Belnap v. Steward Health Care Sys. LLC

• Court: U.S. District Court — District of Utah
• Writing for the Court: Judge Dale A. Kimball
• Decision Date: 10 February 2020
• Docket Number: Case No. 2:19-cv-00330-DAK
• Citation: Belnap v. Steward Health Care Sys. LLC, Case No. 2:19-cv-00330-DAK (D. Utah Feb 10, 2020)
• Parties: LEGRAND P. BELNAP, M.D., Plaintiff, v. STEWARD HEALTH CARE SYSTEM LLC; JORDAN VALLEY MEDICAL CENTER, LP; and JOHN DOES 1-20, Defendants.

LEGRAND P. BELNAP, M.D., Plaintiff, v. STEWARD HEALTH CARE SYSTEM LLC;JORDAN VALLEY MEDICAL CENTER, LP; and JOHN DOES 1-20, Defendants.

Case No. 2:19-cv-00330-DAK

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH

February 10, 2020

MEMORANDUM DECISION AND ORDER

Judge Dale A. Kimball

This matter is before the court on Defendants Steward Health Care System LLC and Jordan Valley Medical Center, LP's Motion to Dismiss Plaintiff Legrand P. Belnap, M.D.'s amended complaint for lack of subject-matter jurisdiction and failure to state a claim pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. The court held a hearing on the motion on January 8, 2020. At the hearing, Defendants were represented by Ashley M. Fischer, Katharine M. O'Connor, and Amy F. Sorenson and Plaintiff was represented by Peter Stirba. The court took the matter under advisement. The court considered carefully the memoranda and other materials submitted by the parties, as well as the law and facts relating to the motion. Now being fully advised, the court issues the following Memorandum Decision and Order.

BACKGROUND

Plaintiff Legrand P. Belnap, M.D. ("Dr. Belnap") is a general surgeon with expertise in organ transplantation, bariatric surgery, and cases involving complex cancers. He has been a practicing physician in the State of Utah since 1974. Defendant Jordan Valley Medical Center, LP ("JVMC") is a medical center located in West Jordan, Utah, which was formerly owned by Iasis Healthcare Holdings ("Iasis"). Steward Health Care System LLC ("Steward") is a health care corporation that acquired Iasis in or around September 2017. Steward currently owns or operates five hospitals in the State of Utah, including JVMC and Salt Lake Regional Medical Center ("Salt Lake Regional"), another hospital formerly owned by Iasis.

From 2009 to 2013, Dr. Belnap enjoyed a successful medical practice at Salt Lake Regional. In March 2013, however, Dr. Belnap's hospital privileges at Salt Lake Regional were summarily suspended for alleged behavior issues by Salt Lake Regional's Medical Executive Committee (the "MEC"). Following the MEC's decision, Dr. Belnap sought review of his suspension, and he took part in a hearing before a Fair Hearing Committee in April 2013. The Fair Hearing Committee determined that Dr. Belnap's suspension had been arbitrary and capricious because the investigation that led to the suspension had been one-sided. Consequently, Dr. Belnap's hospital privileges were reinstated in May 2013. Yet, after his reinstatement, Salt Lake Regional (1) did not notify insurance carriers that Dr. Belnap's suspension had been vacated; (2) communicated to third parties that Dr. Belnap had been the subject of suspension proceedings; and (3) began reviewing Dr. Belnap's medical charts for errors.

Based on his suspension and his subsequent experience at Salt Lake Regional, Dr. Belnap filed suit against Salt Lake Regional and Iasis. Approximately seven months after filing the lawsuit, in September 2014, the MEC denied Dr. Belnap's application to renew his hospital privileges at Salt Lake Regional. Again, Dr. Belnap sought and took part in a hearing before a panel to review the MEC's decision. Following the hearing, the panel upheld the denial of Dr.Belnap's renewal application, and that decision was ultimately upheld by the Board of Trustees.¹ Defendants then reported the denial of Dr. Belnap's renewal application to the National Practitioner Data Bank (the "Data Bank").

In or around September 2013, after his privileges had been reinstated at Salt Lake Regional, Dr. Belnap applied for privileges at JVMC. At JVMC, applications for privileges follow a four-step process: (1) the JVMC Medical Executive Committee (the "JVMC Committee") first considers an application with input from the Credentials Committee; (2) if the application is denied, the applicant may request a hearing before the JVMC Fair Hearing Panel (the "FHP"); (3) if denied again, the applicant may request appellate review before the JVMC Appellate Review Body; and (4) a final determination is made by the JVMC Board of Directors. Nearly a year after submitting his application, and approximately six months after filing the lawsuit against Salt Lake Regional, the JVMC Committee denied Dr. Belnap's application for privileges based on previous behavior issues at other hospitals as well as the number of medical malpractice claims against him. In turn, Dr. Belnap requested a hearing from the FHP, which took place in October 2014. The FHP unanimously concluded that JVMC failed to exercise due diligence in evaluating Dr. Belnap's application. Moreover, the FHP recommended that Dr. Belnap's application should be approved.

