Seidenstein v. National Medical Enterprises, Inc.
| Decision Date | 03 September 1985 |
| Docket Number | No. 83-1792,83-1792 |
| Citation | 769 F.2d 1100 |
| Parties | 1985-2 Trade Cases 66,760 Harvey SEIDENSTEIN, M.D., and Harvey Seidenstein, P.A., A Professional Association, d/b/a Drs. Seidenstein and Didonna, P.A., Plaintiffs-Appellees Cross-Appellants, v. NATIONAL MEDICAL ENTERPRISES, INC., and National Medical Hospital of Texas, Inc., d/b/a Sierra Medical Center, Defendants-Appellants Cross-Appellees, Herbert McDonald, M.D., John Hill, M.D. and Joe Kidd, M.D., Defendants Cross- Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Richard Munzinger, Stuart R. Schwartz, El Paso, for all defendants-appellants cross-appellees.
Brice A. Tondre, Wheat Ridge, Colo., Malcolm McGregor, El Paso, Tex., for plaintiffs-appellees cross-appellants.
Appeals from the United States District Court for the Western District of Texas.
Before GEE, WILLIAMS and JOLLY, Circuit Judges.
This appeal arises from the suspension of Dr. Harvey Seidenstein's medical staff privileges at Sierra Medical Center, a private hospital in El Paso, Texas. Texas law governs the major issue, one of defamation.
Sierra Medical Center (Sierra) is one of five hospitals in El Paso offering invasive cardiology and open heart surgery; it is owned by National Medical Enterprises (NME), a California corporation. Dr. Edward Egbert is chairman of Sierra's governing board and a director of NME. Dr. John Hill and Dr. Herbert McDonald are invasive cardiologists. Hill is a member of Sierra's governing board and McDonald is its director of cardiology. Dr. Joe Kidd is a cardiovascular surgeon whose primary practice of open heart surgery is conducted for the most part at Sierra. Dr. Harvey Seidenstein is also an invasive cardiologist. In 1978 he had staff privileges at seven El Paso hospitals including Sierra, although he had never used Sierra's facilities.
Dr. Seidenstein told Dr. Egbert in August 1978 that he intended to exercise his Sierra staff privileges. Sierra's cardiology department was not happy when it heard the news of Dr. Seidenstein's impending arrival. In the years preceding his announcement, Dr. Seidenstein had managed to alienate a goodly portion of the El Paso cardiological community; his conduct had scarcely been such as to engender much personal affection. The record relates how Dr. Seidenstein was accustomed to "giving the Bird" to others in the operating room, and how he called Dr. Crossett "a senile old butcher," Dr. Kern "incompetent," Dr. Iwen "utterly incompetent," Dr. Coldwell "an idiot," Dr. Egbert "dumb," Dr. Hill "a faggot," Dr. Kidd "unethical," and the Sierra board "a bunch of incompetent obstetricians, incompetent internists, and lesser qualified GPs." Dr. Seidenstein endeared himself to his nurse-technician, a Mexican-American, by commenting that his female Mexican-American patients should be overradiated to prevent them from having babies who would grow up to be on welfare, and that Dr. Velez, a Mexican-American cardiologist, was incompetent and should be sent back to South America by the Border Patrol. With similar tact, Dr. Seidenstein told Dr. Kidd's surgical nurse that it was unnecessary for her to prepare post-operative orders for Dr. Kidd's patients because "none of [them] would make it that far anyway." As Dr. Kidd emerged from the operating room after performing surgery to repair a congenital heart defect, Dr. Seidenstein remarked to the director of the Providence cardiac catheterization lab (hereafter cath lab) that "these kinds of cases shouldn't be done in El Paso; they should be sent to Houston to be done by a trained surgeon." Dr. Seidenstein further strained his relationship with local cardiologists by interposing non-existent cases and feigned emergencies to block others from use of the Providence cath lab.
Such incidents aroused strong feelings, sufficiently so that members of Sierra's cardiology department threatened to quit if Seidenstein began to practice there. Sierra's Executive Committee met to discuss the situation; at the meeting, witnesses recounted incidents like those detailed above to explain their refusal to work with Dr. Seidenstein. The Committee voted to suspend Dr. Seidenstein's privileges at the hospital immediately. Dr. Seidenstein was informed by letter dated October 11, 1978, of the charges on which his suspension had been based; the letter read as follows:
The governing body of Sierra Medical Center charges that you have demonstrated an inability to work harmoniously with others. You are charged with an inability to cooperate with personnel of this hospital, of making slanderous and derogatory statements about the hospital itself, its governing body, medical staff, corporate owner and administration. The governing body of Sierra Medical Center determined that summary suspension of your clinical privileges was in the best interest of patient care at Sierra Medical Center. The cardiology program at this hospital is essential if the hospital is to maintain the quality of patient care for which it strives. Cooperation and congenial working relationships between cardiologists and surgeons, lab technicians, nurses and other hospital personnel is essential. You have wrongfully maligned and questioned the abilities of cardiologists and surgeons on the staff of this hospital. You have attempted to monopolize laboratories at other hospitals where you have practiced, making it difficult, if not impossible, for other cardiologists to practice with you. You are charged with having "banked" hospital laboratories for extended periods of time thereby preventing other cardiologists from using laboratory procedures. In these instances, patients have not appeared and tests have not been made even though laboratory schedules appear to have been full. You have indicated a desire to control hospital laboratories and have instructed lab technicians not to schedule patients of other physicians and to inform other physicians that the technicians are unable to assist in performing certain tests, when such was not the case. You are charged with "bumping" patients of other physicians by claiming the existence of a medical emergency which would justify such action, when, in fact, no such emergency existed.
