# Petition for Writ of Certiorari — Tarabishi v. McAlester Regional Hospital > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0582%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1992 - **Citation:** 505 U.S. 1206 ## Text ©) Supreme Court, U, Le FT Y¥40 FILED - 7 MAY 4 1992 OFFICE OF THE CLEk In The Supreme Court of the United States October Term, 1992 ° M. HISHAM TARABISHI, M.D., Petitioner, MCALESTER REGIONAL HOSPITAL, also known as McAlester Regional Health Center Authority Public Trust Status; THE MCALESTER CLINIC, INC.; LEROY M. MILTON, M.D.; GEORGE BROWN, M.D.; WILLIAM G. BLANCHARD, M.D.; SAMUEL E. DAKIL, M.D.; JOHN B. COTTON, M.D. STEVEN ATWOOD, M.D.; CHARLES K. HOLLAND, M.D.; KARL SAUER, M.D.; HERTZL V. SCHAFF, M.D.; JOE MCCAULEY, M.D.; and, DON SCHULLER, M.D., Respondents. . Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Tenth Circuit ¢ PETITION FOR A WRIT OF CERTIORARI ¢ JoHN A. CLARO (Counsel of Record) CLiaro & JOHNSTON 1000 Bank of Oklahoma Plaza 201 Robert S. Kerr Avenue Oklahoma City, OK 73102 Telephone: (405) 235-4074 Attorney for Petitioner April, 1992 COCKLE LAW BRIEF PRINTING CO, (800) 225-6964 OR CALL COLLECT (402) 42-2831 Re, QUESTION PRESENTED DOES A HOSPITAL BOARD’S CONDUCT OF A SHAM PEER REVIEW PROCESS WHICH DAMAGES AND DEPRIVES A COMPETING MEDICAL DOCTOR OF PROPERTY, CONSTITUTE A PER SE VIOLATION OF THE ANTITRUST LAWS? IF SO, DID THE COURT OF APPEALS ERR BY CONSIDERING SUCH CONDUCT ONLY UNDER A MODIFIED RULE OF REASON STAN- DARD BY WHICH OTHERWISE ACTIONABLE JOINT CONDUCT AMONG COMPETITORS IN THE MEDICAL PROFESSION / HOSPITAL COMMUNITY (IN THE FORM OF “PEER REVIEW WITHOUT DUE PROCESS”) IS NOT ACCORDED THE SAME ANTITRUST CONSEQUENCE AS JOINT ACTION BETWEEN COMPETITORS IN SIMI- LAR GOVERNMENT MANDATED, SELF-GOVERNING PROFESSIONS SUCH AS STOCKBROKERAGE, THE LEGAL PROFESSION, ETC.? ii PARTIES TO THE PROCEEDINGS The Petitioner, Plaintiff-appellant and cross-appellee below, is M. Hisham Tarabishi, M.D. The Respondents, Defendants-appellees and cross- appellants below, are the McAlester Clinic, Inc., an Okla- homa professional corporation, McAlester Regional Hos- pital, an Oklahoma public trust hospital, and Leroy M. Milton, M.D., George Brown, M.D., William G. Blanchard, M.D., Samuel E. Dakil, M.D., John B. Cotton, M.D., Steven Atwood, M.D., Charles K. Holland, M.D., Karl Sauer, M.D., Hertzl V. Schaff, M.D., Joe McCauley, M.D., Don Schuller, M.D. iii TABLE OF CONTENTS Page QUESTIONS PRESENTED ........-------> pawastue i PARTIES TO THIS PROCEEDINGS..........---+--. ii TABLE OF CONTENTS..........---0ee eee eeeeeeeee iii TABLE OF AUTHORITIES............---20++++e5e Vv OPINIONS BELOW...........-----ee eee ee reece 1 JURISDICTION. ........--- eee e cece renee eee eeeeees 2 CONSTITUTIONAL AND STATUTORY PROVI- SIONS INVOLVED .........-.-cccccec cece ccceces 2 STATEMENT OF THE CASE...........----+-++++5 2 REASONS FOR GRANTING THE WRIT .........-. 7 |. PETITIONERS HAVE BEEN DEPRIVED OF A VALUABLE PROPERTY RIGHT IN VIOLATION OF THE DUE PROCESS CLAUSE OF THE FOURTEENTH AMENDMENT ........-------- 7 A. THE DUE PROCESS CLAUSE INSURES A FAIR HEARING...........-eee cee ceeeeees 7 B. PROCEDURAL DUE PROCESS MUST BE AFFORDED IN A PEER REVIEW ACTION.. 10 C. PROCEDURAL DUE PROCESS WAS DENIED DR. TARABISHI............-++-- 16 Il. THIS CAUSE SHOULD BE REVERSED AND IEEE onc chev ensecccccccsecesscensones 20 A. THE PER SE RULE SHOULD HAVE BEEN APPLIED BY THE LOWER COURTS...... 20 B. PEER REVIEW PROCEEDINGS ARE NOT EXEMPT FROM THE PER SE APPROACH.. 23 iv TABLE OF CONTENTS - Continued Page C. THIS CAUSE SHOULD BE CONSIDERED UNDER THE RULE OF REASON......... 26 ek. SE Ss ca Sac ua cond ccehecedeeceaanen 28 I MERE BAN Rok s bawen 540555560 085SS 00 aed App. 1 Opinions and orders from the courts below. Constitu- tional and Statutory Texts. Vv TABLE OF AUTHORITIES Page CASEs: Arizona v. Maricopa County Medical Society, 457 ke i, rrr reyes ere rrr rrr Tey 7 24, 25 Armstrong v. Manzo, 380 U.S. 545, 552 (1965) ........- 8 Board of Regents of State Colleges v. Roth, 408 U.S. 564, 570-71 BB C1972). oo ccc cesesscuvvavatecncsses 9 Board of Trade of the City of Chicago v. United States, 266 USFS CIPI) oan cv cksccsensnctbescesseweses 26 Boddie v. Connecticut, 401 U.S. 371 (1971)............. 9 Daniels v. Williams, 474 U.S. 327, 331 ((1985).......... 8 Darling v. Charlestown Com. Mem. Hosp., 33 Ill.2d 326, 211 N.E.2d 253 (1965), cert. denied, 383 U.S. | er rere rer rT tart 10 Denver Rockets v. All-Pro Management, 325 F.Supp. 1049, 1064-65 (C.D.Cal. 1971) .............-02-2. 25 FTC v. Indiana Federation of Dentists, 476 U.S. 447 ‘1, | Se re rer ere re ror er ere or? 26, 27 Fuentes v. Shevin, 407 U.S. 67, 80-81 (1972) ........... 8 Goldfarb v. Virginia State Bar, 421 U.S. 773, 778 n. 17 (EDT 5s nvnsk vn cde pan ee sasnsseceenmareneuscayes 25 Grannis v. Ordean, 234 U.S. 385, 394 (1914)........... 7 Logan v. Zimmerman Brush Co., 455 U.S. 422, 428 CLOGR) iv dcncaseesssesandswrsaes ceaeeaeenenseeenyss 8 Mathews v. Eldrige, 424 U.S. 319, 333 (1976)..........-- 8 FL vi TABLE OF AUTHORITIES - Continued Page McCreery Angus Farms v. American Angus Ass‘n., 379 F.Supp. 1008, 1018 (S.D.Ill. 1974).............. 26 Mullane v. Central Hanover Trust Co., 339 U.S. 306, SER CRP 0 snk ct eei ce onens coe see URE Eee 7 National Society of Professional Engineers v. United States, 435 U.S. 679, 696 (1978)............. 25, 26, 27 Northeast Georgia Radiogical Assoc. v. Tidwell, 670 F.2d SOT, SES Ghee CAR RE ses suwurssvnsaaveceaes 8 Northwest Wholesale Stationers, Inc. v. Pacific Sta- tionary & Printing Co., 472 U.S. 284 (1985) ........ 26 Patrick v. Burget, 800 F.2d 1498, 1506 (9th Cir. 1986) .... 12 Pontius v. Children’s Hospital, 552 F.Supp. 1352 1369-70 COVER POGR. TURE «so ncines See Sweeney v. Athens Regional Medical Ctr., 705 F.Supp. 1556, 1561-62 (M.D.Ga. 1989); Griffith v. Health Care Auth. of the City of Huntsville, 705 F.Supp. 1489, 1501 (N.D.Ala.1989); Wicker v. Union County General Hosp., 673 F.Supp. 177, 186 (N.D.Miss. 1987); Palm Springs Medical Clinic, Inc. v. Desert Hosp., 628 F.Supp. 454, 456-57 (C.D. Cal. 1986). App. 14 that these facts bring the Hospital within the definition of a special function governmental unit for purposes of the LGAA. Plaintiffs respond that Oklahoma law controls the — question here, and thus the interpretation of the status of a hospital under the laws of other states is immaterial. further, the mere fact that a judgment against the Hospi- tal would hurt McAlester does not mean that the Hospital is a special function governmental unit with antitrust immunity. Finally, plaintiffs rely upon the fact that under the provisions of the Governmental Tort Claims Act, Okla.Stat. tit. 51, §§ 151, et seq., then in effect, public trusts operating hospitals were specifically excluded from the definition of “political subdivision” under that Act. In 1987, however, the Governmental Tort Claims Act was amended to specifically include public trusts operating hospitals within the definition of political subdivisions. Defendants’ reliance on Buckley Construction is mis- placed. In Buckley, the plaintiff, a disappointed low bid- der on a construction contract, alleged that one of the defendants, Shawnee Civic & Cultural Development Authority, had violated the antitrust laws in its award of the contract to the second lowest bidder on the project. While the Authority was indeed a public trust created pursuant to the same Oklahoma statutes which created the Hospital in this case,® its challenged conduct was © The Hospital was formed as a trust for furtherance of public functions under 60 Okla.Stat. §§ 176-180. The City of McAlester owns the land upon which the Hospital is located and leases it to the Hospital. Its trustees are public officers, (Continued on following page) ee ttle se AR oe C8 als Tih etttal. itt Bhat wa 6b Sh A RD te ODE ears Le PNB nol 5 EME NLA Ms alo tte App. 15 undertaken pursuant to provisions of the Oklahoma Pub- lic Competitive Bidding Act, Okla.Stat. tit. 61, §§ 101-136. Those provisions were the ones relevant to the question of state action immunity under Parker v. Brown, 317 U.S. 341, 342, 63 S.Ct. 307, 87 L.Ed. 315 (1943), and subsequent (Continued from previous page) appointed by the mayor of McAlester, and they must take the oath of office required of elected public officials. 60 Okla.Stat. § 178(A). Meetings of the trustees are subject to the open meeting laws like other public boards and commissions. /d. at § 178(C). The Declaration of Trust which created the Hospital stated that the Hospital was created for the benefit of the city of McAlester and that the purpose of the trust was to provide hospital and public health services to the residents of McAles- ter. Defendants’ Ex. 155D, Addendum of Appellees/Cross- Appellants at Tab D. However, as the district court noted, a public trust in Oklahoma is a separate legal entity from its beneficiary. See State v. Garrison, 348 P.2d 859, 863 (Okla. 1959). Hospital employees are not city employees. Further, as the district court also noted, 60 Okla.Stat. § 179 makes it clear that any judgment against the Hospital would be satisfied out of the trust estate, and the beneficiary (the city of McAlester) would not be liable. Defendants also argue that in Dr. Tarabishi’s section 1983 action against the Hospital and its trustees arising out of the same facts, this court held that the Hospital and its trustees were acting under color of state law for section 1983 purposes. Tarabishi v. McAlester Regional Hosp., 827 F.2d 648, 652 (10th Cir. 1987). That determination is not, however, dispositive of whether the actions of the Hospital and its trustees are entitled to immunity as those of a special function governmental unit and its officials or employees. Cf. Ezpeleta v. Sisters of Mercy Health Corp., 800 F.2d 119, 122 (7th Cir.1986) (per curiam) (even though antitrust claim is barred by state action doctrine, sec- tion 1983 claim is unavailable because there is no state action in decision to terminate physician’s staff privileges). App. 16 cases.” Thus, the fact that this court in Buckley found the actions of a public trust in awarding a construction con- tract pursuant to applicable competitive bidding statutes immune under the state action doctrine says nothing about whether a public trust hospital should be immune under the LGAA. Further, the cases from other jurisdictions upon which defendants rely are distinguishable. In Sandcrest Outpatient Servs., P.A. v. Cumberland County Hosp. Sys., Inc., 853 F.2d 1139 (4th Cir.1988), involving a county hospital owned and operated by a nonprofit corporation created as an agency and instrumentality of the county, the plaintiff did not appeal! the district court’s conclusion that the nonprofit corporation which owned and operated the hospital was a governmental unit under the LGAA. Thus, the appellate court simply assumed that to be the case. Palm Springs Medical Clinic, Inc. v. Desert Hosp., 628 F.Supp. 454 (C.D.Cal.1986), upon which defendants place great reliance, involved a hospital district created pur- suant to California Health & Safety Code §§ 32000, et seq. After extensively examining the legislative history of the LGAA, the court concluded that the hospital district was immune.® In Sweeney v. Athens Regional Medical Ctr., 705 F.Supp. 1556 (M.D.Ga. 1989), the court held, without ’ Immunity under the LGAA was apparently not an issue in Buckley. 8 We note that recently, however, the Ninth Circuit has ruled that a hospital district is not immune under the state action doctrine, without specifically discussing immunity under the LGAA. Lancaster Comm. Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397 (9th Cir.1991). App. 17 specific analysis but simply “[a]fter considering the rele- vant statutory authority,” that a public hospital authority organized under the Georgia Hospital Authorities Law was a local government unit under the LGAA.® Id. at 1562. Similarly, a district court in Griffith v. Health Care Auth., 705 F.Supp. 1489, 1501 (N.D.Ala.1989) held that a health care authority was a “local government” under the LGAA."° Finally, in Wicker v. Union County Gen. Hosp., 673 F.Supp. 177 (N.D.Miss.1987), a public hospital owned and operated by a county was held to be a governmental : agency.'! None of these cases directly answers the ques- tion of whether a hospital operated as a public trust for furtherance of public functions with a city as its benefici- - ary should be considered a special function governmental unit. Cf. Zapata Gulf Marine v. P.R. Maritime Shipping Auth., 682 FSupp. 1345, 1351 (E.D.La.1988) (court held 4 ls le es ial : ® Under the applicable Georgia law, the authority “oper- : ates as a not-for-profit public corporation and is ‘deemed to exercise public and essential governmental functions and shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of [the Hospital Authorities Law].’” Sweeney, 705 F.Supp. at 1561 (quoting Ga.Code Ann. §§ 31-7-75, 77 (1985)). i 10 The health care authority was established pursuant to | the Health Care Authorities Act of 1982, Ala.Code §§ 22-21-310, et seq., which provided, inter alia, that such authorities “act[ ] as an agency or instrumentality of its authorizing subdivisions and as a political subdivision of the state.” Ala.Code § 22-21-318(c)(2). 