CHARLESTON - For the third time in three years, the state Supreme Court has upheld the validity and enforceability of a particular type of medical protective order against a challenge by insurance companies.
The medical protective orders in question have been entered in lawsuits filed by plaintiffs seeking compensation for injuries sustained in vehicle accidents. The protective orders seek to limit the dissemination and retention of medical records obtained by the insurance companies through discovery.
In this particular action, two cases were consolidated, with State Farm seeking a writ of prohibition to block a protective order in Case I and an appeal by Nationwide of the circuit court’s protective order in Case II.
The insurance companies “objected to the terms of the order, contending, among other things, that the medical protective order was too restrictive because it affected the insurers’ ability to retain and report the information to governmental agencies regulating insurers and to retain and utilize such information in its claims files.”
The insurance companies advanced several arguments against the protective orders regarding “(1) the effect the orders might have on their mandatory statutory reporting obligations; (2) the perceived burdens attending their compliance with such orders; (3) alleged constitutional implications related to enforcement of the orders and the attendant limitations on the use of the medical information subject thereto; (4) the lack of good cause for the orders’ issuance against insurance companies in light of the Insurance Commissioner’s promulgation of privacy regulations.”
The Court did not find any of the arguments persuasive and particularly rejected the suggestion that “while a medical protective order may be warranted to safeguard the plaintiffs’ medical records when they are disclosed to some parties, such protective orders are not necessary to protect medical records disclosed to insurance companies because insurers already are bound by the Insurance Commissioner’s privacy rules.”
Justice Robin Jean Davis wrote on Nov. 15, “While we appreciate the insurers’ efforts to obtain preferential treatment and special exemptions from medical protective orders, we disagree with the proposition they assert… for two reasons: (1) it enlarges the authority of an administrative agency beyond the scope of its legislative delegation of power by substituting the Insurance Commissioner’s regulations for the rulings of the circuit court issuing the protective order and (2) it usurps the exclusive province of the court to regulate discovery in matters over which it presides.
“Insofar as the authority to manage discovery rests with the judicial branch, as implemented by the courts hearing cases in which discovery issues are presented, the authority to limit an insurer’s dissemination of confidential medical information obtained through discovery is governed by the presiding court, through a protective order or otherwise, and not by an administrative regulation applicable to insurance companies.”
The divided court denied the Writ of Prohibition in Case I and affirmed the circuit court in Case II, having the effect of upholding the validity and enforceability of the protective orders in each instance.
Davis delivered the Opinion of the Court, with Chief Justice Menis Ketchum dissenting and Justice Brent Benjamin concurring, in part, and dissenting, in part.