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MCMORRIS v. WILLIAMSPORT HOSP.

September 25, 1984

DAVID L. McMORRIS, M.D., Plaintiff,
v.
THE WILLIAMSPORT HOSPITAL, et al., Defendants



The opinion of the court was delivered by: RAMBO

 INTRODUCTION

 The plaintiff commenced the above-captioned civil action on April 10, 1979, naming the Williamsport Hospital, its Board of Trustees, certain of its officers, Dr. Judith Gouldin and Dr. John Calce as defendants. In this suit, the plaintiff challenges, on various grounds, the hospital's decision to replace him as director of its nuclear medicine department, to install Dr. Gouldin in his place and to accord to her the exclusive right to render official interpretations of nuclear scans and to use the rather sophisticated equipment needed to practice nuclear medicine. Some of the claims set forth in the original complaint have been eliminated by virtue of two Orders handed down by the court and a stipulation entered into by the parties. See Memorandum and Order dated October 15, 1982, Document 91 of the Record (granting defendants' motion for summary judgment on plaintiff's claim that the hospital breached his employment contract); Order dated July 26, 1982, Document 82 of the Record (dismissing plaintiff's civil rights claims); Stipulation dated December 27, 1982, Document 127 of the Record (withdrawing all claims advanced under Section 2 of the Sherman Antitrust Act of 1890, 15 U.S.C. § 2 (1976)). The claims remaining for the court's consideration are claims under Section 1 of the Sherman Act, 15 U.S.C. § 1 (1976), a breach of contract claim arising from the hospital's by-laws and a tort claim based upon alleged interference with the plaintiff's contract rights.

  Presently before the court is a motion for summary judgment filed by the defendants. Summary judgment is "a drastic remedy," Tomalewski v. State Farm Life Ins. Co., 494 F.2d 882, 884 (3d Cir. 1974); accord Ness v. Marshall, 660 F.2d 517, 519 (3d Cir. 1981), and all doubts as to its propriety in a given case must be resolved against the moving party. See, e.g., United States ex rel. Jones v. Rundle, 453 F.2d 147, 150 (3d Cir. 1971). As the Court of Appeals for the Third Circuit recently stated, "summary judgment may only be granted if, upon a review of the materials properly before the court, see Fed.R.Civ.P. 56(c), and viewing the evidence thus considered in a light most favorable to the non-moving party, the court is convinced that no genuine issue of material fact remains for trial and that the movant is entitled to judgment as a matter of law." Lang v. New York Life Ins. Co., 721 F.2d 118, 119 (3d Cir. 1983) (citing Scott v. Plante, 532 F.2d 939, 945 (3d Cir. 1976)). In addressing the instant motion, the court also has considered the general rule that the summary judgment device "should be used sparingly in complex antitrust litigation." Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 7 L. Ed. 2d 458, 82 S. Ct. 486 (1962); accord Cernuto, Inc. v. United Cabinet Corp., 595 F.2d 164, 165 & n.2 (3d Cir. 1979).

 Nevertheless, these general rules should not be construed to preclude a court from entering summary judgment in an appropriate situation. Indeed, notwithstanding the caveat that summary judgment rarely should be entered in antitrust cases, Poller, 368 U.S. at 473, a court is obligated to consider carefully a party's Rule 56 motion under the particular facts of the given case and must stand ready, even in antitrust litigation, to enter judgment if appropriate. First National Bank v. Cities Service, 391 U.S. 253, 288-90, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1968); Harold Friedman, Inc. v. Kroger Co., 581 F.2d 1068, 1080 (3d Cir. 1978). "While we recognize the importance of preserving litigants' rights to a trial on their claims, we are not prepared to extend those rights to the point of requiring that anyone who files an antitrust complaint setting forth a valid cause of action be entitled to a full-dress trial notwithstanding the absence of any significant probative evidence tending to support the complaint." First National Bank, 391 U.S. at 290. Hence, after a movant has produced evidence demonstrating his entitlement to summary judgment, the party resisting the motion must produce affidavits or other admissible materials containing specific facts demonstrating the existence of a genuine triable issue. Tripoli Co. v. Wella Corp., 425 F.2d 932 (3d Cir.) (en banc), cert. denied, 400 U.S. 831, 27 L. Ed. 2d 62, 91 S. Ct. 62 (1970); see also Fed.R.Civ.P. 56(e). A failure to do so will result in the entry of summary judgment. First National Bank, 391 U.S. at 289.

