Subhash C. Batra, M.D. v. Covenant Health System D/B/A Covenant Medical Center/Covenant Medical Center-Lakeside , 562 S.W.3d 696 ( 2018 )

In The
Court of Appeals
Seventh District of Texas at Amarillo
________________________
No. 07-18-00012-CV
________________________
SUBHASH C. BATRA, M.D., APPELLANT
V.
COVENANT HEALTH SYSTEM D/B/A COVENANT MEDICAL
CENTER/COVENANT MEDICAL CENTER-LAKESIDE, APPELLEE
On Appeal from the 99th District Court
Lubbock County, Texas
Trial Court No. 2017-526,055; Honorable William C. Sowder, Presiding
October 9, 2018
OPINION
Before QUINN, C.J., and PIRTLE and PARKER, JJ.
Appellant, Subhash C. Batra, M.D., filed this interlocutory appeal from the trial
court’s supplemental order granting the motion to dismiss with prejudice filed by Appellee,
Covenant Health System d/b/a Covenant Medical Center/Covenant Medical Center-
Lakeside (Covenant), pursuant to the provisions of the Texas Citizens Participation Act.
See TEX. CIV. PRAC. & REM. CODE ANN. § 27.001-.009 (West 2015).1 By his original and
reply briefs, Dr. Batra presents two issues challenging (1) the trial court’s failure to issue
findings of fact and conclusions of law and (2) the trial court’s order granting Covenant’s
motion to dismiss. More specifically, by his second issue, Dr. Batra questions whether
(1) his claims or causes of action regard a matter of “public concern” that relates to the
exercise of the right of free speech; (2) he presented clear and specific evidence of a
prima facie case for each essential element of his various claims; and (3) Covenant
established an affirmative defense to any or all of those claims by a preponderance of the
evidence. In his Summary of the Argument, Dr. Batra also challenges the trial court’s
award of attorney’s fees to Covenant and the imposition of sanctions against him which,
although not presented as separate issues,2 will be addressed in this opinion. Upon
consideration of each issue, we affirm.
BACKGROUND
Dr. Batra is a gastroenterologist who had credentials to practice at Covenant and
its facilities from 1995 until 2016. In 2013 and 2014, certain Covenant staff members
made allegations against him related to patient care. He was temporarily suspended
while an investigation was conducted. Ultimately, he was exonerated of the allegations
and his medical staff privileges were restored.3
1Unless otherwise shown, all further references to “section” or “§” in this opinion are references to
the Texas Civil Practice and Remedies Code Annotated (West 2015).
2 We will address the attorney’s fee question as issue three and the sanctions question as issue
four.
3 The Texas Medical Board also conducted an investigation and dismissed the complaint against
Dr. Batra “based on the information presently available.”
2
As is customary in the medical profession, physicians are required to periodically
apply for the renewal of medical staff privileges at hospitals where they perform their
medical services. In August 2015, Dr. Batra applied for renewal of his privileges at
Covenant. Covenant’s Credentialing Committee recommended to the Medical Executive
Committee, however, that the renewal of his privileges be denied. Dr. Batra claimed the
decision was made without notice and an opportunity to be heard, in violation of the
Medical Staff Bylaws.4 Covenant’s Chief of Staff then re-initiated the original allegations
and added two new allegations concerning patient safety. This time the Medical
Executive Committee provided Dr. Batra sufficient notice and an opportunity to be heard.
In September 2015, based in part on the newly-included allegations, the Medical
Executive Committee again recommended that Dr. Batra’s medical staff privileges be
denied. Pending a review hearing before the Fair Hearing Panel (another procedural
safeguard provided by the Medical Staff Bylaws), Dr. Batra was granted temporary
privileges in accordance with standard procedures. Based on the Medical Executive
Committee’s recommendation, a Fair Hearing Panel was formed for the purpose of
reviewing some of Dr. Batra’s patient cases. At the hearing, the Medical Executive
Committee was represented by its attorney, Ben Davidson. Dr. Batra also had legal
representation and both sides presented witnesses.
The two cases the Medical Executive Committee used to justify denial of Dr.
Batra’s privileges involved the quality of patient care and a breach of patient
4Medical Staff Bylaws (to be distinguished from Covenant’s hospital bylaws) were adopted to
provide a framework for self-governance of the medical staff at Covenant in order to more effectively
discharge its responsibilities in matters involving quality patient care, treatment, services, and safety.
3
confidentiality. The first allegation was that Dr. Batra failed to timely allow intervention by
an anesthesiologist in order to intubate a patient with a cardiac condition when there was
a critical change in her vital signs during a procedure. The second allegation, testified to
by several witnesses assisting during a particular procedure, was that during that
procedure Dr. Batra engaged in a conversation with his son and daughter-in-law via a cell
phone calling feature known as FaceTime. Dr. Batra’s son had attended medical school
for a brief period before pursuing a legal career and expressed an interest in watching the
procedure. The electronic transmission of the procedure was done without patient
consent, although no patient data was transmitted over FaceTime. Dr. Batra expressed
to staff members who assisted him that day that they keep the incident to themselves.
Someone, however, reported the incident to other medical staff.
The members of the Fair Hearing Panel issued a report on March 9, 2016, that did
not contain any findings that Dr. Batra violated the standard of medical practice or
professional conduct. It did, however, include a specific finding that Dr. Batra failed to
meet his burden of showing that the Medical Executive Committee’s proceeding against
him was arbitrary, capricious, or unreasonable.5 The Fair Hearing Panel recommended
conditionally renewing Dr. Batra’s privileges if he agreed to waive certain rights under the
bylaws and receive counseling and therapy.
Notwithstanding the Fair Hearing Panel’s recommendations, on April 12, 2016, the
Medical Executive Committee recommended to Covenant’s Board of Directors that Dr.
5 Per the bylaws, the standard to be applied by the Fair Hearing Panel is whether the Medical
Executive Committee acted in an arbitrary, capricious, or unreasonable manner.
4
Batra’s privileges be denied. Those recommendations were subsequently approved by
the board.
