Petition for Writ of Certiorari — Pinhas v. Summit Health, Ltd.

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87 1131

No.

JEC 12 a7

In the Supreme Coystt” cenis

OF THE i

we. . .

United States

OcTOBER TERM, 1987

No.

Simon J. PInuas, M.D.

Petitioner,

Vs.

SuMMit HEALTH, LTD., a corporation; Mipway Hospira.

MEbDICAL CENTER, a California general hospital; THE

MEbicaAl. STAFF OF MipWay HospiraL MEDICAL CENTER,

an unincorporated association; MITCHELL FELDMAN;

AvGust READER; ARTHUR N. LURVEY; RICHARD E.

POSELL; JONATHAN I. MACY; JAMES J. SALZ;

GILBERT PERLMAN; PEGGY FARBER; MARK KADZIELSKI;

and WEISSBURG & ARONSON,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT AND APPENDIX

LAWRENCE SILVER

A Law Corporation

LAWRENCE SILVER

Louis M. NATALI, JR.

9100 Wilshire Blvd.

Suite 360 West Tower

Beverly Hills, CA 90212

(213) 274-1580

BLECHER & COLLINS

MAXWELL M. BLECIIER

611 West Sixth Street

Suite 2800

Los Angeles, CA 90017

(213) 622-4222

- Attorneys for Petitioner

Bowne of Los Angeles, Inc., Law Printers. (213) 742-6600

QUESTIONS PRESENTED

1. Whether this case should be consolidated with Pat-

rick v. Burget, 800 F.2d 1498 (9th Cir. 1986), cert. granted

108 S.Ct. 65 (1987), which contains identical issues that

are raised in this Petition?

2. Whether the “State Action Doctrine”, which pro-

vides medical peer review activity immunity from inflicted

anti-trust damages, mandates a finding of “state action”

for purposes of Civil Rights Act violations?

3. Whether in light of this Court’s review of the appli-

cability of the state action anti-trust exemption to medical

peer review proceedings in Patrick v. Burget, 800 F.2d

1498 (9th Cir. 1986), cert. granted 108 S.Ct. 65 (1987),

this Court should also define the meaning of “state

action” under the Civil Rights Act?

4. Whether the Health Care Quality Improvement Act

of 1986 is Congressional recognition that medical peer

review activity is clothed with “state action” for purposes

of Civil Rights Acts jurisdiction?

LIST OF PARTIES

The parties to this proceeding are petitioner, Simon J.

Pinhas, M.D. and the respondents — Summit Health,

Ltd., a corporation, Midway General Hospital, a Califor-

nia general hospital, the Medical Staff of Midway General

Hospital, an unincorporated association; Mitchell Feld-

man, hospital administrator at Midway, August Reader,

Arthur Lurvey, Richard Posell, Jonathan Macy, James

Salz, Gilbert Perlman, Peggy Farber, Mark Kadzielski,

and Weissburg & Aronson. The California Board of Medi-

eal Quality Assurance was named as a defendant in the

District Court but was dismissed by agreement before a

final judgment of the District Court.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ...............05:. i

List OF PARTING: oo 5.51... eee

OPINIONS BRIGW..:{c>.. .ciceee eee 1

JUBISHICTION |.6.5°05.5 Peer errr 2

STATEMENT OF THE CASE ...............:. 3

REASONS FOR GRANTING THE WRIT....... 4

CONCLUBION®S . ...40ss0s ewe be eee eee

lil

INDEX FOR APPENDIX

APPENDIX 1

REPORTER’S TRANSCRIPT OF PROCEED-

CT CLe VEC EL AG eu hee an kek nd casa sass ss

APPENDIX 2

FIRST AMENDED COMPLAINT FOR VIOLA-

TION OF CONSTITUTIONAL RIGHTS AND

CIVIL RIGHTS (42 U.S.C. $1983 and

§ 1985(3)); DECLARATORY JUDGMENT AND

TREBLE DAMAGES FOR VIOLATION OF

SECTION 1 OF THE SHERMAN ANTI-TRUST

ACT AND INJUNCTIVE RELIEF ............

APPENDIX 3

NOTICE OF MOTIONS AND MOTIONS TO DIS-

MISS COMPLAINT AND FOR SANCTIONS ..

APPENDIX 4

ORDER DISMISSING ACTION ................

APPENDIX 5

NOTICE OF APPEAL AND DEPOSIT OF

a ee ne are

TABLE OF AUTHORITIES

Cases

Page

Anton v. San Antonio Community Hospital, 19 Cal.3d

SOE, 140 Cal Bote. 448 (1977) 2 occ ccciccccess 8

Bixby v. Pierno, 4 Cal.38d 130, 93 Cal.Rptr. 234

PEGs cea ERs de hee hake ene kee eesex. 8

Ezpeleta v. Sisters of Mercy Health Corporation, 800

og Gy Lk Re ee 7,8

Graham v. Goodcell, 282 U.S. 409 (1931) ........ 2

Greene v. McElroy, 360 U.S. 474 (1950).......... 3

Hannah v. Larche, 363 U.S. 420 (1960) .......... 2

Marrese v. Interqual, Inc., 748 F.2d 373 (7th Cir.

1984), cert. denied, 472 U.S. 1027 (1985) ...... 8

McCulloch v. Sociedad Nacional, 372 U.S. 10 (1963) 2

McElroy v. Guargliardo, 361 U.S. 281 (1960)..... 2

Miller v. Indiana Hospital, 660 F.Supp. 250 (W.D.

Eb RRA ur eee roars, (aoe parte asp Gree ams UP MNES 8

New Haven Inclusion Cases, 399 U.S. 392 (1970) .. 2

Nixon v. Fitzgerald, 457 U.S. 731 (1982) ......... 2

Patrick v. Burget, 800 F.2d 1498 (9th Cir. 1986),

cert. granted 108 S.Ct. 65 (1987).... i, 3, 4, 6, 7, 8, 12

Pinsker v. Pacific Coast Society of Orthodontists, 12

Cal.3d 541, 116 Cal.Rptr. 245 (1974) .......... 8

Reed v. Covert, 354 U.S. 1 (1957) ............... 2

Sarin v. Samaritan Health Center, 813 F.2d 755 (6th

Rg FR ey ee ae npn eWay CN Oe eae 8

Strumsky v. San Diego County Employees Retirement

Association, 11 Cal.3d 28, 112 Cal.Rptr. 805

CE io oe aes eC aw ee Pere 8

TABLE OF AUTHORITIES

CASES

Page

Tambone v. Memorial Hospital, 825 F.2d 1132 (7th

PPR Ser rr re er eT Seer or err re 8

Taylor v. McElroy, 360 U.S. 709 (1958) ....:..... 2,3

United States v. Nixon, 418 U.S. 683 (1974) ...... 2

United States v. Thomas, 361 U.S. 950 (1960) ..... a.

White v. Mechanics Securities Corp., 269 U.S. 283

0 PPP Pere er rere Ee Perro mr yee pre rT 2

Wisconsin v. Constantineau, 400 U.S. 433 (1971) .. 0)

Rules

Federal Rules of Civil Procedure, Rule 12(b)(1).. 4

Federal Rules of Civil Procedure, Rule 12(b) (6).. 4

Rules of the Supreme Court of the United States,

ne Ds oa bho das kaceeen eee eee 2

Statutes

California Business and Professions Code, See. 805

sa wid ene a ae eo ee ee ee eee ee 5, 8,9

NE 6 5 acon es Oe ee ek eee 8

California Civil Code, Sec. 43.7 ................. 6

California Code of Civil Procedure, See. 1094.5... 6

California Code of Civil Procedure, See. 1094.5(d) 8

California Evidence Code, See. 1156, 1157 ....... 6

Or. Bev. Gtet., Boe. 4. G7OC4) occ ccs esccenns 6

Or. Rov. Stak... Bam. CUBIS) oc van ceseccatsnses 6

Or. Rev. Stat., See. 441.0380, 441.055(3) (ce) ....... 5

De. Tew; Beek. ee: Seo ks koe een ence es 5

United States Code, Title 15, See. 1 (Sherman Act) 2,3

TABLE OF AUTHORITIES

STATUTES

Page

United States Code, Title 28, See. 1254(1)....... 2

United States Code, Title 28, See. 2101(e) ....... 2

United States Code, Title 42, See. 1983, 1985 and

1988 (Civil Rights Act)............... 2,3, 4,11, 12

United States Code, Title 42, See. 11111 (Health

Care Quality Improvement Act of 1986) ..... i, 9,12

United States Code, Title 42, See.

SEER r CPP EEE £08 K5. bev 68 bala Oap-c0nescbees 10

Miscellaneous

22 California Administrative Code, See. 70701 (a)

LES y Yeap iret etree Fg ang wy Reman 5

22 California Administrative Code, See. 70703 (a) 5

H.R. No. 903, Before The Committee on Energy and

Commerce, 99th Cong., 2nd Sess. 6, reprinted in

1986 U.S. Code Cong. and Admin. News 6384.... = 10

No.

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1987

No.

SIMON J. PINHAS, M.D.

Petitioner,

vs.

SuMMIT HEALTH, LTD., a corporation; MIDWAY HOSPITAL

MEDICAL CENTER, a California general hospital; THE

MEDICAL STAFF OF MIDWAY HOSPITAL MEDICAL CENTER,

an unincorporated association; MITCHELL FELDMAN;

AUGUST READER; ARTHUR N. LURVEY; RICHARD E.

POSELL; JONATHAN I. Macy; JAMES J. SALZ;

GILBERT PERLMAN; PEGGY FARBER; MARK KADZIELSKI;

and WEISSBURG & ARONSON,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT AND APPENDIX

OPINIONS BELOW

The opinion of the United States District Court for the

Central District of California is not officially reported. A

copy of the Reporter's Transcript of Proceeding is re-

printed in Appendix 1.

JURISDICTION

The jurisdiction of the District Court in this action was

based upon the Sherman Act, 15 U.S.C. § 1 and the Civil

Rights Act, 42 U.S.C. $§ 1983, 1985 and 1988.

The jurisdiction of this Court to review the judgment of

the District Court is invoked under 28 U.S.C. § 1254(1).

Section 1254(1) expressly provides that this Court may

assert its jurisdiction by certiorari either “before or after

rendition of judgment” by a court of appeals. In addition,

28 U.S.C. § 2101(e) provides that “[a]n application to the

Supreme Court for a writ of certiorari to review a case

before judgment has been rendered in the court of ap-

peals may be made at any time before judgment.” There-

fore, jurisdiction is proper because the appeal is pending

in the United States Court of Appeals for the Ninth

Circuit from a final judgment of the District Court which

dismissed petitioner’s complaint. Nizon v. Fitzgerald, 457

U.S. 731 (1982); United States v. Nixon, 418 U.S. 683, 690-

692 (1974).

The Court will review a case pending in the Court of -

Appeals upon a showing that the case is of such “impera-

tive public importance as to justify deviation from normal

appellate practice....° Rule 18, Rules of the Supreme

Court of the United States. This Court has held that that

standard has been met when the identical question was

before it in ancther case. New Haven Inclusion Cases, 399

U.S. 392, 418 (1970); McCulloch v. Sociedad Nacional, 372

U.S. 10, 12 (1963); Hannah v. Larche, 363 U.S. 420, 422 n.

3 (1960); United States v. Thomas, 361 U.S. 950 (1960);

McElroy v. Guargliardo, 361 U.S. 281, 283 (1960); Taylor

v. McElroy, 360 U.S. 709 (1958); Reed v. Covert, 354 U.S.

1,5 (1957); Graham v. Goodcell, 282 U.S. 409, 411-12 n. 2

(1931); White v. Mechanics Securities Corp., 269 U.S. 283,

299 (1925).

This Court should grant review for this Ninth Circuit

ease because it has already issued a writ of certiorari to

review identical questions that is before it in the Ninth

Cireuit ease of Patrick v. Burget, No. 86-1145. In Taylor,

supra, this Court granted certiorari while appeal was

pending because Taylor was pending in the same Circuit

that had previously decided Greene v. McElroy, 360 U.S.

474 (1950), which involved essentially the same impor-

tant constitutional issue, and because it was thought that

the Court of Appeals would dispose of Taylor simply on

the authority of its decision in Greene.

Thus, issuance of a writ of certiorari is proper because

identical issues are raised in petitioner's appeal and the

Ninth Cireuit will dispose of these issues by reference to

its decision in Patrick v. Burget, supra.

STATEMENT OF THE CASE

Petitioner requests that this Court issue a writ of

certiorari to the Ninth Circuit in this case and consolidate

this ease with Patrick v. Burget, supra.

The undisputed facts of this case illustrate the whip-

saw effect of the inconsistent applications of the State

Action Doctrine. After defendant Midway Ilospital con-

vened peer review proceedings against him, Dr. Pinhas

brought an action in Federal District Court, Appendix 2,

against the hospital, its administrators, physicians-com-

petitors and its attorneys under both Section 1 of the

Sherman Act, and Seetions 1983, 1985, and 1988 of the

Civil Rights Act. The District Court dismissed his entire

Complaint,’ holding that the defendants’ activities fit

within the state action exemption barring the Sherman

Act claim, but that “state action” for anti-trust purposes

was not “state action” for Civil Rights Act purposes.

Appendix 1, p. 10. Further, the court held that petitioner

had failed to show that the actions of a private hospital,

pursuant to an elaborate statutory and common law

scheme, were sufficient to establish federal jurisdiction

under 42 U.S.C. §§ 1983, 1985 and 1988.

REASONS FOR GRANTING THE WRIT

1. Because of this Court’s issuance of a writ of certio-

rari in Patrick v. Burget, 800 F.2d 1498, cert. granted 108

S.Ct. 65 (1987), the Court should grant the petition for

writ of certiorari and the motion to consolidate with

Patrick v. Burget because the issues posed by this ease are

identical to the issues in Patrick v. Burget.

In Patrick, the Ninth Circuit reversed a jury verdict

and an award of substantial damages, based upon proven

antitrust violations arising out of abuse in a peer review

process involving Dr. Patrick. The basis for the reversal

was that the peer review proceeding was “state action”

and as such was immune from anti-trust damage awards.

The Court said: “[P]eer review activities at the hospital

... Were mandated by statute and are exempt from fed-

eral antitrust liability under the state action doctrine.”

Patrick at 1505. : :

In order to determine if the Oregon statutory scheme

was “state action”, the Ninth Circuit engaged in the

following analysis. Counsel in this case has added foot-

'The Court granted defendants’ motion to dismiss under both

12(b) (1) and 12(b)(6) Federal Rules of Civil Procedure, Appendix

notes to the following quotation to show that the Oregon

and California statutory schemes, as far as they go, are

not distinguishable:

“The peer review process is supervised actively by

the state. To maintain licenses, health care facilities

regularly must review privilege termination and re-

striction procedures to assure their conformity to

applicable law. Or. Rev. Stat. §$§ 441.030, 441.055

(3)(e).2 When a health care facility terminates or

restricts the privileges of a physician, it must

promptly report to the BOME all facts and circum-

stances that caused the termination or restraint. Or.

Rev. Stat. § 441.820(1).’ Supervision by the Board, a

state agency, is equivalent to supervision by the

state. Benson [v. Arizona State Board of Dental Exam-

iners], 673 F.2d at 278. The hospital’s decisions

terminating or restricting privileges are also judi-

cially reviewable. Oregon courts have reviewed ad-

verse privilege decisions to determine if they were

made in good faith pursuant to fair procedures and

“The California Administrative Code § 70703(a) requires that the

Hospital “shall have an organized medical staff responsible to the

governing body for the adequacy and quality of the medical care

rendered to patients in the hospital.’’ According to Title 22, Califor-

nia Administrative Code, § 70701(a)(1)(F), a Hospital must have a

governing body which must adopt written bylaws in accordance with

legal requirements and its community responsibility which shall

include “self-government by the medical staff with respect to the

professional work performed in the hospital... .” The governing body

shall “assure that the medical staff bylaws, rules and regulations are

subject to governing body approval..., and these bylaws shall in-

clude an effective formal means for the medical staff, as a liaison, to

participate in the development of all hospital policy.” Jd. at (8), (9).

‘See, California Business and Professions Code § 805 et seq.,

Appendix 2, pp. 24-26.

were supported by the facts.* [Citations omitted]; see

also Or. Rev. Stat. 41.675 (5) (rule that peer review

proceedings confidential inapplicable in judicial pro-

ceedings challenging adverse privilege decision).”

The combination of internal review by the hospitals,

review by the BOME, and review by the courts

constitutes adequate supervision.’ Patrick at 1506.

In addition to the similarity between the statutory

schemes, petitioner alleges the same type of bad faith

behavior proved in Patrick v. Burget, supra. (See peti-

tioner’s First Amended Complaint, Appendix 2.) For

example, petitioner alleges in paragraphs 27-28, Appendix

2, pp. 8-9, the use of under-the-table payments in the guise

of a consulting contract; in paragraph 29, Appendix 2, p.

9, summary suspension of medical staff privileges effectu-

ated by Dr. Pinhas’ competitors; in paragraph 38, Appen-

dix 2, p. 12, the inclusion of competitors in the Judicial

Review Committee; in paragraph 47, Appendix 2, pp. 13-

14, use of biased hearing officers employed by respondent

hospital and its law firm; in paragraph 61, Appendix 2, p.

17, the intimidation of petitioner’s witnesses; and in

paragraph 72, Appendix 2, p. 20, interference with peti-

tioner’s getting a copy of the transcript from respondent’s

captive court reporters. Compare findings in Patrick v.

Burget, 800 F.2d 1498, 1504-1505.

*See, California Code of Civil Procedure § 1094.5, Appendix 2,

pp. 43-47.

See California Evidence Code §§ 1156 and 1157, Appendix 2, pp.

48-50.

‘The Patrick court also found it significant that Oregon provided

“good faith immunity to participants in the peer review process. Or.

Rev. Stat. § 41.675(4)”, California does the same, see California Civil

Code, § 43.7, Appendix 2, pp. 51-53.

- 7

The District Court, perceiving itself bound by Patrick v.

Burget, dismissed the anti-trust portion of the complaint.

Therefore, it is appropriate to issue the writ to review and

to grant the Motion to consolidate this case with Patrick

because an identical claim was barred for identical

reasons.

2. This case presents an opportunity for this Court to

examine whether civil rights “state action” is similar to or

distinguishable from antitrust “state action’. Paradoxi-

eally, petitioner’s anti-trust claim was dismissed because

there was “state action” and his Civil Rights Act claim

was dismissed because he was unable to show sufficient

“state action”. The lower court said:

“The Court recognizes the possibility of a claim

that if there is or is not state action for the purposes

of antitrust doctrine, then the same must hold for the

Civil Rights claim. But that, of course, would buy

into the logical fallacy of assuming that the use of

some word or phrase in two different contexts con-

veys the same meaning in both of those context [sic].

It- does not. Ezpeleta versus Sisters of Mercy Health

Corporation, at 800 Fed.2d 119, 7th Circuit, 1986,

demonstrates it does not.’’ Reporter’s Transcript of

Proceedings, Appendix 1, p. 10.

Although the Seventh Circuit holds that civil rights

state action does not have the same meaning as the

antitrust state action, this Court has not addressed this

important issue. Indeed, this Court has not even ad-

dressed the narrower issue of whether the peer review

proceeding is state action for purposes of a civil rights

claim.

As previously discussed, the District Court dismissed

petitioner’s anti-trust portion of the Complaint because it

felt bound by Patrick v. Burget, Appendix 1, p. 8.’ Federal

courts have addressed the issue that peer review proceed-

ings are state action for purposes of antitrust immunity.

