White v. Rockingham Radiologists, Ltd.

Decision Date27 May 1987
Docket NumberNo. 86-1627,86-1627
Citation820 F.2d 98
Parties, 1987-1 Trade Cases 67,574 Gordon O. WHITE, M.D., d/b/a Gordon O. White, Plaintiff-Appellant, v. ROCKINGHAM RADIOLOGISTS, LTD.; N.M. Canter, Jr., M.D.; Rockingham Memorial Hospital; Shenandoah Shared Hospital Services, Inc., Defendant-Appellees.
CourtU.S. Court of Appeals — Fourth Circuit

Joel Marbury Rainer, Atlanta, Ga. (Jack C. Basham, Jr., Parker, Hudson, Rainer & Dobbs, Atlanta, Ga., William A. Julias, Julias Blatt & Blatt, P.C., Harrisonburg, Va., on brief), for plaintiff-appellant.

Jonathan Jay Litten (Donald D. Litten, Litten, Sipe and Miller), Harrisonburg, Va., John Jeffries Miles (Mary Susan Philip, Powers, Pyles, Sutter & Miles, Washington, D.C., Phillip C. Stone, Wharton, Aldhizer & Weaver, Harrisonburg, Va., James G. Welsh, Timberlake, Smith, Thomas & Moses, P.C., Staunton, Va., Frank A. Thomas, III, Shackelford & Honenberger, Richmond, Va., on brief), for defendants-appellees.

Before CHAPMAN, Circuit Judge, BUTZNER, Senior Circuit Judge, and SIMONS, Senior District Judge for the District of South Carolina, sitting by designation.

BUTZNER, Senior Circuit Judge:

Gordon O. White, M.D., appeals the district court's grant of summary judgment to Rockingham Memorial Hospital, Rockingham Radiologists, Ltd., Norman O. Canter, Jr., M.D., and Shenandoah Shared Hospital Services, Inc. (SSHS), on Dr. White's charges of antitrust violations arising out of the hospital's choice of Rockingham Radiologists as the official interpreters of computerized tomographic (CT) head scans.

The district court, correctly applying the standard for summary judgment, concluded that there was insufficient evidence to warrant a jury trial for conspiracy, tying, and group boycott under Sec. 1 of the Sherman Act and of monopolization, attempted monopolization, and conspiracy under Sec. 2. We affirm. 1

I

Accreditation organizations and regulatory agencies require that each patient's hospital record contain an official interpretation of the results of procedures such as x-ray, EEG, and CT scans. Although hospitals do not preclude physicians from interpreting their patients' tests, insurance companies and other third-party payors, such as Medicare and Medicaid, pay only for official interpretations. Consequently, while Dr. White can interpret head scans, he is effectively precluded from billing insurance carriers, Medicare, and Medicaid for his unofficial interpretations.

Dr. White is a neurologist with offices in Harrisonburg, Virginia, who has staff privileges at Rockingham Memorial. He is also associated with physicians in Charlottesville, Virginia, who own a CT scanner. Before Rockingham Memorial had access to a scanner, its patients were sent to Charlottesville and Dr. White made the official interpretation of their head scans for Rockingham's records. His competency to make head scan interpretations is not questioned. Also, he is the official interpreter for all EEG procedures administered at Rockingham.

Rockingham Memorial, a nonprofit institution, is the only hospital in Rockingham County, Virginia. Rockingham Radiologists, Ltd., a professional corporation consisting of six radiologists, furnishes all x-ray services in the hospital. The radiologists are competent to supervise the operation of a CT scanner and to interpret head and other scans. The hospital receives no part of the radiologists' fees.

Rockingham Memorial and two other hospitals in the Shenandoah Valley formed SSHS, a nonprofit corporation, to lower costs by sharing services relating to pharmacies, repair of equipment, and various feasibility studies. In 1981, the hospitals and SSHS established a CT steering committee, consisting of SSHS representatives, one radiologist, and one administrator from each hospital to consider the feasibility of acquiring expensive CT equipment for the hospitals. The steering committee decided that SSHS should acquire a mobile CT scanner for use at all three hospitals.

As a condition of granting a certificate of need, the state health systems agency required that radiologists directly supervise the CT scanner and that each hospital have access to a neurologist or neurosurgeon. Accordingly, the SSHS policy and procedural manual designated the radiologists to supervise the scans, which were to be administered by technicians employed by SSHS. Dr. White was identified as the neurologist for Rockingham Hospital.

