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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Mar-18-2013 12:50 pm
Case Number: CGC-09-489734
Filing Date: Mar-18-2013 12:49
Filed by: KEVIN LEE
Juke Box: 001 Image: 03982832
GENERIC CIVIL FILING (NO FEE)
MICHAEL MCNAIR VS. CITY AND COUNTY OF SAN FRANCISCO et al
001003982832
Instructions:
Please place this sheet on top of the document to be scanned.CHRISTOPHER W. KATZENBACH (SBN 108006)
KATZENBACH LAW OFFICES
1714 Stockton Street, Suite 300 re
San Francisco, CA 94133-2930 xr
Telephone: (415) 834-1778 enor CO)
Fax: (415) 834-1842 San Francisco County Supe
Email: ckatzenbach@kkcounsel.com Mak 29.7003
CLERK
Attorneys for Plaintiff
MICHAEL McNAIR my
IN THE SUPERIOR COURT OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO
MICHAEL McNAIR, No.: CGC-09-489734
Plaintiff, PLAINTIFF’S OPPOSITION TO
DEFENDANT’S MOTION IN
vs. LIMINE NO. 2
CITY AND COUNTY OF SAN FRANCISCO,
ETAL.,
Contention That DPH Notices Are Not
A Contract
Defendants. Case Filed: June 23, 2009
Trial Date: March 18, 2013
Time: 9:30 a.m.
Dept: 206
SSE
Plaintiff opposes Defendant CITY AND COUNTY OF SAN FRANCISCO’s (“City”)
motion in limine No. 2. In its motion, the City’s seeks to exclude evidence or argument that the
Privacy Notice given to plaintiff was a contract or represents a contractual obligation.
MATERIAL FACTS
The nub of this case is the voluntary disclosure of mental health information to the
Department of Motor Vehicles by plaintiff's primary care physician, Dr. Ann Kim, a doctor
employed by the City at the Maxine Hall Health Center. Dr. Kim was not responding to any
subpoena or proper request for information, but simply took it upon herself to disclose the
information to the DMV because she felt plaintiff should not have a commercial driver’s license
because of “public safety.”
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734oOo ND
The Department of Health and Human Services (HHS) concluded, after an administrative
proceeding, that this disclosure was (a) not required by law and (b) not justified by a threat to
public safety under the standard of the Privacy Rule adopted under the Health Insurance
Portability and Accountability Act (HIPAA). The HHS decision found (Plaintiffs Exhibit 3):
The SFDPH confirmed the disclosure, which was in the form of a
letter dated 10-18-06 from the physician to the DMV. However,
the SFDPH asserted initially that the disclosure: a) had been
required by California law and thus was permitted by the Privacy
Rule at 45 C.F.R. §164.512(a), or b) was a disclosure to avert a
serious threat to health or safety permitted by 45 C.F.R. §
164.512(). In addition to the Complainant, OCR interviewed the
physician involved and discussed this matter in depth with the
SFDPH privacy officer and attorney. The SFDPH provided OCR
with a copy of the Complainant's medical records the physician
had referenced in her letter to the DMV. OCR had the
Complainant's medical information evaluated by two HHS
physicians. After thoroughly reviewing all of the evidence in this
matter, OCR concluded that the disclosure was not consistent with
the Privacy Rule because it was not permitted by either 45 C.F.R.
§164.512(a) (required by law) or 45 C.F.R.§164.512()) (imminent
threat to health or safety).
The City undertook mitigation efforts in response to HHS’s conclusion that it violated
HIPAA. Specifically, the City (a) arranged for the DMV to destroy copies of Dr. Kim’s October
18 letter, (b) rewrote its policies on disclosure of medical information concerning disorders
characterized by lapses of consciousness and (c) conducted staff training on HIPAA obligations.
Plaintiff's Exhibit 3, p. 2, second paragraph; Plaintiff's Exhibit 18, p. 1.
As a consequence of Dr. Kim’s disclosure, plaintiff had his commercial license
suspended pending a hearing. He thereafter lost his job at AC Transit before he could get his
commercial license reinstated. He suffered such upset and distress over these events that he was
eventually ejected permanently from the Maxine Hall Health Center because (in the City
employees’ opinions anyway) he could not get over it.
The City made numerous and express promises to keep patient medical information
confidential in Notices the Department of Public Health (DPH) gave plaintiff and other patients.
Plaintiff's Exhibits 1, 2. See generally Plaintiff's Motion In Limine No. 8 at pp. 2-3. The City
promised (Exh. 1): “DPH Pledge: Employees of the San Francisco Department of Public
Health (DPH), its affiliates and contract providers understand that information about you and
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734your health is personal. They are committed to protecting your health information.” The City
further stated (id).: “Who will follow the rules in this notice: All DPH and contract provider
employees . . . must follow these rules.” Pltf. Exh. 1, Summary Notice. The City promised that|
DPH would use and disclose information “[t]o improve your treatment.” Jbid.
The City stated that the health workers at DPH “promise to protect your health
information.” Exh. 2, p. 1, emphasis supplied. The City also stated: “To ask DPH to share your]
health information with people outside of DPH, you must ask in writing.” Exh. 2 a p. 2. The
City stated further: “If health care providers or other persons outside the DPH and its contract
providers need heath information about you, you will be asked to give the okay for DPH to give
out information unless the information is needed for your care in emergencies.” Id., Exh. 2 at p.
4. The City also promised special protection for mental health information—the information
Dr. Kim disclosed to the DMV: “if you are being treated for mental health problems * * * DPH
takes special care not to share this information with people who do not need to use it for care
purposes unless you specifically say that it is okay.” Exh. 2 a p. 2.
The City also identified certain uses and disclosure of health information at pp. 4 through
8; these stated uses did not include disclosure to the DMV. In particular, as to the “public
safety” justification Dr. Kim asserted in the letter to the DMV, the Notice stated as among the
categories permitting disclosure (Plaintiff's Exh. 2 at p. 6):
Required By Law. Health information about you may be shared
when required by federal, state or local law.
Avert a Serious Threat to Health or Safety. Health information
about you may be used and shared to law enforcement officials,
mobile crisis team, or to an intended victim when necessary to
prevent a serious threat to your health and safety or the health and
safety of the public or another person. Any disclosure, however,
would only be to someone able to help prevent the threat.
The City then stated: “Other uses and disclosures of health information not covered by this
Notice or the laws that apply will be made only with your written permission.” Jd., Exh. 2 at p. 8,
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Plaintiffs Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734ARGUMENT
The City’s seeks to exclude evidence or argument that the Privacy Notice given to
plaintiff was a contract or represents a contractual obligation.
Plaintiff has addressed this issue in Plaintiff's Motion In Limine No. 8. Plaintiff
incorporates those arguments in opposition to the City’s motion.
A. THERE WAS SUFFICIENT CONSIDERATION FOR THE PROMISES OF
CONFIDENTIALITY.
1. By allowing access to confidential information about plaintiff's mental health
under promises of confidentiality, the contract was fully executed and the
question of consideration is immaterial.
There is no issue of consideration in this case because this was a fully-executed
agreement. Schiffman v. Atlas Mill Supply Inc. (1961) 193 Cal.App.2d 847, 853: “after the
contract is fully executed on both sides it becomes a closed incident and the question of
consideration becomes immaterial.” The doctor-patient relationship was already established at
the time of the letter to the DMV. DPH and Dr. Kim had already received plaintiff's medical
records, including the mental health information that was disclosed, and had already promised to
keep the records confidential. But for the establishment of the physician-patient relationship,
defendants would have been in no position to have obtained the confidential information Dr.
