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Odom v. Lee (3/17/00) sp-5250
Odom v. Lee (3/17/00) sp-5250
Notice: This opinion is subject to correction before publication in the
Pacific Reporter. Readers are requested to bring errors to the attention
of the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska
99501, phone (907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
DAVID M. ODOM, M.D., )
) Supreme Court No. S-7547
Appellant, )
) Superior Court No.
v. ) 4FA-93-2901 CI
)
HOI P. LEE, M.D., STEVE E. ) O P I N I O N
MANCILL, M.D., JERRY A. )
PERISHO, M.D., RANDALL K. ) [No. 5250 - March 17, 2000]
McGREGOR, M.D., LAWRENCE W. )
STINSON, JR., M.D., )
)
Appellees. )
)
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Charles R. Pengilly, Judge pro tem.
Appearances: David M. Odom, M.D., pro se,
Fairbanks. Ronald L. Bliss, Bliss & Wilkens,
Anchorage, for Appellees.
Before: Compton, Chief Justice, Matthews,
Fabe, and Bryner, Justices. [Eastaugh,
Justice, not participating.]
COMPTON, Chief Justice.
I. INTRODUCTION
Dr. David M. Odom and four other doctors (Defendant
doctors) were parties to a contract for sharing an anesthesiology
practice at Fairbanks Memorial Hospital. Following a dispute with
the Defendant doctors, Dr. Odom filed suit alleging damages for
breach of contract, tortious interference with a contract right,
conspiracy to restrain trade, and unfair trade practices. Dr. Odom
appeals pro se from the denial of his motions for continuance and
to amend pleadings, and from the grant of summary judgment in favor
of the Defendant doctors on all issues. We reverse the summary
judgment and remand for a jury trial.1
II. FACTS AND PROCEEDINGS
The parties to this litigation are all licensed
physicians specializing in anesthesiology. They hold staff
privileges at Fairbanks Memorial Hospital (FMH). They2 began
sharing the anesthesia practice at FMH in 1989. 3
The doctors had a contract among themselves, titled
"Anesthesia Coverage Rules and Regulations" (Rotation Agreement).
This contract stated each doctor's responsibility to the others in
fulfilling their agreement with FMH. The agreement between the
doctors collectively and FMH was titled "Fairbanks Memorial
Hospital Anesthesiologist Agreement." In it the doctors are
denominated the Anesthesia Staff. This agreement incorporated the
terms of the Rotation Agreement. Under this agreement,
"[a]dditional anesthesia services added or staffing requirement
changes due to increased rooms, services, etc. shall be by Joint
Collaboration with the anesthesia staff." Additionally, FMH agreed
that it would "not solicit or recruit for the provision of
anesthesia services during the period of this Agreement without
first notifying the Anesthesia Staff." The five doctors would
provide twenty-four-hour-a-day anesthesia coverage to FMH. Each
doctor also had a separate contract with FMH that allowed the
doctor to practice medicine at FMH.
Two of the doctors, Hoi P. Lee and Randall K. McGregor,
had practiced anesthesiology in Fairbanks before the formation of
the Rotation Agreement with the other doctors. They owned
Anesthesia Associates, Inc. This corporation employed a staff of
Certified Registered Nurse Anesthetists (CRNAs), who assisted the
doctors in the operating room.
The Rotation Agreement set up a detailed rotation
schedule among the doctors and among the CRNAs, and provided for
modification of the schedule. It also provided that if the doctors
could not agree on a modification, the doctor wanting unscheduled
time off was responsible for providing coverage during his absence.
The doctors followed this procedure for approximately five years.
The rotation schedule required the doctor in the "number
one" position to supervise two operating rooms, each staffed by a
CRNA. The second, third, and fourth doctors in the rotation each
worked in one operating room with no CRNA, and the fifth doctor was
off-duty.
