Unreported / Non-Citable
Background
Dr. Richard Pan, an anesthesiologist, died of acute propofol intoxication at Desert Regional Medical Center in September 2021. His widow, Nichapha Khachitthamawadee, and daughter, Alexa Nicha Pan, sued Tenet Healthcare Corporation, Desert Regional Medical Center, DHP Anesthesia Medical Group, Team Health Inc., Team Health Anesthesia, and Dr. Arun Thunga, alleging negligence-wrongful death and intentional infliction of emotional distress; they withdrew a negligent infliction of emotional distress claim in the trial court. The second amended complaint alleged that propofol is commonly abused among anesthesia professionals, that a manager admitted Pan "had been diverting propofol," that propofol accounting discrepancies existed, and that defendants nonetheless made the drug freely available and instructed staff to "close out" discrepancies without regard to how many drugs were missing.
The trial court sustained defendants' demurrers to the second amended complaint without leave to amend, and defendants and the trial court characterized the duty owed to Pan as merely a duty to prevent self-harm. Plaintiffs appealed. The Court of Appeal reviewed the ruling de novo, accepting the complaint's properly pled factual allegations as true and reading the complaint as a whole in context.
The Court’s Holding
The Court of Appeal held the trial court framed the duty too narrowly. Under California Code of Regulations title 22, sections 70263(c)(1) and 70235(a)(2), general acute care hospitals must establish "safe and effective systems for procurement, storage, distribution, dispensing[,] and use of drugs" and develop "regulations concerning anesthetic safety." The court rejected Desert's argument that these regulations protect only patients: a failed drug-control system "exposes everyone with access to the drug supply, staff and patients alike, to the risk of diversion." The court also held that Code of Civil Procedure section 340.5's one-year limitations period for professional negligence does not apply because the claims arise from a failure to safeguard controlled substances, not from the provision of medical care to patients. The court further found that DHP and Thunga contractually assumed Desert's monitoring obligations through the Desert-DHP contract's performance metrics and its designation of Thunga as responsible for those services.
The court independently found a duty under the negligent undertaking doctrine. The complaint adequately alleged that defendants undertook to protect anesthesia providers like Pan from unchecked propofol diversion—a harm they knew was already occurring—and that the services were necessary for the protection of third persons. Because defendants undertook to perform the very duty Desert owed Pan under the regulations, the fifth element did not require a showing of increased risk or reliance. The court concluded the trial court erred in sustaining the demurrers to the negligence-wrongful-death cause of action.
The court held the IIED allegations insufficient: Thunga's alleged conduct—staging the scene to suggest suicide and delaying notification—was not directed at plaintiffs personally, and plaintiffs did not witness the conduct, so neither the "directed at" nor the "reckless disregard" variation applied. The court found no abuse of discretion in denying leave to amend because plaintiffs had two opportunities to plead the claim and identified no amendment that would cure the defect. Because the withdrawn NIED claim was not before the court, it expressed no opinion on that request. The court reversed the judgment of dismissal and remanded with instructions to overrule the demurrers on the first cause of action for negligence only, with each party bearing its own costs on appeal.
Key Takeaways
- Hospitals and their contractors can owe a duty of care to protect healthcare providers from the foreseeable risks of drug diversion, not just a duty to prevent self-harm.
- California Code of Regulations title 22, sections 70263(c)(1) and 70235(a)(2) create duties running to staff as well as patients regarding safe drug distribution systems and anesthetic safety.
- A contractual undertaking to monitor drug discrepancies can give rise to a duty of care to third parties under the negligent undertaking doctrine, even absent privity.
- Code of Civil Procedure section 340.5's one-year limitations period does not apply to claims arising from a failure to safeguard controlled substances, as opposed to professional negligence in rendering medical care.
- To state an IIED claim under the "directed at" theory, conduct must be especially calculated to cause the plaintiff severe distress; conduct undertaken for self-protection does not satisfy this requirement.
Why It Matters
This decision clarifies that hospitals and anesthesia contractors cannot avoid liability for drug-diversion deaths by characterizing the duty as merely preventing suicide. When they know providers are diverting controlled substances and fail to implement adequate controls, they may owe a duty running to staff as well as patients under hospital regulations and the negligent undertaking doctrine.
The ruling also confirms that Code of Civil Procedure section 340.5's one-year limitations period does not govern claims arising from a hospital's failure to safeguard controlled substances, and it leaves open for the trial court on remand how to resolve any request to reintroduce the withdrawn NIED claim.