In Nesson v. Northern Inyo County Local Hospital District, Plaintiff, a radiologist, sued the defendant hospital for breach of contract, breach of the covenant of good faith and fair dealing, violation of Health and Safety Code section 1278.5, violation of the Unruh Civil Rights Act, and violation of the Fair Employment and Housing Act, after his medical privileges at the hospital had been suspended following a peer review process. Plaintiff failed to exhaust administrative remedies, but filed a lawsuit instead.
The California Court of Appeal, Fourth Appellate District, ruled that the trial court had properly dismissed the case pursuant to California Code Civil Procedure § 425.16, the “anti-SLAPP” statute.
Under section 425.16, “a cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech . . . shall be subject to a special motion to strike.” As the court explained, quoting controlling case law, a “SLAPP suit – a strategic lawsuit against public participation – seeks to chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances.” The purpose of the statute is to prevent the “chilling of valid exercise of these rights through ‘abuse of the judicial process’ . . .”
The anti-SLAPP statute establishes a two-step procedure. First, the defendant must show that the cause of action arises from a protected activity, i.e., activity by the defendant in furtherance of its constitutional right to free speech. Second, if the defendant has met this initial burden, the burden shifts to the Plaintiff to demonstrate a reasonable probability of prevailing on the merits of his cause of action.
First, the Court determined that Plaintiff’s claims arose from the summary suspension of Plaintiff’s privilege through a peer review process, and thus constituted “protected activity” under the anti-SLAPP statute. As the Court explained, protected speech includes “official proceeding authorized by law.” Pursuant to Kibler v. Northern Inyo County Local Hospital District, 39 Cal. 4th 192 (2006), a hospital review procedure constitutes an “official proceeding authorized by law.” The Court of Appeal saw no basis for distinguishing this California Supreme Court ruling, noting that “while important, physician’s due process rights are subordinate to the needs of public safety” served by the peer review process.
Second, the court found that Plaintiff had failed to establish a reasonable probability of prevailing on the merits, since he could not establish the requisite elements for breach of contract or any of the other causes of action he had asserted. Finally, it found that his action was barred by his failure to exhaust administrative remedies.