Pacific Radiation Oncology, LLC et al v. The Queen's Medical Center et al
Filing
335
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR TEMPORARY RESTRAINING ORDER OR IN THE ALTERNATIVE FOR PRELIMINARY INJUNCTION re 240 MOTION for Temporary Restraining Order or in the Alternative for Preliminary Injun ction. Signed by JUDGE LESLIE E. KOBAYASHI on 09/12/2014. -- Plaintiffs' Motion for Temporary Restraining Order or in the Alternative for Preliminary Injunction, filed July 14, 2014, is HEREBY GRANTED IN PART A ND DENIED IN PART. The Motion is GRANTED insofar as this Court: FINDS that Defendants' counsel, Alston Hunt Floyd & Ing, violated the Amended Stipulated Protective Order; [dkt. no. 134;] and FINDS that the appropriate sanction is an award of Pla intiffs' reasonable attorneys fees and costs incurred as a result of the violation, as described in this Order. Plaintiffs shall file their memorandum regarding the amount of the award, with supporting documentation, by September 29, 2014, and D efendants may file a memorandum responding to the requested amount by October 13, 2014. This Court CAUTIONS the parties that this Court may strike any memorandum that does not comply with the requirements set forth in this Order. Plaintiffs' Mot ion is DENIED in all other respects.This Court ORDERS the parties to contact the magistrate judge to schedule a discovery conference to address the issues set forth in this Order. (eps)CERTIFICATE OF SERV ICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
PACIFIC RADIATION ONCOLOGY,
LLC, a Hawai`i Limited
Liability Corporation, et
al.,
)
)
)
)
)
Plaintiffs,
)
)
vs.
)
)
THE QUEEN’S MEDICAL CENTER, a )
Hawai`i Non-Profit
)
Corporation, et al.,
)
)
Defendants.
)
_____________________________ )
CIVIL NO. 12-00064 LEK-KSC
ORDER GRANTING IN PART AND DENYING IN PART
PLAINTIFFS’ MOTION FOR TEMPORARY RESTRAINING ORDER
OR IN THE ALTERNATIVE FOR PRELIMINARY INJUNCTION
On July 14, 2014, Plaintiffs/Counterclaim Defendants
Pacific Radiation Oncology, LLC, a Hawai`i Limited Liability
Corporation, PRO Associates, LLC, a Hawai`i Limited Liability
Corporation, John Lederer, M.D., Laeton Pang, M.D., Eva Bieniek,
M.D., Vincent Brown, M.D., Paul DeMare, M.D., and Thanh Huynh,
M.D. (collectively “Plaintiffs”), filed their Motion for
Temporary Restraining Order or in the Alternative for Preliminary
Injunction (“Motion”).
[Dkt. no. 240.1]
Defendants/Counter
Claimants Queen’s Medical Center, a Hawai`i Non-Profit
Corporation, Queen’s Development Corp., a Hawai`i for Profit
1
Plaintiffs filed Exhibit H in support of the Motion under
seal on July 15, 2014. [Dkt. no. 241.] This Court, however,
will not consider the sealed exhibit because Plaintiffs did not
obtain leave of court to file the exhibit under seal.
Corporation, Noreen D.S.W. Mokuau, William G. Obana, M.D.,
Arthur A. Ushijima, Mark H. Yamakawa, Paula Yoshioka,
Sharlene K. Tsuda, Richard C. Keene, Clinton Yee,
Naleen N. Andrade, M.D., Ernest H. Fukeda, Jr., Robb Ohtani,
M.D., Neil J. Hannahs, Christine M. Gayagas, Peter K. Hanashiro,
Robert K. Nobriga, Eric K. Yeaman, Julia C. Wo,
Caroline Ward Oda, Peter Halford, M.D., Barry Weinman, each
individually and in his or her capacity as Officer and Trustee of
Queen’s Medical Center (collectively “Defendants”), filed their
memorandum in opposition on July 25, 2014,2 and Plaintiffs filed
their reply on July 30, 2014.
[Dkt. nos. 249, 260.3]
This matter came on for hearing on August 4, 2014.
Court issued its summary ruling on August 7, 2014.
277.]
The
[Dkt. no.
This Court has also ruled that it would consider the
following documents in ruling on the Motion: the Declaration of
Claire Wong Black, filed August 15, 2014 (“Black Declaration”);
[dkt. no. 284-2;4] Plaintiffs’ response to the Black Declaration,
2
On July 30, 2014, this Court granted Defendants’ motion
for leave to file under seal Exhibits M, P, and Q in support of
their memorandum in opposition. [Dkt. no. 261.] Defendants
filed the exhibits under seal on August 1, 2014. [Dkt. no. 267.]
3
On August 1, 2014, Defendants filed supplemental exhibits
in opposition to Plaintiffs’ Motion (“Supplemental Exhibits”).
[Dkt. no. 272.] On August 7, 2014, this Court issued an entering
order (“EO”) striking the Supplemental Exhibits. [Dkt. no. 276.]
4
Defendants filed the Black Declaration as part of their
Motion for Leave to Supplement Record or, in the Alternative, for
(continued...)
2
filed August 26, 2014 (“Response to Black Declaration”); [dkt.
no. 294;] Plaintiffs’ position statement regarding sanctions,
filed August 26, 2014 (“Plaintiffs’ Position Statement”); [dkt.
no. 295;] and Defendants’ position statement regarding sanctions,
filed August 26, 2014 (“Defendants’ Position Statement”); [dkt.
no. 296].
