ISSUE 2:7, JULY 2014 – Recent Developments

Suits for nursing home neglects sound in general negligence, rather than medical malpractice, and are consequently not subject to damage caps

Manor Care, Inc. v. Douglas, — S.E.2d — (W. Va. 2014)

This super-important decision of the West Virginia Supreme Court cannot be missed.

To repeat: suits for nursing home neglects sound in general negligence, rather than medical malpractice, and are consequently not subject to damage caps.

An eighty-seven years old woman was admitted to a nursing home. The woman suffered from Alzheimer’s dementia, Parkinson’s Disease, and other ailments, but she was able to walk with the use of a walker, recognized and communicated with her family, and was generally well-nourished, and well-hydrated. After spending nineteen days at the nursing home, the woman had become dehydrated, malnourished, bed ridden, and barely responsive. She had fallen numerous times, sustained head trauma and bruises, and suffered from sores in her mouth and throat that required the scraping away of dead tissue and debris. Shortly thereafter, the woman died as a result of severe dehydration.

The nursing home wantonly neglected the woman because it was chronically understaffed.

The West Virginia Supreme Court decided that the ensuing suit for wrongful death properly alleged corporate negligence, as opposed to medical malpractice. The Court reasoned that “the manner in which a claim is pled does not govern whether the MPLA [West Virginia’s Medical Practitioners Liability Act, A.S.] ultimately will be applied to a particular claim.” Yet, the plaintiff’s allegation of corporate negligence was proper as a matter of substance. For that reason, the plaintiff’s action for damages was not capped by the MPLA.

Based on that reasoning and the state’s punitive-damage doctrine, the Court ruled that the plaintiff deserves to recover punitive damages in the amount close to $32,000,000.

Medical Malpractice vs. Violation of “Informed Consent”

Gomez v. Sauerwein, — P.3d — (Wash. 2014)

When a doctor misdiagnoses a patient, he denies the patient important information about her actual condition. As a result, the patient becomes misinformed and may sue the doctor for violation of her entitlement to informed consent.

However, as the Washington Supreme Court recently explained, doing so would be ill-advised.

Here is why:

A doctor violates her patient’s entitlement to informed consent only when she fails to tell the patient something she knows and that “something” is material to the patient’s treatment. When a doctor is justifiably unaware of the patient’s condition (e.g., when she relies upon mistaken lab results) she commits violation at all. On the other hand, when a doctor negligently fails to obtain information pertaining to the patient’s treatment, she commits medical malpractice, as opposed to informed-consent violation. Under the first scenario, an informed-consent violation doesn’t exist. Under the second scenario, this violation is parasitic upon medical malpractice and is therefore superfluous. The patient consequently should sue the doctor for malpractice.

Hence:

“When a health care provider rules out a particular diagnosis based on the patient’s clinical condition—including test results, medical history, presentation upon physical examination, and any other circumstances surrounding the patient’s condition that are available to the provider—the provider may not be liable for informed consent claims arising from the ruled out diagnosis.”

Apologies and Settlement Offers under Maine Medical Malpractice Law

Strout v. Central Maine Medical Center, — A.3d — (Me. 2014)

After looking at a CAT scan that revealed a large lesion in the patient’s liver, a physician told the patient that, although he was still waiting for the final pathology results, he believed that the patient may be suffering from either hepatic or pancreatic cancer, which would be inoperable due to the size and location of the lesion. The physician also informed the patient that even with chemotherapy, his life may be measured in months. This assessment turned out to be wrong: several weeks later, the pathology results revealed that the patient did not suffer from hepatic or pancreatic cancer. Instead, he had B-cell non-Hodgkins lymphoma, which has a five-year survival rate of eighty-five to ninety percent.

This news must have made the patient happier than he was before, but the patient still decided to complain against the physician. He forwarded this complaint to the President of the medical center that employed the physician.

