Menu Close

The unpublished Court of Appeal decision in Electronic Waveform Lab v. EK Health Services addresses whether UR is an “official proceeding” within the meaning of Code of Civil Procedure section 425.16, subdivision (e)(2) (the anti-SLAPP statute [SLAPP is the abbreviation for strategic lawsuit against public participation]) and whether the trial court correctly resolved the motion to dismiss under that statute filed by defendant State Compensation Insurance Fund.

Waveform manufactures and sells an electrotherapy device, commonly known as an H-Wave device, which physicians may prescribe to assist in treating various muscular injuries. State Fund contracts with EK Health and “independent contractor individual physician reviewers” to provide UR services to workers covered by their employers’ workers’ compensation policies issued by State Fund. Waveform filed suit against EK Health, alleging that EK Health was “situated as a monopolistic ‘gate keeper’ to a significant and substantial market share of patients who are injured on the job.” Waveform further alleged that EK Health and the Reviewers conspired to defame Waveform and consistently denied the H-Wave device for treatment of individual patients, with the result that treating physicians asked Waveform to remove H-Wave equipment from doctors’ offices and physical therapy clinics. Waveform alleged that the conduct of all of the defendants violated the Cartwright Act (Bus. & Prof. Code, §§ 16720 et seq.) and that the acts of EK Health and of a subset of the Reviewers constituted intentional interference with prospective economic advantage and trade libel.

EK Health and the Reviewers filed a special motion to strike the complaint under section 425.16 (anti-SLAPP motion) which was denied. The denial of the EK Health motion was not appealed.

Waveform then filed a first amended complaint adding State Fund as a defendant. Waveform alleged that State Fund had implemented through EK Health a “blanket policy” to deny and reject physicians’ prescriptions for utilization of the H-Wave device in treatment of patients’ injures and that “[w]hile creating the appearance of reviewer independence, EK Health and the reviewers in fact complied with State Fund’s policy that all H-Wave requests be denied.” Waveform alleged, the policy “violates the independent medical decision-making that reviewers are required to engage in. . . .”

State Fund filed its own anti-SLAPP motion seeking to dismiss both causes of action alleged against it. The trial court ruled that State Fund had established that its actions arose from “official proceedings” as its actions constituted “statements made in connection with an issue under consideration in a legally-authorized official proceeding.” The trial court also concluded that plaintiff had not shown a probability of prevailing against State Fund at trial and for these reasons granted the State Funds anti-SLAPP motion and it was dismissed. The Court of Appeal reversed.

The parties contest whether UR is an “official proceeding authorized by law” as that term is used in section 425.16, subdivision (e)(2). State Fund argues that “official proceedings” include administrative agency actions involving review and investigation of grievances, and that the workers’ compensation UR system, which involves resolution of claims for medical treatment, should be similarly viewed. Waveform argues that the UR process is not quasi-judicial or part of a comprehensive statutory licensing scheme which is subject to judicial review by administrative mandate. The Court of Appeal ruled that it was not an official proceeding and distinguished UR from case law on arbitration proceedings by saying “UR review is medical rather than legal and informal rather than formal.” “For this reason alone, the trial court erred in concluding that UR is an “official proceeding” within the meaning of that term in section 425.16, subdivision (e)(2).”

The judgment dismissing State Fund from Waveform’s first amended complaint was reversed.