Novak v. Somerset Hosp.
| Decision Date | 30 September 2014 |
| Docket Number | 3:07cv304 |
| Court | U.S. District Court — Western District of Pennsylvania |
| Parties | VICTOR F. NOVAK II, M.D., F.A.C.S, Plaintiff, v. SOMERSET HOSPITAL, et. al., Defendants. |
Electronic Filing
Plaintiff Victor F. Novak, II, M.D., F.A.C.S., is a board-certified general surgeon who practiced at Somerset Hospital ("Somerset Hospital" or the "Hospital") from 1993 until November 2005 when his privileges were terminated. Following his loss of privileges, Plaintiff filed this civil action against the Hospital, Michael J. Farrell ("Farrell"), M. Javad Saadat, M.D. ("Saadat"), and Peter T. Go., M.D. ("Go"). Plaintiff's First Amended Complaint (ECF No. 49), the operative pleading in this case, asserts federal antitrust claims as well as state law claims for tortious interference with contractual relations and breach of contract.1 Presently pending before the Court is Defendants' renewed motion for summary judgment (ECF No. 162). For the reasons that follow, Defendants' motion will be granted in part and denied in part. The motion will be granted as to Plaintiff's antitrust claims and Plaintiff's state law claims will be dismissed pursuant to 28 U.S.C. § 1367(c) for want of subject matter jurisdiction and without prejudice to plaintiff refiling those claims in state court as authorized by 42 Pa. C. S. § 5103(b).
Plaintiff is a general surgeon whose principal place of business in located in Somerset, Pennsylvania. (ECF No. 177 ¶ 1.) He joined Somerset Hospital's medical staff in 1993 after completing his medical training at Conemaugh Memorial Hospital (now Conemaugh Memorial Medical Center, hereinafter, "Conemaugh"). (Id. ¶2.) He has practiced as an independent general surgeon in Somerset and Cambria Counties since that time, with an office in Somerset Borough. (Docket No. 182, ¶ 110.) In 1995, Plaintiff was certified by the American Board of Surgery as a general surgeon, and he maintains that certification. (Id. ¶ 112.)
Defendant Farrell was, at all times relevant to this litigation, the CEO of Somerset Hospital. (ECF No. 177 ¶4.) Defendant Saadat is a gastroenterologist on the Hospital's medical staff and, at all relevant times, served as president of the Hospital's medical staff as well as chairman of its Medical Executive Committee ("MEC"). (Id. ¶¶ 5, 7.) Saadat performed endoscopy services that Plaintiff also performed. (Id. ¶ 9.) Defendant Go is a general surgeon on the Hospital's medical staff and, at all relevant times, was a member of its MEC. (Id. ¶¶ 6, 8.) Go's surgical practice overlapped to some degree with Plaintiff's, although Plaintiff performed certain procedures that Go did not perform. (Id. ¶10.) Unlike Plaintiff, Go is not board certified in general surgery. (ECF No. 182, ¶ 136.)
Somerset Hospital, located at 225 South Center Avenue in the Borough of Somerset, is a non-profit corporation and is designated as a "Sole Community Hospital" under Medicare regulations, 42 C.F.R. §412.92(a). (ECF No. 163, ¶ 16; ECF No. 182, ¶ 120.) In relevant part,the regulations designate a facility as a "Sole Community Hospital" if it is more than 35 miles from other like hospitals or if it is located in a rural area and, because of distance, posted speed limits, and predictable weather conditions, the travel time between the hospital and the nearest like hospital is at least 45 minutes. 42 C.F.R. §412.92(a)(3). The closest hospitals to Somerset Hospital are: Meyersdale Hospital, located in Meyersdale, Pennsylvania, which is approximately 31 minutes from Somerset; Windber Hospital, which is approximately 41 minutes from Somerset; and Conemaugh, which is between 39 and 45 minutes from Somerset. (ECF No. 177, ¶ 12; ECF No. 182, ¶122.)
Since 1998, Plaintiff has been a member of Conemaugh's active medical staff and has held full surgical privileges there. (ECF No. 177 ¶11.) During the seven years that he held privileges at both Somerset Hospital and Conemaugh, Plaintiff performed surgeries at both facilities based on convenience, patient preferences, and the relative capabilities of both hospitals. (Id. ¶ 13.) At some point prior to the termination of his privileges at Somerset Hospital, a moratorium was placed on bariatric surgeries due to concerns over Plaintiff's and another surgeon's pre-operative treatment of patients. (Id. ¶14.) When this occurred, Plaintiff moved his bariatric surgeries to Conemaugh. (Id.)
Conemaugh, located approximately 32.5 miles from Somerset Hospital (ECF No. 177, Pl's Resp. to ¶ 16), is a regional hospital which draws patients primarily from Cambria and Somerset, but also draws substantial numbers from Bedford and Blair Counties. (Id. ¶ 20.) In fact, Conemaugh promotes itself as servicing patients in an eleven county area through its network of community hospitals, physician offices, and specialty services. (Id. ¶ 21.) Conemaugh's network of hospitals includes Meyersdale, located in the southern part of SomersetCounty. (Id. ¶23.) According to Google Maps, Conemaugh and Meyersdale are 41.6 miles apart on U.S. Route 219, which passes through Somerset. (Id. ¶24.)