Sarin v. Samaritan Health Center, 813 F.2d 755 (6th Cir.

1987); Marrese v. Interqual, Inc., 748 F.2d 373 (7th Cir.

1984), cert. denied, 472 U.S. 1027 (1985); Miller v. Indi-

ana Hospital, 660 F.Supp. 250 (W.D. Pa. 1987); But see,

Tambone v. Memorial Hospital, 825 F.2d 1132 (7th Cir.

1987).

However, the related question of whether the peer

review proceeding is state action for purposes of a civil

rights claim has received scant attention. Ezpeleta v.

Sisters of Mercy Health Corporation, 800 F.2d 119 (7th

Cir. 1986). 7

Although the Oregon and California statutory schemes,

as far as they go, are identical, California does differ in

one significant and important aspect, in that California

reports and disseminates to hospitals and medical as-

"No reported California or federal decision has ever determined

whether the compulsory features of Sections 805 and 805.5 of the

Business and Professions Code invest peer review proceedings with

sufficient attributes of state action.

There is, however, a complex body of California law which allows

judicial review of private peer review actions because the proceeding

is treated as quasi-judicial. Section 1094.5(d) of California Code of

Civil Procedure; Anton v. San Antonio Community Hospital, 19 Cal.3d

802, 140 Cal.Rptr. 442 (1977); Pinsker v. Pacific Coast Society of

Orthodontists; 12 Cal.3d 541, 116 Cal.Rptr. 245 (1974); Strumsky v.

San Diego County Employees Retirement Association, 11 Cal.3d 28, 112

Cal.Rptr. 805 (1974); Bixby v. Pierno, 4 Cal.3d 130, 93 Cal.Rptr. 234

(1971).

sociations the results of any peer review proceeding ad-

verse to individual physicians.”

Civil rights jurisdiction exists in this case because

California Business and Professions Code §$ 805, et seq.,

Appendix 2, pp. 24-26, requires the reporting and dissemi-

nation of peer review results and is structurally analo-

gous to the Wisconsin posting statute condemned in

Wisconsin v. Constantineau, 400 U.S. 433, 507 (1971).

In this case, petitioner’s civil rights claims are bot-

tomed on the inadequacy of hospital procedures that

deny, inter alia, the right to counsel, and which ignore the

fact that the hospital can unilaterally choose a biased

hearing officer. California’s reporting and dissemination

requirements, like Wisconsin’s posting requirements,

deny federally protected rights without an adequate due

process hearing.

3. The interplay of the Health Care Quality Improve-

ment Act of 1986, 42 U.S.C. § 11111, et seq., (““HCQIA”’)

on petitioner’s claims further emphasizes the need for

granting this petition for a writ of certiorari. HCQIA

provides in pertinent part:

“(b) ADEQUATE NOTICE AND HEARING —

A health care entity is deemed to have met the

adequate notice and hearing requirement...if the

following conditions are met...

right —

“This California distinction, reporting of peer review results, has

been recently adopted by the Congress in the enactment of the Health

Care Quality Improvements Act of 1986, 42 U.S.C. § 11111, et seq.

HCQIA was applicable to federal anti-trust claims on November 14,

1986 and to state causes of action in 1989, § 11111(e).

(i) to representation by an attorney or other

person of the physician’s choice,...” 42 U.S.C.

§ 11112 (b) (3) (e) (1).

- The section by section analysis of the Act provides:

“For a professional review action to qualify for

protection from damages it must be taken:

In the reasonable belief that it is in furtherance

of quality care;

After a reasonable effort to obtain facts;

After adequate due process;

In the reasonable belief that the action was

warranted by facts known.

Characteristics of due process that would be

deemed adequate:

Notice of action, with reasons specified;

Right to hearing with notice of time, place, date,

and witnesses to testify;

Hearing held before arbitrator or hearing officer

or panel not in direct economic competition with

physician involved;

Right to representation, to copies of the record, to

call and examine witnesses, to present evidence,

and submit written statement;

Right to receive written recommendation and

decision.

Due process can be different in health emergencies

or under other applicable law.” (Emphasis added.)

The Committee on Energy and Commerce, H.R. No.

903, 99th Cong. 2nd sess. 6, reprinted in 1986 U.S.

Code Cong. and Admin. News 6384, 6388-6389.

The Committee’s views state that:

“The due process requirement can always be met by

procedures specified in subsection (b). If the proce-

dures specified in that subsection are provided, the

health care entity will be deemed to have met the due

process standard. If other procedures are followed

but are not precisely of the character spelled out in

subsection 102(b), the test of ‘adequacy’ may still be

met under other prevailing law.’’ (Emphasis added.)

Id. at 6393.

Thus, HCQIA requires a due process hearing, one

important feature of which is the right to retained coun-

sel. HCQIA makes it clear that what respondents did in

this case was a violation of a federally protected right

which is not immunized from either anti-trust review or

federal civil rights review in the federal courts because it

is done in bad faith. Thus, Congress was aware that a

faulty hearing procedure would result in a damage action

to redress these deprivations. We must assume Congress

passed HCQIA so that it would be consistent with other

enactments, such as the Civil Rights Act. This Court must

clarify the confusion before there are inconsistent rulings

on these issues.

CONCLUSIONS

Because the antitrust state action issue presented by

this case is identical to that of Patrick v. Burget, peti-

tioner requests this Court to issue the writ of certiorari.

Unable to pursue his Sherman Act claim because of the

Ninth Cireuit’s interpretation of an Oregon statutory

scheme, nearly identical to California’s, which deems the

elaborate peer review procedure to be state action under

the Sherman Act exemption, petitioner needs this Court’s

intervention prior to the hearing of his Ninth Circuit

appeal.

Further, this Court should determine the interrelation-

ship between state action for anti-trust purposes, state

action for Civil Rights Act jurisdiction under Sections

1983, 1985 and 1988, and the implication of the Health

Care Quality Improvements Act of 1986. The publie policy

behind the three implicated statutory schemes can and

should be reeoneiled to proteet the public, through the

competition in the delivery of health service and basic

civil rights in peer review proceedings. Only this Court, at

this time, has the preeminent authority to accomplish this

goal. Thus, petitioner, by separate motion, will ask that

this Court consolidate this ease with Patrick v. Burget so

that all sides of the-state action issue, the antitrust and

the civil rights sides, can be fully heard.

In addition, petitioner will move separately to appear

amicus curiae in Patrick v, Burget to present petitioner’s

anti-trust and civil rights positions and the interfacing of

these claims.

DATED: December 30, 1987

LAWRENCE SILVER

A Law Corporation

LAWRENCE SILVER,

Louis M. NATALI, JR.

and

BLECHER & COLLINS

MAXWELL BLECHER

Lawrence Silver,

Attorneys for Petitioner

Simon J. Pinhas, M.D.

APPENDIX 1

REPORTER’S TRANSCRIPT OF PROCEEDINGS

LOS ANGELES + CALIFORNIA, MONDAY,

SEPTEMBER 21, 1987

+ 10:00 A.M. SESSION

THE COURT: NO. 8, PINHAS.

MR. SILVER: LAWRENCE SILVER, YOUR

HONOR, FOR THE PLAINTIFF SIMON PINHAS.

MR. WAXMAN: MARK WAXMAN FOR THE

DEFENDANTS.

MR. SILVER: YOUR HONOR, THERE’S ALSO AN

ADDITIONAL APPEARANCE.

THE COURT: OH. GO AHEAD.

MS. ROSENBERG: ALICIA ROSENBERG FOR

THE PLAINTIFF, ALSO, MR. PINHAS.

THE COURT: THANK YOU. YOU FOLKS HAVE

SEEN THE COURT'S NOTES. IF YOU’D LIKE TO BE

HEARD, LL GIVE YOU UP TO FIVE MINUTES

EACH. OF COURSE, THE MOVING PARTY MAY GO

FIRST.

MR. WAXMAN: I THINK WE’LL SUBMIT ON THE

TENTATIVE. -

THE COURT: ALL RIGHT.

MR. SILVER: YOUR HONOR, IN LIGHT OF THE

COURT’S TENTATIVE, I BELIEVE I DO HAVE A

LABORING OAR.

THE COURT: I THINK YOU'RE RIGHT.

————

MR. SILVER: IF I MAY FIRST ADDRESS THE

ANTITRUST ISSUE, AND THAT IS, UNLESS I'M

WRONG, I THINK IT’S FRAMED IN THE TENTA-

TIVE WHETHER OR NOT PATRICK VERSUS

BURGET SURVIVES THE ENACTMENT OF THE

HEALTH CARE QUALITY IMPROVEMENT ACT. IT

IS OUR POSITION THAT PATRICK VERSUS BURGET

DOES NOT SURVIVE THE HEALTH CARE QUAL-

ITY IMPROVEMENT ACT AND THAT THERE IS A

SPECIFIC CONGRESSIONAL POLICY REASON

WHY THE COURT SHOULD BE MOVED TO

CHANGE THE TENTATIVE AFTERNOON RULING

IN THAT FASHION.

THAT IS, IF YOU EXAMINE, AS I’M SURE YOUR

HONOR HAS, ALL THE CONGRESSIONAL CON-

CERNS ABOUT, ON THE ONE HAND, FAIRNESS TO

COUNSEL AND FAIRNESS TO THE PHYSICIAN

WHO IS UNDER REVIEW, AS COMPARED TO PRO-

VIDING FOR A NATIONAL REPOSITORY OF IN-

FORMATION REGARDING PHYSICIANS WHO

PERFORM IN A FASHION LESS THAN SATISFAC-

TORY, CONGRESS AND THE GREAT THRUST OF

THE MATTER, IN ADDITION TO PROVIDING THE

ANTITRUST IMMUNITY, WAS TO PROVIDE FOR

THIS REPOSITORY.

NOW, IF THE COURT HOLDS, THAT IS THE JU-

DICIAL SYSTEM HOLDS, THAT IN STATES SUCH

AS ILLINOIS, INDIANA, NEW YORK, PENN-

SYLVANIA, CALIFORNIA, AND WASHINGTON, AS

A BEGINNING, BECAUSE THAT’S WHERE WE

HAVE DECIDED CASES, THAT THERE IS NO —

THAT ALL OF THESE TYPES OF PROCEEDINGS

ARE STATE ACTIONS, THEN DEFENDANTS, ORIN

THIS CASE, AND DEFENDANTS IN OTHER SIMI-

LAR CASES, CAN SAY, “WE NEED NOF COMPLY

AT ALL WITH THE HEALTH CARE QUALITY IM-

PROVEMENT ACT. WE NEED NOT GIVE DUE PRO-

CESS. WE NEED NOT GIVE INFORMATION TO

THE NATIONAL REPOSITORY. WE NEED NOT

BUY IN, BECAUSE WE ALREADY HAVE AN ABSO-

LUTE, COMPLETE IMMUNITY UNDER THE STATE

ACTION DOCTRINE.”

CONSEQUENTLY, IT SEEMS THAT — IT SEEMS,

YOUR HONOR, THAT IF THE PURPOSE OF CON-

GRESS WAS TO LET SUCH DEFENDANTS BUY

INTO ANTITRUST IMMUNITY, IN ORDER TO BUY

IN, THEY HAD TO DO CERTAIN THINGS. THEY

HAD TO, ONE, CONDUCT HEARINGS FAIRLY,

WHICH THEY HAVE NOT DONE HERE. THEY,

TWO, HAD TO PROVIDE A CERTAIN DEFENSE IN

THOSE HEARINGS, CERTAIN DEFENSE OBLIGA-

TIONS, WHICH HAS NOT BEEN DONE HERE. AND

LASTLY, IN ORDER TO BUY IN, THEY HAD TO

MAKE REPORTS TO THE NATIONAL CLEARING

HOUSE.

IF THE STATE ACTION DOCTRINE PROTECTS

THEM FULLY, WITHOUT ANY INVOLVEMENT

WITH HCQIA, THEN THERE IS NO REASON FOR

THEM TO BUY IN. THEY CAN CONTINUE TO GIVE

HEARINGS THAT LACK DUE PROCESS. THEY

CAN CONTINUE TO NOT PROVIDE INFORMATION

TO THE NATIONAL REPOSITORY. AND THERE-

FORE, BY SAYING THAT THE STATE ACTION DOC-

TRINE, AS ARTICULATED IN PATRICK VERSUS

BURGET, SURVIVES HCQIA IS TO INTERFERE

WITH CONGRESSIONAL INTENT.

IN ADDITION, YOUR HONOR, AS I HAND-DELIV-

ERED TO YOUR HONOR, AS WELL AS OPPOSING

EEE

COUNSEL, A CASE ON FRIDAY, TAMBONE VERSUS

MEMORIAL HOSPITAL, THE 7TH CIRCUIT CASE,

AND THE ONLY CASE THAT MENTIONS HCQIA,

IN THAT CASE THE COURT FOUND, AT LEAST ON

THE BASIS OF THAT RECORD, THAT THERE

WERE NOT SUFFICIENT FACTS TO DETERMINE

WHETHER OR NOT THE STATE ACTION DOC-

TRINE APPLIES.

SINCE MARRESE IS THE SEMINAL CASE OUT

OF THE 7TH CIRCUIT, IN WHICH IT SAYS THE

STATE ACTION DOCTRINE APPLIES, OF COURSE

PATRICK RELIES HEAVILY ON MARRESE, THAT

THE 7TH CIRCUIT NOW SAYS THAT YOU HAVE

SOME FACTUAL SHOWING AS TO WHETHER OR

NOT THE HAND OF THE STATE IS SUFFICIENTLY

INVOLVED IN CONNECTION WITH THE MATTER.

YOUR HONOR’S TENTATIVE RULING WOULD

MEAN THAT IN LIGHT OF THE ALLEGATIONS OF

THE COMPLAINT, BUT ON THE ALLEGATIONS OF

THE COMPLAINT, YOUR HONOR, IT WOULD DE-

TERMINE THAT THERE IS AN ABSOLUTE IMMU-

NITY AS A MATTER OF LAW WITHOUT ANY

FACTUAL SHOWING BY THE DEFENDANTS.

CONSEQUENTLY, I THINK FOR TWO REASONS

YOUR HONOR SHOULD, ONE, DETERMINE THAT

PATRICK VERSUS BURGET DOES NOT SURVIVE

HCQIA, AND, TWO —-AS WELL AS THE STATU-

TORY LANGUAGE; AND TWO, BECAUSE THERE

NEEDS TO BE A FACTUAL SHOWING. IF I NOW

MIGHT ADDRESS MYSELF TO THE CIVIL RIGHTS

ACTS, YOUR HONOR.

THE COURT: YOU EVER A MINUTE LEFT.

MR. SILVER: THAT IS A SHAME, YOUR HONOR,

BECAUSE I THINK THAT IT IS VERY IMPORTANT

IN TERMS OF —

THE COURT: YOU HAVE A MINUTE LEFT, IN

ANY EVENT.

MR. SILVER: I’M SORRY?

THE COURT: YOU HAVE A MINUTE LEFT.

MR. SILVER: THANK YOU, YOUR HONOR.

IF WE GO TO THE OLD NOTIONS OF WHAT THE

CIVIL RIGHTS ACT WAS SUPPOSED TO DO, YOU

TAKE A LOOK AT THE KU KLUX KLAN GOING TO

THE HOUSE OF A MINORITY AND SAYING, “I’M A

SHERIFF. COME WITH ME,” THAT A STATE AC-

TOR UNDER THE OLD CIVIL RIGHTS ACT AND

THE CURRENT CIVIL RIGHTS ACT IS A PERSON

WHO CLAIMS AUTHORITY UNDER COLOR OF

STATE LAW. THAT IS ALSO THE RULE, AND CON-

SEQUENTLY YOUR HONOR’S DETERMINATION

THAT THESE ARE NOT STATE ACTORS WITHIN

THE MEANING OF THE CIVIL RIGHTS ACT, I

THINK WOULD — THERE IS A TOTALLY PRIVATE

ACTION, QUOTE, “UNDER COLOR OF STATE

LAW.”

IN THE CASE THAT BOTH PARTIES RELY

UPON, LUGAR VERSUS EDMONDSON OIL, THERE A

PERSON ASKED THE SHERIFF TO DO SOME-

THING. A PRIVATE PERSON ASKED THE SHER-

IFF TO DO SOMETHING. AND THAT PRIVATE

PERSON WAS HELD TO BE IN VIOLATION AS A

STATE ACTOR IN VIOLATION OF THE CIVIL

RIGHTS ACT.

FURTHER, AS WE HAVE CITED, BOTH IN WIS-

CONSIN VERSUS CONSTANTINEAU, AS WELL AS

JOHN MARSHALL VERSUS SAWYER, THERE WERE

PRIVATE PARTIES INVOLVED IN THE STATE AC-

TION PROCESS, AND THAT WOULD BE SUFFI-

CIENT CONDUCT UNDER THE THREAT OR COLOR

OF STATE LAW TO BRING THEM WITHIN THE

STATE ACTION DOCTRINE.

THE COURT: THANK YOU MR. SILVER.

MR. SILVER: THANK YOU, YOUR HONOR.

‘THE COURT: COUNSEL WISH TO RESPOND?

MR. WAXMAN: JUST BRIEFLY, YOUR HONOR.

FIRST, THE HEALTH ACT CITED OBVIOUSLY

DOESN’T APPLY BECAUSE OF THE DATE IN-

VOLVED AND THE EXEMPTION WHICH THEY

FAILED TO POINT OUT, BOTH OF THOSE POINTS.

THE MEDICAL STAFF CASE, PATRICK, STILL IS

THE LAW OF THE 9TH CIRCUIT. AND OF MOST

INTEREST IS THEY NEVER CITE EZPELETA, THE

LEADING CASE THAT THE COURT CITED ITSELF

THE FIRST TIME AROUND.

SO NOTHING REALLY HAS CHANGED THIS

TIME FROM LAST TIME, AND I THINK THE

COURT’S TENTATIVE SHOULD STAND.

THE COURT: ALL RIGHT. WELL, FIRST OF ALL,

AS TO THE ANTITRUST CLAIM, IT SEEMS TO THIS

COURT THAT IMMUNITY DOES EXIST OF NECES-

SITY, AND OF NECESSITY IT MUST. IT’S CLEAR

TO THE COURT THAT, AT LEAST IN CALIFORNIA,

HOSPITALS ARE AMONG THE MOST REGULATED

INSTITUTIONS. THAT'S MADE CLEAR BY THE

PLEADING IN THIS CASE, EVEN IF THE COURT

DIDN’T BOTHER PICKING UP THE CALIFORNIA

ADMINISTRATIVE CODE AND THE CALIFORNIA

CODES THEMSELVES.

- THAT’S BECAUSE THE COURTS IN THIS STATE,

AND PROPERLY SO, AND THE LEGISLATURE OF

THIS STATE, DESIRE TO HAVE A VERY HIGH

QUALITY MEDICAL CARE FOR THE CITIZENS OF

CALIFORNIA. THE REGULATORY SCHEME IN-

CLUDES, OF COURSE, THE BOARDS OF MEDICAL

EXAMINERS, BOARDS TO EXAMINE THE

NURSES, THE B.M.Q.A., PEER REVIEW COMMIT-

TEES, AND A GOOD DEAL OF ADDITIONAL

SUPERVISION.

