#27615, #27626, #27631-r-GAS

2016 S.D. 75

IN THE SUPREME COURT

OF THE

STATE OF SOUTH DAKOTA

* * * *

(#27615)

RYAN NOVOTNY, Plaintiff and Appellee,

v.

SACRED HEART HEALTH

SERVICES, a South Dakota

Corporation d/b/a AVERA SACRED

HEART HOSPITAL, AVERA HEALTH,

a South Dakota Corporation, Defendants and Appellants,

and

ALLEN A. SOSSAN, D.O. also known

as ALAN A. SOOSAN, also known as

ALLEN A. SOOSAN, RECONSTRUCTIVE

SPINAL SURGERY AND ORTHOPEDIC

SURGERY, P.C., a New York Professional

Corporation, LEWIS & CLARK

SPECIALTY HOSPITAL, LLC, a South

Dakota Limited Liability Company, Defendants.

---------------------------------------------------------------------------------------------------------------------

(#27626)

CLAIR ARENS and DIANE ARENS, Plaintiffs and Appellees,

v. 

CURTIS ADAMS, DAVID BARNES,

MARY MILROY, ROBERT NEUMAYR,

MICHAEL PIETILA, and DAVID WITHROW, Defendants and Appellants,

* * * *

APPEAL FROM THE CIRCUIT COURT OF

THE FIRST JUDICIAL CIRCUIT

YANKTON COUNTY, SOUTH DAKOTA

* * * *

THE HONORABLE BRUCE V. ANDERSON

Judge

* * * *

ARGUED OCTOBER 4, 2016 

OPINION FILED 10/26/16
 and

ALAN A. SOSSAN, also known as 

ALLEN A. SOOSAN, also known as

ALLEN A. SOOSAN, D.O., SACRED 

HEART HEALTH SERVICES, a South 

Dakota Corporation d/b/a AVERA SACRED 

HEART HOSPITAL, AVERA HEALTH, a 

South Dakota Corporation, MATTHEW 

MICHELS, THOMAS BUTTOLPH, DOUGLAS 

NEILSON, CHARLES CAMMOCK, LEWIS 

& CLARK SPECIALTY HOSPITAL, LLC, a 

South Dakota Limited Liability Company, 

DON SWIFT, DAVID ABBOTT, JOSEPH 

BOUDREAU, PAULA HICKS, KYNAN TRAIL, 

SCOTT SHINDLER, TOM POSCH, 

DANIEL JOHNSON, NUETERRA

HEALTHCARE MANAGEMENT, LLC,

VARIOUS JOHN DOES and 

VARIOUS JANE DOES, Defendants.

---------------------------------------------------------------------------------------------------------------------

(#27631)

CLAIR ARENS and DIANE ARENS, Plaintiffs and Appellees,

v. 

LEWIS & CLARK SPECIALTY HOSPITAL, 

LLC, a South Dakota Limited Liability 

Company, Defendant and Appellant,

 and

ALLEN A. SOSSAN, D.O. also known as 

ALAN A. SOOSAN, also known as

ALLEN A. SOOSAN, RECONSTRUCTIVE

SPINAL SURGERY AND ORTHOPEDIC

SURGERY, P.C., a New York Professional

Corporation, SACRED HEART HEALTH 

SERVICES, a South Dakota Corporation, 

d/b/a AVERA SACRED HEART HOSPITAL, 

AVERA HEALTH, a South Dakota Corporation, 

DON SWIFT, D.M., KYNAN TRAIL, M.D. 

CURTIS ADAMS, DAVID BARNES, 

THOMAS BUTTOLPH, MARY MILROY, 

DOUGLAS NEILSON, ROBERT NEUMAYR, 

MICHAEL PIETILA, CHARLES CAMMOCK, 

DAVID WITHROW, VARIOUS JOHN DOES, 

and VARIOUS JANE DOES, Defendants.
* * * *

LESLIE A. BRUECKNER of

Public Justice, P.C.

