Williams v. Kleaveland

• Decision Date: 30 November 1981
• Docket Number: No. G78-647.,G78-647.
• Citation: 534 F. Supp. 912
• Parties: Dale L. WILLIAMS, M.D., Plaintiff, v. Justin I. KLEAVELAND, M.D.; Austin Aardema, M.D.; Lloyd J. Lemmen, M.D.; Max J. Busard, M.D.; Marlin P. Krenz, M.D.; Leland E. Holly, II, M.D.; Donald K. Crandall, M.D.; Guido W. Annessa, M.D.; Richard Peters, M.D.; Sisters of Mercy Health Corporation d/b/a Mercy Hospital, a Michigan non-profit corporation, and Hackley Hospital, a Michigan non-profit corporation, Defendants.
• Court: U.S. District Court — Western District of Michigan

534 F. Supp. 912

Dale L. WILLIAMS, M.D., Plaintiff, v. Justin I. KLEAVELAND, M.D.; Austin Aardema, M.D.; Lloyd J. Lemmen, M.D.; Max J. Busard, M.D.; Marlin P. Krenz, M.D.; Leland E. Holly, II, M.D.; Donald K. Crandall, M.D.; Guido W. Annessa, M.D.; Richard Peters, M.D.; Sisters of Mercy Health Corporation d/b/a Mercy Hospital, a Michigan non-profit corporation, and Hackley Hospital, a Michigan non-profit corporation, Defendants.

No. G78-647.

United States District Court, W. D. Michigan, S. D.

November 30, 1981.

COPYRIGHT MATERIAL OMITTED

Kenneth Frankland, Lansing, Mich., for plaintiff.

J. Terrence Dillon, Grand Rapids, Mich., David Ettinger, Detroit, Mich., for defendants.

OPINION

ENSLEN, District Judge.

This case is before the Court pursuant to Defendants' Motions for Summary Judgment. Plaintiff, Dale L. Williams, M.D., who was deprived of his staff privileges at both Mercy Hospital and Hackley Hospital, asserts that he lost these privileges because of Defendants' violations of Sections 1 and 2 of the Sherman Anti-Trust Act, 15 U.S.C. §§ 1 and 2. He seeks both equitable relief and treble damages.

Plaintiff is a board certified specialist in family practice in Muskegon, Michigan, and is presently a member of the hospital staff of Heritage Hospital in Muskegon. He alleges that Defendant Mercy Hospital, a non-profit hospital in Muskegon; Guido W. Annessa, M.D., chief of staff of Mercy Hospital; Richard Peters, M.D., a member of the ad hoc committee which evaluated Plaintiff's qualifications to retain hospital privileges at Mercy; and Donald K. Crandall, M.D., a member of both the executive committee of Mercy Hospital and of the ad hoc committee, acted in concert with other named Defendants in wrongfully removing him from the Mercy staff.

Plaintiff makes similar allegations against Hackley Hospital, a non-profit corporation in Muskegon; Justin I. Kleaveland, M.D., chief of cardiology at Hackley Hospital; Austin Aardema, M.D., chief of medicine at Hackley, and chairman of the ad hoc committee which reviewed Plaintiff's credentials; Lloyd J. Lemmen, M.D., a member of the ad hoc committee; J. Max Busard, M.D., a member of the Board of Trustees of Hackley Hospital which confirmed Plaintiff's removal from the Hackley staff; Marlin P. Krenz, M.D., chief of staff of Hackley Hospital, and the individual who appointed the ad hoc committee which reviewed Plaintiff's credentials; and Leland F. Holly, II, M.D., a member of the ad hoc committee at Hackley.

Count I of the Complaint charges that on or before July 13, 1976, Defendants Mercy, Crandall, Annessa, and Peters unjustifiably, and as a product of collective thought and planning determined that Plaintiff's plans for the establishment of a health maintenance organization in Muskegon County constituted a threat to the hospital's and individual practitioners' trade and business and therefore decided to review his credentials with the intention of destroying Plaintiff's ability to practice medicine in the area. He claims that, within a month of the initiation of proceedings at Mercy, Hackley Hospital, and Defendant doctors on the Hackley staff, commenced against against him for the same reason.

By preventing him from practicing in the two largest American Medical Association accredited hospital facilities in Muskegon (Defendants claim that the AMA is not an accrediting agency), Plaintiff contends that Defendants prevented him from effectively competing with the individual physician Defendants in the practice of medicine, from competing with the hospitals by providing alternative care, denied him access to monopoly services at the hospitals, and that these actions constituted a combination and conspiracy to boycott Plaintiff in violation of Section 1 of the Sherman Anti-Trust Act. By refusing to permit him to practice on the hospital staff, Plaintiff charges that Defendants conspired to monopolize trade and commerce (the practice of general medicine), and that the individual doctors acquired total control over the access to hospital medical practice by competing physicians. He claims that they have acted in concert to prevent Plaintiff's entry as a competitor in violation of Section 2 of the Act. Additionally, Plaintiff charges that Defendants attempted to monopolize a part of commerce or trade which is also a violation of Section 2.