THE POLICIES ARE FURTHERED, ALSO,

THROUGH COMMON LAW PRINCIPLES WHICH

HOLD HOSPITALS LIABLE FOR THE TORTS OF

THEIR MEDICAL STAFF UNDER MANY CIRCUM-

STANCES. IN ADDITION, OF COURSE, CALIFOR-

NIA HAS ENACTED A NUMBER OF IMMUNITY

STATUTES TO PROTECT THE PEOPLE WHO PAR-

TICIPATE IN THE PEER REVIEW PROCESS AND

AMONG THOSE, OF COURSE, ARE CALIFORNIA

CIVIL CODE 43.7 AND 43.8, 47-2 — AND HAS ALSO

ENACTED REPORTING LAWS SO THAT THE

BOARDS CAN ACCUMULATE INFORMATION AND

THEREBY ATTEMPT TO PROTECT THE PUBLIC.

IN MARRESE VERSUS INTERGARD, INC., AT 748

FED. 2D 373, THE 7TH CIRCUIT CASE REFERRED

’ TO HERE, 1984 CASE, THE COURT DID CONSIDER

THE APPLICATION OF THE STATE ACTION DOC-

TRINE IN A PRIVATE HOSPITAL SETTING

UNDER LAWS QUITE SIMILAR TO CALIFORNIA’S,

AND IT CONCLUDED THAT THE ANTITRUST

LAWS DID NOT APPLY.

iz 8

THAT COURT ALSO RECOGNIZED THE DI-

LEMMA THAT’S IMPOSED UPON HOSPITALS AND

THEIR GOVERNING BOARDS AND THEIR STAFFS

BY THE EXPECTATIONS OF OUR SOCIETY.

THOSE INDIVIDUALS ARE PLACED BETWEEN

THE SCYLLA OF SUITS BY INJURED PATIENTS

AND THE CHARYBDIS OF SUITS BY DISGRUN-

TLED DOCTORS WHO ARE DENIED OR TERMI-

NATED FROM PRIVILEGES.

THE STATES HAVE TRIED TO GIVE SOME PRO-

TECTION AGAINST THIS. AND IT SEEMS TO THE

COURT IT WOULD BE MOST INAPPROPRIATE FOR

THE COURT TO NOW DETERMINE THAT THESE

ACTORS ARE TO BE THREATENED WITH ANTI-

TRUST LIABILITY WHEN THEY'RE WORKING

WITHIN A REVIEW PROCESS.

BY THE WAY, THAT VERY PROCESS DOES PRO-

VIDE, AT LEAST UNDER CALIFORNIA STATE

LAW, FOR ULTIMATE REVIEW BY THE COURTS

OF THE STATE SO THAT A PROPER CONTROL

CAN BE KEPT OVER THE DAMAGE THAT COULD

BE CAUSED BY INAPPROPRIATE ACTIONS. AND

AS COUNSEL KNOW, THAT APPEARS IN C.C.P.

1094.5. THE 9TH CIRCUIT APPEARS TO BE IN

AGREEMENT WITH THAT APPROACH, AS SHOWN

BY PATRICK VERSUS BURGET. AT 800 FED. 2D 1498,

9TH CIRCUIT, 1986.

NOR DOES THE COURT THINK THAT THE RE-

CENT LEGISLATION BY CONGRESS, ASSUMING

IT APPLIES TO THIS CASE, WAS INTENDED TO

CUT BACK ON THE ANTITRUST IMMUNITY AND

THEREFORE TO MAKE IT EASIER TO SUE PEER

REVIEW PARTICIPANTS IN HOSPITALS IN

STATES LIKE OREGON AND CALIFORNIA WHICH

ALREADY HAVE COMPREHENSIVE LAWS REGU-

LATING THIS AREA.

THE GENESIS AND THE HISTORY OF THAT

LEGISLATION SUGGESTS TO THIS COURT AN IN-

TENT TO PROVIDE ADDITIONAL SAFE HARBOR

PROTECTION FOR THOSE PERSONS AND ENTI-

TIES AND NOT LESS PROTECTION. THE RECENT

CASE THE COURT’S BEEN CITED TO, THE COURT

WILL NOTE, DID INDICATE THAT IN THE STATE

THERE CONSIDERED, THE 7TH CIRCUIT WAS

NOT DEALING WITH LAWS LIKE THOSE THAT

ARE ENFORCED AS THEY ARE IN CALIFORNIA,

AS OPPOSED TO WHAT IT WAS DEALING WITH

IN MARRESE. 7

THE LONG AND THE SHORT OF IT IS THAT

PUBLIC POLICY MAKES IT QUITE CLEAR THAT

PEOPLE WHO PARTICIPATE IN THE ASSURANCE

OF MEDICAL QUALITY SHOULD BE PROTECTED

FROM HAVING TO FACE ANTITRUST LAWSUITS

SUCH AS THIS ONE. AND MOST COURTS AND

MOST LEGISLATIVE BODIES WHO HAVE AD-

DRESSED THE ISSUES HAVE FOUND THAT, FOR

ONE REASON FOR OTHER.

IT SEEMS QUITE APPROPRIATE IN THIS CASE

IF THE STATE ACTION DOCTRINE CONTINUES AS

IT HAS IN THE PAST AND THE CONGRESSIONAL

LEGISLATION BE READ AS CONFERRING THE

ADDITIONAL PROTECTION, AND INDEED TO

TAKE THE CASE LIKE THE ILLINOIS CASE, IT

MAY INDEED CONFER PROTECTION IN STATES

WHICH HAVE NO OTHER PROCESS FOR PROTEC-

TION OF THEIR OWN, AS OPPOSED TO THOSE

SUCH AS OREGON AND CALIFORNIA.

AS TO THE CIVIL RIGHTS ACTION, HERE

AGAIN, THE COURT SEES NO CAUSE OF ACTION

SPELLED OUT. SIMPLY PUT, NO CIVIL RIGHTS

CONSPIRACY CAN BE SHOWN, AS THERE’S NO

ACTION OF THE STATE THAT IS IMPLICATED IN

THE DEEDS OF THESE DEFENDANTS.

THE COURT RECOGNIZES THE POSSIBILITY

OF A CLAIM THAT IF THERE IS OR IS NOT STATE

ACTION FOR THE PURPOSES OF ANTITRUST

DOCTRINE, THEN THE SAME MUST HOLD FOR

THE CIVIL RIGHTS CLAIM. BUT THAT, OF

COURSE, WOULD BUY INTO THE LOGICAL FAL-

LACY OF ASSUMING THAT THE USE OF SOME

WORD OR PHRASE IN TWO DIFFERENT CON-

TEXTS CONVEYS THE SAME MEANING IN BOTH

OF THOSE CONTEXT. IT DOES NOT. AND

EZPELETA VERSUS SISTERS OF MERCY HEALTH

CORPORATION, AT 800 FED. 2D 119, 7TH CIRCUIT,

1986, DEMONSTRATES IT DOES NOT.

THERE’S NOTHING TO SUGGEST THE STATE

HAS PARTICIPATED IN ANY WAY IN THE PEER

REVIEW PROCESS OF THE PLAINTIFF. AND IT

SEEMS TO THE COURT THAT IT ALMOST BOR-

DERS ON THE FRIVOLOUS TO STATE THAT THE

MERE FACT THAT THE RESULTS OF THAT PRO-

CESS ARE TO-BE REPORTED CONVERTS THE

ACTIONS OF THE DEFENDANT INTO STATE AC-

TIONS FOR THESE PURPOSES. MOREOVER, IT

SEEMS TO THE COURT RATHER INAPPROPRIATE

TO RELY ON 43 U.S. CODE 1085 WHERE THERE’S

NO RACIAL OR SIMPLY CLASS-BASED ANIMUS

PLED OR SHOWN.

AS TO DECLARATORY RELIEF, THE COURT BE-

LIEVES THE DEFENDANTS ARE CORRECT IN

THEIR CONTENTION THAT THEY ARE DECID-

EDLY THE WRONG PEOPLE TO BE CONTESTING

WHETHER THE CALIFORNIA OR FEDERAL RE-

PORTING STATUTES ARE CONSTITUTIONAL.

FIRST OF ALL, IT CAN BE SAID THAT THE CON-

TROVERSY IS HARDLY RIPE, SINCE AS THE

COURT UNDERSTANDS IT, THE HOSPITAL PRO-

CEEDING IS NOT YET FINAL AND CERTAINLY

HASN’T MADE ITS WAY TO THE COURT.

SECONDLY AND MORE IMPORTANTLY, THE

PLAINTIFF SEEKS TO REQUIRE THE DEFEND-

ANTS TO DEFEND A STATE POLICY, AND NOW A

FEDERAL POLICY, THAT REQUIRES THEM TO

REPORT THEIR ACTIONS, OR ALLOWS THEM TO.

IT WOULD BE STRANGE INDEED TO FIND THAT

THE DEFENDANTS CARE ONE WAY OR THE

OTHER ABOUT WHETHER THOSE POLICIES

STAND OR FALL, AT LEAST IN THE SENSE THAT

THEY MUST MAKE REPORTS.

IT CERTAINLY IS COUNTERINTUITIVE TO FIND

THAT THOSE WHO ARE FORCED TO FILE RE-

PORTS TO THE GOVERNMENT ARE THE ONES TO

DEFEND THE GOVERNMENT’S DEMAND FOR

THE REPORTS. IT SEEMS TO ME THAT IF THE

PLAINTIFF WANTS A REVIEW OF CALIFORNIA’S

POLICY OF REPORTING IN THIS REGARD, THEN

THESE ARE NOT THE PARTIES TO SEEK IT

FROM. NOR DOES IT SEEM TO THE COURT THAT

IT’S JUST OR PROPER TO IMPOSE THE COST OF

DEFENDING FEDERAL AND STATE POLICIES OF

THIS NATURE UPON THESE PARTICULAR PAR-

TIES, A NUMBER OF DOCTORS IN A PRIVATE

HOSPITAL.

BEYOND THAT, THE COURT THINKS THAT IT

WOULD BE QUITE INAPPROPRIATE TO PROCEED

WITH DECLARATORY RELIEF IN THIS SORT OF

SITUATION, WERE IT TO FIND IT OTHERWISE

SHOULD DO SO, BECAUSE IT WOULD BE SIMPLY

UNFAIR AND UNJUST TO THESE PARTIES. IT

WOULD BE INEQUITABLE. AND THE COURT

FEELS THAT IF IT HAD TO DO SO, IT WOULD

SIMPLY EXERCISE ITS DISCRETION TO REFUSE

TO GO FORWARD WITH DECLARATORY RELIEF

AGAINST THESE INDIVIDUALS.

FOR ALL OF THOSE REASONS, THE MOTIONS

TO STRIKE FOR FAILURE TO STATE A CAUSE OF

ACTION SHOULD BE AND HEREBY ARE

GRANTED. HOWEVER, CONSIDERING THE NA-

TURE OF THE ISSUES INVOLVED HERE, THE

COURT IS CERTAINLY NOT GOING TO IMPOSE

RULE 11 SANCTIONS AT THIS TIME. THE COURT

WILL AGREE THAT IN SOME WAYS ONE IS

SURELY TEMPTED TO IMPOSE SUCH SANCTIONS,

PARTICULARLY WHEN A PLAINTIFF SEEMS TO

SIMPLY BE STRIKING OUT AT EVERYBODY IN

SIGHT, INCLUDING EVEN THE DEFENDANTS’

LAWYERS, IN AN ATTEMPT TO DRAG EVERYONE

HE CAN THINK OF INTO A LAWSUIT.

NEVERTHELESS, IN THE POSTURE OF THIS

PARTICULAR CASE AT THIS TIME, THE COURT IS

NOT ABLE TO FIND THAT RULE 11 SANCTIONS

SHOULD BE IMPOSED, SINCE IT IS NOT CON-

VINCED THAT THE RULE 11 STRICTURES HAVE

BEEN VIOLATED.

THAT’LL BE THE RULING OF THE COURT. THE

MOTION, AS I SAY, IS GRANTED, WITHOUT

LEAVE TO AMEND. THE COURT SEES NO PUR-

POSE IN GRANTING LEAVE TO AMEND AT THIS

TIME. I DON’T SEE HOW THE PARTIES COULD

POSSIBLY CURE WHAT I SEE AS THE BASIS FOR

THE CIVIL PROCESS AND LEGAL DEFENSE. I

THINK THEY STATED WHAT THEY HAD TO

STATE AS WELL THEY CAN.

WOULD COUNSEL PLEASE PREPARE AN AP.-

PROPRIATE FORMAL ORDER.

MR. WAXMAN: I WILL, YOUR HONOR.

IN VIEW OF THE FACT COURT HAS OBVIOUSLY

SPENT A GREAT DEAL OF TIME ANALYZING THE

ISSUES HERE, I WONDER IF THE COURT WOULD

GIVE SOME CONSIDERATION TO PUBLISHING

THIS OPTION. AS THE COURT KNOWS, THIS

COMES UP ALL THE TIME BETWEEN HOSPITALS

ON STATUTES AND MEDICAL STAFFS, AND SUCH

AN OPINION WOULD BE OF GREAT ASSISTANCE

IN CLARIFYING THE LAW IN THE AREA, IN THAT

IT IS SOMEWHAT A NEW AREA.

THE COURT: WELL, LL GIVE IT SOME CONSID-

ERATION. BUT FROM LOOKING OVER HERE AT

PLAINTIFF’S COUNSEL, I HAVE A SNEAKING

SUSPICION THAT THEY’RE GOING TO BE ASKING

FOR CLARITY FROM A MORE AUGUST BODY

THAN THIS COURT, AND YOU WILL PROBABLY

HAVE A PUBLISHED OPINION OF EVEN

GREATER IMPORT AND VALUE BEFORE LONG,

BUT I WILL CONSIDER IT.

MR. WAXMAN: THANK YOU.

MR. SILVER: YOUR HONOR, THERE’S ONE, I

BELIEVE, HOUSEKEEPING MATTER THAT WE

SHOULD ADVISE THE COURT OF, AND THAT IS

PLAINTIFFS DID BRING INTO THIS ACTION THE

STATE OF CALIFORNIA AND THERE IS A STIPU-

LATION FLOATING, THAT HAS LEFT MY OFFICE

AND MAY HAVE REACHED MR. WAXMAN’S OF-

FICE, ON IT’S WAY DOWN TO THE STATE OF

CALIFORNIA TO DISMISS THE STATE AS A

PARTY DEFENDANT TO THIS ACTION.

I BELIEVE THAT WITH LEAVE, BY THE WAY,

AND PLAINTIFF ABSOLUTELY, TO BRING THEM

BACK IN, IN THE EVENT THAT THE DEFEND-

ANTS ASSERTED THEY WERE A NECESSARY

PARTY, IN ORDER TO SHORT-CIRCUIT ANY

OTHER PROBLEMS AND PATHS TO THE CIRCUIT,

I WOULD NONETHELESS ASK YOUR HONOR TO

SIGN THAT ORDER DISMISSING THE STATE OF

CALIFORNIA, AS WELL AS THE ORDER DIS-

MISSING THE ACTION, SO THAT IF WE DO SEEK

CIRCUIT REVIEW THERE IS NO SHORT-CIRCUIT-

ING IT BY THIS STIPULATION. I’D WANT A FINAL

ORDER, IN OTHER WORDS

THE COURT: SURE. AND I WOULD THINK THAT

IF THE STATE OF CALIFORNIA’S DISMISSED

AND I GRANTED THESE MOTIONS TO DISMISS

WITHOUT LEAVE TO AMEND, WE'VE GOT NOTH-

ING LEFT. YOU’VE GOT A FINAL ORDER. AM I

NOT CORRECT?

MR. SILVER: WELL, THAT’LL HAVE TO AWAIT

THE SIGNING OF THE STIPULATION AS WELL AS

YOUR HONOR’S SIGNING OF THIS ORDER.

THE COURT: CORRECT.

MR. SILVER: THANK YOU, YOUR HONOR.

THE COURT: OKAY.

(PROCEEDINGS ADJOURNED.)

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Peeters ou

APPENDIX 2

FIRST AMENDED COMPLAINT FOR VIOLATION

OF CONSTITUTIONAL RIGHTS AND CIVIL

RIGHTS (42 U.S.C. § 1983 and § 1985(3)); DECLAR-

ATORY JUDGMENT AND TREBLE DAMAGES FOR

VIOLATION OF SECTION 1 OF THE SHERMAN

ANTI-TRUST ACT AND INJUNCTIVE RELIEF

DEMAND FOR JURY TRIAL

STATEMENT AS TO JURISDICTION

1. This civil action arises under the Constitution of the

United States and 42 U.S.C. § 1983, § 1985, and § 1988; 28

U.S.C. § 2201 and § 2202, and 15 U.S.C. § 1.

2. This court has jurisdiction of the action under 28

U.S.C. § 1331, § 13837 and § 1343, and 15 U.S.C. $4 and

§ 15.

3. The matter in controversy exceeds Ten Thousand

Dollars ($10,000), exclusive of interest and costs.

VENUE

4. Venue is proper pursuant to 28 U.S.C. §§ 1391 and

1392.

PARTIES

5. Plaintiff, Simon J. Pinhas, M.D., (“Dr. Pinhas’’) is

a physician and surgeon duly licensed by the defendant,

State.of California, Board of Medical Quality Assurance

and has limited his practice to that of eye physician and

ophthalmological surgeon. Plaintiff presently, and at all

times stated herein, was a Board certified surgeon, having

been certified in 1982. Plaintiff has been engaged in the

practice of medicine and surgery since 1977 and as such

as “gaged in interstate commerce. Until the grievances

hereinafter complained of, plaintiff was a member, in good

standing, of the defendant Medical Staff of Midway Hos-

pital. Plaintiff is a citizen of the United States and a

resident of the State of California and this judicial

district.

6. Defendant Summit Health Ltd. (“Summit Health’’)

is a corporation authorized to do business pursuant to the

laws of the State of California and is the parent of

Midway Hospital and Medical Center. Summit Health is

engaged in interstate commerce and owns and operates

approximately 19 hospitals and 49 nursing home facilities

in California, Arizona, Colorado, Oregon, Iowa, Washing-

ton, Texas and Saudi Arabia.

7. Defendant Midway Hospital Medical Center (‘‘Mid-

way Hospital’’) is engaged in interstate commerce and is

a general hospital organized and existing pursuant to the

laws of the State of California and conducts its business

by providing medical facilities and medical care in Los

Angeles, California.

8. Defendant Medical Staff of defendant Midway Hos-

pital (“Medical Staff’) is an unincorporated association

of physicians engaged in interstate commerce practicing

medicine at Midway Hospital with its principal place of

activity located at Los Angeles, California. Defendant

Medical Staff, in a conspiracy with other defendants, has

wrongfully summarily suspended plaintiff and has com-

menced and prosecuted an unjustified, illegal and uncon-

stitutional peer review proceeding (‘Peer Review

Proceeding”) against plaintiff.

9. Mitchell Feldman (“‘Mr. Feldman’) at all times

mentioned herein was the regional vice-president of de-

fendant Summit Health, a citizen of the State of Califor-

nia, and a resident of this judicial district, and he, along

with others yet unknown to the plaintiff, has caused,

directly or indirectly, the commencement and prosecution

of the Peer Review Proceeding against plaintiff in viola-

tion of plaintiff's rights.

