KRS 311.6191 Requires Good-Faith, Fact-Based Reporting to KPHF and Kentucky Recognizes Tortious Interference with a Professional’s Licensing-Board Relationship

1. Introduction

This published Kentucky Supreme Court decision arises from Baptist Health Madisonville’s response to a patient’s mother complaining that resident physician Dr. John Mitchell Farmer seemed “on something” during a pediatric visit on November 4, 2019. Baptist leadership barred Dr. Farmer from patient care unless he reported to the Kentucky Physicians Health Foundation (KPHF). Dr. Farmer was later subject to Kentucky Board of Medical Licensure (KBML) action and long-term monitoring conditions.

A Jefferson Circuit Court jury awarded Dr. Farmer $3.5 million on claims including breach of contract and tortious interference with prospective business relations. The Court of Appeals reversed, largely based on evidentiary disagreements and its interpretation of KRS 311.6191. The Supreme Court reversed the Court of Appeals and reinstated the verdict.

Key Issues

• KRS 311.6191: Whether its qualified protection for those furnishing information to KPHF requires the plaintiff to prove both bad faith and actual malice, or whether the absence of either element defeats the protection.
• Relevance of post-referral evidence: Whether PEth test results and the MARR report/diagnosis should have been admitted to justify Baptist’s referral decision.
• Tort scope: Whether tortious interference with prospective business relations can be based on interference with a physician’s relationship with a state licensing agency (KBML).
• Preservation: Whether Baptist preserved a superseding-cause/proximate-cause argument for appeal.

2. Summary of the Opinion

The Court held:

• KRS 311.6191 creates a qualified protection (not an immunity) for furnishers of information to KPHF that applies only when the furnisher acts in good faith and without actual malice. A plaintiff may defeat that protection by proving the absence of either requirement; proving both is not required.
• Good faith is assessed at the time of the report and requires an objectively reasonable factual basis. Post hoc developments (like later test results or diagnoses) do not retroactively establish good faith for the original referral.
• Trial evidentiary rulings excluding PEth results and most of the MARR report were not reversible error—including because Baptist represented to the trial court it did not seek those materials to justify the November 4 referral and because the later-developed medical material was irrelevant to the good-faith inquiry.
• Kentucky recognizes tortious interference with prospective business relations where the improper interference targets a professional’s continuing relationship with a state licensing agency (here, the KBML), because that relationship is central to the professional’s ability to earn a living.
• Baptist’s superseding-cause/causation theory was unpreserved because it was not raised via directed verdict/JNOV practice as required for the legal question whether an intervening act is a superseding cause.
• KRS 311.6191 does not bar the breach of contract claim because that claim arose from Baptist’s refusal to test/investigate before referral, not from “action taken by the program” (KPHF) within the statute’s scope.

3. Analysis

3.1 Precedents Cited

A. Appellate review of jury verdicts and directed verdict/JNOV posture

• Louisville & Jefferson Cnty. Metro. Sewer Dist. v. T+C Contracting, Inc., 570 S.W.3d 551 (Ky. 2018): The Court invoked the strict appellate posture—taking evidence favoring the verdict as true and leaving credibility/weight to the jury—framing its criticism that the Court of Appeals reweighed facts.
• Lewis v. Bledsoe Surface Min. Co., 798 S.W.2d 459 (Ky. 1990) (quoting NCAA v. Hornung, 754 S.W.2d 855 (Ky. 1988)): The “palpably or flagrantly against the evidence” standard anchored the Court’s refusal to disturb the jury’s findings.
• McCoy v. Clark, 219 S.W.2d 50 (Ky. 1949): Cited to underscore that conflicting testimony is for the jury.
• Louisville & N.R. Co. v. Fox, 74 Ky. 495 (1874): Used to emphasize institutional caution in setting aside a jury verdict, especially when the trial judge concurred by entering judgment on the verdict.

B. Standards for contract, statutory interpretation, and evidentiary discretion

• Frear v. P.T.A. Indus., Inc., 103 S.W.3d 99 (Ky. 2003): Contract interpretation is reviewed de novo.
• Estate of Benton v. Currin, 615 S.W.3d 34 (Ky. 2021): Statutory interpretation is reviewed de novo.
• Goodyear Tire & Rubber Co. v. Thompson, 11 S.W.3d 575 (Ky. 2000): Evidentiary rulings reviewed for abuse of discretion.
• Johnson v. Commonwealth, 694 S.W.3d 232 (Ky. 2023): Correct evidentiary rulings are affirmed even if the trial court’s reasoning was imperfect.