Defendants contend that Plaintiff's allegations are fatally deficient because he is unable to show the requisite public injury as a result of his dismissal and that if he has any action at all, Plaintiff must seek redress in a private tort action in the state court. Defendants claim that there has been no adverse effect on competition, emphasizing the requirement of the anti-trust laws and that there must be injury to competition and not to the competitor, and that there has been no evidence to suggest, and that Plaintiff will be unable to do so at trial, that Defendants' actions affected anyone besides Dr. Williams. Where there is no per se violation of the Sherman Act, the Court must determine whether or not the activity in question unreasonably restrains trade. Lamb Enterprises, Inc. v. Toledo Blade Company, 461 F.2d 506, 517 (CA 6 1972) cert. den. 409 U.S. 1001, 93 S.Ct. 325, 34 L.Ed.2d 262 (1972).

All parties agree that this case is governed by the "rule of reason" rather than the "per se" standard. Under Sections 1-7 of the Sherman Act, some agreements and practices are invalid per se while others are illegal only as applied to particular situations. U.S. v. E.I. DuPont de Nemours & Company, 351 U.S. 377, 76 S.Ct. 994, 100 L.Ed. 1264 (1956). Refusal to deal becomes illegal under Sections 1-7 of the Act only when it produces an unreasonable restraint of trade, such as price fixing, elimination of competition or creation of a monopoly. Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F.2d 283 (CA 6 1963), cert. den. 375 U.S. 922, 84 S.Ct. 267, 11 L.Ed.2d 166 reh. den. 375 U.S. 982, 84 S.Ct. 479, 11 L.Ed.2d 428 (1963).

There is a heavy presumption against implicit exemptions from the Sherman Act's proscription of activities in restraint of trade or commerce. Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975). Thus, there is no blanket exemption to the anti-trust laws for the learned professions. Selman v. Harvard Medical School, 494 F.Supp. 603 (S.D. N.Y.1980). However, the Supreme Court in Goldfarb has acknowledged that some exemptions do exist:

The fact that a restraint operates upon a profession as distinguished from a business, is, of course, relevant in determining whether that particular restraint violates the Sherman Act. It would be unrealistic to view the practice of professions as interchangeable with other business activities, and automatically to apply to the professions antitrust concepts which originated in other areas. The public service aspect, and other features of the professions, may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently. We intimate no view on any other situation than the one with which we are confronted today. Id. 421 U.S. at 788 n.17, 95 S.Ct. at 2013 n.17.

See Nara v. American Dental Association, 526 F.Supp. 452 (W.D.Mich.1981).

Many of the learned professions are licensed and regulated by the state, as is the medical profession. The Supreme Court in Goldfarb also distinguished between action which is "prompted" by the state, and that which is "compelled" by direction of the state acting as sovereign. Id. 421 U.S. at 791, 95 S.Ct. at 2015. In this context, the relevant statute M.C.L.A. § 333.21513 provides:

DUTIES AND RESPONSIBILITIES OF OWNER OPERATOR OR GOVERNING BODY

Sec. 21513. The owner, operator, and governing body of a hospital licensed under this article:

(a) Are responsible for all phases of the operation of the hospital, selection of the medical staff, and quality of care rendered in the hospital.

(b) Shall cooperate with the department in the enforcement of this part, and require that the physicians and other personnel working in the hospital and for whom a license or registration is required be currently licensed or registered.

(c) Shall assure that physicians admitted to practice in the hospital are granted hospital privileges consistent with their individual training, experience, and other qualifications.

(d) Shall assure that physicians admitted to practice in the hospital are organized into a medical staff to enable an effective review of the professional practices in the hospital for the purpose of reducing morbidity and improving the care provided in the hospital for patients. This review shall include the quality and necessity of the care provided and the preventability of complications and deaths occurring in the hospital.

Given this state required responsibility, and considering that the public interest involved is significant, I refused to substitute my judgment for that of the hospital's determination of what constituted appropriate medical care and what standards were to be utilized in a physician referral system in Smith v. Northern Michigan Hospitals, 518 F.Supp. 644 (W.D.Mich.) (1981) in granting a motion for summary judgment. Defendants urge the same result here. However, in considering a Motion for Summary Judgment, a District Court must determine whether any material factual issues exist which can only be resolved through a trial. United States v. Allen, 578 F.2d 236 (CA 9 1978). In the past, the general belief was that summary judgment had little or no application to antitrust cases. Poller v. Columbia Broadcasting Systems, 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). While trial courts are still reluctant to grant Motions for Summary Judgment in antitrust actions, the Supreme Court changed the rule somewhat in First National Bank v. Cities Service Company, 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968):

To the extent that p

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