1! The court held -“the Hospital and its board [of trustees] are themselves governmental agencies. The trustees on the board are appointed to limited terms by elected representatives of the people.” Wicker, 673 F.Supp. at 186. ba DP UE Sainte Ht A Se usb. 3 4 App. 18 that Puerto Rico Maritime Shipping Authority was spe- cial function governmental unit because statute creating it described it as a “governmental instrumentality of the Commonwealth of Puerto Rico,” funds to cover an anti- trust damage award against the Authority would come ultimately from the taxpayers, the creation and operation of the Authority “was necessitated by the inability of the private sector to meet the public’s needs,” and because the statute creating the Authority provided that the exer- cise of its powers “constitutes an essential governmental function.”); Trustees of A.J. Bremen Realty Trust v. City of Boston, 1985-1 Trade Cas. (CCH) ] 66,520, 1985 WL 6083 (D.Mass.1985) (court held Massachusetts Port Authority was a special function governmental unit because created as a public instrumentality and because the exercise of its powers were deemed to be an “essential governmental function.”); Northeast Jet Ctr., Ltd. v. Lehigh-Northhampton Airport Auth., 767 F.Supp. 672, 680 (E.D.Penn. 1991) (air- port authority is special function governmental unit). After carefully examining the relevant statutes and case law, we hold that the district court correctly deter- mined that the Hospital is not a special function govern- mental unit. No single factor is determinative. Rather, two considerations guide our decision. First, we agree with the district court that a signifi- cant consideration is where liability for an antitrust dam- age award will actually fall, in light of the LGAA’s obvious concern to limit the imposition of treble damage awards on taxpayers. In this case, the city of McAlester is the beneficiary of the public trust, and as such is clearly not liable for any damage award made against the trust. Ee Se eS ee ee ee bab tain eR AA PS Maat ie eS. mile 0 iat tt Mit i asd Cat tL i ae Rate iO ahd DR ti EPP hte! 0 i net: as hase Rie ointlan base" ee Pb thes ia 8 App. 19 Thus, the LGAA’s concern about imposing unfair burdens on the taxpayers is not implicated. Second, inasmuch as the question of the character of a local entity under the LGAA is a question of state law, we find it persuasive that around the time of the chal- lenged conduct, the Oklahoma legislature clearly viewed public trust hospitals as entities different from political subdivisions. Indeed, under the provisions of the Govern- mental Tort Claims Act, Okla.Stat. tit. 51, § 152, immunity was granted to the “state, its political subdivi- sions, . . . whether performing governmental or propri- etary functions. .. . ” “Political subdivision” was thereafter defined as including a “municipality,” a “school district,” a “county,” and “a public trust where a city, town school district or county is a beneficiary, pro- vided, that for the purposes of this act, a public trust shall not include any hospital operating under a trust author- ity.” Id. at 152(8). This clear exclusion suggests that the Oklahoma legislature at the time did not view public trust hospitals as entities comparable to municipalities, school district, or counties. While the Tort Claims Act’s clear inclusion of public trust hospitals under its definition of political subdivisions since 1987 might suggest a different result today, we believe the former provisions indicate a conscious characterization of a public trust hospital under state law at the time relevant to this case. Having affirmed the conclusion that defendants enjoy no immunity from damage claims under the LGAA, we turn to the merits of this case. Plaintiffs alleged the following antitrust violations: (1) monopolization of surgical health care services by the App. 20 Hospital; (2) monopolization of and attempt to monopol- ize non-surgical and office health care services by the Clinic; (3) conspiracy to monopolize by all defendants; and (4) conspiracy in restraint of trade by all defendants. The district court rejected all those claims. 1. Monopolization by Hospital. Plaintiffs allege the Hospital monopolized the surgi- cal health services market.!? Apparently, as a part of this ciaim, plaintiffs assert that the Hospital violated the “essential facilities” doctrine by means of the revocation of Dr. Tarabishi’s staff privileges, thereby denying him access to the Hospital’s facilities which he argues are crucial to his practice. The elements of monopolization under Sec- tion 2 are “the possession of monopoly power in the relevant market” and “the willful acquisition Or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or his- toric accident.” Reazin v. Blue Cross and Blue Shield, 899 F.2d 951, 973 (10th Cir.), cert. denied, __ U.S. __, 110 S.Ct. 3241, 111 L.Ed.2d 752 (1990) (quoting Bright v. Moss Ambulance Serv., 824 F.2d 819, 823 (10th Cir. 1987) (quoting United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S.Ct. 1698, 1703-04, 12 In their complaint and Amended Complaint, plaintiffs appeared to charge the Hospital with attempted monopoliza- tion as well. The district court did not address such a claim in its Findings of Fact and Conclusions of Law, and plaintiffs do not appear to pursue it in their appellate briefs. A ert Te Gin elt) Ate hws a AE IEA tot Palin I NL we App. 21 16 L.Ed.2d 778 (1966))). In this circuit, proof of monopoly power requires a showing of both power to control prices and power to exclude competition. Reazin, 899 F.2d at 967; Bright, 824 F.2d at 824; Shoppin’ Bag of Pueblo, Inc. v. Dillon Cos., 783 F.2d 159, 163 (10th Cir.1986). Determination of the existence of monopoly power requires proof of rele- vant product and geographic markets. The district court found error with plaintiffs’ proof of markets. More specifically, the court found there was insufficient evidence to prove the asserted markets. These are factual findings subject to the clearly erroneous stan- dard of review. Westman Comm'n Co. v. Hobart Int'l, Inc., 796 F.2d 1216, 1220 (10th Cir.1986), cert. denied, 486 U.S. 1005, 108 S.Ct. 1728, 100 L.Ed.2d 192 (1988). Plaintiffs’ expert, Dr. Joe Jadlow, testified that the relevant product market for the Hospital was the business of supplying surgical health care services. The relevant geographic market was defined as the area within a 30-mile radius of McAlester. The district court noted the following prob- lems with the geographic market: First, the geographic radius was derived from an examination of MRH [Hospital] discharge records, and a finding that 84% of its discharged patients lived within thirty miles of McAlester. As was pointed out on cross-examination, plain- tiffs’ expert did not take into account whether patients who lived within the 30-mile radius went elsewhere than MRH for surgical health care services. The “time factor” which might keep patients close to home was not quantified. District Court Findings of Fact and Conclusions of Law at 25. The district court also criticized Dr. Jadlow’s use of a App. 22 bed count to measure the Hospital’s market share in the market of surgical health care services.}% More fundamentally, the district court noted that plaintiffs simply failed to present any evidence about the Hospital’s power to control prices, a critical element of proof of monopoly power in this circuit. Reazin, 899 F.2d at 967; Shoppin’ Bag of Pueblo, 783 F.2d at 163. Indeed, as plaintiffs’ expert, Dr. Jadlow, conceded, he had not exam- ined whether the Hospital had evidenced monopoly power in its pricing. R. Vol. VI at’ 243, 249-50. Such a proof failure is fatal to plaintiffs’ monopolization claims against the Hospital. Thus, we affirm the district court’s conclusion that “a showing of monopoly power [by the Hospital] has not been made.” District Court Findings of Fact and Conclusions of Law at 27. Plaintiffs’ section 2 claims against the Hospital therefore fail.'4 13 The district court stated “[t]he mere words of the plain- tiffs’ market definition denote more than the provision of a hospital bed.” District court findings of Fact and Conclusions of Law at 25. The district court also concluded that Dr. Tar- abishi, as a provider of surgery or surgical services to his patients, was neither a competing provider now a consumer of “surgical health care services.” Similarly, the court concluded that TMD was neither a competitor nor a consumer in the market of surgical health care services, because TMD did not have beds, the measure by which the Hospital’s market share in the surgical health care services market was determined. 14 As indicated, plaintiffs argue mightily that the “essen- tial facilities” doctrine was violated in this case. This court explored that doctrine in McKenzie v. Mercy Hosp. of Indepen- dence, 854 F.2d 365, 369 (10th Cir.1988): (Continued on following page) App. 23 2. Monopolization and Attempt to Monopolize by Clinic. Whe DSH deal 5 PAL otis To establish monopolization by the Clinic, plaintiffs must, as indicated, prove monopoly power. In their (Continued from previous page) Though the Supreme Court first employed the essential facilities doctrine to condemn the conduct of multiple defendants under Section 1 of the Sher- man Act, the doctrine has since been applied in cases brought under Section 2 and in which only a single entity controls the necessary facility. a om om More recently, the federal courts of appeals have adopted standards to determine whether a monopoi- ist’s refusal to deal constitutes a violation of the essential facility doctrine under Section 2. In MCI Communications Corp. v. American Tel. and Tel. Co., 708 F.2d 1081, 1132-33 (7th Cir.), cert. denied, 464 U.S. 891 [104 S.Ct. 234, 78 L.Ed.2d 226] (1983), the court heid that to establish liability under the doctrine, the plaintiff must show: “(1) control of the essential facility by a monopolist; (2) a competitor’s inability practically or reasonably to duplicate the facility; (3) the denial of the use of the essential facility to a competitor; and (4) the feasibility of providing the facility.” Id. at 369 (citations omitted). This court went on to note, however, that a district court had “declared that for public policy reasons, ‘the essential facilities doctrine is inapplicable to hospital staff privileges decisions.’ ” Id. at 371 n. 12 (quoting Pontius v. Children’s Hosp., 552 F.Supp. 1352, 1370 (W.D.Pa.1982)). See also Castelli v. Meadville Medical Ctr., 702 F.Supp. 1201, 1209 (W.D.Pa. 1988), aff'd, 872 F.2d 411 (3d Cir.1989) (“This court is in full agreement with the consistent decisions of other courts not to apply the essential facilities (Continued on following page) App. 24 attempt to prove such power, plaintiffs’ expert, Dr. Jad- low, defined the relevant product market as the business of supplying non-surgical and office surgery health care services. As with the Hospital, he defined the relevant geographic market as the area within a 30-mile radius of McAlester. He further opined that the Clinic had a 66% share of that market, based on the following analysis: (Continued from previous page) doctrine to exclusive service contracts by hospitals.”). The McKenzie court did not address that issue because it concluded that, even if the doctrine were to apply, the plaintiff had failed to show that he was denied access to an essential facility. Were we to apply the doctrine to this denial of staff privi- leges case, we would hold that it fails as a section two claim because plaintiffs failed to establish that the Hospital or any other defendant is a monopolist. To the extent plaintiffs argue the defendants conspired to deny them access to an essential facility in violation of section one, we would hold as this court did in McKenzie, that plaintiffs were not denied an essential facility. If we analyze the two plaintiffs separately, plaintiffs’ fail- ure to prove an essential facility becomes clearer. Plaintiffs themselves assert that it was the TMD Center which was the alleged primary competitive threat to defendants. For the TMD Center, however, Dr. Tarabishi's access to Hospital facilities was not essential, because in November 1984 the TMD Center and the Hospital entered into a transfer agreement pursuant to which TMD patients had access to the Hospital. As for Dr. Tarabishi himself, his argument that he was denied an essential facility proves too much, for it amounts to an argument that a hospital can never deny a physician staff privileges, because restricting the practice of that physician always, in some sense, reduces competition. Yet Dr. Tarabishi has not proved that restricting his own access to the Hospital, apart from the TMD Center, diminished competition in a meaningful antitrust sense. a a ee eT ae App. 25 And | did this by looking to see what were the specialties of the physicians at the McAlester Clinic. I included those specialties in looking at the total number of physicians in the McAlester community, and | looked to see what proportion of that total group physicians the McAlester Clinic accounted for. R. Vol. V at 24. The district court again noted the follow- ing problems with Dr. Jadlow’s market determinations: While defining the geographic market as a 30- mile radius, plaintiffs’ expert focused only on doctors within McAlester itself. he did not con- sider doctors within the radius who did not practice in McAlester. A recurring theme in his testimony was that he focused solely upon the Clinic and the City of McAlester. Dentists who perform root canal work, for example, while appearing to fall within the language of plain- tiffs’ product market definition, were excluded solely because plaintiffs’ expert did not believe such surgery was done at the Clinic. Regarding the proposed geographic market, plaintiffs’ expert at one point characterized it as an approximation. However, it is clear that the actual geographic area studied was the City of McAlester itself. In sum, both as to product market and geographic market, the procedure of plaintiffs’ expert varied from the actual pro- posed markets. District Court Findings of Fact and Conclusions of Law at 27-28. We cannot say that these findings are clearly erro- neous. 1!5 15 Plaintiffs make a multi-pronged attack on the district court’s conclusions with respect to market definition. It is (Continued on following page) App. 26 Further, again as with the monopolization claim against the Hospital, plaintiffs presented no evidence of the Clinic’s ability to exclude competition and to control price.'© Absent such proof, we are compelled to conclude (Continued from previous page) difficult to respond to all aspects of this attack, because many of them are obscure. Suffice it to say that we bear in mind that it is plaintiffs’ burden to prove relevant markets. Thus, plain- tiffs’ attack on defendants for “fail[ing] to show why medical care consumers from Pittsburgh County may sometimes travel to other locations” is beside the point. Further, proof of mar- kets is required so that adverse impact on competition can be evaluated. Thus, plaintiffs’ markets must bear some relation to plaintiffs’ theory of harm to competition. Plaintiffs in this case have failed in that respect. Plaintiffs belatedly attempt to remedy their failure to plead and prove relevant markets by citing FTC v. Indiana Fed'n of Dentists, 476 U.S. 447, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986), where the Supreme Court stated, ” ‘proof of actual detrimental effects, such as a reduction of output’ can obviate the need for an inquiry into market power, which is but a ‘surrogate for detrimental effects.’ ” Id. at 460-61, 106 S.Ct. at 2018-19 (quot- ing Areeda & Turner, Antitrust Law, { 1511 (1986)); see also Bhan v. NME Hosp., Inc., 929 F.2d 1404, 1413 n. 10 (9th Cir. 1991); Reazin v. Blue Cross & Blue Shield, 899 F.2d 951, 968 n. 24 (10th Cir.), cert. denied, __ U.S. __, 110 S.Ct. 3241, 111 L.Ed.2d 752 (1990). What plaintiffs fail to realize, however, is that the “proof of actual detrimental effects” requires more than the simple allegation that the closure of TMD and the cessation of Dr. Tarabishi’s practice reduced competition. As we have explained previously, what plaintiffs have never shown is that consumer choices were in fact reduced or impaired by the denial of staff privileges to Dr. Tarabishi. See n. 14, supra. 