Richmond Health Facilities-Madison, Lp, D/B/A Madison Health & Rehabilitation Center v. Hon William G. Clouse Jr Judge, Madison Circuit Court
Richmond Health Facilities-Madison, Lp, D/B/A Madison Health & Rehabilitation Center v. Hon William G. Clouse Jr Judge, Madison Circuit Court
Opinion of the Court
Richmond Health Facilities-Madison, LP (Richmond Health) and Extendicare, Inc. (Extendicare)
I. FACTUAL AND PROCEDURAL BACKGROUND.
In 2012, Geraldine McCafferty was admitted to Richmond Health, a nursing facility owned and operated by Extendicare. But McCafferty’s' health rapidly deteriorated so she was transferred to the University of Kentucky Chandler Hospital after only a month’s stay. Eventually, McCafferty passed away. Following McCafferty’s death, Sharon Breshers, the Administratrix of McCafferty’s estate, filed suit against Richmond Health and Exten-dicare, alleging wrongful death, nursing-home abuse, and corporate negligence. The gravamen of Breshers’s claim is that Extendicare, in an attempt to boost profits, purposefully diverted necessary funds from Richmond Health; and, as a result, McCafferty was deprived of adequate medical care, which led to her death.
During discovery, Breshers sought the production of various. documents relating to Richmond Health’s clinical monitoring and oversight., In addition, Breshers. requested documents dealing with corporate finance matters alleged to indicate Exten-dicare’s negligence in funding Richmond Health. Of course, Richmond Health and Extendicare rejected Breshers’s requests ás an irrelevant fishing expedition for privileged information.
The trial court ordered Richmond Health and Extendicare to produce the requested financial documents and allegedly privileged information. In its order, the trial court did take certain precautions against the disclosure of any potentially private information by issuing a protective Order covering patient and personnel files, as well as corporate accounting methodologies perhaps considered proprietary.
Richmond Health and Extendicare, .co-defendants at the trial level, separately sought prohibitive writs from the Court of Appeals. Both parties argued the documents sought by Breshers were privileged under FQAP and, therefore, should not be produced. Additionally, Richmond Health and Extendicare argued their financial information was irrelevant and the trial court erroneously denied their request for a protective order. . The petitions were heard by separate panels of the Court of Appeals, but the same result was reached. Both Richmond Health and "Extendicare failed to produce a privilege log so each Court of Appeals- panel held the petitions fell short of the high burden involved when asserting-a-claim of privilege. Likewise, each panel held financial information was relevant to Breshers’s punitive-damages claim. As for the protective order, the record indicated that Extendicare had al
Operating separately yet again, Richmond Health and Extendieare now petition this Court for a writ of prohibition under Kentucky Rules of' Civil Procedure (CR) 76.36(7)(a).
II. ANALYSIS.
When ruling on a writ petition, we must first determine if the writ is appropriate. We review the merits of a writ petition and, in turn, the soundness of a trial court’s decision, only if a writ is a suitable remedy.. The issuance of,a writ always lies within this Court’s discretion.
[Ujpon a, showing .that (1) the lower court is proceeding or is about to proceed outside of its jurisdiction and there is no remedy through an application to an intermediate court; or (2) that the lower court is acting or is about to act erroneously, although within its jurisdiction, and there exists no adequate remedy by appeal or otherwise and great injustice and irreparable injury will result if the petition is not granted.5
Essentially, writs are divided into two classes. Richmond Health and Extendi-care invoke the second class of writ as they argue the trial court acted erroneously within its jurisdiction. So our review is for abuse of discretion, ie., a decision that is arbitrary, unreasonable, unfair, or unsupported by sound legal principles.
When faced with particular circumstances, we have excused the great-and-irreparable-injury element in order “to preserve the orderly administration of the laws.”
A. The Production of Financial Information was Properly Compelled.
Initially, Richmond Health and Ex-tendicare argue the Court of Appeals erred in allowing the trial court to compel the. production of the financial information requested by Breshers. The main point of Richmond Health’s and Extendicare’s argument is that the financial information sought by Breshers is irrelevant and, in turn, irreparably harmful.
We do well to remind Richmond Health and Extendicare that. CR 26.02, our rule governing the permissible, scope of discovery in civil litigation, trends toward discovery, permitting discovery “regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action....”
Considering that the information is clearly relevant, we see no way in which Richmond Health or Extendicare would suffer irreparable injury or satisfy to any degree the requirements for the application of our certain-special-cases exception. There is no great injustice or substantial miscarriage of justice in compelling a party to producé clearly relevant information. We affirm the ’Court of Appeals.