The President sent the patient the following response:

“As he shared his clinical thinking at the time, [the physician] truly did feel that you were dealing with a very aggressive Stage 4 cancer with a very low survival rate. He in no way wanted to harm either you or your wife but wanted you to have a full understanding of what he thought he would be helping you to deal with. The level of his concern can be seen in the fact that he shared his personal cell phone number with you. That being said, he realizes now that prior to sharing his clinical impressions with you, he needed to wait for the results of the biopsy to confirm what the cancer was. [The physician] is a very dedicated, caring provider …. [and] I know that he will also be sharing the wisdom he has gained from this experience with his colleagues in the practice. I have had …. Patient Financial Services to identify any outstanding balances related to care provided [the physician] and have authorized that these balances …. be written off as a gesture of acknowledgement for the concern you brought to our attention.”

The patient decided that the apology and fee waiver aren’t enough. He sued the physician and the medical center for malpractice that allegedly caused him emotional distress and other damages.

At trial, the patient relied on the President’s letter as evidence of malpractice. The court ruled that the letter contains only one admissible sentence: “That being said, he [the physician] realizes now that prior to sharing his clinical impressions with you, he needed to wait for the results of the biopsy to confirm what the cancer was.” The letter was redacted in tune with this ruling and submitted to the jury. Following the trial, the jury returned a $200,000 verdict in the patient’s favor.

On appeal before the Maine Supreme Court, the medical center argued that the trial judge ought to have suppressed the entire letter. This argument relied on Maine’s Apology Statute, 24 M.R.S. § 2907(2):

“In any civil action for professional negligence … any statement, affirmation, gesture or conduct expressing apology, sympathy, commiseration, condolence, compassion or a general sense of benevolence that is made by a health care practitioner or health care provider or an employee of a health care practitioner or health care provider to the alleged victim, a relative of the alleged victim or a representative of the alleged victim and that relates to the discomfort, pain, suffering, injury or death of the alleged victim as the result of the unanticipated outcome is inadmissible as evidence of an admission of liability or as evidence of an admission against interest. Nothing in this section prohibits the admissibility of a statement of fault.”

The medical center also alluded to the settlement negotiations privilege, M.R. Evid. 408(a): “Evidence of furnishing or offering or promising to furnish, or accepting or offering or promising to accept, a valuable consideration in compromise or attempting to compromise a claim is not admissible to prove liability for, invalidity of, or amount of the claim or any other claim.”

The Maine Supreme Court rejected both arguments and dismissed the appeal. The Court reasoned that the admitted part of the President’s letter was a “statement of fault” that expressed no “apology, sympathy, commiseration, condolence, compassion or a general sense of benevolence.” Hence, it was admissible. The Court also held that the letter was not protected by the settlement negotiations privilege because its fee-waiver offer did not attempt to settle a “claim.” The Court explained that the President “sent the letter to [the patient] in December 2009, long before [the patient] filed his notice of claim against [the medical center] in February 2011. Because there is no evidence of any disputed claim in existence at the time of the admission, the [trial] court properly concluded that the statements contained in the letter were not made as part of a settlement negotiation or mediation.”

This decision is deeply problematic. As an initial matter, the admitted part of the President’s letter was not a “statement of fault.” The physician’s acknowledgment “that prior to sharing his clinical impressions with [the patient], he needed to wait for the results of the biopsy to confirm what the cancer was” did not concede that he committed malpractice when he shared his initial clinical impressions with the patient. The President’s apology for this sharing of tentative information consequently could not be admitted into evidence under 24 M.R.S. § 2907(2). Everything he wrote to the patient squarely fell into the protected communications category under the Apology Statute.

Furthermore, the patient’s complaint against the physician “crystalized to the point of threatening litigation,” which the President’s letter tried to avoid. For these reasons, the medical center actually was entitled to the settlement negotiations privilege (Big O Tires Dealers, Inc. v. Goodyear Tire and Rubber Co., 561 F.2d 1365, 1372-73 (10th Cir. 1977); Blu-J, Inc. v. Kemper, 916 F.2d 637, 642 (11th Cir. 1990)).

The Strout precedent was therefore doubly wrong and the Maine Supreme Court should fix it as soon as possible. Until then, Maine doctors and medical centers will do well to involve attorneys in communicating their regrets and gestures to patients.

