Marrese v. American Academy of Orth. Surgeons

Decision Date03 September 1980
Docket NumberNo. 80 C 1405.,80 C 1405.
Citation496 F. Supp. 236
PartiesR. Anthony MARRESE, M. D., and Michael R. Treister, M. D., Plaintiffs, v. AMERICAN ACADEMY OF ORTHOPAEDIC SURGEONS, Defendant.
CourtU.S. District Court — Northern District of Illinois

Glenn A. Schwartz, Charlotte W. Ziporyn, Landesman, Schwartz & Auslander, Chicago, Ill., Stephen B. Cohen, William J. Stevens, Joseph Schuman, Michael T. Sawyer, Foss, Schuman & Drake, Chicago, Ill., for plaintiffs.

Thomas M. Crisham, Thomas S. White, Pamela S. Hollis, Robert E. Nord, Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Chicago, Ill., for defendant.

OPINION AND ORDER

SHADUR, District Judge.

Defendant American Academy of Orthopaedic Surgeons ("Academy") has moved to dismiss the Amended Complaint (the "Complaint") filed by plaintiffs R. Anthony Marrese and Michael R. Treister (respectively "Dr. Marrese" and "Dr. Treister"). For the reasons stated in this opinion and order the Academy's motion is denied.

Plaintiffs' Amended Complaint

Drs. Marrese and Treister are Board-certified practicing orthopaedic surgeons. They complain of allegedly having been arbitrarily excluded, by procedures amounting in legal effect to a group boycott, from membership in the Academy.

Although Academy membership is not a condition to practice as an orthopaedic surgeon, the Academy is characterized by the Complaint as "in a word, a monopoly in its field, possessed of substantial power to control the market for orthopaedic surgical services, especially by denying access to any of the various subspecialty organizations of the practice." Appendix A to this Opinion sets forth Paragraphs 8-12 of the Complaint, the principal allegations dealing with the claimed significance of membership or non-membership in the Academy.

Prior Illinois Proceedings

Most of the Academy's attack on the Complaint is based on Drs. Marrese and Treister having sued in the Illinois courts on virtually the same set of facts alleged in the Complaint-with important exceptions stemming from the lack of jurisdiction in the state courts to enforce the federal antitrust laws. In their Illinois actions Drs. Marrese and Treister sued separately for declaratory relief as to the claimed illegality of the Academy's hearing procedures in denying them membership.

Dr. Treister's complaint was ultimately dismissed with prejudice for failure to state a cause of action, by a 2-1 decision of the Illinois Appellate Court.1 Dr. Marrese's separate complaint had been stayed by the Circuit Court of Cook County pending the Treister appeal. Though the parties are in dispute as to the final disposition of the Marrese case, this Court will assume for purposes of this opinion that it has been or will be similarly dismissed with prejudice.

Memoranda filed by the Parties

Counsel have provided the Court with more than 135 pages of briefs (sic!). Eighty-five of those pages reflect the Academy's efforts to set aloft a cluster of barrage balloons to prevent what it views as plaintiffs' proposed raid on the fellowship of the Academy.

This Court will not seek to emulate either party in length of discussion. It will instead deal as briefly as possible with the effect of the two critical elements that let the air out of the Academy's balloons:

1. Federal courts have exclusive jurisdiction over the federal antitrust laws.
2. Dr. Treister's Illinois lawsuit was disposed of on a motion to dismiss and not after a hearing on the merits.
Res Judicata and Collateral Estoppel

There can of course be no difference between the parties as to the essential principles of the doctrine of res judicata and collateral estoppel. As another Judge of this Court put it briefly in Batiste v. Furnco Construction Co., 350 F.Supp. 10, 14 (N.D.Ill.1972):

Res judicata usually means that when a court of competent jurisdiction has rendered a final judgment on the merits of an action, equity will bar a subsequent suit between the same parties on the same cause of action not only as to matters which were decided but also as to those matters which might have been decided.

And if the identity of actions is not sufficient to invoke res judicata, principles of collateral estoppel operate in the manner expressed by the Restatement (Second) of the Law of Judgments (the "Restatement") § 68 (Tent. Draft No. 4, 1977) (emphasis added):

When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.
1. Res Judicata

Res judicata cannot apply here by its very definition. No federal antitrust claim was in fact decided by the Illinois courts on the merits. It is equally clear that, because of their lack of jurisdiction to do so, no federal antitrust claim "might have been decided" by the Illinois courts—because for that purpose they are not courts of "competent jurisdiction." As our Court of Appeals succinctly put the legal principle in a related (though factually distinguishable) context, Kurek v. Pleasure Driveway & Park District of Peoria, 583 F.2d 378, 379 (7th Cir. 1978):

Defendants' arguments that the antitrust claims have been adjudicated in state court proceedings are insupportable both because the state courts have not in fact purported to do so, and because jurisdiction of federal antitrust suits is exclusively in the federal courts.

