2012 PROFESSIONAL LIABILITY UPDATE - Eckert Seamans

(c)Limitations of Corporate NegligenceUntil relatively recently, neither the Supreme Court of Pennsylvania nor the StateSuperior Court had addressed the issue of whether the doctrine of corporate liability should beextended to physicians’ practices or professional corporations. Then, in Sutherland v.Monongahela Valley Hospital, 856 A.2d 55 (Pa. Super. Ct. 2004), in a very brief section of itsopinion, the Superior Court “declined” Defendant-physician’s “invitation to extend thenegligence principles contemplated by Thompson” to the physician’s practice. While thisopinion held only that the court would not extend the negligence principles of Thompson “to thecase sub judice,” the reasoning of the court appears to apply more generally. The court reasoned:Id. (citations omitted).We note that the policy considerations underlying the PennsylvaniaSupreme Court’s creation of the theory of corporate liability forhospitals are not present in the situation of a physician’s office. InThompson, the Supreme Court recognized that “the corporatehospital of today has assumed the role of a comprehensive healthcenter with responsibility for arranging and coordinating the totalhealth care of its patients.” The same cannot be said for aphysician’s practice group.However, in Zambino v. Hospital of the University of Pennsylvania, No. 06-3561, 2006U.S. Dist. LEXIS 69119 (E.D. Pa. September 25, 2006), the United States District Court for theEastern District of Pennsylvania denied Defendants’ motion to dismiss Plaintiff’s corporatenegligence claim against Defendant hospital trustees, health system and practice group. Thecourt noted that although the Pennsylvania Supreme Court has not addressed the extension ofcorporate liability to medical providers other than hospitals, other courts (such as thePennsylvania Superior Court in Shannon v. McNulty, infra) have extended this doctrine to otherentities in limited circumstances “such as when the patient is constrained in his or her choice ofmedical care options by the entity sued, and the entity controls the patient’s total health care.”The court held that Plaintiffs were entitled to develop a factual record to support the applicationof this theory to Defendants, and that they may be able to show that Defendants were hospitalentities against whom they could maintain a corporate negligence claim.In Hyrcza v. West Penn Allegheny Health System, Inc., 978 A.2d 961 (Pa. Super. Ct.2009), reargument denied, 2009 Pa. Super. LEXIS 4448 (Pa. Super. Sept. 11, 2009), the SuperiorCourt confronted numerous objections raised by Defendant-appellants, a physician and aprofessional corporation, after a trial on claims sounding in medical malpractice and corporatenegligence resulted in the entry of a multi-million dollar judgment against them. One of thearguments the Superior Court confronted on appeal, was whether the jury should have beencharged on the issue of corporate negligence, with respect to the appellant professionalcorporation. The appellant corporation argued that professional corporations are not liable undera theory of corporate negligence. The Superior Court acknowledged its prior decision inSutherland v. Monongahela Valley Hospital, 856 A.2d 55 (Pa. Super. Ct. 2004), in which it haddeclined to extend the doctrine of corporate negligence to physicians’ offices. Ultimately,however, the Hyrcza Court concluded that the appellant corporation was more in the nature of a72