The opinion of the court was delivered by: Sullivan, District Judge.
This is a controversy in the world of medicine. Plaintiff is a
doctor; defendants are the American Medical Association
("A.M.A.") and certain individuals who were its officers during
the relevant time: George F. Lull, its secretary and general
manager; his assistant, Ernest B. Howard; Edward R. Cummiffee,
chairman of its Judicial Council; John W. Cline, its president;
and J.W. Holloway, Jr., head of its legal department and legal
advisor to the Judicial Council. Defendants have moved to dismiss
the amended complaint for failure to state a cause of action.
The amended complaint is in two counts, the first of which
purports to state a cause of action under the antitrust laws,
specifically sections 1 and 2 of the Sherman Act, 15 U.S.C.A. §
1, 2, and section 4 of the Clayton Act, 15 U.S.C.A. § 15. The
crux of this Count is the charge that the defendants conspired to
monopolize the function of supplying prepaid (or "contract")
medical and hospital services, that is, the giving of those
services in return for a regular monthly payment. In truncated
form, the allegations of Count I are that: Membership in the
A.M.A. is a prerequisite to a successful medical practice, since
it is required before a doctor may use hospitals for the
treatment of his patients. In the years 1949 through 1952,
plaintiff was a member of that organization, and was practicing
his profession in Walla Walla, Washington. In 1949 or 1950 there
was organized in that city "at the instigation of" the A.M.A.,
the Walla Walla Valley Medical Service Corporation ("Medical
Bureau"), which proceeded to enter into contracts to supply
pre-paid medical and hospital care. This Bureau is under the
domination of the A.M.A. through duplication of membership and
joint meetings; and it was organized by defendants as a means of
monopolizing the field of contract medicine. Plaintiff
disapproved of its formation and its method of operation, and
wrote to the Walla Walla Valley Medical Society, a subsidiary of
the A.M.A., protesting and giving his reasons for objecting. On
May 22, 1951, in accordance with the terms of a conspiracy among
the named defendants and others, plaintiff was expelled from the
County Medical Society, State Medical Association, and the
A.M.A., on a false charge, according to an illegal procedure, and
without an opportunity to present his side of the story. Although
he was re-instated as a member of the Judicial Council in 1952,
both consideration of his appeal and publication of the favorable
decision were delayed for several months. As a consequence of all
this, plaintiff was unable to use hospital facilities, his
practice in Walla Walla was ruined, and he was forced to attempt
to re-instate himself in practice in Baltimore, Maryland, where
he is now. Further, the defendants communicated the fact of
plaintiff's expulsion to his father, who thereupon changed his
will to plaintiff's disadvantage. Plaintiff asks actual
damages of $272,000, plus treble damages under the Sherman Act.
That a cause of action under the anti-trust laws is not stated
is apparent. Those laws forbid "restraint" or "monopolizing" of
"trade or commerce among the several States," Title 15 U.S.C.A.
§§ 1 and 2. The gist of Count I is that the A.M.A. monopolized,
or attempted to monopolize, the field of supplying medical and
hospital services on a pre-paid basis. Assuming the truth of the
very general allegations to this effect, there is nothing which
could show a resulting damage to the plaintiff. A member of the
public who observes a monopolistic practice of which he
disapproves has no standing to rectify the matter by bringing
suit. This is the function of the Attorney General. Cf. United
States v. Oregon State Medical Society, 1951, 343 U.S. 326, 72
S.Ct. 690, 96 L.Ed. 978. The remedy available to a private person
is given to "any person * * * injured in his business or property
by reason of anything forbidden in the antitrust laws", Title 15
U.S.C.A. § 15.
Under this section it is evident that there must first exist a
business or property of a kind capable of being injured by the
violation alleged. Peller v. International Boxing Club, 7 Cir.,
1955, 227 F.2d 593, 596; Sargent v. National Broadcasting Co.,
D.C.S.D.Cal. 1955, 136 F. Supp. 560; Conference of Studio Unions
v. Loew's, Inc., 9 Cir., 1951, 193 F.2d 51, certiorari denied
1952, 342 U.S. 919, 72 S.Ct. 367, 96 L.Ed. 687. In the
allegations of the present complaint there is nothing from which
it is possible to deduce how monopolization of the "contract
medicine" business could have injured the plaintiff. He alleges
that at Walla Walla he "developed a successful practice which
emphasized certain basic measures against disease, particularly
the use of diet, vitamins, and antibiotics". This has no
relation to supplying pre-paid medicine; and there is no
allegation that plaintiff was prepared to, attempted to, or even
thought about entering this field. His "business" was therefor
not of a type capable of injury by its monopolization by any one.
The same result is reached in another way by pointing out that
the plaintiff was not injured "by reason of" an anti-trust
violation. His practice was injured by his expulsion from the
Walla Walla Valley Society and by the delayed consideration of
his appeal and the announcement of his reinstatement. It is not
clear how these activities assisted or could have assisted
defendants in their pursuit of a monopoly. The alleged violations
were accordingly not the direct and proximate cause of the
injury. Tepler v. Frick, 2 Cir., 1953, 204 F.2d 506; Virtue v.
