Moss v. Casa Grande Community Hosp., Inc., s. 87-1632
| Decision Date | 02 January 1990 |
| Docket Number | Nos. 87-1632,87-2367 and 87-2537,s. 87-1632 |
| Citation | 892 F.2d 1046 |
| Parties | NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. Clive MOSS and Casa Grande Radiology, a professional corporation, Plaintiffs-Appellants, v. CASA GRANDE COMMUNITY HOSPITAL, INC., dba Hoemako Hospital, an Arizona non-profit corporation, Robert C. Benjamin, Combined Health Resources, an Arizona non-profit corporation, James Pate, William H. Ford, the Medical Staff of Case Grande Community Hospital, Inc., James R. Doyle, Manual M.A. Guerrero, III, Meheranz Irani, Rjagopalan Ravi, Rangit Sood, Sunrad Radiology, Ltd., an Arizona corporation, Donald J. Jacobson and Carl G. Hoffman, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Before EUGENE A. WRIGHT and POOLE, Circuit Judges, and HARRY L. HUPP, * District Judge.
Plaintiff Clive Moss maintained an exclusive services contract with defendant Casa Grande Community Hospital, Inc. ("Casa Grande"), terminable on 90 days notice. By letter dated February 11, 1983, Casa Grande notified Moss that it was terminating his contract, effective May 6, 1983. Moss alleges that his contract was terminated because he "blew the whistle" on (and refused to assist in) the performance of an allegedly dangerous surgical procedure known as a translumbar aortography ("TLA").
Moss' first amended complaint takes a shotgun approach in establishing liability, alleging causes of action against all defendants for, among other things, (1) violation of section 1 of the Sherman Act, 15 U.S.C. § 1, (2) violation of his constitutional rights under 42 U.S.C. § 1983, (3) wrongful discharge, and (4) intentional interference with contractual relations.
The district court granted summary judgment in favor of defendants on each of these claims, and Moss appeals. Defendants Ravi and Sood cross-appeal the district court's denial of their fee applications.
On review of a grant of summary judgment, this court functions in the same manner as the district court. We must determine de novo whether in viewing the evidence in the light most favorable to Dr. Moss, the defendants have demonstrated that no genuine issue of material fact exists and that they are entitled to judgment as a matter of law. Aetna Cas. & Sur. Co. v. Centennial Ins. Co., 838 F.2d 346, 350 (9th Cir.1988).
Moss alleges that defendants have violated Section 1 of the Sherman Act by conspiring to deny his right to practice at Casa Grande Community Hospital (also known as Hoemako Hospital), and by tying Casa Grande radiology services to other services provided by Casa Grande.
Plaintiff alleges that Casa Grande maintains an illegal tying arrangement in that the exclusive radiology contract awarded to Sunrad Radiology after he was terminated forces patients to use Casa Grande's radiologist. The district court granted summary judgment in favor of Casa Grande on the ground that plaintiff had failed to show anti-competitive animus or adverse effect upon competition. Earlier the district judge had found that the market power issue should go to the jury, and denied summary judgment. But he reconsidered the summary judgment motion post-Celotex and granted the motion after finding no evidence of animus or effect on competition. Celotex Corp. v. Catrett, 477 U.S. 317, 91 L.Ed.2d 265, 106 S.Ct. 2548 (1986) ().
The order granting summary judgment is slightly confusing in that it states that the per se rule applies, yet goes on to analyze the case on grounds associated with the rule of reason. Plaintiff argues that the per se rule should apply, so that no showing of anti-competitive animus or adverse effect on competition is necessary to establish liability. He does not argue that defendants acted with anti-competitive animus, or that defendants' actions have had an adverse effect on competition. So, plaintiff's entire claim rests on whether or not the per se rule applies.
In the past, the Supreme Court has held that tying arrangements should be governed by the per se rule. Northern Pacific R.R. Co. v. United States, 356 U.S. 1, 5, 2 L.Ed.2d 545, 78 S.Ct. 514 (1958). However, in Jefferson Parish Hospital District No. 2. v. Hyde, 466 U.S. 2, 80 L.Ed.2d 2, 104 S.Ct. 1551 (1984), the Court abandoned former conventional wisdom and held that "[t]ying arrangements need only be condemned if they restrain competition on the merits by forcing purchases that would not otherwise be made." Id. at 27. The Court in Hyde declined to apply the per se rule to a Section 1 claim brought by an anesthesiologist against a hospital maintaining an exclusive contract with a firm of anesthesiologists. The Court found that consumer lack of price or quantity consciousness would have no impact on their willingness or ability to go to another hospital. Id. at 28.
