Wednesday, May 4, 2016
Cleveland Clinic, et al. v. Darlene Burnham, Case no. 2015-1127
Eighth District Court of Appeals (Cuyahoga County)
Cincinnati Bar Association v. Christopher D. Wiest, Case no. 2016-0263
Hamilton County
Can Hospital File Immediate Appeal to Stop Court’s Order to Release Slip-and-Fall Report?
Cleveland Clinic, et al. v. Darlene Burnham, Case no. 2015-1127
Eighth District Court of Appeals (Cuyahoga County)
ISSUE: Is a trial court order requiring production of documents, conversations, or other materials claimed to be privileged a final, appealable order according to R.C. 2505.02(B)(4), thereby giving a court of appeals jurisdiction to consider the issue?
BACKGROUND:
Darlene Burnham slipped and fell while visiting her sister on July 26, 2012, at the Cleveland Clinic Hospital. Burnham sued the Cleveland Clinic and Cleveland Clinic Health Systems in March 2014 for her injuries. She alleged that a hospital employee was negligent by pouring liquid on the floor and neglecting to warn her of the dangerous condition, leading to the fall.
As part of discovery, Burnham asked for the hospital’s report about the incident as well as the names of the witnesses and their statements. While the hospital provided the names of some of the involved employees, it refused to release the incident report, asserting the documents were privileged based on an attorney-client relationship, work product, or peer review and quality assurance reviews. Burnham asked the trial court to force the Cleveland Clinic to provide the report, which is referred to in court documents as a “Safety Event Reporting System,” or SERS, report.
After considering briefs from both sides on the privilege issue and reviewing the report privately, the trial court determined the report wasn’t a privileged document and ordered its release.
Cleveland Clinic appealed to the Eighth District Court of Appeals, which affirmed the trial court ruling. The Eighth District decided it couldn’t review the claim’s merits because the hospital hadn’t established why an immediate appeal was needed before the trial court made a final ruling in the case or how the hospital would be harmed by the disclosure of the report.
The hospital filed an appeal with the Ohio Supreme Court, which agreed to consider the case.
Privilege Lost If Report Is Released, Hospital Contends
Cleveland Clinic notes this case turns on the meaning of a “final, appealable order” in lawsuits involving the release of privileged documents through discovery before a trial. If the trial court’s order compelling the report’s release was final as defined in state law, then the hospital had a right to immediately appeal the decision to the Eighth District to try to prevent the report’s release.
Both sides focus on the second requirement in R.C. 2505.02(B)(4) for determining a final, appealable order. The provision states an order granting or denying a provisional remedy is final and can be reviewed when “the appealing party would not be afforded a meaningful or effective remedy by an appeal following final judgment as to all proceedings, issues, claims, and parties in the action.”
The hospital argues precedent supports withholding the report’s release, an affidavit in the case stated the report’s purpose was to communicate with counsel about the hospital incident, and other methods such as witness testimony were available to Burnham to get the information she wanted.
In the hospital’s view, Ohio law provides that when a court denies a request for privileged materials, there’s no final, appealable order, but a court’s approval of a request for privileged documents creates a final, appealable order that can be challenged immediately. The ability to file an interlocutory appeal in this situation is essential because privilege can’t be restored once a document has been released, the hospital asserts.
The hospital claims the Ohio Supreme Court’s decision in Smith v. Chen (2015) needs clarification. In that case, the hospital explains, the Court dismissed an appeal because the parties didn’t establish they lacked an effective remedy after the trial court resolved the entire case. The decision “does not adopt a new rule,” the Court’s majority noted, though the dissenting justices maintained that every appellate district had held any order allowing discovery of privileged information was a final, appealable order. According to the hospital, the Eighth District’s ruling misinterpreted Smith and must be corrected.
Clinic Must Do More Than Assert Report Is Privileged, Injured Visitor Argues
Burnham counters, however, that a court’s order to release privileged documents isn’t automatically a final, appealable order that can be contested immediately. Challenges to such orders must show how the party objecting to the release would be prejudiced by producing the document and that it would have no possible legal remedy later, after a final judgment in the matter, Burnham asserts.
She argues the hospital’s claim of privilege isn’t equivalent to demonstrating it wouldn’t have had a meaningful remedy through an appeal after the trial court’s final resolution of the case. The law requires more than simply asserting privilege, she adds.
In Smith, the Supreme Court stated “an appellant must affirmatively establish that an immediate appeal is necessary in order to afford a meaningful and effective remedy.” The Court explained the statute mandates that the matter “truly” be one requiring an immediate appeal. In this case, Burnham maintains, the Cleveland Clinic claimed the “bell could not be unrung” if it turned over the report, but didn’t explain why.
“This Court’s decision in Smith … makes it clear that a party claiming a privilege must meet its burden of proving to the [c]ourts that the item being claimed privileged is truly privileged, and the prejudice faced by releasing the document or information would leave them without a meaningful remedy after judgment,” she wrote in the brief to the Court. “Without meeting this burden, there is no final appealable order.”
She concludes that the unnecessary filing of interlocutory appeals claiming privilege has become a method of lengthening litigation and delaying justice for years, and shouldn’t be allowed unless the party asserting privilege can meet its burden.
