Court Opinion

ID: 1051058
Source: CourtListenerOpinion
Date Created: 2013-10-08 20:15:07.486031+00
Date Added: 2024-06-11T15:07:13.475226
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                            AT KNOXVILLE
                                   April 13, 2009 Session

          JOHN P. KONVALINKA v. CHATTANOOGA-HAMILTON
                   COUNTY HOSPITAL AUTHORITY

                   Appeal from the Chancery Court for Hamilton County
                      No. 08-0334    Howell N. Peoples, Chancellor

                    No. E2008-02091-COA-R3-CV - FILED JUNE 2, 2009

John P. Konvalinka (“Petitioner”) filed a petition for access to public records seeking access to
certain records in the possession of the Chattanooga-Hamilton County Hospital Authority (“the
Hospital” or “Erlanger”). These documents were created pursuant to the provisions of a Corporate
Integrity Agreement entered into between the Hospital and the federal Office of Inspector General
of the Department of Health and Human Services following an investigation into allegations of
illegal conduct by the Hospital. The Hospital filed a motion for protective order claiming the
requested documents were confidential and protected from disclosure pursuant to: (1) the Tennessee
Public Records Act; (2) the federal Freedom of Information Act; and/or (3) federal regulations
implemented by the Department of Health and Human Services. The Trial Court found that the
documents were protected from disclosure by the Tennessee Public Records Act; specifically, Tenn.
Code Ann. § 10-7-504(a)(2)(A). This finding rendered moot whether the documents were protected
from disclosure pursuant to either or both the Freedom of Information Act or the regulations
developed by the Department of Health and Human Services. Petitioner appeals. We hold that the
documents at issue are not protected from disclosure by the Tennessee Public Records Act, and the
judgment of the Trial Court holding otherwise is vacated. We remand this case to the Trial Court
for a determination of whether the documents at issue are protected from disclosure pursuant to
applicable federal law.

                   Tenn. R. App. P. 3 Appeal as of Right; Judgment of the
                         Chancery Court Vacated; Case Remanded

D. MICHAEL SWINEY , J., delivered the opinion of the court, in which HERSCHEL P. FRANKS, P.J., and
CHARLES D. SUSANO , JR., J., joined.

Mathew D. Brownfield and Mark W. Litchford, Chattanooga, Tennessee, for the Appellant, John
P. Konvalinka.

Joseph R. White, Fred H. Moore, and James H. Payne, Chattanooga, Tennessee, for the Appellee,
Chattanooga-Hamilton County Hospital Authority.
                                                   OPINION

                                                  Background

                The documents at issue in this Public Records Act case have their genesis from a
federal and state investigation surrounding allegations that the Hospital submitted false claims to
Medicare and Medicaid and improperly paid remuneration to physicians for referring patients to the
Hospital. The Hospital eventually entered into settlement agreements with both the federal Office
of Inspector General of the Department of Health and Human Services and the State of Tennessee.
In addition to the settlement agreements, the Hospital entered into a Corporate Integrity Agreement
with the Office of Inspector General of the Department of Health and Human Services. The
Corporate Integrity Agreement was designed to promote compliance with the applicable statutes and
regulations. Among other things, the Corporate Integrity Agreement required the Hospital to
establish and maintain a compliance program, which included the creation of a compliance
committee.

                 In March 2008, Petitioner served a request for access to public records on the Hospital
seeking access to fifty-three separate groups of documents. Only three of the fifty-three requests are
at issue in this appeal. These three requests are:

                  (12)     Copies of all compliance reports submitted to the Compliance
                           Committee since the 2005 settlement between Chattanooga
                           Hamilton County Hospital Authority and the United States
                           Federal Government/United States Justice Department; . . .

                  (17)     Copies of all minutes from all meetings of the Erlanger
                           Medical Center’s Compliance Committee for the past four
                           years; . . . [and]

                  (41)     Copies of all minutes from all meetings of Erlanger’s
                           Compliance Committee for the past four (4) years. . . .1

                After the Hospital refused to provide these three groups of requested documents,
Petitioner filed a Petition for Access to Public Records with the Trial Court. Petitioner claimed that
the Hospital lacked a good faith basis upon which to deny the public records request. Petitioner
requested the Trial Court issue a show-cause order requiring the Hospital to appear and show cause
why the petition should not be granted. Petitioner further requested the Trial Court enter an order
requiring the Hospital to produce the records and award Petitioner his attorney fees.