16 Indeed, as defendants point out, what evidence there was on this point suggests the opposite conclusion. At the (Continued on following page) aia cians i hk mec ee eee Es an App. 27 that plaintiffs’ monopolization claim against the Clinic must fail. Plaintiffs also charged the Clinic with attempted monopolization. The elements of that section two viola- tion are: (1) relevant market (including geographic mar- ket and relevant product market) in which the alleged attempt occurred; (2) dangerous proba- bility of success in monopolizing the relevant market; (3) specific intent to monopolize; and (4) conduct in furtherance of such an attempt. Colorado Interstate Gas Co. v. Natural Gas Pipeline Co., 885 F.2d 683, 693 (10th Cir.1989), cert. denied, __ U.S. __, 111 S.Ct. 441, 112 L.Ed.2d 424 (1990); Shoppin’ Bag of Pueblo, 783 F.2d at 161. Further “to satisfy the dangerous proba- bility of success element of an attempt claim, the plaintiff must show that there was a dangerous probability the defendant would achieve monopoly status as the result of the predatory conduct alleged by the plaintiff.” Colorado Interstate Gas Co., 885 F.2d at 693. This is typically done by examining the defendant’s market share in the rele- vant market. Id. The district court, relying on its previous conclusion that plaintiffs failed to prove adequately the relevant (Continued from previous page) same time Dr. Tarabishi left the Clinic, another doctor also left and set up an independent practice as an internist/cardiologist in competition with the Clinic. His independent practice was very successful. App. 28 markets, held that the first two factors were not estab- lished. We agree. We further agree with the district court’s alternative conclusion that the third factor - a specific intent to monopolize - was not established. While the evidence in this case may certainly have shown animosity towards Dr. Tarabishi, we must affirm the district court’s conclu- sion that it failed to show a specific intent to monopolize. In so holding, we reject plaintiffs’ argument that defendants’ legitimate and protected conduct!” in oppo- sing Dr. Tarabishi in the Certificate of Need application proceedings furnishes the requisite specific intent to monopolize. 3. Conspiracy to Monopolize. Plaintiffs charged all defendants with various con- spiracies to monopolize, in violation of section two. More specifically, plaintiffs argue there were three conspiracies: one between the Hospital and the Clinic; one between the Hospital and the physicians; and one between the indi- -vidual physicians. The elements of such a claim are: (1) .. .a combination or conspiracy to monopol- ize; (2)... overt acts done in furtherance of the combination or conspiracy; (3) . . . a specific ’ 7 Plaintiffs do not seriously dispute that defendants activities in the Certificate of Need application hearings were protected under the Noerr/Pennington doctrine. See United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965); Eastern R.R: Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961). Das Atay a as tie «ty OI ARO EE eh NE RS RE ASR NI AEN 10 EN Lat EL AIS att et Bete d ttl ORR thn hs a Mh te OO PRES hes OB ded CPs nstind App. 29 intent to monopolize; and (4) . . . an appreciable effect upon commerce. Dreiling v. Peugeot Motors of Am., Inc., 850 F.2d 1373, 1382 (10th Cir.1988); see also Bacchus Indus., Inc. v. Arvin Indus., 939 F.2d 887, 895 (10th Cir.1991). The district court held for defendants on this claim, noting again plaintiffs’ fail- ure to prove a specific intent to monopolize as well as their failure to establish a conspiracy. We affirm with respect to the lack of evidence of specific intent. The issue of conspiracy in this case is, as the district court acknow!l- edged, more difficult. Because it is crucial to plaintiffs’ section one claim, we discuss it in that context. 4. Conspiracy in Restraint of Trade. Plaintiffs allege that defendants engaged in a con- spiracy to boycott plaintiffs and in a conspiracy to stabi- lize prices, all, obviously, in restraint of trade. They claim that each of these conspiracies is a per se violation of section one. Aliernatively, they charge that they violate section one under the rule of reason. While noting that a group boycott has been held to be a per se violation of section one, the district court declined to apply the per se analysis to the claimed boycott in this case.18 We agree with that determination. 18 In doing so, the court relied on Weiss v. York Hosp., 745 F.2d 786 (3d Cir.1984), cert. denied, 470 U.S. 1060, 105 S.Ct. 1777, 84 L.Ed.2d 836 (1985), in which the court applied the per se rule to a contention that a hospital’s refusal to grant staff privileges to osteopathic physicians constituted a boycott or concerted refusal to deal. The Weiss court noted, however, that: (Continued on following page) App. 30 A plaintiff seeking application of the per se rule must present a threshold case that the chal- lenged activity falls into a category likely to have predominantly anti-competitive effects. The mere allegation of a concerted refusal to deal does not suffice because not all concerted refusals to deal are predominantly anticompeti- tive. Northwest Wholesale Stationers, Inc. v. Pacific Stationary Printing Co., 472 U.S. 284, 298, 105 S.Ct. 2613, 2621, 86 L.Ed.2d 202 (1985); see also Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1412 (9th Cir.1991) (“the per se rule should be invoked for a group boycott when the challenged activity would almost always tend to be predominantly anticom- petitive”). Denying staff privileges to a physician through peer review on the basis that the physician’s conduct is unprofessional and inappropriate is not an activity (Continued from previous page) The Medical Staff is, however, entitled to exclude individual doctors, including osteopaths, on the basis of their lack of professional competence or unprofessional conduct. If York’s policy toward D.O.’s could be viewed as a form of industry self- regulation of this type, the rule of reason, rather than a per se rule, would be applicable. Id. at 820 (citations omitted); see also Miller v. Indiana Hosp., 843 F.2d 139, 144 n. 6 (3d Cir.) (“in a hospital staff privilege case in which the hospital defends on lack of professional ability, the rule of reasons test would apply”), cert. denied, 488 U.S. 870, 109 S.Ct. 178, 102 L.Ed.2d 147 (1988). Because defendants in this case terminated Dr. Tarabishi’s staff privileges at least obstensibly because of a lack of professional competence or unprofessional conduct, we agree with the district court that Weiss does not dictate the use of per se analysis. citadel Bit Mila eS AP att, Some coed BART er ola nan App. 31 “likely to have predominantly anticompetitive effects” such that per se treatment is necessary.!9 The district court went on to apply the rule of reason analysis. In doing so, the court correctly noted that the first question is whether plaintiffs proved there was joint action sufficient to satisfy the requirement that there be a contract, combination or conspiracy. See McKenzie v. Mercy Hosp. of Independence, 854 F.2d 365, 367 (10th Cir.1988). In this case, the court specifically found that there was “no evidence, apart from the peer review pro- cess, that a conspiracy existed.” District Court Findings of Fact and Conclusions of Law at 33. After noting that existing precedents do not completely answer the ques- tion of whether peer review by itself provides the requi- site joint action or whether a hospital can conspire with its medical staff, the court held that, even assuming arguendo that joint action was established, plaintiffs once again simply failed to establish the required impact upon competition. Plaintiffs’ failure to prove adequately the rel- evant markets within the which competition was allegedly affected, and their failure to prove that Dr. Tarabishi’s inability to sue the facilities at the Hospital affected competition, as opposed to Dr. Tarabishi himself as a competitor, doomed plaintiffs’ section one claims to 19 The district court similarly rejected per se treatment of plaintiffs’ conspiracy to stabilize prices claim. We affirm, and we further affirm the district court’s conclusion that there was “no evidence of such a price stabilization conspiracy, whether directly or through the effect of the peer review proceedings.” District Court Findings of Fact and Conclusions of Law at 40. App. 32 failure.2° We affirm. While plaintiffs might wish us to assume or infer an impact on competition based on the denial of Dr. Tarabishi’s staff privileges, and the failure of his TMD center the reality is that it is plaintiffs’ burden to prove such an impact, and plaintiffs simply failed to do so herein. CONCLUSION For the foregoing reasons, the judgment of the dis- trict court dismissing plaintiffs’ claims is AFFIRMED. 20 The district court noted that “the only impact upon competition, as distinguished from plaintiffs, is based upon the speculation that TMD would ultimately become a hospital. The Court finds this speculation to be tenuous.” District Court Findings of Fact and Conclusions of Law at 39. While it is true that there was an area — the provision of out-patient surgery - in which the Hospital arguably did compete with TMD, plain- tiffs never quantified the impact on competition in that market. App. 33 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF OKLAHOMA M. HISHAM TARABISHI, M.D., and M. HISHAM TARABISHI, INC., Plaintiffs, No. 87-652-C VS. ) ) ) ) ) ) McALESTER REGIONAL ) HOSPITAL, a/k/a McALESTER ? REGIONAL HEALTH CENTER ? AUTHORITY PUBLIC TRUST ) STATUS; McALESTER CLINIC, ? INC.; LEROY M. MILTON, M.D. ? GEORGE BROWN, M_D.: ) WILLIAM G. BLANCHARD, ) M.D.; SAMUEL E. DAKIL, M_D.: ? JOHN B. COTTON, M_LD.: ) STEVEN ATWOOD, M.D.: ) CHARLES K. HOLLAND, M.D.; ? KARL SAUER, M.D.; HERTZL V. ) SCHAFF, M.D.; JOE.McCAULEY, ? M.D.; and DON SCHULLER, _—) M.D., ) ) ) Defendants. FINDINGS OF FACT AND CONCLUSIONS OF LAW The above-styled action was brought for alleged vio- lations of federal and state antitrust laws. This case was tried to the Court, and evidence was presented from October 17, 1988 through December 16, 1988. Closing arguments were held on January 20, 1989. App. 34 After considering the pleadings, the testimony and exhibits admitted at trial, all of the briefs and arguments presented by counsel fcr the parties, and being fully advised in the premises, the Court enters the following Findings of Fact, Conclusions of Law and Judgment in accordance with Rule 52, F.R.Cv.P., as follows: FINDINGS OF FACT Jurisdiction and Venue 1. This Court has jurisdiction over the subject mat- ter of this case pursuant to 15 U.S.C. § 15 and § 26. 2. Each of the defendants resides and transacts, or has transacted, business within this District. Venue is appropriate under 28 U.S.C. § 1391(b). 3. The Court finds that the activities of plaintiffs and of defendants giving rise to this litigation, as more fully set forth below, are or were in or affecting interstate commerce sufficiently to confer jurisdiction on this Court under 15 U.S.C. § 15. Specifically, plaintiffs have estab- lished that moneys for the services that plaintiffs and defendants have provided have flowed in interstate com- merce; and that goods and supplies actually purchased by plaintiffs and defendants and that would have been purchased by plaintiffs had they remained in business in McAlester, Oklahoma, travelled in interstate commerce. 4. This Court has jurisdiction over plaintiffs’ state law claims under the doctrine of pendent jurisdiction. Rl ta ohn Pod Rae inte App. 35 The Parties 5. Plaintiff M. Hisham Tarabishi, M.D. (Tarabishi) is a medical doctor, and a naturalized American citizen. Tarabishi is an otorhinolaryngologist, more commonly known as an “Ear, Nose and Throat” (ENT) specialist. In or about the fall of 1979, Tarabishi obtained “Board Certi- fication” in his specialty. 6. Plaintiff M. Hisham Tarabishi, Inc., also known as “TMD Out-Patient Medical Center” and “Tarabishi Medi- cal Center” (TMD) is the professional corporation through which Tarabishi has conducted business as a physician, and through which he sought to operate TMD, an Outpatient surgical clinic in McAlester, Oklahoma. 7. Defendant, McAlester Regional Hospital, a/k/a McAlester Regional Center Public Trust Status (the Hos- pital or MRH) is a 200 bed Oklahoma public trust hospital located in McAlester, Oklahoma, and created under 60 O.S. § 176-180 by the City of McAlester. The Hospital in its current facility was created in 1978 after the consolida- tion of two pre-existing hospitals in McAlester (Pittsburg County, Okla.) into one modern hospital. The City owns the lands upon which the Hospital sits and merely leases them to the Hospital’s governing body. 8. The Hospital was originally constructed with funds from various sources, including $1.5 million from issuance of general obligation bonds by the City of McAlester, and other funds from public and private sources. The Hospital exists as a Public Trust under Okla- homa law, whose beneficiary is the City of McAlester. App. 36 9. McAlester Clinic, Inc. (the Clinic) is an Oklahoma professional corporation now comprised of approx- imately 20 physicians as well as other employees. During the events here primarily at issue, in 1983 and 1984, the Clinic employed approximately 17 or 18 physicians, most of whom were “partners” or equity owners in the profes- sional corporation. The Clinic physicians represent a spectrum of medical specialties, including general or fam- ily practice, internal medicine, general surgery, pedi- atrics, radiology, and ENT. 10. Defendants Leroy M. Milton, M.D. (Milton) (internal medicine); George Brown, M.D. (Brown) (gen- eral surgery); William G. Blanchard, M.D. (Blanchard) (general surgery); Samuel E. Dakil, M.D. (Dakil) (ent); John B. Cotton, M.D. (Cotton) (family practice); Steven Atwood, M.D. (Atwood) (internal medicince/emergency medicine); and Charles K. Holland, M.D. (Holland) (inter- nal medicine) are or were at the relevant times members of the Clinic with the indicated areas of specialty practice. Milton was at all relevant times a member of the MRH Board of Trustees, as was Holland at least in the period 1982-1984. In or about May, 1984, Milton became the “Chief of Staff” at the Hospital, which is the chief admin- istrative office for physicians having privileges at the Hospital. The Chief of Staff is elected by other members of the Hospital medical staff to a one year term that runs approximately from May of one year through April of the following year. The Chief of Staff is responsible for appointing members of various “ad hoc” and standing committees of the Hospital medical staff, and is invested with a variety of administrative duties. ho 0 AREA ILE OOO hig lS App. 37 11. Defendants Karl Sauer, M.D. (Sauer) (orthopedic surgery); Hertzl V. Schaff, M.D. (Schaff) (general sur- gery); Joe McCauley, M.D. (McCauley) (family practice); and Don Schuller, M.D. (Schuller) (radiology) are physi- cians who have also had medical staff privileges at MRH at all relevant times, but are not members of or affiliated with the Clinic. Sauer, Schaff, and McCauley practice individually, and Schuller is a member of a small group unaffiliated with the Clinic. 