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Bousamra v. Excela Health

Superior Court of Pennsylvania

July 19, 2017


         Appeal from the Order Dated October 6, 2015 In the Court of Common Pleas of Allegheny County Civil Division at No(s): G.D. No. 12-003929



          BOWES, J.

         Excela Health, a corporation ("Excela"), Westmoreland Regional Hospital, doing business as Excela Westmoreland Hospital, a corporation ("Westmoreland Hospital"), Robert Rogalski, Jerome E. Granato, M.D., and Latrobe Cardiology Associates, Inc. ("Latrobe Cardiology"), filed this appeal from an October 6, 2015 discovery order. Appellants assert that the order in question required them to produce documents that are protected by the attorney-client and work-product privileges. We affirm.

         On March 1, 2012, Appellee George R. BouSamra, M.D., instituted this action against Appellants as well as Dr. Robert N. Staffen, Mercer Health & Benefits, LLC ("Mercer"), and American Medical Foundation For Peer Review And Education, Inc., a corporation ("American"). Ehab Morcos, M.D. instituted a separate action at docket number 12-3941 against the same defendants, and Dr. Morcos' lawsuit was consolidated with this lawsuit for purposes of discovery as both cases concern the same events.[1]

         During the pertinent time period, Excela operated Westmoreland Hospital, which is an acute care hospital in Greensburg, Pennsylvania, Mr. Rogalski was Excela's Chief Executive Officer ("CEO"), and Dr. Granato was Chief Medical Officer for Excela. Dr. BouSamra and Dr. Morcos were members of a private cardiology practice known as Westmoreland County Cardiology ("WCC"), and had staff privileges as interventional cardiologists at Westmoreland Hospital. Dr. BouSamra gained medical privileges at Westmoreland Hospital in 2005 while Dr. Morcos was granted those privileges in 2006. The two doctors relinquished their staff privileges at Westmoreland Hospital on January 12, 2011.

         Interventional cardiology is a subspecialty of cardiology wherein practitioners utilize intravascular catheter-based techniques to treat, inter alia, coronary artery disease. These specialists employ catheterization and angiography to measure the amount of blood flow through a patient's coronary arteries in order to ascertain if there is blockage restricting the blood movement. If the blockage is present and severe enough, interventional cardiologists implant a stent, and that device increases the flow of blood through the affected artery.

         Dr. BouSamra claimed the following in this lawsuit. By 2006, WCC performed approximately ninety percent of the interventional cardiology procedures at Westmoreland Hospital. WCC generated most of Excela's yearly multi-million dollar income from cardiology services, a large portion of which involved interventional procedures, and the quality of WCC's services attracted patients who otherwise would have traveled to Pittsburgh. In 2007, Excela acquired Latrobe Cardiology. However, that entity did not employ interventional cardiologists and patients who needed interventional cardiac procedures were referred by Latrobe Cardiology cardiologists to other groups, including WCC.

         Dr. BouSamra also averred the following. Animosity existed between the privately-owned WCC and Latrobe Cardiology because those entities competed for patients. In 2008, defendant Dr. Staffen, who was a member of defendant Latrobe Cardiology, complained to Excela that Dr. BouSamra and Dr. Morcos were not properly referring back to Latrobe Cardiology patients whom Latrobe Cardiology had referred to WCC for interventional procedures.

         In this action, Dr. BouSamra additionally alleged that the following occurred. Physicians from Latrobe Cardiology began to speciously accuse WCC of various improper medical practices, including, inter alia, that its cardiologists were placing medically-unnecessary stents in patients. In response, in 2009, the Chief Medical Officer of Westmoreland Hospital decided to conduct an evaluation of the cardiac catheterization laboratory at Westmoreland Hospital and the practices of physicians, including Dr. BouSamra and Dr. Morcos. One of the principals of WCC, one of the cardiologists from Latrobe Cardiology, and the Chief Medical Officer of Westmoreland Hospital agreed that the evaluation of the interventional cardiology procedures performed at WCC would be performed by Dr. Mahdi Al-Bassam, a skilled interventional cardiologist.

