State ex rel. Wallace v. State Med. Bd. of Ohio

[This opinion has been published in Ohio Official Reports at 89 Ohio St.3d 431.]

THE STATE EX REL. WALLACE ET AL., APPELLEES, v. STATE MEDICAL BOARD

OF OHIO ET AL., APPELLANTS.

[Cite as State ex rel. Wallace v. State Med. Bd. of Ohio, 2000-Ohio-213.]

Public records—State Medical Board of Ohio’s investigative records are not

public records—Waiver of right to confidentiality—Determining whether

State Department of Insurance fraud investigatory records are exempt

from disclosure under R.C. 149.43(A)(2).

(No. 99-1385—Submitted April 11, 2000—Decided August 16, 2000.)

APPEAL from the Court of Appeals for Hamilton County, No. C-980557.

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{¶ 1} Relator-appellee Alvin Wallace is a surgical assistant and president of

relator-appellee Surgical Skills, Inc., a business that provides hospitals with

surgical assistants. Surgical assistants perform tasks such as preparing and laying

out the necessary surgical instruments.

{¶ 2} In 1994, respondent-appellant State Medical Board of Ohio and

respondent-appellant State Department of Insurance began independent

investigations of the relators.

{¶ 3} On September 7, 1994, Patricia Ellis, an investigator employed by the

Medical Board, began investigating relators for alleged violations of R.C. Chapter

4731, including the unlicensed practice of medicine.

{¶ 4} In January 1995, Richard Wilson, an investigator employed by

Anthem Blue Cross and Blue Shield (“Anthem”), began investigating insurance

claims submitted to Anthem by the relators.

{¶ 5} Also in January 1995, Robert J. Kaising, an investigator with the

Insurance Department, was assigned to investigate a complaint, made by a third-

party payor other than Anthem, that alleged that relators were committing insurance

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fraud. In June 1995, Kaising learned that Anthem was also conducting an

investigation of the relators.

{¶ 6} Wilson’s investigation commenced after Anthem received a

communication from the National Health Care Anti-Fraud Association. The

communication was authored by FBI agent Cynthia Cronin and stated that the

relators were suspected of submitting fraudulent claims to insurance companies.

The concern was that the relators, surgical assistants, were using billing codes

employed by the medical profession to bill insurance companies for services

rendered by surgeons.

{¶ 7} The scope of Wilson’s investigation was limited to determining

whether Wallace was a physician and whether services that relators provided to

Anthem subscribers were reimbursable, as Anthem’s administrative guidelines did

not allow services performed by nonphysician surgical assistants to be reimbursed.

In the beginning of April or May 1995, Wilson, believing that he was under a duty

to do so, contacted the Insurance Department to discuss information he had

gathered regarding the relators. At that time, he also contacted the Medical Board.

{¶ 8} During their investigations, Wilson was present on several occasions

when Ellis and Kaising interviewed physicians and when they inquired about

arrangements between the relators and medical providers.

{¶ 9} In December 1995, relators contacted the Medical Board and

Insurance Department and requested permission to inspect and copy all of the

documents these agencies had in their possession relating to Wallace and Surgical

Skills, Inc. These requests were made pursuant to the Public Records Act, R.C.

149.43 et seq. The Medical Board and Insurance Department refused to release

their investigatory records to the relators.

{¶ 10} In May 1996, relators filed a mandamus action in the Hamilton

County Court of Common Pleas to compel the respondents to release their

investigatory records relating to relators under R.C. 149.43. Respondents, the

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Medical Board and Insurance Department, claimed that the records were

confidential and exempted from release under R.C. 149.43. On June 3, 1998, the

trial court granted respondents’ motion for summary judgment.

{¶ 11} Relators appealed, asserting five assignments of error. On June 11,

1999, the Court of Appeals for Hamilton County reversed the trial court’s judgment

in part and remanded the case to the trial court for further proceedings in accordance

with its disposition of the case.

