Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Center

552 F. Supp. 1170, 1982 U.S. Dist. LEXIS 15832
District Court, E.D. Pennsylvania·Decided November 15, 1982·No. Civ. A. 81-3050·Published·Cited by 9 cases

Opinion

TABLE OF CONTENTS

I. Preliminary Statement.1173

II. Standards Under Which Defendants’ Motion Must be Decided.1175

A. Rule 12(b)(1).1175

B. Review of Standards Developed in Previous Opinion .1175

1. Pleading Standards .1175

2. Substantive Sherman Act Standards . 1176

C. Analytic Framework .1180

1. Each Case Turns on Its Own Facts.1180

2. Considerations Bearing on the Tripartite Jurisdictional Test .... 1181

a. Nature of the alleged restraint.1181

b. Nature of the plaintiff .1183

III. Application of Legal Standards to Plaintiffs’

Sherman Act Allegations.1184

A. Introductory Statement.U84

B. “In Commerce” Theory .1185

C. “Affecting Commerce” Theory .1186

1. Treatment of Out-of-State Patients by Plaintiffs.1187
2. Interstate Flow of Revenues to Plaintiffs .1190

3. Use of Medical Equipment and Medical Supplies by Plaintiffs . .. 1192

4. Use of Automobiles, Gasoline, and Other Equipment by Plaintiffs . . ■ 1194

5. Prescriptions of Drugs and Medicines by Plaintiffs .-1195

6. Dissuasion of Out-of-State Physicians From Associating with Plaintiffs .1197

7. Inflating of Fees for Cardiology Services .1198

8. Diminished Interstate Investments in Plaintiffs’ Pension Portfolio . . 1200

9. Curtailment of Plaintiffs’ Practice in Connection with a New Jersey Clinic.1201

10. Lessening of Use of Out-of-State Continuing Education.1201
11. Summary .1202

D. Consistency with Prior Precedent.1202

IV. Conclusion.1205

OPINION

JOSEPH S. LORD, III, Senior District Judge.

I. Preliminary Statement

Plaintiff Cardio-Medical Associates, Ltd., and its four physician members, brought this antitrust action against Crozer-Chester Medical Center (hereinafter referred to as “CCMC”), members of the CCMC Board of Directors, and the Chief of the Department of Medicine at CCMC (hereinafter referred to as “the CCMC defendants”), as well as several individual doctors practicing cardiology under the name of Cardiology Associates of Delaware County (hereinafter referred to as “Cardiology Associates”). Plaintiffs allege that the denial to them of *1174 certain specialized staff privileges in cardiology at CCMC violates both sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (1976), and section 4 of the Clayton Act, 15 U.S.C. § 15 (1976).

Plaintiffs originally filed this action on July 30, 1981. In their original complaint, plaintiffs alleged that the denial to them of such privileges resulted from an unlawful conspiracy by defendants that restrained trade in violation of sections 1 and 2 of the Sherman Act. Plaintiffs also alleged that defendants’ conduct violated plaintiffs’ fourteenth amendment rights and, therefore, constituted a deprivation of a constitutionally protected property or liberty interest within the meaning of 42 U.S.C. § 1983 (1976). Pursuant to rule 12(c), the CCMC defendants, later joined by Cardiology Associates, filed a motion for judgment on the pleadings on the grounds that plaintiffs had failed to state a claim for relief or establish that this court had subject matter jurisdiction with respect to either count of the original complaint.

On March 15, 1982, I issued an opinion and order granting defendants’ motion for judgment on the pleadings. Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Center, 536 F.Supp. 1065 (E.D.Pa.1982). Count II of plaintiffs’ original complaint, which alleged violations of the Constitution and section 1983, was dismissed with prejudice. Count I, however, which alleged that the actions of defendants violated the antitrust laws, was dismissed without prejudice and I granted plaintiffs sixty days to file an amended complaint.

On May 13, 1982, plaintiffs, with the assistance of new counsel, filed a thirty-eight page, sixty-five paragraph amended complaint. In fifty-five paragraphs of introductory allegations, plaintiffs attempt to plead jurisdiction and venue; the identity of the parties; the identification of relevant product markets; the alleged effects that defendants’ activities have on interstate trade and commerce; and the activities allegedly constituting defendants’ conspiracy, unreasonable restraint of trade, and group boycott of plaintiffs. Count I of plaintiffs’ amended complaint then states their Sherman Act section 1 claim while Count II states their Sherman Act section 2 claim.

Thus, plaintiffs’ amended complaint alleges, as did Count I of their original complaint, that defendants have prohibited plaintiffs from practicing certain cardiology procedures at CCMC in violation of sections 1 and 2 of the Sherman Act. On the basis of these allegations, plaintiffs seek permanent injunctive relief compelling defendants to permit plaintiffs to perform the specified procedures from which they allegedly have been wrongfully excluded. Plaintiffs also seek damages for the injuries allegedly sustained as a result of the denial of the opportunity to perform these procedures as well as attorneys’ fees and costs.

Pursuant to rule 12(b)(1) of the Federal Rules of Civil Procedure, the CCMC defendants have moved to dismiss plaintiffs’ amended complaint for lack of subject matter jurisdiction. 1 Defendants’ decision to proceed under rule 12(b)(1) as opposed to rule 12(b)(6) was dictated by my holding in the original Cardio-Medical opinion that “[t]he Third Circuit uniformly approaches the interstate commerce issue as one of jurisdiction.” Cardio-Medical, 536 F.Supp. at 1079 n. 15.

For the reasons stated below, I grant defendants’ motion to dismiss as to both counts of plaintiffs’ amended complaint, and, having already afforded plaintiffs the opportunity to amend their complaint, dismiss their cause of action with prejudice. Again,

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Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Center, 552 F. Supp. 1170, 1982 U.S. Dist. LEXIS 15832 (E.D. Pa. 1982).

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