         On April 26, 2009, Dr. Al-Bassam issued a report that contained a favorable evaluation of the WCC interventional cardiologists. He found that their work demonstrated outstanding skills and judgment, there was no misuse or abuse of the practice of interventional cardiology, and their performance of procedures involved no increased complications or mortality.

         Dr. BouSamra also indicated the following in this case. After defendant Mr. Rogalski was appointed CEO of Excela, he became aware of the tension between WCC and Latrobe Cardiology. Mr. Rogalski also attempted to incorporate WCC into the Excela system. Through this endeavor, Excela planned to dominate the Westmoreland County market in interventional cardiology. WCC and Excela began negotiating. In April, 2010, WCC rejected Excela's overtures; the following month, Excela began to recruit interventional cardiologists to compete with WCC.

         Dr. BouSamra claimed in this lawsuit that Excela then used Latrobe Cardiology's unfounded complaints about his and Dr. BouSamra's over-stenting to discredit them in the Westmoreland County area, as follows. In June 2010, without notice to Dr. BouSamra and Dr. Morcos, Excela engaged Mercer to conduct peer review of interventional cardiologists, including Dr. BouSamra and Dr. Morcos. Based upon Dr. Al-Bassam's 2009 evaluation outcome, Mr. Rogalski's knowledge of the rivalry between Latrobe Cardiology and WCC, and the passage of a mere two months between the rejection of Excela's offer to incorporate WCC under its umbrella and the initiation of the Mercer peer review, Dr. BouSamra averred that Mercer's 2010 peer review was pretextual and was designed to discredit Dr. BouSamra and Dr. Morcos. The outcome of the Mercer peer review, which was based upon a sampling, indicated that Dr. BouSamra and Dr. Morcos, as well as other interventional cardiologists, had performed medically unnecessary stenting. Excela focused upon Dr. BouSamra and Dr. Morcos, who were given the results of the Mercer review on December 18, 2010. The two doctors resigned their privileges at Westmoreland Hospital on January 12, 2011, to avoid negative professional repercussions from what they perceived as an unwarranted and pretextual peer-review outcome.

         Wary of the events occurring with Excela, Dr. BouSamra already had begun to look at other hospitals, and, by the time he resigned, he had gained provisional privileges to perform coronary interventions at Forbes Regional Hospital, which serves patients in Westmoreland County and eastern Allegheny County.

         Before Mercer completed its peer review, Excela hired an outside public relations consultant, Jarrard, Phillips, Cate, & Hancock ("Jarrard"), to aid it in publicizing the over-stenting issues. Since the Mercer review was based upon a sampling, on February 9, 2011, Excela hired American, another outside peer review corporation, to conduct an additional peer review. American evaluated interventional procedures performed by only Dr. BouSamra and Dr. Morcos for 2010, which amounted to 753 files. The purpose of that review was to determine if any of the procedures that they performed at Excela were not medically necessary.

         In this case, Dr. BouSamra also accused the American peer review of being pretextual and specifically designed to discredit him and Dr. Morcos, maintaining that American conducted its review of their 753 cases from 2010 over the course of a weekend and devoted less than ten minutes to each patient file. On February 23, 2011, American issued a report to Excela that indicated that the practice of Dr. BouSamra and Dr. Morcos was to overestimate arterial blockage and to inappropriately implant stents.

         On March 2, 2011, Excela held a press conference and publicly announced that its experts had concluded that Dr. BouSamra and Dr. Morcos performed medically unnecessary stenting procedures in 2010. That press conference received wide media coverage the following day.

         Dr. BouSamra and Dr. Morcos instituted their lawsuits. Their positions were: 1) the Mercer and American peer review proceedings were conducted in bad faith and were specifically intended to disparage their medical practices; and 2) Excela, in furtherance of its campaign of preventing Dr. BouSamra and Dr. Morcos from competing with it in Westmoreland County, publicly announced the unsupported findings from the two peer reviews to discredit the doctors. They raised various causes of action in the two lawsuits; they also included intentional interference with existing and potential contractual relationships and defamation.

