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NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK.

The First Department determined New York law applies to discovery from PriceWaterhouseCoopers in New York’s suit against Exxon alleging fraud in connection with the company’s knowledge of the causes and effects of global warming. PriceWaterhouseCoopers argued Texas law applied. Texas has an accountant privilege, New York does not:

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In this proceeding arising from an underlying investigation by the NYAG [attorney general]into alleged fraud by respondent Exxon concerning its published climate change information, the motion court properly found that the New York law on privilege, rather than Texas law, applies, and that New York does not recognize an accountant-client privilege.

We reject Exxon’s argument that an interest-balancing analysis is required to decide which state’s choice of law should govern the evidentiary privilege. Our current case law requires that when we are deciding privilege issues, we apply the law of the place where the evidence will be introduced at trial, or the place where the discovery proceeding is located … . In light of our conclusion that New York law applies, we need not decide how this issue would be decided under Texas law. Matter of People of the State of New York v PriceWaterhouseCoopers, LLP, 2017 NY Slip Op 04071, 1st Dept 5-23-17

 

CIVIL PROCEDURE (NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/PRIVILEGE (ACCOUNTANT PRIVILEGE, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/DISCOVERY (CIVIL PROCEDURE, CHOICE OF LAW, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/PRIVILEGE (ACCOUNTANT PRIVILEGE, CHOICE OF LAW, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/ACCOUNTANT PRIVILEGE (NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/CHOICE OF LAW (ACCOUNTANT PRIVILEGE, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/ENVIRONMENTAL LAW  (EXXON, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/GLOBAL WARMING (EXXON, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/EXXON (GLOBAL WARMING, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)

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REPORT REGARDING CARE OF PLAINTIFF’S DECEDENT WAS NOT PART OF A MEDICAL OR QUALITY ASSURANCE PROGRAM, WAS NOT PRIVILEGED UNDER THE EDUCATION LAW OR PUBLIC HEALTH LAW, AND WAS THEREFORE SUBJECT TO DISCOVERY IN THIS MEDICAL MALPRACTICE ACTION. 

The Third Department, reversing Supreme Court, determined that a report sought by plaintiffs was not part of a medical or quality assurance review function or participation in a medical malpractice prevention program and therefore was not privileged pursuant to Education Law § 6527 (3) and Public Health Law § 2805-m:

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…[W]we find that defendants failed to meet their burden of establishing the report’s privilege. Defendants did not submit an affidavit or other information from anyone with first-hand knowledge establishing that a review procedure was in place or that the report was obtained or maintained in accordance with any such review procedure … . Nevertheless, defendants argue that the face and content of the report clearly establish that it is a quality assurance review which is precluded from disclosure. Yet, nothing in the report reflects that the hospital’s Department of Patient Safety and Quality Improvement ever reviewed it … . Further, the report’s conclusory statement that it was prepared for quality assurance purposes and was shielded by the subject statutes is patently insufficient to satisfy the required standard … .

In short, the purpose of the Education Law and Public Health Law discovery exclusions is to encourage a candid peer review of physicians, and thereby improve the quality of medical care and prevent malpractice… , but such protections are not automatically available and do not prevent full disclosure where it should otherwise be provided … . Estate of Savage v Kredentser, 2017 NY Slip Op 03825, 3rd Dept 5-11-17