Oakland, California

MICHAEL D. BORNITZ

ROBERT D. TRZYNKA

BRENDAN F. PONS of

Cutler Law Firm, LLP

Sioux Falls, South Dakota

and

TIMOTHY L. JAMES of

James & Larson Law 

Yankton, South Dakota Attorneys for plaintiffs and 

appellees.

EDWIN E. EVANS

MARK HAIGH of

Evans, Haigh & Hinton, LLP

Sioux Falls, South Dakota Attorneys for defendants and 

appellants Curtis Adams, David 

Barnes, Mary Milroy, Robert 

Neumayr, Michael Pietila & 

David Withrow #27626.

ROGER A. SUDBECK

MATTHEW D. MURPHY of

Boyce Law Firm, LLP

Sioux Falls, South Dakota Attorneys for defendants and 

appellants Sacred Heart Health 

Services & Avera Health 

#27615.

JEFF WRIGHT

JOHN GRAY of

Heidman Law Firm, LLP

Sioux City, Iowa Attorneys for defendant and 

appellant Lewis & Clark 

Specialty Hospital, LLC

#27631.

GREGORY J. BERNARD of

Thomas Braun 

 Bernard & Burke, LLP

Rapid City, South Dakota Attorneys for defendant and 

appellant Kynan Trail joining 

#27631.
#27615, #27626, #27631

-1-

SEVERSON, Justice

[¶1.] In this action against various health organizations and individuals 

involved at those organizations, Plaintiffs moved to compel production of peer 

review materials and asked the circuit court to find SDCL 36-4-26.1, which grants 

privilege to peer review materials, unconstitutional. The circuit court determined 

that the statute was constitutional but only if it applied a “crime-fraud exception.”

It determined that the exception had been met and ordered Defendants to produce, 

without in camera review, “objective information gathered or considered by the peer 

review committees.” The court also ordered any other “remaining materials” to be 

submitted to the court for in camera review. We granted Defendants’ petition for 

intermediate appeal. Defendants assert that the court erred by compelling 

production of third-party items held by a peer review committee and by creating a 

crime-fraud exception to SDCL 36-4-26.1. We reverse and remand.

Background

[¶2.] Plaintiffs in this action, Ryan Novotny and Clair Arens, were treated 

by Dr. Alan Sossan. After treatment, Plaintiffs filed lawsuits against Dr. Sossan, 

his medical clinic, Avera Sacred Heart Hospital, Lewis & Clark Specialty Hospital, 

and other individual defendants, collectively referred to throughout this opinion as 

Defendants. The Plaintiffs alleged various causes of action including negligence, 

negligent credentialing, fraud, deceit, bad faith peer review, unjust enrichment, 

racketeering, and conspiracy. When Plaintiffs sought production of documents from 

Defendants, Defendants asserted that some of the materials sought were peer 

review materials protected under SDCL 36-4-26.1. Plaintiffs moved to compel 
#27615, #27626, #27631

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production and asked the circuit court to determine that SDCL 36-4-26.1, protecting 

“[t]he proceedings, records, reports, statements, minutes, or any other data 

whatsoever, of any committee described in § 36-4-42[,]” is unconstitutional. 

[¶3.] The court held a hearing on the matter and issued a memorandum 

decision.1 It determined that SDCL 36-4-26.1 is constitutional only if an exception 

applies. Therefore, it created and applied a “crime-fraud exception.” Under its 

exception, the court determined that Plaintiffs “submitted sufficient evidence to 

make out a prima facie case of fraud and deceit sufficient for [the] court to allow 

access to the peer review records of the Defendants.” It determined that an in 

camera review was not necessary before production of some peer review material to 

Plaintiffs. It directed that the “objective information gathered or considered by the 

peer review committees . . . shall be disclosed and copies provided to Plaintiff’s 

counsel under a protective order without in camera inspection, as that information 

is not considered private deliberative information as contemplated by the statute.”2 

 

1. The court directed the memorandum decision to be filed in all of the cases 

that it collectively referred to as the “Sossan Litigation.” There are multiple

cases pending before the circuit court that involve the peer review question.