 The parties have developed the record substantially, having engaged in extensive discovery during the course of this five-year-old case. The court has carefully reviewed the record in conjunction with the parties' legal arguments and the standard of review discussed supra. For the reasons set forth below, the court will grant the defendants' motion for summary judgment on all claims except for the plaintiff's claim that the defendants have engaged in an unlawful tying arrangement violative of Section 1 of the Sherman Act.

 FACTUAL BACKGROUND

 In the practice of nuclear medicine, radioactive materials are used to diagnose and treat certain illnesses. Unknown before World War II, this medical specialty has become an important diagnostic and therapeutic tool. In therapeutic nuclear medicine, radioisotopes are used to destroy abnormal growths. In diagnostic nuclear medicine, two basic approaches are available. These are called the "in vivo" and the "in vitro" procedures.

 In the "in vitro" diagnostic procedure, the physician does not introduce radioactive materials into the patient's body. Rather, a specimen, usually a blood sample, is extracted from the patient. After subjecting the specimen to radionuclides, the physician compares the result with that obtained from tests involving normal or control specimens. See generally Deposition of George L. Jackson, M.D., dated November 9, 1983 Vol. I at 57-60, Document 256 of the Record; Deposition of David L. McMorris, M.D., dated November 18, 1980 to November 21, 1980 [hereinafter cited as First McMorris Deposition] at 13-26, Document 262 of the Record.

 In 1960, The Williamsport Hospital began to offer services in nuclear medicine. The plaintiff, who possessed staff privileges at the facility since 1958, served as the primary practitioner of nuclear medicine at the hospital from the time that these services were first offered. The plaintiff and his covering physician were designated as authorized users of radionuclides on the original license filed by the hospital with the Atomic Energy Commission.

 Through the years, the plaintiff divided his time and energy between the hospital's nuclear medicine department and his own practice of internal medicine. It appears that the plaintiff eventually was required to concentrate a steadily increasing amount of effort in the area of nuclear medicine. As he stated during his deposition:

 
In 1960 we got some basic equipment and got the basic procedures that were then available and I made these studies known to the staff and then performed those studies and as the field of nuclear medicine developed we added on more sophisticated equipment through the same application and developed more sophisticated studies. I was available all the time and, in fact, at the outset I performed as a technician and a secretary, a transporter of isotopes from the air field; did the procedures and reported them. As time went along this grew and I adjusted my schedule to meet the demand, both in terms of my office practice and what other things had to be decreased, such as going off the staff at Divine Providence [Hospital] because of the increased responsibilities.

 First McMorris Deposition at 124. The plaintiff estimates that by the early to mid-1970's, he had been spending between 60 and 70 percent of his time practicing nuclear medicine. Id. at 124-25.

 Eventually, it became apparent that the plaintiff would need assistance of some kind in order to continue providing quality care in both the hospital's nuclear medicine department and his own practice of internal medicine. See, e.g., Letter from Plaintiff to Clive Waxman, Jr., President of Williamsport Hospital, (April 19, 1972), Appendix to the Hospital Defendants' Motion for Summary Judgment [hereinafter cited as Defendants' Appendix] at 130a, Document 222 of the Record (plaintiff stated that because of an increasing workload in the department, "it bec[ame] necessary for consideration to be given for full-time coverage . . . by a professional man.").