This controversy had its genesis in CRNA Kay Wilson's
refusal to follow Dr. Odom's instructions during a certain type of
procedure.4 After the third incident with CRNA Wilson, Dr. Odom
approached Dr. Lee about the problem. He got no definitive
response from Dr. Lee.
The specific precipitating event occurred on October 4,
1993, when Dr. Odom was choosing rooms for the following day. He
realized he would be in the number one position on the rotation.
He intended to use the procedure CRNA Wilson had refused to help
with in the past; CRNA Wilson was assigned to work with Dr. Odom
that day. Dr. Odom advised the surgical secretary that he would
take only one operating room the following day, and that the second
room and the CRNAs should be assigned to the number two doctor.
Following this incident, the Defendant doctors sent a
memo to the FMH Chief of Staff about the incident involving Dr.
Odom. The same day, the FMH Chief of Staff suspended Dr. Odom's
staff privileges for twenty-four hours. The Defendant doctors also
met and decided to revoke their contract with Dr. Odom. They
notified Dr. Odom that they would exclude him from their new
contract. After FMH reinstated his staff privileges the following
day, Dr. Odom could perform services at FMH only at the request of
a patient or a particular physician. He no longer received a share
of the general anesthesiology practice at FMH.
Dr. Odom filed suit alleging damages for breach of
contract, tortious interference with a contract right, conspiracy
to restrain trade, and unfair trade practices. The Defendant
doctors accepted Dr. Odom back into the rotation approximately two
months after the incident with CRNA Wilson, after he filed suit.
After Dr. Odom's reinstatement in the rotation schedule,
FMH began administrative proceedings to revoke his hospital
privileges. Dr. Odom's original attorney, Joseph Sheehan, had
limited his representation of Dr. Odom to the suit against the
Defendant doctors. Mr. Sheehan specifically did not want to sue
FMH or expand the suit to issues beyond the breach of the Rotation
Agreement. Because of this, Dr. Odom retained a different lawyer
to represent him in the administrative proceeding before FMH during
the first part of 1994. In June 1994, following the administrative
proceeding, FMH revoked Dr. Odom's hospital privileges.
Trial was set for April 1995. In October 1994 Dr. Odom
sought a continuance of the trial date because he needed additional
discovery for his case against the Defendant doctors. This was at
a time when Dr. Odom already knew of his potential claims against
FMH and its parent corporation, based on revocation of his
privileges in June of that year. The superior court granted his
unopposed motion for continuance; a new trial date was set for
January 1996. The deadline for amending pleadings was September
1995.
In July 1995 Mr. Sheehan formally informed Dr. Odom that
he was withdrawing as Odom's counsel. Dr. Odom attempted to find
other counsel, but initially was unsuccessful. In August the
Defendant doctors filed a motion for summary judgment. On
September 19 the superior court granted Mr. Sheehan's motion to
withdraw. Dr. Odom sought and received a two-week extension of the
deadline for his response to the summary judgment motion. On
October 2 he filed a pro se cross-motion for summary judgment.
On October 20, Ray Brown, a partner in the law firm of
Dillon & Findley, appeared for Dr. Odom. He filed a motion to
vacate the trial date and for a continuance. At oral argument, Mr.
Brown told the superior court that, if it granted the motion, his
firm would represent Dr. Odom and be ready for trial in nine
months. The superior court denied the motion. On October 7, Mr.
Brown filed a motion to supplement his summary judgment briefing,
and for a Rule 56(f) continuance. The trial court denied this
motion on November 15. After the November 15 ruling Brown declined
to represent Dr. Odom further.
Following oral argument, in which Dr. Odom appeared pro
se, the superior court granted summary judgment to the Defendant
doctors on three of the four claims. The court took the claim of
tortious interference with contract under advisement, and
considered two additional arguments that Dr. Odom had failed to
raise. The superior court then granted summary judgment to the
Defendant doctors on this claim as well. Dr. Odom appeals pro se
the denial of the continuance and the summary judgment.5
III. DISCUSSION
A. Breach of Contract
The superior court granted summary judgment to the
Defendant doctors on all of Dr. Odom's breach of contract claims.