2. The court ordered production of the following documents from the peer review 

committees under the theory that they contained objective information not 

subject to protection: 

(1) [T]he applications submitted by Dr. Sossan in order to obtain 

privileges

(2) [A]ll attachments and collateral information that were attached to 

those applications

(3) [A]ll documents that were generated or obtained by the peer review 

committees to obtain other background information of Dr. Sossan, 

including any criminal background checks . . . and all materials 

(continued . . .)
#27615, #27626, #27631

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It further directed that the remaining materials be submitted to the circuit court for 

in camera review with a privilege log as required.

[¶4.] We granted Defendants’ petition for an intermediate appeal from the 

circuit court’s order. Defendants contend that the court erred in two aspects. First, 

Defendants assert that the court erred by compelling peer review committees to 

produce documents obtained by the committees from independent sources. Second, 

Defendants maintain that the court erred by judicially creating a crime-fraud 

exception to SDCL 36-4-26.1.3

_________________________________________________

(. . . continued)

received by the peer review committees from the National Medical 

Practitioners Databank, if any

(4) [A]ny other objective information they received in their due 

diligence endeavor to make ‘reasonable effort to obtain the facts of 

the matter under consideration’

(5) [A]ll complaints filed against Dr. Sossan by any person or other 

medical provider . . . between the time Dr. Sossan was granted 

privileges at their facilities and his termination, and any final 

resolution or other action taken as a result of such complaint.

3. In the course of these cases, the circuit court addressed a number of issues of 

first impression and made various determinations that we are not deciding in 

this intermediate appeal. The circuit court determined that this Court would 

recognize a common law action of negligent credentialing. Although we are 

addressing discovery issues on such a claim, we offer no decision on whether 

we would recognize that claim in this State. In addition, Defendants have 

indicated that they may appeal the circuit court’s determination “that 

hospitals owe an independent physician’s patients more than a reasonable 

hospital duty, but actually owe those patients a fiduciary duty.” We do not 

decide that matter. Nor do we decide whether the claims presented by 

Plaintiffs are medical malpractice ones barred by the statute of limitations. 

Finally, we do not consider whether the information in dispute is protected by 

any federal provisions.
#27615, #27626, #27631

-4-

Standard of Review

[¶5.] “Ordinarily, ‘we review the circuit court’s rulings on discovery matters 

under an abuse of discretion standard.’” Milstead v. Smith, 2016 S.D. 55, ¶ 7, 883 

N.W.2d 711, 716 (quoting Anderson v. Keller, 2007 S.D. 89, ¶ 5, 739 N.W.2d 35, 37). 

“However, when we are asked to determine whether the circuit court’s order 

violated a statutory privilege, it raises a question of statutory interpretation 

requiring de novo review.” State v. Vargas, 2015 S.D. 72, ¶ 19, 869 N.W.2d 150, 158 

(quoting Andrews v. Ridco, 2015 S.D. 24, ¶ 14, 863 N.W.2d 540, 546).

Analysis

[¶6.] We have not previously addressed the questions whether litigants may 

discover independent–source material directly from a peer review committee or 

whether an exception to SDCL 36-4-26.1 exists. We address these narrow issues in 

this intermediate appeal. First, we consider whether Plaintiffs may obtain 

materials directly from peer review committees. 

