Recent California decisions establish that before a public or private hospital may deny a doctor the right to practice his profession at that hospital, either by the termination of existing staff privileges or by the denial of an initial application for such privileges, the hospital must provide a fair procedure which affords the doctor an opportunity to answer the "charges" upon which his exclusion rests. (See, e.g., Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541 [116 Cal.Rptr. 245, 526 P.2d 253]; Ascherman v. San Francisco Medical Society (1974) 39 Cal.App.3d 623 [114 Cal.Rptr. 681].) In the instant case we must decide, in the light of these recent decisions, what procedural requisites, if any, a doctor who has been deprived of such
For the reasons discussed below, we conclude initially that before a doctor may initiate litigation challenging the propriety of a hospital's denial or withdrawal of privileges, he must exhaust the available internal remedies afforded by the hospital. As we explain, this exhaustion of remedies principle has long been applied in suits attacking the actions of comparable "private associations," and we conclude that the doctrine applies when a doctor sues in tort for monetary damages as well as when he seeks a judicial order compelling reinstatement or admission.
We further conclude that whenever a hospital, pursuant to a quasi-judicial proceeding, reaches a decision to deny staff privileges, an aggrieved doctor must first succeed in setting aside the quasi-judicial decision in a mandamus action before he may institute a tort action for damages. As we point out, mandate has been the traditional means for reviewing analogous quasi-judicial determinations, and we believe that before hospital board or committee members are subjected to potential personal liability for actions taken in a quasi-judicial setting, an aggrieved doctor should be required to overturn the challenged quasi-judicial decision directly in a mandamus action. At the same time, however, we reject defendants' broad contention that a hospital and its board or committee members enjoy an absolute immunity from tort liability whenever by a quasi-judicial proceeding they deny hospital privileges; once the hospital's quasi-judicial decision has been found improper in a mandate action, an excluded doctor may proceed in tort against the hospital, its board or committee members or any others legally responsible for the denial of staff privileges.
1. The facts of the instant case.
In September 1974, plaintiff, Dr. Sarah Kaiman, instituted the underlying action against two private hospitals, Westlake Community Hospital (Westlake) and Los Robles Hospital (Los Robles), as well as numerous individual members of the hospitals' boards and committees. Dr. Kaiman's complaint alleged that she is a qualified doctor "whose professional ethics and qualifications are of the highest calibre," that she has been engaged in the private practice of medicine for 25 1/2 years, that she is licensed to practice medicine in 4 states and has been licensed to practice medicine in California since March 1971. The complaint
According to the complaint, Dr. Kaiman's revocation from Westlake was the result of a malicious conspiracy, engineered by all of the named defendants in order to destroy Dr. Kaiman's medical practice and to restrain competition in order to benefit each member of the conspiracy; the complaint alleged that in furtherance of the conspiracy defendants deliberately concealed the truth as to her qualifications to practice her profession. The complaint additionally alleged that the revocation of her privileges at Westlake "was pursued and perfected in a manner contrary to established principles of fairness and justice," and contrary to Westlake's own bylaws and constitution. Finally, the complaint alleged that Westlake and its board and committee members had maliciously conspired with Los Robles and certain of its board and committee members, and that, pursuant to such conspiracy, Los Robles had improperly denied Dr. Kaiman's application for staff membership.
On the basis of the foregoing allegations, the complaint asserted that plaintiff was entitled to substantial general and exemplary damages on a number of distinct theories: (1) intentional and unlawful interference with the right to pursue and practice a lawful calling and trade; (2) conspiracy to restrain competition; (3) intentional infliction of emotional distress; and (4) fraud and deceit.
Several months thereafter, Westlake and the individual defendants associated with Westlake filed the motion for summary judgment which is at issue in the instant proceeding.
