# Opposition Brief — Redbud Community Hospital v. United States District Court for the Northern District of California

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1999
- **Citation:** 526 U.S. 1166

## Text

| Supreme Court, UM
FILED

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Nos. 98-1513 and 98-1526

WAY =O 1999

In The
Supreme Court of the United States

}, OFFRe OF SHE GLERM

a e ERD

REDBUD COMMUNITY HOSPITAL,
ADVENTIST HEALTH, INC.,

vs. Petitioners,

UNITED STATES DISTRICT COURT, NORTHERN DISTRICT
OF CALIFORNIA, DAVID BURROWS, RHODA THOMAS,

Respondents,
and
WOLFGANG SCHUG, M.D.,
Vs. Petitioner,

DAVID BURROWS, successor-in-interest to Cody Burrows,
deceased; DAVID BURROWS and RHODA THOMAS individually,
and as heirs and surviving parents of Cody Burrows,

Respondents.

oe +
On Petitions For Writ Of Certiorari To The
United States Court Of Appeals For The Ninth Circuit
_ J
RESPONDENTS’ CONSOLIDATED BRIEF IN OPPOSITION
TO BOTH PETITIONS FOR WRITS OF CERTIORARI
*

JAMes M. BRADEN
Law Orrices or JAMes M. Brapven
44 Montgomery Street, Suite 1210
San Francisco, California 94104
Phone: (415) 398-6865
Fax: (415) 788-5605

RicHARD J. MASSA
Massa & ASSOCIATES
120 North Forbes Street
Lakeport, California 95453
Phone: (707) 262-0230
Fax: (707) 262-1028

Attorneys for Respondents

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 342-2831

i ie AEP INA Ene Re set 2% Daten dso

COUNTER-STATEMENT OF
QUESTIONS PRESENTED

The district court issued an interlocutory discovery
order for production of hospital records, names of wit-
nesses, and other evidence that petitioners wish to con-
ceal. The court effectively denied petitioner Schug’s
request to certify the order for immediate appeal pur-
suant to 28 U.S.C. Sec. 1292. The order as to documents
was directed not to Schug, but only to the hospital peti-
tioners, because only they had custody of the supposedly
privileged materials.

Petitioner Schug nevertheless filed a purported
appeal as of right, ignoring the general rule against
uncertified interlocutory appeals in civil cases. The
appeal was, therefore, summarily dismissed based on
controlling Ninth Circuit authority, which is consistent
with Supreme Court and other circuits’ authority, that
parties to a civil case may not have automatic interlocu-
tory appeals of discovery orders, unlike third-party wit-
nesses served with grand jury subpoenas.

Both Schug’s and the Hospitals’ separate petitions for
writs of mandamus also were summarily denied by the
9th Circuit, based on authority in that Circuit, which
again is consistent with authority of the U.S. Supreme
Court, that mandamus will not lie unless the district
court abused its discretion by issuing a clearly erroneous
ruling. Accordingly, the Ninth Circuit’s rulings on both
the appeal and the mandamus petitions were contained
in a single one-page, unpublished order.

Based on this history, the actual questions presented,

which would have to be decided favorably to petitioners

COUNTER-STATEMENT OF
QUESTIONS PRESENTED - Continued

before this Court could consider the questions of substan-
tive “privilege” law they present, are:

(1) Should the Court of Appeals for the Ninth Cir-
cuit have issued a writ of mandamus to overturn an
interlocutory district court civil discovery order on the
ground of a purported state (not federal) law medical
peer review “privilege,” where no showing was made
that the order was clearly erroneous and hence an abuse
of discretion, in light of the admissions in the briefs
below and in both petitions here that applicability of this
state “privilege” under federal law has been rejected by
numerous federal courts and thus is at best a debatable
proposition?

(2) Does a party in civil litigation who claims he
would be irreparably harmed by release of documents
held by another party in the case have the right to auto-
matic interlocutory appeal, after being denied discretion-
ary leave to appeal, to challenge the discovery order on
the ground that the materials are “privileged”?

Respondents submit that the answers to both ques-
tions are well settled in the negative and are unworthy of
review by this Court. First, petitioners do not come even
close to meeting the high standard for the extraordinary
remedy of mandamus. Second, the purported interlocu-
tory appeal is conclusively barred by longstanding stat-
ute, case law, and judicial policy.

Respondents submit that the petitions should be
summarily denied on that basis and that the tendentious
questions posed by petitioners cannot and need not be

iil

COUNTER-STATEMENT OF
QUESTIONS PRESENTED ~- Continued

reached given the procedural posture of this interlocutory

proceeding.

Moreover, the questions in both petitions as to
whether the purported privilege should apply to respon-
dents’ state law claims for medical malpractice as well as
to their federal claims for EMTALA violations are red
herrings. The district court’s order pertains solely to dis-
covery of the records from the hospital and does not
reach the admissibility of the records in the trial of the
State or federal law claims; thus it is not accurately
described as a ruling on “privilege” at all. As only release
is at issue, it would make absolutely no difference at this
stage whether this case contained only the federal
EMTALA claim or, as it does, both state law and federal
claims. In either event, the only two possible outcomes

are that the records are either released to respondents or

they remain concealed.

PARTIES TO THE PROCEEDINGS

[he two petitions accurately list the parties to the

proceedings.

TABLE OF CONTENTS
Page

COUNTER-STATEMENT OF QUESTIONS PRESENT ED

PARTIES TO THE PROCEEDINGS ................. iv
tapes Ce COMMENTS. oo Se \
INGE TUF ECMO, oo oe are el ee vi
SABLE OP AUTRES oil ee Vii
I. COUNTER-STATEMENT OF THE CASE....... 1
Il. LEGAL ARGUMENTS FOR DENYING THE
WOMENS C655 54 aN E NCS ie a ee 8

A. Neither Petition Even Attempts to Argue
That Any Novel Issue of Mandamus Law Is
Presented By The Ninth Circuit's
Unpublished Summary Denial of Writs of
Mandamus Against An Interlocutory Dis-
covery Order. The Petitions, In Fact, Dem-
onstrate Effectively, and Thus Concede,
That There Is Sufficient Conflicting Author-
ity That The District Court’s Discovery
Order Cannot Possibly Meet the Abuse of
Discretion/Clearly Erroneous Standard for
-viaterm ia irsatige, Mise. ic.o. FOUR RAPT OTE PPE ee 8

B. There Is No Intercircuit Split On the Ques-
tion Whether A Party Who is Not the Target
of Discovery In a Civil Case Has The Right
to Automatic Appeal Of An Interlocutory
Discovery Order Directed At Another Party,
Particularly Where the Other Party Is Able
and Motivated to Contest the Discovery
Order Itself, Whether By Petition for Man-
damus, as Has Already Occurred Here, Or
Subsequently By Suffering Contempt and
Then Appealing the Contempt Ruling..... 19

Sad: SAMAR vw os oh yk oe 29

INDEX TO APPENDICES

Page
Appendix A_ Certificate of Record From United
States District Court Containing
Docket Entries Regarding Dr.
Schug’s Interlocutory and Direct
ADORE PUAEB. 6 606145 ess eas wo A-1

Appendix B_ Declaration of Respondents’ Coun-
sel Richard Massa Regarding Dis-
trict Court Judge’s Statements on
Dr. Schug’s Attempted Interlocu-
WOE FDOONE 665 6 Nec enpersGawen scars B-1

