ALBANY, N.Y. (Legal Newsline) – The New York Court of Appeals has issued a decision concerning a question from the U.S. Court of Appeals for the Second Circuit concerning whether state law creates “a private right of action for bad-faith and malicious reporting to the Office of Professional Misconduct.”
In the 10-page ruling issued Nov. 21, Judge Leslie Stein said that New York State’s Public Health Law had not been “enacted for the benefit of persons similarly situated to plaintiff, and a private right of action is inconsistent with the legislative purpose and broader statutory scheme.”
Stein wrote that the Second Circuit's question "should be answered in the negative."
Stein gave three reasons for the rationale in making the ruling. The first was that the plaintiff, in this case, was not able to “demonstrate that he falls within the class the legislature intended to benefit.”
Second, that there are “common law remedies” that therefore undermine the “plaintiff’s argument that there is no other method of deterring bad-faith reporting.” Third, that the “implied right of action for which the plaintiff advocates would diminish the effectiveness of” the law.
This ruling stems from a civil court case in which the plaintiff, Dr. Robert D. Haar, was sued by Nationwide Mutual Fire Insurance Co. over allegations of insurance fraud. Haar had treated four people who had been hurt in car accidents and had then filed claims with the company.
Nationwide “either fully or partially denied each claim” and consequently reported Haar to New York’s Office of Professional Misconduct, the ruling states. Haar, in turn, sued Nationwide over allegations of defamation.
The case went to U.S. District Court for the Southern District of New York and then to the Second Circuit. The federal appeals court judges recognized that they were divided on this question and then certified the question to send to the New York Court of Appeals