Causes of Action: Montana Supreme Court Severely Limits Patients’ Ability to Sue Doctors and Hospitals for Violating Consumer Protection

Brookins v. Mote, 292 P.3d 347 (Mont. 2012)

This decision is not big news, but it lucidly formulates a principle by which to determine whether a patient can sue her doctor for violating the state’s consumer protection statute.

As an initial matter, why would an aggrieved patient sue her doctor for violating the consumer protection statute instead of filing a straightforward suit that alleges medical malpractice?

Many people know the answer, but I will still give it.

Medical malpractice suits are much harder to prosecute than a consumer protection lawsuit. Here is why:

The first and most significant obstacle is proof of negligence. A patient suing her doctor for malpractice must establish that the treatment she received from the doctor did not align with the customs, standards, and protocols devised by the medical profession. The required proof is not easy to provide. The patient, for example, normally would not be able to convince the factfinder that the doctor committed malpractice simply by showing that the treatment she received did not succeed.

Under consumer protections laws, by contrast, the plaintiff must prove that the defendant used deception or misrepresentation to induce him to enter into an unfavorable bargain. An unsuccessful medical treatment can often be perceived as a bad bargain, and when a doctor or a hospital entices the patient to undergo the treatment, the enticement may constitute a violation of the applicable consumer protection statute.

Furthermore, to properly file a medical malpractice suit, the plaintiff must submit to court an expert affidavit, “merit certificate” or equivalent evidence (depending on the jurisdiction in which the suit is filed). The required expert assistance is expensive. Many plaintiffs cannot easily afford it. For them, suing a doctor or a hospital under the applicable consumer protection statute might be an attractive possibility: all the plaintiff needs to do is credibly portray her unsuccessful treatment by the doctor as a consumer deceit, or even fraud—an allegation that does not call for an expert witness. Subsequently, the plaintiff may still need a medical expert in order to prove her deceit or fraud allegations, but even then she would not have to hire an expert before she knows that the case proceeds to trial. This deferral of a substantial litigation expenditure improves the plaintiff’s bargaining position in her settlement negotiations with the defendant. The unspent cost of a medical expert witness increases the settlement range and the probability of a settlement.

Filing a consumer-protection suit may also help the plaintiff bypass the rigid limitations and repose provisions for medical malpractice actions. New York, for example, sets the general limitation period for civil suits at 3 years. Moreover, plaintiffs are often able to suspend the beginning of this period by successfully asserting the discovery rule. This rule applies when the plaintiff shows that some of the facts that allow her to sue the defendant were not—and could not reasonably be—within her knowledge. The plaintiff’s “reasonable ignorance” postpones (or “tolls”) the statute of limitations. By contrast, for suits alleging medical malpractice the limitation period is set at 2.5 years, and a plaintiff can only toll this period in cases involving continuous treatment or an undiscoverable foreign object that a doctor or a nurse left in her body (in the latter case, the plaintiff must file her suit within a year after the foreign object was, or could reasonably be, discovered).

Note, however, that the consumer-protection bypass may not be open for patients suing a hospital that belongs to the New York City Health and Hospitals Corporation. Under the applicable statute, McKinney’s C.L.N.Y. Ann. § 7401(2), any tort action against the Corporation (not just an action alleging medical malpractice) must be filed within 1 year and 90 days from the accrual of the cause of action. The key question here is whether a consumer protection suit constitutes a “tort” action for purposes of the statute. Arguably, it does: violation of consumer protection is a statutory tort.

Finally, consumer protection laws often allow successful plaintiffs to recover treble damages. Medical malpractice law does not allow plaintiffs to recover such damages. Courts also rarely award punitive damages in medical malpractice suits, although, of course, a doctor’s egregious conduct may trigger this sanction.

Brookins illustrates a plaintiff’s unsuccessful attempt to establish medical negligence. This plaintiff was a woman who experienced medical complications before, during, and after delivering a baby with severe brain development problems. The plaintiff filed a malpractice suit against the obstetrician responsible for the baby’s prenatal care, delivery, and postnatal care; and she also sued the hospital in which she delivered the baby. Her suit against the obstetrician was settled out of court for an unreported amount.

The plaintiff’s suit against the hospital alleged negligent credentialing of the obstetrician and a violation of Montana’s consumer protection statute. As far as the first claim is concerned, the plaintiff argued that the hospital ought not to have granted the obstetrician attending privileges that enabled him to deliver treatment to hospital patients. The reason supporting that argument was straightforward: the obstetrician’s record showed medical malpractice and a misdemeanor sexual abuse of a child.

The plaintiff’s negligent credentialing claim was still not strong enough. As it happens, Montana’s Board of Medical Examiners (MBME) considered the obstetrician’s record and allowed him to keep his license (subject to certain limitations, with which he complied). The plaintiff, on the other hand, called no medical experts to dispute the MBME’s ruling that gave the obstetrician a second chance. The plaintiff’s negligent credentialing claim was therefore doomed to fail.

For that reason, presumably, the plaintiff decided to try her luck under Montana’s consumer protection statute as well. She argued that it was unfair on the part of the hospital to credential a substandard medical professional and let him deliver her baby. According to the plaintiff, this “unfair act or practice” violated Section 30–14–103 of Montana’s Consumer Protection Act.

This argument misconstrued the domain within which “unfair or deceptive acts or practices” are prohibited by the Montana statute. Under that statute, this domain encompasses “trade or commerce.” The Montana Supreme Court consequently ruled that only “the entrepreneurial, commercial, or business aspects of running a hospital are actionable under Montana’s Consumer Protection Act.” Credentialing of doctors by hospitals, held the Court, is not an entrepreneurial, commercial, or business activity. Consequently, hospitals are not accountable for doctors’ credentialing under the consumer protection law.

The Court’s decision relied on Washington law that adopted the same formulation for hospitals’ liability under the consumer protection law: see Jaramillo v. Morris, 750 P.2d 1301, 1304 (Wash.App.1988) (holding that plaintiff’s complaint against hospital is not actionable under the Consumer Protection Act because it implicated no “entrepreneurial aspects of the hospital’s business, such as billing”).

Notably, Washington Supreme Court delivered a decision similar to Brookins four years ago: Ambach v. French, 216 P.3d 405 (Wash. 2009). This decision explained that the Consumer Protection Act requires the plaintiff to “establish five distinct elements: (1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or property; (5) causation.” This explanation was followed by the Court’s ruling that personal injury is not damage to the plaintiff’s “business or property”; and so the financial loss resulting from one’s physical injury cannot be categorized as a business or property damage.

This ruling raises an interesting question: can a person who uses his or her body as a business asset—say, a model, an actor, a TV presenter, or a professional athlete—sue doctors and hospitals under the Consumer Protection Act for unsuccessful medical treatment? This route seems to be open for such a plaintiff when she complains that her decision to undergo the treatment (e.g., plastic or cosmetic surgery) was induced by the defendant’s misrepresentation or deceit. I might get back to this question on another occasion.