In Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465 [131 Cal.Rptr. 90, 551 P.2d 410] (Westlake), we held that, before
Here, as in Westlake, defendant Sutter Central Valley Hospitals, through its quasi-judicial peer review procedures, terminated plaintiff Mark T. Fahlen's physician's staff privileges. He sued the hospital and its chief operating officer, seeking damages, reinstatement, and other relief on multiple theories. Among other things, his complaint claims the hospital's action constituted retaliation for his reports of substandard performance by hospital nurses, and thus violated Health and Safety Code section 1278.5.
Defendants moved to dismiss the action on grounds, among others, that plaintiff could not bring a civil suit under section 1278.5 unless he first succeeded by mandamus in overturning the hospital's action. The trial court denied the motion. In a published decision, the Court of Appeal reversed in part. The appellate court held that plaintiff could pursue those claims based on section 1278.5, rather than on the common law, even though he had not previously sought and obtained a mandamus judgment against the hospital's decision. This holding conflicted with that of another appellate decision, Nesson v. Northern Inyo County Local Hospital Dist. (2012) 204 Cal.App.4th 65 [138 Cal.Rptr.3d 446] (Nesson). We granted defendants' petition for review for the sole purpose of resolving the conflict.
We conclude that when a physician claims, under section 1278.5, that a hospital's quasi-judicial decision to restrict or terminate his or her staff privileges was itself a means of retaliating against the physician "because" he or she reported concerns about the treatment of patients, the physician need not first seek and obtain a mandamus judgment setting aside the hospital's decision before pursuing a statutory claim for relief. Section 1278.5 declares
Section 1278.5 does not expressly or impliedly condition this right on a prior successful mandamus challenge to a hospital's quasi-judicial decision to restrict or terminate the whistleblower's medical staff privileges. Indeed, the statute includes terms indicating the Legislature's understanding and expectation that a medical staff member's whistleblower suit might begin and go forward while the hospital's proceedings against the physician were still pending.
Moreover, such a condition would seriously undermine the Legislature's purpose to afford a whistleblower on a hospital medical staff the right to sue. A hospital disciplinary proceeding against a member of the medical staff is ostensibly focused on concerns about the physician's professional fitness, not on redressing his or her claims of whistleblower retaliation. Indeed, plaintiff asserts here that the hospital proceeding was the very means of retaliation. By concluding, on limited mandamus review, that the administrative evidence of the physician's deficiencies was sufficient to support the hospital's decision, the mandamus court could thus entirely and permanently foreclose the physician's statutory right to litigate, in court, his or her distinct claim that whistleblower retaliation was a reason for the exclusionary effort.
The Legislature cannot have intended, sub silentio, to so limit the physician's statutory right to persuade a judicial fact finder, in the first instance, that the adverse hospital action actually occurred because of, and in retaliation for, his or her efforts to report concerns about the hospital's quality of care. We thus conclude, as to the narrow issue before us, that there is no such necessary condition to a physician's statutory medical whistleblower claim.
Of course, both the California Legislature and the United States Congress have recognized that legitimate, properly conducted hospital peer review proceedings are themselves a crucially important means of protecting patients against unsafe hospital medical care. As we discuss below, both state and federal statutes seek to encourage participation in medical peer review activities by providing qualified tort immunity for those involved in reasonably founded medical peer review decisions. Even aside from these statutory limitations, "mixed motive" cases may arise in which such proceedings, though instigated at least in part as retaliation against a whistleblower,
Future litigants may argue that proper attention to these various concerns should affect the trial timing, the issues, and the available remedies in an individual physician's whistleblower suit under section 1278.5. Such matters, however, are beyond the scope of the narrow question before us here. We pass no final judgment upon them, but await their appropriate future development.
Plaintiff physician, a kidney specialist, was employed by Gould Medical Group (Gould) in Modesto. Beginning in 2004, he was granted nonprovisional staff privileges at Memorial Medical Center (Hospital), which is operated by defendant Sutter Central Valley Hospitals (Sutter). Twice in 2004 and twice in 2006, plaintiff argued with Hospital nurses who assertedly failed to follow his patient treatment instructions. From August 2007 through April 2008, plaintiff had six other clashes with particular Hospital nurses about patient care. On several of these occasions, he reported to nursing supervisors, or in writing to the Hospital's administration, that nurses had been insubordinate and had provided substandard care.
In early May 2008, after the last of these clashes, defendant Steve Mitchell, the Hospital's chief operating officer, contacted Gould's medical director about plaintiff's disruptive interactions with the Hospital's nursing staff. Mitchell hoped that Gould's director would meet with plaintiff, that plaintiff would get angry during the meeting, that Gould's director would react by terminating plaintiff's employment, and that plaintiff would then leave town. This, Mitchell envisioned, would obviate the need for peer review proceedings to determine the status of plaintiff's Hospital staff privileges. Gould did terminate plaintiff's at-will employment contract on May 14, 2008. As a result, plaintiff's medical malpractice insurance was cancelled, leaving him immediately unable to treat patients at the Hospital.
