Parikh v. Franklin Medical Center

• Decision Date: 20 September 1996
• Docket Number: Civil Action No. 95-30111-MAP.
• Citation: 940 F.Supp. 395
• Parties: Nitin PARIKH, M.D., v. FRANKLIN MEDICAL CENTER, et al.
• Court: U.S. District Court — District of Massachusetts

940 F.Supp. 395

Nitin PARIKH, M.D., v. FRANKLIN MEDICAL CENTER, et al.

Civil Action No. 95-30111-MAP.

United States District Court, D. Massachusetts.

September 20, 1996.

COPYRIGHT MATERIAL OMITTED

John F. Rogers, Cain, Hibbard, Myers & Cook, Pittsfield, MA, for plaintiff.

Francis D. Dibble, Jr., Anita F. Sarro, Jerome M. Scully, Kelly A. McCarthy, Bulkley, Richardson & Gelinas, Springfield, MA, for Franklin Medical Center.

Diane H. Esser, David J. Singer, Esser, Singer, Eisenberg, Wainstein & Berlin, Greenfield, MA, for Sudershan Singla, M.D.

MEMORANDUM REGARDING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DEFENDANTS' MOTIONS FOR PARTIAL SUMMARY JUDGMENT

(Docket Nos. 43, 47 & 55)

PONSOR, District Judge.

I. INTRODUCTION

Plaintiff Nitin P. Parikh, M.D., has filed this action to enforce his exclusive right to practice anesthesiology at defendant Franklin Medical Center ("FMC"). In response, FMC and codefendant Sudershan Singla M.D., Dr. Parikh's former partner, have filed counterclaims against plaintiff, seeking, among other things, a declaration that the exclusive-dealing arrangement violates federal and state antitrust laws. Before the court are the parties cross-motions for summary judgment.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party bears the initial burden of producing evidence to support its claim or pointing to an absence of evidence to support the nonmoving party's claim. If the moving party meets this burden, the nonmoving party must go beyond the pleadings to demonstrate the existence of a genuine issue for trial. The court must evaluate all the evidence in the light most favorable to the nonmoving party. See McCarthy v. Northwest Airlines, Inc., 56 F.3d 313, 315 (1st Cir.1995).

After oral argument the court proposed to counsel the employment of a variation of the usual summary judgment mechanism, sometimes available in non-jury cases. This variation permits the court to make findings and draw inferences as to certain disputed issues at the summary judgment stage, essentially in the role of a factfinder, where nothing further is expected to emerge at trial to change or amplify the record. See 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720, at 26 (2d ed. 1983). Here, all parties agreed to permit the court to act essentially as factfinder in weighing the submissions of the parties' two antitrust experts. Unfortunately, after carefully sifting through the experts' submissions, the court has concluded that it will be necessary to take testimony from these witnesses in order to address the disputes generated by their opinions intelligently. Accordingly, the court will adhere to the usual summary judgment analysis on these motions.

III. FACTUAL AND PROCEDURAL BACKGROUND

The relevant facts are as follows. Disputes are noted accordingly.

A. Factual Background

1. Franklin County and Franklin Medical Center

According to a 1995 report prepared by the Massachusetts Department of Public Health ("DPH"), Franklin County, located 95 miles west of Boston, is the most rural county in the Commonwealth of Massachusetts. Covering approximately 850 square miles and consisting of 26 towns, the county has a population of less than 88,000. In central Franklin County, the population center of the county, 26.1% of the population is living at or below 200% of poverty, 15% is 65 or older, and 8.4% receives AFDC benefits.

FMC is a 162-bed, acute-care community hospital located in Greenfield, Massachusetts. It is the only acute-care facility in Franklin County. The hospital is flanked by other community hospitals that offer the same range of medical services. Specifically, within 25 miles of FMC are Brattleboro Memorial Hospital, a 61-bed facility in Brattleboro, Vermont, Athol Memorial Hospital, a 49-bed facility in Athol, Massachusetts, and Cooley Dickinson Hospital, a 158-bed facility in Northampton, Massachusetts. North Adams Regional Hospital, with 134 beds, is located 28 miles west of Greenfield in North Adams, Massachusetts. At least three additional community hospitals are located within 45 minutes' driving time.

2. Exclusive Contract

In or about April 1990, after FMC's only board-certified anesthesiologist had announced his retirement, the hospital began a search for a new director of anesthesia services. In its search, FMC sought to address staff concerns about the quality and consistency of anesthesia care at the hospital as well as the administrative efficiency of the anesthesia department. Dr. Parikh, a board-certified anesthesiologist, responded to the hospital's advertisement for a medical director of anesthesia services and, in August 1990, entered into an interim agreement with FMC for the provision of anesthesia services.

