Peer Review: How Privileged?

How privileged, how impenetrable, is the peer review privilege? In Fox v. Kramer, 22 Cal. 4th 531, 994 P.2d 343 (Cal. 2000), the Supreme Court of California considered this narrow issue: Could plaintiffs Wendy Fox and her husband, Dr. Richard B. Fox, subpoena a doctor to give expert testimony or refer at trial to his draft preliminary report when his conclusions were based on hospital peer review committee records reviewed in the course of his official duties for a public agency? The court concluded that the answer is no; a plaintiff is not permitted to use a subpoena to accomplish indirectly that which is “forbidden directly.” But that did not necessarily mean that all information brought out in medical peer-review committee proceedings was barred from introduction in court.

The plaintiff in Fox was a physician's wife who underwent a colonoscopy procedure under a form of anesthesia known as “conscious sedation,” in which pain- and anxiety-relieving medication is given. The anesthesia does not render the patient completely unconscious, permitting her to express discomfort or change positions. During the procedure, Mrs. Fox experienced pain. She moaned or asked the physicians to wait, or stop a moment; they did so, administered more medication, and after she indicated that it was all right to continue, completed the procedure. The plaintiff recalled afterward that she moaned and asked the physicians to “wait a minute,” but otherwise did not remember anything about the procedure except two or three periods of consciousness, of 2 or 3 seconds each, during which she felt pain.

In the recovery area, the plaintiff dreamed that she screamed during the colonoscopy, begged the physicians to stop, and fought them off. In the succeeding days, she began to believe that she had been abused during the colonoscopy. She developed a fear of medical personnel and suffered from nightmares. Dr. and Mrs. Fox complained to the hospital.

Peer Review Discussion Following the Foxes' complaint, several physicians discussed the incident at a peer-review committee meeting attended by plaintiff's husband, who took part in the review because of his position at the hospital. Dr. Fox later claimed that one of the nurses who assisted at the colonoscopy stated at the meeting that Mrs. Fox screamed during the procedure.

In September of 1993, Dr. and Mrs. Fox brought an action for malpractice against Mrs. Fox's doctors, Richard J. Kramer and Michael J. Kushlan, and against the hospital where the procedure was performed. They alleged that Mrs. Fox was inappropriately sedated and that the physicians proceeded with the colonoscopy procedure after she withdrew her consent. They sought damages for injuries to Mrs. Fox, including post-traumatic stress disorder, and on behalf of Dr. Fox, for loss of consortium.

More than 3 years after filing their malpractice complaint, the Foxes lodged a complaint with the California Department of Health Services (hereafter DHS). Dr. Michael Schnitzer was assigned to investigate the complaint. He relied substantially on the hospital peer-review committee records in forming his opinions, and he created a report from his findings. Dr. Schnitzer's report was never finalized, and the DHS took no administrative action against the hospital on the basis of the investigation.

Shortly before trial, the plaintiffs subpoenaed the DHS draft preliminary report and received a redacted copy from DHS counsel. Several paragraphs of the report were blacked out or crossed out. The unredacted portions of the report summarized the allegation that Ms. Fox had asked the physicians to stop the colonoscopy procedure. The report's first subsection ' “Patient's Rights” ' was crossed out and initialed by Dr. Schnitzer. That section contained the opinion: “The patient at the time of the procedure was in obvious distress and the procedure should have been stopped.” The last page of the report recites facts from Dr. Kramer's “operative report” to the effect that Mrs. Fox was extremely anxious at the beginning of the procedure and was crying, panting and hyperventilating. The final paragraph stated: “During Fox's procedure, even though her mind was clouded by the medication given, I believe she did ask her physicians to stop the procedure and her wishes were not respected. She did not receive appropriate, considerate and respectful care.”

Four days before trial, plaintiffs moved to augment their expert list to include the author of the DHS report, Dr. Schnitzer, and they subpoenaed his testimony. The DHS, through the state's Attorney General, moved to quash the subpoena on the ground that Dr. Schnitzer's conclusions relied on hospital peer-review materials unavailable to the public under California Evidence Code ' 1157, (which states that records of peer review committee investigations are “privileged” from discovery) and that such conclusions were created by the DHS in confidence in compliance with its statutory mandate to oversee the licensing and regulation of California hospitals. The DHS contended that Dr. Schnitzer's opinions and conclusions were also entitled to the “official information” privilege within California Evidence Code ' 1040, because he could not testify “without immediately implicating and compromising the confidentiality of the materials he reviewed.”

