Nanavati v. Burdette Tomlin Memorial Hosp.

• Decision Date: 26 September 1988
• Docket Number: Nos. 86-5778,86-5819,s. 86-5778
• Citation: 857 F.2d 96
• Parties: 47 Fair Empl.Prac.Cas. 1126, 47 Empl. Prac. Dec. P 38,240, 1988-2 Trade Cases 68,208, 12 Fed.R.Serv.3d 146, 3 Indiv.Empl.Rts.Cas. 1161 Suketu H. NANAVATI, M.D., Appellant in 86-5778, v. BURDETTE TOMLIN MEMORIAL HOSPITAL, and Executive Committee of the Medical Staff of Burdette Tomlin Memorial Hospital and Robert J. Sorensen, Appellants in 86-5819. Robert J. SORENSEN, M.D. v. Suketu H. NANAVATI, M.D.
• Court: U.S. Court of Appeals — Third Circuit

Page 96

857 F.2d 96

47 Fair Empl.Prac.Cas. 1126,

47 Empl. Prac. Dec. P 38,240,

1988-2 Trade Cases 68,208, 12 Fed.R.Serv.3d 146,

3 Indiv.Empl.Rts.Cas. 1161

Suketu H. NANAVATI, M.D., Appellant in 86-5778, v. BURDETTE TOMLIN MEMORIAL HOSPITAL, and Executive Committee

of the Medical Staff of Burdette Tomlin Memorial

Hospital and Robert J. Sorensen,

Appellants in 86-5819.

Robert J. SORENSEN, M.D. v. Suketu H. NANAVATI, M.D.

Nos. 86-5778, 86-5819.

United States Court of Appeals Third Circuit.

Argued July 13, 1987.

Decided Aug. 24, 1988.

Petitions for Panel Rehearing and Suggestion for Rehearing

In Banc Denied Sept. 26, 1988.

David H. Weinstein (argued), William B. Lytton, Kohn, Savett, Klein & Graf, P.C., Philadelphia, Pa., for appellant Suketu H. Nanavati, M.D.

F. Emmett Fitzpatrick, III (argued), F. Emmett Fitzpatrick, Philadelphia, Pa., for appellee Robert J. Sorensen, M.D. Nina Wisznat Chase (argued), Carl J. Valore, Valore, McAllister, Westmoreland, Gould, Vesper & Schwartz, P.C., Northfield, N.J., Robert E. Paarz (argued), William M. Honan, Horn, Kaplan, Goldberg, Gorny & Daniels, Atlantic City, N.J., for appellees Burdette Tomlin Memorial Hosp.

Before HIGGINBOTHAM, BECKER and HUNTER, Circuit Judges.

OPINION OF THE COURT

BECKER, Circuit Judge.

I. INTRODUCTION

This case arises out of a bitter and quite public personal feud between Suketu H. Nanavati, M.D., and Robert J. Sorensen, M.D., two physicians at Burdette Tomlin Memorial Hospital ("the Hospital"), a small Cape May Court House, New Jersey hospital. The feud has spawned two actions with numerous claims: (1) federal antitrust claims (each has sued the other on an antitrust theory); (2) reciprocal slander suits involving the hospital as well as the physicians; (3) race discrimination claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. Secs. 2000e to 2000e-17, and under 42 U.S.C. Sec. 1981 (Dr. Nanavati is an American citizen born in India); and (4) reciprocal tortious interference with business claims. The litigation has raged in state as well as federal courts, trial and appellate, and has presented an extraordinary number of difficult legal issues in the fields of procedure, judgments, defamation, and antitrust. The jury, following a lengthy trial, left the opposing parties, whom it apparently thought "deserved each other," in a virtual wash: it awarded Dr. Nanavati a substantial antitrust verdict against the hospital which, when trebled, was almost equivalent to the substantial defamation and tortious business interference verdicts it awarded Dr. Sorensen. However, the district court set aside the antitrust award by a judgment n.o.v., and these cross-appeals followed.

The procedural history of the case is extraordinarily complex, and problems of subject matter jurisdiction flowed from the odd manner in which the case was pleaded. Technically, the parties brought two separate consolidated actions, and arguably the viability of certain pendent state claims in one action depended upon their relationship to federal claims in the other action. However, any putative jurisdictional problems were solved by the healing effect of Fed.R.Civ.P. 15(b) under which pleadings may be deemed amended to conform to proof. Given the liberal construction of Rule 15(b) and our assessment that all parties treated the consolidated actions as one unified action, we shall do the same. We therefore conclude that we have jurisdiction.

Turning to the defamation claim (and tortious interference claims, which have no independent basis and stand or fall with the defamation claims), we conclude that the award in Dr. Sorensen's favor cannot stand. First, we hold that four of the five allegedly slanderous statements made by Nanavati were protected statements of opinion. This conclusion follows from the fact that these statements were made to newspaper reporters (it is the publication to the reporters and not the republication in the newspapers that is in issue) who were fully conversant with the facts on which they were based, and who understood that Nanavati was presenting his own opinion on the question of the quality of medical care. Even outrageous statements of opinion are protected, and we will set aside the award in Dr. Sorensen's favor. Furthermore, we hold that the fifth statement, which was made to a hospital technician, who did not believe it and who passed it on to her superior solely for the purpose of protesting such scandalous remarks would not be recognized by New Jersey as inflicting sufficient injury to sustain an action for slander.

