Medical Malpractice; Definition of Health Care Liability Claim

Ross v. St. Luke’s Hospital, No. 13-0439, May 1, 2015 (Houston 14)(opinion by Johnson, J.)(concurring opinion by Lehrmann, J., joined by Devine, J.)

Digest: A personal injury claim asserted by a non-patient who slipped and fell in a non-patient area is not a Health Care Liability Claim and therefore is not subject to the expert report requirements of the Texas Medical Liability Act.

Summary: Plaintiff Lezlea Ross, after visiting a friend at the hospital, slipped, fell and was injured in an area near the exit doors where the floor was being cleaned and buffed. She sued the hospital, which moved for dismissal on the grounds that the plaintiff’s claim was a Health Care Liability Claim (HCLC) as defined by the Texas Medical Liability Act (TMA) and that the plaintiff had not filed an expert report as required by the TMA. The trial court granted the motion to dismiss, and the court of appeals affirmed. The Texas Supreme Court reversed and held that the plaintiff’s claim was not an HCLC.

The TMA defines a HCLC as “a cause of action against a health care provider or physician for treatment, lack of treatment, or other claimed departure from accepted standards of medical care, or health care, or safety or professional or administrative services directly related to health care.” In a previous opinion, Texas West Oaks Hospital L.P v. Williams, 371 S.W.3d 171 (Tex. 2012), the court had held that the phrase “directly related to health care” modified only professional or administrative services” and did not modify “safety.” That construction allowed health care providers to assert that virtually all claims filed against them were HCLC’s even if they were not related to medical care, and resulted in a large number of cases moving through the courts of appeals addressing the issue of whether a non-medical case against a doctor or hospital was an HCLC and subject to the TMA caps and medical report requirements. The Court’s holding in this case provided some badly needed clarity and limitation on what is and what is not a health care liability claim.

Holding: The Court held that a “safety standards based claim” (as opposed to a claim based on health care standard or medical care standards) is a HCLC only if “there [is] a substantive nexus between the safety standards allegedly violated and the provision of health care. And that nexus must be more than a ‘but for’ relationship.” The court then listed seven “non-exclusive considerations” for courts to use in determining whether a claim is an HCLC. They are:

1. Whether the alleged negligence of the defendant occurred in the course of the defendant’s performance of tasks with the purpose of protecting patients from harm;

2. Whether the injuries occurred in a place where patients might be during the time they were receiving care, thus implicating the provider’s obligation to protect persons receiving care;

3. Whether, at the time of injury, the claimant was in the process of seeking or receiving medical care;

4. Whether, at the time of injury, the claimant was providing or assisting in the provision of health care;

5. Whether the alleged negligence is based on safety standards arising from professional duties owed by a health care provider;

6. If an instrumentality was involved in the alleged negligence, whether it was of a type used in the provision of health care;

7. Whether the alleged negligence occurred in the course of the defendant’s taking action or failing to take action necessary to comply with safety-related requirements for health-care providers by governmental or accrediting agencies.

Based on these considerations, the Court determined that a slip and fall accident by a non-patient in a public area was not a HCLC and remanded the case for further proceedings.


Genie Indus. Inc. v. Matak, No. 13-0042, May 8, 2015 (Corpus Christi)(Opinion by Hecht, J., joined by Green, Johnson, Willett, Guzman and Brown)(Dissenting Opinion by Boyd, J, joined by Lehrmann and Devine)

Digest: There was no evidence to support jury’s “yes” answer to design defect question because, as a matter of law, the machine at issue was not unreasonably dangerous.

