Opinion
A146771 A148123
05-30-2017
JENNIFER SUI, Plaintiff and Appellant, v. SUTTER BAY HOSPITALS et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (City & County of San Francisco Super. Ct. No. CGC-12522567)
This appeal and cross-appeal present numerous issues concerning the interpretation and application of Evidence Code section 1158, the statute requiring medical providers to make available to a patient's attorney, for inspection and copying, the patient's medical records before the institution of judicial proceedings. Although these issues retain some continuing relevance, their significance undoubtedly has been greatly reduced by the increasing maintenance of medical records electronically and an amendment to section 1158 adding the requirement that upon request the information be provided in electronic form. Nonetheless, this litigation arises out of a request for the delivery of paper copies and questions, among other things, the circumstances under which copying costs charged by a copy service chosen by the medical provider must comply with cost limitations imposed by section 1158.
All statutory references are to the Evidence Code unless otherwise indicated.
Legal Context
Subdivision (b) of section 1158 provides: "Before the filing of any action or the appearance of a defendant in an action, if an attorney at law or his or her representative presents a written authorization therefor signed by an adult patient [or other appropriate patient representative] to a medical provider, the medical provider shall promptly make all of the patient's records under the medical provider's custody or control available for inspection and copying by the attorney at law or his or representative." Subdivision (d) provides: "Failure to make the records available during business hours, within five days after the presentation of the written authorization may subject the medical provider having custody or control of the records to liability for all reasonable expenses, including attorney's fees, incurred in any proceeding to enforce this section." Subdivision (e)(1) provides: "All reasonable costs incurred by a medical provider making patient records available pursuant to this section may be charged against the attorney who requested the records." And subdivision (e)(2) defines "reasonable costs" to include reproduction of 8½ by 14-inch or less documents at 10 cents per page and clerical costs at the maximum rate of $16 per hour.
Subdivision (a) of section 1158 defines a "medical provider" for purposes of the section. Subdivision (c) provides: "Copying of medical records shall not be performed by a medical provider, or by any agent thereof, when the requesting attorney has employed a professional photocopier . . . to obtain or review the records on his or her behalf." Subdivision (f) provides that if the records are provided to the attorney or attorney's representative for inspection or copying at the record custodian's place of business, the fee that may be charged shall not exceed $15 plus any actual retrieval costs paid to a third party in possession of the records. Subdivision (g), which became effective in 2016 (Stats. 2015, ch. 528, § 1), provides: "If the records requested pursuant to subdivision (b) are maintained electronically and if the requesting party requests an electronic copy of such information, the medical provider shall provide the requested medical records in the electronic form and format requested by the requesting party, if it is readily producible in such form and format, or, if not, in a readable form and format as agreed to by the medical provider and the requesting party."
Section 1158 "states a clear public policy of permitting a patient, before filing any action, to inspect and to copy any medical records concerning the patient. The legislative purpose behind the enactment is not stated, but its apparent goal is to permit a patient to evaluate the treatment he or she received before determining whether to bring an action against the medical provider. Section 1158 also enables the patient to seek freely advice concerning the adequacy of medical care and to create a medical history file for the patient's information or subsequent use. It operates to prevent a medical provider from maintaining secret notes which can be obtained by the patient only through litigation and potentially protracted discovery proceedings." (National Football League Management Council v. Superior Court (1983) 138 Cal.App.3d 895, 903, fn. omitted.)
Although this oft-quoted passage refers to permitting a "patient" to inspect and copy the records, section 1158 applies only to requests made by a patient's attorney or attorney representative. Patients themselves are given the right to inspect their medical records by Health and Safety Code section 123110. (See Maher v. County of Alameda (2014) 223 Cal.App.4th 1340, 1352-1354.)
In Thornburg v. Superior Court (2006) 138 Cal.App.4th 43 (Thornburg I), it was held that the limitation on copying charges imposed by section 1158 applies to the charges of a copying service that, pursuant to a contract with the medical provider, copies patient records requested by a patient's attorney and bills the attorney for the copies. The copy service "had the obligation of responding to section 1158 requests and is therefore subject to the limitations of the statute." (138 Cal.App.4th at p. 46.) According to the Court of Appeal, "If the Legislature really intended that health care providers could avoid the cost limitations set forth in the fifth paragraph of the statute by simply retaining a copy service, we doubt the Legislature would have taken the trouble to impose the limitations in the first place." (Id. at p. 52.) "It is difficult to believe that having expressly placed the cost limitations in the statute the Legislature intended that they could either be avoided by having another entity respond to the section 1158 request or only enforced by way of the circuitous and burdensome remedy of recovering the cost differential from an expressly covered health care provider." (Id. at p. 51.)
In Thornburg v. El Centro Regional Medical Center (2006) 143 Cal.App.4th 198, 206 (Thornburg II), the Court of Appeal held that "section 1158 gives patients a private right of action to enforce its provisions, including costs limitations" in an action for damages against the medical provider.