We review the superior court's decision de novo. See Farmer v.
State, 788 P.2d 43, 46 n.8 (Alaska 1990). Dr. Odom is entitled to
have the record reviewed in the light most favorable to him, and to
have all reasonable inferences drawn in his favor. See Metcalfe
Invs., Inc. v. Garrison, 919 P.2d 1356, 1360 (Alaska 1996).
There are three issues of material fact which the
superior court should not have decided on summary judgment: (1) who
committed the first material breach; (2) whether the Defendant
doctors violated the covenant of good faith and fair dealing; and
(3) whether the Defendant doctors had modified the contract,
through course of dealing, to permit Dr. Odom's conduct.
1. Materiality of the breach
Dr. Odom argues the superior court erred in holding that
he breached the Rotation Agreement on October 4, 1993, by refusing
to cover the second operating room staffed by CRNA Wilson. Dr.
Odom argues that the Defendant doctors breached the agreement first
by requiring him to work with an inadequate CRNA and by ignoring
his requests to resolve the situation that had developed with CRNA
Wilson. The superior court concluded that because the parties'
responsibility to follow the rotation schedule was the foundation
of the contract, Dr. Odom's breach was sufficient to excuse
performance by the Defendant doctors.
The contract between the doctors specifically provided
that each doctor had the responsibility for providing locum tenens
coverage for his own absences. Had Dr. Odom been on vacation and
failed to arrange for coverage in his absence, the superior court
would have been correct that Dr. Odom's breach was the first
material breach. The superior court concluded that because Dr.
Odom was not excused from performance because of an emergency, and
because he knew of his problem with CRNA Wilson, he could have
provided locum tenens coverage during his absence. However, this
conclusion does not address the issue of fact raised by Dr. Odom,
which is that he had no choice but to accept the CRNAs provided
through Anesthesia Associates, Inc., and that Anesthesia
Associates, Inc. had the responsibility to supervise them.6
Dr. Odom argues that the Defendant doctors who had
supervisory power over CRNA Wilson committed the first breach.
When Dr. Odom notified Dr. Lee of the problem, Dr. Lee took no
action. Dr. Odom explained he expected that when he refused to
take the two operating rooms it would force the Defendant doctors
to meet with him and resolve the problem. Instead the Defendant
doctors met without Dr. Odom and excluded him from the contract.
The answer to the question of who committed the first
material breach depends on who had supervisory control over the
CRNAs. If it was the corporation owned by Drs. Lee and McGregor,
it was their responsibility to solve the problem with CRNA Wilson.
Although Anesthesia Associates, Inc. employed the CRNAs,
the Defendant doctors claim that it is each doctor's responsibility
to supervise the CRNA under his control. The Defendant doctors
admit the CRNAs are "nominally employed" by the corporation, and
that the corporation withholds employment taxes from the nurses'
paychecks. Anesthesia Associates, Inc. billed each doctor for his
use of the CRNAs and issued paychecks to the CRNAs.
The superior court questioned the parties about this.
Based on the superior court's questions of Dr. Odom, the superior
court apparently concluded that Dr. Odom was under no obligation to
use CRNA Wilson and that he could have employed a different CRNA,
or even gotten another doctor, outside the Rotation Agreement, to
cover his other operating room. This conclusion decides a genuine
issue of material fact; whether Dr. Odom was obliged to use the
CRNAs provided by Anesthesia Associates, Inc.
Several facts alleged by Dr. Odom support his argument
that he had no choice but to work with the CRNAs provided by the
corporation. Dr. Perisho, one of the Defendant doctors, stated in
an affidavit that after the incident between Dr. Odom and CRNA
Wilson, the Defendant doctors told Dr. Odom, "if he would continue
in the rotation under the terms of the original agreement, and work
with the CRNA's as scheduled, he would be welcome back in the
rotation." This statement tends to shows that the Defendant
doctors believed the Rotation Agreement required accepting the
CRNAs provided.
