Collins v. Associated Pathologists, Ltd.

• Decision Date: 20 April 1988
• Docket Number: No. 87-1399,87-1399
• Parties: 1988-1 Trade Cases 67,971 James G.P. COLLINS, Plaintiff-Appellant, v. ASSOCIATED PATHOLOGISTS, LTD., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 473

844 F.2d 473

1988-1 Trade Cases 67,971

James G.P. COLLINS, Plaintiff-Appellant, v. ASSOCIATED PATHOLOGISTS, LTD., et al., Defendants-Appellees.

No. 87-1399.

United States Court of Appeals Seventh Circuit.

Argued Oct. 27, 1987.

Decided April 20, 1988.

Peter B. Freeman, Hopkins & Sutter, Chicago, Ill., for plaintiff-appellant.

Susan M. Hickman, Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Hugh J. Graham, III, Graham & Graham, Springfield, Ill., for defendants-appellees.

Before CUMMINGS, COFFEY and EASTERBROOK, Circuit Judges.

CUMMINGS, Circuit Judge.

Plaintiff Dr. James G.P. Collins, a pathologist, is currently employed and practicing his specialty in San Leandro, California. Dr. Collins claims that he was forced to accept his current position after antitrust violations deprived him of his former position at St. John's Hospital in Springfield, Illinois. ¹ More specifically, in a ten-count amended complaint Dr. Collins alleged that the contractual arrangement between St John's and Associated Pathologists, Ltd. ("APL"), the group providing pathology services to the hospital, was a combination in restraint of trade, an unlawful boycott, and an unlawful tying agreement. Dr. Collins also accused APL of monopolization, attempted monopolization and conspiracy to monopolize the provision of pathology services. Finally, Dr. Collins' pendent state claims alleged violations of state antitrust law, breach of contract, misrepresentation, wrongful removal or reduction in staff privileges and tortious interference with staff privileges. Defendants St. John's Hospital and APL ² filed motions for summary judgment. In a thorough opinion, Judge Mihm painstakingly examined the voluminous discovery material filed in this case and concluded that Dr. Collins failed to raise a genuine issue of material fact with regard to any of his claims. 676 F.Supp. 1388, 1411 (C.D.Ill.1987). Accordingly, the court granted the defendants' motions for summary judgment. We affirm on all counts that are still pressed. ³

I

From October 1974 through January 31, 1982, when the directors of APL asked for and received Dr. Collins' resignation, Dr. Collins was an employee and, for most of that period, a shareholder of APL. Throughout the period in which he was employed by APL, Dr. Collins worked under contracts between APL and St. John's as a pathologist at St. John's. The contracts between APL and St. John's required APL to provide complete and adequate pathology services to St. John's. APL's contractual obligation to provide pathology services included engaging the staff necessary to provide "full and complete professional service for the department."

Following his forced resignation from APL in January 1982, Dr. Collins sought to continue his employment at St. John's as an independent pathologist, separate from the APL contract. Although St. John's did not remove or reduce Dr. Collins' staff privileges, it refused to employ him as a pathologist. This refusal and the contractual relationships surrounding it provide the bases for Dr. Collins' claims.

II

Dr. Collins begins his argument by challenging the standard for summary judgment employed by the district court. He cites Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), for the proposition that courts should hesitate before granting summary judgment in complex antitrust litigation. His argument ignores cases in this Circuit limiting Poller and noting that the very nature of antitrust litigation encourages summary disposition of such cases when permissible, see Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir.1984), certiorari denied, 470 U.S. 1054, 105 S.Ct. 1758, 84 L.Ed.2d 821 (1985); Havoco of America, Ltd. v. Shell Oil Co., 626 F.2d 549 (7th Cir.1980); Lupia v. Stella D'Oro Biscuit Co., Inc., 586 F.2d 1163, 1166 (7th Cir.1978), certiorari denied, 440 U.S. 982, 99 S.Ct. 1791, 60 L.Ed.2d 242 (1979), as well as the recent trilogy of cases in which the Supreme Court made clear that, contrary to the emphasis of some prior precedent, the use of summary judgment is not only permitted but encouraged in certain circumstances, including antitrust cases, Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see generally Childress, A New Era for Summary Judgments: Recent Shifts at the Supreme Court, 116 F.R.D. 183 (1987).