Dr. Batra unsuccessfully appealed the denial of the renewal of his privileges to the
Appellate Review Committee, which also found that he failed to meet his burden. On
June 28, 2016, the Board of Directors accepted the recommendation of the Appellate
Review Committee and affirmed its decision to adopt the Medical Executive Committee’s
recommendation to deny renewal of Dr. Batra’s privileges at Covenant. At that point, the
Board’s decision to not renew Dr. Batra’s clinical privileges became final.
As required by law, the next step was submitting the Board’s decision to the
National Practitioner Data Bank (NPDB).6 The NPDB is a federal program that collects
and provides information about professional malpractice lawsuit judgments as well as
disciplinary and termination reports to health care organizations and facilities,
professional license regulating governmental agencies, and third-party payors for health
care insurance coverage. On July 20, 2016, the Chief Medical Officer at Covenant
instructed an employee to submit a report to the NPDB concerning Dr. Batra.
Per the internal procedures of the NPDB, Dr. Batra challenged the adverse report
by requesting review of the report by the Secretary of the United States Department of
Health and Human Services. On March 10, 2017, Dr. Batra was informed by letter that
the Secretary had conducted a review and denied his challenge. He was also advised
that the adverse report would remain on file with the NPDB.
6 Hospitals are required by 42 U.S.C. § 11133(a)(1)(A) and 45 CFR § 60.6 to report to the National
Practitioner Data Bank any peer review action that adversely affects clinical privileges for longer than thirty
days.
5
Based on the adverse report to the NPDB and the loss of his clinical privileges, Dr.
Batra sued Covenant, in June 2017, for defamation, business disparagement, tortious
interference with prospective relations, improper restraint of trade, breach of contract, and
intentional infliction of emotional distress. He asserted that the report was inaccurate and
misleading and demonstrated a conscious disregard for the truth of the allegations. He
also complained that Covenant’s attorney, Ben Davidson, made ex parte statements to
the Medical Executive Committee and the Board of Directors which were detrimental to
him.
Before any discovery was conducted, Covenant moved to dismiss Dr. Batra’s suit
under the Texas Citizens Participation Act. See § 27.003(a). In October 2017, a hearing
was held on Covenant’s motion to dismiss. No witnesses were presented; however, the
trial court received affidavits and supporting documents after ruling on objections to that
evidence. On November 22, 2017, the trial court signed an order dismissing Dr. Batra’s
suit with prejudice, while reserving a ruling on attorney’s fees. See §§ 27.001, 27.005(c),
(d). On December 19, 2017, the trial court signed an order awarding Covenant $47,500
in attorney’s fees through the hearing on the motion to dismiss, plus additional fees for
any successful appeals, and imposing a $1,000 sanction against Dr. Batra to deter him
from bringing similar actions. See § 27.009(a)(1), (2).
Dr. Batra then sought to appeal the trial court’s ruling by filing his notice of appeal
on January 18, 2018, thirty days after the order was signed. Section 27.008(b) of the Act
provides that an appellate court shall expedite an appeal, whether interlocutory or not,
from a trial court order on a motion to dismiss a legal action under section 27.003. See
§ 27.008(b). For purposes of appellate timetables, an expedited appeal is an accelerated
6
appeal governed by the Texas Rules of Appellate Procedure for accelerated appeals.
See TEX. R. APP. P. 28.1(a), (b). See also Kim v. Kim, No. 05-16-01508, 2017 Tex. App.
LEXIS 3062, at *1 (Tex. App.—Dallas, pet. denied) (mem. op.). The Texas Rules of
Appellate Procedure require a notice of appeal in an accelerated appeal to be filed within
twenty days after the judgment or order is signed. TEX. R. APP. P. 26.1(b).
Although the notice of appeal in this case was filed thirty days after the order of
dismissal was signed and was, therefore, untimely, Rule 26.3 provides a fifteen-day
extension period if the notice is filed in the trial court and a motion for extension of time
reasonably explaining the delay is filed in the appellate court. While a motion for
extension of time is necessarily implied; see Verburgt v. Dorner, 959 S.W.2d 615, 617
(Tex. 1997), it is still necessary for an appellant to reasonably explain the need for an
extension. See Jones v. City of Houston, 976 S.W.2d 676, 677 (Tex. 1998). At the behest
of this court, Dr. Batra did offer a timely reasonable explanation. Therefore, his notice of
appeal was heretofore deemed timely-filed.
ISSUE ONE—FINDINGS OF FACT AND CONCLUSIONS OF LAW
By his first issue, Dr. Batra complains of the trial court’s failure to enter findings of
fact and conclusions of law sufficient to provide the parties with adequate notice of the
basis for its ruling. He argues he suffered harm by the trial court’s failure to do so. We
disagree.
A party who files a motion to dismiss pursuant to section 27.003 may request the
trial court to enter findings on whether suit was filed to deter or prevent the movant from
exercising constitutional rights and whether suit was filed for an improper purpose,
including to harass or to cause delay or to increase litigation costs. § 27.007(a). When
7
requested to issue such findings by the movant, the trial court is required to do so. See
id. See also Greer v. Abraham, 489 S.W.3d 440, 443 (Tex. 2016). However, the statute
is silent and, therefore, imposes no duty on the trial court to make findings of fact and
conclusions of law when requested by the nonmovant.
Dr. Batra acknowledges that the TCPA does not address traditional findings of fact
and conclusions of law but notes it does not forbid them either. See Greer, 489 S.W.3d
at 443 n.3. He maintains that Greer is “practically an instruction manual” for an appellate
court to remand a cause to the trial court to explain its judgment.
Six days after the trial court signed its order granting Covenant’s motion to dismiss
with prejudice, Dr. Batra filed a request for findings of fact and conclusions of law. See
TEX. R. CIV. P. 296 (requiring request to be filed within twenty days after the judgment is
signed in “any case tried . . . without a jury”). When no findings of fact and conclusions
of law were filed, Dr. Batra did not file a notice of past due findings of fact and conclusions
of law as required by Rule 297. See TEX. R. CIV. P. 297. A past-due reminder under Rule
297 is required to preserve the issue for appeal. See AD Villarai, LLC v. Chan Il Pak, 519
S.W.3d 132, 137 (Tex. 2017) (citing Las Vegas Pecan & Cattle Co. v. Zavala County, 682
S.W.2d 254, 255-56 (Tex. 1984)). Consequently, without addressing whether findings of
fact and conclusions of law are appropriate pursuant to Rule 296 when requested by the
nonmovant from an order dismissing a suit under the TCPA, we conclude that Dr. Batra
did not preserve his issue for appellate review. Issue one is overruled.7
7 In his argument, Dr. Batra also complains of this court’s denial of his opposed motion to exceed
the word count limit in his original brief to include his Proposed Findings of Fact and Conclusions of Law.
