William Beaumont Hosp. v. Medtronic, Inc. (Full Text)

Case 2:09-cv-11941-RHC-PJK Document 42 Filed 05/17/10 Page 1 of 9

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

WILLIAM BEAUMONT HOSPITAL and SOUTH
OAKLAND ANESTHESIA ASSOCIATES, P.C.,

Plaintiffs,

MEDTRONIC, INC.,

Defendant.
/

Case No. 09-CV-11941

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S “MOTION TO COMPEL PRODUCTION OF DOCUMENTS”

On April 21, 2010, the court denied Defendant Medtronic, Inc.’s motion to compel

as to the first, second, and fifth entries on Plaintiff’s peer review privilege log. (4/21/10

Order at 20.) The court further directed Plaintiffs William Beaumont Hospital and

Oakland Anesthesia Associates, P.C. to file additional documentation as to the third,

fourth, and sixth entries on their privilege log. (Id. at 20-21.) Plaintiffs filed additional

exhibits on April 29, 2010. Having reviewed the additional material, the court will grant

Defendant’s motion as to the third entry on Plaintiffs’ peer review privilege log and deny

Defendant’s motion as to all other entries.

I. STANDARD

A. Peer Review Privilege

Michigan’s Public Health Code requires hospitals “to review their professional

practices and procedures to improve the quality of patient care and reduce morbidity

and mortality.” Gallagher v. Detroit-Macomb Hosp. Ass’n, 431 N.W.2d 90, 94 (Mich. Ct.

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App. 1988). To facilitate this review, hospitals must establish peer review committees.

Dorris v. Detroit Osteopathic Hosp. Corp., 594 N.W.2d 455, 463 (Mich. 1999).

Specifically, hospitals must:

assure that physicians and dentists admitted to practice in the hospital are
organized into a medical staff to enable an effective review of the
professional practices in the hospital for the purpose of reducing morbidity
and mortality and improving the care provided in the hospital for patients.
The review shall include the quality and necessity of the care provided and
the preventability of complications and deaths occurring in the hospital.

Mich. Comp. Laws § 333.21513(d).

To maximize the effectiveness of this review, Michigan has enacted two statutes

that create a peer review privilege for records collected at the direction of a peer review

committee. Under Mich. Comp. Laws § 333.20175(8),

[t]he records, data, and knowledge collected for or by individuals or
committees assigned a professional review function in a health facility or
agency, or an institution of higher education in this state that has colleges
of osteopathic and human medicine, are confidential, shall be used only
for the purposes provided in this article, are not public records, and are not
subject to court subpoena.

Mich. Comp. Laws § 333.20175(8). Similarly, Mich. Comp. Laws § 333.21515 provides

that “[t]he records, data, and knowledge collected for or by individuals or committees

assigned a review function described in this article are confidential and shall be used

only for the purposes provided in this article, shall not be public records, and shall not

be available for court subpoena.” Mich. Comp. Laws § 333.21515.

To determine whether a record is privileged, “the court should consider the

hospital’s bylaws, internal rules and regulations and whether the committee’s function is

that of retrospective review for purposes of improvement and self-analysis and thereby

protected, or part of current patient care.” Gallagher, 431 N.W.2d at 94. The records

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must have been collected for or by the peer review committee. Marchand v. Henry Ford

Hosp., 247 N.W.2d 280, 282 (Mich. 1976). The fact that information is submitted to a

peer review committee does not mean that it satisfies the collection requirement so as

to make it privileged. Monty v. Warren Hosp. Corp., 366 N.W.2d 198, 202 (Mich. 1985).

Also, the protection afforded quality assurance and peer review reports does not

depend on the type of claim asserted by the proponent of the subpoena. Ligouri v.

Wyandotte Hosp. & Med. Ctr., 655 N.W.2d 592, 595 (Mich. Ct. App. 2003).

Although privileges are to be narrowly construed, Centennial Healthcare Mgmt.

Corp. v. Mich. Dep’t of Consumer & Indus. Servs., 657 N.W.2d 746, 754 (Mich. Ct. App.

2003), the “Legislature protected peer review documents in broad terms.” In re

Lieberman, 646 N.W.2d 199, 202-03 (Mich. Ct. App. 2002) (stating that the peer review

privilege statute “demonstrates that the Legislature has imposed a comprehensive ban

on the disclosure” of peer review material). Indeed, peer review documents

are not subject to disclosure in a criminal investigation pursuant to a
search warrant, In re Investigation of Lieberman, 250 Mich. App. 381, 646
N.W.2d 199 (2002), a civil suit concerning an assault on a hospital patient,
Dorris, supra, a medical malpractice claim, Gallagher v. Detroit-Macomb
Hosp. Ass’n, 171 Mich. App. 761, 431 N.W.2d 90 (1988), or an
investigation by the Board of Medicine, Attorney General v. Bruce, 422
Mich. 157, 369 N.W.2d 826 (1985).

Manzo v. Petrella, 683 N.W.2d 699, 705 (Mich. Ct. App. 2004). The Michigan

Legislature intended to “fully protect quality assurance/peer review records from

discovery.” Ligouri, 655 N.W.2d at 594 (emphasis in original).