CIVIL PROCEDURE (MEDICAL MALPRACTICE, DISCOVERY, REPORT REGARDING CARE OF PLAINTIFF’S DECEDENT WAS NOT PART OF A MEDICAL OR QUALITY ASSURANCE PROGRAM, WAS NOT PRIVILEGED UNDER THE EDUCATION LAW OR PUBLIC HEALTH LAW, AND WAS THEREFORE SUBJECT TO DISCOVERY IN THIS MEDICAL MALPRACTICE ACTION)/MEDICAL MALPRACTICE (REPORT REGARDING CARE OF PLAINTIFF’S DECEDENT WAS NOT PART OF A MEDICAL OR QUALITY ASSURANCE PROGRAM, WAS NOT PRIVILEGED UNDER THE EDUCATION LAW OR PUBLIC HEALTH LAW, AND WAS THEREFORE SUBJECT TO DISCOVERY IN THIS MEDICAL MALPRACTICE ACTION)/PRIVILEGE  (MEDICAL MALPRACTICE, DISCOVERY, REPORT REGARDING CARE OF PLAINTIFF’S DECEDENT WAS NOT PART OF A MEDICAL OR QUALITY ASSURANCE PROGRAM, WAS NOT PRIVILEGED UNDER THE EDUCATION LAW OR PUBLIC HEALTH LAW, AND WAS THEREFORE SUBJECT TO DISCOVERY IN THIS MEDICAL MALPRACTICE ACTION)

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MOTION TO COMPEL DISCOVERY OF NYPD DOCUMENTS SHOULD NOT HAVE BEEN DENIED SOLELY BECAUSE FOIL REQUESTS FOR THE DOCUMENTS HAD BEEN DENIED.

The First Department determined Supreme Court should not have denied a motion to compel discovery of New York Police Department documents solely because prior requests for the documents under the Freedom of Information Law were denied. The “public interest” privilege did not justify outright denial of the motion:

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… [T]the court erred in denying defendants’ motion outright because of the prior denials of their requests for the same information under the Freedom of Information Law (FOIL). “CPLR article 31 is not a statute specifically exempt[ing]’ public records from disclosure under FOIL” and “no provision of FOIL bars simultaneous use of both” CPLR 3101 and FOIL to procure discovery … .

The “public interest” privilege did not justify the outright denial of defendants’ motion, because the court did not engage in the requisite balancing of the public interest in encouraging witnesses to come forward to cooperate in pending criminal investigations against defendants’ need for the documents to defend against plaintiffs’ claim … . Accordingly, we find that remittal to the motion court for in camera review of the requested files is appropriate in this case, to give the court the opportunity to conduct the proper balancing, in the first instance, of the interests of both parties … . Smith v Watson, 2017 NY Slip Op 03878, 1st Dept 5-11-17

 

CIVIL PROCEDURE (MOTION TO COMPEL DISCOVERY OF NYPD DOCUMENTS SHOULD NOT HAVE BEEN DENIED SOLELY BECAUSE FOIL REQUESTS FOR THE DOCUMENTS HAD BEEN DENIED)/FREEDOM OF INFORMATION LAW (CIVIL PROCEDURE, MOTION TO COMPEL DISCOVERY OF NYPD DOCUMENTS SHOULD NOT HAVE BEEN DENIED SOLELY BECAUSE FOIL REQUESTS FOR THE DOCUMENTS HAD BEEN DENIED)/DISCOVERY LAW (CIVIL PROCEDURE, MOTION TO COMPEL DISCOVERY OF NYPD DOCUMENTS SHOULD NOT HAVE BEEN DENIED SOLELY BECAUSE FOIL REQUESTS FOR THE DOCUMENTS HAD BEEN DENIED)/PRIVILEGE (PUBLIC INTEREST PRIVILEGE, MOTION TO COMPEL DISCOVERY OF NYPD DOCUMENTS SHOULD NOT HAVE BEEN DENIED SOLELY BECAUSE FOIL REQUESTS FOR THE DOCUMENTS HAD BEEN DENIED)/PUBLIC INTEREST PRIVILEGE (MOTION TO COMPEL DISCOVERY OF NYPD DOCUMENTS SHOULD NOT HAVE BEEN DENIED SOLELY BECAUSE FOIL REQUESTS FOR THE DOCUMENTS HAD BEEN DENIED)

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DOCTOR’S CREDENTIALING FILE PRIVILEGED AND NOT DISCOVERABLE, WHETHER CONTENTS OF PERSONNEL FILE ARE PRIVILEGED MUST BE DETERMINED DOCUMENT BY DOCUMENT.

