Mathews v. Lancaster General Hospital

Opinions of the United
1996 Decisions States Court of Appeals
for the Third Circuit
6-21-1996
Mathews v. Lancaster Gen Hosp
Precedential or Non-Precedential:
Docket 95-1391,95-1392,95-1532,95-1548
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
Nos. 95-1391, 95-1392,
95-1532 and 95-1548
___________
ROBERT S. MATHEWS, M.D.,
Appellant at No. 95-1391
v.
LANCASTER GENERAL HOSPITAL;
LANCASTER GENERAL HOSPITAL FOUNDATION;
COLUMBIA HOSPITAL; COLUMBIA HOSPITAL FOUNDATION;
GERALD W. ROTHACKER, JR., M.D.; THOMAS R. WESTPHAL, M.D.;
JOHN SHERTZER, M.D.; J. PAUL LYET, M.D.;
JAMES P. ARGIRES, M.D.; HUGH H. HOKE, JR., M.D.
ROBERT S. MATHEWS, M.D.,
Appellant at No. 95-1392
v.
ORTHOPEDIC ASSOCIATES OF LANCASTER, LTD.
ROBERT S. MATHEWS, M.D.
v.
LANCASTER GENERAL HOSPITAL;
LANCASTER GENERAL HOSPITAL FOUNDATION;
COLUMBIA HOSPITAL; COLUMBIA HOSPITAL FOUNDATION;
GERALD W. ROTHACKER, JR., M.D.; THOMAS R. WESTPHAL, M.D.;
JOHN SHERTZER, M.D.; J. PAUL LYET, M.D.;
JAMES P. ARGIRES, M.D.; HUGH H. HOKE, JR., M.D.
Lancaster General Hospital,
Gerald W. Rothacker, Jr., M.D.,
Thomas R. Westphal, M.D.,
John H. Shertzer, M.D.,
J. Paul Lyet, M.D.,
James P. Argires, M.D.
and Hugh H. Hoke, Jr., M.D.,
Appellants at No. 95-1532
ROBERT S. MATHEWS, M.D.
v.
ORTHOPEDIC ASSOCIATES OF LANCASTER, LTD.,
Appellant at No. 95-1548
_______________________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action Nos. 93-cv-06774 and 94-cv-04647)
___________________
Argued January 10, 1996
Before: SCIRICA, ALITO and WEIS, Circuit Judges
(Filed June 21, 1996)
JUDAH I. LABOVITZ, ESQUIRE (ARGUED)
Mann, Ungar, Spector & Labovitz
1709 Spruce Street
Philadelphia, Pennsylvania 19103
Attorney for Robert S. Mathews, M.D.
REEDER R. FOX, ESQUIRE (ARGUED)
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, Pennsylvania 19103-7396
Attorney for Lancaster General Hospital,
Lancaster General Hospital Foundation,
Gerald W. Rothacker, Jr., M.D.
Thomas R. Westphal, M.D.,
John H. Shertzer, M.D.,
J. Paul Lyet, M.D.,
James P. Argires, M.D.,
and Hugh H. Hoke, Jr., M.D.
JONATHAN B. SPRAGUE, ESQUIRE (ARGUED)
Post & Schell
1800 JFK Boulevard, 19th Floor
Philadelphia, Pennsylvania 19103
Attorney for Columbia Hospital and
Columbia Hospital Foundation
JOHN G. HARKINS, JR., ESQUIRE (ARGUED)
Harkins Cunningham
1800 One Commerce Square
2005 Market Street
Philadelphia, Pennsylvania 19103-7042
Attorney for Orthopedic Associates of Lancaster, Ltd.
__________________
OPINION OF THE COURT
__________________
SCIRICA, Circuit Judge.
Dr. Robert Mathews brought suit against Lancaster
General Hospital, Columbia Hospital, and several physicians,
alleging defendants conspired to curtail his professional
privileges in violation of the Sherman Act and state law. The
district court held all defendants except Columbia Hospital were
immune from suit for monetary damages under the Health Care
Quality Improvement Act of 1986 (the "Act"), 42 U.S.C. 11101-
11152 (1988 & Supp. IV 1992). It also found that Dr. Mathews
failed to produce evidence of concerted action and antitrust
injury. The district court entered summary judgment against Dr.
Mathews on his antitrust claims and dismissed his pendant state
law claims. See Opinion and Order, Mathews v. Lancaster Gen.
Hosp., Nos. 93-6774, 94-4647 (E.D. Pa. May 4, 1995).
Dr. Mathews appeals the grant of immunity, and
defendants cross-appeal the denial of their motion for attorneys'
fees. The Act requires that "a professional review action be
taken in the reasonable belief that the action was in furtherance
of quality health care" for immunity to attach. 42 U.S.C.
11112(a)(1). Because the evidence in this case supports the
conclusion that defendants possessed a reasonable belief that
their action was in furtherance of quality health care, we
believe the district court correctly found them to be immune from
suit. We also hold that the award of attorneys' fees to
prevailing defendants under the Act lies in the discretion of the
district court.
Dr. Mathews also challenges the district court's grant
of summary judgment on the antitrust claims. We believe Dr.
Mathews has failed to raise a genuine issue of material fact as
to whether defendants engaged in concerted action in restraint of
trade. Nor has he shown the existence of an antitrust injury.
We will affirm.
I. Factual Background
Dr. Robert Mathews is an orthopedic surgeon who has
been on the staff of Lancaster General Hospital ("Lancaster
General") since 1973 and Columbia Hospital ("Columbia") since
1992. He practices as a corporate partner with another
orthopedic surgeon, Dr. George Kent. Lancaster General,
Columbia, and affiliated corporate entities, the Lancaster
General Hospital Foundation and the Columbia Hospital Foundation,
are defendants in this antitrust suit. Also defendants are
Orthopedics Associates of Lancaster, Ltd. ("Orthopedic
Associates"), an orthopedic surgery group practice in competition
with Dr. Mathews' practice, and several doctors, including Drs.
Gerald Rothacker, Jr., Thomas Westphal, and John Shertzer, all
orthopedic surgeons and shareholders of Orthopedic Associates.
Dr. Mathews alleges that Lancaster General, Columbia, Orthopedic
Associates, and the individual defendants engaged in an antitrust
conspiracy to curtail his orthopedics practice and his privileges
at Lancaster General by improperly sanctioning him in a peer
review proceeding. He alleges that Dr. J. Paul Lyet, another
orthopedic surgeon, Dr. James Argires, a neurosurgeon and a
member of the Lancaster General Hospital Board of Directors, and
Dr. Hugh Hoke, a former President of the Medical and Dental Staff
of Lancaster General Hospital and ex-officio member of the
Lancaster General Hospital Board, also participated in the
conspiracy.
