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.
The opinion of the court was delivered by: Fisher, Circuit Judge.
Argued September 14, 2004
Before: ALITO, AMBRO and FISHER, Circuit Judges.
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 U.S.C. §§ 11101-11152, the Hospital was entitled to immunity from money damages regarding the professional review actions at issue.*fn1 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 Court*fn2 that resulted in judgment for the Hospital as to all claims.
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 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."
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"),*fn3 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, Nancollas also used a "sleep dose" of general anesthesia. Recovery from this surgery could extend up to three (3) months.*fn4
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.
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.*fn5
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 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.
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 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.
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 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.*fn6
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 Nancollas.*fn7 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 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 ...