St. Joseph's Hosp. Health Ctr. v. Am. Anesthesiology of Syracuse, P.C.

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: Debra Ann Livingston, Chief Judge
• Citation: St. Joseph's Hosp. Health Ctr. v. Am. Anesthesiology of Syracuse, P.C., 131 F.4th 102 (2nd Cir. 2025)
• Docket Number: 24-1643
• Decision Date: 13 March 2025
• Parties: ST. JOSEPH'S HOSPITAL HEALTH CENTER, Plaintiff-Counter-Defendant-Appellee, v. AMERICAN ANESTHESIOLOGY OF SYRACUSE, P.C., American Anesthesiology, Inc., NMSC II LLC., North American Partners in Anesthesia, LLP, Defendant-Counter-Claimants-Appellants.

131 F.4th 102

ST. JOSEPH'S HOSPITAL HEALTH CENTER, Plaintiff-Counter-Defendant-Appellee, v. AMERICAN ANESTHESIOLOGY OF SYRACUSE, P.C., American Anesthesiology, Inc.,NMSC II LLC., North American Partners in Anesthesia, LLP, Defendant-Counter-Claimants-Appellants.

24-1643

United States Court of Appeals, Second Circuit

March 13, 2025

Appeal from an order of the United States District Court for the Northern District of New York (Sannes, C.J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the order of the district court is AFFIRMED.

For Plaintiff-Counter-Defendant-Appellee: David A. Ettinger, Honigman LLP, Detroit Michigan (John F. Queenan, Rivkin Radler LLP, Albany, NY, on the brief).

For Defendant-Counter-Claimants-Appellants: William Mayer Katz, Jr., Holland & Knight LLP, Dallas, TX (Dina McKenney, Holland & Knight LLP, Dallas, TX, and Scott O'Connell, Holland & Knight LLP, Boston MA, on the brief).

Present: Debra Ann Livingston, Chief Judge, Gerard E. Lynch, Beth Robinson, Circuit Judges.

SUMMARY ORDER

Defendant-Counter-Claimants-Appellants American Anesthesiology of Syracuse, P.C., American Anesthesiology, Inc., NMSC II, LLC, and North American Partners in Anesthesiology, LLP (collectively, "NAPA") appeal from a May 16, 2024 order of the district court, denying their motion for a preliminary injunction. Plaintiff-Counter-Defendant-Appellee St. Joseph's Health Center ("St. Joseph's"), a 431-bed nonprofit hospital in Syracuse, New York, entered into a contract with NAPA (the "Agreement") under which NAPA, the largest anesthesia services provider in North America, would be the exclusive provider of anesthesia care at St. Joseph's. The Agreement contains a non-solicitation provision that prohibits St. Joseph's from inducing or hiring any NAPA employee until two years after the Agreement terminates. In late 2023, St. Joseph's informed NAPA that it would not be renewing the Agreement when it expired on July 1, 2024. The parties attempted to negotiate new contract terms or, alternatively, a buyout of the non-solicitation clause. When these negotiations proved unsuccessful, St. Joseph's initiated this action seeking a declaratory judgment that the Agreement's non-solicitation provision is unenforceable under New York law and alleging, inter alia, that NAPA violated federal and state antitrust laws. On the same day it filed its complaint and in contravention of the Agreement's non-solicitation provision, St. Joseph's sent offers of employment to the NAPA anesthesia providers working at the hospital, concluding that St. Joseph's would have otherwise been unable to offer critical care to its patients. NAPA filed a counterclaim alleging breach of the Agreement and moved for a preliminary injunction to stop St. Joseph's from soliciting or hiring its employees. On appeal, NAPA argues that the district court abused its discretion by denying its motion for a preliminary injunction and for failing to hold an evidentiary hearing before ruling. We assume the parties' familiarity with the underlying facts and the record of prior proceedings, to which we refer only as necessary to explain our decision to AFFIRM.

I. Preliminary Injunction

We review a district court's denial of a preliminary injunction for abuse of discretion. Res. Grp. Int'l Ltd. v. Chishti, 91 F.4th 107, 114 (2d Cir. 2024). "A district court has abused its discretion if it has (1) based its ruling on an erroneous view of the law, (2) made a clearly erroneous assessment of the evidence, or (3) rendered a decision that cannot be located within the range of permissible decisions." Warren v. Pataki, 823 F.3d 125, 137 (2d Cir. 2016) (quoting Lynch v. City of New York, 589 F.3d 94, 99 (2d Cir. 2009)).

