106 Wn.2d 632, BACKLUND v. BOARD OF COMMISSIONERS

CITE:          106 Wn.2d 632, 724 P.2d 981

               BACKLUND v. BOARD OF COMMISSIONERS

CAUSE NUMBER: 50634-5

FILE DATE:     September 11, 1986

CASE TITLE: William Backlund, Respondent, v. The Board of
               Commissioners of King County Hospital
               District No. 2, Appellant.

[1] Administrative Law and Procedure - Judicial Review - Question of Law - Standard of Review. A court, whether trial or appellate, reviews an issue of law raised in an administrative decision by determining the law for itself, although an agency's interpretation of the law it administers is entitled to substantial weight.

[2] Administrative Law and Procedure - Judicial Review - Question of Fact - Standard of Review. Administrative findings of fact are not clearly erroneous unless, based on the entire administrative record, the reviewing court is left with a definite and firm conviction that a mistake has been made.

[3] Constitutional Law - Freedom of Religion - Free Exercise Clause - State Regulation - Test. Religious beliefs, regardless of their reasonableness or popularity, are protected by the First Amendment. The exercise of such beliefs may be regulated by the state if the regulation is necessary to further a compelling governmental interest and the regulation is the least restrictive means available of satisfying the interest.

[4] Constitutional Law - Freedom of Religion - Free Exercise Clause - State Regulation - Commercial Activity. A person who voluntarily engages in commercial activity must abide by reasonable health and safety regulations which promote a compelling governmental interest of protecting third parties even if compliance with the regulations infringes on the person's First Amendment right to exercise his religion freely.

[5] Medical Treatment - Hospitals - Medical Staff - Withdrawal of Privileges - Review. A public hospital's withdrawal of a physician's privileges is reviewed only to determine if the withdrawal is arbitrary, capricious, or discriminatory.

[6] Administrative Law and Procedure - Judicial Review - Arbitrary and Capricious - What Constitutes. An administrative body has not acted arbitrarily and capriciously if its decision is supported by reasonable grounds and it reached its decision honestly after due consideration of the relevant circumstances and issues.

NATURE OF ACTION: A physician sought judicial review of a hospital's refusal to exempt him from a requirement in its bylaws that all physicians obtain professional liability insurance as a condition of maintaining hospital privileges. The plaintiff claimed that such insurance violated his religious beliefs.

Superior Court: The Superior Court for King County, No. 83-2 17152-1, Robert M. Elston, J., on May 8, 1984, entered a judgment in favor of the plaintiff.

Supreme Court: Holding that the insurance requirement did not violate the plaintiff's right to the free exercise of religion and that the hospital's withdrawal of the plaintiff's privileges was not arbitrary or capricious, the court REVERSES the judgment and reinstates the decision of the hospital.

COUNSEL:      PHILIP L. CARTER and DAVID J. SMITH (of LIVENGOOD, SILVERNALE, CARTER & TJOSSEM), for appellant.

NATHAN JAMES NEIMAN, for respondent.

AUTHOR OF MAJORITY OPINION: Callow, J.-

MAJORITY OPINION: The Board of Commissioners of King County Hospital District 2 terminated Dr. William Backlund's hospital privileges at Evergreen Hospital because of his refusal to purchase professional liability insurance. The Superior Court held that the Board acted unconstitutionally, infringed on Dr. Backlund's right of free exercise of religion as guaranteed by the First Amendment, and ordered the Board to reinstate his privileges at Evergreen.

The issue presented is whether the doctor's right to religious freedom is infringed unless he is granted an exemption to a hospital bylaw 1


1 The medical staff at Evergreen is subject to the Bylaws of Public Hospital District 2 of King County, which are enacted by the Board.



requiring him to carry professional liability insurance. We hold that it is not. We reverse the trial court and reinstate the decision of the Board.

Dr. Backlund is an orthopedic physician practicing in Redmond. In 1974, he applied for staff privileges at Evergreen. Dr. Backlund told the then hospital administrator that because of his religious beliefs he would not acquire professional liability insurance. The administrator informed Dr. Backlund that Evergreen did not require staff physicians to carry such insurance, and subsequently Evergreen granted him staff privileges. Since 1976, Dr. Backlund has distributed a brochure to his patients informing them that because of his Christian beliefs he does not carry professional liability insurance.

