On November 21, 2019, the New York Court of Appeals held that the New York Public Health Law Section 230(11)(b) does not give individuals a private right of action against entities for filing bad-faith reports with the Office of Professional Medical Conduct (“OPMC”). The Court reasoned that: (1) medical professionals were not within the class of individuals intended to benefit from the statute, (2) the statute’s legislative purpose would not be furthered by creating a private right of action, and (3) the creation of a private of right of action would be inconsistent with the legislature’s intent.

Background

Public Health Law Section 230 governs the reporting of, and proceedings to address, claims for professional medical misconduct. See generally N.Y. Pub. Health Law § 230. Section 230(11)(b) provides that “[a]ny person, organization, institution, insurance company, osteopathic or medical society who reports or provides information to the Office of Professional Medical Conduct in good faith, and without malice shall not be subject to an action for civil damages or other relief as the result of such report.” N.Y. Pub. Health Law § 230(11)(b).

Nationwide Mutual Fire Insurance Company (“Nationwide”) received claims from Dr. Robert D. Haar, M.D., for the treatment of four patients who were injured in automobile accidents. After denying Dr. Haar’s claims, Nationwide filed complaints of insurance fraud with the OPMC. Upon concluding its investigation of Nationwide’s complaints, the OPMC decided not to impose any discipline against Dr. Haar. Subsequently, Dr. Haar sued Nationwide for a violation of Public Health Law Section 230(11)(b) based on Nationwide’s alleged bad-faith reporting and for defamation.

Nationwide removed the case to federal court. The District Court granted Nationwide’s motion to dismiss the cause of action arising under the Public Health Law, finding there was no private right of action. Upon appeal, the Court of Appeals for the Second Circuit certified to the New York Court of Appeals the question of whether Public Health Law Section 230(11)(b) gave rise to a private right of action for bad-faith reporting.

New York Court of Appeals Decision

In analyzing whether Public Health Law Section 230(11)(b) creates a private right of action, the New York Court of Appeals used a “three essential factors” test. First, the Court of Appeals found that Dr. Haar failed to establish that medical professionals were intended beneficiaries of the law. The Court of Appeals concluded that the statute’s legislative purpose was to encourage entities to report suspected medical misconduct, not protect medical professionals accused of misconduct. Second, creating new liability for reporters through a private right of action would not promote the purpose of Public Health Law Section 230(11)(b) to increase reporting. Third, the Court of Appeals reasoned that creating a private right of action would contradict the legislative purpose of Public Health Law Section 230(11)(b) because reporting entities would be increasingly exposed to liability, even when reports are made in good faith.

Takeaway for Employers:

Employers should continue to fulfill their mandatory reporting duties pursuant to New York Public Health Law and submit complaints of professional medical misconduct where appropriate. In light of the Haar decision, employers can be assured they will not be subjected to litigation for fulfilling their reporting obligations.

 

*   *   *

If you have any questions regarding the New York Court of Appeals ruling in Haar v. Nationwide Mutual Fire Insurance Company, 2019 N.Y. Slip Op. 08445, please do not hesitate to contact us. We are, of course, available to assist and provide counsel as needed.

Putney, Twombly, Hall & Hirson LLP