Amicus Curiae Brief — Gordon v. Lewistown Hospital (No. 05-1000)

6

immunity does not apply. The exclusions, by definition, apply

even if the hospital reasonably believed that the forms of

conduct adversely affected patient welfare. Put differently,

HCQIA does not grant hospitals immunity if they use their

control over admitting privileges to prevent physician

collaboration with other types of health care providers or for

engaging in other competitive conduct.

The Third Circuit ruled below that whether Petitioner’s

actions were intended to solicit or retain business under

§ 11151(9) was irrelevant because:

even when the solicitation exception is in play,

immunity will be judged by . . . whether the Hospital

based its actions upon the reasonable belief that they

are in furtherance of quality healthcare.

Pet. App. 31-32. Thus, according to the Third Circuit,

whenever a hospital has a “reasonable belief” that it is

furthering quality health care, the stated exceptions to

immunity in § 11115 do not apply and the hospital is still

entitled to immunity.

This conclusion is inconsistent with the plain language

of § 11151(9) and reads all of the exceptions out of the

HCQIA. To constitute a “professional review action” in the

first place, a hospital must show that it based its peer review

action on the physician’s “competence or professional

conduct... which conduct affects or could affect adversely

the health or welfare of a patient or patients.” 42 U.S.C.

§ 1115109).

Congress did not intend this outcome. After careful

debate of concerns raised by physicians and the public,’

3. See, e.g., Report 99-103, Part ', Chairman Dingell,

Committee on Energy and Commerce, H.R. Sep. 26, 1986; cf H.R.

Rep. 99-903, pt. 1, at 21 (1986); Testimony of Sidney M. Wolfe,

M.D., Director, Public Citizen Health Research Group, Oct. 6, 1986,

House Judiciary Committee Hearings on H.R. 5540.

: 7

Congress decided a hospital could never make that showing if

the decision was based primarily on one of the four exceptions,

including competitive conduct and association with other classes

of providers, such as osteopathic physicians, psychologists and

others. Holding a hospital can avoid § 11151(9)’s carve-out if it

reasonably believes that such association or certain competitive

conduct would adversely affect patient welfare is to say that the

statutory exceptions do not apply to any action that satisfies the

general definition of a professional review action could qualify

for the statutory exceptions. Under the Third Circuit’s

interpretation, the rule swallows the exception.

Just two years before passage of the HCQIA, in Weiss v.

York Hospital, 745 F.2d 786 (3d. Cir. 1984), the Third Circuit

affirmed an antitrust judgment against a Pennsylvania hospital

for using its credentialing mechanism to exclude DOs as a class.

As Congress debated exceptions to the immunities it was

considering for hospitals, that case was part of the public record

informing the debate. Whether the exclusion of osteopathic

physicians was unlawful was subject to evidence and scrutiny

by a court. However, with complete immunity, the hospital and

its conspirators would not have been subject to scrutiny in the

first instance. While peer review is important and hospitals

should be generally immune, an exception was needed, and

Congress provided it, with § 11151(9). Under the Third Circuit’s

analysis in the case below, there may well have been no Weiss v.

York Hospital, and in that case discrimination against osteopathic

physicians could continue to this day.

Similarly, the health care world is today locked in a

competitive battle between the general acute care setting and

specialized facilities that are sometimes owned and operated

by the competitor of a hospital or certain of their closely allied

physicians. (See, e.g., Baptist Health v. Murphy, et al., 2006

Ark. Lexis 58, 2006 WL 242670 (Ark. Feb. 2, 2006)). Hospitals

are using their credentialing mechanism to lock out competitors,

sometimes defending th actions in the guise of their expansive

view of what best furthers the delivery of quality care.

8

In these types of confrontations, hospitals have had to

answer for their anticompetitive misconduct in a court of

law and have not benefited from a blanket immunity never

intended by Congress. If allowed to stand, the decision in

the Third Circuit below creates just such an expanded

immunity. A hospital’s reasonable belief that its actions

furthered quality healthcare would trump Congressionally

mandated exceptions to immunity. These examples illustrate

the wisdom of not tinkering with traditional rules of statutory

construction, even assuming the set of facts the Third Circuit

relied upon below.

The Supreme Court has consistently held that, as a

fundamental matter of statutory construction, a statute should

be read to give effect to ail its parts, where possible.

