All Care Nursing Service, Inc. v. Bethesda Memorial Hosp., Inc.

• Decision Date: 13 November 1989
• Docket Number: No. 89-5259,89-5259
• Citation: 887 F.2d 1535
• Parties: , 1989-2 Trade Cases 68,845, 15 Fed.R.Serv.3d 535 ALL CARE NURSING SERVICE, INC., Plaintiffs-Appellees, v. BETHESDA MEMORIAL HOSPITAL, INC., et al., Defendants-Appellants. P.D.Q. NURSE, INC., Plaintiff-Appellee, v. SOUTH FLORIDA HOSPITAL ASSOCIATION, INC., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1535

887 F.2d 1535

58 USLW 2342, 1989-2 Trade Cases 68,845,

15 Fed.R.Serv.3d 535

ALL CARE NURSING SERVICE, INC., Plaintiffs-Appellees, v. BETHESDA MEMORIAL HOSPITAL, INC., et al., Defendants-Appellants.

P.D.Q. NURSE, INC., Plaintiff-Appellee, v. SOUTH FLORIDA HOSPITAL ASSOCIATION, INC., et al.,

Defendants-Appellants.

No. 89-5259.

United States Court of Appeals Eleventh Circuit.

Nov. 13, 1989.

William J. Dunaj, Mershon, Sawyer, Johnston, Dunwody & Cole, Miami, Fla., for South Florida Hosp.

Paul A. Koches, Joseph Brooks, Wickens, Koches & Cale, Washington, D.C., for Palm Beach.

Robert R. Vawter, Jr., Shackleford, Farrior, Stallings & Evans, Tampa, Fla., for Doctors Hosp.

Ronald B. Ravikoff, Zuckerman, Spaeder, Kenneth R. Pierce, Zuckerman, Spaeder, Taylor & Evans, Miami, Fla., for All Care, Complete Health, Quality Professional & Benson.

Michael A. Kamen, West Palm Beach, Fla., for Benson.

Charles C. Powers, West Palm Beach, Fla., for PDQ Nurse.

Appeals from the United States District Court for the Southern District of Florida.

Before TJOFLAT, Chief Judge, VANCE, Circuit Judge, and PITTMAN ^*, Senior District Judge.

PITTMAN, Senior District Judge:

In this case, appellants, defendants below, appeal from the district court's order granting a preliminary injunction against them in an action alleging violations of Secs. 1 and 2 of the Sherman Act, 15 U.S.C. Secs. 1-2, and Fla.Stat. Sec. 542.18 and 542.19. As to appellant Palm Beach Gardens Medical Center, we vacate the judgment and remand with instructions to dismiss. As to all other appellants, we vacate the injunction and remand for further proceedings.

On December 27, 1988, appellees, plaintiffs below, All Care Nursing Service, Inc., A Complete Health Care Services, Inc., Benson's Health Care Services, Inc., and Quality Professional Nursing of Florida, Inc. filed a complaint against the twenty-two appellants, including thirteen Palm Beach County hospitals (appellant hospitals), eight temporary nursing service agencies (preferred agencies) and The South Florida Hospital Association (SFHA) arising from the appellants' alleged plan to institute a "preferred provider program" for the provision of temporary nursing services (The SFHA plan). ¹ Appellees filed an emergency motion for preliminary injunction simultaneously with the complaint.

Appellees are temporary nursing agencies located in Palm Beach County, Florida. According to the parties in this action, there presently exists a nationwide shortage of nurses. In the summer of 1988, the appellant hospitals met under the auspices of the defendant SFHA and decided to develop a program under which certain of the temporary service agencies would be designated "preferred agencies." Each participating hospital agreed to give first consideration to the preferred agencies in the staffing of temporary nurses. Temporary nursing service agencies were contacted directly or by way of a notice in the Palm Beach Post, and were invited to submit bids for the provision of temporary nursing services. Sixteen temporary nursing services submitted bids. Of this number, four were eliminated because of their prices. The remaining agencies were asked to resubmit lower bids. The eight appellant agencies were selected as preferred agencies. To maintain preferred status, these agencies were required to ensure that their nurses were covered by workmen's compensation. The agencies also had to agree to rebate a percentage of their gross yearly income to the SFHA, and had to agree not to compete with the hospitals in the hiring of nurses.

Oral argument was held on appellees' emergency motion for a preliminary injunction on January 27, 1989. At the close of the hearing, the court took the cause under submission. On February 21, 1989, the court issued an order granting the appellees' motion for a preliminary injunction. The court, after determining that appellees were likely to prevail on their state "price fixing" and "boycott" claims, ordered the appellant hospitals and the SFHA to employ the services of any temporary nursing agencies, including the appellees, capable of fulfilling their needs until the ultimate resolution of this suit. ² The court also enjoined the appellants from (1) establishing any maximum price standards to which agencies must adhere; (2) substantially interfering with the management or manner in which the individual agencies employ their nurses, and (3) requiring them to contribute any portion of their income in order to be considered as providers of temporary nurses. A $50,000.00 bond was required of the appellants collectively.

