Chen v. Bright Health Physicians of PIH (Summary)

DEFAMATION

Chen v. Bright Health Physicians of PIH, No. B246628 (Cal. Ct. App. Apr. 2, 2014)

The California Court of Appeals reversed summary judgment for the defendant nonprofit corporation in a defamation action filed by a plaintiff physician.

The nonprofit corporation provided medical care through a network of independent contractor physicians, as well as employed physicians.  The plaintiff physician was an independent contractor dermatologist, who alleged that after the corporation employed another dermatologist, it dropped plaintiff physician from its referral list, and also sent a memorandum to all of its physicians stating that for approximately one week, plaintiff physician had not been keeping his scheduled appointments, had been unavailable, and did not notify his patients of his leave of absence.  The plaintiff physician filed the defamation action based on the memorandum, contending that during that week, he was on a planned vacation, that he did not have any scheduled appointments, and that he assigned a medical assistant to answer incoming telephone calls.  The lower court granted the corporation’s motion for summary judgment, and the plaintiff physician appealed.

On appeal, the corporation asserted that it was not liable for defamation because the memorandum shares a “common interest” with the physicians in its network, and thus was protected by the “common interest” privilege under state law (e.g., alerting the network physicians that plaintiff physician was mistreating patients).  The plaintiff physician’s contention was that the memorandum was a false, mischaracterization of the events of that week.

The appellate court reversed the lower court and stated that a jury could infer that the corporation acted recklessly in sending out the memorandum, because it did not investigate the situation and had a pecuniary interest in referring patients to its newly employed dermatologist.  Thus, the court concluded that the privilege can be lost when a defendant deliberately decides not to acquire knowledge about the facts of the publication or furthers an interest other than the one shared, and that these issues are for a jury to decide.