Factual Background
Plaintiff Jennifer Sui was treated at a hospital of defendant Sutter Bay Hospitals, formerly known as Sutter West Bay Hospitals and doing business as California Pacific Medical Center (CPMC), for injuries related to a motor vehicle accident. She retained the law firm of Hersh & Hersh to evaluate a possible lawsuit in connection with the accident. On June 29, 2011, an agent of the firm faxed a letter to CPMC, to which was attached a signed authorization from Sui consenting to the release of her medical information. The letter read, in part, "Through this letter and authorization our office is requesting copies of records for the above patient to be forwarded at your earliest convenience. . . . [¶] . . . [¶] Please provide me with the requested copies and a detailed invoice therewith demonstrating that the amount charged complies with HIPPA [Health Insurance and Portability and Accounting Act of 1996] and California Law."
Pursuant to a contract between CPMC and Foto-Med Solutions Copying Services, Inc. (Foto-Med), CPMC provided Sui's patient records to Foto-Med personnel stationed at the CPMC hospital. On July 13, 2011, Foto-Med faxed to Hersh & Hersh a form captioned "Fee Approval Payment." The form begins, "We have received your request for copies of medical records from: CPMC" and continues, "This letter is to inform you of the prepayment required for these medical records." The form states that the estimated fee is "70", the "prepay amount" is "60," and that "if fee is approved" to please make a check or money order payable to Foto-Med or provide credit card information. The text underscores, "We need payment before we can copy any medical records" and then states, "If there is no response within five business days, the medical records will be filed back and a new request will be needed." The form concludes, "You also have the choice of using your own copy service." Towards the top of the form in bold letters is stamped, "Please return this form with payment."
That same day, July 13, Hersh & Hersh sent a letter to Foto-Med repeating the request for the documents and enclosing a check for $60 "to defray the costs associated with our request regarding our client." On July 19 Foto-Med mailed to Hersh & Hersh copies of 76 pages of Sui's medical records, together with an invoice showing the total charges to be $68.16, with a balance due of $8.16.
The charges were broken down as follows: "clerical fees" $30, "page fee" $22.80, "retrieval" $10, "postage" $2.36, and "handling," $3.00. The page fee of $22.80 for 76 pages equals 30 cents per page.
On July 20, 2012, plaintiff filed her original complaint against both CPMC and Foto-Med. The complaint alleges two causes of action, the first for the violation of section 1158 and the second for the violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.). Both claims are based on allegations that the defendants overcharged plaintiff for the copies of her documents by charging the $30 clerical fee and $10 retrieval fee "with no correlation to or explanation of the actual clerical time required to compile and copy Plaintiff's medical records" and by charging 30 cents per page "rather than the allowable ten cents" per page.
The complaint names as the second defendant Jane Urrutia doing business as Foto-Med Solutions. As indicated in the following text, Foto-Med subsequently filed bankruptcy proceedings and is neither named in the judgment nor a party to the appeal.
The complaint alleges a class action but the court subsequently denied plaintiff's motion to certify a class.
During the pendency of the action, Foto-Med entered bankruptcy proceedings, its contract with CPMC was terminated, and in March 2013 CPMC entered a contract with HealthPort Technologies, LLC (HealthPort) to provide essentially the same medical records copying services at four CPMC campuses. Although plaintiff and her attorneys requested no further documents from CPMC and thus had no interactions with HealthPort, substantial evidence was presented at an extended bench trial concerning the procedures under which HealthPort responds to attorney requests to CPMC for copies of a patient's medical records.
The 12-page (plus lengthy attachments) "services agreement" between CPMC and HealthPort specifies that HealthPort "is an independent contractor, and not an employee agent, or partner of, or joint venturer with" CPMC. The "description of services" attached to the agreement contains the following provision: "Attorney Requests. [CPMC] does not provide copies of patient health information to attorneys, but instead provides access to the attorney or the attorney's representative for the purposes of inspection and/or copying by the attorney or the attorney's representative. HealthPort will perform copy services for attorney requestors as the representative of such requestors and only after receiving authorization from the attorney requestor to perform such services. HealthPort may charge its standard rates to outside requestors, including attorneys and insurance companies, who employ HealthPort as their representative for the purpose of inspecting and/or reproducing patient health information. [CPMC] has not engaged, and does not authorize HealthPort, to act as its agent. HealthPort does not, by virtue of this agreement, become an agent of [CPMC]."