B. The Court of Appeals Appropriately Denied Richmond Health’s and Ex-tendicare’s Request for a Protective Order.
At the Court of Appeals, both Richmond Health and Extendicare sought a protective order for the disclosure of their financial information. In Richmond Health’s case, the Court of Appeals denied the protective-order request because it found there was. an adequate remedy on appeal, citing Hoffman v. Dow Chemical Co.
A protective order is within the full discretion and authority of the trial court and is appropriate only to prevent a party from “annoyance, embarrassment, oppression, or undue expense or burden.”
Perhaps a protective order would be appropriate if we were aware of what Richmond Health and Extendicare were trying to protect. Much like we discuss below with regard to the FQAP’s scope, Richmond Health and Extendicare have simply failed to make any argument sufficient to meet the burden they carry in seeking a more expansive protective order. We aré unwilling and — in light of the record — unable to conclude the trial court abused its- discretion. Extendicare and Richmond Health are not entitled to a writ, nor are they entitled to a protective order. We affirm the Court of Appeals on this issue.
C. Richmond Health and Extendicare Fall Short of their Burden to Show the FQAP Privilege Applies.
Finally, Richmond Health and Ex- . tendicare argue that despite the financial information’s supposed relevancy, FQAP renders it privileged.' In an attempt to improve the quality of care afforded to nursing home residents, Congress enacted in 1987 the Federal Nursing Home Reform Act (FNHRA),
We have yet to have occasion to interpret FQAP’s scope.. In actuality, only two states and one federal court have had such an opportunity. From this paucity of case law, two rules have emerged: the Missouri Rule
Before the Court of Appeals, Richmond Health argued Breshers failed to provide
Richmond Health can offer no evidence to support its argument that Breshers did not provide “reasonable notice” of her motion to compel. It was this alleged lack of notice, though, that Richmond Health argues prohibited it from producing a privilege log or, for that matter, any form of documentation identifying what FQAP should apply* to. Extendicare likewise did not produce a privilege log or any sort of documentation about the allegedly privileged documents, but Extendicare did receive notice of Breshers’s motion to compel.
It is axiomatic that a party who asserts a privilege bears the burden of proving the privilege applies.
Judicial restraint, rather than reaching into the somewhat murky FQAP world, is
We reject the writ petitions — they do not meet our writ standard and, in our estimation, would be nothing more than advisory. Essentially, Richmond Health’s and Extendicare’s arguments are not properly preserved for' our review — indeed, there is nothing to review. A writ is an extraordinary remedy, and this Court will not initiate the practice of using writs to save parties from their own litigation stumblings.
III. CONCLUSION.
We affirm the denial of the writs by the Court of Appeals.
. Various corporate iterations of both Richmond Health and Extendicare are involved in this writ action as co-defendants. For the sake of simplicity, we simply use "Richmond Health” and "Extendicare,” -singularly, -to refer to the respective collection of defendants.
. Kentucky Rules of Civil Procedure (CR) 76.36(7)(a) reads: "An appeal may be taken to the Supreme Court as a matter of right from a judgment or final order in any proceeding originating in the Court of Appeals."
. Hoskins v. Maride, 150 S.W.3d 1, 5 (Ky. 2004) (citation omitted).
. Bender v. Eaton, 343 S.W.2d 799, 800 (Ky. 1961).
. Hoskins, 150 S.W.3d at 10.
. See Tax Ease Lien Investments 1, LLC v. Commonwealth Bank & Trust, 384 S.W.3d 141, 143 (Ky. 2012) (noting that standing is a question of law subject to de novo review); Grange Mut. Ins. Co. v. Trude, 151 S.W.3d 803, 810 (Ky. 2004)(highlighting de novo review is typically appropriate under the first class of writs because jurisdiction is a question of law).
. Hoskins, 150 S.W.3d at 9 ("But if the petition alleged only that the trial court was acting erroneously within its jurisdiction, a writ would issue only if it was shown that there was no adequate remedy by appeal and great injustice and irreparable harm would otherwise occur.”).
. Ohio River Contract Co. v. Gordon, 170 Ky. 412, 186 S.W. 178, 181 (1916).
. Hoskins, 150 S.W.3d at 20 (quoting Bender, 343 S.W.2d at 801).
. Grange Mut., 151 S,W,3d at 808 (quoting Bender, 343 S.W.2d at 801).
. Maddox v. Grauman, 265 S.W.2d 939, 941 (Ky. 1954).
.Id.