MCO’s are not vicariously liable for doctors’ malpractice

Bradford v. Jai Medical Systems Managed Care Organizations, Inc., — A.3d — (Md. 2014)

In this case, Maryland’s Court of Appeals ruled that an MCO assumes no vicarious liability for an affiliated physician’s malpractice.

This ruling isn’t new, especially in jurisdictions like Maryland that apply the Restatement of Agency 2d, § 267, according to which:

“One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.”

Under this provision, an MCO becomes vicariously liable only when it holds the physician out as its agent or employee.

In the case at bar, the patient subjectively believed that he was treated by the MCO’s agent, but this belief was false and the MCO did nothing to instill it. The MCO’s representation concerning its relationship with the (grossly) negligent physician was the physician’s listing in the provider directory that listed nearly 4,000 specialty providers participating in the MCO’s network. None of these providers was identified as an agent or employee of the MCO.

This standard set of facts – held the Court – precludes vicarious liability. Importantly, the Court noted that “there is no reason to preclude application of the theory of apparent agency in the context of an MCO and a network physician.”

Notably, the Court would have reached the same decision if it were to apply the Restatement of Torts 2d, § 429 (as do courts in some other jurisdictions). Under the Restatement of Torts 2d, § 429,

“One who employs an independent contractor to perform services for another which are accepted in the reasonable belief that the services are being rendered by the employer or by his servants, is subject to liability for physical harm caused by the negligence of the contractor in supplying such services, to the same extent as though the employer were supplying them himself or by his servants.”

Hence, the patient could only succeed at ascribing vicarious liability to the MCO if he showed that he reasonably believed that his doctor works for the MCO. The patient evidently failed to make the requisite showing.

The Undefeatable Psychiatric Privilege in Georgia

Cooksey v. Landry, — S.E.2d — (Ga. 2014)

Georgia has a statute, in OCGA § 24–5–501(a), that seals a psychiatric patient’s communications with his therapist completely and for good. This lesson was recently learned by the parents of a psychiatric patient who killed himself after taking Seroquel and Cymbalta – drugs accompanied by an FDA warning about an increased risk of suicidal thinking and behavior in young adults. In tune with that warning, the FDA recommends that medical professionals prescribing those drugs monitor patients for suicidal thoughts and behavior.

To see whether their son’s psychiatrist monitored him for suicidal thoughts and behavior, the parents requested him to provide them “all records pertaining to the deceased’s medical treatment and history.” The psychiatrist denied that request, citing OCGA § 24–5–501(a).

The Georgia Supreme Court ruled for the psychiatrist. The Court reasoned that “As a matter of public policy, Georgia law “has long provided for the confidentiality of communications between a [psychiatrist] and patient” (citing Kennestone Hosp., Inc. v. Hopson, 538 S.E.2d 742 (Ga. 2000)) and that the “primary purpose of the privilege “is to encourage the patient to talk freely without fear of disclosure and embarrassment, thus enabling the psychiatrist to render effective treatment of the patient’s emotional or mental disorders” (citing State v. Herendeen, 613 S.E.2d 647 (Ga. 2005)). Crucially, “The psychiatrist-patient privilege remains inviolate even though the patient’s care and treatment or the nature or extent of the patient’s injuries are put in issue in a civil proceeding” and “unlike other recognized privileges, the psychiatrist-patient privilege survives the death of the patient” (!!) (citing OCGA § 31–33–4, which provides that statutes authorizing the release of health records to a deceased patient’s representative “shall not apply to psychiatric, psychological, or other mental health records of a patient”).

The Court’s reasoning is quite compelling, but I still believe that the dissenters, Justices Benham and Hunstein, got it right. Every psychiatric patient would want her records to stay confidential. Yet, she would virtually always agree in advance to unlock the privileged information in order to prove that she died as a result of her psychiatrist’s malpractice. Documentary evidence to this effect would have allowed the parents to win the case despite the rigidity of the privilege. After all, as the Court had acknowledged, this privilege belongs to the patient, not to the doctor. If so, why not allow judges to use common sense when the patient’s future intent is undocumented?

