Smith v. Ricks, C 91-20368 JW.

• Decision Date: 15 July 1992
• Docket Number: No. C 91-20368 JW.,C 91-20368 JW.
• Citation: 798 F. Supp. 605
• Court: U.S. District Court — Northern District of California
• Parties: John Phillip SMITH, M.D., Plaintiff, v. William B. RICKS, M.D., et al., Defendants.

798 F. Supp. 605

John Phillip SMITH, M.D., Plaintiff, v. William B. RICKS, M.D., et al., Defendants.

No. C 91-20368 JW.

United States District Court, N.D. California.

July 15, 1992.

Jerome Berg, San Francisco, Cal., for plaintiff.

Chris G. Gasparich, Mary C. Oppedahl, Jennifer A. Shy, Jeffrey L. Fazio, Crosby, Heafey, Roach & May, Oakland, Cal., for defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

WARE, District Judge.

Plaintiff John Smith brings this action alleging violations of the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 2, and Section 6 of the Clayton Act, 15 U.S.C. § 17. Plaintiff's claims arise out of an alleged conspiracy and collusive effort by the Defendants to diminish Plaintiff's surgical practice by revoking his staff privileges at Good Samaritan Hospital of the Santa Clara Valley.

Plaintiff has named numerous defendants in his complaint, including a number of physicians "involved in the operation of the medical staff activities" at Good Samaritan; Good Samaritan Hospital and Health Dimensions, Inc., which controls Good Samaritan; a majority of the board of trustees of Good Samaritan, which voted to revoke Plaintiff's staff privileges; and two legal advisors of the above described Defendants. Pl.'s Compl. For Damages. Defendants filed this motion for summary judgment, pursuant to Fed.R.Civ.P. 56. Defendants assert that under the Health Care Quality Improvement Act of 1986, 42 U.S.C. § 11101 et seq., they are immune from federal antitrust liability.

I. BACKGROUND

Plaintiff first applied for staff privileges at The Good Samaritan Hospital of the Santa Clara Valley in November, 1981. Plaintiff became an Associate member of the medical staff in February, 1982. In March, 1983, Plaintiff's status was upgraded from Associate to Active.

Pursuant to California regulations, staff privileges must be reviewed biennially. In August, 1984, Plaintiff applied for renewal of his privileges, and in January, 1985, he was reappointed to the Hospital's medical staff. In the reapplication form, Plaintiff stated that he was appealing a decision regarding his status at another hospital, O'Connor Hospital ("O'Connor").

On January 6, 1986, the California Board of Medical Quality Assurance ("BMQA") informed Good Samaritan Hospital that Plaintiff's staff privileges at O'Connor Hospital had been revoked. The loss of privileges was based on Plaintiff's medical treatment of five patients at O'Connor Hospital. When Defendant Ullrich, then Chairman of the Department of Medicine at Good Samaritan, inquired into the details of the O'Connor decision, Plaintiff stated that the patient care claims were unfounded, were reviewed by a biased committee, and that his termination was based on a "failure to advance." Good Samaritan asked O'Connor to provide medical records for the five O'Connor patient cases which prompted Plaintiff's loss of privileges at O'Connor. Plaintiff objected to release of the documents and to an investigation by the Good Samaritan staff. Ultimately Plaintiff consented to the release of the files, and the files were received by Good Samaritan in late December, 1987.

In September, 1986, Plaintiff was once again required to submit to a biennial review of his staff privileges at Good Samaritan, as required by State regulation. The 1986 reapplication, which occurred during the investigation of Plaintiff's termination from O'Connor Hospital, was ultimately denied by Good Samaritan Hospital.

In early 1988, Defendants Ricks, Murphy, Siegel and Ullrich, who are cardiologists at Good Samaritan, reviewed the O'Connor case files and concluded that Plaintiff's treatment of those patients had been below acceptable standards of care. All five of these cases had involved the cardiac catheterization of patients.

On April 14, 1988, Good Samaritan's Cardiology Executive Committee met with Plaintiff and discussed the five O'Connor cases. Unbeknownst to the Committee, six days prior to this meeting, a patient of Plaintiff's died during a cardiac catheterization procedure. On June 9, 1988, the Committee reviewed the case file of this latest patient death, and on June 21, 1988, discussed the matter with Plaintiff. The Committee ultimately concluded that Plaintiff's privileges should be revoked. Good Samaritan's Department of Medicine Executive Committee concurred.