Finding that the hospital's peer-review records were immune from discovery under Cal. Evid. Code ' 1157(a), and that Dr. Schnitzer's testimony would be based on his review of those records, the trial court quashed the subpoena; it also ruled that plaintiffs could not introduce or refer to the draft preliminary report summarizing Dr. Schnitzer's conclusions. In addition, plaintiffs were ordered not to “allude to, reference or disclose to the jury that peer review/quality assurance meetings were conducted.”

Appeal to the Court of Appeal

At trial, without Dr. Schnitzer's report or testimony, the jury found for the defense. Plaintiffs appealed, contending that the superior court erred in excluding Dr. Schnitzer's testimony and the DHS report. The Court of Appeal upheld the trial court's ruling, and the Supreme Court further upheld that court's decision … but not the appellate court's reasoning.

The Court of Appeal held that hospital peer-review evidence was inadmissible under California Evidence Code ' 1151 to prove negligence or culpable conduct. This section of the Evidence Code provides: “When after the occurrence of an event, remedial or precautionary measures are taken, which, if taken previously, would have tended to make the event less likely to occur, evidence of such subsequent measures is inadmissible to prove negligence or culpable conduct in connection with the event.” The court ruled that hospital peer-review committee meetings qualify as subsequent “remedial or precautionary measures” because they typically involve evaluations of the performance and competence of physicians at the hospital, and may result in the revocation, limiting, or denial of staff privileges.

The Court of Appeal acknowledged the absence of California authority on point, but was “convinced that such evidence [from peer-review proceedings] constitutes subsequent remedial or precautionary measures within the meaning of ' 1151.” The appellate court's analysis pointed to the “overwhelming public policy favoring the confidentiality of peer review evidence in a malpractice context,” and the “logical application” to “post-accident investigations” of case law, and reached the conclusion that Evidence Code ' 1151 encompasses workplace discipline.

CA Supreme Court: Same Result, Different Reasoning

The Supreme Court of California saw the Court of Appeal's conclusion on the remedial measure issue as strained and inconsistent with legislative intent with respect to the more apposite statute, Cal. Evid. Code ' 1157, “which expressly preclude[s] only the discovery of peer review committee records and the use of involuntary testimony by a 'person in attendance' at a meeting of a peer review committee.” Sec. 1151 was inapplicable in this instance, the supreme court found, because this case's facts dealt with peer review and the records ensuing from it, not with subsequent remedial action to change in future the procedures followed in operations like Mrs. Fox's.

The immunity described in the Cal. Evid. Code ' 1157, the Supreme Court noted, “extends to, first, the proceedings, and second, the records of the described staff committees. There is a strong public interest in preserving this confidentiality of the medical review process.” On the other hand, ' 1157, subdivision (a), states that the section “[b]y its terms … creates only a privilege against discovery from medical staff committees; it does not create a bar against introduction of evidence” otherwise properly obtained. Fox, 994 P.2d 343, 347 (citing Alexander v. Superior Court, 5 Cal. 4th 1218, 1223, fn. 4, 859 P.2d 96 (Cal. 1993)). This section establishes immunity from discovery but not an evidentiary privilege in the sense that medical staff records are exempt from evidence.

Sec. 1157 goes further and prohibits people who attend these peer review sessions from being compelled to give testimony over whatever transpired within the session. But this section precludes only compelled and not voluntary testimony. The statute “expresses a legislative judgment that the public interest in medical staff candor … requires a degree of confidentiality … It evinces a legislative judgment that the quality of in-hospital medical practice will be elevated by armoring staff inquiries with a measure of confidentiality.” 994 P.2d 343, 348. Prohibiting involuntary testimony serves a fundamental legislative purpose. But the court here noted that such purpose is inapplicable when a physician is willing to testify voluntarily.

The obvious general purpose of ' 1157, the court stated, is to improve the quality of medical care in the hospitals by the use of peer review committees ' if doctors who serve on such committees were subject in malpractice cases to the burdens of discovery and involuntary testimony on the basis of their committee work, the evidentiary burdens could consume large portions of the doctors' time to the prejudice of their medical practices or personal endeavors and could cause many doctors to refuse to serve on them.

