Defamation, Courts, Conflict, and More

Often, what is occurring around the country in workers' compensation provides curiosity that drives this and other blogs. The WorkCompCentral article High Court Finds Doctor Can't Sue for Defamation After Fraud Accusations caught my eye recently. It is simply not uncommon for those involved in litigation to have less-than-nice things to say about others involved. Some would likely be shocked at some of the insults that are casually delivered at trial. But, this situation provides a backdrop for a discussion of defamation. 
An insurance company accused an orthopedic surgeon of insurance fraud, and denied some billing. The State's investigators eventually cleared the surgeon "of any wrongdoing." But, "by that time, the one-year statute of limitations for a defamation suit had long since expired." The physician's attorney therefore turned to a law "intended . . . to protect whistle blowers and patients." People sometimes forget that lawyers are supposed to be imaginative, creative, and persistent. 
The physician, and lawyer, in this case seized upon a "good faith" requirement in that statute, and alleged that the insurance company "had acted in bad faith" in its denial of billings. There was appellate authority cited, in which another court had "found that a plaintiff had a private right of action under" that statute. However, there was conflicting analysis from another state appellate court. The physician was seeking adoption of, concurrence with, the appellate court that agreed with his statutory interpretation. Such instances or conflicting appellate decisions is not uncommon in litigation. 
This type of conflict is generally grounds, in Florida, for a party to seek review by the state's highest court. It is referred to as "conflict jurisdiction" in Florida. See Florida Constitution, Article V.(3)(b)3.("that expressly and directly conflicts with a decision of another district court of appeal or of the supreme court"). The Florida Constitution similarly grants the Supreme Court jurisdiction to "review a question of law certified by the Supreme Court of the United States or a United States Court of Appeals." 
This recent case illustrates both of these legal paradigms. It was filed in state court, but "removed" to federal court. A defendant can ask for this "removal" after being served with a lawsuit. Thus, the first choice regarding courts goes to the plaintiff, but if the jurisdictional requirements are met, a defendant can remove the case to federal court. In this instance, a tort case, that is what occurred. But, as an aside, a workers' compensation case could not be similarly "removed" because the jurisdiction for that type of dispute is exclusively a state matter. 
The federal court has jurisdiction over federal matters, such as a violation of a federal law such as the Americans with Disabilities Act (ADA) or the Fair Labor Standards Act (FLSA), etc. The federal courts also have jurisdiction in cases between residents of different states, when the "matter in controversy" is more than $75,000. 28 U.S. Code § 1332. This is called "diversity" jurisdiction.
Thus, in this genre of federal civil jurisdiction, the federal courts are asked to preside over state law disputes. To do so, the federal court must understand state law, and may require context to do so. If a state's highest court has not rendered an opinion regarding some question of state law, the federal court may request an interpretation from that court. That occurred in this instance, with the federal court turning to the New York Court of Appeals, that state's highest court. 
Defamation is a tort (a civil wrong) in which an intentional, false statement results in damages. It is critical that the definition of this tort requires all four elements: intent, falsity, communication, and damages. The one with which students often struggle is the communication (you can say anything you want in your head or to your mirror), but once it is said out lout to someone else, it has been communicated. Defamation comes mainly in two forms, the written and the spoken. In order to remember the distinction, remember that "spoken" and "slander" each start with "s." The "written" form has no similar reminder to tie it to "libel," but you can just remember that the "s" words go together and sort the "libel" out as the "other one." 
Since the statute of limitations had run on the tort of defamation, the doctor here sought recovery for the bad faith he alleged resulted in his bill denial and in the several years of investigation. The federal court was thus interpreting a state law, which had been differently interpreted by two New York appellate courts. The Federal District Court noted the conflict, and certified the legal question to New York's highest court. That court concluded "that the New York Legislature had not intended for the law to used as a vehicle for defamation torts by physicians."
Some will note that there is no discussion of what should be the first analysis: "does the law say there is a right of action for defamation by physicians?" The first question should always be "what does the statute say." It is curious when a decision does not address that before beginning a discussion of what a legislature intended. Legislatures bring predictability when their work (laws) say precisely what they mean. Courts bring predictability when they follow what laws say. Once the effort begins at deciphering what was or was not intended, a slippery slope may well be what is found. 
The purpose of the law here, the Court concluded, was to encourage "fraud reporters" to come forward. Reading a private right of action into the statute, that would then create a way for a physician to sue such "reporters" "would undermine the law's statutory purpose by increasing the fraud reporters' exposure to liability." In light of that logic, and the absence of a legislatively stated right of action for such physicians, the New York court concluded no such right of action for physicians is created by that law. The proposed interpretation would frustrate the stated purpose of the law.
The case outcome is perhaps not earth-shattering in any particular corner of workers' compensation outside of New York. But, the lessons of "diversity," "conflict," "statutory interpretation," and interaction of courts is educational and informative.
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    About The Author

    • Judge David Langham

      David Langham is the Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims at the Division of Administrative Hearings. He has been involved in workers’ compensation for over 25 years as an attorney, an adjudicator, and administrator. He has delivered hundreds of professional lectures, published numerous articles on workers’ compensation in a variety of publications, and is a frequent blogger on Florida Workers’ Compensation Adjudication. David is a founding director of the National Association of Workers’ Compensation Judiciary and the Professional Mediation Institute, and is involved in the Southern Association of Workers’ Compensation Administrators (SAWCA) and the International Association of Industrial Accident Boards and Commissions (IAIABC). He is a vocal advocate of leveraging technology and modernizing the dispute resolution processes of workers’ compensation.

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