Four Corners Nephrology Associates, P.C. v. Mercy Medical Center

582 F.3d 1216, 2009 U.S. App. LEXIS 21320, 2009 WL 3085882
CourtCourt of Appeals for the Tenth Circuit
DecidedSeptember 29, 2009
Docket08-1231
StatusPublished
Cited by34 cases

This text of 582 F.3d 1216 (Four Corners Nephrology Associates, P.C. v. Mercy Medical Center) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Four Corners Nephrology Associates, P.C. v. Mercy Medical Center, 582 F.3d 1216, 2009 U.S. App. LEXIS 21320, 2009 WL 3085882 (10th Cir. 2009).

Opinion

GORSUCH, Circuit Judge.

To provide Durango, Colorado, residents and Southern Ute Indian tribe members with greater access to kidney dialysis and other nephrology services, Mercy Medical Center, a non-profit hospital, together with the tribe, sought to entice Dr. Mark Bevan to join the hospital’s active staff. When Dr. Bevan declined, the hospital hired somebody else. To convince that physician and others to settle in Durango, and aware that starting a nephrology practice was likely to prove unprofitable for the foreseeable future, the hospital and tribe agreed to underwrite up to $2.5 million in losses they expected the practice to incur. To protect its investment, Mercy made its new practice the exclusive provider of nephrology services at the hospital.

In response, Dr. Bevan sued. He contended that Mercy’s refusal to deal with other nephrologists, including himself, amounted to the monopolization, or attempted monopolization, of the market for physician nephrology services in the Durango area. The district court granted summary judgment to the hospital, and we affirm for two reasons. First, the hospital has no antitrust duty to share its facilities with Dr. Bevan at the expense of its own nephrology practice. Second, in demanding access to Mercy’s facilities, Dr. Bevan seeks to share — not to undo — the hospital’s putative monopoly. That, of course, is not what the antitrust laws are about: they seek to advance competition, not advantage competitors.

I

A

Viewing the facts in the light most favorable to Dr. Bevan as the summary judgment non-movant, they reveal that Dr. Bevan and his associates at Four Corners Nephrology Associates, P.C., enjoy a thriving practice based in Farmington, New Mexico. For years, patients throughout the Four Corners area (where Colorado, *1218 Utah, New Mexico, and Arizona meet) have traveled to Dr. Bevan’s office to receive kidney dialysis and other outpatient nephrology services. These include patients from Durango, Colorado, and its nearby Southern Ute Indian reservation, many of whom require dialysis three times per week. Each round-trip drive between Durango and Farmington can take these patients an hour-and-a-half or more.

In part because of the distance to Farmington and the prevalence of kidney disease in the Durango area, most acutely among members of the Southern Ute tribe, the tribe, Mercy hospital, and the Durango Rotary Club all sought for many years to convince Dr. Bevan to provide kidney dialysis and other nephrology services in Durango. Dr. Bevan consistently declined these invitations. While Dr. Be-van held consulting medical privileges at Mercy, and occasionally took inquiries by phone from doctors there, the last time he entered the Durango hospital to treat patients was in 1995.

Unable to lure Dr. Bevan to town, Mercy and the tribe decided to undertake a joint effort to recruit another nephrologist. After extensive interviews, the tribe selected Dr. Mark Saddler, who agreed to come to Durango in 2005 — but on a condition. Concerned that patient numbers in Duran-go would not provide him with the income he previously enjoyed, Dr. Saddler insisted that the hospital employ him on a salaried basis. The hospital agreed. Anticipating that its new nephrology practice would lose money for many years, the hospital also agreed to underwrite losses of up to $500,000 over seven years, while the tribe agreed to backstop certain additional losses, depositing $2 million into a trust fund for that purpose. In addition, Dr. Saddler was permitted to serve as the director of a new, independently owned outpatient dialysis center in Durango.

Under Mercy’s preexisting bylaws, the employment of Dr. Saddler as a full-time active nephrologist automatically terminated Dr. Bevaris consulting privileges. The point of consulting staff members, the bylaws make clear, is limited to filling gaps in the expertise of the hospital’s active staff: “Consulting Staff consist of providers who offer services required or desired but not otherwise provided by an Active Medical Staff member.” Mercy Medical Staff Bylaws, J.A. at 419. While no longer eligible to serve as a consulting staff member, Dr. Bevan was able, consistent with the hospital’s bylaws, to remain a member of its courtesy staff, a position that allowed him to consult and write orders with the permission of an attending physician.

Unsatisfied with these developments, Dr. Bevan, along with one of his associates at Four Corners Nephrology, filed an application to become a member of the hospital’s active staff, on par with Dr. Saddler and competing with the hospital’s nephrology practice. Mercy’s bylaws did not forbid the hospital from having two active staff members with the same expertise, but they did present at least one significant hurdle for Dr. Bevan. Unlike members of the consulting staff, members of the hospital’s active staff were obliged by the bylaws to reside within 30 minutes of the hospital in order to be available to provide emergency care. To meet this mandate, Dr. Bevan, who continued to live in Farmington, first suggested that he resided in Durango office space. When that gambit failed to persuade hospital authorities, he told Mercy he had leased a residence near Durango, which, on investigation, turned out to be a plot of vacant land.

As these events unfolded, Mercy decided to preempt any future application from Dr. Bevan and his colleagues by designating its nephrology practice — now including Dr. Saddler and a partner — as the sole provid *1219 er of nephrology services to the hospital. Mercy cited several factors contributing to its decision. First, hospital administrators expressed concern that granting active staff membership to Dr. Bevan and other Four Corners Nephrology doctors would reduce the volume of patients for Dr. Saddler and his partner to the point where they would lose technical proficiency or leave for better jobs. Second, while Mercy and the tribe anticipated that the hospital’s new nephrology practice would operate at a loss, they feared that granting staff privileges to other nephrologists would exacerbate those losses, causing the hospital to draw down the Southern Ute and hospital subsidies more rapidly. Ultimately, the hospital feared that money would run out before its practice could become self-sustaining. Finally, Mercy administrators expressed concern that Dr. Bevan would offer a repeat performance of his actions in Page, Arizona. According to them (though disputed by Dr. Bevan), when a competing group of nephrologists opened a dialysis center in Page, about four hours west of Farmington, Dr. Bevan responded by opening his own dialysis center in Page. The town apparently couldn’t support two competing clinics, however, and the competitor clinic soon closed. Shortly after that, Dr. Bevan closed his clinic in Page, leaving the town with no nephrology practice and many of its kidney dialysis patients once again with a four-hour trek to Farmington. In light of its understanding of this episode, the hospital worried that Dr. Bevan’s true intentions were to destroy Durango’s nephrology practice, rather than to increase the quality and quantity of nephrology services in Durango.

B

In response to the hospital’s decision, Dr. Bevan filed this lawsuit. While his complaint outlined various causes of action, for purposes of this appeal Dr.

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Bluebook (online)
582 F.3d 1216, 2009 U.S. App. LEXIS 21320, 2009 WL 3085882, Counsel Stack Legal Research, https://law.counselstack.com/opinion/four-corners-nephrology-associates-pc-v-mercy-medical-center-ca10-2009.