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Addis v. Holy Cross Health System Corp.

July 8, 1996

HOWARD M. ADDIS, M.D., HOWARD M. ADDIS, M.D., SURGEON, INCORPORATED, AND TJB PARTNERSHIP,

PLAINTIFFS-APPELLEES,

v.

HOLY CROSS HEALTH SYSTEM CORPORATION, ST. JOSEPH'S CARE GROUP, INCORPORATED, ST. JOSEPH'S MEDICAL CENTER, INCORPORATED, ST. JOSEPH'S HORIZON CORPORATION, INCORPORATION, GEORGE B. FRIEND, GVS MANAGEMENT, INCORPORATED, GEORGE B. FRIEND, M.D., INCORPORATED, THOMAS R. GRUSZYNSKI, THOMAS R. GRUSZYNSKI, M.D., INCORPORATED, PATRICK J. O'DEA, AND MICHIANA GASTROENTEROLOGY, INCORPORATED,

DEFENDANTS-APPELLANTS.



Appeal from the United States District Court for the Northern District of Indiana, South Bend Division. No. 94 C 118 Allen Sharp, Chief Judge.

Before BAUER, KANNE, and ROVNER, Circuit Judges.

KANNE, Circuit Judge.

ARGUED FEBRUARY 21, 1996

DECIDED JULY 8, 1996

Howard M. Addis, M.D., and other plaintiffs sued multiple defendants on claims for relief under federal antitrust and racketeering laws and on supplemental state law claims. The district court awarded the defendants summary judgment on the claims for relief under federal law and dismissed without prejudice the plaintiffs' state law claims, but the district court declined to determine whether the defendants were entitled to immunity from damages under the Health Care Quality Improvement Act of 1986, 42 U.S.C. secs. 11111-12.

In this appeal, we must decide whether the defendants' postjudgment motion required the district court to determine the propriety of awarding them attorney fees under the fee-shifting provision of the Health Care Act, 42 U.S.C. sec. 11113. We emphasize at the outset the district court's Herculean labors in its handling of this multifaceted dispute, which gives meaningful expression to the concerns that animated Congress in its creation and approval of the Health Care Act. However, we are forced to conclude that while the district court was not required to address the issue of the defendants' immunity under sec. 11111 in ruling on their motion for summary judgment, it was obligated by sec. 11113 to resolve the defendants' request for attorney fees, and we remand this matter for further proceedings.

I.

This case has a long and involved history, but the events pertaining to this appeal are fairly straightforward. The defendants moved for partial summary judgment on the plaintiffs' claims for relief under federal law, and the plaintiffs chose not to oppose that motion. The district court did not base its ruling on this tactical decision by the plaintiffs but instead addressed the merits of the plaintiffs' federal claims. The district court accepted those facts asserted by the defendants that were supported by the record because the plaintiffs chose not to controvert any of those facts. We accordingly take the facts as found by the district court in its order granting partial summary judgment in favor of the defendants.

During the time relevant to this lawsuit, Howard M. Addis was a medical doctor licensed to practice medicine in the state of Indiana and served on the staff at Saint Joseph's Medical Center in South Bend. *fn1 In August of 1993, the Medical Center's professional review board -- known as the Staff Credentials Committee -- began an inquiry into the care provided Mrs. Jean Riley by Dr. Addis. Dr. Addis had performed invasive surgery upon Mrs. Riley after failing to diagnose and treat with appropriate antibiotics an infection in her prosthetic heart valve. Dr. George Friend, chair of the Medical Center's surgery department, initiated the inquiry (after consulting with two other doctors) by requesting corrective action from Dr. Paul Howard, chief of staff at the Medical Center.

The credentials committee held meetings on September 9 and September 20, 1993, and Dr. Addis appeared at the latter meeting. The credentials committee then prepared a report and forwarded it to the Medical Center's executive committee. The executive committee conducted a hearing on September 21 at which both Dr. Addis and Dr. Randolph Szlabick, vice-chair of the surgery department, testified. The executive committee voted to suspend Dr. Addis's privileges for thirty days and so informed Dr. Addis by telephone that evening. The Medical Center reinstated Dr. Addis's privileges on October 21 with certain proctoring requirements.

Dr. Addis and his related business entities filed this lawsuit in February of 1994, alleging violations of the Racketeer-Influenced and Corrupt Organizations Act, 18 U.S.C. sec. 1961 et seq., and the Sherman Antitrust Act, 15 U.S.C. sec. 2 et seq., as well as claims for relief under Indiana law, and they filed an amended complaint on November 16. The district court summarized the plaintiffs' allegations as follows:

The primary thrust of both the original and amended complaint is that three physicians, Dr. Friend, chairman of the Med Center Surgery Department, Dr. Gruszynski, chairman of the Med Center Obstetrics/ Gynecology Department, and Dr. O'Dea, chairman of the Med Center Medical Department (specializing in gastroenterology), conspired with the Med Center, and its corporate family, to drive Dr. Addis out of the surgery-provider market in the South Bend geographic area. Dr. Addis alleged that his use of laproscopic (laser) surgery had drawn patients away from the three physicians and thus the three attempted to remove him from the market with the complicity of the Med Center. It is relevant to note that all three sit on the Executive Committee, but they are only three of the fifteen members of that committee. No other Executive Committee members are in direct economic competition with Dr. Addis.

The parties moved through discovery, and the defendants filed their motion for partial summary judgment under FED. R. CIV. P. 56(b) on February 23, 1995.

In their Rule 56 motion, the defendants offered alternative bases for summary judgment. They first argued that they were immune from damages liability pursuant to the Health Care Act, 42 U.S.C. secs. 11111-12. In the alternative, they argued that the facts demonstrated their entitlement to judgment as a matter of law on the plaintiffs' claims for relief under federal law. On July 6, the district court granted the defendants' motion on the basis of the inadequacy of the plaintiffs' federal claims and dismissed the plaintiffs' state law claims without prejudice. In its memorandum opinion and ...


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