Mason v. Central Suffolk Hosp.

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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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2 No. 143
Roger Mason, &c.,
Appellant,
v.
Central Suffolk Hospital, et al.,
Respondents.

Robert G. Spevack, for appellant.
Michael S. Cohen, for respondents.
Healthcare Association of New York State, amicus

curiae.

R. S. SMITH, J.:
In Gelbard v Genesee Hosp. (87 NY2d 691, 698 [1996]),
we left open the question “whether a breach of contract action
can be predicated on a violation of medical staff by-laws.” We
now answer that question in part, holding that no action for
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No. 143
damages may be based on a violation of medical staff by-laws,
unless clear language in the by-laws creates a right to that
relief.

Facts
Doctor Roger Mason was a member of the medical staff of
Central Suffolk Hospital and a specialist in laparoscopic surgery
(surgery performed by means of a narrow tube called a laparoscope
inserted through the abdominal wall). On February 3, 1998, the
Hospital suspended Dr. Mason’s privileges to perform “advanced”
laparoscopic procedures, and required him to obtain a concurring
second opinion before performing certain other kinds of surgery.
The Hospital based its decision on a review of Dr. Mason’s cases
by another doctor, who reported that in some of those cases Dr.
Mason’s skills and judgment appeared to be flawed, and that his
failings may have caused patients to be injured.
Dr. Mason sought internal review of this decision
pursuant to the Hospital’s by-laws. Lengthy proceedings
followed, with the net result that the Hospital found the initial
suspension to be justified; discontinued the requirement for a
second opinion, but required a period of monitoring of certain
procedures; and provided for reinstatement of Dr. Mason’s
advanced laparoscopic surgery privileges on certain conditions.
Dr. Mason then complained to the Public Health Council of the
Department of Health, pursuant to Public Health Law § 2801-b.
The Public Health Council rejected his complaint.

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No. 143
After the Public Health Council’s ruling, Dr. Mason
brought this action against the Hospital and Dr. Jon Zelen, a
former employee of Dr. Mason’s surgical practice group who had
left before February 1998 to form a competing group. Dr. Mason
alleged that Dr. Zelen had stood to gain from restrictions being
placed on Dr. Mason’s privileges, and that he had therefore made
false accusations and stirred up an unwarranted investigation by
the Hospital. Dr. Mason claimed that the Hospital’s by-laws were
a contract between him and the Hospital, and that the Hospital
breached that contract by failing to follow the procedures the
by-laws required and by suspending him “without legitimate
cause.” He sought damages from the Hospital for breach of
contract, and from Dr. Zelen for inducing the breach.
Defendants’ motion to dismiss the complaint for failure
to state a cause of action was denied by Supreme Court. The
Appellate Division reversed and ordered the complaint dismissed.
We now affirm the Appellate Division’s order.
Discussion
A number of our cases reject claims by doctors
complaining of the denial of hospital privileges. One of these
was Leider v Beth Israel Hosp. Assn. (11 NY2d 205, 208 [1962]),
in which we held “that the plaintiff, a surgeon, has no vested
right to the use of the hospital’s facilities for the care and
treatment of his private patients.” In Guibor v Manhattan Eye,
Ear and Throat Hosp., Inc. (46 NY2d 736, 737 [1978]), we cited

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No. 143
Leider for the broad proposition that “(a)t common law, absent a
contractual obligation to the contrary, a physician’s continued
professional association with a private hospital was within the
unfettered discretion of the hospital’s administrators.”
We noted in Guibor that “this seemingly harsh common-
rule” had been “tempered” by the enactment of Public Health Law §
2801-b. The statute provides that it “shall be an improper
practice” for a hospital’s governing body to “curtail, terminate
or diminish in any way a physician’s . . . professional
privileges in a hospital, without stating the reasons therefor,
or if the reasons stated are unrelated to standards of patient
care, patient welfare, the objectives of the institution or the
character or competency of the applicant” (§ 2801-b[1]). It
also provides that any person “claiming to be aggrieved by an
improper practice as defined in this section” can make a
complaint to the Public Health Council, which, if it upholds the
complaint, shall direct the hospital’s governing body to review
its actions (§ 2801-b[2],[3]); and that the statute’s provisions
“shall not be deemed to impair or affect any other right or
remedy” (§ 2801-b[4]). Public Health Law § 2801-c provides that
Supreme Court “may enjoin violations or threatened violations of
any provisions of this article.” In Guibor, we held that an
action seeking an injunction under § 2801-c was premature where
the doctor had not first presented his claim to the Public Health
Council.