[¶7.] SDCL 36-4-42 establishes that:

a peer review committee is one or more persons acting as any 

committee of a state or local professional association or society, 

any committee of a licensed health care facility or the medical 

staff of a licensed health care facility, or any committee 

comprised of physicians within a medical care foundation, 

health maintenance organization, preferred provider 

organization, independent practice association, group medical 

practice, provider sponsored organization, or any other 

organization of physicians formed pursuant to state or federal 

law, that engages in peer review activity. For the purposes of 

this section, a peer review committee is also one or more persons 

acting as an administrative or medical committee, department, 

section, board of directors, shareholder or corporate member, or 

audit group, including the medical audit committee, of a licensed 

health care facility.
#27615, #27626, #27631

-5-

Peer review committees engage in activities defined by SDCL 36-4-43: 

For the purposes of §§ 36-4-25, 36-4-26.1 and 36-4-42, peer 

review activity is the procedure by which peer review 

committees monitor, evaluate, and recommend actions to 

improve the delivery and quality of services within their 

respective facilities, agencies, and professions, including 

recommendations, consideration of recommendations, actions 

with regard to recommendations, and implementation of 

actions. Peer review activity and acts or proceedings 

undertaken or performed within the scope of the functions of a 

peer review committee include:

(1) Matters affecting membership of a health professional on the 

staff of a health care facility or agency;

(2) The grant, delineation, renewal, denial, modification, 

limitation, or suspension of clinical privileges to provide health 

care services at a licensed health care facility;

(3) Matters affecting employment and terms of employment of a 

health professional by a health maintenance organization, 

preferred provider organization, independent practice 

association, or any other organization of physicians formed 

pursuant to state or federal law;

(4) Matters affecting the membership and terms of membership 

in a health professional association, including decisions to 

suspend membership privileges, expel from membership, 

reprimand, or censure a member, or other disciplinary actions;

(5) Review and evaluation of qualifications, competency, 

character, experience, activities, conduct, or performance of any 

health professional, including the medical residents of health 

care facility; and

(6) Review of the quality, type, or necessity of services provided 

by one or more health professionals or medical residents, 

individually or as a statistically significant group, or both.

[¶8.] The privilege granted to materials of a peer review committee is found 

in SDCL 36-4-26.1. It provides:
#27615, #27626, #27631

-6-

The proceedings, records, reports, statements, minutes, or any 

other data whatsoever, of any committee described in § 36-4-42,

relating to peer review activities defined in § 36-4-43, are not 

subject to discovery or disclosure under chapter 15-6 or any 

other provision of law, and are not admissible as evidence in any 

action of any kind in any court or arbitration forum, except as

hereinafter provided. No person in attendance at any meeting of 

any committee described in § 36-4-42 is required to testify as to 

what transpired at such meeting. The prohibition relating to 

discovery of evidence does not apply to deny a physician access 

to or use of information upon which a decision regarding the 

person’s staff privileges or employment was based. The 

prohibition relating to discovery of evidence does not apply to 

deny any person or the person’s counsel in the defense of an 

action against that person access to the materials covered under 

this section.

The circuit court determined that the statute contemplates deliberative information 

and therefore objective information within the committee’s possession was not 

subject to the privilege. 

[¶9.] The statute’s language “of any committee” encompasses and protects 

“[t]he proceedings, records, reports, statements, minutes, or any other data 

whatsoever” that is within the committee’s possession if it “relat[es] to peer review 

activities defined in § 36-4-43,” regardless of its origin. SDCL 36-4-26.1; 36-4-43. 

The circuit court was correct that the statute protects deliberative information. 

However, the broad language protects more than deliberative materials. See 

Shamburger v. Behrens, 380 N.W.2d 659, 665 (S.D. 1986) (“[S]taff competency 

evaluations are not discoverable materials” under SDCL 36-4-26.1.). Peer review 

activity is broader than deliberation as it is defined as “the procedure by which peer 

review committees monitor, evaluate, and recommend actions to improve the 

delivery and quality of services within their respective facilities, agencies, and 

professions, including recommendations, consideration of recommendations, actions 
#27615, #27626, #27631

-7-

with regard to recommendations, and implementation of actions.” SDCL 36-4-43 

(emphasis added). 

