Falcone v. Middlesex County Medical Soc.

• Decision Date: 08 May 1961
• Docket Number: No. A--87,A--87
• Citation: 34 N.J. 582,89 A.L.R.2d 952,170 A.2d 791
• Parties: , 89 A.L.R.2d 952 Italo J. FALCONE, Plaintiff-Respondent, v. MIDDLESEX COUNTY MEDICAL SOCIETY, an unincorporated association, and Middlesex County Medical Society, a corporation, Defendants-Appellants.
• Court: New Jersey Supreme Court

Page 582

34 N.J. 582

170 A.2d 791, 89 A.L.R.2d 952

Italo J. FALCONE, Plaintiff-Respondent, v. MIDDLESEX COUNTY MEDICAL SOCIETY, an unincorporated association, and Middlesex County Medical Society a corporation, Defendants-Appellants.

No. A--87.

Supreme Court of New Jersey.

Argued Feb. 20, 1961.

Decided May 8, 1961.

Harry Heher, Trenton, for appellants (Backes & Backes, Trenton, attorneys, Robert M. Backes, Trenton, of counsel).

Robert N. Wilentz, Perth Amboy, for respondent (Wilentz, Goldman, Spitzer & Sills, Perth Amboy, attorneys; Frederick K. Becker, Perth Amboy, of counsel).

The opinion of the court was delivered by

JACOBS, J.

The Law Division directed that the plaintiff Dr. Falcone be admitted to full membership in the Middlesex County Medical Society; its reasons and supporting authorities are set forth in a comprehensive opinion which is reported in Falcone v. Middlesex County Medical Soc., 62 N.J.Super. 184, 162 A.2d 324 (Law Div.1960) and is discussed in Note, 'Explusion and Exclusion from Hospital Practice and Organized Medical Societies,' 15 Rutgers L.Rev. 327 (1961). The County Medical Society appealed from the Law Division's judgment to the Appellate Division and, while the appeal was pending there, we certified it on our own motion.

The Law Division's factual findings are amply supported by the record and need only be dealt with here briefly. After pre-medical study, Dr. Falcone enrolled in the Philadelphia College of Osteopathy. While there he received a full medical course and in 1946 was awarded the degree of Doctor of Osteopathy (D.O.). Thereafter he served a one-year internship and a three-year residency at the Detroit Osteopathic Hospital. He presented his credentials to the New Jersey State Board of Medical Examiners, passed the prescribed medical examination (see N.J.S.A. 45:9--15), and in 1950 received a certificate from the State Board which set forth that Italo John Falcone, D.O. had passed examination and 'is hereby licensed to practice Medicine and Surgery in the State of New Jersey.' See N.J.S.A. 45:9--5.1. The Philadelphia School is an accredited school of osteopathy and, after a personal inspection, was approved as in good standing by the New Jersey State Board of Medical Examiners; although the Philadelphia School affords a full traditional medical course as well as osteopathic teaching, it has not been recognized as an approved medical college by the American Medical Association (A.M.A.). ¹ In November 1951, after seven months' attendance, plus credit for his work at the Philadelphia School, Dr. Falcone graduated from the College of Medicine of the University of Milan with the degree of Doctor of Medicine and Surgery (M.D.). The College of Medicine of the University of Milan was then and still is recognized as an approved medical college by the American Medical Association. Following his graduation from Milan, Dr. Falcone completed a sixteen months' internship at St. Peter's General Hospital in New Brunswick and thereafter he had a short residency in surgery at the Jersey City Medical Center. The St. Peter's internship had the approval of the American Medical Association; the residency at the Jersey City Medical Center had no such approval and was terminated by Dr. Falcone when he became aware of that fact.

In 1953 Dr. Falcone was admitted as an associate member of the Middlesex County Medical Society. The by-laws of the Society provide that a physician may not be an associate member for more than two years. In 1956 the Society declined to admit Dr. Falcone as an active member, assigning as its reason that he had been 'licensed to practice as a Doctor of Osteopathy and, not as a Doctor of Medicine.' This reason was unsound since Dr. Falcone's license unrestrictedly authorized him to practice medicine and surgery although it did refer to him as the holder of the degree of D.O. Nothing in the Society's written by-laws purports to preclude membership by a licensed physician who holds an M.D. from an A.M.A. approved medical school (as does Dr. Falcone) but the record does indicate that the Society's committee on medical ethics applies an unwritten membership requirement of four years of study at a medical college approved by the A.M.A. This requirement, if effective, would preclude membership by Dr. Falcone since the A.M.A. has not approved the Philadelphia School and Dr. Falcone's actual attendance at the A.M.A. approved school at Milan was not of the prescribed duration; and it would preclude his membership despite the uncontroverted evidence that he is a duly licensed (N.J.S.A. 45:9--1 et seq.) and duly registered (R.S. 26:11--60, N.J.S.A.) New Jersey physician who meets all of the qualifications prescribed in the written by-laws; that he has consistently practiced surgery and obstetrics and has never practiced osteopathy; ² that he is regarded by medical colleagues who are members of the Society, as a qualified physician and surgeon; and that he has not engaged in any conduct which would raise any question as to his professional ethics and competency.