In 2012, Conemaugh added another primary care physician office to its network by purchasing the practice of Ann Smith, M.D., a family practitioner who, at the time of the purchase, had been serving as president of Somerset Hospital's medical staff. (ECF No. 177, ¶22; Farrell Suppl. Aff. ¶4, ECF No. 164.) Former patients of Dr. Smith are now being served by physicians who are employed by Conemaugh. (Farrell Suppl. Aff. ¶4.) Conemaugh has also added a cardiology practice located in Somerset and has sought zoning approval for a diagnostic center to be located less than a mile from Somerset Hospital. (ECF No. 177, ¶ 22.)
Conemaugh is a much larger and more comprehensive facility than Somerset Hospital. (ECF No. 177, ¶¶ 15, 16.) For example, Conemaugh has an open heart surgery program, while Somerset Hospital does not. (ECF No. 177, ¶ 38.) In 2006 and 2007, over 27,000 surgeries were performed at Conemaugh, while some 7,184 surgeries were performed at Somerset Hospital. (Id. ¶ 17.) During this same time period, 13,440 endoscopies were performed at Conemaugh, while 2,738 were performed at Somerset Hospital. (Id. ¶ 18.) For the period 2006-2007, Conemaugh's net patient revenue was $305 million, compared to Somerset Hospital's net patient revenue of $61 million. (Id. ¶19.)
Conemaugh runs advertisements in the Somerset newspaper on a nearly daily basis, including ads for Conemaugh Valley Surgeons, a group of ten general surgeons employed by Conemaugh. (ECF No. 177, ¶¶ 25, 26.) Conemaugh also advertises on billboards in and around Somerset and on the Johnstown television station serving the Somerset area. (Id. ¶¶ 27, 29.) In addition, Conemaugh is listed in the Somerset telephone directory along with numerous other hospitals offering general surgery services, such as Meyersdale, Windber, Western MarylandHealth System in Cumberland, Maryland, and the UPMC hospitals located in Pittsburgh. (Id. ¶ 28.)
According to patient flow data reported by hospitals to the Pennsylvania Health Care Cost Containment Council (the "Council"), 21.6% of patients in what the Council defined as Somerset Hospital's primary service area went to Conemaugh in 2005 for inpatient general surgery services. (ECF No. 177 ¶ 30.) This same data shows that 22.36% of patients living in what the Council defines as Somerset Hospital's primary service area went to "other" hospitals for inpatient surgery, including hospitals in Greensburg, Pittsburgh and Cumberland, Maryland. Thus, nearly 44% of patients in the defined area obtained inpatient general surgery services at hospitals other than Somerset Hospital. (Id. ¶ 31.)
Defendant Farrell defines the primary service area of Somerset Hospital to include the seventeen zip codes located within a 10 mile radius of the Hospital. (ECF No. 177 ¶ 32.) In this "17-zip-code-area" from which Somerset Hospital draws 90% of its patients, more than 32% of these patients are admitted to Conemaugh, Meyersdale, and Windber. (Id. ¶ 33.)
On July 1, 2005, the U.S. Food and Drug Administration announced the recall of certain implantable cardiac defibrillator ("ICD") devices manufactured by Guidant Corporation. (ECF No. 177, ¶ 41.) As a result of the recall, two patients requested that Plaintiff perform surgeries to replace the battery generators on the recalled ICDs with non-recalled ICD generators. (Id.) Regulations promulgated by the Pennsylvania Department of Health stated that implantation of ICD devices may only be performed at hospitals with an open heart surgery program. See 28 Pa. Code §138.18(b). (ECF No. 177, ¶ 40.) Because Somerset Hospital did not have an open heartsurgery program, it was not authorized at the time to implant or change ICD devices. (ECF No. 177, ¶ 38.)
Plaintiff had privileges to implant and change pacemakers at Somerset Hospital. (ECF No. 177, ¶39.) Although Plaintiff did not have privileges to implant or change ICD devices, he states that he believed he had privileges, as well as the competency, to replace the battery generators of ICD devices, which he characterizes as a simple procedure performed by general surgeons. (Id., Pl.'s Resp. to ¶ 39.)
On August 9 and 15, 2005, Plaintiff performed surgeries to replace the battery generators on the recalled ICDs for the two patients. In scheduling these surgeries, Plaintiff identified the August 9, 2005 procedure as a pacemaker generator change. (ECF No. 177, ¶ 44.) When the patient was in the surgical holding area, Hospital staff realized that Plaintiff intended to replace the battery generators on the recalled ICDs. (Id. ¶ 45.) Upon realizing Plaintiff's intent, Sandy Mamula, the Director of Ambulatory/Surgical Services, contacted Dr. Jonathan Kates, the Chairman of the Hospital's Credential Committee, who told her to go ahead with the...
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