[¶10.] Furthermore, the ordinary meaning of the statutory terms records and 

any other data whatsoever encompasses objective facts. See Krusac v. Covenant 

Med. Ctr., Inc., 865 N.W.2d 908, 913 (determining that the ordinary meaning of the 

statutory terms record and data encompass objective facts). Such an interpretation 

is further supported by the statute’s exceptions. Although the exceptions are not 

issues in this appeal, the language of the exceptions is important when construing 

the language in SDCL 36-4-26.1. See In re Petition for Declaratory Ruling re SDCL 

62-1-1(6), 2016 S.D. 21, ¶ 9, 877 N.W.2d 340, 344 (“[W]e give words their plain 

meaning and effect, and read statutes as a whole, as well as enactments relating to 

the same subject.”). One of the two exceptions to the privilege allows a physician 

“access to or use of information upon which a decision regarding the person’s staff 

privileges or employment was based.” SDCL 36-4-26.1; SDCL 36-4-26.2. The 

ordinary meaning of information includes objective facts. Thus, if the Legislature 

did not contemplate or intend that the statute protect objective facts then it would 

not have needed to create such an exception. 

[¶11.] Defendants concede that some documents within the possession of a 

peer review committee may be discovered from other sources. Defendants have 

referred this Court to numerous decisions from other jurisdictions generally holding 

that litigants may obtain, from independent sources, some documents given to peer 

review committees. Many of those cases interpret state statutes that explicitly 
#27615, #27626, #27631

-8-

address the issue.4 South Dakota does not have a similar provision. Our statutes 

are silent on documents that peer review committees obtain from other sources. 

[¶12.] Relying on and quoting Wheeling Hospital, Sacred Heart advocates for 

the following rule: 

information created by or at the behest of a peer review 

committee, including a physician’s application for privileges, is 

protected and remains protected at all times, regardless of who 

obtains it; items from independent sources, not generated at the 

behest of a committee, which were gathered and/or reviewed by 

a peer review committee do not become privileged simply 

because a committee gathered and/or reviewed them; and such 

independent source items are discoverable “from the original, 

external sources, but not from the peer review committee, itself.” 

According to Defendants, information “not generated [by or] at the behest of a 

committee” falls outside of the protection of SDCL 36-4-26.1. 

 

4. See Ex parte Qureshi, 768 So.2d 374, 378 (Ala. 2000) (addressing Ala. Code § 

22-21-8(b), which stated in part that “[i]nformation, documents, or records 

otherwise available from original sources are not to be construed as being 

unavailable for discovery or for use in any civil action merely because they 

were presented or used in preparation of [peer review activities]”); McGee v. 

Bruce Hosp. Sys., 439 S.E.2d 257, 259 (S.C. 1993) (interpreting S.C. Code 

Ann. § 40-71-20 providing, “[i]nformation, documents, or records which are 

otherwise available from original sources are not immune from discovery or 

use in a civil action merely because they were presented during the 

committee proceedings”); Day v. Finley Hosp., 769 N.W.2d 898, 901 (Iowa Ct. 

App. 2009) (construing Iowa Code § 147.135(2), which provided that 

“[i]nformation or documents discoverable from sources other than the peer 

review committee do not become nondiscoverable from the other sources 

merely because they are made available to or are in the possession of a peer 

review committee”); State ex rel. Wheeling Hosp., Inc. v. Wilson, 782 S.E.2d 

622, 630 (W. Va. Ct. App. 2016) (determining scope of discovery under W. Va. 