Because he intended to open a private practice in Modesto, plaintiff scheduled a meeting with Mitchell to determine the status of his Hospital staff privileges. After the meeting was scheduled, but before it occurred, Mitchell declared in an e-mail to the Hospital's chief executive officer that plaintiff "does not get it" — meaning, as Mitchell admitted, that plaintiff was going to lose his privileges at the Hospital. The chief executive officer responded that it "[l]ooks like we need to have the Medical Staff take some action on his MedQuals!!! Soon!"
Plaintiff requested a hearing. The MEC informed him by letter that a judicial review committee (JRC) would conduct the review hearing in accordance with the procedures set forth in the bylaws. The letter also included a statement of charges, including 17 incidents of disruptive or abusive behavior toward Hospital staff from 2004 through 2008, and one incident of "abusive and contentious behavior" during a 2008 interview with the ad hoc investigating committee.
The JRC, composed of six physicians with Hospital staff privileges, conducted an extensive evidentiary hearing in 13 sessions between October 2009 and May 2010. An attorney acted as a hearing officer.
In unanimously adopted findings, issued on June 14, 2010, the JRC reversed the MEC's decision. The JRC reached the following conclusions: The evidence failed to show plaintiff was professionally incompetent or had engaged in behavior endangering the delivery of patient care. To the extent anyone's conduct was detrimental to such care, the nursing staff was more to blame than plaintiff. Several of his interactions with the nursing staff had been "inappropriate and [un]acceptable," but the Hospital should have intervened sooner and failed in its responsibility to do so. As a result, the Hospital omitted to consider intermediate steps short of loss of staff privileges, such as anger management counseling. Moreover, after the MEC recommended termination of privileges, plaintiff had voluntarily obtained psychological counseling and attended anger management sessions, and his behavior had appreciably improved. Accordingly, the MEC had failed to sustain its burden of proving that its recommendation not to reappoint plaintiff to the Hospital's medical staff for "medical disciplinary cause" was "reasonable and warranted."
Under the Hospital's bylaws, the final decision whether to terminate a physician's staff privileges rests with its board of trustees (Board). The Board concluded it needed the JRC's assistance to fulfill its duties in plaintiff's case. By a letter dated September 16, 2010, the Board propounded a series of
After considering the Board's request, the JRC concluded it was unreasonable, because it would require JRC members to read the entire hearing transcript and all the documentary evidence. The JRC advised that the Board would "have to proceed on the basis of all the materials available to it at this time, including the Findings of Fact and Conclusion that [were] previously rendered by the [JRC]."
In a letter to plaintiff's counsel, dated January 7, 2011, the Board conveyed its decision reversing the JRC. The Board criticized the JRC's findings and conclusions as "unlinked to any factual support in the hearing record." From its own review of the evidence, the Board concluded that plaintiff's conduct "was inappropriate and not acceptable, [and was] directly related to the quality of medical care at the Hospital."
Plaintiff did not seek direct judicial review of the Board's decision by means of a petition for writ of mandamus to set the decision aside. The Hospital filed with the Medical Board of California a so-called "805 report" of its action, as required by Business and Professions Code section 805.
On March 9, 2011, plaintiff filed the instant complaint against Sutter, Mitchell, and various Doe defendants. The complaint alleged generally that defendants had caused his medical group (Gould) to fire him, had tried to run him out of Modesto, and had terminated his staff privileges "because of his complaints about the substandard, insubordinate and unprofessional nursing care he had observed at [the Hospital], conduct which endangered patient care and patient safety." On various theories, the complaint sought reinstatement to the Hospital's medical staff; a declaration of defendants' bad faith; economic and noneconomic compensation, including lost wages; costs and attorney fees; punitive damages; and other appropriate relief permitted by law.
Defendants demurred, and also filed a motion under Code of Civil Procedure section 425.16, the so-called anti-SLAPP statute, to strike the complaint.
The trial court overruled the demurrer and denied the anti-SLAPP motion. The court found that plaintiff's suit did not arise from defendants' protected activity, as described in Code of Civil Procedure section 425.16, because "disciplinary action is not protected activity." Moreover, the court determined, plaintiff had established probable merit to his suit, because he was not required to exhaust direct judicial review of the Board's decision, by seeking and obtaining a writ of mandamus to set it aside, before filing the instant action.
