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Memorial Hermann Health System v. Khalil

Court of Appeals of Texas, First District

March 28, 2017

SAMIA KHALIL, M.D., Appellee

         On Appeal from the 334th District Court Harris County, Texas Trial Court Case No. 2015-77483

          Panel consists of Justices Massengale, Brown, and Huddle.


          Harvey Brown Justice

         After 40 years of employment at Memorial Hermann hospital, Dr. Samia Khalil sued Memorial Hermann Health System for defamation, tortious interference with an existing contract, conspiracy, and intentional infliction of emotional distress. Khalil, age 77, also sued for age discrimination. Memorial Hermann sought to dismiss several of her claims under summary dismissal procedures found in the Texas Citizens Participation Act (TCPA).[1] In turn, Khalil filed a TCPA motion to dismiss Memorial Hermann's TCPA motion. Both motions were denied by operation of law.

         In two issues, Memorial Hermann argues that it was entitled to dismissal of Khalil's challenged claims. Through a cross-appeal, Khalil argues that, while Memorial Hermann's motion was properly denied, her TCPA counter-motion was denied in error and that she is, therefore, entitled to recover attorney's fees.

         We reverse the denial of Memorial Hermann's motion, affirm the denial of Khalil's motion, and remand for further proceedings.


         Dr. Samia Khalil worked as a pediatric anesthesiologist at Memorial Hermann hospital for four decades. Along with those duties, she taught pediatric anesthesiology at The University of Texas Health Science Center at Houston (UT Health). UT Health is not a defendant in Khalil's lawsuit. According to her petition, Dr. Khalil was approached in 2014 by Dr. Carin Hagberg-who was both the UT Health chair of the anesthesia department and the Memorial Hermann chief of anesthesiology-about "vague complaints" made to "hospital administration" about Dr. Khalil. Hagberg and Khalil agreed that Khalil would enter into a UT Health corrective action plan.

         The corrective action plan was not completed before the deadline for Khalil to submit a complete application for recredentialing at Memorial Hermann. Citing her failure to submit a complete application by the deadline-versus a determination that she was not competent for recredentialing-Memorial Hermann announced that Khalil's credentials had expired, which meant that she was no longer able to practice medicine there. Khalil sued Memorial Hermann.

         Below is a more detailed account of the events leading up to Khalil's departure from Memorial Hermann and of the Memorial Hermann and UT Health documents created during those two entities' investigations into Khalil's competence, which she submitted to the trial court.

         A. Khalil's corrective action plan and the investigations into her competence

         Due to "anecdotal" statements questioning Khalil's patient care, compliance with hospital procedures, and collegiality, Hagberg approached Khalil in 2014 to establish a corrective action plan. The corrective action plan was entered between Khalil and UT Health, not Memorial Hermann. It required Khalil to be assessed by UT Health's internal Employee Assistance Program, follow any EAP recommendations, participate in a chart review of her recent cases, and comply with applicable standards and guidelines. UT Health prohibited Khalil from "faculty clinical care" of patients while she was taking action pursuant to the corrective action plan and it was assessing her EAP compliance and chart audit. The UT Health corrective action plan began just a few weeks before Khalil's Memorial Hermann recredentialing deadline: December 31, 2014.

         UT Health informed Memorial Hermann's credentials committee chair, Mark Farnie, of Khalil's corrective action plan. As the December 2014 deadline drew near, Memorial Hermann informed Khalil that she would be given only a limited, 13-month renewal[2] because of the on-going plan and because the hospital wanted to engage her "in quality and patient safety activities and to promote collegial working relationships in the clinical areas." Therefore, her credentials would need to be renewed again or they would expire at the end of January 2016.

         Khalil met with a UT Health EAP representative, as required by her corrective action plan. That representative recommended that Khalil undergo an outside assessment. Khalil refused to participate, stating in a letter dated November 30, 2015 that the process was "flawed by design and intrinsically unfair." Khalil eventually agreed to participate in an outside assessment, but that assessment was not completed before the January 2016 recredentialing deadline. As a result, she did not have a completed application by the deadline. Memorial Hermann then declared that Khalil's credentials had expired because she failed to complete her renewal application by the deadline.

         Khalil challenges Memorial Hermann's characterization and asserts that Memorial Hermann's intentional delay tactics caused her to not meet the deadlines. Khalil also asserts that Memorial Hermann coordinated with UT Health to have UT Health remove her from clinical care, which allowed Memorial Hermann to avoid the procedural protections found in its medical staff bylaws. She asserts that she was denied notice, hearing, and due process. Khalil describes the chain of events as "orchestrated" and claims the two entities placed her in a "catch-22" that prevented the renewal of her credentials.

