Monthly Archives: July 2016

The 20% Rule: An Emerging Theory of Liability Under the FLSA

By: Eric B. Moody

Employers are no doubt familiar with the Fair Labor Standards Act (“FLSA”), but may not be aware of an emerging theory of liability under the FLSA that affects employers with tipped employees.1 This new cause of action is based on a United States Department of Labor handbook that states a tipped employee cannot spend in excess of 20% of their work time performing side work.2 This article explores the origins in law of this emerging theory of liability, discusses the practical difficulty of the 20% Rule, and provides some analysis on how to minimize or resolve these claims.

Origins of the 20% Rule Claim

The FLSA requires that employers pay employees a minimum wage. However, the FLSA allows employers to pay tipped employees a reduced minimum wage, often referred to as a “tip rate.”3 Provided certain other conditions are met, an employer may count a tipped employee’s tips toward meeting the minimum wage requirement under the FLSA.4

In order to prevent employers from abusing the FLSA’s tip credit provisions, the regulations interpreting the FLSA place limits on when an employer may pay an employee at a tip rate. For instance, if an employee works in two or more separate jobs for an employer, with one job receiving tips and the other not receiving tips, then the employer can only pay the tip rate for the employee’s time spent in the job receiving tips.5 The FLSA refers to this working arrangement as a “dual job” occupation.6

The FLSA regulations distinguish an employee in a dual job from the typical job of a restaurant server. In addition to serving customers, restaurant servers often perform “side work.” Side work encapsulates a wide variety of tasks, depending on the restaurant, and includes such duties as balancing cash receipts, stocking, cleaning, inventory, and preparatory work.7 Many of the duties that constitute side work do not “directly” produce tips.8 However, the FLSA allows employers to require servers to perform side work even though it does not directly produce tips. The FLSA and interpreting regulations do not affix a specific time limit to the amount of time that a tipped employee can perform side work, other than stating a tipped employee can spend “part of her time” engaging in side work.9

Recently, the agency in charge of enforcing the FLSA, the United States Department of Labor Wage and Hour Division (“Wage and Hour Division”), added a restriction to the amount of time a tipped employee can spend performing duties that are not “tip producing.” Specifically, the Wage and Hour Division publishes a Field Operations Handbook for its investigators and staff to use in enforcing the FLSA.10 The Field Operations Handbook limits the percentage of time a tipped employee can spend performing side work to 20% of the employee’s shift.

Agency interpretations, such as the Field Operations Handbook, are not “automatically” law, such as a statute or a regulation.11 But courts can give an agency’s interpretation deference, thus giving it the force of law.12 Unfortunately for employers, many federal district courts have given the Field Operations Handbook deference and allowed claims based on the 20% Rule to proceed, including federal district courts in New York, South Carolina, Illinois, and Georgia.13

The Middle and Southern Districts of Florida have also allowed claims based on the 20% Rule to proceed.14 Moreover, there is limited authority contrary to the 20% Rule in the Eleventh Circuit, meaning employers with tipped employees can expect to see more of these claims in the future.15 Courts that have given the 20% Rule deference, however, may have failed to fully consider the practical difficulties the 20% Rule creates in workplaces such as restaurants.

Practical Difficulties of the 20% Rule

From a practical standpoint, maintaining records to show strict compliance with the 20% Rule is difficult due to the fluid nature of a server’s job. Analysis of a server’s shift under the 20% Rule requires dissection of each of a server’s shifts on a minute-by-minute basis to determine when the server performed tipped labor versus non-tipped labor. Often, 20% Rule claims involve an employee claiming he spent large percentages of his time performing side work, much of which will be intertwined with time serving customers. The employer will typically not have (and realistically may not be able to produce) the type of records that could disprove the employee’s testimony.