Given our disposition of his issue, his proposed findings are of no legal consequence. Any complaint
regarding our disposition of his motion should be directed to the Supreme Court of Texas .
8
ISSUE TWO—DISMISSAL UNDER THE TEXAS CITIZENS PARTICIPATION ACT
The Texas Citizens Participation Act is often characterized as an “anti-SLAPP”
(Strategic Lawsuits Against Public Participation) statute. See KBMT Operating Co. LLC
v. Toledo, 492 S.W.3d 710, 713 n.6 (Tex. 2016); Serafine v. Blunt (Serafine I), 466 S.W.3d
352, 356 (Tex. App.—Austin 2015, no pet.). The stated purpose of the TCPA is to
“encourage and safeguard the constitutional rights of persons to petition, speak freely,
associate freely, and otherwise participate in government to the extent permitted by law
and, at the same time, protect the rights of a person to file meritorious lawsuits for
demonstrable injury.” See § 27.002; ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d
895, 898 (Tex. 2017). To effectuate the purpose of the TCPA, the Legislature included
an expedited manner of dismissing claims brought to intimidate or to silence a defendant’s
exercise of an enumerated First Amendment right. See § 27.003. See also Coleman,
512 S.W.3d at 898.
The first step of a TCPA analysis is to determine whether the defendant has
demonstrated by a preponderance of the evidence that the TCPA applies to the plaintiff’s
claims. See Warner Bros. Entm’t, Inc. v. Jones, 538 S.W.3d 781, 800-01 (Tex. App.—
Austin 2017, pet. filed March 7, 2018). In making that determination we must recognize
that the statute “casts a wide net,” and that “[a]lmost any imaginable form of
communication, in any medium, is covered.” See Adams v. Starside Custom Builders,
LLC, 547 S.W.3d 890, 894 (Tex. 2018) (citing § 27.001(1)). In order for the TCPA to be
applicable, a defendant moving to dismiss must show by a preponderance of the
9
evidence8 that the plaintiff’s claims are based on, relate to, or are in response to the
defendant’s exercise of: (1) the right of free speech, (2) the right to petition, or (3) the right
of association. § 27.005(b). In considering whether the TCPA is applicable, the trial court
is statutorily required to consider all pleadings, as well as supporting and opposing
affidavits stating the facts on which a claim of liability is based. § 27.006. Bedford v.
Spassoff, 520 S.W.3d 901, 904 (Tex. 2017) (citing In re Lipsky, 460 S.W.3d 579, 590
(Tex. 2015)). If the record demonstrates that the plaintiff’s claim implicates one of these
rights, then the statute is applicable as to that claim, and the trial court must proceed to
the second step.
At the second step of a TCPA analysis, the burden shifts to the plaintiff to establish
by “clear and specific evidence”9 a prima facie case10 for each essential element of the
8Preponderance of the evidence means the greater weight and degree of credible evidence that
would create a reasonable belief in the truth of the matter. Herrera v. Stahl, 441 S.W.3d 739, 741 (Tex.
App.—San Antonio 2014, no pet.).
9 The TCPA does not define “clear and specific” evidence. Thus, the words “clear” and “specific”
are given their plain or common meaning. In re Lipsky, 460 S.W.3d at 590. Proof by clear and specific
evidence is “more than mere notice pleading.” Bedford v. Spassoff, 520 S.W.3d 901, 904 (Tex. 2017)
(citing In re Lipsky, 460 S.W.3d at 590). A party must “provide enough detail to show the factual basis for
its claim.” In re Lipsky, 460 S.W.2d at 591. It is clear, however, that the TCPA does not impose an elevated
evidentiary standard or categorically reject circumstantial evidence. Id. Nor does it impose a higher burden
of proof than that required of the plaintiff at trial. Id.
10 The legal meaning of a prima facie case is “evidence sufficient as a matter of law to establish a
given fact if it is not rebutted or contradicted.” In re Lipsky, 460 S.W.3d at 590 (citing Simonds v. Stanolind
Oil & Gas Co., 134 Tex. 348, 136 S.W.2d 207, 209 (1940)). It is the “minimum quantum of evidence
necessary to support a rational inference that the allegation of fact is true.” Id. (quoting In re DuPont de
Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004)). Under the TCPA, a prima facie case requires “element-
by-element, claim-by-claim exactitude.” Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191,
206 (Tex. App.—Austin 2017, pet. dism’d). “Conclusory statements are not probative and accordingly will
not suffice to establish a prima facie case.” Better Bus. Bureau of Metro. Houston, Inc. v. John Moore
Servs., Inc., 441 S.W.3d 345, 355 (Tex. App.—Houston [1st Dist.] 2013, pet. denied.) (citing In re DuPont
de Nemours & Co., 136 S.W.3d at 223-24).
10
claim in question. § 27.005(c). If the plaintiff meets that burden, the court may not grant
the defendant’s motion to dismiss as to that claim. Id.
Again, in determining whether to grant or deny a motion to dismiss, the trial court
is statutorily required to consider all pleadings, as well as supporting and opposing
affidavits stating the facts on which a claim of liability is based. § 27.006. Bedford, 520
S.W.3d at 904. In addition to consideration of the pleadings and affidavits, a trial court
may, but is not required to, hear live testimony and receive the submission of
documentary evidence.
