"antitrust injury." The court reasoned that the conspiracy which the
plaintiff charged was aimed at restraining competition in the industrial
gas market, thereby causing higher prices for consumers and potential
loss of profits for non-conspiring producers. Because he was in an area
of the economy not endangered by the anticompetitive scheme, i.e., the
labor market, he could claim no "antitrust injury." By contrast, here,
Dr. Koefoot, the general practitioner plaintiffs, and the plaintiff
hospitals are clearly within the "target area" of the alleged
anti-competitive scheme, the itinerant surgery rule. The controversy
between the parties thus centers over whether any of the plaintiffs have
suffered any injury in fact. The Court will consider the disputes as to
each class of plaintiffs, i.e., Dr. Koefoot, the general practitioner
plaintiffs, and the plaintiff hospitals, in turn.
The defendants contend that the record demonstrates that Dr. Koefoot
has not been hampered by the rule against itinerant surgery in his
ability to perform surgery at the rural plaintiff hospitals because his
practice in those hospitals has continued unaffected by his expulsion as a
Fellow of the ACS. The general practitioner plaintiffs continue to refer
their surgical patients to him regardless of whether the surgery is
performed at a plaintiff hospital or in Grand Island. Moreover, Dr.
Koefoot has not been prevented from practicing surgery in the plaintiff
hospitals; nor has he been denied staff privileges at any hospital
despite his expulsion from the ACS. Fellowship in the ACS is not a
prerequisite to the practice of surgery in any state, and his exclusion as
a Fellow did not affect his surgical privileges at any hospital in Grand
Island or at the plaintiff hospitals. Indeed, defendants contend that to
the extent that Fellows of the ACS who compete with Dr. Koefoot and who
are still subject to the itinerant surgery rule spend more time providing
care for their patients after surgery personally, Dr. Koefoot's
competitive position may actually be strengthened. In addition, the
defendants contend that the record demonstrates that Dr. Koefoot's
expulsion has not prevented him from association with Fellows of the
College, from taking advantage of the educational and scientific programs
of the College, and from maintaining his reputation as a surgeon of the
Plaintiffs respond by referring to the great degree of prestige
associated with being a Fellow of the ACS and the associated referrals
engendered therefrom. The ACS receives numerous calls requesting
referrals to surgeons, who, quite naturally, are referred to ACS
members. Moreover, plaintiffs emphasize the importance of ACS membership
in obtaining staff privileges at hospitals.
In addition, plaintiffs emphasize that expulsion from membership
injured Dr. Koefoot's reputation. First, Dr. Koefoot lost the services of
his associate, Dr. Fowles, who refused to continue performing surgery at
the plaintiff hospitals when he was faced with deferral and possible
denial of his ACS application. According to Dr. Koefoot, he subsequently
encountered significant problems in finding a replacement for Dr.
Fowles. Second, at the time of the disciplinary action, one of his fellow
Regents on the Board of Regents of the University of Nebraska, Dr. Robert
Prokop, called for Dr. Koefoot's impeachment or resignation as a Regent.
Third, Dr. Koefoot has allegedly been injured in his ability to act as an
expert witness in surgical matters in litigation. Before 1978, Dr.
Koefoot testified ten to fifteen times per year; after the disciplinary
charges were brought, his expert witness testimony has decreased to three
to four times per year. Opposing counsel has raised his suspension and
expulsion from the ACS as impeachment of his credentials when Dr. Koefoot
has testified. Fourth, surgeons who formally sought Dr. Koefoot's advice
and counsel, including the President of the Nebraska Medical
Association, will not speak to him today.
More importantly for purposes of this motion, plaintiffs allege that
the level of Dr. Koefoot's referrals from other physicians has declined
since his suspension and expulsion from the ACS. Dr. Koefoot
submitted an affidavit which states in its first paragraph:
Since the inception of the disciplinary action taken
by the American College of Surgeons (hereinafter
referred to as ACS) against me, the number of surgical
patients I have operated upon in the hospitals at St.
