BouSamra v. Excela Health

210 A.3d 967

George R. BOUSAMRA, M.D.

v.EXCELA HEALTH, a Corporation; Westmoreland Regional Hospital, Doing Business as Excela Westmoreland Hospital, a Corporation; Robert Rogalski ; Jerome E. Granato, M.D.; Latrobe Cardiology Associates, Inc., a Corporation; Robert N. Staffen, M.D.; Mercer Health & Benefits, LLC; and American Medical Foundation for Peer Review and Education, Inc., a Corporation

Appeal of: Excela Health, Westmoreland Regional Hospital, Robert Rogalski, Jerome E. Granato, M.D., and Latrobe Cardiology Associates, Inc.

No. 5 WAP 2018

Supreme Court of Pennsylvania.

Argued: October 24, 2018

Decided: June 18, 2019

OPINION

JUSTICE MUNDY

In this appeal by allowance, we consider whether Excela Health waived the attorney work product doctrine or the attorney-client privilege by forwarding an email from outside counsel to its public relations and crisis management consultant, Jarrard, Phillips, Cate & Hancock. We conclude that the attorney work product doctrine is not waived by disclosure unless the alleged work product is disclosed to an adversary or disclosed in a manner which significantly increases the likelihood that an adversary or anticipated adversary will obtain it. Accordingly, we remand this matter to the trial court for fact finding and application of the newly articulated work product waiver analysis. Further, we affirm the Superior Court's finding that Excela waived the attorney-client privilege.

George R. BouSamra, M.D. (BouSamra), along with his colleague, Ehab Morcos, M.D. (Morcos), were members of Westmoreland County Cardiology (WCC), a private cardiology practice located in Westmoreland County.¹ BouSamra and Morcos are interventional cardiologists, who use intravascular catheter-based techniques to treat, among other things, coronary artery disease. Interventional cardiologists utilize catheterization and angiography to measure blood flow through patients' coronary arteries and evaluate the presence of blockages. If a blockage is severe enough, interventional cardiologists implant a stent --a device which increases the blood flow through the affected artery by widening the narrowed section.

Westmoreland Regional Hospital is operated by Excela Health (Excela), a corporation. As of 2006, approximately 90% of the interventional cardiology procedures at Westmoreland Regional Hospital were performed by WCC. As a result, most of the income Excela realized from interventional cardiology procedures at Westmoreland Regional Hospital stemmed from WCC's procedures.

In 2007, Excela acquired Latrobe Cardiology (Latrobe). Although Latrobe was a cardiology practice, it did not employ interventional cardiologists. Instead, Latrobe referred its patients requiring interventional cardiac procedures to other cardiologist groups, including WCC. Because WCC and Latrobe competed for patients, some animosity existed between the practices.

In 2008, Dr. Robert N. Staffen (Staffen), a member of Latrobe, complained to Excela that BouSamra and Morcos were not properly referring back to Latrobe those patients whom Latrobe had referred to WCC for interventional cardiology procedures. Additionally, some Latrobe physicians began accusing WCC doctors, particularly BouSamra and Morcos, of performing improper and medically unnecessary stenting. In light of these accusations, one of the principals of WCC, one of the cardiologists from Latrobe, and the then-Chief Medical Officer of Westmoreland Regional Hospital agreed that Dr. Mahdi Al-Bassam, a skilled interventional cardiologist, would perform a review of WCC's procedures.

On April 26, 2009, Dr. Al-Bassam issued a report concluding that the accusations made against WCC were unfounded. In fact, Dr. Al-Bassam found that the interventional cardiologists demonstrated outstanding skills and judgment, and found no evidence of misuse or abuse of interventional cardiology. He further concluded that the procedures performed by WCC involved no increased complications or mortality.

In February 2010, Robert Rogalski (Rogalski) was appointed CEO of Excela, at which point he became aware of the acrimonious relationship between WCC and Latrobe. Seeking to control the market for interventional cardiology in Westmoreland County, Rogalski began negotiating with WCC intending to bring WCC into Excela's network. The negotiations were ultimately unsuccessful, and in April 2010, WCC rejected any further negotiations.

In June 2010, Excela engaged Mercer Health & Benefits, LLC (Mercer) to review whether physicians at Westmoreland Regional Hospital, including BouSamra, were performing medically unnecessary stenting. Mercer's review was based on a sampling of interventional cardiology procedures. The results of the study were critical of BouSamra's work, and concluded that he had performed medically unnecessary interventional cardiology procedures.