Here, in addition to the submission of his own affidavit and the affidavit of an expert
witness, Dr. John Dunn, Dr. Batra submitted “a box under seal” containing several
thousand pages of “protected materials” he asserts were relevant to his claims After a
lengthy discussion concerning the admissibility of the documents contained within that
box, the trial court acknowledged to counsel that it would consider its contents, subject to
Covenant’s objections and claims of privilege. Thus, in this case, we must decide whether
the record, including the pleadings, supporting and opposing affidavits, and the “box” of
exhibits considered by the trial judge, contains a sufficient quantum of evidence to
implicate the TCPA and, if so, whether it also contains a minimum quantum of “clear and
specific” evidence necessary to support a rational inference establishing each element of
Dr. Batra’s claims.11
11 To the extent the contents of the “box” were not specifically referenced in the affidavits of Dr.
Batra and Dr. Dunn, this court is not required to sift through a voluminous record to determine whether an
assertion of fact is valid. Labrador Oil Co. v. Norton Drilling Co., 1 S.W.3d 795, 803 (Tex. App.—Amarillo
1999, no pet.).
11
Assuming the TCPA is applicable (step one), and the nonmovant plaintiff has
established by “clear and specific evidence” a prima facie case for each essential element
of a claim being asserted (step two), then the motion to dismiss should be denied unless
the movant defendant establishes by a preponderance of the evidence each essential
element of a “valid defense” to the nonmovant plaintiff’s claim (step three). § 27.005(d).
In considering this third step (whether a valid defense to the nonmovant plaintiff’s claim
has been established by a preponderance of the evidence) we apply a standard of review
that is essentially equivalent to a motion for summary judgment on an affirmative defense.
This is so because it is the defendant’s burden to establish a valid defense to the plaintiff’s
claim. Therefore, in order to defeat the plaintiff’s establishment of a prima facie claim, the
defendant must establish, as a matter of law, each essential element of at least one valid
defense as to each of the nonmovant plaintiff’s claims. This analysis also requires
“element-by-element, claim-by-claim exactitude.” See Elite Auto Body LLC v. Autocraft
Bodywerks, Inc., 520 S.W.3d 191, 206 (Tex. App.—Austin 2017, pet. dism’d).
In reviewing whether a defense has been established as a matter of law, this court
applies familiar standards. One, the defendant has the burden of showing that there is
no genuine issue of material fact and that it is entitled to a judgment on its defense as a
matter of law. Two, in deciding whether there is a disputed material fact issue, evidence
favorable to the claimant will be taken as true; and (3) every reasonable inference must
be indulged in favor of the claimant and any doubts resolved in his favor. Am. Tobacco
Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997) (citing Nixon v. Mr. Property
Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985)).
12
Furthermore, in conducting our third step review, we consider the pleadings and
evidence in a light favorable to the nonmovant. Porter-Garcia v. Travis Law Firm, P.C.,
Nos. 01-17-00203-CV, 01-17-00206-CV, 2018 Tex. App. LEXIS 6676, at *11 (Tex. App.—
Houston [1st Dist.] Aug. 23, 2018, no pet. h. (citing Deuell v. Tex. Right to Life Comm.,
Inc., 508 S.W.3d 679, 685 (Tex. App.—Houston [1st Dist.] 2016, pet. denied)).
STANDARD OF REVIEW
We review de novo the trial court’s determinations whether the parties met or failed
to meet their respective burdens of proof under section 27.005. See Tervita, LLC v.
Sutterfield, 482 S.W.3d 280, 282 (Tex. App.—Dallas 2015, pet. denied). See also Cox
Media Group, LLC v. Joselevitz, 524 S.W.3d 850, 859 (Tex. App.—Houston [14th Dist.]
2017, no pet.) (reviewing de novo the denial of a motion to dismiss under the TCPA).
STEP ONE—APPLICATION OF THE TCPA
The TCPA applies if Dr. Batra’s suit is “based on, relates to, or is in response to”
Covenant’s exercise of the right of free speech. The exercise of the right of free speech
is defined as a “communication made in connection with a matter of public concern.” §
27.001(3). A “communication” is defined as the “making or submitting of a statement or
document in any form or medium including oral, visual, written, audiovisual, or electronic.”
§ 27.001(1); Deaver v. Desai, 483 S.W.3d 668, 672 (Tex. App.—Houston [14th Dist.]
2015, no pet.). The definition encompasses both public and private communications.
See Lippincott v. Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015).
A “matter of public concern” includes an issue related to “health or safety,
environmental, economic, or community well-being, the government, a public official or
public figure, or a good, product, or service in the marketplace.” § 27.001(7)(A). The
13
provision of medical services by a health care professional constitutes a matter of public
concern. Lippincott, 462 S.W.3d at 510. Communications about a physician’s
competence are also a matter of public concern. See Mem’l Hermann Health Sys. v.
Khalil, No. 01-16-00512-CV, 2017 Tex. App. LEXIS 7474, at *15 (Tex. App.—Houston
[1st Dist.] Aug. 8, 2017, pet. denied) (mem. op.).
Dr. Batra’s suit is based on two types of communications, to wit: (1) the adverse
report to the NPDB and (2) Davidson’s ex parte statements at the Medical Executive
Committee meeting and subsequently, at the April 2016 Board of Directors’ meeting.
Because a “communication” may take any form or medium, a review of the pleadings
shows that Covenant established the first prong of the first step in determining
applicability of the TCPA—a communication.
As to the second prong of the first step, Covenant was also required to establish
that the communications in question were made “in connection with” a matter of public
concern. The communications at issue relate to Dr. Batra’s handling of specific cases,
his medical competence, and disciplinary action by Covenant. Notwithstanding Dr.
Batra’s insistence that the communications at issue were private, those types of matters
have consistently been found to be matters of public concern. See Lippincott, 462 S.W.3d
at 510; Khalil, 2017 Tex. App. LEXIS 7474, at *15. See also Budri v. Humphreys, No. 02-
18-00070-CV, 2018 Tex. App. LEXIS 6294, at *5-6 (Tex. App.—Fort Worth Aug. 9, 2018,
no. pet. h.) (mem. op.) (finding private emails to be a matter of public concern).