The Court of Appeal affirmed in part and reversed in part. The appellate court first concluded the trial court had erred in finding the Hospital's peer review action was not protected activity for purposes of the anti-SLAPP
However, the Court of Appeal agreed in part with the trial court's "merits" determination. The appellate court concluded that the first count of plaintiff's complaint, for relief under section 1278.5, does not lack probable merit despite his prior failure to exhaust judicial remedies by way of a mandamus proceeding to set aside the Board's decision. In this regard, the Court of Appeal disagreed with any contrary implication in Nesson, supra, 204 Cal.App.4th 65. Furthermore, the appellate court determined, the complaint's second count, for a declaration under Business and Professions Code section 803.1, subdivision (b)(6), that the defendants acted in bad faith in terminating his Hospital privileges — a prerequisite to precluding the Medical Board of California from disclosing the termination to an "inquiring member of the public" — is functionally ancillary to the statutory whistleblower claim, and may thus also be maintained without prior exhaustion of judicial remedies.
On the other hand, the Court of Appeal held, the third, fifth, sixth, and seventh counts of the complaint set forth statutory or common law claims to which the Westlake rule of prior judicial exhaustion applies. The Court of Appeal thus entered an order directing the trial court to grant the anti-SLAPP motion with respect to the third, fifth, sixth, and seventh counts, but to deny it with respect to the first, second, and fourth counts.
We granted defendants' petition for review, and limited the issue to that raised in the petition, i.e., whether, before a physician may commence a civil suit alleging that a hospital's quasi-judicial decision to terminate the physician's staff privileges was wrongfully retaliatory under section 1278.5, the physician must first prevail in an administrative mandamus proceeding to set the decision aside. Answering that narrow question, we conclude that a successful mandamus attack on the decision is not a necessary condition to the filing of a section 1278.5 action. Accordingly, we will affirm the Court of Appeal's judgment.
Section 1278.5, the health care facility whistleblower statute, was adopted in 1999 and amended in 2007. As currently in effect, it declares "the public policy of the State of California to encourage patients, nurses, members of the medical staff, and other health care workers to notify government entities of suspected unsafe patient care and conditions." (Id., subd. (a), italics added.) To this end, the statute provides that "[n]o health care facility shall discriminate or retaliate, in any manner, against any patient, employee, member of the medical staff, or any other health care worker ... because that person has ... [¶] ... [p]resented a grievance, complaint, or report to the facility, to an entity or agency responsible for accrediting or evaluating the facility, or the medical staff of the facility, or to any other governmental entity." (Id., subd. (b)(1)(A), italics added.)
Besides providing for a civil penalty of up to $25,000 for each violation (§ 1278.5, subd. (b)(3)), the statute specifies, inter alia, that "[a] member of the medical staff who has been discriminated against pursuant to this section shall be entitled to reinstatement, reimbursement for lost income resulting from any change in the terms or conditions of his or her privileges caused by the acts of the facility[,] ... and the legal costs associated with pursuing the case, or to any remedy deemed warranted by the court pursuant to this chapter or any other applicable provision of statutory or common law" (id.,
In Westlake, supra, 17 Cal.3d 465, after a hospital revoked a physician's staff privileges, she sued the hospital and numerous individual members of its boards and committees. In her complaint, she asserted that she was a highly competent and qualified doctor, and that the revocation was the result of a malicious conspiracy to destroy her medical practice and restrain competition. The complaint set forth common law causes of action for unlawful intentional interference with the right to practice a trade or calling; conspiracy to restrain competition; intentional infliction of emotional distress; and fraud and deceit. Compensatory and exemplary damages were sought.
Defendants moved for summary judgment, alleging that, in making its decision, the hospital had followed its established quasi-judicial procedures for determining staff privilege issues; that these procedures included a review committee hearing at which live and documentary evidence was presented; that the plaintiff was advised of, and exercised, all her internal rights to review; and that the decision had been upheld on review by the hospital's board of directors. The defendants claimed, among other things, that these facts barred plaintiff's action because she could not attack the hospital's quasi-judicial decision "collateral[ly]" by a tort suit for damages, but must first mount a successful "`direct attack'" on the decision by means of a mandamus action to set it aside. (Westlake, supra, 17 Cal.3d 465, 473.)
Applying the law generally applicable to cases of exclusion from professional associations, we agreed with defendants that, before suing for damages arising from expulsion or exclusion from a hospital's medical staff, a physician must exhaust all administrative and judicial avenues of review of the exclusionary decision. Thus, we reasoned, where the hospital afforded the physician quasi-judicial procedures before reaching its decision, he or she cannot sue in tort on grounds the decision was maliciously motivated without first having attacked it successfully by means of an administrative mandamus action. (Westlake, supra, 17 Cal.3d 465, 476-478.)
