State of New York OPINION
Court of Appeals This opinion is uncorrected and subject to revision
before publication in the New York Reports.
No. 81
Dr. Robert D. Haar, M.D.,
Appellant,
v.
Nationwide Mutual Fire Insurance
Company,
Respondent,
et al.,
Defendants.
Gregory Zimmer, for appellant.
Ralph J. Carter, for respondent.
New York Insurance Association, Inc., et al., Coalition Against Insurance Fraud et al.,
amici curiae.
STEIN, J.:
The United States Court of Appeals for the Second Circuit has certified the
following question to this Court: “Does New York Public Health Law [§] 230 (11) (b)
create a private right of action for bad-faith and malicious reporting to the Office of
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Professional Medical Conduct?” (918 F3d 231, 235 [2d Cir 2019]). Because there is no
indication that the legislature intended to create a private right of action in section 230 (11)
(b), we answer the certified question in the negative.
Plaintiff, an orthopedic surgeon licensed to practice medicine in New York, treated
four patients who were injured in automobile accidents and insured by defendant
Nationwide Mutual Fire Insurance Company. Plaintiff submitted claims to defendant in
connection with each patient, and defendant either fully or partially denied each claim.
Defendant thereafter filed complaints with the Office of Professional Medical Conduct
(OPMC) alleging insurance fraud. After an investigation, OPMC declined to impose any
discipline against plaintiff. Plaintiff then commenced this action, asserting that defendant’s
complaints to OPMC lacked a good-faith basis in violation of Public Health Law § 230
(11) (b), and interposed a separate cause of action for defamation.
Defendant removed the action to federal court and moved to dismiss the complaint,
arguing that Public Health Law § 230 (11) (b) did not expressly or impliedly provide
plaintiff with a right of action and that the defamation claim was time-barred. The United
States District Court for the Southern District of New York granted defendant’s motion to
the extent of dismissing the cause of action premised on section 230 (11) (b). Relying on
its prior decision in Lesesne v Brimecome (918 F Supp 2d 221 [SD NY 2013]), the District
Court opined that, if presented with the issue of whether Public Health Law § 230 (11) (b)
implies a private right of action, this Court would hold that it does not. The District Court
subsequently concluded that plaintiff’s defamation cause of action was time-barred.
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Plaintiff appealed. Recognizing an Appellate Division split regarding whether
Public Health Law § 230 (11) (b) implies a private right of action (compare Ahmed
Elkoulily, M.D., P.C. v New York State Catholic Healthplan, Inc., 153 AD3d 768, 771-
772 [2d Dept 2017]), with Foong v Empire Blue Cross & Blue Shield, 305 AD2d 330, 330
[1st Dept 2003]), the Second Circuit certified the above question, which this Court accepted
(32 NY3d 1211 [2019]).
Public Health Law § 230 governs professional medical misconduct proceedings.
Section 230 (11) sets forth the procedures for reporting “information . . . which reasonably
appears to show that a licensee is guilty of professional misconduct,” as defined by the
Education Law (Public Health Law § 230 [11] [a]). To that end, the statute requires that
certain organizations and licensees report suspected medical misconduct, although the
statute also permits “any other person” to submit complaints to OPMC (Public Health Law
§ 230 [11] [a]). The provision at issue in this case states that “[a]ny person, organization,
institution, insurance company, osteopathic or medical society who reports or provides
information to [OPMC] in good faith, and without malice shall not be subject to an action
for civil damages or other relief as the result of such report” (Public Health Law § 230 [11]
[b]).
As plaintiff concedes, Public Health Law § 230 (11) (b) does not expressly create a
cause of action authorizing licensees to commence civil litigation against a complainant
that files an allegedly bad-faith and/or malicious report with OPMC (compare Public
Health Law § 230 [10] [j] [creating an express right to commence a CPLR article 78
proceeding in certain instances]). Consequently, “recovery may be had . . . only if a
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legislative intent to create such a right of action is fairly implied in the statutory provision[]
and [its] legislative history” (Brian Hoxie’s Painting Co. v Cato-Meridian Cent. School
Dist., 76 NY2d 207, 211 [1990] [internal quotation marks omitted]; see Sheehy v Big Flats
Community Day, 73 NY2d 629, 633 [1989]; see also Cruz v TD Bank, N.A., 22 NY3d 61,
70 [2013]; Hammer v American Kennel Club, 1 NY3d 294, 299 [2003]; Uhr v East
Greenbush Cent. School Dist., 94 NY2d 32, 38 [1999]; Carrier v Salvation Army, 88 NY2d
298, 302 [1996]). Stated differently, “[a]bsent explicit legislative direction, . . . it is for the
courts to determine, in light of [the statutory] provisions, particularly those relating to
sanctions and enforcement, and their legislative history, and of existing common-law and
statutory remedies, with which legislative familiarity is presumed, what the [l]egislature
intended” (Burns Jackson Miller Summit & Spitzer v Lindner, 59 NY2d 314, 325 [1983]).
