Willis v. Santa Ana Community Hospital Ass'n

• Decision Date: 04 December 1962
• Citation: 376 P.2d 568,58 Cal.2d 806,26 Cal.Rptr. 640
• Court: California Supreme Court
• Parties: , 376 P.2d 568 H. B. K. WILLIS, Plaintiff and Appellant, v. SANTA ANA COMMUNITY HOSPITAL ASSOCIATION et al., Defendants and Respondents. L. A. 26890.

Page 640

26 Cal.Rptr. 640

58 Cal.2d 806, 376 P.2d 568

H. B. K. WILLIS, Plaintiff and Appellant, v. SANTA ANA COMMUNITY HOSPITAL ASSOCIATION et al., Defendants and Respondents.

L. A. 26890.

Supreme Court of California, In Bank.

Dec. 4, 1962.

Jacobs, Jacobs, Nelson & Witmer and M. Lyle Nelson, Santa Ana, for plaintiff and appellant.

McCloskey, Wilson & Mosher and Theodore C. Carlstrom, Palo Alto, amici curiae on behalf of plaintiff and appellant.

W. Mike McCray and H. Warren Knight, Santa Ana, for defendantsa and respondents.

Peart, Baraty & Hassard, San Francisco, Beardsley, Hufstedler & Kemble, Musick, Peeler & Garrett, James E. Ludlam and Charles F. Forbes, Los Angeles, amici curiae on behalf of defendants and respondents.

GIBSON, Chief Justice.

Plaintiff, an osteopathic physician and surgeon licensed to practice in California, brought this action to recover damages from defendants, the Santa Ana Community Hospital Association, its named directors and administrator, three osteopathic physicians, and two doctors of medicine. The complaint seeks relief under both the Cartwright Act (Bus. & Prof.Code, §§ 16700-16758) and common law principles. Plaintiff appeals from a judgment of dismissal entered when he failed to amend after the trial court sustained general demurrers to the complaint. We have concluded that the Cartwright Act is not applicable but that the complaint states a cause of action at common law.

The complaint may be summarized as follows: Defendants, with malice and intent to oppress, entered into a conspiracy to dominate the practice of medicine by licensed osteopathic physicians and surgeons in Orange County, to prevent some osteopaths from acquiring membership on the staffs of hospitals in the Santa Ana area in which membership is necessary before they can properly treat their patients, to restrain and eliminate fair competition in the medical field in the county, and to enhance the practice of defendant physicians. Pursuant to the conspiracy, plaintiff's membership on the osteopathic staff of defendant hospital was terminated in 1959 without any hearing or assigned reason, and defendants indicated to the public that he was expelled because of questionable competence and reputation. As a result, plaintiff was prevented from acquiring membership on the osteopathic staffs of other hospitals having adequate facilities and was unable to place his patients in such hospitals. Plaintiff's professional ethics and qualifications are of the highest caliber, and solely by reason of the conspiracy, he has lost and will lose patients, thereby suffering loss of income. Plaintiff prays for damages in an amount three times that of his alleged losses of income and for punitive damages.

Cartwright Act

The Cartwright Act provides that, with exceptions not relevant here, every 'trust' is unlawful and void and that any person injured in his business or property by anything declared unlawful in the act may recover three times the damages sustained by him. (Bus. & Prof.Code, §§ 16726, 16750.) The term 'trust' is defined as 'a combination of capita, skill or acts by two or more persons' for any of a number of purposes, of which the following are pertinent: '(a) To create or carry out restrictions in trade or commerce. (b) To limit or reduce the production, or increase the price of merchandise or of any commodity. (c) To prevent competition in manufacturing, making, transportation, sale of purchase of merchandise, produce or any commodity.' (Bus. & Prof.Code, § 16720.)

The language relating to the type of combination made unlawful does not include the term 'profession,' and the words used are subject to meanings of varying breadth. For example, the word 'trade' can be used both in the broad sense of anything practiced as a means of livelihood or in the more restricted sense of a mechanical occupation 'distinguished from the liberal arts and learned professions, and from agriculture.' (Black's Law Dictionary (4th ed. 1951) p. 1665; see also Webster's Third New Internat. Dict. (1961) p. 2421.) Although there are cases which have given the statutory language a rather broad meaning to include, for example, barbering and maintenance services (Messner v. Journeymen Barbers, etc. Internat. Union, 53 Cal.2d 873, 886, 4 Cal.Rptr. 179, 351 P.2d 347; People v. Building Maintenance, etc. Assn., 41 Cal.2d 719, 723, 264 P.2d 31), there is no California decision bringing the professions under the act.

It is significant that, in related legislation added to the Business and Professions Code at the same time as the Cartwright Act, the word 'profession' was included among the terms describing the scope of the legislation, notwithstanding the fact that the words 'trade' and 'business' were also used. (Bus. & Prof.Code, § 16600 (making void contracts restraining persons from engaging in 'a lawful profession, trade or business of any kind').) The difference in terminology between this section and the Cartwright Act may be viewed as indicating that the act was not intended to apply to the professions.

We are of the view that antitrust legislation providing for treble damages should not be applied to the professions unless the language...