As was the case with Foto-Med, HealthPort employees are stationed at the CPMC hospitals, where they are considered "in-house copy-service" representatives. When CPMC receives an attorney request for copies of a patient's medical records, it verifies that there is a valid authorization to release the records to the patient's attorney, and then provides the records to HealthPort employees who enter the records into HealthPort's electronic data system and send the encrypted documents to HealthPort's corporate offices in Georgia. From Georgia, HealthPort then sends the requesting attorney a "pre-bill" invoice accompanied by a document titled "California Agent Fee Information." This information sheet quotes parts of section 1158, omitting the rates specified in the statute, and reads in part, "HealthPort has agreed to copy records for you, upon your hiring of HealthPort as your representative/agent for purposes of making such copies. The rates that HealthPort is charging do not fall under § 1158." The sheet then provides HealthPort's "competitive rates for copying the records as your representative," of "$30.00 + $.25 per page (plus actual postage and applicable sales tax, if any)," in addition to a $15 retrieval fee charged by the medical facility. Under the heading "How can I get my records," the sheet states there are two ways, the most efficient being through HealthPort's website. "As another option you may pay for this specific request by following the directions on your invoice. By doing so you are agreeing to assign HealthPort as your agent of record for this particular request only. Upon receipt of full payment, HealthPort will release your requested records and you will receive them shortly thereafter." At the time of trial, the information sheet did not indicate that the requesting attorney could retain a different copying services to copy the records.
We shall state in the present tense the practices as they were shown to be followed at the time of trial, although this court has been advised that CPMC's arrangement with HealthPort was terminated in June 2016, approximately 10 months after the entry of judgment.
Trial court proceedings
Prior to the start of trial, CPMC refunded the $58.20 overcharge that plaintiff had paid for the copies provided by Foto-Med. There followed a bench trial that extended over approximately eight days during a period of some three weeks.
For a period of approximately six months following the close of evidence, the court conducted a series of hearings and issued several orders in connection with the preparation of a statement of decision. During this period, plaintiff was granted leave to file an amended complaint, which added a cause of action for violation of the Confidentiality of Medical Information Act (Civ. Code, § 56 et seq.). The amendment alleged that CPMC's transmittal of the patient's medical records to the copying services without the patient's consent violates the statutory proscription against "disclos[ure of] medical information regarding a patient . . . without first obtaining an authorization." (Civ. Code, § 56.10, subd. (a).) The court found there was no surprise or prejudice in permitting the amendment because the subject had been fully addressed during the course of trial. However, the court ultimately held that CPMC was not violating the statute because of an exception in the statute that permits disclosure of the medical records to "a person or entity that provides billing, claims management, medical data processing or other administrative services for providers of health care." (Civ. Code, § 56.10, subd. (c)(3).)
The court issued a 39-page statement of decision. The court concluded that the practices followed by CPMC and Foto-Med violated section 1158 and "serves as a predicate violation of law sufficient to support plaintiff's Business and Professions Code section 17200 claim." The court wrote, "Despite CPMC's and Foto-Med's attempts to contract otherwise, Foto-Med acted as the agent for CPMC when it copied the documents. The contract between Foto-Med and CPMC, asserting that Foto-Med performed its copying services as an independent contractor, is ineffective in preventing Foto-Med's actions from being attributable to CPMC as an agent for CPMC . . . . [U]nder Foto-Med's arrangement, there is no volitional action that the attorney has to take to confirm an agency relationship with Foto-Med. The purported relationship between Foto-Med and the requesting attorney is premised on Foto-Med's bill alone, which is insufficient. [¶] Accordingly, Foto-Med was at all times acting as CPMC's agent and is bound by the limitations on copying charges in section 1158," citing Thornburg I. The court rejected CPMC's argument that Plaintiff had waived her rights under section 1158, and held that the fees charged to plaintiff "greatly exceed the limitations on copying charges contained within section 1158." The court held "[t]here is no ground for awarding restitution or disgorgement because CPMC voluntarily sent a check to Plaintiff before the trial in the amount of $58.20."
The court held that the documentation utilized by HealthPort, however, was sufficient to avoid application of section 1158. According to the court, "as with Foto-Med, the court finds that HealthPort acted as CPMC's agent at the time it received medical records from CPMC's ROI staff members. Unlike Foto-Med, however, the court finds that the actions taken by HealthPort after receiving patient medical records are sufficient to establish an agency relationship between HealthPort and the requesting attorney, such that HealthPort may charge more for its copying services than set forth in section 1158. The primary difference between Foto-Med's actions (which are found to have violated section 1158) and HealthPort's (which are not) is the presence of the California Agent Fee Information sheet in the latter situation, which provides the requesting attorney with additional information about the patient's medical records, and the agency relationship that will be created between the requesting attorney and HealthPort. The requesting attorney therefore acts with knowledge of that agency relationship when he submits payment to HealthPort, in a way that was not present under FotoMed's arrangement with CPMC. [¶] . . . [¶] . . . [W]hen an attorney pays HealthPort's charges, he or she knowingly accepts HealthPort's terms and hires the company to make and send copies of the requested medical records. The requesting attorney, as the principal, controls whether or not HealthPort, the agent, is authorized to make and deliver copies in exchange for payment. . . . [¶] . . . Because section 1158 does not proscribe the amount that a requesting attorney's agent copy service may charge for making and delivering copies of his or her client's medical records, CPMC and HealthPort's current practices do not violate section 1158."