In July 1982, Evergreen began studying a proposal to require all staff physicians to acquire professional liability insurance. After study, the Board amended the hospital bylaws on June 28, 1983. The bylaws are expressly subject to amendment and physicians on the staff are "subject to such limitations as are contained in these bylaws."

Dr. Backlund refused to purchase the required insurance. The Board gave notice that failure to comply with the bylaws would result in the suspension of his privileges at Evergreen. Dr. Backlund requested a hearing. In July 1983, the Joint Conference Committee of Evergreen Hospital considered Dr. Backlund's request for an exemption from the amended bylaws and referred his request to the Board. The Board convened a hearing in October 1983, and by mutual agreement postponed the hearing until December. Dr. Backlund testified that he had decided not to carry the professional liability insurance after studying biblical principles. He also testified that he does not carry hospital or life insurance, or use a collection agency for his practice because of his beliefs.

After the December hearing the Board entered its findings of fact and conclusions. Pertinent findings of fact relating to Dr. Backlund's beliefs include:

"     30. That Dr. Backlund professes to have a conviction,
      based upon his religion, that he should not purchase professional
      liability insurance coverage.

. . .

32. That Dr. Backlund's conviction with respect to
      professional liability insurance appears to be a unique
      position professed to be held solely by himself. . . .

33. That notwithstanding Dr. Backlund's position regarding
      professional liability insurance coverage, he maintains
      automobile insurance because it is required by the lease
      company from which he leases his automobile, and he also
      maintains homeowner's insurance because his mortgage lender
      requires it.

. . .

37. That Dr. Backlund appears to be sincere in his
      beliefs and appears to have held them for sometime.

Pertinent findings of fact relating to Evergreen's interest in requiring physicians to carry professional liability insurance include:

"     22. [SIC] That it is recognized that if a physician
      makes an error or omission which causes harm to a patient,
      within the Hospital, it is likely that not only the physician,
      but that the Hospital will be named in any subsequent
      claim or lawsuit, as a party defendant.

22. That the "deep pocket" theory of litigation is
      well and commonly known, and it is likely that if a suit
      or claim were commenced against a physician and the Hospital
      due to an alleged error or omission that took place at
      the Hospital, and if through discovery in such a proceeding,
      it were determined that the physician were uninsured,
      it is likely that the claimant would attempt to pursue
      the Hospital for full financial responsibility.

23. That the Hospital, named as a party defendant
      in a suit with an uninsured physician, may be compelled
      to exert greater administrative and staff effort in the
      preparation for defense of a malpractice claim if the
      physician involved is uninsured, inasmuch as said physician
      will not have the assistance of an insurance carrier in
      the preparation of the defense of his claim.

24. That RCW 4.22.030 relating to contribution amongst
      joint tortfeasors where the claims are indivisible, may
      very well place at risk the Hospital for the full amount
      of any claims by an injured patient even if the majority
      of the negligence, as would be determined by a trier of
      facts, were determined to be the negligence of an uninsured
      physician. . . .

25. That testimony indicates that settlement negotiations
      with a plaintiff/claimant where the physician is uninsured,
      are more difficult and potentially more costly to the
      Hospital than where the physician carries professional
      liability insurance coverage.

26. That Evergreen Hospital is a participant in the
      Washington Hospital Liability Insurance Fund . . .

27. That where claims are made against hospitals,
      the costs of defense and the cost of settlement or payment
      of said claims is borne by the fund and the participants
      in the fund, including Evergreen Hospital. While it may
      be difficult to quantify, there is no question that the
      more that the fund has to pay in defense of or payment
      or settlement of claims, the more costly the coverage
      is to the participants in the fund, including Evergreen
      Hospital. There is adequate evidence to show that where
      a physician is uninsured, and the Hospital is named as
      a party defendant in a claim which arises out of the negligence
      of a physician in a hospital setting, where the physician
      fails to maintain professional liability insurance, additional
      costs and expenses are incurred or may be incurred by
      the fund, which costs and expenses are then borne by the
      participants in the fund, including Evergreen Hospital.

