Gordon v. Lewistown Hospital

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
9-12-2005
Gordon v. Lewistown Hospital
Precedential or Non-Precedential: Precedential
Docket No. 03-3370
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-3370
ALAN D. GORDON, M.D.;
ALAN D. GORDON, M.D., P.C., a corporation;
MIFFLIN COUNTY COMMUNITY
SURGICAL CENTER, a corporation,
Appellants
v.
LEWISTOWN HOSPITAL
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. No. 99-cv-01100)
District Judge: Honorable Sylvia H. Rambo
Argued September 14, 2004
Before: ALITO, AMBRO and FISHER, Circuit Judges.
(Filed September 12, 2005)
Steven B. Varick (Argued)
Henry S. Allen, Jr.
Holland & Knight
131 South Dearborn Street, 30th Floor
Chicago, IL 60603
George M. Sanders
Audrey L. Gaynor & Associates
120 South Riverside Plaza, Suite 2150
Chicago, IL 60606
Attorneys for Appellants
Jonathan B. Sprague (Argued)
Post & Schnell
1600 John F. Kennedy Boulevard
Four Penn Center, 13th Floor
Philadelphia, PA 19103
Susan M. Lapenta
Horty, Springer & Mattern
4614 Fifth Avenue
Pittsburgh, PA 15213
Attorneys for Appellee
Robert B. Hoffman
Wolf, Block, Schorr & Solis-Cohen
212 Locust Street, Suite 300
Harrisburg, PA 17101
Attorney for Amicus-Appellant
Pennsylvania Medical Society
2
David E. Loder (Argued)
Duane Morris
30 South 17th Street
United Plaza
Philadelphia, PA 19103-4196
Attorney for Amicus-Appellee
The Hospital & Healthsystem
Association of Pennsylvania
OPINION OF THE COURT
FISHER, Circuit Judge.
This antitrust case arises from professional review actions
undertaken by Lewistown Hospital (the “Hospital”) to stem
unprofessional conduct engaged in by Alan D. Gordon, M.D.
(“Gordon”) that impacted adversely upon patient welfare. Gordon
and two corporations of which he is the sole shareholder, Alan D.
Gordon, M.D., P.C., and Mifflin County Community Surgical Center,
Inc. (“MCCSC”) (which operates an outpatient surgical center in
Lewistown, Pennsylvania), asserted against the Hospital multiple
violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2,
seeking both money damages and injunctive relief. The District
Court granted summary judgment in favor of the Hospital regarding
the majority of Gordon’s antitrust claims that require as one of their
elements a concerted action or conspiracy, and found no genuine
issue of material fact that would support an inference of concerted
action or conspiracy. The District Court also determined that,
pursuant to the Health Care Quality Improvement Act (“HCQIA”), 42
3
U.S.C. §§ 11101-11152, the Hospital was entitled to immunity from
money damages regarding the professional review actions at issue.1
Thereafter, the District Court conducted a non-jury trial and entered
judgment in favor of the Hospital on the few remaining antitrust
claims that sought injunctive relief. Gordon raises multiple issues in
this appeal implicating both the summary judgment and post-trial
rulings of the District Court. We will affirm the comprehensive
rulings of the District Court2 that resulted in judgment for the
Hospital as to all claims.
I. Facts
A. The Hospital
The Hospital, a general medical and surgical facility, is the
only hospital serving Mifflin and Juniata counties in Pennsylvania.
It provides primary and secondary acute inpatient care in addition to
1
The immunity provided by the HCQIA for persons engaging
in the peer review process is limited to damages liability. 42 U.S.C.
§ 11111(a). Disciplined physicians may still maintain actions for
injunctive or declaratory relief. See Imperial v. Suburban Hosp.
Ass’n, 37 F.3d 1026, 1030-31 (4th Cir. 1994) (detailing HCQIA
legislative history regarding scope of immunity provided to
individuals engaging in the peer review process).
2
The District Court performed extensive analysis of the
parties’ claims both at summary judgment and in its post-trial
findings of fact and conclusions of law set forth respectively at
Gordon v. Lewistown Hospital, No. CV-99-1100, 2001 WL
34373013 (M.D.Pa. May 21, 2001), and Gordon v. Lewistown
Hospital, 272 F. Supp. 2d 393 (M.D.Pa. 2003). Consequently, this
opinion sets forth only those facts necessary to inform our analysis.
4
providing outpatient surgery through its outpatient surgery center.
The Hospital does not employ any physicians, but instead grants staff
privileges to physicians who practice there. The physicians granted
staff privileges comprise the Medical-Dental Staff of the Hospital. A
physician must be a member of the Medical-Dental Staff to practice
at the Hospital. The Hospital’s Credentialing Policy, adopted in 1991
and revised in 1997, sets minimum professional requirements for
physicians practicing at its site.
The Medical-Dental Staff engages in a peer review process
through its Credentials Committee. The Credentials Committee
makes recommendations to the Hospital Board of Trustees, guided by
the Hospital’s Credentialing Policy, regarding whether particular
physicians meet the minimum professional requirements to practice
at the Hospital both as to their admission to and renewal of Medical-
Dental Staff membership. The Credentialing Policy states in part that
“[a]ppointment to the medical staff is a privilege which should be
extended only to professionally competent individuals continuing to
meet the qualifications, standards and requirements set forth in this
policy.” It also specifies that to qualify for staff appointment, a
physician must be able to work harmoniously with others sufficiently
to convince the hospital that all patients treated by him will receive
quality care and that the hospital and its medical staff will be able to
operate in an orderly manner. The Policy further states that
recommendations for reappointment shall in part be based upon the
appointee’s “behavior in the hospital, cooperation with medical staff
and hospital personnel as it relates to patient care or the orderly
operation of the hospital, and general attitude towards patients, the
hospital and its personnel.”
5
B. Gordon, Nancollas, and Their Respective Cataract
Procedures
Gordon is an ophthalmologist first appointed to the Hospital’s
Medical-Dental Staff in 1980. Gordon and Dr. Paul Nancollas
(“Nancollas”), an employee of Geisinger Medical Group-Lewistown
(“Geisinger”),3 who also was a member of the Medical-Dental Staff,
were the only two ophthalmologists practicing at the Hospital.
During the relevant period, the two employed different techniques in
cataract surgery. Gordon’s comments to patients regarding those
differences and Nancollas’s skills are at the heart of Gordon’s
antitrust claims.
Gordon performed cataract surgery using the
phacoemulsification (“Phaco”) procedure. The Phaco procedure
involved making only a small incision in the cornea (which prevented
bleeding) and used only topical anesthesia. Because the Phaco
procedure led to a rapid improvement in vision, patients undergoing
this procedure generally recovered in two (2) weeks. Gordon alleged
that his Phaco procedure had fewer risks, took less time and cost 50%
less than the extracapsular extraction (“ECCE”) surgical technique
employed by Nancollas. The ECCE procedure involved a larger
incision and use of sutures. In addition, the ECCE procedure required
that an anesthetic be injected into the back of the eye where the
physician cannot see the end of the needle, risking damage to the eye
and nervous system. Given the pain caused by the ECCE procedure,
3
Geisinger provides both physician services and a health
insurance plan. The health insurance plan is a closed plan, meaning
that reimbursement of charges that patients incur will only be made
if a Geisinger physician treats the patient. Gordon is not a Geisinger
physician and has been denied admission to Geisinger’s medical
panel despite his attempts to obtain such status.
6
Nancollas also used a “sleep dose” of general anesthesia. Recovery
from this surgery could extend up to three (3) months.4
Between 1993 and 1995, Gordon and Nancollas both placed
various newspaper ads regarding their respective surgical practices in
the Lewistown Sentinel in addition to other publications circulated in
Mifflin and Juniata counties. In 1993, an ad (placed by Geisinger on
Nancollas’s behalf) indicated that Nancollas performed “modern
cataract extraction” although at the time he still used the ECCE
procedure. In response to what he perceived as false advertising,
Gordon placed an ad in the Lewistown Sentinel comparing himself to
Nancollas and urged readers to call the Hospital for information
comparing the complication rates of their respective surgical
outcomes. Although the Hospital informed Gordon of its belief that
the release of such information was unlawful, and requested that he
not suggest the release of such information in future advertisements,
no disciplinary action arose from the ad. However, Gordon’s
subsequent ad of September 15, 1995, compared the two procedures,
was critical of the “Geisinger ophthamologist” and indicated that all
of the anesthesiologists at the Hospital preferred Gordon’s anesthetic
technique to that performed by Geisinger. Both Geisinger and
Nancollas complained to the Hospital regarding this ad. The
complaint was forwarded by the Hospital to the Credentials
Committee because Gordon’s ad indicated preferences of Hospital
anesthesiologists. The Hospital took no disciplinary action against
Gordon for this second ad, taking the position that it involved parties
external to the Hospital, but indicated to Gordon its concern regarding
the adversarial and unprofessional tone of Gordon’s ad.
4
We note that Nancollas has since switched to the Phaco
procedure favored by Gordon.
7
In 1995, however, Gordon contacted Nancollas’s patients and
made disparaging comments about Nancollas. In June 1997, Gordon
again disparaged Nancollas’s skills to a patient and sent a letter
questioning Nancollas’s skills to more than thirty people, including
the entire Hospital Board. The crux of Gordon’s claims here concern
the Hospital’s response to the 1995 and 1997 incidents culminating
in the forty-five day suspension and subsequent revocation for a
period of five years of Gordon’s Medical-Dental Staff privileges, both
of which are discussed in the following section.5
C. Gordon’s Conduct and Its Impact Upon His Medical-
Dental Staff Privileges
1. The Suspension of Gordon’s Medical-Dental
Staff Privileges
In 1995, the Hospital received complaints from elderly
patients who related that Gordon had telephoned them and made
disparaging comments about Nancollas, with whom they were then
5
To provide context, the Hospital chronicled a long history of
disciplinary action regarding Gordon’s professional behavior, not his
competence. The details regarding these actions are set forth in the
District Court opinions. These prior incidents, beginning in 1985,
pertained to Gordon’s disruptive behavior in using loud and profane
language in public areas of the Hospital, verbally attacking other
physicians within the Intensive Care Unit, yelling at a nurse who had
witnessed his disruptive behavior, and telephoning a patient at her
home regarding her decision to treat with another ophthalmologist.