Vil

TABLE OF AUTHORITIES

Page
Feperat Cases
Allied Chemical Corp. v. Daiflon, Inc., 437 U.S. 659
RFE ors sv VAIS ORE ee 10
Bankers Life Co. v. Holland, 346 U.S. 379 (1953) ....... 9
Bauman v. United States District Court, 557 F.2d 650
CHIE AMR BOC oa is ee obo ae in 11
Boughton v. Cotter Corp., 10 F.3d 746 (10th Cir.
oiahig LES CRT TN CAE EERE CTE COPTER SE y
Branch v. Phillips Petroleum Co., 638 F.2d 873 (5th
Mth PWIOAT <5 20 ChaaTa eC cCEN Ee hoes oy ee os eee 28
Burdeau v. Powell, 256 U.S. 465 (1921) ............... 22
Calderon v. United States District Court, 98 F.3d
es gee etc Ma Te SRR Te ie Sees AE ie ats SCRE 13
Corporacion Insular De Seguros v. Garcia, 876 F.2d
254 (1st Cir. SOMERS PCAN Wh bhs reeled ds dls chee oe
Covey Oil Co. v. Continental Oil Co., 340 F.2d 993
SEW EES Pr eS centr Os 28
Doe v. St. Joseph’s Hospital, 133 F.R.D. 677 (N.D.
ME RONEND dws dene hates Ty eau Goer tee et ee 17
Dorsten v. Lapeer County General Hospital, 88 F.R.D.
er Me NON. SIO bos os oe Ne Seb es 17
Dowling v. American Hawaii Cruises, Inc., 971 F.2d
We RON Reale SOEs i es Cake ek eas uk 17
Eastland v. U.S. Servicemen’s Fund, 421 U.S. 491
elie) ROA gE OSE LOY ber ey a DE nee 22

Equal Employment Opportunity Commission v. IIli-
nois Dep't of Employment Security, 995 F.2d 106
PIE SRT UES dies is bes Oho nse cv PE RAR ie ae 17

Vili

TABLE OF AUTHORITIES —- Continued

Page
EX perte Bradley, 7 Wall. S64 (1BGS). cs. sis ccciicienes 10
EX OAT FONE, Soe Aas BO AAO 65 heii eves cbs cunes 9
EX PRTG FAURE: TEE its Foe CAGED Sika Waele cei vies 10
FIC v. TRW, 626 F2d 207 (D.C. Cir. 1960) 2... 00.4445 17
Go-Bart Importing Co. v. United States, 282 U.S. 344
CASE ie O65 Sos EV Oo 0 ERR Cae oe UE eh eee 22
Gravel v. United States, 408 U.S. 606 (1972) .......... 22
Hancock v. Dodson, 958 F.2d 1367 (6th Cir. 1992)..... 17

Harris v. United States, 413 F.2d 316 (9th Cir. 1969) .... 22
Heathman v. United States District Court, 503 F.2d

LOSe Coe ake SAP Ree hic be Rh EES RUMOUR Ss Heb Cun yas 14
In re Attorney General of the United States, 596 F.2d
eo Wee Sai PP a ers cores ns vas eke) i Fbss canto ves oe
In re Faltico, 561 F.2d 109 (8th Cir. 1977) ............ 27
In re Grand Jury Investigation of Ocean Transporta-
print, GUA BiG Gre CERS.. So SIF Se hats ka snea wens 27
In re Grand Jury Proceedings, 5 F.3d 397 (9th Cir.
i 2 2 PME eee Gry eer any Pyar Ma ae Geen Lb yo ganar 17
In re Grand Jury Proceeding (Schofield), 721 F.2d
AEE Ch Se RO a ak 055s ease eer C Ores 22
In re Grand Jury Subpoena Duces Tecum (Marger),
OID: F.Bie. Oo TOE Gale SHIN aie ohana News ee nes hates 22
In re Grand Jury Subpoena Issued to Bailin, 51 F.3d
PS COU EP Dees AGNES pace eee FPR eek ns 14 F
In re Gren, 633 F.2d 825 (9th Cir. 1980).............. 22 .
In re International Horizons, Inc., 689 F.2d 996 (11th
Ct. EOAE Race cl ses Kovacs Mea en eho idee des 17
In re National Mortgage Equity Corp., 857 F.2d 1238
(Pets CME SPO) cok yan cada cen MALWeeen- chan Zi, bay 20

NN eR MCE eB
ES Te ee ea eee Te OTE One Nee eee ene ee

ix

TABLE OF AUTHORITIES - Continued

Page
Jaffee v. Redmond, 518 U.S. 1 Te eae. a Te, ee
Jiricko v. Coffeyville Memorial Hospital Medical Cen-

ter, 700 F. Supp. 1559 (D. Kan. 1988).............. 17
Kerr v. United States District Court, 426 U.S. 394

PPR EEE a he Sh OMAR ET Fine Tee eo Te, Sone: 10
King v. United States District Court, 16 F.3d 992 (9th

RM BOOOE Ve cus a tes pete ie ee 14
LeMasters v. Christ Hospital, 791 F.Supp. 188 (S.D.

RAID BEUGD cain i ius eta e ooh iw ee 16
Linde Thomason Langworthy Kohn & Van Dyke, P.C.

v. Resolution Trust Corporation, 5 F.3d 1508 (D.C.

pe cg) DUPE TROD | Ree PERS Gn y oe 17
Manthe v. Vanbolden, 133 FE.R.D. 497 (N.D. Tex.

BEPRES CS VENDA sA Nid epee eee RANG Chae es 16
Memorial Hospital for McHenry County v. Shadur,

O66 7.20 toe Cth Cir T98l): a es. 16, 17
National Super Spuds, Inc. v. New York Mercantile

Exchange, 591 F.2d 174 (2d Cir. BOF sod ocd Sau Bos 24
Nixon v. Sirica, 487 F.2d 700 AG Ce POs) os 25
Ott v. St. Luke Hospital, 522 F.Supp. 706 (E.D. Ky.

ROPRG AAs (NSELE gaWNad Vis RAS wend SORE ce 16
Pagano v. Oroville Hospital, 145 F.R.D. 683 (E.D.

Ms ROPE AV deheeesn lb peat ies eel oe 16
Parr v. United States, 351 U.S. 513 Eh 3 SRR ae 9, 10
Perlman v. United States, 247 U.S. 7 (1918)

ie Aad RCNA Shak ye owe Male & 65s Ee Ge See 41, 22, 23, 24, 25, 27

Quinn v. Kent General Hospital, 617 F.Supp. 1226
ies A PD gk wi eee Co ueues Ge ee. 17

TABLE OF AUTHORITIES — Continued

Robertston v. Neuromedical Center, 169 F.R.D. 80
CORA EAC SONS Vs cba ewe ae tee ad Le 16

Robinson v. Magovern, 83 F.R.D. 79 (W.D. Pa. 1979) .... 16
Roche v. Evaporated Milk Association, 319 U.S. 21

CSR so bs as Sadao AE TRG CRORE OS CURES Kee es 9
Schafer v. Parkview Memorial Hospital, 593 F.Supp.

Ch EOE. BER: RED 6 hi A Rech eee aa saw ok eae 17
Schwimmer v. United States, 232 F.2d 855 (8th Cir.

La AMM re aaa ra ser siren | Pea a Mee any my pene 27
Sexton v. Poole Truck Lines, Inc., 888 F.Supp. 127

COR SD, ARs OR oe a ck on Keb Fee RTRs PROMO 17
Smith v. Alice Peck Day Memorial Hospital, 148

8 Rg Md es Bie |, 3 nao arr erimneer es pune suerte 17
Survival Systems of Whittaker Corp. v. United States

District Court, 825 F.2d 1416 (9th Cir. 1987) ....... 13
Teasdale v. Marin General Hospital, 138 F.R.D. 691

PR A OL. RON iw os heen een hadi ecuaee eet 16
Todd v. South Jersey Hospital System, 152 F.R.D. 676

CUA he Ret bs 2: SEEMS P a Gengear gata gan ee aCe in ba Sea Oe 16
United States Alkali Association v. United States, 325

Reh Be PEE ob ice seas ae a ee ee Caper wey ee 9
United States v. Illinois, 148 F.R.D. 587 (N.D. Ill.

| PONE ge er ee ree ER CR ope ey rat eae ene 16
United States v. One Parcel of Property Located at

31-33 York Street, 930 F.2d 139 (2d Cir. 1991)...... 17
lintted States v.. Ryan, 462 US. S30 (1971)... 005 cases 25

United States v. Wilson, 960 F.2d 48 (7th Cir. 1992) .... 17

pape HESS

xi

TABLE OF AUTHORITIES - Continued

Page

University of Pennsylvania v. Equal Employment
Opportunity Commission, 493 U.S. 182 (1990)....... 14
Wei v. Bodner, 127 F.R.D. 91 (D.N.J. 1989)............ 16

Will v. Calvert Fire Insurance Co., 437 U.S. 659
GRRE) eR «ts CRG BGs eed Ce 9, 10
Will v. United States, 389 U.S. 90 Bo. y & REO aies Omer iah od 9, 10

Wilson v. United States District Court, 103 F.3d 828
UR Se NON ec isa eo ee 14

STATE CASES

Alexander v. Superior Court, 5 Cal.4th 1218, 23
CalRpiw.2d 397, 859: F.2d 96 (2993). cic 7

Cedars-Sinai Medical Center v. Superior Court (Bow-

yer), 18 Cal.4th 1, 954 P.2d 511, 74 Cal.Rptr.2d
SE No 5 EOD REDRESS 6

OTHER AUTHORITIES

Nelson, Goelz & Watts, Ninth Circuit Civil Appel-
PRE CI oo EW ir ee OE aes 14

I.
COUNTER-STATEMENT OF THE CASE

The petitions should be denied because, very simply,
this is the wrong case for the United States Supreme
Court to consider what might otherwise be interesting
questions of privilege law (or, more accurately, of civil
discovery law). There are three decisive reasons for this.

