In Gargiulo v. Baystate Health, Inc., CIV.A. 11-30017-MAP, 2011 WL 3627549 (D. Mass. Aug. 18, 2011), the Court held that in claims arising under federal law asserted in a federal court, the Massachusetts medical peer review privilege does not protect documents from subpoena or discovery. The case has implications on claims against accountants and attorneys. Some states have enacted statutes or adopted common law that provide more protection from discovery of documents prepared by accountants and lawyers than federal law may provide. This case holds that where there are both state and federal claims in a lawsuit the Court will apply the federal law rather than state law concerning disclosure of those documents.

The plaintiff, Debra Gargiulo, a former resident in the medical residency program at Baystate Medical Center in Springfield, brought suit against the defendants, Baystate Health, Inc. and Baystate Medical Center, Inc., claiming they had discriminated against her based on her age and disability in violation of both state and federal law. According to her complaint, Ms. Gargiulo had begun the defendants’ surgical residency program when she was in her mid-40s. After receiving positive performance reviews during her first two years in the program, Gargiulo received somewhat mixed and more negative evaluations of her clinical performance during her third year. Thereafter, she disclosed to Baystate that she suffered from post-traumatic stress disorder and was granted a temporary medical leave of absence from the residency program. In her lawsuit, Gargiulo alleged that roughly a year later, when she attempted to return to the program, the program director told her that she was “too old” to successfully complete her residency and was offered only limited re-entry into the program under terms that Gargiulo characterized as unfair. Gargiulo sued the defendants in federal court alleging age and disability discrimination under state law and the federal Americans with Disabilities Act (“ADA”) and Age Discrimination in Employment Act (“ADEA”).

During the discovery phase of the litigation, Gargiulo sought production of Baystate’s records relating to her performance evaluations as well as those of others in the residency program. In opposing the plaintiff's motion to compel production of those documents, the defendants asserted that such documents were not subject to discovery under the Massachusetts medical peer review privilege, which provides that “the proceedings, reports and records of a medical peer review committee shall be confidential and ... shall not be subject to subpoena or discovery, or introduced into evidence, in any judicial or administrative proceeding.” Mass. Gen. Laws ch. 111 § 204(a). As courts have noted previously, the purpose of that statutory medical privilege is “to promote candor and confidentiality. . . and to foster aggressive critiquing of medical care by the provider’s peers.” Pardo v. Gen. Hosp. Corp., 841 N.E.2d 692, 700 (Mass. 2006). A chief concern underlying the creation of the privilege was that the threat of medical malpractice claims should not inhibit effective self-regulation within the medical profession.

Alternatively, the defendants asserted that because medical peer review privileges are pervasive throughout the country (having been enacted by some 47 states and the District of Columbia) and because they promote an important interest, the Court should recognize a federal common law medical peer review privilege that would bar the discovery sought by Gargiulo.

Judge Kenneth P. Neiman disagreed with both of the defendants’ arguments and allowed the plaintiff’s motion to compel the requested documents. With regard to the Massachusetts medical peer review privilege, the Court noted that under the Federal Rules of Evidence, privileges in the federal courts are governed by federal law except with respect to an element of a claim or defense as to which state law supplies the rule of decision. State privilege law thus controls only as to state law claims. The Court held where the plaintiff had asserted both state and federal law claims, the defendants could not rely on a state law privilege to prevent discovery of the documents. In so holding, the Court rejected the overly-formalistic contention that since the plaintiff invoked diversity jurisdiction in her complaint, state law should apply. Rather, the Judge explained that despite the plaintiff’s invocation of diversity jurisdiction, her complaint also asserts viable federal claims under the ADA and ADEA. Looking to decisions from other jurisdictions, Judge Neiman noted where, as here, the documents at issue relate to both the federal and state law claims, it would be unworkable to attempt to apply two separate disclosure rules to different claims tried to the same jury. The Court thus held “when there are federal law claims in a case also presenting state law claims, the federal rule favoring admissibility, rather than any state law privilege, is the controlling rule.”

The Court also declined the defendants’ invitation to recognize a federal common law medical peer review privilege. The Court noted that “[n]o court in the First Circuit or District of Massachusetts has yet done so.” The Court reasoned, at least in a case such as the plaintiffs not involving medical malpractice claims, the important federal interest in fairly determining discrimination cases is too great to allow such a privilege to “be used as a shield against violations of federal discrimination law.” Additionally, the Court noted that the United States Supreme Court has instructed federal courts to be “especially reluctant to recognize a privilege in an area where it appears that Congress has considered the relevant competing concerns but has not provided the privilege itself.” In this regard the Court found it significant that the federal Health Care Quality Improvement Act of 1986, which extended qualified immunity to medical professionals involved in certain medical peer review processes, does not establish a federal evidentiary privilege for documents generated during such reviews. Accordingly, the Court found Congress had already considered the issue and declined to create the privilege urged by the defendants. The Court thus allowed the plaintiff's motion to compel the requested documents, holding they were not subject to any privilege or exemption from discovery.

Although decided in the specific context of the medical peer review privilege under Mass. Gen. Laws ch. 111 § 204(a), the same reasoning arguably would apply to the discoverability in federal court of documents subject to other state law privileges. The ruling in this case therefore provides a strong incentive for plaintiffs to file suit in federal as opposed to state court in any case where the plaintiff anticipates seeking discovery of documents subject to a Massachusetts state law privilege. Likewise, in order to gain access to documents under federal law that otherwise would be privileged under state law, plaintiffs in such cases are incentivized by this decision to assert federal law claims in addition to, or instead of, any applicable state law claims.

Critics of this decision, concerned with the weakening of the Massachusetts medical peer review privilege and the potential chilling effect that it might have on aggressive critiquing of medical care providers by their peers, may find two silver linings in the Court’s opinion. First, in ordering the defendants to produce the requested documents, the Court issued a protective order to maintain the confidentiality of the reviewing party members and any patients mentioned in the documents. Second, although not definitively ruling on the issue, the Court’s decision clearly implies that a different result might be obtained in a case involving medical malpractice claims. It remains to be decided whether in such a case the relevant competing interests would be held to weigh in favor of recognizing a federal common law medical peer review privilege.