              The Hospital filed a Motion for Protective Order pertaining to the three document
requests. The Hospital claimed that the records at issue were protected from disclosure pursuant to

         1
         Request No. 17 and Request No. 41 appear to request the same information. In his brief on appeal, Petitioner
acknowledges that these two requests do in fact request the same documents.

                                                        -2-
Tenn. Code Ann. §§ 10-7-504(a)(2)(A) and (a)(5)(A). In addition, the Hospital claimed that several
federal statutes and regulations protected the disclosure of these documents, including 5 U.S.C. §§
552(b)(4) and (b)(7), as well as various subparts of 45 C.F.R. §§ 5.65(b)(4) and 5.68.

                Petitioner responded to the motion for protective order, asserting that several of the
statutes and regulations cited by the Hospital did not apply to the requested documents and, even if
they did, they did not operate to prevent disclosure of the requested documents.

             Following a hearing on the motion for protective order, the Trial Court entered a
detailed Memorandum Opinion and Order. According to the Trial Court:

                       In October 2005, [the Hospital] entered into a Corporate
               Integrity Agreement (“CIA”) and a Settlement Agreement with the
               Office of the Inspector General of the Department of Health and
               Human Services (“OIG”). . . . [The Hospital] also at this time entered
               into a Settlement Agreement with the State of Tennessee. The CIA
               requires heightened internal scrutiny and investigation of potential
               problems, detailed reporting of the results of these investigations to
               OIG, and the detailed notification of OIG of any “investigation or
               legal proceeding . . . brought by a governmental entity . . . involving
               an allegation that Erlanger has committed a crime or had engaged in
               fraudulent activities.”

                                              *   *     *

                       A.      Relevant Terms of the CIA

                        Under the CIA, [the Hospital] is required to form a
               Compliance Committee to monitor compliance with the CIA and
               report directly to the OIG, as well as establish a Disclosure Program
               to allow for employee disclosure of potential issues with or questions
               about [the Hospital’s] compliance with civil, criminal or
               administrative law. . . . The CIA required Erlanger to create a Code
               of Conduct setting forth, among other things, “the requirement that
               all of [Erlanger’s officers, directors, agents and employees] shall be
               expected to report to the Compliance Officer . . . suspected violations
               of any Federal health care program requirements or of Erlanger’s own
               Policies and Procedures.” Likewise, the Code of Conduct had to
               contain a “commitment to nonretaliation and to maintain, as
               appropriate, confidentiality and anonymity with respect to such
               disclosures.” . . . (emphasis added)

                      The Disclosure Program under the CIA had to allow for a
               mechanism through which individuals could report, with an
               expectation of anonymity and confidentiality, any potential violations

                                                  -3-
of law. . . . Like the Compliance Committee’s Code of Conduct, the
Disclosure Program had to emphasize the protection of “anonymous
communications for which appropriate confidentiality shall be
maintained.” (emphasis added) These anonymous and confidential
reports, once received via the Disclosure Program, were given to the
Compliance Officer. The Compliance Officer is required under the
CIA to perform an investigation of all such reports, and to keep a log
containing the reports themselves along with “the status of the
respective internal reviews, and any corrective action taken. . . .”

        The CIA also requires that Erlanger submit annual reports to
OIG “with respect to the status of, and findings regarding, Erlanger’s
compliance activities. . . .” These reports must contain a variety of
information, including a summary of “Reportable Events” (e.g.
potential violations of law), and corrective action taken in response
to a violation or other issue, a summary of the Disclosure Program’s
log, a summary of “any ongoing investigation or legal proceeding”
against the hospital that it is required to report under the CIA. . . .

        B.      Text and Purpose of the Statutory Exclusions

         Under Tenn. Code Ann. § 10-7-503(a), “all state, county and
municipal records . . . shall at all times . . . be open for personal
inspection by any citizen of Tennessee, and those in charge of such
records shall not refuse such right of inspection to any citizen, unless
otherwise provided by state law.” The statute does, however, limit its
otherwise broad applicability with a number of exceptions for certain
confidential records. One of the most pertinent exceptions in relation
to this case provides that, “[a]ll investigative records of . . . the office
of inspector general . . . shall be treated as confidential and shall not
be open to inspection by members of the public. The information
contained in such records shall be disclosed to the public only in
compliance with a subpoena or an order of a court of record.” Tenn.
Code Ann. § 10-7-504(a)(2)(A).

