Rueschhoff Physical Therapy, Inc. v. Preferred Provider Therapists, Inc.

• Court: Missouri Court of Appeals
• Writing for the Court: PUDLOWSKI
• Citation: Rueschhoff Physical Therapy, Inc. v. Preferred Provider Therapists, Inc., 980 S.W.2d 130 (Mo. App. 1998)
• Decision Date: 20 October 1998
• Docket Number: No. 73856,73856
• Parties: 1998-2 Trade Cases P 72,330 RUESCHHOFF PHYSICAL THERAPY, INC., d/b/a Heritage Physical Therapy, Plaintiff/Appellant, v. PREFERRED PROVIDER THERAPISTS, INC., et al., Defendants/Respondents.

Page 130

980 S.W.2d 130

1998-2 Trade Cases P 72,330

RUESCHHOFF PHYSICAL THERAPY, INC., d/b/a Heritage Physical Therapy, Plaintiff/Appellant, v. PREFERRED PROVIDER THERAPISTS, INC., et al., Defendants/Respondents.

No. 73856.

Missouri Court of Appeals,

Eastern District,

Division One.

Oct. 20, 1998.

Schlueter & Byrne, P.C., J. Joseph Raymond, III, Clayton, for appellant.

Husch & Eppenberger, LLC, Mark G. Arnold, Stephen H. Rovak, Stephen J. O'Brien, David P. Stoeberl, Patrick Gunn, Philip T. Ayers, Hazelwood, for respondent.

PUDLOWSKI, Presiding Judge.

This appeal arises from a petition filed by Rueschhoff Physical Therapy, Inc, d/b/a Heritage Physical Therapy ("RPT") seeking relief from Preferred Provider Therapists, Inc., William Hopfinger, William Nash, Medrehab of Missouri, Inc., Gene Inman, David Ayers, Charles McDonnell, Russell Eaves, and Dan Kelley (collectively, "Defendant") claiming that they conspired to boycott RPT's clinics from (1) admission into its independent practice association of physical therapy clinics, and (2) by horizontally restraining trade through territorial restrictions within the member agreements of the independent practice association. The trial court granted summary judgment to Defendant; RPT appeals its group boycott and territorial restraint claims. We affirm the judgment of the trial court.

In review of summary judgment, we review the record in the light most favorable to the party against whom the judgment was entered. ITT Commercial Finance v. Mid-America Marine, 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is intended to move the parties beyond the petition allegations and determine if a material fact exists for trial. Martin v. City of Washington, 848 S.W.2d 487, 491 (Mo. banc 1993). Appellate review of the grant of summary judgment is purely a question of law and, hence, uses the same criteria as imposed by the trial court in its initial determination of the propriety of the motion. ITT Commercial Finance, 854 S.W.2d at 376. "In complex antitrust cases, no different or heightened standard for the grant of summary judgment applies." Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483, 1490 (8th Circuit), cert. denied, 506 U.S. 1080, 113 S.Ct. 1048, 122 L.Ed.2d 356 (1993).

Summary judgment will be granted as a matter of law to the moving party when there is no genuine issue as to any material fact. Rule 74.04(c)(3). The moving party bears the burden of establishing a right to judgment as a matter of law; any evidence presented that demonstrates a genuine issue of material fact will defeat the moving party's prima facie showing. Landes v. State Farm Fire and Casualty Company, 907 S.W.2d 349, 353 (Mo.App. W.D.1995). In our review, the facts are construed most favorably to the party against whom the summary judgment was entered. Lindell Trust Co. v. Lieberman, 825 S.W.2d 358, 359 (Mo.App. E.D.1992); Gast v. Ebert, 739 S.W.2d 545, 546 (Mo. banc 1987).

When viewing the facts for the purpose of our summary judgment standard, we find that: RPT provides out-patient physical therapy services. RPT began as one clinic and expanded to two prior to the filing of its petition. Subsequently, RPT expanded and now owns four physical therapy clinics in the metropolitan Saint Louis area.

Preferred Provider Therapist, Inc. ("PPT") is a network of 155 physical and occupational therapists that provide out-patient physical therapy in its 50 clinics throughout Missouri and Illinois. PPT is a preferred provider organization which offers physical therapy services at a reduced medical cost. These reductions are bundled together and submitted as benefit packages to large managed health care companies. After negotiations, these health care companies agree to refer all of their physical therapy patients to members of PPT for the agreed charges. All of the services rendered by PPT to the managed health care companies's clients are provided by PPT's affiliated member clinics.

