Davies v. Genesis Medical Center
| Decision Date | 12 February 1998 |
| Docket Number | No. 3-97-CV-20068.,3-97-CV-20068. |
| Citation | 994 F.Supp. 1078 |
| Parties | Gerald DAVIES, M.D., and Anesthesia & Pain Consultants P.C., Plaintiffs, v. GENESIS MEDICAL CENTER; Anesthesia & Analgesia, P.C.; Richard J. Leth, M.D.; Timothy J. Miller, M.D.; Janice K. Barker, M.D.; and Michael A. Swanson, M.D., Defendants. |
| Court | U.S. District Court — Southern District of Iowa |
This matter is before the Court on Defendants' resisted Motions to Dismiss (Clerk's Nos. 9, 11, 30, and 31). The Court heard argument on the Motions on November 17, 1997. Appearing were Brett Nelson, Michael Byrne and William Bush. This matter is fully submitted.
Plaintiffs' Complaint, filed April 18, 1997, and First Amended Complaint, filed April 24, 1997, contained the following counts: Count I, claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.A. § 1964(c) (West 1984 & Supp.1996); Count II, claims arising under the Sherman Act, 15 U.S.C. §§ 1 and 2 (1994); Count III, tortious interference with a valid economic expectancy; Count IV, claims under the Health Care and Quality Improvement Act (HCQIA), 42 U.S.C.A. § 11112 (West 1991 & Supp.1996); Count V, breach of contract; Count VI, conspiracy under Iowa law; Count VII, defamation; Count VIII, intentional infliction of emotional distress; Count IX, negligent supervision; and Count X, breach of the duty of good faith and fair dealing.
On May 30, 1997, Defendant Genesis Medical Center (Genesis) filed a Motion to Dismiss (Clerk's No. 9), seeking dismissal of Counts I, II, IV, VII, and IX. Defendant Anesthesia & Analgesia (A & A) filed a Motion to Dismiss (Clerk's No. 11) on June 2, 1997, seeking dismissal of Counts I, II, and VII.
Plaintiffs filed a Second Amended Complaint on August 18, 1997, and a Corrected Second Amended Complaint on August 19, 1997. Both listed the following counts: Count I, RICO; Count II, Sherman Act, § 1; Count III, Sherman Act, § 2; Count IV, Title VII, 42 U.S.C.A. § 2000e to 2000e-17 (West 1991 & Supp.1996), ethnicity discrimination; Count V, Iowa antitrust laws, Iowa Code § 553.5 (1996); Count VI, intentional interference with contractual, prospective contractual, and business relations; Count VII, defamation; Count VIII, intentional infliction of emotional distress; and Count IX, breach of contract.
On September 8 and 9, 1997, Genesis filed a Motion to Dismiss the Corrected Second Amended Complaint and a Brief (Clerk's Nos. 29 & 30), which challenged Counts I through IV, and Count VII. On September 15, 1997, A & A filed a Motion to Dismiss the Corrected Second Amended Complaint and a Brief (Clerk's Nos. 31 & 35), joining in Genesis' Motion to Dismiss, and further alleging that Plaintiffs failed to state a claim under Count V.
In summary, the Court notes that all Defendants' motions to dismiss challenged the following counts: Count I, RICO; Count II, Sherman Act, § 1; and Count III, Sherman Act, § 2. Additionally, in response to claims either added or amended in the Corrected Second Amended Complaint, Defendants challenged the following claims in the second round of motions to dismiss: Count IV, Title VII; Count V, Iowa antitrust laws; and Count VII, Defamation. Defendants did not challenge the following claims: Count VI, intentional interference with contractual relations; Count VIII, intentional infliction of emotional distress; and Count IX, breach of contract. Some issues were raised and resolved through the pleadings process, and thus do not need further order from the Court. By the Corrected Second Amended Complaint, Plaintiffs dismissed their HCQIA and negligent supervision claims (Counts IV and IX, respectfully, in the First Amended Complaint), which had been challenged in the first Motions to Dismiss (Clerk's Nos. 9 & 11).