(1) Petitioners fail to appreciate, or at least to point
out for this Court, that the interlocutory nature of the
challenged discovery order is fatal to their campaign for
appellate review. It is no accident that the Ninth Circuit,
after full briefing and oral argument, issued an
unpublished order summarily denying both the Hospitals’
and Dr. Schug’s petitions for mandamus and summarily
dismissing Dr. Schug’s separate appeal. There is no rea-
son to believe the Ninth Circuit failed to understand from
the lengthy briefs (two rounds per side) and oral argu-
ment that the issues presented were of potentially signifi-
cant legal interest. But that Court, like this Court, is not
inclined to ignore equally important legal doctrines that
bar the type of piecemeal, interlocutory delay of civil case
discovery orders that these petitioners have so far cre-
ated.

Thus, the Ninth Circuit summarily disposed of this
matter because the separate appeal was barred under
clear authority against the very type of interlocutory
derailment of ongoing civil litigation Dr. Schug improp-
erly perpetrated by filing it, and has exacerbated by
bringing to this Court. And the mandamus petitions were
flawed because petitioners’ presentation to the Ninth Cir-
cuit, like the one they make here, proved that the district

court could not have abused its discretion — needed to
justify reversal by that extraordinary writ — because the
existence of the purported privilege under federal law
was, at best, debatable.

(2) This also is the wrong case on the facts for the
seminal review of federal privilege (or discovery) law
that petitioners want this Court to undertake. They pre-
sent the case as though it involved nothing more than a
discovery attempt by respondents, approved by the dis-
trict court, to strike at California’s protection for doctors
to express their candid opinions of medical services ren-
dered by other doctors, or even for an accused doctor to
be candid about his own work. But that is not the thrust
of respondents’ discovery effort and that was not the fact
situation as it appeared to the district court.

Rather, the district court did not rule that respon-
dents are entitled to the so-called peer review documents,
witness names, and other information because it thought
plaintiffs in every case ought to be allowed to see what
other doctors thought of a defendant doctor’s work.
Rather, the court based its decision on evidence that the
peer review process had been corrupted by misconduct
separate from the underlying EMTALA violations or
medical malpractice Dr. Schug committed. The hospital
petitioners, though not petitioner Schug, note this in
passing (at p. 6 of Hospitals’ petition), but breezily dis-
miss it.

But these facts, as the district court itself said, were
crucial to its decision because the apparent corruption
within the peer review process itself brings this case
closer to numerous federal cases, including antitrust and

| :
TT

employment discrimination complaints, as well as Cali-
fornia state cases involving alleged criminal violations,
where the state privilege has been overridden due to
similar process corruption facts. Such cases, like this one,
are quite unlike petitioners’ model of doctors being
forced to reveal what they said about other doctors. That
is, respondents are not seeking opinions, but rather facts,
documents and the identity of witnesses that would
prove the process was corrupted.

Respondents contend that principal defendant Schug,
perhaps aided and abetted by others at the Hospital, vio-
lated the California Penal Code by fraudulently creating a
false medical record to cover up gross misconduct. Schug
indeed admitted under oath the bizarre act of burning his
original notes in a bonfire at his home. Such violation of
law would not entitle the hospital to the privilege even
under California state law, contrary to petitioners’ false
assertion that it is “undisputed” the state privilege would
bar the discovery if there were no federal claims in this
case. And even if there were no criminal violation, proof of
such independent spoliation of evidence would also
arguably eliminate the state privilege, even if state law
instead of federal law were to apply.

The district court thus wrote: “[T]o the extent plain-
tiffs allege that Dr. Schug may have been instructed to
create the [false] addendum and burn his notes at the
peer review meeting, plaintiff’s claims for spoliation of
evidence and EMTALA depend on communications made
during the peer review proceedings. Thus, this case is
more like the antitrust cases than medical malpractice
cases, since part of the claims arise out of peer review
meetings.” Hospital Pet. App. 16 (emphasis added).

Although the Hospital petitioners do quote this passage
in their brief, they give it a misleading spin by imme-
diately adding that the district court “did not state why it
would not delay discovery until plaintiffs explained in
greater detail how the Hospital’s peer review process was
involved in the claims plaintiffs were asserting, nor did it
say why it would not conduct an in camera review of the
documents.” Hospital Pet. 6.

But respondents provided the district court as much
explanation as they could — without actually seeing the
withheld evidence — of how the Hospital’s peer review
process apparently was corrupted. Whether the district
court needed to make an in camera review of the con-
cealed evidence is within that court’s zone of discretion
and surely cannot be an appropriate matter for review by
the United States Supreme Court. The discovery record in
this case already includes at least 25 depositions, four
volumes of grand jury testimony in criminal proceedings
against Dr. Schug, and hundreds of documents that con-
tain thousands of pages. All this material was available to
the district court prior to its determination that respon-
dents had presented a sufficiently plausible allegation of
direct corruption of the peer review process to justify
discovery of relevant records, and some of it was
reviewed by that court.

It borders on the absurd for petitioners to invite the
United States Supreme Court to intervene, on an inter-
locutory basis in this civil proceeding, to upset the district
court’s determination of whether and to what extent this
evidence supports the discovery sought by respondents
under the well-recognized exception, even when a state
privilege is otherwise applicable, for situations where the

peer review process is, itself, corrupt or otherwise impli-
cated in the predicate facts of the case.

(3) Both petitions present a purported legal ques-
tion that was not the primary basis for the district court’s
decision. That question, therefore, is not properly before
this Court. That is, even if this Court were to accept it for
review and decide it favorably to petitioners, the district
court’s ruling would still have to stand based on that
court’s primary — and independent — ground for deci-
sion.

Petitioners argue that this case presents a proper
vehicle for decision of a question purportedly left open
by this Court in Jaffee v. Redmond, 518 U.S. 1 (1996), which
they describe as being whether “state law claims that are
pendent to federal question cases are governed by federal
privilege law.” Hospital Pet. 11 (quoting Hosp. Pet. App.
14). The district court did opine that respondents’ state
law claims against Dr. Schug and the Hospital would be
“governed” by federal privilege law.

But that opinion was presented by the district court
merely as an alternative ground for its ruling “assuming
arguendo that the [peer review] evidence was relevant
only to the [state law] spoliation claim.” (Hospital Pet.
App. 14.) Both petitioners overlook, however, that the
court had just given its primary ground for decision that
rendered the alternative ground mere surplusage:

“Defendants first argue that plaintiff’s
request for the peer review records only applies
to the state law claim of spoliation, and thus
state privilege law should apply to this claim.
However, defendants’ arguments fail for two
reasons. First, plaintiffs contend that that the

records are relevant because the defendants, and
other unknown persons who may be members
of the Peer Review committee, conspired to
alter, destroy, and falsify Cody [Burrows’] medi-
cal records with regard to the care and treatment
he received during his stay at Redbud [Hospi-
tal]. This contention is common to all causes of
action, including the federal cause of action under
EMTALA. As such federal privilege law governs.”
(Hospital Pet. App. 14, emphasis added.)

That ruling alone is sufficient to justify the district court's
order granting respondents discovery of the alleged peer
review information. Nothing the court went on to gratu-
itously add “arguendo” about purported applicability of
the privilege to the state law claims can add or subtract
anything from the adequate basis for that ruling. Even if
there were no state law claims in this case at all, the
district court’s discovery order would stand on its own
purely federal law foundation based on that court’s study
of the facts of this case which is inappropriate for inter-
locutory review by the Supreme Court.