Moreover, while many duties are certainly tip producing activities, such as taking and serving orders, it is unclear whether other activities are tip producing activities or non-tip producing activities. For example, a customer requests new silverware from a server. The server is unable to locate clean silverware, so he washes silverware instead and takes it to the customer. An argument could be made that cleaning the silverware was an activity directed toward producing tips, while a counterargument could be made that cleaning the silverware was work incidental to tip producing activities and, therefore, should count toward the 20% calculation. These types of distinctions could be left to a jury, who may not understand the nuances of the FLSA or the realities of the restaurant business.16

In Pellon v. Business Representation Intern., Inc., a federal district court in Florida recognized the difficulty of proving compliance with the 20% Rule and the difficulty of litigating such a case, describing 20% Rule cases as infeasible.17 The Pellon court recognized that the 20% Rule creates an exception that could swallow the tip credit whole, resulting in a “discovery nightmare,” and may require “perpetual surveillance” of tipped employees during their shifts.18 Unfortunately for employers, other federal courts, including Florida’s federal courts, have ignored the Pellon court’s criticism for a number of reasons. Most notably, the Pellon case involved sky caps, not waiters, who had not even made a threshold showing that their non-skycap duties exceeded 20% of their workday.19

Practical Tips for Preventing and Resolving 20% Rule Claims

Employers with tipped employees can take several steps to attempt to prevent 20% Rule claims. First, employers can shift some tasks typically falling under the umbrella of side work to non-tipped employees.

Second, employers can attempt to limit side work to distinct periods, such as before the employee begins serving customers or after the employee finishes serving customers. This action should minimize the percentage of time an employee may later argue they spent performing non-tipped duties.

Third, an employer may also consider paying the employee minimum wage during these discrete periods while performing side work. While this may result in higher labor costs—always a critical consideration in the restaurant industry—the employer may offset some of these costs by more closely monitoring the number of servers working and cutting servers when demand dictates. In other words, if servers are not spending time performing side work while they serve customers, they should be able to serve additional tables.

When faced with a 20% Rule claim, an employer may consider early resolution due to the limited value of the claim. Damages are limited to the difference between tip wage and minimum wage for the percentage of time an employee spends performing non-tipped duties.20 If an employee proves that he spent more than 20% of his time performing side work, then the employee can recover for all time spent performing side work. For example, if a tipped employee spends 30% of his work time performing non-tipped duties, he will only be able to recover the difference between tip wage and minimum wage for the 30% of work time performing non-tipped duties.

Early valuation of a 20% Rule claim can be difficult since employers typically do not keep the type of records that would allow the employer to ascertain a server’s time spent on side work duties. Moreover, plaintiffs may refrain from tipping their hand as to the amount of work time they allege exceeded the 20% Rule.

Employers can attempt to make some valuation of a 20% Rule claim by examining their tipped employees’ duties during “discrete time periods—such as before the restaurant opens to customers, after the restaurant is closed to customers, or between the lunch and dinner shifts.”21 In fact, the United States District Court for the Middle District of Florida ruled that the plaintiffs in a 20% Rule case were limited to these discrete periods in proving that their related non-tipped duties exceeded 20% of their shifts due to the difficulties of attempting a minute-by-minute examination of a typical server shift.22 Successfully making this argument early in a 20% Rule case can help cap the value of the claim.

Due to the limited value of a 20% Rule claim, the greatest source of exposure is typically the attorney’s fees. Under the FLSA, a prevailing plaintiff will likely be entitled to liquidated damages in the same amount as the unpaid minimum wages.23 As with other FLSA claims, a prevailing plaintiff will also likely be entitled to his or her reasonable attorneys’ fees and costs, which can be substantial in disputed 20% Rule claims. Moreover, defending and litigating a 20% Rule claim can be expensive due to the factual questions involved. Accordingly, depending on the specific circumstances of the case, employers may want to consider early resolution in order to avoid potential exposure and to limit defense fees and costs.

Conclusion

With this new 20% Rule theory gaining steam, employers with tipped employees who perform side work will likely see more of these claims. Unfortunately, most federal courts in Florida have not recognized the difficulty this rule creates for employers. Therefore, employers should consider minimizing their exposure from such claims by reconsidering their side work assignments. When faced with a lawsuit, employers may ultimately want to consider early resolution of these claims to avoid exposure and significant defense costs.

(Endnotes)