In 1992, Gordon verbally attacked a nurse in the Hospital’s
emergency department and received a 28-day suspension. See
Gordon v. Lewistown Hospital, 714 A.2d 539 (Pa. Cmwlth. Ct.
1998).
8
treating. Hospital counsel twice wrote to Gordon’s counsel warning
that any additional complaints of this nature would trigger an
investigation of Gordon’s conduct. Despite this, Gordon called
additional patients complaining about their decision to use Nancollas.
By November of 1995, Gordon’s harassing telephone calls to patients
were addressed by the Hospital Credentials Committee, which
determined that Gordon should be suspended for forty-five days and
that his reappointment application should be postponed until after he
had served the suspension. Gordon requested a hearing and was
represented by counsel. Prior to the hearing, the Hospital received
additional complaints regarding Gordon’s conduct. As a result,
Gordon was summarily suspended on April 19, 1996, pending
completion of the hearing and any resultant appeals regarding the
forty-five day suspension.
At the conclusion of a three-day hearing, the forty-five day
suspension was upheld. The Hearing Officer found that: (1) Gordon
precipitated a confrontation involving Geisinger between himself and
Dr. Quereshi (a Geisinger physician) on June 19, 1995, in the
presence of a patient; (2) the confrontation and its effects were
“unacceptable and disruptive”; and (3) Gordon’s concerns about
Geisinger and medical economics did not excuse such conduct. The
Hearing Officer also found that Gordon had expressed himself to a
nurse in an unacceptable manner when he stated that she “didn’t give
a damn about the patients,” “is a trouble maker and always has been”
and that “you are all assholes.” The Hearing Officer concluded that
whether Gordon’s concerns were real or perceived, he addressed them
inappropriately. At the hearing, there also was testimony regarding
Gordon’s telephone calls to Nancollas’s cataract patients during the
period of June 1994 to April 1995, some of which were made the
night before the patients were to undergo cataract surgery. Although
Gordon recognized that his calls could increase patient anxiety, he
nonetheless placed the calls to warn the patients about Nancollas.
9
The Hearing Officer concluded that the calls showed extremely poor
judgment and cruelty towards patients. Gordon never appealed the
Hearing Officer’s decision to the Hospital’s Appeal Review Panel.
2. The Revocation of Gordon’s Medical-Dental
Staff Privileges
During this period, Gordon’s application for reappointment to
the Medical-Dental Staff for the period of February 1, 1995 to
January 31, 1997, was pending before the Credentials Committee. In
light of the events to date, the Credentials Committee considered
denying the application. But instead, it gave Gordon the opportunity
to provide assurances that he understood the inappropriateness of his
past conduct and to vow to conduct himself in the future in
accordance with standards defined by the Credentials Committee and
with all Hospital and Medical-Dental Staff bylaws. Specifically, on
August 2, 1996, Dr. Charles Everhart, Chairman of the Credentials
Committee, forwarded a letter to Gordon stating in part:
The Credentials Committee has a very long history of
dealing with problems created by your behavior and
of imposing conditions and discipline in an effort to
make you understand that your behavior cannot
continue. A vastly disproportionate share of the
Credentials Committee’s time and of the Hospital’s
resources have been devoted to problems created by
you. This is notice to you that those extensive efforts
on your behalf are over. You will not be
recommended for reappointment unless the
Credentials Committee receives from you, absolute,
credible assurances that you understand that your
behavior has been inappropriate and that, in the
future, you will consistently conduct yourself strictly
10
in accordance with [the] standards outlined in this
letter and with all hospital and medical staff bylaws
and policies.
On August 14, 1996, Gordon agreed to adhere to those requirements
in a letter to Everhart stating in part:
I will use the administrative channels to register
complaints or concerns about poorly functioning
equipment or about others practicing at the hospital or
assisting me.
***
I find that my phone calls to patients were
counterproductive and I stopped making these calls in
late 1995. Although I feel that patients ought to be
informed of their situation, I have not called patients
for sometime nor is it my intention to call or
otherwise attempt to communicate with the patients of
any other ophthalmologist for the purpose of
commenting on that physician’s training, skill or
competency or the procedure performed by such
physician.
By September 5, 1996, however, Gordon engaged in a shouting match
in the presence of patients and nursing personnel with a physician
who had referred a patient to Nancollas. Consequently, the
Credentials Committee provided Gordon one last opportunity to
explain his conduct as part of an investigation.
11
a. The Conditions of Gordon’s Reappointment
On September 30, 1996, the Credentials Committee offered
Gordon conditional reappointment if he agreed to seventeen
“Conditions of Reappointment” (“Conditions”), the relevant portions
of which follow:
(2) You must use appropriate administrative
channels to register any complaint or concern
that you might have about others practicing at
the Hospital. Specifically, any complaint or
concern about any other member of the
Medical-Dental Staff must be in writing
addressed to either the President of the
Medical Staff or the Chairperson of the
Hospital, with a copy to the President of the
Hospital. Any complaint or concern about any
nursing personnel shall be reported in writing
to that individual’s supervisor, with a copy to
the President of the Hospital. Any other
complaint or concern about scheduling,
equipment or any other matter must be in
writing directed to the President of the
Hospital; and
(3) You shall not call, or otherwise attempt to
communicate with, the patients of any other
ophthalmologist, or other physician practicing
in the Hospital, for the purpose of
commenting on the physician’s training, skill
or competence or the procedure performed by
such physician. Furthermore, other than in
response to a specific question or for the
12
purpose of a referral, you shall not make any
comment about any other ophthalmologist as
part of your discharge instructions or at any
time when dealing with patients who have
been or will be treated at the Hospital.
After consulting with counsel, Gordon indicated on October 10, 1996,
that he would accept the Conditions. On November 11, 1996, the
Chairman of the Hospital Board of Trustees, Robert Postal, notified
Gordon of his reappointment to the Medical-Dental Staff subject to
his strict adherence to the Conditions. On November 14, 1996,
Gordon provided his written agreement to be bound by the
Conditions. He now contends that these Conditions constitute an
unreasonable restraint on trade. But as discussed infra, we find that
they were reasonable in light of Gordon’s conduct and do not
impermissibly restrain trade in any relevant antitrust market.6
b. Gordon’s Breach of the Conditions of
Reappointment
By June of 1997, Gordon had twice breached the Conditions
causing a second revocation of his privileges. First, on a Sunday
afternoon, he called the home of Mrs. Seecora, a then eighty-two year
old former patient. Mrs. Seecora, who had since enrolled in the
Geisinger Health Insurance Plan, was at that time a patient of
6
We note, as the District Court found, that even once the
Conditions were imposed, Gordon placed at least two ads in the
Lewistown Sentinel with one of the ads pointing out the increased
risks associated with the technique employed by the “Geisinger
physician.” The Hospital took no disciplinary action regarding these
activities.
13
Nancollas.7 During that call, even after Mrs. Seecora stated that she
was treating with Nancollas (which should have triggered Condition
3), Gordon proceeded to discuss with her the differences in
procedures performed by each physician (despite the fact that
Nancollas had already removed one of her cataracts); conveyed his
personal animus for Nancollas, indicating that Nancollas was “just
learning”; listed the unnecessary risks that she faced in having
Nancollas remove her cataract; and told her that she had been misled
and uninformed because Nancollas “sometimes doesn’t tell the whole
story.” Mrs. Seecora’s daughter reported the incident to the Hospital
President’s office conveying that Gordon’s unprofessional conduct
had intimidated and harassed her mother.
Gordon also breached the Conditions when he mailed a letter
dated June 4, 1997, to over thirty people, including the entire Hospital
Board, the Hospital Credentials Committee, and the Hospital’s
Administration, containing a five-paragraph critique of Nancollas’s
surgical method. The letter itself indicated that it was “sent on the
request of the administration who notified [him] that if [he] did have
concerns [concerning potential risks to patients], [he] should put them
in writing rather than just verbally discussing them with the
administration.” But per the Conditions of his reappointment,
Gordon should have directed the letter to the President of the Medical
7
Gordon treated Mrs. Seecora three (3) times from July 22,
1994 to September 1994. On October 18, 1995, his office contacted
Mrs. Seecora as a “follow-up” to her last appointment of September
1994. On January 4, 1996, Gordon’s office sent a re-call card to her.
On August 26, 1996, his office telephoned her, at which time she
indicated she was doing well and seeing her eye doctor. When
Gordon’s office contacted her again in April 1997, however, she
declined to make an appointment, indicating that she was taking care
of her condition.
14
Staff or the Chairperson of the Credentials Committee with a copy to
the President of the Hospital. Despite this procedural shortcoming,
because Gordon had raised a concern regarding the quality of care at
the Hospital, the Credentials Committee initiated a quality study of
Nancollas’s procedure.8 That investigation ultimately concluded that
Nancollas’s procedure fell within the applicable standard of care.
c. The Decision to Revoke Gordon’s Medical-
Dental Staff Privileges
In the wake of this conduct, Gordon met with the Credentials
Committee at their request on July 17, 1997. The next day, the
Credentials Committee Chair informed Gordon that the Committee
determined that he violated the Conditions of his reappointment and
that he would be excluded from the Hospital after July 23, 1997.
