The opinion of the court was delivered by: Rovner, District Judge.
The controversy in this case centers around the "itinerant surgery"
rule of the defendant American College of Surgeons ("ACS"). That rule
defines itinerant surgery as follows:
The performance of surgical operations (except on
patients whose chances of recovery would be prejudiced
by removal to another hospital) under circumstances in
which the responsibility for diagnosis or care of the
patient is delegated to another who is not fully
qualified to undertake it.
In practice, the rule essentially requires that a surgeon who does not
undertake the post-operative care of a patient himself may only delegate
that care to another surgeon.
Plaintiffs are Robert Koefoot ("Dr. Koefoot"), a surgeon residing in
the metropolitan area of Grand Island, Nebraska; three local hospitals in
the vicinity of Grand Island at which Dr. Koefoot performs surgery; and
three general practitioners to whom Dr. Koefoot delegates post-operative
care for his patients at the plaintiff hospitals. Defendants are the ACS
and two of its executives, Dr. C. Rollins Hanlon and Dr. Frank Padberg.
In Count I of the complaint, plaintiffs allege that the defendants
combined, conspired, or contracted to restrain trade and commerce in
violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, by adopting
and enforcing the itinerant surgery rule. Dr. Koefoot was suspended in
June, 1979 and expelled one year later by the ACS for his violation of
that rule. In Count II, plaintiffs allege that Dr. Koefoot was denied
basic procedural and constitutional guarantees of due process during the
investigation and hearings which led to his expulsion from the ACS for
performing itinerant surgery. Plaintiffs seek money damages and injunctive
relief in the form of Dr. Koefoot's reinstatement to the ACS and
abrogation of the by-law prohibiting itinerant surgery. Presently pending
before this Court is the motion of defendants for summary judgment
pursuant to Fed.R. Civ.P. 56.
In order to prevail on a motion for summary judgment, a defendant has
the burden of establishing that there is no genuine issue of material
fact. Korf v. Bail State University, 726 F.2d 1222 (7th Cir. 1984). Any
inferences to be drawn from the underlying facts must be viewed in the
light most favorable to the non-moving party. Hermes v. Hein, 742 F.2d 350
(7th Cir. 1984). The existence of a factual dispute, however, only
precludes summary judgment if the disputed fact is outcome-determinative.
Big 0 Tire Dealers, Inc. v. Big 0 Warehouse, 741 F.2d 160, 163 (7th Cir.
Plaintiffs provide medical care in the State of Nebraska, largely a
rural state consisting of 92 counties, comprising approximately 70,000
square miles. In 1980, there were approximately 2,300 doctors in
Nebraska, of whom 181 were general surgeons such as Dr. Koefoot. Over 70%
of the state's population resides in 21 of the 92 counties, located in
and around the major cities of Omaha and Lincoln. Those 21 counties had
89% of the physician population, leaving only 247 physicians to serve the
remaining 71 counties with their 457,000 residents. The state has 116
hospitals. The area outside that known as the "Fish Hook" has only 247
physicians to serve over 63,000 square miles and 450,000 people, a ratio
of 1,850 people per doctor. Thus, the practice of rural medicine in
Nebraska is vital to the health of its general populace.
According to the plaintiffs, the ACS is the largest, oldest, most
prestigious, and most influential surgical organization and accrediting
body in the world. At the end of 1982, its membership included more than
46,000 surgeons; in 1980, more than 60% of Board Certified surgeons in
the United States were members of the ACS. Membership as a Fellow of the
ACS commands considerable prestige within the medical profession and
provides assurance to the patient that the Fellow is fully qualified in
the field of surgery. In 1983, the ACS had total assets of $26 million,
budgeted receipts of over $13 million, and an endowment fund of more than
$11 million, thereby indicating that it has substantial financial power.
