Fahlen v. Sutter Cent. Valley Hosps (Summary)

EXHAUSTION OF REMEDIES

Fahlen v. Sutter Cent. Valley Hosps., No. S205568 (Cal. Feb. 20, 2014)

The Supreme Court of California affirmed that a physician did not need to set aside a hospital’s decision to terminate staff privileges, through a mandamus action, before filing suit under the state’s whistleblower law.  The court held that the statute forbidding retaliation or discrimination against whistleblowers in no way conditions its protection on a successful mandamus challenge to the hospital’s actions.  To rule otherwise, the court held, would be to undermine the purpose of the protection and to disregard the legislature’s intent. 

At the heart of the case is a physician who was employed by a medical group and was granted clinical privileges to practice at a hospital.  In both 2004 and 2006, the physician twice argued with nurses because they allegedly failed to follow his treatment instructions.  From 2007 to 2008, the physician had six additional clashes with nurses who he claimed had been insubordinate and had provided substandard care.  On several occasions, the physician had reported his concerns to the hospital.

In 2008 the hospital contacted the director of the medical group to discuss the physician’s “disruptive interactions” with staff.  Shortly thereafter, the medical group terminated the physician’s employment.  Admittedly, this was the action the hospital had hoped would occur.  Instead of resigning his appointment and privileges and leaving the area, however, the physician notified the hospital of his intent to continue to practice.  Thereafter, an investigation was commenced and a report was made and approved by the Medical Executive Committee recommending against the renewal of the physician’s privileges.  The physician challenged this recommendation through the hearing process.

Some ten months and 13 sessions later, the judicial review committee reversed the recommendation of the Medical Executive Committee.  The Board sent the matter back to the judicial review committee with a series of detailed questions asking whether each incident occurred and seeking clarification about the evidence that was considered with respect to each incident.  Concluding that it was unreasonable, the judicial review committee refused to abide by the Board’s request.

Thereafter, the Board rejected the conclusion of the judicial review committee finding that it was “unlinked to any factual support in the hearing record” and that from its review of the record, the physician’s conduct “was inappropriate and not acceptable, [and was] directly related to the quality of medical care at the hospital.”

The physician opted not to seek mandamus to reverse the Board’s decision.  Instead, he sued the hospital seeking reinstatement and damages, claiming that the hospital’s action to terminate his privileges had been in retaliation for his complaints about substandard care.  The ruling of the California Supreme Court paved the way for the physician to proceed with this action.