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December 30, 1982

ROBERT G. PONTIUS, M.D., Plaintiff,
CHILDREN'S HOSPITAL, a Pennsylvania Non-Profit corporation, and HENRY T. BAHNSON, M.D., LENOX D. BAKER, M.D., THOMAS K. OLIVER, JR., M.D., JAMES R. ZUBERBUHLER, M.D., Defendants

The opinion of the court was delivered by: COHILL


 In November of 1975, Children's Hospital determined not to reappoint the plaintiff, Dr. Robert G. Pontius, to his post as a cardiovascular surgeon. The hospital reached this decision after proceedings which comported not merely with the constitutional requisites of due process, but very nearly the procedural trappings of a full scale trial. The plaintiff now seeks to use federal antitrust laws effectively to obtain judicial review of the hospital's decision not to retain him on its staff. Dr. Pontius also names in his suit four individual physicians who allegedly acted against him in ways violative of the Sherman Act, 15 U.S.C. §§ 1-7. Because the plaintiff has failed to raise any question of material fact suggesting that the hospital's decision violated the antitrust laws, the motion of defendant Children's Hospital for summary judgment must be granted. With respect to the individual defendants, the plaintiff has also failed to raise a genuine issue of fact which would permit a finding of a Sherman Act violation. Consequently, the individual defendants are likewise entitled to summary judgment.

 I. The Parties

 A. The Plaintiff

 Robert G. Pontius, M.D., graduated from Haverford College, Haverford, Pennsylvania in 1945, and from the Medical School, University of Pennsylvania in 1947. He interned at the Hospital of the University of Pennsylvania from 1947 to 1948. He was an assistant instructor, Department of Pharmacology, University of Pennsylvania School of Medicine from 1948 to 1949. See Pontius Affidavit, Plaintiff Curriculum Vitae (Exhibit "A").

 Dr. Pontius did his surgical residency at Jefferson Davis Hospital, Houston, Texas during 1949 to 1950. He was the Chief Resident at Jefferson Davis and Veteran's Administration Hospital from 1954 to 1955. He was a resident in the Thoracic Surgery Program at Baylor University College of Medicine and Affiliated Hospitals, Houston, Texas from 1955 to 1956. He was a Research Fellow in Surgery, The Children's Hospital, Harvard Medical School, Boston, Massachusetts from 1956 to 1957.

 Dr. Pontius served in the U.S. Navy during World War II from 1942 to 1945 and in the Navy Reserve during the Korean War. His medical career includes a considerable amount of scholarship. He has published thirty-three scholarly works. Notable among Dr. Pontius' coauthors are the famous Texas heart surgeons, Doctors Denton A. Cooley and Michael DeBakey. Dr. Pontius also coauthored publications with two defendants in this action, Henry G. Bahnson, M.D. and James R. Zuberbuhler, M.D. Id.

 Dr. Pontius has conducted thirty-five presentations to various seminars and professional meetings in the United States and Europe. He is the author, coauthor and producer of twelve motion pictures dealing with various adult and pediatric cardiovascular surgical topics. Dr. Cooley was a coauthor with Dr. Pontius of one of the motion pictures. In 1974 Dr. Pontius was the president of a chapter of the American College of Surgeons and president of a chapter of the American Heart Association in 1967.

 In 1957 the late William B. Kiesewetter, M.D., Chief of Surgical Services at Children's Hospital of Pittsburgh, conducted a search for a qualified cardiovascular surgeon to do cardiac surgery on a full time basis. As a result of this inquiry, Children's Hospital hired Dr. Pontius.

 B. The Defendants

 1. Children's Hospital

 Children's Hospital of Pittsburgh is a non-profit corporation organized under the laws of the Commonwealth of Pennsylvania and affiliated with the University of Pittsburgh Medical School. As its name suggests, Children's Hospital is a specialized facility devoted to the care and treatment of young persons, generally those under seventeen years of age. See Robinson v. Magovern, 521 F. Supp. 842, 878 (W.D. Pa. 1981), aff'd mem., 688 F.2d 824 (3d Cir. 1982), cert. denied, 459 U.S. 971, 103 S. Ct. 302, 74 L. Ed. 2d 283, 51 U.S.L.W. 3340 (1982). The hospital has acquired a national reputation, particularly in the field of organ transplantation.