{¶ 12} The court of appeals determined that by allowing Wilson to be

present during witness interviews the Medical Board violated the duty to keep its

investigatory records confidential; however, the court concluded, “R.C. 4731.22

provides a privilege for information in the Medical Board’s investigatory records.

Without a valid waiver from all persons whose privacy rights are implicated, these

records may not be disclosed under the Public Records Act.” The court further

noted that Dr. Semertzides, one of the physicians who was interviewed in Wilson’s

presence, authorized the release of all information gathered during his interview.

With regard to this information, the court of appeals directed the trial court to

conduct an in camera inspection and withhold any information that implicated the

privacy rights of anyone other than Semertzides. Additionally, the court of appeals

concluded that the trial court had a duty to conduct an in camera inspection of the

Insurance Department’s records in order to ascertain whether the information

contained therein was exempted from release.

{¶ 13} In addressing relators’ other assignments of error, the court held that

the investigations conducted by the Medical Board and the Insurance Department

were legitimate and therefore not ultra vires and that the denial of records did not

violate Wallace’s equal protection rights.

{¶ 14} The cause is now before this court upon the allowance of a

discretionary appeal.

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Robert Armand Perez, Sr., for appellees.

Betty D. Montgomery, Attorney General, Scott Myers and Lisa Wu Fate,

Assistant Attorneys General, and Mark R. Weaver, Special Counsel to the Attorney

General, for appellants.

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ALICE ROBIE RESNICK, J.

{¶ 15} This case, which the court of appeals characterized as a “complex

case involving the interplay of the Public Records Act, the confidentiality

provisions of the State Medical Board of Ohio, and similar, but not identical

provisions governing the State Department of Insurance” (footnote omitted), raises

two separate yet interrelated issues for our consideration. First, we must determine

whether the records in question are “public records” within the meaning of R.C.

149.43. If these records are not public records but rather are confidential

investigatory materials, then we must determine whether the presence of a

nonagent, third party during witness interviews constitutes a waiver of

confidentiality in the otherwise privileged material.

I. Confidentiality of Investigatory Records

{¶ 16} Ohio’s Public Records Act is codified in R.C. 149.43 et seq. The

statute defines “[p]ublic record” as “any record that is kept by any public office.”

R.C. 149.43(A)(1). The term “public office” includes “any state agency * * *

established by the laws of this state for the exercise of any function of government.”

R.C. 149.011(A). R.C. 149.43 must be construed liberally in favor of broad access

to records kept by public offices, and any doubt is to be resolved in favor of

disclosure of the records. State ex rel. Gannett Satellite Info. Network, Inc. v. Petro

(1997), 80 Ohio St.3d 261, 264, 685 N.E.2d 1223, 1227, citing State ex rel. Gannett

Satellite Info. Network, Inc. v. Shirey (1997), 78 Ohio St.3d 400, 401, 678 N.E.2d

557, 559. Additionally, mandamus is the appropriate remedy to compel compliance

with R.C. 149.43. R.C. 149.43(C); see, also, State ex rel. Multimedia, Inc. v.

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Snowden (1995), 72 Ohio St.3d 141, 142, 647 N.E.2d 1374, 1377, citing State ex

rel. Steckman v. Jackson (1994), 70 Ohio St.3d 420, 426, 639 N.E.2d 83, 88-89.

With these standards in mind, we now proceed.

A. Medical Board Records

{¶ 17} The Medical Board is a “public office” for the purposes of R.C.

149.43. Former R.C. 4731.22(C)(1), the applicable provision governing Medical

Board investigations, stated, “Information received by the board pursuant to an

investigation shall be confidential and not subject to discovery in any civil action.”

146 Ohio Laws, Part V, 8765. (The current version is codified at R.C.

4731.22[F][5] and is virtually the same.)