12. Plaintiffs have named as co-conspirators but not as defendants several other physicians who have also practiced at MRH. These include Michael Boyer, M.D. (Boyer) (anesthesiology); James Dunagin, M.D. (Dunagin) (ophthalmologic surgery): Merlyn Bellamy, M.D. (Bellamy) (pathology); and Thurman Schuller, M.D. (T. Schuller) (pediatrics). Dunagin has not had any affiliation with the Clinic. Dunagin served as Chief of Staff at MRH from May, 1983 to April, 1984. Bellamy has had no affilia- tion with the Clinic. T. Schuller has been a member of the Clinic, and at least in the late 1970’s and early 1980's he served as the internal “chief of staff” at the Clinic. The Early Years 13. Dr. Tarabishi received his initial medical educa- tion at Alexandria University in Alexandria, Egypt where he graduated in 1966 as a Doctor of Medicine. From 1966 to 1969 Dr. Tarabishi completed a one year internship and a two year residency in ENT at the University Hospital at the University of Alexadria and became board certified in ENT in Egypt in 1969. App. 38 14. Dr. Tarabishi came to the United States in Febru- ary, 1970. He worked at part time non-physician medical jobs while studying for the Equivalency Exam for Foreign Medical Graduates (ECFMG) which he passed in Decem- ber 1970. Also during this time, Dr. Tarabishi’s wife, Farida, herself an Egyptian born, educated and trained doctor, came to the United States and set out to become United States qualified. 15. After both had passed the ECFMG, Dr. Tarabishi and his wife moved to Pittsburgh, ‘Pennsylvania where each of them commenced medical internship training. Dr. Tarabishi performed a general rotating internship at St. Margaret Memorial Hospital from July 1971 until June 1972. Thereupon, he commenced his residency training and completed a 12 month general surgery residency at St. Margaret Memorial Hospital from July 1972 until June 1973. Thereafter, from July 1973 until June 1974, Dr. Tar- abishi completed an additional one year of residency in ENT at the Eye and Ear Hospital at the University of Pittsburgh. A conflict developed in the fall of 1973 between Dr. Tarabishi and his “supervisor” Dr. Myers, allegedly because Dr. Myers did not want Arab doctors in the program in the wake of the 1973 Arab-Israeli war. In any event, litigation by Tarabishi against Dr. Myers and the Hospital ensued, resulting in a settlement. 16. In 1975, Dr. Tarabishi became a United States citizen. The same year, Tarabishi transferred to the ENT residency program at the University of Utah and com- pleted his training in or about 1977. He turned to adver- tisements in progressional journals to seek job opportunities, and accepted a position as an ENT surgeon with the Marshfield Clinic in Marshfield, Wisconsin thus Nt RE PL tte TET Wh i App. 39 availing himself of an established patient base with which to establish his practice. He remained in the employ of the Marshfield Clinic from July 1977 to May 1979, and thereafter sought to relocate to a warmer climate and a less isolated location. After again referring to profes- sional periodicals, Tarabishi contacted the Clinic, in McAlester, Oklahoma. The Clinic had been seeking a second ENT to join its existing ENT specialist, Dr. Sam Dakil, for some time. 17. Following preliminary discussions and meet- ings, Tarabishi was offered and accepted employment with the Clinic pursuant to a written contract. He started to work at the Clinic in May, 1979. Contemporaneously with commencing his employment at the Clinic, Dr. Tar- abishi was granted full staff privileges at the defendant Hospital. By November or December, 1979, differences had developed between Dr. Tarabishi and the Clinic over provisions relating to employment, compensation and pension vesting. Upon learning that Dr. Tarabishi was looking at other office space, the Clinic decided upon and announced his termination from employment. 18. Ata Clinic special staff meeting, on December 7, 1979, attended by defendant Doctors Holland, Milton, Dakil, Cotton, Brown and Blanchard, the minutes reflect: Doctor Thurman Schuller, Chief-of-Staff, stated that he felt it was important for the Staff to adopt a position on the doctors leaving the Clinic, to wit: Doctors Abdolkarim Khora- sanchian and M. Hisham Tarabishi. Doctor Schuller requested that the Staff adopt a posi- tion that it was impossible for the McAlester Clinic to do business with Doctors Tarabishi and App. 40 Khorasanchian since the philosophies of the Clinic and these two doctors were incompatible. (Plaintiff’s Exhibit! 101). 19. Dr. Tarabishi’s employment at the Clinic ceased in January, 1980. After leaving the Clinic, Dr. Tarabishi opened his own medical practice, such practice consisting of some general surgery, an office medical practice and otolaryngological surgery. In 1982, Dr. Tarabishi was elected President of the Medical Society of Pittsburg County, Oklahoma. Dr. Tarabishi’s Outpatient Surgical Facility 20. During an interview of Dr. Tarabishi by a repor- ter for the local McAlester newspaper in February, 1982, Tarabishi spoke out against the high cost of medical services, the hardship such high costs create, and the damage done to the economy. In this and other similar public statements, Dr. Tarabishi placed part of the blame on the medical profession itself, and the failure of the medical profession to utilize innovative cost savings tech- niques which could lead to a substantial reduction in the cost of medical care. (p.ex.1). 21. In 1982, Dr. Tarabishi formulated a plan to establish the TMD Center, to be located in McAlester. In connection with such plans, Dr. Tarabishi caused an eval- uation to be made of the economic feasibility of the establishment of such a medical center. An initial fea- sibility study was conducted by two certified public 1 hereafter “p.ex.” App. 41 accountants retained for this purpose by Dr. Tarabishi. Subsequently, additional feasibility studies were con- ducted in connection with an application for financing for the TMD Center. Based upon the analyses by these accountants, it was determined that Dr. Tarabishi’s planned center would be economically practicable and feasible. 22. Under the laws of the State of Oklahoma, it is necessary to obtain approval of various State agencies which, during the time period in question, regulated the establishment and/or expansion of some medical facili- ties within this State. The procedure by which this was done was called a licensing and “Certificate of Need” procedure. The agency passing on applications for Certif- icates of Need, and the granting of the licenses to such facilities in Oklahoma was the Oklahoma Health Plan- ning Commission. 23. In late 1982, Dr. Tarabishi hired a respected health care industry consultant, Mr. Jerry Colclazier, to assist in preparation of his Certificate of Need Applica- tion. In the course of evaluating such undertaking, and subsequently carrying it out, Mr. Colclazier conducted an independent investigation of the need for, and desir- ability of, Dr. Tarabishi’s outpatient ambulatory surgical center; and further conducted an inquiry concerning Dr. Tarabishi himself, including interviews with various per- sons associated with defendant MRH. Based upon these inquiries, Mr. Colclazier concluded that an outpatient ambulatory surgical center of the sort envisioned by Dr. Tarabishi was needed in McAlester, and that Dr. Tarabishi possessed the capability of establishing and operating such a facility. Accordingly, Mr. Colclazier decided to App. 42 represent Dr. Tarabishi in the Certificate of Need proceed- ings before the Oklahoma Health Planning Commission, and began to prepare the written Certificate of Need Application. Such Application was finalized and filed on March 14, 1983. (p.ex.24). 24. Consistent with the advice of Mr. Colclazier, Dr. Tarabishi attempted to get a commitment from MRH to maintain a “position of neutrality” in relation to his Cer- tificate of Need Application. Upon receiving Dr. Tar- abishi’s request, the MRH Board appointed a three (3) man ad hoc committee to investigate. The ad hoc commit- tee was comprised of the defendant Dr. C. K. Holland, Chuck McBee and John Alexander (Dr. Tarabishi’s former accountant.) The committee met with Dr. Tarabishi and questioned him regarding his plans for TMD. Specific inquiry was made regarding Dr. Tarabishi’s financial plans and projections. The ad hoc committee also inquired about the nature and type of medical procedures and@practice planned by Dr. Tarabishi for the TMD Cen- ter. 25. Thereafter, in or about October 1982, MRH informed Dr. Tarabishi that its position regarding the proposed TMD was that it had no interest in the medical practice of a physician conducted in his own office. How- ever, MRH would not comply with Dr. Tarabishi’s request for a “position of neutrality” for use in the Certificate of Need Application process. 26. In January 1983, Dr. Tarabishi wrote a letter to the MRH Board, specifically addressed to Chairman John Alexander, once again requesting that MRH formally WeBiesaccenenands ont Mead: oe eee a SALE, Onl 00 i aN ay el | hacia, ttre: Bataan he App. 43 state a “position of neutrality” with regard to the pro- posed TMD Center and to his to-be-filed Application for Certificate of Need. To this renewed request the MRH Board stated that its position was “the same as it was in October 1982, at which time a letter was sent io Dr. Tarabishi stating that surgical procedures conducted within the confines of individual physician offices are outside the authority’s purview” (p.ex.81 - January 5, 1983 minutes). 27. As reflected by the minutes of its board of direc- tors, in February 1983, MRH, through its board, discussed for the first time, creation of its own outpatient ambula- tory surgery service. (p.ex.81 - February 2, 1983 minute, page 2). MRH board minutes in March, 1983, reflect that “renovations are underway” for completion of an outpa- tient ambulatory surgery department. The “new” depart- ment was to be ready for business by April 1, 1983. 28. In May 1983, as reflected by the minutes of the MRH board, Administrator Ed Majors “announced” to the board that “unless the Board directs otherwise” MRH would respond to the Oklahoma Health Planning Com- mission that the TMD Center “will duplicate the hospi- tal’s surgical services.” The minutes reflect that to Mr. Majors’ announcement “[t]here were no other com- ments.” (p.ex.81 — May 4, 1983 minutes, page 1). 29. Dr. Tarabishi was not informed of MRH’s change in position toward the TMD Center until the morning of the first hearing on his application in Okla- homa City when five individuals from the McAlester medical community appeared in opposition. In fact, before the first hearing one Gary Brock, MRH Assistant App. 44 Administrator, expressly stated to Dr. Tarabishi that MRH would not oppose the Certificate of Need Application. 30. Prior to the hearings before the Oklahoma Health Planning Commissions, there were no further dis- cussions by the Hospital board relating to opposing, or not opposing, Dr. Tarabishi’s Certificate of Need Applica- tion. However, Ed Majors, Administrator of MRH, Gary Brock, then Assistant Administrator, Tom Giandrone, Comptroller, and Dr. Leroy I. Milton, then a shareholder of the defendant Clinic and Member of the Board of Trustees of MRH, appeared in Oklahoma City and opposed Dr. Tarabishi’s Application. 31. The hearings before the Oklahoma Health Plan- ning Commission in Oklahoma City on Dr. Tarabishi’s Application for Certificate of Need were held on May 12, 19, and 25, 1983. 32. On April 29, 1983, Dr. Tarabishi received from MRH, a letter signed by the defendant J. W. McCauley, which notified such plaintiff that the Executive Commit- tee of the medical staff of MRH had been reviewing his medical records for illegibility. The letter warned that “a sampling of your records will be reviewed in one month. If the records are still not legible, then the Executive Committee will take further steps at that time regarding suspension of medical staff privileges for incomplete records.” (p.ex.38). 33. On May 3, 1983, Dr. Tarabishi received from MRH, signed by the defendant Don H. Schuller, a letter notifying him that the Executive Committee of the medi- cal staff of MRH had reviewed his attendance at MRH Library Committee meetings. The letter stated that Dr. App. 45 Tarabishi’s failure to meet certain attendance require- ments “shall be grounds for corrective action leading to revocation of medical staff membership . . . ” (p.ex.40). 34. On May 17, 1938, an MRH “standing commit- tee”, the Pharmacy & Therapeutic’s Committee, chaired by Dr. LeRoy M. Milton, (an attendee at the May 12, 1983 TMD Certificate of Need hearing) recommended that Dr. Tarabishi’s clinical privileges at MRH be reduced, based upon an allegation that Dr. Tarabishi had been involved in a “potentially life-threatening therapeutic error.” The alleged therapeutic error had occurred four (4) months earlier (p.ex.56(g)). 35. On June 6, 1983, after the granting of the TMD Certificate of Need, Dr. Tarabishi was notified that MRH intended to commence “corrective action” proceedings to investigate the “Darby” case, involving the dosage of lidocaine, the “alleged therapeutic error.” (p.ex.56(i)). 36. At each hearing before the Oklahoma Health Planning Agencies held on Dr. Tarabishi’s Certificate of Need Application the aforesaid representatives from the McAlester area medical community appeared and vigor- ously opposed the application. In opposing the establish- ment of the TMD Center, hospital administrator %d Majors claimed that it would hurt MRH financially, by costing the Hospital substantial sums, including approx- imately $387,500 during the first year, $432,800 the sec- ond year and $472,000 the third year of TMD’s operations. (p.ex.25(a) at page 5). 37. Dr. Tarabishi specifically stated to the Oklahoma Health Systems Agency during the application hearing App. 46 that he had plans for five additional physicians to utilize the proposed facility. (p.ex.25(b), page 10). 