The opinion of the court was delivered by: MINER
Memorandum-Decision and Order
Plaintiff, an anesthesiologist, has commenced this action for declaratory, injunctive and monetary relief against the following defendants: Champlain Valley Physicians Hospital Medical Center (hereinafter the "hospital"), its President, David T. Hannan, its Chief of Staff, Michael J. Moynihan, Anesthesia Associates of Plattsburgh, P. C. (hereinafter "AAP"), its President, John Menustik and the hospital's Chief of Anesthesiology, Salem Bayoumy. Plaintiff's complaint contained claims for relief under the Sherman and Clayton Antitrust Acts, 15 U.S.C. §§ 1 et seq., the Civil Rights Act of 1871, 42 U.S.C. § 1983 and the Medicare Act, 42 U.S.C. §§ 1395 et seq. Subject matter jurisdiction for the various federal claims was predicated upon 28 U.S.C. §§ 1331(a), 1343(3) and 1337. Additionally, the complaint set forth four claims for relief invoking this Court's pendent jurisdiction, and, finally, treble damages, compensatory damages and punitive damages were sought.
On July 19, 1979, the Honorable James T. Foley, U.S.D.J., granted defendants' motion to dismiss as to the civil rights, medicare and state pendent claims and denied defendants' motion to dismiss as to the antitrust claims. Plaintiff's cross-motion for preliminary injunctive relief was denied and dismissed. See Konik v. Champlain Valley Physicians Hospital Medical Center, 79-CV-217 (N.D.N.Y. July 19, 1979). The only claims remaining, then, are plaintiff's antitrust claims.
Before this Court is defendants' motion to dismiss the antitrust claims for lack of subject matter jurisdiction and for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), and, in the alternative, for summary judgment pursuant to Fed. R. Civ. P. 56(b). Also before this Court is plaintiff's cross-motion for partial summary judgment pursuant to Fed. R. Civ. P. 56(a).
Plaintiff is a physician duly licensed to practice medicine in the State of New York. She has held her license since 1958 and her specialty is anesthesiology. On January 1, 1961, Dr. Konik was appointed to the staff of the predecessor of the defendant, Champlain Valley Physicians Hospital Medical Center, and has remained on the general medical staff of the defendant hospital over the last twenty-two years. (Affidavit of Louise Konik, M.D., sworn to October 27, 1982, para. 8; hereinafter "Konik Affidavit").
Indeed, Dr. Konik has served as Chief of the Anesthesiology Department at the hospital.
In June, 1969, the anesthesiologists serving the defendant hospital subscribed to a document that stated their intent to form a professional group for the practice of anesthesiology in Plattsburgh. Plaintiff herself signed this document. (Affidavit of David T. Hannan, sworn to April 9, 1979, Ex. A; hereinafter "Hanna Affidavit"). Moreover, due to the expansion of the hospital and the increase in the need for their professional services, the hospital encouraged the five staff anesthesiologists to "enter a group practice arrangement." (Hannan Affidavit, Ex. C). A formal partnership agreement, reciting the wishes of the hospital, was executed by the anesthesiologists on January 1, 1971. (Hannan Affidavit, Ex. B). During this early existence of the anesthesiology group, however, the hospital did not believe that a formal contract between itself and the group was required since the scheduling of services through the group "would preempt the available caseload." (Hannan Affidavit, Ex. D).
There is no mention of fee arrangements in the anesthesiologists' partnership agreement. However, there is some evidence that a billing fee of $35.00 was collected by the hospital for anesthesia services during obstetrical vaginal delivery, that quarterly transfers of the accumulated fees were made to the group, and that such an arrangement was the product of an agreement between the hospital and the anesthesiologists as a group. (Hannan Affidavit, Ex. F).
During the year 1973, the anesthesiology group established a professional corporation, allegedly for administrative and professional reasons. This is the professional corporation which in this action constitutes the defendant AAP (Konik Affidavit, para. 25). Dr. Konik continued to be affiliated with AAP until August, 1978. (Id., P 27).