Code § 30-3C-3 (1980) providing in part that “information, documents or 

records otherwise available from original sources are not to be construed as 

immune from discovery or use in any civil action merely because they were 

presented during the proceedings of such organization”).
#27615, #27626, #27631

-9-

[¶13.] Such a rule is consistent with our broad statutory scheme. By their 

plain language, the statutes protect the “proceedings, records, reports, statements, 

minutes, or any other data whatsoever . . . relating to” the “procedure by which [a]

peer review committee” engages in its functions. SDCL 36-4-26.1; SDCL 36-4-42; 

SDCL 36-4-43. Protection of information generated “by or at the behest of a peer 

review committee” protects the peer review process as contemplated by the 

statutory scheme. At the same time, it prevents an unreasonably broad application 

of the privilege, such as protecting documents simply because the committee 

received them. See State v. Karlen, 1999 S.D. 12, ¶ 31, 589 N.W.2d 594, 601 

(“[P]rivileges are to be construed narrowly as they constitute a barrier to the search 

for truth.”). The rule balances the interests that the medical community and the

public have in both allowing frank and effective peer review and in uncovering and 

recovering from acts of fraud, deceit, and the like. See Pawlovich v. Linke, 2004 

S.D. 109, ¶ 14, 688 N.W.2d 218, 223 (recognizing “the important role played by 

doctors, attorneys[,] and other professionals in reviewing members of their 

respective profession. Professional societies, through peer review, can and do 

perform a great public service by exercising control over those persons placed in a 

position of public trust.”). It is evident that the purpose of the peer review statute is 

to encourage full candor in the peer review process, and that policy is advanced 

when information created by or at the behest of a peer review committee is 

protected. Although Plaintiffs are not entitled to discover any of the materials 

within the peer review committee’s possession, Plaintiffs and Defendants may 

obtain information from other sources in accordance with the rule stated above.
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-10-

The constitutionality of SDCL 36-4-26.1

[¶14.] In light of the broad protection granted under SDCL 36-4-26.1, the 

circuit court determined that the statute did not pass constitutional scrutiny unless 

it applied an exception. Accordingly, it crafted and applied a “crime-fraud 

exception.” It appears that the circuit court determined that the exception was 

necessary in order to protect Plaintiffs’ constitutional right to open courts. 

Plaintiffs also seem to assert that the exception is necessary to guarantee their 

right to procedural due process. The court determined that the statute survived a 

substantive due process challenge, and the parties have not asked us to reconsider 

that determination in this intermediate appeal. 

[¶15.] First, we consider Plaintiffs’ right to procedural due process. “To 

establish a procedural due process violation, a plaintiff must demonstrate that he 

has a protected property or liberty interest at stake and that he was deprived of 

that interest without due process of law.” Osloond v. Farrier, 2003 S.D. 28, ¶ 16, 

659 N.W.2d 20, 24 (quoting Hopkins v. Saunders, 199 F.3d 968, 975 (8th Cir. 1999)). 

“[T]he individual must be deprived of this right by a state actor.” Id..

[¶16.] Plaintiffs invite us to weigh the public policy of peer review 

confidentiality against their need for evidence and of revealing instances of bad 

faith peer review. However, neither the circuit court nor Plaintiffs have identified a 

protected liberty or property interest at stake that has been deprived by the State. 

Instead, it appears that Plaintiffs assert that their due process is violated by the 

privilege because it violates their constitutional right to have a remedy by due 

course of law. The right to have a remedy by due course of law is a separate 
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-11-

constitutional right under S.D. Const. art. VI, § 20. See infra ¶ 19. “A property 

interest worthy of due process protection must be granted or defined by a source 

independent from the Constitution, such as state law.” Hollander v. Douglas Cty, 

2000 S.D. 159, ¶ 12, 620 N.W.2d 181, 185.

[¶17.] Plaintiffs primarily rely on Adams v. St. Francis Regional Medical 

Center, 955 P.2d 1169, 1184 (Kan. 1998), to contend that their constitutional rights 

are violated under SDCL 36-4-26.1 and that the privilege must yield to their

interest in peer review materials. Adams is distinguishable. In Adams, parents 

alleged that their daughter died due to negligent treatment provided by a doctor 

and medical center. Adams, 955 P.2d at 1171. Plaintiffs’ attorney obtained an 

investigation file, including disciplinary forms, from the State Board of Nursing and 