28. That it is prudent that the Board of Commissioners
      exercise reasonable efforts to protect the assets of the
      Hospital District . . . and that requiring [professional
      liability insurance] coverage of physicians practicing
      at the Hospital is a reasonable and logical extension
      of the fiduciary duty of the Hospital District.

29. That where a physician is not covered by professional
      liability insurance, it may cause that physician, as well
      as the Hospital to practice defensive medicine, in order
      to protect the assets of the physician and the Hospital.
      . . . This practice should be avoided because of the
      extra costs to the patient and the community.

. . .

40. That while it might be difficult to quantify the
      detriment to the Hospital by a physician not maintaining
      professional liability insurance coverage, as required
      by the Bylaws, such detriment or potential thereof clearly
      exists although shared by all of the hospitals within
      the Washington Hospital Liability Insurance Fund. That
      just because it is difficult to quantify the detriment
      does not mean that the detriment does not exist.

. . .

42. That the Hospital District possesses the authority
      to require mandatory professional liability insurance
      coverage of physicians practicing within the Hospital.

43. That if a physician were allowed to practice in
      contravention of the Hospital District Bylaws requiring
      the maintenance of professional liability insurance, the
      patients and/or taxpayers of the District may have to
      bear additional costs and expenses which would otherwise
      be borne by the physician's professional liability insurance
      carrier.

After the Board's decision, Dr. Backlund applied for a writ of certiorari asking the Superior Court to review the Board's decision. In its oral decision, the Superior Court held that Dr. Backlund refused to comply with the insurance requirement because of "sincerely held religious beliefs", and that his conduct was constitutionally protected. Further, the court held the Board failed to meet its burden of proving compelling state interests with sufficient evidence. The court also held that the evidence before the Board failed to prove that less restrictive alternatives had been explored. The trial court concluded that the Board's decision was clearly erroneous and Dr. Backlund's privileges at Evergreen should be reinstated.

The Board requested direct review by this court. Later the Board filed with the trial court a motion for clarification of its order. On March 1, 1985, the trial court ruled that the order required Evergreen to reinstate Dr. Backlund's privileges to admit and treat his own patients but that Evergreen was not required to place Dr. Backlund on its emergency room call list. 2


2 Dr. Backlund asserts that his patients consent to his failure to carry malpractice insurance. However, with some exceptions, one may not contract against one's own negligence and it is against public policy to procure a release of liability for malpractice.



Dr. Backlund has not appealed this order.

[1] It is the province and duty of the judiciary to interpret the law. OVERTON v. ECONOMIC ASSISTANCE AUTH., 96 Wn.2d 552, 555, 637 P.2d 652 (1981); HEARST CORP. v. HOPPE, 90 Wn.2d 123, 130, 580 P.2d 246 (1978). FRANKLIN CY. SHERIFF'S OFFICE v. SELLERS, 97 Wn.2d 317, 646 P.2d 113 (1982), CERT. DENIED, 459 U.S. 1106 (1983) stated at page 325:

"Since issues of law are the responsibility of the judicial
      branch to resolve, the error of law standard allows the
      reviewing court to essentially substitute its judgment
      for that of the administrative body, though substantial
      weight is accorded the agency's view of the law.

This standard of review applies to our review of the Board and the trial court's application of the constitutional provision involved.

[2] Factual determinations are reviewed under a different standard. Generally, courts are not to retry questions of fact already determined by an administrative body. FRANKLIN CY., 97 Wn.2d at 324-25; THORNDIKE v. HESPERIAN ORCHARDS, INC., 54 Wn.2d 570, 343 P.2d 183 (1959); CF. SMITH v. SKAGIT CY., 75 Wn.2d 715, 453 P.2d 832 (1969). Appellate review of administrative decisions is on the record of the administrative tribunal. Although there is evidence to support a finding, the reviewing court can declare a finding to be clearly erroneous when based on the entire evidence in the record if it is left with a definite and firm conviction that a mistake has been committed. FRANKLIN CY., 97 Wn.2d at 324; SEE ALSO ANCHETA v. DALY, 77 Wn.2d 255, 259 60, 461 P.2d 531 (1969); UNIVERSAL CAMERA CORP. v. NLRB, 340 U.S. 474, 95 L. Ed. 456, 71 S. Ct. 456 (1951). A review of the record does not leave a definite and firm conviction that any mistake has been committed. The Board's findings are not "clearly erroneous". We accept the findings as found by the administrative body. The Board had ample opportunity to assess the credibility of the witnesses and to weigh the evidence.

