979 F.2d 728 (9th Cir. 1992), 90-55333, Austin v. McNamara

Docket Nº:90-55333.
Citation:979 F.2d 728
Party Name:George AUSTIN, M.D., Plaintiff-Appellant, v. James V. McNAMARA, M.D.; James R. St. John, M.D.; Richard B. Brown, M.D.; Paul J. Schweinfurth, M.D.; Thomas Jones, M.D.; Santa Barbara Cottage Hospital, Defendants-Appellees.
Case Date:November 06, 1992
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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979 F.2d 728 (9th Cir. 1992)

George AUSTIN, M.D., Plaintiff-Appellant,


James V. McNAMARA, M.D.; James R. St. John, M.D.; Richard

B. Brown, M.D.; Paul J. Schweinfurth, M.D.;

Thomas Jones, M.D.; Santa Barbara

Cottage Hospital, Defendants-Appellees.

No. 90-55333.

United States Court of Appeals, Ninth Circuit

November 6, 1992

Argued and Submitted Dec. 6, 1991.

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Thomas Kallay, Santa Monica, Cal., David M. Harney, Harney, Drummond, Garza & Packer, Los Angeles, Cal., for plaintiff-appellant.

Ellis J. Horvitz, Sandra J. Smith, Horvitz & Levy, Encino, Cal., Jeffrey C. Moffat, Bonne, Jones, Bridges, Mueller & O'Keefe, Los Angeles, Cal., James P. Herzog, David R. Fisher, Herzog & Fisher, Marina del Rey, Cal., Jeanette M. Nelson, Bauer, Harris & McEvoy, Santa Barbara, Cal., John J. Weber, O'Flaherty & Belgum, Long Beach, Cal., Keith N. Crouch, George McDonald & Associates, South Pasadena, Cal., Randall L. Shelley, Rushfeldt, Shelley & Drake, Sherman Oaks, Cal., for defendants-appellees.

Astrid G. Meghrigian, San Francisco, Cal., Lawrence Silver, Los Angeles, Cal., Stephen D. Libowsky, Katten, Muchin & Zavis, Chicago, Ill., for amici curiae.

Appeal from the United States District Court for the Central District of California.

Before PREGERSON, CANBY and RYMER, Circuit Judges.

CANBY, Circuit Judge:

This is an appeal by plaintiff Dr. George Austin of a grant of summary judgment for the defendants, a hospital and doctors affiliated with it, in a case alleging Sherman Act and pendent state law violations. The district court held that the defendants were immune from antitrust liability under the Health Care Quality Improvement Act of 1986 ("HCQIA"), 42 U.S.C. §§ 11101-11152 (1988), which took effect while the events giving rise to this lawsuit were unfolding. The district court accordingly granted summary judgment for the defendants on Austin's antitrust claims and dismissed the pendent state law claims. Austin appeals that ruling, arguing principally that his claims matured before the immunity provision of HCQIA took effect. We now affirm.


Dr. Austin, a neurosurgeon, moved to Santa Barbara in 1981. He applied for and received staff privileges at several hospitals in the area, including the Santa Barbara Cottage Hospital ("Cottage Hospital"). At the time of his arrival, there were three other neurosurgeons in the area, all of whom also had privileges at Cottage Hospital: Drs. Brown, St. John and Schweinfurth. A fifth neurosurgeon, Dr. Jones, moved to Santa Barbara and became a member of the Cottage Hospital staff a few months after Austin's arrival.

According to Austin, in the years between his arrival and the suspension of his privileges at Cottage Hospital in 1986, Drs. Jones and St. John openly attacked him in front of nurses on the staff of Cottage Hospital, and all the other neurosurgeons attacked his judgments in monthly meetings of the neurosurgical group. In addition, Drs. St. John and Brown categorically refused to "cover" for him (substitute for him when he was busy or unavailable), and the other doctors frequently refused to cover for him.

In January 1986, Dr. McNamara became chief of staff at Cottage Hospital and Dr. Brown became chief of surgery. Shortly thereafter, Dr. McNamara informed Austin that an internal evaluation of his cases would take place, in the form of a review by Dr. Brown of Austin's cases from 1985. This evaluation was apparently in response to complaints received from the nursing and technician staffs, as well as from Austin's colleagues.

Dr. Brown subsequently presented his findings to the Surgical Audit Committee ("SAC"), on which Dr. Schweinfurth sat. Dr. Brown identified alleged deficiencies in 26 of Austin's 30 cases from 1985, as well

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as three "problematic" cases from 1986. The SAC voted to have an outside reviewer further evaluate Austin's charts and suggested that the hospital continue to monitor his work.