The Fourth Department, reversing Supreme Court, determined defendant doctor’s (Kolli’s) credentialing file was privileged and therefore not discoverable. The discovery request for the doctor’s personnel file was too broad; whether any parts of it are privileged must be determined document by document:

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Concerning the discoverability of Dr. Kolli’s credentialing file, we note that such files “fall squarely within the materials that are made confidential by Education Law § 6527 (3) and article 28 of the Public Health Law”… . That privilege shields from disclosure ” the proceedings [and] the records relating to performance of a medical or a quality assurance review function or participation in a medical . . . malpractice prevention program’ ” .. . Here, defendants established that the credentialing file was “generated in connection with a quality assurance review function pursuant to Education Law § 6527 (3) or a malpractice prevention program pursuant to [article 28 of the] Public Health Law” … . We therefore conclude that the credentialing file is privileged and that the court improperly ordered defendants to disclose it… .

Although there is an exception to the privilege, the exception is limited to those statements made by a doctor to his or her employer-hospital concerning the subject matter of a malpractice action and pursuant to the hospital’s quality-control inquiry into the incident underlying that action … . Contrary to plaintiffs’ contention, that exception does not apply here because the injury underlying this action was never the subject of such an inquiry. Jousma v Kolli, 2017 NY Slip Op 03308, 4th Dept 4-28-17

 

NEGLIGENCE (DOCTOR’S CREDENTIALING FILE PRIVILEGED AND NOT DISCOVERABLE, WHETHER CONTENTS OF PERSONNEL FILE ARE PRIVILEGED MUST BE DETERMINED DOCUMENT BY DOCUMENT)/MEDICAL MALPRACTICE (DISCOVERY, PRIVILEGE, DOCTOR’S CREDENTIALING FILE PRIVILEGED AND NOT DISCOVERABLE, WHETHER CONTENTS OF PERSONNEL FILE ARE PRIVILEGED MUST BE DETERMINED DOCUMENT BY DOCUMENT)/CIVIL PROCEDURE (MEDICAL MALPRACTICE, DISCOVERY, PRIVILEGE, DOCTOR’S CREDENTIALING FILE PRIVILEGED AND NOT DISCOVERABLE, WHETHER CONTENTS OF PERSONNEL FILE ARE PRIVILEGED MUST BE DETERMINED DOCUMENT BY DOCUMENT)/PRIVILEGE (MEDICAL MALPRACTICE, DISCOVERY, PRIVILEGE, DOCTOR’S CREDENTIALING FILE PRIVILEGED AND NOT DISCOVERABLE, WHETHER CONTENTS OF PERSONNEL FILE ARE PRIVILEGED MUST BE DETERMINED DOCUMENT BY DOCUMENT)/DISCOVERY (MEDICAL MALPRACTICE, PRIVILEGE, DOCTOR’S CREDENTIALING FILE PRIVILEGED AND NOT DISCOVERABLE, WHETHER CONTENTS OF PERSONNEL FILE ARE PRIVILEGED MUST BE DETERMINED DOCUMENT BY DOCUMENT)/CREDENTIALING FILE  (MEDICAL MALPRACTICE, PRIVILEGE, DOCTOR’S CREDENTIALING FILE PRIVILEGED AND NOT DISCOVERABLE, WHETHER CONTENTS OF PERSONNEL FILE ARE PRIVILEGED MUST BE DETERMINED DOCUMENT BY DOCUMENT)/PERSONNEL FILE MEDICAL MALPRACTICE, DISCOVERY, PRIVILEGE, DOCTOR’S CREDENTIALING FILE PRIVILEGED AND NOT DISCOVERABLE, WHETHER CONTENTS OF PERSONNEL FILE ARE PRIVILEGED MUST BE DETERMINED DOCUMENT BY DOCUMENT)

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RECORDED PHONE CONVERSATION WITH INSURER PROTECTED AS A STATEMENT PREPARED FOR LITIGATION.

