Friedman in his methodology of bronchoscopy. Further, there is no evidence that either reacted to Dr. Friedman's situation except in a peer review capacity, and, hence, no evidence that either acted out of personal economic interest as opposed to the interests of the hospital. Dr. Galati's conduct is "consistent with other equally plausible explanations [;] [therefore] the conduct does not give rise to an inference of conspiracy." Matsushita, 106 S. Ct. at 1361.
Under Pennsylvania's "Peer Review Protection Act," any person who provides information to a peer review committee that is related to the performance and duties of the committee and is not false or believed to be false shall not be held criminally or civilly liable. 63 P.S. § 425.3(a). Therefore, as a matter of law, the actions of Drs. Galati and Powers in reviewing Dr. Friedman's performance as a staff physician at the request of the Chairman of the Department of Medicine or medical staff committees responsible for audits and quality of patient care cannot be the factual basis of an anti-competitive claim. This is especially so where the views expressed are expressed in a due process hearing, subjected to cross-examination and counter-evidence and ultimately judged by a committee of unbiased physicians. See Marrese v. Integral, Inc., CCH 1984-1 Trade Cas. para. 66,271 (7th Cir., Nov. 6, 1984);
Pontius v. Children's Hospital, 552 F. Supp. 1352, 1376 (W.D. Pa. 1982).
Dr. Galati had a very limited role in the decisions of others to discipline Dr. Friedman. Prior to the initiation of charges, Dr. Galati conducted a literature search at the request of Dr. Hadfield concerning the use of fiberoptic bronchoscopy. He evaluated Dr. Friedman, again at Dr. Hadfield's request. Later, Dr. Galati met twice with Drs. Hadfield and Haft, again at Dr. Hadfield's request, to discuss the Friedman proceedings prior to the May 5, MEC meeting. Dr. Galati attended the first part of this meeting, but only after he had been requested to do so by Dr. Haft and Dr. Hadfield because other MEC members wanted a pulmonologist to attend. He was one of 26 witnesses who testified before the ad hoc committee. Dr. Powers also testified at the ad hoc committee, concerning Dr. Friedman's extensive use of the Intensive Care Unit and his own experience with Dr. Friedman.
Finally, Dr. Galati took three other steps. He wrote a letter to Dr. Hadfield on November 2, stating that he would not participate in the continual monitoring of Dr. Friedman's bronchoscopies, as originally recommended by the ad hoc committee, because he perceived legal and ethical problems. In addition, he signed a letter, also dated November 2, prepared by Dr. Beckwith and signed by all the other section chiefs in the Department of Medicine, which noted their concern about the substantiated charges of misconduct and the difficulty of complying with the conditions of probation suggested by the ad hoc committee. This letter expressed the view that Dr. Friedman's privileges should be terminated. Finally, Dr. Galati chaired a subcommittee requested to formulate guidelines for the proper use of bronchoscopies. Dr. Friedman also participated in this effort. The criteria developed did not preclude therapeutic bronchoscopies, but rather placed the burden on the doctor to justify undertaking the procedure.
This was the extent of Dr. Galati's participation. He did not attend the November 3, 1982 MEC meeting at which the committee upheld the ad hoc committee's findings and voted to recommend that Dr. Friedman be placed on probation. Nor did he contact any of the members of the Board or attend any Board meetings concerning Dr. Friedman.
Had the Board followed the recommendation of probation by the MEC in November, 1982, there would have been no substantial effect upon Dr. Friedman's privileges or on competition. The record demonstrates no evidence that the Board's decision to terminate Dr. Friedman's privileges entirely arose from any conspiracy with Dr. Galati or Dr. Powers. On the contrary, the record indicates that the Board's action arose from its independent consideration of the ad hoc committee and MEC findings that Dr. Friedman had failed to follow hospital rules, that he had over-used bronchoscopies and that such conduct was likely to continue because Dr. Friedman would not agree to follow the bronchoscopy criteria developed by the hospital.
Dr. Friedman cannot show that these criteria and precautions adopted for use of therapeutic bronchoscopy are inconsistent with sound medical practice. These indications were adopted by the hospital for the protection of its patients and itself. Dr. Friedman objects to the hospital's adherence to the adopted indications for therapeutic bronchoscopies, and nothing that Dr. Galati did independently.
In evaluating plaintiff's claim against other board members and the DCMH Board collectively, there is no evidence that the Board members made other than an independent judgment about Dr. Friedman. Nor is there any evidence that there was discussion about the impact of the decision on Dr. Galati or Dr. Powers or on hospital revenues or competition among physicians.