used the information within those documents in depositions. Id. at 1172. The 

medical center sought a protective order limiting the use of the documents. It 

contended that the Board had violated confidentiality statutes and that disciplinary 

forms “were prepared in conjunction with peer review” and thus protected. Id. The 

lower court determined that the documents were “privileged and [it] quashed 

depositions of persons named in them[.]” Id. at 1180. The Kansas Supreme Court 

explained that this effectively prevented plaintiffs “from developing facts that they 

could have and probably would have developed had it not been for plaintiffs’ 

obtaining information from the Board’s documents.” Id. The court noted that “[t]he 

dilemma thus created for the plaintiffs runs counter to at least one of the principles 

that traditionally guide courts in making decisions concerning confidential 

material—that a party is required to exhaust available alternative sources of 
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information before seeking a court’s order compelling discovery.” Id. After 

weighing plaintiffs’ right to due process and the interest in creating a peer review 

privilege, the court determined that the lower “court’s protective order and order 

granting other discovery relief denied plaintiff . . . access [(to relevant facts)] and 

thus violated plaintiffs’ right to due process and a fair determination of their 

malpractice action against the defendants.” Id. at 1187.

[¶18.] The situation that existed in Adams does not exist in this case. 

Plaintiffs have not demonstrated that they have no other access to information 

necessary for the causes of action that they are claiming. Plaintiffs’ causes of action 

of fraud and deceit and negligent credentialing do not require evidence directly from 

the peer review committee. Minnesota’s Supreme Court has explained that 

“negligence [can] be shown on the basis of what was actually known or what should 

have been known at the time of the credentialing decision.” Larson v. Wasemiller, 

738 N.W.2d 300, 310 (Minn. 2007) (determining that because “the confidentiality 

provisions of the peer review statute do not preclude the presentation of evidence in 

defense of a negligent–credentialing claim, . . . the confidentiality provision is not 

facially unconstitutional”). Similarly, deceit includes “[t]he assertion, as a fact, of 

that which is not true, by one who has no reasonable ground for believing it to be 

true[.]” SDCL 20-10-2 (2). Thus, Plaintiffs, who have provided the circuit court 

with affidavits that set forth information given to the committee, have 

demonstrated that they are able to obtain evidence that goes to the heart of their 

claims. In addition, we have explained what information Plaintiffs may obtain from 

sources other than a peer review committee.
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[¶19.] We next address the circuit court’s determination that a “crime-fraud 

exception” is necessary to protect Plaintiffs’ constitutional right to open courts. S.D. 

Const. art. VI, § 20 provides: “All courts shall be open, and every man for an injury 

done him in his property, person or reputation, shall have remedy by due course of 

law, and right and justice, administered without denial or delay.” According to the 

court, Plaintiffs asserted that the privilege violates their right of access to the 

courts “by depriving them of the best and most relevant information to establish 

their claim of fraud and deceit or that the peer review committees here acted 

improperly or in bad faith.” Notably, the Plaintiffs have not provided authority for 

the proposition that their right under S.D. Const. art. VI, § 20 is violated when a 

litigant is denied access to the best and most relevant information to establish their 

claim. “We have interpreted the ‘open courts’ provision as a ‘guarantee that for 

such wrongs as are recognized by the laws of the land the courts shall be open and 

afford a remedy.’” Green v. Siegel, Barnett & Schutz, 1996 S.D. 146, ¶ 13, 557 

N.W.2d 396, 399-400 (quoting Kyllo v. Panzer, 535 N.W.2d 896, 901). “We have held 

that reasonable conditions on a cause of action are not unconstitutional.” Id. 

