Betkerur v. Aultman Hosp. Ass'n

• Decision Date: 15 March 1996
• Docket Number: No. 94-3673,94-3673
• Citation: 78 F.3d 1079
• Parties: 1996-1 Trade Cases P 71,336 Mangala V. BETKERUR, M.D.; Canton Neonatology, Inc., Plaintiffs-Appellants, v. AULTMAN HOSPITAL ASSOCIATION; Martha W. Magoon, M.D.; Northeastern Ohio Perinatal Services, Inc.; Thomas Hoover, M.D.; George R. Dakoske, M.D.; William M. Holls, M.D.; Stark County Women's Clinic, Inc.; Atrium South OB/GYN, Inc.; G. Robert Fitz, M.D.; Daniel W. Adams, M.D., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1079

78 F.3d 1079

1996-1 Trade Cases P 71,336

Mangala V. BETKERUR, M.D.; Canton Neonatology, Inc., Plaintiffs-Appellants, v. AULTMAN HOSPITAL ASSOCIATION; Martha W. Magoon, M.D.;

Northeastern Ohio Perinatal Services, Inc.; Thomas Hoover,

M.D.; George R. Dakoske, M.D.; William M. Holls, M.D.;

Stark County Women's Clinic, Inc.; Atrium South OB/GYN,

Inc.; G. Robert Fitz, M.D.; Daniel W. Adams, M.D.,

Defendants-Appellees.

No. 94-3673.

United States Court of Appeals,

Sixth Circuit.

Argued Oct. 3, 1995.

Decided March 15, 1996.

On Appeal from the United States District Court for the Northern District of Ohio; George W. White, Chief Judge.

Alan C. Witten (briefed), McShane, Breitfeller & Wittne, Columbus, OH, Louis A. Jacobs (argued and briefed), Upper Arlington, OH, for Betkerur, Canton Neonatology, Inc.

Walter J. Rekstis, III (briefed), Squire, Sanders & Dempsey, Cleveland, OH, Joseph J. Feltes, Buckingham, Doolittle & Burroughs, Canton, OH, Douglas J. Colton (argued and briefed), Verner, Liipfert, Bernhard, McPherson & Hand, Washington, DC, for Aultman Hospital Association.

Walter J. Rekstis, III, Squire, Sanders & Dempsey, Cleveland, OH, Karen S. McQueen (argued and briefed), Fred J. Haupt, Krugliak, Wilkins, Griffiths & Dougherty, Canton, OH, for Magoon.

Karen S. McQueen, Fred J. Haupt, Krugliak, Wilkins, Griffiths & Dougherty, Canton, OH, for Northeastern Ohio Perinatal Services, Inc.

Walter J. Rekstis, III, Timothy F. Sweeney, Squire, Sanders & Dempsey, Cleveland, OH, for Hoover, Stark County Women's Clinic, Inc., Fitz, Adams.

Timothy T. Reid (briefed), Denise M. Weaver, Reid, Berry & Stanard, Cleveland, OH, for Dakoske, Atrium South OB/GYN, Inc.

Joseph J. Feltes, Buckingham, Doolittle & Burroughs, Canton, OH, Douglas J. Colton, Verner, Liipfert, Bernhard, McPherson & Hand, Washington, DC, for Holls.

Before: SILER and DAUGHTREY, Circuit Judges; ROSEN, District Judge. ^*

ROSEN, District Judge.

Plaintiff-Appellant Mangala V. Betkerur, M.D. ("Appellant"), is a neonatologist who initially brought this action in 1986. ¹ After various motions to dismiss and discovery matters were resolved, Appellant filed her Second Amended Complaint on February 27, 1992, alleging violations of federal civil rights and antitrust laws, and also asserting antitrust, tortious conduct, and breach of contract claims under Ohio law.

In her complaint, Appellant asserted a federal antitrust violation based on an alleged agreement among the Defendant-Appellee obstetrician-gynecologists ("OB/GYNs") ² to boycott Appellant's practice by referring all of their patients to Defendant-Appellee Martha W. Magoon, M.D., another neonatologist who, like Appellant, practices at Defendant-Appellee Aultman Hospital. Appellant's federal civil rights claims allege discrimination on the basis of race and national origin; Appellant contends that Dr. Magoon, a white, American-born neonatologist, was appointed Director of Neonatology over the better-qualified Appellant based on Appellant's race and Indian origin. The defendants named in Appellant's suit include: (1) Aultman Hospital in Canton, Ohio, at which Appellant has staff privileges, (2) six physicians who also have privileges at Aultman Hospital, and (3) three medical corporations with which some of the defendant physicians are affiliated.

In the court below, Defendants-Appellees moved for summary judgment on all claims. The district court, adopting a magistrate judge's report and recommendation in its entirety, granted summary judgment on the federal claims and declined to retain jurisdiction over the supplemental state law claims. Appellant now appeals the grant of summary judgment to Appellees on her federal claims. Because we find that Appellant has failed to establish her federal antitrust and discrimination claims as a matter of law, we affirm.