In brief, the Westlake affidavits declared that between October 31, 1973, and November 20, 1973, an ad hoc committee composed of the chief of staff and two other doctors reviewed the hospital medical records and treatments of Dr. Kaiman and prepared a report for the hospital's credentials committee recommending the revocation of all of Dr. Kaiman's medical staff privileges; on November 20, the credentials committee considered the report, approved the recommendation and forwarded it to Westlake's board of directors, which subsequently approved the recommendation of revocation on November 28, 1973. The following day, the hospital notified Dr. Kaiman of its decision to revoke her privileges, informed her of her right under the hospital bylaws to request a quasi-judicial hearing before a judicial review committee, and advised her that she could continue to treat patients currently hospitalized until their discharge but that written consultation by another member of the hospital staff would be required as to treatment of new patients admitted to the hospital pending her hearing.
The Westlake affidavits further stated that a week later, Dr. Kaiman requested a hearing pursuant to the hospital's bylaws and that on January 31, 1974, a hearing took place before the hospital's judicial review committee. At the hearing, counsel appeared and represented both the executive committee of the hospital and Dr. Kaiman, both parties called witnesses and introduced documentary evidence, and the entire proceedings were transcribed by certified reporters; the hearing lasted approximately five hours. On March 20, 1974, the hospital informed Dr. Kaiman that the judicial review committee had determined that her staff privileges should be revoked, advising her of her right to appeal the decision to the hospital's board of directors at a meeting scheduled for that purpose on March 27, 1974. Dr. Kaiman
In addition to setting forth the foregoing chronology of events, the Westlake affidavits quoted a provision of the Westlake bylaws which reads in relavant part: "Each member of, or applicant to the Medical and Dental Staff, waives any right of personal redress against the Medical and Dental Staff, the Judicial Review Committee, the Governing Board, or any member thereof, for disciplinary action taken under this article."
The Los Robles affidavits related an entirely distinct chronology of events. According to these affidavits, Dr. Kaiman had been admitted to membership on the "courtesy staff" of Los Robles in December 1972, but had resigned from such membership in June 1973. On March 1, 1974, Dr. Kaiman filed a new application for admission to the Los Robles staff. From March 13, 1974, to May 10, 1974, the Los Robles staff contacted the references included in Dr. Kaiman's application and discovered information which contradicted some of the statements which Dr. Kaiman had made in her application concerning positions which she had previously held at other hospitals. The affidavits also disclosed that the hospital received additional information from a local physician with whom Dr. Kaiman had previously practiced which raised doubts as to Dr. Kaiman's professional competency.
On May 10, 1974, the Los Robles medical committee formally considered Dr. Kaiman's application and, according to the affidavits, determined that regardless of the outcome of Dr. Kaiman's dispute with Westlake, her application for membership at Los Robles should be denied because of the information disclosed by Los Robles' own investigation of her qualifications. Subsequently both the medical executive committee and the Los Robles board of trustees concurred in this decision, and on June 24, 1974, the hospital informed Dr. Kaiman that her application for membership had been denied.
Although the Los Robles affidavits do not indicate that the hospital ever informed Dr. Kaiman of the reason for her rejection or that she had any right to obtain a quasi-judicial review of the decision within the hospital hierarchy, one affidavit quotes a provision of the Los Robles
In moving for summary judgment, defendants asserted that the foregoing affidavits conclusively established the invalidity of plaintiff's suit with respect to the events at both hospitals. Insofar as Dr. Kaiman's action rested on the impropriety of her exclusion from Los Robles, defendants claimed that the affidavits demonstrated that she had failed to exhaust an available "private administrative" remedy and thus could not presently challenge the Los Robles exclusion in a judicial action.
With respect to the Westlake revocation, defendants contended that plaintiff's action was barred on three separate grounds. First, defendants claimed that the "waiver of redress" provision of the Westlake bylaws quoted above was effective to bar any recovery by plaintiff arising from the termination of staff privileges at the hospital. Second, they claimed that because the affidavits demonstrated that the revocation at Westlake was undertaken pursuant to a quasi-judicial proceeding, the actions of both the hospital and the individual members of its boards with respect to such revocation fell within the absolute privilege afforded by Civil Code section 47, subdivision 2. Third and finally, defendants asserted that even if either the hospital or its board members could be held liable for damages arising from the revocation under some circumstances, plaintiff could not "collaterally attack" the hospital's revocation decision by a tort action, but could only seek damages after she had succeeded in a "direct attack" on the quasi-judicial hospital decision in a mandamus proceeding.
