All Care Nursing Service, Inc. v. High Tech Staffing Services, Inc.

135 F.3d 740, 1998 U.S. App. LEXIS 2637, 1998 WL 64997
CourtCourt of Appeals for the Eleventh Circuit
DecidedFebruary 18, 1998
Docket95-4714, 95-5218
StatusPublished
Cited by41 cases

This text of 135 F.3d 740 (All Care Nursing Service, Inc. v. High Tech Staffing Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
All Care Nursing Service, Inc. v. High Tech Staffing Services, Inc., 135 F.3d 740, 1998 U.S. App. LEXIS 2637, 1998 WL 64997 (11th Cir. 1998).

Opinions

EDMONDSON, Circuit Judge:

Two separate actions (with different plaintiffs) against the same defendants for alleged antitrust violations have been consolidated and are treated as one appeal. Plaintiffs appeal a jury verdict for defendants on antitrust claims. They also appeal the jury verdict against them on counterclaims for state and federal RICO violations. Many issues were raised on appeal. But we conclude that most of the challenges obviously lack merit, and we do not discuss them in this opinion. We do discuss a couple of issues in some detail, and we affirm the district courts’ judgments.

Background

Beginning in the mid-1980’s the United States experienced a severe nursing shortage. Southern Florida was hit especially hard due to its increased demand for nurses in winter months to accommodate the high influx of people to the area at that time of year. This shortage, along with other market considerations, caused an increase in prices for nursing services and a difficulty in staffing hospitals (and other facilities) with sufficiently licensed nurses.1

Hospitals use full or part-time hospital nurses, contract nurses (nurses hired for a specified period of time), travel nurses (contract nurses hired from different areas of the country), and temporary nurses (nurses employed by agencies and hired by hospitals for a shift at a time).2 Temporary nursing agencies send their nurses to hospitals, nursing homes, clinics, doctors’ offices, and patients’ homes. They have the choice to provide services for any facility or person in need of such care. They are not limited to providing nurses to hospitals.

During the pertinent period, hospitals were faced with quality concerns, as well as rising prices. No efficient means existed to share information with other hospitals about agency nurses. This lack of information resulted in problems with some agencies, including plaintiff-appellant All Care Nursing Services, Inc. (“All Care”).3 These problems included “phantom booking” — where a hospital requests a specific nurse with whom it has dealt in the past, only to be sent a different nurse; “blind booking” — where a hospital sets up to receive the services of a nurse from an agency only to have the agency cancel at the last minute; fraudulent billing — billing hospitals for services of an RN when actually a less qualified LPN or CNA performed the services; cheating on certification exams; and altering certification documents.

[744]*744In response to the problems the South Florida Hospital Association (“SFHA”) approached hospitals in Palm Beach County about a potential purchasing arrangement. In 1988, twelve (12) Palm Beach County hospitals set up an arrangement whereby they would solicit bids from temporary nursing agencies and would then select agencies to be preferred providers of such services, the Preferred Provider Program (“PPP”). The selection of the preferred agencies was to be made based upon competence, services provided, quality, and bid price. Under this joint-buying arrangement all the participating hospitals agreed to seek first nurses from preferred providers before going to nonpre-ferred agencies for nurses on each occasion.

All agencies were invited, either by letter or by advertisement in the Palm Beach newspaper (Palm Beach Post), to participate in the bidding. Sixteen (16) agencies presented bids and eight (8) were selected as preferred.4

In November 1988, the PPP began operation. Each hospital entered into individual contracts with each of the preferred agencies. All the agencies selected as preferred providers were required to agree to things like treating their nurses as employees by providing workers’ compensation, paying taxes, and providing necessary insurance. Before the PPP, agencies had treated their nurses as independent contractors, not employees; and the higher costs associated with unprotected workers were borne by the hospitals.5

The preferred agencies did not contract with the hospitals at the same prices, but instead at the prices that each particular agency had bid. Agencies were also required to agree in the contracts not to change their prices for one year — the length of each contract — and, thus, were somewhat tied into their bid prices. But to allow for shifts due to market changes, each agency could terminate its contract with a particular hospital upon 30 days notice (the “escape clause”).

After the creation of the PPP, plaintiffs-appellants filed suit against the participating hospitals, preferred agencies, and the SFHA6 alleging antitrust violations under sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and under Florida Statutes §§ 542.18 and 542.19. Defendants then filed a counterclaim against All Care, and its operator Monahan, for violations of federal and state RICO statutes by billing fraudulently, aiding cheating on certification exams, and aiding persons to obtain false certification.7

Awaiting trial, plaintiffs-appellants sought and received a preliminary injunction, which halted implementation of the PPP. That preliminary injunction, however, was vacated by this court because of the district court’s failure to hold the necessary evidentiary hearing. All Care Nursing Serv., Inc. v. Bethesda Memorial Hosp., Inc., 887 F.2d 1535 (11th Cir.1989). The request for an injunction was never reinstated.

After a four-week jury trial, a verdict was entered in favor of defendants on all relevant claims. Plaintiffs filed motions for new trial, for judgment as a matter of law, and for amendment of the pleadings to conform with [745]*745the evidence. All these motions were denied by the district court; and we now affirm those denials.8 Plaintiffs-appellants also appeal the antitrust and RICO counterclaim verdicts against them; but we affirm those judgments, too.

Discussion

I. Federal and State RICO Claims

Plaintiffs-appellants All Care and Monahan argue that the Florida and Federal RICO claims against them are barred by the economic-loss rule. That rule provides that “parties to a contract can only seek tort damages if conduct occurs that establishes a tort distinguishable from or independent of [the] breach of contract.” Jones v. Childers, 18 F.3d 899, 904 (11th Cir.1994) (citations and quotations omitted). The rule is based upon the idea that “contract principles are more appropriate than tort principles for resolving economic loss claims.” Florida Power & Light Co. v. Westinghouse Elec. Corp., 510 So.2d 899, 901 (Fla.1987).

Neither All Care nor Monahan can use the economic-loss rule to escape liability under the federal RICO statutes.9 We have already ruled that Florida’s economic-loss rule does not bar a plaintiff from “bringing a [federal] RICO action where a breach of contract claim also exists .... many RICO cases involve contract disputes.” Arabian American Oil Co. v. Scarfone, 939 F.2d 1472, 1478 (11th Cir.1991).

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Bluebook (online)
135 F.3d 740, 1998 U.S. App. LEXIS 2637, 1998 WL 64997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/all-care-nursing-service-inc-v-high-tech-staffing-services-inc-ca11-1998.