Summary: Plaintiff’s decedent was killed when the 40-ft. aerial lift he was working on tipped over when it was fully extended. The lift (known as the AWP-40S) was designed to be maneuverable into small inside areas. It therefore had a narrow base that allowed it to go through doors. Users of the lift were supposed to attach 3-foot outriggers to stabilize the lift’s bottom before extending it to its 40-ft. height. At the end of each outrigger was a levelling jack that insured the outrigger was pressed firmly against the floor, even when the floor was not level. There were warnings on the lift not to move lift with the platform elevated. Plaintiff’s decedent was killed in preparing for a move with the lift extended and plaintiff in the platform. As soon as the jacks were raised to allow the lift to be moved, the lift tipped over. Plaintiff’s family sued Genie, the maker of the lift, and the jury found a design defect before attaching 55% responsibility to Genie. The court of appeals affirmed, but the Texas Supreme Court reversed and rendered a judgment for Genie.

Holding: The Court’s ruling begins by paying lip service to the role of the jury: “The respective roles of courts and juries must be carefully guarded. The right to trial by jury in a civil case is constitutionally protected because we have, as a polity, determined to lay the resolution of factual disputes at the feet of our peers. But when the facts admit of only one reasonable conclusion, it is the rule of law that must supply the decision, lest jurors be given the very power from which they are intended to protect us, deciding for whatever reasons seem good to them who and who should not prevail.”

The Court then reviewed the evidence of a safer alternative design, and defined that term as meaning a design “that would have prevented or significantly reduced the risk of injury, would not substantially impair the products utility and was economically and technologically feasible at the time.” It need not have been actually built and tested, but only capable of being developed.

The Court then considered each of the alternative designs proffered by the plaintiffs expert and explained how those designs did not fit the definition of safer alternative design, BUT the Court rejected Genie’s argument that there was no evidence of safer alternative design and instead characterized the evidence as weak but more than a scintilla.

The Court went on to consider Genie’s argument that there was no evidence that the AWP-40S was unreasonably dangerous. The Court notes that this determination depends on whether the product’s risks outweigh its utility, which requires the consideration of five factors:

1. the utility of the product to the user and to the public as a whole weighed against the gravity and likelihood of injury from its use;

2. the availability of a substitute product which would meet the same need and not be unsafe or unreasonably expensive;

3. the manufacturer’s ability to eliminated the unsafe character of the product without seriously impairing its usefulness;

4. the user’s anticipated awareness of the dangers inherent in the product and their avoidability because of general public knowledge of the obvious condition or the product or by using warnings; and

5. the expectations of the ordinary consumer.

In applying these factors, the Court noted that the product’s utility was undisputed. It was designed to be small and lightweight so it could be used in a variety of working environments. The Court notes that the risk of moving the platform while it is elevated was warned against and was obvious and patent, and that there was no evidence of any similar misuse by any of the other 100,000 purchasers of the AWP-40S. Thus, the Court characterized the risk of a fall such as the one that occurred as “all but nonexistent.” Based on its determination that the risk was very obvious and that there was no evidence of any other substitute product and only weak evidence of a safer alternative design, the court found as a matter of law that the product was not unreasonably dangerous. The Court reversed the lower court judgments and rendered judgment for the manufacturer.


Abutahoun v. Dow Chemical Co., No. 13-0175, May 8, 2015 (Dallas) (J. Green)

Digest: Chapter 95 of the Texas Civil Practice and Remedies Code, which relates to limitations on a property owner’s liability for injury, death, or property damage to an independent contractor, applies to all independent contractor claims for damages caused by a property owner’s negligence, even if the claims arise out of the property owner’s negligent activities and not the independent contractor’s own work.

Summary: Dow Chemical Company contracted with Robert Henderson’s employer, Win-Way Industries, to install a system of pipelines at Dow’s facility. While working for Win-Way on the asbestos-insulated pipeline, Henderson was exposed to asbestos dust by Dow employees. Henderson was also exposed to asbestos dust as a result of his own work, which was the same kind of work as the Dow employees were doing. After contracting mesothelioma, Henderson’s family filed suit against Dow. In response, Dow moved for summary judgment under Chapter 95 of the Texas Civil Practice and Remedies Code. The court granted summary judgment predicated on the negligence of Dow, but allowed Henderson’s claims predicated on the negligence of Dow’s employees to proceed to trial. The jury rendered a verdict for Henderson based on the negligence of Dow’s employees and Dow appealed.