We analogized to the rule that, before bringing a malicious prosecution action, the plaintiff must have prevailed — i.e., achieved a "`favorable termination'" — in the prior suit he or she alleges was filed and pursued with wrongful motives. (Westlake, supra, 17 Cal.3d 465, 483.) In both instances, we reasoned, a claim that a judicial or quasi-judicial proceeding was misused
Westlake thus established the principle that, before one may bring a common law tort suit claiming purely personal professional injury or damage arising from an allegedly malicious and wrongful quasi-judicial administrative decision, he or she must first demonstrate that the decision cannot survive the normal means of judicial review. The question before us is whether a different rule applies to a statutory cause of action for whistleblower retaliation under section 1278.5.
Campbell, the first case in this series, was concerned only with whether particular whistleblower statutes required an employee claiming forbidden retaliation to exhaust the employer's internal administrative grievance procedures before filing a tort suit. The plaintiff, an architect employed by the Regents of the University of California (Regents), sued the Regents, alleging she was demoted, then terminated, for reporting to superiors, and later to the Federal Bureau of Investigation, that the overly restrictive specifications the Regents were using for small campus construction projects violated competitive bidding laws. Before commencing her whistleblower suit, she had filed an informal grievance with the Regents, but then ignored their advisement that the complaint must be resubmitted under the particular internal procedures applicable to whistleblower claims.
Then, as now, the California Whistleblower Protection Act (Gov. Code, § 8547 et seq.; Whistleblower Act) generally forbade retaliation against an employee of a state agency, including the University of California (UC), for disclosing information that may evidence improper government activity, if the purpose of the disclosure was to remedy the improper situation. (Id., §§ 8547.2, subd. (a), 8547.10, subds. (b) (section 8547.10(b)), (c) (section 8547.10(c)).) As applicable to UC in particular, the statute provided, under the version of section 8547.10(c) then in effect, that the wronged whistleblower could bring a damage action, but only after the employee "[had] first filed a complaint with the university ..., and the university [had] failed to reach a decision regarding that complaint within the time limits established for that purpose by the [R]egents."
In an apparent effort to avoid Government Code section 8547.10(c)'s explicit condition that an administrative complaint be filed, the plaintiff asserted her court claim under two other statutory whistleblower protection schemes, Government Code section 12653, subdivisions (b) and (c) (False Claims Act (Gov. Code, § 12650 et seq.) provision specifying that government employee discharged for disclosing false claim to law enforcement agency may bring damage action), and Labor Code sections 1102.5 and 1105 (forbidding employer, including UC, to retaliate against employee for disclosing to a government or law enforcement agency information about violations of law or failure to comply with regulations; further providing that "[n]othing
We disagreed. We noted that the specific exhaustion provisions in Government Code section 8547.10(c) — which primarily address how long a pending administrative proceeding can delay the right to file a civil whistleblower complaint against the Regents — did not imply an intent to omit the traditional requirement of administrative exhaustion from any statutory whistleblower scheme where exhaustion was not expressly mentioned. (Campbell, supra, 35 Cal.4th 311, 327.) We further invoked the principle that where statutes, such as Government Code section 12653 and Labor Code sections 1102.5 and 1105, or their equivalents, create a right that did not previously exist at common law, and also provide a comprehensive system of administrative enforcement (there, through UC's detailed official grievance procedures), we must infer a requirement that the employee seek administrative relief before filing suit.
Finally, we rejected the plaintiff's argument that when it extended the Labor Code's whistleblower protections to public employees, including employees of UC, in 1992, the Legislature intended to abrogate any need to invoke the public employer's administrative grievance procedures before filing suit. We noted that, while initial legislative analyses of the 1992 bill indicated it would give public employees (like the private employees previously covered) a direct right to sue, later reports suggested a purpose merely to eliminate any prior requirement that a public employee prove malice in order to prevail on an administrative claim of whistleblower retaliation. Deeming the legislative history thus "unclear" (Campbell, supra, 35 Cal.4th 311, 331), we concluded we could not read into the statutory scheme an intent to override the normal rules of resort to administrative procedures.
More pertinent to the issue of judicial exhaustion, as presented by the instant case, is our decision in Arbuckle, supra, 45 Cal.4th 963. There, Arbuckle, an employee of the State Board of Chiropractic Examiners (SBCE) alleged she was subjected to workplace retaliation after she asked superiors whether she should issue a citation to the SBCE's chairperson for practicing with an expired license, and was told not to do so. Arbuckle filed a complaint with the State Personnel Board (SPB), alleging retaliation in violation of the Whistleblower Act. After a detailed investigation pursuant to SPB regulations, during which each side submitted extensive documentary evidence and written arguments, the SPB's executive officer issued a 16-page "Notice of
Arbuckle did not seek board review. Instead, she filed a superior court damage suit against the SBCE and its executive director, alleging whistleblower retaliation in violation of Government Code section 8547.8
On review, we reversed the Court of Appeal. We first concluded that Arbuckle had satisfied the administrative prerequisites to suit expressly set forth in Government Code section 8547.8, subdivision (c) (section 8547.8(c)). This statute, we noted, specified that a public employee could not pursue a civil damage action for whistleblower retaliation "`unless [the employee] has first filed a complaint with the [SPB] ..., and the board has issued, or failed to issue, findings pursuant to [Government Code] [s]ection 19683.'" (Arbuckle, supra, 45 Cal.4th 963, 971, quoting § 8547.8(c), italics omitted.) In turn, we explained, Government Code section 19683, governing SPB procedures for handling complaints of reprisal or retaliation, clearly used the word "findings" to mean the initial decision of the SPB's executive officer, and did not encompass a requirement that a complainant who received adverse "findings" at this level seek a hearing before the board. Hence, we concluded, no such requirement was incorporated in section 8547.8(c).
