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Constantine Frantzides, M.D., Ph.D., An Individual, and v. Northshore University Healthsystem

March 30, 2011

CONSTANTINE FRANTZIDES, M.D., PH.D., AN INDIVIDUAL, AND
CHICAGO INSTITUTE OF MINIMALLY INVASIVE SURGERY, LTD., PLAINTIFFS,
v.
NORTHSHORE UNIVERSITY HEALTHSYSTEM
FACULTY PRACTICE ASSOCIATES, INC., AN ILLINOIS NOT-FOR-PROFIT CORPORATION, NORTHSHORE UNIVERSITY HEALTHSYSTEM, AN ILLINOIS NOT-FOR-PROFIT CORPORATION, MARK TALAMONTI, M.D., AND ILLINOIS COLLECTION SERVICE, INC., AN ILLINOIS CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER

Dr. Constantine Frantzides, M.D., Ph.D, and the Chicago Institute of Minimally Invasive Surgery ("Plaintiffs"), bring five claims against Defendants Northshore University HealthSystem Faculty Practice Associates, Inc., Northshore University Healthsystem, Dr. Mark Talamonti, M.D., and Illinois Collection Service, Inc. (collectively, "Defendants"). Plaintiffs' Amended Complaint alleges that Defendants violated the Sherman Act'sprohibition on contracts or conspiracies in restraint of trade, 15 U.S.C. § 1 (Count I), and the Act's prohibition of monopolization, 15 U.S.C. § 2 (Count II). Plaintiffs further allege several state-law claims: intentional interference with prospective economic advantage (Count II), conspiracy (Count IV), and a violation of the Illinois Right of Publicity Act, 765 ILCS 1075/1 (Count V). Defendants now move to dismiss Plaintiffs' complaint on all counts. For the following reasons, Defendants' motion is granted, and the complaint is dismissed without prejudice.

FACTUAL BACKGROUND

The following facts are presented in Plaintiffs' Amended Complaint and recounted in the light most favorable to Plaintiffs. Disability Rights Wisc., Inc. v. Walworth County Bd. of Supervisors, 522 F.3d 796, 799 (7th Cir. 2008).

I. The Parties

Defendant Northshore University Healthsystem, Inc. ("NUH"), formerly known as Evanston Northwestern Healthcare Corporation ("ENH"), is a hospital located in Evanston, Illinois. (Am. Compl. ¶ 6.) Defendant Northshore University HealthSystem Faculty Practice Associates, Inc. ("Faculty Practice"), formerly known as ENH Faculty Practice Associates, is an Illinois subsidiary of NUH, made up of 500 primary and specialty care physicians practicing in the northern suburbs of Chicago. (Am. Compl. ¶ 5.) Defendant Mark Talamonti is a Faculty Practice physician and has served as Chairman of the Department of Surgery at NUH since July 1, 2007. (Id. ¶ 7.) The final Defendant, Illinois Collection Service, Inc. ("ICS") is an Illinois collections agency. (Id. ¶ 8.)

Dr. Constantine Frantzides is a well-known laparoscopic surgeon and currently a professor of surgery at the University of Illinois in Chicago. (Id. ¶ 3.) The Chicago Institute of Minimally Invasive Surgery ("CIMIS") is a medical clinic located in Skokie, Illinois. (Id. ¶ 4.) Dr. Frantzides formed CIMIS in 2006 and now serves as its Director.*fn1 Prior to 2006, Dr. Frantzides was associated with Defendants NUH and Faculty Practice. This dispute arises out of events that occurred after Dr. Frantzides and the Defendant practice groups parted ways.

II. Events Following the Parties' Termination Agreement

In the fall of 2003, NUH recruited Dr. Frantzides to join Faculty Practice, and he was named NUH's Director of Minimally Invasive Surgery. (Id. ¶¶ 17-18.) Three years later, in September 2006, Dr. Frantzides negotiated an Employment Termination Agreement with Faculty Practice.*fn2

(Id. ¶ 20.) By the terms of the agreement, Dr. Frantzides retained surgical privileges at NUH and agreed to use his "reasonable best efforts to assist [NUH] and Faculty Practice with collections of any accounts receivable arising from or related to services he performed while employed by Faculty Practice . . . ." (Id. ¶ 21.) Dr. Frantzides alleges that following the execution of the Termination Agreement, NUH and Faculty Practice launched a "continuous and systematic" campaign to damage his ability to compete in the laparoscopic surgery services market. (Id. ¶ 23.) Plaintiffs specifically allege that NUH and Faculty Practice: (1) misrepresented to patients that Dr. Frantzides had instituted collections actions against them; (2) harassed physicians who wished to refer patients to Dr. Frantzides; and (3) intentionally denied surgical privileges at NUH to Dr. Jacob Roberts, a surgeon associated with Dr. Frantzides. (Id. ¶ 24.)