         The present appeal pertains to a discovery ruling, and the following facts are pertinent in that respect. Timothy Fedele, Esquire, was Excela's Senior Vice-President and General Counsel (occasionally referred to as "in-house counsel") during the relevant events. Excela hired Jarrard, an independent public relations firm that is located in Nashville, Tennessee, to create a media plan to implement the public announcement about the over-stenting issues. Molly Cate was the principal at Jarrard who worked on the Excela media plan, and included on her team were Tim Fox, Alan Taylor, and Magi Curtis.

         On February 25, 2011, Ms. Cate was told by Excela that legal issues prevented public disclosure of the names of the doctors who implanted unnecessary stents. On February 26, 2011, outside counsel transmitted advice to Mr. Fedele by means of an email. On February 26, 2011, Mr. Fedele forwarded that email to Ms. Cate[2] and management level employees at Excela. Ms. Cate forwarded Mr. Fedele's email, which included in its chain the email authored by outside counsel, to the other three members of the Jarrard team. On February 28, 2011, Excela told Ms. Cate that, at the press conference planned for March 2, 2011, Dr. BouSamra and Dr. Morcos would be publicly named as the cardiologists who over-stented.

         The issue in this appeal is whether Dr. BouSamra and Dr. Morcos are entitled to view the February 26, 2011 email from outside counsel to Mr. Fedele, and certain emails generated in response to that email. On November 18, 2014, special master Marvin A. Fein was appointed herein to resolve all discovery disputes. Excela created a privilege log, which referenced the February 26, 2011 email from Mr. Fedele to Ms. Cate and various management level Excela personnel, which included outside counsel's February 26, 2011 email. The log also listed various emails generated among the members of the Jarrard team, as well as an email Ms. Cate sent to a management level executive at Excela and copied to Mr. Fedele. These emails will be collectively referred to as the "Jarrard documents."

         A motion to compel Excela to produce the Jarrard documents was presented. In response, Appellants asserted that both the attorney-client and the work-product privileges applied. Appellees countered that the attorney-client and work-product privileges with respect to the Jarrard documents was improper due to the fact that Excela waived any privilege when Mr. Fedele forwarded outside counsel's email to Ms. Cate, a third party. The special master conducted an in camera review of the emails and, on May 16, 2015, concluded that, although the February 26, 2011 email from outside counsel to Mr. Fedele would probably have to be produced eventually, the email was subject to the attorney-client privilege. The special master did not discuss the work-product privilege.

         Dr. BouSamra filed exceptions to that ruling. On October 6, 2015, after reviewing the emails in camera, the trial court concluded that the attorney-client privilege was waived when Mr. Fedele sent outside counsel's email to a third party, Ms. Cate of Jarrard. The trial court reasoned as follows:

A communication between counsel and a third party is not protected by the attorney-client privilege. Also, the privilege is lost when a protected communication is shared with a third person. There is an exception where a third party acting as an agent of a lawyer is facilitating the lawyer's representation. See Restatement of the Law Governing Lawyers § 70 (2000), which reads as follows:
Privileged persons within meaning of § 68 are the client (including a prospective client), the client's lawyer, agents of either who facilitate communications between them, and agents of the lawyer who facilitate representation.
This exception does not apply because persons with Jarrard Phillips Cate & Hancock were not agents of defendants' counsel facilitating the representation. They were retained by Excela to assist Excela in public relations matters.
It was not the role of defendants' counsel to make decisions regarding communications with the public. At the most, a lawyer will give advice to a client asking the lawyer to advise it regarding legal issues with respect to communications with the public. The presence of Jarrard would not in any way assist counsel in giving such legal advice.

Trial Court Opinion, 10/6/15, at 1-2.

         Appellants filed the present appeal in Dr. BouSamra's action from the October 6, 2015 order. They advance these issues for our review.

1. Does attorney-client privilege apply to a company's email with its media consultants, if the emails contain the advice of outside counsel and seek feedback so that in-house counsel may give legal advice to the company CEO on the appropriate course of action?
2. Does the work product doctrine protect the mental impressions of outside counsel ...

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