In December 1990, after extended negotiations between the parties, Dr. Parikh and FMC entered into an exclusive contract. According to the terms of the agreement, "in order to provide for the continuity and consistency necessary in order to insure a high quality of anesthesia services to patients and to insure adequate staffing of [FMC's] Anesthesia Department," the hospital would give Dr. Parikh the "exclusive right to practice anesthesiology at Franklin Medical Center" and "to select and appoint all future anesthesiologists and/or [certified registered nurse anesthetists] at Hospital, in conjunction with the President of the Hospital, in accordance with established credentialing criteria." The agreement also contained a "grandfather" provision, allowing two non-board-certified anesthesiologists, Peter Arches, M.D., and Edward Bueno, M.D., and a certified registered nurse anesthetist, Joann O'Shea, to continue practicing at FMC.

Dr. Parikh told the hospital that he would take the position provided that he received exclusive control over the administrative functions of the anesthesia department and some guarantee that "my family and I could count on Greenfield being our permanent home." Parikh Aff. ¶ 11. Harlan R. Smith, president of FMC, states that Dr. Parikh "was very concerned about the contract being terminated based on performance issues" and thus wanted "generous conditions around the terms of his agreement." Pl.'s L.R. 56.1 ¶ 29. Accordingly, the contract provided for a five-year term automatically renewable for successive five-year periods unless Dr. Parikh died, suffered a career-ending disability, or lost his license to practice medicine in Massachusetts. The agreement also provided for termination in the event of a material breach, but did not identify any specific performance standards.

In December 1990, Dr. Parikh was 38 years old. He expected his exclusive contract with FMC to last for the remainder of his medical career, or about 30 years.

3. Improvement of Anesthesia Department

In or about 1990, the Joint Commission on Accreditation of Healthcare Organizations ("JCAHO"), a hospital-accreditation organization, cited FMC's anesthesia department for multiple deficiencies. Upon his arrival at FMC in the fall of 1990, Dr. Parikh reorganized the department, implemented a variety of quality-assurance and patient-evaluation programs, and upgraded anesthesia systems and monitoring. These efforts paid off. In 1991, and again in 1994, JCAHO conducted citation-free reviews of FMC's anesthesia department.

4. Rejection of Doctor

In 1993, Dr. Parikh objected to the hospital's plans to allow Raymond Pierson, M.D., a staff physiatrist (a medical doctor specializing in physical medicine and physical therapy) at FMC, to perform epidural, nerve-block, and other pain-management procedures at the hospital. Dr. Parikh made his objections on the basis of the exclusivity provisions in his contract with FMC. Dr. Pierson did not receive the requested privileges, and Dr. Parikh admits that his objections played a role in that result.

5. Partnership

In early 1994, anticipating an increase in demand for anesthesia services at FMC, Dr. Parikh recruited another board-certified anesthesiologist, Dr. Singla, to work with him at the hospital. In June 1994, Drs. Parikh and Singla entered into a partnership agreement. The agreement gave Dr. Parikh full discretion over the collection of accounts payable, the administration of partnership banking accounts, and other day-to-day business activities. The agreement further provided that 10% of Dr. Singla's partnership income would be held in an escrow account and subject to forfeiture if Dr. Singla provided medical services in Franklin County outside the terms of the partnership agreement. Finally, Drs. Parikh and Singla agreed that upon termination of their partnership Dr. Singla would resign from the medical and dental staffs at FMC.

Dr. Singla began his practice at FMC in July 1994. Dr. Parikh first submitted partnership billings to his billing service in October 1994 and first distributed partnership income to Dr. Singla in February 1995.

On or about March 17, 1995, Dr. Parikh notified Dr. Singla that he intended to terminate their partnership. On March 23, Dr. Parikh notified FMC that Dr. Singla would be resigning his staff privileges at the hospital, as required by the partnership agreement, and that he expected FMC not to interfere with his exclusive right to practice anesthesiology at the hospital. Thereafter, on the advice of counsel, FMC informed Dr. Parikh that it would not prohibit Dr. Singla from practicing at the hospital.

On or about May 12, 1995, Dr. Parikh told FMC that he would not include Dr. Singla on any future anesthesia-service schedules. On May 15, FMC transferred Dr. Parikh's scheduling responsibilities to another doctor. Several months later, in August 1995, FMC notified Dr. Parikh that it would not renew his exclusive contract at the end of its initial term on December 31, 1995.

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