Here, the hospital's peer review committee records were immune from discovery under Evidence Code '1157(a). In addition, where, as here, an expert has relied on privileged material to formulate an opinion, the court may exclude his testimony or report as necessary to enforce the privilege, the opinion stated.

The Uncompleted Draft DHS Report

The court found that the DHS was entitled to review the records of the peer review committee only as part of its official, purely investigative, inquiry. Therefore, contrary to plaintiffs' contention, the fact of DHS review did not constitute a general waiver by the hospital of discovery immunity. The court held that Dr. and Mrs. Fox could not accomplish indirectly what was forbidden to them to do directly, ie, obtain the equivalent of discovery of the contents of hospital peer review committee records by subpoenaing the testimony or the report of the DHS investigator who reviewed them in the course of his public duties.

The Foxes' claim that any privilege against disclosure of the contents of the DHS report was waived when the DHS produced it in redacted form in response to their subpoena was also not accepted by the court.

Draft Report Not 'Public' Within Statute

Dr. and Mrs. Fox went on to assert that the Dr. Schnitzer's draft preliminary report should not have been excluded because Health and Safety Code ' 1280, subdivision (e), makes “[a]ll inspection reports and lists of deficiencies … open to public inspection when the state department has received verification that the health facility has received the report from the state department.” The draft preliminary report, which included Dr. Schnitzer's handwritten interlineations and extensive deletions and redactions, was obviously only an uncompleted draft, not a final “inspection report” by the DHS, nor had it been served on the hospital by the DHS. In any event, the court concluded, “the statute appears inapplicable because it applies to reports made as a result of periodic inspections pursuant to Health and Safety Code section 1279, not the type of report made here in response to a specific complaint lodged with the DHS.”

Public Entities, Privilege and the Public Interest

In addition, although the cuperior court did not expressly address the Attorney General's argument that the subpoena should be quashed under Evidence Code ' 1040, the supreme court found the provision dispositive. Sec. 1040 provides that a public entity may refuse to disclose official information if the privilege is claimed by a person authorized by it to do so, and if such disclosure is against the public interest because the necessity of preserving the confidentiality outweighs the necessity for disclosure. In this case, the investigator based his opinions on “official information” within the meaning of the code ' information acquired in confidence by a public employee in the course of his duty and not officially disclosed to the public. And, the court held, the necessity of preserving such confidentiality with regard to hospital peer review committee records ' which inures to the benefit of the general public by encouraging candid and uninhibited evaluations of physicians by their peers ' here greatly outweighed the necessity of disclosure in the interest of justice.

Peer Review vs. Subsequent Remedial Action

This case contains an intriguing analysis of the inadmissibility of subsequent remedial measures to prove negligence or culpability. This was the plank on which the Court of Appeal rested its decision and with which the California State supreme court disagreed.

While the Court of Appeal “emphasized that employer disciplinary actions have long been held to constitute remedial measures,” in this particular case, the peer review was not convened to investigate misconduct. Nothing in the record indicated that any changes were made in the hospital's protocol for colonoscopy procedures, or that any disciplinary action was taken to make the alleged harm less likely to occur in the future. Most courts addressing analogous provisions concerning evidence of subsequent remedial measures distinguish between an investigation and actual steps taken to correct a problem; post-event investigations do not themselves constitute remedial measures, although they might provide the basis for such measures.

The supreme court saw the Court of Appeals' application of 1151 to the facts of this case as a stretch of the scope of that section, and inconsistent with legislative intent with respect to ' 1157, which does not grant blanket immunity to all things discussed by a peer review committee, but “expressly preclude[s] only the discovery of peer review committee records and the use of involuntary testimony by a person in attendance at the meeting.” The supreme court found that the latter provision would be superfluous if the legislature intended in every case that all evidence regarding hospital peer review was already inadmissible under ' 1151 of the code to prove negligence.

Peer review, according to the California Supreme Court, does not represent a subsequent remedial measure. Therefore, this court concluded that there is no special rule against the admissibility of peer review committee material, and found that the general rule against the admissibility of subsequent remedial measures to prove culpability was inapplicable.

