Pinhas v. Summit Health, Ltd., 87-6530

• Decision Date: 26 July 1989
• Docket Number: No. 87-6530,87-6530
• Citation: 880 F.2d 1108
• Parties: , 1989-2 Trade Cases 68,683 Simon J. PINHAS, Plaintiff-Appellant, v. SUMMIT HEALTH, LTD.; Midway Hospital Medical Center; the Medical Staff of Midway Hospital Medical Center; Mitchell Feldman, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1108

880 F.2d 1108

58 USLW 2113, 1989-2 Trade Cases 68,683

Simon J. PINHAS, Plaintiff-Appellant, v. SUMMIT HEALTH, LTD.; Midway Hospital Medical Center; the Medical Staff of Midway Hospital Medical Center Mitchell Feldman, et al., Defendants-Appellees.

No. 87-6530.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 7, 1989.

Decided July 26, 1989.

Lawrence Silver, Steven L. Rayman, Blecher & Collins and Maxwell Blecher, Beverly Hills, Cal., for plaintiff-appellant.

J. Mark Waxman, Weissburg and Aronson, Inc., Los Angeles, Cal., for defendants-appellees.

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

Before CANBY, WIGGINS and O'SCANNLAIN, Circuit Judges.

WIGGINS, Circuit Judge:

Appellant Dr. Simon J. Pinhas appeals the dismissal of his action challenging the removal of his staff privileges at Midway Hospital Medical Center (Midway) in Los Angeles. Pinhas alleges claims under section 1 of the Sherman Antitrust Act, 15 U.S.C. Sec. 1 (1982) and 42 U.S.C. Secs. 1983, 1985(3) (1982). Pinhas also seeks a declaratory judgment that Cal.Bus. & Prof.Code Secs. 805, 805.5 (West Supp.1989), and the Health Care Quality Improvement Act of 1986, 42 U.S.C. Sec. 11101-11152 (Supp. IV 1986), are unconstitutional under the fourteenth amendment. The district court granted appellees' motion to dismiss all four claims. We reverse the dismissal of the antitrust claim, and affirm the dismissal of the section 1983 claim and request for declaratory judgment. ¹

I BACKGROUND

Dr. Pinhas is an eye physician and ophthalmological surgeon. He became a member of the medical staff at Midway in October 1981. Reimbursement under Medicare for the charges of an assistant surgeon in the performance of eye surgery became unavailable in February 1986. Pinhas alleges that most hospitals in Los Angeles subsequently eliminated their requirement that assistant surgeons be utilized during eye surgeries. Pinhas, together with several other ophthalmic surgeons at Midway, petitioned the medical staff at Midway to eliminate its assistant surgeon requirement. The medical staff refused to do so. Pinhas advised the hospital administration that the medical staff's refusal to eliminate the assistant surgeon requirement Pinhas contends that as a result of his refusal to return the contract, Lurvey and Feldman conspired to initiate disciplinary proceedings against him. By letter dated April 13, 1987, Pinhas was advised by Summit Health and Midway, through Lurvey and Feldman, that he was summarily suspended as of that date. The letter stated that he was being suspended based on a "medical staff review of Dr. Pinhas's medical records, with consideration as to the questions raised regarding: indications for surgery; appropriateness of surgical procedures in light of patient's medical condition; adequacy of documentation in medical records; and ongoing pattern of identified problems." The letter also indicated that the Midway Executive Committee (MEC) would convene within ten days to review and consider the action. The MEC met on April 20, 1987, and permitted Pinhas to make a statement. The MEC upheld the summary suspension with the recommendation to terminate his staff privileges at Midway. Midway's board of directors concurred with the MEC's recommendation.

would cost him approximately $60,000 per year. Pinhas allegedly told the hospital that although he wished to keep the majority of his practice at Midway, he would nevertheless move his practice if the assistant surgeon requirement was not abolished. Pinhas alleges that rather than abolish the assistant surgeon requirement, Midway offered him what he characterizes as a "sham" contract in which he was to be paid the sum of $36,000 per year (later raised to $60,000 per year) for consulting services he contends he would not have been expected to perform. Pinhas refused to sign the contract. Despite repeated requests by appellees Dr. Lurvey, the Chief of Staff at Midway, and Mitchell Feldman, regional vice-president of Summit Health Ltd. (Summit), the parent corporation of Midway, Pinhas refused to return the contract.