C. Privilege, “good faith,” and analogous qualified-protection doctrines

• Maggard v. Kinney, 576 S.W.3d 559 (Ky. 2019): Distinguished “immunity” from “privilege.” The majority characterized KRS 311.6191 as a privilege-like qualified protection from liability rather than an immunity from suit.
• Toler v. Sud-Chemie, Inc., 458 S.W.3d 276 (Ky. 2014): In qualified privilege contexts, plaintiffs bear the burden to show the privilege does not apply in the specific circumstances; the Court applied that framing to KRS 311.6191.
• Harstad v. Whiteman, 338 S.W.3d 804 (Ky. App. 2011) and Weinstein v. Rhorer, 42 S.W.2d 892 (Ky. 1931): Used for the proposition that while privilege existence can be a legal question, whether it is defeated often becomes a jury question when facts are disputed.
• Crayton v. Commonwealth, 846 S.W.2d 684 (Ky. 1992); Sheehy v. Volentine, 706 S.W.3d 229 (Ky. 2024); Spillman v. Beauchamp, 362 S.W.2d 33 (Ky. 1962): “Good faith” in other legal domains can fail where the actor lacks an objectively reasonable factual basis—supporting the Court’s view that KRS 311.6191 good faith is not merely subjective sincerity.

D. Discovery/harmless error and “no changing theories on appeal”

• McFall v. Peace, Inc., 15 S.W.3d 724 (Ky. 2000): Discovery errors are subject to harmless error; here any discovery limitation was harmless because Baptist obtained the MARR report/PEth information in time for trial.
• Hopewell v. Commonwealth, 641 S.W.2d 744 (Ky. 1982): A party cannot argue one theory to the trial court and a different one on appeal; crucial to rejecting Baptist’s attempt to re-characterize why it needed PEth/MARR evidence.
• Com., Cabinet for Health & Fam. Servs. v. Chauvin, 316 S.W.3d 279 (Ky. 2010): Statutory privileges and enumerated exceptions must be strictly followed; referenced in discussing KRS 311.619 confidentiality and the Court of Appeals’ “waiver by lawsuit” rationale.

E. Post hoc justification and relevance limits

• United States v. Eisner, 297 F.2d 595 (6th Cir. 1962) and Staker v. United States, 5 F.2d 312 (6th Cir. 1925): Probable cause cannot be established by later-discovered evidence; used by analogy to reject post hoc establishment of “good faith.”
• Vincent v. Commonwealth, 706 S.W.3d 94 (Ky. 2024): Later evidence of intoxication cannot retroactively justify an unjustified stop; likewise later PEth/MARR outcomes could not retroactively justify the initial referral decision for purposes of KRS 311.6191 good faith.

F. Tortious interference doctrine (Restatement adoption and scope)

• Nat'l Collegiate Athletic Ass'n By & Through Bellarmine Coll. v. Hornung, 754 S.W.2d 855 (Ky. 1988): Kentucky’s adoption of Restatement (Second) of Torts §§ 766B, 767, and 773; also the allocation of burdens where the defendant claims good faith to protect a legally protected interest.
• Cullen v. South East Coal Co., 685 S.W.2d 187 (Ky. App. 1982): Quoted Restatement § 766B formulation, including interference by “preventing” acquisition/continuation of a prospective relation.
• Keeble v. Hickeringill, 103 Eng. Rep. 1127, 11 East 574 (1707): Historical “hindering another in his trade or livelihood” principle supporting doctrinal expansion to modern economic relationships.
• Hilen v. Hays, 673 S.W.2d 713 (Ky. 1984): Common law adapts with societal complexity; used to justify recognizing interference aimed at licensure relationships.
• Westwood v. City of Hermiston, 787 F. Supp. 2d 1174 (D. Or. 2011), aff'd, 496 F. App'x 728 (9th Cir. 2012): Baptist’s out-of-state authority arguing the tort is limited to voluntary economic relations; Kentucky rejected its applicability as distinguishable and unpersuasive on first principles.

