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PURGESS v. SHARROCK

October 27, 1992

Purgess, Plaintiff, against Sharrock, et al., Defendants.

FREEH


The opinion of the court was delivered by: LOUIS J. FREEH

LOUIS J. FREEH, U.S.D.J.

 BACKGROUND

 Purgess, a Board-certified anesthesiologist, was hired by HSS in October 1988. After only a few months on the job, Purgess' employment was terminated by the hospital, allegedly on the grounds that he had failed to perform adequately.

 Purgess disputes defendants' characterization of his performance, and filed this action, claiming that Sharrock, HSS and other members of the hospital staff (a) conspired to fix prices, in violation of § 1 of the Sherman Act (Count 1); (b) conspired to restrain competition by terminating Purgess' employment at HSS, also in violation of § 1 of the Sherman Act (Count 2); (c) attempted to and conspired to monopolize the market for orthopedic anesthesiological services in the New York metropolitan area, in violation of § 2 of the Sherman Act (Count 3); and (d) engaged in and conspired to engage in a pattern of racketeering activity, in violation of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962 (a)-(d) (Counts 4 and 5). Purgess further contends that defendants fraudulently induced him to enter an employment contract with HSS (Count 6), breached that employment contract (Count 7), wrongfully withdrew his staff privileges and academic affiliation (Count 8), defamed him after they terminated his employment (Count 9), engaged in unfair competition (Count 10), tortiously interfered with his economic opportunities (Count 11), and violated 42 U.S.C. § 1983 and his constitutional right to due process (Count 13). Defendants challenge the adequacy of each of these claims.

 DISCUSSION

 A. Motion in Limine

 Purgess moved to exclude evidence of any of his cases which were not identified at the time of his discharge on the grounds that (1) after-the-fact justifications for his discharge are prohibited as a matter of law; (2) the New York Public Health Council ("PHC"), which has special expertise in the area, has already reviewed Purgess' performance in the challenged cases; (3) the additional cases were never raised in the hospital's peer review process or before any state agency and were not considered at the time of Purgess' termination; (4) the additional cases were not timely disclosed; and (5) the additional cases raise collateral issues, which will confuse the jury. Because none of these asserted grounds require that the evidence be excluded in its entirety, the motion is denied at this time. Purgess may renew his objections to that evidence at the appropriate time during trial. *fn3"

 In arguing that defendants' "after-the-fact justifications" for his discharge are precluded as a matter of law, Purgess relies on the Supreme Court's decision in Silver v. New York Stock Exchange, 373 U.S. 341, 83 S. Ct. 1246, 10 L. Ed. 2d 389 (1963). Contrary to Purgess' claims, however, Silver does not state that such justifications -- if in fact that is what the evidence at issue should be considered -- are inadmissible as a matter of law. Rather, the Court in Silver merely stated that it need not consider the defendant's proffered evidence, given its finding that the defendant could not present any justification which would negate its liability. 83 S. Ct. at 1260 ("Since it is perfectly clear that the [defendant] can offer no justification . . . for its collective action . . . and that the Exchange has therefore violated § 1 of the Sherman Act, . . . there is no occasion for us to pass upon the sufficiency of the reasons which the [defendant] later assigned for its action."). Accordingly, Silver is not binding here.

 The Court also finds that the PHC's determination regarding Purgess' conduct at HSS does not preclude defendants from introducing evidence regarding his cases. It is undisputed that the PHC's proceedings are not adversarial, and thus that HSS' ability to present its view of the matter before the PHC was substantially circumscribed. Moreover, the issue, as presented to the PHC, was not identical to that presented here.

 Finally, the Court finds that the additional cases, although disclosed late in the litigation, were produced sufficiently in advance of trial that they may be admitted into evidence. A question of fact may exist as to whether defendants actually considered the additional cases in determining that Purgess' employment at HSS should be terminated. However, that question goes to the weight to be accorded the evidence, not its admissibility. Because the evidence regarding Purgess' additional cases is clearly relevant to the issues here and because the Court does not find that such evidence will confuse the jury and/or prejudice Purgess, defendants may introduce that evidence at trial.

 B. Motion for Summary Judgment

 1. Sherman Act Antitrust Violations (Counts 1, 2, and 3)

 Defendants argue that plaintiff's federal antitrust claims fail as a matter of law because (1) plaintiff has no standing to bring those claims; (2) plaintiff cannot establish a conspiracy under the federal antitrust laws; (3) plaintiff cannot show a restraint on trade; and (4) the Hospital for special surgery has insufficient market power to monopolize any relevant market. *fn4"

 (a) Antitrust Standing Generally

 Section 4 of the Clayton Act grants private rights of action under the antitrust laws, stating that "any person who shall be injured . . . by reason of anything forbidden in the antitrust laws may sue." 15 U.S.C. § 15(a). Despite this broad language, the Supreme Court has limited the class of parties entitled to bring such actions, and has required potential plaintiffs to demonstrate more than a mere "injury in fact." Associated General Contractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 103 S. Ct. 897, 907, 74 L. Ed. 2d 723 (1983). Rather, antitrust plaintiffs must show (1) that they have suffered an "antitrust injury," and (2) that they are otherwise proper plaintiffs to bring the action at issue. Todorov v. DCH Healthcare Authority, 921 F.2d 1438, 1449 (11th Cir. 1991); Volvo No. America Corp. v. Men's International Professional Tennis Council, 857 F.2d 55, 66 (2d Cir. 1988).

 The Supreme Court has defined "antitrust injury" as

 injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendants' acts unlawful. The injury should reflect the anticompetitive effect either of the violations or of anticompetitive acts made possible by the violation. It should, in short, be ...


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