HOUSTON – A Texas appeals court has upheld a lower court’s ruling that a physician who voiced her opposition to COVID-19 vaccine mandates, had her privileges suspended by Methodist Hospital and then sought a plethora of financial records from the hospital, will be denied an opportunity to receive those records.
In a June 27 memorandum opinion, Fourteenth Court of Appeals Justices Kevin Jewell, Charles A. Spain and Randy Wilson opted to affirm a prior ruling from the 234th District Court in Harris County, Texas, that plaintiff Dr. Mary Talley Bowden would not be granted access to the financial records in question from Methodist Hospital and its associated physician group, TMH Physician Organization, due to a statutory exemption under Chapter 22 of the Texas Business Organizations Code.
Wilson wrote the Court’s opinion in this case.
“Appellant Mary Tally Bowden is an Ear, Nose and Throat doctor who practices in Houston. When the COVID-19 pandemic began, Bowden began speaking out online against COVID-19 vaccines and began treating COVID-19 patients with Ivermectin. In June of 2021, appellee The Methodist Hospital suspended and terminated over 150 employees who refused to receive a COVID-19 vaccine. In November of 2021, Methodist suspended Bowden’s privileges due to disagreements with Bowden about her use and advocacy of Ivermectin for the early treatment of COVID-19 and her objections to Methodist’s vaccination mandate. Methodist also publicly responded to Bowden’s views on Twitter, calling her views ‘dangerous misinformation,” Wilson stated.
“In November 2021, Bowden and her media consultant, Dolcefino Communications, sent a series of demands for access to financial records of Methodist and its associated physician group, appellee TMH Physician Organization. Most of the requested information relates to Methodist’s COVID-19 related care and associated financial data. Bowden and Dolcefino cited Section 22.353 of the Texas Business Organizations Code as the legal basis for all of their requests. The Methodist Parties did not comply with the request. Thereafter, Bowden and Dolcefino petitioned the trial court for a writ of mandamus compelling the Methodist Parties to ‘permit plaintiffs…to examine the books, records, minutes, and documents described herein, and to make extracts and copies.’ Bowden later served defendants with a request for production of documents, seeking much of the same information as the mandamus petition.”
Wilson explained that Methodist Hospital and the Physician Organization answered, asserting an affirmative defense based on their exemption-status under Chapter 22. Though they voluntarily produced some documents, including tax records, they also moved for a protective order to prevent further discovery and filed a motion for traditional summary judgment.
“On July 13, 2022, the trial court signed an order granting the motion for protection, and, on Aug. 16, 2022, signed its order granting the Methodist Parties’ motion for summary judgment and dismissing Dolcefino’s and Bowden’s claims with prejudice. The order states: ‘The Court finds that the summary judgment record conclusively establishes that neither defendant solicits funds from the public; instead, any public gifts or donations are provided to a separate entity, The Methodist Hospital Foundation, which in turn provides funding to defendants. Accordingly, defendants are exempt from the requirements of Section 22.353.’ Dolcefino and Bowden moved to vacate the final summary judgment and for a new trial, which the trial court denied. Only Bowden appeals,” Wilson said.
On appeal, Bowden argued contends that the trial court erred on three points: 1) In granting the motion for summary judgment and dismissing her two claims (for public disclosure and for declaratory judgment); 2) In overruling her objections to the affidavit the Methodist Parties used to support their summary judgment motion and; 3) In granting the Methodist Parties’ motion for protection.
Wilson said evidence provided by the defendants, including an affidavit from Edward L. Tyrrell, showed that they do not receive funds from the general public.
The affidavit stated, in part, “Neither Houston Methodist nor TMH Physician Organization solicits funds from the general public. Likewise, neither Houston Methodist nor TMH Physician Organization receives funds from the general public.”
The Tyrrell Affidavit also included attached statements authenticating a corporate reference manual and tax records (IRS Form 990s) showing that during the relevant timeframe, the Methodist Parties received revenue from related organizations, government grants, professional fees and patient care services, but not from the general public.
The Corporate Reference Manual illustrates contributions from the public are received by a separate nonprofit foundation, and that Methodist then receives grants from that foundation: “Houston Methodist Hospital Foundation receives all private donations that are for the benefit of research, education, and the furtherance of the mission of Methodist.”