Gordon pursued a hearing on the recommendation, which was held
on August 22, 1997. At the hearing, Everhart testified regarding the
Hospital’s ongoing concern about Gordon’s unprofessional conduct
and its potential threat to patient care. In addition, both Mrs. Seecora
and her daughter conveyed that Gordon’s Sunday afternoon telephone
call to the then eighty-two year old was unprofessional, inappropriate,
intimidating, and harassing. On September 25, 1997, the Hearing
Officer upheld the revocation of Gordon’s appointment and clinical
privileges, concluding in part that “the Hospital could not draft a
8
Surprisingly, given the history of Gordon’s conduct, this was
the first written complaint Gordon made regarding Nancollas’s
competency. Gordon critiqued Nancollas’s surgical method,
including: (1) the type of anesthesia used; (2) the longer duration of
the procedure; (3) the length of the incision; (4) stroke risks
associated with the incision and manner of administering anesthesia;
and (5) unnecessary risks associated with Nancollas’s use of certain
equipment.
15
condition . . . that would protect the Hospital and its patients from
Gordon’s poor judgment.” Gordon appealed the decision, but the
Appellate Review Panel, in its November 24, 1997 Recommendation
and Report, affirmed in part because Gordon continued to harass,
intimidate and upset elderly and vulnerable hospital patients. On
November 25, 1997, the Board informed Gordon that it had adopted
the recommendation to revoke his privileges.
D. The Hospital’s Alleged Predatory Tactics
Gordon also contends that the Chairman of the Credentials
Committee, Everhart, conspired with the Hospital to revoke Gordon’s
Medical-Dental Staff privileges in order to placate Geisinger’s
concern regarding his anti-Nancollas ad campaign and to prevent him
from opening MCCSC as an independent surgical center.
1. Everhart’s Surgical Center
In 1995, the only surgical facilities in Mifflin and Juniata
counties were the Hospital and an outpatient center attached via a
corridor to the Hospital that was owned by Everhart. Everhart had a
written market allocation agreement with the Hospital, prohibiting
each from providing services that the other provided. That center
possessed a then-State mandated Certificate of Need (“CON”) for the
performance of endoscopic procedures.9 Apparently, in 1995,
Gordon requested and was denied permission to operate out of
Everhart’s facility because ophthalmologic surgery did not conform
to the CON among other reasons. See Gordon, 272 F. Supp. 2d at
9
Until 1996, Pennsylvania law required that prior to opening
an outpatient surgical center, the Commonwealth must issue a CON
indicating that an unfulfilled need existed for additional medical
facilities services in the proposed facility’s service area.
16
410. Gordon threatened to open his own facility, which Everhart
reported to the Hospital. In fact, both the Hospital and Gordon
pursued a CON to open an outpatient surgical facility. But Everhart
never competed with Gordon either in the outpatient surgical services
market or the physician services market. Gordon contends that it was
only after this threat to competition that the Hospital dredged up
written patient complaints regarding the calls made by Gordon to
Nancollas’s patients. He further contends that Everhart and the
Hospital worked in tandem to prevent Gordon’s competitive threat.
2. Geisinger
Gordon further contends that the revocation of his Medical-
Dental Staff Privileges for his having commented upon Nancollas’s
cataract procedures to patients was precipitated not by his conduct,
but rather as a result of the Hospital’s economic relationship with
Geisinger. In support of this, Gordon points to the 1995 expiration
of Geisinger’s lease for two-thirds (2/3) of the space in the Hospital’s
medical office building; Geisinger physicians’ use of Hospital
facilities; and its insurance plan’s reimbursements comprising 16.9%
of the Hospital’s revenue. Gordon asserts that this economic
dependence, coupled with Geisinger’s prior request that the Hospital
deal with Gordon’s advertising against Nancollas, supports his theory
of an antitrust conspiracy with respect to the Hospital’s eventual
suspension and subsequent revocation of his Medical-Dental Staff
privileges. See Gordon, 272 F. Supp. 2d at 409-411.
3. Discouraging Other Physicians from
Practicing at MCCSC
In order to open MCCSC, Gordon required at least one
anesthesiologist on staff. All anesthesiologists on the Hospital’s
Medical-Dental Staff were contractually precluded from practicing at
17
any other facility. Consequently, Gordon sought the services of non-
Hospital anesthesiologists to assist him at MCCSC. Gordon contends
that the Hospital attempted to dissuade anesthesiologists who
indicated their willingness to work for MCCSC from joining Gordon
and MCCSC. Gordon also contends that the Hospital interfered in his
relationship with an orthopedic surgeon who, although a member of
the Hospital Medical-Dental Staff, intended to perform surgery at
MCCSC. See Gordon, 272 F. Supp. 2d at 412-13.
II. Procedural History
A. Gordon’s Complaint
In his June 25, 1999 Complaint subsequently amended on
February 2, 2000,10 Gordon asserted eight claims under the Sherman
Act, 15 U.S.C. §§ 1-2, against the Hospital. He alleged five claims
invoking Section 1 of the Sherman Act. 15 U.S.C. § 1. In Count I,
he alleged that the Conditions governing his reappointment to the
Medical-Dental Staff in 1996 constituted a contract in restraint of
trade given that the Conditions prevented him from competing to
retain or obtain business by providing information to patients
regarding their surgical decisions and by foreclosing him from
supplying services in the relevant physician ophthalmic service
markets (“Conditions as restraint of trade”). Count II asserted that the
Hospital illegally tied its outpatient cataract facility services to the
purchase of ophthalmic services from a Geisinger physician,
10
We note that in addition to this action, Gordon mounted
various challenges to the revocation of his privileges. Two court
actions filed in Pennsylvania state courts were summarily dismissed
and upheld on appeal. Gordon v. Lewistown Hospital, 729 A.2d 1284(Pa. Cmwlth. Ct. 1999) and Gordon v. Lewistown Hospital, No.
01071 HGB 1998 (Pa. Super. Ct. March 16, 1999).
18
Nancollas (“illegal tying”). In Count IV, Gordon contended that the
Hospital and Geisinger entered into a reciprocal arrangement whereby
Geisinger leased space from the Hospital on condition that the
Hospital procure substantially all of its physician specialty services
(including ophthalmology) from Geisinger (“reciprocal dealing”).
Count V asserted that the Hospital engaged in a group boycott to
exclude Gordon from the outpatient cataract surgery market (“group
boycott”). In Count VI, Gordon plead that the Hospital engaged in
exclusive dealing (“exclusive dealing”).
Gordon also asserted three (3) claims invoking Section 2 of
the Sherman Act, 15 U.S.C. § 2. He alleged in Count III that the
Hospital attempted to monopolize the market for outpatient cataract
facility services in the Lewistown area since 1996 (“attempted
monopolization of facility services”) and in Counts VII and VIII that
the Hospital conspired with Geisinger to monopolize, respectively,
the outpatient facility services market and the physician inpatient,
outpatient, and outpatient ophthalmic surgical services market
(“conspiracy to monopolize markets”).
B. The Summary Judgment Motions
The Hospital sought summary judgment on Gordon’s antitrust
claims alleging concerted activity or conspiracy. The claims
implicated by the Hospital’s summary judgment motion included:
Count I (Conditions as restraint of trade), Count IV (reciprocal
dealing), Count V (group boycott), Count VI (exclusive dealing) and
Counts VII and VIII (conspiracy to monopolize markets). The
Hospital argued that there was no genuine issue of material fact
supporting an inference of the alleged concerted action or conspiracy.
Gordon countered that the record contained ample evidence that the
Hospital conspired with Geisinger and/or Robert Postal, Chairman of
the Hospital Board of Trustees, to restrain his ability to provide
19
patients with information regarding the respective surgical procedures
employed by him as compared to Nancollas. The District Court
granted summary judgment on May 21, 2001, in favor of the Hospital
on these Counts, concluding that Gordon had not presented any
evidence from which a reasonable jury could find the existence of a
conspiracy between the Hospital and Geisinger and/or Postal.
At the same time, the Hospital also moved for summary
judgment on its affirmative defense that it possessed immunity from
money damages liability under the HCQIA for its actions in
suspending and subsequently revoking Gordon’s Medical-Dental
Staff privileges. The Hospital contended that those actions were
“professional review actions” within the meaning of 42 U.S.C.
§ 11151(9), and thus gave rise to immunity from money damages.
Gordon cross-moved for summary judgment on the Hospital’s
HCQIA immunity defense, asserting that: (1) the solicitation
exception to the definition of professional review action applied, see
42 U.S.C. § 11151(9)(B) (exempting from HCQIA immunity an
action by a professional review body that is primarily based on the
“physician’s fees or the physician’s advertising or engaging in other
competitive acts intended to solicit or retain business”); (2) the
revocation of Gordon’s Medical-Dental Staff privileges did not relate
to either his competence or professional conduct, see 42 U.S.C.
§ 11151(9); (3) the revocation of his Medical-Dental Staff privileges
was not based on conduct that affects patient welfare, see 42 U.S.C.
§ 11151(9); and (4) that granting immunity would violate the purpose
of the HCQIA by punishing a physician for criticizing incompetent
competitors. He also argued alternatively that even if there was a
professional review action, the requirements for obtaining HCQIA
immunity set forth in 42 U.S.C. § 11112(a) were not met. The
District Court determined that application of the solicitation
exception turned on the subjective intent of the physician engaging in
20
the professional conduct at issue. As subjective intent was a disputed
issue of fact, summary judgment was denied.
Gordon and MCCSC also moved for summary judgment as to
Count I (Conditions as restraint of trade), asserting that analysis of the
claim under the traditional rule of reason test was not necessary to
find that the Conditions governing his reappointment to the Hospital
Medical-Dental Staff violated the Sherman Act. Rather, he argued
that the “quick look” approach applied. See United States v. Brown
Univ., 5 F.3d 658, 668-69 (3d Cir. 1993). Applying instead the
traditional rule of reason analysis to the claim, the District Court
determined that Gordon and MCCSC failed to satisfy their initial
burden of demonstrating that the Conditions resulted in anti-
competitive effects in the relevant product and geographic markets.