Friend-of-the-Court Filings
The Ohio Hospital Association and the Ohio State Medical Association together filed an amicus curiae brief supporting the Cleveland Clinic’s position. The organizations express concern that the Eighth District’s ruling will cause other courts to refuse to consider appeals of court orders to produce privileged material, which could lead to the release of medical information protected by either physician-patient or attorney-client privilege. They ask the Court to clarify that Smith allows a party to immediately appeal a discovery order that would release privileged information.
The Academy of Medicine of Cleveland & Northern Ohio’s amicus brief in support of the hospital focuses on confidentiality related to peer review and quality assurance processes. The ability to immediately appeal orders to disclose these records despite the privilege also affects medical malpractice cases, and such appeals are critical to protecting review procedures intended to improve patient care and treatment, the academy asserts.
The Ohio Association for Justice, a group of personal injury and consumer lawyers, has filed an amicus brief supporting Burnham’s positions. No harm will result from the release of the incident report, and no personal details or financial information will be divulged, the association argues. These types of delays escalate legal costs without the necessary showing of any actual prejudice, it maintains in requesting that the Court reaffirm the Smith decision.
- Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing the Cleveland Clinic and Cleveland Clinic Health System: Bret Perry, 216.875.2767
Representing Darlene Burnham: Alexander Pal, 216.529.9377
Attorney Discipline
Cincinnati Bar Association v. Christopher D. Wiest, Case no. 2016-0263
Hamilton County
The Board of Professional Conduct has recommended that Kentucky attorney Christopher D. Wiest be suspended for two years, with 18 months stayed under certain conditions. The board found Wiest, who is admitted to practice law in Ohio and Kentucky, used confidential information he received from a company his law firm represented to make stock trades that benefitted him financially and also disclosed the confidential details to federal investigators.
Client Requests Research on Potential Acquisitions
As an associate attorney for Thompson Hine, Wiest provided “environmental due diligence” research for a client, The Stanley Works. The company went through a merger in late 2009 and became Stanley Black & Decker, and Wiest continued doing similar work for the new company.
On Oct. 21, 2010, the firm contacted Wiest to explore whether Stanley should acquire a company called InfoLogix. The confidential analysis was code-named “Project Icon.” According to the professional conduct board’s report, the firm agreed to do the project on Oct. 7.
Also on Oct. 21, InfoLogix publicly disclosed that the stock exchange Nasdaq had decided to remove, or de-list, the company from its service because of non-compliance with a minimum requirement. InfoLogix stock was suspended from trading when the exchange opened that morning. A separate company offered to quote InfoLogix stock through its service beginning the same day.
Lawyer Purchases InfoLogix Stock
Wiest, who had three personal accounts for buying and selling stocks, made several trades of InfoLogix stock between Oct. 28 and Dec. 16, 2010, in his 401(k) account through the law firm. Wiest bought 10,000 shares of InfoLogix stock on Oct. 28. He had acquired 35,000 shares by Nov. 16. Two days later, he sold 13,510 shares of the stock at a loss of about $17,700.
On Dec. 15, 2010, Stanley Black & Decker announced publicly it had acquired InfoLogix. The next day, Wiest contacted an attorney and, based on the attorney’s advice, sold his remaining InfoLogix stock for a profit of $56,291.97 before taxes.
Board Finds Two Rule Violations
The Cincinnati Bar Association investigated and filed a disciplinary complaint against Wiest, alleging four professional conduct rule violations.
The professional conduct board dismissed two of the allegations, but found Wiest violated two other rules. The board’s report stated Wiest acknowledged he provided confidential information to the Securities and Exchange Commission (SEC) and testified to the SEC about that information in response to a subpoena. However, the subpoena in this case didn’t lift Wiest’s duty of confidentiality to his client, the board explained.
The board determined Wiest took confidential information from the client gained through his employment and provided that information to the SEC without his employer’s consent and for the purpose of trying to limit his exposure in an insider-trading investigation. This was an illegal act, violating R.C. 1333.81, that reflected adversely on his honesty and trustworthiness, the board concluded in describing Wiest’s first rule violation.
Wiest told the board his InfoLogix stock purchases weren’t made because of confidential information, but instead because of the stock’s de-listing and volatility. He also maintained he had reason to think the Stanley acquisition of InfoLogix wasn’t going forward.
However, the board reasoned that Wiest bought the stock based on the confidential information he had received and that he knew or should’ve known the deal’s uncertainty prohibited him from purchasing the stock. Wiest’s dishonest and deceitful actions for his own financial benefit amount to professional misconduct, the board concluded.
Noting concern for the public’s trust in the legal profession and that “a fully stayed suspension would send the wrong message” to the legal profession and the public, the board recommended a two-year suspension with the final 18 months stayed if Wiest doesn’t commit any more misconduct.
Briefs Filed Under Seal
Wiest has objected to the board’s findings and recommended sanctions, and the Cincinnati Bar Association has responded. However, at the request of the parties, the Court sealed the briefs.
- Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing the Cincinnati Bar Association: Ann Lugbill, 513.784.1280
Representing Christopher D. Wiest: George Jonson, 513.241.4722
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