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May 28, 1985


The opinion of the court was delivered by: Rovner, District Judge.

                             MEMORANDUM OPINION
                                 AND ORDER

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. 1984).

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 Hospitals.

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% to 33%.

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 Fellowship ...

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