People v. Roth
| Decision Date | 10 August 1979 |
| Citation | 419 N.Y.S.2d 851,100 Misc.2d 542 |
| Parties | , 1979-2 Trade Cases P 62,828 PEOPLE of the State of New York v. Samuel J. ROTH, M.D., Spyros Karas, M.D., Joel Karen, M.D., S. Peter Ravitz, M.D., Barry Schwibner, M.D., Frank Oliveto, M.D., Frank Hudak, M.D., Seth Kaufman, M.D., and Surgical Specialties Association of New York, Inc., Defendants. |
| Court | New York County Court |
Robert Abrams, Atty. Gen. of the State of New York, New York City, John M. Desiderio, Asst. Atty. Gen., Chief, Anti-Monopolies Bureau, New York City, for the People of the State of New York.
Kostelanetz & Ritholz, New York City, Kase & Druker, Mineola, for defendant Kaufman.
Weingard & Broudny, New York City, for defendants Ravitz and Schwibner.
Harvey Paticoff, New York City, for defendant Karen.
O'Brien & Keefe, Rockville Centre, for defendant Oliveto.
Irving Anolik, New York City, for defendants Roth, Karas, Hudak and SSANY.
Kent, Masterson, Brown, Lexington, Ky., Mudge Rose Guthrie & Alexander, New York City, for amicus curiae, Association of America Physicians & Surgeons.
Andrews, Davis, Legg, Bixler, Milsten & Murrah, Inc., Oklahoma City, Okl., for amicus curiae, Private Medical Care Foundation, Inc.
LeBoeuf, Lamb, Lieby & Macrae, New York City, for amicus curiae, Medical Society of the State of New York.
This is a motion by the defendants for an order dismissing this indictment pursuant to Criminal Procedure Law Section 210.20.
The defendants are charged with a Combination in Restraint of the Furnishing of Services, in violation of the Donnelly Act, General Business Law §§ 340, 341. There are eight individual-physician defendants and one association defendant, Surgical Specialties Association of New York, Inc. (hereinafter "SSANY").
The indictment charges the defendants, Inter alia, with "concertedly resigning their authorizations to treat non-emergency Workmen's Compensation patients, and concertedly refusing to treat non-emergency No-Fault patients."
Amicus curiae briefs in support of the motion have been submitted by the Medical Society of the State of New York, the Association of American Physicians and Surgeons, Inc., and the Private Medical Care Foundation, Inc.
The facts are substantially undisputed.
The Workmen's Compensation Law, Section 13-b, requires that only physicians authorized by the Compensation Board treat workers who are injured during the course of their employment. Fees are governed by a minimum fee schedule adopted by the Board. The No-Fault Insurance Law (Insurance Law Sec. 678) enacted by the Legislature in 1977 adopted the minimum fee schedule of the Compensation Board as the maximum fee schedule to be paid to physicians for the treatment of persons injured in automobile accidents.
In 1975 many physicians who were dissatisfied with the Compensation Board communicated their complaints to the Chairman of the Board and members of the Legislature. Individual physicians resigned from the Compensation panels. Their complaints included the failure of the Board to answer correspondence or authorize necessary treatment; the unreasonable delays or failure to approve payment of fees; the requirement of duplicitous paper work and coercion in forcing them to accept inadequate fees.
The defendant physicians and others organized SSANY in 1977 with the objective of urging the modification of the Compensation fee schedule and the elimination of administrative abuses from the system. As the efforts to obtain legislative action failed, the physicians concertedly agreed to resign their authorizations to treat work-related or automobile accident injuries. Over 250 physicians in the Long Island area became unavailable to render non-emergency medical aid to workers and accident victims. This situation prevails to this date.
The Attorney General of the State of New York, upon learning of the numerous complaints from residents who were refused medical services, commenced an investigation. This Indictment is the result of that investigation.
The defendants have advanced several arguments in support of this motion to dismiss the indictment.
This Court will consider the only one which is necessary to its decision. It is an issue of first impression, to wit: Is the medical profession exempt from the provisions of the Donnelly Act?
