Analysis and Impact of April 2024 Supreme Court Medical Malpractice Decision Estate of Essex v. Grant County Pub. Hosp. Dist. No. 1
The Washington Supreme Court’s unanimous decision on April 11, 2024, in Estate of Essex v. Grant County Pub. Hosp. Dist. No. 1, No. 101745-6 significantly expands the scope of hospital liability and raises questions about the corporate practice of medicine doctrine. This opinion is bound to alter hospital claims for years to come.
The Essex Court rejects the idea that a hospital can only be held vicariously liable for the negligence of independent contractors in the emergency department via a theory of ostensible agency. The Court adopts a new “nondelegable duty” which holds a hospital directly liable for emergency department services provided to a patient. The Court reasons that this nondelegable duty is created by the hospital licensing statutes (Chapter 70.41 RCW) and regulations (WAC 246-320-136 and WAC 246-320-281).
The opinion declined to address two other theories of vicarious liability (agency law principles of delegation and inherent function) but stated their intention to address these in a more appropriate future case. Finally, the Court reversed the trial court’s dismissal of Plaintiff’s corporate negligence claim against Samaritan and cited well established case law on the topic.
Background Facts
Cindy Essex went to Samaritan Hospital’s emergency department (ED) with 10 out of 10 pain in her left shoulder and chest that radiated to her abdomen. Slip op. at 3. Her mother checked her in and signed the consent forms because Ms. Essex was incoherent with pain, writhing and crying out. Id. She was moved to a private room, and an hour later an independent contractor ED doctor evaluated her. Id. She had an extensive work-up, including imaging that was interpreted by an independent contractor radiologist. Slip op. at 4. She was eventually transferred to Central Washington Hospital for further evaluation. Id. It was eventually determined that she had necrotizing fasciitis, and her condition was “nonsurvivable.” Slip op. at 5. Ms. Cindy Essex was moved to comfort care, and she later died. Id.
Ms. Essex’s mother brought a medical negligence and wrongful death claim against Samaritan Hospital, the ED doctor, and radiologist, among others. Slip op. at 5. After extensive discovery, Plaintiff moved for summary judgment on Samaritan’s potential vicarious liability for the ED doctor’s and radiologist’s alleged negligence. Slip op. at 5. She argued Samaritan was liable under theories of (1) nondelegable duty, (2) inherent function, and (3) delegation. Slip op. at 5-6. The trial court denied her motion. Slip op. at 6.
Samaritan successfully sought summary judgment concerning Essex’s (1) corporate negligence claim and (2) vicarious liability claim concerning the acts of Samaritan’s nurses. Slip op. at 6. Plaintiff sought an interlocutory appeal. Id. The Court of Appeals concluded, in part, that “(1) ostensible agency is the sole basis for holding a hospital vicariously liable for the negligence of nonemployee physicians” and (2) summary judgment was appropriate concerning Essex’s corporate negligence claim against Samaritan. Id; Est. of Essex v. Grant County Pub. Hosp. Dist. No. 1, 25 Wn. App. 2d 272, 274, 523 P.3d 242 (2023).
Supreme Court’s Analysis
The main question before the Supreme Court was whether ostensible agency is the only theory under which a hospital can be held vicariously liable for the negligence of nonemployee doctors providing emergency services. Slip op. at 7. Plaintiff argued a hospital can be liable based on (1) breach of nondelegable duty, (2) negligent performance of an inherent function, and (3) delegation under agency law. Id. The Supreme Court analyzed each in turn.
Hospital licensing statutes and regulations create a nondelegable duty to emergency room patients.
The Court acknowledged that in general, an entity is not liable for injuries caused by an independent contractor. Slip op. at 8. However if there is a nondelegable duty the entity will be vicariously liable for the independent contractor’s negligent performance of that duty. Id. Statutes and regulations can establish nondelegable duties. Slip op. at 9. The Court relied on a 1978 Court of Appeals case to determine that Washington’s current statutory and regulatory scheme imposes a nondelegable duty concerning a hospital’s provision of emergency services. Slip op. at 9-10 (citing Adamski v. Tacoma Gen. Hosp., 20 Wn. App. 98, 111 n.5, 579 P.2d 970 (1978) (citing former WAC 248-18-285 (1975)).