{¶ 18} In State Med. Bd. of Ohio v. Murray (1993), 66 Ohio St.3d 527, 536,

613 N.E.2d 636, 642-643, we held that information contained in the Medical

Board’s records “is to be kept confidential at all times and is not, under any

circumstances, * * * discoverable in a civil action.” Based on the plain language

employed in R.C. 4731.22, language that we previously deemed a “clear legislative

directive,” we hold that the Medical Board’s investigative records are not public

records. Id. at 536, 613 N.E.2d at 642.

{¶ 19} R.C. 149.43(A)(1) defines “public record” and enumerates

exceptions from the definition of “public record” for purposes of the Public Records

Act. “Records the release of which is prohibited by state or federal law” are not

public records. R.C. 149.43(A)(1)(q), formerly R.C. 149.43(A)(1)(p), 146 Ohio

Laws, Part I, 134. In enacting former R.C. 4731.22(C)(1), the General Assembly

specifically exempted the Medical Board’s investigative records from disclosure

under R.C. 149.43.

{¶ 20} Having determined that the Medical Board’s investigative records

are not public records within the meaning of R.C. 149.43, we must now determine

whether the Medical Board waived its right to confidentiality by allowing Wilson,

a third party, to attend witness interviews.

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{¶ 21} Former R.C. 4731.22(C)(1) mandated that the board “conduct all

investigations and proceedings in such a manner as to protect patient

confidentiality. The board shall not make public names or other identifying

information about patients unless proper consent is given or a waiver of the patient

privilege exists” under R.C. 2317.02(B). 146 Ohio Laws, Part V, 8766. (This

mandate remains unchanged in the current version of R.C. 4731.22. See R.C.

4731.22[F][5]. Moreover, this current version requires the board to protect

confidentiality not only of patients but also of persons who file complaints with the

board.) This provision contains safeguards designed to protect patient

confidentiality in the same manner that the physician-patient privilege protects

patient confidences. State Med. Bd. of Ohio v. Miller (1989), 44 Ohio St.3d 136,

138, 541 N.E.2d 602, 604. The court of appeals correctly recognized that by

allowing Wilson to attend witness interviews, the Medical Board violated its duty

to maintain the confidentiality in the information it gathered. We agree that it was

improper for the Medical Board to give a private third party access to this

information. Thus, the issue remains whether the Medical Board’s breach of

confidentiality constitutes a waiver.

{¶ 22} One physician, Dr. Semertzides, authorized the release of

information gathered at an interview attended by Wilson. The court of appeals

determined that by signing the release Semertzides waived his privilege of

confidentiality with regard to information gathered at his interview. Consequently,

the court of appeals directed the trial court to release the records pertaining to

Semertzides and to withhold any information concerning anyone else whose

privacy rights were implicated. The court ordered that all other records should

remain confidential because “[w]ithout a valid waiver from all persons whose

privacy rights are implicated, these records may not be disclosed under the Public

Records Act.”

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{¶ 23} “Waiver” is defined as a voluntary relinquishment of a known right.

See Chubb v. Ohio Bur. of Workers’ Comp. (1998), 81 Ohio St.3d 275, 278, 690

N.E.2d 1267, 1269, citing State ex rel. Athens Cty. Bd. of Commrs. v. Gallia,

Jackson, Meigs, Vinton Joint Solid Waste Mgt. Dist. Bd. of Directors (1996), 75

Ohio St.3d 611, 616, 665 N.E.2d 202, 207. Persons may either expressly or

impliedly waive statutory provisions intended for their own benefit, but statutory

provisions cannot be waived when they are intended for the benefit of others. See

Brannock v. Brannock (1986), 104 N.M. 385, 386, 722 P.2d 636, 637; see, also,

State v. Ventura (1999), 101 Ohio Misc.2d 15, 19, 720 N.E.2d 1024, 1027.

Moreover, it is a well-settled general principle that no party has the power to waive

matters that affect third parties, because the holder of the privilege is the only one

who has the power to relinquish it. Id.