E.g., Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S.

157, 158 (2004); and Duncan v. Walker, 533 U.S. 167, 174

(2001). Here, the HCQIA can be read to give effect to both

§ 11151(9) and § 11112 if the “reasonable belief” requirement

and presumption of § 11112 only applies after the court has

determined, under § 11151, that an action is a “professional

review action,” which requires a determination that the action

does not fall within one of the stated exceptions set forth in

§ 11151(9)(A)-(E). The Third Circuit did not address this

logical and legal failing in its decision. No other court has

construed these statutory sections like the Third Circuit did.

The Court should grant certiorari to clarify how the law is to

be read and to give effect to all its parts.

B. Words Are Not Read Into A Plain Statute.

The Third Circuit’s decision effectively amends § 11112

to add that “it will be presumed that an action under

§ 11151(9)(A)-(E) is still a ‘professional review action’ if

the action is taken with a reasonable belief it was done in

furtherance of quality health care.”

9

But §§ 11111, 11112 and 11151 do not say that. Rather, §

11151 defines a “professional review action” and identifies five

exceptions (in § 11151(9)(A)-(E)) that are not considered to be

based on competence or professional conduct and therefore are

not “professional review actions.” § 11112 then identifies how

defined “professional review actions” must be taken and the

presumptions that apply. Finally, § 11111 provides a limited

immunity for damages for “professional review actions” as

defined in § 11151 and taken in accordance with § 11112.

If Congress intended the immunity of § 11111 to apply to

the exceptions identified in § 11151(9)(A)-(E) in situations

where the review action was made with a reasonable belief it

was furthering quality care, it easily could have expressed just

that, as it did in § 11112. It did not. The inference and legal

effect from Congress’ failure to do so is clear. See Barnhart v.

Sigmon Coal Co., 534 U.S. 438, 452 (2002) (when Congress

includes particular language in one section of a statute but omits

it in another section of the same act, it is generally presumed

that Congress acts intentionally and purposely in the disparate

exclusion); Jd. K. P. Permanent Make-Up, Inc. v. Lasting

Impression I, Inc., 543 U.S. 111, 118 (2004). Under the

established rules of statutory construction, the Third Circuit’s

“reasonable belief” gloss cannot be applied to the enumerated

exceptions to immunity of § 11151. The Court should grant

Certiorari.

C. Even If HCQIA Was Not Clear On Its Face The

Legislative History Directly Contravenes The Third

Circuit’s Decision.

The only way the Third Circuit could have read a

“reasonable belief” gloss onto the exceptions of § 11151(9)(A)-

(E) would have been to find the language ambiguous on its face

and then rely on extrinsic evidence, such as the legislative

history, to determine its meaning. Indeed, this is the very analysis

the Third Circuit conducted with respect to the preamble

language of $ 11151:

10

The plain language of the statute indicates the

breadth of ‘conduct’ encompassed within the

definition of ‘professional review action’... .

Pet. App. 27. The Third Circuit also analyzed the preamble

language in the alternative, assuming it was ambiguous, by

looking to the legislative history. Pet. App. 27-28. But the

Third Circuit failed to conduct that same analysis with respect

to its interpretation of the exceptions in § 11151(9)(A)-(E).

The meaning of those exceptions is just as plain as the

“conduct” defined as “could affect adversely the health and

welfare of a patient.” Thus, the “reasonable belief” gloss

should not have been applied to the exception. More

importantly, the legislative history concerning the exceptions

confirms the exceptions are absolute.

When HCQIA was debated, professional associations

and the United States sought to assure that the proposed

immunity of HCQIA would not empower hospitals to exclude

classes of practitioners or inhibit competition. The

Subcommittee on Civil and Constitutional Rights observed

that with the increasing competitive pressures in the health

care industry

“peer review poses the risk of preventing or

discriminating against other health providers from

full economic participation in the marketplace,

(which) is no different than any other illegal

restraint of trade.” See 132 Cong. Rec. H9954-

Ol, 1986 WL 788373 (daily ed. Oct. 14, 1986)

(statement of Rep. Edwards).