Kim communicated to the DMV. As to the records defendants received, therefore, the contract
was fully-executed. That is, plaintiff gave the doctors access to his medical records in exchange
for their treatment of him. This is a fully-executed agreement because it involves the past
performance by the parties; it is not an executory agreement to provide future medical services on
to provide future medical records.
In other words, once plaintiff gave DPH and Dr. Kim his medial information, that
consummated the transaction and triggered the contractual duty of confidentiality that the City
had promised for health information it obtained from patients.
2. The detriment to plaintiff in allowing access to confidential information,
thereby exposing this information to misuse, is sufficient consideration.
Detriment is sufficient consideration for a contract. “A long series of decisions has
established the rule that a benefit to the promisor, or a detriment to the promisee, is a sufficient
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734consideration for a contract.” Rusconi v. California Fruit Exchange (1929) 100 Cal.App. 750,
754.
In this case, the detriment in providing access to these confidential records is sufficient
detriment to support a contract to keep the records confidential. Plaintiff provided defendants
access to confidential medical information, including the mental health information that they
thereafter disclosed to the DMV, under conditions stated in the DPH notices that DPH would
keep health information confidential. Plaintiff was under no legal obligation to allow the
defendants access to his confidential medical and mental health records. Particularly as to the
mental health information Dr. Kim disclosed, Dr. Kim had no treatment need for this
information. Both of the mental health reports Dr. Kim disclosed had been prepared for other
purposes. Allowing such access exposed this information to the potential for misuse and
increased the risk of a breach of confidentiality.
Even if defendants would have treated plaintiff had he not signed the HIPAA notice,
defendants still had the implied contractual duty to maintain confidentiality of medical records
they ultimately received because he became their patient. The detriment in providing medical
records is sufficient consideration for both express and implied promises of confidentiality. Roe
v. State (2001) 94 Cal.App.4" 64, 70-73 (confidentiality provisions of settlement agreement
incorporating statutory provisions governing confidentiality of real estate appraiser disciplinary
proceedings are enforceable as contract).
O'Byrne v. Santa-Monica-UCLA Medical Center (2001) 94 Cal.App.4" 797, cited by
defendants, involved the mere adoption of Bylaws required by law and no other action or
detriment indicating formation of a contract based on these Bylaws. /d. at 810. In the instance
case, the City expressly made commitments to follow the rules in the notices. The City used
contractual language of promises and commitments to its patients, stating that it and its
employees “are committed to protecting your health information” (Exh. 1) and they “promise to
protect your health information.” Exh. 2, p. 1, emphasis supplied. The Notice also stated, as to
the mental health information that was disclosed to the DMV: “if you are being treated for
mental health problems * * * DPH takes special care not to share this information with people
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734io Oo ND
who do not need to use it for care purposes unless you specifically say that it is okay.” Exh. 2a
p. 2. Plaintiff justly relied on these promises in allowing Dr. Kim access to his medical records,
including his mental health records.
3. Promissory Estoppel would substitute for consideration if necessary.
Even if the foregoing were insufficient to show consideration, the doctrine of promissory
estoppel would supply the necessary element of consideration in this case. The Court in Cotta v.
City and County of San Francisco (2007) 157 Cal.App.4" 1550, 1566 described the promissory
estoppel doctrine:
"Promissory estoppel is ‘a doctrine which employs equitable
principles to satisfy the requirement that consideration must be
given in exchange for the promise sought to be enforced.’
[Citation.]" (Kajima/Ray Wilson v. Los Angeles County
Metropolitan Transportation Authority (2000) 23 Cal.4th 305, 310
[96 Cal.Rptr.2d 747, 1 P.3d 63].) "A promise which the promisor
should reasonably expect to induce action or forbearance on the
part of the promisee or a third person and which does induce such
action or forbearance is binding if injustice can be avoided only by
enforcement of the promise. . . .' [Citations.]" (/d. at p. 310.) "To
be binding, the promise must be clear and unambiguous.
[Citations.]" (Lange v. TIG Ins. Co. (1998) 68 Cal.App.4th 1179,
1185 [81 Cal-Rptr.2d 39].)
Again, there is no dispute as to the promises of confidentiality the City made and there
can be no dispute that the City “should reasonably expect” these promises to induce plaintiff and
other patients to rely on the City maintaining confidentiality of patient medical records. Injustice
could only be avoided by enforcing these promises; otherwise plaintiff, and similarly situated
patients, would have to suffer the losses and humiliations associated with the unjustified
disclosure of their confidential medical information without compensation or effective redress.
B. WHILE HIPAA REQUIRES A PRIVACY NOTICE, THAT DOES NOT MEAN THAT THE
PROMISES THE CITY MADE ARE NOT CONTRACTUAL.
The City’s argument that HIPAA requires notices of patient rights is not a defense on the
facts here.
First, as discussed in Plaintiff's Motion In Limine No. 8, the physician-patient
relationship is a contractual relationship. Scripps Clinic v. Superior Court (2003) 108
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734Cal.App.4" 917, 940. A contractual relationship includes statutory duties as implied terms. The]
general rule was long-ago summarized by the Supreme Court in Alpha Beta Food Markets v.
Retail Clerks Union (1955) 45 Cal.2d 764, 771: “‘all applicable laws in existence when an
agreement is made, which laws the parties are presumed to know and to have had in mind,
necessarily enter into the contract and form a part of it, without any stipulation to that effect, as iff
they were expressly referred to and incorporated.’ [Citation omitted].” Accord: Accord: Bell v.
Farmers Ins. Exchange (2006) 135 Cal.App.4" 1138, 1147. This necessarily includes the
privacy obligations stated in HIPAA. The fact that HIPAA requires certain privacy notices does
not alter the fact that HIPAA’s privacy standards are implied terms of the contractual
relationship.
Second, the City also overstates what HIPAA requires in the form of a notice. Nothing in
the HIPAA regulations requires the City to make the express promises and commitments it made
in its Notices. See 45 C.F.R. § 164.520(b)(1)(v).! Such contractual promises of confidentiality
are not precluded by HIPAA or the notices it requires. HIPPA regulations allow entities to
include optional elements in the notice that would impose more stringent limitations on
disclosures. 45 C.F.R. § 164.520(b)(2)(i).? HIPAA allows state laws to provide more stringent
standards for protecting patient privacy (Brown v. Mortensen (2011) 51 Cal.4" 1052, 1067; 45
' The required content of the notice is far more limited (45 C.F.R. § 164.520(b)(1)): “(v) Covered]
entity's duties. The notice must contain: (A) A statement that the covered entity is required by
law to maintain the privacy of protected health information and to provide individuals with
notice of its legal duties and privacy practices with respect to protected health information; (B) A\
statement that the covered entity is required to abide by the terms of the notice currently in
effect; and (C) For the covered entity to apply a change in a privacy practice that is described in
the notice to protected health information that the covered entity created or received prior to
issuing a revised notice, in accordance with § 164.530(i)(2)(ii), a statement that it reserves the
right to change the terms of its notice and to make the new notice provisions effective for all
protected health information that it maintains. The statement must also describe how it will
provide individuals with a revised notice.”
> 45 C.F.R. § 164.520(b)(2) :“Optional elements. (i) In addition to the information required by
paragraph (b)(1) of this section, if a covered entity elects to limit the uses or disclosures that it is
permitted to make under this subpart, the covered entity may describe its more limited uses or
disclosures in its notice, provided that the covered entity may not include in its notice a
Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734C.F.R. § 160.203(b)). Nothing in HIPAA prevents the City from promising more confidentiality
and greater protection and remedies for privacy breaches than HIPAA or the mandatory terms of
HIPAA notices require.