The instant order is this Court’s decision on the
Motion, and this order supersedes the August 7, 2014 summary
ruling.
After careful consideration of the Motion, supporting
and opposing documents, and counsel’s arguments at the hearing,
Plaintiffs’ Motion is HEREBY GRANTED IN PART AND DENIED IN PART
for the reasons set forth below.
BACKGROUND
At all relevant times, Plaintiff Pacific Radiation
Oncology, LLC (“PRO”) had five equity members and one employee
physician.
All six were citizens and residents of Hawai`i and
were physicians licensed to practice in Hawai`i.
[Amended
Complaint for Declaratory and Injunctive Relief and for Damages,
filed 2/23/12 (dkt. no. 44) (“Amended Complaint”), at ¶ 3.]
4
(...continued)
Reconsideration of [276] EO Dated August 7, 2014. [Dkt. no.
284.] The Court granted that motion, but only to the extent that
the Court stated that it would consider the Black Declaration in
ruling on the instant Motion. [EO, filed 8/18/14 (dkt. no.
286).] The August 18, 2014 EO allowed Plaintiffs to file a
memorandum, with supporting declarations, responding to the Black
Declaration, and ordered the parties to file position statements
regarding the type of sanction to be awarded.
3
According to the Amended Complaint, PRO was the largest radiation
oncology group in Hawai`i.
[Id. at ¶ 3.]
Drs. DeMare, Brown,
Huynh, Lederer, Pang, and Bieniek (collectively “the PRO
Physicians”) were part of PRO in various capacities.
At the time
Plaintiffs filed the Amended Complaint, Drs. Lederer and Brown
were managers of PRO, Dr. Huynh was an equity partner, and
Drs. DeMare, Pang, and Bieniek were members.
[Id. at ¶¶ 4-5.]
Prior to the filing of this action, the PRO Physicians provided
services to their patients at, inter alia, The Queen’s Medical
Center (“Queen’s”), The Cancer Center of Hawai`i (“TCCH”)
facility in Ewa Beach, and the TCCH facility in Liliha.
Queen’s
was the only facility on Oahu that was licensed by the Nuclear
Regulatory Commission (“NRC”) and had an operating room.
When
the procedures they performed did not require an operating room,
the PRO Physicians tried to accommodate their patients and allow
the patients to choose the treatment location.
[Id. at ¶ 3.]
In 2011, after an approximately forty-year professional
relationship between Queen’s and PRO, Queen’s Board of Trustees
made the decision to transition the Queen’s radiation oncology
department to a closed facility.
In other words, only physicians
who are employed by Queen’s would be granted clinical privileges
at Queen’s.
[Id. at ¶¶ 11, 19.]
Plaintiffs’ position is that
implementing the closed-facility model, also known as an
employment-based model, would effectively terminate the PRO
4
Physicians’ privileges at Queen’s and leave them without access
to an NRC-licensed hospital facility to treat their patients.
Plaintiffs allege that, in adopting the closed-facility
model, the Queen’s Board of Directors (“the Board”) “did not
follow any of the constitutional, legal, or due process
requirements provided for in both the [Queen’s] Bylaws and
applicable Hawai`i law to ensure that the Plaintiffs’ substantive
and procedural rights to due process were not violated.”
¶ 19.]
[Id. at
Plaintiffs allege that Defendants’ stated reason for
adopting the closed-facility model - “‘to standardize and to
achieve improved clinical outcomes, enhance patient satisfaction,
[and] achieve better quality and continuity of care’” - is a
pretext, and the real reason behind the policy change is to deny
patients the opportunity to be treated at non-Queen’s facilities,
thereby preventing Plaintiffs from providing services which
compete with Queen’s.
[Id. at ¶¶ 25-26.]
Plaintiffs also argue
that, in enacting a resolution adopting the closed-facility
model, Defendants acted “arbitrarily, capriciously, dishonestly,
and maliciously with the specific and deliberate intent of
harming Plaintiffs and destroying Plaintiffs’ ability to treat
patients at facilities competing with [Queen’s].”
[Id. at ¶ 27.]
Further, Plaintiffs allege that Defendants acted “intentionally,
knowingly, grossly negligently and in conscious and in wanton
disregard to rights of the Plaintiffs warranting an award of
5
exemplary and punitive damages.”
[Id. at ¶ 29.]
The Amended Complaint alleges the following claims:
denial of procedural and substantive due process, as guaranteed
by article I of the Hawai`i Constitution and the First and
Fourteenth Amendments of the United States Constitution
(“Count I”); violations of Queen’s bylaws and governing
regulations (“Count II”); intentional and tortious interference
with Plaintiffs’ contractual obligations to facilities which
compete with Queen’s (“Count III”); intentional and tortious
interference with prospective business advantage (“Count IV”);
intentional and tortious interference with Plaintiffs’
professional and contractual relationship with their patients
(“Count V”); unfair, deceptive, anti-competitive and illegal
trade practices in violation of Haw. Rev. Stat. Chapter 480 based
on the termination of the PRO Physicians’ privileges
(“Count VI”); unfair, deceptive, anti-competitive and illegal
trade practices in violation of Chapter 480 based on violations
of the Federal Anti-Kickback statute, 42 U.S.C. § 1320a-7b
(“Count VII”); unfair, deceptive, anti-competitive and illegal
trade practices in violation of Chapter 480 based on attempted
economic credentialing (“Count VIII”); unfair, deceptive, anticompetitive and illegal trade practices in violation of Chapter
480 based on the breach of Queen’s corporate integrity agreement
with the Office of the Inspector General of the Department of
6
Health and Human Services (“Count IX”); and a claim for breach of
fiduciary duty and bad faith (“Count X”).