We have consistently identified three “essential factors” to be considered in
determining whether a private right of action can be fairly implied from the statutory text
and legislative history: “(1) whether the plaintiff is one of the class for whose particular
benefit the statute was enacted; (2) whether recognition of a private right of action would
promote the legislative purpose; and (3) whether creation of such a right would be
consistent with the legislative scheme” (Sheehy, 73 NY2d at 633-634; see e.g. Cruz, 22
NY3d at 70; Carrier, 88 NY2d at 302). Critically, all three factors must be satisfied before
an implied private right of action will be recognized (see Pelaez v Seide, 2 NY3d 186, 200
[2004]). Applying these factors here, we conclude that the legislature did not intend to
create a right of action under Public Health Law § 230 (11) (b).
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Beginning with the first factor, plaintiff failed to demonstrate that he falls within the
class the legislature intended to benefit by enacting Public Health Law § 230 (11) (b).
Section 230 was first adopted, without subdivision (11), to facilitate resolution of medical
disciplinary proceedings (see Sponsor’s Mem, Bill Jacket, L 1975, ch 109 at 6).
Subdivision (11) was subsequently added and amended, providing “[a]ny person,
organization, institution, insurance company, osteopathic or medical society” with
immunity from civil litigation for making good-faith reports to OPMC (Public Health Law
§ 230 [11] [b]). On the face of this provision, there is no indication that the legislature
intended to benefit medical professionals accused of misconduct, as opposed to persons or
entities that report suspected medical misconduct.
Even if there were any ambiguity in the statutory text with respect to who the statute
was intended to benefit, the legislative history of section 230 (11) (b) could not be much
clearer on this point. The Sponsor’s Memorandum in support of the original version of
section 230 (11) (b) observed that “[t]he American Medical Association’s ad hoc
Committee on Medical Discipline ha[d] reported that one of the major problems for state
regulating boards [was] the reluctance of hospitals, medical societies, and physicians to
provide information concerning errant doctors, because of a fear of litigation” (Sponsor’s
Mem, Bill Jacket, L 1977, ch 773 at 6). In order “to alleviate that concern and to increase
the reports of unprofessional conduct to [OPMC],” section 230 (11) (b) was codified
specifically to afford “immunity from civil suit to all individuals, societies, and institutions
who provide information to [OPMC] in good faith” (id. [emphasis added]). In that regard,
the Sponsor’s Memorandum further observed that, “[w]hen Arizona enacted similar
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legislation, the number of complaints reported to [its] board quadrupled, and disciplinary
action became more effective.” Thus, the pertinent legislative history makes clear that
section 230 (11) (b) was not added to the Public Health Law to protect physicians, such as
plaintiff, accused of misconduct. Rather, that provision was intended to protect the public
from medical misconduct by encouraging reporting.
Nevertheless, plaintiff argues that, given the numerous procedural protections
afforded to doctors who are accused of misconduct, Public Health Law § 230 was generally
intended for their benefit. To be sure, as the legislature has amended section 230 over the
past 45 years, it has continuously grappled with how to balance an effective disciplinary
system for the medical profession with procedural due process. However, the fact that the
legislature has amended section 230 to provide procedural safeguards does not mean that
section 230 (11) (b), in particular, was designed to benefit medical professionals accused
of misconduct. A degree of procedural due process is afforded in all administrative
proceedings; therefore, to accept plaintiff’s argument essentially would be to conclude that,
in all administrative law contexts, the very parties or entities being regulated are, as a matter
of course, the intended beneficiaries of the statutes that regulate them. Inasmuch as the
text and legislative history of section 230 (11) (b) establish that, in order to encourage
increased reporting of unprofessional conduct, the legislature specifically sought to shield
complainants from liability by imparting a limited immunity from civil actions commenced
by regulated entities, plaintiff’s focus on the procedural due process protections generally
accorded to licensees subject to medical disciplinary proceedings is misplaced.
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Simply put, there is no indication that physicians accused of misconduct were the
intended beneficiaries of section 230 (11) (b). Thus, “the first, and perhaps most easily
satisfied, prong” for determining whether a statute implies a private right of action is not
satisfied in this case (Sheehy, 73 NY2d at 634).
Because plaintiff fails the first prong of our well-settled analysis, we must
conclude—regardless of our consideration of the other two factors—that there is no
implied right of action under Public Health Law § 230 (11) (b) (see Pelaez, 2 NY3d at 200).
In any event, plaintiff’s arguments with respect to the remaining two prongs fare no better
than the first. Regarding the second factor—“whether recognition of a private right of
action would promote the legislative purpose” of the statute (Sheehy, 73 NY2d at 633)—
plaintiff argues that the legislature’s intent in enacting Public Health Law § 230 (11) (b)
was, in part, to discourage bad-faith reporting. However, this position is belied by both the
text of the statute and the legislative history discussed above, which demonstrate that the
legislature’s goal was to increase reporting—nothing in either the text or legislative history
evinces legislative concern that OPMC was receiving too many reports. Nor does plaintiff
point to anything that would suggest that recognizing a private right of action would
discourage only bad-faith reporting. Thus, were this Court to recognize an implied right
of action, we would likely undermine the statutory purpose of section 230 (11) (b) by
increasing reporters’ exposure to liability, thereby potentially creating a spill-over or
chilling effect that could discourage good-faith reporting.