{¶ 24} Several groups have a privilege of confidentiality in the Medical

Board’s investigative files. In re Kralik (1995), 101 Ohio App.3d 232, 236, 655

N.E.2d 273, 275. These groups include patients, physicians who are under

investigation, investigation witnesses, and any other persons whose confidentiality

right is implicated by a Medical Board investigation. Id. The holder of the

confidentiality privilege is the one who must waive it before the contents of the

Medical Board’s investigative files relating to that person may be divulged. Id.

Hence, when someone who is not authorized to waive the privilege discloses

privileged information, the information remains privileged. State v. Shipley (1994),

94 Ohio App.3d 771, 775, 641 N.E.2d 822, 825, citing Powers v. Chicago Transit

Auth. (C.A.7, 1989), 890 F.2d 1355, 1357-1359.

{¶ 25} By permitting Wilson to attend Medical Board interviews with

witnesses, the Medical Board waived its own confidentiality privilege; however,

the Medical Board cannot unilaterally waive others’ privileges to confidentiality,

because the Medical Board is not the holder of those privileges.

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{¶ 26} The court of appeals properly ordered an in camera review of

records pertaining to the interview with Semertzides and the release of those

records after they are redacted to protect the confidentiality of anyone else who has

not waived the privilege.

B. Insurance Department Records

{¶ 27} The State Department of Insurance is a “public office” for purposes

of R.C. 149.43. At issue is R.C. 3901.44, which relates to insurance fraud

investigatory records.

{¶ 28} Former R.C. 3901.44(A) stated: “All papers, documents, reports,

and evidence in the possession of the division of insurance fraud of the department

of insurance that pertain to an investigation conducted or authorized by the division

are confidential law enforcement investigatory records under section 149.43 of the

Revised Code. Notwithstanding such section, the division shall not prohibit public

inspection of such records that pertain to an investigation after the expiration of all

federal and state statutes of limitations applicable to the particular offense to which

the papers, documents, reports, and evidence relate.” 142 Ohio Laws, Part III,

4579. (The current version, codified at R.C. 3901.44[B], is substantially the same.)

{¶ 29} Former R.C. 3901.44(A)’s explicit reference to R.C. 149.43 requires

that the two sections be read in conjunction. “Confidential law enforcement

investigatory records” are not public records for purposes of R.C. 149.43. Former

R.C. 149.43(A)(1), now R.C. 149.43(A)(1)(h). However, this is not the end of the

inquiry. R.C. 149.43(A)(2) defines “confidential law enforcement investigatory

records” as “any record that pertains to a law enforcement matter of criminal, quasi-

criminal, civil, or administrative nature, but only to the extent that the release of the

record would create a high probability of disclosure of any of the following:

“(a) The identity of a suspect who has not been charged with the offense to

which the record pertains, or of an information source or witness to whom

confidentiality has been reasonably promised;

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“(b) Information provided by an information source or witness to whom

confidentiality has been reasonably promised, which information would reasonably

tend to disclose the source’s or witness’s identity;

“(c) Specific confidential investigatory techniques or procedures or specific

investigatory work product;

“(d) Information that would endanger the life or physical safety of law

enforcement personnel, a crime victim, a witness, or a confidential information

source.” (Emphasis added.)

{¶ 30} The Insurance Department invites this court to hold that analysis

pursuant to R.C. 149.43 is unnecessary because the plain language of R.C. 3901.44

specifically deems insurance fraud investigatory records “confidential law

enforcement investigatory records” under R.C. 149.43. We decline to adopt this

interpretation.

{¶ 31} A two-step analysis is required when exempting records from release

under R.C. 149.43(A)(2). State ex rel. Multimedia, Inc. v. Snowden (1995), 72 Ohio

St.3d 141, 142, 647 N.E.2d 1374, 1377. The first inquiry is whether the record in

question is a confidential law enforcement record. The second inquiry is whether

releasing the record would create a high probability of disclosure of any of the four

categories of information specified in R.C. 149.43(A)(2).

{¶ 32} The language employed by the General Assembly in former R.C.