The Third Department, reversing Supreme Court, determined the audio recording of a conversation between defendant and his insurer was privileged as a statement prepared for litigation. Plaintiff was injured using a log splitter on defendant’s property. Defendant denied owning the log splitter and plaintiff alleged defendant admitted ownership in the statement:

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The statement was made during a phone conversation between Judy Gavin, the insurer’s claims representative, and defendant five days after the incident. At the start of the conversation, Gavin informed defendant that the conversation was being recorded and taken as part of the normal claims process. Gavin further agreed to provide defendant with a copy of the statement. We have long recognized that “[t]he purpose of liability insurance is the defense and settlement of claims and, once an accident has arisen, there is little or nothing that the insurer or its employees do with respect to accident reports except in preparation for eventual litigation or for a settlement which may avoid litigation” … . As such, an insurer’s file is generally protected by “a conditional immunity . . . as material prepared for litigation” … . This conditional privilege may have to yield to disclosure where the other party demonstrates a substantial need for the material and withholding same would result in undue hardship (see CPLR 3101 [d] [2]). Accident reports prepared with a mixed purpose, however, are not exempt from disclosure … .

Defendant’s burden was to demonstrate that his statement was obtained solely for litigation purposes … . To that end, defendant submitted the affidavit of Dennis Stauffer, who was Gavin’s supervisor at the time of the incident. Stauffer explained that Gavin was no longer employed by the insurer and that she procured the statement in accord with the insurer’s “normal practice in anticipation of future litigation.” In our view, Stauffer’s affidavit, coupled with Gavin’s own characterization of the interview as part of the normal claims process, satisfied defendant’s threshold burden of proof … . There is no dispute that ownership of the log splitter is a key issue, but plaintiffs have other means available to explore this issue, and they have not demonstrated any undue hardship if the statement is withheld. Nor is there any indication that the statement was taken for some purpose other than preparing for litigation. Curci v Foley, 2017 NY Slip Op 03100, 3rd Dept 4-20-17

 

INSURANCE LAW (RECORDED PHONE CONVERSATION WITH INSURER PROTECTED AS A STATEMENT PREPARED FOR LITIGATION)/PRIVILEGE (RECORDED PHONE CONVERSATION WITH INSURER PROTECTED AS A STATEMENT PREPARED FOR LITIGATION)/EVIDENCE (INSURANCE LAW, RECORDED PHONE CONVERSATION WITH INSURER PROTECTED AS A STATEMENT PREPARED FOR LITIGATION)

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NO EXPECTATION OF PRIVACY IN EMAIL ACCOUNT OWNED BY ATTORNEY’S EMPLOYER, THEREFORE ATTORNEY CLIENT AND SPOUSAL PRIVILEGES DID NOT APPLY, ATTORNEY WORK PRODUCT PROTECTION MAY APPLY.

The First Department determined nonparty Perlmutter (attorney) did not have an expectation of privacy in an email account owned by his employer, Marvel. Therefore the emails were not protected by attorney client privilege or spousal privilege. However, some emails may be protected as attorney work product:

Application of the four factors set forth in In re Asia Global Crossing, Ltd. (322 BR 247, 257 [Bankr SD NY 2005]), which we endorse … , indicates that Perlmutter lacked any reasonable expectation of privacy in his personal use of the email system of Marvel, his employer, and correspondingly lacked the reasonable assurance of confidentiality that is an essential element of the attorney-client privilege … . Among other factors, while Marvel’s email policies during the relevant time periods permitted “receiving e-mail from a family member, friend, or other non-business purpose entity . . . as a courtesy,” the company nonetheless asserted that it “owned” all emails on its system, and that the emails were “subject to all Company rules, policies, and conduct statements.” Marvel “reserve[d] the right to audit networks and systems on a periodic basis to ensure [employees’] compliance” with its email policies. It also “reserve[d] the right to access, review, copy and delete any messages or content,” and “to disclose such messages to any party (inside or outside the Company).” Given, among other factors, Perlmutter’s status as Marvel’s Chair, he was, if not actually aware of Marvel’s email policy, constructively on notice of its contents

Perlmutter’s use of Marvel’s email system for personal correspondence with his wife waived the confidentiality necessary for a finding of spousal privilege … .