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No. 143
In Gelbard v Genesee Hosp. (87 NY2d 691 [1996]), a
physician sought an order restoring his staff privileges, relying
not on the Public Health Law, but on the hospital’s by-laws. Dr.
Gelbard claimed, as Dr. Mason does here, that the by-laws were a
contract, and he sought an injunctive remedy for their breach.
Without reaching the merits of Dr. Gelbard’s claim we held that
the lawsuit, as in Guibor, was premature; even where a doctor who
is seeking reinstatement sues for breach of contract, his claim
must first be presented to the Public Health Council, for
otherwise the “statutory requirement of threshold PHC review”
might be “circumvented by artful pleading” (Id. at 697).
This case differs from Gelbard in two ways: Dr. Mason
is not seeking reinstatement, but damages, and he has already
presented his claim to the Public Health Council. No argument
can be or is made that Dr. Mason’s suit is premature, and
therefore we must decide in this case, as we did not need to do
in Gelbard, whether the claim is legally sufficient.
While we have never decided whether hospital by-laws
constitute a contract for breach of which a doctor may sue,
several Appellate Division decisions have dealt with that
question, producing mixed and perhaps inconsistent results. Some
cases decline to dismiss complaints alleging breach of medical
staff by-laws, holding them legally sufficient as suits for
injunctive relief (e.g., Chalasani v Neuman, 97 AD2d 806 [2d Dept
1983]) or damages (Giannelli v St. Vincent’s Hospital and Med.

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Ctr. of New York, 160 AD2d 227 [1st Dept 1990]); Chime v
Sicuranza, 221 AD2d 401 [2d Dept 1995]). Other decisions,
however, appear to limit the effect of these holdings in damages
actions by rejecting complaints for wrongful termination of staff
privileges based on alleged by-law violations (Falk v Anesthesia
Assoc. of Jamaica, 228 AD2d 326 [1st Dept 1996]; Gelbard v
Gennesee Hosp., 255 AD2d 882 [4th Dept 1998]). There appears to
be no appellate case in which a damages award for breach of
medical staff by-laws has been upheld after trial.
The decisions of our Court, and many of those of the
Appellate Division, are consistent with an important, though
generally unexpressed, policy consideration: It is preferable for
hospital administrators who decide whether to grant or deny staff
privileges to make those decisions free from the threat of a
damages action against the hospital. It is not just in a
hospital’s interest, but in the public interest, that no doctor
whose skill and judgment are substandard be allowed to treat or
operate on patients. A decision by those in charge of a hospital
to terminate the privileges of, or deny privileges to, a doctor
who may be their colleague will often be difficult. It should
not be made more difficult by the fear of subjecting the hospital
to monetary liability.
This does not mean, of course, that the hospital may
not expose itself to such liability if it chooses to do so. A
clearly written contract, granting privileges to a doctor for a

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fixed period of time, and agreeing not to withdraw those
privileges except for specified cause, will be enforced. But the
by-laws in this case are not such a contract.
Not a word in the by-laws that are now before us says
or implies that doctors have a vested right to hospital
privileges. The most relevant provisions of the by-laws are
procedural, not substantive: They are contained in Article V
(Procedures for Appointment and Reappointment) and Article VI
(Hearing and Appeal Procedures). It is most unlikely that these
by-law provisions were intended by anyone to create a monetary
claim in favor of a doctor for wrongful termination or suspension
of privileges. Dr. Mason also relies on Section 7.4 of the by-
laws, which provide that no representative of the Hospital or
staff shall be liable for action taken “in good faith and without
malice.” Dr. Mason claims that the Hospital acted in bad faith
and with malice, and that therefore he may sue. It is far-
fetched, however, to suggest that Section 7.4, entitled “Immunity
from Liability,” was intended to create a liability where one
would otherwise not exist.
Dr. Mason claims that a rule imposing liability for a
breach of institutional by-laws can be traced to our decision in
Tedeschi v Wagner Coll. (49 NY2d 652 [1980]), but Tedeschi
actually supports the rejection of Dr. Mason’s damages claim. We
held in Tedeschi that the plaintiff, a college student, was
entitled to a judgment directing the college that was seeking to

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No. 143
suspend her to comply with its own written guidelines; but we
also held that “[s]o much of the complaint as sought money
damages . . . was properly dismissed . . . .” (49 NY2d at 661-
62). In Maas v Cornell Univ. (94 NY2d 87 [1999]), we
distinguished Tedeschi in a case brought by a professor
challenging a university’s disciplinary action. We held that the
professor could not sue for breach of contract based on the
university’s “failure to observe bylaws and procedures” (Id. at
90). We see no reason why the by-laws of the Hospital here
should be read to confer more rights on Dr. Mason than the
institutional documents in Tedeschi and Maas did on the
plaintiffs in those cases.
Accordingly, the order of the Appellate Division
should be affirmed, with costs.
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Order affirmed, with costs. Opinion by Judge R.S. Smith. Chief
Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo
and Read concur.

Decided November 18, 2004

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