this Court, cognizant of our obligation not to substitute our judgment for that of the jury, feels constrained to agree with the antitrust defendants that a judgment of "No Cause for Action" must be entered against Dr. Nanavati on the antitrust claims, notwithstanding the jury's verdict.
After hearing 8 weeks of testimony, deliberating 4 full days, and requesting and receiving a complete recharge on antitrust law, the jury found that Dr. Sorenson, the sole individual charged with an antitrust violation, had not participated in any antitrust violation. Notwithstanding this finding, the jury also found that a contract, combination or conspiracy in restraint of commerce existed, special interrogatory question B-1, and that the two remaining antitrust defendants, BTMH and the Executive Committee, were participants therein. (B2 & B3). Despite a thorough review of the record, we are unable to find evidence in this case to support a finding that the Hospital and the Executive Committee, the defendants who were not exonerated by the jury, committed a violation of the antitrust laws. Specifically, in light of the jury's exoneration of Dr. Sorenson, the record is devoid of evidence to support a finding that either the Hospital or the Executive Committee participated in any conspiracy designed to stifle competition or engaged in any unlawful restraint of trade which had an anticompetitive effect.
Because we were extremely reluctant to set aside any portion of the verdict in this enormously complicated case, we have made every effort to preserve the jury's findings and decision. We have carefully searched the voluminous record of this case in an effort to locate evidence to support a finding that BTMH and the Executive Committee participated in a conspiracy violative of the antitrust laws, and we have attempted to discern, in the absence of more explicit jury findings,
the basis for the jury's apparent conclusion
that a contract, combination or conspiracy in restraint of interstate commerce existed. Our attempts to locate evidence from which a rational factfinder could conclude that the Hospital and the Executive Committee participated in such a conspiracy, while Dr. Sorenson did not, have been futile. We are convinced that judgment must be entered in favor of BTMH and the Executive Committee on the antitrust claim.
There is simply no evidence in this case which supports the imposition of liability for an antitrust violation against BTMH or the Executive Committee, in light of the jury's rejection of Dr. Nanavati's original theory that Dr. Sorenson influenced or masterminded the alleged anticompetitive activities.
In our effort to preserve the jury's verdict, we have considered a number of alternative legal theories which might support the imposition of liability against the defendants herein, but have found that our attempts to locate factual bases for these theories in the record have been unavailing. We shall discuss each theory in turn.
The most obvious interpretation of the jury's responses to the antitrust special interrogatories, and the one which the defendants urge upon the Court, is the finding that BTMH conspired with the Executive Committee. Such a factual finding, defendants contend, would result in the need for this Court to "mold" the jury's verdict to reach a verdict of "No Cause for Action." Defendants rely, in making this argument, on Weiss v. York Hospital, 745 F.2d 786 (3d Cir. 1984), cert. denied, 470 U.S. 1060, 105 S. Ct. 1777, 84 L. Ed. 2d 836 (1985), in which the Third Circuit held that the medical staff of the hospital
and the hospital itself could not, as a matter of law, "conspire" with one another. 745 F.2d at 817. The medical staff involved in the Weiss case had been empowered to make staff privilege decisions on behalf of the hospital, and in making such decisions, the Third Circuit explained, the medical staff therefore acted as an officer of the corporate hospital. 745 F.2d at 817. Since the medical staff, as an entity, had no "interest in competition with the hospital," id., there could not be, as a matter of law, a conspiracy between the medical staff and the hospital with respect to staff privilege decisions. In keeping with the reasoning in Weiss,24 the jury in the present case was charged that BTMH and the Executive Committee could not, as a matter of law, conspire with one another.
Not having been persuaded that this charge was incorrect, we hold that the jury's verdict with respect to the antitrust claim, if indeed it is based upon a finding that the Executive Committee and the Hospital conspired, cannot stand. Particularly in light of the fact that the jury was instructed twice on this point, however, we are unwilling to assume that the jurors' intent was to find a conspiracy between these two defendants regarding the termination of Dr. Nanavati's staff privileges. Instead, on this motion, we have attempted to discern alternative interpretations for the jury's interrogatory answers, including considering the possibility that the jury found separate or distinct antitrust violations for each defendant.
With respect to the Executive Committee, the single ground asserted by Dr. Nanavati which presents even a colorable antitrust claim is the Executive Committee's decision to recommend that Dr. Nanavati's staff privileges be terminated. This decision, made as it was by a "combination" of individual competitors, could, under Weiss, supra, at 814, support antitrust liability without regard to the involvement of any other entity. In order to impose antitrust liability, however, more is required than just proof of some action taken by the group. The action taken must have been one which was anticompetitive. If this were not so, every action taken by the "combination" would be violative of the antitrust laws.
Such a result could not be countenanced, of course where, as here, there are legitimate reasons for the existence of the organized group of competitors.