Moreover, the district court’s “arguendo” separate
ground refers to the information’s potential relevance to
state law spoliation claims, but not to the separate state
law claims for medical malpractice. But as Petitioner
Schug mentions in passing in a footnote not linked to
discussion of the purported Jaffee v. Redmond issue, the
state law spoliation claim no longer exists. On May 11,
1998, just six days after the district court’s opinion just
quoted, the California Supreme Court abolished that as a
valid state law cause of action. Cedars-Sinai Medical Center
v. Superior Court (Bowyer), 18 Cal.4th 1, 954 P.2d 511, 74
Cal.Rptr.2d 248 (1998), cited in Schug Pet. 3 n.2.

a ee ee

In essence, therefore, petitioners are seeking a merely
advisory opinion by this Court pertaining to an issue that
was not even necessary to the district court’s decision in
the first place and which, in any event, was effectively
mooted by the California Supreme Court just a few days
afterwards.

We emphasize that both petitioners’ presentations of
this case as one concerning “privilege” is misleading.
While California Evidence Code Sec. 1157 could be
viewed as establishing a form of privilege by implication,
the statute in terms refers only to discovery of documents.
It does not determine whether documents, once discov-
ered, would be admissible as evidence at trial. See Alex-
ander v. Superior Court, 5 Cal.4th 1218, 1223 n.4, 23
Cal.Rptr.2d 397, 859 P.2d 96 (1993) (“Evidence Code Sec.
1157 creates only a privilege against discovery from med-
ical staff committees; it does not create a bar against
introduction of evidence.”) The district court has made
no ruling on whether any peer review information, once
released to respondents, would be admitted.

Thus, while the state law claims of malpractice do
remain in this case, the potential Jaffee v. Redmond issue of
whether federal “privilege” law would govern their
admissibility as to those state claims is not yet ripe for
decision. That is because, of course, the district court has
not yet had occasion to rule on that question.

This is yet another reason why petitioners’ persis-
tence in interlocutory delay of this civil case is so obvi-
ously improper. If and when purportedly privileged
documents are admitted into evidence in support of
respondents’ state malpractice claims, and an adverse

judgment is rendered against one or both petitioners,
their Jaffee v. Redmond questions might at least arguably
(without conceding the point) be worthy of certiorari
review by this Court.

II.
LEGAL ARGUMENTS FOR DENYING THE WRITS

A. Neither Petition Even Attempts to Argue That
Any Novel Issue of Mandamus Law Is Pre-
sented By The Ninth Circuit’s Unpublished
Summary Denial of Writs of Mandamus
Against An Interlocutory Discovery Order. The
Petitions, In Fact, Demonstrate Effectively, and
Thus Concede, That There Is Sufficient Con-
flicting Authority That The District Court’s
Discovery Order Cannot Possibly Meet the
Abuse of Discretion/Clearly Erroneous Stan-
dard for Mandamus Relief.

Petitioners would have this Court leap over the pro-
cedural posture of this case and conduct a plenary exam-
ination of federal medical “privilege” (discovery) law as
though the Ninth Circuit had already done that in a
published opinion in a case properly before it on appeal
from a final judgment. This, of course, is not the case.

The reason the Ninth Circuit summarily declined
petitioners’ invitation is the same reason this Court
should do so: The district court’s opinion is light-years
short of the clearly erroneous/abuse of discretion that is
necessary for the extraordinary remedy of mandamus to
reverse an interlocutory discovery order. Indeed, this
Court’s strictures against mandamus in such situations

appear to be materially stronger even than those uni-
formly applied followed by the courts of appeal.

Petitioners cannot escape the decisive threshold issue
of mandamus law merely by alleging, as they do, that this
Court has jurisdiction of their petitions under the general
certiorari statute, 28 U.S.C. Sec. 1254(1), rather than
under the separate statute, 28 U.S.C. Sec. 1651, that gives
this Court power to issue “all writs necessary or appro-
priate.” Although petitioners are not asking the Supreme
Court directly to issue writs of mandamus to the district
court, their request for reversal of the Ninth Circuit’s
summary action is that this Court order the Ninth Circuit
to issue those writs of mandamus. That, obviously, is
tantamount to the Supreme Court's directly issuing the
writs.

It is well settled that this Court will not issue (or
order the issuance of) writs of mandamus against inter-
locutory district court orders absent truly extraordinary
circumstances. Orders that are not appealable by reason
of their interlocutory nature may not ordinarily be
reviewed by mandamus, even though the hardship of a
prolonged trial “is imposed on parties who are compelled
to await the correction of an alleged error at an interlocu-
tory stage by an appeal from a final judgment.” United
States Alkali Association v. United States, 325 U.S. 196, 202
(1945); Roche v. Evaporated Milk Association, 319 U.S. 21,
25-32 (1943); Bankers Life Co. v. Holland, 346 U.S. 379,
382-83 (1953); Will v. United States, 389 U.S. 90, 96-98
(1961); Parr v. United States, 351 U.S. 513, 520 (1956).
Mandamus writs “are drastic and extraordinary remedies

[to be] reserved for really extraordinary causes.” Ex parte
Fahey, 332 U.S. 258, 259 (1947); Will, supra, 389 U.S. at

10

106-07. “The power to issue [the writs] is discretionary
and it is sparingly exercised.” Parr, supra, 351 U.S. at 520.

This Court has repeatedly emphasized that man-
damus, which can have “the unfortunate consequence of
making the [district court] judge a litigant” — as is the
case here at least with the Hospitals’ petition — should
be restricted to extraordinary situations in order to imple-
ment the long-standing congressional policy against
piecemeal appellate litigation, “particularly in an era of
excessively crowded lower court dockets.” Kerr v. United
States District Court, 426 U.S. 394, 402-03 (1976) (unani-
mously upholding Ninth Circuit’s summary denial of
petition for writ of mandamus on alleged ground, as
here, that district court’s discovery order violated pur-
ported privilege). To that end, the party seeking the writ
must show that his right to it is “clear and indisputable.”
Id.

The Supreme Court has long refused to issue, or
order lower courts to issue, writs of mandamus to control
or reverse the discretionary acts of district courts. Ex parte
Bradley, 7 Wall. 364 (1863); Ex parte Parker, 120 U.S. 737
(1887). Because the district court was exercising power
within its zone of discretion, the Supreme Court more
recently went out of its way to reverse the issuance of
writs of mandamus by courts of appeal in Will v. Calvert
Fire Insurance Co., 437 U.S. 659 (1978), and Allied Chemical
Corp. v. Daiflon, Inc., 437 U.S. 659 (1978). These cases
underscore the important policy against using mandamus
and other extraordinary writs as a means to obtain appel-

late review of non-appealable interlocutory orders.

11

The Ninth Circuit followed its own case law, which is
to similar effect as the foregoing Supreme Court cases,
when it summarily refused to overturn the district court’s
interlocutory discovery by writ of mandamus. It was
clear enough even under the Circuit’s law that petitioners
did not even come close to making a case for the extraor-
dinary relief they sought.

The U.S. Supreme Court’s even stronger statements
of reluctance to use or order use of the writ adds a further
barrier that petitioners cannot possibly overcome. For
these petitions to be worthy of Supreme Court consider-
ation, they would have to make a plausible case not
merely that the district court was clearly erroneous and
abused its discretion in ordering discovery, but that the
Ninth Circuit was, itself, clearly erroneous and abused its
discretion by not using mandamus to reverse the district
court.

Petitioners have not made such showing — on either
level of inquiry. Their presentation here and below of the
apparent division of authority concerning the legal issue
they want this Court to leap to decide constitutes a con-
clusive admission that their petitions do not present even
an arguable case for mandamus to be ordered by this
Court after full review.

The Ninth Circuit’s order summarily denying man-
damus cited, without comment, Bauman v. United States
District Court, 557 F.2d 650, 654 (9th Cir. 1977), which
holds, inter alia, that mandamus will not lie unless the
district court’s decision (a) was “clearly erroneous as a
matter of law”; and (b) involved an important issue of

first impression. Petitioners admit that they cannot satisfy

12

the first prong of this test, and they come close to admit-
ting that they cannot satisfy the second prong.