During the course of the posttrial proceedings leading to the entry of the statement of decision, the court issued an "order requiring plaintiff's counsel to prepare alternative proposed statement of decision" that directed plaintiff's counsel to prepare a proposed statement of decision providing, among other things, as follows: "Although the acceptance by the attorneys of the offer by HealthPort to act as their agent is effective in preventing CPMC from violating section 1158, the court finds HealthPort's California Agent Fee Information sheet to constitute a fraudulent business practice under Business and Profession Code section 17200 because the excerpt from Evidence Code section 1158 quoted in the Information Sheet is fraudulent and deceptive. Under Business and Profession Code section 17200, the information sheet must make clear that the attorney can hire their own copy service to go to CPMC and copy the records. For this reason, the court will issue an injunction preventing the distribution of HealthPort's California Agent Fee Information sheet to attorneys until this form has been clarified or other steps have been taken by CPMC to ensure that this option has been brought to the attorney's attention."
Following another hearing, on February 13, 2015, the court issued a further order directing the attorneys to submit "appropriate language that modifies HealthPort's current documentation to ensure that requesting attorneys understand that they have the 'option' to hire HealthPort's copying services or that they have the 'option' of receiving photocopying services from another entity." This order also directed counsel "to suggest language of a form response that could be sent to an attorney when they first ask for copies advising them of what will occur, i.e. HealthPort will provide an estimate of what it will cost for HealthPort to provide the documents and at the rates they will charge or that they could choose to hire their own copy service for immediate copying of records." CPMC submitted a response, objecting to the issuance of an injunction on numerous grounds, disputing that HealthPort's California Agent Fee Information Sheet constitutes a fraudulent business practice, but "under protest" "suggest[ing] the following additional language, to be set forth above the bolded text 'How can I get my records faster': 'You also have the choice of using your own copy service.' " CPMC also "suggest[ed]" the content of an explanatory letter to be sent by CPMC to requesting attorneys.
The court's ultimate statement of decision recites: "At the court's request, CPMC submitted a proposed letter to clarify the requesting attorney's options. The court construes CPMC's proposed letter as an offer to send it out, and accepts it, and based on that representation finds all the issues moot as they involved an injunction. CPMC agreed to provide clarifying information to requesting attorneys, which moots plaintiff's claims under California Business and Professions Code 17200 . . . , including her claim for an injunction as to the misleading nature of the California Agent Fee Information sheet."
The court thereafter entered judgment "in conformance with the statement of decision." On the same day that plaintiff filed her notice of appeal, she also filed a motion for attorney fees, requesting $957,181.50 in attorney fees under section 1158 and Code of Civil Procedure section 1021.5. Over opposition, the court found that plaintiff was the prevailing party and under both sections awarded her $456,310 in fees. As to CPMC's arrangement with Foto-Med, the court ruled, "this court found that CPMC directly violated . . . section 1158." As to the arrangement with HealthPort, "the court found that because of clever drafting of the arrangements with HealthPort that CPMC's practices did not directly violate . . . section 1158 but that CPMC's description of the services and methods of doing business with HealthPort was misleading and deceptive and accordingly, this court has found plaintiff to be the prevailing party." The court held plaintiff therefore entitled to attorney fees under section 1158, subdivision (d) and under Code of Civil Procedure section 1021.5. With respect to the latter provision, the court held that the action had conferred a significant benefit on the general public and that the financial burden of private enforcement rendered a fee award appropriate even though the action had not generated monetary recovery. Defendant avoided an injunction and determination of the California Business and Professions Code section 17200 claim "by agreeing with the court to change its practices in regards to attorney medical record requests which conferred and continues to confer a significant benefit to a large group of the general public that not only includes attorneys, but their clients as well."
Section 1158, subdivision (d) provides: "Failure to make the records available during business hours, within five days after the presentation of written authorization may subject the medical provider having custody or control of the records to liability for all reasonable expenses, including attorney's fees, incurred in any proceeding to enforce this section."
The amount of the fees awarded was determined as follows. The court found the 963.3 hours expended by plaintiff's attorneys to be reasonable, and their $700 and $650 hourly rates to be "reasonable adorned lodestar rates" (avoiding the application of a multiplier), producing a lodestar amount of $513,260. From this amount the court deducted $36,700, representing the fees incurred with respect to the unsuccessful class action motion, and $20,250 "for the limited success with respect to HealthPort's dealings with CPMC," the fees incurred in "unsuccessfully arguing that the HealthPort arrangement directly violated" section 1158. The court considered the resulting amount of $456,310 to be reasonable and rejected CPMC's argument "that any claim for attorney's fees by plaintiff is unreasonable because CPMC voluntarily reimbursed plaintiff for her copying after the class action was denied." The court asserted that plaintiff was entitled to pursue the matter because "CPMC in both its arrangements with Foto-Med and HealthPort sought to directly avoid having to provide copies at the low rates provided in . . . section 1158. Not having to supply copies at these reduced rates constituted a substantial monetary benefit to CPMC and represented a substantial monetary cost to those obtaining the copies."
Both parties have timely appealed from the judgment and CPMC has timely appealed from the attorney fee order. By stipulation, the appeals have been consolidated in this court.