Cc. THE City’s SUBJECTIVE INTENTIONS NOT TO MAKE A CONTRACT ARE
IRRELEVANT UNDER THE OBJECTIVE STANDARD OF CONTRACT FORMATION.
The City’s argument that the City did not intend to enter into a contract is not a defense.
"Contract formation is governed by objective manifestations, not subjective intent of any
individual involved. [Citations.] The test is ‘what the outward manifestations of consent would
lead a reasonable person to believe.' [Citation.]" Roth v. Malson (1998) 67 Cal.App.4" 552, 557.
Agreement may be manifested by conduct as much as by words (Rosendahl Corp. v. H. K.
Ferguson Co. (1962) 211 Cal.-App.2d 313, 316), including conduct that would show the creation
of a unilateral contract, such as by plaintiff allowing access to his mental health records in
response to the City’s promises of confidentiality. Aronowicz v. Nalley's, Inc. (1972) 30
Cal.App.3d 27, 43 and fn. 14.
D. THE PRIVACY NOTICES ARE SUFFICIENTLY CERTAIN TO STATE THE
CONTRACTUAL OBLIGATION OF CONFIDENTIALITY.
It is surely disingenuous for the City to claim that the privacy notice that it wrote and was
expected to follow is too uncertain to describe its obligations. In any event, the promises of
confidentiality and non-disclosure quoted previously are direct and clear.
To the extent that the City is arguing that the exceptions to confidentiality are less clear
than it would like, again there is nothing in the language that is too uncertain to be enforced. As
to the specific justifications at issue in this case, the City promised no disclosures would be made|
without a patient’s authorization unless (a) required by law or (b) to avert a serious threat to
safety and disclosed to someone who could prevent that danger. There is nothing uncertain
about these promises. The City merely has to show that the disclosure was required by law or
was to avert a serious threat to safety.
limitation affecting its right to make a use or disclosure that is required by law or permitted by §
164.512) )(d.” 8
Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734The City’s problem is not what these promises mean, but its inability to bring Dr. Kim’s
letter within them. In fact, HHS rejected these very arguments. That decision is binding. See
Plaintiff's Motion In Limine No. 5, Collateral Estoppel.
E. THE City ATTORNEY’S OBLIGATION TO APPROVE CONTRACTS AS TO FORM
DoEs NOT PREVENT CONTRACT FORMATION.
The City’s argument based on Charter Section 6.102(6) is discussed at length in
Plaintiffs Motion In Limine No. 3. However, the simple answer to the City’s argument is that
the City Attorney’s failure to approve a contract as to form, assuming that was in fact the case, is
irrelevant to contract formation.
1. “Approval As To Form” Is A Ministerial Obligation That Is Not A
Condition For Contract Formation.
The “approval as to form” language is, at best, a ministerial obligation. It does not
preclude contracts and does not invalidate contracts. In Cotta v. City and County of San
Francisco (2007) 157 Cal.App.4" 1550, 1562, the appellate court rejected the City’s argument
that “approval as to form” language precluded contract formation (footnote omitted):
T]he City argues that it did not comply with charter provisions that
govern City contracting. Specifically, the resolution/alleged
contract was not approved as to form by the city attorney, and
there was no certification from the controller that sufficient funds
were available. (See S.F. Charter, §§ 6.102, subd. 6, 3.105.) In
Transdyn/Cresci JV v. City and County of San Francisco (1999) 72
Cal.App.4th 746, 758-760 [85 Cal.Rptr.2d 512], both of these
requirements were held to be ministerial and the failure to satisfy
these requirements did not invalidate the otherwise binding
contract.
The duty to approve contacts “as to form” is not a condition precedent to contract
formation. In re Marriage of Hasso (1991) 229 Cal.App.3d 1174, 1181 (attorney's approval "as
to form" not a condition precedent to enforceability of an agreement). Rather, “approval as to
form” means only that the document is in proper form. See Freedman v. Brutzkus (2010) 182
Cal. App. 4" 1065, 1070, where the appellate court concluded that to a recital of attorney’s
approval as to “form and content” simply means the document is in proper form and reflects the
deal that was made: “We conclude that the only reasonable meaning to be given to a recital that
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734oC em IN DA HW
counsel approves the agreement as to form and content, is that the attorney, in so stating, asserts
that he or she is the attorney for his or her particular party, and that the document is in the proper
form and embodies the deal that was made between the parties.). The Charter language is even
narrower than the language in Freedman, as the Charter requires only approval as to form and
says nothing about approval as to content as well.
The language of the City Charter has no greater meaning than this: Namely, that the City
Attorney has the duty to review contracts and advise the City if they are in proper form. This is
not a condition precedent to contract formation; it is simply an internal obligation the City
Attorney has in advising City departments.
2. Noting In The Charter Precludes Implied In Fact Contracts Arising From
Duly-Adopted Documents.
Absent some explicit prohibition on implied contract terms or explicit formal
requirements for City contracts, implied terms are not prohibited in any way. As the Supreme
Court explained in Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 246 (emphasis
supplied):
There seems little doubt that the general provisions giving the
district the power to enter into contracts of employment without
specifying any formal requirements for such contracts were
intended to apply to both implied and express contracts since the
only significant difference between the two is the evidentiary
method by which proof of their existence and terms is established.
Governmental subdivisions may be bound by an implied contract if
there is no statutory prohibition against such arrangements.
Accord: Retired Employees Assn. of Orange County, Inc. v. County of Orange (2011) 52 Cal.4"
1171, 1179-1180 (implied terms allowable in employment contract with county employees).
The Supreme Court has also recognized that duly-adopted documents may form implied-
in-fact contracts. Retired Employees Assn. of Orange County, Inc. v. County of Orange (2011)
52 Cal.4" 1171, 1187. The Supreme Court held in Retired Employees Assn. that implied
contractual obligations from duly-adopted documents do not run afoul of the rules governing
public contract formation, stating: “[The Association] does not seek to recover “under a contract
made in violation of the particularly prescribed statutory mode’ [citations omitted], but claims
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734instead it has contractual rights that are implied in resolutions duly approved by County.” /d. at
1187. Accordingly, the Supreme Court held, the contract formation cases were “inapposite.”
Ibid.
Similarly, the California courts have rejected any requirement that the public entity
expressly state that it is entering into a contract. In California Teachers Assn. v. Cory (1984) 155
Cal.App.3d 494, 504-505, the state argued that a statute does not create contractual obligations
unless it explicitly uses words of contract and that a contract cannot be created by implication
from a statute. Jd. at 504. The appellate court rejected this argument (id. at 505): “In Californial
law, a legislative intent to grant contractual rights can be implied from a statute if it contains an
unambiguous element of exchange of consideration by a private party for consideration offered
by the state.” Cory’s formulation of this principle was cited with approval by the Supreme Court
in Retired Employees Assn., supra, 52 Cal.4" at 1186.
Nothing in Section 6.102(6) or any other provision of the SF Charter precludes implied
contractual terms. Nothing in the Charter precludes implied contract terms arising from
mandatory legal obligations that California has long recognized create implied contractual terms.
Bell v. Farmers Ins. Exchange (2006) 135 Cal.App.4" 1138, 1147; Lockheed Aircraft Corp. v.
Superior Court (1946) 28 Cal.2d 481, 486; Hayes v. Bank of America (1945) 71 Cal.App.2d 301,
304-305. Nothing in the Charter precludes recognition of privacy rights established in HIPAA as}
part of implied contractual terms governing the physician-patient relationship; courts in other
jurisdictions have concluded that the obligation to maintain patient privacy is an implied
contractual duty (Horne v. Patton (Ala. 1974) 291 Ala. 701, 710-711, 287 So.2d 824, 831-832),
supported by the established confidentiality provisions in statutes and ethical standards (id. at
711, 287 So.2d at 832; Alsip v. Johnson City Medical Center (Tenn. 2006) 197 S.W.3d 722, 725-
726).