We then turned to the defendants' claim that, before filing a statutory tort suit for whistleblower retaliation, Arbuckle was also required to exhaust judicial remedies against the SPB's adverse decision by prevailing in a mandamus action to have that decision set aside. (Arbuckle, supra, 45 Cal.4th 963, 974.) Generally, we conceded, writ review of an adverse administrative decision is a necessary step before further remedies are pursued, and if the administrative proceeding had the requisite judicial character, it is binding in a later court action. (Id. at pp. 975-976.) However, we noted, the Whistleblower Act expressly provided a civil action for whistleblower retaliation, while also specifying, as the only precondition to suit, that a complaint be filed with the SPB, and that the board "issue[], or fail[] to issue, findings." (Gov. Code, § 8547.8(c).) This statutory language, we concluded, suggested
Moreover, we stressed, a conclusion that, unless overturned on mandamus, the SPB's findings are binding in a court action for damages under the Whistleblower Act would unduly restrict the statutory remedy. As we explained, "Writ review [of a quasi-judicial administrative proceeding] under Code of Civil Procedure section 1094.5 is limited to the record compiled by the administrative agency, and the agency's findings of fact must be upheld if supported by `substantial evidence.' [Citation.]" (Arbuckle, supra, 45 Cal.4th 963, 977.) Under that standard of review, we noted, "it would be very difficult for a complaining employee to have the board's adverse factual findings overturned. Therefore, in nearly every case, an adverse decision from the board would leave the employee without the benefit of the damages remedy set forth in section 8547.8(c).... Nothing in section 8547.8(c) suggests that the Legislature intended the damages remedy created in that provision to be so narrowly circumscribed, and such a narrow interpretation of the damages remedy would hardly serve the Legislature's purpose of protecting the right of state employees `to report waste, fraud, abuse of authority, violation of law, or threat to public health without fear of retribution.' [Citation.]" (Arbuckle, supra, at pp. 977-978.)
We later reached similar results, for similar reasons, when construing a portion of the Whistleblower Act that applies specifically to employees of the CSU system. In Runyon, supra, 48 Cal.4th 760, the plaintiff, Runyon, who had chaired an academic department of the College of Business Administration (College) at CSU Long Beach, filed an administrative whistleblower complaint with CSU. Runyon alleged he had been removed from his position by the College's dean, Luis Calingo, in retaliation for reporting improper conduct by Calingo. Pursuant to CSU's established procedures for handling such complaints, a CSU human resources manager conducted an internal investigation, during which Runyon had the opportunity to respond in writing to the investigator's tentative findings. Ultimately, CSU's vice-chancellor for human resources issued a determination letter stating CSU's decision that, while Runyon had made a protected disclosure by complaining about Calingo's habitual absence from campus, Calingo had not removed Runyon as department chair for that reason, but for inadequate job performance.
Runyon then filed a damage action against CSU and Calingo, asserting a cause of action under Government Code section 8547.12, which states when an employee may sue CSU for whistleblower retaliation. Under section 8547.12, subdivision (c) (section 8547.12(c)), such an action is allowed only if the complaining employee has filed an administrative complaint, and CSU "has failed to reach a decision" thereon within the time set by its internal procedures, or has not "satisfactorily addressed" the claim within 18 months.
We reversed. We first concluded that by foreclosing a damage suit when CSU has "`satisfactorily addressed'" the employee's administrative complaint (Runyon, supra, 48 Cal.4th at p. 773, italics added) Government Code section 8547.12(c) meant to impose such a bar only when CSU's administrative response was to the satisfaction of the complaining employee, not when CSU had rejected the employee's complaint. This construction, we explained, was consistent with both the language and the legislative history of section 8547.12(c). (Runyon, supra, 48 Cal.4th 760, 773.)
