Can hospitals claim contractual immunity from physician lawsuits under their bylaws? Cottam v. IHC Health Services Explained

In Cottam v. IHC Health Services, the Utah Court of Appeals addressed whether hospital bylaws can provide contractual immunity from physician lawsuits and the briefing requirements for challenging such immunity provisions on appeal.

Background and Facts

Dr. Daniel Cottam was denied reappointment to LDS Hospital’s medical staff in 2018 after the Medical Executive Committee voted to terminate his privileges. Following an extensive hearing process that included 15 hours of testimony and 90 exhibits, both a hearing committee and the Board of Trustees upheld the denial. The hospital defendants subsequently reported the denial to the National Practitioner Data Bank, prompting Cottam to sue for breach of contract, tortious interference, defamation, and other claims.

Key Legal Issues

The central issues were whether hospital bylaws can provide contractual immunity from physician lawsuits and whether a hospital’s alleged breach of its bylaws voids such immunity. The hospital defendants moved to dismiss based on bylaw provisions releasing them from “liability of every kind” related to credentialing, peer review, and reappointment processes. Cottam argued the hospital’s alleged breaches of the bylaws voided this immunity.

Court’s Analysis and Holding

The court of appeals affirmed the dismissal on inadequate briefing grounds rather than resolving the underlying legal question. Cottam failed to provide reasoned analysis explaining why the district court erred in enforcing the bylaws’ immunity provisions. Instead, he merely repeated arguments from his district court brief about federal Health Care Quality Improvement Act immunity and made general appeals to “fairness.” The court noted that while the first breach rule might potentially void contractual immunity, Cottam’s oblique references were insufficient to meet Rule 24’s briefing requirements.

Practice Implications

This decision underscores the critical importance of adequate briefing when challenging contractual immunity provisions. The court explicitly left unresolved whether a hospital’s material breach of its bylaws voids contractual immunity, noting this “must be resolved another day.” For practitioners, this case demonstrates that hospital bylaws constitute binding contracts that can include broad immunity provisions, but it also suggests potential avenues for challenge through contract law principles like the first breach rule—provided such challenges are properly briefed with supporting legal authority and analysis.