The City has itself asserted and relied upon implied contractual terms in enforcing City
contracts. In Stacy & Witbeck, Inc. v. City and County of San Francisco (1995) 36 Cal.App.4"
1074, 1084, the City defended the finding of a contract violation by relying on the implied
covenant of good faith and fair dealing. The appellate court agreed: “The PUC held that the
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734wn
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covenant of good faith and fair dealing was an implicit requirement of clause 89 and, thus, of
section 6.14 of chapter 6. We agree.”
Under the City Charter in San Francisco, it is the operating department that have the
contracting powers, not the City Attorney. S.F. Administrative Code §§ 21.04, 21.05. See
Kennedy v. Ross (1946) 28 Cal.2d 569, 575-577 (SF Charter gives contracting authority to
departments and/or commissions established by the Charter, not to the Board of Supervisors).
As to the San Francisco Health Commission and Department of Public Health in particular, the
Charter provides (§ 4.112, second 4):
The Commission and the Department shall manage and control the
City and County hospitals, emergency medical services, and in
general provide for the preservation, promotion and protection of
the physical and mental health of the inhabitants of the City and
County, except where the Charter grants such authority to another
officer or department.
The Privacy Notices and their content were duly-adopted by the DPH and the Health
Commission under their powers under the Charter.
3. The Cases Relied Upon By The City Involve Specific Language Governing
The Contract Formation Process Under Different City Charters.
The cases the City has relied upon do not involve general language describing a city
attorney’s duties, but specific language stating that no contract can be adopted by the governing
bodies unless the contract is approved by the attorney during the formal contract formation
process. The language in the San Francisco City Charter is markedly different than the language
in the Los Angeles and Long Beach City Charters that was at issue in the cases the City has
relied upon. Moreover, those cases do not involve implied contracts arising from duly-adopted
documents. As the Supreme Court noted in Retired Employees Assn., the contract-formation
cases are simply “inapposite” in the case of implied contract. Retired Employees Assn., supra,
52 Cal.4" at 1187.
In Dynamic Indus. Co. v. City of Long Beach (1958) 159 Cal.App.2d 294, 298, the
appellate court explained:
Section 293 of its charter provides, in material part, as follows:
“The City of Long Beach shall not be and is not bound by any
contract, except as otherwise provided herein, unless the same is
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734made in writing, by order of the city council, and signed by the city
manager or by some person in behalf of the city authorized so to
do by the city manager; provided, that the approval of the form of
the contract by the city attorney shall be endorsed thereon before
the same shall be signed on behalf of the City....” [§] The
contract whose validity plaintiff seeks to establish was not signed
by the city manager, as the charter requires.
In First Street Plaza Partners v. City of Los Angeles (1998) 65 Cal.App.4" 650, 661-662,
the appellate court similarly explained: “The Charter of the City of Los Angeles contains a
section which generally specifies the procedures according to which the City may be bound to a
contract.”> In concluding that there was no valid contract, the appellate court found (id. at 664):
“none of the acts which ‘shall’ be done to form a contract with the City ever occurred.”
Both First Street Plaza and Dynamic Industries involved Charter provisions that
specifically governed how contracts were to be formed. As the court in Dynamic Industries
explained: “where the statute provides the only mode by which the power to contract shall be
exercised, the mode is the measure of the power.” /d., supra, 159 Cal.App.2d at 299.
The San Francisco Charter does not contain provisions governing how contracts are to be
formed that are remotely similar to the Los Angeles or Long Beach City Charters. Section
6.102(6), the only San Francisco Charter language the City cites, concerns the general powers of
the City Attorney, not how contracts are formed or approved by San Francisco.
* The appellate court described the specific provisions of the Los Angeles Charter that stated the
specific contract approval process under the Los Angeles City Charter (id. at 662):
In 1991, at the time of the CAO report which plaintiff contends
was accepted by the City Council and Mayor as a contract, Section
385 provided in pertinent part as follows: “Every contract
involving an expenditure of more than five hundred dollars ($500)
shall . . . be made in writing, the draft whereof shall be approved
by the board, officer or employee authorized to make the same,
and signed on behalf of the City by the Mayor, or some other
person authorized thereto by resolution of the council in the case of
a contract authorized by Council, or, in the case of other contracts,
by the board, officer or employee, as the case may be, authorized
to make the same, provided, however, that the approval of the City
Attorney of any such contract as to form . . . shall be endorsed
thereon before the Council or such board, officer or employment
[sic] shall have the power to approve the same.”
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734oD mI DH RF WN
a a a i i
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20
While the Los Angeles Charter at issue in First Street Plaza also contained a requirement
for approval as to form by the Los Angeles city attorney, that requirement was contained in the
specific section of the Los Angeles Charter governing contract formation as a specific
requirement of the contract-approval process that expressly conditioned the power to contract on
such approval. The applicable language was as follows (id., 65 Cal.App.4"" at 662) (emphasis
supplied): “provided, however, that the approval of the City Attomey of any such contract as to
form . . . shall be endorsed thereon before the Council or such board, officer or employment [sic]
shall have the power to approve the same.”
There is no comparable language in the San Francisco Charter linking the power to
approve contracts to a prior approval by the City Attorney. To the contrary, only ordinances
must be approved prior to submission to the Board of Supervisors. In San Francisco, it is the
operating department that has the general contracting powers. S.F. Administrative Code §§
21.04, 21.05. Nothing in the Charter sections governing the contacting power of departments
contains any requirement that the City Attorney approve any contract as to form before it is
approved or before it can be a binding obligation
F. THE 1986 OPINION BY THE CITY ATTORNEY REGARDING APPROVAL OF
ORDINANCES Is IRRELEVANT TO ISSUES OF CONTRACT FORMATION OR
APPROVAL.
The City relies on a 1986 opinion by the City attorney discussing the duty of the City
Attorney to approve ordinances as to form before being submitted to the supervisors as a
condition of the validity of an ordinance. See City Motion In Limine See City Motion In
Limine #3.
The charter language discussed in the 1986 opinion was added in the 1931 Charter and
only addressed ordinances. See p. 3 of 1986 Opinion. The rational for its adoption applies only
to ordinances, not contracts. Nothing in the 1986 opinion discusses any Charter language
governing approval as to form for contracts. Nothing in this opinion states that a contract would
be invalid if not approved as to form, what kind of approval as to form would be required or
when that could occur.
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Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734co 0D em N DH BF WON
RN NY NY NN KN KY KY S&B Be we we ew ee He
oN A A FF YH YN = SOD we IY DH BF Ww NY
The current language in Section 6.102(6) continues the 1931 Charter language regarding
ordinances by requiring prior approval only for ordinances, not contracts: the City Attorney
“shall... [a]pprove as to form all surety bonds, contracts and, prior to enactment, all
ordinances”.
In San Francisco, there is a significant reason to treat contracts and ordinances
differently. The 1931 Charter, as well as the current Charter, gives contracting power to the
operating departments. S.F. Administrative Code §§ 21.04, 21.05; Kennedy v. Ross (1946) 28
Cal.2d 569, 575-577 (SF Charter gives contracting authority to departments and/or commissions
established by the Charter, not to the Board of Supervisors). Ordinances, in contrast, are adopted]
by the Supervisors.
In particular, the San Francisco Health Commission and Department of Public Health is
given full authority to govern hospitals and provide for health services. S.F. Charter § 4.112,
second § (quoted above at p. 12). The Privacy Notices and their content were duly-adopted by
the DPH and the Health Commission under their powers under the Charter.