1 29 U.S.C. § 201, et seq.
2 The cause of action is referred to as the “20% Rule” throughout this article, and the term “side work” is defined later in the article.
3 The FLSA defines tipped employees as employees “engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. § 203(t); 29 C.F.R. § 531.50.
4 29 U.S.C. § 203(m); see also 29 C.F.R. § 531.50 et seq.
5 29 C.F.R. § 531.56(e) (hereinafter “regulation 531.56(e)”).
6 An example of a dual job in the restaurant context would be an employee who works as a prep cook during some shifts, as a maintenance person during some shifts, and as a server during other shifts. The employer must pay the employee minimum wage while working as a prep cook or a maintenance person. The employer may pay the employee at a tip rate when working as a server. Id.
7 Regulation 531.56(e) permits a server to spend part of “her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses.”
8 Courts have interpreted the applicable regulations to create three categories of duties for tipped employees: (1) tip producing activities, which can be compensated at the tip rate; (2) non-tip producing activities incidental to tip producing duties, the subject of the 20% Rule; and (3) non-tip producing activities unrelated to tip producing duties, such as time spent in the chef role described above. Fast v. Applebee’s Intern., Inc., 502 F. Supp. 2d 996, 1002 (W.D. Mo. 2007). Although outside of the scope of this article, plaintiffs bringing 20% Rule claims will often bring an alternative claim that some side work duties are unrelated to tip producing duties and claim compensation at minimum wage for time spent performing these duties.
9 29 C.F.R. § 531.56(e).
10 United States Department of Labor, Wage and Hour Division, Field Operations Handbook, § 30d00(e), available at: http://www.dol.gov/ whd/foh/ (last visited June 16, 2016). The Field Operations Handbook provides Wage and Hour Division investigators and staff with “interpretations of statutory provisions, procedures for conducting investigations, and general administrative guidance.” Id.
11 Instead, agency interpretations are “entitled to respect, but only to the extent that they are persuasive.” Christensen v. Harris Cnty., 529 U.S. 576, 578 (2000) (internal citations omitted).
12 Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984).
13 See, e.g., Flood v. Carlson Restaurants Inc., 94 F. Supp. 3d 572 (S.D.N.Y. 2015); Irvine v. Destination Wild Dunes Mgmt, Inc., 106 F. Supp. 3d 729 (D.S.C. 2015); Hart v. Crab Addison, Inc., No. 13-CV-6458 CJS, 2014 U.S. Dist. LEXIS 85916 (W.D.N.Y. June 24, 2014); Driver v. AppleIllinois, LLC, 890 F. Supp. 2d 1008, 1013 (N.D. Ill. 2012); Holder v. MJDE Venture, LLC, No. 1:08-CV-2218-TWT, 2009 U.S. Dist. LEXIS 111353 (N.D. Ga. Nov. 30, 2009).
14 Ash v. Sambodromo, LLC, 676 F. Supp. 2d 1360 (S.D. Fla. 2009); Crate v. Q’s Rest. Group LLC, No. 8:13-cv-2549-T-24 EAJ, 2014 U.S. Dist. LEXIS 61360 (M.D. Fla. May 2, 2014).
15 Some defendants outside of the Eleventh Circuit have successfully argued that the 20% Rule is not entitled to deference, resulting in dismissal of 20% Rule claims, but these decisions are limited to date. See Montijo v. Romulus Inc., No. CV-14-264-PHX-SMM, 2015 U.S. Dist. LEXIS 41848 (D. Ariz. Mar. 30, 2015); Richardson v. Mountain Range Restaurants LLC, No. CV-14- 1370-PHX-SMM, 2015 U.S. Dist. LEXIS 35008 (D. Ariz. Mar. 19, 2015).
16 Which “duties may prompt a customer to tip is a question of fact upon which reasonable finders of fact could disagree.” See Fast, 502 F. Supp. 2d at 1004.
17 528 F. Supp. 2d 1306 (S.D. Fla. 2007), aff’d, 291 F. App’x 31 (11th Cir. 2008).
18 Id. at 1314.
19 Crate v. Q’s Rest. Group LLC, 2014 U.S. Dist. LEXIS 61360. As another example, a Missouri District Court found that Pellon was “inconsistent with 29 C.F.R. § 785.13 and 29 C.F.R. § 516.18, which require the employer to exercise control over work performed by an employee and to keep records of work done in tipped and non-tipped occupations.” Fast v. Applebee’s Intern., Inc., 159 Lab. Cas. P 35714 (W.D. Mo. 2010), aff’d, 638 F.3d 872 (8th Cir. 2011); see also Flood, 94 F. Supp. 3d 572. 20 Fast, 502 F. Supp. 2d at 1002.
21 Crate v. Q’s Rest. Group LLC, 2014 U.S. Dist. LEXIS 61360.
22 Id.
23 29 U.S.C. § 216(b).