Id. The District Court concluded that there existed a genuine issue of
material fact as to the scope of the relevant geographic market.
Gordon, 1999 WL 34373013 at *11-12. Based on this determination,
the District Court also denied the Hospital’s motion for summary
judgment as to Count II (illegal tying) and Count III (attempted
monopolization of facility services), given that they also required
definition of the relevant geographic market. Id. at *24-25.
In sum, upon entry of the District Court’s May 21, 2001
Order, the only claims remaining for trial were Counts II (illegal
tying) and III (attempted monopolization of facility services). But
both parties filed motions for reconsideration of the May 21, 2001
Order resulting in the District Court’s issuance of its August 15, 2001
order, modifying its prior ruling as to Count I (Conditions as restraint
of trade) and HCQIA immunity. The District Court reinstated Count
I, concluding that it had erred by including that Count as a claim that
could not be maintained in the absence of conspiracy, particularly
since it alleged a “contract” violating the Sherman Act. The District
Court also reconsidered its prior ruling on HCQIA immunity,
concluding that it had misinterpreted the solicitation exception by
focusing on the physician’s subjective competitive intent when it
should have focused on the basis for the Hospital’s action.
Consequently, the District Court granted the Hospital HCQIA
21
immunity from damages regarding the 1996 suspension and 1997
revocation.
C. The Bench Trial
Between April 3 and 23, 2002, the District Court conducted
a non-jury trial as to the antitrust claims that survived summary
judgment. These included Counts I (Conditions as restraint of trade),
II (illegal tying) and III (attempted monopolization of facility
services), pursuant to which Gordon sought injunctive relief in the
form of rescission of the Conditions and reinstatement of his
Medical-Dental Staff privileges. On July 11, 2003, the District Court
entered judgment for the Hospital as to all remaining claims after
issuing extensive findings of fact and conclusions of law.
D. Issues on Appeal
On appeal, Gordon challenges the District Court’s grant of
summary judgment in favor of the Hospital as to: (1) HCQIA
immunity from money damages for the 1997 revocation11 of Gordon’s
Medical-Dental Staff privileges and (2) those of Gordon’s antitrust
claims which require a concerted action or conspiracy (i.e., Count IV
(reciprocal dealing), Count V (group boycott), Count VI (exclusive
dealing) and Counts VII and VIII (conspiracy to monopolize
markets)). He also challenges the July 11, 2003 entry of judgment for
the Hospital based upon the District Court’s post-trial findings of fact
11
Gordon does not challenge the application of HCQIA
immunity to any damages arising from the 1996 suspension.
22
and conclusions of law with respect to Count I (Conditions as
restraint of trade), Count II (illegal tying), and Count III (attempted
monopolization).12
For the reasons that follow, we will affirm the District Court.
III. Standards of Review
We have jurisdiction under 28 U.S.C. § 1291 to review the
District Court’s final order. We address Gordon’s challenges
consistent with their procedural development. We first will address
the issues raised on appeal concerning the District Court’s summary
judgment rulings. Gordon, 2001 WL 34373013. Our review of the
District Court’s grant of summary judgment is plenary. Mathews v.
Lancaster General Hosp., 87 F.3d 624, 632 (3d Cir. 1996).
Next, we will consider the challenges to the District Court’s
findings following the non-jury trial. Gordon, 272 F. Supp. 2d 393.
We review the District Court’s factual findings from the non-jury trial
under a clearly erroneous standard, meaning that a finding is clearly
erroneous if we are left with a definite and firm conviction that a
mistake has been committed. United States v. Igbonwa, 120 F.3d
437, 440 (3d Cir. 1997), cert. denied, 522 U.S. 1119 (1998). Finally,
where we are confronted with mixed questions of fact and law, we
apply the clearly erroneous standard except that the District Court’s
choice and interpretation of legal precepts remain subject to plenary
review. Mellon Bank, N.A. v. Metro Communications, Inc., 945 F.2d
635, 641-42 (3d Cir. 1991).
12
In making its findings, the District Court determined that
Gordon was not a credible witness regarding his conduct or the
Hospital’s reaction to it. The District Court also considered evidence
that indicated Gordon’s true motivation for this lawsuit – his desire
to ruin the Hospital by dragging it through protracted and expensive
litigation.
23
IV. Health Care Quality Improvement Act Immunity
In 1986 Congress enacted the Health Care Quality
Improvement Act. As the name suggests, the purpose of the HCQIA
was to improve the quality of medical care by restricting the ability
of physicians who have been found to be incompetent from repeating
malpractice by moving from state to state without discovery of such
finding. 42 U.S.C. § 11101; H.R. Rep. No. 99-903 at 2, reprinted in
1986 U.S.C.C.A.N. 6384-6391. See also Mathews, 87 F.3d at 632(recognizing the purpose of the HCQIA). The HCQIA established a
national reporting system requiring that insurance companies report
medical malpractice payments made; that boards of medical
examiners report sanctions imposed against physicians; and that
hospitals report adverse professional review information. 42 U.S.C.
§§ 11131-33. To support that purpose and ensure that both hospitals
and doctors engage in meaningful professional review, Congress
provided immunity to those persons participating in professional
review activities. See 42 U.S.C. § 11101(5), 11111(a); H.R. Rep. 99-
903 at 2-3, reprinted in 1986 U.S.C.C.A.N. at 6385. Specifically, the
Act provides that persons participating in professional review
activities or providing information to professional review bodies are
immune from suit for money damages arising out of their
participation in such activities. 42 U.S.C. § 11111(a)(1)-(2). At its
heart, the HCQIA was intended to deter antitrust suits by disciplined
physicians. Mathews, 87 F.3d at 633.
Only actions that meet the definition of professional review
action are eligible for immunity under the HCQIA. H.R. Rep. No.
99-903 at 21, reprinted in 1986 U.S.C.C.A.N. at 6403. The HCQIA
defines “professional review action” as:
[A]n action or recommendation of a professional
review body which is taken or made in the conduct of
a professional review activity, which is based on the
competence or professional conduct of an individual
physician (which conduct affects or could affect
adversely the health or welfare of a patient or
patients), and which affects (or may affect) adversely
24
the clinical privileges, or membership in a
professional society, of the physician. Such term
includes a formal decision of a professional review
body not to take an action or make a recommendation
described in the previous sentence and also includes
professional review activities relating to a
professional review action.
42 U.S.C. § 11151(9). In order to qualify for HCQIA immunity, a
professional review action must be taken:
(1) in the reasonable belief that the action was in
the furtherance of quality healthcare,
(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).
Id. at § 11112(a). A professional review action will be presumed to
have met the preceding standards necessary for immunity to attach
unless the presumption is rebutted by a preponderance of the
evidence. Id. The HCQIA places a high burden on physicians to
demonstrate that a professional review action should not be afforded
immunity. 42 U.S.C. § 11112(a). In fact, an action is presumptively
immune if it was made “in the reasonable belief that the action was
in furtherance of quality health care.” 42 U.S.C. § 11112(a). This
test 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 action would restrict
25
incompetent behavior or would protect patients.” H.R. Rep. No.
99-903 at 10, reprinted in 1986 U.S.C.C.A.N. at 6393; 42 U.S.C.
§ 11112(a).
As we previously recognized, this presumption of immunity
creates an unusual standard for reviewing summary judgment orders,
as the plaintiff bears the burden of proving that the professional
review process was not reasonable and thus did not meet the standard
for immunity. Mathews, 87 F.3d at 633. See also Pamintuan v.
Nanticoke Memorial Hosp., 192 F.3d 378, 388 (3d Cir. 1999). But
Gordon attempts to avoid application of this presumption of
immunity by attacking the actions taken against him on grounds that
they were not “professional review actions” within the meaning of the
HCQIA, 42 U.S.C. § 11151(9). It is Gordon’s position that the
professional conduct at issue did not affect adversely the health or
welfare of patients as required by § 11151(9), and therefore there was
no professional review action to confer immunity on the Hospital. He
asserts that he only could be expelled from the medical staff as a
result of a professional review action if it was based on either his
competence or his professional conduct, which conduct affects or
could affect adversely the health or welfare of a patient or patients.
See 42 U.S.C. § 11151(9). Since his professional competence has
never been in dispute, Gordon argues that he was expelled for his
conduct in violating the Conditions – his telephone conversation with
Mrs. Seecora and the June 4th letter. According to Gordon, in order
to qualify its actions based on that conduct as a “professional review
action” entitled to immunity under the HCQIA, the Hospital bore the
burden to show that his conduct “could affect adversely the health or
welfare of patients”.13
13
We note that the arguments of The Pennsylvania Medical
Society (“PMS”) as amicus for Gordon promote our adoption of a
heightened standard for providing HCQIA protection to a
professional review action premised on physician conduct rather than
competence. PMS suggests that the nexus between the physician
conduct and adverse effect on patient welfare be judged by a standard
of “concrete harm” or a realistic projection of it. However, as
discussed infra, such a construction is not supported by the statute, as
26
The Conditions were imposed upon Gordon for the purpose
of deterring Gordon’s harassment and intimidation of elderly patients
by calling them to disparage Nancollas’s skills. The record contains
a plethora of evidence that Gordon’s conduct in violating the
Conditions could affect adversely the health or welfare of patients.
