Anesthesia Advantage, Inc. v. Metz Group

• Decision Date: 13 March 1991
• Docket Number: Civ. A. No. 86-B-1235.
• Citation: 759 F. Supp. 638
• Parties: The ANESTHESIA ADVANTAGE, INC., a Colorado corporation; Konstantine Kalandros, CRNA; Scott McGlothlen, CRNA; G. Edward Oswald, CRNA; and Raymond Golden, CRNA, Plaintiffs, v. The METZ GROUP, an unincorporated association; David Heisterkamp, M.D.; Joseph Verbrugge, M.D.; Steven Caputo, M.D.; and Ronald Stevens, M.D., Defendants.
• Court: U.S. District Court — District of Colorado

759 F. Supp. 638

The ANESTHESIA ADVANTAGE, INC., a Colorado corporation; Konstantine Kalandros, CRNA; Scott McGlothlen, CRNA; G. Edward Oswald, CRNA; and Raymond Golden, CRNA, Plaintiffs, v. The METZ GROUP, an unincorporated association; David Heisterkamp, M.D.; Joseph Verbrugge, M.D.; Steven Caputo, M.D.; and Ronald Stevens, M.D., Defendants.

Civ. A. No. 86-B-1235.

United States District Court, D. Colorado.

March 13, 1991.

COPYRIGHT MATERIAL OMITTED

Bobbee J. Musgrave, B. Lawrence Theis, Walters & Theis, Denver, Colo., for plaintiffs.

Fred M. Winner, James Hinga, Todd Lundy, Baker & Hostetler, Denver, Colo., for Metz, Heisterkamp, Caputo and Stevens.

Timothy A. LaQuey, Raymond J. Miller, Denver, Colo., for Verbrugge.

MEMORANDUM OPINION AND ORDER

BABCOCK, District Judge.

Hearing was held on three summary judgment motions filed by individual defendants David Heisterkamp, Joseph Verbrugge, Steven Caputo and Ronald Stevens (the individual Metz defendants) and defendant the Metz Group (collectively Metz defendants). The motions seek judgment on the federal antitrust allegations in the amended complaint of plaintiff the Anesthesia Advantage, Inc., and individual plaintiffs Konstantine Kalandros, Scott McGlothlen, G. Edward Oswald and Raymond Golden (collectively, plaintiffs). Because plaintiffs fail to meet their summary judgment burden. I grant the motions.

                                                     CONTENTS
                INTRODUCTION ............................................................... 641
                    I. HUMANA HOSPITAL ..................................................... 642
                    A. Events .............................................................. 642
                    B. Defendants' Summary Judgment Motion ................................. 643
                       1. Unreasonable Restraint of Trade: Market Power .................... 643
                          a. Per Se Violations Versus Rule of Reason ....................... 644
                             i.   Price Fixing ............................................. 644
                             ii.  Market Allocation ........................................ 646
                             iii. Group Boycott ............................................ 646
                          b. Rule of Reason and Market Power ............................... 647
                       2. Conspiracy: Independent Action ................................... 649
                          a. Ambiguity ..................................................... 649
                

                             i. Call Schedule .............................................. 649
                             ii. Other Evidence ............................................ 649
                          b. Negating Evidence of Independent Interest ..................... 650
                    II. ST. LUKE'S HOSPITAL ................................................ 651
                    A. Events .............................................................. 651
                    B. Defendants' Summary Judgment Motion ................................. 651
                       1. Unreasonable Restraint of Trade: Market Power .................... 652
                          a. Per Se Violations Versus Rule of Reason ....................... 652
                          b. Rule of Reason and Market Power ............................... 652
                       2. Conspiracy: Independent Action ................................... 652
                          a. Ambiguity ..................................................... 652
                          b. Negating Evidence of Independent Interest ..................... 652
                    III. ST. MARY'S-CORWIN HOSPITAL ........................................ 653
                    A. Events .............................................................. 653
                    B. Defendants' Summary Judgment Motion ................................. 653
                       1. Unreasonable Restraint of Trade: Market Power .................... 653
                       2. Conspiracy: Independent Action ................................... 653
                          a. Ambiguity ..................................................... 654
                          b. Negating Evidence of Independent Interest ..................... 654
                             i. Plaintiffs' Affidavits ..................................... 654
                             ii. Defendants' Evidence ...................................... 654
                

INTRODUCTION

This dispute arises between two groups of medical professionals. The individual plaintiffs are certified registered nurse anethetists (CRNA), licensed by the State of Colorado as registered nurses. Plaintiff Anesthesia Advantage, Inc. is a Colorado corporation and successor to High Country Anesthetists, a partnership organized by three of the individual plaintiffs. The shares of Anesthesia Advantage are held in equal proportions by the individual plaintiffs. The Metz defendants are medical doctors licensed by the State of Colorado. Defendant Metz Group is an unincorporated association and its membership includes the individual Metz defendants.

