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VAKHARIA v. SWEDISH COVENANT HOSP.

November 18, 1997

USHA VAKHARIA, M.D., Plaintiff,
v.
SWEDISH COVENANT HOSPITAL, et al., Defendants.



The opinion of the court was delivered by: MORAN

 In this pleading and discovery war plaintiff first filed a complaint of four counts. It ultimately expanded to a 50-page complaint with seven counts. The various claims were then the subject of several motions and opinions. We believe the pending claims resulting from that skirmishing are as follows:

 Count I, a Title VII claim against Swedish Covenant Hospital (SCH).

 Count II, § 1981 claims against SCH and Dr. Loeber relating to the formation of contracts with patients.

 Count III, ADEA claims against SCH.

 Count IV, breach of contract through violation of the Medical Staff Bylaws, a claim against SCH.

 Count V, § 1981 and § 1985 claims against SCH, Dr. Loeber, Dr. Chookaszian, and certain named Board members.

 Count VI, a Sherman Act, § 1 claim against SCH, the American Society of Anesthesiologists (ASA), Dr. Vacanti, Dr. Blancato, Dr. Wender, Dr. Loeber, Dr. Chookaszian, Dr. Myint and Dr. Konowitz.

 Count VII, Title VII claims against SCH, Loeber and certain Medical Executive Committee (MEC) members.

 Defendants SCH and Dr. Loeber moved on January 8, 1993, for summary judgment on Counts I-IV, and a long period of discovery intervened thereafter, until the last brief was filed on December 10, 1996. The SCH defendants thereafter, on January 30, 1997, filed a supplemental motion for summary judgment addressed to Counts V and VII, based on the same arguments, and plaintiff filed her own motion for partial summary judgment on May 21, 1997.

 The briefing and the accompanying exhibits in this case are massive. The memoranda alone exceed well over 200 pages. The chronology of the motions is itself somewhat curious. In 1993 defendants filed a 46-page 12(m) statement. On February 10, 1995, plaintiff filed an 89-page 12(n) response but did not propose any uncontested facts herself. Some of the responses were cited to specific portions of the record. Most, however, depended on an all-inclusive affidavit by plaintiff at the end of the 12(n) statement. Then, on July 26, 1996, defendant filed a 40-page supplemental 12(m) statement that was a virtual rerun of the earlier statement, but it added an affidavit from Dr. Ronald Wender to reflect the fact that quality-of-care issues had been addressed after the earlier submission. Plaintiff responded again at the time of her "Response to Reply" of the defendants, the fourth brief filed. This time, however, on December 10, 1996, she again filed a 12(m) response and added 566 paragraphs of additional facts, extending over some 106 pages. Many of those paragraphs of additional facts rely upon plaintiff's verification, although some are obviously hearsay and others are subjective conclusions. We will, however, make use of them to the extent we can.

 Since this motion was first filed there have been two significant decisions by the Seventh Circuit. In E.E.O.C. v. AIC Security Investigations, Ltd., 55 F.3d 1276 (7th Cir. 1995), the court held that individuals who do not independently meet the Title VII and ADEA definition of "employer" cannot be held liable under those statutes. Accord, Williams v. Banning, 72 F.3d 552 (7th Cir. 1995). In Alexander v. Rush North Shore Medical Center, 101 F.3d 487 (7th Cir. 1996), the court held that, on the facts in that case, a self-employed physician with staff privileges at a hospital may not bring a Title VII action -- or an ADEA action because the definition of "employer" is the same under both statutes -- against the hospital, because the physician does not have an employment relationship with the hospital.

 Plaintiff seeks to distinguish Alexander, arguing that its authority is questionable in light of two Supreme Court opinions and that the facts here are different. We note initially that any argument that the decision in Alexander is erroneous must be addressed to the Court of Appeals, not this court. Further, we are not persuaded by plaintiff's catalog of distinctions between her situation and that of the physician in Alexander, partly because of the facts stated by her in her 12(m) statement of December 10, 1996. Her exhibits include exhibit 18, the series of contractual arrangements between the hospital and the chair of the anesthesiology department, Dr. Loeber. Those agreements expressly provide that the physicians in the department are independent contractors, who independently bill for their services and provide those services according to their professional judgment. Plaintiff's tax status was as an independent provider. Dr. Loeber had the authority to hire anesthesiologists, although the suspension of their staff privileges was subject to the due process procedures of the hospital. She also had the authority to assign the cases -- an authority plaintiff claims was discriminatorily exercised. According to plaintiff, SCH signed an exclusive contract with a corporation, effective February 1, 1990, for the provision of anesthesiology services. This was after her suspension but before the ad hoc committee report and the termination of her staff privileges. On the basis of Alexander we are compelled to conclude that plaintiff was not in an employment relationship with SCH as a matter of law.