Holding: The Court held that Section 95.002(2) applies to a negligence claim that arises from the “condition or use” of an improvement to real property, it covers liability arising from premises defects and negligent activities. The Court based this holding on common law jurisprudence that a property owner may be subject to negligence where an injury arises from a premises defect or negligent activity on the premises. The court also relied on the fact that a year before the legislature amended Chapter 95 to include the “condition or use” language, the Court interpreted the “condition or use” language as it is used in the Texas Tort Claims Act to encompass two disparate bases for liability: liability for a condition of real property and liability based on respondeat superior. Accordingly, Chapter 95 applies to an independent contractor’s claims for damages caused by the contemporaneous negligent acts of a property owner.


Phillips, et al. v. Carlton Energy Group, LLC, No. 12-0255, May 8, 2015 (Houston – 1st) (opinion by Hecht, J.)

Digest: The reasonable certainty required to prove lost profits must be measured in context. When projected profits are considered in determining the value of a mineral prospect to be actually purchased or sold, the relevant metrics are supplied by the business market that values, invests in, and trades on such interests. The law should not require greater certainty in projecting those profits than would be required by the market itself. [Note: This was the main issue addressed by the opinion. There were also some findings relating to alter ego liability that are described in the holding below.]

Summary: This dispute arose from a mineral prospect owned by a third party. The plaintiff and the defendants were all interested in investing in this prospect and entered into various contracts with the owner of the prospect and each other. Ultimately, the defendants convinced the owner to ditch the plaintiff and deal solely with the defendants. The plaintiff sued the defendants for tortious interference and various other claims (including alter ego), seeking actual damages based on the fair market value of the plaintiff’s lost interest in the prospect (which value depended in part on the projected profits the plaintiff’s interest in the prospect would have generated).

The jury found, among other things, that the defendants (directly and/or as alter egos of each other) tortiously interfered with the plaintiff’s contract. The jury awarded the plaintiff $66.5 million in actual damages and $8.5 million in exemplary damages. The trial court remitted the judgment to $31.16 million, which the plaintiff accepted in lieu of retrial while reserving its right to seek the higher amount on appeal. The trial court rendered judgment against one of the defendants based on alter ego, but refused to do so against two of the other defendants. On appeal, the appellate court reversed the trial court’s judgment in part and rendered judgment on the verdict, awarding the plaintiff the $66.5 million in actual damages found by the jury, as well as exemplary damages, and including the other two defendants as alter egos. The defendants appealed to the Texas Supreme Court, arguing that: (1) there was no evidence to support the jury’s finding that the defendants were liable for tortious interference; (2) the plaintiff’s evidence of the fair market value of the plaintiff’s interest in the mineral prospect was too speculative to support an award of damages; and (3) two of the defendants were not liable as alter egos under Nevada law.

Holding: The Texas Supreme Court affirmed the judgment of the appellate court in part, reversed in part, and remanded the case to that court for further proceedings. The Court first held that the evidence supported the jury’s findings relating to the defendant’s liability for tortious interference. The Court then addressed the defendants’ argument that the damage award was too speculative. The Court noted that lost profits must be proven with reasonable certainty. This is true even when the lost profits are not sought as damages themselves but are merely used to determine the market value of property for which recovery is sought. But the Court further noted that when evidence of potential profits is used to prove the market value of an income-producing asset, the law should not require greater certainty in projecting those profits than would be required by the market itself. Applying this standard, the Court determined that the jury’s $66.5 million damage award was not supported by the evidence, although there was some evidence to support the lower judgment amount of $31.16 million.

