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A Manhattan surgeon is likely to learn soon whether he and his fellow physicians have the right in state law to sue individuals who report them in bad faith for misconduct to a statewide panel, after the highest state court in New York heard arguments on that question Wednesday.

The New York Court of Appeals was asked to consider that question by the Second Circuit U.S. Court of Appeals, which is currently weighing such a lawsuit.

The litigation was brought by Dr. Robert Haar, a Manhattan-based orthopedic surgeon, who sued Nationwide Mutual Fire Insurance Co. two years ago for allegedly reporting him to the New York State Office of Professional Medical Conduct in bad faith.

Nationwide reported Haar to the statewide office in 2012 based on four insurance claims he submitted to the company for his medical treatment of patients injured in vehicles it insured.

One of those claims was denied outright by Nationwide, while three others were partially denied because the amounts billed allegedly exceeded limits imposed under state regulations. Based on the claims submitted by Haar, Nationwide said it was obligated to report him to the OPMC.

The OPMC finished its investigation five years after the complaint was made, after which Haar was cleared of any disciplinary action related to the claims.

He then sued Nationwide on claims of defamation and allegations that the company reported him to the OPMC in bad faith.

But, Nationwide argued, the latter cause of action doesn't exist in state law. While the company conceded that Haar was able to sue over defamation, it claimed that state law didn't allow him to seek damages for their report to the OPMC.

Haar had based that part of his lawsuit on a section of the state public health law, § 230(11)(b), that deals with reporting to the OPMC. The law essentially grants civil immunity for individuals, or entities, that report medical misconduct to the office "in good faith, and without malice."

"Any person, organization, institution, insurance company, osteopathic or medical society who reports or provides information to the [OPMC] in good faith, and without malice shall not be subject to an action for civil damages or other relief as the result of such report," the law reads.

Ralph Carter, an associate at Duane Morris in Manhattan, represented Nationwide before the Court of Appeals during arguments Wednesday on whether that section of law afforded Haar a private right of action to sue the company over its reports.

Carter argued that, because the statute didn't explicitly say a medical professional could sue in response to reports made in bad faith, the Legislature didn't intend for that to be an option.

"Had the Legislature intended to do so, it would have done so," Carter said.

Instead, Carter said, Haar had the option to bring different common law claims against Nationwide over the reports, like the defamation claim he originally included in his lawsuit against the company.

Gregory Zimmer, a solo practitioner from Manhattan who represented Haar on Wednesday, said Nationwide's argument missed both the legislative intent of the law and the procedural history of the litigation itself.

In this case, Zimmer argued, Haar couldn't have brought a defamation claim against Nationwide because the statute of limitations on such a claim had already expired by the time he was informed of the complaints by the OPMC.

Those complaints were made by Nationwide to the statewide office in 2012, which is when the statute of limitations began to run on the defamation claim. That meant Haar had one year from when that complaint was filed to bring the defamation claim in court, or be time barred against doing so in the future.

It wasn't until years later, Zimmer said, that Haar was even aware that the complaint had been made.

"If you look at what happened in this case, it took OPMC so long to even inform him that they received a complaint, that the statute of limitations had expired for years on a defamation claim," Zimmer said.

Zimmer also argued that, while a private right to action wasn't spelled out in that part of the law, it was implied by the Legislature in the way it was written. Because the law specifically mentioned reporting in good faith, it prohibited bad faith reporting, he argued.

The judges of the high court appeared skeptical of that argument at times, questioning Zimmer on the intent of the statute when it was enacted by the Legislature and how it could be interpreted as a mechanism for litigation.

Associate Judge Eugene Fahey said during arguments that Zimmer's argument could be seen as a misinterpretation of the law, which he said was to protect individuals from medical misconduct, not provide doctors with an avenue for retaliation.

"The purpose of the statute is to protect the general public, not the doctor itself that's being reported," Fahey said.

The Second Circuit asked the Court of Appeals to review the question because of differing interpretations of the statute by two state appellate courts in New York.

The Appellate Division, First Department handed down a decision in 2003 in which it held that a plaintiff was afforded a private right of action under the section of public health law used by Haar to sue Nationwide.

That decision was contradicted two years ago in a decision handed down by the Appellate Division, Second Department, which suggested in the ruling that if the Court of Appeals were to take up the question, it "would hold that this statute does not create a private right of action."

The Court of Appeals will likely hand down an answer to the Second Circuit's question in November.

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