I. FACTUAL BACKGROUND

Upon deciding to establish an in-house neonatal intensive care unit ("NICU"), Aultman Hospital extended a staff appointment and neonatology privileges to Appellant, a board-certified neonatologist, ³ in 1981. Appellant describes herself as a "tan-skinned Indian," and she received her medical degree in India prior to immigrating to the United States. Her initial appointment at Aultman guaranteed her a minimum income of $75,000 per year. At the time Appellant joined Aultman's staff, the hospital's perinatal facilities were designated as "Level II" by the State of Ohio, ⁴ and that designation continues to the present.

In 1982, Aultman Hospital granted staff privileges to two additional neonatologists: (1) Dr. Alwan, who was born and educated in Egypt, and who primarily practiced at Timken Mercy Medical Center, also in Canton; and (2) Defendant-Appellee Dr. Magoon, who is white, was born and educated in the United States, and is, like Appellant, board-certified in neonatology.

From the outset, there was a certain amount of tension in the relationship between Appellant and Dr. Magoon. Appellant initially offered to make Dr. Magoon her employee, but Magoon declined and instead entered into an agreement directly with Aultman. Appellant found this noteworthy because she felt that she was the established director of the NICU. Moreover, Appellant contends that, despite their comparable training, Dr. Magoon was given a more favorable compensation arrangement upon joining Aultman than Appellant then enjoyed; only upon Appellant learning of this discrepancy was she able to obtain the same arrangement for herself. Appellant further maintains that Dr. Magoon's appointment was "facilitated by her family's professional and social ties to the Hospital's leadership." (Appellant Br. at 14). Appellant also contends that her efforts to create a higher public relations profile for the hospital's NICU were rebuffed, but that Dr. Magoon's presence was prominently advertised around the community shortly after she joined the Aultman staff. Specifically, Appellant alleges that the hospital's president told her that she was "not a good selling person." (J.A. at 532).

The referral system that was employed when Dr. Magoon joined the hospital's staff also contributed to the tension in the relationship between Appellant and Magoon. Neonatologists derive their patients, and hence their income, primarily from referrals from OB/GYNs. Initially, Appellant, Dr. Magoon, and Dr. Alwan operated under a "cross-coverage" agreement, which provided for around-the-clock neonatal coverage distributed among the three physicians. Under this agreement, OB/GYNs were required to refer their patients to the neonatologist who was designated as "on-call" at the time of the referral. The OB/GYNs, therefore, could not refer their patients to a preferred physician; rather, referrals to neonatologists were dictated by the schedule established by the neonatologists.

A. Dissolution of the Cross-Coverage Agreement

Appellant's claims in the instant litigation arise in large part from the events surrounding the dissolution of the cross-coverage agreement among the neonatologists. Both Dr. Magoon and the referring OB/GYNs evidently grew increasingly dissatisfied with the existing arrangement. Accordingly, during the years of 1984 and 1985, they took various steps that eventually led to the termination of the cross-coverage agreement in the fall of 1985.

According to Appellant, Dr. Magoon found the agreement unsatisfactory because it limited the number of referrals, and thus the amount of money, that she believed she could obtain under a different system. As evidence of Dr. Magoon's financial motives, Appellant points to Dr. Magoon's efforts during the summer of 1984 to obtain a new contractual arrangement with Aultman Hospital. In particular, a July 27, 1984, letter from Dr. Magoon to Richard Pryce, the President of Aultman Hospital, discusses a proposed new contract; the letter states that, due to the limitations imposed by the existing cross-coverage agreement, Dr. Magoon's medical corporation would have to "significantly increase" its per-day fee for services in order to generate the target level of income called for in the proposed contract. (J.A. at 668-69). The letter further states that, should Dr. Magoon be able to assume some of the referrals currently taken by Appellant under the cross-coverage agreement, this fee increase could be avoided. (J.A. at 669). Finally, Dr. Magoon's letter expresses concern about the reaction of patients to a significant increase in the per-day fees, and the "adverse public relations" that might follow. (J.A. at 669).

Appellees disagree with this characterization of their reasons for seeking to terminate the cross-coverage agreement. In her deposition, Dr. Magoon cites "differences in our philosophies of care" as her reason for seeking dissolution of the agreement. (J.A. at 637). For their part, the OB/GYNs contend that they objected to the cross-coverage agreement because it prevented them from exercising their individual preferences for a particular neonatologist who more closely shared their individual approaches to patient care. Specifically, the individual Defendant-Appellee OB/GYNs cited Magoon's greater reliability "in matters of professional judgment" and her more skillful interactions with both the OB/GYNs and their patients as their primary reasons for preferring Magoon over Appellant. (J.A. at 287 (affidavit of Dr. Hoover); J.A. at 352 (affidavit of Dr. Dakoske); J.A. at 723, 726 (deposition testimony of Dr. Holls); J.A. at 292-93 (affidavit of Dr. Fitz); J.A. at 282 (affidavit of Dr. Adams)).

Based largely on these expressions of dissatisfaction with the existing arrangement, the hospital convened an ad hoc committee to study perinatal care at Aultman. This committee issued a report on March 21, 1985, recommending that Aultman should designate a single neonatologist as the Director of the NICU, with the other neonatologists reporting to that Director. (J.A. at 354-55). The hospital's Department of Pediatrics objected...