Dr. Odom stated in his deposition that at the time the
five doctors negotiated the initial Rotation Agreement, there was
some concern about continued employment for the CRNAs that had been
working with Drs. Lee and McGregor. In his affidavit, Dr. Odom
states that the CRNAs were retained to ensure that they would
continue to have jobs and to protect Drs. Lee and McGregor's
investment in their employees.
The Rotation Agreement itself also indicates that Dr.
Odom did not have any choice but to use the CRNAs. It provides for
the CRNAs to provide replacements for themselves if they need time
off, when they are scheduled to work. It also provides for an
alteration of the rotation for the doctors if all of the CRNAs are
on vacation at the same time.
Finally, in the memo written on the day of the incident
with CRNA Wilson, the Defendant doctors indicated to the Chief of
Staff that by refusing to supervise the CRNAs, Dr. Odom had failed
to uphold the Rotation Agreement. This tends to show the Defendant
doctors believed that it was a provision of the Rotation Agreement
to accept the CRNAs employed by Anesthesia Associates, Inc.
Reviewing the facts in the light most favorable to Dr.
Odom, he refused to handle two operating rooms when one room was
staffed by a CRNA who had refused to cooperate with him during a
Propofol Infusion. He asked the surgical secretary, who had filled
vacancies on the anesthesia rotation for five years, to ask the
number two doctor on the rotation to assume responsibility for the
second operating room. He believed the matter could be resolved
before the next time he was number one on the rotation and required
to take both operating rooms. Dr. Odom attempted to enlist the
help of Dr. Lee in correcting CRNA Wilson and failed. He believed
his action of refusing to work with her would force a meeting to
resolve the situation.
Whether Dr. Odom's breach was the first material breach
is a genuine issue of material fact, depending on who was
responsible for supervising the CRNAs and whether Dr. Odom was
obligated to work with them under the terms of the Rotation
Agreement. The superior court erred in granting summary judgment
on this issue.
2. Good faith
Dr. Odom argues that because he was acting in good faith
in seeking to call the problem with CRNA Wilson to the attention of
the Defendant doctors and to rectify the problem, that the
Defendant doctors acted in bad faith by treating Dr. Odom's action
as breach of contract. On October 5 the Defendant doctors met
without Dr. Odom and, without consulting him, they decided to
exclude him from the Rotation Agreement. The Defendant doctors'
bad faith, Dr. Odom argues, is further evidenced by FMH reinstating
his staff privileges in full after twenty-four hours. In a memo
the Defendant doctors sent to the Chief of Staff, they state that
"[i]t is a further concern of the below signed that patient care is
being jeopardized by Dr. Odom's professional practice of medicine."
There is no indication whether that statement reflects their
concern over Dr. Odom's refusal to follow the rotation, or whether
there were other motives which caused them to contact the Chief of
Staff about Dr. Odom's staff privileges at FMH. The superior court
should not have resolved by summary judgment the issue of whether
the Defendant doctors acted in bad faith.
3. The course of dealing
Dr. Odom gave the superior court two examples of how the
Rotation Agreement had been modified by a doctor's unavailability
in the past. One was a medical emergency where a doctor could not
leave a patient to cover his assigned operating rooms, and the
other was a health emergency where one doctor was too ill to take
responsibility for his rooms.
The Defendant doctors argue that even if the course of
dealing had changed or modified the Rotation Agreement terms for
dealing with "unavailability," there is nothing to suggest that the
course of dealing modification would cover a dispute over
supervision of the CRNAs where Dr. Odom was clearly available.
