Higgins v. Medical College of Hampton Roads

Decision Date28 April 1994
Docket NumberCiv. A. No. 2:93cv1037.
Citation849 F. Supp. 1113
CourtU.S. District Court — Eastern District of Virginia
PartiesElizabeth M. HIGGINS, M.D., Janice Roman, M.D., Plaintiffs, v. MEDICAL COLLEGE OF HAMPTON ROADS, Eastern Virginia Medical School, Anas M. El-Mahdi, Edward Brickell, James E. Etheridge, Defendants.

K. Reed Mayo, Hunton & Williams, Norfolk, VA, Jeffrey M. Cross, Mary C. Bonaccorsi, Ross & Hardies, Chicago, IL, for plaintiffs.

Anthony F. Troy, John K. Burke, Jr., Mays & Valentine, Richmond, VA, David K. Sutelan, John W. Brown, P.C., Chesapeake, VA, for defendants.

MEMORANDUM OPINION AND ORDER

CLARKE, District Judge.

Defendants Medical College of Hampton Roads ("Medical College"), Eastern Virginia Medical School ("EVMS"), Anas M. El-Mahdi ("El-Mahdi"), Edward Brickell ("Brickell"), and James E. Etheridge ("Etheridge") (collectively "the Defendants"), filed a Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. By Order dated December 13, 1993, the Court designated Magistrate Judge William T. Prince to conduct a hearing and to submit his Report and Recommendation for disposition of Defendants' motion pursuant to Rule 72 of the Rules of Civil Procedure and 28 U.S.C. § 636(b). The magistrate judge's Report and Recommendation was filed with this Court on February 17, 1994. The Plaintiffs and Defendants both submitted objections to the magistrate judge's Report and Recommendation and a hearing was held on April 11, 1994. For the reasons stated below, the Court (1) DENIES Defendants' motion to dismiss Counts I and II for lack of standing and GRANTS Defendants' motion to dismiss Count III for lack of standing; (2) DENIES Defendants' motion to dismiss the Medical College under Eleventh Amendment immunity; (3) DENIES Defendants' motion to dismiss Counts I and II because of Plaintiffs' unclean hands; (4) DENIES Defendants' motion to dismiss Count I for insufficient allegation of facts; (5) DENIES Defendants' motion to dismiss Count II for insufficient allegation of facts; (6) GRANTS Defendants' motion to dismiss Count III as to the Medical College and EVMS; and (7) GRANTS the Defendants' motion to dismiss EVMS from all claims.

I. BACKGROUND
A. Factual Background

Construing the allegations in the complaint in the light most favorable to the Plaintiffs who are the non-moving parties, the facts in this case are as follows. Plaintiffs Dr. Elizabeth Higgins, M.D., ("Dr. Higgins"), and Dr. Janice Roman, M.D., (Dr. Roman") (collectively "the Plaintiffs") are board certified in radiation oncology. Dr. Higgins and Dr. Roman were faculty members at EVMS and part of the Department of Radiation Oncology and Biophysics at EVMS until June, 1993. Sometime in 1983 or 1984, the Department of Radiation Oncology at EVMS and Maryview Medical Center ("Maryview") entered into an agreement under which the faculty of EVMS would provide exclusive radiation oncology services to patients at Maryview. In 1985, Dr. Higgins was assigned by the Chairman of the Department of Radiation Oncology at EVMS to provide radiation oncology services at Maryview on Mondays and Thursdays as well as assignments at other hospitals. In 1989, Dr. Roman was assigned by the Chairman of the Department of Radiation Oncology at EVMS to provide radiation oncology services at Maryview on Tuesdays, Wednesdays and Fridays as well as assignments at other hospitals.

During the period of June 1992 until November 1992, the Plaintiffs became concerned about coverage issues at Maryview and the impact of such issues on patient care at Maryview. In November 1992, Dr. Higgins met with the Maryview administration to discuss the possibility of her and Dr. Roman devoting their entire energies to Maryview and resigning from EVMS. In December 1992, the Plaintiffs met with Maryview administration to further discuss a full-time arrangement at Maryview. At this December meeting, Maryview's president, Mr. Herbek, agreed to present to Maryview Board of Directors the plan that the Plaintiffs would contract to become full-time radiation oncologists at Maryview. On January 8, 1993, the Plaintiffs again met with the administration at Maryview and they were informed that Maryview's administration and Board of Directors had approved the plan to allow the Plaintiffs to become full-time radiation oncologists at Maryview. Also at this meeting, the Plaintiffs and Maryview agreed that Maryview would notify the Medical College and EVMS of its intention not to renew its exclusive contract for radiation oncology services. The Plaintiffs would also inform the Medical College and EVMS of their decision to separate from the Medical College and EVMS effective June 30, 1993.