        [The Hospital] argues that this exception applies to the three
records requests at issue here because there records were “generated,
compiled and reported pursuant to the requirements of the CIA as part
of the ongoing investigation by and settlement negotiations with the
OIG.” . . . [The Hospital] also asserts it was “performing
investigative functions on behalf of and at the request of the OIG,”
and that the products of these investigative activities are clearly
exempted from disclosure under the statute. . . . Petitioner, on the
other hand, argues merely that this exception is inapplicable to the
requested records in this case because [the Hospital] “cites no

                                    -4-
authority for its position that it is now an agent of the OIG,” and is
therefore not entitled to confidentiality protections under the
statute. . . .

        While it is true that [the Hospital] does not provide any
evidence or argument to support the existence of an agency
relationship, Petitioner fails to respond to the basic import of [the
Hospital’s] argument here: viz. that the compliance records at issue
are in effect “investigative records of the OIG” under the plain
language of the statute. [The Hospital], under the CIA, is responsible
with providing compliance and other investigative records to the
OIG. The statute clearly protects such documents – “all investigative
records . . . of the office of the inspector general” – as confidential,
and exempts them from public disclosure.

        If the statute did not so provide, and instead only protected
records in the possession of the OIG (such requirement is not in Tenn.
Code Ann. § 10-7-504(a)(2)(A)), the protections provided by the
statute would be moot. Parties seeking the production of otherwise
protected records in the hands of the OIG could simply by-pass the
OIG altogether and demand records from all those public entities that
provide the OIG with the contents of their investigative records.
Surely the legislature could not have intended such illusory
confidentiality protections for those categories of records they chose
specifically to exempt from the broad applicability of the statute.

       C.      Confidentiality and the Efficacy of the CIAs

        In further support of its position that there is good cause to
protect as confidential the contents of the Compliance Committee
reports, and the records of the Committee meeting minutes, [the
Hospital] cites a federal case from the Northern District of California
where the district court elaborates upon the confidential nature of the
CIA documents:

       Once an entity enters into a CIA, the CIA typically
       requires the subject entity to adopt measures designed
       to promote compliance, and to submit annual reports
       and documents addressing the requirements of the
       CIA, including the results of audits and reviews.
       These types of documents often include confidential
       or proprietary information. Indeed, a frequent
       concern raised by the subject entities during
       negotiation of the CIA is what type of protection the

                                  -5-
        government will extend to the subject entity’s
        confidential and proprietary information.

Hersh & Hersh v. U.S. Dept. of Health and Human Services, 2008
U.S. Dist. LEXIS 26237, at *18 (N.D. Cal. March 31, 2008). While
the party seeking disclosure in Hersh & Hersh did so under the
federal Freedom of Information Act, unlike the case sub judice, this
court recognizes the validity of the district court’s characterization of
the compliance documents compiled under the CIA. The function of
the compliance reports is to aid the OIG in its oversight of [the
Hospital], and to likewise facilitate and enable full disclosure in the
administration of the CIA.

         The Petitioner claims that “[neither the CIA nor the settlement
agreements have] any provision mandating there be confidentiality of
the requested public records.” . . . This assertion seems, under the
plain language of the CIA, patently false. The CIA in this case does
in fact call, on more than one occasion, for the confidentiality of the
requested documents. The CIA explicitly states that the disclosures
in the compliance reports should be kept with “confidentiality and
anonymity” where appropriate, and that for disclosures made to the
Compliance Officer via the Disclosure Program “appropriate
confidentiality shall be maintained.” . . . So not only are the contents
of the compliance reports confidential on their face, per the Hersh
court’s characterization, but they are specifically designated as such
under the language of the CIA.

        Compelling disclosure of these documents would hamper both
[the Hospital’s] ability to comply with the CIA and OIG’s ability to
rely on the completeness of [the Hospital’s] reports. [The Hospital],
and other entities acting pursuant to CIAs, must feel free to fully
disclose information to the OIG. If entities are not confident that the
contents of their disclosure will remain confidential once it is
prepared for the OIG, their willingness to comply fully with CIAs
will greatly decrease. Likewise, the effectiveness of the OIG’s efforts
to oversee and regulate the health care industry through the use of
CIAs will be negatively impacted if the regulated entities are
persistently concerned that the information they compile for
compliance is subject to public disclosure.