Perhaps most compelling is the testimony of Mrs. Seecora’s daughter
regarding the effect on her eighty-two year old mother of Gordon’s
derogatory comments about Nancollas. Additionally, Everhart
testified that Gordon’s behavior was unprofessional and posed a
threat to patient care. The Hearing Officer concluded that perhaps no
conditions could be drafted sufficient to protect the Hospital and its
patients from Gordon’s poor judgment. The Appellate Review Panel
upheld the recommended credentialing action because the Seecora
phone call demonstrated that Gordon continued to harass, intimidate
and upset elderly and vulnerable hospital patients.
Such unprofessional conduct on the part of a physician is
within the purview of a “professional review action” under the
HCQIA. The plain language of the statute indicates the breadth of
“conduct” encompassed within the definition of “professional review
action” by the inclusion of conduct that “could affect adversely the
health or welfare of a patient.” 42 U.S.C. § 11151(9). The statute
contemplates not only potential harm through use of the term “could,”
but it also affords protection to actions taken against physician
conduct that either impacts or potentially impacts patient “welfare”
adversely, meaning patient “well being in any respect; prosperity.”
Black’s Law Dictionary (West Group, 7th Ed. 1999). Even if the
statutory language was deemed to be ambiguous, the legislative
history would support the same construction. See Health Care
Quality Improvement Act of 1986, H.R. 5540, 99th Cong. 2d Session
(1986), 132 Cong. Rec. at 30768 (Oct. 14, 1986) (“competence and
professional conduct should be interpreted in a way that is sufficiently
broad to protect legitimate actions based on matters that raise
it conflicts with the objective standard applicable for the presumption
of immunity - - when an action is undertaken “in the reasonable belief
that the action was in the furtherance of quality health care.” 42
U.S.C. § 11112(a).
27
concerns for patients or patient care.”). Other courts similarly have
applied immunity in circumstances where a physician’s
unprofessional “conduct” was an issue in the challenged professional
review actions. See, e.g., Brader v. Allegheny Gen. Hosp., 167 F.3d
832, 835 (3d Cir. 1999) (affirming summary judgment in favor of
Hospital afforded HCQIA immunity for peer review decisions
involving a surgeon characterized as “a disruptive force in the
hospital”); Bryan v. James E. Holmes Reg’l Med. Ctr., 33 F.3d 1318,
1324 (11th Cir. 1994) (granting immunity when physician’s
privileges revoked for inappropriate and unprofessional behavior
stemming from his “being a volcanic-tempered perfectionist, a
difficult man with whom to work, and a person who regularly viewed
it as his obligation to criticize staff members at [the Hospital] for
perceived incompetence or inefficiency,” some of which occurred in
front of patients about to undergo surgery); Morgan v. PeaceHealth,
Inc., 14 P.3d 773 (Wash. Ct. App. 2000) (upholding immunity when
physician’s privileges suspended for sexual harassment and
inappropriate behavior with patients); Meyers v. Columbia/HCA
Healthcare Corp., 341 F.3d 461 (6th Cir. 2003) (upholding immunity
when physician’s reappointment denied because of failure to timely
disclose disciplinary actions in another state, personality problem and
various incidents of disruptive behavior); Imperial v. Suburban Hosp.
Ass’n, 37 F.3d 1026 (4th Cir. 1994) (affirming district court order
granting summary judgment to hospital where physician’s
reappointment to staff denied on basis of hospital’s conclusion that
his professional activities did not meet standard of care, he was
deficient in his record keeping, patient management, and work
relationships with health care professionals at the hospital).
Gordon simply cannot escape the ramifications of his conduct
by relying on a tortured construction of the statute that ignores the
fact that, at all levels of the process, his conduct was found to
adversely impact patient health or welfare. There is no question on
this record that Gordon’s conduct towards Mrs. Seecora adversely
affected her welfare given that Gordon’s comments caused her to
question her decision to allow Nancollas to operate on her cataract in
March of 1997. Nor will this Court substitute its judgment for that of
health care professionals and the governing body of the Hospital as
28
to whether Gordon’s conduct either did or could have an adverse
impact on patient health or welfare. See Brader, 167 F.3d at 843
(citing Bryan v. James E. Holmes Regional Medical Center, 33 F.3d
1318, 1337 (11th Cir. 1994)); see also Lee v. Trinity Lutheran Hosp.,
408 F.3d 1064 (8th Cir. 2005). Accordingly, Gordon’s arguments in
this regard, though creative, must fail.
Gordon argues alternatively that his conduct with which the
Hospital took issue falls within the ambit of the solicitation exception
to professional review action. The HCQIA exempts from
“professional review action” a number of actions not considered to be
based on the competence or professional conduct of a physician. Id.One such exemption is the “solicitation exception,” which excludes
from HCQIA coverage actions “based on the competence or
professional conduct of a physician if the action is primarily based on
. . . the physician’s fees or the physician’s advertising or engaging in
other competitive acts intended to solicit or retain business.” Id. at
11151(9)(B).
In denying the motions for summary judgment as to HCQIA
immunity, the District Court initially determined that the applicability
of HCQIA immunity turned on whether Gordon’s conduct (viewed
from his subjective perspective) in contacting Mrs. Seecora and in
mailing the June 4, 1997 letter was intended to solicit or retain
business. But upon reconsideration, the District Court determined
that the relevant intent is that of the Hospital in undertaking the
action, not whether the physician had the subjective intent to solicit
business when engaging in the conduct at issue. If the action were
“primarily based on” conduct relating to the physician’s fees or the
physician’s advertising or engaging in other competitive acts intended
to solicit or retain business, then the action would be excluded from
HCQIA coverage as a “professional review action.” Ultimately, the
lack of evidence that the action was “primarily based on” Gordon’s
efforts to solicit or retain business proved dispositive and the Hospital
was granted immunity from money damages under the HCQIA.
29
We conclude the District Court’s construction upon
reconsideration to be correct.14 “It is elementary that the meaning of
the statute must, in the first instance, be sought in the language in
which the act is framed, and if that is plain . . . the sole function of the
courts is to enforce it according to its terms.” Abdul-Akbar v.
McKelvie, 239 F.3d 307, 312 (3d Cir.), cert. denied, 533 U.S. 953(2001). The plain language of the solicitation exception focuses on
the basis of the “action” taken by the professional review body, not
on the conduct of the physician precipitating the action – “an action
is not considered to be based on the competence or professional
conduct of a physician if the action is primarily based on . . . the
physician’s fees or the physician’s advertising or engaging in other
competitive acts intended to solicit or retain business.” 42 U.S.C.
§ 11151(9)(B) (emphasis added). Our precedent applying an
objective standard to determine immunity from money damages
under 42 U.S.C. § 11112(a) further supports this construction. See
Mathews, 87 F.3d at 635 (holding that § 11112(a) of the HCQIA
imposes an objective standard which is met when peer reviewers
reasonably conclude that their actions will restrict incompetent
behavior or protect patients and recognizing that an objective
standard furthers Congressional intent that immunity issues may be
resolved at summary judgment); Brader, 167 F.3d at 840 (“Like other
circuits, we have adopted an objective standard of reasonableness in
14
Amicus for the Hospital, the Hospital & Healthsystem
Association of Pennsylvania (“HAP”), aptly argue that the District
Court initially erred in focusing on Gordon’s subjective intent
because “[w]hat the solicitation exception actually excludes is a
review action based upon the mere fact that a physician has engaged
in activities with the intent to solicit or retain business; it does not
exclude actions taken on the basis of the review committees’
reasonable conclusion that the physician’s activities (whether or not
intended to solicit business) are unprofessional.” We agree with
amicus’s further assertion that if HCQIA immunity hinged on the
disruptive physician’s subjective intent, every disruptive physician
would claim that the unprofessional conduct being reviewed was
intended for a competitive purpose in order to invoke the solicitation
exception to professional review action.
30
this context.”). See also H.R. Rep. 99-903 at 10, reprinted at 1986
U.S.C.C.A.N. at 6392-93 (adopting objective standard that a
professional review action must be undertaken in the reasonable
belief that it is in furtherance of quality healthcare and rejecting a
“good faith” standard as being capable of being misinterpreted as
requiring only a test of the subjective state of mind of the physicians
conducting the professional review action). Consequently, even when
the solicitation exception is in play, immunity will be judged by
applying the objective standard regarding whether the Hospital based
its actions upon the reasonable belief that they are in furtherance of
quality healthcare. See 42 U.S.C. § 11112(a).
The real issue in this regard is the sufficiency of the basis for
the Hospital’s actions, i.e., whether it was undertaken to protect
patients. See Brader, 167 F.3d at 840. See also Manion v. Evans,
Civ. No. 89-7436, 1991 WL 575715 at *8 (N.D. Ohio 1991), appeal
dismissed, 986 F.2d 1036 (6th Cir.), cert. denied, 510 U.S. 818(1993) (hospital granted HCQIA immunity at summary judgment
where physician invoked solicitation exception to professional review
action but evidence supported conclusion that actions were
“motivated solely by [the Committee’s] concern for the well being of
patients,” thereby placing the burden upon physician to produce
evidence that the Committee was not engaged in a professional
review action); Rogers v. Columbia/HCA, 971 F. Supp. 229 (W.D.
La. 1997), aff’d, 140 F.3d 1038 (5th Cir. 1998) (primary reason for
disciplinary action was professional competence despite competition
between peer review committee and disciplined physician). This
standard is an objective one that looks to the totality of the
circumstances. Mathews, 87 F.3d at 635 (citing Imperial, 37 F.3d at
1030). Of course, as with any challenge to the applicability of
immunity to a professional review action, the burden is on the
physician to overcome the presumption that the hospital was engaged
in a professional review action. 42 U.S.C. § 11112.