Discussion
1. Plaintiff's complaint was not mooted by reimbursement of the disputed overcharge.
Initially, we reject CPMC's contention that by reimbursing plaintiff the amount she claimed to have been overcharged for copies of her medical records, some 27 months after commencement of the litigation, the action was mooted and should have been dismissed. Although the return of these fees eliminated the claim for damages or restitution, plaintiff alleged that the unlawful practice was continuing, that she anticipated making future record requests, and she sought injunctive relief. She was also seeking to recover her attorney fees. At the time plaintiff filed her unfair business practices claim she allegedly had suffered injury in fact and lost money as a result of the overcharges and therefore was entitled to file the claim under Business and Professions Code section 17204. She retained the right to seek injunctive relief despite the receipt of reimbursement during the course of the litigation. (See, e.g., Lozano v. AT&T Wireless Services, Inc. (9th Cir. 2007) 504 F.3d 718, 732-733.)
While it is true, as CPMC emphasizes, that plaintiff had no interaction with HealthPort, her claims are asserted against CPMC. Although the evidence showed that practices differed in at least one respect after HealthPort replaced Foto-Med as CPMC's in-house copying service, which the trial court concluded affected the outcome, plaintiff has maintained that CPMC's practices continue to violate section 1158. The fact that CPMC contracted with a different copying service whose practices differ somewhat from those of the copying service CPMC utilized when plaintiff made her records request does not preclude plaintiff from challenging the allegedly continuing unlawfulness of CPMC's conduct.
2. CPMC's practice under its arrangement with Foto-Med violated section 1158 .
CPMC contends that the trial court erred in finding that it violated section 1158 when Foto-Med was the copying service through which it responded to section 1158 requests. The contention is plainly without merit, as CPMC implicitly recognized (despite its disclaimer) when it refunded, before the start of trial, the charges imposed by Foto-Med in excess of the fees authorized by the statute. The practice then in effect was precisely the same as the practice condemned in Thornburg I. As the trial court correctly observed, the only agency relationship that existed when plaintiff's attorneys requested and received copies of plaintiff's medical records was between CPMC and Foto-Med. Neither plaintiff nor her attorneys did or agreed to anything that conceivably rendered Foto-Med the agent of either of them. In response to the attorneys' request for copies of the medical records sent to CPMC, Foto-Med alone responded, pursuant to its agreement with CPMC. The response was the "Fee Approval Payment" form that advised the attorneys of "the prepayment required for these medical records." As the agent of CPMC, Foto-Med was bound by the limitations imposed by section 1158 and CPMC, as its principal, was properly held accountable for the overcharge. "Given section 1158's manifest purpose of limiting the cost of copying, we cannot construe the scope of the statute so narrowly and mechanically that the limitation is easily and effectively avoided by health care providers who attempt to contract away their responsibilities under the statute." (Thornburg I, supra, 138 Cal.App.4th at p. 53.)
CPMC's attack on the trial court's finding, supported by an amicus curiae, is based on a misreading of the trial court's decision. CPMC and the amicus curiae argue that section 1158 does not obligate a medical provider receiving a request for copies of medical records to make copies for the requester. They correctly point out that section 1158 merely requires the medical provider, upon presentation by an attorney of written authorization from the patient or patient's representative, to "promptly make all of the patient's records under the medical provider's custody or control available for inspection and copying by the attorney at law or his or her representative." (§ 1158, subd. (b).) The trial court did not hold that CPMC has any greater obligation. A stipulation that the parties entered at the start of trial makes clear that CPMC did not do even that: "At no point did CPMC attempt to provide the patient records directly to plaintiff or her counsel. Nor did CPMC ever attempt to contact plaintiff or her counsel to arrange for photocopying of the records, for permission to release the records to Foto-Med, or to engage Foto-Med as the copy service provider."
It is true that the letter from plaintiff's attorneys requested "copies of records," not that the records be made available to the attorneys for inspection and copying. But the statute requires that the records promptly be made available upon presentation of written authorization from the patient and the letter from plaintiff's attorneys attached such written authorization. Upon receipt of the request from plaintiff's attorneys, CPMC undoubtedly had the right to respond that it does not make copies of its records but that the records were available for inspection or for copying by a copy service of the attorneys' choice, or by the copy service with which it had an arrangement under which the service would provide the copies if requested to do so by the attorneys. (That is essentially what the proposed letter subsequently drafted by CPMC in response to the trial court's prodding provides.) However, CPMC was not entitled to neglect advising the attorneys, within five days or at all, that the records were available for those purposes. Nor was it entitled to have the copy service with which it had contracted respond as its apparent agent that the copies would be provided upon payment of fees in excess of those permitted by section 1158. Hence, the trial court's finding that CPMC's practice violated the statute when plaintiff's request for her medical records was answered by the response from Foto-Med is fully supported by the evidence.