G. Preservation and superseding cause as a legal issue

• Kentucky Guardianship Adm'rs, LLC v. Baptist Healthcare Sys., Inc., 635 S.W.3d 14 (Ky. 2021): Clarified two types of instructional error and their standards of review; used to explain why Baptist’s causation theory did not fit instruction-preservation categories.
• Miller ex rel. Monticello Banking Co. v. Marymount Med. Ctr., 125 S.W.3d 274 (Ky. 2004) (citing House v. Kellerman, 519 S.W.2d 380 (Ky. 1974)): Whether an intervening event is a superseding cause is a legal issue, typically raised via directed verdict—not by asking the jury to choose “legal cause.”
• Williams v. Courier-J. & Louisville Times, Inc., 399 S.W.2d 467 (Ky. 1965): Directed verdict propriety when proximate causation is not established.
• Norton Healthcare, Inc. v. Disselkamp, 600 S.W.3d 696 (Ky. 2020); Patton v. Bickford, 529 S.W.3d 717 (Ky. 2016): Explained why “direct result” is not the governing standard and is at best ambiguous compared to “substantial factor”/but-for causation.
• NKC Hospitals, Inc. v. Anthony, 849 S.W.2d 564 (Ky. App. 1993) and Williams v. Kentucky Dep't of Educ., 113 S.W.3d 145 (Ky. 2003): Clarified intervening vs superseding cause and that superseding causation “as such” is not submitted to the jury.
• Deutsch v. Shein, 597 S.W.2d 141 (Ky. 1980): Cited via Monticello Banking for Restatement § 431 “substantial factor” formulation.
• Grubb v. Smith, 523 S.W.3d 409 (Ky. 2017): Unpreserved issues are not reviewed absent proper preservation.
• Nami Resources, L.L.C. v. Asher Land and Mineral, Ltd., 554 S.W.3d 323 (Ky. 2018) and Shepherd v. Commonwealth, 251 S.W.3d 309 (Ky. 2008): Palpable error review is discretionary and typically requires a request and briefing.

H. Unpreserved excessive damages

• Gibson v. Fuel Transport, Inc., 410 S.W.3d 56 (Ky. 2013) and Gersh v. Bowman, 239 S.W.3d 567 (Ky. App. 2007): Excessiveness arguments require specific objections/proposed limits in instructions; Baptist did not preserve.

I. Licensing context

• Abul-Ela v. Ky. Bd. of Med. Licensure, 217 S.W.3d 246 (Ky. App. 2006): Cited to underscore the due process-laden nature of medical licensure decisions and the significance of the physician–KBML relationship.

J. Dissent authorities (for contrast)

• Pathways, Inc. v. Hammons, 113 S.W.3d 85 (Ky. 2003): Dissent invoked “substantial factor” and “popular sense of responsibility” to argue Baptist’s referral was not the root cause of damages.
• Hall v. Commonwealth, 468 SW3d 814 (Ky. 2015): Dissent referenced the definition of relevant evidence to argue the patient complaint was “evidence” of impairment.

3.2 Legal Reasoning

A. The Court’s central statutory holding: KRS 311.6191 is defeated by lack of either good faith or absence of actual malice

The Court interpreted KRS 311.6191’s grammar as creating qualified protection for furnishers of information to KPHF only if they act “in good faith and without actual malice.” The Court rejected the Court of Appeals’ reading that the plaintiff must prove both bad faith and actual malice, reasoning that such a reading would render the statute’s explicit good-faith condition superfluous for the second category of protected persons.

Doctrinally, the Court analogized to qualified privilege principles familiar from defamation law: privilege may apply prima facie, but whether it is defeated can be a jury question when facts are disputed (citing Harstad and Weinstein).

B. “Good faith” has an objective component and cannot be established post hoc

A major jurisprudential contribution of the opinion is its insistence that KRS 311.6191 “good faith” requires an honest belief with an objectively reasonable basis in fact at the time information is furnished to KPHF. The Court reinforced this with analogies: probable cause cannot be cured by later discoveries (United States v. Eisner; Staker v. United States), and later intoxication evidence cannot justify an unjustified stop (Vincent v. Commonwealth).

On the facts the Court was required to view favorably to the verdict, it found ample evidence supporting a lack of good faith: Baptist’s leadership allegedly proceeded on an unsubstantiated complaint while disregarding contemporaneous physician observations; received embellished/false information (e.g., “suicidal ideation” characterization); and declined to test or meaningfully investigate before barring patient contact.

C. Evidentiary rulings: PEth and MARR evidence was irrelevant to good faith, and Baptist was bound by its trial-court position

The Court gave two independent reasons for affirming the trial court’s key rulings:

• Relevance: PEth results and MARR’s diagnosis were subsequent developments and thus irrelevant to whether Baptist acted in good faith at the time of the referral.
• Invited-position / inconsistent-argument bar: Baptist told the trial court it did not intend to use PEth/MARR evidence “for the purpose of assessing the basis for the referral decision made on November 4, 2019,” but rather for damages/causation narrative—so it could not later claim exclusion prevented it from defending the referral decision (citing Hopewell v. Commonwealth).

The Court also observed that any discovery limitation was harmless because Baptist obtained the information in time for trial (citing McFall v. Peace, Inc.).