38. Mr. Majors of MRH stated to the Oklahoma Health Systems Agency that if five physicians practice at the proposed outpatient facility “the problems (financial impact) will be five times greater.” (p.ex.25(b) page 10). 39. At the hearings before the Oklahoma Health Systems Agency Mr. Majors stated that “if the trend to pull services from hospitals continues, the hospitals will be financially doomed and costs will soar.” (p.ex.25(b) at page 10). 40. MRH believed, and its administrator, Ed Majors, testified that the TMD Center would take away the pay- ing, “cream of the crop”, patients and leave MRH with the “low pay, no pay patients”. 41. While opposing the Certificate of Need Applica- tion on the ground that an outpatient ambulatory surgical facility was not needed in McAlester, MRH itself estab- lished and opened its out-patient ambulatory surgical facility in April, 1983. - 42. Also, at or near the time that it became known to defendants that Dr. Tarabishi was moving forward with his plans, MRH initiated new promotion and public relations endeavors. These included developing advertis- ing which was run in the McAlester newspapers and the preparation of a new “slide show”, highlighting the new outpatient ambulatory surgical center. (p.ex.81). 43. Beginning in July, 1981 and continuing until April, 1982, Dr. Tarabishi purchased real property located | App. 47 in downtown McAlester to be the site for the TMD Cen- ter. The property consisted of three lots, two of which contained buildings which Dr. Tarabishi had hoped to be able to remodel and use as part of the TMD Center. However, the existing structures were not feasible reno- vation projects, for engineering reasons, and the build- ings had to be demolished. Two of the lots were purchased by Dr. Tarabishi with cash he had on hand. After site preparation and demolition, Dr. Tarabishi had spent approximately $160,000 on these two lots. The addi- tional third lot was purchased for $200,000 with bor- rowed funds after financing for the TMD project was finally in place. 44. Dr. Tarabishi first applied to the First National Bank of McAlester for a loan in the amount of $1,000,000 to finance construction of the TMD Center. At the time of the filing of such application, the President of the First National Bank was one Clark Bass. Mr. Bass had been instrumental in the establishment of MRH and had for years served on its Board of Trustees. There was inconsis- tent testimony as to whether any commitment from this bank was ever made. 45. In the spring of 1983, Dr. Tarabishi applied to another McAlester bank, the American Bank of Com- merce. With the assistance of a guarantee by the United States Small Business Administration, a commitment was obtained from such Bank for a loan in the amount of $1,000,000 which was Subsequently revised upward to $1,250,000 as construction on the TMD Center progressed. The Bank required and obtained a real estate mortgage on all three of Dr. Tarabishi’s lots, including those two (2) App. 48 lots that Dr. Tarabishi owned and which were previously unencumbered. 46. Construction of the building for TMD Center began in July, 1983; and the construction was completed one year later. The total cost of construction, including the cost of real estate and site preparation, was approx- imately $1,050,000. 47. In addition to the cost of construction of the facility, there were costs of equipping and furnishing the same. Total costs of equipping and furnishing the facility were approximately $200,000. Dr. Tarabishi paid these monies from his own funds. 48. The TMD Center opened and began operations on July 9, 1984. TMD was operated by M. Hisham Tar- abishi, Inc. The facility itself was owned by Dr. Tarabishi, individually, and was leased to the professional corpora- tion. It continued in operation until August 31, 1985, at which time it ceased operations and plaintiff’s medica] practice in McAlester was terminated. Plaintiff has attempted to restore his medical practice in Pennsylvania, but has been unable to obtain hospital privileges. The revocation by MRH has directly contrib- uted co this failure. 49. The TMD Center was not equipped to deal with medical/surgical matters of a complex nature. Access to the facilities of MRH was needed in the event that com- plications developed during procedures at the TMD Cen- ter. TMD did not have the facilities, equipment or staff for emergency situations so that Dr. Tarabishi required access to the MRH emergency room also. | App. 49 50. Dr. Tarabishi’s surgical and emergency room hospital privileges were summarily revoked effective May 24, 1984. Thereafter, he could no longer respond to medical emergencies at MRH for his patients and could no longer perform surgery at MRH. 51. On July 17, 1984, MRH revoked all staff privi- leges of Dr. Tarabishi so that he could no longer use its facilities for any purposes. On at least one occasion, Dr. Tarabishi’s patient was told that Dr. Tarabishi could not even appear at MRH to confer with or console a patient, even as a friend. 52. Asa condition for licensing the TMD Center, the Oklahoma Health Planning Commission required that TMD have access to the MRH emergency care hospital facilities. This condition could be met as long as the physician operator of the facility had full medical staff privileges at the emergency care hospital. 53. Upon revocation of Dr. Tarabishi’s MRH staff privileges, and thereafter, the TMD Center failed to meet the Oklahoma Health Planning Commission requirement set forth above. 54. In November, 1984, MRH entered into what was termed a “transfer agreement” with Dr. Tarabishi and his facility. The effect of such “transfer agreement” was to allow patients from plaintiffs’ facility to be admitted to MRH in the event of an emergency so requiring. How- ever, the “transfer agreement” did not permit Dr. Tar- abishi to continue to treat patients after such admission. 55. Dr. Tarabishi informed each of his patients con- sidering surgery at TMD about the limitations on his ee App. 50 treatment and care in the event of surgical emergencies requiring transfer to MRH. 56. Pursuant to the by-laws of MRH, its staff com- prised and served on certain “standing committees” including, among others, the Executive Committee, Phar- macy and Therapeutic Committee, Medical Committee, Emergency Room Committee, ICU Committee, Surgical Committee, By-laws Committee and Library Committee. 57. Several of the “standing committees” at MRH were influential and powerful in regard to establishing medical staff policy, patient and medical procedure review, staffing and personnel matters, and physician peer review. These standing committees could direct the medical chief-of-staff to initiate investigations against a physician staff member for purposes of discipline, reduc- tion of staff privileges, or removal from the MRH staff. The Pharmacy & Therapeutic Committee in November 1983, made disciplinary recommendations regarding Dr. Tarabishi to the MRH chief-of-staff. 58. On May 1, of each year, new appointments were made to the medical staff “standing committees”, chiefs of service, and chief-of-staff. 59. Following Tarabishi’s announcement of his intentions to establish an outpatient surgical facility, the clinic physicians increased their percentage and domina- tions of key MRH “standing committees”. (p.ex.78 & 88). 60. The Clinic physicians held key positions of authority on all important MRH “standing committees”. By May of 1984, and for many periods of time preceding App. 51 that, the physician chief of each medical service within MRH was from the Clinic. 61. After May 25, 1983, the date upon which the Oklahoma Health Planning Commission granted the Cer- tificates of Need for TMD, Dr. Tarabishi was made the subject of several MRH “corrective action” charges which led to “disciplinary investigations”. Prior to that date Dr. Tarabishi had never been subjected to disciplinary charges. 62. From June 1983 until July 17, 1984, Dr. Tarabishi was charged and investigated by various ad hoc, hearing review and appellate committees or boards at MRH. The incidents and subsequent proceedings will now be described. The Darby Incident 63. The “Darby” Incident occurred on January 30, 1983. (The Incident Report is Defendants’ Exhibit? 68-40). It involved an alleged overdose of lidocaine. On April 27, 1983, the Pharmacy and Therapeutics Committee met and resolved to ask for Dr. Tarabishi’s response to the inci- dent. (d.ex.68-41). A memo was sent to Tarabishi. (d.ex.68-42). On May 17, 1983, the P and T Committee referred the matter to the executive Committee with the recommendation that Tarabishi’s clinical privileges be reduced, and specifically that Tarabishi not be permitted to administer any cardiac drugs. (d.ex.68-43). The Execu- tive Committee appointed an ad hoc committee. On June 2 hereafter “d.ex.” App. 52 13, 1983, the ad hoc committee informed Tarabishi that the dosage given was excessive. (d.ex.68-44). No further action was taken. On July 21, 1983, the Emergency Room Committee recommended no further action be taken. (d.ex.68-45). The Executive Committee accepted this rec- ommendation on July 22, 1983. (d.ex.68-54). A “second investigation” into the Darby matter was announced on January 14, 1984, along with other matters. (p.ex.60d). On January 18, 1984, an ad hoc committee held a hearing. (p.ex.60f). The committee requested a written response (p.ex.60e), but did not receive one (p.ex.60g). The committee issued its report, adverse to Tarabishi. (p.ex.60h). The Executive Committee made a decision favoring revocation. (p.ex.60y). A Review Committee met on April 7 and 26, 1984. (p.ex.65 & 67). On May 3, 1984, that committee issued its report. (p.ex.600). The Executive Committee affirmed the Review Committee. (p.ex.61(p)). The governing body made its decision of revocation. (p.ex.68 & 69). On July 18, 1984, Dr. Tarabishi’s privileges were revoked. (p.ex.70). - The Ketcherside Incident 64. The Ketcherside incident began on September 15, 1983, when Dr. Tarabishi, a member of the Surgery Committee, made a recommendation to the attention of the Executive Committee that an ad hoc committee be formed. (d.ex.68-57). The Surgical Committee acknowl- edged his request (d.ex.68-58), and reviewed the case (d.ex.68-59). On November 11, 1983, the Surgical Com- mittee voted unanimously to remove Tarabishi from the committee or suspend him until he “prove[d] himself App. 53 innocent” of charges of breach of confidentiality. (d.ex.68-62) (d.ex.68-64). A letter of Suspension was sent (d.ex.68-65). On December 6, 1983, the ad hoc committee found Tarabishi guilty of unethical and disruptive behav- ior, and stated it would report same to the Executive Committee (d.ex.68-68). On January 4, 1984, the Executive Committee laced Tarabishi on one-year probationary status. (d.ex.68-72). Tarabishi appealed. An ad hoc hear- ing voted 2-1 in Tarabishi’s favor. (d.ex.68-79). On March 12, 1984, the Executive Committee reprimanded Tar- abishi. (d.ex.68-83). Tarabishi again appealed (d.ex.68-84), and on May 2, 1984, the decision was affirmed. (d.ex.68-89). The Jacobs Incident 65. The Jason Jacobs incident concerns an eight- year-old asthmatic hospitalized for a tonsillectomy. His surgery was scheduled for May 21, 1984. After the incident, Tarabishi was sent a letter from Dr. George Brown summarily suspending Tarabishi’s Emergency Room/Operating Room privileges. (p-ex.71(p)). An ad hoc committee was formed, which issued its report on June 21, 1984, holding that the sum- mary suspension should remain in effect until fina] dispo- sition by the governing board. (p.ex.71(cc)). The Executive Committee approved the ad hoc committee report on June 22, 1984. (p.ex.71(ee)). App. 54 The Parks and Weaver Incidents 66. The Stephanie Parks incident involved a written report by Dr. Boyer that Dr. Tarabishi had inadequately evaluated a patient for surgery. (p.ex.61(a)). The Amber Weaver incident involved a written report by Boyer that Tarabishi had not seen and examined Amber Weaver prior to the time of surgery. (p.ex.61(b)). The Chief of Staff, Dr. Dunagin, Sent Tarabishi a letter alleging “serious new charges”. (p.ex.61(c)). On February 28, 1984, the ad hoc committee met and recom- mended disciplinary action. (p.ex.61(g)). The Executive Committee concurred in the findings on March 1, 1984. (p.ex.61(i)). The Price Incident 67. The Gary Price incident occurred on December 18, 1983. (d.ex.68-93). A fourteen-year-old boy received a gunshot wound to the face and Dr. Tarabishi placed him in the Emergency Room. Dr. Boyer wrote the Hospital that he believed that the actions of Dr. Tarabishi were not warranted by the patient’s condition. An ad hoc commit- tee was formed. (p.ex.60d). The committee, consisting of Dr. Don Schuller, Dr. Sauer, and Dr. Brown, ultimately concluded that Dr. Tarabishi was guilty of “inappropriate assessment and management of emergency cases.” (p.ex.60h). On February 23, 1984, the Executive Commit- tee recommended revocation of Dr. Tarabishi’s medica! staff privileges, (d.ex.68-144), based upon the Price inci- dent, among others. App. 55 The McCabe Incident 68. The Brandon McCabe incident occurred on December 20, 1983. (d.ex.68-92). Dr. Tarabishi wrote his own incident report. (d.ex.68-94). An ad hoc committee was assigned, which investigated both this incident and the Price incident. The Jackson Incident 69. In a letter to Dr. Dunagin dated December 26, 1983, Dr. Tarabishi wrote that Dr. Boyer “failed to prop- erly evaluate the patient pre-operatively to clear him fora general anesthesia —- which cost the patient his life.” (d.ex.68-94). In the ad hoc meeting of January 18, 1984, regarding the McCabe and Price cases, Dr. Tarabishi was asked about the statement in his letter and Dr. Tarabishi supplied the patient’s name as Mr. Jackson. The commit- tee rendered findings adverse to Dr. Tarabishi. (d.ex.68-127). Ultimate Revocation 70. On February 3, 1984 an ad hoc committee issued its report. The committee took account of I. the McCabe case, II. the Price case, III. Dr. Tarabishi’s accusation against Dr. Boyer of traumatic intubation, IV. the Jackson case, V. the Darby case, and VI. the Ketcherside case. It also discussed the illegibility of Dr. Tarabishi’s handwrit- ing. (d.ex.68-127). On February 23, 1984, the executive committee recommended the revocation of Dr. Tarabishi’s medical staff privileges. App. 56 On May 3, 1984, the Hearing Appeals Committee issued its report on the “seven charges” against Dr. Tar- abishi. (d.ex.68-169). On May 8, 1984, the executive com- mittee recommended that Dr. Tarabishi’s staff privileges be revoked (d.ex. 68-170). On July 18, 1984, Dr. Tarabishi was notified that his appeal was denied. (d.ex.68-178). 