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Signed Consent Bars Doctor’s Defamation Lawsuit

February 16, 2013

In this case, a Loyola radiation oncology resident, sued Loyola University and his program director Dr. Suneel Nagda after Dr. Nagda provided unacceptable recommendations on the resident’s application for staff privileges in an Arizona hospital. On one form, Dr. Nagda checked off a box stating that he “cannot recommend” the resident for the position. As a result of Dr. Nagda’s statements to the Arizona hospital, the resident’s hospital privileges were reduced from two years to one year and his practice at the hospital was “limited” in other ways – although he did still received privileges at the hospital.

The resident then sued, alleging that Loyola and Dr. Nagda defamed him, interfered with his prospective contract, and intentionally inflicted emotional distress upon him.

In the first opinion in this case, the court held that the resident had not made sufficient allegations to substantiate his contractual interference or emotional distress claims, but that he did sufficiently state a claim for defamation.

A substantial amount of litigation took place after the initial ruling.

Ultimately, Loyola and Dr. Nagda filed a motion for summary judgment.

In its ruling on the motion for summary judgment, the court ruled that the defamation claim also had to be dismissed. When the resident applied for hospital privileges, he signed a consent for release of information which stated in part:

I release UMC, all Provider Entities, all Third Party Payors, Accrediting Bodies, Organization and Authorities and their respective employees, agents, officers, directors, shareholders, members, medical staffs and the successors thereof from liability resulting from (a) any and all acts performed by them or delegated to others providing, obtaining, assembling, maintaining and sharing any information as authorized or contemplated hereby, (b) any recommendation any of the foregoing may make to any party concerning my Qualifications, and (c) the release of information as contemplated hereby.

The court noted that Arizona law (which it applied to this case) provides that “consent of another to the publication of defamatory matter concerning him is a complete defense to his action for defamation.”

While the court may have made an exception to the consent for defamatory statements that a plaintiff “had no reason to anticipate,” the court also noted that the plaintiff had alleged that Loyola staff repeatedly “spread false rumors” about him since the beginning of his residency, so he had ample notice that Loyola would likely publish defamatory statements about him in a recommendation.

In summary, the court ruled, at least under Arizona law, that a signed consent is a complete defense to a plaintiff’s defamation claim, even if the defendants act maliciously when making the statements.

I think the court’s interpretation of the law went too far. Because defamation is an intentionally false statement that harms a person’s reputation, the court’s opinion seems to give those providing recommendations the ability to intentionally and maliciously make false statements that they know will affect an applicant’s chances of being employed. Would the court stand by its opinion if Loyola falsely stated that the resident was being investigated for murdering several patients?

Doctors are required to sign releases before they will even be considered for hospital privileges. There is no alternative. How can doctors protect themselves?

Until the courts narrow the applicability of the releases, insert additional language in the release clauses.

For example, had the phrase “provided that such actions are taken in good faith” been added to the end of the release language, the outcome in this case may have been much different.

Strongly consider whether you want to sign a release that does not contain a “good faith” requirement. If a hospital won’t agree to act in good faith during its dealings with physicians, should you really be taking a chance on working with that hospital?

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