Mir v. Little Co. of Mary Hosp.

• Decision Date: 13 April 1988
• Docket Number: No. 87-6269,87-6269
• Citation: 844 F.2d 646
• Parties: 1988-1 Trade Cases 67,960, 10 Fed.R.Serv.3d 1114 Jehan Zeb MIR, M.D., Plaintiff-Appellant, v. LITTLE COMPANY OF MARY HOSPITAL, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 646

844 F.2d 646

1988-1 Trade Cases 67,960, 10 Fed.R.Serv.3d 1114

Jehan Zeb MIR, M.D., Plaintiff-Appellant, v. LITTLE COMPANY OF MARY HOSPITAL, Defendant-Appellee.

No. 87-6269.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 11, 1988.

Decided April 13, 1988.

John J. Schimmenti, El Segundo, Cal., for plaintiff-appellant.

Jay D. Christensen, Ellingsen, Christensen & West, Los Angeles, Cal., Laurence D. Getzoff, San Francisco, Cal., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before SNEED, HUG and ALARCON, Circuit Judges.

ALARCON, Circuit Judge:

Plaintiff-Appellant, Jehan Zeb Mir, M.D., (Mir) appeals from the district court's order dismissing this action after dismissal of his complaint without leave to amend, for failure to state a claim for which relief could be granted. Mir also appeals from the district court's decision to grant $15,960.00 in attorneys' fees and costs to defendant- We must answer the following questions:

appellee Little Company of Mary Hospital (Hospital).

(1) Whether the statute of limitations bars Mir's federal antitrust claim.

(2) Whether Mir's failure to obtain a writ of mandate from the California state court bars his state antitrust and common law claims.

(3) Whether the previous state court action precludes Mir's civil rights claims.

(4) Whether the district court erred in imposing sanctions against Mir pursuant to Fed.R.Civ.P. 11.

I. PROCEDURAL POSTURE

On May 17, 1976, Mir applied for staff privileges at the Hospital. He sought to practice cardiac, thoracic, vascular, and general surgery. Mir was denied all privileges. After exhausting the Hospital's procedures for appeals, Mir filed a lawsuit in California Superior Court on May 5, 1978 seeking damages and an injunction directing the Hospital to grant his application for surgery privileges.

In 1979, while his state court action was still pending, Mir filed a second application for surgery privileges at the Hospital. On July 3, 1979, the Hospital granted Mir's request for general, vascular, and thoracic surgery privileges but denied his request to perform cardiac surgery because he had failed to complete fifty open heart surgeries in the preceding year.

In January 1982, Mir moved to amend his state court action for damages to include a petition for a writ of mandate. The Hospital opposed the motion, contending that Mir could not proceed with a damage action until a writ of mandate, reversing the Hospital's decision to deny him privileges, had been granted by the state court. The state court denied the request to amend.

On March 1, 1983, Mir again filed an amended pleading in state court in which he petitioned for a writ of mandate to overturn the Hospital's decision denying him cardiac surgery privileges. Mir claimed that the Hospital violated his due process rights when it denied him all surgery privileges in 1978 and when it denied him cardiac surgery privileges in 1979.

On August 23, 1983, the state court denied the petition. Mir appealed. The California Court of Appeal dismissed the appeal on December 10, 1985. The Court of Appeal found that Mir had been granted privileges in general, vascular and thoracic surgery, therefore his claim regarding those privileges was moot. In addition, the court found that Mir's failure to produce evidence that he had exhausted the Hospital's procedures for reviewing the second administrative decision denying cardiac privileges resulted in a waiver of his right to appeal from that decision. Mir took no further action in state court and made no additional requests to the Hospital to review the denial of cardiac surgery privileges.

On December 1, 1986, Mir filed this action in district court. In his complaint, Mir alleged federal antitrust, state antitrust, and common law causes of action. In an amended complaint filed on December 8, 1986, Mir added claims of violations of 42 U.S.C. Secs. 1983, 1985 and 1986.

On May 22, 1987, the Hospital filed a motion to dismiss the complaint for failure to state a claim for which relief could be granted. The Hospital argued that all of Mir's claims were barred by the statute of limitations. In addition, the Hospital contended that one or two essential elements were missing from each of the claims and that the state common law claims were barred by res judicata. The Hospital also requested that the district court take judicial notice of Mir's pleadings in the state court action, the Hospital's answer to the initial complaint, and the decisions of the California Superior Court and the Court of Appeal. A motion for sanctions and attorneys' fees was also filed. Following a hearing, the district court granted all three motions.