The chain of events that precipitated this lawsuit
began on December 27, 1989. That morning, Dr. Kent was
performing spinal surgery at Lancaster General. Dr. Mathews was
listed as a co-surgeon for the operation. During the procedure,
a high speed drill slipped and tore the patient's esophagus. Dr.
Kent attempted to repair the esophagus himself without seeking
outside assistance or a consultation. Dr. Mathews was not
present in the operating room when the esophagus was injured.
Later that evening, the patient suffered complications
necessitating emergency surgery to repair the tear.
After the accident, Dr. Kent's hospital privileges were
suspended for five days while an ad hoc committee, chaired by Dr.
Hoke and composed of several other Lancaster General physicians
(the "Hoke Committee"), investigated. The Hoke Committee
concluded that Dr. Kent had acted inappropriately by failing to
seek a consultation on the patient's torn esophagus. In a report
dated January 4, 1990, the Hoke Committee recommended a focused
review of Dr. Kent's cases for a prospective six month period by
the Quality Assurance Committee of the Department of Surgery and
urged that letters of reprimand be placed in the confidential
files of both Drs. Kent and Mathews. The report concluded that
Dr. Mathews, as co-surgeon, bore some responsibility for the
incident.
In accordance with the Hoke Committee's recommendation,
Dr. Robert Johnson, the President of the Medical and Dental
Staff, authorized a second ad hoc committee of three board-
certified orthopedic surgeons to conduct the six-month focused
review of Dr. Kent's cases. The committee was selected by Dr.
Rothacker, Chairman of the Department of Surgery at Lancaster
General, and consisted of Drs. Rothacker, Westphal and Lyet (the
"Rothacker Committee"). The parties dispute why the focused
review was not undertaken by the Quality Assurance Committee as
the Hoke Committee had recommended. Drs. Rothacker and Westphal
are both shareholders of Orthopedic Associates and economic
competitors of Dr. Mathews.
The Rothacker Committee reviewed 208 surgical cases in
which Dr. Kent served as either the primary or assisting surgeon.
Apparently Dr. Rothacker played the most important role in the
review. At the end of the review which took two years, the
committee concluded that 27 of the 208 cases evidenced a
substandard level of care. Twenty-three of those cases, the
committee discovered, involved spine surgery, and Dr. Mathews had
been the primary surgeon in each of those cases. Dr. Rothacker
reported the findings of the committee to Dr. Johnson in a March
19, 1992 letter. In the letter, Dr. Rothacker recommended that
the 27 files rated substandard by the committee be sent to an
outside agency for further review, and "[i]f this agency agrees
that these cases were not managed in an acceptable fashion, a
restriction of privileges would be indicated." Both Dr. Kent and
Dr. Mathews were sent copies of the letter. Dr. Rothacker also
reported the conclusions of his committee to the Executive
Committee of the Medical and Dental Staff on April 6, 1992,
although he did not provide the Executive Committee with any
underlying materials or with the Hoke Committee report.
Subsequently, in a letter dated April 30, 1992, Dr. Johnson
informed Dr. Mathews that an independent reviewer would evaluate
both Dr. Mathews' and Dr. Kent's cases. Attached to this letter
was a copy of the minutes of the April 6, 1992 meeting of the
Executive Committee, which stated in part:
In a significant number of these cases [of
Dr. Kent], Dr. Robert Mathews was also
involved in the surgery, as primary or
assistant surgeon. Therefore, any review by
an outside review agency will also involve a
review [of] Dr. Mathews' performance in these
cases, and may result in a recommendation
regarding Dr. Mathews' clinical privileges.
At the time he was conducting the review of Dr. Kent's
cases, Dr. Rothacker was also concerned about economic trends
affecting the medical profession. In a November 1991 letter to
the Lancaster General Hospital Foundation Board, Dr. Rothacker
wrote: "The economic climate for medical practice, as you know,
is not favorable at this time. Most of us anticipate a
significant drop in our gross earning ability and most likely our
net earning ability." In January 1993, in order to respond to
negative economic trends, Orthopedic Associates, of which Dr.
Rothacker was a principal, and Lancaster General formed a joint
venture--the MidAtlantic Orthopedic Institute. The Institute was
intended "to develop, operate and market a comprehensive
orthopedic care and orthopedic surgical services program, through
[Lancaster General]." Orthopedic Associates was to be the
exclusive provider of orthopedic surgical services at the
Institute, and Lancaster General agreed to dedicate operating
room time and support personnel to Orthopedic Associates. Dr.
Mathews was a major user of operating room time at Lancaster
General.
Meanwhile, Lancaster General had retained the American
Medico-Legal Foundation to select an independent reviewer to
review the 27 cases in which the Rothacker Committee had found
that Drs. Kent and Mathews had provided substandard care. The
Foundation chose Philip D. Wilson, Jr., M.D., of Cornell Medical
College. Dr. Wilson is a board certified orthopedic surgeon who
has taught in the field of orthopedic surgery for over 40 years.
Drs. Kent and Mathews were given an opportunity to submit
additional information regarding the files to be sent to the
independent reviewer, and both submitted some supplementary
materials. On March 18, 1993, Dr. Wilson issued a report
concluding the quality of care rendered by Drs. Kent and Mathews
was inadequate and below acceptable standards. Dr. Wilson's
report concluded:
the pattern and trend of care reflected by
review of the records of the 23 patients
undergoing lumbar spinal surgery by these two
surgeons in a period of 6 months are
substandard in the following ways:
(1) Incredibly poor documentation of patient
work-ups lacking clear definition of primary
complaints, clear histories of present
illnesses, well recorded past medical
histories, complete and orderly specific
orthopedic and neurological examinations, and
specifics of prior ambulatory care and
treatments.
(2) Lack of timely review, editing and
correction of dictated and typed office
notes.
(3) Lack of timely signature to authorize
such notes.
(4) Poor use of consultants such as
neurologists, neurosurgeons, and/or
electroneurodiagnosticians.
(5) Great dependence on literal and non-
objective interpretations of CAT scans
without direct clinical correlations for
diagnosis.
(6) Failure to use alternative imaging
techniques such as the full spectrum of
routine x-rays, MRIs, and myelographic
enhanced CTs.
