Virmani v. Novant Health Incorp.

• Decision Date: 05 April 2001
• Docket Number: No. 00-2423,00-2423
• Citation: 259 F.3d 284
• Parties: (4th Cir. 2001) ASHUTOSH RON VIRMANI, MD, Plaintiff-Appellee, v. NOVANT HEALTH INCORPORATED, formerly known as Presbyterian Health Services Corporation, Defendant-Appellant. NORTH CAROLINA MEDICAL SOCIETY; NORTH CAROLINA HOSPITAL ASSOCIATION; AMERICAN MEDICAL ASSOCIATION; AMERICAN HOSPITAL ASSOCIATION; AMERICAN ASSOCIATIONOF PHYSICIANSOF INDIAN ORIGIN; AMERICAN COLLEGEOF INTERNATIONAL PHYSICIANS; NATIONAL MEDICAL ASSOCIATION; CHARLOTTE MEDICAL SOCIETY; NORTH CAROLINA ASSOCIATIONOF PHYSICIANSOF INDIAN ORIGIN; OLD NORTH STATE MEDICAL SOCIETY, Amici Curiae. Argued:
• Court: U.S. Court of Appeals — Fourth Circuit

Page 284

259 F.3d 284 (4th Cir. 2001)

ASHUTOSH RON VIRMANI, MD, Plaintiff-Appellee, v. NOVANT HEALTH INCORPORATED, formerly known as Presbyterian Health Services Corporation, Defendant-Appellant.

NORTH CAROLINA MEDICAL SOCIETY; NORTH CAROLINA HOSPITAL ASSOCIATION; AMERICAN MEDICAL ASSOCIATION; AMERICAN HOSPITAL ASSOCIATION; AMERICAN ASSOCIATIONOF PHYSICIANSOF INDIAN ORIGIN; AMERICAN COLLEGEOF INTERNATIONAL PHYSICIANS; NATIONAL MEDICAL ASSOCIATION; CHARLOTTE MEDICAL SOCIETY; NORTH CAROLINA ASSOCIATIONOF PHYSICIANSOF INDIAN ORIGIN; OLD NORTH STATE MEDICAL SOCIETY, Amici Curiae.

No. 00-2423

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

Argued: April 5, 2001

Decided: August 1, 2001

Appeal from the United States District Court for the Western District of North Carolina, at Charlotte. H. Brent McKnight, Magistrate Judge.

(CA-99-15-3-V)

COUNSEL ARGUED: Lawrence Carlton Moore, III, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for Appellant. James Clayton Culotta, LAW OFFICE OF KENNETH JOEL HABER, P.C., Rockville, Maryland, for Appellee. ON BRIEF: Everett J. Bowman, Louis A. Bledsoe, III, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for Appellant. Kenneth J. Haber, Charles E. Hamilton, III, LAW OFFICE OF KENNETH JOEL HABER, P.C., Rockville, Maryland, for Appellee. Julian D. Bobbitt, Jr., Sean A. Timmons, SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P., Raleigh, North Carolina, for Amici Curiae Medical Society, et al. Normand F. Pizza, Carin A. Kramer, MILLING, BENSON, WOODWARD, L.L.P., New Orleans, Louisiana, for Amici Curiae Association of Physicians, et al.

Before WIDENER and LUTTIG, Circuit Judges, and Rebecca Beach SMITH, United States District Judge for the Eastern District of Virginia, sitting by designation.

Affirmed by published decision. Judge Smith wrote the opinion, in which Judge Widener and Judge Luttig joined.

OPINION

SMITH, District Judge:

Novant Health, Incorporated ("Novant") appeals an order of the district court denying its motion for protective order and granting in part Dr. Ashutosh Ron Virmani's motion to compel records related to medical peer reviews. Novant argues that the documents Virmani seeks to discover are privileged. Because we decline to recognize a privilege for medical peer review materials, we affirm the order of the district court.

I.

Dr. Virmani is an obstetrician-gynecologist who was granted medical staff membership and clinical privileges at Presbyterian Hospital and Presbyterian Hospital Matthews (collectively,"Presbyterian").¹ During a laparoscopic procedure in 1994 at Presbyterian Hospital, Virmani inadvertently punctured the iliac artery of a patient, creating a life-threatening emergency. Virmani states that this is a known possible complication of the procedure. Following a lengthy series of proceedings, Presbyterian suspended Virmani's staff membership and clinical privileges.

The first review (the "First Peer Review"), conducted by Presbyterian's OB/GYN Committee, lasted five months, from March through August of 1995. The Committee reviewed all cases in which Virmani had been the primary care physician since August of 1993 and found 24 of the 102 cases to be problematic. Based on the Committee's report, Novant suspended Virmani's privileges, pending a review by Presbyterian's Medical Board. At Virmani's request, the Hearing Committee of the Medical Board, which is composed of three physicians, conducted a full hearing on November 21, 1995. Following that hearing, the Medical Board voted to terminate Virmani's medical staff privileges. Presbyterian's Board of Trustee's upheld that decision on January 19, 1996.