It is that fact that makes inapplicable the principal precedents on which the Academy seeks to rely: cases in which earlier proceedings in a federal court (one by definition having the power to adjudicate federal antitrust claims) were held to preclude later antitrust suits whether or not the first court had actually decided such a claim.2 In that respect Judge Decker's opinion in Lincoln National Bank v. Lampe, 414 F.Supp. 1270, 1279-80 (N.D.Ill.1976), dealing with a like argument in the securities field, might well have been written for this case:

Despite the extensive treatise on res judicata submitted in the defendant's memorandum, if fails to address the implication of the statutory provision of § 27 of the 1934 Act which vests exclusive jurisdiction for violations of that Act in the federal courts. Furthermore, § 28 of the same Act provides that the remedies under the Act are given in addition to any other remedies existing in law or equity. Thus it appears that plaintiff could neither bring its 1934 Act claim before the Circuit Court, nor is it barred from seeking additional relief under that Act in federal court.

That this accurately reflects the general law in this field is confirmed by the squarely applicable language of Section 61.2(1)(c) of Tentative Draft No. 5 (1978) of the Restatement, and even more specifically by Official Comment (1) thereon and Illustration 2 thereunder (from which the present case follows a fortiori):

A. Co. brings an action against B. Co. in a state court under a state antitrust law and loses on the merits. It then commences an action in a federal court upon the same facts, charging violations of the federal antitrust laws, of which the federal courts have exclusive jurisdiction. The second action is not barred.

In this Court's view Judge Merhige's opinion in Nash County Board of Education v. Biltmore Co., 464 F.Supp. 1027 (E.D.N.C. 1978) may be distinguished from this case because of what he characterized (464 F.Supp. at 1030) as the manner in which "the North Carolina antitrust enforcement mechanism almost completely mirrors its federal counterpart, especially with respect to the availability of treble damages." In any case, however, this Court does not agree that the approach suggested by Judge Merhige ought to apply here as against the principles announced and applied in Judge Learned Hand's opinion in Lyons v. Westinghouse Electric Corp., 222 F.2d 184, 189 (2d Cir. 1955); or in Cream Top Creamery v. Dean Milk Co., 383 F.2d 358 (6th Cir. 1967); or in the Lincoln National Bank and Kurek cases previously cited; or in the Restatement; cf. Butterman v. Steiner, 343 F.2d 519, 520 (7th Cir. 1965).

2. Collateral Estoppel

As for collateral estoppel, the teaching of that doctrine (again to quote the Restatement) is that the effect of the Illinois litigation is limited to "questions of fact or law actually litigated and determined" in the first action between the parties. There is thus a critical difference between an earlier case in which the parties have gone to trial or otherwise had a factual determination and a case, like the Illinois cases here, disposed of on a motion to dismiss the complaint — that is, on questions of law.

Illinois has decided that the facts there alleged by Drs. Marrese and Treister were not sufficient as a matter of law to state a cause of action under Illinois law.3 Indeed the entire concept of a motion to dismiss is not that plaintiffs' allegations have or have not been determined to be true, but rather that even assuming them to be true plaintiff has no legal right to relief.4

Thus the issue that has really been adjudicated between the parties is that the Academy's conduct complained of by Drs. Marrese and Treister afforded no remedy under Illinois law. There has been no "issue of fact essential to the judgment . . actually litigated and determined by" the Illinois courts.5 This Court is of course free to determine whether the federal antitrust laws are breached by that same conduct. Nothing the Illinois Appellate Court has said did — or could — decide that issue.6

Antitrust Issues

Because we are at the threshold pleading stage, the test to be applied to the sufficiency of the Complaint is that stated in Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957):

A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.

While...

To continue reading

Request your trial
9 cases
  • Marrese v. American Academy of Orthopaedic Surgeons, s. 81-2671
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 10 Gennaio 1984
    ...judgment in the plaintiffs' state-court action against the Academy was res judicata in the present suit. The motion was denied. 496 F.Supp. 236 (N.D.Ill.1980), on reconsideration, 524 F.Supp. 389 (N.D.Ill.1981). The Academy asked the district judge to certify his denial for an immediate app......
  • County of Cook v. Midcon Corp., 82 C 2803
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • 7 Novembre 1983
    ...Cir.), cert. denied, 439 U.S. 1090, 99 S.Ct. 873, 59 L.Ed.2d 57 (1978) (federal antitrust claim); Marrese v. American Academy of Orth. Surgeons, 496 F.Supp. 236, 238-239 (N.D. Ill.1980) (federal antitrust claim); Lincoln National Bank v. Lampe, 414 F.Supp. 1270, 1279-80 (N.D.Ill.1976) (dama......
  • Marrese v. American Academy of Orthopaedic Surgeons
    • United States
    • United States Supreme Court
    • 4 Marzo 1985
    ...claims, and therefore a state court judgment cannot have claim preclusive effect in a subsequent federal antitrust suit. 496 F.Supp. 236, 238-239 (1980), on reconsideration, 524 F.Supp. 389 (1981). Discovery began and respondent refused to allow petitioners access to certain files relating ......
  • Marrese v. American Academy of Orthopaedic Surgeons
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 25 Gennaio 1983
    ...was res judicata in the federal proceeding; the complaint failed to state a claim under the Sherman Act. The motion was denied, 496 F.Supp. 236 (N.D.Ill.1980), and discovery began. The plaintiffs asked the Academy to produce all of its correspondence and other documents relating both to the......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT