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Gafner v. DECH part 2

(b) Merits of Corporate Liability Claim [¶31] We turn then to the final issue in this matter, whether we should adopt into the common law of the State of Maine a cause of action against hospitals and other medical facilities referred to as "corporate liability." As discussed herein, we use the term corporate liability to encompass only those theories of liability predicated upon a more general obligation of hospitals to insure the quality of care within the institution. We do not intend the term to incorporate concepts of vicarious liability{8} or other types of direct liability occasioned by a hospital's breach of a previously recognized duty.{9} [¶32] For purposes of this analysis, we accept the Gafners' factual assertion that the Hospital "failed to have in place at the time of Shannon Gafner's birth a written policy requiring mandatory consultation" with a specialist in high risk births. See Thompson v. Nason Hosp., 591 A.2d 703, 707 (Pa. 1991). No duty to promulgate such policies existed at common law, nor has the Legislature placed such a duty on the Hospital. Nonetheless, the Gafners ask us to recognize a duty on the part of a hospital to adopt rules and policies controlling the actions of independent physicians practicing within its walls. [¶33] In determining whether a duty exists, many factors must be considered, including "'the hand of history, our ideals of morals and justice, the convenience of administration of the rule, and our social ideas as to where the loss should fall.'" Trusiani v. Cumberland & York Distribs., Inc., 538 A.2d 258, 261 (Me. 1988) (quoting William L. Prosser, Palsgraf Revisited, 52 Mich L. Rev. 1, 15 (1953)). [¶34] Addressing those policy considerations, the Gafners rely heavily on the analysis of the Pennsylvania Supreme Court in Thompson. There, the court adopted a theory of corporate liability, allowing a hospital to be held liable if it "failed to monitor and review medical services provided within its facilities." Id. at 708. The court suggested that a hospital's duties could be separated into four general areas: (1) a duty to use reasonable care in the maintenance of safe and adequate facilities and equipment; (2) a duty to select and retain only competent physicians; (3) a duty to oversee all persons who practice medicine within its walls as to patient care; and (4) a duty to formulate, adopt and enforce adequate rules and policies to ensure quality care for the patients. Id. at 707 (footnote and citations omitted).{10} [¶35] Some form of this cause of action has been adopted in many other states,{11} and is largely recognized as stemming from the decision of the Illinois Supreme Court in Darling v. Charleston Community Memorial Hospital, 211 N.E.2d 253 (Ill. 1965); see Pedroza v. Bryant, 677 P.2d 166, 168 (Wash. 1984) (en banc). The theory has also sparked a great deal of commentary, including an article urging this Court to adopt the corporate liability theory in Maine. See C. Elisabeth Belmont, Comment, Hospital Accountability in Health Care Delivery, 35 Me. L. Rev. 77 (1983). Proponents of the theory present a number of justifications in its support. Most prominent is the concept that hospitals are no longer viewed as the mere physical facilities in which doctors do their work, but are rather viewed as comprehensive healthcare centers that "provide and monitor all aspects of health care." See David H. Rutchik, Note, The Emerging Trend of Corporate Liability: Courts' Uneven Treatment of Hospital Standards Leaves Hospitals Uncertain and Exposed, 47 Vand. L. Rev. 535, 538 (1994). Thus, [b]ecause hospitals offer comprehensive medical services within a corporate structure, courts have found that the public reasonably may rely on the hospital itself as a health-care provider. The public expects to be treated and cured by the hospital rather than by particular nurses or other employees who provide patient care. Accordingly, patients often believe that the various health-care practitioners within the hospital render care collectively on the hospital's behalf. . . . [T]he increased public reliance on sophisticated, profit-generating hospitals [is] a major reason for imposing corporate liability. Id. at 539 (footnotes omitted). See, e.g., Strubhart v. Perry Mem'l Hosp. Trust Auth., 903 P.2d 263, 275 (Okla. 1980); Thompson, 591 A.2d at 706-07; Pedroza, 677 P.2d at 169; Darling, 211 N.E.2d at 257. Other rationales offered in justification for the doctrine of corporate liability include the belief that "a hospital is in the best position to monitor and control