The Amended Complaint prays for the following relief:
temporary, preliminary, and permanent injunctions enjoining
Queen’s from terminating the PRO Physicians’ hospital privileges;
special, general, and punitive damages under Hawai`i law for the
damages caused by Defendants’ actions alleged in the Amended
Complaint; treble damages under Chapter 480, if greater than the
amount of punitive damages that Plaintiffs are entitled to;
attorneys’ fees, interest, and prejudgment interest; restitution,
disgorgement of profits, and other equitable relief warranted by
Defendants’ breach of their fiduciary duties; and any other
appropriate relief.
In the instant Motion, Plaintiffs allege that, in
January 2011, Queen’s was concerned that it was losing patients
to TCCH.
Queen’s executives therefore authorized Queen’s
administrators to analyze PRO’s referral practices and any
resulting loss of revenue to Queen’s.
This required the
administrators to access and review the confidential medical
records of hundreds of PRO patients whose records were on Queen’s
electronic record-keeping system because the patients had their
initial consultations at Queen’s.
Queen’s did not notify either
the patients or the treating physicians about this review.
in Supp. of Motion at 5-6, 8.]
7
[Mem.
Initially, a spreadsheet was prepared of all surgeons,
urologists, or other physicians who referred a patient to a PRO
Physician, as far back as 2008.
After the analysis of the
spreadsheet, an effort was made to encourage some of the
referring physicians to begin referring patients to non-PRO
radiation oncologists.
A further review of the PRO patients’
records was conducted to determine: where each PRO patient
received his or her treatment; whether it appeared that a PRO
Physician directed the patient to a TCCH facility for reasons
that were not related to the patient’s best interests; and the
economic impact on Queen’s.
Queen’s sought to confirm its
suspicions that the PRO Physicians were referring patients to
TCCH for economic reasons.
[Id. at 8-9.]
According to
Plaintiffs, the “unlawful examinations of PRO’s confidential
patient records to gain a competitive advantage is now part of
Plaintiffs’ 480-2 claim against [Queen’s].”
[Id. at 9.]
Randy Talavera, the manager of Queen’s radiation
therapy department reviewed the records of 133 patients “who had
a consultation with a PRO physician but then did show up at
[Queen’s] again for radiation therapy during the time frame
January 2011 through June of 2011.”
[Id.]
A list of 132 such
patients was compiled showing each patient’s name, patient
number, and the name of his or her physician (“the List”).
Defendants’ counsel attached the List as an exhibit to: 1) a
8
subpoena to TCCH’s custodian of records, signed by the Clerk of
Court on July 10, 2014 (“the Subpoena”); and 2) Defendants’
Second Request for Production of Documents and Things to
Plaintiffs Pacific Radiation Oncology, LLC and PRO Associates,
LLC, dated July 9, 20135 (“the RPD”).
[Motion, Decl. of Mark S.
Davis (“Davis Decl.”), Exhs. A (Subpoena), B (RPD).6]
On
July 10, 2014, Defendants’ counsel publicly filed the complete,
unredacted Subpoena with its return of service.
of Motion at 2; Dkt. no. 236.]
[Mem. in Supp.
Defendants’ counsel contacted the
magistrate judge through an email on July 12, 2014 and stated
that they had inadvertently filed the unredacted List as an
exhibit to the Subpoena.
Counsel stated that, as soon as
possible, Defendants would file an ex parte motion to delete the
exhibit from the public record, but counsel asked the magistrate
judge if the district court could remove the Subpoena from the
publicly available website and allow Defendants to replace the
exhibit with a redacted version, pending the filing and ruling on
the ex parte motion.
[Davis Decl., Exh. C.]
On July 14, 2014,
the Clerk’s Office restricted access to the Subpoena, and
5
The date was apparently a typographical error and should
have read July 9, 2014.
6
The copies of the List attached to Exhibit A and Exhibit B
are redacted so that only the first two digits of the patient
number and the physician’s name is visible for each patient. The
copies of the List served with the original Subpoena and the
original RPD were not redacted. [Mem. in Supp. of Motion at 12.]
9
Defendants filed their ex parte motion to seal the exhibit.
[Dkt. no. 239.]
on July 15, 2014.
The magistrate judge granted the ex parte motion
[Dkt. no. 242.]
In addition to challenging the attachment of the List
to the Subpoena and the RPD and the public filing of the List
with the Subpoena, Plaintiffs argue that: Queen’s was not
entitled to review the medical records that were the basis of
List; and Defendants are not entitled to review the additional
medical records that they seek in the Subpoena and the RPD.
Plaintiffs argue that Queen’s past review and use of the medical
records of the PRO patients, and the proposed review Defendants
seek of additional patient records, violate the Health Insurance
Portability and Accountability Act of 1996, 42 U.S.C. § 1320d, et
seq., (“HIPAA”), including its implementing regulations, and the
Hawai`i State Constitution.