It is not entirely clear from the record whether plaintiff chose to withdraw from the AAP as a consequence of the hospital's decision to require a formal contractual undertaking between itself and the anesthesiologists as a condition to the delivery of those services, or, whether plaintiff withdrew from the group for internal and personal reasons other than the contractual clauses plaintiff now finds to be objectionable.
In any event, the hospital's stated reason for the contractual arrangement was to "provide community anesthesiology services sufficient in quantity and quality to meet the ongoing surgical and obstetrical demands of its patients." (Hannan Affidavit).
Plaintiff alleges that at this time she was advised that she would not be permitted any access to the surgical suites at the hospital unless she agreed "to abide by and become a signatory to the contemplated exclusive contract between the hospital and defendant, AAP." (Konik Affidavit, para. 30). However, on August 1, 1978, an offer was made to Dr. Konik on behalf of the hospital and its administration, to allow her to practice at the hospital and deliver anesthesia services for a period of time up to September 1, 1978, as an independent physician on the staff practicing as "a solo physician." (Konik Affidavit, para. 31, Exs. 5, 6).
During this period of time, plaintiff maintains, there was no disruption in anesthesia coverage at the hospital, the assignment of anesthesia services was effectively handled by the Department of Anesthesiology, she effectively competed with AAP in delivering anesthesia services to the hospital, and that this arrangement "proceeded smoothly . . . with no problems whatsoever," in part because she was obligated to abide by the bylaws of the General Medical staff of the hospital as well as all of the rules, regulations and bylaws of the Department of Anesthesiology, all of which allegedly provide that physicians must furnish necessary services when required.
(Id., P 33). Plaintiff further maintains that on September 1, 1978 defendant President Hannan ordered defendant Bayoumy, then Chief of Anesthesiology, to remove Dr. Konik from the anesthesia rotation schedule. As a consequence, plaintiff has not engaged in the active practice of her profession at the defendant hospital since September, 1978.
Between September and November, 1978, the hospital and plaintiff attempted to reach an accommodation regarding the content of the agreements which the hospital allegedly required as a condition of the delivery of anesthesiology services to its patients. One of the proposed agreements is alleged to have provided for a uniform posted fee schedule to which the plaintiff objected. Dr. Konik signed and submitted a counter proposal, dated September 29, 1978, with a provision, originally contained in the earlier August 31, 1978 tripartite agreement subscribed to by the hospital and AAP but unsigned by plaintiff, that provided that the fees charged will be no greater than those charged by other anesthesiologists for similar work situations in upstate New York. (Hannan Affidavit, Ex. G). This counter proposal also sought to reserve to the plaintiff all legal rights against the defendants. The defendant hospital and the defendant AAP did not sign this proposal.
Plaintiff states that she was "forced" to sign and submit this counter proposal "to restore my access to the surgical suites of the defendant hospital in order that I could continue delivering anesthesia services," lest professional inactivity result in a deterioration of her skills. (Konik Affidavit, para. 35). Dr. Konik further states that she will not be coerced into entering into any contract, similar to the August 31, 1978 agreement, regulating her fee schedule and that, as a competent practitioner of 18 years, she will not have her status reviewed every six months as provided for in the contract. She asserts that the matter of a due process violation (denial of the use of hospital facilities for delivery of anesthesiological services), in addition to the contractual impasse, was brought to the attention of the State and County Medical Societies at a November 13, 1978 meeting between the principals and representatives of those societies. (Konik Reply Affidavit).
A new proposal was submitted by defendants, attempting to incorporate the clauses desired by plaintiff and reach an accommodation as to the disputed reservation of legal rights. (Hannan Affidavit, Ex. I). Plaintiff apparently refused to sign this compromise agreement. Therefore, plaintiff claims, the original tripartite agreement (hospital-AAP-plaintiff) of August 31, 1978, signed only by the defendants hospital and AAP, is presently in effect.