The defendants contend that as members of a learned profession they are exempt from the provisions of the Donnelly Act (Supra ). They rely on the New York Court of Appeals decision of Matter of Freeman, 34 N.Y.2d 1, 355 N.Y.S.2d 336, 311 N.E.2d 480 (1974).
The Attorney General responds that the references to the Donnelly Act in Freeman
(Supra ) are dicta; that the Donnelly Act is the "Little Sherman Antitrust Act" (State v. Mobil Oil, Corp., 38 N.Y.2d 460, 381 N.Y.S.2d 426, 344 N.E.2d 357); and, therefore, this Court should be guided by the holding enunciated by the United States Supreme Court in Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572.
The Sherman Act () does not contain a specific exemption in favor of any profession. An analysis of the judicial application of the Act reveals that the Courts have not created an exemption in favor of any profession. Instead, Federal Courts have evaluated each case on its merits, using as a test a rule of reason to determine whether the activity was anti-competitive and an unreasonable restriction on interstate commerce, thereby constituting a violation of the Sherman Act. National Society of Professional Engineers v. U. S., 435 U.S. 679, 691, 98 S.Ct. 1355, 55 L.Ed.2d 637; 78 Col.L.Rev. No. 7, pages 1363-74.
In Goldfarb v. Virginia State Bar, 421 U.S. 773, 788, 95 S.Ct. 2004, 44 L.Ed.2d 572, the Supreme Court stated that there is a heavy presumption against implicit exemptions. U. S. v. Philadelphia Natl. Bank, 374 U.S. 321, 350-1, 83 S.Ct. 1715, 10 L.Ed.2d 915. It gave neither blanket inclusion nor blanket exclusion to the professions, holding that the conduct of mandatory price-fixing was anti-competitive and an unreasonable restraint in interstate commerce, and therefore violative of the Act. The Court based its decision on the activity and not upon whether it was business, trade or profession. Because of the activity alleged herein, a concerted refusal to deal in the nature of a boycott, there is no doubt that if the Sherman Act were controlling in this case, it would mandate the denial of this motion. American Medical Ass'n v. United States, 317 U.S. 519, 63 S.Ct. 326, 87 L.Ed. 434; United States v. Oregon State Bar, D.C., 385 F.Supp. 507.
The Donnelly Act, New York's antitrust law which was enacted in 1899, is a codification of prior common law and statutory law. In re Davies (1901) 168 N.Y. 89, 61 N.E. 118. Presently it declares void and illegal against public policy "every contract, agreement, arrangement or combination, whereby . . . competition or the free exercise of any activity in the conduct of any business or trade or commerce or in the furnishing of service in this state is or may be restrained."
The Act does not contain a specific exemption in favor of any profession. The only judicial application of the Act to the professions is Matter of Freeman, 34 N.Y.2d 1, 355 N.Y.S.2d 336, 311 N.E.2d 480, which involved the question of whether a Surrogate, in fixing a fee, was unduly influenced by a minimum fee schedule of the local Bar Association. One of the parties asserted that a minimum fee schedule was regulated by the Donnelly Act. The Court of Appeals ruled on that issue without considering whether the conduct was proscribed under the Act but rather relying upon the distinction between the profession and a business or trade. It stated unequivocally a profession is not a business and therefore exempt from the provisions of the Donnelly Act.
In rendering its decision, it was aware of the lower Court holding in Goldfarb, D.C., 355 F.Supp. 491. It specifically distinguished the Federal decision, stating that the question presented dealt solely with the relationship of the State antitrust law to the statutory scheme for regulating the practice of law.
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Karen v. State
...of the indicted doctors and others with low fees and delays in payments thereof under those plans. (See People v. Roth, 100 Misc.2d 542, 543-544, 419 N.Y.S.2d 851 affd. 74 A.D.2d 1008, 425 N.Y.S.2d 904, affd. 52 N.Y.2d 440, at 446-447, 438 N.Y.S.2d 737, 420 N.E.2d 929.) The defendant doctor......
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International Service Agencies v. United Way of New York State
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