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Pacific Radiation Oncology, LLC v. The Queen's Medical Center

Supreme Court of Hawaii

June 13, 2016

PACIFIC RADIATION ONCOLOGY, LLC, a Hawai'i Limited Liability Corporation, et al., Plaintiffs-Appellants,
v.
THE QUEEN'S MEDICAL CENTER, a Hawai'i Non-Profit Corporation, et al., Defendants-Appellees.

         CERTIFIED QUESTION FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAI'I (CIVIL NO. 12-00064 LEK-KSC)

          RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ., WITH RECKTENWALD, C.J., CONCURRING SEPARATELY

          OPINION

          McKENNA, J.

         I. Introduction

         This court has been asked to provide guidance to the United States District Court for the District of Hawai'i ("District Court") on questions of Hawai'i law. At issue is whether the parties may use, or be compelled to produce, the confidential medical records of over 100 cancer patients, in an effort to prosecute or defend against claims that the Plaintiff doctors steered these patients away from treatment at Defendant Queens Medical Center. The patients are not parties to the underlying lawsuit, although 19 of them have been granted intervenor status. All of them have intervened solely to assert their right to privacy and seek a prohibition on the use and production of their medical records.

         The District Court[1] certified the following questions to this court:

1. May a third party who is in lawful possession of a patient's confidential medical records use, or be compelled to produce, these records in litigation where the patient is not a party?
2. If a third party may use and/or produce a patient's confidential medical records in litigation, is a de-identification process sufficient to protect the patient's privacy interests where the third party already allowed its agents access to the patient's records and its agents inadvertently made part of the patient's medical information public?

         This court may "reformulate the relevant state law questions as it perceives them to be, in light of the contentions of the parties." Allstate Ins. Co. v. Alamo Rent-A-Car, Inc., 137 F.3d 634, 637 (9th Cir. 1998) (citations and quotation marks omitted). To avoid confusion, we reformulate the certified questions to clarify that the term "party" refers to the parties to the litigation, not to the parties to the physician-patient relationship. We believe that the "parties" in this case are the plaintiffs and defendants, and the "third parties" in this case are the patient interveners. We also reformulate the question so that a negative answer to the first certified question will not preclude us from answering the second certified question to the extent we can. Therefore, the reformulated certified questions are:

1. May a party who is in lawful possession of a patient's confidential medical records use, or be compelled to produce, these records in litigation where the patient is not a party?
2. Is a de-identification process sufficient to protect the patient's privacy interests where the party already allowed its agents access to the patient's records and its agents inadvertently made part of the patient's medical information public?[2]

         Hawai'i Rules of Appellate Procedure ("HRAP") Rule 13 (2000) governs certified questions. It provides, in relevant part, "When a federal district . . . court certifies to the Hawai'i Supreme Court that there is involved in any proceeding before it a question concerning the law of Hawai'i that is determinative of the cause and that there is no clear controlling precedent in the Hawai'i judicial decisions, the Hawai'i Supreme Court may answer the certified question by written opinion." We therefore confine our answer to the "law of Hawai'i that is determinative of the cause, " namely article I, section 6 of the Hawai'i Constitution. That constitutional provision states, in relevant part, "The right of the people to privacy is recognized and shall not be infringed without the showing of a compelling state interest."

         We answer the first certified question in the negative. Article I, section 6 of the Hawai'i Constitution protects the health information of patient interveners to this case. Pursuant to that provision, and under the facts of this case, the parties cannot use, or be compelled to produce, confidential patient medical records in litigation where the patient is not a party, absent a compelling state interest.

         As to the second certified question, we do not address whether sufficient de-identification is possible where one party already allowed its agents access to the patient's records and its agents inadvertently made part of the patient's medical information public. The de-identification process and requirements are set forth under the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), Pub L. No. 104-191, 110 Stat. 1936 (1996), and its corresponding regulations; therefore, the sufficiency of de-identification does not "concern[] the law of Hawai'i that is determinative of the cause." HRAP Rule 13. Whether the use and production of de-identified medical records is "sufficient to protect the patient's privacy interests, " however, is a question this court can address under article I, section 6. We hold that the use and production of de-identified medical information of patients who are not parties to the litigation violates those patients' right to privacy under article I, section 6 of the Hawai'i constitution, as no compelling state interest has been shown in this case.

         II. Background

         The Plaintiffs in this case are Pacific Radiation Oncology, LLC; PRO Associates, LLC; John Lederer, M.D.; Vincent Brown, M.D.; Paul DeMare, M.D.; Thanh Huynh, M.D.; Laeton Pang, M.D.; and Eva Bieniek, M.D. (collectively, "PRO"). The Plaintiffs filed an Amended Complaint for Declaratory and Injunctive Relief and for Damages ("Amended Complaint") against Defendants Queens Medical Center and Queens Development Corporation (collectively "QMC").[3] The Amended Complaint alleged that the Plaintiffs "had a long-standing, 40-year relationship with QMC to provide professional radiation oncology therapy services to PRO patients at facilities owned by QMC, using equipment, technician support, and other services provided by QMC." QMC is the only Nuclear Regulatory Commission-approved hospital at which radiation oncologists can operate on patients. Plaintiffs also acknowledged that they had "a one-third interest in The Cancer Centers of Hawai'i ['TCCH'], " a competitor of QMC.

         According to the Amended Complaint, QMC notified Plaintiffs that the QMC Board had decided to convert QMC to a "closed radiation therapy department, " meaning that only physicians employed by QMC could exercise clinical privileges to provide professional radiation oncology services at QMC. QMC explained that it arrived at its decision to terminate PRO's privileges after determining that PRO had "transferred] patients to other facilities for no medical reason or patient request. ..." Plaintiffs alleged in their Amended Complaint that QMCs action was intended to destroy their ability to treat patients at facilities competing with QMC.

         Plaintiffs' Amended Complaint raised ten claims for relief: a claim of denial of procedural and substantive due process; a claim of violation of QMC bylaws and governing regulations; three separate claims of intentional and tortious interference; four separate claims of unfair, deceptive, anti-competitive and illegal trade practices in ...


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