Thus petitioners admit there is ample authority,
albeit they disagree with it, supporting the district court’s
refusal to apply the California “privilege” (discovery pro-
hibition) in federal question cases such as this one. This
presumptively means the district court’s decision cannot
have been clearly erroneous as a matter of law. See cases
discussed in Hospital Pet. 17-18; 20-23 (privilege “has had
an ambiguous existence, neither uniformly adopted nor
rejected” — at p. 21)) and Schug Pet. 13-16 (“the circuit
courts have not treated the medical peer review privilege
uniformly” — at p. 13).

Petitioners’ presentations of pro and con cases in
these sections of their brief are not as even-handed as
they appear because the actual weight of federal on the
medical peer review privilege tilts substantially further
against it than petitioners’ skewed case selection sug-
gests. Nevertheless, petitioners have presented enough
federal authority contra the privilege to foreclose the
argument that the district court’s order was clearly erro-
neous or an abuse of discretion.

Of course, the only reason petitioners were even-
handed to any extent was their understandable desire to
convince this Court that there is a sufficiently material
difference of opinion in the lower courts to warrant
Supreme Court review under the “conflict” criterion for
certiorari. But, again, they have tried to leap a vast can-
yon in two successive jumps. The primary issue pre-
sented by this case, as opposed to the theoretical case

13 ::

petitioners would like to generate for the Court’s consid-
eration, is whether the district court abused its discretion
and whether the Ninth Circuit further abused its own
discretion in not ruling, by mandamus, that the district
court abused its discretion.

Petitioners are apparently correct that none of the
published privilege cases to date (the instant district
court opinion is unpublished just like the Ninth Circuit's
order) has arisen under the particular federal law —
EMTALA — at issue here. But that does not indicate that
any truly novel issue of first impression is presented that
would justify the extraordinary remedy of mandamus. In
light of the breadth of federal question cases in which the
purported peer review privilege has been discussed _—
and mostly denied application — no particular novelty or
new analysis is required merely because EMTALA is the
federal law involved here. Indeed, the claimed privilege
under EMTALA is on all fours with a similar privilege
claim under another federal statute, the Health Care
Quality Improvement Act of 1986, which has been
definitively rejected by at least six federal courts (indi-
cated by parenthetical references to HCQIA in case list
below).

Under Ninth Circuit authority, the absence of clear
legal error was, alone, fatal to their request for man-
damus. Calderon v. United States District Court, 98 F.3d
1102, 1105 (9th Cir. 1996); Survival Systems of Whittaker
Corp. v. United States District, 825 F.2d 1416, 1418 n.1 (9th
Cir. 1987) (the novelty ov first impression test is irrelevant
where no showing that court below was clearly erro-
neous). As Ninth Circuit Judge Dorothy Nelson points
out in the leading Ninth Circuit practice guide: “[E]ven in

14

privilege cases, the court usually will intercede by man-
damus only where petitioner can demonstrate clear error.
See Heathman v. United States District Court, 503 F.2d 1032,
1035 (9th Cir. 1974) (petition denied where no clear error);
In re Grand Jury Subpoena Issued to Bailin, 51 F.3d 203, 206
(9th Cir. 1995)...” Nelson, Goelz & Watts, Ninth Circuit
Civil Appellate Practice, Sec. 13:168, p. 13-22.

That the district court’s refusal, in this EMTALA case,
to accord petitioners the benefit of California’s peer
review privilege is contrary to no published precedent by
itself indicates, under Ninth Circuit authority, that the
court’s action cannot have been clearly erroneous. See
Wilson v. United States District Court, 103 F.3d 828, 830 (9th
Cir. 1996). Particularly when there is no contrary Ninth
Circuit authority, and the ruling is consistent with deci-
sions in other circuits, as the district court’s was, the clear
error standard cannot be met. King v. United States District
Court, 16 F.3d 992, 993 (9th Cir. 1994).

While petitioners’ effective admissions that the dis-
trict court’s order was neither an abuse of discretion nor
clearly erroneous should be sufficient to foreclose man-
damus and thus require denial of certiorari, we emphas-
ize that petitioners’ briefs present a misleading
impression that the weight of legal authority pro and
contra their position is more or less the same. In fact,
federal privilege law is overwhelmingly hostile in general
to new privileges not recognized as part of the common
law in the original draft of the Federal Rules of Evidence
and, specifically, to the purported peer review privilege.

In University of Pennsylvania v. Equal Employment
Opportunity Commission, 493 U.S. 182, 110 S.Ct. 577 (1990),

15

a unanimous Supreme Court refused to recognize a state
law peer review privilege with regard to university fac-
ulty evaluations. The Court strongly reiterated the long-
standing rule that privileges are disfavored in federal
practice, and that any privilege must be strictly con-
strued, because “testimonial exclusionary rules and privi-
leges contravene the fundamental principle that ‘the
public ... has a right to every man’s evidence.’ ” 493 U.S.
at 189.

The Court considered all the arguments that peti-
tioners here present, i.e., that their interest in protecting
the confidentiality of sensitive peer review materials out-
weighs plaintiffs’ need for the evidence, that the evidence
sought can be obtained through other means, that doctors
(professors there) have relied on the privilege, and that it
is unlikely they would honestly evaluate their colleagues
in its absence. Id. at 192-93. The Court acknowledged that
these concerns have some merit, but bluntly decided that
the federal interest in remedying discrimination, and
revealing evidence related to that purpose, is more
important. Id.

Similarly, Congress’ concern, under EMTALA, to cur-
tail abuse of patients at hospital emergency rooms also is
presumptively more important. Indeed, this Court was
concerned that acceptance of the peer review privilege
for faculty evaluations “would also lead to a wave of
similar privilege claims by other employers who play
significant roles in furthering speech and learning in
society,” id. at 585 — a group that obviously includes
hospitals and doctors.

16

That Supreme Court decision both reflects, and fur-
ther encourages, the overwhelming tide of federal court
hostility to recognition both of the medical peer review
privilege specifically and, generally, of new privileges
that were unknown to prior federal common law but
which were sought to be imported from state law or even
from general legal scholarship. This true picture of the
landscape of the case law refutes petitioners’ hyperbolic
rhetoric that the district court’s unpublished order here
has caused some sui generis breach in the sanctity of a
universally-recognized (all 50 states, as both put it) peer
review privilege that doctors have, supposedly, long com-
fortably counted upon to exist and be enforced.

A partial list of federal cases refusing to apply the
medical peer review privilege to bar discovery follows.
(Cases, referred to above, that refuse to recognize the
peer review privilege under the Health Care Quality
Improvements of Act of 1996, a federal statute on all
fours with EMTALA, are noted in parentheticals as
“HCQUIA.”) Wei v. Bodner, 127 F.R.D. 91 (D.N.J. 1989),
(HCQUIA case); Robertston v. Neuromedical Center, 169
F.R.D. 80 (M.D. La. 1996) (HCQUIA); Pagano v. Oroville
Hospital, 145 F.R.D. 683 (E.D. Cal. 1993) (HCQUIA);
LeMasters v. Christ Hospital, 791 F.Supp. 188, 191 (S.D.
Ohio 1986) (HCQUIA); Manthe v. Vanbolden, 133 F.R.D.
497 (N.D. Tex. 1991) (HCQUIA); Teasdale v. Marin General
Hospital, 138 F.R.D. 691, 694 (N.D. Cal. 1991) (HCQUIA);
Robinson v. Magovern, 83 F.R.D. 79 (W.D. Pa. 1979); Ott v.
St. Luke Hospital, 522 F.Supp. 706 (E.D. Ky. 1981); Todd v.
South Jersey Hospital System, 152 F.R.D. 676, 683 (D.N.J.
1993); Memorial Hospital for McHenry County v. Shadur, 664
F.2d 1058, 1062-63 (7th Cir. 1981); United States v. Illinois,

17

148 ER.D. 587, 588-89 (N.D. Ill. 1993); Smith v. Alice Peck
Day Memorial Hospital, 148 F.R.D. 51, 56 (D.N.H. 1993);
Jiricko v. Coffeyville Memorial Hospital Medical Center, 700
F.Supp. 1559, 1564 (D. Kan. 1988); Doe v. St. Joseph's
Hospital, 133 F.R.D. 677, 680 (N.D. Ind. 1987); Quinn v.
Kent General Hospital, 617 F.Supp. 1226, 1245 (D. De.
1985); Schafer v. Parkview Memorial Hospital, 593 F.Supp.
61, 65 (N.D. Ind. 1984); Dorsten v. Lapeer County General
Hospital, 88 F.R.D. 583, 586 (E.D. Mich. 1980).’