The Court remanded to the appellate court the issue of whether the evidence was factually insufficient to support the judgment. Finally, with respect to the alter ego question, the Court rejected the defendants’ argument that a Nevada statute preempted common-law alter ego liability for any person other than a shareholder, director, or officer of a corporation. The Court reasoned that, while the statute precluded a common law expansion of the alter ego doctrine as applied to corporate shareholders/directors/officers, it had no effect on the common-law alter ego liability of other persons. The Court also rejected the defendants’ argument that a provision of the statute, which states that alter ego liability must be determined by the court as a matter of law, applied to cases brought in Texas courts. The Court noted that, generally, the local law of the forum determines whether an issue shall be tried by the court or by a jury. The Court further noted that the right to a jury constitutionally guaranteed in Texas courts cannot be supplanted by a Nevada statute. Under Texas law, factual disputes related to the basis for alter ego liability are for the jury to determine. Once the jury has resolved those disputes, or when the facts are undisputed, then the question of whether an imposition of alter ego liability is justified is a matter of law for the court. The Court ultimately determined that the evidence not only supported the jury’s verdict, but established the defendants’ alter ego liability as a matter of law.


Gharda USA, Inc., et al. v. Control Solutions, Inc., et al., No 12-0987, May 8, 2015 (Houston – 1st) (opinion by Green, J.)

Digest: The trial court did not abuse its discretion by disregarding the plaintiffs’ unreliable expert testimony on causation. The individual opinion testimony of at least two of the experts was unreliable and the remaining two experts based their opinion on the first two experts’ unreliable opinions. Given that, in this case, expert testimony regarding causation was required, the plaintiff failed to provide sufficient evidence of this essential element to its claim.

Summary: This dispute arose out of a fire that occurred in a warehouse where the plaintiffs operated a blending facility to formulate pesticides. One of the chemicals the plaintiffs used in their formulations (chlorpyrifos) was manufactured and supplied by the defendants. Prior to blending the chlorpyrifos into their formulations, the plaintiffs were required to melt it in an industrial oven called a “hot box” that was located in the warehouse. After the fire, the plaintiffs brought a products liability suit against the defendants, alleging a manufacturing defect and negligence.

The plaintiffs retained four experts: two fire origin investigators and two chemists. The two fire origin investigators testified that they believed the fire started in the hot box, but relied on the other two experts to prove how the fire could have started there. The two chemist experts assumed that the fire started in the hot box and testified that the fire could have been caused by contamination from one of the inert ingredients in the chlorpyrifos (EDC). Chemist #1 assumed that there was sufficient EDC contamination to cause exothermic decomposition, but did no calculations, research, or tests to determine what a sufficient amount of contamination would be. Chemist #2 similarly assumed that there was sufficient EDC contamination, but admitted there was no such evidence supporting his assumption. Chemist #2 also testified that the defendants’ manufacturing process “possibly” resulted in a sufficient amount of EDC contamination, but was unable to testify to the actual amount of EDC in the drums within the hot box. All four of the plaintiffs’ experts testified at trial, over the objections of the defendants.

The jury found in favor of the plaintiffs, finding that the defendants’ negligence and manufacturing defect caused the fire. The defendants moved for judgment notwithstanding the verdict, arguing that there was no evidence of negligence, defect, or causation because the plaintiffs’ expert testimony was unreliable. The trial court denied the motion and entered judgment for the plaintiffs. After judgment was entered, the defendants again moved for judgment notwithstanding the verdict. This time, the trial court agreed that the plaintiffs’ expert testimony was unreliable and rendered a take-nothing judgment in favor of the defendants. The plaintiffs appealed, and the court of appeals reversed in a split decision, holding that the expert testimony was reliable and that there was sufficient evidence of negligence, manufacturing defect, and causation. The defendants appealed.

Holding: The Texas Supreme Court reversed the court of appeals’ judgment and reinstated the trial court’s judgment that the plaintiffs take nothing. The Court first noted that, given the complexity of the plaintiffs’ causation theory, the plaintiffs were required to support such theory with expert testimony and objective proof. The Court determined that the testimony of both chemist experts was unreliable because it: (1) was based on a mere possibility, rather than reasonable probability; (2) was speculative; (3) was based on inconsistent facts and failed to explain the inconsistency; and (4) assumed facts not in evidence. The Court then determined that the trial court properly disregarded the expert testimony from the two fire investigator experts, since they both were relying on the chemists’ unreliable expert testimony to provide the factual foundation for their origin theories. Accordingly, the Court held that all of the plaintiffs’ expert testimony was unreliable and could not be considered by the jury. Without expert testimony, there was no evidence of an essential element (i.e., causation) of the plaintiffs’ negligence and manufacturing defect claims. Thus, the trial court did not err when it granted the defendants’ motion for judgment notwithstanding the verdict.


