Court Opinion

ID: 9746418
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:14:46.290575+00
Date Added: 2024-06-11T07:25:12.709860
License: Public Domain

SILLS, P. J., Concurring.
 Instead of analyzing this case on its procedural aspects, I would confine our decision to the substantive issue before us and reverse on the merits. The hospital clearly had substantial evidence to summarily suspend Dr. Oskooi.
Let us start by asking a basic question: how in the world did the judiciary ever get into the business of Monday morning quarterbacking the decisions of private hospitals about staff doctors? The answer is laid out in two *246footnotes in a California Supreme Court case, Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541 [116 Cal.Rptr. 245, 526 P.2d 253] (Pinsker II).1 In footnotes 7 and 8 on page 550, Justice Tobriner explained that courts have imposed a right to “fair procedure” in the membership decisions of certain private associations, such as professional associations and labor unions, since late Victorian times.
The initial theory was that these groups enjoyed monopoly power over the right of individuals to practice their trade or profession.2 By 1977, however, the Supreme Court thought it enough that association membership merely affect “an important economic interest.” (Ezekial v. Winkley (1977) 20 Cal.3d 267, 277 [142 Cal.Rptr. 418, 572 P.2d 32] [“[T]he application of the common law rule does not depend on the existence of ‘monopoly’ power .... The judicial inquiry, rather, has consistently been focused on the practical power of the entity in question to affect substantially an important economic interest.”].) Thus the California fair procedure cases began with a labor union’s expulsion of a tailor who worked during a strike (Otto v. Tailors’ P. & B. Union (1888) 75 Cal. 308 [17 P. 217]), progressed to Black shipyard workers seeking membership in a labor union where there was a closed shop {James v. Marinship Corp., supra, 25 Cal.2d 721), and eventually found their way to an orthodontist seeking membership in a specialist medical society (Pinsker I, supra, 1 Cal.3d 160.)
It was not until 1975, however, that this common law right of fair procedure was extended to applications for staff privileges in a hospital. (Ascherman v. Saint Francis Memorial Hosp. (1975) 45 Cal.App.3d 507 [119 Cal.Rptr. 507].) The theory was that the hospital enjoyed control over the physician’s ability to “fully practice” his or her profession. (Id. at p. 511.) The court reasoned the “mere existence of other hospitals” was not “a *247sufficient safety valve to prevent deprivation of substantial economic advantage with the advent of comprehensive health planning.” (Ibid.)3
When Ascherman was decided, no published decision had held that a hospital might be liable for the negligent selection of physicians on whom it conferred staff privileges. Nor did Ascherman discuss the possibility, which is, at the very least, counterintuitive to the monopoly-economic interest rationale. After all, if a labor union must accept a worker into its fold, it hardly seems fair to hold the labor union liable for the torts of the worker because of that admission!
But in 1982 Elam v. College Park Hospital (1982) 132 Cal.App.3d 332 [183 Cal.Rptr. 156] held that a hospital could be liable for the negligence of a staff physician. “As a general principle,” the court intoned, “a hospital’s failure to insure the competence of its medical staff through careful selection and review creates an unreasonable risk of harm to its patients.” (Id. at p. 341.) Under the doctrine of “corporate negligence,” a hospital could now be held liable to a patient for the negligence of doctors with staff privileges. “[W]e hold a hospital is accountable for negligently screening the competency of its medical staff to insure the adequacy of medical care rendered to patients at its facility.” (Id. at p. 346.)
Elam reached the Court of Appeal on a summary judgment in favor of the hospital. The Elam court reversed the summary judgment because there was a triable issue of fact as to whether a hospital should have conducted an investigation through its peer review committee of a certain physician upon receiving notice of a prior malpractice claim. (132 Cal.App.3d at p. 348.)
It never dawned on the Elam court that it was placing hospitals in a bind. Case law had already established that hospitals did not have the freedom to exclude physicians from staff privileges without having some good reason; now Elam was holding that hospitals could be liable for not excluding potentially negligent physicians. Indeed, a sentence in the opinion suggests that the Elam court was under the misimpression that hospitals have unfettered discretion in whom they allow staff privileges: “[T]he hospital is in the best position to evaluate the competence of physicians it, in its discretion, allows to perform surgery and to practice within its premises . . . .” (132 Cal.App.3d at p. 345, italics added.)
As two law review commentators were quick to notice, the Elam decision subjected hospitals to competing and contradictory objectives. “The hospital *248may indeed find itself between the proverbial ‘rock and a hard place’—being sued by the physician for expelling him from the medical staff or being sued by his patient for not expelling him, or both.” (Loveridge & Kimball, Hospital Corporate Negligence Comes to California: Questions in the Wake of Elam v. College Park Hospital (1983) 14 Pacific. L.J. 803, 813.)