You are charged with viciously and unnecessarily questioning the competence of other physicians. You have demonstrated an inability to work within the prescribed rules and regulations at hospitals, including William Beaumont Army Medical Center and Providence Memorial Hospital.
Seidenstein appealed his suspension to a Judicial Review Committee. The Committee held a hearing, lasting thirteen hours, at which many witnesses, including McDonald, Hill, and Kidd, testified. At some point after the suspension but before the Committee announced its final decision, Dr. Egbert said to a group of Sierra doctors that the reasons for Dr. Seidenstein's suspension "were of such a grave ethical and moral nature that they could not be disclosed."
On November 21, 1978, the Judicial Review Committee affirmed Dr. Seidenstein's suspension; it concluded that he had "demonstrated a pattern of behavior which has gone on for a decade and which the Board felt could be anticipated to continue." Dr. Seidenstein responded to his suspension and Dr. Egbert's remark by bringing this action against Hill, Kidd, McDonald, Sierra and NME, alleging violations of Sections 1 and 2 of the Sherman Act, denial of due process and equal protection under the United States and Texas constitutions, violations of Secs. 1983 and 1985, violations of federal Medicare and Medicaid regulations, tortious interferences with business relationships, deceptive trade practices, trade disparagement, libel, and slander.
Before trial the district court granted defendants' motions to dismiss and for partial summary judgment on all but the Sherman Act, tortious interference, and defamation claims. At the close of the evidence, the court granted defendants' motion for a directed verdict as to Dr. Seidenstein's claims of libel and conspiracy to monopolize, attempted monopolization, and monopolization under section 2 of the Sherman Act, found Dr. Egbert's remark, the alleged slander, to have been uttered on a conditionally privileged occasion, and submitted the remaining case to the jury on 23 special interrogatories.
The jury found that defendants neither violated section 1 of the Sherman Act nor tortiously interfered with Dr. Seidenstein's business relationships. It did find for Seidenstein on his slander claim and set damages at $625,000. Defendants filed motions for judgment notwithstanding the verdict and for partial new trial, which were denied; judgment was entered for Seidenstein. His motions for new trial and for entry of mandatory injunction were also denied. Defendants appealed, and Dr. Seidenstein cross-appealed.
"Actual Malice"
Dr. Egbert made the statement at issue here--that the reasons for Dr. Seidenstein's suspension "were of such a grave ethical and moral nature that they could not be disclosed"--to a group of Sierra doctors. Dr. Egbert and the doctors shared a common, and legitimate, interest in the suspension; Dr. Egbert's remark was thus protected by the conditional privilege granted under Texas law to "statements which occur under circumstances wherein any one of several persons having a common interest in a particular subject matter may reasonably believe that facts exist which another, sharing that common interest, is entitled to know." Gaines v. CUNA Mutual Insurance Society, 681 F.2d 982, 986 (5th Cir.1982), quoting McDowell v. Texas, 465 F.2d 1342, 1344-45 (5th Cir.1971), cert. denied, 410 U.S. 943, 93 S.Ct. 1371, 35 L.Ed.2d 610 (1973); see Dixon v. Southwestern Bell Telephone Co., 607 S.W.2d 240, 242 (Tex.1980); Dun & Bradstreet, Inc. v. O'Neil, 456 S.W.2d 896 (Tex.1970). The trial court's finding of conditional privilege is not disputed, nor is it disputed that Texas law requires a showing of...
To continue reading
Request your trial
-
Wagner v. TEXAS A & M UNIVERSITY
...U.S. ___, 116 S.Ct. 1318, 134 L.Ed.2d 471 (1996); Duffy, 44 F.3d at 312-13; Danawala, 14 F.3d at 254; Seidenstein v. National Medical Enter., Inc., 769 F.2d 1100, 1103-04 (5th Cir. 1985); Gaines, 681 F.2d at 986; Hurlbut v. Gulf Atlantic Life Ins. Co., 749 S.W.2d 762, 768 (Tex.1987). To sho......
-
Ginzburg v. Memorial Healthcare Systems, Inc.
...physician was "slicing the geographic market much too thin" in limiting the market to one hospital); Seidenstein v. Nat'l Med. Enter., Inc., 769 F.2d 1100, 1106 (5th Cir.1985) (finding that there was no evidence to prove that the hospital should be "recognized as a separate and distinct mar......
-
Allen-Myland, Inc. v. Intern. Business Machines
...Courts have generally rejected market definitions limited to the defendant's products. See, e.g., Seidenstein v. National Medical Enterprises Inc., 769 F.2d 1100, 1106 (5th Cir.1985); Domed Stadium Hotel, Inc. v. Holiday Inns, Inc., 732 F.2d 480, 488 (5th Cir.1984); Edward J. Sweeney & Sons......
-
Defiance Hosp. v. Fauster-Cameron, Inc.
...limiting market to one hospital), cert. denied, 488 U.S. 852, 109 S.Ct. 137, 102 L.Ed.2d 110 (1988); Seidenstein v. National Medical Enterprises, Inc., 769 F.2d 1100, 1106 (5th Cir.1985) (no evidence that the hospital "is recognized as a separate and distinct market, or that unique services......
-
ANTITRUST AND RACE.
...definition rejections in cases involving racial discrimination allegations, see, for example, Seidenstein v. Nat'l Med. Enters., Inc., 769 F.2d 1100, 1106 (5th Cir. 1985); Hu v. Huey, 325 Fed. App'x. 436, 439 (7th Cir. 2009). Judicial rejection of narrow market definition is in part due to ......