The record here establishes that the 1997 revocation of
Gordon’s Medical-Dental Staff privileges resulted from concern for
patient welfare. Gordon’s attempts to couch his telephone calls to
Mrs. Seecora to fit within the parameters of the solicitation exception
31
are disingenuous based on the extensive record before this Court
chronicling Gordon’s continued inappropriate conduct undertaken to
advance his personal agenda to the detriment of patient welfare. To
hold otherwise on a record such as this would effectively chill
effective peer review by permitting the subject of the peer review
process to control the application of HCQIA immunity by couching
his or her intentions to fit within the solicitation exception to
“professional review action.”
Based on the foregoing discussion, we will affirm the
determination of the District Court to confer upon the Hospital
HCQIA immunity from money damages.
V. Antitrust Claims Requiring Concerted Activity
Gordon set forth multiple antitrust claims requiring proof of
concerted activity or conspiracy. These claims invoked both
Section 1 of the Sherman Act (see Counts I (Conditions as restraint
of trade), IV (reciprocal dealing), V (group boycott) and VI (exclusive
dealing)) and Section 2 of the Sherman Act (see Counts VII and VIII
(conspiracy to monopolize markets)). The District Court granted
summary judgment on grounds that there was no proof of concerted
activity or conspiracy between the Hospital and Geisinger and/or
Postal in undertaking disciplinary action against Gordon to restrain
his ability to provide patients with competitive information.15 Gordon
challenges the District Court’s grant of summary judgment in favor
of the Hospital as to those claims. He also challenges the District
Court’s entry of judgment for the Hospital at the conclusion of the
non-jury trial as to Count I (Conditions as restraint of trade). Because
concerted action is required for all of the aforementioned claims, we
15
The District Court initially granted summary judgment for
the Hospital as to Count I (Conditions as restraint of trade). But upon
reconsideration, the Court determined that it had erred by including
this as a claim that required the existence of concerted activity or a
conspiracy in order to survive summary judgment. Because there was
a genuine issue of material fact regarding the relevant geographic
market, that claim was part of the non-jury trial.
32
first address its parameters. We then address Gordon’s challenge to
the claims disposed of at summary judgment followed by our analysis
of Gordon’s challenge to the District Court’s post-trial rulings
regarding Count I (Conditions as restraint of trade).
A. Concerted Activity
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 violation of Section 1, a plaintiff must
prove: (1) concerted action by the defendants; (2) that produced anti-
competitive 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., 510 U.S. 994 (1993). See also Big Apple BMW,
Inc. v. BMW of North Am. Inc., 974 F.2d 1358, 1364 (3d Cir. 1992),
cert. denied, 507 U.S. 912 (1993). Without proof of all of these
elements, a Section 1 claim cannot be maintained. Id.16
The essence of a Section 1 claim is the existence of an
agreement. Mathews, 87 F.3d at 639 (citing Alvord-Polk, Inc. v.
F. Schumacher & Co., 37 F.3d 996, 999 (3d Cir. 1994), cert denied,
514 U.S. 1063 (1995). Unilateral action simply does not support
liability; there must be a “unity of purpose or a common design and
understanding or a meeting of the minds in an unlawful
16
Claims for conspiracy to monopolize under Section 2 of the
Sherman Act also require evidence of a conspiracy. 15 U.S.C. § 2.
Section 2 of the Sherman Act prohibits monopolization, attempts to
monopolize and conspiracies to monopolize any part of interstate
trade or commerce.
33
arrangement.” Siegel, 54 F.3d at 1131 (quoting Copperweld Corp. v.
Independence Tube Corp., 467 U.S. 752, 771 (1984)). Concerted
action is established where two or more distinct entities have agreed
to take action against the plaintiff. See Weiss v. York Hosp., 745 F.2d
786, 812 (3d Cir. 1984). Accordingly, it requires proof of a causal
relationship between pressure from one conspirator and an
anticompetitive decision of another conspirator. See Big Apple BMW,
974 F.2d at 1364.
B. Claims Disposed of at Summary Judgment
Gordon challenges the grant of summary judgment in favor of
the Hospital on those of Gordon’s antitrust claims that require
concerted action or conspiracy, concluding that there was no genuine
issue of material fact regarding the concerted action. These include
claims brought under Section 1 of the Sherman Act (Count IV
(reciprocal dealing), Count V (group boycott), Count VI (exclusive
dealing)) and claims brought under Section 2 of the Sherman Act
(Counts VII and VIII (conspiracy to monopolize markets)). Gordon
argues that the District Court erred given that the existence of
concerted action is a fact-intensive inquiry not appropriate for
summary judgment.
Our review of a grant of summary judgment is plenary.
Mathews, 87 F.3d at 639. 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. Id. citing
Fed. R. Civ. P. 56(c). The moving party bears the burden of showing
the absence of any genuine issues of material fact. See Celotex Corp.
v. Catrett, 477 U.S. 317 (1986). A non-movant’s burden in defending
against summary judgment in an antitrust case is no different than in
any other case. In re Flat Glass Antitrust Litigation, 385 F.3d 350,
357-58 (3d Cir. 2004); Petruzzi’s, 998 F.2d at 1230 (citing Big Apple
BMW, 974 F.2d at 1263).
When the question involves concerted action, the non-movant
may rely solely on circumstantial evidence and the reasonable
inferences drawn therefrom to withstand summary judgment. Id. But
34
this requires more than mere complaints of concerted action. There
must be evidence that tends to exclude the possibility of independent
action, meaning that the evidence reasonably tends to prove that the
alleged conspirators had a conscious commitment to a common
scheme designed to achieve an unlawful objective. See Big Apple
BMW, 974 F.2d at 1364, citing Monsanto Co. v. Spray-Rite Serv.
Corp, 465 U.S. 752, 764 (1984); Alvord-Polk, 37 F.3d at 1001. This
is because mistaken inferences in this context may serve to chill the
very conduct that the antitrust laws are designed to protect. Alvord-
Polk, 37 F.3d at 1001 (citing Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 594 (1986); Monsanto, 465 U.S. at
763-64). If such a showing is made, the movant bears the burden of
proving that drawing an inference of unlawful behavior is
unreasonable. Id. Evidence of conduct that is as consistent with
permissible competition as with illegal conspiracy, without more, will
not support an inference of conspiracy. Alvord-Polk, 37 F.3d at 1001.
See also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574 (1986).
Gordon takes exception to the District Court’s conclusion that
the Hospital’s progressive discipline towards Gordon, which
ultimately led to the 1996 suspension and 1997 revocation of his
Medical-Dental Staff privileges, was unrelated to pressure from
Geisinger. Gordon contends that there was ample evidence that
Geisinger pressured the Hospital to muzzle his criticism of Nancollas,
and that the Hospital did so without any independent permissible
basis. He points to the Hospital’s 1989 refusal to discipline him for
the comments he made about Nancollas to a nursing home patient as
compared to the actions undertaken in 1996-97 when the Hospital
was concerned regarding Geisinger’s renewal of its lease. According
to Gordon, it follows that the Hospital strayed from its prior position
of ignoring his conduct outside the Hospital and succumbed to
pressure from Geisinger to muzzle Gordon by first suspending and
then revoking his Medical-Dental Staff privileges.17
17
In addition to being the Chairman of the Hospital Board of
Trustees, Postal also was the Chairman of the Mifflin County
Industrial Development Authority, which was involved in advancing
35
We conclude, however, that the record evidence supports the
District Court’s conclusion. The whole of the evidence simply does
not exclude the possibility that the Hospital acted independently in
undertaking its professional review actions. See Big Apple BMW, 974
F.2d at 1365. No evidence of record exists to permit even an
inference of a causal connection between Geisinger and the
professional review actions resulting in the suspension and revocation
of Gordon’s privileges. Id. at 1364 (“A jury may not be permitted to
speculate as to cause . . .; the plaintiff must demonstrate . . . ‘a unity
of purpose or a common design and understanding, or a meeting of
the minds.’”). Gordon relies on the Hospital’s “shift” in its response
to Gordon’s conduct, asserting that discipline only was undertaken in
1995 and 1996 given pressure from Geisinger, on which the Hospital
was economically dependent. Big Apple BMW, 974 F.2d at 1365(evidence of concerted action spanning several years existed
including meetings among dealers indicating their opposition to new
franchisees); Arnold Pontiac-GMC, Inc. v. General Motors Corp.,
786 F.2d 564 (3d Cir. 1986) (evidence of concerted action where after
meeting with a competitor of plaintiff, dealer denied plaintiff’s
franchise application despite previous affirmative steps taken toward
granting the franchise). But there is no evidence of Geisinger’s
involvement in the professional review action that resulted in the
revocation of Gordon’s Medical-Dental Staff privileges. A review of
Gordon’s tenure as a member of the Hospital’s Medical-Dental Staff
reveals a consistent pattern of disruptive and unprofessional conduct.
The independence of the Hospital’s actions in 1996 is not trumped
simply because the Hospital’s discipline of Gordon became
increasingly severe over time. As we recognized in Mathews,
“[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 medical
the financing for the Hospital Medical Arts Building in which
Geisinger leased space. In light of this, Gordon attempts to link
Postal’s involvement in effecting Gordon’s agreement to the
Conditions (which he alleges “gagged” him from conveying
information regarding Nancollas) to his interest in renewing the
Geisinger lease.
36
staff to coerce the hospital into accepting its recommendation.”
Mathews, 87 F.3d at 639-640. Moreover, peer review actions, when
properly conducted, generally enhance competition and improve the
quality of medical care. Id. at 640 (citing Weiss v. York Hosp., 745
F.2d 786, 821 n.60 (3d Cir. 1984). Although theoretically the lease
could support an inference that Geisinger’s economic power may
have had some influence on the Board’s decision, Gordon has not
produced any evidence of any communication between the Hospital
and Geisinger regarding the revocation of Gordon’s Medical-Dental
privileges. Gordon also has not raised a genuine issue of material fact
that Geisinger coerced the Hospital into revoking Gordon’s Medical-
Dental Staff privileges. There is as well no evidence to exclude the
possibility that the Hospital acted independently in undertaking
progressive peer review of Gordon. This precludes an inference of
antitrust conspiracy. Mathews, 87 F.3d at 640-41.