Nothing in the Charter or the City Attorney’s 1986 opinion supports any argument that
the City Attorney acts as a check on the substantive powers of the City’s departments, that the
City Attorney can prevent a department from entering into a contract or that the City Attorney
must approve a contract before it can be entered into by a Department.
Dated: March 18, 2013 KATZEN) SLE
— (Chis mega atzenbach
Attorneys for ya Antiff MICHAEL McNAIR
15
Plaintiff's Opposition To Defendant’s Motion In Limine No. 2
CGC-09-489734
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Mar-18-2013 12:50 pm Case Number: CGC-09-489734 Filing Date: Mar-18-2013 12:49 Filed by: KEVIN LEE Juke Box: 001 Image: 03982832 GENERIC CIVIL FILING (NO FEE) MICHAEL MCNAIR VS. CITY AND COUNTY OF SAN FRANCISCO et al 001003982832 Instructions: Please place this sheet on top of the document to be scanned.CHRISTOPHER W. KATZENBACH (SBN 108006) KATZENBACH LAW OFFICES 1714 Stockton Street, Suite 300 re San Francisco, CA 94133-2930 xr Telephone: (415) 834-1778 enor CO) Fax: (415) 834-1842 San Francisco County Supe Email: ckatzenbach@kkcounsel.com Mak 29.7003 CLERK Attorneys for Plaintiff MICHAEL McNAIR my IN THE SUPERIOR COURT OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO MICHAEL McNAIR, No.: CGC-09-489734 Plaintiff, PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION IN vs. LIMINE NO. 2 CITY AND COUNTY OF SAN FRANCISCO, ETAL., Contention That DPH Notices Are Not A Contract Defendants. Case Filed: June 23, 2009 Trial Date: March 18, 2013 Time: 9:30 a.m. Dept: 206 SSE Plaintiff opposes Defendant CITY AND COUNTY OF SAN FRANCISCO’s (“City”) motion in limine No. 2. In its motion, the City’s seeks to exclude evidence or argument that the Privacy Notice given to plaintiff was a contract or represents a contractual obligation. MATERIAL FACTS The nub of this case is the voluntary disclosure of mental health information to the Department of Motor Vehicles by plaintiff's primary care physician, Dr. Ann Kim, a doctor employed by the City at the Maxine Hall Health Center. Dr. Kim was not responding to any subpoena or proper request for information, but simply took it upon herself to disclose the information to the DMV because she felt plaintiff should not have a commercial driver’s license because of “public safety.” 1 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734oOo ND The Department of Health and Human Services (HHS) concluded, after an administrative proceeding, that this disclosure was (a) not required by law and (b) not justified by a threat to public safety under the standard of the Privacy Rule adopted under the Health Insurance Portability and Accountability Act (HIPAA). The HHS decision found (Plaintiffs Exhibit 3): The SFDPH confirmed the disclosure, which was in the form of a letter dated 10-18-06 from the physician to the DMV. However, the SFDPH asserted initially that the disclosure: a) had been required by California law and thus was permitted by the Privacy Rule at 45 C.F.R. §164.512(a), or b) was a disclosure to avert a serious threat to health or safety permitted by 45 C.F.R. § 164.512(). In addition to the Complainant, OCR interviewed the physician involved and discussed this matter in depth with the SFDPH privacy officer and attorney. The SFDPH provided OCR with a copy of the Complainant's medical records the physician had referenced in her letter to the DMV. OCR had the Complainant's medical information evaluated by two HHS physicians. After thoroughly reviewing all of the evidence in this matter, OCR concluded that the disclosure was not consistent with the Privacy Rule because it was not permitted by either 45 C.F.R. §164.512(a) (required by law) or 45 C.F.R.§164.512()) (imminent threat to health or safety). The City undertook mitigation efforts in response to HHS’s conclusion that it violated HIPAA. Specifically, the City (a) arranged for the DMV to destroy copies of Dr. Kim’s October 18 letter, (b) rewrote its policies on disclosure of medical information concerning disorders characterized by lapses of consciousness and (c) conducted staff training on HIPAA obligations. Plaintiff's Exhibit 3, p. 2, second paragraph; Plaintiff's Exhibit 18, p. 1. As a consequence of Dr. Kim’s disclosure, plaintiff had his commercial license suspended pending a hearing. He thereafter lost his job at AC Transit before he could get his commercial license reinstated. He suffered such upset and distress over these events that he was eventually ejected permanently from the Maxine Hall Health Center because (in the City employees’ opinions anyway) he could not get over it. The City made numerous and express promises to keep patient medical information confidential in Notices the Department of Public Health (DPH) gave plaintiff and other patients. Plaintiff's Exhibits 1, 2. See generally Plaintiff's Motion In Limine No. 8 at pp. 2-3. The City promised (Exh. 1): “DPH Pledge: Employees of the San Francisco Department of Public Health (DPH), its affiliates and contract providers understand that information about you and 2 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734your health is personal. They are committed to protecting your health information.” The City further stated (id).: “Who will follow the rules in this notice: All DPH and contract provider employees . . . must follow these rules.” Pltf. Exh. 1, Summary Notice. The City promised that| DPH would use and disclose information “[t]o improve your treatment.” Jbid. The City stated that the health workers at DPH “promise to protect your health information.” Exh. 2, p. 1, emphasis supplied. The City also stated: “To ask DPH to share your] health information with people outside of DPH, you must ask in writing.” Exh. 2 a p. 2. The City stated further: “If health care providers or other persons outside the DPH and its contract providers need heath information about you, you will be asked to give the okay for DPH to give out information unless the information is needed for your care in emergencies.” Id., Exh. 2 at p. 4. The City also promised special protection for mental health information—the information Dr. Kim disclosed to the DMV: “if you are being treated for mental health problems * * * DPH takes special care not to share this information with people who do not need to use it for care purposes unless you specifically say that it is okay.” Exh. 2 a p. 2. The City also identified certain uses and disclosure of health information at pp. 4 through 8; these stated uses did not include disclosure to the DMV. In particular, as to the “public safety” justification Dr. Kim asserted in the letter to the DMV, the Notice stated as among the categories permitting disclosure (Plaintiff's Exh. 2 at p. 6): Required By Law. Health information about you may be shared when required by federal, state or local law. Avert a Serious Threat to Health or Safety. Health information about you may be used and shared to law enforcement officials, mobile crisis team, or to an intended victim when necessary to prevent a serious threat to your health and safety or the health and safety of the public or another person. Any disclosure, however, would only be to someone able to help prevent the threat. The City then stated: “Other uses and disclosures of health information not covered by this Notice or the laws that apply will be made only with your written permission.” Jd., Exh. 2 at p. 8, 3 Plaintiffs Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734ARGUMENT The City’s seeks to exclude evidence or argument that the Privacy Notice given to plaintiff was a contract or represents a contractual obligation. Plaintiff has addressed this issue in Plaintiff's Motion In Limine No. 8. Plaintiff incorporates those arguments in opposition to the City’s motion. A. THERE WAS SUFFICIENT CONSIDERATION FOR THE PROMISES OF CONFIDENTIALITY. 1. By allowing access to confidential information about plaintiff's mental health under promises of confidentiality, the contract was fully executed and the question of consideration is immaterial. There is no issue of consideration in this case because this was a fully-executed agreement. Schiffman v. Atlas Mill Supply Inc. (1961) 193 Cal.App.2d 847, 853: “after the contract is fully executed on both sides it becomes a closed incident and the question of consideration becomes immaterial.” The doctor-patient relationship was already established at the time of the letter to the DMV. DPH and Dr. Kim had already received plaintiff's medical records, including the mental health information that was disclosed, and had already promised to keep the records confidential. But for the establishment of the physician-patient relationship, defendants would have been in no position to have obtained the confidential information Dr. Kim communicated to the DMV. As to the records defendants received, therefore, the contract was fully-executed. That is, plaintiff gave the doctors access to his medical records in exchange for their treatment of him. This is a fully-executed agreement because it involves the past performance by the parties; it is not an executory agreement to provide future medical services on to provide future medical records. In other words, once plaintiff gave DPH and Dr. Kim his medial information, that consummated the transaction and triggered the contractual duty of confidentiality that the City had promised for health information it obtained from patients. 