(7) Lack of judgment in applying extensive
lumbar surgical decompressions and fusions to
patients irrespective of age and type of
condition.
(8) Lack of well controlled ambulatory non-
operative techniques such as bracing,
exercise therapy, pain blocks and
physiotherapeutic modalities.
(9) Nonsystematic use of medications such as
NSAIDs, muscle relaxants, analgesics, etc.
(10) Lack of objective hospitalization
progress notes recording such details as
progress of wound, recovery milestones, etc.
(11) The lack of a concise but descriptive
discharge note with details of course as well
as diagnoses, operative procedures and
complications.
(12) Deficient operative notes without
details of intraoperative findings and
annotated justification for widespread and
radical decompressive and stabilization
procedures.
(13) Lack of understanding of principles for
suitable internal fixation of the spine.
(14) Lack of observing suitable principles
for optimal results from spinal arthrodesis
grafting techniques.
Dr. Wilson recommended that both doctors' privileges to perform
spine surgery be restricted until they were able to "demonstrate
a renewed and updated understanding of present day principles and
practice of this type of surgery." By letter dated May 10, 1993,
Dr. Mathews was advised of Dr. Wilson's conclusions and furnished
with a copy of his peer review report. The letter warned that
any restriction of privileges would be reported to the National
Practitioner Data Bank.
In July 1993, Dr. Mathews was negotiating with
Lancaster General over the possible sale of a property adjacent
to Lancaster General in which he held an interest. He sought to
link those negotiations to the hospital's proposed actions
regarding his privileges. Dr. Mathews believed an understanding
had been reached with Lancaster General that he would sell the
property and voluntarily cease to perform spine surgery, and
Lancaster General would not submit an adverse report to the
National Practitioner Data Bank. In accordance with his
understanding, Dr. Mathews voluntarily did not request privileges
for spine surgery in his 1994-95 staff privileges application to
Lancaster General, submitted on July 29, 1993. But on August 27,
1993, Dr. Hoke wrote to Dr. Mathews rejecting the linkage of the
sale of property and Dr. Mathews' staff privileges.
On September 16, 1993, the Lancaster General Hospital
Board of Directors voted to restrict Dr. Mathews' privileges to
perform spine surgery as either primary or assisting surgeon.
They also voted to require Dr. Mathews to obtain a second opinion
or consultation before performing prosthetic joint surgery,
arthroscopy, or hand or foot surgery for a period of 12 months.
Dr. Shertzer (a partner in Orthopedic Associates), Dr. Argires,
and Dr. Hoke abstained from voting, although they were members of
the Board. The Board notified Dr. Mathews of its decision by
letter dated September 22, 1993 and informed him of his right to
a fair hearing under Lancaster General Hospital Medical Staff
Bylaws. On October 26, 1993, Dr. Mathews requested a hearing,
and the Board subsequently voted to suspend the restrictions on
his privileges until a hearing could be held. Before the hearing
was scheduled, however, Dr. Mathews filed this suit.
During this course of events, Dr. Mathews also applied
for staff privileges at Columbia Hospital. Columbia granted Dr.
Mathews "temporary privileges" in the Division of Surgery,
Orthopedics, effective April 22, 1992. Later that year, Dr.
Mathews was granted "provisional courtesy privileges" for a
period of twelve months. Near the end of that period, on August
25, 1993, Columbia's Credentials Committee recommended that Dr.
Mathews' privileges be upgraded to "courtesy privileges," and
Columbia upgraded Dr. Mathews' status the next month. Dr.
Mathews submitted a reappointment application to have his
privileges at Columbia renewed for the year beginning January 1,
1994, but in the course of reviewing Dr. Mathews' application,
Mr. Robert Katana, President and CEO of Columbia Hospital,
discovered the application did not contain a reappointment
reference from Lancaster General. Columbia requires all staff
physicians to submit a reappointment reference from any other
hospital where they exercise privileges, and Mr. Katana requested
such a reference from Dr. Mathews. Dr. Mathews never submitted
the reappointment reference from Lancaster General, and his
courtesy staff privileges at Columbia expired on December 31,
1993. Thereafter, Columbia granted Dr. Mathews "temporary
privileges." In September 1993, at the time Mr. Katana was
considering Dr. Mathews' application for an extension of
privileges, Lancaster General was in the process of negotiating a
merger with Columbia Hospital.
II. Procedural History
Dr. Mathews brought suit against Lancaster General
Hospital, Columbia Hospital, and various staff members of
Lancaster General on December 15, 1993, and against Orthopedic
Associates of Lancaster, Ltd. on August 1, 1994. The two cases
were consolidated. The district court granted summary judgment
to Lancaster General, Orthopedic Associates, and the individual
defendants on federal and state claims for monetary relief
because it found they enjoyed immunity from monetary damages
under 11111(a) of the Health Care Quality Improvement Act. The
district court also granted summary judgment to all defendants,
including Columbia, on Dr. Mathews' antitrust claims, holding he
had not produced evidence showing concerted action on the part of
the defendants or an antitrust injury. The district court
entered summary judgment on Dr. Mathews' federal claims for
injunctive relief and dismissed without prejudice state claims
for injunctive relief. See Opinion and Order, Mathews v.
Lancaster Gen. Hosp., Nos. 93-6774, 94-4647 (E.D. Pa. May 4,
1995) ("Opinion and Order"). Mathews appeals the district
court's grant of summary judgment. All defendants except
Columbia appeal the district court's refusal to grant attorneys'
fees.
We have jurisdiction under 28 U.S.C. 1291 to review
the district court's final order. Our review of the district
court's grant of summary judgment is plenary. Petruzzi's IGA
Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1230
(3d Cir.), cert. denied sub nom. Moyer Packing Co. v. Petruzzi's
IGA Supermarkets, Inc., 114 S. Ct. 554 (1993).
III. The Health Care Quality Improvement Act
This case arises under the Health Care Quality
Improvement Act of 1986, 42 U.S.C. 11101-11152 (1988 & Supp.
IV 1992). Congress passed the Act "to improve the quality of
medical care by encouraging physicians to identify and discipline
physicians who are incompetent or who engage in unprofessional
behavior." H.R. Rep. No. 903, 99th Cong., 2d Sess. 2 (1986),
reprinted in 1986 U.S.C.C.A.N. 6287, 6384, 6384. Congress
believed incompetent physicians could be identified through
"effective professional peer review," which it chose to encourage
by granting limited immunity from suits for money damages to
participants in professional peer review actions. 42 U.S.C.
