, §§ 13-64-101 to - 503, C.R.S. 2019, the trial court reduced the amount of the verdict by more than half, to $6,974,692.27. SCLT appeals the judgment entered on the jury verdict. Arguing that the HCAA violates, among other rights, the right to a civil jury trial guaranteed by the Seventh Amendment, the Smiths cross-appeal the trial court's order reducing the amount of damages awarded by the jury.

¶6 We conclude that the trial court should have dismissed the corporate negligence and uninformed consent claims against SCLT as a matter of law because, under the corporate practice of medicine doctrine, SCLT was not vicariously liable for any malpractice by Dr. Khan, nor did it owe a duty to Ms. Smith to assume any medical responsibilities that Dr. Khan failed to fulfill. We likewise conclude that the trial court should have dismissed the Smiths’ claim for negligence per se because the state licensing and federal Medicare regulations that they rely on were not enacted primarily for the public's safety. Based on our disposition of these issues, we do not reach either the evidentiary issues that SCLT raises or the Smiths’ cross-appeal challenging the constitutionality of the HCAA.

II. Corporate Practice of Medicine

¶7 SCLT contends that the Smiths’ negligence claims against it are barred by the corporate practice of medicine doctrine, and thus should not have been submitted to the jury. We agree.

A. Standard of Review and Governing Law

¶8 We review de novo a trial court's denial of a motion for directed verdict or a motion for judgment notwithstanding the verdict. Parks v. Edward Dale Parrish LLC , 2019 COA 13, ¶ 10, 452 P.3d 141. In doing so, "[w]e view the evidence, and all inferences that may reasonably be drawn therefrom, in the light most favorable to the nonmoving party." Id. A court should not grant either motion "unless there is no evidence that could support a verdict against the moving party on the claim." Id.

¶9 To prevail on a claim of negligence, a plaintiff must show that (1) the defendant owed her a legal duty of care; (2) the defendant breached that duty; (3) the plaintiff suffered injury; and (4) the cause of that injury was the defendant's conduct. Laughman v. Girtakovskis , 2015 COA 143, ¶ 9, 374 P.3d 504.

B. Relevant Facts

¶10 This case revolves around Kenalog

, a particulate corticosteroid that Dr. Khan used in Ms. Smith's procedure. The Smiths argued that Dr. Khan caused Ms. Smith's injuries while using Kenalog off-label — i.e., in a way that had not been approved by the Food and Drug Administration (FDA) — and that he failed to obtain Ms. Smith's informed consent to his off-label use of the drug. As relevant to the issues in this appeal, the Smiths claimed that SCLT had a duty to prevent Dr. Khan's off-label use of Kenalog, or at least to ensure that Ms. Smith had given her informed consent to its off-label use in the event that Dr. Khan failed to obtain such consent.

¶11 Kenalog

is one of a number of medications that SCLT kept on hand for use in its facility as part of what the trial court found was a "formulary."1 SCLT did not tell its physicians how they could use Kenalog or any other drug that it stocked, but it was undisputed at trial that Kenalog has a wide variety of uses consistent with its labeling. It was likewise undisputed that Dr. Khan did not inform Ms. Smith either that he intended to use Kenalog during her procedure or that he intended to use it in a manner inconsistent with the manufacturer's label.

¶12 Ms. Smith signed three separate consent forms before her procedure began. The forms each had different titles and, importantly here, different purposes: Patient Consent and Registration (PCR), Evidence of Informed Consent (EIC), and Consent for Anesthesia Services (CAS). The PCR and CAS forms had the SCLT logo on the front page, but the EIC form did not.

¶13 Ms. Smith discussed the procedure with Dr. Khan, her pre-operative nurse Rhodalyn Roff, and the nurse anesthetist, Ms. Cason. Ms. Smith and Ms. Roff both signed the PCR form. Ms. Smith, Ms. Roff (as a witness), and Dr. Kahn all signed the EIC form. The CAS form was signed by Ms. Smith, Mr. Smith, and Ms. Cason.

¶14 It was undisputed at trial that no one explained to Ms. Smith that Kenalog

would be used off-label. Nor did the forms that Ms. Smith signed disclose that information.

C. Plaintiffs’ Claims and Trial Court's Ruling

¶15 As the Smiths’ trial brief put it, "[t]his case is about [SLCT's] failure to protect its patients by allowing a drug called Kenalog

to be used for transforaminal epidural injections in the lumbar spine after the manufacture[r] warned it should not be used for epidural injections." In essence, the Smiths asserted that SCLT had a duty to Ms. Smith that it breached by failing to prevent Dr. Khan from using Kenalog during the procedure or, in the alternative, by failing to ensure that she was fully informed of — and consented to — its off-label use.

¶16 Along with several other defenses, SCLT maintained that it could not be held liable for Ms. Smith's injuries as a matter of law. Relying on the corporate practice of medicine doctrine, which prohibits a corporation that employs a physician from interfering with the physician's medical judgment, SCLT argued in its motion for directed verdict, and again in its motion for judgment notwithstanding the verdict, that because it had no control over Dr. Khan's medical decisions, it was not responsible for negligent acts that Dr. Khan committed during Ms. Smith's course of treatment, and that it did not have — and had not assumed — an independent duty to ensure that Ms. Smith gave her informed consent. See Daly v. Aspen Ctr. for Women's Health, Inc. , 134 P.3d 450, 452 (Colo. App. 2005) ; see also § 12-36-117(1)(m), C.R.S. 2019; § 25-3-103.7, C.R.S. 2019; Hall v. Frankel , 190 P.3d 852, 861 (Colo. App. 2008). Arguing that the administrative regulations the Smiths relied on did not provide for a private cause of action, SCLT also sought judgment as a matter of law on the Smiths’ negligence per se claim.

¶17 The trial court rejected SCLT's arguments. While it acknowledged that the corporate practice of medicine doctrine would shield SCLT from vicarious liability for Dr. Khan's negligence, the court ruled that the...

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