Thus, Plaintiffs seek a temporary
restraining order (“TRO”) and/or a preliminary injunction that
will “put an end to [Queen’s] unauthorized access to and
dissemination of PRO’s patient records, and to enjoin [Queen’s],
its attorneys, and its consultants from reviewing and more
importantly form publishing the highly confidential information
including the names of these many, many cancer patients.”
in Supp. of Motion at 15.]
10
[Mem.
STANDARD
This Court has described the standards applicable to a
motion for a TRO as follows:
In general, the standard for a temporary
restraining order or a preliminary injunction is
as follows:
“[I]njunctive relief is an extraordinary
remedy that may only be awarded upon a clear
showing that the plaintiff is entitled to
such relief.” Winter v. Natural Res. Def.
Council, Inc., 129 S. Ct. 365, 376 (2008).
The standard for granting a preliminary
injunction and the standard for granting a
temporary restraining order are identical.
See Haw. Cnty. Green Party v. Clinton, 980 F.
Supp. 1160, 1164 (D. Haw. 1997); Fed. R. Civ.
P. 65.
Sakala v. BAC Home Loans Servicing, LP, CV. No.
10-00578 DAE-LEK, 2011 WL 719482, at *4 (D.
Hawai`i Feb. 22, 2011) (alteration in original).
A plaintiff seeking a preliminary
injunction must establish that he is likely
to succeed on the merits, that he is likely
to suffer irreparable harm in the absence of
preliminary relief, that the balance of
equities tips in his favor, and that an
injunction is in the public interest. Am.
Trucking Ass’ns v. City of Los Angeles, 559
F.3d 1046, 1052 (9th Cir. 2009) (quoting
Winter v. Natural Res. Def. Council, Inc.,
--- U.S. ---, 129 S. Ct. 365, 374, 172 L. Ed.
2d 249 (2008)) (explaining that, “[t]o the
extent that [the Ninth Circuit’s] cases have
suggested a lesser standard, they are no
longer controlling, or even viable” (footnote
omitted)); see also Winter, 129 S. Ct. at
374-76 (holding that, even where a likelihood
of success on the merits is established, a
mere “possibility” of irreparable injury is
insufficient to warrant preliminary
injunctive relief, because “[i]ssuing a
preliminary injunction based only on a
11
possibility of irreparable harm is
inconsistent with [the Supreme Court’s]
characterization of injunctive relief as an
extraordinary remedy that may only be awarded
upon a clear showing that the plaintiff is
entitled to such relief”).
Painsolvers, Inc. v. State Farm Mut. Auto. Ins.
Co., 685 F. Supp. 2d 1123, 1128-29 (D. Hawai`i
2010) (footnote and some citations omitted)
(alterations in original). The Ninth Circuit has
held that its “serious questions” version of the
sliding scale test for preliminary injunctions
survives Winter to the extent that, a court may
grant a preliminary injunction where the plaintiff
(1) “demonstrates . . . that serious questions
going to the merits were raised and the balance of
hardships tips sharply in the plaintiff’s
favor[,]” and (2) satisfies the other Winter
factors, likelihood of irreparable injury and that
the injunction is in the public interest.
Alliance for the Wild Rockies v. Cottrell, 632
F.3d 1127, 1134–35 (9th Cir. 2011) (citation and
block quote format omitted) (some alterations in
original).
Hunger v. Univ. of Hawai`i, 927 F. Supp. 2d 1007, 1015 (D.
Hawai`i 2013) (some alterations in Hunger) (some citations
omitted).
DISCUSSION
I.
Temporary Restraining Order/Preliminary Injunction
At the outset, this Court recognizes that the Motion
raises important issues about the confidentiality of patients’
medical records.
A patient’s medical records, especially a
cancer patient’s medical records, contain material that is the
very essence of private, personal information.
It is beyond
dispute that the public disclosure of that information in this
12
case subjected the affected PRO patients to potential irreparable
harm.
Further, the unauthorized review and use of patients’
medical records, even where the use is less than public
disclosure, also puts the patients at risk of irreparable harm.
The patients on the List, however, are not parties to
this action, nor have any of them come forward to join in
Plaintiffs’ Motion.
This Court notes that, in each of the
Hawai`i Supreme Court’s mandamus rulings that Plaintiffs cite, it
was the patient who was seeking a ruling protecting his or her
medical information.
Cohan v. Ayabe, 132 Hawai`i 408, 322 P.3d
948 (2014); Naipo v. Border, 125 Hawai`i 31, 251 P.3d 594 (2011)
(per curiam); Brende v. Hara, 113 Hawai`i 424, 153 P.3d 1109
(2007) (per curiam).
Despite that fact, this Court could find
that the PRO Physicians face imminent, irreparable harm because
their relationships with the affected patients would suffer
because of the alleged violation of the patients’ rights under
HIPAA and the Hawai`i State Constitution.
However, even if it
made such a finding, this Court could not grant the TRO that
Plaintiffs seek.
In spite of the egregious public disclosure of the
List, this Court cannot find that Plaintiffs are likely to
succeed on the merits because the Amended Complaint does not
contain a claim alleging improper review and use of confidential
patient information in violation of HIPAA and the Hawai`i State
13
Constitution.7
Plaintiffs claim that this is part of their
§ 480-2 claims (Counts VI through IX), but Plaintiffs’ position
is belied by the allegations of the Amended Complaint, which do
not refer to the improper review and use of patient information.