The first of the trilogy cases, Matsushita, is especially instructive because it involved the grant of a summary judgment motion in complex antitrust litigation. The plaintiffs in that case, Zenith and National Union Electric Corporation, filed suit alleging that 21 corporations, Japanese manufacturers of consumer electronic products and their American subsidiaries that sold the products in this country, had illegally conspired to drive American firms from the market through a concerted predatory pricing scheme. The district court found that any inference of conspiracy was unreasonable because (1) some portions of the evidence suggested that defendants conspired in ways that did not injure plaintiffs, and (2) the evidence that bore directly on the price-cutting conspiracy did not rebut the more plausible inference that petitioners were cutting prices to compete in the American market, not to monopolize it. The court then granted summary judgment in favor of all defendants on all counts.

The Court of Appeals for the Third Circuit reversed. It concluded that a reasonable factfinder could find a conspiracy. Commenting on the Third Circuit's opinion, the Supreme Court noted that the circuit court had not considered if it was as plausible to conclude that defendants' price-cutting behavior was independent as it was to conclude that it was conspiratorial. The Supreme Court reversed and remanded, ordering that the summary judgment be reinstated unless the Third Circuit could find some other evidence in the record that excluded the possibility that defendants underpriced plaintiffs to compete for business rather than to implement an economically senseless conspiracy. Id. 475 U.S. at 597-598, 106 S.Ct. at 1362.

In reversing the circuit court the Supreme Court relied on a seemingly new evidentiary standard for summary judgments. The Court restated the language of Fed.Rule Civ.Proc. 56(e) requiring the non-moving party to establish that there is a genuine issue of material fact, but the Court redefined "genuine." Id. at 586-587, 106 S.Ct. at 1356. It stated: "[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Id. This means that "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.' " Id. This language indicates that a summary judgment motion is like a trial motion for a directed verdict and that "genuine" allows some quantitative determination of the sufficiency of the evidence. The trial court still cannot resolve factual disputes that could go to a jury at trial, but weak factual claims can be weeded out through summary judgment motions. The existence of a triable issue is no longer sufficient to survive a motion for summary judgment. Id. at 587, 106 S.Ct. at 1356. Instead, the triable issue must be evaluated in its factual context, which suggests that the test for summary judgment is whether sufficient evidence exists in the pre-trial record to allow the non-moving party to survive a motion for directed verdict. See Childress, 116 F.R.D. at 186.

Further, the Supreme Court seems to require lower courts to engage in a qualitative review of the claim that goes beyond a minimum quantitative sufficiency of the evidence type of review. "It follows from these settled principles that if the factual context renders respondents' claim implausible--if the claim is one that simply makes no economic sense--respondents must come forward with more persuasive evidence to support their claim than would otherwise be necessary." Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356. "[T]he absence of any plausible motive to engage in the conduct charged is highly relevant to whether a 'genuine issue for trial' exists. Lack of motive bears on the range of permissible conclusions that might be drawn from ambiguous evidence: if petitioners had no rational economic motive to conspire, and if their conduct is consistent with other, equally plausible explanations, the conduct does not give rise to an inference of conspiracy." Id. at 596-597, 106 S.Ct. at 1361. Matsushita, not Poller, is now the applicable standard and the district court in this case applied it correctly.

III

In Count III of his amended complaint, Dr. Collins asserts that the series of consecutive contracts between APL and St. John's created and maintained an illegal tying arrangement in violation of Section 1 of the Sherman Act. Each of the three contracts required APL to provide complete and adequate pathology services to St. John's. St. John's then included the pathology services provided by APL in the package St. John's presented to its patients. This package included the full range of facilities and services necessary for the patients' treatment and maintenance in the hospital. As a result of this arrangement, patients who required pathology services purchased those provided for in the package--the services of APL.

Dr. Collins contends that this arrangement constitutes illegal tying. However, a tying arrangement demands by definition two separate products--a tying product and a tied product. In an attempt to satisfy this requisite, Dr. Collins argues that the tied product consists of the hospital facilities and services...