71. To the extent that these Findings of Fact consti- tute Conclusions of Law, they shall be so considered. CONCLUSIONS OF LAW At the Court’s request, the plaintiffs submitted a summary of their proposed theories of recovery. The Court will address each theory in turn. Individual Monopolization by Defendant Hospital Plaintiffs contend that defendant MRH individually monopolized its market, in violation of 15 U.S.C. § 2. It has been held that [t]he elements of monopolization under Section 2 are “the possession of monopoly power in the relevant market” and “the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or his- toric accident.” Bright v. Moss Ambulance Service, Inc., 824 F.2d 819, 823 (10th Cir. 1987). Monopoly power is defined as the ability to control prices and exclude competition. Both elements must be demon- strated to establish the existence of monopoly power. /d. a ms Le. App. 57 at 824. Before it can be determined whether monopoly power exists, the plaintiff must define the relevant geo- graphic and product market. Feldman v. Jackson Memorial Hosp., 571 F.Supp. 1000, 1010 (S.D.Fla. 1983), aff'd mem., 752 F.2d 647 (11th Cir.), cert. denied, 472 U.S. 1029 (1985). Determining the relevant product market necessities an examination of which commodities [in the case at bar, services] are reasonably interchangeable by consumers for the same purposes. Westman Comm. Co. v. Hobart Int'l, Inc., 796 F.2d 1216, 1221 (10th Cir. 1986), cert. denied, 108 S.Ct. 1728 (1988). The geographic market is the narrowest market which is wide enough so that products [services] from adjacent areas cannot compete on substantial parity with those included in the market. Id. at 1222. One com- mentator has perhaps more clearly stated that “[t]he rele- vant geographic market is that area in which patients can realistically obtain the relevant services, the geographic area in which the provider markets the relevant services, or both.” Enders, Federal Antitrust Issues Involved in the Denial of Medical Staff Privileges, 17 Loy.U.Chi.L.J. 331, 360 (1986). Plaintiffs’ expert defined the relevant market for MRH as the business of supplying surgical health care services [product market] within a thirty-mile radius of McAlester, Oklahoma [geographic market]. See Transcript of testimony of Joe Jadlow at page 22, LL.6-9 [hereafter Jadlow Tr.]. He further found that, according to bed count, MRH had about 75 percent of market. (Jadlow Tr. at 23, LL.4-5). He stated that he found evidence that MRH had monopoly power. (Jadlow Tr. at 22, L.22). Plaintiffs contend that MRH’s monopoly power was demonstrated by (1) its exclusion of plaintiffs from the market, and (2) App. 58 its market share of over 75%. (Plaintiffs’ Proposed Find- ings of Fact and Conclusions of Law at { 105). The Court finds several problems with the market thus defined. First, the geographic radius was derived from an examination of MRH discharge records and a finding that 84% of its discharged patients lived within thirty miles of McAlester. (Jadlow Tr. at 13, LL.17-25). As was pointed out on cross-examination, plaintiffs’ expert did not take into account whether patients who lived within the 30-mile radius went elsewhere than MRH for surgical health care services. (Jadlow Tr. at 115, L.18). The “time factor” which might keep patients close to home was not quantified. Further, it appears extremely doubt- ful that “bed count” is an appropriate measure of market share in the market of “surgical health care services.” The mere words of the plaintiffs’ market definition denote more than the provision of a hospital bed. Even at this late date, it is not clear whether plaintiffs contend that both of them or only one of them was harmed by the alleged monopoly. The Court will first view Dr. Tarabishi as the aggrieved party. Dr. Tarabishi, as distinguished from TMD, provided surgery or surgical services to his patients. If words have meaning, these terms describing the product produced by a surgeon, and the term “surgi- cal health care services” involve distinct products. In White v. Rockingham Radiologists, Ltd., 820 F.2d 98 (4th Cri. 1987), the court stated that one who is neither a provider nor a consumer of a service may not prevail on a claim of monopoly with regard to that service. Id. at 104. The same conclusion applies to Dr. Tarabishi in the case at bar. In Feldman, supra, the plaintiff-podiatrist defined the rele- vant product market as “surgical services”. The district OG, Eee App. 59 court rejected this definition. “Since hospitals cannot per- form surgery (they sell health care facilities), there could not be a viable monopoly claim in this action against the hospitals. They and [plaintiff] were not competitors, nor could they be.” 571 F.Supp. at 1010 n.15. As for TMD, that facility did not have beds. (Jadlow Tr. at 193 L.2). While some TMD patients might have used beds in MRH, this fact would not transform TMD into a consumer within the market. Therefore, the Court con- cludes that TMD’s claim under this theory also fails. Most fundamentally, the Tenth Circuit requires proof of both ability to exclude competition and to control prices. Plain- tiffs’ expert conceded that he had not examined whether MRH had evidenced monopoly power in its pricing. (Jad- low Tr. at 243 LL.6-11). Therefore, a showing of monopoly power has not been made. For ail of these reasons, the Court must conclude that plaintiffs failed to prove their claim of individual monopolization against defendant MRH. Individual Monopolization by Clinic Plaintiffs allege individual monopolization on the part of defendant Clinic. The elements of the offense have been previously stated. See Brights, 824 F.2d at 823. Plain- tiffs’ expert defined the relevant market for the Clinic as the business of supplying nonsurgical and office surgery health care services within a thirty-mile radius of McAlester. (Jadlow Tr. at 22, LL.12-15). He stated that the Clinic had a 66% share in that market. (Viadlow Tr. at 138, L.23). He described his determination of market share as follows: App. 60 And | did this by looking to see what were the specialties of the physicians at the McAlester Clinic. I included those specialties in looking at the total number of physicians in the McAlester community, and | looked to see what proportion of that total group physicians the McAlester Clinic accounted for. Jadlow Tr. at 24, LL.8-12 (emphasis added) See also Jadlow Tr. at 143, LL.11-19. While defining the geographic market as a 30-mile radius, plaintiffs’ expert focused only on doctors within McAlester itself. He did not consider doctors within the radius who did not prac- tice in McAlester. (Jadlow Tr. at 144, LL.7-18). A recurring theme in his testimony was that he focused solely upon the Clinic and the City of McAlester. (Jadlow Tr. at 149, LL.9-10; 153, L.25-154, LL.1-6; 156, LL.16-20). Dentists who perform root canal work, for example, while appear- ing to fall within the language of plaintiffs’ product mar- ket definition, were excluded solely because plaintiffs’ expert did not believe such surgery was done at the Clinic. (Jadlow Tr. at 147, LL.8-9 and LL.22-24). Regarding the proposed geographic market, plaintiffs’ expert at one point characterized it as an approximation. (Jadlow Tr. at 158, L.21). However, it is clear that the actual geographic area studied was the City of McAlester itself. In sum, both as to product market and geographic market, the procedure of plaintiffs’ expert varied from the actual proposed markets. Relevant markets were not properly defined. Also, no showing was made of the ability of the Clinic to exclude competition and to control prices. The Court concludes that this claim also fails. App. 61 Attempted monopolization by defendant clinic Plaintiffs also contend that the clinic is guilty of an attempted monopolization in violation of 15 U.S.C. § 2. Proof of this offense requires the establishment of four factors: 1) a relevant market in which the alleged attempt occurred; 2) a dangerous probability of success in monopolizing the relevant market: 3) a specific intent to monopolize; and 4) conduct in furtherance of such an attempt. Lease Lights, Inc. v. Pub.Serv.Co., 849 F.2d 1330, 1335 (10th Cir. 1988). The Court has already described the inadequate mar- ket definition in the case. Thus, the Court concludes that plaintiffs failed to establish the first two elements. Even if they were established, however, plaintiffs presented no evidence of specific intent to monopolize on the Clinic’s part. The Court is aware that specific intent need not be expressed; it may be inferred from past conduct, from Statements, from contemporaneous documents, or even from the potentiality of monopoly power. 3 Von Kalinowksi, Antitrust Laws and Trade Regulation, §9.01[4] (1989). While plaintiffs argue that such intent may be found in that one is presumed to intend the probable consequences of his acts, this Court believes that such an argument comports more with a finding of general intent. This is insufficient regarding attempted monopolization. See Times-Picayune Publ. Co. v. United States, 345 U.S. 594, 626 (1953). App. 62 Conspiracy to Monopolize The plaintiffs urge against all defendants a conspir- acy to monopolize in violation of 15 U.S.C. §2. To succeed on such a claim, (1) The plaintiff must demonstrate a combina- tion or conspiracy to monopolize; (2) there must be overt acts done in furtherance of the combi- nation or conspiracy; (3) the defendants must have a specific intent to monopolize; and (4) the combination or conspiracy musf have an appre- ciable effect upon commerce. Drilling v. Peugeot Motors of America, Inc., 850 F.2d 1373, 1382 (10th Cir. 1988). The Court discusses the issue of conspiracy infra. However, even if a finding of conspiracy could be made in this case, again there was no evidence of specific intent to monopolize. The Court rules for the defendants on this claim. Violation of the Essential Facilities Doctrine Plaintiff alleges that defendant MRH violated the essential facilities doctrine through its revocation of Dr. Tarabishi’s privileges. Plaintiffs’ argument is that since Dr. Tarabishi was competing with a portion of the facili- ties and services of MRH through the TMD Surgery Cen- ter and needed access to the other, more complex, facilities of such defendant in order to continue the oper- ation of the TMD Center, the Hospital acted to expel plaintiffs’ competition by withholding access to the more complex facilities. App. 63 In McKenzie v. Mercy Hosp., 854 F.2d 365, 369 (10th Cir. 1988), the court quoted with approval the following elements of the doctrine: (1) control of the essential facility by a monopol- ist; (2) a competitor’s inability Practically or reasonably to duplicate the facility; (3) the denial of the use of the essential facility to a competitor; and (4) the feasibility of providing the facility. The McKenzie court found that the plaintiff did not estab- lish that Mercy Hospital controlled facilities essential to his medical practice. Therefore, it did not explore the other factors. In a footnote, the court said that it was leaving open the question whether, for public policy rea- sons, the essential facilities doctrine Should ever apply to hospital staff Privileges decisions. Id. at 371 n.12. As noted, one essential element for application of the doctrine is control of the facility by a monopolist. The Court has already explained why it has concluded that plaintiff failed to Prove that MRH has monopoly power. A relevant market must be proven, even when plaintiff is relying on the essential facilities theory. Consul. Ltd. v, Transco Energy Co., 805 F.2d 490 (4th Cir. 1986). cert. denied, 107 S.Ct. 2182 (1987). A court may recognize sub- markets under certain circumstances. See, €.g., Case- Swayne Co. v. Sunkist Growers, Inc., 369 F.2d 449 (9th Cir. 1966), cert. denied, 387 U.S. 932, rev'd on other grounds, 389 U.S. 384 (1967). Plaintiffs have cited the Case-Swayne deci- sion, among others, to argue that the Court may recog- nize a market narrower than that set out in the Complaint, and that in actuality Pittsburg County is the relevant market. See Plaintiffs’ Motion in Limine of App. 64 November 16, 1988. In essence, this is an argument that the Hospital is the relevant market. One court recently stated: A single hospital may constitute the relevant market from the point of view of patients, yet not constitute the market for the purpose of analyzing the claims of providers of services. Several cases suggest that it would rarely be appropriate to define a single hospital as the relevant market for providers of services. Rockland Phys. Assoc. v. Grodin, 616 F. Supp. 945, 955 (S.D.N.Y. 1985) (citations omitted). Under the evidence presented in this case, this Court has concluded that plaintiffs have failed to establish such a market definition. Accordingly, this claim must fail. Conspiracy to Boycott Plaintiffs argue that the peer review proceedings and the agreements and understandings reached in connec- tion with them constituted a conspiracy to boycott under 15 U.S.C. §1, a per se unlawful restraint of trade for which all defendants are liable. “ss Read literally, §1 prohibits every agreement “in restraint of trade”. Courts have interpreted the statute as prohibiting only those agreements that are “unreasonably restrictive” of competition. See Tekton, Inc. v. Builders Bid Serv. of Utah, Inc., 676 F.2d 1352, 1354 (10th Cir. 1982). When addressing the merits of a Section 1 claim, a court either declares the challenged practice a per se violation (i.e., presumptively illegal) or applies a “rule of reason” analysis to determine whether the challenged practice App. 65 imposes an unreasonable restraint on trade. See McKenzie, supra, 854 F.2d at 367 n.6. A group boycott has been held to be a per se violation of §1. See, e.g., United States v. General Motors Corp., 384 U.S. 127, 145-46 (1966). In Weiss v. York Hosp., 745 F.2d 786 (3rd Cir. 1984), cert. denied, 470 U.S. 1060 (1985), the court applied the per se analysis to a claim by osteopathic physicians. However, the court recognized that in a hos- pital staff privilege case in which the hospital defends based upon lack of Professional ability, the rule of reason test would apply. Id. at 820. The court stated that “[w]e recognize... that in many cases involving exclusion from staff privileges, courts will, more or less openly, have to utilize a rule of reason balancing approach.” Id. See also Pontius v. Children’s Hosp., 552 F.Supp. 1352, 1369-70 (W.D.Penn. 1982) and Friedman v. Delaware Co. Mem. Hosp., 672 F.Supp. 171, 190 (E.D. Penn. 1987), aff'd mem., 849 F.2d 600 (3rd Cir. 1988). The Court has determined not to invoke per