The uncontradicted record shows
that the DCMH Board's revocation of Dr. Friedman's privileges resulted from its belief that, as the ad hoc committee had found, the charges against plaintiff had been substantiated and that he had no intention of improving his behavior. The Board, therefore, reasonably believed and logically concluded that probation would be useless, and that the risk of civil liability was strong should a claim of malpractice arise based on the fact that a physician was being permitted to violate hospital rules which had been adopted for patient care and safety.
Further, the Board's decision was reasonable and was arrived at fairly. Because the Board's decision differed from the MEC's recommendation, the matter was referred to the Board's Joint Conference Committee. Dr. Friedman and his attorney were given the right to appear before this committee to attempt to persuade in favor of probation. Both declined to do so. They were invited to address the Board which reconsidered its earlier decision for revocation of privileges. Instead of suggesting a willingness to comply with the therapeutic bronchoscopy indications, Dr. Friedman, through counsel, threatened to sue each board member personally for damages should the privileges be finally terminated. The Board members obviously were not intimidated by the prospect of having to justify their decision.
An inference of conspiracy cannot rationally be drawn where the Board reasonably acted within its authority on unappealed substantiated findings of misconduct and where there was every indication of intention on the part of the malcontent physician to continue as before. In short, where the decision is highly consistent with independent action, in the absence of some direct evidence of agreement, a Sherman Act conspiracy cannot be inferred out of whole cloth, even if the ultimate decision happens to be consistent with the economic interests of a competitor of the plaintiff. The facts support a conclusion that the Board was motivated to terminate Dr. Friedman out of concern for the hospital rather than personal vindictiveness against Dr. Friedman. This court can conclude that based upon the factual evidence presented plaintiff's claim of conspiracy against the Board is implausible. Matsushita, 106 S. Ct. at 1350. Plaintiffs have failed to adduce any evidence that excludes the possibility that the hospital acted independently or for a legitimate purpose. See White v. Rockingham Radiologists, Ltd., 820 F.2d 98, 1987-1 Trade Cas. (CCH) para. 67,574 (4th Cir. 1987).
Friedman has not brought evidence before this court to support his claim of conspiracy. Plausible independent and valid reasons exist for the decision made by the DCMH. Moreover, Friedman has not proffered evidence sufficient to distinguish the decisionmaking of Dr. Galati from other members of the Board. For this court to infer that Dr. Galati acted in an anticompetitive manner in light of the evidence submitted would require this court to let stand an allegation of conspiracy based wholly on stacking inference upon inference, hearsay and ultimately improper speculation. Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105 (3d Cir. 1980), cert. denied, 451 U.S. 911, 68 L. Ed. 2d 300, 101 S. Ct. 1981 (1981). The Supreme Court spoke directly on the issue of the standard to determine sufficient evidence to sustain a conspiracy antitrust claim. In Monsanto Co. v. Spray-Rite Service Corp.,
465 U.S. 752, 104 S. Ct. 1464, 79 L. Ed. 2d 775 (1984) the Court stated that:
the correct standard is that there must be evidence that tends to exclude the possibility of independent actions by the manufacturer and distributor. That is, there must be direct or circumstantial evidence that reasonably tends to prove . . . a conscious commitment to a common scheme designed to achieve an unlawful objective.
104 S. Ct. at 1473.
"Inferred factual conclusions based on circumstantial evidence are permitted [to go to the jury] only when, and to the extent that, human experience indicates a probability that certain consequences can and do follow from the basic circumstantial facts." Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d at 116. In the issue at hand human experience does not necessarily lead to the conclusion that defendants acted "to exclude plaintiff from practicing medicine at DCMH for the purpose of destroy[ing] and obtain[ing] for themselves a large portion of plaintiff's practice." (Amend. Comp., para. 23). Conceivably, defendants excluded plaintiff from practicing at DCMH because of his unorthodox use of therapeutic bronchoscopies which potentially increased hospital liability. Thus, plaintiff's asserted facts are speculative. Evidence, "some of [which] is speculation and some . . . hearsay . . . is hardly the kind of play upon which to rely for an antitrust case." Mid-South Grizzlies v. National Football League, 550 F. Supp. 558, 569 (E.D. Pa. 1982) aff'd 720 F.2d 772 (3d Cir. 1983). In Mid-South, an antitrust case where the district court granted summary judgment, the court held that "plaintiff had not provided a sufficient quantum of evidence to permit a party to go to the jury." Id. Such is true here. Friedman has not provided sufficient evidence of conspiracy to be permitted to go to the jury. While it is true that on a summary judgment motion, this court must resolve all doubts as to the existence of genuine issue of fact against the movant and must view all inferences from the facts in the light most favorable to the opposing party.
