Rome Ambulatory Surg. Center v. Rome Mem'L Hosp., 5:01-CV-23.
| Decision Date | 22 December 2004 |
| Docket Number | No. 5:01-CV-23.,5:01-CV-23. |
| Citation | 349 F.Supp.2d 389 |
| Parties | ROME AMBULATORY SURGICAL CENTER, LLC, Plaintiff, v. ROME MEMORIAL HOSPITAL, INC., and Greater Rome Affiliates, Inc., Defendants. |
| Court | U.S. District Court — Northern District of New York |
Epstein, Becker & Green, P.C., William G. Kopit, Michael R. Bisegger, of Counsel, Washington, D.C., Attorneys for Plaintiff.
Wood & Smith, P.C., William J. Leberman, of Counsel, Syracuse, NY, Attorneys for Plaintiff.
Hancock & Estabrook, LLP, Thomas C. Buckel, of Counsel, Syracuse, NY, Attorneys for Defendants.
On October 24, 2002, United States Magistrate Judge Gustave J. Bianco issued a Revised Protective Order in this case. In the spring of 2004, during the course of filing summary judgment papers, the parties agreed between themselves to file all submissions conventionally, and under the protective seal, to prevent the inadvertent disclosure of sensitive information. As such, the documents in support of the motions decided below are not available at this time.
Plaintiff has moved to lift the seal on large portions of the material. Defendants oppose in part. These motions are scheduled to be heard on January 14, 2005 in Utica, New York. To the extent that information contained within the sealed record is revealed in the course of this decision, the seal is lifted. Due consideration has been given to the information revealed and it has been determined that such information is not in conflict with the purposes for which the order was granted.
MEMORANDUM-DECISION and ORDERPlaintiff Rome Ambulatory Surgery Center, LLC ("plaintiff" or "RASC") brought suit against Rome Memorial Hospital, Inc. ("defendant", "Rome Hospital" or the "Hospital") and its corporate parent Greater Affiliates, Inc. ("GRA" or "defendants").
Plaintiff was a freestanding ambulatory surgical facility located in the City of Rome, New York within Oneida County.1 Prior to the events which led to this action, the Rome medical community was politically divided. A significant number of area physicians were affiliated with the Hospital, and another group of independent physicians had formed their own organization. The plaintiff facility was established by the non-hospital, independent physicians, and the alleged illegal conduct consists of Hospital efforts aimed at harming the competing facility.
Defendants' alleged conduct falls into two general categories. First, plaintiff alleges that defendants engaged in various acts to limit the number of patient referrals to RASC. This included inducing and conspiring with the affiliated physicians such that those physicians would not refer patients to RASC for surgery, and intimidation of the physicians who used the facility. The second category of alleged illegal conduct involves entering into unlawful exclusive contracts with commercial third party payers. Under these contracts, the patients covered by those health insurance plans were effectively removed from the market in which RASC competed.
RASC claims that this referral restriction and exclusive contracting, not only injured plaintiff, but forced it to leave the market taking with it the consumer benefits it provided; greater customer choice, higher quality service, and lower prices.
Plaintiff's second amended complaint asserts twelve causes of action. There are six causes of action under Sherman Act 15 U.S.C. § 1:
First Cause of Action — Tying Contract in Restraint of Trade;
Second Cause of Action — Per se Illegal Tying Contract;
Third Cause of Action — Illegal Exclusive Contracts;
Fourth Cause of Action — Market Allocation;
Fifth Cause of Action — Conspiracy to Unreasonably Restrain Trade in Out-Patient Surgery, and;
Sixth Cause of Action — Per se Illegal Boycott.
There are four causes of action under Sherman Act 15 U.S.C. § 2:
Seventh Cause of Action — Monopoly leveraging;
Eighth Cause of Action — Attempted Monopolization;
Ninth Cause of Action — Monopolization of the Outpatient Surgery Market, and;
Tenth Cause of Action — Conspiracy to Monopolize the Outpatient Surgery Market.
Finally, there are two causes of action brought pursuant to New York State law;
Eleventh Cause of Action — Intentional Interference with Contractual Relations, and;
Twelfth Cause of Action — Interference with Business Relations.
Pursuant to Fed.R.Civ.P. 56, defendants moved for summary judgment on the entire complaint, based on lack of standing — causation and failure to demonstrate an antitrust injury — and various insufficiencies of the separate causes of action. Plaintiff cross-moved for summary judgment on the Fifth and Tenth conspiracy causes of action. Oral argument was heard on August 13, 2004 in Utica, New York. Decision was reserved.
Most of the following facts are not in dispute. The interpretation of the facts is, of course, in sharp dispute. Where there are factual conflicts, pursuant to the summary judgment standards (see infra p. 402), the facts are viewed most favorably to the plaintiff, except as to the two causes of action where it is the movant.
Rome Hospital is a not-for-profit community hospital that provides a full range of patient services including general inpatient acute care and outpatient surgery. It is affiliated with other non-profit and for-profit corporations which provide support to the Hospital and various medical services in the Rome area. While it is the only hospital within the City of Rome, there are four others within a twenty mile radius; Oneida Healthcare, St. Elizabeth Medical Center, Faxton Hospital, and St. Luke's Healthcare. The last two are owned by Mohawk Valley Network which also owns several outpatient facilities in Rome.
There were three significant changes in the Rome healthcare environment in the years immediately preceding the events which led to this action. The first was in 1995 wherein the Hospital transformed from a heavily indebted publicly managed hospital to a non-profit private hospital. Following the change in status, the Hospital began another reconfiguration into a managed care system/network. The financial plan of the Hospital presumes that profits from ambulatory surgeries will be used to subsidize other, less profitable, medical services.
The next year brought a change in the regulatory environment, The Healthcare Reform Act of 1996, effective January 1997, replaced Department of Health regulation of hospital rates for most third party payers with a competitive system. Prior to the Reform Act the state set hospital reimbursement rates under a formula which guaranteed higher rates each year. Rome Hospital now had to...
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