 2. Henry T. Bahnson, M.D.

 Dr. Bahnson attended Davidson College and Harvard Medical School, graduating from the latter in 1944. He interned and took his residency at the Johns Hopkins Hospital. He achieved board certification in general and thoracic surgery in 1953. Prior to 1963, when Dr. Bahnson joined the staff and faculty at the University of Pittsburgh Medical School and Children's Hospital, he was on the staff at Johns Hopkins Hospital. In 1963 Dr. Bahnson came to Pittsburgh, taking his position as full professor and head of the department of surgery at the medical school. See generally Bahnson Deposition at 4-10.

 3. Lenox D. Baker, M.D.

 Dr. Baker attended Davidson College for two years before being accepted into Johns Hopkins Medical School, from which he graduated in 1966. He completed his internship and residency at the University of Pittsburgh from 1967 through 1972. Dr. Baker received board certification in general surgery in 1973 and thoracic surgery in 1974. Following his stay at the University of Pittsburgh, Dr. Baker put in two years of public service with the United States Public Health Service; first as assistant director of surgery at the medical center of the federal prison in Springfield, Missouri, later as chief of surgery at the Services' Indian Hospital in Talihina, Oklahoma. Following the completion of his public service, Dr. Baker practiced first in Phoenix and later in Norfolk, Virginia. While in Pittsburgh, Dr. Baker worked in Children's Hospital and had occasion to work with Dr. Pontius. See generally Baker Deposition at 3-13.

 4. Thomas K. Oliver, M.D.

 Dr. Oliver attended the University of California at Berkeley and Harvard Medical School. He graduated from the latter in 1949. His internship and residency took place at Cornell University's New York Hospital Center. Dr. Oliver completed his training in 1955. He was board certified in pediatrics with a sub-specialty certification in neonatal/perinatal medicine.

 5. James R. Zuberbuhler, M.D.

 Dr. Zuberbuhler attended Allegheny College and the University of Pennsylvania Medical School. Following his graduation from medical school in 1956, Dr. Zuberbuhler started his residency in cardiology at the University of Michigan and finished it at the University of Pennsylvania. His residency was interrupted by military service. Dr. Zuberbuhler started part time work at Children's Hospital in 1961 and became a full time employee in 1963, at which time he also became an assistant professor in the medical school. Since 1967 he has held the post of Director of Cardiology at Children's Hospital. He is also a full professor of pediatrics at the University of Pittsburgh. See generally Zuberbuhler Deposition at 4-9.

 II. Statement of Facts

 On December 5, 1957 Children's Hospital hired Dr. Robert G. Pontius as a full-time member of the medical staff to implement a program in pediatric cardiothoracic surgery. Simultaneously, Dr. Pontius received an appointment as Assistant Professor at the University of Pittsburgh School of Medicine. See Gaffney Deposition Exhibit No. 1 attached to the Appendix to the individual defendant's Motion for Summary Judgment as Exhibit "A." (Unless otherwise indicated, all references to exhibits in this opinion refer to the exhibits attached to the foregoing appendix.) Under his contractual arrangement, which mirrored the arrangement of all full-time staff members, Dr. Pontius was paid a flat salary. See id. and Pontius Deposition at 22. In October of 1960 Dr. Pontius elected to terminate this contractual arrangement with Children's Hospital and enter private practice. Under this arrangement, Dr. Pontius received no compensation from Children's Hospital, but instead billed his fees directly to his patients. See Pontius Deposition at 23.

 In 1963 Henry T. Bahnson, M.D. was appointed Chairman of the Department of Surgery at the University of Pittsburgh School of Medicine. See Bahnson Affidavit at para. 2. Over the objections of Dr. Pontius, he was also appointed to the staff at Children's Hospital. Dr. Pontius alone opposed the appointment. See Exhibit "A."