se analysis in this case. Plaintiffs argue that, even absent a per se violation, the agreements reached were unlawful under the rule of reason. They contend that the peer review proceedings were a sham to achieve anticompetitive goals. There are two essential elements to a section 1 violation: an unrea- sonable restraint of trade and a contract, combination or conspiracy to attain it. Randy's Studebaker Sales, Inc. v. Nissan Motor Corp., 533 F.2d 510, 516 (10th Cir. 1976). See also Skyview Distributing, Inc. v. Miller Brewing, 620 F.2d 750, 752 (10th Cir. 1980). The issue before the Court is the application of these Principles in the peer review context. App. 66 As the above citations indicate, consideration of a section 1 claim requires that one court has called a “bifur- cated analysis”. The threshold analysis requires a determination of whether some form of joint action exists to satisfy the contracts, combinations, or conspir- acy requirement. It is only after concerted action is found that a court need proceed to the second part of the analysis — whether the concerted activity is an unreasonable restraint of trade. Kreuzer v. Amer. Academy of Periodontology, 735 F.2d 1479, 1485 (D.C. Cir. 1984). Many antitrust plaintiffs run aground on the first, or “joint action” requirement. The United States Supreme Court has made the following pronouncement: The correct standard is that there must be evi- dence that tends to exclude the possibility of independent action . . . . That is, there must be direct or circumstantial evidence that reasonably tends to prove . . . a conscious commitment to a common scheme designed to achieve an unlaw- ful objective. Monsanto v. Soray-Rite Service Corp., 465 U.S. 752, 768 (1984). Interpreting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986), the Tenth Circuit has stated the following two-part evidentiary test: (1) is the plaintiff's evidence of conspiracy ambiguous, i.e., is it as consistent with the defendants’ permissible independent interests as with an illegal conspiracy; and, if so, (2) is there any evidence that tends to exclude the App. 67 possibility that the defendants were pursuing these independent interests. Key Financial Planning Corp. v. ITT Life Ins. Corp., 828 F.2d 635, 639 (10th Cir. 1987). In other words, the plaintiff bears the difficult burden of showing that various actors combined in a joint action. In this case, the Court has found no evidence, apart from the peer review process, that a conspiracy existed. Dr. Tar- abishi’s testimony regarding a tape recording of a conver- sation between Dr. Thurman Schuller, Dr. Bellamy and Dr. Schaff is not credible. While there was testimony that plaintiff recorded conversations Surreptitiously in the Hospital, he had testified in an earlier trial that he physi- cally overheard this particular conversation. The timing of and the many flaws in the peer review proceedings against Dr. Tarabishi do not rise to the level that the Court can infer an improper conspiracy. In the realm of peer review, however, in one sense there is no disputing the presence of joint action. It is in the nature of peer review that various actors combine to take action of some sort. See Miller v. Indiana Hosp., 843 F.2d 139, 144 n.5 (3rd Cir.), cert. denied, 109 S.Ct. 178 (1988) (“[T]he joint action taken by the medical staff satisfies the conspiracy requirement”). See also Nanavati v. Burdette Tomlin Mem. Hosp., 857 F.2d 96, 117-118 (3rd Cir. 1988) (“[W]hen the Executive Committee acts as a body, it constitutes a ‘combination’ “). and id. at 118 (any action taken by the medical staff satisfies the “contract, combi- nation or conspiracy” requirement of section 1). There is a split of authority as to whether a hospital is capable of forming a combination with its own staff. Compare App. 68 Nanavati, supra, 857 F.2d at 118 (Hospital could not con- spire with the Executive Committee, based on analogy to the rule that a corporation cannot conspire with its offi- cers and directors) and Oltz v. St. Peter's Community Hosp., 861 F.2d 1440, 1450 (9th Cir. 1988) (rejecting this view, on the basis that the hospital and the medical staff are legally separate entities). The Oltz court relied on the decision in Bolt v. Halifax Hosp. Med. Center, 851 F.2d 1273 (11th Cir. 1988), which decision was subsequently vacated in preparation for en banc argument. 861 F.2d 1233 (11th Cir. 1988). However, the Oltz precedent still stands. Defendants argue strongly against adoption of any form of this “structural conspiracy” theory, i.e., antitrust liability for mere participation in peer review coupled with anticompetitive effect. They argue that such adop- tion “would probably destroy the peer review process itself”. (Defendants’ Post-Trial Brief at 22). They properly note that per review is the norm, that it was not “invented” for Dr. Tarabishi, and that it has a legitimate and iegal function. The Court must reconcile such argu- ments with various precedents. In Kobe, Inc. v. Dempsey Pump Co., 198 F.2d 416, 425 (10th Cir.), cert. denied, 344 U.S. 837 (1952), the court quoted the following language: It is not the form of the combination or the particular means used but the result to be achieved that the statute condemns. It is not of importance whether the means used to accom- plish the unlawful objective are in themselves lawful or unlawful. Acts done to give effect to the conspiracy may be in themselves wholly innocent acts. Yet, if they are part of the sum of the acts which are relied upon to effectuate the App. 69 conspiracy which the statute forbids, they come within its prohibition. (quoting Amer. Tobacco Co. v. United States, 328 U.S. 781 (1946)). See also, e.g., Consolidated Metal Prod. v. Ameri. Petro Insti- tute, 846 F.2d 284, 294 (5th Cir. 1988) (undersection one an unreasonable restraint of trade may be established by proof of either an unlawful purpose or an anticompetitive effect). Assuming arguendo that the mere activity of peer review constitutes joint action for section 1 purposes, the question remains whether a plaintiff need only show anticompetitive effect. Clearly, as defendants argue, such a result would virtually stifle peer review by imposing “automatic liability”. Plaintiffs themselves have rejected this approach, arguing that liability should attach only when misuse of the peer review process may be inferred. The Court must address the question of the appropriate standard of review. In Miller v. Indiana Hosp., 843 F.2d 139 (3rd Cir.), cert. denied, 109 S.Ct. 178 (1988), the court rejected the deferential “substantial evidence” test used by some courts, holding that it had “no place in an antitrust case where Congress has given the jury the responsibility of resolving disputed fact issues.” Id. at 143. Obviously, in a bench trial, the Court has the same responsibility. The Miller court does not indicate what standard is to be substituted. The defendants assert that the court’s inquiry be confined to determination of: (1) whether the plaintiff was involved in one or more incidents raising legitimate questions about welfare of patients or the hospital; (2) whether the physicians involved in the peer App. 70 review were free of direct financial motivation to cause harm to the plaintiff; and (3) whether the results of the peer review process appear to bear some relationship to the nature and gravity of the offense or offenses charged. (Defendants’ Post-Trial Brief at 26). Reference has also been made to the Health Care Quality Improvement Act of 1986, 42 U.S.C. §§11101 et seg. The Court has ruled in its Order of June 10, 1988, that this Act, applicable to peer review actions commenced on or after November 14, 1986, does not apply in the case at bar. Nevertheless, it sets forth certain criteria which, log- ically, a reviewing court might ultimately consider. 42 U.S.C. §11111(a) sets forth the scope of immunity. §11112(a) provides: For purposes of the protection set forth in sec- tion 11111(a) of this title, a professional review action must be taken - (1) In the reasonable belief that the action was in the furtherance of quality health care, (2) after a reasonable effort to obtain the facts of the matter. (3) after adequate notice and hearing pro- cedures are afforded to the physician involved or after such other procedures as are fair to the physician under the circumstances, and (4) in the reasonable belief that the action was warranted by the facts known after such reasonable effort to obtain facts and after meet- ing the requirement of paragraph (3). A professional review action shall be presumed to have met the preceding standards necessary OE App. 71 for the protection set out in section 11111(a) of this title unless the presumption is rebutted by a preponderance of the evidence. It is clear that even under the heightened standard repre- sented by section 11112, a district court is entitled to thoroughly examine the peer review proceedings. The detailed examination in this case of the peer review proceedings involving Dr. Tarabishi leads the Court to the conclusion that the proceedings would not pass muster, even under the deferential standard described above. In many instances, there was not “a reasonable effort to obtain the facts of the matter” or to provide adequate notice. The record is replete with exam- ples. The witnesses were not personally interviewed regarding the Darby case. The Committee merely read reports. In the Amber Weaver matter, the Committee did not talk to the patient’s mother, but reached a conclusion that Dr. Tarabishi had not seen her preoperatively. In the Ketcherside matter, although Mrs. Ketcherside contra- dicted Dr. McCauley’s account, she was not directly talked with by the Committee. In d.ex.68-155 at page 219, the Committee states that Dr. Tarabishi was invited to appear but “declined to answer questions”. It is clear from page 216 that Dr. Tarabishi had only been provided with Dr. Boyer’s letters ten minutes before the hearing began. Other instances could be cited. The deficiencies in these peer review proceedings go far beyond a failure to observe “procedural niceties”, as defendants seek to char- acterize them. Tainting the entire process was the per- sonal animus of many of the defendants toward Dr Tarabishi. In one breath, a defendant doctor in this trial would testify that he virtually despised Dr. Tarabishi; in App. 72 the next, he would testify that he could be and was “fair and impartial” while sitting in judgment. These asser- tions of objectivity are, quite simply, not credible. It was made clear to the Court that many of the defendant doctors would have taken Dr. Boyer’s word over Dr. Tarabishi’s in any circumstance. The Court cannot, by any rational definition of the term, “approve” the peer review proceedings under review. The issue, however, is whether they constitute an antitrust violation. The question of intent has occupied much of the post- trial briefing in this case. The requisite intent in a §1 civil case is only a general intent, that is, that each party acted with the intention that his acts have the consequences they did have, and with the knowledge that at least one other actor would act in conjunction with him. 2 Von Kalinowski, Antitrust Laws & Trade Regulation §6.01[3] (1989). See also Bank of Utah v. Commercial Security Bank, 369 F.2d 19, 26 (10th Cir. 1966), cert. denied, 386 U.S. 1018 (1967) (intent to restrain trade is not essential to Section 1 violation). Contra, SI Handling Systems, Inc. v. Heisley, 658 F.Supp. 362, 378 (E.D. Penn. 1986) (intent necessary for a §1 violation must be an anti-competitive intent). Cer- tainly, those participating in peer review are aware that revocation of a doctor’s privileges will affect his ability to compete. Thus, it appears that plaintiffs are correct that, in theory, a §1 violation may be shown from the mere fact of peer review accompanied by the requisite impact upon competition. The Court stresses the last two words of the preced- ing sentence because a rule of reason analysis requires not merely an examination of impact upon the claimant, App. 73 but rather upon the balance of anticompetitive and pro- competitive effects within the relevant market. See, e.¢., Hornsby Oil Co., Inc. v. Champion Spark Plug Co., 714 F.2d 1384, 1392-93 (Sth Cir. 1983). The basic principles of mar- ket definition used in Section 2 cases may be used in Section 1 cases. Id. at 1393 n.9. For the reasons previously stated, the Court finds plaintiffs’ market definitions to be flawed. Further, the only impact upon competition, as distinguished from plaintiffs, is based upon the speculation that THD would ultimately become a hospital. The Court finds this spec- ulation to be tenuous. No showing was made of an effect on competition within the relevant market and the Court concludes that judgment must be entered for defendants on this basis. Conspiracy to Stabilize Prices Plaintiffs have also asserted a Section 1 violation through a conspiraey to stabilize prices. The United States Supreme Court has declared sich a conspiracy illegal per se. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223 (1940). However, this Court again declines to extend the per se category beyond its present bound- aries. The Court must again examine the conspiracy issue. Under a rule of reason analysis, the Court finds no evidence of such a price stabilization conspiracy, whether directly or through the effect of the peer review proceed- ings. The Court must reject this claim. The Court’s find- ing of no conspiracy also disposes of plaintiffs’ state law claim under 21 O.S. §421. App. 74 Immunity The Court hereby reaffirms its prior rulings that defendants are not immune under the “state action” doc- trine or under the Local Government Antitrust Act of 1984, 15 U.S.C. §§34-36. On the second asserted immu- nity, the defendants’ most recent citation of Sandcrest Outpatient Services v. Cumberland County Hosp. Sys., Inc., 853 F.2d 1139 (4th Cir. 1988) is not particularly helpful, because the critical issue - whether the Hospital System is a local government unit — was not raised on appeal. Id. at 1142. To the extent that these Conclusions of Law consti- tute Findings of Fact, they shall be so considered. CONCLUSION This litigation was the Court’s first exposure to the hospital peer review process. The Court was shocked to discover that a physician’s career can be - and in this instance has been - destroyed through patently improper proceedings. Peer review, as it is presently practiced, is fundamentally flawed. The purpose of monitoring physi- cians’ conduct is laudable and necessary; however, to accomplish that purpose, the review must be conducted by disinterested parties who have examined all of the pertinent evidence. The only issue in this trial was whether defendants committed antitrust violations. (By the time plaintiffs’ present counsel entered the case, the statute of limitations had run on other causes of action.) The Court has concluded that no antitrust violation occurred in this instance, although precedent in this area remains in flux. But the Court is convinced that unless App. 75 fundamental reform is made in peer review, litigation will continue to proliferate. It is the Order of the Court that judgment be entered in favor of defendants and against plaintiffs. IT IS SO ORDERED this _ 4th day of May, 1989. /s/ H. Dale Cook H. DALE COOK United States District Judge App. 76 AMENDMENT 14 Section 1. [Citizenship - Due process of law - Equal protection.] All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. App. 77 § 1. Trusts, etc., in restraint of trade illegal; penalty Every contract, combination in the form of trust or other- wise, Or Conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any contract or engage in any combination or con- spiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding one million dollars if a corporation, or, if any other person, one hundred thou- sand dollars, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court. § 2. Monopolizing trade a felony; penalty Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other per- son or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on con- viction thereof, shall be punished by fine not exceeding one million dollars if a corporation, or, if any other per- son, one hundred thousand dollars, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court. App. 78 CHAPTER 117. ENCOURAGING GOOD FAITH PROFESSIONAL REVIEW ACTIVITIES Section 11101. Findings PROMOTION OF PROFESSIONAL REVIEW ACTIVITIES 11111. Professional review (a) In general (b) Exception (c) Treatment under State laws 11112. Standards for professional review actions (a) In general (b) Adequate notice and hearing (c) Adequate procedures in investigations or health emergencies 11113. Payment of reasonable attorneys’ fees and costs in defense of suit 11114. Guidelines of the Secretary 11115. Construction (a) In general (b) Scope of clinical privileges (c) Treatment of nurses and other practitioners (d) Treatment of patient malpractice claims REPORTING OF INFORMATION 11131. Requiring reports on medical malpractice pay- ments 11132. 11133. 11134. 11135. 11136. 11137. App. 79 (a) In general (b) Information to be reported (c) Sanctions for failure to report (d) Report on treatment of small payments Reporting of sanctions taken by Boards of Medi- cal Examiners (a) In general (b) Failure to report Reporting of certain professional review actions taken by health care entities (a) Reporting by health care entities (b) Reporting by Board of Medical Examiners (c) Sanctions (d) References to Board of Medical Examiners Form of reporting (a) Timing and form (b) To whom reported (c) Reporting to State licensing boards Duty of hospitals to obtain information (a) In general (b) Failure to obtain information (c) Reliance on information provided Disclosure and correction of information Miscellaneous provisions (a) Providing licensing boards and other health care entities with access to information App. 80 (b) Confidentiality of information (c) Relief from liability for reporting (d) Interpretation of information DEFINITIONS AND REPORTS 11151. Definitions 11152. Reports and memoranda of understanding (a) Annual reports to Congress (b) Memoranda of understanding (c) Memorandum of understanding with Drug Enforcement Administration § 11101. Findings The Congress finds the following: (1) The increasing occurrence of medical mal- practice and the need to improve the quality of medical care have become nationwide problems that warrant greater efforts than those that can be undertaken by any individual State. (2) There is a national need to restrict the abil- ity of incompetent physicians to move from State to State without disclosure or discovery of the physician’s previous damaging or incompe- tent performance. (3) This nationwide problem can be remedied through effective professional peer review. (4) The threat of private money damage lia- bility under Federal laws, including treble dam- age liability under Federal antitrust law, App. 81 unreasonably discourages physicians from par- ticipating in effective professional peer review. (5) There is an overriding national need to pro- vide incentive and protection for physicians engaging in effective professional peer review. (Nov. 14, 1986, P. L. 99-660, title IV, § 402, 100 Stat. 3784.) PROMOTION OF PROFESSIONAL REVIEW ACTIVITIES § 11111. Professional review (a) In general. (1) Limitation on damages for profes- sional review actions. If a professional review action (as defined in section 431(9) [42 USCS § 11151(9)]) of a pro- fessional review body meets all the standards specified in section 412(a) [42 USCS § 11112(a)], except as provided in subsection (b) - (A) the professional review body, (B) any person acting as a member or staff to the body, (C) any person under a contract or other for- mal agreement with the body, and (D) any person who Participates with or assists the body with respect to the action, shall not be liable in damages under any law of the United States or of any State (or political subdivision thereof) with respect to the action. The preceding sen- tence shall not apply to damages under any law of the United States or any State relating to the civil rights of any person or persons, including the Civil Rights Act of 1964, 42 U.S.C. 2000e, et seq. and the Civil Rights Acts, 42 App. 82 U.S.C. 1981, et seq. Nothing in this paragraph shall pre- vent the United States or any Attorney General of a State from bringing an action, including an action under sec- tion 4C of the Clayton Act, 15 U.S.C. 15C, [15 USCS § 15c] where such an action is otherwise authorized. (2) Protection for those providing information to profes- sional review bodies. Notwithstanding any other provi- sion of law, no person (whether as a witness or otherwise) providing information to a professional review body regarding the competence or professional conduct of a physician shall be held, by reason of having provided such information, to be liable in damages under any law of the United States or of any State (or political subdivision thereof) unless such information is faise and the person providing it knew that such information was false. (b) Exception. If the Secretary has reason to believe that a health care entity has failed to report information in accordance with section 423(a) [42 USCS § 11133(a)], the Secretary shall conduct an investigation. If, after provid- ing notice of noncompliance, an opportunity to correct the noncompliance, and an opportunity for a hearing, the Secretary determines that a health care entity has failed substantially to report information in accordance with section 423(a) [42 USCS § 11133(a)], the Secretary shall publish the name of the entity in the Federal Register. The protections of subsection (a)(1) shall not apply to an entity the name of which is published in the Federal Register under the previous sentence with respect to pro- fessional review actions of the entity commenced during the 3-year period beginning 30 days after the date of publication of the name. App. 83 (c) Treatment under State laws. (1) Professional review actions taken on or after October 14, 1989. Except as provided in paragraph (2), subsection (a) shall apply to State laws in a State only for professional review actions commenced on or after October 14, 1989. (2) Exceptions. (A) State early opt-in. Subsec- tion (a) shall apply to State laws in a State for actions commenced before October 14, 1989, if the State by legislation elects such treatment. (B) State opt-out. Subsection (a) shall not apply to State laws in a State for actions commenced on or after October 14, 1989, if the State by legislation elects such treat- ment. (C) Effective date of election. An election under State law is not effective, for pur- poses of subparagraphs (A) and (B), for actions commenced before the effective date of the State law, which may not be earlier than the date of the enactment of that law. (Nov. 14, 1986, P. L. 99-660, Title IV, Part A, § 411, 100 Stat. 3784.) § 11112. Standards for professional review actions (a) In general. For purposes of the protection set forth in section 411(a) [42 USCS § 11111(a)], a professional review action must be taken — (1) in the reasonable belief that the action was in the furtherance of quality health care, (2) after a reasonable effort to obtain the facts of the matter, (3) after adequate notice and hearing pro- cedures are afforded to the physician involved ~~, App. 84 or after such other procedures as are fair to the physician under the circumstances, and (4) in the reasonable belief that the action was warranted by the facts known after such reason- able effort to obtain facts and after meeting the requirement of paragraph (3). A professional review action shall be presumed to have met the preceding standards necessary for the protec- tion set out in section 411(a) [42 USCS § 11111(a)] unless the presumption is rebutted by a preponderance of the evidence. (b) Adequate notice and hearing. A health care entity is deemed to have met the adequate notice and hearing requirement of subsection (a)(3) with respect to a physi- cian if the following conditions are met (or are waived voluntarily by the physician): (1) Notice of proposed action. The physician has been given notice stating - (A) (i) that a professional review action has been proposed to be taken against the physician, (ii) reasons for the proposed action, (B) (i) that the physician has the right to request a hearing on the proposed action, (ii) any time limit (of not less than 30 days) within which to request such a hearing, and (C) asummary of the rights in the hearing under paragraph (3). (2) Notice of hearing. If a hearing is requested on a timely basis under paragraph (1)(B), the App. 85 physician involved must be given notice stating (A) the place, time, and date, of the hear- ing, which date shall not be less than 30 days after the date of the notice, and (B) a list of the witnesses (if any) expected to testify at the hearing on behalf of the professional review body. (3) Conduct of hearing and notice. If a hearing is requested on a timely basis under paragraph (1)(b) - (A) subject to subparagraph (B), the hear- ing shall be held (as determined by the health care entity) - (i) before an arbitrator mutually acceptable to the physician and the health care entity, (ii) before a hearing officer who is appointed by the entity and who is not in direct economic competition with the physician involved, or (iii) before a panel of individuals who are appointed by the entity and are not in direct economic competition with the physician involved; (B) the right to the hearing may be forfeited if the physician fails, without good cause, to appear; (C) in the hearing the physician involved has the right — (i) to representation by an attorney or other person of the physician’s choice, App. 86 (ii) to have a record made of the pro- ceedings, copies of which may be obtained by the physician upon pay- ment of any reasonable charges associ- ated with the preparation thereof, (iii) to call, examine, and cross-exam- ine witnesses, (iv) to present evidence determined to be relevant by the hearing officer, regardless of its admissibility in a court of law, and (v) to submit a written statement at the close of the hearing; and (D) upon completion of the hearing, the physi- cian involved has the right - (i) to receive the written recommen- dation of the arbitrator, officer, or panel, including a statement of the basis for the recommendations, and (ii) to receive a written decision of the health care entity, including a state- ment of the basis for the decision. A professional review body’s failure to meet the condi- tions described in this subsection shall not, in itself, con- stitute failure to meet the standards of subsection (a)(3). (c) Adequate procedures in investigations or health emergencies. For purposes of section 411(a) [42 USCS § 11111(a)], nothing in this section shall be construed as - (1) requiring the procedures referred to in sub- section (a)(3) - (A) where there is no adverse professional review action taken, or App. 87 (B) in the case of a suspension or restric- tion of clinical privileges, for a period of not longer than 14 days, during which an inves- tigation is being conducted to determine the need for a professional review action; or (2) precluding an immediate Suspension or restriction of clinical privileges, subject to subse- quent notice and hearing or other adequate pro- cedures, where the failure to take such an action may result in an imminent danger to the health of any individual. (Nov. 14, 1986, P. L. 99-660, Title IV, Part A, § 412, 100 Stat. 3785.) § 11113. Payment of reasonable attorneys’ fees and costs in defense of suit. In any suit brought against a defendant, to the extent that a defendant has met the standards set forth under section 412(a) [42 USCS § 11112(a)] and the defendant substan- tially prevails, the court shall, at the conclusion of the action, award to a substantially prevailing party defend- ing against any such claim the cost of the suit attributable to such claim, including a reasonable attorney’s fee, if the claim, or the claimant’s conduct during the litigation of the claim, was frivolous, unreasonable, without founda- tion, or in bad faith. For the purposes of this section, a defendant shall not be considered to have substantially prevailed when the plaintiff obtains an award for dam- ages or permanent injunctive or declaratory relief. (Nov. 14, 1986, P. L. 99-660, Title IV, Part A, § 413, 100 Stat. 3787.) App. 88 § 11114. Guidelines of the Secretary The Secretary may establish, after notice and opportunity for comment, such voluntary guidelines as may assist the professional review bodies in meeting the standards described in section 412(a) [42 USCS § 11112(a)], (Nov. 14, 1986, P. L. 99-660, Title IV, Part A, § 414, 100 Stat. 3787.) § 11115. Construction (a) In general. Except as specifically provided in this part [42 USCS §§ 11111 et seq.], nothing in this part [42 USCS §§ 11111 et seq.] shall be construed as changing the liabilities or immunities under law. (b) Scope of clinical privileges. Nothing in this part [42 USCS §§ 11111 et seq.] shall be construed as requiring health care entities to provide clinical privileges to any or all classes or types of physicians or other [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0582%3A1. Public record. Not legal advice.