The Court evaluated the current statutory scheme, whereby Chapter 70.41 RCW governs hospital licensing and regulation, and certain provisions require the Department of Health to establish minimum standards for operating a hospital and providing “safe and adequate care and treatment of patients.” Slip op. at 10 (citing RCW 70.41.010; RCW 70.41.030).
The Department of Health has adopted regulations to implement this statutory scheme and to “establish minimum health and safety requirements for the licensing, inspection, operation… of hospitals.” Id (citing WAC 246-320-001). Some of the regulations direct hospital leadership to take specific actions such as to “provide practitioner oversight for specialty services, including emergency services.” Slip op. at 10-11 (citing WAC 246-320-136). A hospital is not required to provide emergency services in order to be licensed but if it does, it is subject specific regulations. Slip op. at 11 (citing WAC 246-320-281). Such as it must “[m]aintain the capacity to perform emergency triage and medical screening exam twenty-four hours per day.” Id.
The Court concluded that “[w]hen read together, these regulations impose a nondelegable duty on hospitals providing emergency services.” Slip op. at 11. The Court continued:
Hospitals must provide “all patients access to safe and appropriate care” and are required to establish policies concerning standards of care, nursing practices, and staff oversight. WAC 246-320-136(3)-(6), -281(3)-(4). We conclude that WAC 246-320-136 and WAC 246-320-281 create a nondelegable duty for hospitals providing emergency care services through nonemployee doctors. Although hospitals may delegate the performance of this duty to nonemployee doctors, the ultimate duty—and thus the potential vicarious liability for the failure to meet that duty—remains with the hospital. Slip At 12.
They held “[a] hospital remains responsible for those nondelegable duties regardless of whether it performs those duties through its own staff or contracts with doctors who are independent contractors to do so.” Slip op. at 2-3.
Other theories of vicarious liability were not addressed by the Court but may be in the future.
Plaintiff argued that Samaritan is liable under agency law principles of delegation. Slip op. at 12. The Court declined to address the question in this case but would wait for future case that “squarely addresses the interplay between the nondelegation theory we embrace today, ostensible agency, and this agency theory.” They did agree with Samaritan’s argument that Washington courts have not applied that theory in these circumstances but went no further . Id.
The Court further concluded that “inherent function is not an independent basis of liability, but that it may be relevant to determining what actions are nondelegable.” They explained that in Adamski the question was if the jury should decide if an independent contractor doctor was an agent of a hospital and the court considered the performance of an inherent function as one factor in analyzing the hospital-doctor relationship. Slip op. at 13 (citing Adamski, 20 Wn. App. at 112.). The Court held that “the performance of an inherent function may be a relevant factor in determining whether a duty may be delegated” but declined to address the question with this case. Slip op. at 13.
Sufficient evidence for corporate negligence claim against Samaritan to survive summary judgment.
The trial court dismissed Plaintiffs corporate negligence claim against Samaritan, finding that a trier of fact could not find that Samaritan’s corporate negligence was the proximate cause of Ms. Essex’s death. Slip op. at 13. The Court relied on established case law and confirmed that a hospital’s liability under a theory of corporate negligence is unchanged and separate from this new vicarious liability under the nondelegable duty doctrine. Slip op. at 14-15 (citing Pedroza v. Bryant, 101 Wn.2d 226, 228, 677 P.2d 166 (1984) (citing Hansen v. Wash. Nat. Gas Co., 95 Wn.2d 773, 776, 632 P.2d 504 (1981))). They ultimately reversed the trial court’s summary judgment order, holding that there is sufficient evidence concerning Samaritan’s negligence in training and overseeing its nurses to survive. Slip op. at 19.
The Future Of The Corporate Practice Of Medicine Doctrine?
The Essex court appears to disapprove of hospitals avoiding liability for negligently rendered emergency services by utilizing nonemployee doctors in the ED. The decision’s conclusion states:
Where a hospital elects to provide emergency services, our statutes and regulations create a nondelegable duty concerning the provision of those services. Doctors perform an inherent function of the hospital in carrying out that duty. Thus, we conclude that a hospital cannot escape liability for the negligent provision of emergency services by delegating that duty to its nonemployee doctors. Slip op. at 19.
