X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
As competition among health care providers intensifies, many have turned to advertising their services. Increasingly, these advertisements tout in glowing terms the accomplishments of a physician or a hospital. One does not have to look any further than the burgeoning field of laser eye surgery for an example. Radio, newspapers and magazines are filled with advertisements extolling the experience and abilities of physicians who perform laser eye surgery. However, because of the misinformation generated by such advertisements, the Federal Trade Commission (FTC) last year issued a guide cautioning would-be consumers as to the risks of this procedure. [FOOTNOTE 1] Such advertising is not limited to laser eye surgery. For example, the general public is bombarded with claims by cardiologists that they are “Number 1″ in the state; by neurosurgeons who promise that a procedure will reduce or eliminate pain “within 24 hours;” or by gynecologists who claim to have performed “thousands” of laparoscopic surgeries. [FOOTNOTE 2]Since the general public has very little opportunity to verify these claims, it is vulnerable to potentially misleading promotion. When a physician fails to live up to his or her claims of experience and success and causes injury to a patient, the only recourse traditionally was through a medical malpractice lawsuit. However, recent case law in several jurisdictions suggests that, in appropriate cases, a patient may also claim that a physician fraudulently misled the patient as to his or her qualifications, experience and rates of success. Couched in these terms, such a claim may be recognized by a state’s consumer protection or consumer fraud act. This type of claim may increase the patient’s monetary recovery by exposing the physician to punitive or treble damages. This article explores the developing line of cases as it applies to such claims and offers suggestions for the practitioner who represents either the patient or the physician. The FTC issued the first consumer fraud regulations in 1914. In 1938, Congress amended the FTC Act to provide consumer protection. [FOOTNOTE 3]By the 1960s and 1970s, states began to enact their own consumer protection or consumer fraud acts, and by 1981, each state had such an act. [FOOTNOTE 4]Such legislation is intended to protect consumers from fraudulent and deceptive business practices. Initially, many jurisdictions excluded professionals, including medical professionals, from the purview of their consumer protection acts. Courts reasoned that the learned professions are otherwise well-regulated industries that did not require the additional regulation provided by a consumer protection act. [FOOTNOTE 5]However, in recent years this exclusion has eroded as professionals, including medical professionals, have begun to operate more like traditional businesses. RELATIONSHIPS COUNT Whether a health care provider is liable to a patient under a state’s consumer protection act depends upon how the relationship between the provider and patient is characterized. The health care provider/patient relationship can be characterized in three ways: involving only the administration of health care to the patient; involving only the business aspects of a provider’s medical practice; or involving a combination of care rendered to the patient and the provider’s business practice. In the first relationship, in which the patient claims only that the provider’s care was inadequate, courts have routinely held that the patient may only recover under a malpractice theory and not under a state’s consumer protection act. For example, in Quimby v. Fine, [FOOTNOTE 6]the plaintiff alleged that her physician did not obtain adequate informed consent before performing a tubal ligation. The tubal ligation failed and the plaintiff gave birth to a baby girl who was severely disabled and ultimately died. The plaintiff claimed in part that the defendant’s failed sterilization violated the Federal Consumer Protection Act. The court disagreed, holding instead that claims of malpractice are exempt from the Consumer Protection Act because they relate to the competence of the physician. [FOOTNOTE 7] In the second health care provider/patient relationship, in which the patient claims only that the provider engaged in deceptive business practices, the patient may potentially recover under a state’s consumer protection act. For example, in Elder v. Fischer, [FOOTNOTE 8]residents of a facility for the developmentally disabled sued the facility under Ohio’s Consumer Sales Practices Act, challenging the facility’s billing practices. While the trial court dismissed the plaintiffs’ suit, the court of appeals reversed, permitting the plaintiffs’ claim under the state’s consumer protection act because the allegations