After the scanner was put into service, the radiologists made all official interpretations. Dr. White asked the hospital president for authorization to make official interpretations of his patients' head scans. Told that this was a matter for the medical staff, he sought and received authority from the staff to perform and charge for this service. The radiologists resisted, claiming that they were entitled to interpret all scans.

The radiologists and Dr. White each sought the hospital's approval to make official interpretations of head scans. Negotiations continued over the next several months. Dr. White rejected a compromise under which he would share the responsibility and fees for official interpretations of CT scans on his patients with the radiologists. Finally, at a meeting of the hospital's board of directors, both the radiologists and Dr. White presented their positions. The board chose the radiologists as the official interpreters of all CT scans, on grounds that one entity should be responsible for the entire CT operation. The board permitted Dr. White to provide an unofficial interpretation to his patients.

II

In his first cause of action, Dr. White alleged that Rockingham Memorial, the radiologists, SSHS, and other conspirators who were not named as defendants violated Sec. 1 of the Sherman Act, which makes unlawful any "contract, combination ..., or conspiracy, in restraint of trade." 15 U.S.C. Sec. 1.

To survive a motion for summary judgment in an antitrust conspiracy case, a plaintiff must establish that there is a genuine issue of material fact whether defendants entered into an illegal conspiracy that caused the plaintiff to suffer a cognizable injury. Matsushida Electric Industrial Co., Ltd. v. Zenith Radio Corporation, 475 U.S. 574, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). When the moving party has met its responsibility of identifying the basis for its motion, the nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." See Fed.R.Civ.P. 56(e); Celotex Corporation v. Catrett, --- U.S. ----, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

For summary judgment, "the inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion," United States v. Diebold, Inc. 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). However, the Court has cautioned that

[t]he plain language of Rule 56(c) mandates the entry of summary judgment after adequate time for discovery ... against a party who fails ... to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be "no genuine issue as to any material fact."

Celotex Corp., 106 S.Ct. at 2252-53. There is no genuine issue for trial unless sufficient evidence favors the nonmoving party for a jury to return a verdict for that party. Anderson v. Liberty Lobby, Inc., --- U.S. ----, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).

Dr. White cites as direct evidence of a conspiracy a letter Dr. Canter, president of Radiologists, Ltd., wrote to Dr. White after the medical staff meeting, a letter the radiologists submitted to the hospital board on March 29, 1983, and the SSHS policy manual. As indirect evidence he cites "competition between radiologists and neurologists over who is better qualified to provide CT scanning services," failure of the hospital's radiologists and SSHS to consult him about the purchase of a CT scanner, and formation of the SSHS steering committee which gave control over the CT scanner to the radiologists. He also complains about the radiologists' refusal to accept the hospital staff's vote supporting his request to render the official interpretation of head scans, the hospital's proposed "anti-competitive" compromise, and ultimate referral of the dispute to the hospital board.

Concerted activity is the essential element of Dr. White's claim under Section 1 of the Act. Terry's Floor Fashions, Inc. v. Burlington Industries, Inc., 763 F.2d 604, 610 (4th Cir.1985). But conduct as consistent with permissible competition as with illegal conspiracy does not itself support an inference of antitrust conspiracy. The party opposing summary judgment must present evidence that tends to exclude the possibility that the alleged conspirators acted independently: "[t]hat is, there must be direct or circumstantial evidence that reasonably tends to prove ... a conscious commitment to a common scheme designed to achieve an unlawful objective." See Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 1471, 79 L.Ed.2d 775 (1984).

Tested by these principles, the evidence on which Dr. White relies to show a conspiracy is insufficient to warrant its submission to a jury. His primary direct evidence, the letter from Dr. Canter, does no more than unilaterally state the radiologists' position. 2

The portion of the letter from the radiologists to the trustees on which Dr. White relies states:

It is the understanding of the radiological group at R.M.H. that we have been placed in charge of this program by SSHS. The program has been established by mutual cooperation of SSHS and the x-ray departments of all three hospitals. Protocol has been established and set up.

The letter is correct in stating that SSHS had placed the radiologists in charge of the scanning program. The letter, however, is significant for what it did...

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