I do not suggest that the two competing objectives of fair procedure and protection of patients from staff physician negligence are mutually exclusive in the strictest logical sense. The two ideas can be reconciled; it is possible to treat physicians fairly while still excluding the bad eggs.
Reconciling the two objectives, however, puts a premium on a physician’s honest disclosure of past affiliations. The application for staff privileges isn’t just some routine bit of paperwork. For better or worse, the case law has made it one of the most critical functions in hospital management.
We must remember the natural relationship between a doctor’s prior record of patient care and the likelihood of successful future care. Prior hospital affiliations are not unreasonable predictors on that score. For example, a surgeon who failed to disclose a three-year hospital affiliation where all his or her patients died would be nothing less than a malpractice time bomb waiting to go off in the immediate, but indefinite future.
But unless hospitals are to be saddled with an unreasonable information-gathering requirement—forced to scrutinize prospective staff physicians like the CIA performing a security clearance—it is absolutely vital that the applying physician be absolutely truthful in his or her application.4 Hospitals exist to help the sick and injured; they are not detective agencies.5 They *249should have the widest possible discretion in decisions affecting physician staff privileges.6
There is no dispute in the present case that Dr. Oskooi did not disclose hospital affiliations for a lengthy duration of time. And there is no doubt that falsehood on an application for hospital staff privileges is good cause not to grant staff privileges to a doctor in the first place. (See Unterthiner v. Desert Hospital Dist. (1983) 33 Cal.3d 285, 299 [188 Cal.Rptr. 590, 656 P.2d 554].) The dissent, however, has concluded that because Dr. Oskooi was suspended, and the hospital did not mention omissions in its bylaws as a ground for suspension, that substantial evidence did not support the hospital’s action. I cannot agree.
Dr. Oskooi was clearly and plainly warned in the application itself that any significant omission was cause for summary dismissal. The difference between a suspension pursuant to the bylaws and a dismissal pursuant to the application form is an academic, technical distinction far beyond the right to rudimentary fair procedure created by the case law. Dr. Oskooi was only entitled to “rudimentary procedural and substantive fairness.” (Ezekial v. Winkley, supra, 20 Cal.3d at p. 278.)
The essential elements of this “rudimentary” fair procedure are (1) notification of “the reason for the proposed rejection” and (2) “a fair opportunity to defend.” (See Pinsker II, supra, 12 Cal.3d 541, 555.) Dr. Oskooi certainly had these. He was given fair notice that the hospital wanted to suspend him because he omitted previous hospital affiliations on his application, and a hearing on that point—complete with hearing officer and court reporter. That hearing has now been the subject of extensive litigation in the trial court and now this court. As with much of life in late 20th century America, there is so much due process in this case that one cannot help tripping on it.7
What about the claim that Dr. Oskooi was not treated fairly because the letter suspending him referred him to the possibility of a hearing “as *250provided in Article VII, part B” of the hospital’s bylaws, and—guess what—when you look up article VII, part B, you only find a threat to patient care or institutional management as grounds for a suspension?
The application form stated that any significant omission of information was grounds for summary dismissal. A dismissal is worse than a suspension. In the context of this case, the fact that a physician can be dismissed for omitting information on an application while the bylaws provide that a physician can be suspended for threat to patient care or institutional management (and are silent about application omissions) is a minor discrepancy, not a denial of fair procedure. (See Rhee v. El Camino Hospital Dist. (1988) 201 Cal.App.3d 477, 497 [247 Cal.Rptr. 244] [violations of hospital bylaws must result in “unfairness, in some way depriving the physician of adequate notice or an opportunity to be heard before impartial judges” to establish denial of due process].) The hospital’s letter telling Dr. Oskooi that he could request a hearing “as provided in Article VII, part B” of the bylaws was at most a technical goof—a classic case of harmless error. The letter still clearly gave him notice that the reason for the hospital’s action was the omissions from the application. And, as the transcript shows, Dr. Oskooi had every opportunity to rebut the charge that he omitted vital information from his application. He was able, for example, to offer the explanation that a clerk had excused him from the need to attach further information.
I thus agree with Justice Sonenshine’s opinion that the judgment in this case must be reversed, with the hospital to receive its costs. It is enough that the judgment be reversed because it erroneously holds the hospital did not have substantial evidence to suspend Dr. Oskooi.