10. Defendant August Reader, M.D. (“Dr. Reader’’)

is a physician and surgeon duly licensed by the defen-

dant, State of California, Board of Medical Quality As-

surance and has limited his practice to that of eye

physician and ophthalmological surgeon and is competi-

tion with plaintiff Dr. Pinhas. Dr. Reader is engaged in

interstate commerce and is a member of the defendant

Medical Staff, a citizen of the State of California, and a

resident of this judicial district, and he, along with others

yet unknown to the plaintiff, has caused, directly or

indirectly, the commencement and prosecution of the

Peer Review Proceeding against plaintiff in violation of

plaintiff's rights.

11. Defendant Arthur Lurvey, M.D. (“Dr. Lurvey”’) is

a physician and surgeon duly licensed by the defendant,

State of California, Board of Medical Quality Assurance

and at all times mentioned herein was the Chief of Staff of

Midway Hospital. Dr Lurvey is engaged in interstate

commerce, is a citizen of the United States, resident of

the State of California and a resident of this judicial

district, and he, along with others yet unknown to the

plaintiff, has caused, directly or indirectly, the commence-

ment and prosecution of the Peer Review Proceeding

against plaintiff in violation of plaintiff's rights.

12. Defendant Richard E. Posell (“Mr. Posell’’) is,

and at all times herein mentioned was engaged in inter-

state commerce and was, an attorney at law, duly admit-

ted and practicing law in the State of California and is a

citizen of the United States, resident of the State of

California and a resident of this judicial district, and has

caused, directly or indirectly, the prosecution of the Peer

Review Proceeding against plaintiff in violation of plain-

tiff’s rights.

13. Defendant Jonathan I. Macey, M.D. (““Dr. Macy’’)

is a physician and surgeon duly licensed by the defen-

dant, State of California, Board of Medical Quality As-

surance and has limited his practice to that of eye

physician and ophthalmological surgeon and is in compe-

tition with plaintiff Dr. Pinhas. Dr Macy is engaged in

interstate commerce and is a member of the defendant

Medical Staff, a citizen of the State of California, and a

resident of this judicial district, and he, along with others

yet unknown to the plaintiff, has caused, directly or

indirectly, the commencement and prosecution of the

Peer Review Proceeding against plaintiff in violation of

plaintiffs rights.

14. Defendant James J. Salz, M.D. (Dr. Salz’’) is a

physician and surgeon duly licensed by the defendant,

State of California, Board of Medical Quality Assurance

and has limited his practice to that of eye physician and

“Ophthalmological surgeon and is in competition with

plaintiff Dr. Pinhas. Dr. Salz is engaged in interstate

commerce and is a member of the defendant Medical

Staff, a citizen of the State of California, and a resident of

this judicial district, and he, along with others yet un-

known to the plaintiff, has caused, directly or indirectly,

the commencement and prosecution of the Peer Review

Proceeding against plaintiff in violation of plaintiff's

rights.

15. Defendant Gilbert Perlman, M.D. (“Dr. Perl-

man”) is a physician and surgeon duly licensed by the

defendant, State of California, Board of Medical Quality

Assurance and has limited his practice to that of eye

cee aaadit.

physician and ophthalmological surgeon and is in compe-

tition with plaintiff Dr. Pinhas. Dr. Perlman is engaged in

interstate commerce and is a member of the defendant

Medical] Staff, a citizen of the State of California, and a

resident of this judicial district, has caused, directly or

indirectly, the commencement and prosecution of the

Peer Review Proceeding against plaintiff in violation of

plaintiff's rights.

16. Defendant Peggy Farber (Ms. Farber”) is em-

ployed by defendants Summit Heath and Midway Hospi-

tal in their Risk Management Section. At the direction of

her employers and others, she was charged with (a)

securing the information which was placed in the false

charges brought against Dr. Pinhas and (b) interfering

with Dr. Pinhas’ defense against those charges at the

Peer Review Proceedings. Ms. Farber is a citizen of the

State of California, and a resident of this judicial district.

17. Defendant Mark A. Kadzielski (“Mr. Kadzielski’’)

is a principal of defendant Weissburg & Aronson Inc.,

and at all times herein mentioned was engaged in inter-

state commerce and was, an attorney at law, duly admit-

ted and practicing law in the State of California. Mr.

Kadzielski is a citizen of the State of California, and a

resident of this judicial district, and has caused, directly

or indirectly, the commencement and prosecution of the

Peer Review Proceeding against plaintiff in violation of

plaintiff's rights.

18. Defendant Weissburg & Aronson Ince. (“W&A’’) is.

engaged in interstate commerce and is a professional

corporation engaged in the practice of law in the State of

California and this judicial district, and has caused,

directly or indirectly, the commencement and prosecution

of the Peer Review Proceeding against plaintiff in viola-

tion of plaintiff's rights.

19. Defendant State of California, Board of Medical

Quality Assurance (“BMQA”’) is an agency of the State

of California created by and existing pursuant to Busi-

ness and Professions Code, $2000 et seq. Defendant

BMQA is charged with the responsibility of enforcing,

among others, Sections 805, 805.1 and 805.5 of the Cali-

fornia Business and Profession Code as well as Section

423 et. seq. of the Health Care Quality Improvements Act

of 1986, 42 U.S.C. § 11133, et. seq.

20. Relief is sought against each and all defendants,

as well as their agents, assistants, successors, employees,

attorneys, representatives and all persons acting in con-

cert or in cooperation with them or at their direction.

FACTUAL ALLEGATIONS

21. From October, 1981 through the present, plaintiff

Dr. Pinhas, a diplomat of the American Board of Ophthal-

mology, has been a member of the defendant Medical

Staff. As such, he has had the right to cause the admis-

sion of his patients to defendant Midway Hospital and to

use defendant Midway Hospital’s facilities for the care

and treatment of his patients, including, but not limited

to, the facilities to perform eye surgery.

22. By reason of his training, experience and skill, Dr.

Pinhas holds a national and international reputation as a

specialist in corneal eye problems. He performs general

eye surgery and specifically cornea transplants, cataract

removal, and interocular lens replacements. Because of

his training, experience and skill, Dr. Pinhas is able to

perform these surgeries with a high level of success and

with few, if any, complications. One of the reasons for his

success is the rapidity with which he, as distinguished

from his competitiors, can perform such surgeries. The

speed with which such surgery can be completed benefits

the patient because the exposure of cut eye tissue is

drastically reduced. Some of Dr. Pinhas’ competitors

regularly require, on the average, six times the length of

surgical time to complete the same procedures as Dr.

Pinhas. Because of his reputation, skill and successes Dr.

Pinhas has performed more surgeries than any other

ophthalmic surgeon at Midway Hospital during the rele-

vant time period.

23. Prior to February, 1986, the common practice in

Los Angeles County was to have most eye surgeries,

especially cataract extractions, performed by a primary

surgeon and a second, assistant surgeon. This practice

required by the defendant Medical Staff, the (“assistant

surgeon requirement’’), significantly increased the cost of

such eye surgeries.

24. In February 1986, the administrators of Medicare,

the federal health insurance program for the elderly,

determined that assistant surgeons were not necessary in

connection with the performance of such eye surgeries

and refused, henceforth, to provide reimbursement for the

charges of any such assistant.

25. Certain ophthalmic surgeons of staff at defendant

Midway Hospital, including plaintiff Dr. Pinhas, re-

quested that the defendant Medical Staff modify its

assistant surgeon requirement. Nearly all hospitals in

Southern California, except defendant Midway Hospital

and Cedars-Sinai (whose Medical Staff overlaps with that

of defendant Midway Hospital), abolished the assistant

surgeon requirement at or about the time that Medicare

made its change. The request to eliminate the assistant

surgeon requirement at Midway Hospital was denied and

remains in effect at the time of the filing of this First

Amended Complaint.

26. The consequence of the failure to make the change

was that surgeons, such as the plaintiff, would have to

compensate their competitors to be their assistants dur-

ing surgery since Medicare would no longer compensate

such assistants. Plaintiff Dr. Pinhas advised the adminis-

tration of Midway Hospital that the additional costs to

him of the Medical Staff’s refusal to eliminate the assis-

tant surgeon requirement would be about $60,000 per

year. Dr. Pinhas, expressing a desire to keep the bulk of

his practice at defendant Midway Hospital, nonetheless

stated that he would move his practice if the assistant

surgeon requirement was not abolished.

27. On or about January 26, 1987 defendants Summit

Health and Midway Hospital, seeking to resolve the

difficulty created by defendant Medical Staff’s refusal to

abolish the assistant surgeon requirement and Medicare’s

refusal to reimburse for assistant surgeons. Defendant

Summit Health and Midway Hospital offered a ‘“sham”’

contract to Dr. Pinhas, a true and correct copy of this

“sham” contract is attached hereto and made a part

hereof as Exhibit “A”. The scheme provided by this

“sham” contract was to “hire” Dr. Pinhas for $36,000 per

year (later raised orally to $60,000 per year) to perform

certain services, except, Dr. Pinhas would never be ealled

upon to do such work. The “sham” contract was a vehicle

by which defendants Summit Heath and Midway Hospital

would pay Dr. Pinhas for continuing to bring patients to

Midway Hospital. When the “sham” contract was ex-

plained to Dr. Pinhas, he was told that many of the

members of the defendant Medical Staff had similar

contracts, and that the Chief of the defendant Medical

Staff, defendant Dr. Lurvey, was aware of this proposed

contract and the other “sham” contracts.

28. Dr. Pinhas refused to in anyway participate in

such a scheme, refused to sign the contract, and refused

to return the contract, even after defendant Dr. Lurvey,

acting on behalf of himself, defendant Summit Health,

defendant Mr. Feldman, defendant Midway Hospital and

defendant Medical Staff threatened that plaintiff's failure

to do so would cause a review of his charts and possible

Peer Review Proceedings. Nevertheless, defendants Sum-

mit Health and Midway Hospital made one monthly

payment of $5000 to Dr. Pinhas. This payment was

“hidden” in a reimbursement check to Dr. Pinhas and was

promptly recorded by Dr. Pinhas as an overpayment and

a credit against the amount of defendants Midway Hospi-

tal and Summit Health otherwise owed Dr. Pinhas.

29. By letter dated April 13, 1987 (“April 13, 1987

letter’), and without prior notice or an opportunity for a

hearing, Dr. Pinhas was advised by defendants Summit

Health and Midway Hospital, through defendants

Dr. Lurvey and Mr. Feldman, that he was summarily

suspended as of that immediate date. As such, Dr. Pinhas

was deprived of all medical staff privileges, including the

right to admit his patients and to perform surgical proce-

dures. The April 13, 1987 letter stated that such action

was the result of a “medical staff review of Dr. Pinhas’

medical records, with consideration as to the questions

raised regarding: indications for surgery; appropriateness

of surgical procedures in light of patient’s medical condi-

tion; adequacy of documentation in medical records; and

ongoing pattern of identified problems.” (A true and

correct copy of the April 13, 1987 letter is attached hereto

as Exhibit “B” and made a part hereof.)

30. By the same April 13, 1987 letter, Dr. Pinhas was

advised that the Midway Hospital Medical Executive

Committee (“Midway Executive Committee”) would econ-

vene to review and consider the action within 10 days.

31. On April 20, 1987 the Midway Executive Commit-

tee met. After an initial meeting from which Dr. Pinhas

was excluded, the Executive Committee invited him into

the meeting room and requested that Dr. Pinhas make a

statement. Lacking ‘sufficient notice, unprepared, con-

fused and without benefit of legal or fellow staff advice, he

asked what the charges were, and was told that the letter

of April 13, 1987 was self-explanatory. Thereafter,

Dr. Pinhas attempted to reply briefly.

32. By letter dated April 20, 1987, the same date of

that meeting, defendants Midway Hospital and Summit

Health notified Dr. Pinhas that the Midway Executive

Committee had upheld the summary suspension with the

recommendation to terminate his staff privileges at Mid-

way Hospital. He was also informed that the Midway

Hospital Board of Directors had coneurred with the

Midway Executive Committee’s recommendation. (A true

~ and correct copy of the April 20, 1987 letter is attached

hereto as Exhibit “C” and made a part hereof.)

33. In accordance with the Midway Hospital Medical

Staff Bylaws (“Bylaws”, a true and correct copy of the

relevant portions of which are attached hereto as Exhibit

“D” and made a part hereof), Dr. Pinhas requested a

hearing by the Midway Hospital Judicial Review Commit-

-tee (“Judicial Review Committee’) by letter dated

- April 30, 1987. (A true and correct copy of the April 30,

1987 letter is attached hereto as Exhibit “E”’ and made a

part hereof.)

34. In his April 30, 1987 letter, Dr. Pinhas made

certain procedural and discovery requests, including the

right to be represented by retained counsel, the right to

full disclosure with sufficient particularity of all charges

against him, the right to an impartial hearing officer, and

the right to an unbiased, unprejudiced hearing panel.

35. On May 7, 1987 Dr. Pinhas received Midway Hos-

pital’s Notice of Hearing (“May 7, 1987 Notice’) from

defendants Midway Hospital and Summit Health,

through defendant Mr. Feldman, scheduling the Judicial

Review Committee’s proceedings to commence on May 12,

1987. (A true and correct copy of the May 7, 1987 Notice

is attached -hereto as Exhibit “F”’ and made a part

hereof. )

36. The May 7, 1987 Notice, according to the Bylaws,

is also meant to serve the function of notifying a Respon-

dent before the Judicial Review Committee of the charges

that are being made against him. Those charges as con-

tained in the May 7, 1987 Notice were rendered in broad,

general terms. The Notice listed “specific charts” that the

Hospital contended would support those charges. But the

charts identified were not made available to Respondent

as of the date of May 7, 1987 Notice. Approximately 128

eharts were identified, though some appeared to be

duplicates.

37. The May 7, 1987 Notice announced the appoint-

ment, by defendant Dr. Lurvey, of the members of the

Judicial Review Committee and the appointment of the

Hearing Officer, defendant Mr. Posell. All of the physi-

cians who are included as members of the Judicial Review

Committee are dependent upon the defendants Midway

Hospital and Summit Health for their economic livelihood

and professional activities. The members of the Judicial

Review Committee, members of the defendant Medical

Staff, together with defendants Summit Health, Midway

Hospital, Dr. Lurvey, Mr. Feldman and Mr. Posell are

represented by the same counsel, defendant W&A. W&A

has represented the other defendants in connection with

the preparation of the false and unjustified charges

brought against plaintiff Dr. Pinhas.

38. The Judicial Review Committee, over the objection

of Dr. Pinhas, included physicians who were and are in

direct economic and professional competition with plain-

tiff Dr. Pinhas: John Hofbauer, M.D. and Stephen Seiff,

M.D.

39. The May 7, 1987 Notice, in a summary fashion

dismissed some of Dr. Pinhas’ procedural and discovery

requests, and stated that the Judicial Review Committee

had unanimously voted not to permit Dr. Pinhas to be

represented by an attorney at law at the hearing.

40. On May 9, 1987, Dr. Pinhas filed his Objections to

the Notice of Hearing (“Objections”). (A true and cor-

rect copy of Dr. Pinhas’ Objections is attached hereto as

Exhibit “G”’ and made a part hereof.)

41. In his Objections, Dr. Pinhas contended that the

May 7, 1987 Notice did not provide a reasonable quantum

of time in which he could prepare, present, and have

decided the preliminary Motions that he believed had to

be resolved — with respect to procedure and substance —

prior to the hearing of his matter. Moreover, Dr. Pinhas

argued that without more specific information, and with-

out possession and sufficient review and analysis of docu-

mentary evidence, the Judicial Review Committee

hearing, as established and scheduled, contravened his

rights under the United States and California Constitu-

tions, the laws of the State of California, and the contrac-

tual obligations imposed upon defendant Midway

Hospital and the defendant Medical Staff to fair notice

and a rational and meaningful opportunity to be heard.

42. In his Objections, Dr. Pinhas requested that the

Judicial Review Committee sustain those objections and

dismiss the Notice of Hearing as totally defective.

43. On May 12, 1987, the administration of defendants

Midway Hospital and Summit Health did not act upon

the objection, but treated it as a request for a continuance

and granted Dr. Pinhas a two week continuance,

rescheduling the Judicial Review Committee hearing for

May 26 and 27, 1987.

44. Because the May 7, 1987 Notice of Hearing named

defendant Mr. Posell as the Hearing Officer, on May 8,

1987, Dr. Pinhas, through his counsel Lawrence Silver, -

sent Mr. Posell a letter requesting that he respond to

certain questions in order that Dr. Pinhas could deter-

mine whether to file a challenge to Mr. Posell sitting as

the Hearing Officer. (A true and correct copy of the

May 8, 1987 letter is attached hereto as Exhibit “H” and

made a part hereof.)

45. By letter (“Posell letter”) dated May 11, 1987,

Mr. Posell refused to respond to Dr. Pinhas’ request. (A

true and correct copy of the Posell letter is attached

hereto as Exhibit “I’’ and made a part hereof.)

46. On May 14, 1987, Dr. Pinhas, through his counsel,

filed 15 Motions with respect to procedural and discovery

issues, including Motions regarding his request for repre-

sentation by counsel and his request that Mr. Posell

respond to certain voir dire questions in order to ascer-

tain any bias, prejudice, or interest on Mr. Posell’s part.

(True and correct copies of these Motions are attached

hereto as Exhibit “J” and made a part hereof.)

47. On information, knowledge and belief, plaintiff

alleges that defendant Mr. Posell is biased and

prejudiced against he and his counsel, Lawrence Silver,

ine

and that Mr. Posell and members of the law firm of which

he is a partner, Shapiro, Posell & Close, serve as hearing

officers at the_request of defendant W&A in cases where

W&A represents the hospital. There is a unity of interest

between defendants W&A and Mr. Posell. Mr. Posell and

his law firm are-retained and continue to be retained as

counsel to the Hospital because Mr. Posell ensures that

Judicial Review Committees achieve the results that

W&A and the clients of W&A desire. Mr. Posell and

Shapiro, Posell & Close have an economic interest in the

outcome of the Peer Review Proceeding and had such an

economic interest at the outset because his continued

employment by defendant Summit Health, defendant

Midway Hospital, defendant W&A and the defendant

Kadzielski depends upon his continued rulings in favor of

the defendant Midway Hospital’s position and against

physicians who are in the same position as Dr. Pinhas.

48. On May 18, 1987, Mr. Posell wrote to Dr. Pinhas’

counsel and reiterated that the May 7, 1987 Notice ad-

vised Dr. Pinhas that the Judicial Review Committee had

unanimously voted not to permit either Dr. Pinhas or the

Medical Staff to be represented by an attorney at law at

the hearing. Mr. Posell further stated that neither the

Hearing Officer nor the Judicial Review Committee may

eonsider Motions or requests made “in any phase of the

hearing or appeal procedure by an attorney at law unless

the Hearing Committee, in its discretion, permits both

sides to be represented by legal counsel.” Mr. Posell cited

Bylaw Article VIII, Section 2(b), stating further that Dr.

Pinhas’ counsel’s continued participation was a violation

of that Bylaw. (A true and correct copy of Mr. Posell’s

May 18, 1987 letter is attached hereto as Exhibit “K” and

made a part hereof.) ;

49. On May 19, 1987, Dr. Pinhas’ counsel asked defen-

dant Mr. Posell to recuse himself because of bias and

prejudice and to answer three questions related to his ex

parte communications with counsel for the defendant

Midway Hospital, and for clarification of his ruling. (A

true and correct copy of the letter to Mr. Posell dated

May 19, 1987 is attached hereto as Exhibit “L” and made

a part hereof.) Mr. Posell has not responded to that

letter.