. 413 S.W.2d 332, 334 (Ky. 1967).
. Ewing v. May, 705 S.W.2d 910, 913 (Ky. 1986).
. See 42 U.S.C. 1396r, et seq.; 42 U.S.C. 1395Í-3, et seq.; 42 C.F.R. 483, et seq.
. 42 U.S.C. 1395i — 3(b)(1)(B).
. 42 U.S.C. 1396r(b)(l)(B).
. 42 U.S.C. 1395i — 3(b)(1)(B).
. See State ex rel. Boone Ret. Ctr. v. Hamilton, 946 S.W,2d 740 (Mo. 1997) (en banc),
. See In re Subpoena Duces Tecum to Jane Doe, Esq., 99 N.Y.2d 434, 757 N.Y.S.2d 507, 787 N.E.2d 618 (2003).
. CR 37.01 ("A party, upon reasonable notice to other parties and all persons affected thereby, may apply for an order compelling discovery as follows: _”) (emphasis added).
. Collins v. Braden, 384 S.W.3d 154, 163 (Ky. 2012).
. Stidham v. Clark, 74 S.W.3d 719, 725 (Ky. 2002).
. Id. at 722.
. Collins, 384 S.W.3d at 163 (quoting Lexington Pub, Library v. Clark, 90 S.W.3d 53, 63 (Ky. 2002)).
. Id. at 163-64 ("All we have to go on is the hospital's argument about the content of the documents.... Without more certainty about the content of those documents, a reviewing court cannot determine whether any statements are even in the documents or whether any statements are covered by the privilege.”).
Concurring Opinion
CONCURRING IN RESULT ONLY:
Because this subject matter will likely come back up in this and other cases, I would, go a step further than the majority and analyze the application of the FQAP.
As part of the Omnibus Budget Reconciliation Act of 1987, Congress enacted the Federal Nursing Home Reform Act (“FNHRA”) to “improve the quality of care for ... nursing home residents.” Pub.L. No. 100-203, §§ 4201-4218; H.R.Rep. No. 100-391, pt. 1, at 452 (1987). At issue in this case is a subsection of FNHRA, the Federal Quality Assurance Privilege — 42 U.S.C. Sections 1395i-3(b)(1)(B) (skilled nursing facilities) and 1396r(b)(l)(B) (nursing facilities) — which respectively provide:
A [skilled] nursing facility must maintain a quality assessment and assurance committee, consisting of the director of nursing services, a physician designated by the facility, and at least 3 other members. of the facility’s staff, which (i) meets at least quarterly to identify issues with respect to which quality assessment and assurance activities are necessary and (ii) develops and implements appropriate plans of action to correct identified quality deficiencies. A State or Secretary may not require disclosure of the records of such committee except insofar as such disclosure is related to the compliance of such committee with the requirements of this sub-paragraph..
42 U.S.C. §' 1395i~3(b)(i )(B). The purpose of the FQAP is to “protect the [Quality Assurance] committee’s own records— its minutes or internal working papers or statements of conclusion — from discovery.” Jewish Home of E. PA v. Ctrs. for Medicare and Medicaid Servs., 693 F.3d 359, 362 (3d Cir. 2012). The goal is to engender self-critical analysis and ultimately, improve the quality of nursing home residents’ health care.
This Court has yet to address the scope of the FQAP. Two state supreme courts and one federal appellate court, however, have addressed the issue — albeit reaching differing conclusions. The Missouri Supreme Court and the U.S. Court of Appeals for the Third Circuit narrowly construed the FQAP to only privilege documents that are “generated” by a nursing home’s quality assurance committee. See Jewish Home of E. PA v. Ctrs. for Medicare and Medicaid Servs., 698 F.3d 359, 362 (3d Cir. 2012); State ex rel. Boone Ret. Ctr. v. Hamilton, 946 S.W.2d 740, 743 (Mo. 1997) (en banc). The New York Court of Appeals extended Boone’s holding to privilege all documents created “by or at the behest of’ a nursing home’s quality assurance committee. See In re Subpoena Duces Tecum to Jane Doe, Esq., 99 N.Y.2d 434, 757 N.Y.S.2d 507, 787 N.E.2d 618, 623 (2003). I would adopt the former approach and hold that only documents generated by a nursing home’s quality assurance committee fall within the scope of the FQAP. “This statutory privilege' is exceedingly narrow.” Boone, 946 S.W.2d at 743.