The rationale for this strong protection of peer review material is that:

“[c]onfidentiality is essential to effective functioning of these staff
meetings; and these meetings are essential to the continued improvement
in the care and treatment of patients. Candid and conscientious

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evaluation of clinical practices is a sine qua non of adequate hospital care.
To subject the discussions and deliberations to the discovery process,
without a showing of exceptional necessity, would result in terminating
such deliberations.”

Attorney General v. Bruce, 369 N.W.2d 826 (Mich. 1985) (quoting Bredice v. Doctors

Hosp., Inc., 50 F.R.D. 249, 250 (D.D.C. 1970)). Without confidentiality, “the willingness

of hospital staff to provide their candid assessment will be greatly diminished,” which

“will have a direct effect on the hospital’s ability to monitor, investigate, and respond to

trends and incidents that affect patient care, morbidity, and mortality.” Dorris, 594

N.W.2d at 463. “By insuring that the proceedings remain confidential, the Legislature

has provided strong incentive for hospitals to carry out their statutory duties in a

meaningful fashion.” Attorney General v. Bruce, 335 N.W.2d 697, 702 (Mich. Ct. App.

1983).

II. DISCUSSION

A. Anesthesia Department Quality Assurance Review

On their peer review privilege log, Plaintiffs assert that an Anesthesia

Department Quality Assurance Review as well as accompanying investigative notes,

memos, and communications are protected by the peer review privilege. (Pls.’ Suppl.

Filing Ex. A, Entry No. 3.) These documents were prepared by the Department of

Anesthesia Quality Assurance Director and were given to the Patient Safety Officer and

the Department Chairman. (Id.) In their supplemental filing, Plaintiffs state that

“[d]espite diligent efforts, William Beaumont Hospital has been unable to locate

documents related to Entry No. 3 on Exhibit A and thus is unable to supply the

supplemental information requested by the Court.” (Pls.’ Suppl. Filing at 2 n.1.)

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In the court’s previous order, it stated that failure to file additional information by

the deadline “will result in Defendant’s motion being granted as to these documents.”

(4/21/10 Order at 21.) The party asserting a privilege bears the burden of

demonstrating that the privilege applies. See In re Columbia/HCA Healthcare Corp.

Billing Practices Litigation, 293 F.3d 289, 294 (6th Cir. 2002). Because Plaintiffs have

not demonstrated that these documents were collected for or by a peer review

committee, the court will grant Defendant’s motion as to Entry No. 3 on Plaintiffs’ April

29, 2010 peer review privilege log.

B. Summary FDA Site Visit

Regarding the document entitled “Summary FDA site visit,” Plaintiffs have

attached an affidavit of Kay Beauregard, Vice President of William Beaumont Hospital,

Royal Oak. (Pls.’ Suppl. Filing Ex. H.) Beauregard drafted the Summary FDA Site Visit

document when she was “Administrative Director of William Beaumont Hospital, Royal

Oak with administrative responsibility for Patient Safety and Hospital Quality.” (Id. ¶ 1.)

In her affidavit, Beauregard states,

In my capacity as a participant in Root Cause Analysis of SE 05-03,
member of the Performance Improvement Steering Committee (Royal
Oak) and Administrative Director, Patient Safety and Hospital Quality, I
prepared and distributed a summary of the site visit by the Food and Drug
Administration on July 19, 2005 to the Chief Medical Officer, Chief
Executive Officer, Patient Safety Officer, Senior Administrators and
members of the Root Cause Analysis committee, which summary, based
on Beaumont’s policies and Corporate Performance Improvement and
Patient Safety Plan, is protected by the peer review privilege.

(Id. ¶ 6.)

Hospital occurrences involving “death or serious physical or psychological injury”

are deemed Sentinel Events, for which a root cause analysis must be performed. (Pls.’

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Resp. Exs. B, D.) The root cause analysis “is a process for identifying the basic reason

or causal factor(s) for the Variance, which, if eliminated or corrected, would have

prevented the Sentinel Event from occurring.” (Id. Ex. D) The analysis is performed by

a task force, consisting of “the organization’s leadership and appropriate individuals

involved in the processes and systems under review.” (Id.) A final report of the root

cause analysis must be presented to the Performance Improvement Steering

Committee. (Id.) A report of the Sentinel Event involving Cathy Cober was prepared

and presented to the Performance Improvement Steering Committee on July 15, 2005.

(Pls.’ Suppl. Filing Ex. H ¶ 5.)

The Performance Improvement Steering Committee was established pursuant to

the Corporate Improvement and Patient Safety Plan, which has the purpose of

establishing, authorizing, and providing “the structure for performance improvement and

patient safety as an ongoing priority of William Beaumont Hospital.” (Id. Ex. H.1.) The

Committee must, among other things, “assure an optimal environment for the pursuit

and coordination of performance improvement activities.” (Id. ¶ 3.2.) The Committee is

to emphasize “[i]mprovement of processes, measurement of outcomes, and uniformity

of care.” (Id.)