50. On May 19, 1987, Dr. Pinhas, appearing in propria

persona, refiled the same 15 Motions respecting procedu-

ral and discovery matters, specifically including: the re-

quest to be represented by counsel; the request that the

Hearing Officer respond to the voir dire questions submit-

ted to him; the request for the full disclosure with particu-

larity of the charges against him; and the request that Dr.

Pinhas’ motions be heard and decided at a reasonable

time prior to the commencement of the hearing.

51. On May 21, 1987, defendant Mr. Posell denied

nearly all of the Motions filed by Dr. Pinhas. (A true and

correct copy of the letter from Mr. Posell dated May 21,

1987 is attached hereto as Exhibit “M” and made a part

hereof. )

52. The alleged peer review hearings concerning Dr.

Pinhas commenced on May 26 and proceeded for a total

of six hearing sessions which were concluded on June 12,

1987.

53. During the course of the hearings, defendants

Summit Health, Midway Hospital, the Medical Staff, Mr.

Posell, Mr. Kadzielski, W&A, Dr. Perlman, Mr. Feldman,

Dr. Lurvey and Ms. Farber, engaged in conduct to de-

prive plaintiff Dr. Pinhas of a fair hearing.

54. On information, knowledge and belief, plainti

alleges that defendants Mr. Kadzielski and W&A, ¢

rectly and indirectly, had improper ex parte communie

tions with defendant Mr. Posell.

55. On information, knowledge and belief, plainti

alleges that defendants Mr. Kadzielski and W&A, d

rectly and indirectly, had improper ex parte communie

tions with members of the Judicial Review Committee.

56. On information, knowledge and belief, plainti

alleges that defendant Dr. Perlman had improper ¢

parte communications with members of the Judicial R

view Committee.

57. On information, knowledge and belief, plainti

alleges that defendants Dr. Lurvey, the Medical Sta‘

Summit Health, Midway Hospital had improper ex par

communications with members of the Judicial Revie

Committee.

58. On information, knowledge and belief, plainti

alleges that defendant Mr. Posell had improper ex part

communications with members of the Judicial Revie

Committee.

59. Defendants Summit Health, Midway Hospita

Medical Staff and others sought to, and did in fae

intimidate witnesses Dr. Pinhas sought to eall as wi

nesses in his defense of the case, including the threat «

initiating Peer Review Proceedings against physiciar

who might testify on behalf of Dr. Pinhas.

60. Defendants Summit Health, Midway Hospita

Medical Staff, Ms. Farber and others sought to, and di

in fact, intimidate witnesses Dr. Pinhas sought to eall ¢

witnesses in his defense of the case.

61. On June 1, 1987, at approximately 6:30 p.m., defen-

dant Ms. Farber of Midway Hospital’s Risk Management

Section approached a table in the cafeteria where Marina

Nino, Barbara Aviles, Rose Pierce and Suprani Watana,

all of whom were employed by defendants Summit Health

and Midway Hospital, were sitting while they were wait-

ing to be called into the hearing regarding Dr. Pinhas’

privileges. Ms. Farber said the following:

a. “I want to prepare you for what you are getting

yourselves into.”

b. “You don’t have to do this.”

e. “You can leave if you want to. You will not be

persecuted or harassed if you leave.”

d. “You are on your own, the hospital will not pay

for your time.”

e. “It is going to be like a court in there. There is a

court stenographer. Everything you say will be taken

down and under oath.”

_ f. “You will each be called, one by one, you will not

be allowed to go in as a group.”

g. “You will be questioned in there by doctors, you

will be cross-examined.”

62. Shortly thereafter, Kay Deol, an administrator of

defendant Midway Hospital and an employee of defend-

ants Summit Health, Midway Hospital and Mr. Feldman,

came over to the table and she and defendant Ms. Farber

stayed around and hovered around the cafeteria for the

rest of the evening. (True and correct copies of the

declarations dated June 9, 1987 of Marina Nino and

Barbara Aviles are attached hereto as Exhibit ‘“N” and

made a part hereof.)

63. Defendants Summit Health, Midway Hospital,

Medical Staff, Mr. Kadzielski, W&A, Mr. Posell, Mr.

Feldman, and Dr. Lurvey, precluded plaintiff Dr. Pinhas

from examining two important witnesses, Mr. Feldman,

the person who signed the charges against Dr. Pinhas and

Dr. Lurvey, Chief of Staff who allegedly authorized the

charges against Dr. Pinhas. Said defendants refused to

produce Mr. Feldman and Dr. Lurvey as witnesses for

cross-examination even though, -

a. Mr. Feldman signed the charges,

b. Dr. Lurvey was listed in Exhibit “F’’, the

charges, as a witness who would appear at the hear-

ing, and

e. Dr. Pinhas and his representative repeatedly

requested that they appear at the hearing and testify

truthfully. (A true and correct copy of Dr. Pinhas’

request to Dr. Lurvey and Mr. Feldman to appear

are attached hereto as Exhibit “O” and made a part

hereof.)

64. It is custom and practice in California that during

the peer review proceeding, even if the Judicial Review

Committee does not permit counsel to be present at the

hearing, counsel is permitted to be on the grounds of the

hospital to confer with his client during appropriate

breaks in the proceeding.

65. Defendant Mr. Posell issued an order ordering

counsel for Dr. Pinhas, who had been listed as a witness,

excluded from the Hospital grounds during any portion

of the hearing, while permitting counsel for the Hospital,

Mr. Kadzielski and/or associates of W&A, not only to

utilize hospital facilities, but also to communicate with

the prosecutor, defendant Dr. Perlman.

66. Defendant Mr. Posell acted not only as Hearing

Officer but also as counsel for defendant Midway Hospi-

tal and the Medical Staff, and ruled and continued to

rule, without legal or factual justification, adversely to

Dr. Pinhas.

67. Defendant Mr. Posell, acting as counsel for the

Medical Staff, refused to allow Dr. Pinhas to have

counsel.

68. Defendant Mr. Posell made rulings during the

course of the entire proceeding to frustrate and interfere

with plaintiff Dr. Pinhas’ ability to defend against the

charges brought against him.

69. Defendant Mr. Posell ruled that Dr. Pinhas’ coun-

sel’s correspondence would not be answered, and yet

eomplied with all requests of defendants Mr. Kadzielski

and W&A.

70. Defendant Mr. Posell intentionally ordered wit-

nesses not to testify to the fact that defendant Dr. Macy

and defendant Dr. Salz, who testified adversely to Dr.

Pinhas at the hearing, also engaged in the same similar

eonduct with which Dr. Pinhas was charged. Mr. Posell

precluded them from being identified by witnesses who

were prepared to identify Dr. Macy and Dr. Salz to

establish what the “standard in the community” was.

Defendant Mr. Posell declined to permit Dr. Pinhas and

his physician representative to have breaks and time to

eonfer. In addition, Mr. Posell issued time requirements

which were inherently unfair, and_ substantially

prejudiced Dr. Pinhas. Mr. Posell, on the other hand,

always considered and granted whatever requests were

made by the prosecutor defendant Dr. Perlman.

71. Defendant Mr. Posel] precluded testimony and

evidence from being presented by Dr. Pinhas, and made

hostile verbal comments to Dr. Pinhas, his physician

representative and witnesses who appeared on behalf of

Dr. Pinhas on and off the record made before the Judicial

Review Committees.

72. Defendant Mr. Kadzielski and W&A retained, as

they have done in the past, the services of Lacey Short-

hand Reporting Service (‘““Lacey Reporters”), over whom

they seek to exercise and do exercise control by reason of

the substantial business they place with Lacey Reporters.

Dr. Pinhas needed a copy of the transcript in order to

adequately examine witnesses and prepare cross-examina-

tion. Plaintiff Dr. Pinhas, through counsel, ordered a copy

of the transcript from Lacey Reporters on an expedited

basis. Notwithstanding the order, defendant Mr. Kadziel-

ski and W&A ordered Lacey Reporters not to produce the

transcript. On the same day as defendant Mr. Kadzielski

and W&A issued their instructions to Lacey Reporters,

eounsel for Dr. Pinhas inquired how the preparation of

the transcript was coming and was advised that Lacey

Reporters could not produce a transcript in any timely

fashion by which Dr. Pinhas could be able to use it for

successive hearings. Upon information, knowledge and

belief, plaintiff alleges that Lacey Reporters did so at the

request of defendants Mr. Kadzielski and W&A. A day or

so later Lacey Reporters agreed to produce the tran-

seript, but not before the date that its utility for cross-

examination would have passed and at a page rate of

$12.00 per page.

73. Defendant Mr. Posell, after he heard from other

defendants that plaintiff Dr. Pinhas, through counsel, was

trying to secure a transcript, and while the hearing was

pending, called Dr. Pinhas on the telephone. During that

telephone conversation Mr. Posell called Dr. Pinhas a liar

and threatened him by saying that Dr. Pinhas’ attempts

to get a copy of the transcript would cause him problems

in the future.

74. On June 29, 1987 Dr. Pinhas received in the mail a

document entitled “Report and Decision of the Judicial

Review Committee (“Report and Decision”) (a copy of

the Report and Decision is attached hereto as Exhibit

a at 2

75. Upon information, knowledge and belief, plaintiff

alleges that defendant Mr. Posell drafted the purported

Report and Decision in an effort to protect defendants

Summit Health, Midway Hospital, the Medical Staff, Dr.

Lurvey, Mr. Feldman and himself from liability, and that

such report was inconsistent with the findings and deter-

minations of the Judicial Review Committee.

76. Although the alleged Report and Decision pur-

ports to bear the signature of the Chairman of the Judi-

cial Review Committee, Ellis Berkowitz, M.D.; it does not.

Plaintiff on information knowledge and belief alleges that

this alleged Report and Decision is not reflective of the

determination of that tribunal. Plaintiff on information

knowledge and belief alleges that this alleged Report and

Decision was signed by an agent of defendants Summit

Health, Midway Hospital, the Medical Staff, Mr. Feldman

and Dr. Lurvey, without the authorization of each mem-

ber of the Judicial Review Committee.

77. On July 6, 1987 the defendant Medicai Staff ap-

pealed the decision of the Judicial Review Committee to

the Governing Board of defendant Midway Hospital (a

copy of the appeal of Defendant Medical Staff is attached

hereto and made a part hereof as Exhibit “Q”’).

78. On July 7, 1987 Plaintiff Dr. Pinhas appealed the

purported decision of the Judicial Review Committee to

the Governing Board of the Defendant Midway Hospital

(a copy of the appeal of plaintiff Dr. Pinhas is attached

hereto as Exhibit “R’’).

FIRST CLAIM FOR RELIEF

(For Declaratory Relief Against Defendants Summit

Health, Midway Hospital, Medical Staff, Mr. Feldman,

Dr. Lurvey and BMQA Because They are Violating the

Constitution of the United States by Enforcing and

Participating in the Enforcement of Section 805 and

805.5 of the California Business and Professions Code

and Section 423, et seq of the Health Care Quality

Improvement Act of 1986, 42 U.S.C. § 11133)

79. Plaintiff incorporates Paragraphs 1 through 78,

inclusive, above by reference as though set forth in full

herein.

80. Defendants, and each of them, are estopped from

denying, that the actions which the defendants have

taken, and the actions which are threatened by the de-

fendants, have been done and are being done pursuant to

and under authority of the laws of the State of California

and the laws of the United States.

81. Defendants, and each of them, are estopped from

denying that they have acted, claim to act, and threaten to

continue to act, pursuant to, under the authority of, and

within the protection of:

a. Section 70703, et seq., of the California Admin-

istrative Code;

b. Section 805 of the California Business and Pro-

fessions Code;

e. Section 805.5 of the California Business and

Professions Code;

d. Section 805.1 of the California Business and

Professions Code;

e. Section 1094.5 of the California Code of Civil

Procedure and the case law decided thereunder;

f. Sections 1156 and 1157 of the California Evi-

dence Code;

g. Section 43.7 of the California Civil Code;

h. Other provisions of the laws of the State of

California and the case law decided thereunder; and

i. Sections 423 et seq. of the Health Care Quality

Improvements Act of 1986, 42 U.S.C. § 11133, et. seq.

82. To maintain licenses, health care facilities regu-

larly must review privilege termination and restriction

procedures to assure their conformity to applicable law.

The California Administrative Code § 70703(a) requires

that the Hospital “shall have an organized medical staff

responsible to the governing body for the adequacy and

quality of the medical care rendered to patients in the

hospital.” According to Title 22, California Administra-

tive Code, § 70701(a)(1)(F), a Hospital must have a

governing body which must adopt written bylaws, in

accordance with legal requirements and its community,

which shall include “self-government by the medical staff

with respect to the professional work performed in the

hospital....” The governing body shall “assure that the

medical staff bylaws, rules and regulations are subject to

governing body approval..., and these bylaws shall in-

clude an effective formal means for the medical staff, as a

liaison, to participate in the development of all hospital

policy.” Id. at (8), (9).

83. When a health care facility terminates or restricts

the privileges of a physician, it must promptly report to

the defendant BMQA all facts and circumstances that

caused the termination or restraint pursuant to Section

805 of the California Business and Professions Code,

which reads as follows:

“California Business and Professions Code $805

The chief executive officer and the chief of the

medical staff, where one exists, of any health facility

licensed pursuant to Division 2 (commencing with

Section 1200), or any medical, psychological, dental

or podiatric professional society, or mecical specialty

society described in Section 43.7 of the Civil Code, or

any health care service plan or medical care founda-

tion shall report to the ageney which issued the

license, certificate or similar authority when any

licensed physician and surgeon, psychologist, podia-

trist, or dentist is denied staff privileges, removed

from the medical staff of the institution or if his or

her staff or membership privileges are restricted for

a cumulative total of 45 days in any calendar year for

any medical disciplinary cause or reason. The reports

shall be made within 20 working days following such

removal or restriction, shall be certified as true and

correct by the chief executive officer and the chief of

the medical staff, where one exists, and shall contain

a statement detailing the nature of the action, its

date and all of the reasons for, and circumstances

surrounding, the action. If the removal or restric-

tions is by resignation or other voluntary action that

was requested or bargained for in lieu of medical

disciplinary action, the report shall so state.

The reporting required herein shall not act as a

waiver of confidentiality of medical records and com-

mittee reports. The information reported or disclosed

shall be kept confidential except as provided in sub-

division (ce) of Section 800, provided that a copy of

the report containing the information required by

this section may be disclosed as required by Section

805.5 with respect to reports received on or after

January 1, 1976. The Board of Medical Quality As-

surance, the Board of Osteopathic Examiners, and

the Board of Dental Examiners shall disclose such

reports as required by Section 805.5. A file contain-

ing reports received pursuant to this section shall be

maintained by the agency receiving the reports for a

minimum of five years after receipt.

No person shall ineur any civil or criminal liability

as the result of making any report required by this

section.

Failure to make a report pursuant to this section shall

be a misdemeanor punishable by a fine of not less than

two hundred dollars ($200) nor more than one thousand

two hundred dollars ($1,200).”

84. Pursuant to Section 805.5 of the California Busi-

ness and Professions Code, hospitals are required to

request from BMQA information regarding any adverse

determination made pursuant to the peer review process

contained in BMQA’s records. The pertinent parts of

Section 805.5 of the California Business and Professions

Codes read as follows:

“California Business and Professions Code § 805.5

(a) Prior to granting or renewing staff privileges

for any physician and surgeon, clinical psychologist,

podiatrist, or dentist, any health facility licensed

pursuant to Division 2 (commencing with Section

1200) of the Health and Safety Code, or any health

eare service plan or medical care foundation, or the

medical staff of any such institution, shall request a

tities

report from The Board of Medical Quality Assur-

ance, the Board of Osteopathic Examiners, or the

Board of Dental Examiners to determine if any

report has been made pursuant to Section 805 indi-

eating that the applying physician and surgeon,

clinical psychologist, podiatrist, or dentist has been

denied staff privileges, been removed from a medical

staff, or had bis staff privileges restricted as pro-

vided in Section 805. The request shall include the

name and California license number of the physician

and surgeon, clinical psychologist, podiatrist, or den-

tist. Furnishing of a copy of the 805 report shall not

cause the 805 report to be a publie record.

(b) Upon a request made by an institution de-

seribed in subdivision (a) or its medical staff, which

is received on or after January 1, 1980, the board

shall furnish a copy of any report made pursuant to

Section 805. However, the board shall not send a

copy of a report where the denial, removal, or restric-

tion was imposed solely because of the failure to

complete medical records.

In the event that the board fails to advise such

institution within 30 working dayz following its re-

quest for a report required by this section, the insti-

tution may grant or renew staff privileges for the

physician and surgeon, clinical psychologist, podia-

trist, or dentist.

(ec) Any institution described in subdivision (a)

or its medical staff which violates the provisions of

subdivision (a) is guilty of a misdemeanor and shall

be punished by a fine of not less than two hundred

dollars ($200) nor more than one thousand two

hundred dollars ($1,200).”

85. California Business and Professions Code § 850.1

provides that the state licensing agency, defendant

BMQA, is entitled to inspect and copy statements of

charges, documents, medical charts or exhibits in evi-

dence; and any opinion findings or conclusions relating to

any disciplinary proceeding resulting in an action subject

to § 805 of the Business and Professions Code reporting

provisions.

86. A hospital’s decision terminating and restricting

privileges are judicially reviewable pursuant to Section

1094.5 of the California Code of Civil Procedure. (A copy

of the text of Section 1094.5 is attached hereto as Adden-

dum “A”’.)

87. Peer review proceedings are confidential pursuant

to California Evidence Code Sections 1156 and 1157. (A

copy of the text of Sections 1156 and 1157 are attached

hereto as Addendum “B”.)

88. California provides immunity to participants in the

peer review process pursuant to Section 43.7 of the

California Civil Code. (A copy of the text of Section 43.7

is attached hereto as Addendum “C”’.)

89. Defendants are estopped from denying that they

have been, are presently, and will be acting under color of

authority of law and the protection afforded to them

provided by the laws of the State of California and of the

United States. All defendants are engaged in the enforce-

ment and execution of the laws of the State of California,

and more particularly, an alleged peer review process

directed to plaintiff at defendant Midway Hospital. As a

result of defendants’ wrongful conduct, plaintiff has been

deprived of his constitutionally protected rights.

90. Defendant BMQA is the “Board of Medical Exam-

iners” as defined by the Health Care Quality Improve-

)

ment Act of 1986, Section 423, et. seq. § 11133 which

provides, in pertinent part:

“See. 423. REPORTING OF CERTAIN PRO-

FESSIONAL REVIEW ACTIONS TAKEN BY

HEALTH CARE ENTITIES([, 42 U.S.C. § 11133].

(a) REPORTING BY HEALTH CARE

ENTITIES. —

(1) ON PHYSICLANS. — Each health eare en-

tity which —

(A) takes a professional review action that

adversely affects the clinical privileges of a phy-

sician for a period longer than 30 days;

(3) INFORMATION TO BE REPORTED. —

The information to be reported under this subsec-

tion is —

(A) the name of the physician or practitioner

involved,

(B) a description of the acts or omissions or

other reasons for the action or, if known, for the

surrender, and

circumstances of the action or surrender as the

Secretary deems appropriate.

(b) REPORTING BY BOARD OF MEDICAL

EXAMINERS. — Each Board of Medical Examin-

ers shall report, in accordance with section 424,

the information reported to it under subsec-

tion (a) and known instances of a health care

. ee

entity's failure to report information under

subsection (a) (1).

zs = *#

See. 425. DUTY OF HOSPITALS TO OBTAIN

INFORMATION, [42 U.S.C. § 11135].