D. New common-law development: tortious interference reaches interference with a professional’s licensing-board relationship

The opinion announces a novel Kentucky rule: an actor can commit tortious interference with prospective business relations by improperly interfering with a professional’s ongoing relationship with a state licensing authority (here, the KBML). The Court reasoned that licensure is a “continuing business or other customary relationship not amounting to a formal contract” under Restatement § 766B, and that interference with licensure strikes at the heart of one’s ability to earn a livelihood—consistent with the tort’s historical roots (Keeble v. Hickeringill) and Kentucky’s Restatement-based framework (Nat'l Collegiate Athletic Ass'n By & Through Bellarmine Coll. v. Hornung).

In supporting the foreseeability and seriousness of such interference, the Court emphasized modern realities: nationwide credentialing and reporting systems (e.g., the National Practitioner's Data Bank) magnify the economic and reputational harm from adverse licensure actions.

E. KRS 311.6191 does not bar the breach of contract claim

The Court separated Baptist’s refusal to test/investigate (pre-referral) from “action taken by the program” (KPHF), concluding the statute cannot shield a breach claim predicated on Baptist’s own pre-referral policy obligations. On the verdict-favorable view, Baptist breached whether the employee policy or medical-staff policy applied, because testing and investigation did not occur and leadership admitted “there was not an investigation.”

F. Preservation doctrine: superseding cause must be raised as a legal issue via directed verdict/JNOV

The Court held Baptist’s superseding-cause theory was unpreserved because it was not raised in directed verdict or JNOV motions, even though Baptist attempted to frame causation through proposed instructions. Relying on Miller ex rel. Monticello Banking Co. v. Marymount Med. Ctr. and NKC Hospitals, Inc. v. Anthony, the Court reiterated that superseding causation is a legal issue and “never submitted to the jury” as such.

3.3 Impact

A. Reporting to KPHF: more process on the front end

Hospitals and other “furnishers of information” to KPHF should expect that KRS 311.6191 protection will turn on the quality of the contemporaneous factual basis for a referral/report and whether a reasonable actor would have taken basic steps to verify, contextualize, or investigate before restricting practice and initiating KPHF involvement. The opinion discourages “shoot first, justify later” reporting by rejecting post hoc validation as a substitute for initial good faith.

B. Tortious interference expands into the licensure domain

The decision substantially broadens potential tort exposure in Kentucky: interference claims are no longer confined to prospective employers/customers but can encompass conduct that foreseeably damages a professional’s standing with a licensing board—an area with significant downstream consequences.

C. Litigation practice: preservation and theory discipline

The case is also a procedural warning: (i) superseding-cause arguments must be raised by directed verdict/JNOV, and (ii) positions taken to win evidentiary rulings at trial can bind the party on appeal (Hopewell v. Commonwealth).

4. Complex Concepts Simplified

• Qualified privilege (here): A legal shield that can defeat liability if specific conditions are met. Under KRS 311.6191, a person furnishing information to KPHF must act in good faith and without actual malice.
• Good faith (as used by the Court): Not just “I meant well.” It requires an honest belief supported by an objectively reasonable factual basis at the time of the report.
• Actual malice: In this context, a heightened fault concept (more than mere negligence) that generally entails knowingly false statements or reckless disregard.
• Tortious interference with prospective business relations: Liability for intentionally and improperly disrupting another’s expected economic relationships—even if there is no signed contract—evaluated using Restatement factors (§ 767).
• Superseding cause: An intervening event that is so extraordinary and unforeseeable that it breaks the chain of legal responsibility. Kentucky treats whether an intervening act is superseding as a legal question for the court, typically raised by directed verdict, not by asking a jury to choose “the” legal cause.
• PEth test / AUD-Mild (as discussed): The Court treated these as limited and, for the key statutory issue, irrelevant because they arose after the referral; it also noted the record lacked robust scientific context (no Daubert hearing) to treat PEth characterization as conclusive proof of impairment on the date of the complaint.

5. Conclusion

The Kentucky Supreme Court’s opinion does two consequential things. First, it clarifies that KRS 311.6191 protects furnishers of information to KPHF only when they satisfy both good faith and absence of actual malice—and that good faith fails without an objectively reasonable factual basis at the time of reporting, regardless of later developments. Second, it modernizes Kentucky’s tortious interference doctrine by holding that improper interference with a professional’s relationship with a state licensing board can support liability, recognizing licensure as a central, economically determinative relationship in contemporary professional life. The Court’s reinstatement of the jury verdict signals that, in Kentucky, patient-safety reporting mechanisms remain protected—but not when activated without the statute’s demanded good-faith foundation.