We turn to the extent to which Dr. Backlund's beliefs and conduct are protected by the free exercise of religion clause of the first amendment to the United States Constitution. 3


3 The parties have not argued persuasively for a different application of the provisions of the First Amendment and Const. art. 1, 11 (amend. 34) of the state constitution as they pertain to the exercise of religion.



[3] To qualify for First Amendment protection individuals must prove only that their religious convictions are sincere and central to their beliefs. The court will not inquire further into the truth or reasonableness of the individual's convictions. As stated by Justice Douglas in UNITED STATES v. BALLARD, 322 U.S. 78, 86-87, 88 L. Ed. 1148, 64 S. Ct. 882 (1944):

"[The First Amendment] not only "forestalls compulsion
      by law of the acceptance of any creed or the practice
      of any form of worship" but also "safeguards the free
      exercise of the chosen form of religion." CANTWELL v.
      CONNECTICUT, 310 U. S. 296, 303. "Thus the Amendment
      embraces two concepts, - freedom to believe and freedom
      to act. The first is absolute but, in the nature of things,
      the second cannot be." ID., pp. 303-304. Freedom of
      thought, which includes freedom of religious belief, is
      basic in a society of free men. BOARD OF EDUCATION v.
      BARNETTE, 319 U. S. 624. It embraces the right to maintain
      theories of life and of death and of the hereafter which
      are rank heresy to followers of the orthodox faiths.
      Heresy trials are foreign to our Constitution. Men may
      believe what they cannot prove. They may not be put to
      the proof of their religious doctrines or beliefs. Religious
      experiences which are as real as life to some may be incomprehensible
      to others. Yet the fact that they may be beyond the ken
      of mortals does not mean that they can be made suspect
      before the law. Many take their gospel from the New Testament.
      But it would hardly be supposed that they could be tried
      before a jury charged with the duty of determining whether
      those teachings contained false representations. The
      miracles of the New Testament, the Divinity of Christ,
      life after death, the power of prayer are deep in the
      religious convictions of many. If one could be sent to
      jail because a jury in a hostile environment found those
      teachings false, little indeed would be left of religious
      freedom. The Fathers of the Constitution were not unaware
      of the varied and extreme views of religious sects, of
      the violence of disagreement among them, and of the lack
      of any one religious creed on which all men would agree.
      They fashioned a charter of government which envisaged
      the widest possible toleration of conflicting views.
      Man's relation to his God was made no concern of the state.
      He was granted the right to worship as he pleased and
      to answer to no man for the verity of his religious views.
      The religious views espoused by respondents might seem
      incredible, if not preposterous, to most people. But
      if those doctrines are subject to trial before a jury
      charged with finding their truth or falsity, then the
      same can be done with the religious beliefs of any sect.
      When the triers of fact undertake that task, they enter
      a forbidden domain.

SEE ALSO STATE v. MEACHAM, 93 Wn.2d 735, 740, 612 P.2d 795 (1980); L. Tribe, AMERICAN CONSTITUTIONAL LAW 14-11 (1977). Religious beliefs need not be acceptable, logical, consistent, or comprehensible to others in order to merit First Amendment protection. THOMAS v. REVIEW BD., 450 U.S. 707, 714, 67 L. Ed. 2d 624, 101 S. Ct. 1425 (1981). Courts "have nothing to do with determining the reasonableness of the belief." STATE EX REL. BOLLING v. SUPERIOR COURT, 16 Wn.2d 373, 384, 133 P.2d 803 (1943) (quoting BARNETTE v. WEST VA. BD. OF EDUC., 47 F. Supp. 251, 253 (S.D. W. Va. 1942), AFF'D, 319 U.S. 624, 147 A.L.R. 674 (1943)).