In his petition, Dr. Batra’s claims for defamation, business disparagement, and
improper restraint of trade are directly based on, related to, or are in response to
Covenant’s submission of the adverse report to the NPDB and Davidson’s statements to
14
certain organizations within the Covenant system. His claims for tortious interference
with prospective relations, breach of contract, and intentional infliction of emotional
distress are tangentially based on, related to, or in response to submission of the adverse
report and statements made by Davidson. As such, Covenant established that Dr. Batra’s
suit was based on, related to, or was in response to a communication concerning a matter
of public concern, implicating Covenant’s First Amendment right of free speech as
contemplated by the Texas Citizens Participation Act. Accordingly, we conclude that
Covenant has satisfied both prongs of the first step concerning whether Dr. Batra’s claims
fall within the scope of the TCPA.12
During oral submission of this appeal, both parties agreed that the “cornerstone”
of the underlying case is the following portion of the adverse report submitted to the
NPDB:
On June 28, 2016, the Board of Directors of Covenant Health System took
final action to uphold a recommendation originating from the Covenant
Medical Center (“CMC”) Medical Executive Committee (“MEC”) to deny Dr.
Subhash Batra’s application for renewal of medical staff privileges at CMC.
The MEC recommendation was not based upon a single issue but rather
multiple events involving patient safety concerns, as well as confidentiality
issues. Events specifically cited as cause for concern included instances
of Dr. Batra’s failure to timely allow intervention by an anesthesiologist when
requested, as well as the use of a cell phone video calling feature to transmit
a patient procedure without patient consent.
They disagree, however, on the impact of the quoted excerpt on each of Dr. Batra’s
claims. Covenant contends the report is merely an accurate account of what transpired,
12 Dr. Batra argues that courts are ignoring First Amendment precedent from the United States
Supreme Court by applying the TCPA. But the TCPA is not restricted solely to speech that enjoys
constitutional protections. See Youngkin v. Hines, 546 S.W.3d 675, 681 (Tex. 2018) (noting that “[i]t does
not follow from the fact that the TCPA professes to safeguard the exercise of certain First Amendment rights
that it should only apply to constitutionally guaranteed activities”) (emphasis in original). See also Elite Auto
Body LLC, 520 S.W.3d at 204-05 (rejecting attempts to limit the TCPA “communications” solely to those
the First Amendment protects for to do so would read language into the statute that is not there).
15
while Dr. Batra asserts the report was made with reckless disregard for the truth. In step
two, we will address each of Dr. Batra’s claims independently.
STEP TWO—W HETHER THE PLAINTIFF HAS ESTABLISHED A PRIMA FACIE CASE
DEFAMATION
Defamation is “the invasion of a person’s interest in [his] reputation and good
name.” Hancock v. Variyam, 400 S.W.3d 59, 63 (Tex. 2013). To establish a defamation
claim, a plaintiff must show the defendant: (1) published a false statement of fact to a third
party, (2) that defamed the plaintiff, (3) with the requisite degree of fault, and (4) the
statement caused damages, unless the statements were defamatory per se. See In re
Lipsky, 460 S.W.3d at 593. See also Khalil, 2017 Tex. App. LEXIS 7474, at *16-17.
As to the “requisite degree of fault,” a plaintiff suing for defamation for statements
made by a peer review committee must establish malice as an element of the claim. See
Ching v. Methodist Children’s Hosp., 134 S.W.3d 235, 242 (Tex. App.—Amarillo 2003,
pet. denied). Therefore, in the context of a defamation claim based upon communications
made by a peer review committee, a plaintiff must show actual malice by demonstrating
that the defendant made a false and defamatory statement of fact “with knowledge that it
was false or with reckless disregard of whether it was false or not.” See Van Der Linden
v. Khan, 535 S.W.3d 179, 202 n.12 (Tex. App.—Fort Worth 2017, pet. denied) (citing v.
Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989)). See also New York Times Co. v.
Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964). Cf. TEX. CIV. PRAC. & REM.
CODE ANN. § 41.001(7) (West Supp. 2018) (requiring a plaintiff to prove a specific intent
by the defendant to cause substantial injury or harm to the plaintiff to show malice). When
a plaintiff’s claim triggers a qualified privilege or immunity defense, a plaintiff must prove
16
actual malice regardless of his status. Khalil, 2017 Tex. App. LEXIS 7474, at *17. If a
qualified privilege exists, “the law presumes good faith and want of malice.” Id. at *18.
Therefore, in order to avoid dismissal of his defamation claim, Dr. Batra was
required to provide clear and specific evidence that Covenant and Davidson acted with
actual malice during the peer review process which culminated in the adverse report
submitted to the NPDB. In support of its motion to dismiss, Covenant provided the
affidavits of Davidson and Chief Medical Officer, Dr. Craig D. Rhyne.
Davidson averred that he represented the Medical Executive Committee at the
hearing before the Fair Hearing Panel on whether to renew Dr. Batra’s privileges. As its
counsel, he made himself available to the hospital board to answer any questions
concerning the hearing during its deliberation of Dr. Batra’s application to renew his
privileges. He reviewed the report submitted to the NPDB and found it to be “a truthful
report of the conclusion of the Fair Hearing process” and he averred that the report
accurately reflected the reasons for the adverse action taken against Dr. Batra, i.e.,
patient safety concerns and confidentiality issues. He confirmed the report was accurate,
truthful, and made with conscious regard for the truth of the proceedings. He expressed
his unawareness of any ill motives by anyone involved in the Fair Hearing process or any
other motive for denial of Dr. Batra’s privileges at Covenant other than patient treatment
and confidentiality issues. He also stated that at no time did he disregard the truth, falsify
information, or act with any intention to harm Dr. Batra or his practice.
By his affidavit, Dr. Rhyne testified to his personal knowledge of the medical peer
review process. He provided specific details of the bylaws and the conduct and
proceedings of the Medical Executive Committee and the Board of Directors. As a voting
17
member of the Medical Executive Committee, Dr. Rhyne had personal knowledge of the
events involving Dr. Batra. He stated the adverse report was a truthful report and
accurately reflected the reasons for the adverse action. He was unaware of any falsity in
the report which was carefully drafted and prepared from the evidence presented during
the Fair Hearing process. He averred that at no time did he disregard the truth, falsify
information, or act with any intention to harm Dr. Batra or his practice. He also had no
indication of any ill motives by anyone in the Covenant system regarding Dr. Batra.
Based on our review of the relevant evidence, Dr. Batra has not shown by clear
and specific evidence that Covenant acted with malice in drafting an adverse report that
was ultimately submitted to the NPDB. Furthermore, Covenant was required by law to
submit the report and there is no indication of malice throughout the process by anyone
associated with Covenant. Without meeting his burden, Dr. Batra’s defamation claim
could not survive dismissal. Because Dr. Batra did not establish by clear and specific
evidence a prima facie case for defamation, the trial court did not err in dismissing that
claim.