Accordingly, we will affirm the grant of summary judgment
to the Hospital as to Counts IV (reciprocal dealing), V (group
boycott), VI (exclusive dealing), VII and VIII (conspiracy to
monopolize markets).
C. Post-trial Judgment Regarding Count I
Judgment was entered in favor of the Hospital following a
non-jury trial as to Count I (Conditions as restraint of trade) in which
Gordon alleged that the Hospital and the Chairman of the Hospital
Board, Postal, imposed the Conditions to prevent Gordon from
competing to retain or obtain business by communicating truthful
non-deceptive information to patients relevant to their surgical
decisions. He asserts that the Conditions constituted an unreasonable
restraint of trade in that they foreclosed him from competing in the
physician services market for outpatient cataract surgery, inpatient
eye surgery and emergency eye surgery. It also is asserted that the
Hospital sought to prevent MCCSC from competing with it in the
facility services market for outpatient cataract surgery.
Gordon specifically contends that the District Court erred in
concluding that he failed to sustain his burden of proving a prima
37
facie case under the traditional rule of reason test. First, Gordon
challenges the District Court’s application of the traditional rule of
reason rather than the “quick look” rule of reason analysis. The latter
applies in cases where per se condemnation is inappropriate but
where no elaborate industry analysis is required to demonstrate the
anticompetitive character of an inherently suspect restraint. United
States v. Brown Univ., 5 F.3d 658, 669 (3d Cir. 1993). Rather, the
competitive harm is presumed and the defendant must set forth some
competitive justification for the restraints. Id. Gordon contends that
the information restraints were manifestly anticompetitive and not
supported by any pro-competitive justification. Despite Gordon’s
protestations, the quick look approach may be applied only when an
observer with even a rudimentary understanding of economics could
conclude that the arrangement in question would have an
anticompetitive effect on customers and markets. California Dental
Ass’n v. FTC, 526 U.S. 756, 770 (1999). Such is not the case here,
where even if the Conditions were a restraint, they represent a non-
price vertical restraint between one hospital and one physician, which
we have held is reviewed under the traditional rule of reason. See
Orson Inc. v. Miramax Film Corp., 79 F.3d 1358, 1368 (3d Cir.
1996) (“[v]ertical restraints of trade, which do not present an express
and implied agreement to set resale prices, are evaluated under the
rule of reason.”). This is especially true given the District Court’s
determination, with which we agree, that Gordon and the Hospital
were not competitors in the relevant market in November 1995 when
he agreed to the Conditions. His competition in the facility services
market did not commence until MCCSC opened more than one year
later.
Application of the traditional “rule of reason” requires that a
factfinder look at the totality of the circumstances in order to
determine whether a business combination constitutes an
unreasonable restraint of trade. Brown Univ., 5 F.3d at 668. Under
this test, Gordon bears the initial burden of showing that the alleged
contract produced an adverse, anticompetitive effect within the
relevant geographic market. Id. This can be achieved by
demonstrating that the restraint is facially anticompetitive or that its
enforcement reduced output, raised prices or reduced quality. Id.38
Alternatively, because proof that the concerted action actually caused
anticompetitive effects is often impossible to sustain, proof of the
defendant’s market power will suffice. Id.; F.T.C. v. Indiana
Federation of Dentists, 476 U.S. 447, 460-61 (1986). Market power,
the ability to raise prices above those that would otherwise prevail in
a competitive market, is essentially a surrogate for detrimental effects.
Brown Univ., 5 F.3d at 668. We must be mindful that
the legality of an agreement or regulation cannot be
determined by so simple a test . . . as whether it
restrains competition. Every agreement concerning
trade, every regulation of trade, restrains. To bind, to
restrain is of their very essence. The true test of
legality is whether the restraint imposed is such as
merely regulates and perhaps thereby promotes
competition or whether it is such as may suppress or
even destroy competition. To determine that question,
the court must ordinarily consider the facts peculiar to
the business to which the restraint is applied; its
condition before and after the restraint was imposed;
the nature of the restraint and its effect actual or
probable. The history of the restraint, the evil
believed to exist, the reason for adopting the particular
remedy, the purpose or end sought to be obtained, are
all relevant facts. This is not because a good intention
will save an otherwise objectionable regulation or the
reverse; but because knowledge of intent may help the
court to interpret facts and to predict consequences.
Board of Trade of the City of Chicago v. United States, 246 U.S 231,
238-39 (1918). See also Eichorn v. AT & T Corp., 248 F.3d 131,
144-45 (3d Cir.), cert. denied, 534 U.S 1014 (2001) (indicating
totality of circumstances considered under rule of reason includes
facts peculiar to particular business to determine the nature and
purpose of the allegedly illegal restraint).
Although the District Court determined that Gordon met the
concerted action requirement for purposes of this Sherman § 1 claim
39
through the existence of the Conditions of his reappointment, the
District Court also determined that he failed to meet his burden of
proving that enforcement of the Conditions by excluding him from
the Medical-Dental Staff had anticompetitive effects. In applying the
traditional rule of reason, we first must determine whether the
Conditions had substantial anticompetitive effects. Gordon argues
that the Conditions reduced output given that the output of a surgeon
is not only the surgery itself but necessarily includes advice,
scheduling, and hand-holding. See National Collegiate Athletic Ass’n
v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 99 (1984)
(restrictions on output are unreasonable restraints of trade). Gordon
claims that the Conditions impaired historically effective competition
between surgeons competing to provide surgery services by
prohibiting him from conveying comparative information regarding
procedures that were essential for patients to make informed
decisions. In advancing his argument, Gordon asserts that Condition
3 prevents him from communicating with Nancollas’s patients or any
other physician’s patients for the purpose of conveying comparative
information and that it prevents him from making “any comment” at
any time about “any other ophthalmologist” with any person in the
Hospital’s service area. But Condition 3 only serves to chill
Gordon’s comments regarding other ophthalmologists as part of his
discharge instructions or at any other time when dealing with patients
who have been or will be treated by the Hospital, excepting
comments made “in response to a specific question or for the purpose
of a referral.” In light of Gordon’s history, precluding him from
making gratuitous statements at any time and in whatever fashion he
deemed appropriate regardless of its impact or potential impact on
patient health or welfare does not, standing alone, elevate Condition
3 to having anticompetitive effects. Likewise, as the District Court
determined, Condition 2 only prohibited Gordon from commenting
upon a particular surgical method as it relates to a particular
physician, and not, as Gordon contends, from differentiating himself
and his methods in surgical meetings.
Next, we must determine whether the Hospital possessed
market power in the relevant markets in order to determine if we may
presume anticompetitive effects from the Conditions under the rule
40
of reason test. Determination of market power is a determination of
fact; therefore we review the District Court’s conclusions to
determine if they are clearly erroneous. Igbonwa, 120 F.3d at 440.
Gordon bore the burden of proving the relevant product and
geographic markets affected by the Hospital’s imposition of the
Conditions. Eichorn v. At & T Corp., 248 F.3d 131, 147 n.4 (3d Cir.
2001). Once the markets are defined, we must determine whether the
Hospital’s market share is sufficient to infer the existence of market
power. Fineman v. Armstrong World Industries, Inc., 980 F.2d 171,
201-02 (3d Cir. 1992). The relevant product markets (each
containing a facility and physician services component) are:
(1) general outpatient cataract surgery, (2) general inpatient cataract
surgery; and (3) general emergency eye surgery. Gordon disputes the
District Court’s findings regarding the geographic market definition
and determination of market power.
The relevant geographic market, from which the court
calculates the market share in the relevant product markets, is that
area in which a potential buyer may rationally look for the goods or
services he seeks. Pennsylvania Dental Ass’n v. Medical Service
Ass’n of Pa., 745 F.2d 248 (3d Cir. 1984). The geographic scope of
a relevant product market is a question of fact to be determined in the
context of each case in acknowledgment of the commercial realities
of the industry being considered. Borough of Lansdale v.
Philadelphia Elec. Co., 692 F.2d 307, 311 (3d Cir. 1982).
Gordon ascribes error to the District Court’s determination
that the relevant geographic market for general outpatient cataract
surgery consisted of all hospitals and surgical centers performing
outpatient cataract surgery within a 30 mile radius of Lewistown,
rather than only Mifflin and Juniata counties as he had proposed.18
He argues that defining a geographic market demands a review from
the consumer’s perspective and that the District Court’s thirty mile
18
The geographic market as defined by the District Court
included Mifflin and Juniata Counties in addition to portions of
Snyder, Union, Clinton, Centre, Huntington, Franklin, Cumberland
and Perry Counties.
41
radius of Lewistown ignores the geography of the region – that
Mifflin and Juniata Counties sit within a valley that was isolated by
mountain ranges making the actual distances that patients must travel
much greater than that perceived when relying on an “as the crow
flies” radius. Gordon essentially seeks to substitute the Hospital’s
primary service area for the relevant geographic market. Absent
more, however, a primary service area does not equate to the relevant
geographic market for outpatient cataract surgery services. See Miller
v. Indiana Hosp., 814 F. Supp. 1254, 1263 (W.D. Pa. 1992), aff’d,
975 F.2d 1550 (3d Cir. 1992), cert. denied, 507 U.S. 952 (1993).
The District Court’s findings regarding the scope of the
geographic market were not clearly erroneous. The District Court
determined from its review of Gordon’s expert’s report and testimony
that the greater the importance of the medical procedure to patients,
the greater the willingness of the patients to travel to receive that
service. Further, the evidence revealed that two-thirds of the patients
that live within eight miles of the Hospital received cataract surgery
elsewhere. Conversely, approximately 21% of the Hospital’s patients
for outpatient cataract surgery live closer to other facilities yet chose
Lewistown Hospital. Gordon’s proposed two-county market
excluded competitors for cataract surgery facilities services located
in other counties to whom Lewistown area optometrists referred
patients, including, among others, the J.D. Blair Hospital in
Huntington, Centre Community Hospital in State College, Pinnacle
Health System and Pennsylvania Eye Surgery Center in Harrisburg.
