Miller v. Indiana Hosp.

Decision Date22 April 1988
Docket NumberNo. 87-3403,87-3403
Citation843 F.2d 139
Parties, 1988-1 Trade Cases 67,945 Ralph J. MILLER, M.D., Appellant, v. INDIANA HOSPITAL, a corporation; Henry F. Hild; Donald F. Smith; William R. McMillen; John S. Simpson; Thomas S. Barbor; Samuel W. Jack, Jr.; Mrs. C. Fred Hildebrand; Mrs. Wanda M. Weyandt; Harry C. McCreary; C. Wilmer Johnston; George M. Evans; Donald S. Brody; Roger J. Reschini; Joseph Kovalchick; William G. Evans, M.D.; Melvin C. Williams, M.D.; Robert G. Goldstrohm, M.D.; David C. Hughes, M.D.; Ralph F. Waldo, M.D.; Herbert L. Hanna, M.D.; Richard N. Freda, M.D.; Frank Weiner, M.D.; Henry Mitchell, M.D.; Ralph R. Brown, M.D.
CourtU.S. Court of Appeals — Third Circuit

Judd F. Crosby (argued), Evans, Ivory, Moses, Hollander & MacVay, P.C., Pittsburgh, Pa., for appellant.

Larry A. Silverman (argued), Dickie, McCamey & Chilcote, P.C., Pittsburgh, Pa., for appellees.

Before SLOVITER and BECKER, Circuit Judges, and COWEN, District Judge *.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

In this antitrust case filed by a physician against a hospital and members of its administrative and medical staff the district court entered summary judgment for the defendants based on its conclusion that the hospital's decision to terminate the physician's staff privileges was supported by "substantial evidence" of the physician's unprofessional conduct. 660 F.Supp. 250. On appeal, we must decide whether the court erred as a matter of law in using a "substantial evidence" standard for entry of summary judgment.

I.

Plaintiff Ralph J. Miller is a licensed physician and surgeon specializing in urology. He was a teaching fellow at the University of Pittsburgh for several years and has published numerous articles in the area of his medical specialty. He established a practice in Indiana, Pennsylvania in 1959 after obtaining staff privileges in the Department of Surgery at Indiana Hospital. 1 Indiana Hospital is the only general hospital in the County of Indiana, a county with a population of approximately 93,000 persons and an area of 825 square miles.

Several years after moving to Indiana, Miller purchased land and built a five-office medical building two miles from the hospital. In 1975 Miller erected another building on the land, in which he envisioned housing a comprehensive family-oriented medical center, which was to include a group practice, with pediatricians, family practitioners, and medical and surgical specialists. The center also included on-site laboratory and radiology services which, Miller has averred, it could and did provide "at lower cost than the same services at the hospital." App. at 151.

According to the affidavits of Miller and others, the administrators of Indiana Hospital perceived Miller and his expansion plans as a threat to the hospital. For example, William Peters, Administrator of the hospital in the 1960's, averred that in the mid-1960's Henry Hild, Chairman of the Board of the hospital, told Peters that he disliked Miller and was concerned about Miller's plans to expand his health care holdings. Robert Knight, Comptroller of the hospital in the early 1970's, averred that people within the hospital administration were fearful that Miller and his expansion plans posed a threat to the hospital and that they wanted to "gather sufficient medical staff support to keep Dr. Miller from hiring good doctors to staff his medical center." App. at 140-41. Don Gaydos, Director of Fiscal Services at the hospital in the early to mid 1970's, averred that Donald Smith, President of the hospital, told Gaydos "to befriend Dr. Miller so that I [Gaydos] could gather information on what and how Dr. Miller was planning as to expansion of his medical office building and his health care center so that I could report these things back to Mr. Smith." App. at 138.

In 1977, a patient under Miller's care at the hospital died. After a member of the medical staff's executive committee wrote several letters to the staff's president regarding the allegedly inadequate care Miller had provided to the deceased patient and others, the hospital's executive committee held an informal meeting, which Miller attended. The executive committee thereafter sent Miller written notice of its decision to recommend to the hospital's board of directors that Miller's staff privileges be revoked.

Following Miller's demand for a hearing, the executive committee notified Miller in writing of the hearing date, the charges against him, and the names of the witnesses who were to appear. The hearing committee was comprised of three members of the hospital's medical staff and one member of the dental staff; the hospital's legal counsel presided. Miller was represented by counsel, and was able to present and cross-examine witnesses. The hearing lasted for three days, produced over twenty-two hundred pages of transcript testimony and exhibits, and resulted in a recommendation that Miller's staff privileges be revoked.