BUSINESS DISPARAGEMENT
To establish business disparagement, a plaintiff must show (1) the defendant
published false and disparaging information about the plaintiff, (2) with malice, (3) without
privilege, (4) that resulted in special damages to the plaintiff. In re Lipsky, 460 S.W.3d at
592 (citing Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003)).
Essential to a claim of business disparagement is proof of malice and lack of privilege.
As previously discussed, there is no clear and specific evidence that Covenant or
Davidson acted with malice in submitting the adverse report to the NPDB. Additionally,
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as discussed later in this opinion, Covenant’s peer review process entitles it to a qualified
privilege and immunity from civil liability. Again, because Dr. Batra did not establish by
clear and specific evidence a prima facie case for business disparagement, the trial court
correctly dismissed that claim.
IMPROPER RESTRAINT OF TRADE
Restraint of trade is an antitrust claim governed by the Texas Free Enterprise and
Antitrust Act of 1983. See TEX. BUS. & COM. CODE ANN. §§ 15.01-.52 (West 2011).
Section 15.05(a) provides that “[e]very contract, combination, or conspiracy in restraint of
trade or commerce is unlawful.” TEX. BUS. & COM. CODE ANN. § 15.05(a). Section
15.05(b) makes it “unlawful for any person to monopolize, attempt to monopolize, or
conspire to monopolize any part of trade or commerce.” TEX. BUS. & COM. CODE ANN §
15.05(b). A person may bring suit “whose business or property has been injured by
reason of any conduct declared unlawful” in those statutes. TEX. BUS. & COM. CODE ANN
§ 15.21; Montoya v. San Angelo Cmty. Med. Ctr., No. 03-16-00510-CV, 2018 Tex. App.
LEXIS 3868, at *15 (Tex. App.—Austin May 31, 2018, pet. filed July 11, 2018) (mem.
op.).
The elimination of a single competitor does not constitute proof of an
anticompetitive effect for every market and context. In re Mem’l Hermann Hosp. Sys, 464
S.W.3d 686, 709 (Tex. 2015). To prevail on an improper restraint of trade claim, a plaintiff
must “plead . . . a reduction of competition in the market in general and not mere injury to
their own positions as competitors in the market.” Id.
Dr. Batra alleged in his petition that Covenant violated section 15.05 of the Texas
Business and Commerce Code by “illegal monopolization and/or restraint of trade and
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attempted monopolization and/or restraint of trade and/or conspiracy to monopolize or
restrain trade.” In his affidavit, he made global statements that Covenant derived an
illegal benefit from termination of his privileges by limiting patient choice in the Lubbock
area. He did not, however, present clear and specific evidence that his removal from the
pool of interventional gastroenterologists in the area would adversely and unreasonably
affect overall competition. Accordingly, because he did not establish by clear and specific
evidence a prima facie case for improper restraint of trade, the trial court correctly
dismissed that claim.
TORTIOUS INTERFERENCE WITH PROSPECTIVE RELATIONS
To prevail on a claim of tortious interference with prospective relations, a plaintiff
must show that (1) there was a reasonable probability that the parties would have entered
into a business relationship; (2) the defendant committed an independently tortious or
unlawful act that prevented the relationship from occurring; (3) the defendant acted with
a conscious desire to prevent the relationship from occurring or knew the interference
was certain or substantially certain to occur as a result of the conduct; and (4) the plaintiff
suffered actual harm or damages as a result of the defendant’s interference. Coinmach
Corp. v. Aspenwood Apt. Corp., 417 S.W.3d 909, 923 (Tex. 2013); Montoya, 2018 Tex.
App. LEXIS 3868, at *20-21. As to the second prong, “independently tortious” means
conduct that violates some other recognized tort duty. Wal-Mart Stores, Inc. v. Sturges,
52 S.W.3d 711, 713 (Tex. 2001).
Dr. Batra asserts he had longstanding and continuous relationships with referring
physicians in the Lubbock area and that the rate of referrals was greatly reduced due to
20
Covenant’s actions. He also claims there was a “reasonable probability” that he would
have been selected to perform procedures on patients from referring physicians.
The evidence presented does not clearly and specifically establish which referrals
or procedures Dr. Batra lost due to the adverse report. To speculate that he “would have
been” chosen to perform procedures is insufficient to meet his burden of proof. He does
not establish which business relationships he would have entered into but for the alleged
defamation by Covenant. Furthermore, he did not plead that Covenant committed an
independently tortious act. His affidavit makes conclusory statements that his reputation
was harmed and that his gastroenterology practice sustained a reduction in gross income
in the years following the peer review process and submission of the adverse report to
the NPDB. He asserts that health care providers in Lubbock “would certainly check [the
adverse report] as standard operating procedure when considering employment . . . or
reimbursement for claims for health care provided.” Again, Dr. Batra speculated that
other Lubbock health care providers would have checked the NPDB without pointing to a
single specific instance of a lost referral. Dr. Batra also failed to produce clear and specific
evidence of the required element that Covenant acted with a conscious desire to prevent
a business relationship from occurring or that Covenant knew that any interference with
a business relationship was certain to occur from the adverse report. As such, Dr. Batra
failed to establish a prima facie case for tortious interference with prospective business
relations and the trial court correctly dismissed his claim.
BREACH OF CONTRACT
The elements that must be proven to prevail on a breach of contract claim are (1)
the existence of a valid contract; (2) performance or tendered performance by the plaintiff;
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(3) breach by the defendant; and (4) damages sustained by the plaintiff as a result of that
breach. See Domingo v. Mitchell, 257 S.W.3d 34, 39 (Tex. App.—Amarillo 2008, pet.
denied). Dr. Batra bases his breach-of-contract claim on the Medical Staff Bylaws and in
doing so, relies on Gonzalez v. San Jacinto Methodist Hosp., 880 S.W.2d 436 (Tex.
App.—Texarkana 1994, writ denied) (finding that procedural rights under the hospital
bylaws were contractual).