The Society's declaration of his ineligibility and its refusal to admit him to membership have had seriously adverse economic and professional effects on Dr. Falcone. He was a member of the medical staffs of the Middlesex General Hospital and St. Peter's General Hospital in New Brunswick but was dropped because they, like other hospitals in the area, require that their staff physicians be members of the County Medical Society. It seems entirely evident that Dr. Falcone cannot successfully continue his practice of surgery and obstetrics or properly serve his surgical and obstetric patients without the use of local hospital facilities; he testified that in order to earn a livelihood it is necessary 'to belong to the local society' for 'otherwise, you cannot use the hospitals.' The virtual monopoly which the Society possesses in fact over the use of local hospital facilities results from the well known interrelationship between the County Society, the State Medical Society, the American Medical Association and the Joint Commission on Accreditation of Hospitals. See Falcone v. Middlesex County Medical Soc., supra, 62 N.J.Super., at p. 197, 162 A.2d, at p. 331; Note, supra, 15 Rutgers L.rev., at p. 327, n. 2; Comment, 'The American Medical Association: Power, Purpose, and Politics in Organized Medicine,' 63 Yale L.J. 938, 949 (1954); cf. Chafee, 'The Internal Affairs of Associations Not for Profit,' 43 Harv.L.Rev. 993, 1021 (1930); Note, 41 Minn.L.Rev. 212 (1957); Note, 5 Utah L.Rev. 270 (1956); Note, 22 U.Chi.L.Rev. 694 (1955). See also American Medical Ass'n v. United States, 76 U.S.App.D.C. 70, 130 F.2d 233, 250, note 87 (D.C.Cir. 1942); Group Health Cooperative of Puget Sound v. King County Medical Soc., 39 Wash.2d 586, 237 P.2d 737, 754 (Sup.Ct.1951). Over thirty years ago Professor Chafee, in his discussion of nonprofit associations, pointed to the distinction between the customary social and fraternal organizations on the one hand and trade unions and professional societies on the other hand; he noted that whereas exclusion or expulsion from a social or fraternal organization may result in little more than hurt feelings, exclusion or expulsion from a trade union or a professional society may result, as here, in deprivation of the invaluable opportunity 'to earn a livelihood.' 43 Harv.L.Rev., at p. 1022. In a more recent discussion addressed specially to medical societies, the editors of the Yale Law Journal, after pointing out that exclusion or expulsion from a local medical society results, as a practical matter, in the deprivation of hospital facilities, descriptively noted that 'non-membership amounts to a partial revocation of licensure to practice medicine.' 63 Yale L.J. at p. 953.

After the County Society refused to admit him to full membership, Dr. Falcone appealed to the State Medical Society which gave him a hearing but refused to permit representation by legal counsel. The State Society declined to interfere with the County Society's action and on further appeal the American Medical Association took the position that it lacked jurisdiction. Dr. Falcone then instituted his proceeding in the Law Division seeking an order directing the County Society to admit him to membership. The only party named as a defendant was the County Society but no other parties were indispensable and we need not now consider whether others would have been proper parties since the issue was not raised in the Law Division and no move was made there towards joinder of the State Society, the hospitals, or others as parties. See Reid v. Medical Society, 156 N.Y.S. 780, 791 (Sup.Ct.1915), affirmed 177 App.Div. 939, 163 N.Y.S. 1129 (App.Div.1917); cf. Note, supra, 15 Rutgers L.Rev. 327. The County Society's position in the Law Division, repeated in this court, is that it is a voluntary organization which is at liberty to prescribe its own rules and that Dr. Falcone has 'no judicially enforceable right of admission to membership.' In the Law Division, Judge Vogel determined that, in the light of its virtual monopolistic control of the practice of medicine in the area, the County Society must be dealt with as involuntary in nature and subject to judicial scrutiny; he expressly found that the County Society's requirement of four years' study in a medical college approved by the A.M.A., as applied to Dr. Falcone, 'contravenes the public policy of the State' and entered judgment directing that it admit him to full membership. See Falcone v. Middlesex County Medical Soc., supra, 62 N.J.Super. at pp. 201--202, 162 A.2d at pp. 333--334.

Throughout his formative writings, Holmes repeatedly stressed the vital part played by public policy considerations in the never ending growth and development of the common law. Over eighty years have passed since he expressed his now well known thought that 'every important principle which is...