its staff physicians." See Rutchik, supra, at 549. See, e.g., Pedroza, 677 P.2d at 169; see also, e.g., Gregory T. Perkes, Casenote, Medical Malpractice--Ostensible Agency and Corporate Negligence, 17 St. Mary's L.J. 551, 573 (1986) (explicating Brownsville Med. Ctr. v. Gracia, 704 S.W.2d 68 (Tex. App. 1985)), cited in Thompson, 591 A.2d at 706 n.4. [¶36] Notably, the theory is also understood to have been generated by the "judicial desire to place liability on the party most able to pay." See Perkes, supra at 573. See also Rutchik, supra, at 549 (citing Pedroza, 677 P.2d at 169). [¶37] This evolving theory of liability, however, has not been universally embraced. At least one critic has decried the result as misguided economic policy making on the part of the courts. See, e.g., Thompson, 591 A.2d at 709 (Flaherty, J., dissenting). Declaring the cause of action to represent a "deep pocket" approach, Justice Flaherty offered the following observations: In adopting this new theory of liability, the majority is making a monumental and ill-advised change in the law of this Commonwealth. The change reflects a deep pocket theory of liability, placing financial burdens upon hospitals for the actions of persons who are not even their own employees. At a time when hospital costs are spiraling upwards to a staggering degree, this will serve only to boost the health care costs that already too heavily burden the public. Traditional theories of liability, such as respondeat superior, have long proven to be perfectly adequate for establishing corporate responsibility for torts. Id. at 709 (Flaherty, J. dissenting). Others have concluded that, "[i]n its adoption of a general 'duty to oversee all persons who practice medicine within its walls as to patient care,' the Thompson court neither provided guidance as to the extent to which hospitals must now monitor staff physicians, nor did it articulate the standard of care to which hospitals must adhere." Judith M. Kinney, Casenote, Tort Law--Expansion of Hospital Liability Under the Doctrine of "Corporate Negligence," 65 Temp. L. Rev. 787, 797 (1992) (footnote omitted). See Mark E. Milsop, Comment, Corporate Negligence: Defining the Duty Owed by Hospitals to Patients, 30 Duq. L. Rev. 639, 643 (1992) (noting that, despite the Thompson court's broad statement of the general rule, "the question remains as to exactly what the rule's boundaries are"); cf. Rutchik, supra, at 566 (arguing that "[w]ithout consistent judicial application of the standards, corporate liability presents hospitals with the daunting specter of potentially limitless liability").{12} [¶38] We traditionally approach the adoption of a new cause of action with caution. See, e.g., Hottentot v. Mid-Maine Med. Ctr., 549 A.2d 365, 368-69 (Me. 1988). In this area of complex public policy affecting the process by which medical decisions are made, as well as the safety of patients, the welfare of the public, and economic forces as yet unexplicated, we must be no less cautious. [¶39] The balancing of interests implicated by the changing nature of hospitals has been undertaken in some depth by the Legislature. Consistent with the growing recognition of an independent duty on the part of hospitals to assure the credentials of physicians practicing with their facilities, the Legislature has considered the relationship between hospitals and physicians and has placed very specific duties upon hospitals. Among those duties is the obligation to assure that "[p]rovider privileges extended or subsequently renewed to any physician are in accordance with those recommended by the medical staff as being consistent with that physician's training, experience and professional competence." 24 M.R.S.A. § 2503(2) (1990). To date, however, the Legislature has not chosen to place upon hospitals a specific duty to regulate the medical decisions of the physicians practicing within the facility.{13} [¶40] Nonetheless, the Gafners would have us incorporate into Maine law a theory of corporate liability for failure to have explicit policies in place controlling the actions of independent physicians. This formulation of the theory of liability has only been recognized by a few jurisdictions.{14} Instead, most courts that have recognized the cause of action referred to as corporate liability have grounded the claim upon the responsibility of the facility to assure that physicians practicing in the facility are properly credentialed and licensed.