 Around 1970 and 1971 Dr. Pontius began to make allegations of improper referrals of surgical patients to cardiovascular surgeons by cardiologists at Children's Hospital. When the complaints continued, Thomas K. Oliver, M.D., in his capacity as Medical Director at Children's Hospital, wrote to Dr. Pontius stating he had investigated the allegations and had found them totally lacking in merit. See Dr. Oliver's letter, Exhibit "B."

 Dr. Pontius apparently remained dissatisfied with the referral practices. In 1971 he spoke to the parents of one Lisa Valentino, attempting to convince them to change their decision to use Dr. Bahnson instead of himself to operate on their daughter. This conduct prompted Dr. Oliver to write Dr. Pontius and state that the Valentinos had freely chosen Dr. Bahnson as their surgeon and that Dr. Pontius's actions would be brought to the attention of the Medical Executive Committee of Children's Hospital. See Exhibit "C."

 On February 28, 1973 the Executive Committee of the Medical Staff unanimously voted to censure Dr. Pontius as a result of a written order given by Dr. Pontius concerning an intensive care patient named Kimberly Miller. The order read: "No more orders without my approval. Call me 963-7819." The Committee found that this order was "inimical to the best possible care" and "contrary to the maintenance of educational standards." See Exhibit "D."

 Because the Executive Committee included members of the Credentials Committee, counsel for Dr. Pontius requested that the hospital select an ad hoc hearing committee composed of persons who had not taken part in the decision to reappoint Dr. Pontius to the staff to hear Dr. Pontius's case. Counsel also asked that both the Credentials Committee and Dr. Pontius be permitted to present evidence in support of their respective positions and that all testimony be recorded. See Exhibit "F."

 These requests were granted, and on June 25, 1975, an ad hoc committee of five medical staff members was appointed to review the Credentials Committee's decision not to reappoint Dr. Pontius to staff. Dr. Paul Gaffney was appointed Chairman of the Committee.

 The initial meeting of the Ad Hoc Committee took place on June 26, 1975. Shortly after the hearing commenced, the parties jointly decided to suspend the hearing, pending preparation of a complete list of the reasons, together with supportive material, for the decision not to reappoint Dr. Pontius to the Children's Hospital staff. See pp. 32-35 of the Transcript of the Ad Hoc Committee Hearing also marked as Exhibit "G."

 The charges against Dr. Pontius were compiled in a document entitled "Matters to be Considered by the Ad Hoc Committee with Regard to the Decision of the Credentials Committee Not to Reappoint Robert G. Pontius, M.D. to the Staff of Children's Hospital" (hereinafter the "Blue Book") and was submitted to Dr. Pontius's counsel on October 3, 1975. See Exhibit "H." The table of contents to the Blue Book outlines the reasons for the decision not to reappoint Dr. Pontius. They included: (1) Incompetence; (2) The excessive mortality rate among Dr. Pontius's patients; (3) Unnecessary operations; (4) Failure to adhere to the standard medical practices; (5) Failure to adhere to the established teaching practices of Children's Hospital; (6) Unprofessional conduct with patients; (7) Inability to cooperate with other surgeons and staff members; and (8) Insufficient recent surgical experience.

 The supporting materials to the Blue Book included a letter from defendant, Dr. Lenox D. Baker. Dr. Baker is a cardiothoracic surgeon, who had worked as a surgical resident under Dr. Pontius before leaving Children's Hospital in June, 1972. See Baker Affidavit at para. 2 and para. 3. The letter was submitted at the request of Dr. Bahnson, who had asked Dr. Baker to outline his experiences with Dr. Pontius during this period. See Baker Affidavit at para. 3 and Bahnson Affidavit at para. 6. The letter was confidential and was shown only to the members of the Ad Hoc Hearing Committee. See "Blue Book" and Exhibit "I." Counsel for Dr. Pontius suggests in his brief, at 17-19, that the lack of opportunity to cross examine Dr. Baker on the contents of his letter represents a dreadful breach of due process. While we are not completely comfortable with the secret receipt of evidence by the Ad Hoc Committee, we are far from certain that confidentiality of such information is inappropriate in the narrow parameters of a staff privilege hearing. In any event, the plaintiff has not alleged a violation of his right to due process.