The pendant state claims in the amended complaint have been dismissed, leaving three allegations of federal antitrust law violations against the Metz defendants, each allegedly committed at different hospitals. Count One alleges that the Metz defendants violated section one of the Sherman Act, 15 U.S.C. § 1, at Humana Hospital of Aurora (Humana Hospital) through a conspiracy to restrain trade by price fixing, allocating the market and boycotting as a group. Amended Complaint ¶¶ 72-74. Counts Four and Six also allege that the Metz defendants violated section one of the Sherman Act by conspiring to restrain trade at St. Luke's Hospital (St. Luke's) through a group boycott and conspiring to restrain trade by threats at St. Mary's-Corwin Hospital (St. Mary's).

Section one of the Sherman Act prohibits "every contract, combination ... or conspiracy, in restraint of trade or commerce...." 15 U.S.C. § 1. Thus, the two essential elements of a section one claim are (1) a contract, combination or conspiracy resulting in (2) an unreasonable restraint of trade. Business Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 723, 108 S.Ct. 1515, 1519, 99 L.Ed.2d 808 (1988); Zimmerman v. Board of Publications of the Christian Reformed Church, Inc., 598 F.Supp. 1002, 1009 (D.Colo.1984).

Defendants move for summary judgment on the antitrust claims. Federal Rule of Civil Procedure 56 provides that summary judgment shall be granted if the evidence shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). Summary judgment is appropriate against a party who fails to make a showing sufficient 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. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

The nonmovant must offer evidence to dispute the facts demonstrated by the evidence of the movant. R-G Denver, Ltd. v. First City Holdings of Colorado, 789 F.2d 1469, 1471 (10th Cir.1986). The nonmovant cannot rely on conclusory allegations in an affidavit. Lujan v. National Wildlife Fed'n, ___ U.S. ___, ___, 110 S.Ct. 3177, 3188-89, 111 L.Ed.2d 695, 716 (1990).

In the antitrust context, the allegations of restraint of trade must be supported by significant probative evidence. Ambiguous evidence standing alone is not enough to defend against a motion for summary judgment. Key Financial Planning Corp. v. ITT Life Ins. Corp., 828 F.2d 635, 638 (10th Cir.1987). Plaintiffs must present evidence that tends to exclude the possibility that the alleged conspirators acted independently. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 1356-57, 89 L.Ed.2d 538 (1986). Summary judgment is not disfavored in antitrust cases. See Camellia City Telecasters, Inc. v. Tribune Broadcasting Co., 762 F.Supp. 290, (D.Colo.1991).

I. HUMANA HOSPITAL

A. Events

In March, 1983, plaintiffs wrote to Humana Hospital and offered to provide around-the-clock obstetrical anesthesia services on a contractual basis. At that time, Anesthesia Associates, headed by anesthesiologist Dr. Peter Press (Press), was the single active group providing anesthesia services at Humana Hospital. Jeff Holland (Holland), the Executive Director of Humana Hospital, was actively soliciting proposals from anesthesia providers in an effort to stimulate competition with Anesthesia Associates, to expand coverage and to attract new obstetricians.

Holland contracted with anesthesiologists Dr. Copeland and Dr. Wyte, then members of the Metz Group, for 24-hour-a-day anesthesia services. The contract provided that Copeland and Wyte could subcontract with CRNAs. Under the contract, the CRNAs would be permitted to (1) monitor and reinject epidural anesthesia with a physician's order and (2) begin anesthesia for emergency cesarean sections at the discretion of the obstetrician and after consultation with the on-call anesthesiologist. Copeland and Wyte subcontracted with plaintiff CRNAs, who were then doing business as High Country and were independent contractors. The CRNAs were paid an hourly fee plus 45% of the amount billed to patients. Plaintiff CRNAs began providing anesthesia coverage on weekday nights in the fall of 1983.

Pursuant to then-existing hospital policy and Colorado law, the CRNAs were under the supervision of physicians when initiating epidural anesthesia. By the time performance of the contract began, Humana Hospital's policy on epidural placement by CRNAs was stricter than required by Colorado law. Humana Hospital policy, and its contract with Copeland and Wyte, required that in a nonemergency a physician anesthesiologist be present in the hospital during placement of an epidural by a CRNA. Supervision by a physician who was not an anesthesiologist was not permitted except in the case of an emergency. Eventually this policy was relaxed, so that surgeons who felt comfortable with supervising CRNA placement of epidural anesthesia and who were competent could do so without calling an anesthesiologist. There was never a requirement that CRNAs had to be supervised at...