87 F.3d 624 (3rd Cir. 1996), 95-1391, Mathews v. Lancaster General Hosp.

Docket Nº:Robert S. MATHEWS, M.D., Appellant at No. 95-1391,
Citation:87 F.3d 624
Case Date:June 21, 1996
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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Page 624

87 F.3d 624 (3rd Cir. 1996)

Robert S. MATHEWS, M.D., Appellant at No. 95-1391,

v.

LANCASTER GENERAL HOSPITAL; Lancaster General Hospital

Foundation; Columbia Hospital; Columbia Hospital

Foundation; Gerald W. Rothacker, Jr., M.D.; Thomas R.

Westphal, M.D.; John Shertzer, M.D.; J. Paul Lyet, M.D.;

James P. Argires, M.D.; Hugh H. Hoke, Jr., M.D.

Robert S. MATHEWS, M.D., Appellant at No. 95-1392,

v.

ORTHOPEDIC ASSOCIATES OF LANCASTER, LTD.

Robert S. MATHEWS, M.D.

v.

LANCASTER GENERAL HOSPITAL; Lancaster General Hospital

Foundation; Columbia Hospital; Columbia Hospital

Foundation; Gerald W. Rothacker, Jr., M.D.; Thomas R.

Westphal, M.D.; John Shertzer, M.D.; J. Paul Lyet, M.D.;

James P. Argires, M.D.; Hugh H. Hoke, Jr., M.D.; Lancaster

General Hospital; Gerald W. Rothacker, Jr., M.D.; Thomas

R. Westphal, M.D.; John H. Shertzer, M.D.; J. Paul Lyet,

M.D.; James P. Argires, M.D.; and Hugh H. Hoke, Jr., M.D.,

Appellants at No. 95-1532.

Robert S. MATHEWS, M.D.

v.

ORTHOPEDIC ASSOCIATES OF LANCASTER, LTD., Appellant at No. 95-1548.

Nos. 95-1391, 95-1392, 95-1532 and 95-1548.

United States Court of Appeals, Third Circuit

June 21, 1996

Argued Jan. 10, 1996.

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Judah I. Labovitz (argued), Mann, Ungar, Spector & Labovitz, Philadelphia, Pennsylvania, for Robert S. Mathews, M.D.

Reeder R. Fox (argued), Duane, Morris & Heckscher, Philadelphia, Pennsylvania, for Lancaster General Hospital, Lancaster General Hospital Foundation, Gerald W. Rothacker, Jr., M.D. Thomas R. Westphal, M.D., John H. Shertzer, M.D., J. Paul Lyet, M.D., James P. Argires, M.D., and Hugh H. Hoke, Jr., M.D.

Jonathan B. Sprague (argued), Post & Schell, Philadelphia, Pennsylvania, for Columbia Hospital and Columbia Hospital Foundation.

John G. Harkins, Jr. (argued), Harkins Cunningham, Philadelphia, Pennsylvania, for Orthopedic Associates of Lancaster, Ltd.

Before: SCIRICA, ALITO and WEIS, Circuit Judges.

OPINION OF THE COURT

SCIRICA, Circuit Judge.

Dr. Robert Mathews brought suit against Lancaster General Hospital, Columbia Hospital, and several physicians, alleging defendants conspired to curtail his professional privileges in violation of the Sherman Act and state law. The district court held all defendants except Columbia Hospital were immune from suit for monetary damages under the Health Care Quality Improvement Act of 1986 (the "Act"), 42 U.S.C. §§ 11101-11152 (1988 & Supp. IV 1992). It also found that Dr. Mathews failed to produce evidence of concerted action and antitrust injury. The district court entered summary judgment against Dr. Mathews on his antitrust claims and dismissed his pendant state law claims. See Opinion and Order, Mathews v. Lancaster Gen. Hosp., 883 F.Supp. 1016 (E.D.Pa.1995).

Dr. Mathews appeals the grant of immunity, and defendants cross-appeal the denial of their motion for attorneys' fees. The Act requires that "a professional review action be taken in the reasonable belief that the action was in furtherance of quality health care" for immunity to attach. 42 U.S.C. § 11112(a)(1). Because the evidence in this case supports the conclusion that defendants possessed a reasonable belief that their action was in furtherance of quality health care, we believe the district court correctly found them to be immune from suit. We also hold that the award of attorneys' fees to prevailing defendants under the Act lies in the discretion of the district court.

Dr. Mathews also challenges the district court's grant of summary judgment on the antitrust claims. We believe Dr. Mathews has failed to raise a genuine issue of material fact as to whether defendants engaged in concerted action in restraint of trade. Nor has he shown the existence of an antitrust injury. We will affirm.