The court must weigh the circumstantial evidence, and in doing so, consider that "there are limits beyond which reasonable inference -- drawing degenerates into groundless speculation." Tunis Brothers Co. v. Ford Motor Co., 587 F. Supp. 267, 1984-2 Trade Cas (CCH) para. 66,068 at 65,932 (E.D. Pa. 1984). To allow plaintiffs claim to stand would be to allow the jury to rule upon groundless speculation. Plaintiff cannot effectively rely upon the fact that Dr. Galati practices in the same field as he and thus potentially can financially benefit from his dismissal as the basis for a conspiracy action. See Stone v. William Beaumont Hospital, 1983-2 Trade Cas. (CCH) para. 65,681 (1983).
Indeed, as the court held in Robinson v. Magovern, 521 F. Supp. 842, (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 (1982), "If the first entity [the hospital] discontinues its business relationship with a firm [the plaintiff physician] for its own, independent reasons, no concerted activity has occurred even though the second entity [a competing physician] had requested that the first entity take such action." Id. at 893 n. 42.
B. Section 2 of the Sherman Act
Plaintiff alleges that his exclusion from the staff at DCMH has resulted in the "monopolization, or attempted monopolization" of "pulmonary medical services" at DCMH. (Amended Complaint para. 47). Plaintiff alleges further that the Drexel Hill defendants conspired with the other defendants in "an attempt to monopolize the provision of pulmonary care in the market served by the defendant hospital." (Amended Complaint para. 46).
In sum, plaintiff claims a Section 2 Sherman Act violation on the theories of monopolization, attempted monopolization and a conspiracy to monopolize. Plaintiff has failed to prove his Section 2 Sherman Act claim under any of these theories; therefore, summary judgment must be granted on the Section 2 claims.
In order for plaintiff to establish that monopolization occurred he must show that defendants possessed monopoly power.
U.S. v. Grinnell, 384 U.S. 563, 570-571, 16 L. Ed. 2d 778, 86 S. Ct. 1698 (1966); Robinson v. Magovern, 521 F. Supp. at 886. The Board at DCMH does not possess the power to exclude competition in the pulmonary medicine field. This is quite simply because physicians who object to DCMH's conservative bronchoscopy indications are free to have their patients admitted at hospitals subscribing to a more liberal practice. Within the immediate vicinity of DCMH are Bryn Mawr Hospital, Fitzgerald-Mercy Hospital, Riddle Memorial Hospital, Haverford Community Hospital, Lankenau Hospital, Taylor Hospital and Metropolitan-Springfield Hospital. Dr. Friedman himself has privileges at Fitzgerald-Mercy Hospital. (DCMH Ex. 1, Affidavit, Richard Thomas, president and CEO of DCMH).
The Board of DCMH cannot exclude Dr. Friedman and his liberal school of bronchoscopy from practicing at any of these hospitals in the relevant market. Defendants simply cannot exclude competition from within the ten mile radius of DCMH where all of the aforementioned hospitals are located. Therefore, as a matter of law plaintiff cannot establish that defendants have market power to exclude competition. Pontius v. Children's Hospital, 552 F. Supp. 1352, 1366 (E.D. Pa. 1982).
Plaintiff contends that DCMH is the relevant geographical market for the Section 2 Sherman Act claim. Plaintiff has advanced nothing to support this claim. "The area of effective competition is the territory within which the buyer has, or is the absence of unlawful market power would have, the ability to seek alternatives." Pontius v. Children's Hospital, Id. See also U.S. v. Philadelphia National Bank, 374 U.S. 321, 359-61, 10 L. Ed. 2d 915, 83 S. Ct. 1715 (1963). In cases involving doctors, the geographic market has been defined as the area in which doctors can sell and patients can buy medical service. Robinson v. Magovern, 521 F. Supp. 842. Thus, courts have taken an expansive view of the relevant geographical market for services provided. Dr. Friedman's contention that DCMH is the relevant geographical market is out of step with existing precedent and with practical commercial realities which govern defining a geographic market. Brown Shoe Co., Inc. v. U.S., 370 U.S. 294, 336, 8 L. Ed. 2d 510, 82 S. Ct. 1502 (1962). Plaintiff's contention that the relevant geographical market for purposes of monopolization is DCMH is so restrictive as to be unreasonable as a matter of law.