Paul and in Central City, Nebraska, has declined
significantly. In 1980 I performed 97 operative
procedures in both hospitals. In 1981, 1982 and 1983 I
performed 71, 52 and 41 operative procedures. I
attribute this decline to the publicity resulting from
the disciplinary charges of unethical surgery relating
to the delegation of post-operative care of patients
under my supervision to family practitioners. I have
had a number of patients from St. Paul and Central
City who do not desire to have surgery performed in
their local community hospital because of the charges
of unethical surgery in the delegation of
post-operative care to family physicians. This has
caused the hospitals and family physicians to lose
revenues associated with the surgery which could have
been performed in their local hospitals.
(Plaintiffs' Exhibit No. 1.)
Defendants contend, however, that the deposition testimony of both Dr.
Koefoot and the general practitioner plaintiffs demonstrates that his
level of referrals has not decreased. They contend that Dr. Koefoot
himself admitted that no physician from Grand Island or outside Grand
Island has discontinued referring surgical cases to him since his
expulsion. Similarly, each of the general practitioner plaintiffs also
testified that he continues to refer his surgical patients to Dr. Koefoot
in the same fashion as he has through the years of his association with
Dr. Koefoot. Finally, defendants contend that Dr. Koefoot testified that
only one physician, Dr. Hrnicek from Grand Island, has even reduced the
number of surgical cases he has referred to Dr. Koefoot in recent years.
According to defendants, Dr. Koefoot admitted during his deposition that
the reduction in referrals from Dr. Hrnicek occurred well before his
suspension and expulsion from the College.
This Court has carefully reviewed the deposition testimony cited by
both parties and finds that it is inconclusive. The defendants' argument
that Dr. Koefoot makes no claim that the total number of operations
performed by him has declined is flatly contradicted by Dr. Koefoot's
statement at his deposition that "the amount of surgery that I have done
has decreased during this period. . . ." (Koefoot Dep. at 170-71.)
Moreover, Dr. Koefoot's deposition testimony does not clearly establish,
as defendants contend, that the one referring physician who reduced the
number of referrals to Dr. Koefoot, Dr. Hrnicek, did so well before the
disciplinary charges against Dr. Koefoot were brought by the ACS. Dr.
Koefoot testified in answer to a question asking him to approximate the
length of the time that Dr. Hrnicek had been referring patients to
another doctor (presumably instead of to Dr. Koefoot) that he "judged"
the time to be the last four years. Given the date on which Dr. Koefoot's
deposition was taken, his answer is consistent with an inference that
Dr. Koefoot in essence was testifying that the decreasing referrals began
at the time that the ACS brought disciplinary charges against him.
In addition, this Court simply cannot accept the defendants' contention
that any injury to Dr. Koefoot's reputation is irrelevant to his
antitrust claim. To the extent that the number of patients referred to a
surgeon depends upon his reputation, that reputation is critically
important and directly affects his income. Because Dr. Koefoot is a
direct competitor of surgeons who are Fellows of the American College of
Surgeons, injury to his reputation and income is precisely the sort of
anti-competitive injury that the antitrust laws were designed to
prevent. Dr. Koefoot, of course, will be required strictly to establish at
trial that the level of his referrals and income has decreased as a
direct result of his expulsion from the ACS.
Material issues of fact exist as well as to the antitrust injury
suffered by the general practitioner plaintiffs and by
the plaintiff hospitals. To the extent that Dr. Koefoot can establish
antitrust injury to his practice as a result of his expulsion by the
ACS, similar injury may be established by the general practitioner and
hospital plaintiffs. Paragraph 1 of Dr. Koefoot's affidavit quoted
above, while conclusory, does state that the number of surgical
operations performed by Dr. Koefoot at the plaintiff hospitals has
declined as follows: 1980-97, 1981-71, 1982-52, 1983-41. (Plaintiffs'
Exhibit 1, ¶ 1.)*fn2 In a four year period, therefore, the number of
surgical operations performed at the rural plaintiff hospitals has
declined by more than half. Moreover, according to the affidavit, some of
Dr. Koefoot's patients who otherwise would have had surgery performed at
the plaintiff hospitals have told him that they do not want surgery
performed there "because of the accusations of unethical surgery."