Moreover, we stressed that, as in Arbuckle, according preclusive effect to the administrative decision would unduly restrict the civil remedy provided by the pertinent whistleblower statute. We iterated that "[w]rit review, whether through administrative mandate (Code Civ. Proc., § 1094.5) or ordinary mandate (id., § 1085), gives substantial deference to the agency's findings. Requiring the employee to overturn CSU's adverse decision by writ before bringing a civil action would mean that `in nearly every case, an adverse decision from [CSU] would leave the employee without the benefit of the damages remedy set forth in [section 8547.12(c)].' [Citation.]" (Runyon, supra, 48 Cal.4th 760, 774.) Quoting Arbuckle, we explained again that nothing in the Whistleblower Act suggests the Legislature intended to so narrowly circumscribe a statutory damage remedy designed to encourage public employees to report threats to health or safety, or the wrongful or incompetent performance of public duty. (48 Cal.4th at p. 774.)
A medical staff member who has suffered retaliatory discrimination "shall be entitled" to redress, including, as appropriate, reinstatement and reimbursement of resulting lost income. (§ 1278.5, subd. (g).) Section 1278.5 does not affirmatively state that these remedies may be pursued by means of a civil action, but it necessarily assumes as much when it explains certain procedures that may apply when "the member of the medical staff ... has filed an action pursuant to this section...." (Id., subd. (h), italics added.)
Indeed, in contrast with those laws, section 1278.5 neither provides, nor acknowledges the existence of, a parallel administrative proceeding in which the complainant's claim of retaliation, as such, might be addressed and resolved. Section 1278.5's failure to mention resort to such an administrative forum as a condition to suit, where the Legislature has included such a requirement in similar statutes, is a significant indicator that the Legislature did not contemplate such a precondition in this instance.
Indeed, the Hospital's peer review proceeding was not an administrative forum designed to consider, and to redress by appropriate relief, plaintiff's claim of discriminatory treatment in retaliation for his reports about substandard patient care by others. On the contrary, the ostensible purpose of the proceeding was to address charges against him that deficiencies in his own competence and professionalism constituted a danger to patient care. The
Reasons cited in Arbuckle and Runyon for concluding that judicial exhaustion was contrary to the legislative intent and purpose thus apply with even greater force here. In those cases, we emphasized that judicial exhaustion requirements would seriously undermine the protective statutory purposes of the Whistleblower Act even though the administrative procedures at issue
A requirement that plaintiff succeed in overturning an allegedly retaliatory, as opposed to remedial, administrative decision before filing a statutory action would very seriously compromise the legislative purpose to encourage and protect whistleblowers. On mandamus review, the Hospital's ruling in this case could not be set aside if, on the face of the administrative record, fair procedures produced a decision substantially supported by evidence and findings that plaintiff's professional shortcomings endangered patient care and thus warranted the termination of his staff privileges. (Code Civ. Proc., § 1094.5, subds. (b)-(d); see Arbuckle, supra, 45 Cal.4th 963, 977.)
Defendants stress that in Westlake, supra, 17 Cal.3d 465, we invoked, by analogy, the law applicable to malicious prosecution suits to assert that a physician may not base a common law tort action on the allegation that a quasi-judicial medical peer review decision was wrongly motivated, unless the physician first succeeds in showing, by mandamus, that the decision was erroneous with respect to the issues actually adjudicated. We noted in particular that such a rule provided some justified measure of protection
But the balance of competing interests is altered when the wrongful motive at issue is one specifically prohibited by statute, in the public interest, under a legislative policy that also seeks to safeguard the health and safety of hospital patients. Section 1278.5 specifically contemplates that forbidden retaliatory action against a medical staff whistleblower includes "any unfavorable changes in ... the terms or conditions of ... privileges of the ... member of the medical staff." (Id., subd. (d)(2).) The statute further provides, without qualification, that a medical staff member who has suffered such retaliatory discrimination is entitled to relief for "any change in the terms or conditions of his or her privileges caused by the [wrongful] acts of the [health care] facility" (id., subd. (g)). Clearly aware that hospitals commonly "act[]" on medical staff privilege issues through quasi-judicial peer review proceedings (§ 1278.5, subd. (h); see Bus. & Prof. Code, § 809 et seq.; Westlake, supra, 17 Cal.3d 465), the Legislature has given no indication that it intends to require a medical staff whistleblower to have such an allegedly retaliatory "act[]" set aside in a separate court proceeding before he or she may bring a statutory action.
The legislative history of section 1278.5, subdivision (h) is consistent with a conclusion that the Legislature did not intend to require postponement of a section 1278.5 action even while peer review proceedings against the plaintiff were still in progress, let alone until the final peer review decision had been set aside by mandamus. As introduced on February 21, 2007, Assembly Bill No. 632 (2007-2008 Reg. Sess.) (Assembly Bill No. 632) added hospital staff physicians to the list of protected persons under section 1278.5, but it did not include the provisions of subdivision (h).