Plaintiffs allege that at the time the Termination Agreement was executed, there were several outstanding accounts receivable arising out of Dr. Frantzides' services while he was associated with Faculty Practice. After the Termination Agreement took effect, Faculty Practice sent a number of Dr. Frantzides' patients to a collection agency-Defendant ICS. (Id. ¶ 28.) Plaintiffs claim that Faculty Practice "intentionally directed ICS to give patients the impression that Dr. Frantzides alone had retained ICS . . . [and] that Dr. Frantzides would receive the proceeds from whatever funds ICS collected." (Id. ¶ 28.) Approximately 600 collection notices were sent to Dr. Frantzides' patients. (Id. ¶ 36.) Plaintiffs claim that once these notices were distributed, Dr. Frantzides began receiving "dozens" of angry phone calls from patients accusing him of sending their accounts to a collection agency. (Id. ¶ 30.)

Concerned at the thought that he was identified as the beneficiary of the collection agencies' activities, Dr. Frantzides met with Harry Jones, Faculty Practice's Chief Compliance Officer, on February 6, 2007. (Id. ¶ 30.) Dr. Frantzides requested that Mr. Jones inform patients that Dr. Frantzides was not, in fact, receiving any of the collected funds and that Dr. Frantzides had not sent the patients to ICS. (Id.) Though Dr. Frantzides claims Jones appeared "receptive" to his concerns, three days later on February 9, 2007, Jones wrote to Dr. Frantzides, asserting that a change in the format of the collection letter, to identify Dr. Frantzides only as the "Provider" of services and Faculty Practice as the "Creditor," would be too confusing for patients to understand, and could result in reduced collections. (Id. ¶ 31.) Thus, Faculty Practice refused to distribute amended notices to correct what Dr. Frantzides believes is an error. (Id.) Dr. Frantzides alleges that as a result of this billing practice, his relationship with his patients has been damaged, leading to a reduction in patients seeking additional treatment from him and fewer word-of-mouth referrals. (Id. ¶ 37.)

On July 1, 2007, Mark Talamonti, M.D. was appointed Chairman of NUH's Department of Surgery. (Id. ¶ 38.) Plaintiffs claim that after being appointed Chairman, Dr. Talamonti began to discourage and intimidate NUH physicians from referring patients to Dr. Frantzides and CIMIS. Plaintiffs allege, for example, that in October 2007, when a Faculty Practice physician attempted to refer a patient to Dr. Frantzides for a laparoscopic bowel resection, Dr. Talamonti "castigated" the referring physician for making the recommendation.*fn3 According to Plaintiffs, Dr. Talamonti "threatened to use his power and position as Chairman of the Department of Surgery at NUH to 'investigate' the referring physician . . . ." (Id. ¶¶ 40-41.) Plaintiffs suggest that such intimidation of other physicians is a "common practice" of Dr. Talamonti, Faculty Practice and NUH as a whole, and the purpose of such conduct "has been to protect their power in the [laparoscopic services market] and increase their revenues . . . ." (Id. ¶ 42.)

Finally, Plaintiffs claim that sometime in June 2008, Dr. Frantzides contacted Dr. Talamonti to request "Professional Staff Privileges" at NUH for Dr. Jacob Roberts-Dr. Frantzides' Physician Assistant and new CIMIS surgeon. Dr. Talamonti declined this request on June 11, 2008, stating that Roberts did "not meet the minimum criteria to be a member of the [NUH] professional staff." (Id. ¶ 47.) On June 16, 2008, Dr. Frantzides wrote back, insisting that Dr. Roberts "be granted privileges of the 'Assistant' category as defined in Article 4, paragraph 4.2.6 of the [Faculty Practice] bylaws," and providing copies of the cited provisions.*fn4 (Id. ¶ 48.) Over the course of several weeks, Dr. Frantzides and Talamonti went back and forth about the issue until Dr. Talamonti finally told Dr. Roberts that he would not receive privileges at NUH due to Roberts' affiliation as a "fellow" with CIMIS. (Id. ¶ 51.) ...


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