Fraud vs. Medical Malpractice, and Caps on Damages

Goldenberg v. Woodard, (Nev. 2014)

In this case, the Nevada Supreme Court decided that a fraud action against a doctor cannot be recast into a suit for medical malpractice.

The case involved a physician who failed to disclose to his patient that he was not authorized to perform unsupervised colonoscopy. The physician then carried out the colonoscopy procedure and perforated the patient’s colon.

The Court held that the patient can sue the physician for fraud and that her compensation consequently will not be limited by Nevada’s $350,000 cap on noneconomic damages for medical malpractice. The Court based this decision on California law that separates allegations of fraud arising from “wrongful intentional conduct” from “mere negligence” (citing Covenant Care, Inc. v. Superior Court, 86 P.3d 290, 295 (Cal.2004)).

The Court also ruled that the abovementioned cap “limits noneconomic damages to an aggregate of $350,000 per incident, regardless of how many plaintiffs, defendants, or claims are involved.” The Court based this decision on the statutory switch (in NRS 41A.031) from a cap that limited “the noneconomic damages awarded to each plaintiff from each defendant” to a cap that limits “the amount of noneconomic damages awarded in such an action.”

To Toll or Not to Toll? Some Intricacies of the Fraudulent Concealment Doctrine

Gallant v. MacDowell, — S.E.2d — (Ga. 2014)

The doctrine of fraudulent concealment tolls the prescribed limitations and repose periods until the victim learns or becomes reasonably capable of learning the true facts. Ordinarily, the tolling will end at the point at which the victim seeks the diagnosis of another doctor. At that point, the victim is no longer deterred from learning the true facts. Based on these rules and the facts below, the Georgia Supreme Court tolled the limitations period for a dental patient.

This patient was treated by two dentists who maintained separate practices but worked together as a team. Based on a treatment plan devised by one of the dentists, the other dentist was to extract certain teeth and place implants into the patient’s jaw. The first dentist was then to install dental prostheses on the implants. Shortly after the first of several implant procedures, the first dentist determined that the implants had been improperly placed in such a manner as to make the installation of prostheses difficult. Instead of removing those implants, the dentist decided not to inform the patient about the problem. He tried to work around the difficulties created by the implants and go forward with installing the prostheses. He did not want to put the patient through the process of removing and replacing the implants, because she had been through “enough.”

The fix didn’t work and the patient tried to improve her teeth situation with the second dentist. While the second dentist was fixing the fix, the limitations period had expired. The patient nonetheless sued the first dentist. The trial court granted the defendant’s motion for summary judgment: it decided that, even if the statute of limitations was tolled by fraud, nevertheless, as of the date the patient sought the care of the second dentist, she had thereby “consulted with another doctor” and was consequently on notice of the possible malpractice; so that the statute of limitations began to run. The Court of Appeals reversed that decision: it reasoned that the patient’s visits to the second dentist did not end the tolling of the statute of limitations because the two dentists worked together, and so “by consulting with the second dentist the patient cannot be deemed to have sought an independent medical opinion such that she reasonably could have discovered her cause of action.”

The Georgia Supreme Court sided with the Court of Appeals. It clarified that a fraud-based tolling ends only when the victim is no longer deterred from learning the true facts. Unsurprisingly, “cases in which consultation with another doctor was deemed to have triggered the end of the tolling of the statute of limitation for alleged fraud involve instances in which the other doctor consulted was one who was not previously associated with the plaintiff’s care or the treatment that was allegedly negligently rendered.”

FTCA’s Trap for the Unwary

Sanchez v. U.S., 740 F.3d 47 (1st Cir. 2014)

Mr. Sanchez’s wife died in a Massachusetts hospital shortly after delivering her third child by c-section. She died from arguably preventable hemorrhaging.

