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Brader v. Allegheny General Hosp.

filed: September 1, 1995.


On Appeal from the United States District Court for the Western District of Pennsylvania. (D.C. No. 93-cv-01920).

Before: Sloviter, Chief Judge, Alito and McKEE, Circuit Judges.

Author: Sloviter


SLOVITER, Chief Judge.


Facts and Procedural History

Appellant Dr. Alan H. Brader challenges the district court's dismissal of his antitrust and breach of contract claims against defendants Allegheny General Hospital, Allegheny Surgical Associates ("ASA"), Cardio-Thoracic Surgical Associates ("CTSA"), Dr. George J. Magovern, and Dr. Daniel L. Diamond. Because the district court dismissed the complaint, the only facts before us are those alleged in the complaint itself.

Allegheny General, a hospital located in Pittsburgh, Pennsylvania, also serves as a regional referral hospital treating patients referred to it from Western Pennsylvania, Eastern Ohio and West Virginia. ASA, a Pennsylvania corporation with offices in Pittsburgh, engages in the practice of general surgery, with principal emphasis in trauma and vascular surgery. Dr. Diamond is the President of ASA and Division Director for General Surgery at Allegheny General. ASA obtains its patients through referrals from other physicians; Allegheny General uses ASA exclusively to perform its trauma service. CTSA, a Pennsylvania corporation that also maintains its offices in Pittsburgh, practices in the field of cardio-thoracic surgery. Dr. Magovern is the President of CTSA and Chairman of the Department of Surgery at Allegheny General. CTSA obtains its patients through physician referrals and from on-call trauma referrals.

In July 1988, Brader, a physician licensed to practice in Pennsylvania and North Carolina, became a provisional staff member of Allegheny General and an employee of ASA. In June 1989, Magovern accused Brader of incompetence and of having improperly rendered trauma treatment to a patient who was on the call service of CTSA (Magovern's group) although the details of Magovern's displeasure are not spelled out in the complaint. According to Brader's complaint, Magovern had no factual basis to support his accusations. Nonetheless, shortly thereafter, when the issue of Brader's advancement from provisional to regular staff status at Allegheny General arose, it was opposed by Magovern. Solely as a result of Magovern's opinion and based on this single issue, Diamond told Brader that he should look elsewhere for employment, that he would not support him for staff membership, that his prior support for Brader had jeopardized his "political" career at Allegheny General, and that Brader could not practice medicine at Allegheny General if he was not employed with ASA.

Sometime after this conversation, Diamond conducted an informal quality assurance study of (presumably Brader's) ruptured abdominal aortic aneurysm (AAA) procedures, which Brader contends was not performed in accordance with Allegheny General's medical staff bylaws. In May 1990 after the study was completed, at a meeting between Brader, Diamond and representatives of Allegheny General, Diamond tried to suspend Brader, allegedly in violation of the bylaws and for no reasonable basis related to the quality of plaintiff's performance.

Later in May, at a meeting of Brader, Magovern and Diamond, Brader agreed to an independent review of his surgical record on AAA procedures. Magovern selected Dr. John Ochsner to conduct it. Brader alleges that Ochsner was a personal friend of Magovern. According to Brader, Diamond, Magovern and Allegheny General submitted inadequate and misleading information to Ochsner for his review. In addition, Brader contends that he was prevented from having an informal conference with Ochsner in violation of the medical staff bylaws.

Ochsner concluded, as a result of the inadequate and misleading information, that Brader's mortality experience was not surprising or unexpected but recommended that his performance of ruptured AAA procedures should be supervised due to excessive morbidity. In October 1990 Magovern summarily suspended Brader's privileges to perform AAA procedures at the hospital without any factual basis. Later that month, Brader's application for advancement to attending staff status at Allegheny General was denied on the recommendations of Diamond and Magovern, and in part at Magovern's recommendation all of Brader's clinical privileges at the hospital were suspended. App. at 58.