        The Protective Order at issue only applies to three of the fifty-
three document requests in the current case, and would not limit
Petitioner’s discovery beyond excluding specifically the Compliance
Committees’ compliance reports and the record of the Compliance
Committee’s minutes. (citations to the record omitted)

                                  -6-
                Following entry of the memorandum opinion, Petitioner appealed and argues on
appeal that the Trial Court erred when it concluded that the records did not have to be produced. The
specific issues raised by Petitioner are:

               I.      Did the Trial Court err in holding that the requested
                       compliance reports and records were not obtainable due to an
                       exception to the Tennessee Public Records Act?

               II.     Did the Trial Court err in holding that the requested
                       compliance reports and records were investigative records of
                       the Office of Inspector General?

               III.    Did the Trial Court err by not requiring production of
                       redacted compliance reports and records?

                The Hospital argues that the Trial Court was correct when it found that Tenn. Code
Ann. § 50-7-504(a)(2)(A) protected the records from disclosure. The Hospital further argues that
even if Tenn. Code Ann. § 50-7-504(a)(2)(A) does not apply, the records nevertheless are protected
from disclosure pursuant to Tenn. Code Ann. § 50-7-504(a)(5)(A) as well as applicable federal
statutes and regulations.

                                             Discussion

                The facts in this case are undisputed. The appeal involves matters of statutory
interpretation, which present questions of law. With respect to legal issues, our review is conducted
“under a pure de novo standard of review, according no deference to the conclusions of law made
by the lower courts.” Southern Constructors, Inc. v. Loudon County Bd. of Educ., 58 S.W.3d 706,
710 (Tenn. 2001).

               Tenn. Code Ann. § 10-7-504(a)(2)(A) provides, in relevant part, as follows:

               All investigative records of the Tennessee bureau of investigation, the
               office of inspector general, all criminal investigative files of the
               department of agriculture and the department of environment and
               conservation, all criminal investigative files of the motor vehicle
               enforcement division of the department of safety relating to stolen
               vehicles or parts . . . shall be treated as confidential and shall not be
               open to inspection by members of the public. The information
               contained in such records shall be disclosed to the public only in
               compliance with a subpoena or an order of a court of record;
               provided, however, that such investigative records of the Tennessee
               bureau of investigation shall be open to inspection by elected
               members of the general assembly if such inspection is directed by a
               duly adopted resolution of either house or of a standing or joint
               committee of either house. . . . (emphasis added)

                                                 -7-
                The issue as to whether the above quoted statute applies is this case depends on
whether, as the Hospital claims, “the office of inspector general” includes or is referring to both the
state and federal Office of Inspector Generals. Petitioner claims that this statute only applies to the
state Office of Inspector General, and because the Corporate Integrity Agreement was entered into
between the Hospital and the federal Office of Inspector General, the statute simply has no bearing
on this case.

                 In 2004, the Tennessee General Assembly created the Office of TennCare Inspector
General which was to “focus solely on the prevention and detection of fraud and abuse in the
TennCare program” See 2004 Tenn. Pub. Acts Ch. 673. At the same time, the Public Records Act,
Tenn. Code Ann. § 10-7-504(a)(2), was amended to exempt from disclosure “[a]ll investigative
records of the Office of TennCare Inspector General . . . .” See 2004 Tenn. Pub. Acts Ch. 673.
There is no question that at that point in time, Tenn. Code Ann. § 10-7-504(a)(2) referred only to a
State entity, i.e., the Office of TennCare Inspector General, as there clearly is no corresponding
federal agency bearing that particular name.

               In 2005, the General Assembly amended the relevant statute pertaining to the Office
of TennCare Inspector General and, among other things, formally changed the name of the “Office
of TennCare Inspector General” to “Office of Inspector General.” See 2005 Tenn. Pub. Acts Ch.
474. Contemporaneous with this change, the Public Records Act was amended by “deleting the
words ‘Office of TennCare Inspector General’ wherever they appear in the part and substituting
instead the words ‘Office of Inspector General.’” See 2005 Tenn. Pub. Acts Ch. 474.

               As stated, it is clear to this Court that in 2004, the Tennessee General Assembly was
referring only to the State Office of TennCare Inspector General in Tenn. Code Ann. § 10-7-
504(a)(2)(A). We further conclude that the General Assembly continued to refer only to the State
entity when the statute was amended in 2005 simply to reflect the name change from “Office of
TennCare Inspector General” to “Office of Inspector General.” In short, we agree with Petitioner
that the General Assembly was not referring to the federal Office of Inspector General in Tenn. Code
Ann. § 10-7-504(a)(2)(A), and the decision of the Trial Court on this issue is reversed.