1 A similar tide of federal authority has rejected federal
application of state privileges in cases other than medical peer
review. A by no means exhaustive list includes: United States v.
Wilson, 960 F.2d 48, 50 (7th Cir. 1992) (refusing to apply state
unemployment claims privilege); In re Grand Jury Proceedings, 5
F.3d 397, 402-03 (9th Cir. 1993) (no to state privilege for votes on
academic promotions); In re International Horizons, Inc., 689 F.2d
996, 1004-05 (11th Cir. 1982) (no to state accountant-client
privilege); FTC v. TRW, 628 F.2d 207, 210 (D.C. Cir. 1980) (no to
self evaluation privilege against federal agency subpoena);
Memorial Hospital for McHenry County v. Shadur, 664 F.2d 1058,
1061 (7th Cir. 1981) (no to state medical peer review privilege;
Hancock v. Dodson, 958 F.2d 1367, 1373 (6th Cir. 1992) (no to state
doctor/patient privilege); United States v. One Parcel of Property
Located at 31-33 York Street, 930 F.2d 139 (2d Cir. 1991) (no to state
privilege re erased arrest records); Sexton v. Poole Truck Lines,
Inc., 888 F.Supp. 127 (M.D. Ala. 1994) (no to state privilege re
sealed driving records); Equal Employment Opportunity
Commission v. Illinois Dep’t of Employment Security, 995 F.2d 106,
109 (7th Cir. 1993) (no to state privilege re unemployment
hearings); Linde Thomason Langworthy Kohn & Van Dyke, P.C. v.
Resolution Trust Corporation, 5 F.3d 1508, 1514-15 (D.C. Cir. 1993)
(no to state insured-insurer privilege); Dowling v. American
Hawaii Cruises, Inc., 971 F.2d 423 (9th Cir. 1992) (no to state
privilege for safety review meetings).

Een OEE EN nonce NneLE Te

18

To be sure, petitioners here, as below, purport to rely
upon some of these same cases by attempting to distin-
guish them as being only apparently adverse authority.
Their theory is that in listed cases where the gravamen
was not, at least directly, improper patient care — e¢.g.,
antitrust or discrimination cases — discovery notwith-
standing the state peer review privilege could be justified
because these purported violations happened “in” the
peer review process itself, as opposed to the’ violations
merely being analyzed by the peer review process.

This argument is unpersuasive for two reasons. First,
regardless of the purported distinction, the upshot is that
court after court has ordered discovery of peer review
information. No matter what the theory, such discovery
obviously is so common that no reasonable doctor could
truly have relied on the supposed immunity from discov-
ery of peer review records. Yet this frequent knowledge
and fact of discovery has not caused the medical care
system to collapse as the petitions say will happen
because of the discovery ordered in this case.

Second, as we showed in the Statement of the Case,
the purported distinction between those cases and the
instant case does not actually exist. Or, even if it does
arguably exist, that issue is not fit for review by the
Supreme Court.

The primary ground for the district court’s order, as
we explained, was that sufficient evidence supported
plaintiff’s contention that relevant misconduct did happen
“in” the peer review process itself. That alone takes the
case out of the fact pattern petitioners have invented in
their attempt to obtain certiorari. (That pattern, again, is

19

one where the peer review records contain nothing more
than straight commentary by doctors about each other’s
performance). This determination by the district court
was based upon its knowledge of the record in this case,
which is a matter especially within its zone of discretion.
It probably would not be appropriate for Supreme Court
review even on a properly presented appeal after final
judgment. It certainly is not appropriate for Supreme
Court intervention on an interlocutory basis.

B. There Is No Intercircuit Split On the Question
Whether A Party Who is Not the Target of Dis-
covery In a Civil Case Has The Right to Auto-
matic Appeal Of An Interlocutory Discovery
Order Directed At Another Party, Particularly
Where the Other Party Is Able and Motivated to
Contest the Discovery Order Itself, Whether By
Petition for Mandamus, as Has Already
Occurred Here, Or Subsequently By Suffering
Contempt and Then Appealing the Contempt
Ruling.

Although the Hospitals’ and Schug’s petitions for
mandamus were and are unmeritorious, defendants were
entitled to bring them and to make their arguments to the
Ninth Circuit and to the Supreme Court. Those petitions
did not halt all progress in the litigation of the civil suit in
the district court. Although the Ninth Circuit issued a
stay, which remains in effect, of the order for discovery of
the peer review records, that did not prevent any other
case proceedings from going forward in the district court.

20

But Schug’s separate appeal was fraudulent miscon-
duct from the beginning, which has now been exacer-
bated by a fraudulent presentation to this Court of an
entirely nonexistent “intercircuit split” in the authority
applicable to interlocutory appeals of discovery orders in
civii cases. This improper appeal had, and continues to
have, precisely the devastating “freezing” effect on the
entire civil case, prevention of which is the underlying
rationale for the important statutory and case law policy
against piecemeal interlocutory appeals. The appeal,
unlike the mandamus petitions, caused the case file to be
transferred from the district court to the Ninth Circuit,
thereby depriving the district court of jurisdiction to
move the case forward through remaining motions to a
trial date. This freeze has lasted for a year now, and will
continue while the certiorari petition as to the appeal is
pending.

28 U.S.C. Sec. 1291 gives the courts of appeal jurisdic-
tion over appeals solely from final decisions of district
courts, which do not include interlocutory discovery
orders. Section 1292(b), however, provides a discretionary
avenue to obtain immediate appellate relief from an
allegedly oppressive discovery (or other) order: Asking
the district court to certify the order for immediate
appeal.

Schug omits from his fact statement the crucial infor-
mation that his trial court law firm did file a motion,
including memorandum of law, on June 1, 1998 for Sec.
1292(b) certification of the district court’s order. See
excerpt from district court docket sheet, attached hereto
as App. A. However, the attorney in the firm who filed
those papers apparently was unaware that a different

21

attorney in the firm had been told by the district judge at
a status conference three days earlier that if such motion
were presented, the court would not be inclined to grant
it. See declaration of respondents’ counsel, attached
hereto as App. B. This information induced Schug’s coun-
sel on June 4, 1998 to withdraw the motion for Sec.
1292(b) certification. See App. A.

But instead of the withdrawal’s terminating inter-
locutory appellate proceeding in this case, Schug’s coun-
sel, despite obvious awareness that discretionary
certification was the proper and sole remedy for immedi-
ate relief, replaced their certification motion with a notice
of appeal as of right under Sec. 1291. See App. A (entry
for June 3, 1998). They persist in that improper venture to
this very day.

Not a single case cited in Schug’s petition (pp. 21-26)
supports the theory that a party in a civil case has a right
to automatic interlocutory of a discovery order that sup-
posedly affects him, but which is directed at another
party in the same case who holds the documents and
other information sought. Moreover, such interlocutory
appeal is particularly inappropriate where, as here, the
other party is fully motivated to contest the order and is
indeed vigorously contesting the order. Such an appeal,
which violates basic black letter federal doctrine against
piecemeal appeals, is not supported by Perlman v. United
States, 247 U.S. 7 (1918), or any other authority.

The Ninth Circuit summarily dismissed the appeal

based on its own prior authority, In re National Mortgage

22

Equity Corp., 857 F.2d 1238 (9th Cir. 1988), which
explained why neither Perlman nor any other case sup-
ports a right to appeal a civil discovery order in that
situation. This Ninth Circuit decision, however, broke no
new ground nor is it contrary to any case from any other
circuit.

The Ninth Circuit explained that it, like the Supreme
Court and some other circuits, had previously permitted
interlocutory appeals by parties who claimed potential
adverse impact of disclosures by a third party, one not a
party to any ongoing civil case, who had been served
with a grand jury subpoena. 857 F.2d at 1240, citing
Gravel v. United States, 408 U.S. 606, 608 n.1 (1972); In re
Grand Jury Proceeding (Schofield), 721 F.2d 1221 (9th Cir.
1983); In re Grand Jury Subpoena Duces Tecum (Marger), 695
F.2d 363 (9th Cir. 1982); In re Gren, 633 F.2d 825 (9th Cir.
1980); Harris v. United States, 413 F.2d 316 (9th Cir. 1969).