Repeal of the McCarran Act Would Roil the Insurance Industry

By: David C. Borucke

The business of insurance is insulated from the full weight of antitrust law under the McCarran-Ferguson Act (the “McCarran Act”).1 This statutory protection, however, may soon disappear. Multiple bills to repeal the McCarran Act are pending in the 114th Congress, with some bi-partisan support. If the McCarran Act is repealed, for example as a step toward replacing the Affordable Care Act, carriers will need to update their antitrust compliance practices. In particular, carriers will need to radically limit information sharing. Thus, with timely reason, we describe the scope of the McCarran Act and then some antitrust basics to underscore the potential impact of repeal.

The McCarran Act Antitrust Exemption

The federal government once deemed insurance as a purely local matter, i.e., a state concern beyond the constitutional reach of federal regulation. New Deal jurisprudence then expanded the scope of the Commerce Clause.2 However, in 1944 the U.S. Supreme Court ruled that insurance transactions affect interstate commerce and are, therefore, subject to federal antitrust law.3

Congress moved quickly in response to the Supreme Court decision. In 1945 Congress passed the McCarran Act to maintain the predominance of state regulation over the industry. The Act includes a limited but important exemption for the “business of insurance.” The exemption applies where the following three requirements are met:

First, the conduct must be the “business of insurance” and not just any business conducted by an insurance company. The focus is on the nature of the conduct. The conduct is likely exempt where it involves underwriting and the spreading of risk, has a direct connection to the contract between the insurer and insured, and/or involves only entities within the insurance industry. In particular, Congress sought to maintain the industry practice of pricing through rating organizations – the quintessential “business of insurance” that would otherwise be subject to antitrust scrutiny.

Second, the conduct must be regulated by the state. This is a lenient requirement. Active and effective state regulation is not necessary. The mere potential to regulate is sufficient.4 For example, this requirement is readily satisfied in Florida given the broad authority of the Office of Insurance Regulation to enforce the Insurance Code and the Unfair Insurance Trade Practices Act.5

Third, the conduct must not constitute “[a] boycott, coercion or intimidation.”6 The U.S. Supreme Court has clarified that, for purposes of the McCarran Act, a boycott requires something more than an agreement among insurers to set prices and a refusal to deal.7 It requires that extra step of coercing others into conformance, or enlisting third-parties to compel the target to capitulate through conduct in a collateral transaction.

In sum, the McCarran Act is a form of reverse “preemption” – if a state takes minimal steps to regulate the business of insurance, then federal antitrust law is largely preempted. In this way, the McCarran Act provides the breathing space that allows insurers to engage in beneficial, collective action without antitrust concerns, including: joint ratemaking through rating organizations; the standardization of insurance forms; agreements based on the joint collection of underwriting information; and the exchange of pricing information among insurers to determine if rates are competitive.8 Notably, this is a measure of protection for collective action among competitors unheard of in most other industries.

Antitrust Basics – The Sherman Act

The Sherman Antitrust Act of 1890 is enforced by two federal agencies, the Department of Justice and the Federal Trade Commission.9 Aggrieved private parties may also have standing to bring lawsuits and, if successful, recover treble damages, attorney’s fees, and costs.10 Significant violations may also result in criminal penalties, including incarceration for the individuals involved.

Many states, like Florida, have laws that mirror the Sherman Act.11 Importantly, the McCarran Act does not preempt these state laws. While Florida has adopted federal exemptions and immunities,12 some states have not. For example, in a recent Texas case against a large insurance brokerage, the Fifth Circuit Court of Appeal affirmed the dismissal of federal antitrust claims pursuant to the McCarran Act, but reversed and remanded similar claims brought under a Texas antitrust statute.13

Our focus here is the prohibition against agreements that unreasonably restrain trade. Stated differently, there are two essential elements for a Sherman Act “Section 1” violation: (i) an agreement between separate individuals or entities; and (ii) that agreement is unreasonable. 14

Agreement – A Knowing Wink

An “agreement” is broadly defined by antitrust law. It does not need to be in writing or expressed; rather, an informal understanding or a “knowing wink” can also be an agreement. For example, three competitors are sitting in a hotel bar after a trade association meeting. One says: “I sure hope prices rise tomorrow.” If not a further word is said between them and prices go up the next day, the competitors may be found guilty of an agreement to fix prices despite the absence of a formal or explicit agreement. However, it is important to note that affiliated companies, even if separately incorporated, as well as officers and employees of the same company are typically (not always) considered part of a single entity and, thus, unable to reach such agreements.