Plaintiffs therefore cannot satisfy the likelihood of success
requirement.
Because all of the factors of the Winter analysis
are mandatory, this Court need not address the remaining factors.
The dilemma presented in the Motion is a serious one, but it
simply does not fit within the TRO analysis.
Plaintiffs’ Motion
is therefore DENIED to the extent that it seeks a TRO and/or a
preliminary injunction.
II.
Discovery Issues
This Court, however, also construes Plaintiffs’ Motion
as a discovery motion.
A.
Violation of the Protective Order
On November 8, 2013, the magistrate judge filed the
Amended Stipulated Protective Order (“Protective Order”).
no. 134.]
[Dkt.
The Protective Order defines “Protected Health
Information” as “any information about Parties or non-parties
relating to their health, medical conditions, diagnosis, and
treatments protected by federal and/or state law including but
not limited to information relating to HIV status, mental health,
7
Nor could Plaintiffs meet the serious questions as to the
merits requirement.
14
and substance abuse.”
[Id. at ¶ 3.]
It also states:
The Parties shall make reasonable efforts to
ensure that . . . Protected Health Information
[is] not filed in the public record of this
litigation. If any Party seeks to file . . .
Protected Health Information or any document
containing such information with the Court, that
Party shall first file a motion or stipulation to
allow filing of such information in redacted form
or under seal. In addition, the Party shall
submit a copy of the motion or stipulation along
with the documents sought to be filed in redacted
form or under seal for in camera review by the
Court. . . .
[Id. at ¶ 15.]
It is beyond dispute that the List constituted
Protected Health Information, as defined in the Protective Order,
because it revealed patients’ names and their cancer diagnoses.
Protective orders are issued to protect parties and other persons
“from annoyance, embarrassment, oppression or undue burden or
expense.”
Fed. R. Civ. P. 26(c)(1).
Information about a
patient’s cancer diagnosis is precisely the type of information
that protective orders are intended to prevent disclosure of.
Defendants admit, as they must, that the List should not have
been publicly filed with the Subpoena.
Defendants assert that
the public filing of the List was inadvertent and that defense
counsel took reasonable steps to try to avoid the public filing
of Confidential Health Information.
Defense counsel, Clare Wong
Black, Esq. of the law firm Alston Hunt Floyd & Ing (“Alston
Hunt”), took the following steps:
15
2.
On February 18, 2014, I instructed the
paralegal and all administrative assistants
to the attorneys working on the abovecaptioned matter regarding redaction and
dissemination of Confidential Information
. . . pursuant to the stipulated protective
order entered in this case.
3.
On March 25, 2014, I instructed certain staff
members working on the above captioned matter
that that [sic] no documents — including
certificates of service — should be
electronically filed without express attorney
review and approval before filing.
4.
On July 8, 2014, I instructed certain staff
members working on the above-captioned matter
that the list of patients transferred by PRO
physicians from [Queen’s] to TCCH — which
list ultimately became Exhibit A and was
inadvertently included in the electronically
filed return of service — was highly
confidential patient information and needed
to be kept in a safe place.
[Black Decl. at ¶¶ 2-4 (citations omitted).]
In spite of these
instructions, however, on July 10, 2014, “a staff member
inadvertently filed a return of service,” which included the List
as an Exhibit, “without requesting attorney review and approval
as required.”
[Id. at ¶ 6.]
Based on the existing record, these
are the only steps that Alston Hunt took to prevent the public
filing of the List.8
8
Ms. Black also describes instructions that she gave on
July 11, 2014, which was after the public filing of the Subpoena
that the List, but before counsel became aware of the filing.
[Black Decl. at ¶ 5.] This Court, however, finds that the postdisclosure instructions are not relevant to the issue of whether
counsel’s pre-disclosure steps were reasonable. This Court also
finds that Alston Hunt’s efforts to address the public filing of
(continued...)
16
The Black Declaration indicates that the only specific
instruction defense counsel gave specifically about the List was
the July 8, 2014 instruction that the List was highly
confidential and to keep it “in a safe place.”
[Id. at ¶ 4.]
Ms. Black did not repeat her prior instructions about obtaining
attorney approval prior to filing documents in this case.
The
last instruction about obtaining approval before filing, however,
was almost four months prior to the filing of the List.
This
Court FINDS that, under the circumstances of this case - a case
in which Protected Health Information clearly plays a significant
role - Alston Hunt failed to make reasonable efforts to ensure
that Protected Health Information was not publicly filed, and the
Alston Hunt staff member included the List in a public filing
because of Alston Hunt’s failure to make reasonable efforts.
This Court therefore FINDS that Alston Hunt violated the
Protective Order by publicly filing the List.
1.
Applicable Law
The Ninth Circuit has stated that “[d]istrict courts
have the inherent power to sanction a lawyer for a ‘full range of
litigation abuses.’”
Evon v. Law Offices of Sidney Mickell, 688
8
(...continued)
the List are not relevant to the issue of whether it violated the
Protective Order by publicly filing the List. The postdisclosure efforts are relevant to Defendants’ obligations under
a different provision of the Protective Order. See Protective
Order at ¶ 24.