Gonzales v. Ramirez, No. 14-0107, May 8, 2015 (per curiam opinion)

Digest: Party who contracted with a trucking company to haul silage was not a motor-carrier under either the Federal Motor Carrier Safety Regulations and further owed no common law duties to the driver of the trucking company it hired.

Summary: The Defendant Gonzales hired Garcia Trucking to haul silage from the farm where it was being harvested to the Littlefield Feed yard. During the transport, a tire on one of the trucks blew out, causing an accident with a car being driven by Tammy Jackson and containing her 14-year old daughter as a passenger. The accident killed the Jacksons and the driver of the truck, Raymond Ramirez. Claiming that the truck was negligently overloaded, the Jacksons and Mr. Ramirez’s widow sued Gonzales and Garcia trucking. After Garcia was nonsuited by one plaintiff and defaulted as to the other two, Gonzales filed a motion for summary judgment on all claims. The trial court granted the motions, and the plaintiffs appealed.

The court of appeals reversed, finding a fact-issue existed as to whether Gonzales was a motor carrier under the Texas Motor Carrier regulations (which would have made him vicariously liable for the acts of the driver) and as to whether Gonzales retained control over the driver’s work so as to owe common law duties to him.

Holding: The Texas Supreme Court reversed the court of appeals and remanded for the court to consider a negligent hiring claim that it had not reached. The Court held as a matter of law that Gonzales was not a motor-carrier under either the Federal Motor Carrier regulations or the state regulations. The Court likewise held that there was no evidence that Garcia had a right to control the actions of the driver Ramirez so as to make to create a duty to ensure that Garcia was performing the contract safely.

The Court’s ruling also addressed carrier regulations and common law duty to the driver:

1. Federal Motor Carrier Regulations: The Court found that the federal motor carrier regulations did not apply to this case since it involved hauling silage between two locations in the state of Texas.

2. State Motor Carrier Regulations: Under the state regulations, Gonzales was a motor carrier if he “controlled, operated, or directed the operation of a truck.” The evidence showed that Gonzales controlled the loading site and was ultimately responsible for hauling the silage as part of an underlying agreement with a third party, but did not control what driver operated what truck or what routes the drivers took. The Court concluded that Gonzales was acting as a shipper and not a motor-carrier and therefore was not vicariously liable for the acts of the driver, Gonzales.

3. State common law duty to driver: The Court applied the well-known rule that a general contractor does not owe a duty to employees of a sub-contractor to ensure that the sub-contractor safely performs its work. The court recognized the rule’s exception that imposes a duty when the contractor retains some control over the work, but held that there was no evidence here to satisfy the exception. The Court held the evidence showing that the contractor was asking the sub to bring a particular truck and had the right to refuse to load a truck if it looked unsafe was not sufficient to show that the contractor retained control over the work.


Molina v. Alvarado, No. 14-0536, May 8, 2015 (El Paso) (Per Curiam)

Digest: Once a plaintiff files suit against a governmental unit based on the acts of the governmental unit’s employee, it is immediately and forever barred from filing suit against the employee under the Texas Tort Claim’s Act’s election of remedies provision.

Summary: Alvarado’s vehicle was struck by a city vehicle driven by Molina while Molina was purportedly under the influence of alcohol. Alvarado filed suit against the City of McCamey. Alvarado later amended his petition, adding Molina as a defendant, asserting claims against him in his official capacity and, alternatively, in his individual capacity. Molina moved for summary judgment under the TTCA’s election of remedies provision. The trial court denied Molina’s motion.