3901.44(A), now (B), answers the first query in the affirmative. In essence, what

R.C. 3901.44 does is classify insurance fraud investigatory records as “confidential

law enforcement investigatory records” under R.C. 149.43. Thus, the next step is

to ascertain whether any of the exemptions in R.C. 149.43(A)(2) apply.

{¶ 33} “[E]xceptions to disclosure must be strictly construed against the

custodian of the public records, and the burden to establish an exception is on the

custodian.” Multimedia, 72 Ohio St.3d at 142, 647 N.E.2d at 1377, citing State ex

rel. James v. Ohio State Univ. (1994), 70 Ohio St.3d 168, 169, 637 N.E.2d 911,

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912; see, also, State ex rel. Gannett Satellite Info. Network, Inc. v. Petro (1997), 80

Ohio St.3d 261, 266, 685 N.E.2d 1223, 1228; State ex rel. McCleary v. Roberts

(2000), 88 Ohio St.3d 365, 370, 725 N.E.2d 1144, 1148-1149. Our duty requires

us to strictly construe confidential law enforcement investigatory records and

“resolve any doubts in favor of disclosure.” Multimedia, 72 Ohio St.3d at 143, 647

N.E.2d at 1378. Generally, in the absence of evidence that the custodian of the

records disclosed their contents to the public, the exemptions are fully applicable.

Petro, 80 Ohio St.3d at 265, 685 N.E.2d at 1227; see, also, State ex rel. WLWT-TV5

v. Leis (1997), 77 Ohio St.3d 357, 361, 673 N.E.2d 1365, 1369-1370.

{¶ 34} Application of a statutory exemption to a particular document is best

accomplished by an in camera inspection. See Henneman v. Toledo (1988), 35

Ohio St.3d 241, 243, 520 N.E.2d 207, 210. Based on the limited record before us,

we are unable to discern the nature of the records at issue. Consequently, the trial

court is the tribunal best equipped to inspect these documents in camera, to

determine whether their release “would create a high probability of disclosure” of

any of the material specified in R.C. 149.43(A)(2), and to withhold any information

that falls within a statutory exemption. After examination of the investigatory files,

material that does not fall within an exemption must be disclosed upon a request

made pursuant to R.C. 149.43, and any exempted information should be withheld.

See Franklin Cty. Sheriff’s Dept. v. State Emp. Relations Bd. (1992), 63 Ohio St.3d

498, 589 N.E.2d 24, paragraph one of the syllabus.

{¶ 35} Having concluded that a two-part inquiry is required in order to

determine whether insurance fraud investigatory records, which R.C. 3901.44

designates “confidential law enforcement investigatory records” for purposes of

R.C. 149.43, are exempted from release, we now turn to the question of whether

the Insurance Department waived its right to rely on any applicable exemptions.

{¶ 36} R.C. 149.43’s exemptions are “usually fully applicable absent

evidence that the public office having custody of the records disclosed the records

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to the public.” Petro, 80 Ohio St.3d at 265, 685 N.E.2d at 1227. Wilson, an

investigator employed by Anthem, was present at several witness interviews

conducted by Kaising. During the investigation of the appellees, Wilson attended

these interviews as a representative of Anthem and brought with him a working

knowledge of the insurance industry and his employer. At no time during his

investigation of the appellees did Kaising share or disclose the contents of the

Insurance Department’s investigatory file with Wilson. Investigations into

insurance fraud are not conducted in a vacuum. Investigators working for private

insurance companies may have occasion to interact with investigators from the

Insurance Department. As a matter of fact, R.C. 3999.42, which went into effect

in March 1998, requires that insurers having a “reasonable belief that a person is

perpetrating or facilitating an insurance fraud * * * notify the department of

insurance.” Although Wilson is a member of the public, his presence at witness

interviews conducted by the Insurance Department is not tantamount to a public

disclosure and does not effectuate a waiver of any applicable statutory exemptions.

{¶ 37} Thus, the court of appeals properly remanded this cause so that the

trial court could conduct an in camera inspection of the records in question.