On July 14, 1988, the Hospital's Medical Staff Executive Committee ("MEC") received the above recommendations. Plaintiff met with the MEC on August 19, 1988. The MEC interviewed Plaintiff regarding each incident which preceded the recommendation to revoke his privileges. On August 29, 1988, the MEC notified Plaintiff it had adopted the recommendation to revoke Plaintiff's staff privileges. The MEC did indicate, however, that Plaintiff could reapply for staff privileges provided he agree to a number of conditions, including training and consultation requirements, as well as a reduced work load. The MEC and Plaintiff were unable to reach a mutual agreement on acceptable conditions for Plaintiff's reapplication. Accordingly, the MEC put forth a recommendation to revoke Plaintiff's staff privileges "based on Plaintiff's inability to interpret, organize and analyze medical information and use it as a basis for making medical judgments." Def.'s Supplemental Statement of Undisputed Facts RE Def.'s Mot. for Summ. J.

Thereafter, Plaintiff sought review of the MEC's decision by the Hospital's Judicial Review Committee ("JRC"). Plaintiff received notice of the JRC hearing, which included nine individually held sessions. Each session was transcribed by a court reporter, resulting in over 1,500 pages of transcription. The hearings were held before a hearing officer and a panel of physicians who were not in economic competition with Plaintiff. The sessions were held between April 17, 1989 and August 29, 1989. Plaintiff was represented by counsel at the sessions, and was permitted to call, examine and cross-examine witnesses. A total of six witnesses were called during the course of the hearings.

Plaintiff introduced 22 exhibits into evidence at the JRC hearing, and was presented with all evidence introduced by the medical staff. Plaintiff claims that he was denied the opportunity to have a comparison survey of Defendant "physician-competitors" medical services rendered at Good Samaritan. Pl.'s Compl. for Damages. Plaintiff argues the survey would have shown that his own work was as good, if not superior to, the work of the doctors reviewing Plaintiff's cases. Plaintiff claims the survey would show that the decision to revoke his privileges was both arbitrary and the product of an effort to eliminate Plaintiff as an economic competitor in the field of cardiac care.

On October 2, 1989, the JRC decided that the charges against Plaintiff were supported by facts and evidence. The JRC confirmed that Plaintiff's treatment of the five O'Connor patients was below an acceptable standard of care; that the records of Plaintiff's patients revealed a lack of logic, organization and judgment; and that the patient death in April, 1988 resulted from similar treatment as that exhibited by Plaintiff in the O'Connor cases. However, the JRC decided to reappoint Plaintiff to the medical staff with significant preceptorship requirements. Plaintiff accepted this decision and filed no appeal.

On October 16, 1989, the Medical Staff appealed the JRC decision to the Hospital's Board of Trustees. The Medical Staff argued that the preceptorship was not sufficient to ensure patient welfare. Plaintiff was notified of the Board's hearing and submitted a written statement. Plaintiff, represented by counsel, attended the two hearings held by the Board. The hearings were transcribed. Plaintiff's counsel conducted a voir dire of the Board. The Board accepted the JRC's findings of fact and accepted no new evidence from either party. On January 20, 1990, the Board reversed the decision of the JRC, and ordered the termination of Plaintiff's staff privileges. The Board found that preceptorship was not adequate protection of patient welfare, given the nature of the cardiac procedures Plaintiff would be performing, and the history of Plaintiff's medical performance.

Plaintiff's antitrust allegations extend beyond the events at Good Samaritan Hospital described above. Plaintiff had also maintained staff privileges at Mission Oaks Hospital in the Santa Clara Valley. In 1989, Health Dimensions, Inc., the operator of Good Samaritan, acquired Mission Oaks Hospital, and merged the two institutions into a single hospital called Good Samaritan. The medical staffs of the two hospitals were merged, and the staff of Mission Oaks was dissolved. Staff members of the former Mission Oaks Hospital who did not have privileges at Good Samaritan were invited to apply; Plaintiff chose not to do so.

The substance of Plaintiff's complaint can be described as a conspiracy theory encompassing most of the individuals who participated in the various reviews and appeals described at length above. Plaintiff alleges that the defendant cardiologists "covered" for each other by not conducting reviews of each other's work through an audit procedure. Plaintiff further alleges a number of due process violations during the review process, including: 1) that a legal advisor used by the committees was a family relative of one of Plaintiff's accusers; 2) that the Hospital by-laws imposed the burden of proof on Plaintiff to show that the decision to expel Plaintiff lacked a basis in fact or was otherwise arbitrary; 3) that Plaintiff was denied the opportunity to present a comparative survey of medical performance by all physicians in the cardiology department; 4) that Plaintiff was not permitted to present evidence of other cardiologists' cases at Good Samaritan; 5) that Plaintiff's counsel was not permitted to cross-examine adverse witnesses or otherwise actively participate in the hearing process; and 6) that Plaintiff's co...