Pinsker I was Pinsker v. Pacific Coast Soc. of Orthodontists (1969) 1 Cal.3d 160 [81 Cal.Rptr. 623, 460 P.2d 495].

In less than three paragraphs on pages 551 through 552 of Pinsker II, supra, 12 Cal.3d there are no less than four references to monopolies: “Because of their monopolistic power in a given field of employment” (referring to “labor unions or professional and trade associations”); “Where a union has . . . attained a monopoly” (quoting from James v. Marinship Corp. (1944) 25 Cal.2d 721 [155 P.2d 329, 160 A.L.R. 900]); the “underlying rationale of Marinship” was “a virtual monopoly over the use of local hospital facilities” (describing the way Falcone v. Middlesex County Medical Society (1961) 34 N. J. 582 [170 A.2d 791, 800, 89 A.L.R.2d 952], relied on Marinship)', and the medical associations there “still wielded monopoly power and affected sufficiently economic and professional concerns so as to clothe the societies with a ‘public interest’ ” (describing the rationale in Pinsker I).

The court did not explain what it meant by “comprehensive health planning.” The Ascherman decision was handed down before health maintenance organizations (HMO) became widespread. Whether the current trend toward shorter hospital stays and surgical treatment on an outpatient basis undercuts Ascherman's rationale is a matter which may be left for another day.

One of the themes of Dr. Oskooi’s position is that the hospital could have obtained information from various medical associations, so what was the harm in not listing the hospitals? But because of the bind which the cases have put hospitals in, the burden should be on the applying physician to help hospitals minimize their cost of information gathering.

The importance of candor on the part of the applying hospital staff physician has been underscored by the Legislature in another context. Back in 1967, the Court of Appeal in Kenney v. Superior Court (1967) 255 Cal.App.2d 106 [63 Cal.Rptr. 84] had allowed a plaintiff who was suing a doctor for malpractice (but not suing the hospital where the malpractice was allegedly committed) to obtain the hospital’s staff records on the doctor. The Legislature quickly rebuffed the decision by enacting Evidence Code section 1157, which exempted hospital staff records from pretrial discovery. As our Supreme Court recently explained in discussing the statute: “ ‘Committee members and those providing information to the committee must be able to operate without fear of reprisal. Similarly, it is essential that doctors seeking hospital privileges disclose all pertinent information to the committee." (Alexander v. Superior Court, supra, 5 Cal.4th 1218, 1227, quoting (with specific agreement) Cruger v. Love (Fla. 1992) 599 So.2d 111, 114.) See also Brown v. Superior Court (1985) 168 Cal.App.3d 489, 501 [214 Cal.Rptr. 266]: “The Legislature intended through section 1157 to *249encourage full and free discussions in the hospital committees in order to foster health care evaluation and improvement.”

In this regard, Justice Kane’s remarks in his dissent in Ascherman have proved prophetic: “At a time when the standards of professional conduct and service are subject to aggressive consumer assault and when hospitals and physicians are exposed to increasing horizons of liability—often predicated upon principles of vicarious or imputed liability—courts should not unduly interfere with the legitimate and ostensible good-faith efforts of. . . hospitals and physicians to protect themselves." (Ascherman v. Saint Francis Memorial Hosp., supra, 45 Cal.App.3d 507, 516 (dis. opn. of Kane, J.), italics added.)

Indeed, when one examines the record before the trial court judge as well as that before the hospital’s own administrative hearing officer, it shows how much the imposition of cumbersome legal procedures can obstruct simple common sense. One of the documents presented to the trial court was an internal memo revealing, from sources who had been promised anonymity, that early in his career in Illinois there were complaints that Dr. Oskooi, *250an eye doctor, was giving vaginal and rectal exams to his female patients. Even though the memo also mentioned that the practice was discontinued after he was visited by a delegation of fellow ophthalmologists, one can still imagine how Dr. Oskooi’s colleagues at Fountain Valley Regional Hospital reacted to the information. Yet, probably because hospital personnel decisions have been turned into the equivalent of civil service hearings with every “i” needing to be dotted and “t” needing to be crossed, that information was not aired at the hospital hearing, where Dr. Oskooi might have had the chance to tell his side of the story. There are times when a surfeit of due process gets in the way of justice.