Per Se Unreasonable Conduct

Once an agreement exists, the next question is whether that agreement “unreasonably” restrains competition. Certain trade restraints are so injurious to competition that they are deemed to be automatically unreasonable and, thus, illegal per se. 15 There is no defense to a per se violation. Courts will not consider the business justifications, the good motives of the parties involved, or even a lack of market power.

With few exceptions, per se unlawful agreements are those entered into by competitors. Price fixing among competitors is the most familiar, but the prohibition may be broader than you think. Any agreement or understanding between two or more competitors to fix, raise, maintain or stabilize prices, or one that tends to affect a material term of price, is per se unlawful.

As should be clear, in the absence of the protection afforded by the McCarran Act, many collective ratemaking activities traditional in the insurance industry could be deemed per se unlawful, particularly those involving prospective loss costs, setting final/end rates, and rating plans and schedules. Likewise, insurers exchanging information about their current rates would run a serious risk of being found liable, absent immunity. Other types of per se unlawful agreements include agreements to restrict output or allocate customers or territories, group boycotts, and tied selling (e.g., tying two insurance coverages).

The Rule of Reason

All other agreements are subject to a balancing test, referred to as the “rule of reason,” which uses defined markets to weigh the anti-competitive restraints caused by the agreement against its procompetitive benefits.16 If, on balance, the agreement is pro-competitive, the agreement is deemed reasonable and lawful. Under this analysis, courts will consider a number of factors, including the motives of the parties, all reasonable business justifications, and the impact of the agreement in defined product and geographic markets.

A rule or reason analysis is often complicated and uncertain. There is no bright-line test for determining whether a particular agreement is, on balance, pro-competitive. Agreements typically subject to a rule of reason analysis include exclusive dealing, reciprocal dealing, information exchanges, bundled discounts, and joint ventures or pooling arrangements. These types of agreements can involve complicated assessments to determine their legality.

For example, joint underwriting arrangements and joint data collection typically constitute the “business of insurance” exempt from antitrust scrutiny under the McCarran Act. If the exemption is lost, however, a joint venture analysis may apply. Federal guidelines for analyzing collaborations among competitors typically involve complex assessments of market power and then an assessment of market impact.17

In sum, the McCarran Act permits insurers to cooperate in ways that federal antitrust law would prohibit in other industries. Attention should be paid, therefore, to developments in Congress. If the McCarran Act is repealed, carriers will need to update their antitrust compliance policies and practices. In the meantime, an important objective of compliance will remain avoiding activities that result in the loss of immunity.

(Endnotes)

1 15 U.S.C. §§ 1011 et seq.
2 See Wickard v. Filburn, 317 U.S. 111 (1942) (holding that a farmer growing wheat not for sale, but to feed his own animals, is engaged in interstate commerce subject to federal regulation).
3 See United States v. South-Eastern Underwriters Ass’n, 322 U.S. 533 (1944).
4 See Lawyers Title Co. of Mo. v. St. Paul Title Ins. Corp., 526 F.2d 795, 797 (8th Cir. 1975) (“[T] he McCarran Act exemption does not depend on the zeal and efficiency displayed by a state in enforcing its laws. Congress provided that exemption whenever there exists a state statute or regulation capable of being enforced.”).
5 See Florida Insurance Act, chs. 624-632, 634-636, 641-642, 648, 651, Fla. Stat.
6 15 U.S.C § 1013(b).
7 Hartford Fire Ins. Co. v. California, 509 U.S. 704 (1993); see also Slagle v. ITT Hartford, 102 F.3d 494, 498 (11th Cir. 1996) (“Conduct constitutes a ‘boycott’ [for purposes of the McCarran Act] where, in order to coerce a target into certain terms on one transaction, parties refuse to engage in other, unrelated or collateral transactions with the target … unrelated transactions are used as leverage to achieve the desired ends.”).
8 See Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 221 (1979) (describing the protection of cooperative rate-making as the core purpose behind the McCarran Act exemption).
9 15 U.S.C. § 1 et seq.
10 15 U.S.C. § 15.
11 See, e.g., § 542.18, Fla. Stat. (“Every contract, combination, or conspiracy in restraint of trade or commerce in this state is unlawful.”).
12 See § 542.20, Fla. Stat.
13 Sanger Ins. Agency v. Hub Int’l, Ltd., 802 F.3d 732 (5th Cir. 2015).
14 15 U.S.C § 1. The Sherman Act also prohibits monopolization and related violations, which are beyond the scope of this article.
15 See Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990).
16 See Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284 (1985).
17 U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrust Guidelines for Collaborations Among Competitors (April 2000).

