When regulators cut a deal with a doctor facing discipline, they were unaware of a $5.5 million lawsuit in his past.

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Since 2001, Dr. James H. Greene has been accused in two lawsuits of negligence that resulted in extreme injury or death. In both cases, Greene’s employer, Group Health Cooperative, paid significant settlements to the patients’ families — one for $5.5 million, the other for $800,000.

But when health-care regulators filed disciplinary charges against Greene earlier this year, they knew about only one settlement, the smaller one. The state Department of Health wound up giving Greene its lightest possible punishment.

All the while, the $5.5 million settlement was hidden away, improperly sealed by a King County Superior Court judge.

It shows up in a database used by lawyers, but only as Confidential v. Confidential, in county Confidential. The defense attorneys? Confidential. Medical experts? Confidential.

The Seattle Times recently got this lawsuit opened, as part of a continuing investigation of improperly sealed court records.

The public — and state regulators — can now see what’s inside.

Layers of secrecy

A lawsuit involving a Group Health doctor was improperly sealed by a King County judge. Settled for $5.5 million, the case shows up in a database used by lawyers, but only as Confidential v. Confidential. Also termed “confidential”: names of county, defense lawyers, medical experts.

Source: Jury Verdicts Northwest

The suit accuses Greene of not bothering to examine a pregnant woman well past her due date and entering her 25th hour of labor, leading to devastating injuries to a newborn child. While Group Health denied that Greene and other employees were negligent, it paid millions to the baby’s family — so long as they kept quiet about it. Let slip the defendant’s name, and they could lose the money.

Even now that the case is unsealed, the family and their lawyer can’t talk about it.

Theirs is one of at least two dozen medical-malpractice cases sealed in their entirety in King County Superior Court since 1990.

The lawsuit involving Greene — along with two other Group Health cases unsealed through The Times’ efforts this year — illustrates the dangers of secrecy in medical-malpractice lawsuits. Patients, regulators and hospitals need to know all they can about the people entrusted with the public’s health.

A difficult delivery

When she was 38 weeks pregnant, an ultrasound showed that her child already weighed an estimated 10 pounds, 4 ounces. The average newborn weighs 7 to 8 pounds, and a full-term pregnancy typically lasts about 40 weeks.

The 35-year-old woman was in the midwife program at Group Health, a nonprofit HMO with more than 500,000 members in Washington and Idaho. Nurse midwives provided prenatal care while doctors handled delivery.

At 40 weeks, she still had not delivered. The child continued to grow.

In June 1999, when she was “42-plus weeks” pregnant, she finally went into labor and was admitted to Group Health Central Hospital in Seattle. After about 24 hours of labor, a midwife contacted the obstetrician on call, Dr. James H. Greene.

But Greene didn’t respond by examining the woman, nor did he personally review her chart, according to court records. Instead, he told the midwife to keep doing what she was doing.

About two hours later, the baby’s head appeared. The midwife called another Group Health doctor. She arrived but for 10 minutes was unable to deliver the child, according to court records. The baby’s shoulders were stuck. A Virginia Mason obstetrician offered his help, and delivered the baby within two minutes.

The baby boy had no heartbeat. Medical workers resuscitated him — but he wound up with brain damage, spastic quadriplegia and a seizure disorder. He struggles to communicate and must be fed through a tube.

In 2001, the child’s family sued Group Health, alleging that the midwives, Greene and another doctor were negligent. Group Health’s employees should have recognized the risk factors for shoulder dystocia — large baby, long pregnancy, protracted labor — and warned the expectant mother against regular delivery, the lawsuit alleged. Greene, the plaintiffs argued, should have examined her and prepared for a Caesarean section.

Group Health denied its employees were negligent, court records show.

In 2003, the two sides settled, with Group Health agreeing to pay $5.5 million. A confidentiality clause said the boy’s parents could not “reveal to or discuss with anyone, including the media,” the names of “the parties released” — that is, Group Health.

The mother recently told The Times: “Basically, we can’t talk to you. I’m sorry.”

The family’s lawyers could publish, or release, the case’s facts — but only if the names of the parties, the defense attorneys, the county and the case number were left out. That’s why the lawsuit appears in a lawyers’ database as Confidential v. Confidential.

The Times asked one of the family’s lawyers, Judy Massong, which party wanted the confidentiality agreement. “The defendants,” she said. You mean Group Health? she was asked. “I can’t say that,” she said. The confidentiality agreement won’t allow her to say those words.

An attorney appointed to represent the boy’s interests also asked that the entire file be sealed, saying this would keep the settlement details confidential. Judge Terry Lukens went along, even though the law doesn’t permit such extraordinary secrecy on such slim grounds.

When The Times challenged this sealing order, a different judge opened the file.

Group Health officials declined to comment on this or any other case, citing concern for patient privacy.

“A crack in the system”

In Washington, companies that provide liability insurance to physicians must notify state regulators of any malpractice settlement above $20,000.

But the way the Department of Health reads the law, the reporting requirement wasn’t triggered in the late-birth case settled for $5.5 million. That’s because the lawsuit didn’t name Greene as an individual defendant, and it was Group Health’s insurers who paid, not Greene’s.

But many medical-malpractice lawsuits name only a hospital or HMO as a defendant, even when individual doctors are accused of negligence.