II. MOTION TO DISMISS

The district court ruled that Mir's First Amended Complaint failed to state a claim

against the Hospital for which relief could be granted. We agree.

A. Standard of Review

We review de novo a dismissal for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Ledesma v. Jack Stewart Produce, 816 F.2d 482, 484 (9th Cir.1987). A complaint should not be dismissed unless it is clear that no set of facts in support of the plaintiff's claim would entitle him to relief. Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir.1986). "In reviewing a motion to dismiss we presume that the facts alleged in the complaint are true." McRorie v. Shimoda, 795 F.2d 780, 783 (9th Cir.1986). In addition to the complaint, it is proper for the district court to "take judicial notice of matters of public record outside the pleadings" and consider them for purposes of the motion to dismiss. MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir.1986) (court took judicial notice of motion to dismiss filed in a separate suit and considered it in the motion to dismiss before them); see also Mack, 789 F.2d at 1282 (court took judicial notice of records in a state administrative proceeding and considered them in the motion to dismiss).

B. Federal Antitrust Claim

In his complaint, Mir alleges a conspiracy to restrain the free practice of cardiac vascular surgery in violation of the federal antitrust laws, 15 U.S.C. Sec. 1 (1982). The Hospital contends that this claim is barred by the statute of limitations. 15 U.S.C. Sec. 15b (1982) states that an antitrust action must be "commenced within four years after the cause of action accrued." Mir commenced this action on December 1, 1986.

"A cause of action in antitrust accrues each time a plaintiff is injured by an act of the defendant and the statute of limitations runs from the commission of the act." Pace Indus. v. Three Phoenix Co. (Pace), 813 F.2d 234, 237 (9th Cir.1987). The Hospital contends that the last act that could have injured Mir occurred on July 3, 1979 when the Hospital again rejected his request for cardiac surgery privileges. Mir argues that the Hospital has engaged in continuing anticompetitive behavior since the 1979 denial. He contends that the fact that the Hospital has opposed his state court action seeking a mandate overturning their decision to deny him surgical privileges constitutes a continuing violation. Mir does not claim that the Hospital took any action other than defending itself in the state court action.

Assertion of a defense to a court action, without more, is not a sufficient act to constitute a continuing violation of the federal antitrust laws. See Brunswick Corp. v. Riegel Textile Corp., 752 F.2d 261, 272 (7th Cir.1984) (defending oneself in a proceeding brought by another is not an act actionable under the federal antitrust laws), cert. denied, 472 U.S. 1018, 105 S.Ct. 3480, 87 L.Ed.2d 615 (1985); cf. Pace, 813 F.2d at 238 (bringing a state court action to enforce a contract illegal under the antitrust laws is the last overt act and prosecuting the suit does not continue the violation; the statute of limitations runs from the date the suit is filed). A party "cannot start a suit ... and then sue the defendant for refusing to default. Brunswick, 752 F.2d at 272.

Mir also asserts that the state court proceedings tolled the statute of limitations. In Pace, we held that prior state court actions " 'do not toll the statute of limitations, no matter how close their relationship to the one at bar.' " 813 F.2d at 240 (quoting Ramirez de Arellano v. Alvarez de Choudens (Ramirez), 575 F.2d 315, 319 (1st Cir.1978)). The statute of limitations is tolled in antitrust actions only if the previous action was the case at bar and not merely a related action on the same facts. Id. at 241 (citing Ramirez, 575 F.2d at 320).

None of the complaints filed by Mir in the state court raised federal antitrust issues. Thus, under Pace, the statute of limitations applicable to the federal antitrust claims was not tolled pending resolution of the state court action.

Additionally, Mir argues that his federal antitrust claim is not barred by the statute of limitations because "even ignoring the continuing nature of defendant's conspiracy or the tolling effect of the state court proceedings, plaintiff's future earnings and injury to good will would have been too speculative to have been awarded in a suit based upon the original exclusion in 1976." Mir asserts that at the very least he should be able to maintain an action to recover damages that accrued during the four year period prior to bringing this federal action because the statute of limitations runs from the date that the damages accrue and are no longer speculative. Mir requested damages for the loss of past and future earnings and good will. He argues that until the state court action was completed, his damages were speculative because there was still the possibility that the Hospital would be required to allow him cardiac surgery privileges.

In Zenith Radio Corp. v. Hazeltine Research (Zenith), 401 U.S. 321, 339, 91 S.Ct. 795, 806, 28 L.Ed.2d 77 (1971), the Supreme Court held that when a court refuses to...