Martin v. Memorial Hosp. at Gulfport

• Citation: 86 F.3d 1391
• Decision Date: 10 July 1996
• Docket Number: No. 95-60186,95-60186
• Parties: , 1996-2 Trade Cases P 71,472 James P. MARTIN, Plaintiff-Appellee, Cross-Appellant, v. MEMORIAL HOSPITAL AT GULFPORT, Wray Anderson, Mitchell Salloum, Edward Reid, and Myrtis Franke, Defendants-Appellants, Cross-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1391

86 F.3d 1391

65 USLW 2045, 1996-2 Trade Cases P 71,472

James P. MARTIN, Plaintiff-Appellee, Cross-Appellant, v. MEMORIAL HOSPITAL AT GULFPORT, Wray Anderson, Mitchell Salloum, Edward Reid, and Myrtis Franke Defendants-Appellants, Cross-Appellees.

No. 95-60186.

United States Court of Appeals Fifth Circuit.

July 10, 1996.

Larry D. Moffett, C. Michael Ellingburg, Lucy Carroll Lacey, Daniel, Coker, Horton and Bell, Jackson, MS, James Anthony Keith, Simpson & Keith, Gulfport, MS, for Martin.

Neville Henry Boschert, Richard Glenn Cowart, Watkins, Ludlam & Stennis, Jackson, MS, Robert C. Galloway, Gulfport, MS, William M. Rainey, Franke, Rainey & Salloum, Gulfport, MS, for defendants-appellants-cross-appellees.

Appeals from the United States District Court for the Southern District of Mississippi.

Before POLITZ, Chief Judge, and DeMOSS and DENNIS, Circuit Judges.

DENNIS, Circuit Judge:

The principal question presented by this case is whether a hospital, owned and operated by a municipality and a state subdivision hospital district, and the hospital's board of trustees, are immune from an antitrust claim under the Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) state action doctrine.

A nephrologist brought this antitrust action against the hospital and its board seeking to enjoin the enforcement of the hospital's contract with the medical supervisor (also a nephrologist) of its End Stage Renal Disease facility (ESRD). The contract grants the medical supervisor authority to plan, organize, conduct and direct the professional ESRD services and to provide and maintain complete physician care of ESRD patients personally or through his designated representative. Subsequently the hospital adopted a resolution formally interpreting the contract to mean that only the medical supervisor or his medical practice associate working under the direction and control of the medical supervisor, for whom the supervisor accepts full responsibility, has the right to perform chronic dialysis in the ESRD. Because the plaintiff nephrologist is not associated with the medical supervisor in practice, the hospital's enforcement of the contract and its resolution prevents the nephrologist from personally performing chronic renal dialysis for his patients in the hospital's ESRD.

The district court denied the hospital and the board a summary judgment declaring them to be immune from the federal antitrust claim, and they appealed. We reverse and remand for the entry of a summary judgment dismissing the federal antitrust action. We have jurisdiction of the appeal under the collateral order doctrine because the district court's ruling conclusively determines the disputed question, resolves an important issue completely separate from the merits of the action, and is effectively unreviewable on appeal from a final judgment. The state action doctrine immunizes the enforcement of the municipal-state subdivision hospital's exclusive contract with its ESRD supervisor because suppression of competition was the foreseeable result of the state statutes which (1) authorize only a health care provider having obtained a certificate of need to establish an ESRD, and (2) empower the hospital to contract with any individual for the providing of services by or to the hospital regarding any facet of the operation of the hospital or any division or department thereof, or any related activity, and to terminate such contract when deemed in the best interests of the hospital.