Under a monopolization theory, plaintiff must also prove the willful acquisition or maintenance of monopoly power. U.S. v. Grinnell, 384 U.S. at 570-571. Plaintiff has not shown a general intent of the defendants to monopolize the bronchoscopy practice area. There is no indication that DCMH has discouraged competition from area hospitals in the bronchoscopy practice area. Indeed, its termination of Dr. Friedman's privileges is evidence of a general intent not to monopolize since a monpolist hospital would not want an able practitioner looking for a new home in which to conduct his specialty. See Robinson v. Magovern, 521 F. Supp. at 891-892. Similarly, when considering the Section 2 claim against Drs. Galati and Powers, plaintiff cannot effectively establish that Drs. Galati and Powers engaged in any unlawful willful act towards monopolization. If they wanted to monopolize the bronchoscopy market Dr. Galati would have supported efforts to eliminate permanently his competition from practicing at DCMH. On the contrary, Dr. Galati was willing to go along with the MEC's recommendation of probation for Dr. Friedman. Nor can it be said that Drs. Galati and Powers individually, or as members of the Medical Associates of Drexel Hill, engaged in any act to acquire or maintain a monopoly at DCMH. Plaintiff claims that the Medical Associates of Drexel Hill being the only pulmonary specialist physicians currently practicing at DCMH, possess a monopoly in pulmonary service. However, there is no evidence from which a jury could draw a reasonable inference that defendants had any intent to monopolize the pulmonary service field. The monopoly, if it existed, occurred through an historic accident which resulted from Dr. Friedman's unwillingness to follow DCMH rules and regulations. As such, the monopoly would not violate Section 2 of the Sherman Act. U.S. v. Grinnell, 384 U.S. at 570-71.
2. Attempted Monopolization
To establish attempted monopolization plaintiff must prove that defendants had a specific intent to monopolize the relevant market; engaged in conduct to implement the specific intent; and that there was a dangerous probability of success. Swift, et al. v. United States, 196 U.S. 375, 49 L. Ed. 518, 25 S. Ct. 276 (1905).
Plaintiff cannot prove that the defendants had a specific intent to monopolize the bronchoscopy field. Defendants have shown that the decision to terminate Dr. Friedman was based upon a legitimate business reason -- that of reducing hospital liability due to Dr. Friedman's method of practice. A valid business decision as was made here by DCMH acts to "bear out the specific intent essential to sustain an attempt to monopolize under § 2." Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 627, 97 L. Ed. 1277, 73 S. Ct. 872 (1953).
Plaintiff cannot establish that there was a dangerous probability of achieving a monopoly in the market. There are numerous hospitals located within a ten mile radius that engaged in the pulmonary service/broncoscopy field in which Dr. Friedman practices.
Thus, there does not exist a dangerous probability that DCMH will achieve a monopoly in the geographic market.
3. Conspiracy to Monopolize
The essential elements of a conspiracy to monopolize are (1) an agreement or understanding between two or more economic entities, (2) a specific intent to monopolize, and (3) the commission of an overt act in furtherance of the alleged conspiracy. See e.g., Continental Ore Co. v. Union Carbide of Carbon Corp., 370 U.S. 690, 8 L. Ed. 2d 777, 82 S. Ct. 1404 (1902). The plaintiff also has the burden of providing sufficient evidence to establish that the conspirators "had a conscious commitment to a common scheme designed to achieve an unlawful objective." Edward J. Sweeney and Sons v. Texaco, Inc., 637 F.2d 105, 111 (3d Cir. 1980).
Plaintiff has presented no evidence defendants engaged in a conspiracy to monopolize. In light of the discussion on a Section 1 Sherman Act violation, first, plaintiff cannot establish that two or more economic entities were involved in this action. Agents of DCMH made the decision to terminate Dr. Friedman; no other entity was involved in that decision. Second, for the reasons stated under Attempt to Monopolize, infra, plaintiff cannot prove that defendant engaged in a specific intent to monopolize. Thirdly, plaintiff has not shown an overt act in furtherance of the conspiracy. Plaintiff's termination was a business judgment decision necessary to eliminate Dr. Friedman from the staff after he failed to comply with hospital regulations.
