Palm Medical Group, Inc. v. State Compensation Insurance Fund

Palm Medical Group, Inc. (Palm), an occupational medical clinic located in Fresno, was denied admission into the preferred provider network (PPN) operated by State Compensation Insurance Fund (SCIF), a California public enterprise fund operating throughout the state as a nonprofit workers’ compensation insurer. After a four-week trial, a jury found that SCIF had excluded Palm in violation of the common law fair procedure doctrine and awarded Palm damages of $1,131,000. The trial court subsequently granted SCIF’s motion for judgment notwithstanding the verdict on the ground that there was insufficient evidence to establish a duty on the part of SCIF to afford Palm fair procedure in considering its application for admission to the PPN. Palm contends the trial court erred in granting SCIF’s motion for judgment notwithstanding the verdict, and also in denying its request for an injunction requiring SCIF to admit Palm to the PPN. SCIF— supported by several amici curiae—defends the judgment on the basis of the trial court’s reasoning and on numerous additional grounds. SCIF also argues that damages are not an available remedy for a violation of the fair procedure doctrine and…