Morgenstern v. Wilson

Decision Date20 July 1994
Docket NumberNo. 93-2446,93-2446
Citation29 F.3d 1291
Parties1994-1 Trade Cases P 70,645 Dan A. MORGENSTERN, M.D., Plaintiff-Appellee, v. Charles S. WILSON, M.D.; Deepak Gangahar, M.D.; Herbert E. Reese, M.D.; Walt F. Weaver, M.D.; Christopher C. Caudill, M.D.; Joseph R. Gard, M.D.; Sabyasachi Mahapatra, M.D.; Robert J. Buchman, M.D.; Michael A. Breiner, M.D.; Alan D. Forker, M.D.; Stephen W. Carveth, M.D., Defendants-Appellants. Cardiovascular & Thoracic Surgery, P.C.; Cardiology Consultants, P.C., Defendants. Nebraska Heart Institute, P.C., Defendant-Appellant.
CourtU.S. Court of Appeals — Eighth Circuit

Joe Sims, Washington, DC, argued (Kathryn M. Fenton and James D. Wareham, on the brief), for appellant.

Daniel Klaus, Lincoln, NE, argued, for appellee.

Before McMILLIAN and WOLLMAN, Circuit Judges, and VIETOR, * District Judge.

McMILLIAN, Circuit Judge.

Charles S. Wilson, M.D., and others, (hereinafter referred to as defendants), appeal from an interlocutory order entered in the United States District Court for the District of Nebraska compelling either the dissolution or the restructuring of the Nebraska Heart Institute (NHI). Morgenstern v. Wilson, Civ. No. 90-L-34 (D.Neb. Apr. 26, 1993). For reversal, defendants argue the district court erred in granting an injunction because (1) several legal theories of anti-competitive conduct that were presented to the jury were erroneous as a matter of law, and (2) there was insufficient evidence to support the jury's verdict that Wilson, along with the associated cardiac surgeons, thoracic and vascular surgeons, and cardiologists who comprised NHI, violated Sec. 2 of the Sherman Antitrust Act, 15 U.S.C. Sec. 2. Appellee Dan A. Morgenstern, M.D., filed a motion to dismiss the appeal for lack of appellate jurisdiction. For the reasons discussed below, we reverse the judgment of the district court.

I.

In 1987, NHI, a professional corporation, was formed in Lincoln, Nebraska, to provide administrative, clinical and marketing services to its members. The members of NHI were Cardiology Consultants, P.C. (CCPC), a group cardiology practice consisting of six cardiologists, and Cardiovascular & Thoracic Surgery, P.C. (CVTS), a cardiac surgical group practice comprised of three cardiac surgeons and two thoracic and vascular surgeons. The cardiologists of CCPC referred their patients in need of open-heart surgery, angioplasty, and other cardiac surgical procedures to the surgeons of CVTS.

In July 1987 CVTS employed Morgenstern as a cardiac surgeon. After practicing one year with CVTS, CVTS informed Morgenstern that he would not be made a partner with the group. However, at Morgenstern's request, his employment contract with CVTS was extended for a second year during which he continued to perform cardiac surgical procedures on patients referred to CVTS by CCPC. While associated with NHI as a member of CVTS, Morgenstern performed approximately 180 cardiac surgeries.

Upon leaving CVTS in 1989, Morgenstern opened his own cardiac surgery practice in Lincoln. Although the thoracic and vascular aspects of Morgenstern's practice thrived, Morgenstern's cardiac surgery practice failed. During the nine months he practiced cardiac surgery after leaving CVTS, he performed only six surgeries. None of the six patients was referred to Morgenstern by CCPC.

Morgenstern filed suit in federal district court against NHI, CCPC, CVTS, and the individual cardiologists and surgeons affiliated with those groups, alleging numerous violations of the Sherman Antitrust Act. After abandoning his conspiracy to monopolize claim under Sec. 1 of the Sherman Antitrust Act, and attempted monopolization and conspiracy to monopolize claims under Sec. 2 of the Sherman Antitrust Act, Morgenstern proceeded to trial solely on a claim of actual monopolization of cardiac surgery pursuant to Sec. 2. The jury failed to reach a verdict, and the district court ordered a new trial on the actual monopolization claim. The district court denied defendants' motion for judgment as a matter of law.

Following the second trial, the jury exonerated CCPC and CVTS of liability, but found the individual physicians and NHI liable for monopolizing the "adult cardiac surgery market." The jury found that Morgenstern had suffered $1,467,000 in damages as a result of the formation of NHI and the failure of the cardiologists to refer patients to Morgenstern, or their referral of patients only to the surgeons associated with NHI. The district court, denying defendants' renewed motion for judgment as a matter of law, upheld the jury's verdict on a theory of "monopolization by combination of individuals and corporations, acting in concert." However, the district court found insufficient evidence to support the jury's award of damages and granted a new trial on that issue. The district court, implementing the jury's verdict on liability, granted injunctive relief to Morgenstern pursuant to Sec. 16 of the Clayton Act, 15 U.S.C. Sec. 26, and ordered defendants to dissolve or restructure NHI to eliminate common ownership by cardiologists and surgeons and to prevent joint marketing on behalf of CCPC and CVTS. This appeal by defendants followed. Morgenstern filed a motion to dismiss the appeal for lack of appellate jurisdiction.