Brader appealed all of these adverse actions in accordance with the medical staff bylaws. On October 9, 1991, a hearing panel recommended that the suspension of Brader's ruptured and elective AAA privileges be lifted, but on October 25, 1992 a hearing panel recommended that the decision not to advance Brader to attending staff status be sustained, and concluded that Brader's challenge to the suspension of his clinical privileges was moot. App. at 59. According to Brader's complaint, the decision not to advance him to attending staff status violated the medical staff bylaws because it was based on hearsay and he had no opportunity to confront the witnesses against him. App. at 60.

Brader appealed the adverse October 25, 1992 decision to an Appellate Review Panel, which on January 7, 1993 affirmed the recommendation not to advance Brader but concluded that there was no evidence to warrant the continuation of the suspension of Brader's clinical privileges. On February 26, 1993, however, the Allegheny General Board of Directors, allegedly in violation of the medical staff bylaws, reimposed the suspension of Brader's AAA procedures at the hospital.

Brader tried to obtain staff privileges at other hospitals in Allegheny County and Washington County, but he was unable to do so due to his suspension from Allegheny General. Brader contends that defendants' actions have prevented him from practicing medicine in any location within the market area served by the defendants and forced him to relocate his practice to North Carolina.

On November 18, 1993, Brader filed a three-count complaint against defendants alleging claims for violations of sections 1 and 2 of the Sherman Act as well as a claim for breach of contract arising from the alleged violations of the medical staff bylaws. Shortly thereafter, Brader filed an Amended Complaint in order to correct the spelling of Magovern's name.

Defendants moved to dismiss Brader's Amended Complaint arguing that the complaint failed to allege facts sufficient to support the Conclusion that Brader had suffered an "antitrust injury" so as to confer standing and that the complaint failed to allege various facts, such as the existence of a conspiracy and the relevant market power of the defendants, to support Brader's claims under the Sherman Act. The defendants also sought to dismiss Brader's claim of breach of contract because the complaint failed to allege which sections of the medical staff bylaws, if any, had been breached, and failed to allege facts sufficient to show that any of the alleged infractions were not merely de minimus violations. Finally, defendants argued that they were immune from suit with respect to all of Brader's claims under the Health Care Quality Improvement Act (HCQIA), 42 U.S.C. §§ 11101-11152. Brader sought leave to amend the complaint, and submitted a proposed Second Amended Complaint, and defendants renewed their motion to dismiss, relying upon the same grounds raised in the earlier motion.

By order dated September 14, 1994, the district court dismissed the Amended Complaint, granted Brader leave to amend, ordered the Second Amended Complaint to be filed, and granted defendants' motion to dismiss the Second Amended Complaint. In its accompanying opinion, the district court stated that the Second Amended Complaint contained sufficient allegations regarding a conspiracy and defendants' market power, but "failed to adequately plead that there was an unlawful purpose for the defendants' conduct or that there was an actual anticompetitive effect as a result of plaintiff being denied staff privileges." App. at 13. The district court dismissed Brader's claims under both section 1 and section 2 of the Sherman Act on the ground that the complaint "does not suggest that [the defendants'] action did, or could have, effected [sic] interstate commerce in an anticompetitive manner." App. at 13. The court also dismissed Brader's breach of contract claim, holding that the Second Amended Complaint contained sufficient specific allegations of the bylaw sections allegedly breached by the defendants, but that it failed to allege facts sufficient to support a causal link between those alleged breaches and the injuries suffered by Brader. The district court's opinion did not address the defendants' claim of immunity to Brader's suit under HCQIA.

Brader now appeals the district court's dismissal of his Second Amended Complaint. This court has jurisdiction of Brader's appeal pursuant to 28 U.S.C. § 1291. We have plenary review over a district court's grant of a motion to dismiss. Malia v. General Elec. Co., 23 F.3d 828, 830 (3d Cir.), cert. denied, 130 L. Ed. 2d 328, 115 S. Ct. 377 (1994). In conducting our review, we accept as ...

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