Essentially, plaintiff seeks to imply a private right of action based on negative
implication; he argues that the “good faith” language in Public Health Law § 230 (11) (b)
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implicitly recognizes that bad-faith reporting is actionable. However, this Court has
already rejected a similar argument in Cruz v TD Bank, in which we determined that there
was no private right of action in favor of the plaintiffs—judgment debtors whose bank
accounts were frozen—against the financial institution that failed to provide the plaintiffs
with certain forms required by statute (22 NY3d at 65, 72). There, the plaintiffs posited
that a provision in the relevant statute “explicitly saying that banks cannot be liable for
inadvertently failing to provide the[se] forms . . . signaled that financial institutions could
be liable for all other failures to comply with the statute, whether inadvertent or otherwise”
(id. at 72). We declined to infer a private right of action, reasoning that, “[i]f the legislature
intended to create new liability for banks, it is odd that it would choose to do so by
expressly stating that banks are not liable in particular circumstances while, at the same
time, remaining silent as to any instances when banks are liable under the new statute”
(id.). We observed that, “when interpreting a statute, courts typically do not rely on
legislative silence to infer significant alterations of existing law on the rationale that
legislative bodies generally do not ‘hide elephants in mouseholes’” (id., quoting Whitman
v American Trucking Assns., Inc., 531 US 457, 468 [2001]). We similarly reject plaintiff’s
argument here that the language of Public Health Law § 230 (11) (b) creates an implied
right of action by negative implication.
Moreover, as the parties agree, common law remedies exist, thereby undercutting
plaintiff’s argument that there is no other method of deterring bad-faith reporting. For
example, although the issue is not before us, the parties are in agreement that the very same
allegations that could support a cause of action under section 230 (11) (b), if one existed,
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might also support a defamation claim when the identity of the claimant is known. To the
extent the statutory text and legislative history of section 230 (11) (b) are silent regarding
a concern over bad-faith reporting, we can infer that the legislature was satisfied with
existing common-law remedies, “with which legislative familiarity [must be] presumed”
(Burns Jackson Miller Summit & Spitzer, 59 NY2d at 325).
The third and final factor of our analysis—“whether creation of such a right would
be consistent with the legislative scheme” (Sheehy, 73 NY2d at 633)—also militates
against recognition of an implied right of action. As highlighted above, the legislature
enacted Public Health Law § 230 (11) to encourage robust reporting, and the implied right
of action for which plaintiff advocates would diminish the effectiveness of this statutory
scheme. We further observe that, just as Public Health Law § 230 (11) (a) mandates that
certain organizations and licensees report suspected medical misconduct to OPMC, the
Insurance Law also requires insurance companies to report suspected insurance fraud to
OPMC (see Insurance Law § 5108 [c]; 11 NYCRR 68.8). Recognizing an implied right of
action in section 230 (11) (b) could discourage mandatory reporters from complying with
their statutory duties out of concern that even a good-faith report could spawn litigation
under that section. This result would be antithetical to the legislature’s clear objective.
Additionally, Public Health Law § 230 (11) (a) contains a confidentiality provision that
professional misconduct reports to OPMC “shall remain confidential and shall not be
admitted into evidence in any . . . judicial proceeding.” This rule was designed to further
encourage “those who were alleged victims of professional misconduct on the part of a
physician to come forward without fear of disclosure so that appropriate investigations
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might be pursued” (Matter of Barnette v Sobol, 83 NY2d 333, 338 [1994]). Although
licensees may in some cases, as here, be aware of or discern the complainant’s identity, the
confidentiality provision generally operates to prevent licensees from discovering the
identity of complainants and, consequently, pressing any civil claims against them (cf.
Matter of Barnette, 83 NY2d at 341 [holding that section 230 (11) (a) did not bar access to
written complaints for cross-examination purposes where the licensee “face(d) charges,
some of which were 15 to 20 years old, and the authors of the complaints ha(d) testified
and (were) already known to the physician”]). That the legislature did not contemplate
broad access to the identity of reporters is an additional indication that section 230 (11) (b)
was not intended to create a private right of action.
In sum, Public Health Law § 230 (11) (b) was not enacted for the benefit of persons
similarly situated to plaintiff, and a private right of action is inconsistent with the legislative
purpose and broader statutory scheme. Therefore, the statutory text and legislative history
do not imply a legislative intent to create a right of action under section 230 (11) (b).
Accordingly, the Second Circuit’s certified question should be answered in the negative.
* * * * * * * * * * * * * * * * *
Following certification of a question by the United States Court of Appeals for the Second
Circuit and acceptance of the question by the Court pursuant to section 500.27 of this
Court’s Rules of Practice, and after hearing argument by counsel for the parties and
consideration of the briefs and the record submitted, certified question answered in the
negative. Opinion by Judge Stein. Chief Judge DiFiore and Judges Rivera, Fahey, Wilson
and Feinman concur. Judge Garcia took no part.
Decided November 21, 2019
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