How privileged, how impenetrable, is the peer review privilege? In Fox v. Kramer , 22 Cal. 4th 531, 994 P.2d 343 (Cal. 2000), the Supreme Court of California considered this narrow issue: Could plaintiffs Wendy Fox and her husband, Dr. Richard B. Fox, subpoena a doctor to give expert testimony or refer at trial to his draft preliminary report when his conclusions were based on hospital peer review committee records reviewed in the course of his official duties for a public agency? The court concluded that the answer is no; a plaintiff is not permitted to use a subpoena to accomplish indirectly that which is “forbidden directly.” But that did not necessarily mean that all information brought out in medical peer-review committee proceedings was barred from introduction in court.

The plaintiff in Fox was a physician's wife who underwent a colonoscopy procedure under a form of anesthesia known as “conscious sedation,” in which pain- and anxiety-relieving medication is given. The anesthesia does not render the patient completely unconscious, permitting her to express discomfort or change positions. During the procedure, Mrs. Fox experienced pain. She moaned or asked the physicians to wait, or stop a moment; they did so, administered more medication, and after she indicated that it was all right to continue, completed the procedure. The plaintiff recalled afterward that she moaned and asked the physicians to “wait a minute,” but otherwise did not remember anything about the procedure except two or three periods of consciousness, of 2 or 3 seconds each, during which she felt pain.

In the recovery area, the plaintiff dreamed that she screamed during the colonoscopy, begged the physicians to stop, and fought them off. In the succeeding days, she began to believe that she had been abused during the colonoscopy. She developed a fear of medical personnel and suffered from nightmares. Dr. and Mrs. Fox complained to the hospital.

Peer Review Discussion Following the Foxes' complaint, several physicians discussed the incident at a peer-review committee meeting attended by plaintiff's husband, who took part in the review because of his position at the hospital. Dr. Fox later claimed that one of the nurses who assisted at the colonoscopy stated at the meeting that Mrs. Fox screamed during the procedure.

In September of 1993, Dr. and Mrs. Fox brought an action for malpractice against Mrs. Fox's doctors, Richard J. Kramer and Michael J. Kushlan, and against the hospital where the procedure was performed. They alleged that Mrs. Fox was inappropriately sedated and that the physicians proceeded with the colonoscopy procedure after she withdrew her consent. They sought damages for injuries to Mrs. Fox, including post-traumatic stress disorder, and on behalf of Dr. Fox, for loss of consortium.

More than 3 years after filing their malpractice complaint, the Foxes lodged a complaint with the California Department of Health Services (hereafter DHS). Dr. Michael Schnitzer was assigned to investigate the complaint. He relied substantially on the hospital peer-review committee records in forming his opinions, and he created a report from his findings. Dr. Schnitzer's report was never finalized, and the DHS took no administrative action against the hospital on the basis of the investigation.

Shortly before trial, the plaintiffs subpoenaed the DHS draft preliminary report and received a redacted copy from DHS counsel. Several paragraphs of the report were blacked out or crossed out. The unredacted portions of the report summarized the allegation that Ms. Fox had asked the physicians to stop the colonoscopy procedure. The report's first subsection ' “Patient's Rights” ' was crossed out and initialed by Dr. Schnitzer. That section contained the opinion: “The patient at the time of the procedure was in obvious distress and the procedure should have been stopped.” The last page of the report recites facts from Dr. Kramer's “operative report” to the effect that Mrs. Fox was extremely anxious at the beginning of the procedure and was crying, panting and hyperventilating. The final paragraph stated: “During Fox's procedure, even though her mind was clouded by the medication given, I believe she did ask her physicians to stop the procedure and her wishes were not respected. She did not receive appropriate, considerate and respectful care.”

Four days before trial, plaintiffs moved to augment their expert list to include the author of the DHS report, Dr. Schnitzer, and they subpoenaed his testimony. The DHS, through the state's Attorney General, moved to quash the subpoena on the ground that Dr. Schnitzer's conclusions relied on hospital peer-review materials unavailable to the public under California Evidence Code ' 1157, (which states that records of peer review committee investigations are “privileged” from discovery) and that such conclusions were created by the DHS in confidence in compliance with its statutory mandate to oversee the licensing and regulation of California hospitals. The DHS contended that Dr. Schnitzer's opinions and conclusions were also entitled to the “official information” privilege within California Evidence Code ' 1040, because he could not testify “without immediately implicating and compromising the confidentiality of the materials he reviewed.”