The superior court concluded that any modification that
may have been made to the Rotation Agreement reached only
unexpected emergencies, and that there was no factual basis to
conclude it was modified to authorize Dr. Odom's behavior. It is
true that Dr. Odom was available to cover both operating rooms, and
that he elected not to because of his problems with CRNA Wilson.
However, Dr. Odom raised a question of fact whether it was
reasonable for him to assume that he could cover his operating
rooms in the manner that had been used before, if in fact he was
obligated to use the CRNAs provided by Anesthesiology Associates,
Inc. Whether Dr. Odom's conduct was reasonable hinges on the
resolution of who supervised the CRNAs and whether Dr. Odom had any
other choice but to employ them under the terms of the Rotation
Agreement.
B. Tortious Interference with Contract
The superior court granted summary judgment on this issue
from the bench. The court concluded that the contract at issue was
the one between the doctors and FMH. The superior court concluded
that there had been no breach of any obligation running to FMH.
Based on the lack of breach, the superior court determined there
could be no tortious interference with contract.
To establish a tortious interference with contract claim,
Dr. Odom must show: (1) an existing contract between him and a
third party; (2) the Defendant doctors' knowledge of the contract
and intent to induce a breach; (3) breach; (4) wrongful conduct of
the Defendant doctors which caused the breach; (5) damages; and (6)
the Defendant doctors' conduct was not privileged or justified.
See Geolar, Inc. v. Gilbert/Commonwealth Inc. of Michigan, 874 P.2d
937, 940 (Alaska 1994).
Dr. Odom argues that the superior court was looking at
the wrong contract. Since there can be no tortious interference
claim among parties to the same contract, the superior court should
not have considered the contract between the doctors and FMH. Dr.
Odom is arguing that the Defendant doctors tortiously interfered
with his contract for hospital privileges at FMH. Those privileges
were revoked for twenty-four hours after the Defendant doctors sent
a letter to the Chief of Staff, informing him that Dr. Odom had
"disrupted the smooth operation of the O.R. schedule" and
disregarded the Rules and Regulations.
The Defendant doctors claim that Dr. Odom failed to raise
this argument below. Dr. Odom's complaint is not specific about
which contract he is alleging was interfered with. However, Dr.
Odom did not have an opportunity to elaborate on this issue when
the superior court ruled from the bench. There is no prejudice to
the Defendant doctors in considering the issue.
Dr. Odom's attempt to establish his claim of tortious
interference was cut short when the superior court ruled from the
bench, based on its apparent misunderstanding of which contract was
at issue. Dr. Odom should be allowed to develop this claim on
remand.
C. Antitrust/Unfair Trade Practices
In his complaint, Dr. Odom alleges conspiracy to restrain
trade, in violation of AS 45.50.562,7 monopolization, in violation
of 45.50.564, 8 and unfair trade practices, in violation of
45.50.566. 9
This court is guided by federal Sherman Act cases in
construing the Alaska antitrust law. See West v. Whitney-Fidalgo
Seafoods, Inc., 628 P.2d 10, 14 n.6 (Alaska 1981). Claims brought
under AS 45.50.562 are also referred to as Sherman Act § 1 claims;
claims under AS 45.50.564 have been termed Sherman Act § 2 claims.
Section 1 of the Sherman Act prohibits unreasonable restraints on
trade. See 15 U.S.C. § 1 (1997); Business Elecs. Corp. v. Sharp
Elecs. Corp., 485 U.S. 717, 723 (1988) (recognizing that § 1 of the
Sherman Act "was intended to prohibit only unreasonable restraints
of trade"). Federal courts have interpreted this prohibition two
ways: (1) under a per se rule, where certain activities are
considered illegal, with no requirement to prove actual damage to
competition, or (2) under the "rule of reason." See Federal Trade
Comm'n v. Indiana Fed. of Dentists, 476 U.S. 447, 457-58 (1986).