Holding: Under the TTCA’s election of remedies provision, § 101.106(a), once a plaintiff elects to sue either the employee in his individual capacity or the governmental unit, he is immediately and forever barred from subsequently electing to sue the other regarding the same subject matter. But suit filed against the employee for acts within the scope of employment is not a suit against the employee; rather, it is, in all but name only, a suit against the governmental unit. Therefore, a suit against the employee may or may not be a suit against the governmental unit. But a suit against a governmental unit cannot be a suit against the employee individually. Thus, the election of remedies provision forces a plaintiff to decide at the outset whether an employee acted independently or within the general scope of his or her governmental employment. Because Alvarado filed suit against the City, and not Molina, the action constituted an irrevocable election and immediately and forever barred any suit or recovery by Alvarado against Molina regarding the same subject matter.


RSUI Indemnity Co. v. Lynd Co., No. 13-0080, May 8, 2015 (San Antonio) (opinion by J. Boyd, joined by Johnson, Willett, Guzman, Lehrmann and Devine)(Dissenting Opinion by C.J. Hecht, joined by Green and Brown)

Digest: Where two constructions of an insurance policy present reasonable interpretations of the policy’s language, the policy is ambiguous and the construction that most favors the insured will be adopted.

Summary: The Lynd Company secured an excess insurance policy from RSUI Indemnity Company that covered multiple commercial properties. An endorsement to the policy provided that, “in the event of loss,” RSUI’s liability shall be limited to the “least of the following in any one ‘occurrence’”: (1) “[t]he actual adjusted amount of the loss”; (2) “115% of the individually stated value for each scheduled item”; or (3) “[t]he Limit of Liability as shown on the Declarations page.”

In September 2005, Hurricane Rita damaged 15 of Lynd’s properties that were insured under the agreement. The actual adjusted loss of the damage totaled $24.5 million. After the insurance carrier on Lynd’s primary policy paid $20 million, Lynd turned to RSUI to secure payment for the remaining $4.5 million, less the policy’s deductible. While the parties agreed that the loss resulted from one occurrence, they disagreed on how to compare and apply the three alternative limits when one occurrence causes losses at multiple locations. Lynd, applying option No. 1, sought payment from RSUI in the actual adjusted amount of $4.5 million, contending that amount was the “least” of the three options, considering the loss as a whole. RSUI, on the other hand, considered the “least” of the three options as to each property individually or on an item-by-item basis, applying option No. 1 to some properties and option No. 2 to other properties. Specifically, RSUI paid the actual adjusted amount on 13 of the properties and 115% of the reported value on two of the properties. That amount totaled to $750,000. Lynd filed suit to recover the difference between $750,000 and $4.5 million, less the policy’s deductible.

Holding: Where two constructions of a policy present reasonable interpretations of the policy’s language, the policy is ambiguous. When the policy is ambiguous, the uncertainty must be resolved by adopting the construction that most favors the insured, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties’ intent. After analyzing the endorsement’s relevant terms, including the terms “loss” and “occurrence,” the Court concluded that the language supports both Lynd’s and RSUI’s constructions. RSUI contended that Lynd’s construction is unreasonable because the policy was a “scheduled” policy, which provides scheduled limits for each property independently, rather than a “blanket” policy, which aggregates all covered properties to provide one coverage limit applied collectively. As support for its contention that the policy is a “scheduled” policy, RSUI pointed to the endorsement’s title, which reads “Scheduled Limit of Liability.” However, the Court noted that although the title of a provision may be relevant to interpreting the provision, the greater weight must be given to the plain meaning of the provision’s operative language.

RSUI also pointed to the fact that the policy included a schedule of covered items and their values. But the Court noted that although “every scheduled policy . . . [might] include[ ] or incorporate[ ] a schedule of covered items and their values,” it does not follow that “every policy that includes a schedule of covered items and their values limits liability on an item-by-item basis.” Further, the Court noted that the premium rate charged by RSUI is not consistent with only a scheduled policy, and the fact that RSUI based the premium on an average rate for all scheduled items is more consistent with a blanket policy than a scheduled policy. For these reasons, the Court held that RSUI had not established that Lynd’s construction of the endorsement’s language is unreasonable.


