Kessel v. Monongalia County General Hospital Co.

648 S.E.2d 366, 220 W. Va. 602
CourtWest Virginia Supreme Court
DecidedJune 29, 2007
Docket33096
StatusPublished
Cited by11 cases

This text of 648 S.E.2d 366 (Kessel v. Monongalia County General Hospital Co.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kessel v. Monongalia County General Hospital Co., 648 S.E.2d 366, 220 W. Va. 602 (W. Va. 2007).

Opinions

BENJAMIN, Justice:

On December 29, 2005, the Circuit Court of Monongalia County entered an order granting partial summary judgment with respect to all claims arising under state antitrust law asserted by James W. Kessel, M.D., Richard D. Vaglienti, M.D. and Stanford J. Huber, M.D. (hereinafter collectively “Appellants”) against Monongalia County General Hospital d/b/a Monongalia General Hospital (hereinafter “Monongalia General”), Mark Bennett, M.D., and Bennett Anesthesia Consultants, P.L.L.C. (hereinafter collectively “BAC”), and Professional Anesthesia Services, Inc. (hereinafter “PAS”).1 In Count III of their complaints, which were consolidated for resolution before the circuit court, Appellants asserted that two “exclusive” contracts, one between Monongalia General and BAC and one between Monongalia General and PAS, for the provision of operative anesthesiology services at Monongalia General constituted a “restraint of trade” in violation of the West Virginia Antitrust Act, W. Va. § 47-18-1, et seq., (hereinafter the “WVA-TA”). According to the Appellants, the circuit court erred by (1) following federal precedent developed under the Sherman Act, 15 U.S.C. § 1, et seq., in interpreting the WVA-TA; (2) determining that the provisions of W. Va.Code § 47-18-3(b) (1978), were “com[607]*607parable” to the Sherman Act; and (3) finding that the contracts at issue do not violate the per se restrictions contained in W. Va.Code § 47-18-3(b) and W. Va.C.S.R. § 142-15-3 (1991). Upon due consideration of the arguments presented by the parties and the pertinent legal authorities, we affirm the circuit court's partial summary judgment order.2

I.

FACTUAL AND PROCEDURAL HISTORY

On March 24,1975, Monongalia Anesthesia Associates (hereinafter “MAA”) entered into a contract with Monongalia General for the exclusive provision of anesthesia services at the hospital.3 Each of the appellants were shareholders and employees of MAA. In the early 1990’s the MAA and Monongalia General began a renegotiation of the contract. Although the result of these negotiations is not clear from the record before this Court, it appears that MAA continued to exclusively provide the anesthesiological services, except for cardio-thoraeic surgeries, at Monongalia General until December 30, 1998, when Mo-nongalia General entered the contract with BAC, at issue herein, for the exclusive provision of orthopedic surgical anesthesia. Thereafter, Monongalia General and MAA were unable to reach an agreement regarding MAA’s exclusive provision of all non-eardio-thoracic and non-orthopedie surgical anesthesia services at the hospital. Monon-galia General then solicited a request for proposal from a number of providers of surgical anesthesia services, including MAA, for the exclusive provision of these remaining surgical anesthesia services. As a result of this solicitation, Monongalia General entered the contract with PAS, at issue herein.

Subsequently, Appellants initiated suit alleging tortious interference with business relationships, due process violation/failure to provide a fair hearing pursuant to medical staff by-laws, restraint of trade, breach of contract and breach of the covenants of good faith and fair dealing. Previously, in Kessel v. Monongalia General Hospital Company, dba Monongalia General Hospital, 215 W.Va. 609, 600 S.E.2d 321 (2004) (hereinafter “Kessel I ”), this Court responded to a question certified by the circuit court regarding Monongalia General’s ability to enter into exclusive contracts. Appellants’ antitrust claims were not at issue in Kessel I. In Kessel I, this Court examined Monongalia General’s legal authority to enter into exclusive contracts in light of its status as a quasi-public hospital. Monongalia General’s status as a quasi-public hospital was significant because, subject to compliance with applicable law and hospital rules and regulations, a “physician or surgeon is entitled to practice in the public hospitals of this state” and that “quasi-public hospitals have the same duty as public hospitals to admit regularly licensed [608]*608physicians to membership on their medical staffs.” Syl. pts. 9 and 11, Kessel I, in part. In light of these findings, this Court held, in syllabus point 12 of Kessel I, that “a public or quasi-public hospital may not enter into exclusive contracts with medical service providers that have the effect of completely excluding other physicians who have regular staff privileges at the hospital from the use of the hospital’s medical facilities.” An important consideration for the Court in Kessel I was a patient’s right to choose his or her physician. Therefore, while prohibiting exclusive contracts in public and quasi-public hospitals, the Court noted that the hospital may still enter into preferential contracts pursuant to which the hospital contracts with primary service providers who then provide the designated service unless a patient requests that another staff physician perform the service. Kessel I, 215 W.Va. at 621, 600 S.E.2d at 333.

Contrary to Appellants’ suggestion, this Court’s decision in Kessel I does not impact their claims regarding violation of the WVA-TA. Simply because a public or quasi-public hospital is px-ohibited, under West Vii-ginia law, fi’om entering into an exclusive contract with certain service providers does not automatically result in that same contract violating our antitrust laws.4 Violation of anti-ti-ust laws constitutes a separate legal inquiry-

Appellants’ complaints allege that Monongalia General’s contracts with BAC and PAS ax-e a “restraint of trade” which constitute “exclusive dealings.” Although their complaints simply assex-t “resti-aint of trade,” Appellants rely upon W. Va.Code § 47-18-3(b) and W. Va.C.S.R. § 142-15-3 in support of their claims before both the circuit court and this Couxf. West Virginia Code § 47-18-3, entitled “Contracts and combinations in restraint of trade,” provides:

(a) Evei-y contract, combination in the form of trust or otheiwise, or conspiracy in x-estraint of trade or commei*ce in this State shall be unlawful.
(b) Without limiting the effect of subsection (a) of this section, the following shall be deemed to restrain trade or commerce unreasonably and are unlawful:
(1) A contract, combination or conspiracy between two or more persons:
(A) For the purpose or with the effect of fixing, controlling, or maintaining the market pi-ice, rate or fee of any commodity or service; or
(B) Fixing, controlling, maintaining, limiting or discontinuing the production, manufacture, mining, sale or supply of any commodity, or the sale or supply of any service, for the purpose or with the effect of fixing, controlling or maintaining the market price, rate or fee of the commodity or service; or
(C) Allocating or dividing customers or markets, functional or geographic, for any commodity or service.
(2) A contract, combination or conspiracy between two or more persons whereby, in the letting of any public or private contract:
(A) The price quotation of any bid is fixed or controlled; or

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Kessel v. Monongalia County General Hospital Co.
648 S.E.2d 366 (West Virginia Supreme Court, 2007)

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Bluebook (online)
648 S.E.2d 366, 220 W. Va. 602, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kessel-v-monongalia-county-general-hospital-co-wva-2007.