B. The “Missouri” Approach ’
The Supreme Court of Missouri,. and subsequently the U.S. Court of Appeals for the Third Circuit, each narrowly construed the FQAP. See Jewish Home, 693 F.3d at 362; Boone, 946 S.W.2d at 743. Both courts limited the scope of the statute by holding that only reports which are “generated” by a nursing home’s quality assurance committee are covered by the FQAP. See Jewish Home, -693 F.3d at 362 (“The language of 42 U.S.C. § 1396r(b)(l)(B) ... limits the scope of protection from discovery to the records generated by the Quality Assurance Committee.”) (emphasis added); see also State ex rel. Borne, 946 S.W.2d 740,. 743 (finding that the FQAP “protects only the committee’s own records — its minutes or internal working papers or statements of conclusions from discovery.”).
Following the Supreme , Court of Missouri, the Third Circuit — the only federal appellate court which has construed the scope of 42 U.S.C. § 1396r(b)(l)(B) — held that the FQAP “limits the scope of protection from discovery to the’records generated by the Quality Assurance Committee.” Jewish Home, 693 F.3d at 362 (citing Boone, 946 S.W.2d at '743) (emphasis added). Quoting the Missouri Supreme Court, the Third Circuit agreed that “[n]o honest reading of the statute ... can extend the statute’s privilege to' records and materials generated .outside, the committee and submitted to the committee for its review.” Jewish Home, 693 F.3d at 362. I agree.
In Jewish Home, the 'documents, in question were “contemporaneous, routinely-generated incident reports that were part of the residents’ medical records.” Id. Because these documents were not “minutes, internal papers,, or conclusions generated by the Quality Assurance Committee,” the Third Circuit held that the documents were not protected .by the FQAP. Id. Likewise, the documents Breshers seeks to discover do not fall within the scope of the FQAP because they were not .generated by Appellants’ Quality Assurance Committee, nor are they minutes, internal papers or conclusions of the Quality Assurance Committee. Id.
New York’s highest court
In Jane Doe, the parties agreed that the residents’, clinical records were not covered by the FQAP. The court noted that “such records do not acquire quality assurance protection merely because they are reviewed or used by a quality assurance committee. . Id.,, 757 N.Y.S.2d 507, 787 N.E.2d at 622. The parties additionally agreed that the work product of the quality assurance committee was privileged by the FQAP. Id. The controversy thus centered on “what documents or reports constitute ‘records of such committee’ ” under 42 U.S.C. § 1396r(b)(l)(B)(ii). Id. The petitioner therein argued that because the nursing home’s incident reports, infections reports, and the like were derived from clinical records that were not privileged by the FQAP, they should likewise not fall within the ambit of the FQAP. Id., 757 N.Y.S.2d 507, 787 N.E.2d at 623. Ultimately, the court determined:
While we agree with the Missouri court and petitioner that the federal protection is narrow, we decline to adopt the Boone standard because the federal statute does not restrict quality assurance records to only those reports created by quality assurance committee members themselves. We read the language “records of such committee” (42 USC § 1396r [b][l][B][ii]) as encompassing within its parameters any reports generated by or at the behest of a quality assurance committee for quality assurance purposes.
Id. I disagree. Extending the FQAP to encompass any reports generated “at the behest of’ a nursing home’s quality assurance committee has troubling implications.
Moreover, although Appellants rely' heavily on Jane Doe’s holding, they failed to take heed of the New York court’s warning: “[f]or the future, we. recommend that a party seeking to protect documents from disclosure compile a privilege log in order to aid the court in its assessment of a privilege claim.” Id. The Court of Appeals rejected Appellants’ position for this very reason. Additionally, despite. Appellants’ ipse dixit argument to the contrary,
The only case cited in support of Appellants’ broad interpretation is Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., a Sixth. Circuit opinion which stands for the proposition that privileges should be determined on a “case-by-case” basis. See 332 F.3d 976, 979-80 (6th Cir. 2003). I do not disagree. However, Goodyear Tire is inapposite to the current controversy. The quoted language from Goodyear Tire is referring to the recognition of new privileges, not the construction of existing ones;
In Boone and Jane Doe, the high courts of Missouri and New York each readily acknowledged that they were dealing with a case of first impression that had yet to be settled by a federal court.
Therefore, to the extent that the records sought to be discovered by Breshers were not generated by Appellants’ Quality Assurance Committee, and are not “minutes or internal working papers or statements of conclusion,” I would hold that they are not covered by the FQAP, and hence, are discoverable. Jewish Home, 693 F.3d at 362. Therefore, I would go further than the majority by adopting this application of the FQAP and would-, thus, instruct the courts below to proceed accordingly.