Given the lack of evidence that Marvel viewed any of Perlmutter’s personal emails, and the lack of evidence of any other actual disclosure to a third party, Perlmutter’s use of Marvel’s email for personal purposes does not, standing alone, constitute a waiver of attorney work product protections … . Peerenboom v Marvel Entertainment, LLC, 2017 NY Slip Op 01981, 1st Dept 3-16-17

 

ATTORNEYS (NO EXPECTATION OF PRIVACY IN EMAIL ACCOUNT OWNED BY ATTORNEY’S EMPLOYER, THEREFORE ATTORNEY CLIENT AND SPOUSAL PRIVILEGES DID NOT APPLY)/PRIVILEGE (NO EXPECTATION OF PRIVACY IN EMAIL ACCOUNT OWNED BY ATTORNEY’S EMPLOYER, THEREFORE ATTORNEY CLIENT AND SPOUSAL PRIVILEGES DID NOT APPLY)/ATTORNEY CLIENT PRIVILEGE (NO EXPECTATION OF PRIVACY IN EMAIL ACCOUNT OWNED BY ATTORNEY’S EMPLOYER, THEREFORE ATTORNEY CLIENT AND SPOUSAL PRIVILEGES DID NOT APPLY)/SPOUSAL PRIVILEGE (NO EXPECTATION OF PRIVACY IN EMAIL ACCOUNT OWNED BY ATTORNEY’S EMPLOYER, THEREFORE ATTORNEY CLIENT AND SPOUSAL PRIVILEGES DID NOT APPLY)/ATTORNEY WORK PRODUCT (NO EXPECTATION OF PRIVACY IN EMAIL ACCOUNT OWNED BY ATTORNEY’S EMPLOYER, THEREFORE ATTORNEY CLIENT AND SPOUSAL PRIVILEGES DID NOT APPLY, ATTORNEY WORK PRODUCT PROTECTION MAY APPLY)

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MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE.

The First Department, over a two-justice dissent, determined the defendants in this personal injury case did not demonstrate a need for plaintiff’s mental health, alcohol abuse, substance abuse and HIV-related medical records. Supreme Court properly issued a protective order to that effect:

Defendants did not meet their burden of showing a “compelling need” for medical records concerning HIV; they failed to submit evidence that would establish a connection between plaintiff’s claimed HIV status and her future enjoyment of life (Public Health Law § 2785[2][a]…). Similarly, defendants failed to meet their burden of showing that “the interests of justice significantly outweigh the need for confidentiality” such to permit discovery of mental health, alcohol abuse, or substance abuse records (Mental Hygiene Law § 33.13[c][1]; Mental Hygiene Law § 22.05 [b] …).

As the dissent notes, as a rule, “all matter material and necessary in the prosecution or defense of an action” should be fully disclosed (CPLR 3101[a] …). However, plaintiff’s alleged general anxiety and mental anguish from back and leg injuries do not place her entire mental and physical health into contention … . She has not, as argued by the dissent, waived any protection applicable to such records. James v 1620 Westchester Ave. LLC, 2017 NY Slip Op 01303, 1st Dept 2-21-17

 

CIVIL PROCEDURE (MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)/NEGLIGENCE (CIVIL PROCEDURE, (MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)/DISCOVERY (MEDICAL RECORDS, MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)/MEDICAL RECORDS (MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)/HIV (MEDICAL RECORDS, MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)/MENTAL HEALTH (MEDICAL RECORDS, MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)/SUBSTANCE ABUSE (MEDICAL RECORDS, MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)/ALCOHOL ABUSE (MEDICAL RECORDS, MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)/PRIVILEGE (MEDICAL RECORDS, MENTAL HEALTH, HIV, SUBSTANCE ABUSE AND ALCOHOL ABUSE MEDICAL RECORDS NOT DISCOVERABLE IN THIS PERSONAL INJURY CASE)