11101(5), 11111(a). Congress also sought "to restrict the
ability of incompetent physicians to move from State to State
without disclosure or discovery of the physician's previous
damaging or incompetent performance" by creating an obligation to
report professional review sanctions to the Secretary of the
Department of Health and Human Services. 42 U.S.C. 11101(2),
11134.
The standards that a professional review action must
satisfy in order to entitle participants in the review process to
immunity are set forth in 42 U.S.C. 11112(a) and include
certain fairness and due process requirements. For immunity to
attach, the results of the action must be reported to the State
Board of Medical Examiners in compliance with 42 U.S.C. 11133.
The Act was intended to deter antitrust suits by
disciplined physicians. Congress believed "[t]he threat of
private money damage liability under Federal laws, including
treble damage liability under Federal antitrust law, unreasonably
discourages physicians from participating in effective
professional peer review." 42 U.S.C. 11101(4). The Act
contains a fee shifting provision to discourage frivolous suits
by physicians disciplined in peer review proceedings. See 42
U.S.C. 11113.
The Act includes a presumption that a professional
review activity meets the standards for immunity, "unless the
presumption is rebutted by a preponderance of the evidence." 42
U.S.C. 11112(a). This presumption results in an "unusual
standard" for reviewing summary judgment orders under the Act.
"In a sense, the presumption language in [the Health Care Quality
Improvement Act] means that the plaintiff bears the burden of
proving that the peer review process was not reasonable." Bryan
v. James E. Holmes Regional Medical Ctr., 33 F.3d 1318, 1333
(11th Cir. 1994) (emphasis in original), cert. denied, 115 S. Ct.
1363 (1995). "We must examine the record in this case to
determine whether [Dr. Mathews] satisfied his burden of producing
evidence that would allow a reasonable jury to conclude that the
Hospital's peer review disciplinary process failed to meet the
standards of the [Act]." Id. at 1334; see also Austin v.
McNamara, 979 F.2d 728, 734 (9th Cir. 1992) (same).
A. Professional Review Actions under the Act
Dr. Mathews argues Lancaster General and defendant
physicians conducted at least two "professional review actions"
relating to him: first, the March 19, 1992 letter of Dr.
Rothacker on behalf of the Rothacker Committee recommending a
focused review of his cases and a possible restriction of his
privileges, and second, the September 16, 1993 vote by the
Lancaster General Hospital Board of Directors to revoke his spine
privileges. The Act defines a "professional review action" as:
an action or recommendation of a professional
review body which is taken or made in the
conduct of professional review activity . . .
which affects (or may affect) adversely the
clinical privileges, or membership in a
professional society, of a physician. Such
term . . . also includes professional review
activities relating to a professional review
action.
42 U.S.C. 11151(9). Dr. Mathews contends that Dr. Rothacker's
March 19, 1992 letter constituted a professional review action
because it made a recommendation that had the potential to
adversely affect his clinical privileges. He argues the district
court erred by not treating the Rothacker Committee's letter as a
professional review action and not assessing it for compliance
with the fairness and procedural standards outlined in 42 U.S.C.
11112(a).
The district court, reading the definitions of
"professional review action" and "professional review activity"
together, concluded that "the term ``professional review activity'
refers to preliminary investigative measures taken in a
``reasonable effort to obtain the facts' relevant to a possible
change in a physician's privileges, while the term ``professional
review action' refers to the decision that results from a review
of the facts obtained." See Opinion and Order, slip op. at 21.
It concluded Dr. Rothacker's letter was a part of the
preliminary investigative process and therefore not a
"professional review action." We agree with the district court's
analysis.
The definition of "professional review action"
encompasses decisions or recommendations by peer review bodies
that directly curtail a physician's clinical privileges or impose
some lesser sanction that may eventually affect a physician's
privileges. "Professional review actions" do not include a
decision or recommendation to monitor the standard of care
provided by a physician or factfinding to ascertain whether a
physician has provided adequate care. These are "professional
review activities." See Fobbs v. Holy Cross Health Sys. Corp.,
789 F. Supp. 1054, 1065 (E.D. Cal. 1992) ("[P]rofessional review
activity means the investigative process during and/or upon which
a professional review action, i.e., a decision, is made."),
aff'd, 29 F.3d 1439 (9th Cir. 1994), cert. denied, 115 S. Ct. 936(1995). We believe Dr. Rothacker's March 12, 1992 letter was a
part of ongoing professional review activities. It did not
constitute a decision to restrict Dr. Mathews' privileges, nor
did it recommend that Dr. Mathews' privileges be restricted
immediately. In fact, the letter did not impose any penalty.
Instead, it recommended further investigation and review by an
outside agency before any limitations were placed on Dr. Mathews'
privileges. No professional review action occurred here until the
Board's September 16, 1993 vote to suspend Dr. Mathews'
privileges. See Austin v. McNamara, 979 F.2d at 736 ("no
``action' was taken in this case until . . . the first occasion
when [plaintiff's] clinical privileges were adversely affected.
Prior to that time, he had been monitored and reviewed, but no
professional review body had limited his clinical privileges or
adopted a recommendation that they be limited."). Because Dr.
Rothacker's March 19, 1992 letter was not a professional review
action, the district court correctly held it did not have to meet
the standards set forth in 42 U.S.C. 11112(a).
B. Immunity under the Act
Dr. Mathews contends summary judgment was inappropriate
because there were disputed issues of fact as to whether the
defendants met the standard for immunity set forth in 42 U.S.C.
11112(a). For immunity under 11111(a) to attach, four
requirements must be met. The professional review action must be
taken:
(1) in the reasonable belief that the
action was in the furtherance of quality
health care,
(2) after a reasonable effort to obtain
the facts of the matter,
(3) after adequate notice and hearing
procedures are afforded to the physician
involved or after such other procedures as
are fair to the physician under the
circumstances, and
(4) in the reasonable belief that the
action was warranted by the facts known after
such reasonable effort to obtain facts and
after meeting the requirement of paragraph
(3).
42 U.S.C. 11112(a). We will undertake the inquiry mandated by
each of 11112(a)'s four prongs to determine whether the
district court's grant of summary judgment on the basis of
immunity was proper.
