Hospital Officials Free From Libel in Physicians’ Reviews, Court Says

Hospital administrators cannot be sued for libel for disclosing critical evaluations of a physician’s performance to state medical authorities or to another hospital considering his application for staff privileges, a state Court of Appeal ruled Friday.

The three-judge panel unanimously upheld the pretrial dismissal of a $9-million suit brought by Dr. William Dorn III of Los Angeles against two Northern California hospitals and their administrators for reports they made to the state Board of Medical Quality Assurance and officials at Centinela Hospital Medical Center in Inglewood.

“Protecting such transmittals against defamation actions is necessary to accomplish the strong policy goals of maintaining a high quality of professional medical care,” retired San Francisco Superior Court Judge Francis L. McCarty, sitting by special assignment, wrote for the panel.

First Appellate Ruling

The decision, the first appellate ruling on the issue, is binding on all state trial courts unless overturned by the state Supreme Court.

An attorney for one of the hospitals and its administrator praised the ruling, saying that allowing such lawsuits could have had a “chilling effect” on candid peer evaluations in the medical community.

“Physicians and hospitals should be able to evaluate the skills and abilities of doctors who want staff privileges without having to fear that any negative is going to result in a libel suit,” said Joseph P. Mascovich of Oakland.

Dorn’s attorney, George Holland of San Francisco, denounced the ruling and said he will give “very serious thought” to an appeal to the state Supreme Court.

Holland said Dorn had never received a chance to challenge the evaluation before it was sent along to others. “I can’t see the justification for allowing (administrators) to report things we say did not occur,” he said.

Applied for Staff Privileges

The case arose in 1976 when Dorn applied for staff privileges as an orthopedic surgeon at Broadway Hospital and Valley General Hospital in Vallejo. He was permitted to perform surgery while being observed by other physicians who evaluated his skills and knowledge.

Later, Broadway Hospital said it notified Dorn he would be permitted to perform surgery only with the assistance of other surgeons with staff privileges. Dorn said he received no such notice but subsequently withdrew his application.

Hospital administrator Ronald D. Mendelzon then notified the Board of Medical Quality Assurance, the agency that reviews the performance of licensed physicians, of the restrictions it had placed on Dorn.

Meanwhile, Dorn applied for staff privileges at Centinela and that hospital contacted Jack Manley, administrator at Valley General, citing the report to the Board of Medical Quality Assurance and asking about the reasons for the restrictions.

Manley responded with a confidential letter, saying that the evaluation of Dorn’s performance contained several criticisms, including “unacceptable technical skill during certain surgical procedures.”

Afterward, Centinela increased the number of physicians then monitoring Dorn’s performance but later granted him staff privileges. Dorn, in turn, brought suit against the two Vallejo hospitals, Mendelzon and Manley, charging they had disseminated “false information” about his ability.

Two Solano County Superior Court judges granted summary judgments in favor of the hospitals and administrators and those rulings were upheld in a 20-page opinion issued by the appeal court Friday.

‘Absolute’ Protection

The panel said that under state statutes, the report to the Board of Medical Quality Assurance was entitled to “absolute” protection from the libel action and that the letter to Centinela could be subject to suit only if motivated by malice against Dorn.

The court rejected Dorn’s contention that malice could be implied because the letter was written by the administrator without his own investigation of whether the evaluation was reliable or biased.

“If a hospital administrator, who ordinarily possesses no medical training or experience, were under a duty to undertake an independent investigation of the accuracy of peer evaluations written by staff physicians . . . the protection in the law would become a nullity,” McCarty wrote in an opinion joined by Appellate Justices J. Anthony Kline and John E. Benson.