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PROCEEDINGS BEFORE THE FOOD AND DRUG ADMINISTRATION ARE QUASI-JUDICIAL IN NATURE, STATEMENTS PROTECTED BY ABSOLUTE PRIVILEGE.

The First Department, in a full-fledged opinion by Justice Saxe, over a dissenting opinion, reversing Supreme Court, determined proceedings before the FDA (US Food and Drug Administration) are quasi-judicial in nature and statements made during the proceedings are therefore protected by absolute, not qualified, privilege. The defamation cause of action should have been dismissed:

The statements that form the basis of the defamation claim at issue here were made to a U.S. Food and Drug Administration (FDA) investigator in the course of an investigation. … Given both the nature of an FDA investigation into the propriety of the hospital’s research protocols and the importance of the unimpeded flow of thoughts and information in this investigative context, as a matter of law and public policy, statements to such an investigator must be protected by an absolute privilege, not merely a qualified privilege. * * *

The statements at issue here were made to an FDA investigator looking into accusations that IRB (hospital Institutional Review Board) protocols at NYDH (New York Downtown Hospital) might not be properly handled. The FDA is an administrative agency of the federal government, charged with many responsibilities, including ensuring that new drug trials are handled properly. The complicated regulatory scheme for oversight by the FDA over the operation of IRBs in conducting new drug protocols, controlled by 21 CFR part 56, includes provision for procedures where an FDA investigator observes apparent noncompliance with these regulations in the operation of an IRB. Under these regulations, the IRB and parent institution are informed of those observations, and a response describing the corrective actions to be taken is required (see 21 CFR 56.120[a]). If it is determined that the IRB or the institution has failed to take adequate steps to correct the noncompliance, and the FDA Commissioner determines that this noncompliance may justify the disqualification of the IRB or of the parent institution, “the Commissioner will institute proceedings in accordance with the requirements for a regulatory hearing set forth in part 16” (21 CFR 56.121). Of course, the regulatory scheme explicitly provides for court review of final administrative actions taken by the Commissioner (see 21 CFR 10.45[a]).

It is therefore clear that the procedures created by these regulations of IRBs, which include the possibilities of an adversarial regulatory hearing before the FDA (see 27 CFR 156.121[a]) and subsequent judicial review (see 21 CFR 10.45), qualify as a quasi-judicial process by an administrative agency, Stega v New York Downtown Hosp., 2017 NY Slip Op 00139, 1st Dept 1-10-17

 

DEFAMATION (PROCEEDINGS BEFORE THE FOOD AND DRUG ADMINISTRATION ARE QUASI-JUDICIAL IN NATURE, STATEMENTS PROTECTED BY ABSOLUTE PRIVILEGE)/PRIVILEGE (DEFAMATION, PROCEEDINGS BEFORE THE FOOD AND DRUG ADMINISTRATION ARE QUASI-JUDICIAL IN NATURE, STATEMENTS PROTECTED BY ABSOLUTE PRIVILEGE)/ABSOLUTE PRIVILEGE (DEFAMATION, QUASI-JUDICIAL PROCEEDINGS, PROCEEDINGS BEFORE THE FOOD AND DRUG ADMINISTRATION ARE QUASI-JUDICIAL IN NATURE, STATEMENTS PROTECTED BY ABSOLUTE PRIVILEGE)/QUASI-JUDICIAL PROCEEDINGS (DEFAMATION, FOOD AND DRUG ADMINISTRATION, PROCEEDINGS BEFORE THE FOOD AND DRUG ADMINISTRATION ARE QUASI-JUDICIAL IN NATURE, STATEMENTS PROTECTED BY ABSOLUTE PRIVILEGE)

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DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS.