The trial court held that Dr. Backlund's beliefs are sincere. Dr. Backlund's beliefs, being sincere, warrant First Amendment protection. However, not all burdens on religion are unconstitutional. SEE, E.G., UNITED STATES v. LEE, 455 U.S. 252, 71 L. Ed. 2d 127, 102 S. Ct. 1051 (1982); PRINCE v. MASSACHUSETTS, 321 U.S. 158, 88 L. Ed. 645, 64 S. Ct. 438 (1944); REYNOLDS v. UNITED STATES, 98 U.S. 145, 25 L. Ed. 244 (1879). Since Dr. Backlund's beliefs are protected by the free exercise clause of the First Amendment, the burden of proof shifts to the Board to prove that (1) a compelling governmental interest justifies the regulation in question and (2) the regulation is the least restrictive imposition on the PRACTICE of his belief to satisfy that interest. UNITED STATES v. LEE, 455 U.S. at 257; STATE v. MEACHAM, 93 Wn.2d at 740.

To justify a substantial infringement of a First Amendment right there must be a compelling governmental interest.

"It is basic that no showing merely of a rational relationship
      to some colorable state interest would suffice; in this
      highly sensitive constitutional area, "[o]nly the gravest
      abuses, endangering paramount interests, give occasion
      for permissible limitation," . . .

SHERBERT v. VERNER, 374 U.S. 398, 406, 10 L. Ed. 2d 965, 83 S. Ct. 1790 (1963) (quoting THOMAS v. COLLINS, 323 U.S. 516, 530, 89 L. Ed. 430, 65 S. Ct. 315 (1945)). This court has stated the test as follows:

"     [Religious] freedom can be restricted "only to prevent
      grave and immediate danger to interests which the State
      may lawfully protect." WEST VIRGINIA STATE BOARD OF EDUCATION
      v. BARNETTE, 319 U.S. 624, 639, 87 L. Ed. 1628, 63 S.
      Ct. 1178, 147 A. L. R. 674 (1943). . . . The test must
      be applied to the facts of each case because, as its author
      said, "It is a question of proximity and degree."

STATE EX REL. HOLCOMB v. ARMSTRONG, 39 Wn.2d 860, 864, 239 P.2d 545 (1952).

[4] However, conduct motivated by religious beliefs may be subject to regulation if that conduct conflicts with the exercise of the interests of third parties. This concern was articulated by Thomas Jefferson:

""Believing with you that religion is a matter which lies
      solely between man and his God, that he owes account to
      none other for his faith or his worship, that THE LEGISLATIVE
      POWERS OF GOVERNMENT REACH ACTIONS ONLY, AND NOT OPINIONS,
      I contemplate with sovereign reverence that act of the
      whole American people which declared that their legislature
      should 'make no law respecting an establishment of religion,
      or prohibiting the free exercise thereof,' thus building
      a wall of separation between church and State. Adhering
      to this expression of the supreme will of the nation in
      behalf of the rights of conscience, I shall see with sincere
      satisfaction the progress of those sentiments which tend
      to restore to man all his natural rights, convinced HE
      HAS NO NATURAL RIGHT IN OPPOSITION TO HIS SOCIAL DUTIES."
      (Emphasis added.) 8 Works of Thomas Jefferson, 113.

BRAUNFELD v. BROWN, 366 U.S. 599, 604, 6 L. Ed. 2d 563, 81 S. Ct. 1144 (1961). In UNITED STATES v. LEE, 455 U.S. at 261, we find:

"     Congress and the courts have been sensitive to the
      needs flowing from the Free Exercise Clause, but every
      person cannot be shielded from all the burdens incident
      to exercising every aspect of the right to practice religious
      beliefs. When followers of a particular sect ENTER INTO
      COMMERCIAL ACTIVITY AS A MATTER OF CHOICE, THE LIMITS
      THEY ACCEPT ON THEIR OWN CONDUCT AS A MATTER OF CONSCIENCE
      AND FAITH ARE NOT TO BE SUPERIMPOSED ON THE STATUTORY
      SCHEMES WHICH ARE BINDING ON OTHERS IN THAT ACTIVITY.

(Italics ours.)