Although plaintiff filed two counteraffidavits in response to the summary judgment motion, neither affidavit contested any of the factual assertions in the defendants' affidavits. Instead, the counteraffidavits simply reiterated plaintiff's allegations that the denial of staff privileges at both hospitals emanated from defendants' malicious conspiracy to interfere with plaintiff's practice of her profession, and that the Westlake and Los Robles procedures did not comply with general principles of fairness. Plaintiff resisted summary judgment on the ground that the competing affidavits revealed a disputed question of fact, namely, whether defendants had acted maliciously in denying plaintiff staff privileges at the two hospitals.
2. Although a plaintiff is required to exhaust all available internal remedies provided by an association before he may seek damages arising from expulsion or exclusion, defendants' affidavits do not establish either that the Los Robles bylaws afforded plaintiff such a remedy or that the hospital informed plaintiff of the availability of a review procedure.
We turn initially to the defendants' contention that plaintiff may not seek recovery for damages resulting from her exclusion from Los Robles because she failed to exhaust the available internal administrative remedies afforded by the hospital.
As we explained in our second Pinsker decision, recent cases sanctioning judicial review of admission and exclusion practices of various professional associations and hospitals reflect the contemporary application of common law principles embodied in California decisions for almost a century. (See Pinsker v. Pacific Coast Society of Orthodontists, supra, 12 Cal.3d 541, 550-554.) From the earliest decisions reviewing actions of voluntary private associations, in which judicial review typically focused on the actions of fraternal or benevolent societies, our courts have recognized the applicability of the exhaustion of remedies doctrine in this context. (See, e.g., Levy v. Magnolia Lodge, I.O.O.F. (1895) 110 Cal. 297, 307-308 [42 P. 887]; Robinson v. Templar Lodge, I.O.O.F. (1897) 117 Cal. 370, 375-376 [49 P. 170]; Neto v. Conselho Amor. etc. (1912) 18 Cal.App. 234, 238 [122 P. 973].)
In Holderby v. Internat. Union etc. Engrs. (1955) 45 Cal.2d 843, 846 [291 P.2d 463], a plaintiff, without pursuing the internal appellate remedies of a labor union, sought reinstatement and damages after an alleged unlawful exclusion. This court explained: "It is the general and well established jurisdictional rule that a plaintiff who seeks judicial relief against an organization of which he is a member must first invoke
Although plaintiff acknowledges that the exhaustion of remedies doctrine has frequently been applied in matters relating to the actions of private associations, she contends that the doctrine is only applicable when an individual seeks reinstatement or admission
Although no prior California case has explicitly analyzed this issue, our court in Holderby v. Internat. Union etc. Engrs., supra, 45 Cal.2d 843, implicitly endorsed the position adopted by the more recent out-of-state cases by dismissing, for failure to exhaust internal remedies, an action which sought both reinstatement and damages. (See also Simpson v. The Salvation Army (1942) 49 Cal.App.2d 371 [121 P.2d 847]; cf. Benson v. Screwman's Ben. Ass'n (1893) 2 Tex.Civ.App. 66 [21 S.W. 562].) The Holderby majority reached this result in the face of the dissenting opinion's explicit argument that, at a minimum, the exhaustion doctrine should not constitute a bar to the plaintiff's damage claim. (See 45 Cal.2d at pp. 850-851 (Carter, J. dissenting).)