1. Reasonable Belief that the Action was in the
Furtherance of Quality Health Care
On appeal, Dr. Mathews argues he raised material issues
of fact as to whether participants in the peer review proceedings
at Lancaster General acted "in the reasonable belief that [a
restriction of his privileges] was in the furtherance of quality
health care," as is required under 11112(a)(1) of the Act. He
maintains that defendants were in direct economic competition
with him, which supports an inference of their bad faith. The
district court held that 11112(a)(1) mandates an objective
standard, and "assertions of bad faith and anticompetitive motive
are irrelevant to the question of whether a decision was taken in
a reasonable belief that it would further quality health care."
Opinion and Order, slip op. at 29-30.
Other courts of appeals, in evaluating summary judgment
orders granted on the basis of immunity, have uniformly applied
an objective standard in assessing compliance with 11112(a).
See Imperial v. Suburban Hosp. Ass'n, Inc., 37 F.3d 1026, 1030
(4th Cir. 1994) ("The standard is an objective one which looks to
the totality of the circumstances."); Smith v. Ricks, 31 F.3d
1478, 1485 (9th Cir. 1994) ("the ``reasonableness' requirements of
11112(a) were intended to create an objective standard, rather
than a subjective standard"), cert. denied, 115 S. Ct. 1400(1995). They have held that a defendant's subjective bad faith
is irrelevant under 11112(a) and have upheld a finding of
immunity if, on the basis of the record, the court could conclude
that the professional review action would further quality health
care. See, e.g., Bryan v. James E. Holmes Regional Medical Ctr.,
33 F.3d 1318, 1335 (11th Cir. 1994) (Plaintiff's "assertions of
hostility do not support his position [that the hospital is not
entitled to the Act's protections] because they are irrelevant to
the reasonableness standards of 11112(a). The test is an
objective one, so bad faith is immaterial. The real issue is the
sufficiency of the basis for the [Hospital's] actions."), cert.
denied, 115 S. Ct. 1363 (1995); Austin v. McNamara, 979 F.2d 728,
734 (9th Cir. 1992) (same); see also Opinion and Order, slip op.
at 30.
We agree with our sister circuits that 11112(a)
imposes an objective standard. The House Committee on Energy and
Commerce's report on the Act stated with regard to 11112(a)(1):
Initially, the Committee considered a "good
faith" standard for professional review
actions. In response to concerns that "good
faith" might be misinterpreted as requiring
only a test of the subjective state of mind
of the physicians conducting the professional
review action, the Committee changed to a
more objective "reasonable belief" standard.
H.R. Rep. No. 903, 99th Cong., 2d Sess. 10 (1986), reprinted in1986
U.S.C.C.A.N. at 6392-93. Although the quoted passage
relates to a previous version of the Act and to 11112(a)(1) in
particular, we believe that Congress' use of the words
"reasonable belief" in both 11112(a)(1) and (4) indicates an
intention to create an objective standard with regard to
11112(a) as a whole. Under 11112(a)(1), this standard "will
be satisfied if the reviewers, with the information available to
them at the time of the professional review action, would
reasonably have concluded that their actions would restrict
incompetent behavior or would protect patients." H.R. Rep. No.
903, 99th Cong., 2d Sess. 10 (1986), reprinted in 1986
U.S.C.C.A.N. at 6393. The court should look to the totality of
the circumstances. Imperial v. Suburban Hosp. Ass'n, Inc., 37
F.3d at 1030.
Dr. Mathews has presented evidence that defendants,
including Lancaster General as a joint venturer in the
MidAtlantic Orthopedic Institute, were his competitors. But he
has not presented evidence that the professional review action
taken by Lancaster General's Board was motivated by anything
other than a reasonable belief that it would further quality
health care. As the district court concluded after carefully
reviewing the evidence, Dr. Mathews has failed to rebut
11112(a)'s presumption that the peer reviewers' action met the
standard for immunity from suit for monetary damages:
The undisputed evidence shows that, in making
its decision, the Board relied on the
findings of the Rothacker Committee and the
independent expert Dr. Wilson, as reported to
the Board by LGH CEO Mr. Young and defendant
Dr. Hoke. The Rothacker Committee report
represents the conclusion of a committee of
three board certified orthopedic surgeons
that 23 of Dr. Mathews' cases during a six-
month period did not meet appropriate
standards of care. These findings were
confirmed by those of the independent expert,
Dr. Wilson of Cornell Medical College. . . .
After reviewing the cases identified by
the Rothacker Committee, Dr. Wilson submitted
a detailed report in which he concluded that
the pattern and trend of care reflected were
"substandard" in fourteen separate respects,
which he enumerated. . . . The restrictions
voted on by the Board appear tailored to meet
the concerns raised by Dr. Wilson's report.
Thus, in addition to the statutory
presumption in favor of defendants, the
evidentiary record in this case provides
ample support for the conclusion that the
Board's action was taken in a reasonable
belief that it would further quality health
care. . . .
Dr. Mathews has produced no evidence
that anticompetitive considerations actually
entered into the Board's decisionmaking
process. . . . There is no evidence that the
reports contained or that the Board
considered any supporting evidence that was
not related to the quality of health care.
Rather, Dr. Mathews appears to base his
argument solely on his allegation that the
defendants were his competitors and stood to
gain by eliminating him from the market.
Mere participation by plaintiff's
competitors in the Hoke or Rothacker
Committee investigations or the Board's vote,
however, does not run afoul of the [Health
Care Quality Improvement Act]. Although the
Act suggests that a hearing officer or
individuals sitting on a hearing panel should
not be in direct competition with the
physician who is the subject of the hearing,
see 11112(b)(3)(A)(ii) & (iii), it imposes
no such requirement on participants in other
phases of the peer review process. To the
extent plaintiff is attempting to suggest
that it was not reasonable for the Board to
rely on the Rothacker report because it was
generated by orthopedic surgeons who are
plaintiff's competitors, this contention is
negated by the fact that the committee's
findings were confirmed by Dr. Wilson, who is
not in any way in competition with Dr.
Mathews. Moreover, we note that although the
[Act] does not require it, the physician
members of the Board, defendant Drs. Hoke,
Argires, and Shertzer, abstained from voting
on the privilege restrictions. Thus
plaintiff's arguments concerning his
competitors' participation in the peer review
process cannot serve to rebut the presumption
in favor of defendants.
Opinion and Order, slip op. at 28-32. Because Dr. Mathews has
not rebutted the presumption that defendants' actions were taken
in the reasonable belief that they would further quality health
care, and, in fact, the evidence supports the conclusion that
defendants were motivated by legitimate health care concerns, the
district court correctly found defendants met the requirements of
the first prong of 11112(a) of the Act.