The genesis of subdivision (h) is elucidated in a Senate Judiciary Committee analysis prepared for a July 10, 2007, committee hearing. The analysis reported that a major opponent of the proposed amendments, the California Hospital Association (CHA), was concerned that extension of whistleblower protection to hospital staff physicians would have a chilling effect on peer review proceedings, because "the bill could stop a peer review process in its tracks by the simple filing of a section 1278.5 action ...," or "could compel a peer review committee to not initiate a peer review process for fear that it could be considered a retaliatory action...." (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 632, as amended June 6, 2007, p. 9, italics added.)
The analysis further declared that "[t]he critical question, according to the principal opponents of [Assembly Bill No.] 632, is what would happen to a pending peer review action, or to the evidentiary protections and immunity from liability that attend peer review actions, once the member of the medical staff files a [section] 1278.5 action? The hospital, CHA states, could very well be required to produce evidence in the [section] 1278.5 action even before that evidence has been fully developed and presented in a [m]edical [s]taff fair hearing under [Business and Professions Code section] 809 et seq." (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 632, supra, as amended June 6, 2007, p. 10, italics added.)
The Legislature responded to these concerns by a Senate amendment to the bill on July 17, 2007. (Sen. Amend. to Assem. Bill No. 632, July 17, 2007.) It did not do so by immunizing the final quasi-judicial decisions of peer review committees from section 1278.5 actions, or by requiring, as a condition to a civil suit under section 1278.5, that such a decision be set aside by mandamus, or even by providing that a section 1278.5 action should be postponed, or held in abeyance, pending such a final decision. Instead, it simply specified that if the staff physician did file such a suit, the committee could obtain, for
CHA was not satisfied with the July 17, 2007, amendment. In a "Senate Floor Alert" dated August 21, 2007, CHA advanced various objections to Assembly Bill No. 632, as then amended, and proposed further amendments. Among other things, CHA argued that the medical peer review process, with its requirements of administrative exhaustion subject to deferential review under Code of Civil Procedure section 1094.5, would be "significantly undermined if [as proposed subdivision (h) appeared to contemplate,] a member of the medical staff is able to move directly into court without completing the fair hearing process." (David van der Griff, CHA Legis. Advocate, CHA, Sen. Floor Alert regarding Assem. Bill No. 632 (Aug. 21, 2007) (CHA Senate Floor Alert) p. 2.)
Accordingly, CHA asserted, the bill should further guard against the "chilling effect" of section 1278.5 suits on hospital peer review activities by replacing subdivision (h)'s provision for injunctive relief against civil discovery while peer review proceedings were still underway with a provision "that section 1278.5 does not apply to a proposed or taken investigation, corrective or disciplinary action by a medical staff or a hospital governing board against a member of a medical staff or an applicant unless and until there has been a determination that the member or applicant has been determined to have substantially prevailed in such action as specified in current law." (CHA Sen. Floor Alert, supra, at p. 2, italics added.)
The only discernible response to these arguments was the addition of subdivision (l), to section 1278.5 by a September 5, 2007, Senate amendment. (Sen. Amend. to Assem. Bill No. 632, Sept. 5, 2007.) As so added, subdivision (l) provides simply that "[n]othing in this section shall be construed to limit the ability of the medical staff to carry out its legitimate peer review activities in accordance with [s]ections 809 to 809.5, inclusive, of the Business and Professions Code." (§ 1278.5, proposed subd. (l), as amended in Sen., Sept. 5, 2007, italics added.)
The Legislature was thus specifically aware of CHA's insistence that the bill should protect medical staff peer review proceedings by not allowing a whistleblower suit unless a hospital's final disciplinary decision failed to survive deferential mandamus review. Nonetheless, the Legislature made no changes in response to the CHA Assembly Floor Alert. Specifically, it left intact subdivision (h), in which, as noted above, the Legislature indicated its understanding that a civil action under section 1278.5 might be commenced, and civil discovery attempted, while peer review proceedings were still underway. The legislative history thus supports the clear implications of the statutory language, i.e., that the Legislature did not intend to require a hospital staff physician who claims a peer review committee's final disciplinary decision was an act in retaliation for whistleblowing activity to succeed in setting the decision aside by mandamus before bringing an action under section 1278.5.
Similarly, the 2007 amendment to section 1278.5, which authorizes whistleblower suits by hospital staff physicians, contains no hint that the right to sue is procedurally limited when a forbidden retaliatory action was taken through medical peer review proceedings. As indicated above, the Legislature knew that disciplinary actions against a hospital staff physician commonly do — indeed must — occur through the peer review process. Thus, the Legislature's failure to expressly provide that a medical peer review decision be overturned on mandamus before a physician could claim, under section 1278.5, that the decision constituted forbidden retaliation strongly suggests no such limitation on the statutory cause of action was intended.