Accordingly, the record supports the District Court’s rejection of a
two-county geographic market.
Gordon further challenges the District Court’s determination
that the Hospital lacked market power in the outpatient cataract
surgery market even when using the District Court’s thirty mile radius
geographic market. He asserts that the District Court erroneously
calculated percentages of market power based on two demonstrative
exhibits prepared by the Hospital. The first chart (“Gordon/Nancollas
Procedures Chart”) reflected all patients in the twenty-eight zip codes
that were within the thirty mile radius of Lewistown from which the
Hospital drew patients. It summarized the number of procedures
42
performed by Gordon and Nancollas in 1996. Although the chart
included some non-cataract procedures performed by those
physicians, cataract procedures accounted for 95% of the total and
reflected a Hospital market share of 46%. The second chart
(“Ophthalmic Surgery Cases Chart”) contained numbers for all
ophthalmic surgeries performed on patients in the same twenty-eight
zip codes but without identifying what percentage of those were
cataract procedures. Using this chart, the District Court determined
that the Hospital’s market share was only 39%. Gordon contests this
finding because the Ophthalmic Surgery Cases Chart reflects
hundreds of specialized procedures that are not performed at the
Hospital and necessarily are performed outside of the Hospital’s
service area. Instead, he advocates use of the Gordon/Nancollas
Procedures Chart, which he claims more accurately described the
cataract market. In either case, however, the market share is
insufficient to prove market power. Fineman, 980 F.2d at 201 (50%
share is insufficient as a matter of law to establish market power). In
addition, the District Court analyzed a number of other scenarios, all
falling well-below the legal threshold for market power. Perhaps
most telling of the Hospital’s lack of market power is the evidence
that outpatient surgical volume at the Hospital declined significantly
after Gordon left and that MCCSC became the dominant provider of
outpatient cataract surgery within less than 2 years of the Hospital’s
decision to revoke Gordon’s Medical-Dental Staff privileges. See
Assam Drug Co. v. Miller Brewing Co., 798 F.2d 311, 318 (8th Cir.
1986) (no market power because market share was declining).
Despite Gordon’s challenges, the District Court’s finding that the
Hospital lacked market power in the outpatient cataract surgery
market was well supported by the evidence and therefore was not
clearly erroneous.19
19
Although Gordon also challenges the District Court’s
finding that the Hospital lacked market power in the inpatient eye
surgery market, he failed to meet his burden of proof that the Hospital
possessed market power in that market, particularly since Gordon’s
expert testified that the market for inpatient eye surgery services is de
minimis. We affirm the District Court’s finding in this regard.
Gordon also argued that he met the prima facie requirements even
43
Based on the foregoing, we will affirm the judgment of the
District Court regarding Count I (Conditions as restraint of trade).
VI. Illegal Tying
In Count II, Gordon asserted that the Hospital illegally tied its
outpatient cataract facility services to the purchase of emergency
ophthalmologic services from a Geisinger physician, Nancollas, in
violation of Section 1 of the Sherman Act. Tying is selling one good
(the tying product) on the condition that the buyer also purchase
another, separate good (the tied product). See Town Sound & Custom
Tops, Inc. v. Chrysler Motors Corp., 959 F.2d 468, 475 (3d Cir.),
cert. denied, 506 U.S. 868 (1992). The essential characteristic of a
tying arrangement lies in the seller’s exploitation of its control over
the tying product to force the buyer into the purchase of a tied product
that the buyer either did not want at all, or might have preferred to
purchase elsewhere on different terms. Jefferson Parish Hosp. Dist.
No. 2 v. Hyde, 466 U.S. 2, 11 (1984). Under the per se analysis, a
plaintiff must prove that (1) the defendant sells two distinct products,
(2) the seller possesses market share in the tying product market, and
(3) a substantial amount of interstate commerce is affected.
Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 512-
13 (3d Cir. 1998). Applying the per se analysis, the District Court
determined that Gordon failed to prove an essential element of his
claim – that the tie impacted a substantial amount of interstate
commerce. Because Gordon failed to present any evidence regarding
either the patient volume effect or the dollar volume business that has
been affected by the tied market of emergency eye surgery physician
services, we conclude that the District Court’s determination that the
when utilizing the traditional rule of reason and that the Hospital
failed to sustain its burden of proving that there was a pro-
competitive benefit from the Conditions. However, we need not
reach this issue given our conclusion that the District Court’s findings
in this regard were not clearly erroneous.
44
Hospital’s alleged tie did not affect a substantial amount of interstate
commerce was not clearly erroneous.20
VII. Attempted Monopolization
To prove attempted monopolization (Count III), Gordon must
prove that the Hospital (1) had specific intent to monopolize the
relevant market, (2) engaged in anticompetitive or exclusionary
conduct, and (3) possessed sufficient market power to come
dangerously close to success. Barr Laboratories, Inc. v. Abbott
Laboratories, 978 F.2d 98, 111 (3d Cir. 1992). The District Court
determined that Gordon’s claim failed given that he could not show
the Hospital’s specific intent to monopolize the outpatient cataract
surgery market or that the Hospital engaged in predatory conduct with
a specific intent to monopolize. He challenges only the District
Court’s findings regarding the Hospital’s attempt to impede
MCCSC’s competition in an attempt to maintain monopoly power in
the outpatient ophthalmologic facility services market in violation of
Section 2 of the Sherman Act.
Gordon contends that he offered direct evidence of both the
Hospital’s admissions of anti-competitive intent and of predatory acts
violative of Section 2 of the Sherman Act. Specifically, he argues
that the Hospital never suggested or proved any legitimate reason for
its threats to an orthopedic surgeon who considered operating out of
MCCSC; for the pressure exerted on an anesthesiologist not to work
with Gordon at MCCSC; for its joint venture with Everhart’s facility
to counter Gordon’s operations at MCCSC; or its market allocation
20
Nor does Gordon’s tying claim survive under a rule of
reason analysis where he must prove that the revocation of his
Medical-Dental Staff privileges unreasonably restrained competition
in the market for emergency ophthalmologic physician services.
Gordon cannot show that the Hospital’s alleged tie of the emergency
ophthalmologic surgery facilities to Nancollas’s professional services
unreasonably restrained competition, especially given that his own
expert testified that the market for facility services was so small that
he could not perform a geographic market analysis.
45
agreement with Everhart. But it was Gordon’s burden to show more
than the Hospital’s intention to prevail over MCCSC or to protect its
market position relative to MCCSC. Pennsylvania Dental, 745 F.2d
at 260-61; Morris Communications Corp. v. PGA Tour, Inc., 235 F.
Supp. 2d 1269, 1286 (M.D. Fla. 2002). Despite Gordon’s arguments,
predatory intent cannot be inferred from anticompetitive practices.
The District Court properly rejected his evidence of “predatory” or
“exclusionary” practices because the conduct complained of was not
conduct without a legitimate business purpose. Unfairness alone is
not enough to classify even disreputable business conduct as
predatory. Id. at 260-61. Perhaps most significant is the District
Court’s determination that rather than acting with a specific intent to
monopolize, the Hospital was acting with a specific intent to
discipline “a persistently obstreperous physician who stubbornly
refused to comply with the standards of courtesy and professionalism
expected of a medical doctor.”21 The record supports the District
21
Gordon complains that the District Court determinations
hinged on “inadmissible hearsay evidence” of his disruptive and
obstreperous behavior from the records of the Hospital hearings.
Gordon had filed a motion in limine to define the scope of the issues
at trial and to limit the case to consideration of Conditions 2 and 3
and their competitive effect. The District Court entered an order that
Defendant may produce evidence regarding any
disciplinary actions taken, the findings of the
disciplinary bodies, and most important, Defendant’s
subsequent consideration of any previous disciplinary
actions taken against Dr. Gordon. However, neither
the Defendant nor Plaintiffs will be permitted to
relitigate the alleged misconduct.
Gordon contends here that the District Court’s reliance on the
documents offered by the Hospital from the disciplinary proceedings
(offered for the limited purpose of showing that the prior disciplinary
actions occurred, its consideration of them, and notice to Gordon of
prior discipline), was improper. He asserts that the District Court
based its finding of his disruptive behavior solely upon those
46
Court’s conclusion. Having found no clear error, we will affirm the
District Court.
VII. CONCLUSION
Based on the reasoning set forth in this opinion, we will
affirm the judgment of the District Court as to all claims raised in this
appeal.
disciplinary documents, which contained unrebutted and inadmissible
hearsay. He further contends that because the order precluded
relitigation of those issues, he did not rebut any of the evidence on
which the District Court ultimately relied to find that he had a history
of disruptive behavior.
The admissibility of evidence is within the discretion of the
trial judge, and admissibility rulings will not be disturbed on appeal
absent an abuse of discretion. See Affiliated Manufacturers, Inc. v.
Aluminum Co. of Am., 56 F.3d 521, 525-26 (3d Cir. 1995) (a district
court’s ruling as to admissibility of evidence is reviewed under an
abuse of discretion standard, where the question involves the
application of the Federal Rules of Evidence). When applying the
traditional rule of reason to determine if the Conditions were
reasonable, a court must review the totality of the circumstances.
Brown Univ., 5 F.3d at 668. Consequently, we find no abuse of
discretion by the District Court for its consideration of documents
from the disciplinary proceedings.
47