II.

We consider first our appellate jurisdiction. Morgenstern argues that the injunction in question, implementing the jury's verdict, is not an appealable interlocutory decision within the provisions of 28 U.S.C. Sec. 1292(a)(1). We disagree.

Section 1292(a) provides, in pertinent part, that "the courts of appeal shall have jurisdiction of appeals from: (1) [i]nterlocutory orders of the district courts ... granting, continuing, modifying, refusing or dissolving injunctions." Thus, by the plain language of Sec. 1292(a), interlocutory orders granting "injunctions" are appealable. Nevertheless, Morgenstern argues that, under Carson v. American Brands, Inc., 450 U.S. 79, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981) (Carson ), unless a litigant is able to show that an interlocutory order of the district court (1) will have serious, perhaps irreparable, consequences, and (2) the order can be effectually challenged only by immediate appeal, the general congressional policy against piecemeal review will preclude interlocutory appeal. Morgenstern contends that, because the order at issue in the present case does not require defendants to take any action until sixty days "following completion of the appellate process," it fails both prongs of the Carson test.

We believe Morgenstern misunderstands the law developed on Sec. 1292(a) appeals. Section 1292(a) invokes two separate avenues of analysis. The United States Supreme Court has stated that Sec. 1292(a)(1) provides appellate jurisdiction for "orders that grant or deny injunctions" as well as those "orders that merely have the practical effect of granting or denying injunctions and have 'serious, perhaps irreparable, consequence.' " Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 287-88, 108 S.Ct. 1133, 1143, 99 L.Ed.2d 296 (1988), quoting Carson, 450 U.S. at 84, 101 S.Ct. at 996-97. Thus, the first question that must be addressed "is whether the order appealed from specifically [granted or] denied an injunction or merely had the practical effect of doing so." Kausler v. Campey, 989 F.2d 296, 298 (8th Cir.1993) (Kausler ). We are in accord with the majority of circuits which have held that, if an interlocutory order expressly grants or denies a request for injunctive relief, the Carson requirements need not be met and the order is immediately appealable as of right under Sec. 1292(a)(1). See, e.g., MAI Basic Four, Inc. v. Basic, Inc., 962 F.2d 978, 982 (10th Cir.1992); Sherri A.D. v. Kirby, 975 F.2d 193, 203 (5th Cir.1992); United States v. Bayshore Assocs., 934 F.2d 1391, 1395-96 (6th Cir.1991); Cohen v. Board of Trustees, 867 F.2d 1455, 1466 (3d Cir.1989); International Ass'n of Machinists & Aerospace Workers v. Eastern Airlines, Inc., 849 F.2d 1481, 1486 n. 11 (D.C.Cir.1988); Donovan v. Robbins, 752 F.2d 1170, 1173-74 (7th Cir.1985); Cable Holdings of Battlefield, Inc. v. Cooke, 764 F.2d 1466, 1471 (11th Cir.1985). By contrast, if an order merely has the practical effect of granting or denying an injunction, the Carson irreparable injury test must be satisfied. Kausler, 989 F.2d at 298.

In determining whether the district court acted specifically to grant injunctive relief, we examine "the language of the order, the grounds on which it rests, [and] the circumstances in which it was entered." Kausler, 989 F.2d at 299. An examination of the district court's order reveals that the district court explicitly granted Morgenstern injunctive relief, and, thus, Carson is inapposite. The district court order, styled as "Order for Injunctive Relief," expressly granted the specific injunctive relief prayed for in Morgenstern's complaint. The district court stated that, in accordance with its "equitable powers" under 15 U.S.C. Sec. 26, 1 defendants "are permanently enjoined as follows: within sixty days after this order becomes final following completion of the appellate process," (1) NHI shall be dissolved, or (2) restructured to eliminate common ownership by cardiologists and surgeons and to prevent joint marketing on behalf of CCPC and CVTS. The district court imposed upon defendants an affirmative obligation, and then stayed that obligation pending appellate review. The district court specifically granted Morgenstern the injunctive relief he requested, and, therefore, we conclude that we have jurisdiction over the present appeal as one coming within the parameters of Sec. 1292(a)(1). Accordingly, we deny Morgenstern's motion to dismiss the appeal.

III.

We now turn to the merits of defendants' appeal. For reversal, defendants argue that several of the legal theories of anti-competitive conduct that were presented to the jury were...

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