Finding that the hospital's peer-review records were immune from discovery under Cal. Evid. Code ' 1157(a), and that Dr. Schnitzer's testimony would be based on his review of those records, the trial court quashed the subpoena; it also ruled that plaintiffs could not introduce or refer to the draft preliminary report summarizing Dr. Schnitzer's conclusions. In addition, plaintiffs were ordered not to “allude to, reference or disclose to the jury that peer review/quality assurance meetings were conducted.”

Appeal to the Court of Appeal

At trial, without Dr. Schnitzer's report or testimony, the jury found for the defense. Plaintiffs appealed, contending that the superior court erred in excluding Dr. Schnitzer's testimony and the DHS report. The Court of Appeal upheld the trial court's ruling, and the Supreme Court further upheld that court's decision … but not the appellate court's reasoning.

The Court of Appeal held that hospital peer-review evidence was inadmissible under California Evidence Code ' 1151 to prove negligence or culpable conduct. This section of the Evidence Code provides: “When after the occurrence of an event, remedial or precautionary measures are taken, which, if taken previously, would have tended to make the event less likely to occur, evidence of such subsequent measures is inadmissible to prove negligence or culpable conduct in connection with the event.” The court ruled that hospital peer-review committee meetings qualify as subsequent “remedial or precautionary measures” because they typically involve evaluations of the performance and competence of physicians at the hospital, and may result in the revocation, limiting, or denial of staff privileges.

The Court of Appeal acknowledged the absence of California authority on point, but was “convinced that such evidence [from peer-review proceedings] constitutes subsequent remedial or precautionary measures within the meaning of ' 1151.” The appellate court's analysis pointed to the “overwhelming public policy favoring the confidentiality of peer review evidence in a malpractice context,” and the “logical application” to “post-accident investigations” of case law, and reached the conclusion that Evidence Code ' 1151 encompasses workplace discipline.

CA Supreme Court: Same Result, Different Reasoning

The Supreme Court of California saw the Court of Appeal's conclusion on the remedial measure issue as strained and inconsistent with legislative intent with respect to the more apposite statute, Cal. Evid. Code ' 1157, “which expressly preclude[s] only the discovery of peer review committee records and the use of involuntary testimony by a 'person in attendance' at a meeting of a peer review committee.” Sec. 1151 was inapplicable in this instance, the supreme court found, because this case's facts dealt with peer review and the records ensuing from it, not with subsequent remedial action to change in future the procedures followed in operations like Mrs. Fox's.

The immunity described in the Cal. Evid. Code ' 1157, the Supreme Court noted, “extends to, first, the proceedings, and second, the records of the described staff committees. There is a strong public interest in preserving this confidentiality of the medical review process.” On the other hand, ' 1157, subdivision (a), states that the section “[b]y its terms … creates only a privilege against discovery from medical staff committees; it does not create a bar against introduction of evidence” otherwise properly obtained. Fox, 994 P.2d 343, 347 (citing Alexander v. Superior Court , 5 Cal. 4th 1218, 1223, fn. 4, 859 P.2d 96 (Cal. 1993)). This section establishes immunity from discovery but not an evidentiary privilege in the sense that medical staff records are exempt from evidence.

Sec. 1157 goes further and prohibits people who attend these peer review sessions from being compelled to give testimony over whatever transpired within the session. But this section precludes only compelled and not voluntary testimony. The statute “expresses a legislative judgment that the public interest in medical staff candor … requires a degree of confidentiality … It evinces a legislative judgment that the quality of in-hospital medical practice will be elevated by armoring staff inquiries with a measure of confidentiality.” 994 P.2d 343, 348. Prohibiting involuntary testimony serves a fundamental legislative purpose. But the court here noted that such purpose is inapplicable when a physician is willing to testify voluntarily.

The obvious general purpose of ' 1157, the court stated, is to improve the quality of medical care in the hospitals by the use of peer review committees ' if doctors who serve on such committees were subject in malpractice cases to the burdens of discovery and involuntary testimony on the basis of their committee work, the evidentiary burdens could consume large portions of the doctors' time to the prejudice of their medical practices or personal endeavors and could cause many doctors to refuse to serve on them.