When considering a motion to dismiss under Federal Rules of Civil Procedure 12(b)(6), a court accepts all factual allegations in the complaint as true and construes them in the light most favorable to the plaintiff. Leatherman v. Tarrant Co. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 163-65, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993); Springdale Educ. Assoc. v. Springdale Sch. Dist., 133 F.3d 649 (8th Cir.1998); McSherry v. Trans World Airlines, Inc., 81 F.3d 739, 740 (8th Cir.1996). A court may dismiss a complaint only if it is clear no relief could be granted under any set of facts that petitioner could prove consistent with the allegations. H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 249-250, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989); accord, Double D Spotting Service, Inc. v. Supervalu, Inc., 136 F.3d 554 (8th Cir.1998). "At a minimum, however, a complaint must contain facts sufficient to state a claim as a matter of law and must not be merely conclusory in its allegations." Springdale Educ. Assoc., 133 F.3d at 651 ().
In an antitrust case, the complaint's description of the defendant's acts must, however, be consistent with the alleged restraint of trade. Hammes v. AAMCO Transmissions, Inc., 33 F.3d 774, 782 (7th Cir.1994).
As set forth in the Corrected Second Amended Complaint, the relevant facts are as follows.
Plaintiff Gerald G. Davies, M.D. (Davies), is a licensed medical doctor and a board certified anesthesiologist. He is a shareholder in the other Plaintiff, Anesthesia and Pain Consultants, P.C. (APC), which is an Iowa professional corporation of licensed medical doctors formed in 1991 by Davies and Dr. John Dooley, not a party in this case. Davies and APC provide medical services, including anesthesiology services, to patients in the area known collectively as the Quad Cities, comprising Davenport and Bettendorf, Iowa, and Rock Island and Moline, Illinois. Before 1995, APC provided most of the cardiovascular and thoracic anesthesiology services at St. Luke's Hospital and its successor, Defendant Genesis Medical Center (Genesis).
Genesis is an Iowa non-profit corporation serving the Quad Cities area. Genesis was formed in June 1994, when St. Luke's Hospital and Mercy Hospital merged. Both hospitals are located in Davenport.
Defendant A & A is an Iowa professional corporation of licensed medical doctors.1 Defendant Richard J. Leth, M.D., an anesthesiologist with medical staff privileges at Genesis, was president of the Anesthesia Department and chairman of the Anesthesia Service Committee (ASC) at Genesis, and he was a shareholder and president of A & A. Defendants Timothy J. Miller, M.D., Janice K. Baker, M.D., and Michael A. Swanson, M.D., are anesthesiologists with medical staff privileges at Genesis, shareholders of A & A, and members of the ASC. All Defendants provide medical services, including anesthesiology services, in the Quad Cities area.
In May 1993, Davies and Dooley announced plans to open an outpatient surgery center. In the same month, St. Luke's and Mercy Hospitals announced their intention of merging. Shortly after the announcement, St. Luke's began reorganizing its anesthesiology department from an open-staff to a closed-staff model. St. Luke's conducted a bidding process to select a single anesthesiology supplier.
Plaintiffs claim that in 1993 Defendants' began a campaign of character assassination under the guise of peer review. Plaintiffs allege that certain Defendants placed unfavorable reports in Davies' peer review file, and that Defendants were attacking Davies' reputation in order to prevent the opening of his outpatient surgery center and eliminate competition in the market for cardiovascular anesthesiology in the Quad Cities and surrounding area.
St. Luke's Hospital opposed Plaintiffs' outpatient surgery center's application for a Certificate of Need in 1993.
In April 1994, A & A was formed.
On May 12, 1994, the Iowa Health Facilities Council granted a Certificate of Need to the outpatient surgery center. St. Luke's and Mercy Hospitals allegedly discouraged an owner from selling his real estate to Davies...
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