 In 1972 and 1973, the plaintiff and various members of the hospital administration attempted to arrive at a solution to the problem regarding appropriate coverage in the nuclear medicine department. The plaintiff believed that the department "would require full attention" but thought that nuclear medicine practitioners necessarily would maintain at least a "limited clinical practice." Letter from Plaintiff to Harry R. Gibson, Chairman of the Board of Managers of The Williamsport Hospital (May 18, 1976), [hereinafter cited as Plaintiff's letter to Gibson] at 5, Defendants' Appendix at 167a; cf. Deposition of Plaintiff dated October 5, 1981 to October 10, 1981 [hereinafter cited as Second McMorris Deposition] at 120, 122, 126, Documents 253 & 258 of the Record (espousing the view that clinical practice is, as to some patients, inherently allied to the practice of nuclear medicine within a hospital); First McMorris Deposition at 211 (stating that a nuclear medicine practitioner should "[do] clinical medicine as well so that . . . [he or she] would be able to do a better job"). In order to provide the desired amount of coverage in the department while allowing time for necessary clinical practice, the plaintiff proposed that another physician be invited to share responsibility for the practice of nuclear medicine in the hospital. Plaintiff's letter to Gibson at 5, Defendants' Appendix at 167a; see also Letter from Plaintiff to Clive R. Waxman, Jr., President of The Williamsport Hospital (January 30, 1973), Defendants' Appendix at 177a. To that end, the plaintiff "began recruiting for an associate." Plaintiff's letter to Gibson at 5, Defendants' Appendix at 167a. Although the hospital strongly believed that the department would "require a single full-time physician['s] commitment," Memorandum from Clive R. Waxman, Jr. to Dr. Herman W. Rannels, Vice-President of The Williamsport Hospital at 1 (February 19, 1973), Defendants' Appendix at 132a, the plaintiff's proposal that there be "shared responsibility" eventually was accepted.

 The plaintiff became associated with Dr. Prayad Chayapruks in 1974. The two doctors shared a private internal medicine practice and, beginning on July 1, 1974, shared responsibility for the hospital's nuclear medicine department. In an agreement dated July 1, 1974, the hospital and the plaintiff set forth their respective rights and responsibilities concerning the department. In this contract, the plaintiff was named the director of the nuclear medicine department. As such, he was assigned various administrative responsibilities for which he was given a flat salary or fee of $20,000.00 per year. See Agreement between The Williamsport Hospital and Plaintiff dated July 1, 1974, Defendants' Appendix at 135a-136a. In addition, he and Dr. Chayapruks were given the right to "bill privately for professional services, which include doing anatomical markings, making decisions as to appropriate views and timings of imaging and interpretation of results of studies for clinical application." Id., Defendants' Appendix at 136a. *fn1" The hospital agreed to provide the facilities and personnel necessary for the "proper practice" of nuclear medicine. Id. On July 9, 1974, the plaintiff wrote to the medical staff of the hospital advising that the department would "operate with full-time professional personnel" and that he would be available in the department during the morning hours and Dr. Chayapruks would be in attendance in the afternoon. Letter from Plaintiff to the Medical and Dental Staff of The Williamsport Hospital (July 9, 1974), Defendants' Appendix at 137a.

 The plaintiff terminated his association with Dr. Chayapruks on June 30, 1975. By letter dated May 29, 1975, the plaintiff indicated that he wished to terminate their joint practice because he was "convinced" that Dr. Chayapruks' "expectations in recognition and rewards [would] be best sought elsewhere in a more regulated academic environment." Letter from Plaintiff to Dr. Prayad Chayapruks (May 29, 1975), Defendants' Appendix at 139a. Dr. Chayapruks remained in Williamsport, however, and continued to work in the hospital's nuclear medicine department, billing patients directly for the services he provided there. It appears that the two doctors maintained a somewhat distant relationship during this time. See, e.g., Hospital Defendants' Request for Admissions Addressed to Plaintiff and Responses Thereto para. 51, Defendants' Appendix at 8a, 20a (Plaintiff concedes that "after July, 1975, Dr. Chayapruks and [he] infrequently communicated, and it was uncommon for both physicians to be in the nuclear medicine department at the same time.").

 In early 1976, each doctor began to question openly the competence and dedication of the other. In a letter dated January 15, 1976 to the vice-president of the hospital, Dr. Chayapruks stated that the plaintiff was spending only about an hour or so per day in the department and sometimes left it uncovered for an entire day. See Letter from Dr. Prayad Chayapruks to Dr. Herman W. Rannels (January 15, 1976), Defendants' Appendix at 141a. He also asserted that the plaintiff lacked the capacity to develop new medical techniques and failed to supervise the department's technicians as required by his directorship contract. Id. Finally, he suggested that the hospital should take the plaintiff's yearly income and divide it between two doctors so as to obtain "better coverage and services" in the department. Id.