Upon being informed of the agreement between Dr. Higgins, Dr. Roman and Maryview, Plaintiffs allege the Defendants approached the Maryview administration and intentionally and wrongfully threatened to completely disaffiliate themselves from Maryview if Maryview proceeded to contract with the Plaintiffs for full-time radiation oncology services. On January 25 and 26, 1993, Dr. Higgins and Dr. Roman met with defendants Etheridge (the Dean of the Medical College and EVMS) and Brickell (the President of the Medical College and EVMS). At these meetings, Plaintiffs allege Etheridge and Brickell said that the Medical College and EVMS could not allow Plaintiffs to disaffiliate from the Defendants and contract to provide full-time radiation oncology services at Maryview. Plaintiffs also allege that Etheridge and Brickell further informed them that they "would do what they had to do" to make sure these things did not occur.

On March 10, 1993, the Maryview administration met with defendants Etheridge and Brickell and informed them that they did not plan to renew the exclusive contract between Maryview and the Medical College and EVMS. On the same day, the Vice-President of Operations at Maryview informed the Plaintiffs of Maryview's willingness to contract with them for full-time radiation oncology services at Maryview.

On March 30, 1993, after being informed by Maryview that there was a problem with respect to the proposed contract, the Plaintiffs met with Etheridge and Maryview's Vice-President of Operations to discuss working in an open (non-exclusive) department at Maryview. On April 23, 1993, Maryview administrators met with Etheridge, Brickell and El-Mahdi as well as Dr. Kuban of the Medical College and EVMS. At this meeting, Maryview administrators were allegedly told that Defendants would not accept an open department at Maryview.

The Board of Directors at Maryview met on April 26, 1993, and voted to renew their exclusive contract for radiation oncology services with the Medical College and EVMS. On April 27, 1993, Maryview's president informed the Plaintiffs in writing of Maryview's decision to continue its exclusive contract for radiation oncology services with the Medical College and EVMS.

B. Procedural History

On October 21, 1993, Plaintiffs filed their complaint which contains three counts. Count I alleges a conspiracy to restrain trade in violation of § 1 of the Sherman Act against EVMS and the Medical College. Count II alleges monopolization in violation of § 2 of the Sherman Act against EVMS and the Medical College. Finally, Count III, which is based on Virginia law, alleges tortious interference with prospective business relations against EVMS, the Medical College, and El-Mahdi, Brickell and Etheridge individually. As part of their prayer for relief, plaintiffs seek: (1) that the Medical College and EVMS be adjudged in violation of Sherman Act §§ 1 and 2; (2) that the Medical College and EVMS be adjudged to have tortiously interfered with the prospective business relationship between the Plaintiffs and Maryview; (3) that the Medical College and EVMS be enjoined from providing radiation oncology services to Maryview; and (4) damages from the Defendants for the tortious interference.

Defendants moved on November 15, 1993, to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. They moved to dismiss on the following grounds:

(A) Plaintiffs have failed to state a claim upon which relief can be granted because it is apparent from the allegations of the Complaint that plaintiffs have suffered no legally compensable injury traceable to the Defendants' conduct and Plaintiffs therefore lack standing;
(B) Because the Medical College is "an arm of the State" entitled to immunity under the Eleventh Amendment of the United States Constitution, the Plaintiffs cannot sue the Medical College in federal court, and this Court must, therefore, dismiss the Complaint;
(C) Plaintiffs have failed to state a claim for injunctive relief under the antitrust laws because the allegations in the Complaint clearly establish that Plaintiffs are coming to this Court with "unclean hands;"
(D) The Plaintiffs have failed to state a claim under Section 1 of the Sherman Act (Count I) because they have failed to allege sufficient facts to show that the Defendants' exclusive contract with Maryview constitutes an unreasonable restraint of trade;
(E) The Plaintiffs have failed to state a claim under Section 2 of the Sherman Act (Count II) because they have failed to allege sufficient facts to establish that the Defendants possess sufficient market share to constitute monopoly power (F) Because the Medical College is immune from tort actions as a public instrumentality of the Commonwealth of Virginia, the Plaintiffs have failed to state a claim against the Medical College in Count III for tortious interference with prospective business relations; and
(G) Because the Medical College lacks capacity to be sued under Virginia law, this Court should dismiss all of Plaintiffs claims against it.

Plaintiffs filed their memorandum in opposition to the Defendants' motion to dismiss on November 29, 1993. Defendants then filed their rebuttal brief on December 3, 1993. Finally, Plai...

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