17
F.3d 1015, 1035 (9th Cir. 2012) (quoting Chambers v. NASCO, Inc.,
501 U.S. 32, 55, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991)).
In
Evon, the Ninth Circuit rejected the argument that the district
court lacked the inherent authority to impose sanctions for an
allegedly inadvertent violation of a protective order.
Id.
“[A] district court may levy sanctions pursuant to its
inherent power for willful disobedience of a court order or when
the losing party has acted in bad faith, vexatiously, wantonly,
or for oppressive reasons.”
Id. (alteration, citations, and
internal quotation marks omitted).
“[A] ‘willful’ violation of a
court order does not require proof of mental intent such as bad
faith or an improper motive, but rather, it is enough that a
party acted deliberately.”
Id.
Thus, a district court can
impose sanctions for either: “(1) willful violation of a court
order; or (2) bad faith.
A determination that a party was
willfully disobedient is different from a finding that a party
acted in bad faith.
sanctions.”
Either supports the imposition of
Id. (emphasis added).
In the instant case, this
Court has found that Alston Hunt violated the Protective Order.
Thus, the only remaining issue is whether that failure was
willful.
In Evon, the defendant’s attorney, who was “running up
against the filing deadline, filed documents without sealing or
redacting them, exposing to public view certain material that had
18
been designated ‘confidential’ under the protective order.”
at 1034.
Id.
In appealing the award of sanctions against him, the
attorney argued that the public filing was “inadvertent,” but the
Ninth Circuit stated that “what he really means is that on the
day of the filing, he realized that compliance with the
protective order would cause him additional time and work, and he
chose not to comply.”
Id. at 1035 (emphasis in original).
The instant case does not rise to the same level as
Evon because there is no evidence that Alston Hunt chose to
violate the Protective Order or that Alston Hunt acted in bad
faith or with an improper motive.
Evon, however, clearly holds
that a district court may impose sanctions if there was a
deliberate violation of a court order.
See id.
Alston Hunt,
through its staff member, deliberately filed the Subpoena, which
included the List as an exhibit.
This Court therefore FINDS that
Alston Hunt’s violation of the Protective order was willful and
warrants the imposition of sanctions.
2.
Appropriate Sanction
As noted supra note 4, this Court directed the parties
to file position statements addressing the type of sanction that
this Court should impose for the violation of the Protective
Order.
Plaintiffs propose the following sanctions:
•an order requiring Queen’s to send each affected
patient a written notice of Queen’s HIPAA
violation, with an admission that it failed
to report the violation “at the outset of
19
this controversy[;]” [Pltfs.’ Position
Statement at 1-2;]
•an order prohibiting Queen’s, Alston Hunt,
Defendants’ mainland counsel, Horty, Springer
& Mattern, P.C., “and all their attorneys,
staff, consultants or agents” from
“publiciz[ing] or access[ing] further in
relation to this litigation any medical
records of any non-party patients without
consent or authorization of the patients in
accordance with law[;]” [id. at 2 (emphases
in original);]
•an order deeming withdrawn Defendants’ requests
for discovery of the medical records of nonparties; [id.;]
•an order requiring Defendants to identify all
documents containing “the protected health
information of patients whose medical records
Queen’s accessed through its records system
and disclosed to third parties,” including
identifying all persons who have seen the
records and where copies of the records
exist; [id.;] and
•an order requiring Defendants and their counsel
to destroy all existing copies of medical
records and any notes containing information
from those records [id.].
The imposition of sanctions in this Order, however, is limited to
sanctions for the public filing of the List as part of the
Subpoena.
All of Plaintiffs’ proposed sanctions relate to
Plaintiffs’ request for a ruling on whether Defendants’ review
and use of the patients’ medical records was proper in the first
instance and whether Defendants are entitled to obtain other
similar records in discovery.
of this Order.
These issues are beyond the scope
See infra Discussion Section II.B.
20
This Court
therefore rejects Plaintiffs’ proposed sanctions.
Defendants propose that this Court impose a monetary
sanction of no more than $1,000.00, and they emphasize that the
sanction imposed “must specifically relate to the particular
claim at issue in the discovery order.”
[Defs.’ Position
Statement at 2 (citing U.S. v. Nat’l Med. Enters., Inc., 792 F.2d
906, 910 (9th Cir. 1986)).]
Under the circumstances of this case, a monetary
sanction is a less than satisfactory form of sanction, but the
Court is unable to articulate one that is more appropriate.
With
this limitation in mind, the Court is cognizant that the amount
of the sanction must relate to the specific purpose of the
sanction - the improper public disclosure of patients’
confidential health information.
Defendants’ proposed limit,
however, is arbitrary and ignores the seriousness of the
violation.
This Court recognizes that the List was publicly
available for less than a week, but the violation of the
patients’ confidentiality was still significant.
Further, the
public disclosure of the List could have been easily avoided.
This Court, however, acknowledges that no affected patient has
come forward to argue that he or she was harmed by the temporary
public availability of the List.
Plaintiffs submitted a
declaration by a patient identified as Mary Doe (“Doe
Declaration”) with their Response to Black Declaration.
21
[Dkt.
no. 294-1.]
Mary Doe, however, did not specifically address the
period when the List was publicly available.
She, like
Plaintiffs, focuses on Defendants’ review and use of her medical
records in the first instance.
[Id. at ¶¶ 8-10.]
This Court,
however, notes that Mary Doe states that her “cancer diagnosis
was something [she] had kept closely guarded and did not
publicize to even many of [her] friends.”