/s/John D. Minton, Jr. CHIEF JUSTICE
Cunningham and Venters, JJ., join.
. I do agree — subject to a caveat — with Appellants' statement that "[t]he Federal Quality Assurance Privilege is intended to allow a health care provider self-critical analysis with the goal of improved care without fear of the process being used to punish the health care provider.” However, "fear'of reprisal” is by no means absolute, and must be balanced with the FNHRA’s ultimate goal of "im-prov[ing] the quality of care for ... nursing
.New York’s court of last resort is the Court of Appeals of New York. For the opinion, see In re Subpoena Duces Tecum to Jane Doe, Esq., 99 N.Y.2d 434, 757 N.Y.S.2d 507, 787 N.E.2d 618 (2003). Additionally, Appellants rely on a lower court decision from Massachusetts to bolster their argument in favor of a broad interpretation of the FQAP. See Evans v. Quaboag on the Common, Inc., et al., 26 Mass.L.Rptr. 372 (Superior Ct. Mass Dec. 7, 2009). We find neither of these cases controlling, nor convincing.
. Not the least of which is what precisely does "at the behest of” mean.
. Kentucky has traditionally allowed a very limited number of privileges. See, e.g., KRE 501-11. For example, this Court recently declined to recognize a physician-patient privilege. See Caldwell v. Chauvin, 464 S.W.3d 139, 142-43 (Ky. 2015).
. Of note, we have rejected a similar argument in the context of the peer-review privilege and medical negligence claims. See Sisters of Charity Health Sys., Inc. v. Raikes, 984 S.W.2d 464, 470 (Ky. 1998); see generally KRS 311.377(2).
. Appellants argue that the FQAP preempts Kentucky’s long held practice of strictly construing privileges, but cites no authority on point to bolster their contention. This however, should not be a point of contention, because the Court of Appeals readily acknowledged that the FQAP preempts state law. Court of Appeals Order at 7. Appellants simply claim that because the FQAP preempts state law, it must be broadly construed to privilege all quality assurance documents. In re Jane Doe, a case upon which Appellants heavily rely, does not support their assertion. See In re Subpoena Duces Tecum to Jane Doe, Esq., 99 N.Y.2d 434, 757 N.Y.S.2d 507, 787 N.E.2d 618, 622 (2003) (“A facility may not create a privilege where none would otherwise exist merely by assigning the duty for compliance or compilation to a quality assurance committee.”). The FQAP's broadest interpretation can be found in In re Jane Doe, but even New York’s highest court limited the privilege to "any reports generated by or at the behest of a quality assurance committee.” Id., 757 N.Y.S.2d 507, 787 N.E.2d at 623. Here, Appellants seek an even broader interpretation from this Court, and neglect to address the only federal casé interpreting the FQAP, which supports a contrary construction. See Jewish Home of E. PA v. Centers for Medicare and Medicaid Services, 693 F.3d 359 (3d Cir. 2012).
. See Goodyear Tire, 332 F.3d at 980 (“[T]he . recognition of a privilege should be judged on a case-by-case basis and weighed against the public interest.”).
. See Boone, 946 S.W.2d at 742 ("This is a case of first impression. No federal court has interpreted theses statutes); In re Jane Doe, 757 N.Y.S.2d 507, 787 N.E.2d at 621 (”[N]either this Court nor any federal court has previously interpreted [the FQAP]).
Reference
- Full Case Name
- RICHMOND HEALTH FACILITIES-MADISON, LP, D/B/A Madison Health & Rehabilitation Center; Preferred Care Partners Management Group, LP; Preferred Care, Inc., D/B/A Preferred Care of Delaware, Inc.; And Kentucky Partners Management, LLC, Appellants v. Honorable William G. CLOUSE, Jr., Judge, Madison Circuit Court, Appellee and Sharon Breshers, as Administratrix of the Estate of Geraldine McCafferty, Deceased, Real Party in Interest and Extendicare, Inc.; Extendicare, L.P.; Extendicare Homes, Inc.; FIR Lane Terrace Convalescent Center, Inc., D/B/A Madison Health & Rehabilitation Center; Extendicare Health Network, Inc.; Extendicare Holdings, Inc.; Extendicare Health Services, Inc.; And Extendicare Health Facility Holdings, Inc., Appellants v. Honorable William G. Clouse, Jr., Judge, Madison Circuit Court, Appellee and Sharon Breshers, as Administratrix of the Estate of Geraldine McCafferty, Deceased, Real Party in Interest
- Cited By
- 12 cases
- Status
- Unknown