Dr. Odom's brief criticizes the superior court for applying "some
nebulous 'rule of reason' not recognized in any authority on the
subject." The rule of reason has been uniformly adopted by federal
courts, and there is a presumption in favor of applying this
standard. See Business Elecs. Corp. v. Sharp Elecs. Corp., 485
U.S. 717, 726 (1988). Under the rule of reason test "[a]fter the
claimant has proven that the conspiracy harmed competition, the
fact finder must balance the restraint and any justifications or
pro-competitive effects of the restraint in order to determine
whether the restraint is unreasonable." Oltz v. St. Peter's
Community Hosp., 861 F.2d 1440, 1445 (9th Cir. 1988). A contract
between a hospital and a group of anesthesiologists is not
considered a per se violation of the Sherman Act. See Jefferson
Parish Hosp. v. Hyde, 466 U.S. 2 (1984). The rule of reason thus
applies to this case.
Sherman Act cases of this kind generally must be
determined on the facts of each case. See Maple Flooring Mfrs.
Ass'n v. United States, 268 U.S. 563, 579 (1925). This court has
noted the United States Supreme Court's admonition that summary
judgment should be used sparingly in antitrust litigation. See KOS
v. Alyeska Pipeline Serv. Co., 676 P.2d 1069, 1073 (Alaska 1983)
(citing Poller v. Columbia Broad. Sys., Inc., 368 U.S. 464, 473
(1962)). When an antitrust plaintiff has established a prima facie
case, he should have an opportunity to prove the necessary
supporting facts at trial. See id.
To establish a prima facie case of unlawful restraint of
trade Dr. Odom must initially prove three elements: "(1) an
agreement or conspiracy among two or more persons or distinct
business entities; (2) by which the persons or entities intend to
harm or restrain competition; and (3) which actually injures
competition." Oltz, 861 F.2d at 1445. Only after Dr. Odom proves
these three elements is it incumbent upon the fact finder to
"balance the restraint and any justifications or pro-competitive
effects of the restraint in order to determine whether the
restraint is unreasonable." Id.
An attachment to an affidavit Dr. Odom filed with his
Verified Complaint, and re-filed in connection with the summary
judgment proceedings, discloses that on the day Dr. Odom stated he
would not work with CRNA Wilson until problems he perceived with
her performance were resolved, Dr. Keith B. Gianni, Chief of Staff
at FMH, summarily revoked Dr. Odom's hospital privileges, without
prior notice. This was done at the request of the Anesthesia
Department, which consisted of the contract Anesthesia Staff, i.e.,
the Defendant doctors, that had the Anesthesiologist Agreement with
FMH. Their unverified memorandum to Dr. Gianni, which listed as
its subject "Physician Behavior," stated no more than that "[Dr.
Odom's] behavior has disrupted the smooth operation of the O.R.
schedule and is in disregard of the Rules and Regulations, to which
we have all agreed and signed." In a similarly conclusory manner
they state that "[i]t is further a concern of the below signed that
patient care is being jeopardized by Dr. Odom's professional
practice of medicine." Apparently Dr. Gianni made no independent
verification of the issues raised by the contract Anesthesia Staff.
The afternoon following the episode involving Dr. Odom's admitted
refusal to work with CRNA Wilson, Dr. Perisho, Chairman of the FMH
Department of Anesthesia, one of the contract Anesthesia Staff as
well as a Defendant doctor, sent a memorandum to Dr. Odom. The
memorandum recites that he and Drs. Mancil, Lee, McGregor, and
Stinson, who constituted the contract Anesthesia Staff under the
Anesthesiologist Agreement with FMH, had met and decided that:
1. Dr. Odom has violated anesthesia contract
[with FMH] and rules and regulations [of the
Anesthesia Staff].
2. The [Anesthesia Staff] wishes not to
continue Dr. Odom as a party to the agreement
[with FMH].