Plaintiff accurately notes that in the instant case, unlike Holderby, she seeks only damages, not reinstatement and damages. Nevertheless, the policy considerations which support the imposition of a general exhaustion requirement remain compelling in this context. In the first place, even if a plaintiff no longer wishes to be either reinstated or admitted to the organization, an exhaustion of remedies requirement serves the salutary function of eliminating or mitigating damages. If an organization is given the opportunity quickly to determine through the operation of its internal procedures that it has committed error, it may be able to minimize, and sometimes eliminate, any monetary injury to the plaintiff by immediately reversing its initial decision and affording the aggrieved party all membership rights; an individual should not be permitted to increase damages by foregoing available internal remedies. (See Summers, Legal Limitations on Union Discipline (1951) 64 Harv.L.Rev. 1049, 1089.)
Moreover, by insisting upon exhaustion even in these circumstances, courts accord recognition to the "expertise" of the organization's quasi-judicial tribunal, permitting it to adjudicate the merits of the plaintiff's claim in the first instance. (See id.) Finally, even if the absence of an internal damage remedy makes ultimate resort to the courts inevitable (see Developments in the Law-Private Associations (1963) 76 Harv.L.Rev. 983, 1075), the prior administrative proceeding will still promote judicial efficiency by unearthing the relevant evidence and by providing a record which the court may review.
Although defendants assert that this provision affords an applicant who is denied membership a right of appeal, at the very least the language of the provision (affording a right of appeal only to "members") is ambiguous. Defendants' affidavits fail to clarify this point; defendants cite no provision of the bylaws defining either the term "member" or "appointment." On this state of the record, we cannot say that defendants have demonstrated as a matter of law that plaintiff failed to exhaust an internal remedy which was available to her (cf. Petermann v. International Brotherhood of Teamsters (1959) 174 Cal.App.2d 184, 191-192 [344 P.2d 25]); accordingly, they were not entitled to summary judgment on this ground. (See American Society of Composers, Authors & Publishers v. Superior Court, supra, 207 Cal.App.2d 676, 690-691.)
Moreover, defendants' affidavits fail in another respect. Although the relevant affidavit states that Dr. Kaiman had not appealed her rejection to the Los Robles medical executive committee, it does not indicate that the hospital ever informed Dr. Kaiman that she had any such right under the hospital's bylaws. In our recent Pinsker decision we explained that
Under similar circumstances in Willis v. Santa Ana etc. Hospital Assn., supra, 58 Cal.2d 806, our court upheld an aggrieved doctor's right directly to institute a tort action for damages resulting from the exclusion; we reaffirm the Willis holding today. When a hospital denies staff privileges to a doctor without affording him the basic procedural protection to which he is legally entitled, the hospital and parties acting in concert with the hospital can offer no convincing reason or justification why they should be insulated from an immediate tort suit for damages. (See also Ascherman v. San Francisco Medical Society, supra, 39 Cal.App.3d 623, 650-651.)
Accordingly, we conclude that the trial court properly denied defendant's motion for summary judgment with respect to the events at Los Robles Hospital.
3. Although the Westlake defendants do not enjoy an absolute immunity from liability, either by virtue of the hospital's bylaws or Civil Code
section 47, subdivision 2, plaintiff cannot maintain a damage action against the hospital or individual board members who participated in the quasi-judicial revocation proceedings until she has succeeded in setting aside the revocation in a mandamus proceeding.
We turn now to the propriety of the trial court's ruling with respect to the events at Westlake hospital. Defendants' own affidavits reveal, of course, that plaintiff did fully exhaust all available internal remedies at Westlake and defendants make no claim that they are entitled to summary judgment with respect to the Westlake matter on the basis of the exhaustion doctrine discussed above. Defendants do contend, however, that summary judgment should have been granted with respect to the events at Westlake on the basis of three separate theories. We discuss each of these contentions in turn.
(a) The Westlake bylaws.
First, defendants rely upon one provision of the Westlake "Constitution and Bylaws" which they assert precludes plaintiff from seeking any recovery for losses occasioned by the termination of her staff privileges at the hospital. As noted above, the relevant section provides in part: "Each member of, or applicant to, the Medical and Dental Staff, waives any right of personal redress against the Medical and Dental Staff, the Judicial Review Committee, the Governing Board or any member thereof, for disciplinary action taken under this Article."