The appellants challenge the district court's finding that the appellees are likely to prevail at a trial on the merits, and the court's application of the per se rule to appellees' price fixing and group boycott claims. Appellants also argue that the district court abused its discretion in granting a preliminary injunction without conducting an evidentiary hearing. According to appellants, given the nature of this case, the complexity of the facts, and the parties' vigorous dispute regarding such facts, it was incumbent upon the district court to allow the parties to present evidence at a hearing, including live testimony, and to afford the parties the opportunity to cross-examine witnesses. Additionally, appellant Palm Beach Gardens Medical Center (Palm Beach Gardens) specifically challenges the preliminary injunction issued against it on the ground that there is no evidence whatsoever that it participated in the SFHA program. Palm Beach Gardens contends that it did not execute any of the nursing services agreements challenged by the appellees, and it did not have any exclusive dealing agreement, written or oral, express or implied, with any temporary nursing agency or group of agencies.

The law is well established that a district court's order granting or denying a preliminary injunction is reviewable only for an abuse of discretion. Baker v. Buckeye Cellulose Corp., 856 F.2d 167, 169 (11th Cir.1988) citing United States v. Jefferson County, 720 F.2d 1511, 1519 (11th Cir.1983). A district court may grant injunctive relief if the movant shows (1) a substantial likelihood of success on the merits; (2) that irreparable injury will be suffered unless the injunction issues; (3) that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party, and (4) that if issued the injunction would not be adverse to the public interest. Id. "A preliminary injunction is an extraordinary and drastic remedy not to be granted unless the movant clearly establishes the 'burden of persuasion' as to the four requisites." Jefferson County, 720 F.2d, at 1519 (quoting Canal Authority v. Callaway, 489 F.2d 567, 572 (5th Cir.1974)).

The injunction issued against Palm Beach Gardens had no basis in law, and must be dissolved. The district court stated in reference to Palm Beach Gardens that "defendant should not suffer any adverse effects from the injunction and may continue to seek temporary nurses in the manner it has in the past. Defendant's argument is more appropriately the subject of a motion to dismiss or for summary judgment." Preliminary injunctions are issued when drastic relief is necessary to preserve the status quo. Cate v. Oldham, 707 F.2d 1176 (11th Cir.1983); Bannum, Inc. v. City of Fort Lauderdale, Fla., 657 F.Supp. 735 (S.D.Fla.1986). In the case sub judice, the issuance of an injunction against Palm Beach Gardens was inappropriate because it was not necessary to preserve the status quo. Simply put, Palm Beach Gardens was not shown to be a participant in the program that the appellees sought to have enjoined; thus, there was no activity in regards to Palm Beach Gardens to be enjoined. In fact, the court finds that the appellees have failed to even make out a claim against this appellant. The evidence is uncontroverted that Palm Beach Gardens did not execute any of the nursing services agreements challenged by the appellants, and does not have any exclusive dealing agreement, written or oral, with any temporary nursing agency or group of agencies. The only appellee agencies alleging any prior course of dealing with Palm Beach Gardens are Quality Professional Nursing of Florida, Inc., and Florida Nurses Network. These agencies do not contend thatthey have been excluded from engagements with this particular appellant, but allege instead that their nursing businesses in Palm Beach County have collapsed due to the agreement between SFHA and participating member hospitals. Based upon these facts, the court concludes that appellees have failed to make out a cognizable claim against Palm Beach Gardens. Accordingly, the preliminary injunction issued against Palm Beach Gardens Medical Center is vacated, and this action is remanded to the trial court with instructions to dismiss Palm Beach Gardens Medical Center. ³

Turning now to the remaining appellants, the court determines that the district court abused its discretion in granting the preliminary injunction. "Federal Rule of Civil Procedure 65(a) states, 'No preliminary injunction shall be issued without notice to the adverse party.' The United States Supreme Court has noted in passing that '[t]he notice required by Rule 65(a) before a preliminary injunction can issue implies a hearing in which the defendant is given a fair opportunity to oppose the application and to prepare for such opposition.' Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 432 n. 7, 94 S.Ct. 1113, 1121 n. 7, 39 L.Ed.2d 435 (1974)." Baker v. Buckeye Cellulose Corp., 856 F.2d 167, 169 (11th Cir.1988); see, also, Commerce Park at DFW Freeport v. Mardian Construction Co., 729 F.2d 334, 341 (5th Cir.1984). Appellees' emergency motion for a preliminary injunction was originally set for oral argument on January 6, 1989. Counsel for all parties were advised that the only oral testimony which would be...