 The plaintiff subsequently wrote to the chairman of the hospital's board of managers complaining that someone had allowed Dr. Chayapruks to direct the department while the plaintiff was out of town. The plaintiff asserted that "to charge Doctor Chayapruks with that responsibility is to ignore the very reasons that necessitated my discharging him as an employee. He simply cannot be trusted." Letter from Plaintiff to Harry R. Gibson, Esq. (January 23, 1976), Defendants' Appendix at 143a. On February 17, 1976, the plaintiff wrote to the chairman of the hospital's credentials committee setting forth twelve reasons for his lack of confidence in Dr. Chayapruks' character and performance. See Letter from Plaintiff to Dr. Robert L. Vanderlin (February 17, 1976), Defendants' Appendix at 145a-146a. Included among the plaintiff's twelve comments were charges that Dr. Chayapruks "manipulated" some of the equipment, failed "to respond to calls" and "attend patients," "improperly advised" a patient, refused to see indigents referred to him from the emergency room and "misrepresented" his background in nuclear medicine. Id.

 After considering the allegations set forth by the two physicians, the hospital administration conducted an investigation of the work performed within the department of nuclear medicine. Both physicians were found to be competent. See Report of Special Executive Committee of the Medical Staff (February 20, 1976), Defendants' Appendix at 148a. After consulting with various administrative and medical committees, however, the hospital's board of managers decided that the plaintiff's directorship contract would be terminated immediately. See Letter from Clive R. Waxman, Jr. to Plaintiff (March 18, 1976), Defendants' Appendix at 148a-149a. *fn2" Notwithstanding that he no longer would possess administrative responsibilities within the department, the plaintiff retained his right of access to the department for professional services. Id. Dr. Chayapruks also retained his privileges in this regard. Id. Finally, the board directed that a consultant be hired to study the practice of nuclear medicine within the hospital and to recommend appropriate measures to ensure effective operation of the department. Id.

 The consultant hired to study the department was Dr. Richard Reba, Chairman of the Nuclear Medicine Department at the Washington Medical Center of George Washington University. Hospital Defendants' Request for Admissions Addressed to Plaintiff and Responses Thereto para. 57, Defendants' Appendix at 8a & 21a. On May 6, 1976, Dr. Reba submitted his report and recommendations in the form of a letter addressed to the chairman of the hospital's board of managers. See Letter from Dr. Reba to Harry R. Gibson (May 6, 1976), Defendants' Appendix at 151a-161a. In his report, Dr. Reba outlined many specific problems existing within the department and observed that, generally, "the current radioisotope activities at the hospital are not organized in a manner which is likely to allow their optimal development to the levels now possible." Id. at 3-4, Defendants' Appendix at 153a-154a. This situation was attributed to the lack of a "single motivating force" in all areas of the operation and the absence of sufficient input by physicians in the area of technical development. Id. at 4, Defendants' Appendix at 154a. To remedy the deficiencies of the department, Dr. Reba made several recommendations. With respect to the functions of the medical personnel, Dr. Reba stated, in pertinent part:

 
A 400 bed general hospital should be able to support a full-time equivalent nuclear medicine physician. My review of the current work load reveals that this is certainly so. The Williamsport Hospital should demand a commitment from its nuclear medicine physician similar to any other hospital based service. I believe the preference would be for a private practice or independent contractor type of arrangement. However, I believe it should be recognized that in many ways nuclear medicine is related to the Medical Staff in a similar fashion as x-ray or pathology in that it is a consultative and service speciality. Therefore, it is in the best interest of the patients, the attending staff and the hospital administrative staff, that nuclear medicine privileges should best be "closed" or departmentalized rather than open and individualized. Although the "closed" arrangement may have avoided the present situation, careful and detailed controls must be included in such an arrangement in order to avoid having a specific individual being in the position of being able to make arbitrary and uncompromising decisions in regard to the operation of a small department.
 
Since the Williamsport Hospital can support a full-time nuclear medicine physician, you should demand a commitment from your nuclear medicine physician similar to any other hospital based service. Would your or any other 400 bed hospital tolerate a [sic] part-time x-ray or part-time laboratory coverage during the working day? It is unlikely, and you should not be satisfied with less for nuclear medicine, particularly since the ...

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