New Jersey Federal Court Extends New Jersey Patient Safety Act Privilege to Near-Miss Event Involving Non-Patient Employee

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Lawson v. Praxair, Inc., Case No. 3:16-cv-2435 (BRM)(DEA)

This case involved a Defendant’s appeal from a magistrate’s order affirming in part and reversing in part a special master’s discovery decision involving invocation of privilege under the New Jersey Patient Safety Act ("NJPSA"). The NJPSA is intended to encourage the disclosure of adverse events and near-misses that threaten the safety of patients in a health care facility by creating a non-punitive culture focused on improvement over blame. To effect this purpose, the NJPSA establishes an absolute privilege for (a) documents received by the Department of Health ("DOH") pursuant to a mandatory requirement or voluntary disclosure, and (b) documents developed by a health care facility as part of a self-critical analysis conducted regarding a preventable or near-miss event. By categorizing these documents as privileged under the NJPSA, health care facilities have the freedom to improve existing shortcomings without fear of those efforts being used against the health care facility in a subsequent civil action.

In this case, Plaintiff sued Defendants for injuries she suffered when an oxygen tank manufactured or distributed by Defendants exploded at a hospital where Plaintiff worked as a nurse. Defendants filed a third party complaint against the hospital for breach of contract and contractual indemnification pursuant to the parties’ product supply agreement. Defendants requested a special master to conduct an in-camera review of documents that the hospital claimed were privileged under the NJPSA and the special master ultimately concluded that 2,009 pages of documents produced were privileged while 33 pages were eligible for disclosure. The special master, therefore, ordered Defendants to bear 98 percent of the costs of the in-camera review.

Defendants then appealed the decision to the magistrate, who denied the appeal. The magistrate, however, granted the hospital’s appeal of the special master’s decision to order production of an email prepared during the hospital’s root cause analysis for in-camera review.

The Defendants then appealed the decision to the District Court. The District Court denied Defendants' appeal and affirmed the magistrate’s decision. The District Court held that Defendants had waived their argument that the NJPSA did not apply because Plaintiff was not a patient, as Defendants had not timely raised the argument with the special master. However, the court nevertheless affirmed the magistrate’s conclusion that the explosion was a “near-miss” that fell within the scope of the NJPSA because it could have injured patients. The District Court further affirmed the magistrate's determination that Defendants had suffered no due process violation due to the application of the NJPSA, as the privileged documents were not the only source of the information Defendants might need to prepare their case. Finally, the District Court affirmed the special master’s cost allocation, as the parties were to bear the cost of review in proportion to the percentage of documents deemed improperly withheld.