State Rep. Tom Campbell, vice chairman of the House Health Care Committee, said: “This is a classic example of a crack in the system. This was never an intention of the Legislature, I can tell you that.”

Campbell said he will propose changing this law in the next legislative session to require greater reporting. He’ll also ask for a stiffer penalty. Insurers that violate the reporting law can currently be punished only by a fine — and the maximum is $250.

The Department of Health’s records show the $5.5 million settlement was never reported to the state. Because Group Health was self-insured up to $3 million, it paid most of the settlement, according to court records. An outside insurer paid the rest.

But Sally Yates, associate general counsel for Group Health, would not say whether Group Health had filed a report with state regulators.

Greene, 43, declined to comment for this story, referring questions to a Group Health spokeswoman. “That’s what I was instructed to do,” he said. He now works for Group Health in Tacoma.

“Dr. Greene will call you”

In May 1999, Greene performed a cervical biopsy on Deluvina Gonzalez, a seamstress who lived in Seattle. She received written after-care instructions that said: “Dr. Greene will call you.”

The biopsy results showed Gonzalez had cervical cancer. But, according to a lawsuit filed by Gonzalez’s family, Greene failed for five months to notify Gonzalez of that news.

Gonzalez died in December 2000 at the age of 56. Her family’s lawsuit, filed in 2002, alleged that Greene’s neglect created a five-month delay in treatment that proved fatal. Medical experts hired by the family said a hysterectomy performed after diagnosis could have saved her.

Group Health denied the allegations of negligence. And its experts concluded that cancer would have killed Gonzalez no matter what.

In January 2004, the two sides settled the lawsuit for $800,000. This settlement included a confidentiality agreement, but the court file itself was not sealed.

This year the state filed disciplinary charges against Greene, stemming from the Gonzalez case. The charges said Greene could produce no contemporaneous notes showing he had tried to contact Gonzalez. The state also accused Greene of other incompetence — saying, for example, that he did not remove the entire tumor during the biopsy.

Greene insisted that he had contacted Gonzalez twice by phone. He also made other attempts to reach her regarding follow-up care, he told the state.

Four months ago, the state and Greene cut a deal, called a “stipulation to informal disposition.” Greene did not admit unprofessional conduct but did agree to corrective action.

The deal requires Greene to serve as an example of sorts. He must tell his Group Health colleagues what happened in this case and describe the steps he’ll take to notify future patients of a life-threatening diagnosis: alerting the patient in writing, delivering word by certified mail, sending a messenger to the patient’s home.

Larry Berg, a staff attorney for the Department of Health, said that when Greene met with regulators to settle the disciplinary charges, his responses were consistent and his demeanor credible. “For the sake of settlement negotiations,” Berg said, the state accepted Greene’s claim that he had called Gonzalez. But the state “still determined that disciplinary action was appropriate,” Berg said, based on Greene’s failure to follow up those initial calls.

When the state reached this deal, it knew of two other settlements in Greene’s past, one for $250,000, the other for $42,500.

Berg recently searched state files and confirmed that the late-birth lawsuit, settled for $5.5 million, was unknown to regulators when they investigated Greene. “If other complaints were known at the time of settlement negotiations, then they also would have been considered and would have influenced the [state’s] decision regarding appropriate sanctions in this case,” Berg said.

Yates, the Group Health attorney, declined to say if the HMO had ever taken action itself against Greene: “We do not divulge that kind of information about our staff.” But she said Group Health does “rigorous reviews” of its employees every year, including an analysis of any claims or lawsuits filed.

Four boxes not to be opened

Carol Johnston, a Bainbridge Island lawyer who specializes in medical-malpractice cases, represented Deluvina Gonzalez’s family. Johnston also represented another family that sued Group Health, in a lawsuit that was sealed.

A reporter recently visited Johnston in her office. On her floor were four boxes, stuffed with documents from those two lawsuits, including records that were exchanged by the parties but never filed publicly. Johnston said she wanted to share what was inside those boxes. But she couldn’t. Confidentiality agreements made that impossible.

In both cases, Johnston said, she and her clients agreed not to discuss who did what, or how much was paid. Such agreements, she said, are “common.” Asked who requests them, Johnston said: “The defense — always, in my experience. And it is made a condition of settlement.”

Yates, the Group Health attorney, declined to answer questions about confidentiality agreements in any particular case.

But, she said, in general: “Confidentiality clauses in settlement agreements are commonly used by parties in all kinds of civil disputes. … They can serve to protect the privacy of individuals involved in a dispute. They can protect families.”

Johnston, a former nurse, bristles at these secrecy agreements: “It prevents the public from having access to information that they’re entitled to, and which can be used to improve health care.”

Demands for confidentiality frustrate her clients, Johnston said. “The vast majority of my clients say, ‘All I want is for this to not happen to someone else.’ ” But secrecy agreements prevent them from helping others, she said, so now they suffer guilt with everything else.

And the incentives to settle are great, Johnston said. Someone may be dying or in immediate need of care. A trial means delay, stress, expense and risk.

Johnston said that because of the confidentiality agreement, Gonzalez’s family cannot talk to the media.

They can’t even provide a picture of Deluvina.

Ken Armstrong: 206-464-3730 or karmstrong@seattletimes.com

Justin Mayo: 206-464-3669 or jmayo@seattletimes.com