Dignity Health v. Mounts (Sept. 17, 2024, B325563) __ Cal.App.5th __ [2024 WL 4210763]
A Dignity Health hospital recruited Dr. Troy Mounts, an orthopedic surgeon, to work in the hospital’s spine surgery practice. A dispute arose as to Mounts’ competence and Dignity’s support of Mounts’ operations. Dignity asked Mounts to refrain from operating until Dignity completed a Focused Professional Practitioner Review (FPPE). Mounts agreed. Dignity then informed Mounts it would submit a Business and Professions Code section 805 report regarding Mounts’ voluntary restriction on practice if it lasted longer than 30 days. Dignity further stated Mounts’ privileges could be summarily suspended if he rescinded his voluntary restriction. When Mounts attempted to rescind his voluntary restriction after 30 days, Dignity filed an 805 report with the medical board as well as a report with the National Practitioner Data Bank (NPDB). Later, after Dignity informed Mounts the FPPE determination would likely be unfavorable, Mounts resigned and sought work at two other hospitals. Dignity declined to provide records of the FPPE to either hospital, and Mounts was not hired.
Dignity sued Mounts to recover the recruiting bonus it paid him. Mounts cross-complained, alleging retaliation under Health and Safety Code section 1278.5, intentional interference with prospective economic advantage, and unfair competition. Mounts’ claims rested on Dignity’s alleged lack of operational support, procedural defects regarding the FPPE process, and refusal to disclose FPPE information to potential employers. The trial court granted Dignity’s anti-SLAPP motion and struck the cross-complaint, ruling that Mounts’ claims were based on privileged conduct. Mounts appealed.
The Court of Appeal affirmed, holding that Mounts failed to show a probability of prevailing. The court explained that each retaliatory act alleged by Mounts (including restricting his operating room time, proctoring, referring patients to other surgeons, failing to follow hospital bylaws, failing to explain how privilege restrictions triggered 805 and NPDB reports, failing to allow him to rescind his voluntary restriction without issuing an 805 or NPDB report, and filing the 805 and NPDB reports) was subject either to the litigation privilege or the common interest privilege, or both. The litigation privilege confers an absolute privilege on communications pertaining to a medical peer review proceeding. The common interest privilege applies to certain “communications made in a commercial setting relating to the conduct of an employee.” The court found that these privileges embraced each category of alleged retaliatory conduct.
Prepared by H. Thomas Watson and Peder K. Batalden, Horvitz & Levy, LLP
California Society for Healthcare Attorneys
1215 K Street, Suite 700
Sacramento, CA 95814
