Feyz v. Mercy Memorial Hospital
719 N.W.2d 1, 475 Mich. 663 (2006)
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Rule of Law:
The judicially created doctrine of nonintervention is repudiated as inconsistent with Michigan's peer review immunity statute, MCL 331.531. Under that statute, the 'malice' exception to immunity is defined as acting with knowledge that information is false or with reckless disregard for its truth or falsity, and this immunity protects only the peer review participants and their communications, not the hospital's ultimate staffing decision.
Facts:
- Dr. Feyz, a physician with privileges at Mercy Memorial Hospital, was dissatisfied with the hospital's standard nursing policy for documenting patient medications.
- Feyz created his own specialized standing orders for nurses to follow when admitting his patients, which were more investigative than the hospital's standard procedure.
- Mercy Memorial Hospital administrators disapproved of Feyz's orders and instructed the nursing staff to ignore them.
- When nurses followed the hospital's policy instead of his, Feyz filed 'incident reports' to trigger peer review investigations of what he termed 'potential medical errors.'
- In response, the hospital initiated peer review proceedings against Feyz based on his insistence on using his own orders and for failing to complete medical records.
- The peer review process resulted in disciplinary action against Feyz, including a referral for a psychiatric examination, temporary probation, and ultimately indefinite probation with restrictions on his practice at the hospital.
Procedural Posture:
- Dr. Feyz filed a complaint in Monroe Circuit Court (trial court) against Mercy Memorial Hospital and several individuals, alleging various statutory and common-law claims.
- The trial court granted summary disposition to the defendants, concluding their actions were protected by the peer review immunity statute and, alternatively, by the doctrine of judicial nonintervention.
- Feyz, as appellant, appealed to the Michigan Court of Appeals.
- A divided panel of the Court of Appeals partially reversed the trial court, holding that peer review immunity did not apply to statutory civil rights claims, which it considered malicious acts, and that the nonintervention doctrine did not bar these claims.
- The defendants, as appellants, were granted leave to appeal to the Michigan Supreme Court.
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Issue:
Under Michigan's peer review immunity statute, MCL 331.531, is the 'malice' exception to qualified immunity established by showing that a peer review participant or entity acted with knowledge of the falsity of information or with reckless disregard for its truth or falsity?
Opinions:
Majority - Young, J.
Yes, the 'malice' exception is established when a person or entity participating in peer review acts with knowledge of the falsity of information or with reckless disregard of its truth or falsity. The court repudiates the judicially created 'doctrine of nonintervention,' which had shielded private hospital staffing decisions from judicial review, because it is inconsistent with the statutory immunity scheme created by the Legislature. The court adopts the 'actual malice' standard from defamation law (knowledge of falsity or reckless disregard for the truth) as the definition of 'malice' for the peer review statute. This standard best fits the communicative context of peer review, which is designed to foster candid evaluation of medical practices to improve patient care. A broader definition of malice would undermine this goal by transforming peer review into a legalistic process. Finally, the court clarifies that this statutory immunity protects only the participants and communications within the peer review process itself; it does not extend to the hospital, which remains the ultimate decision-maker on staffing and can be held liable for its decisions.
Concurring-in-part-and-dissenting-in-part - Cavanagh, J.
No, the term 'malice' should be interpreted according to its general legal definition, which is 'the intent, without justification or excuse, to commit a wrongful act,' not the specialized 'actual malice' standard from defamation law. While agreeing with the majority's repudiation of the nonintervention doctrine, the dissent argues that the Legislature used the word 'malice,' not 'actual malice.' Importing the defamation standard is unwarranted because the statute does not suggest it, and 'actual malice' is a specific term of art developed for First Amendment public-figure cases. The statute also grants immunity for an 'act or communication,' and limiting the definition of malice to a communication-focused standard effectively reads the word 'act' out of the statute. The court should apply the broader, common legal definition of malice.
Analysis:
This decision significantly altered healthcare law in Michigan by eliminating the common-law doctrine of judicial nonintervention, thereby opening private hospital staffing decisions to judicial review. By adopting the high 'actual malice' standard for the peer review immunity exception, the court strongly protected the confidentiality and candor of the peer review process itself. However, by explicitly stating that hospitals are not covered by this immunity for their final credentialing decisions, the opinion clarifies that hospitals can be sued for claims like civil rights violations, creating a new balance between protecting internal review and ensuring institutional accountability.