In an action against a veterinary clinic stemming from an alleged attack by a dog in the waiting room, the Third Department determined the clinic did not demonstrate documents sought by plaintiff’s discovery demands were entitled to conditional immunity as documents prepared for litigation. The matter was remitted for court review of the documents:

Inasmuch as “[t]he purpose of liability insurance is the defense and settlement of claims . . . once an accident has arisen,” documents contained in the insurance adjuster’s file are generally protected by “a conditional immunity . . . as material prepared for litigation” … . Accident reports that are prepared with “a mixed purpose and result at least in part from the internal operations of the defendant’s business” are not, however, exempt from disclosure … . It is therefore incumbent upon “the party resisting disclosure to[, in the first instance,] show that the materials sought were prepared solely for litigation and this burden cannot be satisfied with wholly conclusory allegations” … . Hewitt v Palmer Veterinary Clinic, PC, 2016 NY Slip Op 08926, 3rd Dept 12-29-16

INSURANCE LAW (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/NEGLIGENCE (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/CIVIL PROCEDURE (DISCOVERY, CONDITIONAL IMMUNITY, DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/CONDITIONAL IMMUNITY (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/PRIVILEGE (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/ACCIDENT REPORTS (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)

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MOTION TO COMPEL COMPLIANCE WITH NON-JUDICIAL SUBPOENAS PROPERLY GRANTED, ANY OBJECTIONS WOULD HAVE TO AWAIT THE ACTUAL QUESTIONING AT THE HEARING.

The Third Department, affirming Supreme Court, determined petitioner’s motion pursuant to CPLR 2308 (b) to compel respondents to comply with non-judicial subpoenas was properly granted. Petitioner was charged by the State Liquor Authority (SLA) with improper conduct, i.e., shipping wine to customers in states that prohibit residents from receiving such shipments. Petitioner subpoenaed the SLA’s general counsel and several others on the SLA staff. It was petitioner’s position that shipping wine out of state had never before been deemed improper by the SLA. The court found the objections to the subpoenas, including an objection based upon attorney-client privilege, premature. Because the subpoenas sought only testimony, any objections would have to await the actual questioning at the hearing:

According to petitioner, the challenged subpoenas are intended to obtain information pertaining to, among other things, SLA’s past and present policies regarding out-of-state shipping, the standards applicable to the charges of improper conduct against petitioner and evidence related to penalty mitigation. CPLR 2308 (b) provides that, upon a motion to compel a respondent to comply with a non-judicial subpoena, the court “shall order compliance” if it determines that the subpoena was authorized. Here, it is undisputed that petitioner was authorized by SLA’s regulations to issue the subpoenas (see 9 NYCRR 54.3 [h]; see also CPLR 2302 [a]). Respondents nevertheless contend that their motion to quash should have been granted based upon their claims that the information sought by the subpoenas is privileged, irrelevant, beyond the scope of the administrative hearing, cumulative and burdensome. We affirm, finding no abuse of Supreme Court’s discretion in the denial of respondents’ cross motion … . Matter of Empire Wine & Spirits LLC v Colon, 2016 NY Slip Op 08145, 3rd Dept 12-1-16

CIVIL PROCEDURE (MOTION TO COMPEL COMPLIANCE WITH NON-JUDICIAL SUBPOENAS PROPERLY GRANTED, ANY OBJECTIONS WOULD HAVE TO AWAIT THE ACTUAL QUESTIONING AT THE HEARING)/SUBPOENAS (NON-JUDICIAL, TESTIMONY ONLY, MOTION TO COMPEL COMPLIANCE WITH NON-JUDICIAL SUBPOENAS PROPERLY GRANTED, ANY OBJECTIONS WOULD HAVE TO AWAIT THE ACTUAL QUESTIONING AT THE HEARING)

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