2. Reasonable Effort to Obtain the Facts
Dr. Mathews also argues that defendants did not engage
in a reasonable effort to obtain the facts under 11112(a)(2) of
the Act. He points to several problems in the factfinding
process, specifically that the Rothacker Committee was composed
of competitors, did not request formal authorization to begin a
focused review of Dr. Mathews' cases, and did not reveal to the
Board the extent of participation in the review process of each
member of the committee. Dr. Mathews also emphasizes the Board
did not undertake an independent investigation and did not
consider Lancaster General routine internal quality reviews.
Contrast Imperial v. Suburban Hosp. Ass'n, Inc., 862 F. Supp.
1390, 1399 (D. Md. 1993) (Board questioned plaintiff's attorney
and reviewed records), aff'd, 37 F.3d 1026 (4th Cir. 1994).
Although Dr. Mathews challenges the integrity of the
Rothacker Committee, he has not rebutted the presumption that
defendants engaged in a reasonable effort to obtain the facts.
The investigation of the Rothacker Committee, as a preliminary,
investigative "professional review activity," was not required
independently to meet the requirements of 11112(a). See suprapart
III.A. The Act contains no provision barring competitors
from participating in "professional review activities." Nor does
it require formal authorization for preliminary "professional
review activities." Moreover, it is undisputed that Dr. Mathews'
standard of care became the focus of attention during the
Rothacker Committee's review of Dr. Kent's cases, which
necessarily encompassed the cases of Dr. Mathews.
The relevant inquiry under 11112(a)(2) is whether the
totality of the process leading up to the Board's "professional
review action" on September 16, 1993 evidenced a reasonable
effort to obtain the facts of the matter. The Board relied on
the recommendations of two separate reviews. The initial review
by the Rothacker Committee took over two years to complete and
reviewed 208 cases. The second review was performed by an
independent outside reviewer retained by Lancaster General. The
outside reviewer, Dr. Wilson, confirmed the findings of the
Rothacker Committee. The district court correctly concluded that
Dr. Mathews has not overcome the presumption that the Board
undertook reasonable efforts to obtain the facts of the matter in
compliance with 11112(a)(2). See Opinion and Order, slip op.
at 38.
3. Adequate Notice and Hearing Procedures
Dr. Mathews does not contest on appeal that Lancaster
General and the defendant individual physicians afforded him
adequate notice and hearing procedures in accordance with
11112(a)(3) of the Act. A review of the record confirms
defendants complied with 11112(a)(3).
Dr. Mathews was given notice of the progress of the
professional review activities at each step. A copy of the March
19, 1992 letter of the Rothacker Committee was sent to Dr.
Mathews at the same time its conclusions were reported to the
Medical and Dental Staff. On April 30, 1992, Dr. Johnson sent a
letter to Dr. Mathews informing him that an outside reviewer
would review the 27 cases identified by the Rothacker Committee.
This letter included minutes of the Medical and Dental Staff
Executive Committee meeting, in which the Executive Committee
indicated that the outside review "may result in a recommendation
regarding Dr. Mathews' clinical privileges." Before the outside
reviewer, Dr. Wilson, commenced his review, Dr. Mathews was given
the opportunity to provide additional materials, and he did so.
Dr. Mathews was provided with a copy of Dr. Wilson's March 18,
1993 report. Lancaster General informed Dr. Mathews that it was
considering placing restrictions on his privileges and it gave
Dr. Mathews the opportunity to respond informally. After the
Board voted to restrict Dr. Mathews' privileges on September 16,
1993, Dr. Young informed Dr. Mathews of the Board's decision by
letter dated September 22, 1993. The letter informed Dr. Mathews
of his right to request a hearing, stated the time limit for
doing so, and provided a summary of the rights he would be
afforded at the hearing. The letter also stated that Dr.
Mathews would be provided the procedural safeguards set for forth
in the Act.
After Dr. Mathews requested a hearing, the Board
suspended the proposed restrictions until the hearing could be
held. Shortly thereafter, Dr. Mathews filed this suit, short-
circuiting the completion of the review procedures called for by
11112(b)(3). Even though the hearing has never been held,
Lancaster General complied with the safe harbor provision,
11112(b), in all respects until the time when Dr. Mathews filed
suit. In fact, Lancaster General provided Dr. Mathews with
additional notices and procedural rights during the conduct of
preliminary professional review activities that were not required
by the Act. We do not believe a plaintiff can deprive defendants
of immunity by refusing to participate in the hearing required
under 11112(b)(3). Accordingly, we conclude Dr. Mathews has
not raised a material issue of fact rebutting the presumption
that defendants complied with 11112(a)(3) of the Act.
4. Reasonable Belief that the Action was Warranted by
the Facts Known
Finally, Dr. Mathews disputes whether the Board's
professional review action against him was taken in the
reasonable belief that it "was warranted by the facts known," as
required under 11112(a)(4) of the Act.
Dr. Wilson, the outside reviewer, concluded that Dr.
Mathews had provided substandard care in spine surgery cases.
The Board then placed restrictions on Dr. Mathews' privileges to
conduct spine surgery. Because these restrictions were tailored
to address the health care concerns raised by the reports of the
Rothacker Committee and Dr. Wilson, we believe the evidence
supports the conclusion that the restrictions were imposed based
on a reasonable belief that they were warranted by the facts
known. Moreover, Dr. Mathews has produced insufficient evidence
to rebut the presumption that the Board's action was taken in the
reasonable belief that it was warranted. As we have noted, Dr.
Mathews relies on the opinion provided by his expert witness, Dr.
Goldner, who disagreed with Dr. Wilson's conclusions. While the
conflicting expert reports raise an issue of fact as to the
adequacy of care provided by Dr. Mathews, they do not rebut the
presumption that the Board made its decision in the reasonable
belief that it was warranted by the facts known. The conclusions
of Dr. Goldner's report were not among "the facts known" at the
time of the professional review action. Furthermore, the
Rothacker Committee report and the report of Dr. Wilson were not
so obviously mistaken or inadequate as to make reliance on them
unreasonable. The requirements of 11112(a)(4) have been met as
well.
5. Summary on Immunity under the Act
We hold 11112(a) of the Act imposes an objective
standard. Under 11112(a)(1), this standard is met when peer
reviewers reasonably conclude that their actions will restrict
incompetent behavior or protect patients. Because the record
supports the district court's holding that Lancaster General and
the individual defendants reasonably believed their actions would
further quality health care and also fulfilled the remaining
three prongs of 11112(a) of the Act, we will affirm the
district court's judgment that defendants are immune from suit
for monetary damages.