{15} For example, in Pedroza, the Washington Supreme Court gave the following description of its theory of corporate liability: The doctrine of corporate negligence has . . . been utilized by courts to require hospitals to exercise reasonable care to insure that the physicians selected as members of hospital medical staffs are competent. [Those courts] have also held that hospitals have a continuing duty to review and delineate staff privileges so that incompetent staff physicians are not retained. See Pedroza at 168-69 (citations omitted). This expression of the duty is similar to the Maine Health Security Act's own provisions. See 24 M.R.S.A. § 2503(2). [¶41] In contrast, the Gafners' proposed theory of "corporate liability" has not yet gained significant acceptance in other jurisdictions and has not been addressed by our own Legislature. Moreover, no study of the effects of such a change in the law has been undertaken. Creating a duty that would place external controls upon the medical judgments and actions of physicians should not be undertaken without a thorough and thoughtful analysis. [¶42] We decline to create such a duty from whole cloth and therefore decline to recognize the cause of action suggested by the Gafners. There are a number of reasons for our refusal to accept the Gafners' theory of liability against the Hospital. Private hospitals in Maine are extensively regulated. The Legislature has created duties and guidelines for the actions of those hospitals in a number of areas. Before the expansion of tort liability into an area that has been significantly controlled by the Legislature, we should allow the Legislature to address the policy considerations and determine whether imposing such a duty constitutes wise public policy. [¶43] Moreover, creating a duty on the part of hospitals to control the actions of those physicians who have traditionally been considered independent contractors may shift the nature of the medical care provided by those physicians. In an area as replete with the possibility of unexpected or unintended consequences as this, we should exercise restraint in the use of our authority to create new causes of action. As the concurrence commented in Hottentot, "[w]hen the legislative and the executive branches have the extensive involvement they do in this area and yet have declined to provide judicial remedies" sought by the plaintiffs, "we should likewise stay our hand as a common law court." Hottentot, 549 A.2d at 370 (Hornby, J., concurring). [¶44] In sum, there exist serious and unanswered public policy questions regarding the wisdom of requiring hospitals to control the medical judgments and actions of independent physicians practicing within their facilities. Those questions implicate both quality of care and economic considerations. We will not lightly adopt a new theory of liability in an area of such significant concern for the public health. We decline to do so here. The entry is: Judgment in favor of the Hospital on the Gafners' claim of corporate liability against the Hospital is affirmed. Judgment as to the Gafners' claim of vicarious liability for the actions of the nurses is vacated and remanded to the Superior Court for remand to the panel for further proceedings consistent with this opinion.
Attorneys for plaintiffs: Walter F. McKee, Esq., (orally) Sumner H. Lipman, Esq. Lipman & Katz, P.A. P O Box 1051 Augusta, ME 04332-1051 Attorneys for defendant: Martha C. Gaythwaite, Esq., (orally) Evan Smith, Esq. Friedman Babcock & Gaythwaite P O Box 4726 Portland, ME 04112-4726
FOOTNOTES******************************** {1} . Under 24 M.R.S.A. § 2857(1) (1990), the final determinations of the panel are treated as private and confidential until trial. We need not set forth the panel's ultimate findings here. {2} . The Gafners did not object to the chair's referral of their motion to extend time for designating experts to the Superior Court, notwithstanding the Act's requirement that any request for extension of time, whether or not related to discovery, must be made to the panel chair, see 24 M.R.S.A. § 2853(7) (Pamph. 1998). The Superior Court has the general authority to rule on discovery motions referred by the chair. See 24 M.R.S.A. § 2852(6) (1990). On these facts, where there was no objection by the Gafners, the court did not exceed its authority when it ruled on all of the discovery motions referred by the panel chair. {3} . The Act provides that the chair "may rule on requests regarding discovery, or may allow the parties to seek a ruling in the Superior Court." 