implicated the facility’s business practices and not the care received at the facility. MALPRACTICE AND DECEPTION Finally, in the third health care provider/patient relationship, in which the patient claims both inadequate care and deceptive business practices, courts have increasingly held that a patient may recover under a malpractice theory as well as under a state’s consumer protection act. For example, in Jeffrey v. Walden, [FOOTNOTE 9]Dr. Terry Walden inserted dentures that did not fit the patient. The patient claimed that Dr. Walden had promised that he could make the dentures fit, but was unsuccessful for three years. The patient sued Dr. Walden under Texas’ Deceptive Trade Practices Act, alleging that Dr. Walden knowingly made false, misleading and deceptive representations to the plaintiff. Dr. Walden moved to dismiss on the grounds that the plaintiff’s claim was a straightforward dental malpractice claim for which the plaintiff could not recover under the Deceptive Trade Practices Act. While the court noted that the plaintiff’s claim involved negligent dental care, the court also observed that the plaintiff claimed that Dr. Walden made knowing misrepresentations. Because of these allegations of misrepresentation, the court sustained the claim under the Deceptive Trade Practices Act. This year, the Washington Court of Appeals in Wright v. Jeckle [FOOTNOTE 10]addressed the issue of whether a claim involving allegations of both malpractice and fraud fell under the state’s consumer protection law. Dr. Milan Jeckle ran a weight-loss program and solicited patients to use prescription weight-loss medication that he advertised, marketed and sold directly to his patients. Dr. Jeckle explicitly advertised that the prescription medication he sold was safe. However, Dr. Jeckle’s patients learned of alleged harmful effects of the medication and brought a class action lawsuit under Washington’s Consumer Protection Act. The issue before the Washington Court of Appeals was whether the marketing and advertising of the doctor’s practice involved the entrepreneurial aspects of medicine, thereby implicating the Consumer Protection Act, or whether the claim involved the doctor’s care, thereby implicating the state’s medical negligence law. PUNISHING FRAUDULENT DEEDS The court noted that not all aspects of a physician/patient relationship concern solely the administration of health care. The court concluded that just because the doctor rendered medical advice during the relationship, that “[did] not preclude the potential for a claim based upon the entrepreneurial aspect of the profession….” [FOOTNOTE 11]As a result, the court permitted the patients to maintain a claim under the state’s Consumer Protection Act against the doctor for misrepresentations in his business activities, particularly his advertising, marketing and assurances that his weight-loss treatment regimen was “safe.” Another notable case was decided this year by a New Jersey state court, Howard v. University of Medicine and Dentistry of New Jersey. [FOOTNOTE 12]While not decided in the context of the state’s consumer protection legislation, the case nonetheless permitted the plaintiff to assert a claim of fraud against a physician arising out of his alleged misrepresentations to a patient. Joseph Howard suffered from a cervical spine condition. Prior to deciding to undergo surgery to repair the condition, Howard met with the defendant, Dr. Robert Heary. Howard claimed that during the meeting Dr. Heary told him that he was a board certified surgeon who had performed approximately 60 similar surgeries per year during the past 11 years. Based in part upon these representations, Howard agreed to allow Dr. Heary to perform the surgery. The surgery was unsuccessful, rendering Howard a quadriplegic. Howard filed a medical malpractice lawsuit against Dr. Heary, claiming that he was negligent in performing the surgery. Contrary to what the plaintiff claimed Dr. Heary told him before the surgery, during his deposition Dr. Heary testified that he was not board certified when he operated on the plaintiff, but became board certified two years later. In addition, Dr. Heary testified that he had performed “a couple of dozen” similar procedures prior to the plaintiff’s surgery, not 60 per year for the past 11 years. [FOOTNOTE 13] A NEW TWIST ON AN OLD CLAIM In light of this testimony, the plaintiff sought to amend his complaint to assert a claim of fraudulent misrepresentation against the defendant. The court noted that it was already established that a plaintiff may assert a cause of action against a physician who operates without having the patient’s consent or who obtains that consent by use of fraud or misrepresentation. [FOOTNOTE 14]In the latter case, the patient may assert a claim of fraud against the physician, if the patient