As a result of this concern, the Act contains exclusions:

disciplining a physician for practicing with a DO (See,

Exclusion 9(D)) or, as here, for competitive acts to solicit or

retain business (See, Exclusion 9(B)). While a hospital could

present evidence that it had a good faith belief, for instance,

that a physician should not associate with a DO, it does not

1]

receive HCQIA immunity when it disciplines a physician for

doing so.*

Congressman Waxman made it clear during discussion

of the HCQIA bill that the identified categories of

§ 11151(9)(A)-(E) were completely excluded from the

protections of the Bill:

I appreciate that any form of immunity raises

defense concerns about the potential for mischief

that might be visited by doctors on their colleagues

for improper reasons. . . 1am now convinced that

we have addressed every legitimate objection that

has been raised to the bill. As redrafted, our bill

applies only to professional review actions based

on the competence or conduct of an individual

physician. We completely exclude from the

protections of the bill, any disciplinary action

based on a doctor’s advertising .. .

Health Care Quality Improvement Act of 1986: Hearing on

H.R. 5540 Before the Subcomm. on Civil Rights and

Constitutional Rights of the Comm. on the House Judiciary,

99th Cong., 2d Sess. (1986) (statement of Hon. Henry A.

Waxman, sponser of H.R. 5540) (emphasis added).

Mr. Dingell, in Committee hearings on the bill,

confirmed Congress’ intent to provide absojute exclusions

for actions based on, inter alia, activities with regard to

classes of health care practitioners. The “reasonable belief”

4. The Third Circuit noted below that one of the purposes of

HCQIA was to improve the quality of medical care by restricting

the ability of physicians who have been found to be incompetent

from repeating malpractice by moving from state to state without

discovery of such finding. App. 23; 42 U.S.C. § 11101. That purpose

is not advanced in any way by the decision below reading a

“reasonable belief” gloss onto the pro-competitive exceptions to the

definition of a professional review action.

12

standard is not discussed nor otherwise raised in the entire

legislative history of the act to av id the effect of the

exclusions:

In addition, the Committee has carefully

delineated circumstances which would not be

considered to be based on competence or

professional conduct. These include actions based

on one’s joining or not joining a professional

society; on one’s fees; on advertising or otherwise

lawfully competing for business; on the economic

Organization of one’s practice; or on one’s

activities with regard to health care practitioners

who are not physicians .. . the Committee heard

concerns from several groups that this area

presented the greatest potential for abuse of the

professional review process for economic or other —

reasons under the guise of improving the quality

of health care. Accordingly, the Committee chose

to restrict the protections under this legislation to

actions by physicians against other physicians who

do not meet reasonable tests of competence or

professional behavior. Professional review

actions against physicians for reasons excluded

from this legislation or those against other

health care practitioners shall continue to be

judged under all applicable law.

H.R. Rep. No. 99-903, pt. 1, at 21 (1986) (emphasis added).

Certiorari should be granted to confirm there is no

“reasonable belief” basis to void the exceptions to

§ 11151(9), and to effectuate Congress’ clear intent.

13

II. CERTIORARI SHOULD BE GRANTED BECAUSE

THE RULING BELOW IMPROPERLY SHIFTS

THE BURDEN TO PLAINTIFFS TO ESTABLISH

THE IMMUNITY DOES NOT APPLY.

In the decision below, the Third Circuit observed:

Of course, as with any challenge to the

applicability of immunity to a professional review

action, the burden is on the physician to overcome

the presumption that the hospital was engaged in

a professional review action. 42 U.S.C. § 11112.

App. 32 (emphasis added).

This circular formulation misses the point that the

question before the Court was whether this was a professional

review action, as defined by Congress, at all. As significantly,

it: contradicts established law that the burden is on the party

raising an affirmative defense; suggests that all hospital

review activities constitute “professional review actions”

within the meaning of the statute and thus are entitled to a

burden-shifting presumption of immunity; and threatens the

very policies that Congress sought to achieve by establishing

limits to hospital power through the exceptions enumerated

in § 11151(9)(A)-(E).

A. Immunity is an affirmative defense, the burden

of which is on the party raising it.

There can be little doubt that immunity is an affirmative

defense, and as such, the burden of proving such a defense

rests on the party raising it. E.g., K. P. Permanent Make-Up,

Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 120, 125

S. Ct. 542, 549 (2004); Ironside v. Simi Valley Hosp., 103

F.3d 482, 484 (6th Cir. 1996); Yeager’s Fuel v. Pennsylvania

Power & Light Co., 22 F.3d 1260, 1266 (3d Cir. 1994). By

holding that in “any challenge (emphasis added) to the

applicability of immunity to a professional review action,

14

the burden is on the physician to overcome the presumption

that the hospital was engaged in a professional review

action,” the Third Circuit expressly contradicted this

established rule of law, and created a conflict with the Court

and other circuit decisions. App. 32.