2. The detriment to plaintiff in allowing access to confidential information, thereby exposing this information to misuse, is sufficient consideration. Detriment is sufficient consideration for a contract. “A long series of decisions has established the rule that a benefit to the promisor, or a detriment to the promisee, is a sufficient 4 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734consideration for a contract.” Rusconi v. California Fruit Exchange (1929) 100 Cal.App. 750, 754. In this case, the detriment in providing access to these confidential records is sufficient detriment to support a contract to keep the records confidential. Plaintiff provided defendants access to confidential medical information, including the mental health information that they thereafter disclosed to the DMV, under conditions stated in the DPH notices that DPH would keep health information confidential. Plaintiff was under no legal obligation to allow the defendants access to his confidential medical and mental health records. Particularly as to the mental health information Dr. Kim disclosed, Dr. Kim had no treatment need for this information. Both of the mental health reports Dr. Kim disclosed had been prepared for other purposes. Allowing such access exposed this information to the potential for misuse and increased the risk of a breach of confidentiality. Even if defendants would have treated plaintiff had he not signed the HIPAA notice, defendants still had the implied contractual duty to maintain confidentiality of medical records they ultimately received because he became their patient. The detriment in providing medical records is sufficient consideration for both express and implied promises of confidentiality. Roe v. State (2001) 94 Cal.App.4" 64, 70-73 (confidentiality provisions of settlement agreement incorporating statutory provisions governing confidentiality of real estate appraiser disciplinary proceedings are enforceable as contract). O'Byrne v. Santa-Monica-UCLA Medical Center (2001) 94 Cal.App.4" 797, cited by defendants, involved the mere adoption of Bylaws required by law and no other action or detriment indicating formation of a contract based on these Bylaws. /d. at 810. In the instance case, the City expressly made commitments to follow the rules in the notices. The City used contractual language of promises and commitments to its patients, stating that it and its employees “are committed to protecting your health information” (Exh. 1) and they “promise to protect your health information.” Exh. 2, p. 1, emphasis supplied. The Notice also stated, as to the mental health information that was disclosed to the DMV: “if you are being treated for mental health problems * * * DPH takes special care not to share this information with people 5 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734io Oo ND who do not need to use it for care purposes unless you specifically say that it is okay.” Exh. 2a p. 2. Plaintiff justly relied on these promises in allowing Dr. Kim access to his medical records, including his mental health records. 3. Promissory Estoppel would substitute for consideration if necessary. Even if the foregoing were insufficient to show consideration, the doctrine of promissory estoppel would supply the necessary element of consideration in this case. The Court in Cotta v. City and County of San Francisco (2007) 157 Cal.App.4" 1550, 1566 described the promissory estoppel doctrine: "Promissory estoppel is ‘a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.’ [Citation.]" (Kajima/Ray Wilson v. Los Angeles County Metropolitan Transportation Authority (2000) 23 Cal.4th 305, 310 [96 Cal.Rptr.2d 747, 1 P.3d 63].) "A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. . . .' [Citations.]" (/d. at p. 310.) "To be binding, the promise must be clear and unambiguous. [Citations.]" (Lange v. TIG Ins. Co. (1998) 68 Cal.App.4th 1179, 1185 [81 Cal-Rptr.2d 39].) Again, there is no dispute as to the promises of confidentiality the City made and there can be no dispute that the City “should reasonably expect” these promises to induce plaintiff and other patients to rely on the City maintaining confidentiality of patient medical records. Injustice could only be avoided by enforcing these promises; otherwise plaintiff, and similarly situated patients, would have to suffer the losses and humiliations associated with the unjustified disclosure of their confidential medical information without compensation or effective redress. B. WHILE HIPAA REQUIRES A PRIVACY NOTICE, THAT DOES NOT MEAN THAT THE PROMISES THE CITY MADE ARE NOT CONTRACTUAL. The City’s argument that HIPAA requires notices of patient rights is not a defense on the facts here. First, as discussed in Plaintiff's Motion In Limine No. 8, the physician-patient relationship is a contractual relationship. Scripps Clinic v. Superior Court (2003) 108 6 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734Cal.App.4" 917, 940. A contractual relationship includes statutory duties as implied terms. The] general rule was long-ago summarized by the Supreme Court in Alpha Beta Food Markets v. Retail Clerks Union (1955) 45 Cal.2d 764, 771: “‘all applicable laws in existence when an agreement is made, which laws the parties are presumed to know and to have had in mind, necessarily enter into the contract and form a part of it, without any stipulation to that effect, as iff they were expressly referred to and incorporated.’ [Citation omitted].” Accord: Accord: Bell v. Farmers Ins. Exchange (2006) 135 Cal.App.4" 1138, 1147. This necessarily includes the privacy obligations stated in HIPAA. The fact that HIPAA requires certain privacy notices does not alter the fact that HIPAA’s privacy standards are implied terms of the contractual relationship. Second, the City also overstates what HIPAA requires in the form of a notice. Nothing in the HIPAA regulations requires the City to make the express promises and commitments it made in its Notices. See 45 C.F.R. § 164.520(b)(1)(v).! Such contractual promises of confidentiality are not precluded by HIPAA or the notices it requires. HIPPA regulations allow entities to include optional elements in the notice that would impose more stringent limitations on disclosures. 45 C.F.R. § 164.520(b)(2)(i).? HIPAA allows state laws to provide more stringent standards for protecting patient privacy (Brown v. Mortensen (2011) 51 Cal.4" 1052, 1067; 45 ' The required content of the notice is far more limited (45 C.F.R. § 164.520(b)(1)): “(v) Covered] entity's duties. The notice must contain: (A) A statement that the covered entity is required by law to maintain the privacy of protected health information and to provide individuals with notice of its legal duties and privacy practices with respect to protected health information; (B) A\ statement that the covered entity is required to abide by the terms of the notice currently in effect; and (C) For the covered entity to apply a change in a privacy practice that is described in the notice to protected health information that the covered entity created or received prior to issuing a revised notice, in accordance with § 164.530(i)(2)(ii), a statement that it reserves the right to change the terms of its notice and to make the new notice provisions effective for all protected health information that it maintains. The statement must also describe how it will provide individuals with a revised notice.” > 45 C.F.R. § 164.520(b)(2) :“Optional elements. (i) In addition to the information required by paragraph (b)(1) of this section, if a covered entity elects to limit the uses or disclosures that it is permitted to make under this subpart, the covered entity may describe its more limited uses or disclosures in its notice, provided that the covered entity may not include in its notice a Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734C.F.R. § 160.203(b)). Nothing in HIPAA prevents the City from promising more confidentiality and greater protection and remedies for privacy breaches than HIPAA or the mandatory terms of HIPAA notices require. Cc. THE City’s SUBJECTIVE INTENTIONS NOT TO MAKE A CONTRACT ARE IRRELEVANT UNDER THE OBJECTIVE STANDARD OF CONTRACT FORMATION. The City’s argument that the City did not intend to enter into a contract is not a defense. "Contract formation is governed by objective manifestations, not subjective intent of any individual involved. [Citations.] The test is ‘what the outward manifestations of consent would lead a reasonable person to believe.' [Citation.]" Roth v. Malson (1998) 67 Cal.App.4" 552, 557. Agreement may be manifested by conduct as much as by words (Rosendahl Corp. v. H. K. Ferguson Co. (1962) 211 Cal.