demonstrates that the defendant made a material misrepresentation with the intention of misleading the patient and which resulted in detriment to the plaintiff. [FOOTNOTE 15] Against this backdrop, the court held that, if the defendant lied about his qualifications and experience, “then a jury could find that he misled the patient as to his abilities and, hence, the true identity of the physician who would perform the surgery.” [FOOTNOTE 16]If a plaintiff could then prove reasonable reliance upon the physician’s misrepresentations and detriment, a plaintiff would be entitled to damages for injuries caused by the surgery. [FOOTNOTE 17] The court further held that under such circumstances a plaintiff may recover nominal damages for “an unauthorized invasion of the plaintiff’s person” and compensatory damages for all injuries caused by the performance of the operation, even if the injuries were not caused by physician neglect. In addition, the court held that a plaintiff could recover punitive damages if the defendant acted in wanton and willful disregard of the patient’s rights. [FOOTNOTE 18] Interestingly, the court held that even if the plaintiff was not injured from the surgery, the plaintiff could nevertheless recover “for mental anguish resulting from the belated knowledge that the operation was performed by a doctor to whom the patient had not given consent.” [FOOTNOTE 19] Jeffrey, Wrightand Howardsuggest a trend in cases brought against health care providers: Health care providers who exaggerate their experience, abilities or likelihood of success risk not only a malpractice claim, but also a claim for fraud or misrepresentation. That claim may be based on common law, as in Howard, or on a state’s consumer protection statute, as in Wright. DODGING DAMAGES By couching claims as violations of a state’s consumer protection statute, in addition to nominal damages, compensatory damages, and, where appropriate, punitive damages, a plaintiff may be entitled to treble damages, including attorney fees and costs of suit, for a defendant’s violation of a state’s consumer protection statute. [FOOTNOTE 20]These can be substantial damages and may not necessarily be covered by a health care provider’s malpractice insurance policy. To avoid these claims, health care providers who advertise and market their practices and services should take great care to represent their experience, abilities and rates of success as accurately and fairly as possible. In addition, providers should resist the urge to predict success in any procedure, but rather should fully and accurately apprise the patient of the percentage of success in the procedure as well as its material risks. The threat of punitive and treble damages should not be forgotten. However, in the event a patient files a claim under a state consumer protection statute for fraudulent misrepresentation, a health care provider should argue that the basis for the claim involves negligent treatment and not the provider’s business practices, and show the clear distinction between the two. Despite the blending of these two concepts by some courts, many courts still distinguish between such claims. William A. Krais is a principal at Morristown, N.J.’s, Porzio, Bromberg & Newman, where he specializes in medical malpractice and personal injury litigation. He can be reached at [email protected]. ::::FOOTNOTES:::: FN1Basik Lasik: Tips on Lasik Eye Surgery, Federal Trade Commission, August 2000. FN2 See, e.g.,Special Advertising Section, New Jersey Monthly, April 2001, at 119. FN315 U.S.C. 45. FN4Lee Ann Bundren, Commentary, State Consumer Fraud Legislation Applied to the Health Care Industry: Are Health Care Professionals Being �Consumed’?, 16 J. Legal Med. 133, 135 (1995). FN5 See, e.g., Hampton Hosp. v. Bresan, 672 A.2d 725 (N.J. Sup. Ct. App. Div. 1996) and Feldstein v. Guinan, 499 N.E.2d 535, 538 (Ill. App. Ct. 1986). FN6724 P.2d 403 (Wash. Ct. App. 1986). FN7 See also Haynes v. Yale-New Haven Hosp., 699 A.2d 964, 972-74 (Conn. 1997) (where the court held that a claim for medical malpractice does not fall under the Connecticut Unfair Trade Practices Act) and Evanston Hosp. v. Crane, 627 N.E.2d 29 (Ill. App. Ct. 1993) (where the court refused to apply the Illinois Consumer Fraud Act because the only basis for liability was the medical negligence of the hospital’s physicians, nurses and staff). FN8717 N.E.2d 730 (Ohio Ct. App. 1998). FN9899 S.W.2d 207 (Tex. Ct. App. 1993). FN1016 P.3d 1268 (Wash. Ct. App. 2001). FN11 Id. at 1271. FN12768 A.2d 195 (N.J. Sup. Ct. App. Div. 2001), leave to appeal granted, _ A.2d _ (N.J. 2001). FN13 Id.at 196. FN14 Id.at 198. FN15 Id. FN16 Id. FN17 Id. FN18 Id. FN19 Id. (quoting Perna v. Pirozzi, 457 A.2d 431, 438 (N.J. 1983)). FN20 See, e.g., N.J.S.A. 56:8-19.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.