[Id. at ¶ 10.]
This
supports the Court’s finding that the public availability of the
List, even if for less than a week, warrants sanctions because it
was an egregious violation of the patients’ confidentiality.
This Court therefore FINDS that the appropriate
sanction for Alston Hunt’s violation of the Protective Order is
an award of Plaintiffs’ reasonable attorneys’ fees and costs
incurred in responding to the public filing of the List as part
of the Subpoena.
This includes, inter alia, Plaintiffs’
counsel’s: communication with defense counsel and district court
personnel regarding the removal of the List from the public
record; communication with patients identified on the List to
notify them of the public filing of the List; and the filing and
litigation of the instant Motion.
This Court, however, will
reduce the attorneys’ fees and costs associated with the Motion
because of Plaintiffs’ limited success, i.e. because Plaintiffs
moved for a TRO and a preliminary injunction and this Court
denied those requests.
22
Plaintiffs shall file a memorandum, with a supporting
declaration of counsel and supporting documentation (including
detailed itemization of the hours spent and invoices or receipts
for any expenses incurred), by no later than September 29, 2014.
Plaintiffs’ memorandum shall not exceed five pages.
Plaintiffs’
filing must comply with the requirements of Local Rule 54.3(d)
and (e).
Defendants may file a memorandum, not to exceed five
pages, responding to the amount of Plaintiffs’ requested award of
attorneys’ fees and costs.
Defendants may also file declarations
and exhibits, if any, relevant to the amount of the requested
award.
Defendants may not use the memorandum to challenge the
decision to award sanctions or the ruling that an award of
reasonable attorneys’ fees and costs is the appropriate sanction.
Defendants must file their memorandum by no later than
October 13, 2014.
This Court CAUTIONS the parties that it may strike any
memorandum that does not comply with this Order.
B.
Other Relief
To the extent that Defendants contend that patient
information is relevant and necessary to the claims and defenses
in this case, while Plaintiffs seek to prevent Defendants from
obtaining or using patient information in a manner that violates
HIPAA and/or the Hawai`i State Constitution, the parties must
23
address these issues through the normal discovery process.
This
Court therefore ORDERS the parties to contact the magistrate
judge to schedule a discovery conference to address the use of
Protected Health Information in this case.
In order to provide guidance to the parties and the
much beleaguered magistrate judge, this Court will briefly
address the parties’ dispute about the applicable law.
Defendants take the position that their review and use of the
medical records of the patients at issue in this case complies
with HIPAA.
Plaintiffs contend that Defendants’ prior use and
review of the medical records violated HIPAA, as well as article
I, section 6 of the Hawai`i Constitution, which states, in
relevant part that “[t]he right of the people to privacy is
recognized and shall not be infringed without the showing of a
compelling state interest.”
Plaintiffs also argue that this
Court should prohibit Defendants from obtaining any further
medical records of PRO patients.
Defendants assert that HIPAA
preempts Plaintiffs’ arguments based on the Hawai`i State
Constitution.
HIPAA does contain an express preemption provision.
U.S.C. § 1320d-7(a)(1) (stating, in pertinent part, that “a
42
provision or requirement under this part, or a standard or
implementation specification adopted or established under
sections 1320d-1 through 1320d-3 of this title, shall supersede
24
any contrary provision of State law . . . .” (emphasis added)).
Pursuant to the regulations implementing HIPAA:
Contrary, when used to compare a provision of
State law to a standard, requirement, or
implementation specification adopted under this
subchapter, means:
(1) A covered entity or business associate
would find it impossible to comply with both
the State and Federal requirements; or
(2) The provision of State law stands as an
obstacle to the accomplishment and execution
of the full purposes and objectives of part C
of title XI of the Act, section 264 of Public
Law 104–191, or sections 13400–13424 of
Public Law 111–5, as applicable.
45 C.F.R. § 160.202.
In addition,
A standard, requirement, or implementation
specification adopted under this subchapter that
is contrary to a provision of State law preempts
the provision of State law. This general rule
applies, except if one or more of the following
conditions is met:
. . . .
(b) The provision of State law relates to the
privacy of individually identifiable health
information and is more stringent than a
standard, requirement, or implementation
specification adopted under subpart E of part
164 of this subchapter.
. . . .
45 C.F.R. § 160.203.
Thus, courts have recognized that HIPAA
does not preempt “more stringent” privacy protections guaranteed
under state law.
See, e.g., OPIS Mgmt. Res., LLC v. Sec., Fla.
Agency for Health Care Admin., 713 F.3d 1291, 1294 (11th Cir.
25
2013).
Pursuant to the HIPAA regulations:
More stringent means, in the context of a
comparison of a provision of State law and a
standard, requirement, or implementation
specification adopted under subpart E of part 164
of this subchapter, a State law that meets one or
more of the following criteria:
(1) With respect to a use or disclosure, the
law prohibits or restricts a use or
disclosure in circumstances under which such
use or disclosure otherwise would be
permitted under this subchapter, except if
the disclosure is:
(i) Required by the Secretary in
connection with determining whether a
covered entity or business associate is
in compliance with this subchapter; or
(ii) To the individual who is the
subject of the individually identifiable
health information.
. . . .