-App.2d 313, 316), including conduct that would show the creation of a unilateral contract, such as by plaintiff allowing access to his mental health records in response to the City’s promises of confidentiality. Aronowicz v. Nalley's, Inc. (1972) 30 Cal.App.3d 27, 43 and fn. 14. D. THE PRIVACY NOTICES ARE SUFFICIENTLY CERTAIN TO STATE THE CONTRACTUAL OBLIGATION OF CONFIDENTIALITY. It is surely disingenuous for the City to claim that the privacy notice that it wrote and was expected to follow is too uncertain to describe its obligations. In any event, the promises of confidentiality and non-disclosure quoted previously are direct and clear. To the extent that the City is arguing that the exceptions to confidentiality are less clear than it would like, again there is nothing in the language that is too uncertain to be enforced. As to the specific justifications at issue in this case, the City promised no disclosures would be made| without a patient’s authorization unless (a) required by law or (b) to avert a serious threat to safety and disclosed to someone who could prevent that danger. There is nothing uncertain about these promises. The City merely has to show that the disclosure was required by law or was to avert a serious threat to safety. limitation affecting its right to make a use or disclosure that is required by law or permitted by § 164.512) )(d.” 8 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734The City’s problem is not what these promises mean, but its inability to bring Dr. Kim’s letter within them. In fact, HHS rejected these very arguments. That decision is binding. See Plaintiff's Motion In Limine No. 5, Collateral Estoppel. E. THE City ATTORNEY’S OBLIGATION TO APPROVE CONTRACTS AS TO FORM DoEs NOT PREVENT CONTRACT FORMATION. The City’s argument based on Charter Section 6.102(6) is discussed at length in Plaintiffs Motion In Limine No. 3. However, the simple answer to the City’s argument is that the City Attorney’s failure to approve a contract as to form, assuming that was in fact the case, is irrelevant to contract formation. 1. “Approval As To Form” Is A Ministerial Obligation That Is Not A Condition For Contract Formation. The “approval as to form” language is, at best, a ministerial obligation. It does not preclude contracts and does not invalidate contracts. In Cotta v. City and County of San Francisco (2007) 157 Cal.App.4" 1550, 1562, the appellate court rejected the City’s argument that “approval as to form” language precluded contract formation (footnote omitted): T]he City argues that it did not comply with charter provisions that govern City contracting. Specifically, the resolution/alleged contract was not approved as to form by the city attorney, and there was no certification from the controller that sufficient funds were available. (See S.F. Charter, §§ 6.102, subd. 6, 3.105.) In Transdyn/Cresci JV v. City and County of San Francisco (1999) 72 Cal.App.4th 746, 758-760 [85 Cal.Rptr.2d 512], both of these requirements were held to be ministerial and the failure to satisfy these requirements did not invalidate the otherwise binding contract. The duty to approve contacts “as to form” is not a condition precedent to contract formation. In re Marriage of Hasso (1991) 229 Cal.App.3d 1174, 1181 (attorney's approval "as to form" not a condition precedent to enforceability of an agreement). Rather, “approval as to form” means only that the document is in proper form. See Freedman v. Brutzkus (2010) 182 Cal. App. 4" 1065, 1070, where the appellate court concluded that to a recital of attorney’s approval as to “form and content” simply means the document is in proper form and reflects the deal that was made: “We conclude that the only reasonable meaning to be given to a recital that 9 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734oC em IN DA HW counsel approves the agreement as to form and content, is that the attorney, in so stating, asserts that he or she is the attorney for his or her particular party, and that the document is in the proper form and embodies the deal that was made between the parties.). The Charter language is even narrower than the language in Freedman, as the Charter requires only approval as to form and says nothing about approval as to content as well. The language of the City Charter has no greater meaning than this: Namely, that the City Attorney has the duty to review contracts and advise the City if they are in proper form. This is not a condition precedent to contract formation; it is simply an internal obligation the City Attorney has in advising City departments. 2. Noting In The Charter Precludes Implied In Fact Contracts Arising From Duly-Adopted Documents. Absent some explicit prohibition on implied contract terms or explicit formal requirements for City contracts, implied terms are not prohibited in any way. As the Supreme Court explained in Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 246 (emphasis supplied): There seems little doubt that the general provisions giving the district the power to enter into contracts of employment without specifying any formal requirements for such contracts were intended to apply to both implied and express contracts since the only significant difference between the two is the evidentiary method by which proof of their existence and terms is established. Governmental subdivisions may be bound by an implied contract if there is no statutory prohibition against such arrangements. Accord: Retired Employees Assn. of Orange County, Inc. v. County of Orange (2011) 52 Cal.4" 1171, 1179-1180 (implied terms allowable in employment contract with county employees). The Supreme Court has also recognized that duly-adopted documents may form implied- in-fact contracts. Retired Employees Assn. of Orange County, Inc. v. County of Orange (2011) 52 Cal.4" 1171, 1187. The Supreme Court held in Retired Employees Assn. that implied contractual obligations from duly-adopted documents do not run afoul of the rules governing public contract formation, stating: “[The Association] does not seek to recover “under a contract made in violation of the particularly prescribed statutory mode’ [citations omitted], but claims 10 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734instead it has contractual rights that are implied in resolutions duly approved by County.” /d. at 1187. Accordingly, the Supreme Court held, the contract formation cases were “inapposite.” Ibid. Similarly, the California courts have rejected any requirement that the public entity expressly state that it is entering into a contract. In California Teachers Assn. v. Cory (1984) 155 Cal.App.3d 494, 504-505, the state argued that a statute does not create contractual obligations unless it explicitly uses words of contract and that a contract cannot be created by implication from a statute. Jd. at 504. The appellate court rejected this argument (id. at 505): “In Californial law, a legislative intent to grant contractual rights can be implied from a statute if it contains an unambiguous element of exchange of consideration by a private party for consideration offered by the state.” Cory’s formulation of this principle was cited with approval by the Supreme Court in Retired Employees Assn., supra, 52 Cal.4" at 1186. Nothing in Section 6.102(6) or any other provision of the SF Charter precludes implied contractual terms. Nothing in the Charter precludes implied contract terms arising from mandatory legal obligations that California has long recognized create implied contractual terms. Bell v. Farmers Ins. Exchange (2006) 135 Cal.App.4" 1138, 1147; Lockheed Aircraft Corp. v. Superior Court (1946) 28 Cal.2d 481, 486; Hayes v. Bank of America (1945) 71 Cal.App.2d 301, 304-305. Nothing in the Charter precludes recognition of privacy rights established in HIPAA as} part of implied contractual terms governing the physician-patient relationship; courts in other jurisdictions have concluded that the obligation to maintain patient privacy is an implied contractual duty (Horne v. Patton (Ala. 1974) 291 Ala. 701, 710-711, 287 So.2d 824, 831-832), supported by the established confidentiality provisions in statutes and ethical standards (id. at 711, 287 So.2d at 832; Alsip v. Johnson City Medical Center (Tenn. 2006) 197 S.W.3d 722, 725- 726). The City has itself asserted and relied upon implied contractual terms in enforcing City contracts. In Stacy & Witbeck, Inc. v. City and County of San Francisco (1995) 36 Cal.App.4" 1074, 1084, the City defended the finding of a contract violation by relying on the implied covenant of good faith and fair dealing. The appellate court agreed: “The PUC held that the il Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734wn CoC wm nN a 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 covenant of good faith and fair dealing was an implicit requirement of clause 89 and, thus, of section 6.14 of chapter 6. We agree.” Under the City Charter in San Francisco, it is the operating department that have the contracting powers, not the City Attorney. S.F. Administrative Code §§ 21.04, 21.05. See Kennedy v. Ross (1946) 28 Cal.2d 569, 575-577 (SF Charter gives contracting authority to departments and/or commissions established by the Charter, not to the Board of Supervisors). As to the San Francisco Health Commission and Department of Public Health in particular, the Charter provides (§ 4.112, second 4): The Commission and the Department shall manage and control the City and County hospitals, emergency medical services, and in general provide for the preservation, promotion and protection of the physical and mental health of the inhabitants of the City and County, except where the Charter grants such authority to another officer or department. The Privacy Notices and their content were duly-adopted by the DPH and the Health Commission under their powers under the Charter. 