In June 1986, Dr. McNamara requested Cottage Hospital's Medical Executive Committee ("MEC") to establish an ad hoc committee to investigate concerns about Austin's treatment of patients. The ad hoc committee, on which Dr. Jones served, met four times that summer to discuss possible revocation of Austin's staff privileges. During this same period, Dr. McNamara arranged for an external review by two outside neurosurgeons who were appointed by the California Medical Association. The reviewers gave a generally favorable evaluation of Austin but expressed reservations and recommended further monitoring.

In August 1986, the ad hoc committee voted to request the SAC to monitor Austin's work for six months but did not take any action to limit his clinical privileges. Drs. Brown, Jones and St. John were among those who reviewed Austin's cases as part of the monitoring process.

On November 17, 1986, three days after the immunity provision of HCQIA became effective, Dr. McNamara, as chief of staff, informed Austin that his staff privileges at Cottage Hospital were summarily suspended. This action was apparently taken by Dr. McNamara after he had presented to the MEC certain of Austin's cases that the other neurosurgeons had found to indicate substandard treatment. Two days later, on November 19, Austin appeared before the MEC to defend his treatment in the cases in question. At that meeting, the MEC recommended that Austin's privileges be revoked.

Austin's suspension from Cottage Hospital lasted approximately seven months. During that time, Austin continued to enjoy staff privileges at other hospitals in the area and was able to see patients and perform surgery at one of these hospitals.

Austin requested and received a hearing before the Judicial Review Committee ("JRC"), which was composed of impartial doctors and a former California appellate judge, to appeal the revocation of his staff privileges. After lengthy hearings, the JRC issued a report finding that the MEC's decision to suspend Austin was "unreasonable" and reinstated Austin to the Cottage Hospital medical staff. The report also found, however, that Austin's treatment of one patient had been substandard, and it recommended that Austin's privileges be reinstated subject to "Internal Medicine, Pathology and Radiology procedural consultations" and "periodical outside independent neurosurgical case review." Austin did not appeal the JRC's findings and did not name either the JRC or its members as defendants in this suit.

After his reinstatement, Austin brought this action against Cottage Hospital and Drs. Brown, Jones, McNamara, St. John and Schweinfurth. He asserted claims against all defendants for antitrust violations under the Sherman Act, 15 U.S.C. §§ 1 and 2 (1988); 1 civil rights violations under 42 U.S.C. § 1983 (1988); and pendent state law claims of conspiracy and intentional interference with prospective economic advantage.

The district court dismissed the civil rights claim, which ruling Austin does not appeal. The district court then granted summary judgment in favor of all the defendants on the antitrust claims and dismissed the pendent state law claims without prejudice. The basis for the grant of summary judgment was that the defendants were immune under HCQIA. Austin now appeals the district court's ruling on the antitrust claims. 2

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I. Immunity from Damages under HCQIA

HCQIA was designed both to provide for effective peer review and interstate monitoring of incompetent physicians and to grant qualified immunity from damages for those who participate in peer review activities. See 42 U.S.C. § 11101. In furtherance of the latter goal, HCQIA provides that, if a "professional review action" (as defined in HCQIA) meets certain due process and fairness requirements, then those participating in such review "shall not be liable in damages under any law of the United States or of any State (or political subdivision) with respect to the action." 42 U.S.C. § 11111. This section excludes from its coverage suits brought under 42 U.S.C. § 1983 or Title VII of the Civil Rights Act of 1964, but it clearly does apply to antitrust claims. See Patrick v. Burget, 486 U.S. 94, 105 n. 8, 108 S.Ct. 1658, 1665 n. 8, 100 L.Ed.2d 83 (1988). Because Austin seeks only damages, he can maintain this action only with respect to those acts that are not entitled to immunity under HCQIA. 3

The defendants are immune from antitrust damages under HCQIA if they have demonstrated, first, that their professional review actions complied with the fairness standards set out in 42 U.S.C. § 11112(a); second, that they satisfied § 11112(b)'s requirement of adequate notice and hearing; third, that the hospital reported the results of the professional review action to the state authorities in compliance with §§ 11131-34; and fourth, that the professional review actions commenced on or after November 14, 1986, the effective date of HCQIA.

Austin does not challenge the defendants' compliance with the reporting or notice and hearing requirements, but he does contend that the professional review actions did not meet the standards set out in § 11112(a) and that they commenced before the effective date of the act.

A. Did the "Professional Review Actions" Meet the Standards Propounded in 42 U.S.C. § 11112(a)?

Section 11112(a) provides that:

For purposes of the protection set forth in section 11111(a) of this title, a professional review action must be taken--

(1) in the reasonable belief that the action was in furtherance of quality health care,

(2) after a reasonable effort to obtain the facts of the matter,

(3) after adequate notice and hearing procedures...

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