Colo. Chiropractic Council v. Porter Memorial Hosp.

• Citation: 650 F. Supp. 231
• Decision Date: 25 November 1986
• Docket Number: Civ. A. No. 86 F 562.
• Parties: COLORADO CHIROPRACTIC COUNCIL, a Colorado non-profit corporation, Timothy D. Conwell, D.C., Dennis P. Nikitow, D.C., George E. Springer, Jr., D.C., Dale Baird, D.C., Daniel K. Baird, D.C., Jim Bondarovich, D.C., Douglas Burke, D.C., William Burson, D.C., Bernard Busch, D.C., Jon Paul Carmichael, D.C., James Davis, D.C., William F. Duchaine, D.C., Paul Farber, D.C., Paul E. Finegan, D.C., Joseph Gallegos, D.C., Richard E. Garde, D.C., and Terry Grear, D.C., Plaintiffs, v. PORTER MEMORIAL HOSPITAL, a Colorado corporation, Saint Anthony Hospital Systems, a Colorado corporation, Humana of Delaware, Inc., a Delaware corporation, the Community Hospital Association, a Colorado corporation, Humana of Aurora, Inc., a Colorado corporation, Longmont United Hospital Association, a Colorado corporation, Mercy Medical Center of Durango, a Colorado corporation, Saint Francis Hospital Systems, a Colorado corporation, and St. Thomas More Hospital and Progressive Care Center, a Colorado corporation, Defendants.
• Court: U.S. District Court — District of Colorado

650 F. Supp. 231

COLORADO CHIROPRACTIC COUNCIL, a Colorado non-profit corporation, Timothy D. Conwell, D.C., Dennis P. Nikitow, D.C., George E. Springer, Jr., D.C., Dale Baird, D.C., Daniel K. Baird, D.C., Jim Bondarovich, D.C., Douglas Burke, D.C., William Burson, D.C., Bernard Busch, D.C., Jon Paul Carmichael, D.C., James Davis, D.C., William F. Duchaine, D.C., Paul Farber, D.C., Paul E. Finegan, D.C., Joseph Gallegos, D.C., Richard E. Garde, D.C., and Terry Grear, D.C., Plaintiffs, v. PORTER MEMORIAL HOSPITAL, a Colorado corporation, Saint Anthony Hospital Systems, a Colorado corporation, Humana of Delaware, Inc., a Delaware corporation, the Community Hospital Association, a Colorado corporation, Humana of Aurora, Inc., a Colorado corporation, Longmont United Hospital Association, a Colorado corporation, Mercy Medical Center of Durango, a Colorado corporation, Saint Francis Hospital Systems, a Colorado corporation, and St. Thomas More Hospital and Progressive Care Center, a Colorado corporation, Defendants.

Civ. A. No. 86 F 562.

United States District Court, D. Colorado.

July 7, 1986.

Memorandum Opinion and Order on Sanctions November 25, 1986.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Robert C. Ozer, Ozer, Spriggs & Trueax, P.C., Denver, Colo., for plaintiffs.

Wayne J. Fowler, Melvin B. Sabey, Saunders, Snyder, Ross & Dickson, P.C., Denver, Colo., for Porter Memorial Hosp. and Longmont United Hosp. Ass'n.

Donald A. Klene, Casey & Klene, P.C., Denver, Colo., for Saint Anthony Hosp. Systems.

James E. Hartley, Jack M. Englert, Jr., Holland and Hart, Denver, Colo., for Humana of Delaware, Inc. and Humana of Aurora, Inc.

G. Lane Earnest, Joy Fitzgerald, Caplan and Earnest, Boulder, Colo., for Community Hosp. Ass'n.

David P. Smith, Smith & West, Durango, Colo., for Mercy Medical Center of Durango.

Randolph M. Karsh, Colorado Springs, Colo., for Saint Francis Hosp. Systems.

Rocco F. Meconi, Hawthorne & Meconi, P.C., Canon City, Colo., for St. Thomas More Hosp. and Progressive Care Center.

MEMORANDUM OPINION AND ORDER

SHERMAN G. FINESILVER, Chief Judge.

THIS MATTER is before the Court on Motions to Dismiss filed by defendants Humana of Delaware, Inc., Humana of Aurora, Inc., St. Anthony Hospital Systems, Boulder Community Hospital Association and St. Francis Hospital Systems ("the defendants"). This case involves forty-six chiropractors and a chiropractic council alleging antitrust violations on the part of nine Colorado health care providers. This case also presents the type of baseless litigation which Rule 11 of the Federal Rules of Civil Procedure was designed to address. We have carefully considered the pleadings, briefs, and affidavits filed by the parties, as well as the applicable law. The Motions to Dismiss are GRANTED. Furthermore, we find that the filing of this action was frivolous, vexatious, and in violation of Fed.R.Civ.P. 11.

I.

Plaintiffs are doctors of chiropractic and a nonprofit corporation, Colorado Chiropractic Council, formed to promote the interests of members of the chiropractic profession. Plaintiffs allege that, for at least the past ten years, defendants, individually and in concert with one another, have obstructed plaintiffs' attempts to utilize the hospitals' resources and have denied them hospital staff privileges. Plaintiffs assert that this course of conduct violates Sections One and Two of the Sherman Antitrust Act, 15 U.S.C. § 1, 2 and Colorado Revised Statute § 6-4-101 et seq. Plaintiffs seek compensatory damages of ten million dollars, exemplary damages of ten million dollars, treble damages, a permanent injunction, attorney's fees, costs, and interest.