We understand the need to implement both the statutory medical peer review process, and the whistleblower protections provided by section
Moreover, we recently held, under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.), that where an employer's decision to terminate an employee involved a combination of legitimate reasons and statutorily forbidden discrimination, but the employer proves it would have reached the same conclusion even absent the wrongful discriminatory motive, the terminated worker is not entitled to reinstatement, lost income, and noneconomic damages otherwise available under the statute. In such a case, the worker's remedies are limited to injunctive and declaratory relief, and legal fees and costs. (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 232-235 [152 Cal.Rptr.3d 392, 294 P.3d 49].) It is possible to argue that similar limitations should apply, in an action under section 1278.5, when a physician shows that his or her medical whistleblowing activities helped fuel the hospital's desire to restrict or terminate staff privileges, but the hospital then demonstrates that the peer review process would validly have produced the same result, on legitimate quality-of-care grounds, even absent the retaliatory animus.
It may also be urged that efficiency, and proper deference to the peer review process, justify delaying a trial of a civil action under section 1278.5 until peer review proceedings involving the same hospital staff physician are complete. In a related vein, questions may arise about the extent to which the findings made, and the issues determined, in a final, unreviewed quasi-judicial peer review proceeding should have preclusive effect in a section
Finally, in an argument raised for the first time in this court, defendants urge that serious questions of federal preemption arise under HCQIA if section 1278.5 is construed to allow a staff physician to challenge a quasi-judicial hospital peer review decision in a whistleblower action for damages without first overturning the decision on mandamus. Amici curiae Dignity Health and Adventist Health System/West echo that argument, and suggest further that HCQIA was intended to entirely preclude state laws granting whistleblower protection to hospital staff physicians.
HCQIA seeks to address the "nationwide problems" of the "increasing occurrence of medical malpractice," and of "the need to improve the quality of medical care," through "greater efforts than those that can be undertaken by any individual State." (42 U.S.C. § 11101(1)). The statute's focus is "effective professional peer review." (Id., § 11101(3).) In this regard, Congress has found that the threat of private damages liability discourages physicians from participating in the peer review process (id., § 11101(4)), and that "[t]here is an overriding national need to provide incentive and protection for physicians engaging in effective professional peer review" (id., § 11101(5)).
A professional review action is presumed to have met these standards, subject to rebuttal by a preponderance of evidence. (42 U.S.C. § 11112(a).) Federal decisions generally have held that where the objective standards for
Nor do we see any basis to conclude that HCQIA precludes a hospital physician from bringing a state law whistleblower suit claiming that a hospital peer review decision was retaliatory until the physician has first obtained mandamus relief against the decision. HCQIA says or implies nothing about the procedures states may utilize to determine whether medical peer review decisions are subject to challenge. Accordingly, we are satisfied that HCQIA does not call into question the interpretation of section 1278.5 we have reached above.
Cantil-Sakauye, C. J., Kennard, J., Werdegar, J., Chin, J., Corrigan, J., and Liu, J., concurred.
Our Runyon decision also took note of a "third textual variation" (Runyon, supra, 48 Cal.4th 760, 766) in administrative exhaustion language included in the Whistleblower Act, language we had confronted in Arbuckle, supra, 45 Cal.4th 963. As explained above, Arbuckle was concerned with Government Code section 8547.8(c), which requires an employee of a state agency, such as the SBCE, to file a whistleblower complaint with the SPB before bringing a civil action, but then allows such a suit if the SPB has thereafter "issued, or failed to issue, findings." (§ 8547.8(c).) We concluded in Arbuckle that this language does not require the employee to seek administrative or judicial review of the SPB's initial adverse "findings" before filing suit. (See text discussion, ante.)
Yet, as the parties' conflicting claims in this case suggest, a hospital's concerns about a medical staff member's ability to provide adequate patient care — even if those concerns are reasonable and sincere — do not negate the possibility that retaliatory animus against a whistleblower, a motive forbidden by statute, was a contributing influence on the hospital's quasi-judicial peer review decision to terminate or limit the member's staff privileges. These are distinct issues, even if they happen to coalesce in a particular case, and the Legislature has provided distinct fora and procedures to address each of them. We see no indication that, in doing so, the Legislature intended to limit the statutory right to sue for whistleblower retaliation to only those physicians who have shown on mandamus that there was no reasonable quality-of-care basis for the actions taken against them. We do not speculate whether such "mixed motives" were at work in this case. Moreover, as we discuss in greater detail below, we express no views on how the timing, issues, and remedies involved in a physician's whistleblower retaliation suit under section 1278.5 might be affected by a final, unreviewed quasi-judicial peer review decision finding quality-of-care grounds to limit or terminate the physician's hospital staff privileges. These difficult questions are beyond the scope of the narrow issue on which we granted review. They must await future development, and we thus do not address them.