Mr. Sanchez and his lawyer thought that they had a 3-year window for filing medical malpractice suit in connection with that death, as prescribed by Massachusetts law, Mass. Gen. Laws Ch. 260, § 2A. Unbeknownst to them, however, the hospital was a federally qualified health center, which made the doctors who treated Mrs. Sanchez “federal employees” under the Federally Supported Health Centers Assistance Act of 1992, 42 U.S.C. § 233. As a result, Mr. Sanchez could only sue the United States under the Federal Tort Claims Act (FTCA). He wouldn’t mind doing so, but his ability to file such a suit had expired in two years pursuant to FTCA. This predicament is known as FTCA’s trap for the unwary: see here.

To alleviate this predicament, Congress enacted the Federal Employees Liability Reform and Tort Compensation Act of 1988 (the “Westfall Act”). Under the Westfall Act, an improperly filed claim that ought to have been filed against the United States pursuant to FTCA will be deemed timely if “(A) [it] would have been timely had it been filed on the date that the underlying civil action was commenced, and (B) [it] is presented to the appropriate Federal agency within sixty days after the dismissal of the civil action.” 28 U.S.C. § 2679(d)(5). The Westfall Act, however, does not help plaintiffs such as Mr. Sanchez who waited for more than two years to file their suit pursuant to state law which, unbeknownst to them, was inapplicable.

Mr. Sanchez invoked the “discovery rule” that postpones the accrual of the cause of action for plaintiffs who did not know and could not reasonably suspect that they suffered harm from the defendant’s negligence. This rule, however, was of no avail. Mr. Sanchez’s action arouse out of an unexpected nosocomial death – a circumstance that instills malpractice suspicion in every reasonable plaintiff. Crucially for Mr. Sanchez, he actually acted upon that suspicion when he hired an attorney to investigate a potential malpractice claim against the hospital and its doctors. From that point on, he had two years to file his suit, which he did not do because – once again – he and his attorney mistakenly assumed that they have a three-year window for filing a suit under Massachusetts law.

Mr. Sanchez’s last resort was the doctrine of “equitable tolling.” This doctrine is not readily available for FTCA plaintiffs. Because FTCA waives the federal government’s immunity against liability in torts, the limits under which it authorizes federal courts to hold the United States responsible for tort damages are widely considered jurisdictional. This is particularly true about FTCA’s two-year time bar for filing suits: Kwai Fun Wong v. Beebe, 732 F.3d 1030, 1035–47 (9th Cir. 2013); Román–Cancel v. United States, 613 F.3d 37, 42 (1st Cir. 2010).

There is, however, a different interpretation that allows FTCA plaintiffs to benefit from equitable tolling: see, e.g., Arteaga v. United States, 711 F.3d 828 (7th Cir. 2013) (allowing an FTCA plaintiff to use equitable tolling); Gonzalez v. Thaler, ––– U.S. ––––, 132 S.Ct. 641, 648 (2012) (holding that “equitable tolling” depends on statutory interpretation). The First Circuit was willing to follow that interpretation in Mr. Sanchez’s case.

Ultimately, however, this interpretation did not help Mr. Sanchez because his attorney could easily research a federal database, http://bphc.hrsa.gov/ftca/healthcenters/, to find out that Mrs. Sanchez was hospitalized at a federally qualified health center. Mr. Sanchez’s attorney thus did not act with due diligence – an omission that precludes equitable tolling.

The First Circuit cited in this connection (at p. 55) a recent observation by Judge Posner that “It’s not asking too much of the medical malpractice bar to be aware of the existence of federally funded health centers that can be sued for malpractice only under the Federal Tort Claims Act … and if a member of that bar is not aware and misleads a client, … the lawyer may be liable for legal malpractice but the government can still invoke the statute of limitations” (Arteaga v. United States, 711 F.3d 828, 834–35 (7th Cir. 2013)). After citing that observation, the First Circuit explained that “neither inaction born of ignorance nor recklessness in the face of a known risk could provide a basis for establishing diligence … [and] due diligence is a sine qua non for equitable tolling.” Id. To quote from Judge Posner again, “Equitable tolling cannot be premised on the incompetence of the plaintiff’s lawyer” (Arteaga, at 835).

Mr. Sanchez had consequently lost his medical malpractice suit but he might now be able to sue his attorney for legal malpractice.