In the area of health and safety, governmental interests often override individual objections to regulations relating thereto. SEE JACOBSON v. MASSACHUSETTS, 197 U.S. 11, 49 L. Ed. 643, 25 S. Ct. 358 (1905) (the State can require vaccination though contrary to an individual's religious beliefs); JEHOVAH'S WITNESSES v. KING CY. HOSP., 278 F. Supp. 488 (W.D. Wash. 1967) (the State may require blood transfusions for children over objections of parents), AFF'D, 390 U.S. 598, 20 L. Ed. 2d 158, 88 S. Ct. 1260 (1968); STATE EX REL. HOLCOMB v. ARMSTRONG, SUPRA (University of Washington requirement that students have an X-ray examination before registration to discover possible tuberculosis infections overrode religious objections thereto); IN RE HAMILTON, 657 S.W.2d 425 (Tenn. Ct. App. 1983) (the State may require a 12-year-old girl to submit to cancer treatment over the religious objections of parents).

In many jurisdictions mandatory professional liability insurance requirements are seen as bearing a rational relationship to the health and welfare of the public. The courts have uniformly upheld such requirements, whether in the form of a legislative enactment 4


4 At least two states have enacted legislation requiring health care providers, generally physicians and hospitals, to carry professional liability insurance as a condition of obtaining a license to conduct medical related activities in their states. Kan. Stat. 40-3402 (1981 & Supp. 1985); 40 Pa. Cons. Stat. Ann. 1301.701 (Purdon Supp. 1985).



or hospital rule, because hospitals have the right to take reasonable measures to protect their assets and the patients they serve. SEE, E.G., RENFORTH v. FAYETTE MEM. HOSP. ASS'N, 178 Ind. App. 475, 383 N.E.2d 368, 375 (1978), CERT. DENIED, 444 U.S. 930 (1979); HOLMES v. HOEMAKO HOSP., 117 Ariz. 403, 573 P.2d 477, 7 A.L.R.4th 1231 (1977); STATE EX REL. SCHNEIDER v. LIGGETT, 223 Kan. 610, 576 P.2d 221, APPEAL DISMISSED, 439 U.S. 808 (1978); JONES v. STATE BD. OF MEDICINE, 97 Idaho 859, 555 P.2d 399 (1976), CERT. DENIED, 431 U.S. 914 (1977); POLLOCK v. METHODIST HOSP., 392 F. Supp. 393 (E.D. La. 1975). The interests that a hospital has in enacting a mandatory professional liability insurance requirement have been expressed as follows:

"     IN LIGHT OF THE INCREASING NUMBER AND AMOUNT OF
      PERSONAL INJURY VERDICTS AGAINST DOCTORS AND HOSPITALS,
      IT IS HIGHLY GERMANE TO CONSIDER A HOSPITAL'S INTEREST
      IN HAVING ITS STAFF DOCTORS INSURED IN AN ADEQUATE AMOUNT
      AND BY A RELIABLE CARRIER.
           SUCH COVERAGE PROTECTS THE VITAL FINANCIAL INTEGRITY
      OF A HOSPITAL. IT PROVIDES AN ASSURED FUND TO PAY A JUDGMENT
      WHERE THE DOCTOR IS HELD PERSONALLY LIABLE. If by reason
      of the relationship between a doctor and a hospital, the
      hospital is held jointly liable with the primarily responsible
      doctor, the hospital would have the right of indemnification
      against the doctor and the doctor's carrier. Thus, the
      existence of malpractice insurance covering staff doctors
      would likely reduce the insurance premium on the hospital's
      liability coverage. LASTLY, THE EXISTENCE OF SUCH COVERAGE
      PROTECTS HOSPITAL PATIENTS. (Footnote omitted. Italics ours.) WILKINSON v. MADERA COMM'TY HOSP., 144 Cal. App. 3d 436, 443, 192 Cal. Rptr. 593 (1983).

However, ROSNER v. PENINSULA HOSP. DIST., 224 Cal. App. 2d 115, 36 Cal. Rptr. 332 (1964) held that a hospital district could not, absent statutory authority, impose a requirement of minimum malpractice insurance as a condition of medical staff membership. In 1974, the California Legislature adopted statutory authority overruling ROSNER. 5


5 Cal. Health & Safety Code 1319 (Deering 1982) allows hospitals to require physicians to carry professional liability insurance as a prerequisite to hospital staff membership.