"A preliminary injunction is an extraordinary and drastic remedy" and "should not be granted unless the movant, by a clear showing, carries the burden of persuasion." State Farm Mut. Auto. Ins. Co. v. Tri-Borough NY Med. Practice P.C., 120 F.4th 59, 79 (2d Cir. 2024) (internal quotation marks and citation omitted). To obtain a preliminary injunction, a party must show "(1) irreparable harm; (2) either a likelihood of success on the merits or both serious questions on the merits and a balance of hardships decidedly favoring the moving party; and (3) that a preliminary injunction is in the public interest."¹ N. Am. Soccer League, LLC v. U.S. Soccer Fed'n, Inc., 883 F.3d 32, 37 (2d Cir. 2018). "The irreparable harm requirement is the single most important prerequisite for the issuance of a preliminary injunction" and "must therefore be satisfied before the other requirements for an injunction can be considered." State Farm, 120 F.4th at 80 (internal quotation marks and citations omitted).

To establish irreparable harm, the moving party must show an "injury that is neither remote nor speculative, but actual and imminent and that cannot be remedied by an award of monetary damages." New York v. U.S. Dep't of Homeland Sec., 969 F.3d 42, 86 (2d Cir. 2020) (internal quotation marks and citation omitted). Monetary "compensation need only be 'adequate' for preliminary relief to be unwarranted, not perfect." Daileader v. Certain Underwriters at Lloyds London Syndicate 1861, 96 F.4th 351, 358 (2d Cir. 2024). NAPA alleges that without an injunction, it will be irreparably harmed by lost "customer relationships," lost opportunity costs, the loss of their trained clinicians, and reputational harm. NAPA Br. at 44; see also id. at 44-53. We agree with the district court that on this record none of these alleged harms are sufficient to entitle NAPA to a preliminary injunction.

NAPA's contention that it will be harmed by losing established "customer" relationships (i.e., those between NAPA clinicians and the other medical providers at St. Joseph's) misunderstands the sort of relationships that can be the source of irreparable harm. We have found sufficient injury where "it would be very difficult to calculate monetary damages that would successfully redress the loss of a relationship with a client that would produce an indeterminate amount of business in years to come." Ticor Title Ins. Co. v. Cohen, 173 F.3d 63, 69 (2d Cir. 1999). Even accepting NAPA's assertion that the other medical providers at St. Joseph's are their customers, it is undisputed that anesthesia providers are assigned their patients by the hospital itself, not these other doctors. And nothing in the record suggests that the physicians at St. Joseph's performing procedures requiring anesthesia can request to work with a particular NAPA clinician. The relationships NAPA employees have with other providers at St. Joseph's thus do not generate any business for NAPA, let alone "an indeterminate amount of business" that would make calculating monetary damages difficult. Id.

NAPA's argument that it will suffer lost opportunity costs without an injunction is similarly unavailing. NAPA pins its argument entirely on one declarant who attests that "NAPA intends to reassign . . . clinicians to other nearby facilities after the termination of the Agreement" and that in the past, NAPA has "tried to reassign providers" to another hospital on days when St. Joseph's "anesthesia ha[d] excess capacity." Joint App'x 271. NAPA also claims, without citation to the record, that the loss of its clinicians may force it to breach contracts to provide anesthesia services at other facilities in the area due to a general lack of capacity. The district court did not abuse its discretion in concluding that nonspecific references to reassigning personnel and speculative claims about breaching unidentified contracts are not the sort of "actual and imminent" injury sufficient to justify a preliminary injunction. Tom Doherty Assocs. v. Saban Entm't, Inc., 60 F.3d 27, 37-38 (2d Cir. 1995).

NAPA next claims that it will suffer irreparable injury without an injunction because it provides proprietary training and confidential information to its clinicians. Specifically, NAPA trains its chief clinicians on "best practices in terms of operating room efficiency, inclusion, problem resolution, and culture building" and gives employees access to a "proprietary clinical outcome database" and "Anesthesia Risk Alerts," which "provide the clinicians with real-time data driven analysis and best practices." Joint App'x 338-39. We have never held that the loss of an employee who receives any training from their employer or access to proprietary information necessarily constitutes irreparable harm. District courts have relied on employee training in some cases, but only when the training in question provided the departing employees the ability to unfairly compete with their former employer. See, e.g., Natsource LLC v. Paribello, 151 F. Supp. 2d 465, 469 (S.D.N.Y. 2001) (concluding that a brokerage firm that "expends substantial resources to help its brokers develop customer relations . . . . by providing market intelligence" would be irreparably harmed by an employee's departure...