Despite the FHP's conclusion, the JVMC Committee held another meeting in January 2015 where they heard from three physicians, including Dr. Steven Mintz ("Dr. Mintz"), a general surgeon and the Chief of General Surgery at Salt Lake Regional who was also a member of Salt Lake Regional's Credentials Committee and Board of Trustees, and Dr. Ben Howard("Dr. Howard"), an anesthesiologist, the Chief of Medical Staff at Salt Lake Regional, and a member of the MEC. Dr. Belnap was neither notified of the meeting nor invited to attend. Following this meeting, the JVMC Committee reaffirmed the denial of Dr. Belnap's application for alleged poor behavior at other hospitals. Dr. Belnap appealed the JVMC Committee's decision, and JVMC appointed Yocum as the advisor to the Appellate Review Body. Dr. Belnap filed a motion to disqualify Yocum, but the Appellate Review Panel denied his motion. After a hearing to review the denial of Dr. Belnap's application, the Appellate Review Board affirmed the JVMC Committee's denial of Dr. Belnap's application for privileges, and that decision was subsequently affirmed by the JVMC Board of Directors. As a result, in June 2015, Defendants reported the denial of Dr. Belnap's application for privileges to the Data Bank.

Since the JVMC Board of Directors' denial of Dr. Belnap's application, Dr. Belnap has been unable to obtain privileges at any other hospital due to the Data Bank reports because hospitals are legally required to check the Data Bank prior to granting privileges to any new doctors. As such, Dr. Belnap has been unable to continue his career in inpatient general surgery, and now assists weight loss surgeries at an outpatient clinic. Yet, even at the outpatient clinic, no insurance company will cover Dr. Belnap's services due to the Data Bank reports and his lack of hospital privileges.

Dr. Belnap commenced the instant suit on May 13, 2019 and has since filed an amended complaint wherein he alleges seven causes of action: (1) a conspiracy to restrain trade in violation of Section 1 of the Sherman Act and Section 4 of the Clayton Act; (2) breach of contract; (3) breach of contract as a third-party beneficiary; (4) breach of the implied covenant of good faith and fair dealing; (5) tortious interference with economic relations; (6) intentionalinfliction of emotional distress; and (7) civil conspiracy.² Dr. Belnap alleges that Defendants conspired to eliminate Dr. Belnap from the Utah inpatient general surgery market for anticompetitive reasons. He alleges that Defendants conspired to deny his application for privileges at JVMC in order to eliminate him from the market and preclude him from obtaining privileges at other hospitals. Further, Dr. Belnap contends that by denying him privileges at JVMC and inhibiting him from obtaining privileges at other Utah hospitals, Defendants have deprived patients in Utah from being able obtain necessary treatment that otherwise could have been rendered by Dr. Belnap. Consequently, he claims that such patients have been forced to seek treatment outside of Utah and settle for substandard care.

DISCUSSION

Defendants now move to dismiss Dr. Belnap's antitrust claim for failure to state a claim and his remaining claims for lack of subject-matter jurisdiction. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face." Bixler v. Foster, 596 F.3d 751, 756 (10th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)) (quotation marks omitted). "[A]ll well-pleaded factual allegations in the complaint are accepted as true and viewed in the light most favorable to the nonmoving party." Acosta v. Jani-King of Oklahoma, Inc., 905 F.3d 1156, 1158 (10th Cir. 2018) (quoting Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006)). "[M]ere 'labels and conclusions,' and 'a formulaic recitation of the elements of a cause of action' will not suffice; a plaintiff must offer specific factual allegations to support each claim." Kansas Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (quoting Bell Atl. Corp. v. Twombly, 550U.S. 544, 555 (2007)). Furthermore, if, at any time, a "court determines . . . that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3); see also Full Life Hospice, LLC v. Sebelius, 709 F.3d 1012, 1016 (10th Cir. 2013) ("A court lacking jurisdiction cannot render judgment but must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking.").

I. Antitrust Claim

Under Section 1 of the Sherman Act, "[e]very contract, combination . . . , or conspiracy, in restraint of trade or commerce . . . is . . . illegal." 15 U.S.C. § 1. In order to bring a claim under Section 1, a plaintiff must first establish that he or she has antitrust standing. See Tal v. Hogan, 453 F.3d 1244, 1253 (10th Cir. 2006). Significantly, "the standing requirements in the antitrust context are more rigorous than that of the Constitution." Id. Indeed, not only must an antitrust plaintiff demonstrate an "antitrust injury," he or she must also show "a direct causal connection between that injury and a defendant's violation of...