Beaumont’s Performance Improvement Steering Committee is assigned a

professional review function consistent with the statutory directive for hospitals to

improve patient care and review the quality of care provided. See Mich. Comp. Laws §

333.21513(d). Similarly, as explained in the court’s previous order, the task force

performing the root cause analysis of the Sentinel Event constitutes a committee

performing a professional review function. (4/21/10 Order at 12.) Beauregard did not

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merely submit her summary of the FDA site visit to these peer review committees,

which would “not satisfy the collection requirement so as to bring the information within

the protection of the statute.” Monty, 366 N.W.2d at 202. Instead, it was in her capacity

as a participant in these peer review committees that Beauregard prepared the

summary. (Pls.’ Suppl. Filing Ex. H ¶ 6.) Thus, the records, data, and knowledge

assembled by Beauregard were “collected for or by” a professional review committee.

See Mich. Comp. Laws §§ 333.20175(8), -.21515. Accordingly, they are protected from

discovery by the peer review privilege.

C. Physician Credential Files

Plaintiffs assert that the physician credential files of Dr. Michael Sikorsky and Dr.

Craig McCardell, consisting of letters of recommendation, evaluations, questionnaires,

and other materials, are protected from discovery by the peer review privilege. (Pls.’

Suppl. Filing Ex. A.) In support, Plaintiffs have attached the “Bylaws of the Medical and

Dental Staff of William Beaumont Hospital – Royal Oak.” (Id. Exs. B-E.) The bylaws

establish a Credentials and Qualifications Committee to evaluate Staff appointments,

extension of privileges, and assignments to Departments. (Id. Ex. D ¶ 9.2.) The bylaws

require the Credentials and Qualifications Committee to review applications for Medical

Staff membership and clinical privileges and make a recommendation to the Medical

Executive Board. (Id. Ex. C ¶ 3.5.9.) The Committee is to evaluate the “qualifications,

competence or performance of a health care provider.” (Id. Ex. G, Aff. of Gordon J.

Walker, Non-voting Member of the Credentials and Qualifications Committee, ¶ 3.). Dr.

Sikorsky’s and Dr. McCardell’s physician credential files were prepared by the

Credentials and Qualifications Committee. (Id. ¶ 6.)

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The Michigan Court of Appeals has addressed the applicability of the peer review

privilege to physician credentials files. Dye v. St. John Hosp. & Medical Center, 584

N.W.2d 747 (Mich. Ct. App. 1998). In Dye, the plaintiff filed a motion to compel the

production of a doctor’s “personnel/credentials file” in relation to her claim that the

defendant hospital negligently extended staff privileges to the doctor. Id. at 748. In

response, the hospital attached a copy of its bylaws and an affidavit from a doctor on

the hospital’s credentials committee. Id. These documents stated that the credentials

committee was established “to review the professional practices in the hospital for the

purpose[s] of reducing morbidity and mortality, improving the care provided patients in

the hospital, and to insure that physicians are granted privileges consistent with their

individual training, experience and other qualifications.” Id. The documents also

established that the credentials committee was required to review the “qualifications,

competence, and performance of health care professionals seeking to work at

defendant hospital.” Id. After an in camera review of the file, the trial court ordered the

hospital to produce a number of documents from the file. Id.

On appeal, the Michigan Court of Appeals reversed the trial court’s decision. Id.

at 752. The Michigan Court of Appeals held that the peer review privilege protected

from disclosure the doctor’s credentials file. Id. at 750. The court rejected the plaintiff’s

argument that “materials relating to the provision of staff privileges are outside the

purview of the statutes.” Id. at 749. The court reasoned that the plain meaning of the

statutory language supported the conclusion that the materials were not subject to

discovery because they “were collected by or for its credentials committee, which

exercises a professional review function.” Id.

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Like the hospital in Dye, Plaintiffs have attached the hospital bylaws and an

affidavit from a member of the Credentials and Qualifications Committee. Similar to the

credential committee’s functions in Dye, the Credentials and Qualifications Committee

exercises a professional review function by reviewing the qualifications, competence

and performance of doctors seeking staff appointments and hospital privileges. As in

Dye, the documents at issue in this case include letters of recommendation and

questionnaires which were collected for or by the Credentials and Qualifications

Committee. Because the physician credential files of Dr. Sikorsky and Dr. McCardell

constitute records, data, and knowledge collected by a committee with a professional

review function, the peer review privilege protects against the disclosure of the contents.

See Mich. Comp. Laws §§ 333.20175(8), -.21515.

III. CONCLUSION

IT IS ORDERED that Defendant’s “Motion to Compel Production of Documents”

[Dkt. # 24] is GRANTED IN PART and DENIED IN PART. It is GRANTED as to Entry

No. 3 on Plaintiffs’ April 29, 2010 peer review privilege log. It is DENIED as to all other

entries on Plaintiffs’ April 29, 2010 peer review privilege log.

S/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE

Dated: May 17, 2010

I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, May 17, 2010, by electronic and/or ordinary mail.

S/Lisa G. Wagner
Case Manager and Deputy Clerk
(313) 234-5522

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