The ACS also influences medical education through programs in medical
schools and through its service as the accrediting organization for
residency review programs in several surgical areas. It plays a
considerable role in Board Certification. It is involved in the
accreditation process of thousands of hospitals and other health
treatment facilities. Most importantly, the ACS has substantial influence
on hospital staff privileges for surgeons. A statement issued by the ACS
places special emphasis on either Board Certification or Fellowship in the
ACS as a minimum requirement for surgical staff privileges. That
statement was adopted by the Joint Commission On Accreditation of
Dr. Koefoot is a general surgeon who practices surgery at each of three
hospitals in Grand Island, Nebraska, a city of 45,000 people. He also
practices surgery currently at two of the plaintiff hospitals, Howard
County Community Hospital in St. Paul, Nebraska, and Litzenberg Memorial
County Hospital in Central City, Nebraska. Dr. Koefoot formerly practiced
surgery at the third plaintiff hospital, Fullerton Memorial Hospital in
Fullerton, Nebraska, until the death of his referring general
practitioner from that hospital, Dr. James Maly. Dr. Koefoot performs
approximately 650 major
operations per year. Dr. Koefoot is also active in the affairs in the
University of Nebraska, where for the past 13 years he has been a member
of the Board of Regents of the University of Nebraska, a state-wide
elective position. He has also been involved in numerous community
organizations in Grand Island.
As noted above, Dr. Koefoot currently practices both in hospitals
located in Grand Island itself and in two of the plaintiff hospitals
located outside of Grand Island. Grand Island falls within the area of
Nebraska known as the "Fish Hook, " but the three plaintiff hospitals are
located in counties that fall outside the "Fish Hook." A substantial
portion of his surgical patients are referred to him by general
practitioners residing outside of Grand Island. Patients referred to Dr.
Koefoot by the general practitioner plaintiffs frequently are operated
upon at one of the Grand Island hospitals. Either the patient desires to
be hospitalized in Grand Island or the patient's condition requires
facilities not available at the plaintiff hospitals.
After surgery in one of the hospitals located in Grand Island, Dr.
Koefoot manages the post-operative care of his surgical patients by
seeing them at least once daily. For his Grand Island patients, Dr.
Koefoot charges a fee for the initial office consultation, and,
thereafter, charges a single fee encompassing pre-operative care,
surgical services, and post-operative care of the patient. The general
practitioner plaintiffs charge the Grand Island patients a percentage of
Dr. Koefoot's surgical fee for assisting him at surgery, ranging from 20%
For operations performed at the plaintiff hospitals, typically less
complex and more routine than those he performs at the Grand Island
hospitals, Dr. Koefoot schedules elective surgery generally from 3:00
a.m. to 5:30 a.m. so that he can return to Grand Island for surgery
scheduled there at 7:30 a.m. His travel time to either of the plaintiff
hospitals at which he currently operates is approximately 20 minutes. He
generally arrives at these hospitals approximately 30 minutes before the
scheduled surgery and is assisted at the surgery by the general
practitioner plaintiff who referred the case. Dr. Koefoot sees the patient
following the surgery in the recovery room and writes post-operative
orders but then delegates the post-operative management of his surgical
patient to the referring general practitioner plaintiff. Dr. Koefoot does
not see the patient post-operatively unless he is in the community for
another purpose or unless the referring physician believes it is
necessary. For operations performed at the plaintiff hospitals, Dr.
Koefoot charges surgical patients the same fee that he charges for like
operations at the Grand Island hospitals. He charges for a pre-operative
office consultation if one takes place, but not for out-patient
consultation at the plaintiff hospitals. The general practitioner
plaintiffs also charge for assisting Dr. Koefoot the same percentage of
his fee that they charge for assisting him in Grand Island.
Dr. Koefoot's expulsion from the ACS resulted from his own admissions
to the College regarding the nature of his surgical practice in 1978. His
associate, Dr. William Fowles, had applied to the College for
Fellowship. The College deferred Dr. Fowles' application for one year
pending further investigation because it appeared from his application
that he was engaging in the practice of itinerant surgery. Dr. Koefoot's
protests against the deferral of Dr. Fowles' application led to a series
of communications with the ACS in which Dr. Koefoot admitted that he
himself delegated the post-operative care of his surgical patients at the
plaintiff hospitals to the referring general practitioners and did not see
those patients post-operatively. Dr. Koefoot appeared before the Board of
Regents of the ACS on June 9, 1979 accompanied by his attorney, by the
general practitioner plaintiffs, and by two other physicians. He and the
general practitioner plaintiffs explained the nature of Dr. Koefoot's
surgical practice at the plaintiff hospitals. On June 20, 1979, Dr.
Koefoot was formally advised by the ACS that he had been suspended from