In order for the action taken by an antitrust defendant to be considered one which constitutes a violation of the antitrust laws, that action must be anticompetitive in purpose or effect. E.g., McLain v. Real Estate Board of New Orleans, 444 U.S. 232, 243 (1980). See also Tose v. Pennsylvania Bank, 648 F.2d 879, 892 n. 17 (3d Cir.), cert. denied, 454 U.S. 893, 102 S. Ct. 390, 70 L. Ed. 2d 208 (1981). Thus, the Executive Committee's recommendation that Dr. Nanavati's staff privileges be revoked would conceivably be an acceptable predicate for antitrust liability if it were anticompetitive in purpose or effect. Nothing in the record of this case, however, supports a finding that the Executive Committee's action, irrespective of how unreasonable the jury might have believed it to be, was motivated by an anticompetitive purpose or had an anticompetitive effect, as these terms are defined in antitrust law.
There is a complete dearth of evidence to support an inference that the Executive Committee, as an entity, had any anticompetitive motive or purpose with respect to its recommendation concerning Dr. Nanavati's staff privileges. Furthermore, there is no evidence that any of the individuals who served as members of the Executive Committee were, as individual physicians, motivated in any respect by any desire for personal economic gain.
On such a record there is obviously no rational basis for concluding that the Executive Committee acted with an anticompetitive animus.
Dr. Nanavati has argued, in opposition to defendants' present motion, that proof of an anticompetitive effect is sufficient to support the imposition of liability under the Sherman Act even without a showing of anticompetitive purpose. Dr. Nanavati's amended brief in opposition to defendants' motions at p. 18. Accepting as true the proposition that the antitrust law requires proof only of either anticompetitive purpose or effect, but cf., Borger v. Yamaha International Corp., 625 F.2d 390, 397 & n.4 (2d Cir. 1980) (expressing doubt whether the "purpose or effect" requirement "is a disjunctive rule"), we are nonetheless unable to find evidence in this case which supports the imposition of liability against either the Hospital or the Executive Committee for an antitrust violation arising out of the revocation of Dr. Nanavati's staff privileges. The record simply does not permit a finding that the decision to revoke Dr. Nanavati's staff privileges produced anticompetitive effects.
Although it is of course true that the termination of Dr. Nanavati's staff privileges would have had a deleterious effect on his ability to treat cardiac patients within Cape May County who required hospitalization,
it is equally true that this effect alone, in the absence of an anticompetitive intent, cannot support a verdict against the entities causing the effect. The antitrust laws are designed to protect competition, not competitors. E.g., Brown Shoe Co. v. United States, 370 U.S. 294, 320, 8 L. Ed. 2d 510, 82 S. Ct. 1502 (1962). Nothing in this case supports a finding that the revocation of Dr. Nanavati's privileges was either motivated by a desire to stifle competition or that it substantially impaired competition. It is uncontroverted that, with the possible exception of Dr. Sorenson, see trial transcript of June 2, 1986 at p. 73, lines 19-21; trial transcript of June 4, 1986 at p. 16, lines 18-21, but cf., trial transcript of June 5, 1986 at pp. 97-98, lines 17-5 (Dr. Sorenson sent Dr. Nanavati flowers as a welcoming gift), all of the persons involved in this matter believed in the need for and/or desired to have an additional cardiologist engaged in practice within Cape May County. Dr. Nanavati's own testimony was that he was welcomed with open arms by the other physicians. See trial transcript of June 4, 1986 at p. 16, lines 22-24. The proofs do not support an inference, unless such is drawn solely from the fact that the Hospital and the Executive Committee acted to revoke Dr. Nanavati's staff privileges, that the Hospital and the Executive Committee's activities substantially impaired competition or unreasonably restrained trade. Indeed, the evidence adduced at trial belies any such inference. With respect to Dr. Nanavati's own practice, it is uncontested that the number of patients he treats rose from approximately 1200 at the time of the filing of the original complaint in this action to 4,000 at the time of the trial. Trial transcript of June 13, 1986, pp. 82-85. Furthermore, the proofs showed that a new cardiologist, Dr. Mark Sorenson, entered the "market" during the time period critical to this case.
With respect to the potential liability of the Hospital, we have considered the possibility that an entity other than the Executive Committee, such as an individual physician, might have been found by the jury to have engaged in a conspiracy with the Hospital. Our review of the record of this case, however, again leaves us convinced that no evidence supports the conclusion that the Hospital committed any violation of the antitrust laws, even under this theory.
In keeping with the current state of the law regarding intracorporate conspiracy, see e.g., Weiss, supra, at 813 n. 43 (citing Johnston v. Baker, 445 F.2d 424, 426-27 (3d Cir. 1971) (corporate officers or employees, if they act for their own interests, and outside the interests of the corporation, are legally capable of conspiring with their employer for purposes of § 1 of Sherman Act)), this Court charged the jury, in relevant part, that:
As heretofore stated, in order for you to find that a conspiracy existed under the Sherman Act, you must determine that at least two independent persons or entities took part in the alleged conspiracy. A corporation cannot conspire with itself any more than a private individual can. And it is the general rule that the acts of the agent are the acts of the corporation. Therefore, the Sherman Act does not prohibit an agreement combination or conspiracy, which consists merely in the fact that the officers and other agents of the hospital did their day-to-day jobs of formulating and carrying out its policies. Burdette Tomlin is a corporation. And as such it can act only through its officers and representatives. It does not violate the Sherman Act when it exercises its rights through its officers and agents, which is the only medium through which it can possibly act.
However, if you find that one or more of the individual physicians at the hospital acted in regard to Dr. Nanavati in whole or in part for private economic motives, then you may find that a conspiracy existed.