 The Ad Hoc Committee voted unanimously not to reappoint Dr. Pontius to the staff of Children's Hospital. See Exhibit "L." Dr. Pontius then appealed this decision to the Hospital Board of Trustees. The decision was affirmed in April, 1976. See Exhibit "M." This action was filed on September 5, 1978.

 III. The Claims of Dr. Pontius

 The plaintiff's complaint contains six counts, four arising under the federal antitrust laws and two pendent counts purporting to raise claims under state law. In view of our decision on the antitrust claims, we express no opinion as to the merits of the state law counts.

 Broadly speaking, counts one and two allege violations of section 1 of the Sherman Act, 15 U.S.C. § 1, *fn1" by charging that the defendants conspired to boycott the plaintiff's surgical practice and generally restrain trade and competition among doctors. See Complaint at 9-11. Counts three and four of the Complaint appear to allege violations of section 2 of the Sherman Act, 15 U.S.C. § 2: *fn2" count three claims that the defendants conspired "to restrain trade in and monopolize the trade of thoracic and cardio-vascular surgery," Complaint at 11; count four alleges concerted action by the defendants to monopolize by excluding Dr. Pontius from "the business of pediatric thoracic and cardiovascular surgery in Allegheny County." Id. at 13. The plaintiff has a cause of action for these alleged violations of the Sherman Act pursuant to section 4 of the Clayton Act, 15 U.S.C. § 15. *fn3" The claims under sections 1 and 2 of the Sherman Act really represent two sides of the same coin: eliminating Dr. Pontius from practice at Children's Hospital would necessarily have the consequence of increasing the "market" share of the remaining physicians if no additional physicians came on staff.

 IV. The Applicable Law

 A. Jurisdiction

 Before reaching the merits of this case at the summary judgment stage, the defendants raise the threshold question of our subject matter jurisdiction. It is well established that a claim under the Sherman Act requires that the proscribed actions directly involve or substantially affect interstate commerce in order to support subject matter jurisdiction. See Doctors, Inc. v. Blue Cross of Greater Philadelphia, 490 F.2d 48 (3d Cir. 1973). The defendants earnestly argue that while the overall activities of Children's Hospital, a highly specialized institution, (the closest analogous facilities are located in Columbus, Ohio, Philadelphia, and Baltimore) might be said to substantially affect interstate commerce, the specific act of denying staff privileges to one doctor is insufficient to create Sherman Act jurisdiction. This jurisdictional challenge appears to be foreclosed by our opinion in Robinson v. Magovern, 521 F. Supp. 842, 876-877 (W.D. Pa. 1981), aff'd mem., 688 F.2d 824 (3d Cir. 1982), cert. denied, 459 U.S. 971, 103 S. Ct. 302, 74 L. Ed. 2d 283, 51 U.S.L.W. 3340, but in light of at least one recent case, we are persuaded that some portions of that opinion warrant reconsideration.

 In Robinson v. Magovern, we suggested that the antitrust plaintiff need only establish "that the defendants' activities had a substantial effect on interstate commerce." 521 F. Supp. at 876. We are persuaded by the thoughtful reasoning of former Chief Judge Lord in Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Center, 536 F. Supp. 1065 (E.D. Pa. 1982), that "in any denial of hospital staff privileges case, the only relevant jurisdictional inquiry involves a determination of whether the defendant hospital's denial of staff privileges to the plaintiff physician substantially and directly affects the plaintiff's activities in interstate commerce." Id. at 1076 (emphasis in the original).