Although some early California decisions indicated that comparable bylaws could be effective to preclude any judicial action by an aggrieved member against a private association (see Levy v. Magnolia Lodge, I.O.O.F., supra, 110 Cal. 297, 309-310; Robinson v. Templar Lodge, I.O.O.F., supra, 117 Cal. 370, 374-375), more recent decisions of this court clearly demonstrate that an exculpatory clause of this nature transgresses public policy and cannot bar a plaintiff's access to the courts. Initially, insofar as the provision in question purports to bar a plaintiff's claim based on the intentional wrongdoing of the hospital or its staff, as is alleged in the instant case, Civil Code section 1668 leaves no doubt that the provision is invalid, for the section provides in relevant part: "All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another ... are against the policy of the law."
(b) Civil Code section 47, subdivision 2.
Section 47, subdivision 2, affords an absolute privilege (see, e.g., Albertson v. Raboff (1956) 46 Cal.2d 375, 379 [295 P.2d 405]) to any "publication or broadcast" made in connection with any legislative, judicial, or "other official proceeding authorized by law,"
As we read Dr. Kaiman's complaint and affidavits, however, the gist of her claim is not that her injury has been occasioned simply by defendants' malicious statements at the proceedings, but rather that she has been injured by the malicious actions of the hospital and its committee members in revoking her staff privileges. As the Court of Appeal pointed out in Goodley v. Sullivant, supra, 32 Cal.App.3d 619, 624-625, it is section 43.7, and not section 47, subdivision 2, which "is concerned with the actions taken by a medical committee (i.e., refusing, suspending or revoking hospital privileges to any doctor)"; under section 43.7 such actions enjoy only a conditional privilege. Although, as plaintiff contends, section 47, subdivision 2, has on occasion been applied in contexts other than a defamation action (see, e.g., Younger v. Solomon (1974) 38 Cal.App.3d 289, 300-302 [113 Cal.Rptr. 113]), its absolute privilege has always attached only to statements or publications made in connection with the applicable proceeding. Accordingly, the trial court properly concluded that the section provided no absolute shield for defendants in this case.
(c) Failure to have revocation set aside in mandamus action.
In contending that the present action for damages is premature, defendants assert that plaintiff's cause of action is analogous to a malicious prosecution action which can only be maintained after the allegedly maliciously initiated proceeding has terminated in favor of the person against whom it was brought. (See, e.g., Jaffe v. Stone (1941) 18 Cal.2d 146, 149 [114 P.2d 335, 135 A.L.R. 775].) In Hardy v. Vial (1957) 48 Cal.2d 577 [311 P.2d 494], this court explicitly held that the elements of a traditional malicious prosecution action apply to an action seeking damages resulting from a maliciously initiated administrative proceeding. Defendants argue that because the "private" administrative proceeding conducted by the hospital in the instant case parallels an ordinary "public" administrative proceeding, plaintiff ought to be barred from proceeding with her damage action until the administrative proceeding has been "terminated in her favor," i.e., until the hospital's revocation decision has been overturned in a judicial mandamus action.
We recognize, of course, that the plaintiff's present action is not precisely analogous to the malicious prosecution action at issue in Hardy. In Hardy, as in malicious prosecution cases generally, the plaintiff sought recovery against the parties who had initiated the charges against him; in the instant case, plaintiff seeks recovery against those who actually rendered the revocation decision against her. Moreover, the parallel between public and private administrative proceedings is not complete, for in the public sector those who render decisions in a quasi-judicial capacity enjoy an absolute immunity for their actions (see Gov. Code, § 820.2; Downer v. Lent (1856) 6 Cal. 94, 95-96), whereas in the hospital or professional association setting, the Legislature has afforded individual decisionmakers only a conditional privilege. (Civ. Code, § 43.7, quoted at fn. 6, ante.)