“While the verb ‘receive’ in isolation is sufficiently general that a nonprofit can naturally be said to receive contributions from the public and receive contributions in the form of grants from governmental related or private grantors in Section 22.355(2), ‘receive’ is connected to both ‘solicit’ and ‘raise’ and therefore must be understood in that context. In ordinary speech, the word ‘contributions’ when used in conjunction with the verbs ‘solicit’ and ‘raise’, refers to funds solicited or funds raised in the form of charitable donations, however large or small, from outside the organization, i.e., funds from the public,” Wilson said.
“On the other hand, grants from governmental, related or private grantors’ are not said to be solicited or raised, but are applied for, offered, awarded and accepted. In short, the plain meaning of the word ‘contributions’ in Section 22.355(2) as informed by the context in which it is used – arising from solicitation and fundraising – does not include funds awarded by grants from governmental, related or private grantors.”
Though Bowden argued that “contributions” cannot mean “gifts or donations from the general public” because Section 22.355(2) contemplates contributions to a corporation “from a source other than its own membership,” Wilson refuted this contention.
“According to Bowden, our interpretation makes ‘from its own membership’ surplusage and renders the statute “internally inconsistent.’ However, this qualifying language – ‘from a source other than its own membership’ – further shows that Section 22.353(2) reaches only nonprofits that receive money from the general public,” Wilson stated.
“Had the Legislature intended to reach nonprofits regardless of the nature of the contributions, a qualifier would have been unnecessary. If the statute were simply about transparency for transparency’s sake, the Legislature would not have excluded contributions from members, which makes it easier for a nonprofit to be exempt from disclosure. Consequently, we conclude that the provision provides an exemption from Chapter 22’s disclosure requirement for non-profit corporations that do not solicit or receive funds from the general public.”
Wilson added that the trial court also properly overruled Bowden’s objections to the defendants’ summary judgment evidence.
“Even if Bowden has assigned error on her conclusory challenge, though the Tyrell Affidavit provides statements that incorporate the language of the exemption statute, no sentence in the affidavit includes ‘rote legal conclusions’, or lacks necessary support. The trial court could have reasonably considered the evidence attached to the affidavit as support for statements in Tyrell’s affidavit,” Wilson said.
“As to the latter proposition, Bowden provides no further explanation factually or legally to demonstrate why statements about the role of the Foundation or statements addressing Methodist’s public fundraising statement render it conclusory. To the extent Bowden is referring to statements contained in attachments to her response that she believes would be necessary to rebut a fact issue she believes she raised, the trial court could have reasonably concluded no such fact issue had been raised. The Methodist parties were not required to address these topics in support of proving their exemption.”
Wilson and his colleagues also rejected the plaintiff’s notion that the trial court erred when it granted the Methodist Parties’ motion for protective order.
“In addition, in conducting its Rule 192.4(b) balancing test to this case, the trial court was within its discretion to consider the unique circumstances of the case—that the essence of the lawsuit was to seek discovery of documents and in turn the essence of the Methodist Parties’ defense was to seek refuge from such production based on its claimed status under the exemption. While the statute provides no discovery-stay mechanism associated with the exemption, the trial court could have fairly considered in its Rule 192.4(b) analysis that any discovery, not merely overbroad requests or requests for voluminous or sensitive materials, imposed an increased burden on the Methodist Parties who were seeking application of the exemption and protection from public disclosure,” Wilson stated.
“In sum, Bowden’s discovery requests presented a burden on the Methodist Parties, posed a risk of making the exemption futile, were not probative on matters within our construction of the Texas Business Organizations Code, and any documents responsive were not reasonably calculated to lead to information concerning the application of exemption as to the Methodist Parties and thus the outcome of the trial court’s ruling on the summary judgment. Thus, we cannot say that trial court abused its discretion by determining that additional discovery would not have aided in the tasks of construing the Texas Business Organizations Code and analyzing the application of the exemption. We therefore overrule Bowden’s stated issue. We affirm the trial court’s summary judgment.”
Fourteenth Court of Appeals, State of Texas case 14-22-00860-CV
234th District Court, Harris County, Texas case 2022-02976
From the Southeast Texas Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com