Dr. Batra maintains that each application for renewal of privileges and acceptance
letter documented a “meeting of the minds” under the Medical Staff Bylaws which, once
signed by the parties, created a contract. As Covenant points out, the Medical Staff
Bylaws do not form contracts with physicians. Those bylaws, which are the Medical Staff
Bylaws for Covenant Medical Center, are different and apart from the hospital’s bylaws.
See Stephan v. Baylor Med. Ctr., 20 S.W.3d 880, 887 (Tex. App.—Dallas 2000, no pet.).
A hospital’s bylaws can constitute contractual rights. Id. But rights created by medical
staff bylaws are not necessarily binding on a hospital. Id. The medical staff is composed
of physicians and other medical personnel while the hospital is an entity governed by its
board of directors. Id. at 888. Medical staff bylaws do not create contractual obligations
for the hospital. Park v. Mem’l Health Sys. of E. Tex., 397 S.W.3d 283, 288 (Tex. App.—
Tyler 2013, pet. denied).
Accordingly, Dr. Batra did not establish by clear and specific evidence the breach
of a valid contract between himself and Covenant. There is no evidence that the power
of Covenant’s Board of Directors was defined or limited by the Medical Staff Bylaws. Dr.
Batra’s reliance on Gonzalez is distinguishable as that case found that hospital bylaws,
and not medical staff bylaws, created contractual procedural rights. Here, Dr. Batra relied
22
on the Medical Staff Bylaws, which were not binding on Covenant, to support his breach
of contract claim. Because Dr. Batra did not establish the breach of a valid contract under
the Medical Staff Bylaws, the trial court correctly dismissed his breach of contract claim.
See Columbia Valley Healthcare Sys, L.P. v. Pisharodi, No. 13-16-00613-CV, 2017 Tex.
App. LEXIS 9350, at *8 (Tex. App.—Corpus Christi Oct. 5, 2017, no pet.) (mem. op.).
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
The tort of intentional infliction of emotional distress requires a plaintiff to show (1)
the defendant acted intentionally or recklessly; (2) its conduct was extreme and
outrageous; (3) its actions caused the plaintiff emotional distress; and (4) the emotional
distress was severe. Kroger Tex. Ltd. P’ship v. Suberu, 216 S.W.3d 788, 796 (Tex. 2006).
The Supreme Court has set a high standard for “extreme and outrageous” conduct
holding that the element is only satisfied if the conduct is “so outrageous in character, and
so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded
as atrocious, and utterly intolerable in a civilized community.” See id. See also Hersh v.
Tatum, 526 S.W.3d 462, 468 (Tex. 2017) (finding that defendant’s encouragement to
another to author a column on the suicide of the plaintiffs’ son while they were still in
mourning could not meet the “high standard for extreme and outrageous” conduct).
Assuming arguendo that Dr. Batra could have established he suffered severe
emotional distress by Covenant’s conduct, he could not satisfy the element of “extreme
and outrageous” conduct based on the law as it currently exists. Furthermore, he cites
no authority finding that denial of medical staff privileges is “extreme and outrageous”
conduct. As such, the trial court correctly dismissed his claim for intentional infliction of
emotional distress.
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STEP THREE—COVENANT’S AFFIRMATIVE DEFENSES
Even assuming, as Dr. Batra argues, that he satisfied his burden of showing by
clear and specific evidence each element of a claim or cause of action, the trial court was
still required by statute to dismiss that claim if Covenant met its burden to establish by a
preponderance of the evidence each essential element of at least one valid defense as
to that claim. § 27.005(d). In its motion to dismiss, as to all claims and causes of action,
Covenant raised the defenses of (1) qualified privilege, (2) immunity from civil liability
under Texas and federal law, and (3) limitations.
QUALIFIED PRIVILEGE
A qualified privilege exists for employers and employees communicating about the
competence of another employee when the communication is made to a person having
a corresponding interest or duty in the matter being discussed. Khalil, 2017 Tex. App.
LEXIS 7474, at *18. When the qualified privilege exists, “the law presumes good faith
and want of malice.” Id. “Once the conditional privilege is shown to exist the burden is
on the plaintiff to show that the privilege is lost, that is, the plaintiff must then show malice.”
Id. (quoting Bolling v. Baker, 671 S.W.2d 559, 564-65 (Tex. App.—San Antonio 1984, writ
dism’d w.o.j.)).
“The peer review process is analogous to an employer’s performance assessment
of an employee or an employer’s investigation into an employee’s alleged wrongdoing.”
Khalil, 2017 Tex. App. LEXIS 7474, at *18. Thus, peer review activities are entitled to a
qualified privilege. See St. Luke’s Episcopal Hosp. v. Agbor, 952 S.W.2d 503, 509 (Tex.
1997). Because Covenant’s peer review process enjoys a qualified privilege with a
presumption that Covenant acted without malice, Dr. Batra was required to produce clear
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and specific evidence of actual malice for Covenant to lose its privilege. Ching, 134
S.W.3d at 242. As discussed earlier, the evidence presented by Covenant negated actual
malice; therefore, Covenant established that it was entitled to a qualified immunity
defense as to all claims.
IMMUNITY FROM CIVIL LIABILITY UNDER TEXAS AND FEDERAL LAW
The purpose of the Texas Medical Practice Act is to protect the public interest.
TEX. OCC. CODE ANN. § 151.003(1) (West 2012). Pursuant to that Act, a cause of action
does not accrue against a member, agent, or employee of a medical peer review
committee or against a health care entity from any act, statement, determination or
recommendation made or act reported, without malice, in the course of medical peer
review. TEX. OCC. CODE ANN. § 160.010(b) (West 2012). Therefore, under Texas law,
the defendants were entitled to immunity.
