Bloom v. Hennepin County

• Decision Date: 22 January 1992
• Docket Number: No. Civ. 4-89-615.,Civ. 4-89-615.
• Parties: Phillip M. BLOOM, M.D., Plaintiff, v. HENNEPIN COUNTY, Hennepin County Board of Commissioners, Hennepin County Medical Center, a Minnesota non-profit corporation, Hennepin Faculty Associates, Regional Kidney Disease Program f/k/a Minneapolis Medical Research Foundation, Fred Shapiro, M.D., Morris Davidman, M.D., and Allan J. Collins, M.D., Defendants.
• Court: U.S. District Court — District of Minnesota

783 F. Supp. 418

Phillip M. BLOOM, M.D., Plaintiff, v. HENNEPIN COUNTY, Hennepin County Board of Commissioners, Hennepin County Medical Center, a Minnesota non-profit corporation, Hennepin Faculty Associates, Regional Kidney Disease Program f/k/a Minneapolis Medical Research Foundation, Fred Shapiro, M.D., Morris Davidman, M.D., and Allan J. Collins, M.D., Defendants.

No. Civ. 4-89-615.

United States District Court, D. Minnesota, Fourth Division.

January 22, 1992.

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Frank R. Berman, Scott G. Harris, Minneapolis, Minn., for plaintiff.

Michael O. Freeman, Hennepin County Atty., and Janeen E. Rosas, Asst. County Atty., Minneapolis, Minn., for defendants Hennepin County, Hennepin County Bd. of Com'rs, and Hennepin County Medical Center.

John D. French, John E. Harris, John F. Beukema, Faegre & Benson, Minneapolis, Minn., for defendants Hennepin Faculty Associates, Regional Kidney Disease Program f/k/a Minneapolis Medical Research Foundation, Fred Shapiro, M.D., Morris Davidman, M.D., and Allan J. Collins, M.D.

MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the Court on defendants' motions for summary judgment. The motion of the Hennepin County defendants will be granted. The motion of the remaining defendants will be granted in part and denied in part.

FACTS

Plaintiff is a physician specializing in nephrology, a field of medicine involving the treatment of diseases and conditions of the kidney. Defendant Hennepin County Medical Center (HCMC) is a public hospital owned and operated by defendant Hennepin County; HCMC, Hennepin County, and the Hennepin County Board of Commissioners will be referred to in this memorandum as "the Hennepin County defendants." Defendant Hennepin Faculty Associates (HFA) is a nonprofit corporation formed in 1984 that has contracted with Hennepin County to provide all physician services at HCMC. Defendant Regional Kidney Disease Program (RKDP) operates outpatient kidney dialysis centers throughout Minnesota and adjoining states; RKDP was originally an unincorporated operating division of Minneapolis Medical Research Foundation (MMRF), a nonprofit corporation formed by physicians at HCMC to promote medical research. On May 17, 1989, MMRF (and therefore its component RKDP) became a wholly-owned subsidiary of HFA. Defendants Shapiro, Davidman, and Collins are nephrologists employed by HFA. Shapiro is president of HFA and Davidman is currently chief of the nephrology division at HFA and HCMC; when the events giving rise to this action occurred, Davidman was medical director of RKDP and Collins was director of dialysis operations for RKDP. Defendants HFA, RKDP, Shapiro, Davidman, and Collins will be referred to in this memorandum as "the HFA defendants."

The facts underlying plaintiff's claims, which will be briefly summarized here, are more fully set forth in the discussion of the separate claims. From 1977 to 1984, plaintiff was employed by the University of Minnesota as an assistant professor assigned to HCMC. In 1984, when the physicians of HCMC formed HFA, plaintiff became a member and employee of HFA. Plaintiff had full attending staff privileges at HCMC both as an employee of HCMC and as an employee of HFA. Pl.'s Mem., Bloom Aff. ¶ 2. While technically a specialist in nephrology, plaintiff also had an interest in the treatment of multiple sclerosis, and developed a protocol¹ for using a technique called lymphocytapheresis to deplete a patient's lymphocytes to modify the patient's immunological responses. Id. ¶ 4-7. This treatment proved successful for several of plaintiff's multiple sclerosis patients. Id. ¶ 16.

In January 1989, plaintiff was informed that his employment with HFA would be terminated; on April 13, 1989 he received written confirmation of his termination. HFA Def.'s Mem., Bloom Dep. at 13-15; Pl.'s Mem., Bloom Aff., Ex. C. Because HFA had an exclusive contract to provide physician services for HCMC, HCMC took the position that plaintiff could no longer see patients at HCMC. When plaintiff attempted to schedule a lymphocytapheresis treatment for one of his multiple sclerosis patients on May 25, 1989, HFA informed him that he would not be permitted to treat any patients within HFA clinics or HCMC facilities that were under HFA control; plaintiff took this to mean that he would be denied access to all RKDP facilities. Pl.'s Mem., Bloom Aff., Ex. G. HFA also stated that the lymphocytapheresis treatments would continue under the supervision of an HFA doctor.