SEE WILKINSON, 144 Cal. App. 3d at 441.

Thus health and welfare regulations curtailing the free exercise of religion are justified in order to protect the interests of third parties. With this in mind, we consider whether the Board's findings substantiate the conclusion that a compelling governmental interest is involved in the instant case. We find that the findings do.

At the Board hearings to consider Dr. Backlund's request of an exemption to the bylaw requiring him to carry professional liability insurance or face termination of his privileges, the hospital introduced expert testimony to demonstrate the necessity of the bylaw and to show the substantial interests involved. This testimony included: (1) that the bylaw assured, for the benefit of the hospital's patients and the community, compensation for patients injured at Evergreen aside from any liability the hospital might have; (2) that enforcement of the bylaw would have a positive impact on the amount of liability expenses that Evergreen would have in malpractice claims; (3) that if the bylaw was not enforced Evergreen would have potentially greater liability exposure because it is more difficult to settle claims prior to trial when an uninsured physician is involved; (4) that when an uninsured physician is involved other defendants having liability insurance become the targets of a medical malpractice suit because they have insurance coverage; and (5) that the insured defendants may pay amounts disproportionately greater than their degree of fault. 6


6 This concern was very real given then RCW 4.22.030, which read: If more than one person is liable to a claimant on an indivisible claim for the same injury, death or harm, the liability of such person shall be joint and several. SEE ALSO PARADISE VLY. HOSP. v. SCHLOSSMAN, 143 Cal. App. 3d 87, 191 Cal. Rptr. 531 (1983) (where one of several joint tortfeasors was insolvent, the solvent tortfeasors shared liability for the shortfall). The tort reform act (Laws of 1986, ch. 305, 402) changes the law on joint and several liability. In any event, our consideration is of the risks as THEN contemplated by the Board.



Other testimony indicated that not requiring professional liability insurance promoted defensive medicine, that is, the ordering of unnecessary treatment for the patient in order to establish documentation in the event of a lawsuit. The practical effect of a physician's decision not to purchase professional liability insurance is that the physician's hospital and others more or less subsidize the uninsured's practice.

Dr. Backlund contracted with Evergreen for hospital privileges. It is the Board's duty to protect the financial well-being of the hospital. The Board also owes a duty to the hospital's patients, as "hospital[s have] a nondelegable duty owed directly to the patient, regardless of the details of the doctor-hospital relationship." PEDROZA v. BRYANT, 101 Wn.2d 226, 229, 677 P.2d 166 (1984). This duty includes being able to adequately provide compensation to patients injured through the negligence of the hospital and the hospital staff, including those physicians to whom Evergreen has extended privileges.

A significant number of findings of fact are devoted to the need of the hospital to require its physicians to carry professional liability insurance and these findings amply support the conclusion that there is a compelling governmental interest involved. The Board must also show that the regulation involved is the least restrictive means necessary to satisfy the compelling governmental interest. THOMAS v. REVIEW BD., 450 U.S. at 718. STATE v. MEACHAM, SUPRA, stated that to restrict an individual's exercise of conduct

"the State must have a compelling interest and the restrictive
      statute must have a "nexus of necessity" with the asserted
      State interest. If the statute's purpose may be achieved
      by measures less drastic than restriction of First Amendment
      rights, the State must utilize such other measures. (Citations omitted.) STATE v. MEACHAM, 93 Wn.2d 735, 740, 612 P.2d 795 (1980).

The purpose of the bylaw is to assure that sufficient funds are available to provide for patients who successfully bring malpractice claims against Evergreen and/or the physicians involved. After study, the Board decided that an insurance requirement best met this concern. Alternatives, such as bonding, also burden the physician. The Board could find no less restrictive alternative that was practical.

Dr. Backlund asserts that the March 1, 1985 court order, which required Evergreen to reinstate his privileges solely to admit and treat his own patients, will serve the purpose of the bylaw by means less drastic than a restriction on his First Amendment rights. We disagree. The trial court order defeats the purposes of the bylaw. Dr. Backlund's practice at Evergreen, even if limited to his own patients, necessarily involves hospital personnel and the use of hospital facilities and services. Thus, compelling government interests, protection of hospital assets, patients and staff are not met by the March 1, 1985 order.