3. The Cases Relied Upon By The City Involve Specific Language Governing The Contract Formation Process Under Different City Charters. The cases the City has relied upon do not involve general language describing a city attorney’s duties, but specific language stating that no contract can be adopted by the governing bodies unless the contract is approved by the attorney during the formal contract formation process. The language in the San Francisco City Charter is markedly different than the language in the Los Angeles and Long Beach City Charters that was at issue in the cases the City has relied upon. Moreover, those cases do not involve implied contracts arising from duly-adopted documents. As the Supreme Court noted in Retired Employees Assn., the contract-formation cases are simply “inapposite” in the case of implied contract. Retired Employees Assn., supra, 52 Cal.4" at 1187. In Dynamic Indus. Co. v. City of Long Beach (1958) 159 Cal.App.2d 294, 298, the appellate court explained: Section 293 of its charter provides, in material part, as follows: “The City of Long Beach shall not be and is not bound by any contract, except as otherwise provided herein, unless the same is 12 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734made in writing, by order of the city council, and signed by the city manager or by some person in behalf of the city authorized so to do by the city manager; provided, that the approval of the form of the contract by the city attorney shall be endorsed thereon before the same shall be signed on behalf of the City....” [§] The contract whose validity plaintiff seeks to establish was not signed by the city manager, as the charter requires. In First Street Plaza Partners v. City of Los Angeles (1998) 65 Cal.App.4" 650, 661-662, the appellate court similarly explained: “The Charter of the City of Los Angeles contains a section which generally specifies the procedures according to which the City may be bound to a contract.”> In concluding that there was no valid contract, the appellate court found (id. at 664): “none of the acts which ‘shall’ be done to form a contract with the City ever occurred.” Both First Street Plaza and Dynamic Industries involved Charter provisions that specifically governed how contracts were to be formed. As the court in Dynamic Industries explained: “where the statute provides the only mode by which the power to contract shall be exercised, the mode is the measure of the power.” /d., supra, 159 Cal.App.2d at 299. The San Francisco Charter does not contain provisions governing how contracts are to be formed that are remotely similar to the Los Angeles or Long Beach City Charters. Section 6.102(6), the only San Francisco Charter language the City cites, concerns the general powers of the City Attorney, not how contracts are formed or approved by San Francisco. * The appellate court described the specific provisions of the Los Angeles Charter that stated the specific contract approval process under the Los Angeles City Charter (id. at 662): In 1991, at the time of the CAO report which plaintiff contends was accepted by the City Council and Mayor as a contract, Section 385 provided in pertinent part as follows: “Every contract involving an expenditure of more than five hundred dollars ($500) shall . . . be made in writing, the draft whereof shall be approved by the board, officer or employee authorized to make the same, and signed on behalf of the City by the Mayor, or some other person authorized thereto by resolution of the council in the case of a contract authorized by Council, or, in the case of other contracts, by the board, officer or employee, as the case may be, authorized to make the same, provided, however, that the approval of the City Attorney of any such contract as to form . . . shall be endorsed thereon before the Council or such board, officer or employment [sic] shall have the power to approve the same.” 13 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734oD mI DH RF WN a a a i i 0 em NDA WwW FF BN 20 While the Los Angeles Charter at issue in First Street Plaza also contained a requirement for approval as to form by the Los Angeles city attorney, that requirement was contained in the specific section of the Los Angeles Charter governing contract formation as a specific requirement of the contract-approval process that expressly conditioned the power to contract on such approval. The applicable language was as follows (id., 65 Cal.App.4"" at 662) (emphasis supplied): “provided, however, that the approval of the City Attomey of any such contract as to form . . . shall be endorsed thereon before the Council or such board, officer or employment [sic] shall have the power to approve the same.” There is no comparable language in the San Francisco Charter linking the power to approve contracts to a prior approval by the City Attorney. To the contrary, only ordinances must be approved prior to submission to the Board of Supervisors. In San Francisco, it is the operating department that has the general contracting powers. S.F. Administrative Code §§ 21.04, 21.05. Nothing in the Charter sections governing the contacting power of departments contains any requirement that the City Attorney approve any contract as to form before it is approved or before it can be a binding obligation F. THE 1986 OPINION BY THE CITY ATTORNEY REGARDING APPROVAL OF ORDINANCES Is IRRELEVANT TO ISSUES OF CONTRACT FORMATION OR APPROVAL. The City relies on a 1986 opinion by the City attorney discussing the duty of the City Attorney to approve ordinances as to form before being submitted to the supervisors as a condition of the validity of an ordinance. See City Motion In Limine See City Motion In Limine #3. The charter language discussed in the 1986 opinion was added in the 1931 Charter and only addressed ordinances. See p. 3 of 1986 Opinion. The rational for its adoption applies only to ordinances, not contracts. Nothing in the 1986 opinion discusses any Charter language governing approval as to form for contracts. Nothing in this opinion states that a contract would be invalid if not approved as to form, what kind of approval as to form would be required or when that could occur. 14 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734co 0D em N DH BF WON RN NY NY NN KN KY KY S&B Be we we ew ee He oN A A FF YH YN = SOD we IY DH BF Ww NY The current language in Section 6.102(6) continues the 1931 Charter language regarding ordinances by requiring prior approval only for ordinances, not contracts: the City Attorney “shall... [a]pprove as to form all surety bonds, contracts and, prior to enactment, all ordinances”. In San Francisco, there is a significant reason to treat contracts and ordinances differently. The 1931 Charter, as well as the current Charter, gives contracting power to the operating departments. S.F. Administrative Code §§ 21.04, 21.05; Kennedy v. Ross (1946) 28 Cal.2d 569, 575-577 (SF Charter gives contracting authority to departments and/or commissions established by the Charter, not to the Board of Supervisors). Ordinances, in contrast, are adopted] by the Supervisors. In particular, the San Francisco Health Commission and Department of Public Health is given full authority to govern hospitals and provide for health services. S.F. Charter § 4.112, second § (quoted above at p. 12). The Privacy Notices and their content were duly-adopted by the DPH and the Health Commission under their powers under the Charter. Nothing in the Charter or the City Attorney’s 1986 opinion supports any argument that the City Attorney acts as a check on the substantive powers of the City’s departments, that the City Attorney can prevent a department from entering into a contract or that the City Attorney must approve a contract before it can be entered into by a Department. Dated: March 18, 2013 KATZEN) SLE — (Chis mega atzenbach Attorneys for ya Antiff MICHAEL McNAIR 15 Plaintiff's Opposition To Defendant’s Motion In Limine No. 2 CGC-09-489734