Physician Recruitment Agreements and Protections Under Litigation and Common Interest Privileges: Fall 2024

There are some common pitfalls with physician recruitment agreements, particularly in outlying, rural communities where newly licensed physicians are not likely to set up a practice without incentives. Problems can arise when a recruited physician turns out to be less successful than anticipated and the contractual relationship deteriorates. This is demonstrated in a recent case, Dignity Health v. Mounts (Sep. 18, 2024, B325563) In the underlying matter, respondent Dignity Health dba French Hospital Medical Center (“Dignity”) filed its complaint against Troy I. Mounts, M.D. (“appellant”), an orthopedic surgeon, to recover an advance paid to appellant under their Physician Recruitment Agreement. Appellant filed a cross-complaint alleging Dignity retaliated against him for complaining about the quality of patient care, interfered with his prospective economic opportunities and engaged in unlawful business practices. Dignity filed an anti-SLAPP motion to strike the cross complaint. (Code Civ. Proc., § 425.16.) The trial court denied the motion, but the Court of Appeal reversed the trial court’s order and remanded the matter and advised the trial court to determine whether appellant had demonstrated a probability of prevailing on the merits of his claim. Following remand, the trial court concluded appellant had not demonstrated a probability of prevailing because Dignity’s actions were subject to the litigation privilege (Civ. Code, § 47, subdivision (b)), the common interest privilege (id., subd. (c)) and were barred by the applicable statute of limitations. The trial court therefore granted the motion to strike appellant’s cross-complaint and ordered appellant to pay Dignity’s attorney fees and costs. Appellant contended the trial court erred and the matter was appealed again. In its recent decision, theCourt of Appeal (2nd District) affirmed the trial court’s ruling and agreed appellant had not demonstrated a probability of prevailing.

-B. Thomas French

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