             The next issue is whether the records are exempt from disclosure pursuant to Tenn.
Code Ann. § 10-7-504(a)(5)(A). The relevant portion of this statute provides as follows:

               (5)(A) The following books, records and other materials in the
               possession of the office of the attorney general and reporter which
               relate to any pending or contemplated legal or administrative
               proceeding in which the office of the attorney general and reporter
               may be involved shall not be open for public inspection:

               (i) Books, records or other materials which are confidential or
               privileged by state law;

               (ii) Books, records or other materials relating to investigations
               conducted by federal law enforcement or federal regulatory agencies,

                                                 -8-
                 which are confidential or privileged under federal law . . . .
                 (emphasis added)

               On appeal, the Hospital acknowledges that the Tennessee Attorney General is not in
physical possession of the requested documents. The Hospital argues, however, that “possession”
does not necessarily mean physical possession. We need not decide if “in the possession” means
more than actually physically possessing the documents because we conclude, at a minimum, that
the clear language of the statute requires the Tennessee Attorney General to have actual physical
possession of the documents in order for this exception to apply. Therefore, we conclude that Tenn.
Code Ann. § 10-7-504(a)(5)(A) does not apply in this case.2

                Although we conclude that Tenn. Code Ann. §§ 10-7-504(a)(2)(A) and (a)(5)(A) do
not prohibit disclosure of the requested documents, this does not end our inquiry. Although the
Tennessee Attorney General was involved in this case, the development of the Corporate Integrity
Agreement was done through the federal Office of Inspector General. The federal Office of
Inspector General is certainly at liberty to provide that certain documents generated pursuant to the
Corporate Integrity Agreement are confidential consistent with the provisions of the Freedom of
Information Act and/or the regulations adopted by the Department of Health and Human Services.
The Office of Inspector General’s ability to do that is not eliminated simply because the agreement
is entered into with a state governmental entity such as the Hospital. In such a situation, federal law
could very well prohibit disclosure of these documents even if state law does not.

                The Hospital argues that the requested documents are protected from disclosure
pursuant to exceptions contained in the Freedom of Information Act, 5 U.S.C. § 522(b), as well as
regulations implemented by the Department of Health and Human Services addressing
confidentiality of certain documents, including 45 C.F.R. §§ 5.65 and 5.68.3 The Trial Court never

        2
          This conclusion is reinforced by Tenn. Code Ann. § 10-7-504(a)(5)(A)(v) which discusses disclosure of
documents that are “in the possession” of both the Tennessee Attorney General and another department or agency. This
section would make absolutely no sense if possession did not mean physical possession.
        3
           45 C.F.R.§ 5.65 addresses confidentiality of trade secrets and confidential information of the Department
of Health and Human Services. This regulation provides that information is “confidential” if it meets one of the
following definitions:

                 (i) Disclosure may impair the government’s ability to obtain necessary information
                 in the future;

                 (ii) Disclosure would substantially harm the competitive position of the person who
                 submitted the information;

                 (iii) Disclosure would impair other government interests, such as program
                 effectiveness and compliance; or

                 (iv) Disclosure would im pair other private interests, such as an interest in
                 controlling availability of intrinsically valuable records, which are sold in the
                                                                                                       (continued...)

                                                        -9-
addressed whether the documents at issue in this case were confidential under federal law as that
issue was rendered moot once the Trial Court concluded, incorrectly, that the documents were
protected from disclosure under Tenn. Code Ann. § 10-7-504(a)(2)(A). Because these documents
are not in the record before us, we cannot determine if they are confidential under applicable federal
law. Therefore, we remand this case to the Trial Court for a determination as to whether all or any
portions of the requested documents are protected from disclosure pursuant to either federal
statute(s) or federal regulation(s).

                                              Conclusion

               The judgment of the Trial Court is vacated and this case is remanded to the Trial
Court for further proceedings consistent with this Opinion and for collection of the costs below.
Costs on appeal are taxed to the Appellee, the Chattanooga-Hamilton County Hospital Authority.

                                                        ___________________________________
                                                        D. MICHAEL SWINEY, JUDGE

        3
            (...continued)
                     market by their owner.

45 C.F.R. § 5.65(b)(4).

                                                 -10-