For instance, under the Third Circuit’s view, any time a

physician challenges the suspension or revocation of medical

staff privileges, a hospital would merely need recite that its

actions are immune under § 11111(a) as “professional review

actions” taken in furtherance of patient quality of care; the

burden would then shift to the physician to prove by a

preponderance of the evidence that the activity did not

constitute a “professional review action” as defined in

§ 11151(9). On the contrary, established law requires that

the hospital make a prima facie showing that it meets the

requirements of § 11151(9) and does not fall within one of

the five statutory exceptions enumerated in (A)-(E). Once

the hospital offers proof that its actions constitute

“professional review actions,” it has met its initial burden in

raising its affirmative defense of immunity. The physician

then must overcome the hospital’s initial showing by proving

by a preponderance of the evidence, that the requirements of

§ 11112(a) have not been met, and thus the hospital is not

entitled to immunity under the HCQIA.

The Third Circuit erroneously places the burden on the

physician when it should be placed on the hospital pursuant

to raising an affirmative defense of immunity from the

physician’s anti-trust challenges. The Third Circuit stands

alone in its interpretation of HCQIA. No other circuit court

has held that the burden is on the physician to prove that the

hospital was not engaged in “professional review action” as

defined in § 11151(9)(A)-(E). The Third Circuit’s decision

is contrary to established law and the plain language of a

Congressional Act. Certiorari should be granted to address

this split of authority and to clarify the burden of proof in

HCQIA immunity.

15

B. There is no presumption in § 11151.

The Third Circuit also reads in additional terms not

present in the plain language of the statute. By stating that

“the burden is on the physician to overcome the presumption

that the hospital was engaged in a professional review

action,” the Third Circuit effectively amends § 11151(9) to

add that where a defendant hospital argues that an activity

was made in furtherance of patient quality of care it will

then be presumed that it did not fall within the exception of

§ 11151(9)(A)-(E). This interpetation is contrary to the plain

language of the statute, the legislative history and statutory

rules of construction.

As the presumption is provided only in § 11112(a) and

states that if a “professional review action” (as defined in

§ 11151(9)) is taken, then it will be presumed to have been

taken:

(1) in the reasonable belief that the action was in

furtherance of quality health care,

(2) after a reasonable effort to obtain the facts of

the matter,

(3) after adequate notice and hearing procedures

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 meeting

the requirement of subparagraph (3).

The Third Circuit disregards the question of whether

the hospital’s actions in the first instance constitute

a “professional review action” and instead applies

the presumption in § 11112(a) to § 11151(9)(A)-(E). If

16

Congress had intended for the presumption unger § 11 112(a)

to apply to a “professional review action” under § 11151(9),

it would have expressed it as such. As discussed in section

I.B. above, the inference and legal effect from Congress’

failure to do so presumes that Congress excluded the

presumption from the definition of a “professional review

action” intentionally and purposely. See Barnhart v. Sigmon

Coal Co., 534 U.S. 438, 452 (2002); K.P. Permanent Make-

Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118,

125 S. Ct. 542, 548 (2004).

By reading in a presumption that is not provided in the

plain language of the statute, the Third Circuit has effectively

read the exceptions provided in § 11151(9)(A)-(E) out of

the HCQIA. As described in section I.C. above, the legislative

history demonstrates that the exceptions were carefully

drafted in order to exclude particular activities, such as

associating with a particular class of health care provider or

soliciting for business. These activities were expressly

excluded from the definition of “professional review actions”

because Congress determined they were-too historically

fraught with anticompetitive and political overtones to be a

proper basis for reviewing the competence or professional

conduct of a physician. In order for the statutory exceptions

to be given effect, as intended by Congress, the Court should

grant certiorari to clarify this issue.

17

CONCLUSION

For the foregoing reasons, the Petition for a Writ of

Certiorari should be granted and the case held.