         Just before her credentials expired, Khalil sued Memorial Hermann for various claims, including defamation, based on statements made about her during Memorial Hermann's and UT Health's investigations into her competence, including privileged peer-review statements made by various committees.

         B. Statements made about the on-going investigations into Khalil's competence

         Some of the statements underlying Khalil's suit are communications by UT Health, not by Memorial Hermann. These communications are between UT Health employees, confirming that UT Health had placed limitations on Khalil's clinical care and addressing whether those limitations prevented her from continuing with her medical research activities.

         Other communications were written by Memorial Hermann and directly address Khalil's competence. For example, in a December 8, 2015 letter to Khalil from Memorial Hermann's chief of staff, Dr. James McCarthy, which is marked as a peer-review document, Dr. McCarthy states that Memorial Hermann's medical-executive committee reviewed the quality-review committee's findings and "agreed" that Khalil's clinical practice "represents the potential of imminent patient harm" and, therefore, decided that she was "not to care for patients at this hospital at this time."

         The letter listed specific negative findings, including that Khalil appeared unwilling to change her historical approach, did not communicate well with team members, generally expressed a rigidity unsuitable to a surgical-team environment, had not read patient records or adequately communicated with surgeons on occasion, and "demonstrated lack of insight (and basic knowledge)." The letter then reiterated the committee's conclusion that Khalil's practice creates "the potential of imminent patient harm and will not be permitted if [she] attempt[s] to exercise clinical privileges." Finally, the letter informed Khalil that the hospital's medical-executive committee and "[e]veryone involved" was "trying to promote patient safety and . . . acting in good faith to that end."

         C. Khalil sues and Memorial Hermann seeks dismissal

         Based on the letter from Memorial Hermann's chief of staff as well as other communications, Khalil sued Memorial Hermann for defamation and other claims. Memorial Hermann answered by asserting a general denial and pleading the affirmative defenses of qualified common-law privilege and statutory immunity, citing various federal and state statutes related to peer-review protections. See 42 U.S.C. §§ 11101-11152; Tex. Occ. Code § 160.010; Tex. Health & Safety Code § 161.033.

         Memorial Hermann also moved to dismiss several of Khalil's claims, arguing that they infringed on its constitutional right to free speech and its statutory right to free speech under the TCPA. Khalil amended her petition to assert, as an affirmative defense, that the TCPA is unconstitutional as applied to her because its application would deprive her of "her right to sue for reputational torts that are expressly protected under the Texas Constitution." She also filed a TCPA motion to dismiss Memorial Hermann's TCPA motion.

         A hearing was held on the competing motions on May 6, 2016, thereby establishing June 6 as the deadline for the trial court to issue a ruling on the motions. See Tex. Civ. Prac. & Rem. Code § 27.005(a). No ruling issued by that date; therefore, both motions were denied by operation of law. Id. § 27.008(a).

         Memorial Hermann appeals the denial of its motion. Through a cross-appeal, Khalil appeals the denial of her motion as well.

         Texas Citizens Participation Act

         Memorial Hermann and Khalil filed competing motions to dismiss under the Texas Citizens Participation Act. Id. § 27.001-.011. The TCPA is found in Chapter 27 of the Civil Practice and Remedies Code, which is titled, “Actions Involving the Exercise of Certain Constitutional Rights.” The TCPA's purpose is to protect “citizens who petition or speak on matters of public concern from retaliatory lawsuits that seek to intimidate or silence them.” In re Lipsky, 460 S.W.3d 579, 584 (Tex. 2015). It does so by creating “a new set of procedural mechanisms through which a litigant may require, by motion, a threshold testing of the merits of legal proceedings or filings that are deemed to implicate the expressive interests protected by the statute, with the remedies of expedited dismissal, cost-shifting, and sanctions for any found wanting.” Serafine v. Blunt, 466 S.W.3d 352, 369 (Tex. App.-Austin 2015, no pet.) (Pemberton, J., concurring); see TEX. CIV. PRAC. & REM. CODE § 27.003-.009.