C. Due Process Claims
No inference of unlawful purpose, and certainly not an anti-competitive purpose, can be drawn from the charging and hearing procedures accorded plaintiff by DCMH. The hospital's bylaws were followed in every respect. Plaintiff's claim of lack of due process has been reviewed through two levels of the state court system. Each has found that plaintiff was given full due process. Plaintiff is now precluded by principles of res judicata from relitigating the due process hearing issues in this court at this time.
Importantly, Friedman was given a full hearing on the charges before the ad hoc committee. He presented a full defense, including the contention that his "liberal" bronchoscopy methodology was an accepted mode of treatment. However, even his witnesses did not agree with all of his bronchoscopies or the means or lack of means by which he documented the need for the bronchoscopy.
Dr. Friedman's failure to document the need for the invasive procedure was a critical portion of the charges by Dr. Hadfield and the adverse findings of the ad hoc committee.
Plaintiffs' contention that the Board did not have authority under the by-laws to alter the MEC recommendation is not correct. Article VIII, section 1(A) of the bylaws advises that any practitioner who is affected by an adverse recommendation of the Medical Executive Committee, after hearing before an ad hoc committee, shall be entitled to an appellate review by the "Governing Body," the Board, before that body makes a final decision. Article VIII, section 2(c) advises that if there is no timely request for appellate review of an adverse recommendation of the MEC to the Board, a waiver of such review is deemed made and the recommendation becomes and remains effective against the practitioner pending the Governing Body's decision on the matter. Within 30 days after completion or waiver of appellate review, the Board is obligated to make its final decision in the matter. According to Article VIII, section 7(A), if the decision is in accordance with the MEC's last recommendation, the recommendation shall become final. If the decision is contrary to the recommendation, the Board is obligated to refer the matter to a Joint Conference Committee for further review and recommendation withholding final decision for 30 days awaiting that committee's recommendation. Thereafter, the board is called upon to make a final decision at its next meeting.
The structure of the by-laws contemplates that the Governing Body makes the final decision on recommendations from the MEC on matters involving appointment or status of staff privileges and does not rest that ultimate decision with the Medical Executive Committee.
With respect to the burden of proof at a hearing, plaintiff's contentions are likewise not well founded. The by-laws obligate the representative of the medical staff, if as here its actions prompted the hearing, to present facts in support of its adverse decision and to examine witnesses. Article VIII, section 5(H). Thereafter, the affected practitioner is obligated to support his challenge to the adverse recommendation by an appropriate showing that the charges lack factual basis or the underlying decision is arbitrary, unreasonable or capricious. Id. The practitioner does not have the laboring oar of going forward with evidence. That burden is upon the accusing committee.
The disclosure to the Board that Dr. Hadfield and the other section chiefs had objections to the monitoring aspects of the Medical Executive Committee's recommendation was appropriate and important to a legitimate interest of the board. The objectors expressed significant malpractice concerns for the hospital in view of the substantiation of the charges and Dr. Friedman's avowed intentions not to be constrained by the hospital's criteria for therapeutic bronchoscopy. These concerns were reasonable and essential to the Board's determination of the efficacy of probation and guaging of the level of disharmony among staff that the probation might generate. This is particularly important since the ad hoc committee had already found that Dr. Friedman's misconduct had caused disharmony among the staff.
Likewise, there was no due process violation in the Board's review of Dr. Friedman's personnel file to attempt to ascertain the appropriateness of the recommended probation sanction as well as the malpractice risk which could be influenced by all that the board knew or should have known about Dr. Friedman's history at the hospital as reflected in that file. Not only was there a right to know but a need to know that record.
D. Plaintiff's Pendent State Claims Must Be Dismissed
Having found no federal jurisdiction over plaintiffs' claims, the pendent state claims must be dismissed for lack of subject matter jurisdiction. United Mine Workers v. Gibbs, 383 U.S. 715, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966). The state breach of contract claims are already under consideration by the Court of Common Pleas of Delaware County and plaintiff has moved for partial summary judgment on the issue of whether the act of reappointment by the board ratified or approved Dr. Friedman's past performance and precluded his past record from being considered in the charges against him. For federal claim analysis, suffice it to say, that plaintiff did not appeal the decision of the MEC as to the timeliness of the charges or the findings of substantiation.
AND NOW, this 19th day of October, 1987, it is hereby ORDERED that:
1. Summary judgment as to the federal claims is GRANTED for the defendants and against the plaintiff.
2. Plaintiff's cross motion for partial summary judgment is DENIED.
3. Plaintiff's pending state claims are DISMISSED without prejudice.