Respectfully submitted,

Mark E. Rust

Counsel of Record

DANIEL P. ALBERS

ELIZABETH M. BEDORE

BARNES & THORNBURG

One North Wacker Drive

Suite 4400

Chicago, Illinois 60606

(312) 357-1313

JOSHUA L. PROBER

General Counsel

AMERICAN OSTEOPATHIC

ASSOCIATION

142 E. Ontario Street

Chicago, Illinois 60611

Counsel for Amici Curiae

MOTION FILED is

MAR 13 2006 3

No. 05-1000

In The

Supreme Court of the Anited States

¢

ALAN D. GORDON, M.D.; ALAN D.

GORDON, M.D., P.C.; MIFFLIN COUNTY

COMMUNITY SURGICAL CENTER, INC.,

Petitioners, .

v.

LEWISTOWN HOSPITAL,

Respondent.

7

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Third Circuit

¢

MOTION TO FILE BRIEF AMICUS CURIAE

AND BRIEF OF THE FEDERATED AMBULATORY

SURGERY ASSOCIATION, THE AMERICAN

ACADEMY OF OPHTHALMOLOGY,

THE PENNSYLVANIA ACADEMY OF

OPHTHALMOLOGY, THE AMERICAN COLLEGE

OF SURGEONS AND THE CALIFORNIA

MEDICAL ASSOCIATION IN

SUPPORT OF PETITIONERS

°

MICHAEL M. EATON

Counsel of Record

KATHERINE SALAZAR-POSS RONALD L. WISOR JR.

General Counsel David H. EVANS

AMERICAN ACADEMY OF David C. ADKINS

OPHTHALMOLOGY ARENT FOX PLLC

655 Beach Street 1050 Connecticut Avenue NW

San Francisco, CA 94109 Washington, DC 20036

(415) 447-0359 (202) 857-6000

Counsel for Amici Curiae

i

MOTION TO FILE

BRIEF AMICUS CURIAE OF THE FEDERATED

AMBULATORY SURGERY ASSOCIATION, THE

AMERICAN ACADEMY OF OPHTHALMOLOGY,

THE PENNSYLVANIA ACADEMY OF

OPHTHALMOLOGY, THE AMERICAN COLLEGE

OF SURGEONS AND THE CALIFORNIA MEDICAL

ASSOCIATION

The Federated Ambulatory Surgery Association

(FASA), the American Academy of Ophthalmology

(AAO), the Pennsylvania Academy of Ophthalmology

(PAO), the American College of Surgeons (ACOS) and the

California Medical Association (CMA) respectfully move

for leave to file the attached amicus curiae brief, pursuant

to Supreme Court Rule 37.2(b), in favor of granting the

petition for a writ of certiorari.

FASA, a nonprofit organization, is the nation’s largest

ambulatory surgery center (ASC) association. ASCs are

facilities where physicians perform surgeries that do not

require hospital admission. FASA represents more than

1,800 ASCs nationwide, the physicians and_ other

professionals who provide care in such centers and their

patients.

AAO, a nonprofit organization, is the largest national

membership association of ophthalmologists. AAO has

approximately 28,000 members worldwide. More than 90

percent of practicing ophthalmologists are members of

AAO. PAO, a nonprofit organi_ation, is the membership

association of ophthalmologists in Pennsylvania, with over

500 members. ACOS, a nonprofit organization, is a

scientific and educational association of surgeons that was

founded in 1913. Members of ACOS are referred to as

“Fellows.” The letters FACS (Fellow, American College of

il

Surgeons) after a surgeon’s name mean that the surgeon’s

education and training, professional qualifications, surgical

competence and ethical conduct have passed a rigorous

evaluation and have been found to be consistent with the

high standards established and demanded by ACOS. ACOS

currently has more than 64,000 Fellows, including more

than 3,700 Fellows in other countries and more than 5,000

Associate Fellows, making it the largest organization of

surgeons in the world. CMA, a nonprofit organization, is

California’s largest medical professional association. CMA

represents more than 30,000 physicians, in all specialties,

practicing in California. Many of the members of AAO,

PAO, ACOS and CMA have ownership interests or practice

in ASCs, where they perform surgery as an extension of

their office practices.

The members of FASA, AAO, PAO, ACOS and CMA

are at the forefront of developing ASCs as cost-effective,

high quality alternatives to hospital-based surgery. The first

ASC opened in 1970. Today, more than 14 million

surgeries are performed each year in over 4,500 ASCs. The

vast majority of ASCs are owned by physicians, who invest

in ASCs to obtain greater professional autonomy and

control over their work environment and over the quality of

care delivered to their patients.