Creamery Package Mfg. Co., 1913, 227 U.S. 8, 38, 33 S.Ct. 202, 57
L.Ed. 393. Count I thus fails to state a cause of action under
the anti-trust laws for the reason that there is no showing that
plaintiff was injured in his business or property by acts of
defendants forbidden by those laws.
An additional, and equally fatal defect is that there is no
allegation showing any effect of the alleged monopoly on
interstate commerce; and this is of course essential. Title 15
U.S.C.A. §§ 1 and 2; Polhemus v. American Medical Association, 10
Cir., 1949, 145 F.2d 357, 359. Particularly apt here is Spears
Free Clinic & Hospital for Poor Children v. Cleere, 10 Cir.,
1952, 197 F.2d 125, 126. Plaintiff was a chiropractic institution
in Denver, Colorado, and defendants were the local Medical
Society and various doctors who were its members. The complaint,
attempting to state a cause of action under the anti-trust laws,
alleged that defendants had conspired to prevent the operation of
the plaintiff hospital, and that as a consequence fewer patients
came to it from other states. In affirming the trial court's
dismissal of the complaint, the court remarked that "The practice
of the healing arts in Colorado, including chiropractic, is
wholly local in character", and held that the alleged effect on
interstate commerce was too remote and insubstantial to satisfy
the requirements of the Sherman Act.
Not even a remote effect on interstate commerce is alleged in
the instant case. The "trade or commerce" affected was in Walla
Walla, Washington, and all the events related occurred there. It
is true that there are some allegations, not summarized above,
which describe events in Baltimore, Maryland; but these also are
entirely local in character. There are very general allegations
that defendants were conspiring to bring about the same sort of
monopoly in "numerous of the United States", but no facts are set
forth to support them, and they must be disregarded. Even if
these charges were substantial and supported by facts, there is
no reason to suppose that the formation of a number of local
units would have an effect on interstate commerce.
Since Count I is fatally defective in the ways just
demonstrated, it is unnecessary to consider the various other
objections to it which defendants urge.
Count II repeats most of the allegations of Count I, and states
a cause of action for tort, alleging an intentional and wrongful
invasion of plaintiff's right to establish and conduct a lawful
business, Shell Oil Co., Inc., v. State Tire & Oil Co., 6 Cir.,
1942, 126 F.2d 971, 975; see also Original Ballet Russe v. Ballet
Theater, 2 Cir., 1943, 133 F.2d 187, 189, and Pendleton v. Time,
Inc., 1949, 339 Ill. App. 188, 189, 89 N.E.2d 435. "No persons,
individually or by combination, have the right to directly or
indirectly interfere or disturb another in his lawful business or
occupation, or to threaten to do so, for the sake of compelling
him to do some act which, in his judgment, his own interest does
not require." Doremus v. Hennessy, 1898, 176 Ill. 608, 614,
52 N.E. 924, 925, 54 N.E. 524, 43 L.R.A. 797.
Plaintiff alleges here that the wrongful acts which damaged his
practice as a doctor were that the defendants conspired to and
did have him expelled on a false charge from membership in the
A.M.A., delayed unnecessarily in reinstating him and in
announcing the reinstatement. It is further alleged that these
steps were taken in violation of the Association's own rules and
by-laws. That such a course of action is illegal is plain. The
by-laws of a voluntary association are an agreement between it
and its members, by which both are bound. Porter v. King County
Medical Soc., 1936, 186 Wn. 410, 58 P.2d 367, 370; Pitcher v.
Board of Trade, 1887, 121 Ill. 412, 420, 13 N.E. 187.
Accordingly, a member may not complain of an expulsion when the
association has acted according to its rules. State of North
Dakota v. North Central Association of Colleges, 7 Cir., 1938,
99 F.2d 697, 700; Board of Trade, etc., v. Nelson, 1896, 162 Ill. 431,
44 N.E. 743. By the same token, an expulsion in violation of
the rules of the society is illegal. Supreme Lodge of A.O.U.W. v.
Zuhlke, 1889, 129 Ill. 298, 21 N.E. 789; Gardner v. East Rock
Lodge No. 141, 1921, 96 Conn. 198, 113 A. 308; Lahiff v. St.
Joseph's Total Abstinence & Benev. Society, 1904, 76 Conn. 648,
87 A. 692, 65 L.R.A. 92; People ex rel. Deverell v. Musical
Mutual Protective Union, 1889, 118 N.Y. 101, 23 N.E. 129.
Count II succeeds in stating a cause of action under these and
similar cases. While it is true, as defendant points out, that
the complaint is not "simple, concise, and direct", Fed.Rules
Civ.Proc. rule 8, 28 U.S.C.A., the allegations read as a whole
are sufficient, and plaintiff should have his day in court.
Defendants have submitted a separate motion to strike parts of
the complaint. It will be denied except as it relates to
Paragraphs 7(t) and 8 of Count I as incorporated in Count II.
These relate to the damages alleged to have resulted from
plaintiff's father's changing his will. It is apparent from the
face of the complaint that any such damage would be uncertain,
remote and speculative consequences of the tort for which
defendant is not legally responsible. Telluride Powder Co. v.
Williams, 10 Cir., 1949, 172 F.2d 673.
Count I of the amended complaint is ...