Are Consulting Physicians Required to Intervene?

By: Paula J. Lozano

In Florida medical malpractice lawsuits, plaintiffs’ attorneys often sue not only the providers involved in the direct care of the patient, but also providers who were remotely in contact with the patient’s care. Plaintiffs’ attorneys often take the position that if an insurance policy exists – sue them and maybe we will get a few bucks. Occasionally, it is an effective tactic. By suing all potential parties, plaintiffs avoid a Fabre defense and an “empty chair” at trial, and they may actually obtain a nominal settlement just so the defendant-physician can avoid the cost and inconvenience of litigation or trial. However, defending such cases can become protracted and the litigation costs immense.

Duty to Intervene Allegations and the Costs of Defense

While the true focus of the lawsuit is on the primary care providers, secondary claims often involve a consulting physician’s failure to intervene or override the decisions of the treating physician. In the last several years, CSK attorneys were presented with this “failure to intervene” issue in four different lawsuits. The issues were as follows: (1) whether the treating obstetrician should have presented to the hospital to evaluate his patient after the emergency room physician called regarding use of a steroid for an allergic reaction; (2) whether the anesthesiologist who evaluated the patient in the Post Anesthesia Care Unit (“PACU”) should have convinced the surgeon to take the patient back to surgery to evaluate post-operative bleeding; (3) whether the consulting intensivist who saw the patient in the Intensive Care Unit (”ICU”) five hours after surgery should have overridden the surgeon’s orders and called another surgeon to take the patient back to surgery to explore for a developing hematoma; and, (4) whether the anesthesiologist administering an epidural to a patient in labor should have convinced the obstetrician to perform a C-Section. All patients suffered complications resulting in significant injuries.

In each case, the plaintiff’s attorney alleged negligence on the secondary physicians. Two cases resulted in a nominal settlement, another in a defense verdict, and the last in a dismissal before trial. Only one case pursued a Motion for Summary Judgment on behalf of the secondary physician, which the trial court denied. All four cases were in litigation for years with significant costs.

In Florida, Is There a Duty to Intervene?

In Florida, there is presently no duty for a consulting physician to intervene or convince the treating physician to take a different course of action. However, no Florida court has held that such a duty does not exist. Therefore, plaintiffs’ attorneys are free to file claims against consulting physicians alleging that the provider had a duty to intervene. When confronted with such claims, it is advisable that defense attorneys file early dispositive motions seeking summary judgment. Convincing the courts in Florida that there is no legal duty for a consulting physician to intervene in the care of a patient is the best means of controlling defense costs. However, despite the absence of case law recognizing such a duty in Florida, establishing that plaintiffs have failed to meet their burden of proof as a matter of law is challenging.

Plaintiff’s Burden of Proof and Challenging the Duty Owed

In order to prevail in a medical malpractice matter, the plaintiff bears the burden of proving all four elements of the cause of action: (1) a duty owed to the patient; (2) a breach in the applicable standard of care; (3) a legal causal connection between the breach and the injuries; and, (4) damages. Too often, lawyers and courts gloss over the first element. However, because there is no case law imposing a duty for a physician to intervene in Florida, defense attorneys should aggressively pursue summary judgment on this first element.

Whether a legal duty exists in a negligence action is a question of law decided by the trial court.1 In all four CSK cases discussed above, the plaintiffs’ claims involved whether the secondary provider had a duty to intervene or override the treating provider’s orders. Currently, Florida imposes no such duty on physicians, nor does Florida negate such a duty. In fact, there is no Florida case on point. There are, however, cases from various other jurisdictions that support summary judgment on this question of duty.

