Konik v. Champlain Valley Physicians Hospital Medical Center

733 F.2d 1007
CourtCourt of Appeals for the Second Circuit
DecidedApril 25, 1984
DocketNo. 65, Docket 83-7191
StatusPublished
Cited by13 cases

This text of 733 F.2d 1007 (Konik v. Champlain Valley Physicians Hospital Medical Center) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Konik v. Champlain Valley Physicians Hospital Medical Center, 733 F.2d 1007 (2d Cir. 1984).

Opinion

KEARSE, Circuit Judge:

Plaintiff Louise Konik, M.D., a physician whose speciality is anesthesiology, appeals from a final judgment of the United States District Court for the Northern District of New York, Roger J. Miner, Judge, dismissing her complaint under §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (1982), and § 4 of the Clayton Act, 15 U.S.C. § 15 (1982), which alleged, inter alia, that defendants Champlain Valley Physicians Hospital Medical Center and certain of its officials (collectively the “Hospital” '), and defendants Anesthesia Associates of Plattsburgh, P.C., and its president (collectively “AAP”), had, with respect to the provision of anesthesiology services in the Hospital, engaged in unlawful price-fixing (both vertical and horizontal), group boycott, tying, monopolization, and conspiracy and attempt to monopolize. Prior to trial, in an opinion reported at 561 F.Supp. 700 (N.D. N.Y. 1983), the district court granted partial summary judgment in favor of defendants on Konik’s claim that AAP and its members had engaged in horizontal price-fixing. On March 2, 1983, following a four-week trial, the district court granted defendants’ motion for a directed verdict with respect to Konik’s remaining claims. Id. at 722-24. On appeal Konik claims principally that the trial evidence warranted a directed verdict in her favor rather than against her. For the reasons below, we conclude that the court properly dismissed Konik’s claims, and we affirm the judgment..

[1010]*1010I. BACKGROUND

The case concerns the rendering of anesthesiology services at the Hospital, which is located in the City of Plattsburgh, Clinton County, New York. Dr. Konik, a licensed anethesiologist, has been a member of the medical staff of the Hospital since 1961. Her professional competence is not disputed. The fundamental facts as they emerged at trial are as follows.

A. Pre-1978 Arrangements

Prior to 1961, the practice of anesthesiology at the Hospital had developed on an ad hoc basis, in cooperation with private surgeons who were members of the medical staff. A surgeon who was to perform an operation would schedule the procedure at the Hospital and engage an anesthesiologist who also had staff privileges at the Hospital. Similarly, emergency services were arranged for by the surgeon or obstetrician responsible for the procedure requiring anesthesia. Patients or their insurers were billed directly by the anesthesiologist on a fee-for-service basis.

In the 1960’s the methods were changed both for emergency services and for scheduled services. For emergency anesthesia, a new “call schedule routine” required each member of the anesthesiology department, on a rotating basis, to be “on call” for 24 hours, ready to perform services on 15 minutes’ notice. In 1968 the method for handling scheduled surgery was changed from individual arrangements between surgeons and anesthesiologists to a “central booking” system. Using the new method, the surgeon scheduling a surgical procedure would notify a clerk at the hospital; if he requested a particular anesthesiologist, the request would be honored if feasible. When the scheduling surgeon did not request a particular anesthesiologist, the assignment would be made by the Chief of the Department of Anesthesiology.

In 1971, with the encouragement of the Hospital, the four anesthesiologists then on the staff of the Hospital, including Konik, formed a partnership; in 1973, the partnership was converted into a professional corporation, defendant AAP. Each of the four anesthesiologists associated with AAP was a shareholder and employee of the corporation. In 1977 a fifth anesthesiologist joined AAP; there were five until Konik resigned in 1978.

Although there was no formal contract between the Hospital and AAP giving AAP the exclusive right to provide anesthesiology services during this period, in fact all physicians holding anesthesia staff privileges at the Hospital were either shareholders or employees of AAP. Assignments continued to be made as a departmental matter, by the Hospital’s Chief of Anesthesiology. AAP both billed its patients and distributed its revenues independently of the Hospital.

B. The 1978 Contract

On May 9, 1978, because of a lack of harmony and cooperation among the shareholder/employees of AAP, Konik notified AAP of her withdrawal from the corporation 90 days thence. She thereafter informed AAP and the Hospital that she intended to continue to provide anesthesiology services at the Hospital. The Hospital administrators, however, notified operating room supervisors that after August 9, 1978, the effective date of Konik’s resignation from AAP, Konik would not be permitted to provide such services at the Hospital. Thereafter, the Hospital’s August 9 cutoff date was extended to September 1, and Konik continued, independently of AAP, to provide anesthesiology services at the Hospital until September 1, 1978.

In the meantime, AAP and the Hospital sought to negotiate with each other and with Konik an agreement covering the provision of anesthesiology services at the Hospital. Eventually, the Hospital and AAP entered an agreement dated August 31, 1978, entitled “Memorandum of Understanding” (“the Contract”), the text of which is set forth in the district court’s opinion, 561 F.Supp. at 720-22. As executed, the Contract, which is the focus of Konik’s antitrust challenges, provided, in pertinent part, (1) that AAP would provide sufficient anesthesiology services to the Hospital to ensure (a) anesthesiology ser[1011]*1011vices on all scheduled matters, (b) emergency coverage in the operating room 24 hours a day, 365 days a year, on 15 minutes’ notice, and (c) obstetrical anesthesiology services in the operating room or the delivery suite 24 hours a day, 365 days a year, on 15 minutes’ notice; (2) that the fees charged by the anesthesiologists would be no greater than those charged by other anesthesiologists for similar work situations in upstate New York; and (3) that no more than ten vacation days would be taken by any anesthesiologist during June, July, and August without written agreement between the parties. The Contract recognized that AAP was an independent contractor and provided that it would render the required services either itself “or in conjunction with any others [thereafter admitted to the Medical Staff of [the Hospital].” The Contract provided that its terms and conditions were to be reviewed by the parties every six months.

Konik was invited to become a party to this Contract, which had been drafted as a tripartite agreement among the Hospital, AAP, and Konik. AAP was defined as the “party of the second part”; Konik was defined as the “party of the third part”; and all provisions setting forth the rights, privileges, responsibilities, and undertakings of the anesthesiologists referred, without differentiation, to both the party of the second part and the party of the third part.

Konik declined to enter into the Contract. Instead, in a document dated September 29, 1978, she proffered to the Hospital and AAP a version of a contract (“Konik Proposal”) that differed from the Contract in several material respects.

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Bluebook (online)
733 F.2d 1007, Counsel Stack Legal Research, https://law.counselstack.com/opinion/konik-v-champlain-valley-physicians-hospital-medical-center-ca2-1984.