BouSamra received the results of the Mercer peer review on December 18, 2010. On January 11, 2011, BouSamra resigned his privileges at Westmoreland Regional Hospital, hoping to minimize negative professional repercussions resulting from the peer review study. Prior to resigning, however, BouSamra had already gained provisional privileges to perform coronary interventions at Forbes Regional Hospital, which served patients in Westmoreland County and eastern Allegheny County.

On February 9, 2011, Excela hired American Medical Foundation for Peer Review and Education, Inc., (American) to conduct a more thorough peer review focusing on interventional cardiology procedures performed specifically by BouSamra in 2010. The stated goal of the American study was to determine if any of the procedures BouSamra performed at Excela's hospital were medically unnecessary.

While Mercer was completing its peer review but prior to American beginning its peer review, Excela contracted with an outside public relations consultant, Jarrard, Phillips, Cate & Hancock (Jarrard), to assist Excela in managing the anticipated publicity stemming from the results of the peer review studies. Molly Cate (Cate) was the principal at Jarrard who worked on the Excela media plan and frequently communicated with Excela through Timothy Fedele (Fedele), who was Excela's Senior Vice-President and General Counsel during the relevant events. Cate also worked with other members of Jarrard as part of the team handling Excela's media plans, including Kim Fox (Fox), Alan Taylor (Taylor), and Magi Curtis (Curtis). On February 23, 2011, American issued a final report to Excela in which it concluded that BouSamra and Morcos regularly overestimated arterial blockages and inappropriately implanted stents.

On February 25, 2011, Excela informed Cate that legal concerns prevented it from publically naming BouSamra as one of the doctors alleged to have implanted medically unnecessary stents. The next day, outside counsel sent legal advice by email to Fedele. Fedele forwarded that email to Cate and other employees at Excela. Cate subsequently forwarded that same email to Fox, Taylor, and Curtis--Jarrard employees working on Excela matters with Cate. On February 28, 2011, Excela informed Cate that, contrary to its position taken two days earlier, it was planning to publically identify BouSamra and Morcos as the cardiologists responsible for over-stenting.

On or about March 2, 2011, Excela held a press conference and publicly acknowledged the results of the peer review studies. In its press release, Excela stated that the peer review process had identified 141 patients of BouSamra and Morcos who, in the last twelve months, had received stents which may not have been medically necessary. The press conference received significant media attention the following day. See Excela Health Press Release, Excela Health Launches Medical Necessity Review of Coronary Stent Procedures , March 3, 2011.

BouSamra initiated this action by filing a complaint on March 1, 2012, seeking damages for, among other things, defamation and interference with prospective and actual contractual relations. As the matter continued through the phases of litigation, the parties disagreed as to the scope of discoverable materials. On November 18, 2014, Marvin A. Fein, Esquire, was appointed Special Master to resolve all discovery disputes. See Order of Court, Nov. 18, 2014. In anticipation of resolving the discovery problems, Appellants (referred to collectively as Excela)² created a privilege log of materials it asserted were protected from discovery. This privilege log included the February 26, 2011 email from outside counsel to Fedele, which Fedele forwarded to Excela management-level personnel and Cate, who in turn forwarded it to other Jarrard employees. The log also included various other emails among the members of the Jarrard team. In the interest of brevity, we will refer to these documents as the "Jarrard documents," as the Superior Court did below.

BouSamra filed a motion to compel Excela to produce the Jarrard documents on April 6, 2015. Excela responded by claiming that both the attorney-client privilege and the work product doctrine applied, barring discovery of the Jarrard documents. Appellees argued, however, that both privileges were waived when Fedele forwarded outside counsel's email to Cate because Cate was a third party outside the attorney-client relationship.

After conducting an in camera review of the documents, Special Master Fein issued a report on May 16, 2015, wherein he recognized that "it is likely that the contents of these documents will be disclosed at some point in this proceeding." Special Master's Report at 6, May 16, 2015. Special Master Fein reasoned, however, at that point in the proceedings, Excela had not waived any privilege which would render the documents discoverable. Id. In a proposed order of court issued by Special Master Fein, he recommended that "Plaintiff's Motion for Defendants to produce correspondence dated on or about February 26, 2011, between Excela's outside counsel, inside counsel, and [Jarrard],...