However, we will affirm the judgment n.o.v. on the antitrust claim. We must reach the antitrust claim because we hold that the plaintiff's antitrust and discrimination claims are not, as defendants contend, barred under the principles of res judicata by a state court judgment ordering Dr. Nanavati's hospital staff privileges restored. We will affirm because we conclude that only the Executive Committee's revocation recommendation meets the contract, combination or conspiracy requirement of Sec. 1, and that Nanavati failed to present evidence of damages for the five-day period during which the revocation decision excluded Nanavati from the Hospital.

Referring first to the jury's findings, the jury rejected the two principal premises of Nanavati's case, first by exonerating Sorensen, the alleged mastermind of the conspiracy and Nanavati's sole competitor in Cape May County, from any complicity; and second by concluding that Nanavati's expulsion from the Hospital staff was due to his unprofessional conduct (inability to get along with hospital staff, etc.). In legal terms, we conclude that: (1) Nanavati has presented no viable theory that would render the Hospital a co-conspirator, particularly in view of our decision in Weiss v. York Hospital, 745 F.2d 786 (3d Cir.1984), cert. denied, 470 U.S. 1060, 105 S.Ct. 1777, 84 L.Ed.2d 836 (1985); and (2) given that his staff privileges were reinstated by a state court injunction within five days of his ouster, Nanavati simply failed to present evidence of damages resulting from the recommendation by the Executive Committee (the sole remaining antitrust defendant) to revoke his staff privileges.

II. BACKGROUND FACTS AND PROCEDURAL OVERVIEW

Dr. Nanavati was born and reared in India and came to the United States in 1970 to continue his medical education. He became board certified in cardiology in 1977. After serving in a hospital in DuBois, Pennsylvania, he received medical privileges at Burdette Tomlin Memorial Hospital in Cape May Court House, New Jersey, moved to Cape May in 1979, and continued his practice there. At the time he arrived at the Hospital, its chief (and sole) cardiologist was Dr. Sorensen. Dr. Sorensen was board certified in internal medicine though not in cardiology.

As the Hospital's chief cardiologist, Sorensen had exclusive control over allocating electrocardiograms ("EKG"s), which were a substantial source of revenue. Soon after arriving at the Hospital, Nanavati demanded to share in these EKG readings, but was unsuccessful. Nanavati thereupon sought assistance from the Executive Committee of the medical staff. Then, only three weeks after his arrival, Nanavati launched a verbal attack upon Sorensen at a staff meeting, demanding to know why an "inferior[ly] qualified" physician should control the EKG readings. J.A. at 5159.

Nanavati was allocated EKG readings several days per week, but he remained unsatisfied. He proceeded to make internal complaints about Sorensen's handling of patient care and to demand more EKG readings. Eventually Nanavati made public his complaints about the quality of patient care at the Hospital. In his most serious accusation, he stated that Sorensen's incorrect reading of EKGs had led to the death of at least one patient. Nanavati also engaged in numerous quarrels with nursing personnel and members of the medical staff, arousing the ire of members of the staff by allegedly stealing patients, overbilling and prescribing unnecessary treatments.

Nanavati's comments touched off insulting comments by Sorensen. To the hospital staff, he referred to Nanavati, who is dark-skinned, as a "nigger," J.A. at 4029, and as "the Indian." J.A. at 4013. To the press, he accused Nanavati of being arrogant, backbiting and "nasty." J.A. at 3114. In addition, Sorensen resisted orders from the Executive Committee that he provide Nanavati with more days to read EKGs. The struggle between Nanavati and Sorensen not only became a cause celebre in the local newspapers but also received publicity in the Philadelphia Inquirer.

As we have intimated, a colossal legal struggle, both in the Hospital and outside, followed these verbal battles. In June of 1982, Nanavati filed a charge against the Hospital with the Equal Employment Opportunity Commission ("EEOC") alleging discrimination because of national origin. In August of that year, charges were filed with the Executive Committee seeking Nanavati's dismissal from the staff. The Executive Committee, comprised of several members of the medical staff, was empowered under the Hospital's medical staff constitution and by-laws to make staff privileges recommendations to the Hospital Board of Governors. In September 1982, Nanavati filed a second charge with the EEOC against the Hospital, this time alleging unlawful retaliation.

On November 12, 1982, after evidentiary hearings at which Nanavati was unrepresented by counsel, the Hospital Board of Governors terminated Nanavati's staff privileges for violation of hospital bylaws. ¹ On November 17, 1982, Nanavati filed a complaint in New Jersey Superior Court, Chancery Division, which promptly issued a temporary restraining order reinstating Nanavati to the staff, on the ground that the Hospital had failed to follow its own bylaw procedures in terminating him. On April 15, 1983, the Board of Governors' Hearing Committee, appointed for the occasion in the wake...