Board settlement can't be used in Minnesota liability trial

Physicians say the decision upholds licensing boards' authority to oversee medical practice.

By Amy Lynn Sorrel — Posted Nov. 3, 2008

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A Minnesota appeals court clarified for the first time in the state that nondisciplinary settlements made between doctors and health-related licensing boards cannot be used as evidence in medical liability cases.

Like many states, Minnesota excludes the use of settlements in civil actions. But the plaintiff in the case argued that an agreement for corrective action -- in which a doctor typically consents to certain practice improvements to resolve a board complaint without disciplinary action -- was not a typical settlement because it was imposed by the board.

The case stemmed from a complaint that Sandra O'Rourke filed with the Minnesota Board of Podiatric Medicine against Roy W. Buckmaster, DPM, after complications arose following two surgeries he performed. Buckmaster and the board agreed in 2004 to resolve the matter through a corrective action, which was finalized in March 2005. That June, O'Rourke filed a negligence case against Buckmaster and attached the corrective action to support her claim. Despite the podiatrist's objections, a trial court allowed the move.

In a Sept. 9 opinion, the Minnesota Court of Appeals established that corrective actions -- which involve a voluntary, negotiated compromise between state licensing boards and physicians and other health care professionals -- constitute a settlement. Recognizing broader public policy concerns, judges said that keeping such evidence from reaching a jury "promotes settlement by relieving parties of the fear that statements made in furtherance of settlement could later be used against them."

Discouraging settlements would undermine licensing boards' oversight authority, the court said. Without the option of a corrective action or other settlement, these agencies would be forced to use their resources to address every complaint through a formal hearing, or dismiss all but the most egregious claims.

"Neither of those bleak alternatives could be argued to protect the interests of the public whose welfare is served by licensed professionals and the boards that oversee [their] performance," the opinion states.

There are no plans to appeal to the state Supreme Court, O'Rourke's attorney said. A trial date has not been scheduled.

The ruling, which marks a precedent in the state, is a win not just for doctors, but also for patient care, said Karolyn Stirewalt, policy counsel for the Minnesota Medical Assn. The organization filed a friend-of-the court brief in the case with the Litigation Center of the American Medical Association and State Medical Societies and the Minnesota and American Podiatric Medical Assns.

Corrective actions encourage doctors and licensing boards to improve care by remedying incidents -- such as through educational or supervisory measures -- that may not warrant a full hearing on disciplinary action, Stirewalt said. At the same time, the decision will help deter the filing of board complaints aimed at bolstering medical liability claims.

"This really could have become a nest for licensing boards and decreased the incentive for doctors to [settle]," Stirewalt said. "We really wanted to preserve physicians' ability to enter into corrective action because it's nondisciplinary, it's not reported, and it saves the board resources" needed to properly oversee medical practice.

The decision also helps ensure a fair judicial system, said David T. Schultz, Buckmaster's attorney. The podiatrist denied any wrongdoing.

"This kind of evidence can be very prejudicial," Schultz said. Corrective actions contain no admission of liability and do not involve full due process. Nevertheless, "a jury sees it and says, this is a bad doctor or a negligent doctor because he agreed with the board this complaint was justified in some measure."

Schultz said plaintiffs in the state increasingly are using board complaints and ensuing corrective actions as a tactic to support the filing of medical liability claims. Before this case, trial courts typically blocked the documents from reaching a jury.

The appeals court ruling not only averted a dangerous precedent, but also set an example for other states, Schultz said.

Judges in their decision pointed to similar rulings in Georgia, Iowa and Missouri. But few states have addressed the issue, Schultz noted.

Peter A. Schmit, O'Rourke's attorney, said that while some corrective actions may qualify as negotiated settlements, others may not. The courts should analyze the issue on a case-by-case basis, he said. "As plaintiffs, we are always looking for full disclosure."

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Case at a glance

Can nondisciplinary board settlements be cited in liability cases?

A Minnesota appeals court said no. The ruling set a state precedent.

Impact: Physicians say the decision will deter the filing of unwarranted board complaints and allow state health-related licensing boards to properly oversee medical practice. The plaintiff attorney in the case said the ruling leaves open the question of whether board disciplinary actions can be admitted to support negligence cases.

Sandra O'Rourke v. Roy Wayne Buckmaster, DPM, Minnesota Court of Appeals

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