3. Effective immediately Dr. David Odom will
be an independent and solo practitioner with
responsibility to maintain privileges
according to the medical staff bylaws. He may
do cases on request both scheduled and
emergency. It should be understood that if
Dr. Odom is not specifically requested,
Anesthesia [S]taff as part of the
[A]nesthesiologist [A]greement will provide
the anesthesia services and follow the revised
rules and regulations parallel to the past.
4. Issues regarding quality assurance review
and recommendations made to Dr. Odom must
continue to be addressed by Dr. Odom.
The next day Dr. Gianni, Chief of Staff, sent Dr. Odom a memorandum
in which Dr. Gianni stated that "[y]our summary suspension issued
yesterday has expired and I have elected not to continue it." The
crisis that presumably had justified Dr. Odom's summary suspension
without notice, and thus terminated Dr. Odom's responsibilities
under the Anesthesiologist Agreement, had thus resolved. However,
Dr. Gianni also stated that "[y]ou have your former privileges in
full; specifically, you may render anesthesia care when so asked by
another physician or patient."
In his affidavit, Dr. Odom swears that:
After the meeting with the Defendants, I
met with Gingerich to determine whether FMH
would continue to allow me to practice and,
more particularly, would the hospital provide
me with a pro-rated portion of the anesthesia
practice. Gingerich advised me that my
privileges at the hospital would remain valid,
however, the hospital would not give me a pro-
rated portion of the anesthesia practice,
since it had a contract with the Defendants.
Gingerich did indicate that if I was
specifically name requested by a physician,
hospital staff would permit the scheduling.
The effect of Defendants' conduct was to
eliminate my practice of medicine in
Fairbanks.
According to this affidavit, Dr. Odom later sent a letter to
Gingerich
requesting that I be permitted to continue
sharing on a pro-rated basis in the anesthesia
practice at FMH and that steps be taken to
resolve the dispute between myself and the
Defendants. . . . Gingerich did not respond
in writing to my correspondence, however,
verbally he told me that he would not
intercede and would not allow me a pro-rated
portion of the anesthesia practice.
In the same affidavit, Dr. Odom swears that:
The gross value of anesthesiology
services provided at FMH is approximately
Three Million ($3,000,000) Dollars per year.
In the past five years, surgeons have not
been permitted to name request
anesthesiologists. Although this practice has
changed, neither the surgeon nor the patient
is advised that they have a choice of
anesthesiologists, the names of the
anesthesiologists, or the rates which each
anesthesiologist charges. Because of past
practice and the present lack of information,
almost all anesthesia will go to the
Defendants because FMH does not provide or
permit otherwise. The Defendants have had a
contract with FMH every year that I have been
here, since 1989, except for 1991 and 1992.
Despite not having a contract in 1991 and
1992, the anesthesiologists continued the
rotation system and pro-rated the anesthesia
practice. During these years, total gross
revenues have been about the same -- meaning
that each anesthesiologist receives
approximately Five Hundred Thousand ($500,000)
Dollars annually. Since I am now precluded
from the Anesthesia Agreement, my portion of
these gross revenues (approximately Five
Hundred Thousand ($500,000) Dollars) is being
taken by the Defendants and divided among
themselves -- essentially each of them picks
up another One Hundred Thousand ($100,000)
Dollars, at my expense.
The Defendant doctors argued to the superior court that
the "Anesthesiologist Agreement at issue provided benefits to the
community outweighing any concomitant restraint on commerce." The
superior court agreed, determining that the Anesthesiologist
Agreement did not constitute a conspiracy in restraint of trade:
It's not clear to me, and it's not necessary
to decision in this case, whether that
contract -- now we're talking about again the
contract between the [anesthesiologists] and
FMH -- would be viewed as an anti-trust
violation outside the context of this case.
But the specific context of this case, that is
contract for the provision of medical
services, makes it pretty clear to me that no
such violation occurred here, even colorably.
