The PHL right to sue for bad faith?September 19, 2019

Haar v. Nationwide Mut. Fire Ins. Co., 918 F.3d 231, 235 (2d Cir. 2019)

“For the reasons stated, the Court hereby certifies the following question to the New York Court of Appeals:

1. Does New York Public Health Law Section 230(11)(b) create a private right of action for bad faith and malicious reporting to the Office of Professional Medical Conduct?

We invite the Court of Appeals [**9]  to reformulate this question as it sees fit or expand it to address any other issues of New York law that would assist this Court in determining whether Haar may assert a cause of action under Section 230(11)(b) against Nationwide.

It is hereby ORDERED that the Clerk of this Court transmit to the Clerk of the New York Court of Appeals this opinion as our certificate, together with a complete set of briefs, appendices, and the record filed in this case by the parties. The parties shall bear equally any fees and costs that may be imposed by the New York Court of Appeals in connection with this certification. This panel retains jurisdiction for purposes of resolving this appeal once the New York Court of Appeals has responded to our certification.”

This decision from the Second Circuit, on this diversity case in March 2019, is interesting as it relates to the within issue. I honestly was unaware that a medical provider had a right to sue for bad faith reporting under the PHL. Apparently, there is a split in the Departments and now the Court of Appeals has agreed to hear the case.

We shall see what happens.

4 Responses

  1. Not My department says:

    The First Department case doesn’t seem that great. As the Second Circuit noted “The First Department, with no further analysis, remarked that N.Y. Pub. Health [918 F.3d 235] Law § 230(11)(b) also created a private right of action “[f]or similar reasons,” noting that Section 230(11)(b) “immunizes from suit insurers and others who make good faith reports to” the OPMC.” That no further analysis part is questionable.

    More to the point, the purpose rule of statutory construction further results in a finding that, since the statute’s purpose was to further reporting, reading the creation of an inverse cause of action into it (which is the issue here), is antithetical. Given the statutory language, I’d argue that it absolutely does not create any private right to sue for alleged bad faith. Any such right would have to derive from common law, with the additional loophole that provenance of good faith is an absolute bar to recovery.

  2. Kurt Lundgren says:

    I don’t see the private right of action either. It isn’t even implied in statute. Haar should have tried GBL 349 and conbined it with the public health law to get a valid cause of action. There is precedent for that. .

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