3. CPMC's practice under its arrangement with HealthPort does not necessarily violate section 1158 .
Although plaintiff contends otherwise, the change in procedure effected when HealthPort became CPMC's in-house copying service potentially brought CPMC's practice in responding to attorney requests for copies of patient records into compliance with the statute. CPMC unquestionably is correct that the statute does not obligate a medical provider such as itself to make or provide copies of its medical records in response to such a request. Nor does the statute place limitations on the amount an independent copying service may charge for copying the medical records. The statute requires only that the medical provider promptly make a patient's records available for inspection and copying by the requesting attorney or the attorney's representative. This limited obligation does require, at the least, that the requesting attorney be advised that the records are available to the attorney or its representative for those purposes. The medical provider undoubtedly can delegate an agent to convey that advice to the requesting attorney, but the provider must ensure that the advice is not misleading. The response may advise the requesting attorney of the option to have copies made by the party providing the advice if the attorney chooses to retain that party to do so, at costs set by that party, so long as it is clear that the records are also available for copying by the requesting attorney or by any other copying service the attorney may designate. Thus, on the assumption that CPMC thereafter would, promptly after receiving such a request accompanied by evidence of the patient's authorization, send attorneys requesting copies of the patient's medical records a letter in the form suggested during the course of the post-trial proceedings, and that the communication sent by HealthPort to the attorneys would also indicate that the documents were also available for copying by "your own copy service," the trial court properly concluded that there would be no violation of section 1158 or unfair business practice.
The suggested letter, drafted by counsel for CPMC, reads as follows: "Dear Attorney, [¶] We received your request for copies of your client's medical records. [CPMC] does not make copies of medical records, but it will make the medical records available to you for inspection and copying. As a convenience to you, CPMC has arranged with a release-of-information provider, HealthPort Technologies LLC, to make and deliver copies of the requested medical records if you choose to hire HealthPort to do so. In the near future, HealthPort will be sending you information about its services, along with an invoice for copying the medical records. If you choose to hire HealthPort to obtain the medical records, simply follow the instructions that you receive from Health Port. [¶] You may also obtain access to your client's medical records by making arrangements for you or your representative to inspect and/or copy the requested records on-site at CPMC. Alternatively, you may hire a copy service of your own choosing to copy the requested medical records on-site at CPMC. If you choose either of these options, please contact CPMC immediately to make arrangements for a date and time to inspect and copy the records."
Plaintiff is correct that under section 1158 it is permissible for medical providers such as CPMC to make and provide copies of requested records, and that if they do so they are bound by the cost limitations specified in subdivision (e)(2). However, this ability does not imply, as plaintiff argues, that the statute imposes on the medical provider an obligation to make and provide copies if requested to do so. Whatever ambiguity there may be in section 1158, there is no interpretation of its language that can reasonably be read to imply such an obligation. Moreover, there is nothing in the extensive legislative history that has been brought to our attention by the parties and by the amicus that suggests otherwise. Nothing in the legislative history indicates that the statute was intended to obligate the medical provider to do more than promptly make the records available for inspection and copying—as distinguished from itself making the copies.
This ability is subject to the qualification that the requesting attorney does not employ its own copy service. (§ 1158, subd. (c).)
CPMC's request that the court take judicial notice of documents reflecting the legislative history of section 1158 is granted.
4. The trial court did not abuse its discretion in declining to issue an injunction.
As plaintiff recognizes, "The grant or denial of a permanent injunction rests within the trial court's sound discretion" and is reviewed for an abuse of discretion. (Horsford v. Board of California State University (2005) 132 Cal.App.4th 359, 390.) " 'A trial court has broad authority to enjoin conduct that violates section 17200. [Citation.] That authority is expansive but not unlimited. Although the [Unfair Competition Law] imposes liability for past acts, in order to grant injunctive relief under section 17204 or section 17535, there must be a threat that the wrongful conduct will continue. "Injunctive relief will be denied if, at the time of the order of judgment, there is no reasonable probability that the past acts complained of will recur, i.e., where the defendant voluntarily discontinues the wrongful conduct." ' " (In re Tobacco Cases II (2015) 240 Cal.App.4th 779, 802.)
In arguing that the trial court abused its discretion in refusing to enjoin CPMC from continuing to violate section 1158, plaintiff relies in part on its mistaken contentions that the statute obligates a medical provider to provide copies of its medical records on request, and that HealthPort may not charge fees in excess of those specified in section 1158, subdivision (e)(2) even if HealthPort is genuinely acting as the agent of the attorney requesting the copies. For the reasons stated above, these contentions have no merit and provide no basis for injunctive relief.
