Cooper v. Forsyth County Hosp. Authority, Inc.
| Decision Date | 14 March 1985 |
| Docket Number | No. C-83-75-WS.,C-83-75-WS. |
| Citation | 604 F. Supp. 685 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | Carlos T. COOPER, Jr., D.P.M., and E. Joseph Daniels, D.P.M., Plaintiffs, v. FORSYTH COUNTY HOSPITAL AUTHORITY, INC., Jack P. Barrier, Marian F. Brower, Harley P. Graves, J. Clifton Harper, Kap H. Halverson, Kenneth A. Johnson, Eugene Rossitch, G. Dee Smith, Ann Spencer, Raymond D. Thomas, Martha J. Young, Individually and as Trustees of Forsyth County Hospital Authority, Inc., and William F. Folds, M.D., David Nelson, M.D., William F. Sayers, M.D., Louis Shaffner, M.D., Individually and as Trustees of Forsyth County Hospital Authority, Inc., and George Podgorny, M.D., Robert Means, M.D., Jeff B. Helms, M.D., and Frank E. Pollock, M.D., Kenneth G. Tomberlin, M.D., John T. Hayes, M.D., Richard P. Rose, M.D., Robert G. Underdal, M.D., Isabel Bittinger, M.D., and Jerome E. Jennings, M.D., Defendants, and The Medical Society of the State of North Carolina and the North Carolina Orthopedic Association, Additional Defendants. |
T. Paul Hendrick and Hamilton C. Horton, Jr., Winston-Salem, N.C., for plaintiffs.
Thomas E. Harris, New Bern, N.C., Roddey M. Ligon, Jr., Winston-Salem, N.C., Samuel G. Thompson and John H. Anderson, Raleigh, N.C., J. Robert Elster, George L. Little, Jr., and F. Joseph Treacy, Jr., Winston-Salem, N.C., for defendants.
This cause came on for hearing on December 21, 1984 at the United States Court-house in Greensboro upon motions filed by all parties in the case. Plaintiffs are licensed podiatrists who are doing business in Forsyth County. In their amended complaint, plaintiffs allege that the defendants combined and conspired to restrain trade and commerce in violation of Sections 1 and 2 of the Sherman Act in that plaintiffs were denied hospital privileges. 15 U.S.C. §§ 1 and 2. Plaintiffs contend that defendants' actions constitute a group boycott and an illegal tying arrangement. Plaintiffs further allege that defendants have violated N.C.Gen.Stat. §§ 75-1 and 75-2, and N.C.Gen.Stat. § 131-126.11A. All parties have filed cross-motions for summary judgment with supporting briefs, affidavits, and exhibits.
The court finds that there is no genuine dispute as to any material facts and that this action may be disposed of by summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. After careful review of the extensive record compiled in this case and for the reasons stated herein, the court denies plaintiffs' partial motion for summary judgment and grants the summary judgment motions of defendants Forsyth County Hospital Authority, Inc. (Forsyth Memorial Hospital), its Trustees and Bylaws Committee, the individual defendants Pollock, Tomberlin, Hayes, Rose, Underdal, Bittinger, and Jennings, and defendant North Carolina Orthopedic Association, Inc.
Forsyth Memorial Hospital, a public general hospital with approximately 724 beds, is accredited by the Joint Commission on the Accreditation of Hospitals. The bylaws of the Medical-Dental Staff of Forsyth Memorial Hospital (Forsyth Memorial) provides: "Membership on the Medical-Dental Staff of Forsyth Memorial Hospital is a privilege which shall be extended only to professionally competent physicians and dentists who continuously meet the qualifications, standards, and requirements set forth in these Bylaws." (Article III, Section 1.) On April 21, 1980, plaintiffs applied for staff privileges at Forsyth Memorial.
After conducting hearings with respect to the question of whether or not the bylaws should be amended to allow plaintiffs to have surgical privileges, the Bylaws Committee made a report dated August 5, 1980 in which it recommended against a change in the bylaws. Thereafter, the Executive Committee of the Medical-Dental Staff voted unanimously to adopt the Bylaws Committee's recommendation. On October 14, 1980, the Board of Trustees also voted unanimously to adopt the Bylaws Committee recommendation. Additionally, the Board of Trustees referred the matter to the Joint Conference Committee which also recommended unanimously that the bylaws not be amended. The matter was returned to the Board of Trustees which renewed its recommendation.