(a) IN GENERAL. — It is the duty of each

hospital to request from the Secretary (or the

agency designated under section 424(b)), on and

after the date information is first required to be

reported under section 424(a)) —

(1) at the time a physician or licensed health

care practitioner applies to be on the medical

staff (courtesy or otherwise) of, or for clinical

privileges at, the hospital, information reported

under this part concerning the physician or

practitioner, and

(2) onee every 2 years information reported

under this part concerning any physician or such

practitioner who is on the medical staff (cour-

tesy or otherwise) of, or has been granted

clinical privileges at, the hospital.

A hospital may request such information at

other times. See. 427. MISCELLANEOUS

PROVISIONS [, 42 U.S.C. § 11137].

(a) PROVIDING LICENSING BOARDS

AND OTHER HEALTH CARE ENTITIES

WITH ACCESS TO INFORMATION. — The See-

retary (or the ageney designated under section

424(b)) shall, upon request, provide information

reported under this part with respect to a physi-

cian or other licensed health care practitioner to

State licensing boards, to hospitals, and to other

health care entities (including health maintenance

organizations) that have entered (or may be enter-

ing) into an employment or affiliation relationship

with the physician or practitioner or to which the

physician or practitioner has applied for clinical

privileges or appointment to the medical staff.

* * *

PORTING. — No person or entity shall be held

liable in any civil action with respect to any report

made under this part without knowledge of the

falsity of the information contained in the report.

(d) INTERPRETATION OF INFORMA-

TION. —In interpreting information reported

under this part, a payment in settlement of a

medical malpractice action or claim shall not be

construed as creating a presumption that medical

malpractice has occurred.”

91. Defendant BMQA is charged with the enforcement

of the Health Care Quality Improvement Act of 1986, see

Section 423, et. seq.

92. Defendant BMQA asserts that the following is

required pursuant to Sections 805 of the California Busi-

ness and Professions Code and pursuant to Section 423 of

the Health Care Quality Improvements Act of 1986:

a. Defendant Midway Hospital, by its administra-

tor, and defendant Dr. Lurvey, as Chief of Staff of

Midway Hospital, are required pursuant to Section

805 of the California Business and Professions Code

to submit a “Section 805 report” to it.

b. Defendant Midway Hospital is required, pursu-

ant to Section 423 of the Health Care Quality Im-

provements Act of 1986, to make a “Section 423

report” to it. ne

ec. Absent notice and an opportunity for hearing,

the Section 805 report, or the contents thereof, shall,

pursuant to Business and Professions Code Section

805.5, be distributed to (a) all health eare facilities

where plaintiff Dr. Pinhas has staff privileges, upon

reappointment to the staff, and (b) all hospitals

where Dr. Pinhas may apply for staff privileges.

d. Absent notice and an opportunity for hearing,

the Section 423 report, or the contents thereof, shall,

pursuant to Section 423 of the Health Care Quality

Improvements Act of 1986, be distributed, within two

years, to (a) all health care facilities where plaintiff

Dr. Pinhas has staff privileges, upon reappointment

to the staff, and (b) all hospitals where Dr. Pinhas

may apply for staff privileges.

93. Defendants Summit Health, Midway Hospital, the

Medical Staff, Mr. Feldman and Dr. Lurvey have

threatened to file and continue to threaten to file a

Section 805 report and a Section 423 report.

94. Defendant Midway Hospital’s chief executive of-

ficer and defendant Dr. Lurvey may claim immunity of

the content of the filing of a Section 805 report even if

that content is incorrect, misleading or malicious pursu-

ant to Section 805 of the Business and Professions Code.

95. Defendant Midway Hospital and defendant Dr.

Lurvey may claim immunity of the content of the filing of

a Section 423 report even if that content is ineorrect,

misleading or malicious pursuant to Section 427 of the

Health Care Quality Improvements Act of 1986, 42 U.S.C.

§ 11137(e).

96. Dr. Pinhas has no control over the wording that is

contained in the Section 805 report or Section 423 report

from defendant Midway Hospital and defendant Dr.

Lurvey.

97. The Section 805 report and the Section 423 report

was, or will be, prepared and the wording was selected

within the complete discretion of defendant Midway Hos-

pital and defendant Dr. Lurvey.

98. Defendant Midway Hospital and defendant Dr.

Lurvey are not required to submit, in advance, and do not

intend to submit, in advance of their filing it with BMQA,

the form of Section 805 report or Section 423 report to

Dr. Pinhas.

99. Defendant Midway Hospital and defendant Dr.

Lurvey are not required to provide Dr. Pinhas, and will

not provide Dr. Pinhas, with a copy of the Section 805

report or the Section 423 report after it has been filed

with BMQA.

100. The Section 805 report and the Section 423 report

or the content there of shall be distributed to other

hospitals, physicians and others pursuant to the statute,

regardless of the content of the reports.

101. Any receipt of the Section 805 report or Section

423 report, the maintenance of the Section 805 report or

the Section 423 report, or the distribution of the Section

805 report or the Section 423 report, is done with the

funds of the State of California, is done pursuant to the

authority provided by the statutes of the State of Califor-

nia, more particularly, the California Business and Pro-

fessions Code Sections 805 and 805.5 and the Health Care

Quality improvements Act of 1986. The obligation of

hospitals, to secure information contained in the Section

805 report or Section 423 reports for physicians whose

staff privileges are being renewed or who seek staff

privileges, is compelled and criminal sanctions may apply

to those who do not, pursuant to the laws of the State of

California, more particularly the California Business and

Professions Code Sections 805 and 805.5 and the Health

Care Quality Improvements Act of 1986.

- 102. It is common practice in California, for every

hospital who seeks appointment or reappointment of a

physician to the medical staff, to require that the physi-

cian disclose whether or not they have had medical staff

privileges suspended, terminated, or any action taken

thereon.

103. It is common practice in California for hospitals,

after the decision in Elam v. College Park Hospital, 132

Cal.App.3d 332, 183 Cal.Rptr. 156 (1982) to preclude

admission to the hospital staff if a physician has a report

that in any way casts any doubt on his competency to

practice medicine or engages in any conduct which may

adversely affect patient care.

104. Plaintiff Pinhas contends and seeks the declara-

tion of this Court that § 805 and § 805.5 of the Business

and Professions Code of the State of California as inter-

preted and implemented by the acts of the defendants,

including defendant BMQA, violates the Constitution of

the United States and more particularly the 14th and 5th

Amendments thereto in that Dr. Pinhas’ rights to due

process of law, the equal protection of the laws and his

rights to privacy secured to him by the Constitution of the

United States are violated.

105. Defendants contend and seek a declaration to the

contrary.

106. Plaintiff Pinhas contends and seeks a declaration

of this Court that Section 423 et. seq. of the Health Care

Quality Improvements Act of 1986 violates the Constitu-

tion of the United States and more particularly the 5th

Amendment thereto in that Dr. Pinhas’ rights to due

process of law, the equal protection of the laws and his

rights to privacy secured to him by the Constitution of the

United States are violated.

107. Defendants contend and seek a declaration to the

contrary.

108. It is necessary and appropriate that this dispute

between plaintiff Dr. Pinhas and defendants be adjudi-

cated and determined promptly, so that the parties to this

litigation may know their rights and obligations under the

laws and Constitution of the United States and because

failure to determine this dispute will result in irreparable

injury to Dr. Pinhas.

SECOND CLAIM FOR RELIEF

(For Damages for Violations of Plaintiff's Constitutional

Rights and the Civil Rights Act, 42 U.S.C. § 1983 by

Defendants Summit Health, Midway Hospital, Medical

Staff, Mr. Feldman, Dr. Reader, Dr. Lurvey, Mr.

Posell, Dr. Maey, Dr. Salz, Dr. Perlman, Ms. Farber,

Mr. Kadzielski, W&A, and Each of Them)

109. Plaintiff incorporates Paragraphs 1 through 78

and 80 through 103, inclusive, above by reference as

though set forth in full herein.

110. Dr. Pinhas has been summarily, knowlingly, and

intentionally deprived of the status and his property

interest in membership on Midway Hospital’s medical

staff, including admitting and surgical privileges at Mid-

way Hospital, without prior notice or an opportunity to be

heard.

111. By virtue of the unjustified and unlawful Peer

Review Proceeding which has been commenced and is

continuing to be prosecuted against Dr. Pinhas, defend-

ants and each of them have been, are presently, and will

be acting under the color of authority and law of the State

of California and of the United States. Defendants and

each of them claim that they are engaged in the enforce-

ment and execution of the laws of the State of California

and the peer review process. Under such circumstances,

Dr. Pinhas is entitled to due process rights under the

United States Constitution.

112. Defendants, and each of them, by denying Dr.

Pinhas representation by counsel, full disclosure with

particularity of the charges against Dr. Pinhas and by

refusing to take action on plaintiff's request that Dr.

Pinhas’ Motions be heard and decided at a reasonable

time prior to the commencement of the hearing, are acting

in contravention of procedures required by due process.

Further, defendants and each of them, by denying plain-

tiff his right to an unbiased, unprejudiced, detached

hearing officer, and by appointing the Judicial Review

Committee that consists of members who are in active

economic and professional competition with plaintiff and

of defendant’s own medical staff and subject to the

control, persuasion and undue influence of defendants, is

farther depriving defendant of a fair opportunity to be

heard as guaranteed to him by the due process and equal

protection clauses of the Constitution of the United

States. Further, improper ex parte communications be-

tween counsel for the Medical Staff, the hearing officer,

the Judicial Review Committee members, the prosecutor,

and officers of the Hospital deny plaintiff a fair hearing

- consistent with due process. Further, defendants’ intimi-

dation of witnesses, depriving witnesses of the plaintiff

from attending the hearing, threatening plaintiff's coun-

sel with arrest and ordering him off Hospital grounds

during the hearing — even though he was listed as a

witness, ordering witnesses not to testify to facts helpful

to plaintiff Dr. Pinhas, vilifying plaintiff, his physician

representative, his witnesses, and interfering with plain-

tiff's ability to timely get a copy of the transcript of

proceedings deprive plaintiff of due process of law.

113. Based on the conduct of defendants, and each of

them, as set forth above, Dr. Pinhas has been deprived of j

his rights in violation of the 5th and the 14th Amend-

ments and Due Process and Equal Protection Clauses of

the United States Constitution together with his constitu-

tional right to privacy and has been and will continue to

suffer damages in an amount to be determined at the trial

of this matter, but in excess of the jurisdictional limits of

this Court.

114. Asa result of the conduct of defendants and each

of them, plaintiff is entitled to reasonable attorneys fees,

pursuant to 42 U.S.C. § 1988.

THIRD CLAIM FOR RELIEF

(For Damages for Violations of the Constitution of the

United States and the Civil Rights Act 42 U.S.C.

§ 1985(3) by Defendants Summit Health, Midway Hos-

pital, Medical Staff, Mr. Feldman, Dr. Reader, Dr.

Lurvey, Mr. Posell, Dr. Macy, Dr. Salz, Dr. Perlman,

Ms. Farber, Mr. Kadzielski, W&A, and Each of Them)

115. Plaintiff realleges and incorporates herein by ref-

erence paragraphs 1 through 78, 80 through 103 and 110

inclusive, of this First Amended Complaint.

116. Defendants, and each of them, have conspired to

deprive plaintiff of equal protection under the laws and of

equal privileges and immunities under the laws. In fur-

therance of this conspiracy, defendants, and each of them,

have denied Dr. Pinhas representation by counsel, full

disclosure with particularity of the charges against Dr.

Pinhas and-denied plaintiff's request that Dr. Pinhas’

Motions be heard and decided at a reasonable time prior

to the commencement of the hearing, and have acted in

contravention of procedures required by due process.

Further, defendants and each of them, have denied plain-

tiff his right to an unbiased, unprejudiced, detached

hearing officer, and by appointing the Judicial Review

Committee that consists of members who are in active

economic and professional competition with plaintiff and

of defendant’s own medical staff and subject to the

control, persuasion and undue influence of defendants,

has further deprived defendant of a fair opportunity to be

heard as guaranteed to him by the due process and equa!

protection clauses of the Constitution of the United

States. Further, improper ex parte com:nunications be-

tween counsel for the Medical Staff, the hearing officer,

the Judicial Review Committee members, the prosecutor,

and officers of the Hospital have denied plaintiff a fair

hearing consistent with due process. Further, defendants’

intimidation of witnesses, depriving witnesses of the

plaintiff from attending the hearing, threatening plain-

tiff’s counsel with arrest and ordering him off Hospital

grounds during the hearing — even though he was listed

as a witness, ordering witnesses not to testify to facts

helpful to plaintiff Dr. Pinhas, vilifying plaintiff, his

physician representative, his witnesses on and off the

record before the Judicial Review Committee, and inter-

fering with plaintiff's ability to timely get a copy of the

transcript of proceedings has deprived plaintiff of due

process of law.

117. As a result of the conduct of defendants, and

each of them, plaintiff has suffered property damage to

his medical practice, and has suffered the deprivation of

his property interest in membership on the Midway Hos-

pital’s medical staff, including admitting and surgical

privileges, at Midway Hospital. As a consequence, plain-

tiff has been deprived of his rights in violation of the 5th

and 14th Amendments and Due Process and Equal Pro-

tections Clauses of the United States Constitution to-

gether with the constitutionally protected right of

privacy. ‘i

118. As a result of the conduct of defendants, and

each of them, plaintiff has been damaged in an amount to

be determined at the time of trial, but in an amount in

excess of the jurisdictional limits of this Court.

119. As a result of the conduct of defendants, and

each of them, plaintiff is entitled to reasonable attorneys

fees, pursuant to 42 U.S.C. § 1988 of the Civil Rights Act.

FOURTH CLAIM FOR RELIEF

(Treble Damages for Violation of the Sherman Anti-Trust

Act, Seetion 1, 15 U.S.C. $1 by defendants Summit

Health, Midway Hospital, the Medical Staff, Mr. Feld-

man, Dr. Reader, Dr. Lurvey, Dr. Macy, Dr. Salz, Dr.

Perlman, Mr. Kadzielski, W&A and Each of Them)

120. Plaintiff realleges and incorporates herein by ref-

erence paragraphs 1 through 78, 80, 84, 90, 91, 93 through

103, and 112, inclusive, of the First Amended Complaint.

121. Defendants Dr. Reader, Dr. Maey, Dr. Salz, Dr.

Perlman, and others are engaged in the practice of

medicine limited to eye medicine and ophthalmologic

surgery and are in competition with plaintiff Dr. Pinhas.

122. Defendants are seeking to effectuate a boycott

and drive Dr. Pinhas out of business so that other

ophthalmologists and eye physicians, including, but not

limited to, defendants Dr. Reader, Dr. Macy, Dr. Salz

and Dr. Perlman, will have a greater share of the eye care

and ophthalmic surgery in Los Angeles.

123. In an effort to effectuate the boycott and to

boycott plaintiff Dr. Pinhas, defendants Dr. Reader, Dr.

Macy, Dr. Salz, Dr. Perlman, and others, including, but

not limited to, Dr. Lurvey have sought to control and do

control defendant Medical Staff. Defendant Mr. Feldman

eontrols Summit Health insofar as it relates to Dr.

Pinhas and Midway Hospital.

124. After Dr. Pinhas refused to accept the terms and

conditions of the “sham” contract and refused to return a

copy of it to Midway Hospital, and after defendant Dr.

Lurvey threatened that proceedings may be instituted

against him in the event that he sought to utilize this

Exhibit “A” in any way detrimental to Midway Hospital,

in late March, 1987 Summit Health, Midway Hospital,

Medical Staff, Mr. Feldman, Dr. Reader, Dr. Lurvey, Dr.

Macy, Dr. Salz, and Dr. Perlman entered into a combina-

tion and conspiracy to retaliate against Dr. Pinhas and to

preclude him from continued competition in the market

place, not only at defendant Midway Hospital, but by

reason of the filing of an improper Section 805 report and

a Section 423 report, preclude plaintiff Pinhas from prac-

ticing medicine in California, if not the United States. In

furtherance of the conspiracy of defendants Summit

Health, Midway Hospital, Medical Staff, Mr. Feldman,

Dr. Reader, Dr. Lurvey, Dr. Macy, Dr. Salz, and Dr.

Pearlman, defendants enlisted the assistance and re-

ceived the assistance of Mr. Posell, Mr. Kadzielski, and

W&A to create unjustified charges, to secure adverse

determinations against plaintiff Dr. Pinhas, to cause a

summary suspension and termination of his privileges at

\ iiieiiaietiaiaeieireieasieeeiaae

Midway Hospital and report that summary suspension

and termination to the defendant BMQA, and causing

dissemination of that adverse determination to all hospi-

tals which Dr. Pinhas is a member, and to all hospitals to

which he may apply so as to secure similar actions by

those hospitals, thus effectuating a boycott of Dr. Pinhas.

125. Without admission to other hospitals, plaintiff

Pinhas has no method by which he ean practice

ophthalmic surgery, which constitutes the greater portion

of his practice.

126. The actions undertaken by defendants in connec-

tion with the bringing of false charges against Dr. Pinhas

were done with oppression and malice and:

a. Were not done in a reasonable belief that the

action was in furtherance of the quality of health

care;

b. Were not done after a reasonable effort to

obtain the facts of the matter;

ce. Were not done after adequate notice and hear-

ing procedures afforded to Dr. Pinhas, and utilized

procedures which were not fair under the circum-

stances; and

d. Were not based upon the reasonable belief that

the action was warranted by the facts after defend-

ants’ efforts to obtain facts.

FIFTH CLAIM FOR RELIEF

(Injunctive Relief Against All Defendants)

127. Plaintiff realleges and incorporates herein by ref-

erence all of the allegations of this First Amended

Complaint.

128. Defendants, and each of them, threatened to, and

unless restrained will, continue to deprive plaintiff Dr.

Pinhas of his right to due process and fair procedure

under both the United States Constitution and the Con-

stitution of the State of California.

129. Defendants’ conduct has caused, and will con-

tinue to cause, plaintiff great and irreparable injury,

including, but not limited to, the injury which resulted in

the filing of a California Business and Professions Code

Section 805.5 notice for which pecuniary damages would

not afford adequate relief, in that they would not com-

pletely compensate plaintiff's professional reputation and

good standing, and would be extremely difficult to

ascertain.

WHEREFORE, plaintiff requests judgment to be en-

tered for plaintiff and against defendants, and each of

them, as follows:

1. On the First Claim for Relief, for a declaratory

judgment that Sections 805 and 805.5 of the California

Business and Professions Code and Section 423 et seq of

the Health Care Quality Improvement Act of 1986, 42

U.S.C. § 11133 et seq., are unconstitutional, together with

eosts of suit incurred herein, including reasonable attor-

neys fees pursuant to 42 U.S.C. § 1988, and for such other

and further relief as the Court deems just and proper.

2. On the Second Claim for Relief, for damages ac-

cording to proof, for costs of suit incurred herein, inelud-

ing reasonable attorneys fees pursuant to 42 U.S.C.

§ 1988, and for such other and further relief as the Court

deems just and proper.

3. On the Third Claim for Relief, for damages accord-

ing to proof, for costs of suit incurred herein, including

reasonable attorneys fees pursuant to 42 U.S.C. § 1988,

and for such other and further relief as the Court deems

just and proper.

4. On the Fourth Claim for Relief, for damages ac-

cording to proof and then trebled, and for costs of suit

incurred herein, including reasonable attorneys fees as

allowed by law, and for such other and further relief as

the Court deems just and proper.