In accordance with the medical staff bylaws, Pinhas requested a hearing by the Midway Judicial Review Committee (JRC). He was granted the hearing and received notice of seven charges against him. In accordance with the bylaws, Lurvey appointed seven members of the medical staff to serve on the JRC. Attorney Richard Posell was selected by Midway's attorney Mark Kadzielski of Weissburg & Aronson to serve as the hearing officer. The peer-review hearings began on May 26 and proceeded for six hearing sessions, concluding on June 12, 1987. Both parties were permitted to call witnesses and introduce evidence. Pinhas was not permitted representation by legal counsel prior to or during the proceedings. The JRC issued its report on June 12, 1987, upholding only one of the seven charges against Pinhas. It recommended that Pinhas be reinstated subject to Pinhas's agreement to several special conditions relating to the conduct of his operations and to be placed on a six-month probationary period.

The MEC and Pinhas both appealed the JRC's decision to the Governing Board of the hospital in July 1987. On February 2, 1988, the Governing Board affirmed the decision of the JRC, but imposed more stringent conditions upon Pinhas's six-month probationary period. Finally, sometime in October 1988, Pinhas filed a petition for writ of mandate pursuant to Cal.Civ.Proc.Code Sec. 1094.5 (West Supp.1989). No decision has yet been reached in that matter.

On May 21, 1987, following his suspension, but before the hearing before the JRC, Pinhas filed this suit in federal court. Named as defendants are Summit Health; Midway; the Midway medical staff; Dr. Lurvey; Feldman; Drs. Reader, Macy, Salz, and Perlman, each of whom are ophthalmologists and competitors of Pinhas; Peggy Farber, an employee in the risk management section with Summit Health/Midway; Kadzielski; Weissburg & Aronson; and Posell (collectively "appellees"). ² Pinhas alleges in his complaint that as a result of his refusal to sign the "sham" contract, appellees entered into a Pinhas also alleges under sections 1983 and 1985(3) that the peer-review proceedings did not comport with the due process guarantee of the fourteenth amendment. In support of his due process claim, Pinhas contends he did not receive adequate notice of the charges against him, he was not permitted legal counsel at the hearing, the hearing officer Posell was biased, he was not permitted to cross-examine the MEC's witnesses and was precluded from calling several of his own. In addition to his antitrust and civil rights claims, Pinhas requests a declaratory judgment that Cal.Bus. & Prof.Code Secs. 805, 805.1 and 42 U.S.C. Secs. 11133, 11135 violate the equal protection and due process clauses of the fourteenth amendment.

                conspiracy to preclude him from practicing at Midway or any other hospital in California or the rest of the United States in violation of section one of the Sherman Act, 15 U.S.C. Sec. 1 (1982).  The thrust of Pinhas's antitrust claim is that appellees conspired summarily to suspend and terminate his medical staff privileges at Midway, and to have the report of his termination disseminated to hospitals in California pursuant to Cal.Bus. & Prof.Code Secs. 805, 805.1 (West Supp.1989), and to hospitals throughout the entire country pursuant to 42 U.S.C. Secs. 11133, 11135 (Supp. IV 1986) in order to preclude him from practicing elsewhere.  Section 805 of the California Business and Professions Code requires a health care facility to report actions adversely affecting a doctor's clinical privileges to the California Board of Medical Quality Assurance (BMQA).  Before granting or renewing a staff privilege for a physician or surgeon, a health care facility is also required under section 805.5 to request a report from BMQA to determine whether the applying doctor has been denied staff privileges by another hospital. 3   Similar reporting requirements are mandated by federal law under 42 U.S.C. Secs. 11133, 11135.  Pinhas contends that as a result of his termination and the dissemination of the reports, appellees have effectively boycotted his practice and precluded him from continued competition in the marketplace
                

Appellees filed a motion to dismiss on August 4, 1987, and the court dismissed the case on September 21, 1987. The district court concluded that the appellees were protected from antitrust liability under the state action doctrine pursuant to Patrick v. Burget, 800 F.2d 1498 (9th Cir.1986), rev'd, 486 U.S. 94, 108 S.Ct. 1658, 100 L.Ed.2d 83 (1988). The court dismissed the civil rights claims because of a lack of state action under the fourteenth amendment. It dismissed the claim for declaratory relief as not ripe, and also because the appellees were not the right parties to defend either the state or federal statute. Pinhas's request for reconsideration by the court based on the filing of certiorari with the Supreme Court in Patrick was denied. Pinhas appeals dismissal of his antitrust and section 1983 claims, as well as his request for declaratory relief. He does not appeal the dismissal of his section 1985(3) claim. We have jurisdiction under 28 U.S.C. Sec. 1291 (1982).

II

STANDARD OF REVIEW

A dismissal for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) is a ruling on a question of law that we review de novo. See Fort Vancouver Plywood Co. v. United States, 747 F.2d 547, 552 (9th Cir.1984). Review is limited to the contents of the complaint, see id., and the complaint should not be dismissed under the rule "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief," Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); see also Gibson v. United States, 781 F.2d 1334, 1337 (9th Cir.1986), ...