Federal law also provides immunity for similar claims. The Health Care Quality
Improvement Act (HCQIA), 42 U.S.C. § 11101, sets out standards for medical
professional review actions that, if followed, provide individuals and professional review
bodies immunity from liability for damages. §§ 11111-11112. The HCQIA was passed
out of concern for the increasing occurrence of medical malpractice and the need to
improve the quality of medical care. Poliner v. Tex. Health Sys., 537 F.3d 368, 376 (5th
Cir. 2008), cert. denied, 555 U.S. 1149, 129 S. Ct. 1002, 173 L. Ed. 2d 315 (2009). The
willingness of medical professionals to review the performance of their peers is essential
to policing the quality of health care. Knatt v. Hosp. Serv. Dist. No. 1 of E. Baton Rouge
Parish, 373 Fed. Appx. 438, 444 (5th Cir. 2010). The HCQIA also restricts the ability of
incompetent doctors to move from state to state without disclosure or discovery of
25
damaging or incompetent performance. Poliner, 527 F.3d at 376. The HCQIA immunity
extends to peer review actions. Id. at 377.
To be protected from liability for damages under the HCQIA, a professional review
action must be taken:
(1) in the reasonable belief that the action was in furtherance of quality
health care,
(2) after a reasonable effort to obtain the facts of the matter,
(3) after adequate notice and hearing procedures are afforded to the
physician involved or after such other procedures as are fair to the
physician under the circumstances, and
(4) in the reasonable belief that the action was warranted by the facts known
after such reasonable effort to obtain facts and after meeting the
requirement of paragraph (3). A professional review action shall be
presumed to have met the preceding standards necessary for the
protection set out in [42 U.S.C. § 11111(a)] unless the presumption is
rebutted by a preponderance of the evidence.
See 42 U.S.C. § 11112(a).
As discussed under Dr. Batra’s defamation claim, the affidavit submitted by Dr.
Rhyne establishes the procedure for peer review of physicians at Covenant. He
explained the tasks of the Credentialing Committee, the Medical Executive Committee,
the Fair Hearing Panel, and the Board of Directors as they relate to the peer review
process. He averred that pursuant to the Medical Staff Bylaws, Dr. Batra was provided
with notice, a fair hearing, representation by counsel, and an appeal to the Appellate
Review Committee. Dr. Rhyne also testified that the proceedings were in furtherance of
quality health care after a reasonable effort to obtain the facts of the underlying
accusations. Accordingly, Dr. Batra failed in his burden to show that the Medical
26
Executive Committee acted in an arbitrary, capricious, or unreasonable manner in
recommending to the Board of Directors that his privileges at Covenant be denied.
The evidence showed that the medical peer review process was conducted without
malice. As such, Covenant was entitled to a qualified privilege and also to immunity from
civil liability under Texas and federal law. Because Covenant established by the required
burden of proof that it enjoyed a qualified privilege as to all claims and that it was entitled
to immunity from civil liability, we need not address Covenant’s limitations defense. The
trial court correctly dismissed all of Dr. Batra’s claims not only on his failure to meet his
burden of proof under the TCPA, but also on Covenant’s ability to establish at least one
affirmative defense by a preponderance of the evidence. Issue two is overruled.
ISSUE THREE—ATTORNEY’S FEES
Section 27.009 authorizes the trial court to award the moving party who prevails
on a motion to dismiss reasonable attorney’s fees as justice and equity may require and
sanctions against the party who brought the suit sufficient to deter that party from bringing
similar actions. See § 27.009(a)(1), (2). Generally, the reasonableness of attorney’s fees
authorized by statute is a question of fact. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex.
1998). The reasonableness of attorney’s fees rests with the sound discretion of the trial
court. Sullivan v. Abraham, 488 S.W.3d 294, 299 (Tex. 2016).
Although Dr. Batra included a statement in the Summary of Argument section of
his original brief challenging the trial court’s award of attorney’s fees to Covenant, he did
not present any argument or authority in the body of the brief. Neither did he present any
argument in his reply brief. Consequently, any challenge to the award of attorney’s fees
to Covenant is inadequately briefed and therefore, not preserved for review by this court.
27
See TEX. R. APP. P. 38.1(i). See also ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d
867, 880 (Tex. 2010) (noting that an appellant’s brief must contain a clear and concise
argument for the contentions made, with appropriate citations to the authorities and to the
record). Issue three is overruled.
ISSUE FOUR—SANCTIONS
In its motion to dismiss, Covenant requested imposition of sanctions against Dr.
Batra and the trial court ordered that he pay Covenant $1,000 in sanctions. Covenant
suggests that the sanctions award was proper because Dr. Batra repeatedly argued his
case in “multiple forums.” Dr. Batra counters that there is no evidence to support the
sanctions award because he did not abuse the legal process by pursuing his rights under
different forums, i.e., the Texas Medical Board and the NPDB, and because he was
merely exhausting his administrative rights of appeal before filing suit.
Notwithstanding the fact that we agree Dr. Batra was simply pursuing his
administrative remedies on the denial of his privileges at Covenant, section 27.009(a)(2)
provides that whenever a trial court orders dismissal of a suit pursuant to the provisions
of the TCPA, it “shall award” the movant “sanctions . . . sufficient to deter the party that
brought the legal action from bringing similar actions . . . .” See Urquhart v. Calkins, No.
01-17-00256-CV, 2018 Tex. App. LEXIS 5145, at *14 (Tex. App.—Houston [1st Dist.] July
10, 2018, no pet. h.) (mem. op.). See also Sullivan v. Abraham, No. 07-17-00125-CV,
2018 Tex. App. LEXIS 1196, at *2 n.2 (Tex. App.—Amarillo Feb. 13, 2018, no pet.) (mem.
op.).
There is no statutory requirement that the trial court find or believe that a claimant
abused the legal process before imposing sanctions. The plain language of section
28
27.009(a)(2) “presumes that some sanctions award—i.e., an amount greater than zero—
is required” but allows the trial court broad discretion to determine the amount. Serafine
v. Blunt (Serafine II), No. 03-16-00131-CV, 2017 Tex. App. LEXIS 4606, at *23 (Tex.
App.—Austin May 19, 2017, pet. denied) (mem. op.). Therefore, we review a sanctions
order pursuant to section 27.009(a)(2) under an abuse of discretion standard. Urquhart
2018 Tex. App. LEXIS 5145, at *15. In light of the circumstances of this case and the
record before us, we conclude the trial court did not abuse its discretion in ordering Dr.
Batra to pay sanctions of $1,000 to Covenant. Issue four is overruled.
CONCLUSION
The trial court’s order dismissing Dr. Batra’s claims with prejudice is affirmed.
Patrick A. Pirtle
Justice
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