In Fahlen v. Sutter Central Valley Hospitals, ___ Cal.4th ___  (Feb. 20, 2014), the California Supreme Court upheld the ruling of the California Court of Appeal (5th Appellate District) and Stanislaus County Superior Court (Judge Salter) that a physician may proceed with a whistleblower retaliation lawsuit based on complaints about patient safety without first exhausting quasi-judicial peer review proceedings.

Plaintiff, a physician with privileges at defendant hospital, had numerous conflicts with certain nurses and complained to the hospital administration that they had put patients’ lives in danger by ignoring his instructions.  Subsequently, defendant hospital’s chief operating officer contacted plaintiff’s employer (another hospital) about plaintiff’s behavior and plaintiff’s employment was terminated. This also resulted in the cancellation of plaintiff’s medical malpractice insurance and, consequently, the loss of staff privileges with defendant hospital.  Although a judicial review committee of physicians reversed that decision, defendant hospital’s board of trustees reversed the review committee’s decision.  At this point, the normal course of action for plaintiff to take would be to file a petition for review of the board of trustee’s decision in California Superior Court. Plaintiff did not do that, however.  Instead, he filed a lawsuit against defendant hospital and its chief operating officer for, among other things, violation of California Health & Safety Code Section 1278.5, which protects health care workers from retaliation for reporting suspected unsafe patient care and conditions. In effect, plaintiff claimed he was fired for being a whistleblower when he reported the nurses’ actions.

Defendants filed an anti-SLAPP motion to dismiss the action, arguing that plaintiff could not bring a lawsuit under Section 1278.5 unless he first succeeded by review to the Superior Court.  The trial court (Judge Salter of Stanislaus County Superior Court) denied the motion and the Court of Appeal (5th Appellate District) affirmed, finding that defendants could not show a low probability of plaintiff succeeding on his claim.  Because this holding conflicted with that of another appellate decision, Nesson v. Northern Inyo County Local Hospital Dist., 204 Cal.App.4th 65 (2012), the Supreme Court granted review to resolve the conflict.

The Supreme Court held 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 does not expressly or impliedly condition a plaintiff’s right to bring a lawsuit on a prior successful mandamus challenge to a hospital’s quasi-judicial decision to restrict or terminate the whistleblower’s medical staff privileges.  Indeed, “such a condition would seriously undermine the Legislature’s purpose to afford a whistleblower on a hospital medical staff the right to sue.  A hospital disciplinary proceeding against a member of the medical staff is ostensibly focused on concerns about the physician’s professional fitness, not on redressing his or her claims of whistleblower retaliation.” If plaintiff were barred from filing a lawsuit under Section 1278.5 unless he first sought review of the board’s decision, “the mandamus court could . . . entirely and permanently foreclose the physician’s statutory right to litigate, in court, his or her distinct claim that whistleblower retaliation was a reason for the exclusionary effort.”