(4) With respect to the form, substance, or
the need for express legal permission from an
individual, who is the subject of the
individually identifiable health information,
for use or disclosure of individually
identifiable health information, provides
requirements that narrow the scope or
duration, increase the privacy protections
afforded (such as by expanding the criteria
for), or reduce the coercive effect of the
circumstances surrounding the express legal
permission, as applicable.
. . . .
(6) With respect to any other matter,
provides greater privacy protection for the
individual who is the subject of the
individually identifiable health information.
26
§ 160.202.
Further, although Cohan, Naipo, and Brende, were
factually distinguishable in the context of Plaintiffs’ request
for a TRO and a preliminary injunction, see supra Discussion
Section I., the legal analysis in those cases regarding the
relationship between HIPAA and article I, section 6 of the
Hawai`i Constitution applies to the parties’ discovery disputes.
In Cohan, the Hawai`i Supreme Court stated:
HIPAA provides the “federal floor of privacy
protections that does not disturb more protective
rules or practices. . . . The protections are a
mandatory floor, which other governments and any
[Department of Health and Human Services
regulated] entities may exceed.” Brende, 113
Hawai`i at 429, 153 P.3d at 1114 (quoting 65 Fed.
Reg. 82,462 (Dec. 28, 2000)).
. . . .
Hawai`i is one of ten states that expressly
recognize a right to privacy in their
constitutions. . . . In promulgating [article I,
section 6], the 1978 Constitutional Convention
intended “that privacy [be] treated as a
fundamental right for purposes of constitutional
analysis.” Comm. Whole Rep. No. 15, in 1
Proceedings of the Constitutional Convention of
Hawai`i of 1978 (Proceedings), at 1024. This
express right of privacy is “a recognition that
the dissemination of private and personal matters,
be it true, embarrassing or not, can cause mental
pain and distress far greater than bodily
injury. . . . In short, this right of privacy
includes the right of an individual to tell the
world to ‘mind your own business.’” Stand. Comm.
Rep. No. 69, in 1 Proceedings at 674.
132 Hawai`i at 415, 322 P.3d at 955 (some alterations in Cohan)
(emphases added) (footnote omitted).
27
Thus,
in Hawai`i “a medical information protective order
issued in a judicial proceeding must, at a
minimum, provide the protections of the HIPAA.”
[Brende, 113 Hawai`i at 429, 153 P.3d at 1114]
(emphasis added). The court further held that
article I, section 6 of the Hawai`i Constitution,
establishing the right of privacy, applies to
“informational privacy” and protects “the right to
keep confidential information which is highly
personal and intimate.” Id. at 430, 153 P.3d at
1115 (quotation marks and brackets omitted).
Because health information is “highly personal and
intimate,” it is protected by the informational
prong of article I, section 6. Id.
Id. at 416, 322 P.3d at 956 (emphasis in Cohan) (footnote
omitted).
This Court therefore CONCLUDES that the review and use
of the medical records of the patients at issue in this case must
comply with HIPAA and article I, section 6 of the Hawai`i State
Constitution.
However, this Court notes that:
Once health information has been de-identified, it
is no longer protected by HIPAA. Further, because
HIPAA allows “more stringent” state law to preempt
federal law only when it relates to the privacy of
“individually identifiable health information,” 45
C.F.R. § 160.203(b), this leads to the conclusion
that state law also does not protect de-identified
information. Nw. Mem’l Hosp. [v. Ashcrof], 362
F.3d [923,] 926 [(7th Cir. 2004)].
Id. at 417, 322 P.3d at 957.
This Court emphasizes that its analysis in this section
does not constitute a ruling that: 1) any party is or is not
entitled to obtain discovery; or 2) any party is or is not
entitled to use medical records previously obtained and/or
reviewed.
The parties may address these discovery issues during
their conference with the magistrate judge.
28
CONCLUSION
On the basis of the foregoing, Plaintiffs’ Motion for
Temporary Restraining Order or in the Alternative for Preliminary
Injunction, filed July 14, 2014, is HEREBY GRANTED IN PART AND
DENIED IN PART.
The Motion is GRANTED insofar as this Court:
FINDS that Defendants’ counsel, Alston Hunt Floyd & Ing, violated
the Amended Stipulated Protective Order; [dkt. no. 134;] and
FINDS that the appropriate sanction is an award of Plaintiffs’
reasonable attorneys’ fees and costs incurred as a result of the
violation, as described in this Order.
Plaintiffs shall file
their memorandum regarding the amount of the award, with
supporting documentation, by September 29, 2014, and Defendants
may file a memorandum responding to the requested amount by
October 13, 2014.
This Court CAUTIONS the parties that this
Court may strike any memorandum that does not comply with the
requirements set forth in this Order.
Plaintiffs’ Motion is
DENIED in all other respects.
This Court ORDERS the parties to contact the magistrate
judge to schedule a discovery conference to address the issues
set forth in this Order.
IT IS SO ORDERED.
//
//
//
29
DATED AT HONOLULU, HAWAII, September 12, 2014.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
PACIFIC RADIATION ONCOLOGY, LLC VS. THE QUEEN’S MEDICAL CENTER,
ET AL; CIVIL 12-00064 LEK-KSC; ORDER GRANTING IN PART AND DENYING
IN PART PLAINTIFFS’ MOTION FOR TEMPORARY RESTRAINING ORDER OR IN
THE ALTERNATIVE FOR PRELIMINARY INJUNCTION
30
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