Here, the hospital's peer review committee records were immune from discovery under Evidence Code '1157(a). In addition, where, as here, an expert has relied on privileged material to formulate an opinion, the court may exclude his testimony or report as necessary to enforce the privilege, the opinion stated.

The Uncompleted Draft DHS Report

The court found that the DHS was entitled to review the records of the peer review committee only as part of its official, purely investigative, inquiry. Therefore, contrary to plaintiffs' contention, the fact of DHS review did not constitute a general waiver by the hospital of discovery immunity. The court held that Dr. and Mrs. Fox could not accomplish indirectly what was forbidden to them to do directly, ie, obtain the equivalent of discovery of the contents of hospital peer review committee records by subpoenaing the testimony or the report of the DHS investigator who reviewed them in the course of his public duties.

The Foxes' claim that any privilege against disclosure of the contents of the DHS report was waived when the DHS produced it in redacted form in response to their subpoena was also not accepted by the court.

Draft Report Not 'Public' Within Statute

Dr. and Mrs. Fox went on to assert that the Dr. Schnitzer's draft preliminary report should not have been excluded because Health and Safety Code ' 1280, subdivision (e), makes “[a]ll inspection reports and lists of deficiencies … open to public inspection when the state department has received verification that the health facility has received the report from the state department.” The draft preliminary report, which included Dr. Schnitzer's handwritten interlineations and extensive deletions and redactions, was obviously only an uncompleted draft, not a final “inspection report” by the DHS, nor had it been served on the hospital by the DHS. In any event, the court concluded, “the statute appears inapplicable because it applies to reports made as a result of periodic inspections pursuant to Health and Safety Code section 1279, not the type of report made here in response to a specific complaint lodged with the DHS.”

Public Entities, Privilege and the Public Interest

In addition, although the cuperior court did not expressly address the Attorney General's argument that the subpoena should be quashed under Evidence Code ' 1040, the supreme court found the provision dispositive. Sec. 1040 provides that a public entity may refuse to disclose official information if the privilege is claimed by a person authorized by it to do so, and if such disclosure is against the public interest because the necessity of preserving the confidentiality outweighs the necessity for disclosure. In this case, the investigator based his opinions on “official information” within the meaning of the code ' information acquired in confidence by a public employee in the course of his duty and not officially disclosed to the public. And, the court held, the necessity of preserving such confidentiality with regard to hospital peer review committee records ' which inures to the benefit of the general public by encouraging candid and uninhibited evaluations of physicians by their peers ' here greatly outweighed the necessity of disclosure in the interest of justice.

Peer Review vs. Subsequent Remedial Action

This case contains an intriguing analysis of the inadmissibility of subsequent remedial measures to prove negligence or culpability. This was the plank on which the Court of Appeal rested its decision and with which the California State supreme court disagreed.

While the Court of Appeal “emphasized that employer disciplinary actions have long been held to constitute remedial measures,” in this particular case, the peer review was not convened to investigate misconduct. Nothing in the record indicated that any changes were made in the hospital's protocol for colonoscopy procedures, or that any disciplinary action was taken to make the alleged harm less likely to occur in the future. Most courts addressing analogous provisions concerning evidence of subsequent remedial measures distinguish between an investigation and actual steps taken to correct a problem; post-event investigations do not themselves constitute remedial measures, although they might provide the basis for such measures.

The supreme court saw the Court of Appeals' application of 1151 to the facts of this case as a stretch of the scope of that section, and inconsistent with legislative intent with respect to ' 1157, which does not grant blanket immunity to all things discussed by a peer review committee, but “expressly preclude[s] only the discovery of peer review committee records and the use of involuntary testimony by a person in attendance at the meeting.” The supreme court found that the latter provision would be superfluous if the legislature intended in every case that all evidence regarding hospital peer review was already inadmissible under ' 1151 of the code to prove negligence.

Peer review, according to the California Supreme Court, does not represent a subsequent remedial measure. Therefore, this court concluded that there is no special rule against the admissibility of peer review committee material, and found that the general rule against the admissibility of subsequent remedial measures to prove culpability was inapplicable.