Plaintiffs again applied for staff privileges in September 1981. On January 5, 1982, the Executive Committee and the Credentials Committee of the Medical-Dental Staff recommended the denial of plaintiffs application for clinical privileges. Hearings were held by an Ad Hoc Hearing Committee concerning plaintiffs' applications, and the Board of Trustees approved the recommendation of the Executive and Credentials Committee on February 9, 1982.
Plaintiffs contend that defendants' illegal concerted actions resulting in a group boycott were the refusal to amend the bylaws to allow podiatrists to have staff privileges at Forsyth Memorial and the denial of the plaintiffs' individual applications for staff privileges at Forsyth Memorial. Defendants, on the other hand, contend that their actions were based on the good faith judgment that high quality care requires that surgery performed at Forsyth Memorial only be performed by physicians educated and trained to treat the whole person.
The standard of review for a determination of alleged antitrust violations arising out of a denial of hospital staff privileges is the "rule of reason." See Hospital Building Company v. Trustees of Rex Hospital, 691 F.2d 678 (4th Cir. 1983), cert. denied, ___ U.S. ___, 104 S.Ct. 231, 78 L.Ed.2d 224 (1983) (No. 82-1762). Thus, plaintiffs must prove that defendants' actions violated Section 1 of the Sherman Act; such violation will not be presumed. The court has carefully reviewed the transcript of the meeting of the Board of Trustees on February 9, 1982, the transcript of the meeting of the Bylaws Committee on July 9, 1980, and the transcript of the Bylaws Committee meeting on June 3, 1980, and concludes that defendants' actions were taken in good faith and were not an unreasonable restraint on trade under the circumstances.
North Carolina General Statute § 90-202.2 defines podiatry as follows: "The surgical or medical or mechanical treatment of all ailments of the human foot, except the amputation of the foot or toes or the administration of an anesthetic other than local and except the correction of club-foot deformity and triple arthrodesis." The bylaws of Forsyth Memorial permit only allopathic physicians and dentist to become members of the Medical-Dental Staff, and only members of the Medical-Dental Staff have clinical privileges at Forsyth Memorial. After plaintiff's first application for staff privileges at Forsyth Memorial in 1980, the president of the Medical-Dental Staff appointed a Bylaws Committee. The Bylaws Committee conducted three public hearings before issuing a report recommending against a change in the bylaws.
After plaintiffs' second application for staff privileges at Forsyth Memorial in late 1981, the Credentials Committee of the Medical-Dental Staff reviewed the plaintiffs' applications individually and with particular emphasis on their education and training. The Credentials Committee recommended to the Executive Committee that plaintiffs' application for surgical and admitting privileges at Forsyth Memorial be denied. The committee advised plaintiffs, however, that the Credentials Committee would consider plaintiffs' application for non-surgical allied health privileges if plaintiffs desired to apply for such privileges. (Plaintiffs' Exhibit 15, Deposition of William F. Folds, Chairman of the Credentials Committee.) The court finds that, as the governing body of Forsyth Memorial, the Board of Trustees and its delegated committees had a duty to insure that the hospital provide quality patient care and that the actions by the Board and the Bylaws Committee were in response to this duty.
Plaintiffs contend that defendants have engaged in an illegal typing arrangement which is a per se violation of Section 1 of the Sherman Act. Like the group boycott claim, plaintiffs fail to provide a factual basis for such a finding. Plaintiffs contend that the tying product is foot care at Forsyth Memorial and that the tied product is medical care rendered by orthopedists at the hospital. The United States Supreme Court in Jefferson Parish Hospital v. Hyde, ___ U.S. ___, 104 S.Ct. 1551, 1558, 80 L.Ed.2d 2 (1984), states that "the essential characteristic of an invalid tying arrangement lies in the seller's...
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