Despite these distinctions, however, we believe that the general policy underlying the "favorable termination" requirement in malicious prosecution
In our view, the above requirement accords a proper respect to an association's quasi-judicial procedure, precluding an aggrieved party from circumventing the established avenue of mandamus review. In addition, this result will simplify court procedures by providing a uniform practice of judicial, rather than jury, review of quasi-judicial administrative decisions. (Cf. Code Civ. Proc., § 1094.5; Boren v. State Personnel Board (1951) 37 Cal.2d 634, 637 [234 P.2d 981].)
Finally, this procedure affords a justified measure of protection to the individuals who take on, often without remuneration, the difficult, time-consuming and socially important task of policing medical personnel. Because such individuals remain ultimately subject to suit, the procedure outlined above does not conflict with the legislative decision to afford only a conditional privilege to these decisionmakers (see Civ. Code, § 43.7); once a court determines in a mandamus proceeding that an association's quasi-judicial decision cannot stand, either because of a substantive or procedural defect, the prevailing party is entitled to initiate a tort action against the hospital and its board or committee members or staff.
We summarize our conclusions as to events at Los Robles Hospital. First, we have determined that although a doctor who has been denied hospital staff privileges must exhaust all available internal remedies before instituting any judicial action, including an action seeking only damages, the affidavits in the instant case do not establish that Los Robles provided an available remedy which plaintiff failed to exhaust. Second, we have concluded that because Los Robles undertook the exclusion without notice or hearing, plaintiff is not precluded from immediately instituting a tort action for damages sustained as a result of such exclusion.
We sum up our conclusions as to the revocation of privileges at Westlake Community Hospital. We have explained that the exculpatory clause contained in Westlake's by-laws does not bar plaintiff's action and that Civil Code section 47, subdivision 2, does not provide an absolute privilege to either Westlake or its board or committee members in regard to the revocation of plaintiff's staff privileges. Finally, we have decided that because plaintiff has not yet succeeded in setting aside the
In compelling the exhaustion of available hospital remedies and in requiring that a hospital's quasi-judicial denial of staff privileges, if wrongful, be first set aside, we seek to accommodate the divergent interests involved here. Our court has long recognized, of course, that the existence of unrestrained authority in hospital boards or professional associations has at times enveloped an arbitrary selectivity that threatened to convert the operating room into the province of an elite clique. Our past decisions demonstrate that this court has been adamant in its endeavor to eradicate monopolistic control of professional opportunities.
At the same time, however, we must realistically acknowledge that nonmedical hospital board members and doctors who undertake the hard task of selecting those who are to be accorded the use of the hospital must labor under a heavy burden. Their function is both to attempt to protect the hospital from malpractice suits that may arise from inadequate performance and to insure, so far as possible, that the hospital renders that high quality health care that is more and more the imperative of governmental beneficences. Such board members and doctors frequently donate their time and talents on a volunteer basis. When such individuals pursue their tasks under procedures which accord an aggrieved doctor an opportunity to rebut the charges against him, we believe they are entitled to the modicum of protection provided by the procedural requirements discussed above.
Accordingly, the alternative writ is discharged and a peremptory writ of mandate shall issue, directing the trial court to vacate the challenged order insofar as such order denies defendants' motion for summary judgment with respect to the revocation of plaintiff's staff privileges at Westlake Community Hospital. (Code Civ. Proc., § 437c, 6th par.) In all other respects, the requested relief is denied. Each party shall bear its own costs.
Wright, C.J., McComb, J., Mosk, J., Sullivan, J., Clark, J., and Richardson, J., concurred.
The petition of the real party in interest for a rehearing was denied September 3, 1976.
Although the "Los Robles defendants" are not parties to the present proceeding, the events at Los Robles remain relevant, for the complaint alleges that the "Westlake defendants" were engaged, inter alia, in a conspiracy to exclude plaintiff from Los Robles and are thus liable for damages resulting from Dr. Kaiman's allegedly improper exclusion from that hospital. Accordingly, in the case at bar we must determine whether the trial court properly refused to grant the Westlake defendants summary judgment with respect to both the discharge from staff privileges at Westlake and the denial of staff privileges at Los Robles.