1. Facts and Procedural History

The parties by itemizations and responses stipulated to the facts for purposes of the motion for summary judgment. End Stage Renal Disease (ESRD) units are kidney dialysis units in which chronic renal dialysis is performed. Mississippi law prohibits the establishment, expansion, or relocation of an ESRD unless a Certificate of Need is first obtained from the state department of health. The Memorial Hospital at Gulfport obtained certificates of need for several ESRD facilities including the one involved in this case. The hospital began the operation of its ESRD units in 1981. Subsequently, the hospital entered into an exclusive medical director contract with Dr. Douglas Lanier whereby only Dr. Lanier or his designated representative had the right to perform chronic dialysis in the hospital's ESRD units. In 1986, the hospital and Dr. Lanier recruited Dr. James Martin to come to Gulfport to practice with Dr. Lanier as his associate. Dr. Martin was granted full medical staff privileges including the authority to perform chronic dialysis in the hospital's ESRD units. In November 1988, Dr. Martin and Dr. Lanier encountered some differences and terminated their relationship. Dr. Martin began practicing separately from Dr. Lanier. Afterwards, Dr. Martin did not attempt to perform chronic dialysis at the hospital's ESRD unit until March 1989 when he sought to admit a patient for chronic dialysis. The hospital refused to allow him to perform the chronic dialysis basing its action on the exclusive contract with Dr. Lanier. Dr. Martin wrote to the hospital asserting that he had a right to treat patients in the chronic ESRD unit. On June 26, 1989, the board of trustees of the hospital reevaluated whether Dr. Lanier's contract should remain exclusive and passed a resolution that reaffirmed the exclusive medical director contract, interpreting the contract to mean that only a physician in practice with and under the supervision and control of Dr. Lanier could perform chronic dialysis in the ESRD unit. In November of 1990, Dr. Martin's medical staff privileges were renewed with the exception of his right to personally perform chronic dialysis in the ESRD units, which the hospital denied based on the exclusive contract with Dr. Martin. Dr. Martin retained the authority to admit patients to the hospital and perform acute ESRD services on them as in-patients, but he must permit the medical supervisor or his associate-designee to perform chronic ESRD services for them as out-patients. The Memorial Hospital at Gulfport is a community hospital existing under Miss.Code Ann. § 41-13-10 et seq., and is jointly owned by the City of Gulfport and the Gulfport-West Harrison County Hospital District, a subdivision of the State of Mississippi. See Enroth v. Memorial Hospital at Gulfport, 566 So.2d 202, 206 (Miss.1990).

In 1990, Dr. Martin filed suit in the district court alleging that the hospital and its board had violated federal antitrust laws, violated his constitutional due process rights, interfered with his contractual relationships with his patients, and violated the state antitrust laws. The hospital and its board moved for summary judgment on all claims. The district court granted the defendants' motions in part and denied them in part. The hospital's motion for summary judgment was granted only to the extent of dismissing plaintiff's claims for damages under the general prohibition against recovery of damages for antitrust violations from any local government. 15 USCS § 35. The hospital's motion for summary judgment was denied as to all other claims for relief by plaintiff. The motion for summary judgment by the individual hospital board members was denied insofar as the plaintiff's claims for injunctive relief, attorneys fees and court costs under the federal anti-trust laws. As to all other claims for relief asserted by the plaintiff, the motion for summary judgment dismissing these claims against the individual hospital board members was granted.

The hospital and its board appealed from the district court's denial of summary judgment that they are entitled to state action immunity from suit or liability under the federal anti-trust laws. Dr. Martin filed a motion to dismiss the appeal for lack of jurisdiction on the grounds that the district court's ruling was interlocutory and not a final judgment. The appellants contend, however, that the ruling is appealable under the collateral order doctrine. Accordingly, the principal issues for our appellate review are (1) whether the district court's ruling that rejected the defendants' claim of state action immunity is appealable under the collateral order doctrine; and, if so, (2) whether the hospital and its board members are entitled to state action immunity from the plaintiff's federal anti-trust claim.

2. Jurisdiction

The district court's refusal to grant defendants' motions for summary judgment vindicating their entitlement to state action immunity is appealable under the collateral order doctrine. The district court's ruling meets all of the requisites of an appealable collateral order, viz., that it (a) is "effectively unreviewable" on appeal after trial; (b) conclusively determines the disputed question; and (c) resolves an important issue completely separate from the merits of the action. Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978); Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949); Rauscher Pierce Refsnes, Inc. v. Birenbaum, 860 F.2d 169 (5th Cir.1988).

Title 28 U.S.C. § 1291 provides for appeal from "final decisions of the district courts." Appeal is thereby precluded "from any decision which is tentative, informal or incomplete," as well as from any "fully consummated decisions, where they are but steps towards final judgment in which they will merge." Puerto Rico Aqueduct and Sewer Authority v. Metcalf & Eddy, Inc., 506 U.S. 139, 142-143, 113 S.Ct. 684, 687, 121 L.Ed.2d 605 (1993) (quoting Cohen v. Beneficial Industrial Loan Corp., 337 U.S. at 546, 69 S.Ct. at 1225 (1949)). Nevertheless a judgment that is not the complete and final judgment in a case will be immediately appealable if it falls in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to...