 Plaintiff points to Shrock v. Altru Nurses Registry, 810 F.2d 658 (7th Cir. 1987), and contends that SCH, as an employer, may be liable for conduct that interferes with employment with others. If that concept has vitality it can only relate to her difficulties in obtaining other positions after her staff privileges were terminated, not to her claims of discrimination in the assignment of cases and the like while she was practicing anesthesiology at SCH (and she would have difficulty in attributing discriminatory assignments to the hospital in any event, since the decisionmaker there was Dr. Loeber, an independent contractor who had that authority by virtue of her contractual arrangements). The § 1981 and § 1985 issues, however, require a review of some discrimination claims in any event.

 The most serious claim in this case is that plaintiff was discriminated against because of her national origin, color, race, sex and age in the termination of her staff privileges, as that ended her position at SCH, where she had practiced exclusively for many years, and led to public reporting to the Illinois Department of Registration and Education. Accordingly, we deal with that first. And we do so by first discussing what this case is not about. This case is not about a reduction in force, with plaintiff claiming that she was terminated discriminatorily while other less well-qualified persons were kept on. The SCH defendants claim that plaintiff did not meet minimum standards for SCH, that she was not qualified for the position. An employer need not compare an employee (we use employer-employee terminology as a matter of convenience) to other employees if the employer honestly, even if erroneously, concludes that the employee is not qualified for the position. A failure to review the qualifications of others may provide an argument that the judgment that plaintiff was not qualified was a pretext and not honestly made, but, ultimately, that plaintiff must prove the termination resulted from discrimination against her (and if she can show that the reasoning given was a pretext, a trier of fact can infer that the real reason was discriminatory). Anderson v. Baxter Healthcare Corp., 13 F.3d 1120 (7th Cir. 1994). We realize that we are using the entire McDonnell-Douglas standard here, even though the issue relates to the first step only, a showing of qualification, but we think analysis in pretext terms is useful here.

 Plaintiff claims that her bad experiences began when Dr. Loeber came in as chairman in April 1995, although, according to her, others had been mistreated even earlier. She claims that her hours were cut because of Dr. Loeber's discriminatory conduct. The quality-of-care issues that resulted in the termination of staff privileges did not surface in a major way, however, until Dr. Loeber raised questions about thirteen of plaintiff's cases in a letter on March 17, 1987. The issue escalated and, ultimately, the MEC asked the American Society of Anesthesiologists (ASA) to review three issues: a surplus of physician anesthesiologists, quality of care by specific anesthesiologists (which included the plaintiff), and independent practice/organizational structure. An ASA committee, consisting of Dr. Ronald Wender and Dr. Louis Blancato, undertook a visitation and thereafter issued a report which, among other things, specifically criticized plaintiff's abilities and recommended that her staff privileges not be renewed. That led to plaintiff's summary suspension and a determination by the MEC that plaintiff's staff privileges not be renewed. The next step was the formation of an ad hoc hearing committee (hearing committee). That committee conducted nineteen days of hearings and arguments, compiled a record of 3130 pages, and received thirty-eight exhibits from SCH and over 200 from plaintiff. It unanimously recommended that the suspension and non-reappointment be affirmed. Those recommendations were adopted by the MEC on May 9, 1990. Plaintiff sought review by the SCH Board of Directors. The Board appointed an appellate review committee of six Board members. At the conclusion of the review process the committee determined, in a 21-page report, that the recommendations should be adopted by the Board. The Board did so.

 The primary decisionmaker in this process was the hearing committee, although the MEC, the appellate review committee and the Board all played significant roles in the ultimate decision. We think, then, it is useful to describe what the hearing committee heard and what it decided.

 The summary of events just described is but a speck in the universe of facts submitted by the parties. We will, in due course, return in more detail to the events that led up to the hearing, keeping in mind that we have no wish to be drowned in a sea of irrelevant minutiae. We think, though, that it is helpful to consider the "climate" at the hospital at the time the hearing commenced.

 Plaintiff had earlier complained of bias by a nurse, Karen Filipowski, who prepared several of the incident reports that led to inclusion of cases among the thirteen cases questioned in the March 17, 1987 letter. Represented by counsel, plaintiff complained of discriminatory treatment respecting the contemplated review, although it is not clear that she contended in June and July 1988 that it was based on age, race, gender or national origin. Still, it is clear that plaintiff thought, well prior to the ASA review, that Dr. Loeber was treating her unfairly. Then came the ASA review and its report on June 30, 1989, in which the polarization of the medical staff due to the conflict between Dr. Loeber and plaintiff is noted:

 
To the Medical Staff this issue of "Dr. Vakharia vs. Dr. Loeber" has taken on a staff-wide interest. According to all parties, the problem has affected and divided the entire Medical Staff. To many staff members, especially the foreign medical graduates, it represents the Administration trying to undermine a physician because she is a foreign medical graduate. Many primary care physicians and surgeons who are foreign medical graduates apparently have been specifically requesting the service of Dr. Vakharia and using her as a rallying point for the preservation of the foreign medical graduate within the Medical Center. While this perception may or may not be a real issue within the institution, it nonetheless exists. The feelings of most staff members were very strong on this issue.