ASCs offer improved technology, a non-institutional,

friendly environment and more convenient locations,

shorter wait times and lower patient coinsurance costs than

their hospital competitors. U.S. Dep’t of Justice & Federal

Trade Comm’n, Jmproving Health Care: A Dose of

Competition (July, 2004) (Improving Health Care Report).

At the same time, ASCs save insurers and government

health care programs billions of dollars by obtaining lower

fees and avoiding costly hospitalizations. A recent study of

Medicare claims commissioned by FASA found that, on

ill

average, claims cost $320 less in an ASC compared to

hospital outpatient settings, and that the procedures

performed in ASCs cost the Medicare program $1.1 billion

less in 2005 than if the same procedures were performed in

a hospital. Federated Ambulatory Surgery Association,

Medicare Payments for Procedures Performed in

Ambulatory Surgery Centers Compared with Hospital

Outpatient Departments (Apr. . 2005),

http://www.fasa.org/aprilSexecsum.pdf. By providing a

competitive alternative to hospitals, ASCs “enhance quality

of care, lower prices, and improve access.” Improving

Health Care Report, Ch. 3 at 39-40.

FASA, AAO, PAO, ACOS and CMA urge the Court to

grant the petition for a writ of certiorari to address two

aspects of the Third Circuit’s decision. First, this case

squarely presents the question whether an entity must

actually sell goods or services in the same relevant market

to be a competitor under the Sherman Act. An entity does

not have to seli goods or services in the same relevant

market to.be a competitor under the Sherman Ac.. By

limiting the availability of the Sherman Act’s protections to

actual competitors, the Third Circuit has effectively

immunized antitrust conspirators and monopolists for

anticompetitive activities so long as their competitor has not

yet opened. As a consequence of the Third Circuit’s

holding, incumbents will find it far easier to quash new

entry and to sustain market power. Prices will increase, and

quality will decrease. It is often the potential entrant that

needs the most protection. ASCs are frequently the entities

most likely to enter a market in competition with an

entrenched, incumbent hospital and are frequently the target

of exclusionary practices by those very hospitals. ASCs are

therefore particularly vulnerable to this decision.

IV

The Third Circuit is alone in concluding that potential

competitors are not subject and entitled to Sherman Act

prohibitions and protections. No other Circuit, including

the Third Circuit up until this case, refuses to extend

Sherman Act prohibitions and protections to potential

competitors. This Court should grant the petition for a writ

of certiorari to make clear that an entity does not have to

sell goods or services in the same relevant market to be a

competitor under the Sherman Act. Because FASA, AAO,

PAO, ACOS and CMA represent a broad spectrum of ASCs

and their affiliated physicians and other professionals, their

perspectives on this issue should be helpful to the Court. _

Second, this case raises the question whether a restraint

on a physician’s ability to disseminate truthful and non-

deceptive information about his principal competitor can

constitute a substantial effect on competition. The

dissemination of truthful and non-deceptive information is

critical to the efficient operation of health care markets.

Restraints that limit the ability of physicians to disseminate

such information have a significant effect on the ability of

patients to choose optimal treatments for their illnesses and

can cause significant market inefficiency or failure. The

information restraints in this case, as written and as read by

the Third Circuit, would have a substantial effect on

competition. The Third Circuit is in conflict with this

Court’s decision in California Dental Ass'n v. F.T.C., 526

U.S. 756 (1999) and the Ninth Circuit in California Dental

Ass'n v. F.T.C., 224 F.3d 942 (9th Cir. 2000). This Court

should grant the petition for a writ of certicrari to make

clear that information restraints that limit the ability of

physicians to disseminate truthful and non-deceptive

information, such as the ones in this case, do have a

substantial effect on competition meriting a full

consideration by the court and_ requiring — strong

Vv

procompetitive justifications to sustain the restraints.

Because FASA, AAO, PAO, ACOS and CMA represent a

broad spectrum of physicians, their perspectives on this

issue should be helpful to the Court.

In accordance with Supreme Court Rule 37.2, FASA,

AAO, PAO, ACOS and CMA represent that they obtained

written consent from counsel for the petitioners to file this

brief Amicus Curiae. Counsel for the respondent declined

to consent, however, thereby necessitating this motion.