Specifically, the hearing committee found that Miller had exhibited "disruptive, insulting, intimidating, disrespectful, disparaging, abusive and other improper behavior" toward various members of the staff, App. at 287-90; that he had acted improperly in the case of the deceased patient by failing to request a medical consultation, by failing to order certain tests, and by making improper entries in the patient's record; that he had failed to comply with an order of the Bureau of Medical Assistance barring him from writing Medical Assistance prescriptions; that he had acted unprofessionally by discussing confidential medical information with a layperson; and that he had failed to carry out certain administrative duties.

The executive committee of the medical staff adopted the hearing committee's recommendation, as did the hospital's Board of Directors. In accordance with the hospital's bylaws, Miller's staff privileges were then revoked. 2

Miller filed an action against the hospital in the Court of Common Pleas of Indiana County, alleging, inter alia, breach of contract, defects in the hearing proceedings, and Fourteenth Amendment due process violations. The court granted his ex parte motion for a preliminary injunction, but subsequently dissolved the injunction and denied his request for a permanent injunction. The Superior Court of Pennsylvania affirmed the trial court's denial of injunctive relief, finding that "the charges against [Miller] were supported by sufficient evidence" and that Miller "was dismissed in a fair and impartial manner in accordance with the hospital bylaws." Miller v. Indiana Hospital, 277 Pa.Super. 370, 380, 419 A.2d 1191, 1196 (1980). The Supreme Court of Pennsylvania denied Miller's petition for allowance of appeal. See App. at 24.

In 1977 and 1978, Miller applied for and was denied staff privileges. In 1979 the hospital refused even to consider his application for staff privileges for 1980, and for the next three years it refused even to furnish him with an application.

In 1981 Miller filed the present action in federal district court in which he named as defendants the hospital and approximately twenty-five individual hospital administrators and medical staff members (collectively referred to as "the hospital"). The complaint alleged a conspiracy to deprive Miller of his civil rights and violations of both federal and state antitrust laws and various other state law claims. Miller sought an injunction requiring the hospital to accept and process his application for staff privileges, as well as compensatory and punitive damages. 3

The district court dismissed all of Miller's claims except for the antitrust claims, Miller v. Indiana Hospital, 562 F.Supp. 1259 (W.D.Pa.1983), and Miller does not appeal from that ruling. After further discovery, the respective parties moved for summary judgment on the remaining antitrust claims.

The district court, relying on another decision from the same district, ruled that in order for a plaintiff physician to withstand summary judgment in an antitrust action arising out of a hospital's decision to terminate the physician's staff privileges, "the plaintiff must demonstrate on the basis of the record before the hospital at the time of its decision, that the hospital lacked substantial evidence in support of its ultimate decision." Miller v. Indiana Hospital, No. 81-1091, slip op. at 11-12 (W.D.Pa. February 10, 1986) (quoting Pontius v. Children's Hospital, 552 F.Supp. 1352, 1372 (W.D.Pa.1982)). The court further stated that "whether there is substantial evidence to support the decision of the hospital committee to discharge a physician or to deny staff privileges to that physician is a question of law for a reviewing court and the resolution of that question need not await trial." Miller v. Indiana Hospital, No. 81-1091, slip op. at 11.

After reviewing the transcript of the proceedings before the hospital's hearing committee, the court found the requisite "substantial evidence." It therefore granted the hospital's motion for summary judgment, denied Miller's motion for summary judgment, and dismissed the pendent state law claims. Miller v. Indiana Hospital, 660 F.Supp. 250 (W.D.Pa.1987). Miller appeals.

II.

We have plenary review of the district court's application of legal precepts, in this case its use of a substantial evidence test to grant summary judgment. Universal Minerals, Inc. v. C.A. Hughes & Company, 669 F.2d 98, 101-02 (3d Cir.1981). The hospital argues that because this court stated in Weiss v. York Hospital, 745 F.2d 786, 820 (3d Cir.1984), cert. denied, 470 U.S. 1060, 105 S.Ct. 1777, 84 L.Ed.2d 836 (1985), that a medical staff "is ... entitled to exclude individual doctors ... on the basis of their lack of professional competence or unprofessional conduct," the threshold inquiry in an antitrust staff privilege case is the...

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