IV. Antitrust Claims
Dr. Mathews alleges Lancaster General, Orthopedic
Associates, Columbia and the individual defendants conspired to
conduct a sham peer review investigation and to restrict his
privileges at Lancaster General and Columbia. He argues the
defendants' conspiracy violated 1 of the Sherman Act, entitling
him to treble damages under 15 U.S.C. 15 (1994) and to
injunctive relief under 15 U.S.C. 26. Although several of the
defendants are immune from money damages under the Health Care
Quality Improvement Act, we must still examine Dr. Mathews'
antitrust claims in order to determine whether he is entitled to
injunctive relief. The district court granted summary judgment
to all defendants on the antitrust claims.
Our review of a grant of summary judgment is plenary.
Summary judgment must be granted where no genuine issue of
material fact exists for resolution at trial and the moving party
is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c). The moving party bears the burden of showing the absence
of any genuine issues of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Where the nonmoving party
bears the burden of proof at trial, the moving party may meet its
burden by showing that the nonmoving party has not offered
evidence sufficient to establish the existence of an element
essential to its case. Id. at 322.
Section 1 of the Sherman Act provides:
Every contract, combination in the form of
trust or otherwise, or conspiracy, in
restraint of trade or commerce among the
several States, or with foreign nations, is
declared to be illegal.
15 U.S.C. 1. To establish a section 1 violation, a plaintiff
must prove:
(1) concerted action by the defendants; (2)
that produced anticompetitive effects within
the relevant product and geographic markets;
(3) that the concerted actions were illegal;
and (4) that it was injured as a proximate
result of the concerted action.
Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998
F.2d 1224, 1229 (3d Cir.), cert. denied sub nom. Moyer Packing
Co. v. Petruzzi's IGA Supermarkets, Inc., 114 S. Ct. 554 (1993).
The district court granted summary judgment to defendants,
holding that Dr. Mathews had not presented sufficient evidence of
concerted action and antitrust injury.
A. Concerted Action
"The very essence of a section 1 claim, of course, is
the existence of an agreement." Alvord-Polk, Inc. v. F.
Schumacher & Co., 37 F.3d 996, 999 (3d Cir. 1994), cert. denied,
115 S. Ct. 1691 (1995). For a section 1 claim, "a plaintiff must
prove ``concerted action,' a collective reference to the ``contract
. . . combination or conspiracy.'" Siegel Transfer, Inc. v.
Carrier Express, Inc., 54 F.3d 1125, 1131 (3d Cir. 1995). A
"``unity of purpose or a common design and understanding or a
meeting of the minds in an unlawful arrangement' must exist to
trigger section 1 liability." Copperweld Corp. v. Independence
Tube Corp., 467 U.S. 752, 771 (1984) (quoting American Tobacco
Co. v. United States, 328 U.S. 781, 810 (1946)). "Unilateral
action, no matter what its motivation, cannot violate [section]
1." Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d
105, 110 (3d Cir. 1980), cert. denied, 451 U.S. 911 (1981).
The district court concluded the Board acted
independently and not in concert with Orthopedic Associates or
the individual defendants in taking the professional review
action against Dr. Mathews. See Opinion and Order, slip op. at
50-54. We believe the evidence supports the district court's
conclusion. It is undisputed that only the Board had the
authority to restrict Dr. Mathews' privileges. Where a hospital
board has ultimate decision making authority, "[s]imply making a
peer review recommendation does not prove the existence of a
conspiracy [among the hospital and its staff]; there must be
something more such as a conscious commitment by the medical
staff to coerce the hospital into accepting its recommendation."
Oksanen v. Page Memorial Hosp., 945 F.2d 696, 706 (4th Cir.
1991), cert. denied, 502 U.S. 1074 (1992); see also Todorov v.
DCH Healthcare Auth., 921 F.2d 1438, 1459 (11th Cir. 1991)
("[T]hat the hospital board had before it recommendations from
the medical staff and the radiologists were pleased with [the
hospital's] ultimate decision is, standing alone, insufficient to
infer an antitrust conspiracy."). Dr. Mathews has not raised a
genuine issue of material fact as to whether Orthopedic
Associates or Drs. Rothacker, Westphal, Shertzer, Lyet, Argires
and Hoke coerced or lobbied the Board to restrict Dr. Mathews'
privileges.
Dr. Mathews views the activities of the Rothacker
Committee as evidence of a campaign of its members, Drs.
Rothacker, Westphal, and Lyet, to restrict his privileges. The
Rothacker Committee's recommendation was made eighteen months
before the Board's vote. There is no evidence that any doctor on
the Rothacker Committee had any further connection with the peer
review process thereafter. Moreover, the Rothacker Committee
suggested further review of Dr. Mathews' cases by an outside
reviewer. These facts negate an inference that the Rothacker
Committee or its members were attempting to coerce the Board into
restricting Dr. Mathews' privileges.
Dr. Mathews also points out the presence of Drs.
Shertzer, Argires, and Hoke during the Board's vote to restrict
his privileges. We do not believe the defendants' presence gives
rise to an inference of an antitrust conspiracy. All the
defendants abstained from voting, and Dr. Mathews has presented
no evidence that defendants attempted to influence or lobby the
Board.
Dr. Mathews argues that the contractual relationship
between Lancaster General and Orthopedic Associates relating to
the MidAtlantic Orthopedic Institute supports an inference that
Orthopedic Associates and members of Orthopedic Associates, Drs.
Rothacker, Westphal, and Shertzer, unduly influenced the Board.
Although a contractual relationship might support an inference
that Orthopedic Associates may have had the power to influence
the Board's decision, Dr. Mathews has not produced any evidence
that such coercion actually occurred.
Moreover, we believe peer review actions, when properly
conducted, generally enhance competition and improve the quality
of medical care. See Weiss v. York Hosp., 745 F.2d 786, 821 n.60
(3d Cir. 1984) ("it seems obvious that by restricting staff
privileges to doctors who have achieved a predetermined level of
medical competence, a hospital will enhance its reputation and
the quality of medical care it delivers. Thus such action is
pro-competitive"), cert. denied, 470 U.S. 1060 (1985); Oksanen v.
Page Memorial Hosp., 945 F.2d at 709 ("[T]he peer review process,
by policing competence and conduct of doctors, can enhance
competition."). We are reluctant to draw inferences of an
antitrust conspiracy from ambiguous circumstantial evidence in
cases where the challenged activity promotes competition.