Sup. Ct. R. 37.2(b).

For these reasons and those set out in the accompanying

brief, FASA, AAO, PAO, ACOS and CMA hereby move

the Court to allow them to appear as Amici Curiae and to

submit their brief urging the Court to grant the petition and

reverse the decision of the Court of Appeals for the Third

Circuit.

Respectfully submitted,

MICHAEL M. EATON

Counsel of Record

KATHERINE SALAZAR-POSS RONALD L. WISOR JR.

General Counsel DAVID H. EVANS

AMERICAN ACADEMY OF DAVID C. ADKINS

OPHTHALMOLOGY ARENT FOX PLLC

655 Beach St. 1050 Connecticut Ave., NW

San Francisco, CA 94109 Washington, DC 20036

(415) 447-0359 (202) 857-6000

Counsel for Amici Curiae

March 13, 2006

Vi

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

FEDERAL CASES

Case Page

American Motor Inns, Inc. v. Holiday Inns, Inc.,

SLE FSG 820 Le Oe Be i isiertsechesierstiseraierase 5

American Tobacco Co. v. United States,

Pa ES FUT CA PRED ac crnccccisastcecaddieipenidecnoniiehaue 7

California Dental Ass'n v. F.T.C.,

SEG UT, TOG CIS wiciscishccickstesnsianttvermanvasnvetiaa 11,12

California Dental Ass’n v. F.T.C., 128 F.3d 720 (9th Cir.

EGS), rev'd, 526-0.S. TSG CGO) vivcoscecisccvicncschnocencens 12

California Dental Ass’n v. F.T.C., 224 F.3d 942 (9th Cir.

POD issin cshidsvisdeadaacdeetin vibcepenanaliuabdaiashiaennacibeati 12, 14

Engine Specialties v. Bombardier,

GS FA FERRE Gs PIT I A i isisieivceriocamaiscsle cckeniaaenenys 5

Evans v. S.S. Kresge Co.,

SOA F.2d FASS C56 Cat. UG TO): cosicisnsvalodcenccccurcavecdioicncacss 5

F.T.C. v. Indiana Federation of Dentists, 476 U.S. 447

CR IDE snivscsdveasscvopobsacniagvecove aiwannreiernacabicobanbeussenaaienite 1]

Fishman vy. Estate of Wirtz,

SOT F268 S20 CHU Cis! FSCO) i ivivseotisisiavceccss etvcesiaieeciens 7

Vill

In re Cardizem CD Antitrust Litigation,

332 F.3d 896 (6th Cir. 2003), cert. denied sub nom.

Andrx Pharmaceuticals, Inc. v. Kroger Co.,

a I as otic oso bdons tebegbennsoconedecovsrienswsee 6,7

In re Terazosin Hydrochloride Antitrust Litigation,

Jak F. SUDD. 26: 1279 (S.D. Fit. Z00D)....0..scecessenrseeees 6,8

LePage’s Inc. v. Minnesota Mining & Mfg. Co., 324 F.3d.

141 (3d Cir. 2003), cert. denied,

CE re IND soso sicnsccbadasénctpesdebousessoveedectasenees 7

Otter Tail Power Co. v. United States,

PR NED OE ns. vc spihesedenesubodivopbsddeseereseptentende 5

Palmer v. BRG of Georgia, 498 U.S. 46 (1990)........cccceees. 5

SmithKline Corp. v. Eli Lilly & Co., 575 F.2d. 1056

(3d Cir.), cert. denied, 439 U.S. (1978)..........cccccceeeeeeees 7

Transource International, Inc. v. Trinity Industries,

FE BT IE Gs LIE) ccisocnccsccvtecscessosecoeosesoeeesens 8

United States v. Columbia Pictures Corp.,

169 F. Supp. 888 (S.D.N.Y. 1959)......... sncspicevpasebemsgbecciel 5

United States v. MMR Corp., 907 F.2d 489

Ne a ad a cc onspotereuasesoveassdendes &

United States Philips Corp. v. Windmere Corp.,

BOl F260 O95 (FOG, Civ. 1968) ....cscrccesorosesesessovereveesesooess 7

United States v. Reicher, 983 F.2d 168 (10th Cir. 1992) .... 8

ix

United States v. Topco Associates, Inc.,

OF SF ae Se EE TD victeriotceaierineisine Seeventicanna 4,5

Virginia Health Board of Pharmacy v. Virginia Citizens

Ceti, 2S DB. FOE F FO vicervicinsssinvitinsaiscensviteinn 1]