I. Factual Background

Dr. Robert Mathews is an orthopedic surgeon who has been on the staff of Lancaster General Hospital ("Lancaster General") since 1973 and Columbia Hospital ("Columbia") since 1992. He practices as a corporate partner with another orthopedic surgeon, Dr. George Kent. Lancaster General, Columbia, and affiliated corporate entities, the Lancaster General Hospital Foundation and the Columbia Hospital Foundation, are defendants in this antitrust suit. Also defendants are Orthopedics Associates of Lancaster, Ltd. ("Orthopedic Associates"), an orthopedic surgery group practice in competition with Dr. Mathews' practice, and several doctors, including Drs. Gerald Rothacker, Jr., Thomas Westphal, and John Shertzer, all orthopedic surgeons and shareholders of Orthopedic Associates. Dr. Mathews alleges that Lancaster General, Columbia, Orthopedic Associates, and the individual defendants engaged in an antitrust conspiracy to curtail his orthopedics practice and his privileges at Lancaster General by improperly sanctioning him in a peer review proceeding. He alleges that Dr. J. Paul Lyet, another orthopedic surgeon, Dr. James Argires, a neurosurgeon and a member of the Lancaster General Hospital Board of Directors, and Dr. Hugh Hoke, a former President of the Medical and Dental Staff of Lancaster General Hospital and ex-officio member of the Lancaster General

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Hospital Board, also participated in the conspiracy.

The chain of events that precipitated this lawsuit began on December 27, 1989. That morning, Dr. Kent was performing spinal surgery at Lancaster General. Dr. Mathews was listed as a co-surgeon for the operation. During the procedure, a high speed drill slipped and tore the patient's esophagus. Dr. Kent attempted to repair the esophagus himself without seeking outside assistance or a consultation. Dr. Mathews was not present in the operating room when the esophagus was injured. Later that evening, the patient suffered complications necessitating emergency surgery to repair the tear.

After the accident, Dr. Kent's hospital privileges were suspended for five days while an ad hoc committee, chaired by Dr. Hoke and composed of several other Lancaster General physicians (the "Hoke Committee"), investigated. The Hoke Committee concluded that Dr. Kent had acted inappropriately by failing to seek a consultation on the patient's torn esophagus. In a report dated January 4, 1990, the Hoke Committee recommended a focused review of Dr. Kent's cases for a prospective six month period by the Quality Assurance Committee of the Department of Surgery and urged that letters of reprimand be placed in the confidential files of both Drs. Kent and Mathews. The report concluded that Dr. Mathews, as co-surgeon, bore some responsibility for the incident. 1

In accordance with the Hoke Committee's recommendation, Dr. Robert Johnson, the President of the Medical and Dental Staff, authorized a second ad hoc committee of three board-certified orthopedic surgeons to conduct the six-month focused review of Dr. Kent's cases. The committee was selected by Dr. Rothacker, Chairman of the Department of Surgery at Lancaster General, and consisted of Drs. Rothacker, Westphal and Lyet (the "Rothacker Committee"). The parties dispute why the focused review was not undertaken by the Quality Assurance Committee as the Hoke Committee had recommended. Drs. Rothacker and Westphal are both shareholders of Orthopedic Associates and economic competitors of Dr. Mathews.

The Rothacker Committee reviewed 208 surgical cases in which Dr. Kent served as either the primary or assisting surgeon. Apparently Dr. Rothacker played the most important role in the review. At the end of the review which took two years, the committee concluded that 27 of the 208 cases evidenced a substandard level of care. Twenty-three of those cases, the committee discovered, involved spine surgery, and Dr. Mathews had been the primary surgeon in each of those cases. Dr. Rothacker reported the findings of the committee to Dr. Johnson in a March 19, 1992 letter. In the letter, Dr. Rothacker recommended that the 27 files rated substandard by the committee be sent to an outside agency for further review, and "[i]f this agency agrees that these cases were not managed in an acceptable fashion, a restriction of privileges would be indicated." Both Dr. Kent and Dr. Mathews were sent copies of the letter. Dr. Rothacker also reported the conclusions of his committee to the Executive Committee of the Medical and Dental Staff on April 6, 1992, although he did not provide the Executive Committee with any underlying materials or with the Hoke Committee report. Subsequently, in a letter dated April 30, 1992, Dr. Johnson informed Dr. Mathews that an independent reviewer would evaluate both Dr. Mathews' and Dr. Kent's cases. Attached to this letter was a copy of the minutes of the April 6, 1992 meeting of the Executive Committee, which stated in part:

In a significant number of these cases [of Dr. Kent], Dr. Robert Mathews was also involved in the surgery, as primary or assistant surgeon. Therefore, any review by an outside review agency will also involve a review [of] Dr. Mathews' performance in these cases, and may result in a

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recommendation regarding Dr. Mathews' clinical privileges.

At the time he was conducting the review of Dr. Kent's cases, Dr. Rothacker was also concerned about economic trends affecting the medical profession. In a November 1991 letter to the Lancaster General Hospital Foundation Board, Dr. Rothacker wrote: "The economic climate for medical practice, as you know, is not favorable at this time. Most of us anticipate a significant drop in our gross earning ability and most likely our net earning ability." In January 1993, in order to respond to negative economic trends, Orthopedic...

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