In order to seek affiliation with PPT, a clinic must submit a written application. PPT processes and approves applications in the order they are received based on certain requirements and its locational need. PPT attempts to establish one clinic per 50,000 people in a county. Upon joining PPT, the new member signs a contract which states in part:

Nothing contained in this Agreement shall prevent THERAPIST CORPORATION or any Therapist Providers from providing therapeutic services at any other locations, nor shall anything contained in this Agreement prevent THERAPIST CORPORATION from opening new or additional clinics; however, THERAPIST CORPORATION shall only provide Covered Services to Eligible Persons at the Designated Clinic or Designated Clinics as the case may be.

The PPT member clinics are prohibited from forming or joining competing networks while they are PPT members. Either member clinics or PPT may terminate the PPT provider contract, with notice, with or without cause.

William Hopfinger ("Hopfinger"), William Nash ("Nash"), and Daniel Kelley are owners of PPT member clinics and have been members of PPT's board of directors. Hopfinger and Nash are PPT officers. Medrehab of Missouri, Inc. ("Medrehab") is a PPT member. Gene Inman was a Medrehab employee and a PPT director.

In February 1990 RPT first contacted PPT regarding membership for its one clinic in the county of Saint Charles, Missouri. RPT was orally denied admission into the preferred provider organization. RPT again contacted PPT in December 1992 seeking admission for two clinics. PPT informed RPT that it did not have a geographic need for the location of its two clinics at that time. RPT submitted PPT's required written application in 1995 seeking affiliation for its two clinics. PPT admitted four clinics in the Saint Charles area: one owned by RPT, two owned by Ayers and Charles McDonnell, and one owned by MedRehab.

After acceptance, RPT desired to treat several patients at a non-member clinic with some special therapeutic equipment and treatment; however, it was prohibited from doing so under its contract with PPT. RPT then brought suit against Defendant on 19 March 1996 claiming that its partial exclusion from PPT constitutes an unlawful group boycott, that PPT's site restrictions in providing services amount to an unlawful horizontal territorial restraint, and that Defendant tortiously interfered with its business expectancy. The trial court granted Defendant's motions for summary judgment. RPT appeals.

RPT alleges that four errors were committed in the trial court: (1) Defendant failed to meet its burden to establish that PPT lacked market power; (2) the trial court erred in defining the relevant market broader than RPT; (3) a genuine issue of material fact as to whether the restraints imposed by PPT were justifiable under the "rule of reason"; and (4) the trial court erred in its interpretation of United States v. Topco, 405 U.S. 596, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972) because PPT engages in territorial restraints. ¹ RPT concedes that if we find the trial court did not err in its determination of the market, as argued in its point relied upon number two, then its points one and three are rendered moot. Therefore, we will begin by discussing the trial court's determination of the market influence exerted by PPT.

Section 416.141 RSMo (1994) instructs this Court to construe Sections 416.011 to 416.161 "in harmony with ruling judicial interpretations of comparable federal statutes." Section 416.031.1 RSMo (1994) parallels the 15 U.S.C. Section 1 of the Sherman Act and provides that "Every contract, combination or conspiracy in restraint of trade or commerce in this state is unlawful." Only agreements that unreasonably restrain competition will violate the Sherman Act. Standard Oil Co. v. United States, 221 U.S. 1, 58-64, 31 S.Ct. 502, 515-17, 55 L.Ed. 619 (1911).

For a violation of 15 U.S.C. Section 1 of the Sherman Act: (1) defendants must contract, combine or conspire among each other; (2) the combination or conspiracy produces adverse, anticompetitive effects within relevant product and geographic markets; (3) the objects of and the conduct pursuant to the contract or conspiracy are illegal; and (4) plaintiff is injured as a proximate result of the conspiracy. Johnston v. Norrell Health Care, Inc., 835 S.W.2d 565, 568 (Mo.App. E.D.1992). (Martin B. Glauser Dodge Co. v. Chrysler Corp., 570 F.2d 72, 81 (3rd Cir.1977), cert. denied, 436 U.S. 913, 98 S.Ct. 2253, 56 L.Ed.2d 413 (1978).) The court may analyze a plaintiff's claim as either a per se violation of the Sherman Act, as when direct competitors agree to set prices or restrict output, or under the "rule of reason" to determine if the agreement unreasonably restrains competition. Levine v. Central Florida Medical Affiliates, Inc., 72 F.3d 1538, 1546 (11th Cir.1996).

In Levine, an internist sought redress from a preferred provider organization, among others. Levine asserted that his repeated denial of membership in the organization and the organization's policy of discouraging its member doctors from referring patients outside the network establishes a group boycott which is a per se violation of the Sherman Act. The court disagreed. Th...