Plaintiff also relies on the contention that the record provides no assurance that CPMC will discontinue its prior unlawful practices. The trial court's denial of injunctive relief was based on its understanding that CPMC will in the future promptly respond to attorney requests for patient records with the letter drafted by counsel (see fn. 8, ante) and that the information sheet from HealthPort will indicate that the requested records may also be copied by another copying service. Plaintiff questions the court's interpretation of CPMC's submission under protest of the proposed letter to counsel and addition to the information sheet as an offer to make those additions in response to all future requests. Not only does the record contain no unqualified commitment, plaintiff argues, but the record reveals that CPMC has failed to send the letter or make those changes in response to subsequent patient record requests from others. We agree with plaintiff that the record does not contain evidence of such a commitment by CPMC, and that CPMC's submission under protest of proposed communications cannot be construed as such a commitment. Nonetheless, the matter having been brought to the attention of CPMC, it was not unreasonable for the court to assume that corrective steps would be taken without the necessity of an injunction. The trial court did not abuse its discretion in denying the request for injunctive relief.
5. CPMC's practices do not violate the Confidentiality of Medical Information Act.
As indicated above, following the close of evidence the court permitted plaintiff to amend her complaint to add the claim that by delivering the patient's medical records to its in-house copying service without the patient's consent, CPMC violated the non-disclosure requirements of the Confidentiality of Medical Information Act. (Civ. Code, § 56.10, subd. (a)). The court rejected the contention, concluding that the in-house copy service is "a person or entity that provides billing, claims management, medical data processing or other administrative services for providers of health care" so that the delivery of the records to it is authorized by a statutory exception to the non-disclosure rule. (Civ. Code, § 56.10, subd. (c)(3).)
Subdivision (c)(3) of Civil Code section 56.10 reads: "The information may be disclosed to a person or entity that provides billing, claims management, medical data processing, or other administrative services for providers of health care or health service plans, or for any of the persons or entities specified in paragraph (2). However, information so disclosed shall not be further disclosed by the recipient in a way that would violate this part."
Focusing primarily on the arrangement between CPMC and HealthPort, plaintiff contends that the contractual relationship between the two renders the exception inapplicable. Plaintiff acknowledges that the many other copying services that HealthPort provides to CPMC under the terms of their agreement are within the scope of the statutory exception. But with respect to HealthPort's services in responding to attorney requests for copies of a patient's records, plaintiff contends that the provision in the CPMC/HealthPort contract purporting to negate an agency relationship (see p. 6, ante) requires a different result. Plaintiff contends that CPMC cannot both disclaim an agency relationship with HealthPort and rely on the administrative services exception to justify delivery to it of a patient's medical records without the patient's consent.
However, there is nothing in Civil Code section 56.10, subdivision (c)(3) that limits its application to agents, as distinguished from independent contractors that provide an administrative service. The provision applies to any "person or entity" providing such a service. And the recipient service provider is prohibited from making unauthorized disclosure to others. Subdivision (c)(3) concludes, "information so disclosed [to a person or entity providing an administrative service] shall not be further disclosed by the recipient in a way that would violate [the statute]." There is no dispute that HealthPort does provide an administrative service to CPMC, as did Foto-Med. The trial court therefore was correct in concluding that CPMC's practice does not violate the Confidentiality of Medical Information Act.
Plaintiff's briefing also carries the suggestion that CPMC's practice violates the federal Health Insurance Portability and Accountability Act (HIPPA) (42 U.S.C. § 1320d et seq.; 45 C.F.R. § 164.504). However, the amended complaint makes no such allegation, the trial court did not make any findings with respect to such an allegation, and despite portions of its brief which suggest otherwise, plaintiff states in its reply brief that she "does not need or even attempt to pursue a claim for HIPPA violations." Therefore, there is no need to address assertions in plaintiff's briefs concerning the application of HIPPA. --------
6. Attorney fees
CPMC challenges plaintiff's right to recover any attorney fees and, alternatively, the amount of fees that the trial court awarded. As indicated above, the trial court concluded that plaintiff was the prevailing party and that its fee award of $456,310 was justified under both section 1158, subdivision (d) and Code of Civil Procedure section 1021.5.
CPMC disputes that plaintiff should be considered the prevailing party, arguing that "Sui obtained no victory at trial" because CPMC refunded her claimed overcharge "voluntarily and not under compulsion of a judgment or court ruling." However, there can be no doubt that this payment, made only after more than two years of litigation and on the eve of trial, was the result of this action, and therefore may be considered to render plaintiff the prevailing party. (DeSaulles v. Community Hospital of Monterey Peninsula (2016) 62 Cal.4th 1140, 1154; Arias v. Katella Townhouse Homeowners Assn., Inc. (2005) 127 Cal.App.4th 847, 849.) Moreover, the trial court understood that CPMC would be taking steps to clarify the response to attorneys who make patient records requests. The corrective action comes only after the court made clear that it considered the HealthPort response then in use to be deceptive and an unfair business practice, and that it would issue an injunction unless corrected. Under these circumstances, there was no abuse in deeming plaintiff the prevailing party.
We agree with CPMC that the total amount of the court's award cannot be upheld under section 1158, subdivision (d). That section provides that failure to make requested medical records available within five days may subject the medical provider to liability for the reasonable expenses, including attorney fees, incurred in enforcing the request for access to those records. While this provision may justify an award of the fees incurred up to the point that CPMC refunded the excess fees in dispute (copies of the medical records having already been provided), subdivision (d) cannot be read so broadly as to authorize the recovery of fees incurred in the subsequent litigation over the propriety of the practices and information sheet being utilized by HealthPort. In no sense was that further litigation designed to enforce the right of plaintiff's attorneys to access to plaintiff's medical records within the costs authorized by the statute.
