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McGary v. Williamsport Regional Medical Center

United States District Court, M.D. Pennsylvania

May 22, 2018

SUZAN MCGARY, M.D., Plaintiff.

          Arbuckle, Magistrate Judge.


          Matthew W. Brann, United States District Judge.

         Defendants moved for summary judgment on all counts of Plaintiff's Amended Complaint. For the reasons that follow, that motion will be granted.

         I. BACKGROUND

         Plaintiff Suzan McGary, M.D., performed cardiothoracic surgery at the Williamsport Regional Medical Center (“WRMC”) from 1999 through 2007.[1] In January 2012, after several years practicing elsewhere, Dr. McGary sought to return to WRMC, and applied for privileges there.[2]

         At that time, WRMC's credentialing policy required cardiothoracic surgeon applicants to have performed at least 100 heart surgeries and 100 lung surgeries during the past year.[3] In the year preceding her application, however, Dr. McGary had performed only 37 heart surgeries and 15 lung surgeries.[4] Her application was denied.[5]

         On August 31, 2012, Dr. McGary initiated the above-captioned action against WRMC, the Susquehanna Health System (“SHS”), George Manchester, M.D., Scott Croll, M.D., John Burks, M.D., and Mark A. Osevala, D.O.[6] Her Amended Complaint alleges that WRMC's conduct surrounding the rejection of her privileges application: (1) violated Sections 1 and 2 of the Sherman Act, (2) breached a contract of which she was the intended beneficiary; (3) interfered with her prospective contractual relationships; and (4) amounted to a conspiracy in restraint of trade.[7]

         Defendants moved for summary judgment on September 26, 2016.[8]Magistrate Judge William I. Arbuckle issued a Report and Recommendation (“R&R”) recommending that this Court grant that motion in part and deny it in part.[9] Both parties, however, have objected to that R&R.[10]


         A. Standard of Review

         Summary judgment is granted when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[11] A dispute is “genuine if a reasonable trier-of-fact could find in favor of the non-movant, ” and “material if it could affect the outcome of the case.”[12] To defeat a motion for summary judgment, then, the nonmoving party must point to evidence in the record that would allow a jury to rule in that party's favor.[13] When deciding whether to grant summary judgment, a court should draw all reasonable inferences in favor of the non-moving party.[14]

         This Court has the authority to refer summary judgment motions to magistrate judges for dispositional recommendations.[15] If a party objects to any portion of such a “Report and Recommendation, ” this Court must review that portion de novo.[16]

         B. Whether the Defendants Are Capable of Conspiring Amongst Themselves

         Magistrate Judge Arbuckle recommended that this Court grant summary judgment to the Defendants on three of Dr. McGary's claims-i.e., (1) her claim under § 1 of the Sherman Act, (2) her conspiracy to monopolize claim under § 2 of the Sherman Act, and (3) her civil conspiracy claim-because he concluded that the Defendants are legally incapable of conspiring amongst themselves.[17] Dr. McGary objected to this conclusion.

         To prevail on any of the conspiracy claims at issue, Dr. McGary must show an agreement between two or more individuals or entities.[18] The law is clear, however, that such agreement must be between individuals or entities operating in their individual capacities, and not as agents of their alleged co-conspirator(s).[19]

         SHS is a nonprofit corporation located in Williamsport, Pennsylvania;[20] its Chief Medical Officer is Dr. Manchester.[21] SHS owns WRMC, as well as non-party Susquehanna Physician Services (“SPS”).[22] SPS, in turn, employs Dr. Croll (as a general surgeon), Dr. Burks (as a cardiologist), and Dr. Osevala (as a cardiothoracic surgeon).[23] Because of the parent-subsidiary relationship between SHS and WRMC, and because all the individual physician defendants are employed by SHS or one of its subsidiaries, Magistrate Judge Arbuckle determined that “there [was] no combination of independent entities” capable of engaging in concerted action of the sort that creates liability under the Sherman Act or state conspiracy law.[24]

         Dr. McGary objects to this recommendation. She notes that Dr. Osevala's compensation from SPS is partially performance-based-i.e., he may receive more money by bringing more revenue into the hospital-and believes that his purpose in excluding her from WRMC was to prevent her from reducing his own patient load (and paycheck). Therefore, she argues, while all the Defendants are looking out for the hospital's bottom line, Dr. Osevala is simultaneously seeking to boost his own; consequently, Dr. Osevala and the other Defendants are “separate economic actors pursuing separate economic interests.”[25]

         Determining whether parties are legally capable of conspiring requires “a functional consideration of how the parties involved in the alleged anticompetitive conduct actually operate.”[26] It is true that Dr. Osevala's employment agreement contained an “incentive bonus” provision.[27] It is also true, however, that Dr. Osevala never qualified for that bonus, and was instead just paid his flat, regular salary. Moreover, even if he had qualified for such a bonus, that would simply show that Dr. Osevala was successful in bringing business to the hospital-i.e., that he was successful, as a hospital employee, in furthering the hospital's economic interest.[28] The parties, then, are, as a matter of law, “a single economic entity for purposes of antitrust analysis, ”[29] and cannot legally conspire. Therefore, summary judgment on the conspiracy claims will be entered in favor of Defendants.

         C. Whether Defendants Have Willfully Acquired Or Maintained Monopoly Power

         To prevail on her monopolization claim under § 2 of the Sherman Act, Dr. McGary must show the “willful acquisition or maintenance of [monopoly] power”-i.e., they must show that Defendants engaged in “anticompetitive conduct.”[30] It is well-established, however, that “[c]onduct that merely harms competitors, . . . while not harming the competitive process itself, is not anticompetitive.”[31]

         Dr. McGary argues that Defendants have maintained monopoly power by “rely[ing] on onerous and outdated surgical number standards as a pretextual reason for denying surgical privileges.”[32] Unfortunately, she points to no evidence in support of this argument. To the contrary, it appears that, since May 1, 2007, at least seven doctors met the hospital's 100-surgery criteria and, consequently, gained surgical privileges there.[33] During that time period, in fact, Dr. McGary was the only applicant who was rejected.[34]

         Because Dr. McGary has failed to demonstrate conduct that harms competition-and has, instead, only shown conduct that harms herself, a competitor-summary judgment on this claim will be granted in favor of Defendants.

         D. Whether Defendants Had the Specific Intent to Monopolize

         To prevail on her attempted monopolization claim under § 2 of the Sherman Act, Dr. McGary must prove that Defendants had the “specific intent to monopolize the ...

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