Wallace v. Free Software Foundation, Inc.,

2005 WL 3239208 (S.D. Ind. Nov. 28, 2005)............... 7

FEDERAL RULES

Rule Cited Page

DUN GONE TONE SFI cvcvrireiecntcsisvscictnasatencsanvsieenisiaaminlac l

OTHER AUTHORITIES

Page

U.S. Dep't of Justice & Federal Trade Comm'n, /mproving

Health Care: A Dose of Competition

A RSET Sen oe ae ees 9,10, 1i

U.S. Dep’t of Health and Human Services, Payment for

Procedures in Outpatient Departments & Ambulatory

Serica COmNars CHM; FIGS) vvevcerceiveticecsbivieracchenvateeeie 19

Federated Ambulatory Surgery Association, Medicare

Payments for Procedures Performed in Ambulatory

Surgery Centers Compared with Hospital Outpatient

Departments (Apr. 5, 2005),

http://www.fasa.org/aprilSexecsum.pdf ......... Pane Os: 10

STATEMENT OF INTEREST!

The Statement of Interest of the Federated Ambulatory

Surgery Association (FASA), the American Academy of

Ophthalmology (AAQ), the Pennsylvania Academy of

Ophthalmology (PAO), the American College of Surgeons

(ACOS) and the California Medical Association (CMA)

are included in the Motion to File. FASA, AAO, PAO,

ACOS and CMA have no interest in any party to this

litigation or stake in the outcome of the case.

STATEMENT OF THE CASE

FASA, AAO, PAO, ACOS and CMA adopt the

Statement of the Case presented by the petitioner. Pet. at 3-

9. The petitioners consist of an ophthalmologist, Dr Alan

Gordon (Gerdon), his professional corporation, Dr. Alan

Gordon M.D., P.C., and the surgical facility, Mifflin County

Community Surgical Center, Inc. (MCCSC), he was

attempting to open. The respondent is Lewistown Hospital

(the Hospital), the incumbent, and only, hospital in Mifflin

and Juniata counties in Pennsylvania. Gordon and another

ophthalmologist, Dr. Paul Nancollas (Nancollas), were the

only two ophthalmologists in Mifflin and Juniata counties.

Pet. at 3. Both had privileges at the Hospital. On several

occasions, Gordon was critical of Nancollas. The Hospital

was concerned about Gordon’s criticism. To suppress that

criticism, the Hospital imposed certain restrictions on

Gordon. These restrictions included information restraints

’ Pursuant to Supreme Court Rule 37.6, FASA, AAO, PAO, ACOS and

CMA state that this brief has not been authored in whole or in part by

counsel for a party and that no person or entity, other than Amici, their

members or their counsel, has made a monetary contribution to the

preparation or submission of this brief.

2

that barred Gordon from discussing the differences between

him and Nancollas with patients:

(2) ...[A] complaint or concern about any other member

of the Medical-Dental Staff must be in writing

addressed to either the President of the Medical Staff or

the Chairperson of the Hospital, with a copy to the

President of the Hospital...

(3) You shall not call, or otherwise attempt to

communicate with, the patients of any other

ophthalmologist, or other physician practicing in the

Hospital, for the purpose of commenting on the

physician’s training, skill or competence or the

procedure performed by such physician. Furthermore,

other than in response to a specific question or for the

purpose of a referral, you shall not make any comment

about any other ophthalmologist as part of your

discharge instructions or at any time when dealing with

patients who have been or will be treated at the

Hospital.

App. at 10-11. The Hospital required Gordon to adopt the

conditions to maintain his privileges at the Hospital. He

required privileges or a transfer agreement with the Hospital

to open MCCSC. App. at 83. Gordon was planning to

open MCCSC at the time the information restraints were

imposed. The Hospital knew he was trying to open

MCCSC. E.g., App. at 15.

The petitioners sued the respondent for violations of

Sections 1 and 2 of the Sherman Act. App. at 2. Count I of

the petitioners’ complaint alleged that the information

restraints constituted an unreasonable restraint of trade

under Section 1 because they prevented Gordon from