Antitrust Law Daily Wrap Up, ANTITRUST—Tex. Sup. Ct.: Medical privileges mostly inapplicable in heart surgeon’s monopolization suit, (May 29, 2015)

By Greg Hammond, J.D.

The medical committee privilege and medical peer review committee privilege did not protect a majority of documents from disclosure in an antitrust suit in which a heart surgeon claimed his former hospital retaliated against him for joining a competing facility. Nevertheless, the Texas Supreme Court conditionally granted the hospital’s writ of mandamus, directing the trial court to modify its discovery order insofar as the order compelled production of the few documents that are privileged (In re Memorial Hermann Hospital System, May 22, 2015, Willett, D.).

Background. Miguel A. Gomez, III, M.D. filed suit against Memorial Hermann Hospital System and others, alleging improper restraint of trade under the Texas Free Enterprise and Antitrust Act of 1983 (TFEAA), business disparagement, defamation, and tortious interference with prospective business relations. Gomez was one of the first heart surgeons who agreed to practice at a new competing hospital. He alleges that rumors began to spread that he was having problems with his mortality rate and that certain doctors manipulated data concerning his practice and mortality rates of his patients at a “Cardiovascular and Thoracic CPC” meeting. Gomez’s referral patterns were consequently ruined, and he lost his status as one of the most sought-after surgeons, he claims.

After filing suit, Gomez moved to compel production of certain documents. Memorial Hermann asserted that the documents were protected from discovery under the medical committee privilege and the medical peer review committee privilege. The trial court ordered Memorial Hermann to produce certain documents and the hospital petitioned the Texas Supreme Court for writ of mandamus.

“Anticompetitive action” exception. The Court first found that the lower court did not abuse its discretion in finding that the “anticompetitive action” exception to the medical peer review committee privilege applied. The exception provides that, if a judge makes a preliminary finding that a proceeding or record of a medical peer review committee or a communication made to the committee is relevant to an anticompetitive action or to a civil rights proceeding brought under 42 U.S.C. Section 1983, the proceeding, record, or communication is not confidential to the extent it is considered relevant. An “anticompetitive action” is one in which a plaintiff asserts a cause of action requiring proof that the conduct at issue has a “tendency to reduce or eliminate competition” that is not offset by countervailing procompetitive justifications.

Gomez sufficiently pleaded an anticompetitive action for the exception to apply, the court found. Specifically, he alleged that the defendants intentionally interfered with his “longstanding and continuous relationships with referring physicians in the West Houston and Katy medical community” and that the defendants’ acts constituted a concerted effort to restrain competition in and monopolize surgical procedures. He also alleged that the defendants’ acts constitute illegal monopolization, attempted monopolization, and/or conspiracy to monopolize under Texas law. As a result of the loss of trust in robotic heart surgery, Gomez argues that patients will incur $50,000 or more in medical expenses due to longer hospital stays. He also disputed the existence of any procompetitive justifications for presenting the manipulated mortality data at the Cardiovascular and Thoracic CPC meeting. He therefore sufficiently alleged an injury to competition under the TFEAA.

Relevant documents. The trial court did not abuse its discretion when it made the preliminary finding that the documents in question were relevant to the anticompetitive actions pleaded by Gomez. Specifically, the Court found that the majority of the documents in the sealed record are relevant to essential elements of the anticompetitive causes of actions that Gomez asserted because they tend to make more or less probable Gomez’s allegations that Memorial Hermann disseminated manipulated data on Gomez’s mortality rates, that the dissemination caused Gomez’s referral rates to decline, or that other doctors were fearful that they could also be targeted in such a fashion.

However, any affidavits prepared for and submitted to the trial court were deemed neither records nor proceedings of the committees at issue nor communications to that committee. They consequently were not protected under either the medical peer review committee privilege or the medical committee privilege. In addition, certain other documents retained their protection under the medical peer review committee privilege because they did not discuss any data on mortality rates, physician volume, or referral pattern.

Memorial Hermann’s petition for writ of mandamus was conditionally granted and the trial court was directed to modify its discovery order insofar as the order compelled production of the privileged documents.

The case number is 14-0171.

Attorneys: Peter M. Kelly (Kelly, Durham & Pittard, LLP) for Miguel A. Gomez, III, MD. Charles W. Bailey (Essmyer & Daniel, PC) for Texas Hospital Association. Jesse Coleman (Norton Rose Fulbright) for Memorial Hermann Hospital System. Donald P. Wilcox for Texas Medical Association.

Companies: Texas Hospital Association; Memorial Hermann Hospital System; Texas Medical Association

Cases: Antitrust TexasNews