 Then came the ASA Report, in which it was recommended that the staff privileges of the three Asian female anesthesiologists not be renewed. Two of them left the hospital. Plaintiff chose to fight the recommendation and she also filed discrimination charges on August 4, 1989. In the meantime, Dr. Loeber had resigned on April 27, 1989, effective July 1, 1989, citing her desire to leave the "political arena." Plaintiff was summarily suspended, she contends effective as of the date of the ASA Report, although the hospital insists that formal suspension came later. In any event, the suspension triggered a right to a due process hearing. A period of intense skirmishing between counsel for plaintiff and for the hospital (and, later, for the hearing committee) followed, including a state court lawsuit by plaintiff to get the hearing commenced.

 By the time the hearing began the "climate" was obviously supercharged. Dr. Vakharia wished to compare her care with other anesthesiologists at the hospital. She was committed to the view that there was absolutely no basis for criticizing the quality of her care and considered any criticism to arise from discriminatory motivations. Even during the review process those feelings were evident. The ASA Report notes:

 
Dr. Vakharia is very emotional about this problem and considers it a personal attack on her integrity and ability. During numerous discussions, she viewed the consultants as "saviors" who had come to "clear" her name. There was no doubt that Dr. Loeber wished Dr. Vakharia, Dr. Puthumana and Dr. Change to leave the institution and to replace them with anesthesiologists she felt would provide more sophisticated care.

 The hearing committee insisted that the issue was whether or not plaintiff provided substandard care (and it is clear that the standard was somewhat higher than the standard for the larger community, and rather unclear how much higher that might be).

 That mind set, the court believes, has had a significant and adverse impact upon both the hearing and this lawsuit. Plaintiff has painted with a very broad brush, at one time naming upwards of forty parties as discriminating against her. It is an approach she has carried over into other disputes. See Vakharia v. Little Co. Of Mary Hospital, 917 F. Supp. 1282, 1288 (N.D.Ill. 1996). What the hearing committee was interested in, however, was the quality-of-care issue as it related to plaintiff. Even if Dr. Loeber and others had been motivated by discrimination, the suspension would stand if the hearing committee and subsequent reviewers reasonably believed that plaintiff did not provide the quality of care the hospital required. Even if Dr. Loeber and others had not been motivated by discrimination, the suspension would stand if the hearing committee and subsequent reviewers reasonably believed that plaintiff did not provide the quality of care the hospital required. See Price Waterhouse v. Hopkins, 490 U.S. 228, 242, 104 L. Ed. 2d 268, 109 S. Ct. 1775 (1988). *fn1"

 We have read the entire transcript of the hearing, which, as we said, extends to nineteen days and 3130 pages. One is struck by the paucity of plaintiff's response to the quality-of-care issue. While she complains that she was not permitted to have an attorney handle the questioning, she was allowed to have an attorney and one of her experts, Dr. Heller, cross-examine Dr. Wender. Moreover, the affidavit and deposition of Dr. Heller (we have read both in their entirety), submitted as part of this motion, reflect that plaintiff was fully capable of articulating what she perceived to be the weaknesses in Dr. Loeber's and Dr. Wender's critiques. Most of the cross-examination, however, was devoted, at length, to other matters.

 When plaintiff cross-examined Dr. Loeber and Dr. Wender she was, on several occasions, asked by the committee to get to the cases. She did not. Dr. Wender returned for another session, to be devoted to discussion of the cases. He was not asked about them. Dr. Heller and another expert for plaintiff, Dr. O'Brien, did discuss some of the cases, but they were largely confined to some of the cases cited by Dr. Loeber. They were supportive of the plaintiff in most respects, but they were critical about some aspects of her practices. Dr. Wender's testimony was essentially unchallenged. Dr. Heller was asked by the committee to return for cross-examination relating to the quality-of-care issue. He did not return, even though he lives in the Chicago area, unlike Dr. Wender, who came from Los Angeles. Plaintiff testified, although not at length. It was a confrontational and emotional session. It did little to further the committee's understanding of the quality-of-care issue.

 The failure to explore the cases continued after this suit was filed. We so noted in our memorandum and order of March 8, 1994, in which we refused to require Dr. Wender to submit to further depositions. Finally, in response to the motion for summary judgment plaintiff filed an extensive affidavit of Dr. Heller. That led to a lengthy deposition. Dr. Heller dealt with many, although not all, of the cases ...


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