Plaintiff's remaining claim, entitled "First Cause of Action," purports to set forth claims under 15 U.S.C. §§ 1, 2, 14, 15 and 26. Under the heading of "First Cause of Action," two individual "counts" are pleaded, alleging violations of 15 U.S.C. §§ 1 and 2. A liberal reading of plaintiff's antitrust averments reveals that the gravamen of her § 1 claims are premised upon the per se violations of price-fixing, United States v. Trenton Potteries Co., 273 U.S. 392, 398, 71 L. Ed. 700, 47 S. Ct. 377 (1927), and group boycotts or concerted refusals to deal, Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 212, 3 L. Ed. 2d 741, 79 S. Ct. 705 and n. 5 (1959) (Complaint, para. 40, 41). Plaintiff's partial summary judgment motion is specifically predicated upon a showing of an illegal tying arrangement (exclusive contract), horizontal price fixing, vertical price fixing, illegal group boycott, and a violation of the essential facilities doctrine. (Notice of Motion by Plaintiff for Partial Summary Judgment, dated October 27, 1982).
Defendants have asserted in their summary judgment motion
an array of defenses against plaintiff's antitrust claims, including: (1) the lack of a showing of the existence of an exclusive contract, Capili v. Shott, 620 F.2d 438 (4th Cir. 1980); (2) the failure to demonstrate a conspiracy or a combination in restraint of trade or commerce among the states; and (3) the lack of subject matter jurisdiction under the Sherman Act, Yellow Cab Co. of Nevada v. Cab Emp. Automotive, 457 F.2d 1032 (9th Cir. 1972); Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Center, 536 F. Supp. 1065 (E.D. Pa. 1982). As a threshold matter, this Court shall consider the jurisdictional question.
Jurisdictional Prerequisites Under the Sherman Act
The jurisdictional requirement under the Sherman Act may be satisfied by showing that the challenged activity either occurred in interstate commerce, or, though wholly local in nature, has an effect on interstate commerce. McLain v. Real Estate Board, Inc., 444 U.S. 232, 62 L. Ed. 2d 441, 100 S. Ct. 502 (1980). "It can no longer be doubted . . . that the jurisdictional requirement of the Sherman Act may be satisfied under either the 'in commerce' or the 'effect on commerce' theory." Id. at 242. It is also well established that the jurisdictional issue in antitrust cases involving the denial of hospital staff privileges or access to hospital facilities may be determined under the "effect on commerce" test. Crane v. Intermountain Health Care, Inc., 637 F.2d 715 (10th Cir. 1980). See also Mishler v. St. Anthony's Hospital Systems, 694 F.2d 1225 (10th Cir. 1981).
To establish jurisdiction under the "effect on commerce" test plaintiff need not show that the defendants' challenged conduct itself had a substantial effect on interstate commerce. "If establishing jurisdiction required a showing that the unlawful conduct itself had an effect on interstate commerce, jurisdiction would be defeated by a demonstration that the alleged restraint failed to have its intended anticompetitive effect. This is not the rule of our cases."
McLain v. Real Estate Board of New Orleans, supra, 444 U.S. at 243. The plaintiff, then, must establish that there exists a sufficient nexus between the challenged activity and interstate commerce so that it can be said "as a matter of practical economics" there is "a not insubstantial effect on the interstate commerce involved." Id. at 246. In determining jurisdiction, there is no talismanic test. "Rather, jurisdiction must be determined using a case-by-case analysis of the relevant economic facts." Heille v. City of St. Paul, Minnesota, 671 F.2d 1134, 1136 (8th Cir. 1982). Moreover, "the impact defendant's professional activities may have upon interstate commerce . . . is a question of fact. . . ." Williams v. St. Joseph Hospital, 629 F.2d 448, 454 (7th Cir. 1980).
Here, it is conceded that the plaintiff, Dr. Konik, has been denied use of the facilities at the defendant hospital for delivery of anesthesia services because she failed to sign a contract for the rendering of such services. Dr. Konik alleges that this denial of access by the named defendants violated the antitrust laws under the Sherman Act.
In maintaining that the jurisdictional requirement of the Sherman Act has been met, Dr. Konik presents allegations in her complaint, accompanied by certain proof in depositions and affidavits, that:
1. plaintiff treated patients who traveled in interstate commerce;
2. plaintiff administered and prescribed a substantial quantity of pharmaceutical drugs and anesthesia supplies which were manufactured out of state;
3. a substantial portion of the fees charged by plaintiff was paid by out of state, third-party insurers and payers, ...