When in reality hospitals have been following well established Washington law prohibiting an entity from practicing medicine. See Columbia Phys. Therapy, P.S. v. Benton Franklin Ortho. Assoc., PLLC, 168 Wn.2d 421, 29-31, 228 P.3d 1260 (2010) (recognizing the corporate practice of medicine doctrine, whereby a business entity is legally precluded from practicing medicine). The corporate practice of medicine doctrine limits the duties of corporate entities and legally precludes a corporation itself from practicing medicine. See, e.g., Washington Imaging Servs., LLC v. Washington State Dep’t of Revenue, 171 Wn.2d 548, 558, 252 P.3d 885 (2011) (“It is true that under the common law corporate practice of medicine doctrine, absent legislative authorization, a business may not engage in the practice of medicine”).
The doctrine specifically recognizes that a corporate entity is legally precluded from interfering with the clinical judgment of a practitioner within its walls. See 61 Am. Jur. 2d Physicians, Surgeons, Etc. § 118. Accordingly, a hospital acts only through its agents. See 6 Wash. Prac., Wash. Pattern Jury Instr. Civ. WPI 105.02.01 (6th ed.). Like the Essex court notes, a hospital can be held vicariously liable for the negligent provision of health care by its “officer[s], director[s], employee[s], or agent[s] . . . acting in the scope of [their] employment.” RCW 7.70.020(3).
However, this holding seems to indicate that a hospital in fact has a nondelegable duty to dictate the ED doctors how to practice emergency medicine. Must a hospital now interfere in a provider’s clinical judgment in the name of ensuring patients receive “safe and appropriate care” through hospital policies that dictate standard of care? see slip op. at 12. Washington courts have previously held that it would be far more “disruptive than beneficial to a patient” for a hospital to have a duty to “intervene in the independent physician/patient relationship.” Alexander v. Gonser, 42 Wn. App. 234, 239, 711 P.2d 347 (1985). The Essex opinion raises important questions about whether a one-size-fits-all approach to medicine best serves the interests of patient care given the incalculable number of variables any given ED patient has.
Intersections with the M.N. & G.T. v MultiCare Health System, Inc. Decision
This opinion was limited by its terms to emergency services. However, this is the second Supreme Court decision in a matter of weeks that appears to erode the corporate doctrine of medicine doctrine. In M.N. & G.T. v MultiCare Health System, Inc., No. 101537-2 the Court found that a claim of “medical negligence” under Chapter RCW 7.70 was permissible against a hospital directly (without a vicarious liability claim) for failures of the hospital to follow the standard of care when delivering health care. The Court determined that “health care” under Chapter 7.70 RCW is the process by which any health care provider uses the skills they have been taught to examine, diagnose, treat, or care for the plaintiff as their patient.
This holding leaves unanswered the question of how could the hospital be utilizing the “skills [a doctor has] been taught to examine, diagnose, treat, or care for the plaintiff as their patient.” see Sherman v. Kissinger, 146 Wn. App. 855, 867, 195 P.3d 539 (2008) (alteration in original) (quoting Branom v. State, 94 Wn. App. 964, 969-70, 974 P.2d 335 (1999)). A corporate entity cannot exercise clinical judgment in the manner of a physician and therefore a medical malpractice claim against a hospital is difficult to understand. For more on M.N. & G.T. v MultiCare Health System, Inc. see our analysis here.
These two decisions together make it clear the corporate doctrine of medicine is in peril. We will be watching closely how far the Court in future decisions will require a hospital to go in interfering in the doctor-patient relationship.
Unintended Consequences?
This decision has the potential to significantly impact future medical malpractice lawsuits. From what claims are pled, what defendants are named, and how an institution works up a case. A Hospital may find itself in the untenable position of defending independent contractors with whom it cannot communicate. There could be new wave of interpleaders and third party complaints to bring in practice groups or other parties that would otherwise have been included by a plaintiff.
The Court’s decisions also potentially create a large amount work for Hospital administrators, executives, and doctors to write reasonable, medically accurate policies. These polices will need to satisfy this yet to be fully defined “nondelegable duty.” Further, these polices and their implementation will have ripple effects throughout the health care system as everyone navigates what a highly trained doctor can and cannot decide regarding the treatment of their patient.