5. On all Claims for Relief an injunction, preliminary,

and final, against each and all defendants, their agents,

assistants, successors, employees, attorneys, representa-

tives, and all persons acting in concert or cooperation

with them or at their direction from violating the right of

plaintiff.

JURY TRIAL DEMAND

1. Plaintiff hereby demands trial by jury herein.

DATED: July 13, 1987

LAWRENCE SILVER

A Law Corporation

By: LAWRENCE SILVER

Attorneys for Plaintiff

Yomon J. Pinhas, M.D.

CALIFORNIA CODE OF CIVIL PROCEDURE

SECTION 1094.5

“(a) Where the writ is issued for the purpose of

inquiring into the validity of any final administrative

order or decision made as the result of a proceeding in

which by law a hearing is required to be given, evidence is

required to be taken, and discretion in the determination

of facts is vested in the inferior tribunal, corporation,

board, or officer, the case shall be heard by the court

sitting without a jury. All or part of the record of the

proceedings before the inferior tribunal, corporation,

board, or officer may be filed by the court. Except when

otherwise prescribed by statute, the cost of preparing the

record shall be borne by the petitioner. Where the peti-

tioner has proceeded pursuant to Section 68511.3 of the

Government Code and the Rules of Court implementing

that section and where the transcript is necessary to a

proper review of the administrative proceedings, the cost

of preparing the transcript shall be borne by the respon-

dent. Where the party seeking the writ has proceeded

pursuant to * * * Section 1088.5, the administrative

record shall be filed as expeditiously as possible, and may

be filed with the petition, or by the respondent after

payment of the costs by the petitioner, where required, or

as otherwise directed by the court. If the expense of

preparing all or any part of the record has been borne by

the prevailing party, the expense shall be taxable as costs.

(b) The inquiry in such a ease shall extend to the

questions whether the respondent has proceeded without,

or in excess of jurisdiction; whether there was a fair trial;

and whether there was any prejudicial abuse of discretion.

Abuse of discretion is established if the respondent has

ADDENDUM “A”

———————————————

not proceeded in the manner required by law, the order or

decision is not supported by the findings, or the findings

are not supported by the evidence.

supported by the evidence, in case in which the court is

authorized by law to exercise its independent judgment

on the evidence, abuse of discretion is established if the

court determines that the findings are not supported by

the weight of the evidence. In all other cases, abuse of

discretion is established if the court determines that the

findings are not supported by substantial evidence in the

light of the whole record.

(d) Notwithstanding * * * subdivision (c), in cases

arising from private hospital boards or boards of direc-

tors of districts organized pursuant to The Loeal Hospi-

tal District Law, Division 23 (commencing with Section

32000) of the Health and Safty Code, abuse of discretion

is established if the court determines that the findings are

not supported by substantial evidence in the light of the

whole record. However, in all cases in which the petition

alleges discriminatory actions prohibited by Section 1316

of the Health and Safety Code, and the plaintiff makes a

preliminary showing of substantial evidence in support of

that allegation, the court shall exercise its independent

judgment on the evidence and abuse of discretion shall be

established if the court determines that the finding are

not supported by the weight of the evidence.

(e) Where the court finds that there is relevant evi-

dence which, in the exercise of reasonable diligence, could

not have been produced or which was improperly excluded

at the hearing before respondent, it may enter judgment

as provided in subdivision (f) * * * remanding the case

to be reconsidered in the light of that evidence; or, in

cases in which the court is authorized by law to exercise

its independent judgment on the evidence, the court may

admit the evidence at the hearing on the writ without

remanding the case.

(f) The court shall enter judgment either commanding

respondent to set aside the order or decision, or denying

the writ. Where the judgment commands that the order or

decision be set aside it may order the reconsideration of

the case in the light of the court’s opinion and judgment

and may order respondent to take such further action as

is specially enjoined upon it by law, but the judgment

shall not limit or control in any way the discretion legally

vested in the respondent.

(g) Except as provided in subdivision (h), the court in

which proceedings under this section are instituted may

stay the operation of the adminstrative order or decision

pending the judgment of the court, or until the filing of a

notice of appeal from the judgment or until the expiration

of the time for filing the notice, whichever occurs first.

However, no such stay shall be imposed or continued in

the court is satisfied that it is against the public interest;

provided that the application for the stay shall be accom-

panied by proof of service of a copy of the application on

the respondent. Service shall be made in the manner

provided by Title 5 (commencing with Section 405) of

Part 2 or Chapter 5 (commencing with Section 1010) of

Title 14 of Part 2. If an appeal is taken from a denial of

the writ, the appeal is taken. However, in cases where a

stay is in effect at the time of filing the notice f appeal, the

stay shall be continued by operation of law for a period of

20 days from the filing of the notice. If an appeal is taken

from the granting of the writ, the order or decision of the

agency is stayed pending the determination of the appeal

unless the court to which the appeal is taken shall other-

wise order. Where any final administrative order or deci-

46 2

sion is the subject of proceedings under this section, if the

petition shall have been filed while the penalty imposed is

in fuil foree and effect, the determination shall not be

considered to have become moot in eases where the

penalty imposed by the administrative agency has been

completed or complied with during the pendency of the

proceedings.

(h)(1) The court in which proceedings under this

section are instituted may stay the operation of the

administrative order or decision of any licansed hospital

or any state agency made after a hearing required by

statute to be conducted under the provisions of the

Administrative Procedure Act, as set forth in Chapter 5

(commencing with Section 115000) of Part 1 of Division 3

of Title 2 of the Government Code, conducted by the

agency itself or an administrative law judge on the staff of

the Office of Administrative Hearings pending the judg-

ment of the court, or until the filing of a notice of appeal

from the judgment or until the expiration of the time for

filing the notice, whichever occurs first. However, the stay

shall not be imposed or continued unless the court is

satisfied that the public interest will not suffer and that

the licensed hospital or agency is unlikely to prevail

ultimately on the merits; and provided further that the

application for the stay shall be accompanied by proof of

service of a copy of the application on the respondent.

Service shall be made in the manner provided by Title 5

(commencing with Section 405) of Part 2 or Chapter 5

(commencing with Section 1010) of Title 14 of Part 2.

(2) The standard set forth in this subdivision for

obtaining a stay shall apply to any administrative order

or decision of an agency which issued licenses pursuant to

Division 2 (commencing with Section 500) of the Busi-

ness and Professions Code or pursuant to the Osteopathic

Initiative Act or the Chiropractic Initiative Act. With

respect to orders or decisions of other state agencies, the

standard in this subdivision shall apply only when the

agency has adopted the proposed decision of the adminis-

trative law judge in its entirety or has adopted the

proposed decision but reduced the proposed penalty pur-

suant to subdivision (b) of Section 11517 of the Govern-

ment Code; otherwise the standard in subdivision (g)

shall apply.

(3) If an appeal is taken from a denial of the writ, the

order or decision of the hospital or agency shall not be

stayed except upon the order to which the appeal is taken.

However, in cases where a stay is in effect at the time of

filing the notice of appeal, the stay shall be continued by

operation of law for a period of 20 days from the filing of

the notice. If an appeal is taken from the operation of law

for a period of 20 days from the filing of the notice. If an

appeal is taken from the granting of the writ, the order or

decision of the hospital or agency is stayed pending the

granting of the writ, the order or decision of the hospital

or agency is stayed pending the determination of the

appeal unless the court to which the appeal is taken shall

otherwise order. Where any final administrative order or

decision is the subject of proceedings under this section,

if the petition shall have been filed while the penalty

imposed is in full foree and effect, the determination shall

not be considered to have become moot in cases where the

penalty imposed by the administrative agency has been

completed or complied with during the pendency of the

proceedings.”

CALIFORNIA EVIDENCE CODE SECTIONS 1156

AND 1157

“$1156. (a) In-hospital medical or medical-dental

staff committees of a licensed hospital may engage in

research and medical or dental study for the purpose of

reducing morbidity or mortality, and may make findings

and recommendations relating to such purpose. Except as

provided in subdivision (b), the written records of inter-

views, reports, statements, or memoranda of such in-

hospital medical or medical-dental staff committees relat-

ing to such medical or dental studies are subject to

Sections 2016 to 2036, inclusive, of the Code of Civil

Procedure (relating to discovery proceedings) but, sub-

ject to subdivisions (ce) and (d), shall not be admitted as

evidence in any action or before any administrative body,”

agency, or person.

(b) The diselosure, with or without the consent of the

patient, of information concerning him to such in-hospital

medical or medical-dental staff committee does not make

unprivileged any information that would otherwise be

privileged under Section 994 or 1014; but, notwithstand-

ing Sections 994 and 1014, such information is subject to

discovery under subdivision (a) except that the identity

of any patient may not be discovered under subdivision

(a) unless the patient consents to such disclosure.

(ec) This section does not affect the admissibility in

evidence of the original medical or dental records of any

patient.

(d) This section does not exclude evidence which is

relevant evidence in a criminal action.”

ADDENDUM “B”

§ 1157. Proceedings and records of medical, medical-

dental, podiatric, registered dietitian, psychological or

veterinary staff review committees; local medical, dental,

dental hygienist, podiatric, dietetic, veterinary, chiroprac-

tie society, or state or local psychological review

committees.

(a) Neither the proceedings nor the records or organ-

ized committees of medical, medical-dental, podiatric,

registered dietitian, psychological or veterinary staffs in

hospitals having the responsibility of evaluation and im-

provement of the quality of care rendered in the hospital,

or medical or dental review or dental hygienist review or

chiropractic review or podiatric review or registered dieti-

tian review or veterinary review committees of local medi-

eal, dental, dental hygienist, podiatric, dietetic,

veterinary, or chiropractic societies, or psychological re-

view committees of state or local psychological associa-

tions or societies having the responsibility of evaluation

and improvement of the quality of care, shall be subject to

discovery.

(b) Exeept as hereinafter provided, no person in at-

tendance at a meeting of any of those committees shall be

required to testify as to what transpired at that meeting.

(ec) The prohibition relating to discovery or testimony

does not apply to the statements made by any person in

attendance at * * * a meeting of any of those committees

who is a party to an action or proceeding the subject

matter of which was reviewed at that meeting, or to any

person requesting hospital staff privileges, or in any

action against an insurance carrier alleging bad faith by

the carrier in refusing to accept a settlement offer within

the policy limits.

(d) The prohibitions * * * in this section do not apply

to medical, dental, dental hygienist, podiatric, dietetic,

psychological, veterinary or chiropractic society commit-

tees that exceed 10 percent of the membership of the

society, nor to any of those committees if any person

serves upon the committee when his or her own conduct of

practice is being reviewed.

(e) The amendments made to this section by Chapter

1081 of the Statutes of 1983, or at the 1985 portion of the

1985-86 Regular Session of the Legislature, do not ex-

elude the discovery-or use of relevant evidence in a

criminal action.”

Roars |

CALIFORNIA CIVIL CODE SECTION 43.7

“(b) There shall be no monetary liability on the part

of, and no cause of action for damages shall arise against,

any professional society, any member of a duly appointed

committee of a medical specialty society, or any member

of a duly appointed committee of a state or local profes-

sional society, or duly appointed member of a committee

of a professional staff of a licensed hospital (provided the

professional staff operates pursuant to written bylaws

that have been approved by the governing board of the

hospital), for any act or proceeding undertaken or per-

formed within the scope of the functions of any such

committee which is formed to maintain the professional

standards of the society established by its bylaws, or any

member of any peer review committee whose purpose is to

review the quality of medical, dental, dietetic, chiroprac-

tie, optometric, or veterinary services rendered by physi-

cians and surgeons, dentists, dental hygienists,

podiatrists, registered dietitians, chiropractors, optome-

trists, veterinarians, or psychologists which committee is

composed chiefly of physicians and surgeons, dentists,

dental hygienists, podiatrists, registered dietitians, chiro-

practors, optometrists, veterinarians, or psyehologists for

any act or proceeding undertaken or performed in review-

ing the quality of medical, dental, dietetic, chiropractic,

optometric, or veterinary services rendered by physicians

and surgeons, dentists, dental hygienists, podiatrists,

registered dietitians, chiropractors, optometrists, veteri-

narians, or psychologists or any member of the governing

board of a hospital in reviewing the quality of medical

services rendered by members of the staff if such profes-

sional society, committee, or board member acts without

malice, has made a reasonable effort to obtain the facts of

ADDENDUM “C”

the matter as to which he, she, or it acts, and acts in

reasonable belief that the action taken by him, her, or it is

warranted by the facts known to him, her, or it after such

reasonable effort to obtain facts. ‘Professional society’

includes legal, medical, psychological, dental, dental hy-

giene, dietetic, accounting, optometric, podiatric, pharma-

ceutic, chiropractic, physical therapist, veterinary,

licensed marriage, family, and child counseling, licensed

clinical social work, and engineering organizations having

as members at least a majority of the eligible persons or

licentiates in the geographic area served by the particular

society.

‘Medical specialty society’ means an organization hav-

ing as members at least 25% of the eligible physicians

within a given professionally recognized medical specialty

in the geographic area served by the particular society.

* *

(d) There shall be no monetary liability on the part of,

and no cause of action for damages shall arise against,

any physician and surgeon, podiatrist, chiropractor, or

attorney who is a member of an underwriting committee

of an interindemnity or reciprocal or interinsurance ex-

change or mutual company for any act or proceeding

undertaken or performed in evaluating physicians and

surgeons, podiatrists, chiropractors, or attorneys for the

writing of professional liability insurance, or any act or

proceeding undertaken or performed in evaluating physi-

cians and surgeons or attorneys for the writing of an

interindemnity, reciprocal, or interinsurance contract as

specified in Section 1280.7 of the Insurance Code, if the

evaluating physician and surgeon, podiatrist, chiroprac-

tor, or attorney acts without malice, has made a reasona-

ble effort to obtain the facts of the matter as to which he

or she acts, and acts in reasonable belief that the action

taken by him or her is warranted by the facts known to

him or her after reasonable effort to obtain the facts.

(e) This section shail not be construed to confer immu-

nity from liability on any quality assurance committee

established in compliance with Section 4070 and 5624 of

the Welfare and Institutions Code or hospital. In any case

in which, but for the enactment of the preceding provi-

sions of this section, a cause of action would arise against

a quality assurance committee established in compliance

with Sections 4070 and 5624 of the Welfare and Institu-

tions Code or hospital, such cause of action shall exist as

if the preceding provisions of this section had not been

enacted.”

[SUMMIT HEALTH LTD. LETTERHEAD

DELETED}

CONFIDENTIAL

January 26, 1987

Simon Pinhas, M.D.

9033 Wilshire Boulevard, Suite 206

Beverly Hills, CA 90211

Dear Dr. Pinhas:

It is our pleasure to submit this letter to you as a result

of our negotiations, representing the understanding and

agreements made between Midway Hospital Medical

Center (hereafter referred to as “Hospital”) and Simon

Pinhas, M.D. (hereafter referred to as ‘“Doctor’). When

our respective duly authorized signatures are affixed

hereto, the terms of this Agreement shall become binding

upon Hospital and Doctor for the period specified.

Doctor shall apply for, obtain and maintain medical

staff membership and privileges at Hospital appropriate

to the conduct of his practice during the term of this

Agreement. Such membership (or temporary membership

pending completion of staff application requirements), is

to be obtained prior to January 1, 1987.

Doctor shall at all times be and act as an independent

contractor with respect to all duties and obligations

devolving upon him under this Agreement. Hospital shall

neither have nor exercise any control over the methods by

which Doctor performs his work. The sole interest and

responsibility of Hospital with respect to the manner in

which Doctor performs his work is to assure that the

quality of care is provided in a competent, efficient and

EXHIBIT “A”

ee |

satisfactory manner in accordance with the standards of

medical practice in the State of California. Doctor agrees

that the standards observed in his medical practice and

related activities shall be subject to the bylaws, rules and

regulations applying to the medical staff of the Hospital

and to the peer review functions of the medical staff and

review functions of the Hospital’s Board of Directors.

Doctor shall comply with all applicable provisions of law

and other rules and regulations of any and all governmen-

tal authorities relating to ensure and regulation of physi-

cian and hospitals.

Doctor agrees to accept the appointment as Summit

Nursing Home Liaison with the following duties and

responsibilities concurrent with the position.

1. To act as Summit Nursing Home Liaison at the

Hospital.

2. To offer in-service educational programs to

Hospital staff as appropriate and requested by the in-

service Coordinator of the Hospital.

3. To provide at least one continuing medical

education program to the general staff bi-annually.

4. To submit quarterly reports to Hospital Ad-

ministration concerning the progress and develop-

ment of the Summit Nursing Home Liaison at the

Hospital.

5. To offer professional guidance to Hospital Ad-

ministration for the selection of appropriate capital

equipment purchases for the Summit Nursing Home

Liaison Program.

6. To inform Hospital of any new advances in the

eare and treatment of Ophthalmology patients as

appropriate.

7. To participate in quality of care studies as may

be requested by the Hospital Quality Assurance

Committee.

In consideration for the administrative, educationai

and related services required of and provided by Doctor

and in consideration for his abiding by all other provi-

sions of this Agreement, Hospital will compensate Doctor

at the rate of $3,000.00 per month for the period of

January 1, 1987 through January 1, 1988 for a total of

$36,000 for the twelve-month period.

Because Hospital has entered into this Agreement in

reliance on the personal abilities of Doctor, he may not

assign any of his rights or delegate any of his duties

arising under this Agreenient.

This Agreement shall be terminable by either party,

without cause, upon thirty (30) days written notice. In

the event of termination, payments owed to Doetor pursu-

ant to this Agreement, if any, will be prorated.

This Agreement shall terminate twelve months after

the date of January 1, 1987, unless sooner terminated

with notice as provided above, or unless terminated by

Hospital, without notice, in any of the following events:

(a) If Doctor ceases to be duly licensed and au-

thorized to practice medicine and surgery in Califor-

nla; or

(b) If Doetor fails to maintain membership on the

Medical Staff of the Hospital; or

(ec) If Doctor fails to appropriately carry out his

duties and responsibilities as Summit Nursing Home

Liaison.

We hope that these understandings and agreements are

in accord with our negotiations and are acceptable to you.

If this Agreement meets with your approval, please sign

on the line provided below and return for final execution.

Sincerely,

MIDWAY HOSPITAL MEDICAL

CENTER

By:

Philip A. Conen

Executive Director

(‘Hospital’)

Accepted by:

Simon Pinhas, M.D.

(“Doetor’’ )

[MIDWAY HOSPITAL MEDICAL CENTER

LETTERHEAD DELETED]

April 13, 1987

Simon Pinhas, MD

9033 Wilshire Blvd. #206

Beverly Hills, CA 90211

CERTIFIED MAIL

RETURN RECEIPT REQUESTED

Dear Doctor Pinhas:

In accordance with the Bylaws of the Medical Staff of

Midway Hospital Medical Center, Article VII, Section 2,

you are hereby advised of the Summary Suspension of all

your medical staff privileges; including admitting and

surgical.

This suspension shall become effective on April 13,

1987, at 3:00 p.m. The Medical Executive Committee of

Midway Hospital Medical Center shall convene to review

and consider this action within 10 days as specified in the

Bylaws.

This is a result of Medical Staff review of your medical

records, with consideration as to the questions raised

regarding: indications for surgery; appropriateness of

surgical procedures in light of patient’s medical condi-

tion; adequacy of documentation in medical records; and

ongoing pattern of identified problems.