Defendants contend that even if true, these statements do not prove that
the injuries resulted from the itnerant surgery rule: according to
defendants, patients have refused to be operated upon at the plaintiff
hospitals through a desire to have the highest quality post-operative
surgical care available to them, a goal that the itinerant surgery rule
is tailored to meet. The simple answer to this contention is that there
is insufficient evidence in the record at this time as to the reason for
the refusal of these patients to have their surgery performed at the
Dr. Koefoot's affidavit raises material issues of fact as to the loss
of revenue to the plaintiff hospitals and to the general practitioners
who practice there and as to the cause for that alleged loss of revenue.
Moreover, this Court is not persuaded by the defendants' argument that
the plaintiffs' injuries are not directly caused by the ACS's asserted
violations of the antitrust laws. Whether the itinerant surgery rule has
deprived the general practitioner plaintiffs of the opportunity to render
post-operative care or to act as "assistants" at surgery, see discussion
at p. 12, supra, the general practitioner plaintiffs are squarely within
the "target area" of the itinerant surgery rule. It directly affects
their ability to compete with surgeons in providing "assistant" or
post-operative care. Similarly, to the extent that it has affected the
ability of rural hospitals to compete with metropolitan hospitals for
surgical patients, the plaintiff hospitals are within the "target area"
of the rule.
Accordingly, the defendants' motion for summary judgment as to Count I
of the complaint is denied. Because this Court finds that a material
dispute of fact exists as to the existence of antitrust injury, and
because it declines to find on the state of the present record that any
such injury is purely speculative or conjectural, defendants' motion for
summary judgment as to plaintiffs' claims for injunctive relief under
general equitable principles and under Section 16 of the Clayton Act,
15 U.S.C. § 26, is also denied.
In Count II of the complaint, plaintiffs allege that Dr. Koefoot "was
denied basic procedural and constitutional guarantees of due process
during the investigation and hearing on the disciplinary charges which
resulted in his suspension." All plaintiffs but Dr. Koefoot allege that
they are proper parties to Count II "because their presence is
indispensable to a full and complete disposition of the public interest
issues raised in the complaint." Defendants have moved for summary
judgment against all plaintiffs except Dr. Koefoot on Count II,
contending that plaintiffs other than Dr. Koefoot lack standing because
non-members may not challenge the bylaws of a private association, citing
cases such as Treister v. American Academy of Orthopaedic Surgeons,
78 Ill. App.3d 746, 33 Ill.Dec. 501, 396 N.E.2d 1225 (1st Dist. 1979),
and Porter v. King County Medical
Society, 186 Wn. 410, 58 P.2d 367 (1936). These courts and others have
held that where the bylaws of an association operate directly on its
members but only indirectly and remotely on non-members, the nonmembers
do not have standing to enjoin the association from enforcing its bylaws
or to seek damages resulting from expulsion or exclusion. As discussed
above, this Court cannot rule as a matter of law on the present record
that the plaintiff hospitals and general practitioners are affected only
indirectly and incidentally by the itinerant surgery rule. Accordingly,
defendants' motion for summary judgment as to Count II of the complaint
Defendants' motion for summary judgment is denied as to all plaintiffs
except for plaintiff Fullerton Memorial Hospital, as to which defendants'
motion for summary judgment is granted. The parties are ordered to submit
a final pretrial order following the format prescribed by this Court
within sixty days of the date of this opinion, after which the case will
be set for trial. It is so ordered.