The Ninth Circuit also cited, and endorsed, a differ-
ent basis for immediate appeal “where the aggrieved
party’s motion or petition is the only pending proceeding
in any federal court,” a situation that, of course, does not
exist where that party opposes a discovery order directed
at another party in an ongoing civil case. See 857 F.2d at
1240, citing Eastland v. U.S. Servicemen’s Fund, 421 U.S.
491, 514 (1975) (motion in district court to quash U.S.
Senate subpoena directed at third party); Go-Bart Import-
ing Co. v. United States, 282 U.S. 344, 356 (1931) (no
criminal case pending when motion was made); Burdeau
v. Powell, 256 U.S. 465 (1921) (same); and several other
cases to the same effect.

23

The Ninth Circuit’s opinion cast no doubt on the
viability of all these cases as applications of the so-called
Perlman exception to non-appealability of interlocutory
discovery orders or subpoenas, contrary to Schug’s pre-
posterous claim that the opinion construes the exception
so narrowly that it “essentially eliminates” it. (Schug Pet.
22.) Rather, the Ninth Circuit correctly explained that a
case like the instant one is fundamentally different:

“The reason for allowing [interlocutory]
review of such orders in the grand jury context
is that there are aspects of independence from
the main course of any prosecution that render
the order collateral. .. . We are persuaded that
any aspect of independence is lost in an ongoing
civil case where a party is aggrieved by a dis-
trict court discovery order. The essential charac-
ter of any litigation over a discovery order and
the circumstances under which the order is
issued, as in this case, render it merely a step in
the civil proceeding.” 857 F.2d at 1240.

All the cases cited in Schug’s petition, from every
circuit, are entirely consistent with the Ninth Circuit's
endorsement of immediate appealability (the “Perlman
exception”) in the instances described, while recognizing
that its rationale does not extend to discovery orders
directed at civil litigation parties. Tne most thorough
explanations are two First and Second Circuit opinions
that Schug cites for some peculiar reason, even though
they definitively reject his precise argument for automatic
right of appeal.

In Corporacion Insular De Seguros v. Garcia, 876 F.2d
254 (1st Cir. 1989), the court explains why it rejected a
party’s claim that the Perlman case gave him the right to

24

appeal a discovery order directed at another party. Id. at
258-59. The First Circuit relied upon Judge Friendly’s
opinion in National Super Spuds, Inc. v. New York Mercan-
tile Exchange, 591 F.2d 174, 178 (2d Cir. 1979), the other
case cited by Schug.

Judge Friendly gave perhaps the most thorough
explanation extant of why the Perlman case has nothing to
do with discovery orders in civil cases. The point is very
simple, but Schug muddles it by making a crucial error in
describing the key facts in Perlman.

Schug’s petition claims the grand jury subpoena to
which Mr. Perlman objected was directed at his “book-
keeper.” Schug Pet. 22. The implication is that even
though the bookkeeper was not a party to ongoing civil
litigation, the situation was sufficiently similar to the
relationship between doctor and hospital that if Perlman
could take an interlocutory appeal, despite that he was
not the target, then so should Schug.

But the subpoena was not directed at Perlman’s
“bookkeeper”! Rather, it was directed at the clerk of the
U.S. District Court in New York who was holding some
sensitive documents of Perlman’s company that had been
exhibits in a prior proceeding. 247 U.S. at 8-10. The whole
point of the Perlman case was that a subpoena directed to such
a completely uninvolved and obviously unmotivated and disin-
terested third party created a special situation because such
person would have no wish or motive to contest it on behalf of
the party who might be injured by the disclosure. That is why
the First Circuit in Corporacion Insular, and Judge Friendly
in National Super Spuds, distinguished Perlman “as a
‘unique case’ in which there was no relation between the

25

holder of the privilege (Perlman) and the target of the
court’s order (the clerk of the district court).” 876 F.2d at
259; 591 F.2d at 180.2

In sharp contrast, where a relationship — whether of
employment, self-interest, or otherwise — does exist, the
target of the subpoena “may reasonably be expected to
risk a contempt citation in order to preserve both his own
and his employer’s right to appellate review of their joint
claim of privilege.” 876 F.2d at 260. Judge Friendly
expounded at greater length to the same effect. See 591
F.2d at 179-180.

These opinions, though they do not cite it, were in
fact following the Supreme Court’s decision in United
States v. Ryan, 402 U.S. 530 (1971). This Court explained
that the basic rationale of Perlman was that “the custodian
[of Perlman’s records] could hardly have been expected
to risk a citation for contempt in order to secure Perlman
an opportunity for judicial review.” Id. at 533.

That situation is so far removed from the instant case
as to render Schug’s petition on the appeal simply
absurd. It would be difficult to imagine a more motivated
and effective subpoena or discovery order target, both in
theory and in fact, than the Hospital petitioners herein. In
theory, because they obviously have an even broader and

2 The court in Corporacion Insular also explains why Schug’s
citation to Nixon v. Sirica, 487 F.2d 700, 707 (D.C. Cir. 1973), is
irrelevant. The reason, of course, is the obvious one: “But Nixon
was a unique case, and we do not believe that the court meant to
extend it to any government official other than the President
himself.” 876 F.2d at 257, citing In re Attorney General of the
United States, 596 F.2d 58, 62 (2d Cir. 1979).

26

more profound claimed interest than Schug in the confi-
dentiality of their records. He alleges potential embar-
rassment to himself alone. But no matter how bad that
- might be, it hardly can compare with the Hospital’s
sweeping claim that discovery will destroy the entire
system of peer review that it alleges is fundamental to its
services.

The Hospital also is motivated and effective in fact
because it has indeed vigorously pursued its mandamus
petition, sparing no effort or legal expense. Whether it
will suffer contempt in order to obtain further appellate
review (on a legitimate basis this time) remains to be seen.
But Dr. Schug cannot plausibly say that the Hospital is
less than fully motivated and capable of doing so.

All of Schug’s remaining citations similarly fail to
support either his substantive argument or his argument
for certiorari based on purported intercircuit conflict. We
dispose of them briefly.

Boughton v. Cotter Corp., 10 F.3d 746 (10th Cir. 1993),
is perhaps Schug’s strangest citation because its flat rejec-
tion of interlocutory appeal of the discovery order in that
civil case is entirely consistent with the Ninth Circuit’s
same holding in In re National Mortgage Equity Corp.,
supra, and thus in the instant case as well. The courts cite
numerous other cases, also consistent with the Ninth
Circuit, noting that “in virtually every case in other cir-
cuits involving similar attorney-client privilege claims,
the courts have refused to take [appellate] jurisdiction.”
10 F.3d_at 749-50.

>

27

Even more remarkably, the Tenth Circuit in Boughton
delivers the coup de grace to Schug’s misconceived the-
ory that the Perlman exception permits his immediate
appeal. The court observed that defendants there did
“not [even] rely on Perlman and deny application of these
[grand jury subpoena cases], arguing that they involve
grand jury criminal investigations”! Id. at 749-50 n.2.
Schug’s attorneys should have had the integrity to take
the same position instead of vainly pursuing their
improper appeal.

In re Grand Jury Investigation of Ocean Transportation,
604 F.2d 672 (D.C. Cir. 1979), was not only a grand jury
case just like those distinguished by the Ninth Circuit,
and every other circuit, from ongoing civil litigation, but
the privilege, even if it had once existed, had been effec-
tively waived. In re Faltico, 561 F.2d 109 (8th Cir. 1977),
similarly involved a grand jury subpoena directed at a
non-party “who could not be expected to expose himself
to the penalty of contempt in order to obtain appellate
review,” precisely because his non-party status gave him
no particular stake in the litigation or interest in the
aggrieved party’s complaint about the discovery. Schwim-
mer v. United States, 232 F.2d 855, 860 (8th Cir. 1956), was
by Schug’s own description a similar grand jury sub-
poena directed at non-party with no interest in resisting
it. Similarly, all the cases cited in footnotes 30, 31, 32, and
36 of Schug’s petition (p. 24) are also grand jury sub-
poena cases, are entirely consistent with the Ninth Cir-
cuit’s decision on which dismissal of the instant appeal
was based, and are thus irrelevant because they establish
no “intercircuit conflict.”