Plaintiff commenced this action, alleging state and federal antitrust violations, deprivation of due process, breach of contract, breach of fiduciary duty, conversion, misappropriation of trade secrets, fraud, conspiracy, and wrongful interference with business relationships. Defendants have moved for summary judgment on all claims.

DISCUSSION

A movant is not entitled to summary judgment unless the movant can show that no genuine issue exists as to any material fact. Fed.R.Civ.P. 56(c). In considering a summary judgment motion, a court must determine whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The role of a court is not to weigh the evidence but instead to determine whether, as a matter of law, a genuine factual conflict exists. AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987). "In making this determination, the court is required to view the evidence in the light most favorable to the nonmoving party and to give that party the benefit of all reasonable inferences to be drawn from the facts." AgriStor Leasing, 826 F.2d at 734. When a motion for summary judgment is properly made and supported with affidavits or other evidence as provided in Fed.R.Civ.P. 56(c), then the nonmoving party may not merely rest upon the allegations or denials of the party's pleading, but must set forth specific facts, by affidavits or otherwise, showing that there is a genuine issue for trial. Lomar Wholesale Grocery, Inc. v. Dieter's Gourmet Foods, Inc., 824 F.2d 582, 585 (8th Cir. 1987), cert. denied, 484 U.S. 1010, 108 S.Ct. 707, 98 L.Ed.2d 658 (1988). Moreover, summary judgment must be entered 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, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

I. The Antitrust Claims

Plaintiff alleges that HFA and RKDP have entered into a market allocation conspiracy to monopolize the End Stage Renal Disease (ESRD)² market in the Twin Cities in violation of state and federal antitrust laws. Plaintiff asserts that HFA and RKDP, together with three private nephrology groups who are not parties to this action, have agreed to act as a single firm within the Twin Cities market. Acting as a single firm, plaintiff claims, these groups control the supply of ESRD treatment, permit demand to outstrip supply, and allocate patients among themselves according to geographical "turfs," thus monopolizing the market and creating barriers that prevent nephrologists outside the cartel from entering the market. Pl.'s Mem., Sloan Aff. ¶ 34. Plaintiff alleges that HCMC participated in this scheme by denying staff privileges to all doctors not employed by HFA and by participating in the market allocation plan. Pl.'s Mem. in Opp. to Henn.Cty. Def.'s Mot. for Summ.J. at 14; Pl.'s Mem. in Opp. to HFA Def.'s Mot. for Summ.J. on Antitrust Claims at 7.

In arguing for summary judgment, the Hennepin County defendants argue that they are immune from federal antitrust liability under the Local Government Antitrust Act, 15 U.S.C. § 34, et seq., and the state action doctrine and that they are immune from state antitrust liability under the terms of the Minnesota Antitrust Act. The HFA defendants argue that, to the extent plaintiff alleges that the HFA/HCMC contract violated antitrust laws, they are immune from suit. The HFA defendants also argue that there is no evidence of a market allocation conspiracy or a monopoly and that, in any event, plaintiff has not suffered an antitrust injury.

A. Are the Hennepin County Defendants Immune from Federal Antitrust Liability?

The Local Government Antitrust Act provides that "no damages, interest on damages, costs, or attorney's fees may be recovered under section 15 ... of this title providing for private actions for antitrust violations from any local government, or official or employee thereof acting in an official capacity." 15 U.S.C. § 35(a). The definition of "local government" includes counties as well as any special function governmental unit established by state law. 15 U.S.C. § 34(1). Plaintiff does not dispute that HCMC is a special function governmental unit established under Minn. Stat. § 383B.217 or that HCMC acted within its official capacity in its dealings with plaintiff. Therefore, the Local Government Antitrust Act immunizes the Hennepin County defendants from private suits seeking damages under 15 U.S.C. § 15.

As plaintiff notes, the Local Government Antitrust Act does not immunize the Hennepin County defendants from suits seeking injunctive relief under 15 U.S.C. § 26. 15 U.S.C. § 35; Sandcrest Outpatient Services v. Cumberland County Hospital, 853 F.2d 1139, 1142 (4th Cir. 1988). However, the Hennepin County defendants may be immune from plaintiff's claim for injunctive relief under the state action doctrine. The state action doctrine derives from Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), in which the United States Supreme Court held that the Sherman Act did not apply to the anticompetitive conduct of a state acting through its legislature. While state...