On January 22, 1996, Virmani filed an action against Novant in North Carolina state court, alleging that the manner in which Presbyterian had suspended Virmani's privileges breached its bylaws. The trial court ordered Novant to give Virmani a new peer review proceeding, to be conducted by a peer review body composed of physicians from outside Presbyterian. In August of 1997, the North Carolina Court of Appeals affirmed the trial court's order to the extent it required a second peer review, but reversed as to the requirement that the second peer review body consist of an external committee. See Virmani v. Presbyterian Health Servs. Corp., 488 S.E.2d 284, 289 (N.C. Ct. App. 1997). Presbyterian then began a second internal peer review (the "Second Peer Review"), using a committee composed of members different from those who had conducted the First Peer Review. As a result of the Second Peer Review, the Medical Board and the Board of Trustees again decided to terminate Virmani's staff privileges.

Virmani filed the instant action in federal court on January 15, 1999, alleging that the termination of his privileges constituted discrimination against him on the basis of his race and national origin, in violation of 42 U.S.C.A. SS 1981, 1985 (West 1994). He claims that the hospital performed its medical peer review functions in a discriminatory manner, treating non-Indian physicians differently and disciplining them less harshly. Virmani also asserted state law claims for intentional infliction of emotional distress and negligent infliction of emotional distress.

During discovery, Virmani sought to obtain, inter alia, all peer review records related to all reviews of physicians for any reason, during the twenty years preceding his request. Novant moved for a protective order, arguing that the peer review materials were privileged under North Carolina law, see N.C. Gen. Stat. S 131E-95(b) (1999), and pursuant to Federal Rule of Evidence 501. Virmani filed a motion to compel production of the materials.

The district court² refused to recognize a privilege for medical peer review materials and, in its order filed June 27, 2000, denied Novant's motion for protective order. The court agreed with Novant, however, that the scope of Virmani's discovery requests was overly broad. Accordingly, in its June 27, 2000, order, the court granted in part and denied in part Virmani's motion to compel. Specifically, the court ordered production of "documents pertaining to competency reviews of OB-GYN's from 1982 through 1997." J.A. 206.

On August 15, 2000, the district court denied Novant's motion for reconsideration. The court certified its June 27, 2000, order for interlocutory appeal, and we granted Novant's petition for leave to appeal.

II.

Novant argues on appeal that the district court erred in refusing to recognize a privilege for documents related to medical peer review proceedings. Federal Rule of Evidence 501, which governs privileges in federal courts, provides that

Except as otherwise required by the Constitution of the United States or provided by Act of Congress or in rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of a witness, person, government, State, or political subdivision thereof shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience.

Fed. R. Evid. 501.³ Whether to recognize a privilege under Federal Rule of Evidence 501 is a mixed question of law and fact, which we review de novo. See Carman v. McDonnell Douglas Corp., 114 F.3d 790, 793 n.2 (8th Cir. 1997).

Evidentiary privileges "are not lightly created," United States v. Nixon, 418 U.S. 683, 710 (1974), because "privileges contravene the fundamental principle that the public . . . has a right to every man's evidence," University of Pa. v. EEOC, 493 U.S. 182, 189 (1990) (alteration in original) (internal quotation marks omitted). When considering whether to recognize a privilege, a court must begin with "the primary assumption that there is a general duty to give what testimony one is capable of giving, and that any exemptions which may exist are distinctly exceptional, being so many derogations from a positive general rule." Jaffee v. Redmond, 518 U.S. 1, 9 (1996) (internal quotation marks omitted). Thus, in our determination of whether to recognize a new privilege, we must heed the Supreme Court's admonition that we should not "create and apply an evidentiary privilege unless it `promotes sufficiently important interests to outweigh the need for probative evidence.'" University of Pa., 493 U.S. at 189 (quoting Trammel v. United States, 445 U.S. 40, 51 (1980)); see also Pearson v. Miller, 211 F.3d 57, 67 (3d Cir. 2000) ("[F]ederal courts are to assess the appropriateness of new privileges as they arise in particular cases, but they are to conduct that assessment with a recognition that only the most compelling candidates will overcome the law's weighty dependence on the availability of relevant evidence.").

Novant argues that confidentiality is essential to the effectiveness of medical peer review committees. Some courts have found that if a privilege is not accorded to the documents considered and produced by these committees, physicians would be reluctant to serve on the committees or would be less candid in their evaluations if they did serve; as a result, the quality of health care would suffer. See, e.g., HCA Health Servs. of Va., Inc. v. Levin, 530 S.E.2d 417, 420 (Va. 2000). The issue before us is whether the interest in promoting candor in medical peer review proceedings outweighs the need for probative evidence in a discrimination case.⁴ This is an issue of first impression in this Circuit.⁵ Novant advances three arguments in support of recognizing such a privilege: (1) the reasons underlying the Supreme Court's decision in Jaffee v. Redmond, 518 U.S. 1 (1996), to recognize a "psychotherapist privilege" apply with equal or greater force to the privilege at issue here; (2) Congress favors a medical peer review privilege; and (3) precedent from other circuits favors granting the privilege. We consider each argument in turn.

A.

Novant identifies the following reasons underlying the Supreme Court...