:
en nee

28

The subpoena in Covey Oil Co. v. Continental Oil Co.,
340 F.2d 993 (10th Cir. 1965), was indeed issued in a civil
case, but it went to a non-party witness. Schug overlooks
that this makes that case quite different from the instant
case. The non-party target of the subpoena there was the
very one who brought the appeal, unlike Schug who
claims the right to appeal even though he is not the target
of the discovery. Id. at 996. It was the combination of
being both a non-party and the target that created the
right to appeal: “The appellants, as nonparties to the
main suit, will have no right to appeal from a judgment
therein. The trial court’s order [will be] final as to these
appellants.” Id.

Finally, Branch v. Phillips Petroleum Co., 638 F.2d 873,
877-78 (5th Cir. 1981), is irrelevant because it involved the
distinguishable situation of the Government’s special
right to interlocutory appeal in some discovery contexts.

Accordingly, the law on the appeal matter is settled,
it is consistent throughout the nation, there certainly is no
“intercircuit conflict,” and Schug’s argument in this part
of his petition is utterly without merit, either as to worth-
iness for certiorari or as to legal substance.

29

Ill.
CONCLUSION

For the reasons given above, the petitions for cer-
tiorari should be denied.

Dated: May 5, 1999

Respectfully submitted,

Law Orrices Or JAMES BRADEN

JAMES BRADEN

44 Montgomery Street, Suite 1210
San Francisco, CA 94104

(415) 398-6865

Counsel for Respondents

A-l

APPENDIX A

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

DAVID BURROWS, et al.

Plaintiff(s),
(Petitioner)

Court of Appeals
Docket No. 98-70610

Docket Number(s) of
Court of Appeals

)
)
)
)
V. )
Companion and/or
REDBUD COMMUNITY ? Cross Appeals (if
HOSPITAL DIST., et al. known) 98-70616
)
)
)
)
)

Defendant(s),
(Respondent)

District Court Docket
Number C 96-4345 SI

Date Transcript(s) Filed:
no transcripts designated

CERTIFICATE OF RECORD

This certificate is submitted in conformance with
Rule 11-2 of the Local Rules of the U.S. Court of Appeals
for the Ninth Circuit. The record on appeal, consisting of
the trial transcript (if any) and the trial court clerk’s
record, is ready for the purposes of the appeal. This
record is available in the Clerk’s Office of the U.S. District
Court identified below.

The documents comprising the trial court clerk’s

record have been numbered in conformance with Rule
11(b) of the Federal Rules of Appellate Procedure. These
document numbers are reflected on the U.S. District
Court docket sheet and should be used for reference
purposes in the briefs.

A-2

The actual filing date for this document in the U.S.
Court of Appeals will initiate the briefing schedule in
civil cases (including habeas corpus cases). All parties in
civil cases will receive separate notification of this filing
date. In criminal cases, the briefing schedule is set by a
Time Schedule Order from the U.S. Court of Appeals.

DATED: July 16, 1998 RICHARD W. WIEKING
Office of the CLERK
Clerk /s/ Cora G. Delfin

U.S. District Court
Northern District of
California

450 Golden Gate

Ave., Box 36060

San Francisco, CA 94102

by: Cora Delfin
Deputy Clerk

~~ ee

A-3
. Proceedings include all events.
. 3:96cv4345 Burrows, et al. v. Redbud Community
Hos, et al.
APPEAL

| 6/1/98 161 NOTICE by defendant Dr. Wolfgang Schug’s
request for certification of order for appeal.
[3:96-cv-04345] (cgd) [Entry date 06/03/98]

6/1/98 162 MEMORANDUM OF POINTS AND
. AUTHORITIES by defendant Wolfgang
: Schug in support of notice [161-1] [3:96-
, cv-04345] (cgd) [Entry date 06/03/98]

6/3/98 163 LETTER dated 6/1/98 from John S. Gilmore
for Adventist Health Inc in response to let-
ter from plaintiff's counsel dated 5/26/98.
[3:96-cv-04345] (cgd) [Entry date 06/05/98]

6/3/98 164 LETTER dated 6/2/98 from Redbud Com-
munity Hospital District in response by
plaintiff’s attorney, Richard Massa dated
5/26/98. [3:96-cv-04345] (cgd) [Entry date
06/05/98}

6/3/98 165 MINUTES: (C/R N/A) ( Hearing date:
5.29.98) Further case management confer-

- ence — Held. Motion for leave to file
amended complaint —- Submitted. Discovery

cutoff extended to 7/24/98; Expert Discov-

ery cutoff extended to 6/26/98. Motion for

leave granted and plaintiff to file amended

complaint next week; request for order
shortening time submitted; Defendants to

respond to submitted letter not later than

6/2/98. Court to issue order re 1157 issues;
Defendants request for one

[Boldface emphasis added by respondents]

6/3/98 171

6/4/98 166

6/4/98 167

6/4/98 168

6/4/98 169

6/4/98 170

A-4

week continuance for expert disclosure
granted. [3:96-cv-04345] (cgd) [Entry date
06/05/98]

NOTICE OF APPEAL by defendant Wolf-
gang Schug, M.D., defendant JJ&R Emer-
gency Mgmt (sued erroneously as
Emergency Medical Management Services,
Inc. from Dist. Court decision order dated
5/5/98 [154-1] Fee status Paid, $105.00,
receipt no. 131499. [3:96-cv-04345] (cgd)
[Entry date 06/08/98]

LETTER dated 6/1/98 from Richard J.
Massa re possible use of jury instructions
discussed at the case mgmt conf. on
5/29/98. [3:96-cv-04345] (cgd) [Entry date
06/05/98}

LETTER dated 6/2/98 from Matthew P. Mil-
ler re discovery disputes. [3:96-cv-04345]
(cgd) [Entry date 06/05/98]

LETTER dated 6/3/98 from Sonja M. Dahl
to Mr. Massa. [3:96-cv-04345] (cgd) [Entry
date 06/05/98]

LETTER dated 6/4/98 from Thomas J. Don-
nelly for Redbud Community Hospital re a
petition for writ be filed with the Appellate
Court regarding the Evidence Code 1157
issues. [3:96-cv-04345] (cgd) [Entry date
06/05/98]

NOTICE by defendant of withdrawal of
request for certification. [3:96-cv-04345]
(cgd) [Entry date 06/05/98]

Docket as of July 16, 1998 11:47 a.m.
[Boldface emphasis added by respondents]

BP eet gt oe

B-1

APPENDIX B

MASSA & ASSOCIATES

Attorneys At Law Telephone: (707) 262-0230
120 North Forbes Street Fax: (707) 262-1028
Lakeport, California 95453

January 15, 1999
DECLARATION OF RICHARD J. MASSA

I, RICHARD J. MASSA, declare:

I am an attorney at law admitted to practice before
the United States District Court for the Northern District
of California and the Ninth Circuit Court of Appeals, am
the attorney of record and primarily responsible for fil-
ing, preparation and trial of the case of Burrows, et al., v.
Redbud Hospital, et al., No. C-96-4345 SI, in the United
States District Court, Northern District of California.

I have been personally present at every hearing and
conference held on this matter in the trial court, speci-
fically including the Case Management Conference of
May 29, 1998, held before the Honorable Susan Illston,
District Judge.

At no time during the May 29, 1998, Case Manage-
ment Conference, or at any other time, in my presence or
to my knowledge, did Judge Illston “instruct” defendant
SCHUG, et al., or counsel for defendant SCHUG, et al., to
“withdraw” a request for certification of any order for

appeal.

With regard to the Case Management Conference
held in this matter on May 29, 1998, the only relevant

B-2

comment of Judge Illston with regard to this matter that
declarant recalls was to the effect that if a request for
certification were to be made, the Court would not be
inclined to grant such a request.

I declare under penalty of perjury under the laws of
the State of California that the foregoing is true and

correct.

DATED: January 15, 1999 /s/ Richard J. Massa
RICHARD J. MASSA

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1473%3A3. Public record. Not legal advice.