Court Opinion

ID: 9753726
Source: CourtListenerOpinion
Date Created: 2023-08-28 19:24:21.230273+00
Date Added: 2024-06-11T09:54:13.455376
License: Public Domain

Concurring Opinion by
WILNER, J.
I concur in the result because I agree that private hospitals are not governmental administrative agencies and, in considering common law breach of contract or tort actions based on hospital credentialing decisions, courts should not apply the test applicable to judicial review of agency decisions. The Court of Special Appeals, in my view, made two errors. First, because the parties conceded at trial that the administrative law test was applicable, the intermediate appellate court should have held any complaint about the use of that standard unpreserved for appellate review. The second error was the substantive one of adopting that standard. But for the fact that the Court of Special Appeals chose to reach the issue and apply that erroneous standard of review in a reported decision, this case would not even merit attention by this Court.
Unfortunately, in attempting to state the proper standard of judicial review, this Court has sown some confusion and has not given clear guidance to the trial courts in how to handle motions for summary judgment (or to dismiss for failure to state a claim upon which relief can be granted) in these kinds of cases. I believe that the standard was set in Levin v. Sinai *545Hosp. of Balto., 186 Md. 174, 46 A.2d 298 (1946)—a standard that has been adopted in other States and that works quite well. I would hold, without embellishment, that the appropriate standard to apply when a credentialing decision made by a private hospital is challenged, whether in an action for injunctive relief or in an action to recover money damages for breach of contract or tort, are those set forth in Levin.
In Levin, we established the basic principle that “a private hospital has the right to exclude any physician from practicing therein, and such exclusion rests within the sound discretion of the managing authorities.” Id. at 179-80, 46 A.2d at 301. That principle is, of course, now subject to supervening civil rights laws that were not in effect when Levin was decided and that prohibit discrimination on the basis of race, religion, national origin, gender, age, or disability, the remedy for which is ordinarily committed by statute to Federal or State administrative agencies. Applying the normal “business judgment rule” that generally precludes judges and juries from second-guessing basic business decisions made by a private corporation and thereby interfering with the internal management of the corporation, we further held in Levin that it was not the policy of the State “to interfere with the power of the governing body of a private hospital to select its own medical staff.” Id. at 180, 46 A.2d at 301. That principle, I believe, should apply consistently, whether the relief sought is an injunction to restrain the hospital from denying or terminating privileges, as in Levin, or damages for breach of contract or tort. The nature of the relief sought should not affect the underlying principle of judicial restraint.
We have recognized, and the Court seems to confirm today, that, if a private entity, including a hospital, through by-laws or otherwise, establishes either procedures in the nature of a grievance mechanism, to review adverse decisions affecting continued employment or affiliation, or substantive standards to govern those kinds of decisions, those procedures or standards may, under some circumstances, be regarded as contractual in nature. See Suburban Hospital v. Dwiggins, 324 Md. 294, 596 A.2d 1069 (1991). To the extent that they are so *546regarded and an allegation is made that they have been violated in some material and prejudicial way, an action for breach of contract may lie.
As the Court notes, such an action should be treated like any other breach of contract action. It is incumbent upon the plaintiff to show what the contract was and how it was violated. If there is no genuine dispute of material fact regarding the nature, existence, or relevant terms of the alleged contract and it is clear as a matter of law that the applicable procedures and standards were followed, no breach has occurred and summary judgment or dismissal is permissible. It is not the court’s role to second-guess the decision emanating from the hospital’s grievance or review procedure, for that is not the focus of the action. The contract, if there is one, is not one of perpetual affiliation, but embraces only the procedure and standards for terminating the affiliation.
The Court seems to waffle with respect to tort actions, however. In my view, tort actions should also be governed by the principles enunciated in Levin. Courts are enjoined not to interfere with the internal management and basic business decisions of private corporations, and, as the West Virginia court so aptly stated in Mahmoodian v. United Hosp. Ctr., 185 W.Va. 59, 404 S.Ed.2d 750 (1991), that includes decisions by private hospitals regarding their medical staff. Obviously, a decision to terminate privileges will interfere with the doctor’s ability to treat patients at the hospital, and, if the decision becomes public, it may disparage the doctor’s professional reputation. Those are simply consequences of the business and medical decisions made by the hospital, however, the same that may be suffered by any person whose employment or affiliation is terminated by an employer. Application of the normal business judgment rule in this context does not immunize the hospital or its officials from all tort liability, but it does preclude plaintiffs from circumventing the rule by dressing their complaints about the decision itself in the form of a tort action. If, under the standards set forth in Levin, the plaintiff would not be entitled, as a matter of substantive law, to injunctive relief to preclude the hospital from taking *547the action in the first instance, the plaintiff should not be able to recover tort or contract damages based on the consequences of the action having been taken.
The rules set forth in Levin can and should be applied in a consistent manner. If the gravamen of the action is the credentialing decision itself — not, for example, published statements about it that may be unprivileged and defamatory — and a resolution of the complaint would require a judge or jury to determine whether, in their view, the decision was right or wrong or fair or unfair, the action simply will not lie. That should be the focus of the court in response to a motion for summary judgment.
The Court’s opinion states some of these principles but then blurs them by scattering among them seemingly inconsistent statements, including diversions into Federal or State statutory immunity, which the Court acknowledges is not at issue in this appeal, and the Court’s apparent embrace of Cooper v. Delaware Valley Med. Ctr., 539 Pa. 620, 654 A.2d 547 (1995), which drew a distinction between actions for injunctive relief and actions for damages that the Court acknowledges no other court has made. This case calls out for clear guidance to the trial courts, and, regrettably, the guidance provided in the Court’s opinion is anything but clear.
Judge HARRELL has authorized me to state that he joins in this Concurring Opinion.