After the Board passed the bylaw, it attempted to negotiate a solution with Dr. Backlund. Dr. Backlund made it clear that he would only be satisfied with an exemption from the bylaw. Dr. Backlund also indicates that he will do whatever he can should a successful malpractice claim be brought against him. This is not sufficient since good intentions do not satisfy judgments. We find that there exists a nexus of necessity between the bylaw and the compelling governmental interest. Further, the facts demonstrate that the bylaw's purpose could not be achieved by any less drastic restriction of Dr. Backlund's First Amendment rights.

[5, 6] RITTER v. BOARD OF COMM'RS, 96 Wn.2d 503, 515, 637 P.2d 940 (1981) held that a public hospital's decision withdrawing a doctor's privileges will be overturned "only if the hospital's action is arbitrary, capricious or discriminatory." SEE ALSO RAO v. BOARD OF CY. COMM'RS, 80 Wn.2d 695, 698, 497 P.2d 591 ("arbitrary, tyrannical or predicated upon a fundamentally wrong basis"), CERT. DENIED, 409 U.S. 1017 (1972); GROUP HEALTH COOP. v. KING CY. MED. SOC'Y, 39 Wn.2d 586, 669, 237 P.2d 737 (1951). No claim is made that the Board acted in a discriminatory manner. We need only consider whether the Board acted arbitrarily or capriciously.

"     Administrative action is not arbitrary or capricious
      if there are grounds for two or more reasonable opinions
      and the agency reached its decision honestly and with
      due consideration of the relevant circumstances. Such
      action is not arbitrary or capricious merely because an
      appellate court believes it would have reached a different
      decision on the same facts. SEE, E.G., BARRIE v. KITSAP
      COUNTY, 93 Wn.2d 843, 850, 613 P.2d 1148 (1980). Our
      scope of review should be especially unobtrusive in this
      context given the gravity of interests at stake, the inherent
      difficulty of precisely defining fitness to be a member
      of a hospital staff, and the judiciary's limited capacity
      to question competently a hospital administration's discretion
      in such matters. SEE SOSA v. BOARD OF MANAGERS, 437
      F.2d 173, 176-77 (5th Cir. 1971); SHULMAN v. WASHINGTON
      HOSP. CENTER, 222 F. Supp. 59, 64 (D.D.C. 1963); KHAN
      v. SUBURBAN COMMUNITY HOSP., 45 Ohio St. 2d 39, 44, 340
      N.E.2d 398 (1976). "[S]o long as [initial] staff selections
      are administered with fairness, geared by a rationale
      compatible with hospital responsibility, and unencumbered
      with irrelevant considerations, a court should not interfere."
      SOSA, at 177. There is no reason why judicial review
      should not be similarly limited when staff privileges
      are withdrawn.

RITTER, 96 Wn.2d at 515-16. The Board reached the decision to withdraw Dr. Backlund's privileges at Evergreen with due consideration of the relevant circumstances and, in particular, the constitutional issue at stake. The Board did not act in an arbitrary or capricious manner.

Dr. Backlund freely chose to enter into the profession of medicine. Those who enter into a profession as a matter of choice, necessarily face regulation as to their own conduct and their voluntarily imposed personal limitations cannot override the regulatory schemes which bind others in that activity. Dr. Backlund's practice is open to the public. He enjoys the economic benefits of his practice. However, the practice of orthopedic surgery is a specialty which exposes the practitioner to the risk of large liability claims. Therefore, with these benefits come corresponding burdens, and in this case the need to show financial responsibility in order to meet the liabilities which might result from his practice. Financial irresponsibility presents a substantial risk to his patients. The Board must protect those to whom it is responsible. The Board did so in mandating professional liability insurance. The Board's decision not to grant an exemption is supported by the findings and does not impinge upon Dr. Backlund's right to believe as he chooses, only upon his practice of those beliefs when such practice can be to the detriment of others.

The trial court's judgment is reversed and the decision of the Board reinstated.

CONCURRING JUDGES: Dolliver, C.J., and Utter, Brachtenbach, Dore, Pearson, Andersen, Goodloe, and Durham, JJ., concur.