In re Memorial Herman Hospital System, et al., No. 14-0171, May 22, 2015 (Houston – 1st) (opinion by Willett, J.)

Digest: Although documents and communications related to medical peer review committees are generally confidential and protected from discovery, there is an exception to such privilege known as the “anticompetitive action” exception. Under this exception, if a judge makes a preliminary finding that a proceeding or record of, or a communication to, a medial peer review committee is relevant to an anticompetitive action, such documents are not confidential to the extent they are considered relevant. Moreover, when the committee at issue is both a “medical peer review committee” and a “medical committee,” the “anticompetitive action” exception to the medical peer review committee privilege limits the provision of confidentiality under the medical committee privilege.

Summary: Dr. Gomez, a cardiothoracic surgeon, sued his former hospital (Memorial Hermann Memorial City) and others for retaliating against him for joining a competing hospital (Methodist West). Dr. Gomez had been the only heart surgeon at Memorial City who was capable of performing robotic heart surgeries. Once he decided to go to Methodist West, the defendants began conducting a “whisper campaign” to discredit Dr. Gomez as a surgeon and robotic heart surgery generally. As part of this campaign, one of the individual defendants presented false data and statements regarding Dr. Gomez’s practice and his mortality rates to a room full of Dr. Gomez’s colleagues at a “Cardiovascular and Thoracic CPC” meeting. This defendant had manipulated the data to make it look like patients were more likely to die in Dr. Gomez’s care. The defendants continued to disseminate the manipulated data in the medical community, even after the “true” peer review committee at Memorial Hermann determined such data was not reliable.

Dr. Gomez brought suit and moved to compel the production of certain documents. Memorial Hermann claimed that the documents were protected from discovery under the medical committee privilege and the medical peer review committee privilege. Following an in camera inspection, the trial court ordered Memorial Hermann to produce certain documents. Memorial Hermann filed a petition for writ of mandamus, which the court of appeals denied. Memorial Hermann then sought mandamus relief from the Texas Supreme Court.

Holding: The Supreme Court held that some of the documents were protected, and conditionally granted mandamus relief as to them, but that the remainder of the documents was not confidential under either privilege. The Court held that the trial court had not abused its discretion in holding that the “anticompetitive action” exception to the medical peer review committee privilege applied. This exception provides, in relevant part, that if a judge makes a preliminary finding that a proceeding or record of, or a communication to, a medial peer review committee is relevant to an anticompetitive action, such documents are not confidential to the extent they are considered relevant. The Court held that such exception applies when the plaintiff asserts a cause of action that requires proof that the conduct at issue has a “tendency to reduce or eliminate competition” that is not offset by countervailing procompetitive justifications.

The Court further held that the plaintiff is not required to make an evidentiary showing; rather, the trial judge is to determine a “preliminary finding” based on the plaintiff’s pleadings. Applying this standard, the Court determined that Dr. Gomez had sufficiently pled an anticompetitive action. After analyzing the documents at issue, the Court determined that a small number of them were not relevant to Dr. Gomez’s anticompetitive action and that the trial court abused its discretion in compelling their production. However, for the majority of the documents, the Court determined that they were relevant to essential elements of the anticompetitive causes of actions that Dr. Gomez had asserted. The Court then analyzed whether these relevant documents enjoyed any residual protection under the medical committee privilege. The Court determined that they did not, noting that when the committee at issue is both a “medical committee” and a “medical peer review committee,” the anticompetitive exception to the medical peer review committee privilege limits the provision of confidentiality under the medical committee privilege. Ultimately, the Court conditionally granted the writ of mandamus as to the few documents determined to be irrelevant and directed the trial court to modify its discovery order so that the production of those documents would not be compelled. In all other respects, Memorial Hermann’s petition for writ of mandamus was denied.

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