The authorization for the full fee award under Code of Civil Procedure section 1021.5 is another matter. CPMC argues that plaintiff is not entitled to an award under the "private attorney general" statute because the litigation did not confer a significant benefit on the general public or a large class of persons and was not necessary to secure whatever benefit did result from the litigation, two of the elements necessary to justify an award under section 1021.5. (Graham v. Daimler Chrysler Corp. (2005) 34 Cal.4th 553, 565.) The trial court held that to avoid the injunction which it threatened to enforce Business and Professions Code section 17200, CPMC "agree[d] with the court to change its practices in regards to attorney medical record requests which conferred and continues to confer a significant benefit to a large group of the general public that not only includes attorneys, but their clients as well."
As indicated above, it was not accurate to state that CPMC had agreed to do so, but the corrective steps that the court understood would be taken were undoubtedly in response to the court's views. Although we are advised that CPMC has subsequently changed its practices and is no longer using an independent copy service to provide attorneys with requested copies of client records, there was no indication that this change was contemplated at the time of the court's order.
The record reflects that CPMC receives over 15,000 requests for patient records annually, although the record does not disclose what portion of those requests come from attorneys requesting copies of a client's medical records and most may well come from doctors and others relating to continuing medical care of the patient. While clarification of the alternatives available to attorneys requesting copies of patient records resulting from the litigation undoubtedly will avoid some misunderstandings, it is far less clear how much of a monetary benefit to lawyers or their clients will result from this clarification. CPMC submitted evidence that the rates charged by HealthPort were less than charged by other copy services. Indeed, CPMC characterizes the arrangements it had made with HealthPort as both a convenience and a cost-savings for most attorneys and patients. Plaintiff submitted contrary evidence, to the effect that copies can be obtained from other copy services at less than charged by HealthPort. The court made no finding resolving this conflict. We do think the trial court was incorrect in stating that "[n]ot having to supply copies at these reduced rates [specified in section 1158, subdivision (e)] constituted a substantial monetary benefit to CPMC." The evidence establishes without contradiction that (except for the retrieval fee charged by the hospital) the copying fees are paid to the in-house copy service, an independent entity, and were never paid directly or indirectly to CPMC. Nonetheless, prior to the commencement of this action, CPMC bears responsibility for overcharges that were being made by its in-house copying service as its apparent agent that apparently would have continued to be made in that manner in the absence of this action. Moreover, whatever the extent of the financial benefit realized by attorneys or patients as a result of the changes prompted by these proceedings, "[t]he 'significant benefit' required by Code of Civil Procedure section 1021.5 need not be tangible or concrete but may be recognized from the effectuation of a fundamental policy. [Citation.] The trial court determines the significance of the benefit, and group receiving it, 'from a realistic assessment, in light of all the pertinent circumstances, of the gains which have resulted in a particular case. [Citation.]' [Citation.] The courts are not required to narrowly construe the significant benefit factor. 'The "extent of the public benefit need not be great to justify an attorney fee[s] award." ' " (Indio Police Command Unit Assn. v. City of Indio (2014) 230 Cal.App.4th 521, 543.)
We do not believe the trial court abused its discretion in finding that correction of a deceptive practice likely to mislead attorneys into believing that the only means by which they could obtain copies of a client's medical records to which they are statutorily entitled is to retain the copy service selected by CPMC and pay the fees charged by that service, is a significant and meaningful benefit to the general public or a large class of persons. Although the court did not enter an injunction, it made clear to CPMC that the manner in which attorney requests were then being handled was misleading and an unfair business practice, and the court assumed that as a consequence the practice would be corrected. Nor do we believe this litigation was unnecessary to effect the modification of the offending practices. When the matter was brought to CPMC's attention, CPMC did not immediately acknowledge the need for correction. It did not reimburse plaintiff for the excess charges she had paid until the litigation had been pending for more than two years. And throughout this appeal, CPMC has insisted that it did not violate section 1158 or engage in an unfair practice.
Finally, the amount of the fees awarded—less than half the amount requested—did not constitute an abuse of the trial court's discretion. The court carefully scrutinized the number of hours devoted to the proceedings, which compared favorably to the hours devoted to the case by the defense attorneys, considered the attorneys' hourly rates to be on the high side but justified as "reasonable adorned lodestar rates" in lieu of the multiplier that the attorneys had requested, and deducted from the resulting lodestar the fees charged for services that the court considered unproductive or unnecessary. There is no basis to say that the court's approach or its conclusions were unreasonable.
Disposition
The judgment and attorney fee order from which these appeals have been taken are affirmed. The parties shall bear their respective costs on appeal.
Pollak, Acting P.J. We concur: Siggins, J.
Jenkins, J.