Case Law in Foreign Jurisdictions that Support No Duty to Intervene

Kansas provides direct, persuasive support. Specifically, in Dodd-Anderson By and Through Dodd-Anderson v. Stevens, the appellate court considered adopting a duty for a secondary physician to override the judgment and decisions of another physician.2 In the case, the plaintiffs alleged that the consulting physician negligently failed to intervene in the treating physician’s treatment of a child. The plaintiffs’ expert opined that the secondary physician “should have done something….should have examined and assumed control.”3 Plaintiffs often rely upon such evidence in Florida. However, the Kansas court disagreed, upheld the entry of summary judgment, and provided the following rationale:

[N]o reasonable person, applying contemporary standards, would recognize and agree that a physician has, or should have, a legal duty to unilaterally and perhaps forcibly override the medical judgment of another physician, particularly a treating physician. 4

In fact, the court opined that such a duty would result in “medical, and ultimately legal, chaos.”5 Although the court noted the obvious and endless adverse consequences to the medical community and patients, it did not elaborate on these consequences.6

Alabama lends further support to challenge these “failure to intervene” cases. In Wilson v. Athens-Limestone Hosp., the parents filed a wrongful death action against the hospital and hospital-employed pediatrician alleging improper discharge of their four year old who ultimately died.7 The emergency room physician consulted the child’s pediatrician, Dr. Teng, who had a pre-existing physician-patient relationship with the child.8 Dr. Teng presented to the emergency department, saw the child, and spoke to the emergency room physician, but did not diagnose, treat, or make any recommendations for the patient.9 Still, the plaintiffs alleged that Dr. Teng had a duty to intervene, which he breached by negligently failing to ensure the child received proper care through admission and administration of medication.10 The trial court, however, disagreed and granted the defendants’ directed verdict at trial. The appellate court also agreed and, citing Dodd-Anderson, found that Dr. Teng owed the patient no duty to intervene or override the independent medical judgment of the emergency room physician who retained control of the child.11

More recently, in Gilbert v. Miodovnik, the Court of Appeals for the District of Columbia relied on Dodd-Anderson to determine that a Medical Director did not owe a duty to intervene in the patient’s care.12 In this case, the plaintiff received obstetrical care and treatment from a midwifery group who counseled the patient on the dangers and increased risks of complications giving birth vaginally after two prior C-Sections (VBAC). The midwifery group often consulted with Dr. Miodovnik during “chart review” meetings regarding various patients.13 When the midwives brought this patient to his attention during a routine chart review, Dr. Miodovnik expressed great concern, recommended the patient have a C-section, and instructed the midwives to reiterate the dangers and risks involved in a VBAC in order to obtain proper consent.14 However, the midwives failed to again inform the patient of the risks and failed to again obtain her consent to forego the C-section.

Thereafter, while the patient ultimately agreed to a C-section at the last minute, her uterus ruptured causing significant damages to the baby.15 The plaintiff argued that because Dr. Miodovnik was the Medical Director who gave advice when the midwives presented her case, he owed the patient a duty to intervene, override the judgment of the nurse midwives, and directly communicate with and counsel the patient that the VBAC was inadvisable.16 However, the Court of Appeals found that a traditional physician-patient relationship did not exist between the plaintiff and Dr. Miodovnik, since he never met with or examined the patient.17 The Court of Appeals also found that even though Dr. Miodovnik consulted on the case, he had no duty to intervene, take charge of the patient’s care and treatment plan, or even monitor the situation.18 In summary, the patient already had skilled treating practitioners managing her care, which Dr. Miodovnik neither supervised nor had a duty to supervise.19

Conclusion

In CSK’s experience in medical malpractice lawsuits over the years, plaintiffs persist in making creative arguments that challenge the existence of a duty to intervene. From a practical standpoint, the case law from Kansas, Alabama and the District of Columbia support the proposition that secondary providers consulting on patients’ care, or merely discussing care with the treating provider, have no such duty to intervene or override the treating physician’s plan. In Florida, there is no case law that specifically addresses the issue. However, the holdings from these other jurisdictions provide aggressive defenses to allegations that a physician had the duty to intervene. Florida counsel should raise these defenses early via the filing of dispositive motions in cases where the plaintiffs assert a physician’s duty to intervene, before extraordinary time and resources are expended in litigation. The challenge we continue to face in Florida, however, is finding trial courts willing to grant these motions.

(Endnotes)

1 McCain v. Florida Power Corp., 593 So. 2d 500 (Fla. 1992).
2 905 F. Supp. 937 (D. Kan. 1995), aff’d, 107 F.3d 20 (10th Cir. 1997).
3 Id. at 947.
4 Id. at 948.
5 Id.
6 Id.
7 894 So. 2d 630 (Ala. 2004).
8 Id. at 631.
9 Id.
10 Id. at 633.
11 Id. at 635.
12 990 A.2d 983 (D.C. 2010).
13 Id. at 986.
14 Id.
15 Id. at 987.
16 Id. at 991.
17 Id.
18 Id. at 996-97.
19 Id.