         A. TCPA's dismissal provision and relevant statutory definitions

         Section 27.003 of the TCPA contains the dismissal provision both parties have invoked in this suit. It provides that a party may file a motion to dismiss a legal action against it when the legal action "is based on, relates to, or is in response to [that] party's exercise of" one of three rights: free speech, petition, or association. Tex. Civ. Prac. & Rem. Code § 27.003(a). The Legislature defined "[l]egal action" as "a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal or equitable relief." Id. § 27.001(6). The Legislature also statutorily defined the three sets of rights protected by TCPA summary-dismissal procedures, including a statutorily defined right of free speech. Id. § 27.001(2)-(4); Id. § 27.001(3) ("Exercise of the right of free speech means a communication made in connection with a matter of public concern.") (internal quotation marks omitted).

         B. TCPA's shifting burdens of proof

         When a movant seeks dismissal under the TCPA, the movant has the initial burden to show "by a preponderance of the evidence" that the nonmovant has asserted a "legal action" that is "based on, relates to, or is in response to" the movant's exercise of one of the three rights delineated in the statute. Id. § 27.005(b). If the movant meets that burden, the burden shifts to the nonmovant to establish "by clear and specific evidence" a "prima facie case for each essential element of the claim in question." Id. § 27.005(c). Dismissal may be required, "[n]otwithstanding" the nonmovant's evidence proffered to meet its burden, if the movant establishes "by a preponderance of the evidence each essential element of a valid defense to the nonmovant's claim." Id. § 27.005(d).

         The trial court considers the pleadings and any supporting and opposing affidavits to evaluate whether each party has met its burden. Id. § 27.006(a); In re Lipsky, 460 S.W.3d at 587.[3]

         Standard of Review

         We review de novo the denial of a TCPA motion to dismiss. Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 353 (Tex. App.-Houston [1st Dist.] 2013, pet. denied); Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71, 80 (Tex. App.-Houston [1st Dist.] 2013, pet. denied). This de novo standard applies whether the motion is denied by written order or by operation of law. See Avila v. Larrea, 394 S.W.3d 646, 652-53, 656 (Tex. App.-Dallas 2012, pet. denied). We consider the parties' pleadings, affidavits, and any discovery that might have been authorized by the trial court on the issues. Tex. Civ. Prac. & Rem. Code § 27.006. We view the evidence in the light most favorable to the nonmovant. Cheniere Energy, Inc. v. Lotfi, 449 S.W.3d 210, 214 (Tex. App.-Houston [1st Dist.] 2014, no pet.); Serafine, 466 S.W.3d at 369 n.28.

         Likewise, we review de novo issues of statutory construction. Molinet v. Kimbrell, 356 S.W.3d 407, 411 (Tex. 2011). When construing a statute, our objective is to give effect to legislative intent, which requires us to look first to the statute's plain language. Leland v. Brandal, 257 S.W.3d 204, 206 (Tex. 2008). If that language is unambiguous, we interpret the statute according to its plain meaning. Id.; see Molinet, 356 S.W.3d at 411.

         With regard to Memorial Hermann's denied TCPA motion, we must determine whether Khalil asserted a legal action that is based on, relates to, or is in response to Memorial Hermann's exercise of its right of free speech as defined in the TCPA, and, if so, whether she has established a prima facie case for each essential element of each of her claims that are the subject of the dismissal motion. We must also consider whether Memorial Hermann, nonetheless, has established each essential element of a valid defense to those claims.

         Khalil's TCPA motion to dismiss Memorial Hermann's motion requests the same analysis. One step would be to determine whether Memorial Hermann has met its burden to establish a prima facie case for dismissal of Khalil's claims. See Tex. Civ. Prac. & Rem. Code § 27.005(c). Because evaluating Memorial Hermann's dismissal motion would be a necessary step to disposing of Khalil's motion, we begin with Memorial Hermann's motion.

         Memorial Hermann's Motion to Dismiss

         We begin with the threshold question of whether Memorial Hermann met its burden under the TCPA to establish by a preponderance of the evidence that Khalil brought a legal action that "is based on, relates to, or is in response to" its exercise of the right of free speech, as defined in the TCPA.

         A. Whether Memorial Hermann satisfied its burden

         The TCPA defines the "[e]xercise of the right of free speech" as a "communication made in connection with a matter of public concern." Id. § 27.001(3). A "[c]ommunication includes the making or submitting of a statement or document in any form or medium, including oral, visual, written, audiovisual, or electronic." Id. § 27.001(1). It includes both private and public communications. Lippincott v. Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015). A "[m]atter of public concern" is defined to include, among other things, an issue related to "health or safety." Tex. Civ. Prac. & Rem. Code § 27.001(7)(A).

         The letter to Khalil from Memorial Hermann's chief of staff criticized her past job performance, concluded that her "clinical practice represents the potential of imminent patient harm, " and directed that she be prohibited from engaging in clinical ...

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