[¶20.] The Connecticut Supreme Court has addressed this issue in the 

context of its psychiatrist-patient privilege. See Falco v. Institute of Living, 757 

A.2d 571, 577 (Conn. 2000). Similar to South Dakota, Connecticut’s constitution 

provides: “All courts shall be open, and every person, for an injury done to him in 

his person, property or reputation, shall have remedy by due course of law, and 

right and justice administered without sale, denial or delay.” Conn. Const. art. I, § 

10. In Falco, the Connecticut Supreme Court determined that its “right to redress” 
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-14-

provision does not permit the court to override the psychiatrist-patient privilege. 

Id. at 577. It further explained that it was “unpersuaded that the right to redress is 

implicated at all,” finding that “[t]he psychiatrist-patient privilege merely restricts 

the discovery and the availability of evidence . . . the . . . privilege is no different 

from other common privileges such as the attorney-client or spousal privileges” and 

plaintiff “failed to demonstrate that the privilege limits or impairs the cause of 

action itself.” Id.

[¶21.] Likewise, South Dakota’s peer review privilege does not restrict or 

destroy Plaintiffs’ ability to bring their causes of action. See Green, 1996 S.D. 146, ¶ 

33, 557 NW.2d at 405 (holding that statute of limitations did not “restrict or destroy 

the right to bring a cause of action for legal malpractice, but rather, only 

establish[ed] the period of time in which a plaintiff must assert this right.”). 

Although the peer review privilege prevents Plaintiffs from discovering material 

directly from a peer review committee, it does not bar causes of action or abolish the 

remedy for those actions. Additionally, as we now hold, Plaintiffs may obtain some 

of the information given to the peer review committees from independent sources.

[¶22.] The circuit court and Plaintiffs note that the “crime-fraud exception” is 

necessary to ensure that the privilege is not abused. They point out that other 

privileges have a similar exception, such as the crime or fraud exception to the 

attorney-client privilege. That exception is a codified one. See SDCL 19-19-

502(d)(1) (“There is no privilege under this section: (1) Furtherance of crime or 

fraud. If the services of the lawyer were sought or obtained to enable or aid anyone 

to commit or plan to commit what the client knew or reasonably should have known 
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-15-

to be a crime or fraud[.]”). This Court has recognized a limited exception to the 

spousal privilege. In State v. Witchey, 388 N.W.2d 893 (S.D. 1986), we determined 

that where a witness spouse is an active participant in patently criminal activity, 

the defendant may not prevent the “spouse’s voluntary testimony about a 

communication during joint participation in a crime because that communication 

does not fall within the definition of SDCL [19-19-504].” We created such an 

exception despite the fact that the Legislature has recognized other exceptions to 

the privilege and the joint-participant exception is not among them. See SDCL 19-

19-504. 

[¶23.] Nevertheless, carving out an exception in this case is a task better left 

for the Legislature, which by statute created the peer review privilege. Despite the 

existence of crime or fraud exceptions to other privileges, in this case, we need not 

recognize ones in addition to the statutory ones found in SDCL 36-4-26.1 and SDCL

36-4-26.2. Plaintiffs may obtain certain information from independent sources. The 

availability of that information from sources outside the peer review committees

allows Plaintiffs access to information that may expose alleged fraudulent activity 

and allow Plaintiffs to present their case. Their right to open courts is not violated. 

Conclusion

[¶24.] The circuit court erred when it ordered Defendants to produce 

materials in the possession of medical peer review committees. Furthermore, no 

crime-fraud exception exists to SDCL 36-4-26.1. We reverse and remand with 

instructions to vacate the circuit court’s order compelling production of documents 

protected by peer review.
#27615, #27626, #27631

-16-

[¶25.] GILBERTSON, Chief Justice, and MYREN and CUTLER, Circuit 

Court Judges, and STEELE, Retired Circuit Court Judge, concur.

[¶26.] MYREN, Circuit Court Judge, sitting for ZINTER, Justice, 

disqualified.

[¶27.] CUTLER, Circuit Court Judge, sitting for WILBUR, Justice, 

disqualified.

[¶28.] STEELE, Retired Circuit Court Judge, sitting for KERN, Justice, 

disqualified.