Doctors in New York cannot use a section of state law to sue individuals who report them to the state for alleged misconduct, whether in bad faith or not, because that's not what the Legislature intended when it enacted the statute, the New York Court of Appeals ruled Thursday.

The state high court, in an opinion by Associate Judge Leslie Stein, ruled that a law created to shield individuals from lawsuits when they make those reports "in good faith" could not be interpreted to otherwise allow litigation.

Stein wrote that, if the Legislature had intended to allow doctors to bring litigation using that section of law, it would have expressly provided that right while enacting it. Viewing the law differently would defeat its purpose, she wrote.

"Recognizing an implied right of action in [the law] could discourage mandatory reporters from complying with their statutory duties out of concern that even a good-faith report could spawn litigation under that section," Stein wrote. "This result would be antithetical to the legislature's clear objective."

That decision is the result of a question posed to the Court of Appeals by the U.S. Court of Appeals for the Second Circuit, which is currently weighing whether to uphold a decision tossing a lawsuit brought, at least partly, using the state law at issue.

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

Charlotte Thomas, a partner at Duane Morris in Manhattan, led the case for Nationwide before the Court of Appeals. Ralph Carter, an associate at the firm, represented the company during arguments last month.

Nationwide said the decision was particularly important because it recognized their duty, and that of other insurers, to report suspected allegations of misconduct to the state.

"This is a significant win for insurers because we have a mandatory duty to report suspected fraud," the company said. "The decision will hopefully encourage increased reporting of suspected unprofessional conduct and appropriately shield complainants from unwarranted liability."

Nationwide reported Haar to the statewide office in 2012 after it either denied outright, or partially denied, four insurance claims submitted by Haar for his medical treatment of patients that were injured in vehicles the company insured.

The amount Haar billed Nationwide for the treatment had allegedly exceeded limits imposed under state regulations. Nationwide claimed that, under state law, it was obligated to report Haar to the OPMC as a result.

The OPMC finished its investigation into the claims five years later and cleared Haar of any disciplinary action related to the matter.

Haar then sued Nationwide over the claims, saying the company had both defamed him and unlawfully reported him to the state in bad faith.

The latter part of his lawsuit was based 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.

Haar had argued that the law could be interpreted to mean that, while civil immunity is granted to those who make reports in good faith, anyone who makes a report in bad faith can be sued using the statute.

His attorneys took the position that Haar, and other doctors, would have no recourse against individuals who make reports in bad faith to the state, regardless of the outcome of such a probe.

But that's not true, Stein wrote. While doctors in New York may not be able to use the public health law to sue individuals who report them in bad faith, other avenues exist to bring litigation over those complaints. Doctors can bring defamation claims, for example, Stein wrote.

"To the extent the statutory text and legislative history of section 230(11)(b) are silent regarding a concern over bad-faith reporting, we can infer that the legislature was satisfied with existing common-law remedies," Stein wrote.

In the case of Haar, his defamation claim became invalid because it was brought too late. The statute of limitations to bring such a claim had already run out by the time he was even aware, years later, that a complaint had been made against him to the OPMC.

That gave Haar reason to bring litigation by other means, his attorneys argued before the Court of Appeals last month.

Haar was represented before the Court of Appeals by Gregory Zimmer, a solo practitioner in Manhattan. Zimmer was not immediately available for comment Thursday morning.

Stein wrote that, even if he ran out of time to sue on grounds of defamation, Haar still couldn't use the section of public health law on "good faith" reporting to bring litigation against Nationwide.

On occasion, the Court of Appeals has chosen to interpret a section of state law as containing an implied private right of action, or the ability to sue using the statute even though that option isn't explicitly included in the text. That's not the case here, Stein wrote.

That's because the law wasn't enacted to protect physicians against reports made in bad faith, she wrote. It was created to encourage reports made to the state by shielding individuals from the possibility of litigation.

"The pertinent legislative history makes clear that section 230(11)(b) was not added to the Public Health Law to protect physicians, such as plaintiff, accused of misconduct," Stein wrote. "Rather, that provision was intended to protect the public from medical misconduct by encouraging reporting."

If the court were to interpret that section of law differently, Stein wrote, they would likely be defeating its purpose. Allowing doctors to bring litigation over complaints allegedly made in bad faith could discourage reports made to the state, she wrote.

"Were this Court to recognize an implied right of action, we would likely undermine the statutory purpose of section 230(11)(b) by increasing reporters' exposure to liability, thereby potentially creating a spill-over or chilling effect that could discourage good-faith reporting," Stein wrote.

There's also a provision of the law that shields the identity of individuals who've made reports of misconduct against a physician to the state. Haar had figured out that Nationwide made the report, in this instance, but that's not intended to happen, Stein wrote.

None of the court's judges dissented from the majority opinion penned by Stein. Associate Justice Michael Garcia did not participate in the case.

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