It's certainly in the public interest that
the coverage that we're talking about here be
provided reliably and constantly. It's
pretty clear that, given the rule of reason,
there is no anti-trust violation even though
there may have been some combination that
somehow acted to restrict free trade and free
competition in the area.
See Oltz, 861 F.2d at 1449 (noting that "[t]he rule of reason
requires an evaluation of each challenged restraint in light of the
special circumstances involved").
Viewing the record in the light most favorable to Dr.
Odom, and drawing all reasonable inferences in his favor, a jury
could find that the Defendant doctors had engaged in a conspiracy
to restrain trade, had attempted to monopolize the anesthesiology
practice at FMH, and had engaged in trade practices the effect of
which was substantially to lessen competition or tended to create
a monopoly in the anesthesiology practice at FMH. Thus Dr. Odom
has presented sufficient evidence to establish prima facie
statutory causes of action against the Defendant doctors.
In briefing before this court, the Defendant doctors note
that the rule of reason "requires an evaluation whether, under all
the circumstances of the case, the restrictive practice imposes an
unreasonable restraint on competition." As noted, they argue that
the public interest benefits flowing from the Anesthesiologist
Agreement satisfy the rule of reason.
Dr. Odom has sworn that during a two-year interval there
was no contract between the anesthesiologists and FMH, from which
it could be inferred that any public interest benefits flowing from
the contract, which largely consisted of the assurance of reliable
and constant anesthesiology coverage at all times, could be
achieved without a contract. He also has sworn that it was the
practice of FMH to prohibit surgeons from "name requesting" an
anesthesiologist, a practice that had been replaced by the policy
of simply not advising surgeons or patients that they could "name
request" an anesthesiologist. Balancing the restraint of
competition against the public interest also is a question of fact
to be determined by the jury. It is not a determination to be made
on summary judgment.
IV. CONCLUSION
The summary judgment is REVERSED and the case is REMANDED
for further proceedings consistent with this opinion.
Footnotes
1 In view of our reversal of the summary judgment, we need
not address the denial of the motions for continuance and to amend
pleadings.
2 A sixth doctor, Lawrence W. Stinson, joined the group
later.
3 In 1991 and 1992, the sharing was not pursuant to the
formal agreement with FMH later herein described.
4 The procedure CRNA Wilson refused to cooperate in is
called Propofol Infusion. This type of anesthesia is administered
through the blood stream rather than through the respiratory
system. There is no dispute about Dr. Odom's use of this
procedure.
5 The other doctors point out in their briefing that Dr.
Odom filed a second suit in Fairbanks superior court, Odom v.
Fairbanks Memorial Hospital et al., Case No. 4FA-95-3001. In that
suit Dr. Odom raises claims similar to the ones included in this
suit, but which stem from the administrative proceeding in which
FMH revoked his staff privileges. The other doctors are included
among the fifteen defendants in that case.
That case is now on appeal to this court, docketed as
Case No. S-8007. We make no determination of the effect of our
resolution of this case on the issues raised in that appeal.
6 There were three CRNAs employed by Anesthesia Associates,
Inc. at the time of this dispute. Dr. Odom requested the third
CRNA replace Wilson on October 5. However, the third CRNA was
unavailable.
7 AS 45.50.562 provides:
Every contract, combination in the form of
trust or otherwise, or conspiracy, in
restraint of trade or commerce is unlawful.
8 AS 45.50.564 provides:
It is unlawful for a person to monopolize, or
attempt to monopolize, or combine or conspire
with another person to monopolize any part of
trade or commerce.
9 AS 45.50.566 provides:
It is unlawful for a person to . . . make a
. . . contract for sale of . . . services,
. . . on the condition, agreement, or
understanding that the . . . purchaser will
not use or deal in the . . . service of a
competitor or competitors of the . . . seller,
if the effect of the . . . contract for sale,
or of the condition, agreement, or
understanding may be substantially to lessen
competition or tend to create a monopoly in
any line of commerce.
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