 Cardio-Medical Associates involved facts broadly similar to those alleged in the case sub judice. Cardio-Medical Associates, Ltd. was an incorporated group of four physicians who had general staff privileges at the defendant Crozer-Chester Medical Center, but had failed in their effort to secure certain specialized privileges. Id. at 1069. The plaintiffs alleged violations of federal antitrust and civil rights laws. Judge Lord held that the interstate commerce allegations contained in the complaint were inadequate to support jurisdiction under the Sherman Act. Consequently, he dismissed the antitrust count of the complaint. This dismissal was without prejudice so as to afford the plaintiff an opportunity to allege the requisite links to interstate commerce, but Judge Lord strongly hinted that any such efforts would be futile. Id. at 1084-1085.

 While we agree with the jurisdictional test enunciated by Judge Lord, we respectfully disagree with his application of that test. We believe that many individual physicians, including Dr. Pontius, could demonstrate that the denial of staff privileges affects their activities in interstate commerce. Whether it is the purchase of drugs and other medical supplies, the payment of medical bills by insurers, or crossing state lines to see a specialist, modern medical practice generally involves sufficient interstate commerce to trigger Sherman Act jurisdiction.

 In Cardio-Medical Associates, Judge Lord was explicitly concerned with the ramifications of staff-privilege related suits. Id. at 1069. We share his concerns and also agree with what we see as the thrust of his opinion: the pressing need to avoid the expense of antitrust litigation in an "industry" already highly regulated and fraught with serious problems of cost and quality control. We do not believe, however that this jurisdictional solution comports with the dictates of Doctors Inc. v. Blue Cross of Greater Philadelphia, 490 F.2d 48, 50 (3d Cir. 1973).

 We have grave doubts that the Sherman Act was ever really intended to provide the federal courts with jurisdiction over this class of cases, but given the decisional gloss of recent years, we believe that with the exception of purely local commercial activities, further jurisdictional limitations ought to come from Congress rather than the district courts. Consequently, we hold that Dr. Pontius has shown a sufficient nexus between the alleged acts of the defendants and his activities in interstate commerce to establish the jurisdiction of this court.

 B. Standard for Summary Judgment

 This case is before us on the defendants' motions for summary judgment. Pursuant to Federal Rule of Civil Procedure 56(c), a federal court will grant summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." When considering a motion for summary judgment, a court must view the facts in the light most favorable to the non-moving party. See Goclowski v. Penn Central Transportation Company, 571 F.2d 747, 751 (3d Cir. 1977); Smith v. Pittsburgh Gage and Supply Company, 464 F.2d 870, 874 (3d Cir. 1972). The movant has the burden of establishing that no genuine issue of fact exists. See Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840, 848 (3d Cir. 1974).

 Rule 56(e) of the Federal Rules of Civil Procedure states, however, that "when a motion for summary judgment is made and supported . . . an adverse party may not rest upon the mere allegation or denials of his pleadings, but his response . . . must set forth specific facts showing that there is a genuine issue for trial." The Supreme Court has made it clear that Rule 56(e) should not "be read out of antitrust cases and permit plaintiffs to get to a jury on the basis of the allegations in their complaints, coupled with the hope that something can be developed at trial in the way of evidence to support those allegations." First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289-290, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1968).

 While we do not believe that the nature of this particular suit in any way alters the standard articulated for the grant of summary judgment, we must note, at least in passing, that the erroneous denial of summary judgment in a case of this sort poses grave and unusual dangers to the proper administration of health care in this nation. If a physician, terminated from hospital privileges after receiving due process, is able to force the hospital to assume the burdens of an antitrust trial on the mere allegation that the hospital's decision was grounded on reasons violative of the Sherman Act, the ability of hospitals to regulate their medical staffs will be seriously impaired. Furthermore, if individual physicians, who manage to overcome their traditional reluctance to testify about the professional conduct of a colleague, know that by so doing they risk incurring legal fees running into six figures and a trial of a duration measured in months, on the mere allegation that they have conspired to restrain trade, the discovery of incompetent physicians will be rendered extraordinarily difficult. Consequently we believe that a trial court ought to conduct a particularly close scrutiny of the record in hospital staff privilege cases to ...

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