24 M.R.S.A. § 2852(6). {4} . Any discovery disputes affecting the presentation of the case in the Superior Court may be raised with the Superior Court prior to trial in that forum, thus preserving the party's right to appellate review. We do not address the possibility that a judicial order in a panel discovery matter related to issues such as privilege may be immediately subject to appellate review. See Lewellyn v. Bell, 635 A.2d 945, 947-48 (Me. 1993); Pierce v. Grove Mfg. Co., 576 A.2d 196, 197-200 (Me. 1990). {5} . A dismissal of a claim "is deemed to be the equivalent of a finding for the defendant on all issues before the panel." 24 M.R.S.A. § 2853(8)(B)(2) (Pamph. 1998). Because the court denied the Hospital's motion to dismiss, we need not decide whether a dismissal of the claims would have a different effect on the Superior Court's action on subsequent motions. See 24 M.R.S.A. § 2903(1)(B) (1990 & Pamph. 1998); Irish v. Gimbel, 1997 ME 540, ¶ 19, 691 A.2d 664, 673 (Me. 1997) (unscreened claims may not be pursued in the Superior Court); Dutil v. Burns, 1997 ME 1, ¶ 2, 687 A.2d 639, 640 (Me. 1997) (all claims must be preceded by screening by panel). {6} . The Gafners have not designated any other expert regarding the Hospital's liability. In the absence of an expert witness, the Gafners cannot establish a claim of professional negligence against the Hospital before the panel, whether on issues of vicarious liability as to the nurses or on issues of direct corporate liability. See Hamor v. Maine Coast Mem'l Hosp., 483 A.2d 718, 722-23 (Me. 1984). We recognize, therefore, that the remand to the panel will be pro forma only, in order to allow the panel to enter findings in favor of the Hospital. See 24 M.R.S.A. § 2855 (1990 & Pamph. 1998). {7} . The motion in Dutil was probably mischaracterized as a motion pursuant to M.R. Civ. P. 12(b)(6) because it more closely resembled a challenge to the sufficiency of process. See Dutil, 1997 ME 1, ¶ 5, 687 A.2d at 641. {8} . The Gafners concede that, because Dr. Sammis was not an agent of the Hospital, the Hospital cannot be held vicariously liable for her alleged negligence. Cf. Phillips v. Eastern Me. Med. Ctr., 565 A.2d 306, 307 (Me. 1989); Forbes v. Osteopathic Hosp., 552 A.2d 16, 17 (Me. 1988). {9} . See generally Shaw v. Bolduc, 658 A.2d 229 (Me. 1995) (recognizing hospital's liability for breach of duty of care by its own staff); Gammon v. Osteopathic Hosp. of Me., Inc., 534 A.2d 1282 (Me. 1987) (recognizing unique duty of care regarding body parts). {10} . The Thompson court was careful to qualify the rule by noting that, "for a hospital to be charged with negligence, it is necessary to show that the Hospital had actual or constructive knowledge of the defect or procedures which created the harm. Furthermore, the Hospital's negligence must have been a substantial factor in bringing about the harm to the injured party." Thompson, 591 A.2d at 708 (citations omitted). {11} . See, e.g., infra notes 14 and 15. {12} . Other commentators have noted that the general rule of corporate liability inappropriately places hospitals in the role of insurer for all physicians and medical staff who practice within their facilities. See Martin C. McWilliams Jr. & Hamilton E. Russell III, Hospital Liability for Torts of Independent Contractor Physicians, 47 S.C. L. Rev. 431, 473-74 (1996). {13} . The Gafners no longer claim that the Hospital failed in its duty regarding Dr. Sammis's privileges. See 24 M.R.S.A. § 2503(2). Although originally stated in their notice of claim, this allegation was not pressed by the Gafners in their objection to the Hospital's motion and is not argued before this Court. The Gafners also do not claim that the Hospital failed to provide appropriate facilities or equipment. {14} . See, e.g., Denton Reg'l Med. Ctr. v. LaCroix, 947 S.W.2d 941, 950 (Tex. App. 1997); Thompson, 591 A.2d at 707; Darling, 211 N.E.2d at 258. {15} . See, e.g., Elam v. College Park Hosp., 183 Cal. Rptr. 156, 165 (Cal. Ct. App. 1982); Kitto v. Gilbert, 570 P.2d 544, 550 (Colo. Ct. App. 1977); Insinga v. LaBella, 543 So.2d 209, 211 (Fla. 1989); Mitchell County Hosp. Auth. v. Joiner, 189 S.E.2d 412, 414 (Ga. 1972); Ferguson v. Gonyaw, 236 N.W.2d 543, 550 (Mich. Ct. App. 1975); Corleto v. Shore Mem'l Hosp., 350 A.2d 534, 538 (N.J. 1975); Raschel v. Rish, 488 N.Y.S.2d 923, 925 (N.Y. App. Div. 1985), aff'd 504 N.E.2d 389 (N.Y. 1986); Benedict v. St. Luke's Hosps., 365 N.W.2d 499, 504 (N.D. 1985); Albain v. Flower Hosp., 553 N.E.2d 1038, 1045 (Ohio 1990), overruled on other grounds by Clark v. Southview Hosp. & Family Health Ctr., 628 N.E.2d 46 (Ohio 1994); Rodrigues v. Miriam Hosp., 623 A.2d 456, 462-63 (R.I. 1993); Pedroza, 677 P.2d at 168; Johnson v. Misericordia Community Hosp., 301 N.W.2d 156, 164 (Wis. 1981).
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