Evidence of conduct, which is "as consistent with permissible
competition as with illegal conspiracy does not, without more,
support even an inference of conspiracy." Matsushita Electric
Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 597
n.21 (1986); see also Alvord-Polk, Inc. v. F. Schumacher & Co.,
37 F.3d at 1001. "[T]here must be evidence that tends to exclude
the possibility of independent action." Monsanto Co. v. Spray-
Rite Service Corp., 465 U.S. 752, 768 (1984).
Substantial evidence supports the conclusion that the
Board voted to restrict Dr. Mathews' privileges for legitimate
health care reasons. The Board relied on the report of the
independent reviewer, Dr. Wilson, in addition to Lancaster
General's own internal review procedure conducted by the
Rothacker Committee. Although Dr. Mathews has produced some
circumstantial evidence of an economic motivation on the part of
defendants, the evidence he refers to is equally consistent with
permissible competition and the promotion of quality patient
care. Dr. Mathews has not produced evidence that tends to
exclude the possibility that the Board acted independently.
Under these circumstances, we are reluctant to infer an antitrust
conspiracy, and we believe the district court correctly granted
summary judgment to Lancaster General and the individual
defendants. Cf. Willman v. Heartland Hospital East, 34 F.3d 605,
611 (8th Cir. 1994) ("the limitation and eventual termination of
[plaintiff's] staff privileges . . . is as consistent with the
lawful motive of promoting quality patient care as with an
anticompetitive motive and therefore, without more, does not give
rise to an inference of an antitrust conspiracy"), cert. denied,
115 S. Ct. 1361 (1995).
Dr. Mathews also has not produced sufficient evidence
of concerted action on the part of Lancaster General and Columbia
Hospital to survive summary judgment. While it is true that
Lancaster General and Columbia were conducting merger
negotiations at the time of Dr. Mathews' application for a
renewal of privileges, the undisputed facts establish that
Columbia reduced Dr. Mathews' privileges from courtesy privileges
to temporary privileges in the course of its normal staff review
processes and in accordance with its own bylaws. Because
Columbia's reduction of Dr. Mathews' privileges was as consistent
with the lawful motive of following its bylaws as with an
anticompetitive motive, we believe the evidence does not support
an inference of an antitrust conspiracy. Id. We will affirm the
district court's grant of summary judgment to Columbia Hospital
as well.
B. Antitrust Injury
The district court entered summary judgment for
defendants on the alternative ground that Dr. Mathews had not
produced evidence raising an issue of material fact as to the
existence of an antitrust injury. In antitrust cases, a
plaintiff must prove "injury of the type the antitrust laws were
intended to prevent and that flows from that which makes
defendants' acts unlawful." Alberta Gas Chemicals Ltd. v. E.I.
du Pont de Nemours and Co., 826 F.2d 1235, 1240 (3d Cir. 1987)
(quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S.
477, 489 (1977)), cert. denied, 486 U.S. 1059 (1988). In other
words, because "antitrust law aims to protect competition, not
competitors, [a court] must analyze the antitrust injury question
from the viewpoint of the consumer." Id. at 1241. "An antitrust
plaintiff must prove that challenged conduct affected the prices,
quantity or quality of goods or services," not just his own
welfare. Tunis Bros. Co., Inc. v. Ford Motor Co., 952 F.2d 715,
728 (3d Cir. 1991), cert. denied, 505 U.S. 1221 (1992).
The district court found the evidence does not support
the existence of an antitrust injury resulting from a restriction
on Dr. Mathews' privileges at Lancaster General because
orthopedic services are still readily available to consumers in
the Lancaster area from a large and ever-increasing number of
providers. Opinion and Order, slip op. at 21. The district
court also pointed out that the Board's restrictions on Dr.
Mathews' privileges do not completely extinguish Dr. Mathews'
ability to provide low cost services, but merely curtail his
ability to perform spine surgery at Lancaster General. We
believe the record supports the district court's conclusions.
Accordingly, the district court's grant of summary judgment was
proper.
V. Attorneys' Fees under the Health Care Quality Improvement Act
Lancaster General, Orthopedic Associates, and the
individual defendants argue the district court should have
awarded them attorneys fees under the Health Care Quality
Improvement Act's fee shifting provision, 42 U.S.C. 11113.
They assert the award of attorneys' fees to prevailing defendants
is mandatory under the Act. We disagree. "[T]he appropriate
standard of review of a district court's decision regarding the
award of attorney fees and costs under the [Act] is abuse of
discretion." Muzquiz v. W.A. Foote Memorial Hosp., Inc., 70 F.3d
422, 431-32 (6th Cir. 1995); see also Smith v. Ricks, 31 F.3d
1478, 1487 (9th Cir. 1994), cert. denied, 115 S. Ct. 1400 (1995);
Johnson v. Nyack Hosp., 964 F.2d 116, 123 (2d Cir. 1992).
To recover under 11113 "defendants must establish (1)
that they are among the persons covered by 11111; (2) that the
standards set in 11112(a) were followed; (3) that they
substantially prevailed; and (4) that [plaintiff's] claims or
conduct during the litigation were frivolous, unreasonable,
without foundation or in bad faith." Wei v. Bodner, 1992 WL
165860 at *2 (D. N.J.). Defendants have concededly established
the first three elements. The district court denied fees on the
grounds that Dr. Mathews' suit was not "frivolous, unreasonable,
without foundation or in bad faith." It concluded, "[t]he
majority of the case law was not sufficiently established for us
to say that plaintiff's claim was frivolous, unreasonable,
without foundation, or in bad faith." It also noted that "[n]ot
all of the facts were known to plaintiff at the filing of this
case," and "[p]laintiff's state law claims were dismissed without
prejudice." See Order, Mathews v. Lancaster Gen. Hosp., Nos. 93-
6774, 94-4647 (June 9, 1995).
We believe that "it is important . . . [to] resist the
understandable temptation to engage in post hoc reasoning by
concluding that, because a plaintiff did not ultimately prevail,
his action must have been unreasonable or without foundation."
Muzquiz v. W.A. Foote Memorial Hosp., Inc., 70 F.3d at 432.
The district court carefully considered whether Dr.
Mathews' suit was frivolous, unreasonable, without foundation, or
in bad faith. It correctly pointed out the dearth of case law on
the Act at the time Dr. Mathews filed suit. We conclude the
district court did not abuse its discretion in refusing to award
attorneys' fees.
VI. Conclusion
For the foregoing reasons, we will affirm the judgment
of the district court.