This case presents the same situation. The hospital's tying arrangement cannot force patients to purchase radiology services not otherwise desired. The rule of reason applies.
In Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., 833 F.2d 208, 211 (9th Cir.1987), this court noted that:
In order to survive a motion for summary judgment in a Rule of Reason case, the antitrust plaintiff must produce evidence of
(1) an agreement among two or more persons or distinct business entities;
(2) which is intended to harm or unreasonably restrain competition; and
(3) which actually causes injury to competition.
The record does not contain any evidence to support a finding of intent to injure competition, or of actual injury to competition. Plaintiff does not contend otherwise. The summary judgment on this issue is affirmed.
Plaintiff alleges that the medical staff members of Casa Grande, and in particular defendants Ravi and Sood, conspired to exclude him from practice at Hoemako Hospital. Such concerted activity, plaintiff argues, constitutes a group boycott.
On June 3, 1986 the district court granted summary judgment in favor of Ravi and Sood on the grounds that defendants had alternative business reasons, as opposed to anticompetitive reasons, for opposing plaintiff's privileges, and that plaintiff had failed to make a sufficient showing that defendants had acted with conscious commitment to a common scheme. The latter ground was based upon Monsanto Co. v. Spray-Rite Serv. Co., 465 U.S. 752, 79 L.Ed.2d 775, 104 S.Ct. 1464 (1984), where the Court held:
[t]o permit the inference of concerted action on the basis of receiving complaints alone and thus to expose the defendant to treble damage liability would both inhibit management's exercise of its independent business judgment and emasculate the terms of the statute.
Id. at 764 (quoting Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 111 n. 2 (3d Cir.1980), cert. denied, 451 U.S. 911, 68 L.Ed.2d 300, 101 S.Ct. 1981 (1981)). Plaintiff does not quibble with the district court's holding in this respect (although he purports to appeal that ruling). Instead, he argues that the Medical Staff (named as a defendant) is a group, and that its actions, as a matter of law, constitute concerted action for the purposes of anti-trust law.
Moss' contention is based upon Weiss v. York Hosp., 745 F.2d 786, 814 (3d Cir.1984), cert. denied, 470 U.S. 1060, 84 L.Ed.2d 836, 105 S.Ct. 1777 (1985), where the court held that:
as a matter of law, the medical staff is a combination of individual doctors and therefore that any action taken by the medical staff satisfies the 'contract, combination, or conspiracy' requirement of section 1.
In Weiss, an osteopath sued the hospital, the medical staff, and individuals doctors for conspiring to refuse to admit osteopaths. The application process was controlled almost entirely by the medical staff, with the Medical Staff Executive Committee recommendation almost always followed by the hospital board in making admission decisions. Id. at 796 n. 14. The court found that the medical staff's action in recommending denial of the osteopath's application could constitute the necessary "contract, combination, or conspiracy" element of a section 1 violation, even though the individual defendants were found by the jury not to have conspired. Id. at 814.
The district court here accepted the holding in Weiss, and concluded that the actions of the Medical Staff were the actions of a combination within the meaning of the Sherman Act. However, it granted summary judgment in favor of defendants Ravi and Sood on the ground that their actions were consistent with legitimate business practices.
Moss argues that since the actions of the Medical Staff constitute concerted activity as a matter of law, and since the per se rule should apply to this case, the actions of the Medical Staff in terminating and later denying hospital privileges violate the Sherman Act as a matter of law. Once again Moss' argument hinges on the erroneous assumption that the per se rule of analysis applies.
Moss argues that the Medical Staff's actions constitute a group boycott, to which the per se rule has traditionally applied. As with tying arrangements, the Supreme Court used to consider group boycotts under the per se rule. Northern Pacific R.R. Co., 356 U.S. at 5. But, in Northwest Wholesale Stationers, Inc. v. Pacific Stationery and Printing Co., 472 U.S. 284, 86 L.Ed.2d 202, 105 S.Ct. 2613 (1985), and FTC v. Indiana Federation of Dentists, 476 U.S. 447, 90 L.Ed.2d 445, 106 S.Ct. 2009 (1986), the Court again backed off:
the category of restraints classed as group boycotts is not to be expanded indiscriminately, and the per se approach has...
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