EXHIBIT “B”

A eopy of Article VII and Article VIII are enclosed for

your information.

Sincerely,

Arthur N. Lurvey, MD

Chief of Staff

Mitchell Feldman

Regional Vice-President

[MIDWAY HOSPITAL MEDICAL CENTER

LETTERHEAD DELETED]

April 20, 1987

Simon Pinhas, MD

9033 Wilshire Blvd. #206

beverly Hills, CA 90211

HAND DELIVERED AND BY

CERTIFIED MAIL

RETURN RECEIPT REQUESTED

Dear Doctwor Pinhas:

Thank you for your statements at the Medical Exeeu-

tive Committee meeting held on April 17, 1987.

Please be advised that the Medical Executive Commit-

tee has reviewed and considered the action taken and

upheld the summary suspension with a recommendation

to terminate your medical staff privileges at Midway

Hospital Medical Center. The Board of Directors of

Midway Hospital Medical Center has coneurred with

their recommendation.

Pursuant to the Medical Staff Bylaws, Article VIII, you

are entitled to a hearing as outlined in Section l.a. You

have ten days from the date of receipt of this letter to

request a hearing by a Judicial Review Committee. Said

request shall be by written notice send by certified mail to

the Chief Executive Director of the Hospital. If you fail to

request a hearing within the specified time frames the

recommended action shall become effective immediately.

EXHIBIT “C”

Enclosed is a copy of Article VIII. Please be advised,

per the letter dated April 13, 1987, that summary suspen-

sion of all privileges includes admitting and surgical

privileges.

Sincerely,

Arthur N. Lurvey, MD

Chief of Staff

MIDWAY HOSPITAL MEDICAL CENTER

‘MEDICAL STAFF BYLAWS

PREAMBLE

WHEREAS, Midway Hospital Medical Center is an

investor-owned Hospital organized under the laws of the

State of California; and

WHEREAS, its purpose is to serve as a general acute

eare hospital providing patient care, education, and re-

search; and

WHEREAS, it is recognized that one of the aims and

goals of the medical staff is to strive for quality patient

care in the hospital, that the medical staff must work with

and is subject to the ultimate authority of the board, and

that the cooperative efforts of the medical staff, adminis-

tration, and board are necessary to fulfill the hospital’s

aims and goals in providing quality care to its patients;

and

THEREFORE, the physicians, dentists, and podia-

trists practicing in this hospital hereby organize them-

selves into a medical staff in conformity with these

bylaws.

DEFINITIONS

1. HOSPITAL means Midway Hospital Medical

Center of Los Angeles, California.

2. BOARD OF DIRECTORS or BOARD means the

governing body of the corporation.

3. EXECUTIVE DIRECTOR is the Chief Executive

Officer of the Hospital designated by the Board of Diree-

tors to be responsible for all aspects of the hospital

EXHIBIT “D”

operations, including medical staff liaison and coordina-

tion. In the absence of the EXECUTIVE DIRECTOR,

the Associate Executive Director shall assume all the

responsibilities of the Executive Director.

4. MEDICAL STAFF means the formal organization

of all licensed physicians, dentists and vodiatrist who

are privileged to attend patients in the hospital.

5. MEDICAL EXECUTIVE COMMITTEE or MEC

means the executive committee of the medical! staff.

6. CLINICAL PRIVILEGES or PRIVILEGES

means the permission granted to a practitioner to render

specific diagnostic, therapeutic, medical, dental, podia-

tric, or surgical services.

7. PHYSICIAN means any individual with an M.D. or

D.O. degree who is fully licensed to practice medicine in

all its phases.

8. PRACTITIONER means, unless otherwise ex-

pressly limited, any physician, dentist, or podiatrist ap-

plying for, or exercising clinical privileges in this

hospital.

9. SPECIFIED PROFESSIONAL PERSONNEL

means en individual, other than a licensed physician,

dentist, or podiatrist, who exercises independent judg-

ment within the areas of his professional competence and

who is qualified to render direct or indirect medical,

dental, podiatric, or surgical care under the supervision

of a practitioner who has been accorded privileges to

provide such eare in the hospital.

10. MEDICAL STAFF YEAR means the period from

January Ist to December 31st.

11. EX OFFICIO means service as a member of a

body by virtue of an office or position held and, unless

otherwise expressly provided, means without voting

rights.

12. SPECIAL NOTICE means written notification

sent by certified or registered mail, return receipt

requested.

13. MEDICO-ADMINISTRATIVE OFFICER means

a practitioner engaged by the hospital on a full-time or

part-time basis to perform duties which, although par-

tially administrative, inelude clinical responsibilities.

14. As used in the Bylaws, the masculine gender in-

cludes both masculine and feminine. -

ARTICLE I

NAME

The name of this organization shall be Medical Staff of

Midway Hospital Medical Center.

ARTICLE VIII

HEARING AND APPEAL PROCEDURES

Section 1. REQUEST FOR HEARING

a. Notice of Decision

In all cases in which a practitioner is entitled to a

hearing as set forth herein, he shall have ten (10) days

following the date of receipt of written notice of the

action giving rise to the right to the hearing, sent regis-

tered or certified mail, within which to request a hearing

by a judicial review committee hereinafter referred to.

Said request shall be by written notice sent certified or

registered mail to the Chief Executive Officer. In the

event the applicant member does not request a hearing

within the time and in the manner hereinabove set forth,

he shall be deemed to have waived his right to a hearing

and to any appellate review to which he might otherwise

have been entitled and to have accepted the action in-

volved, and it shall thereupon become effective

immediately.

b. Grounds for Hearing

Any one or more of the following actions shall consti-

tute grounds for a hearing:

(1) Denial of medical staff membership;

(2) Denial of requested advancement in medical

staff membership;

(3) Denial of medical staff reappointment;

(4) Demotion to lower staff reappointment;

(5) Suspension to lower staff category;

(6) Expulsion from medical staff membership;

(7) Denial of requested privileges;

(8) Reduction in privileges;

(9) Suspension of privileges;

(10) Termination of privileges;

(11) Deniai of inerease in privileges.

e. Time and Place for Hearing

Upon receipt of a request for hearing, the Chief Execu-

tive Officer shall deliver such request to the Chief of Staff

or designee. The Chief Executive Officer or his designee

shall, within ten (10) days after receipt of such request,

schedule and arrange for a hearing. The Chief Executive

Officer or his designee shall give notice to the affected

practitioner of the time, place, and date of the hearing.

The date of the hearing shall be within forty-five (45)

days from the date of receipt of the request for a hearing

by the Chief Executive Officer. When the request is

received from a member who is under suspension, which is

then in effect, the hearing shall be held as soon as the

arrangements may reasonably be made, but not to exceed

fifteen (15) days from the date of receipt of the request

for a hearing.

d. Notice of Charges

The notice of hearing shall state in concise language

the acts of omissions with which the practitioner is

charged, a list of any charts under question by chart

number or where the issue involves any of the actions set

out in Section 1,b. of Article VIII, the reasons for the

denial of the request of the applicant or medical staff

member.

e. Judicial Review Committee

When a hearing is requested, the Chief of Staff, with

the approval of the Medical Executive Committee, shall

appoint a judicial review committee which shall be com-

posed of not less than five (5) members of the active

medical staff to act pursuant to this Article. The members

of the judicial review committee shall not have actively

participated in the consideration of the matter involved at

any previous level. Such appointment shall include desig-

nation of the chairman. Knowledge of the matter involved

shall not preclude a member of the active medical staff

from serving as a member of the judicial review commit-

tee. In the event that it is not possible to appoint a fully

qualified judicial review committee from the active medi-

eal staff, the Medical Executive Committee may appoint

qualified physicians from the associate staff or physicians

outside the staff.

f. Postponement. and Extensions

Postponements and extensions of time beyond the

times expressly permitted in these bylaws may be re-

quested by anyone but shall be permitted by the judicial

review committee only on a showing of good cause.

g. Decision of the Hearing Committee

Within thirty (30) days after final adjournment of the

hearing, except in the case of a medical staff member who

shall be under suspension and then within fifteen (15)

days, the judicial review committee shall render a deci-

sion which shall be delivered to the Medical Executive

Committee and to the Governing Board, such decision to

be accompanied by a written report, all other documenta-

- tion, and the hearing record if prepared. The report shall

contain a concise statement of the reasons for the deci-

sion, and a copy of the report and decision shall be

delivered, by registered or certified mail, to the affected

practitioner.

h. Appeal

The decision of the judicial review committee shall be

considered final, subject to the right of appeal as provided

in Section 3 (Appeal to Governing Board) of this Article.

Section 2. HEARING PROCEDURE

a. Personal Presence Mandatory

Under no circumstances shall the hearing be conducted

without the personal presence of the person requesting

the hearing unless he has waived such appearance or has

failed without good cause to appear after appropriate

notice. Such failure to appear shall be deemed to consti-

tute a waiver of the right to such appearance. This does

not waive the right to appeal to the Governing Board.

b. Representation

The affected practitioner shall be entitled to be acecom-

panied by and/or represented at the hearing by a member

of the medical staff in good standing, except if the

member of the medical staff is also an attorney. Since the

hearings provided for in these bylaws are for the purpose

of intra-professional competency or conduct, neither the

person requesting the hearing, the Medical Executive

Committee, nor the Governing Board shall be represented

in any phase of the hearing or appeals procedure by an

attorney at law unless the hearing committee, in its

discretion, permits both sides to be represented by legal

counsel. The body whose decision prompted the hearing

shall appoint a representative from the medical staff to

present its recommendations in support thereof and to

examine witnesses.

e. The Presiding Officer

The presiding officer at the hearing shall be the chair-

man or the hearing officer if one is appointed. The presid-

ing officer shall act to insure that all participants in the

hearing have a reasonable opportunity to be heard, and to

present all oral and documentary evidence, and that

decorum is maintained. He shall determine the order or

procedure during the hearing and shall have the authority

and discretion in accordance with these bylaws to make

all rulings on questions which pertain to matters of law

and to the admissibility of evidence.

d. The Hearing Officer

At the request of the person who requested the hearing,

the Executive Committee, the Judicial Review Committee,

or on its own initiative, the Governing Board may appoint

a hearing officer who may be an attorney at law to preside

at the hearing. Such hearing officer may be legal counsel

acl

eee

to the hospital provided he acts during the hearing in

accord with this Article. He must not act as a prosecuting

officer, as an advocate for the hospital, Governing Board,

or Medical Executive Committee, or body whose action

prompted the hearing. If requested by the Judicial Re-

view Committee, he may participate in the deliberation of

such body and be a legal advisor to it, but he shall not be

entitled to vote.

e. Record of Hearing

The Judicial Review Committee must maintain a record

of the hearing by one of the following methods: a short-

hand reporter present to make a record of the hearing or

a recording. The cost of such shorthand reporter’s appear-

ance shall be borne by the hospital and the party request-

ing the hearing, provided the cost of transcribing the

record of the hearing shall be borne by the party request-

ing the transcription. The hearing committee may, but

shall not be required to, order that oral evidence shall be

taken only on oath or affirmation administered by any

person designated by such body and entitled to notarize

documents in the State of California.

f. Rights of the Parties

At a hearing, both the affected practitioner and the

body whose action prompted the hearing shall have the

following rights: to call and examine witnesses, to intro-

duce exhibits, to cross-examine any witness on any matter

relevant to the issues, to impeach any witness and to

rebut any evidence. If the affected practitioner does not

testify in his own behalf, he may be called and examined

as if under cross-examination. The presiding officer in the

exercise of his discretion may limit testimony that is

cumulative.

g. Admissibility of Evidence

The hearing shall not be conducted according to rules

of law relating to the examination of witnesses or presen-

tation of evidence. Any relevant evidence shall be admit-

ted by the presiding officer if it is the sort of evidence on

which responsible persons are accustomed to rely in the

conduct of serious affairs, regardless of the admissibility

of such evidence, in a court of law. Each party shall have

the right to submit written argument, and the judicial

review committee may request such a writing to be filed

following the close of the hearing. The judicial review

committee may interrogate the witnesses or call addi-

tional witnesses if it deems it appropriate.

h. Official Notice

The presiding officer shall have the discretion to take

official notice of any matters either technical or scientific,

relating to the issues under consideration which could

have been judicially noticed by the courts of this State.

Participants in the hearing shall be informed of the

matters to be officially noticed or to refute the noticed

matters by evidence or by written or oral presentation of

authority. Reasonable or additional time shall be granted,

if requested, to present written rebuttal of any evidence

admitted on official notice.

i. Basis of Decision

The decision of the hearing committee shall be based on

the evidence produced at the hearing. This evidence may

consist of the following: ;

1) Oral testimony of witnesses;

2) Briefs or written arguments presented in con-

nection with the hearing;

3) Any material contained in the medical staff's

personnel files regarding the person who requested

the hearing;

4) Any and all applications, references and accom-

panying documents;

5) All officially noticed matters;

6) Any other evidence deemed admissible under

Section 2,g. of this Article.

j. Burden of Proof

In all cases specified in Section 1,b. of this Article, it

shall be incumbent on the person who requested the

hearing to initially come forward with evidence in his

support. Thereafter, the burden shall shift to the body or

committee whose decision prompted the hearing to come

forward with evidence in support of its action or decision.

In all eases in which a hearing is conducted under this

Article, after all the evidence has been submitted by both

sides, the Judicial Review Committee shall rule against

the person who requested the hearing unless it finds that

he or she has proved by a preponderance of the evidence,

that the decision that prompted the hearing was arbitrary

or unreasonable, and should not be sustained by the

evidence.

k. Adjournment and Conclusion

The presiding officer may adjourn the hearing and

reconvene the same at the convenience of the participants

without special notice. Upon conclusion of the presenta-

tion of oral and written evidence, the hearing shall be

closed. The Judicial Review Committee shall thereupon,

within the time limit specified in Section l,g. of this

Article, outside of the presence of any other person,

conduct its deliberations and render a decision and ac-

companying report as provided by Section 1 of this

Article.

Section 3. APPEAL TO GOVERNING BOARD

a. Time for Appeal

Within ten (10) days after receipt of the decision of the

Judicial Review Committee, either the person who re-

quested the hearing or the body whose decision prompted

the hearing may request an appellate review by the Gov-

erning Board. The request shall be delivered to the

Governing Board in writing and delivered either in per-

son or by certified or registered mail. If such appellate

review is not requested within such period, both sides

shall be deemed to have accepted the action involved and

it shall thereupon become final and shall be effective

immediately. The written request for appeal shall also

inelude a brief statement as to the reasons for appeal.

b. Grounds for Appeal

The grounds for appeal from the hearing shall be:

1) substantial failure of the hearing committee, Medical

Executive Committee, or Governing Board to comply with

the procedures required by this Article or by the hospital

medical staff bylaws in the conduct of hearing and deci-

sions upon hearing so as to deny a fair hearing; 2) action

taken arbitarily or capriciously.

e. Time, Place, and Notice

In the event of any appeal to the Governing Board as

set forth in the preceding subsection, the Governing

Board shall, within ten (10) days after receipt to such

notice of appeal, schedule a date for such review. The

Governing Board through the Executive Director, shall

notify the affected practitioner by certified or registered

mail of the time, place, and date of the appellate review.

The date of appellate review shall not be less than fifteen

(15) days, nor more than forty-five (45) days from the

date of receipt of the request for appellate review, pro-

vided, however, that when a request for appellate review

is from a member who is under suspension which is then

in effect, the appellate review shall be held as soon as the

arrangements may reasonably be made and not to exceed

fifteen (15) days from the date of receipt of the request

for appellate review unless additional time is required to

complete the record. The time for appellate review may be

extended by the chairman of the Governing Board for a

good cause.

d. Hearing Officer

The Governing Board may appoint a hearing officer to

preside over its hearing who may be the same or a

different hearing officer as the one who presided over the

hearing of the Judicial Review Committee. The same rules

set forth above with respect to the hearing officer for the

Judicial Review Committee shall apply to the hearing

officer for the hearing before the Governing Board.

e. Nature of Appellate Review

The proceedings by the governing Board shall be in the

nature of an appellate hearing based upon the record of

the hearing before the Judicial Review Committee, pro-

vided that the Governing Board may, in its sole discre-

tion, accept additional oral or written evidence subject to

the same rights of crossexamination or confrontation

provided at the original hearing. Each party shall have

the right to present, within ten (10) days prior to the date

of the review, a written statement in support of his

position on appeal, and in its sole discretion, the Gov-

erning Board may allow each party or representative to

personally appear and make oral argument. At the conelu-

sion of oral argument, if allowed, the Governing Board

may thereupon at a time convenient to itself conduct

deliberations outside the presence of the appellant and

respondent and their representatives. The Governing

Board may affirm, modify, or reverse the decision of the

Judicial Review Committee.

f. Final Decision

Within ten (10) days after the conclusion of the appel-

late review, the Governing Board shall render a final

decision in writing and shall deliver copies thereof to the

affected practitioner and to the Medical Executive Com-

mittee in person or by certified or registered mail. The

final decision of the Governing Board following the ap-

peal shall be effective immediately and shall not be sub-

ject to further review.

g. Right to One Hearing Only

Except as otherwise provided in this Article, an af-

fected practitioner shall be entitled as a matter of right to

only one hearing before the Judicial Review Committee

and one hearing before the Governing Board on any

single matter which may be the subject of an appeal

without regard to whether such subject is the result of

action by the Medical Executive Committee or the Gov-

erning Board, or a combination of acts of such bodies.

ARTICLE IX

SPECIFIED PROFESSIONAL PERSONNEL

Section 1. APPOINTMENT AND ASSIGNMENT

Specified professional personnel, sometimes referred to

as “allied health professionals”, may be authorized by the

medical staff to perform their professional services within

the hospital. They shall be individually authorized and

assigned to an appropriate clinical department and shall

earry out their professional activities under the supervi-

sion of the chairman of the department, or the appropri-

ate attending staff member assigned responsibility, and

subject to departmental policies and procedures.

Section 2. QUALIFICATIONS

a. The general qualifications to be required of

members of each category of specified professional

personnel shall be determined by the appropriate

department concerned. The chairman of the depart-

ment concerned shall submit a listing of such qualifi-

cations to the Medical Executive Committee for

approval.

b. Specified professional personnel shall not be

eligible for appointment of membership on the Medi-

eal Staff. Nothing herein shall ereate any vested

rights in any Specified Professional Personnel to

receive or to maintain any privileges in the Hospital.

The provisions of Article VII and Article III of these

bylaws shall not apply to specified professional

personnel.

e. Each individual in this category shall have an

appropriate application on file, and their department

shall review and approve such. The application shall

include evidence of licensure, training, and documen-

tation of malpractice insurance.

April 30, 1987

DELIVERED BY TELECOPIER,

HAND DELIVERED, AND

MAILED VIA CERTIFIED MAIL — RETURN

RECEIPT REQUESTED

Arthur N. Lurvey, M.D.

Chief of Staff

Midway Hospital Medical Center

5925 San Vicente Boulevard

Los Angeles, CA 90019

Re: Medical Staff Privileges

Dear Dr. Lurvey:

Please be advised that I represent Simon J.

Pinhas, M.D. and I am authorized on his behalf to

demand a hearing upon his summary suspension of medi-

eal staff privileges from Midway Hospital Medical Center

(“Midway Hospital”) and the Medical Staff of Midway

Hospital Medical Center (‘Medical Staff’). Dr. Pinhas

demands that the hearing and the notice of charges be in

conformity with th

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