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Whistleblowing and Peer Review
Last month, we discussed the fact that one long-settled aspect of the California Supreme Court's peer-review jurisprudence is the exhaustion-of-remedies doctrine, which holds that a doctor aggrieved by a privileging decision must exhaust all available peer-review remedies before initiating a tort action. We stated that two of California's intermediate appellate courts addressed doctors' ' 1278.5 whistleblower claims ' with diametrically opposed results. The court in Nesson v. N. Inyo Cnty. Local Hosp. Dist., 204 Cal. App. 4th 65 (2012), applied the Westlake Cmty. Hosp. v. Superior Court, 17 Cal. 3d 465 (1976) exhaustion rule and held (without much explanation) that a doctor's whistleblower claim was barred because he did not exhaust administrative remedies. But on materially similar facts, the court in Fahlen v. Sutter Cent. Valley Hosps., 208 Cal. App. 4th 557 (2012), held that exhaustion of ' 1278.5 claims is not required because the statute displaced Westlake's common-law exhaustion requirement. Although they reached opposing results, both the Nesson and the Fahlen courts embraced all-or-nothing approaches.
The Exhaustion Doctrine
If the Fahlen court were correct in concluding that ' 1278.5 displaces the exhaustion doctrine enunciated in Westlake, the next task would be to identify the scope of that displacement. Does the statute completely displace the Westlake doctrine in all cases (as Fahlen assumes)? Or does the statute only partially displace the doctrine, and if so, in what circumstances? One way to assess the proper scope of displacement is to analyze the remedy a doctor seeks in a ' 1278.5 claim and whether defendants would need to raise issues of medical competence to prepare their defense. If neither the remedies sought nor the defenses pursued would touch on matters of medical competence or other core concerns of the peer-review process, then the purposes underlying the Westlake exhaustion doctrine and the whistleblower statute may not conflict, and exhaustion may be unnecessary. But ' 1278.5 claims should not be allowed to proceed if they would usurp the proper role of peer-review proceedings to ferret out medical incompetence.
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