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II. Conclusion

{¶ 38} The Public Records Act serves a laudable purpose by ensuring that

governmental functions are not conducted behind a shroud of secrecy. However,

even in a society where an open government is considered essential to maintaining

a properly functioning democracy, not every iota of information is subject to public

scrutiny. Certain safeguards are necessary. Accordingly, we affirm the court of

appeals and remand this cause to the trial court for further proceedings not

inconsistent with this opinion.

Judgment affirmed

and cause remanded.

MOYER, C.J., DOUGLAS, F.E. SWEENEY and PFEIFER, JJ., concur.

COOK and LUNDBERG STRATTON, JJ., concur in part and dissent in part.

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COOK, J., concurring in part and dissenting in part.

{¶ 39} I agree that the Medical Board’s investigative records are not public

records and that the Medical Board waived its own—and only its own—

confidentiality privilege with respect to the Medical Board records discussed in Part

IA of the majority opinion.

{¶ 40} I respectfully dissent, however, from the majority’s judgment that

the insurance department records discussed in Part IB might be subject to public

disclosure under the Public Records Act. Former R.C. 3901.44 explicitly

categorizes the insurance department documents at issue as “confidential law

enforcement investigatory records [and thereby excepted from public disclosure as

‘public records’] under section 149.43,” which precludes the judiciary from

reaching a contrary result. The majority analyzes the applicability of the

“confidential law enforcement investigatory records” exception and concludes that

it does not apply, when the statute plainly states otherwise.

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{¶ 41} We are not privileged to ignore the plain and unambiguous language

of a statute. State v. Krutz (1986), 28 Ohio St.3d 36, 38, 28 OBR 96, 97, 502 N.E.2d

210, 211. To hold as the majority does is to do just that.

LUNDBERG STRATTON, J., concurs in the foregoing opinion.

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LUNDBERG STRATTON, J., concurring in part and dissenting in part.

{¶ 42} I dissent with respect to whether the presence of a third party at

witness interviews constituted a waiver of the State Medical Board’s privilege of

confidentiality. I also join Justice Cook’s dissent and would find that insurance

department records are not subject to disclosure under the Public Records Act. I

concur as to the remainder of the majority opinion.

{¶ 43} Under Part IB of the majority’s opinion, “Insurance Department

Records,” the majority concludes that the presence of Anthem’s investigator did

not constitute a waiver of the Department of Insurance’s privilege of

confidentiality. I would apply the same rationale to Part IA and find that the

investigator’s presence also did not constitute a waiver of the Medical Board’s

privilege. There is no reason to distinguish between the two.

{¶ 44} An insurance fraud investigator is integral to the work of both the

Department of Insurance and the Medical Board to uncover fraud or handle

allegations of unauthorized medical practice. The investigator possesses the

expertise, knowledge, and investigative background that enable the Medical Board

and Department of Insurance to determine the direction of their own investigations.

At times, there were joint investigations that involved the investigator for the State

Medical Board, Patricia Elliss, the Department of Insurance investigator, Robert

Kaising, and Anthem’s investigator, Richard Wilson. They worked together to

gather evidence and interview witnesses.

{¶ 45} The allegations being investigated involved issues of fraudulent

billing, with complex billing codes and methods. The use of experts, such as

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Anthem’s investigator, is crucial in helping the Medical Board to effectively

conduct its investigation. The majority recognizes this importance to the

Department of Insurance yet somehow excludes the Medical Board from obtaining

the same benefits.

{¶ 46} The majority does not address the effect of its decision upon the

presence of other third parties; however, the logical extension is that victims and

other parties who wish to have a trusted advisor, family member, or friend present

at their interview will now waive the confidentiality of their statements. This could

affect a victim’s willingness to report wrongdoing.

{¶ 47} We should hold that the presence of an insurance investigator who

is an active participant in the investigation of the wrongdoing at a witness interview

does not result in a waiver of the confidentiality of the Medical Board’s

investigative records.

{¶ 48} Therefore, I respectfully dissent.

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