Search This Blog

Friday, February 21, 2014

Fahlen v. Sutter Central Valley Hospitals: Supreme Court Allows Physician To Bring Whistleblower Action

In Fahlen v. Sutter Central Valley Hospitals (8/14/12) (discussed here), the Court of Appeal held that a doctor claiming he lost his hospital privileges as a form of whistleblower retaliation need not exhaust his judicial remedy of pursuing review, via writ of mandate, of the hospital's action before he can file a whistleblower lawsuit under California Health and Safety Code section 1278.5.

On February 20, 2014, in a per curiam opinion written by Justice Baxter, the California Supreme Court affirmed in full. I normally don't like to quote opinions at great length, but the introduction to this opinion does an excellent job of setting forth the legal background and holding: 

In Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465 (Westlake), we held that, before a physician may bring a common law tort action directed against a hospital’s quasi-judicial decision to terminate the physician’s staff privileges, he or she must first exhaust all internal hospital procedures to reverse the decision, and, if this fails, must prevail in court in a mandamus proceeding to have the decision set aside. In two more recent decisions, however, we concluded that persons filing damage suits authorized by certain whistleblower statutes — laws forbidding employer retaliation against workers who have reported fraud, danger, corruption, waste, or malfeasance — did not have to exhaust available administrative and mandamus remedies before seeking relief in court. (Runyon v. Board of Trustees of California State University (2010) 48 Cal.4th 760 (Runyon); State Bd. of Chiropractic Examiners v. Superior Court (2009) 45 Cal.4th 963 (Arbuckle); but see Miklosy v. Regents of University of California (2008) 44 Cal.4th 876 (Miklosy).) 
Here, as in Westlake, defendant Sutter Central Valley Hospital, through its quasi-judicial peer review procedures, terminated plaintiff Mark T. Fahlen’s physician’s staff privileges. He sued the hospital and its chief operating officer, seeking damages, reinstatement, and other relief on multiple theories. Among other things, his complaint claims the hospital’s action constituted retaliation for his reports of substandard performance by hospital nurses, and thus violated Health and Safety Code section 1278.5.  
Defendants moved to dismiss the action on grounds, among others, that plaintiff could not bring a civil suit under section 1278.5 unless he first succeeded by mandamus in overturning the hospital’s action. The trial court denied the motion. In a published decision, the Court of Appeal reversed in part. The appellate court held that plaintiff could pursue those claims based on section 1278.5, rather than on the common law, even though he had not previously sought and obtained a mandamus judgment against the hospital’s decision. This holding conflicted with that of another appellate decision, Nesson v. Northern Inyo County Local Hospital Dist. (2012) 204 Cal.App.4th 65 (Nesson). We granted defendants’ petition for review for the sole purpose of resolving the conflict.  
We conclude that when a physician claims, under section 1278.5, that a hospital’s quasi-judicial decision to restrict or terminate his or her staff privileges was itself a means of retaliating against the physician “because” he or she reported concerns about the treatment of patients, the physician need not first seek and obtain a mandamus judgment setting aside the hospital’s decision before pursuing a statutory claim for relief. Section 1278.5 declares a policy of encouraging workers in a health care facility, including members of a hospital’s medical staff, to report unsafe patient care. The statute implements this policy by forbidding a health care facility to retaliate or discriminate “in any manner” against such a worker “because” he or she engaged in such whistleblower action. (§ 1278.5, subd. (b).) It entitles the worker to prove a statutory violation, and to obtain appropriate relief, in a civil suit before a judicial fact finder.  
Slip op. at 1-3. 

The Supreme Court's opinion is available here.

Tuesday, February 11, 2014

Jones v. Farmers Insurance Exchange: Court Reverses Order Denying Certification of Off-the-Clock Wage and Hour Class Claims

Jones v. Farmers Insurance Exchange (10/28/13, pub. 11/26/13) is another post-Brinker decision dealing with certification of wage and hour claims.

Kwesi Jones worked as an adjuster for 
Farmers Insurance Exchange (Farmers). He sued, alleging that Farmers should have paid him and his co-workers for "computer sync time" at home before the beginning of their scheduled shifts. 

Jones filed for class certification, and Farmers opposed, arguing that it had no uniform policy requiring unpaid pre-shift work and that individual issues thus predominated. The trial court denied certification, and the Court of Appeal reversed, finding as follows: 

Under Brinker and Sav-On, the question on commonality is "whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment," and the fact that individual class members will have to prove their damages does not defeat certification. Slip op. at 9-11. 

Although the trial court is "afforded great discretion in ruling on class certification" (slip op. at 11-12), the trial court here abused its discretion and applied improper criteria "by focusing on individual issues concerning the right to recover damages rather than evaluating whether the theory of recovery is amenable to class treatment." Slip op. at 14. Further, "the trial court erred to the extent that its ruling was based on its evaluation of the merits of Plaintiffs’ claim as to the existence of such a uniform policy." Slip op. at 15.
Plaintiffs’ theory of recovery is that Farmers applied a uniform policy to all putative class members denying them compensation for “computer sync time” work performed at home before the beginning of their scheduled shifts. The existence of such a policy is a factual question that is common to all class members and is amenable to class treatment. Whether such a policy, if it exists, deprives employees of compensation for work for which they are entitled to compensation is a legal question that is common to all class members and is amenable to class treatment.
Slip op. at 13. Farmers disputed that it had such a policy, but this argument raised a "common question amenable to class treatment." Slip op. at 13. Farmers' other evidence went to damages, which did not defeat certification. Slip op. at 13-14. Further, "Farmers’s liability depends on the existence of such a uniform policy and its overall impact on its APD claims representatives, rather than individual damages determinations." Slip op. at 15. 

Because of the predominance of common issues, class certification would "provide substantial benefits to the litigants and the courts," and a class action would be a superior method of resolving the dispute. Slip op. at 15. 

Substantial evidence supported the trial court's finding that Mr. Jones was not an adequate class representative because he did not file a declaration stating that he understood his fiduciary obligation to the class. Slip op. at 17. However, rather than deny certification on this basis, the trial court should have given the plaintiffs an opportunity to amend their complaint to name a suitable class representative. Slip op. at 17-18.  

The opinion is available here.

Friday, February 7, 2014

Duran v. US Bank: Cal. Supreme Court Schedules Oral Argument

In Duran v. U.S. Bank N.A., the Court of Appeal reversed a trial court judgment in favor of a class of allegedly misclassified bank officers and ordered the class decertified. Our blog post on the Court of Appeal's decision is here.

The California Supreme Court granted review and yesterday announced that oral argument will be held on Tuesday, March 4, 2014, at 9:00 a.m., in San Francisco.

The Court's web page (here) states the issues as follows:
This case presents issues concerning the certification of class actions in wage and hour misclassification litigation and the use of representative testimony and statistical evidence at trial of such a class action. 
The Court's decision should be published within 90 days of oral argument, which would be June 2, 2014.