The defendants have moved to dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendants principally contend that the Court lacks subject matter jurisdiction and that the Complaint fails to state a claim upon which relief may be granted.

II.

As we have considered matters outside the pleadings in resolving this matter, we must treat the Motions to Dismiss as Motions for Summary Judgment. Fed.R. Civ.P. 12(b).

Summary judgment is a drastic measure which must be applied with caution. FritoLay, Inc. v. Retail Clerks' Union Local No. 7, 629 F.2d 653, 656 (10th Cir.1980). Nevertheless, it is appropriate in cases where there is no genuine dispute as to material facts and the movant is entitled to judgment as a matter of law. See LeFevre v. Space Communications Co., 771 F.2d 421 (10th Cir.1985); Charczuk v. Commissioner of Internal Revenue, 771 F.2d 471 (10th Cir.1985); Weir v. The Anaconda Co., 773 F.2d 1073 (10th Cir.1985). In this instance, initially we consider, as a matter of law, whether we have subject matter jurisdiction over this action.

III.

Article III of the Constitution confines the federal courts' subject matter jurisdiction to cases and controversies. To meet the case and controversy requirement a dispute must be ripe for adjudication and the litigant must have standing to bring the suit. The Article III component of standing requires that a plaintiff allege he has suffered actual or threatened injury at the hands of the defendant, Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979), fairly traceable to the allegedly unlawful conduct, Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59, 72, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978), and likely to be redressed by the requested relief, Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 45, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976).

While Section 4 of the Clayton Act, 15 U.S.C. § 15, authorizes a private party to seek relief under the anti-trust laws, not every private person has standing to assert such claims. The mere allegation of a violation of the anti-trust laws does not provide automatic standing to commence an action. Winckler & Smith Citrus Prods. Co. v. Sunkist Growers, Inc., 346 F.2d 1012, 1014 n. 1 (9th Cir.1965).

In a case such as this, where the plaintiffs claim that the defendants have denied them staff privileges, they must show that they have attempted to deal with the defendant hospitals. It is well settled that "unless the anti-trust claimant has actually sought to deal with someone and has been turned down, there can be no cognizable claim for refusal to deal". Windy City Circulating Co. v. Charles Levy Circulating Co., 550 F.Supp. 960, 964 (N.D.Ill.1982); Paddington Corp. v. Major Brands, Inc., 359 F.Supp. 1244, 1299 (W.D.Okla.1973); see also Wanderlingh v. May Dep't. Stores Co., Civil Action No. 84 F 980, Order at page 3 (D.Colo. Sept. 10, 1984) Available on WESTLAW, DCTU database (in absence of demand for employment there can be no anti-trust claim for refusal to deal).

Accordingly, each of the forty-six individual plaintiffs must allege that he or she made a good faith attempt to obtain staff privileges at defendant hospitals or similar access with the defendants. Further, each defendant must allege that they were denied such access. Only then will the plaintiff have sufficiently alleged an injury fairly traceable to the conduct of defendants.

The uncontradicted affidavits of the various administrators and representatives of the defendants establish that none of the plaintiffs ever applied for staff privileges through the normal procedures applicable to all staff applicants of defendant hospitals. Plaintiffs have attempted to contradict defendants' position through the affidavit of Michael W. Parrish, D.C. Plaintiffs, through the affidavit of Mr. Parrish, contend that a single letter from an attorney representing a group of chiropractors constitutes a bona fide application for hospital privileges at the named hospitals. The letter from plaintiffs' counsel, dated February 3, 1986, (1) requests a blanket grant of staff privileges to doctors of chiropractic in general; (2) discusses in detail a decision of a U.S. Court of Appeals, setting forth an analysis which we do not feel is wholly accurate;¹ (3) implies that under this Court decision, both the defendants and individual physicians associated with the defendants may be liable for treble damages if they fail to grant a request for privileges; and, (4) closes with a threat to initiate litigation if the defendants fail to respond or respond negatively within thirty days. We find the contention of plaintiffs to be without merit and completely lacking in substance as the basis for an antitrust action.

Moreover, defendants' affidavits establish that none of the plaintiffs were ever denied the right to practice at any of the hospitals.

In essence, plaintiffs have put the cart before the horse as did the plaintiff in a case before the Southern District of Mississippi. Griffing v. Lucius O. Crosby Mem. Hosp., 1984-1 Trade Cas. (CCH) ¶ 67, 854 (S.D.Miss.1984). In Griffing, there was no evidence that the plaintiff ever applied for staff privileges or had been denied the right to practice at defendant hospital. Therefore, the court found that the plaintiff had failed to show any anti-trust injury. Id. at p. 67, 565-66.

In this case, the plaintiffs have failed to establish an injury fairly traceable to the conduct of the defendants. Plaintiffs' lack of staff privileges at the defendant hospitals is as much a result of their own failure to utilize normal application procedures, as it is any conduct of the defendants.

Similarly, the Colorado Chiropractic Council, like the individual plaintiffs, has failed to allege any injury suffered from the claimed anti-trust violations. In fact, the Council could not possibly suffer any such injury, because it is a non-profit organization that has no business or property subject to possible injury by the alleged anti-trust violations. See, e.g., Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519, 541-43, 103 S.Ct. 897, 910-911, 74 L.Ed.2d 723 (1983); New Jersey Chiropractic Soc'y v. Radiological...