NAHAS v. SHORE MEDICAL CENTER et al
Filing
249
OPINION. Signed by Judge Robert B. Kugler on 9/24/2019. (dmr)
NOT FOR PUBLICATION
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
__________________________________________
:
FREDERICK NAHAS, M.D.,
:
:
Plaintiff,
:
:
v.
:
:
SHORE MEDICAL CENTER, STEVEN P.
:
NACHTIGALL, JEFFREY GOSIN,
:
PEYTON DEARBORN, LEONARD GALLER,
:
PETER JUNGLUT, and the MEDICAL
:
EXECUTIVE COMMITTEE,
:
:
Defendants.
:
__________________________________________:
Civil No. 13-06537 (RBK/JS)
OPINION
KUGLER, United States District Judge:
Before the Court are the motions of Shore Medical Center (“SMC”), Dr. Steven P.
Nachtigall, Dr. Jeffrey Gosin, Dr. Peyton Dearborn, Dr. Peter Jungblut, and the Medical Executive
Committee (“MEC”) (collectively “Defendants”) for summary judgment (Doc. 212) (hereinafter
“Def. Mot.”), and Plaintiff’s motion for partial summary judgment (Doc. 214) (hereinafter “Pl.
Mot.”). For the reasons set forth in the opinion below, the Court hereby GRANTS the Defendants’
motion for summary judgment in part, specifically as to Plaintiff’s federal antitrust and federal
discrimination claims. As those claims are the basis for jurisdiction in this case, Plaintiff’s pendent
state law claims are dismissed pursuant to 28 U.S.C. § 1367(c) for lack of subject matter
jurisdiction. This Court DENIES Plaintiff’s motion for partial summary judgment.
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I.
BACKGROUND
This case, which has stretched over a decade in multiple courts, arises from Defendant
Shore Medical Center’s denial of surgical admitting privileges to Dr. Nahas, the Plaintiff. A
comprehensive history of Plaintiff’s case has been previously laid out in several opinions, and an
abbreviated version is set out again here.
A. Parties
Plaintiff, a Lebanese-American medical doctor, was first licensed to practice in New Jersey
in 1978, and is board-certified by the American Board of Surgery in General Surgery and Vascular
Surgery. (Doc. 241-2, Plaintiff’s Revised Counterstatement of Facts (“Pl. CSOF”) ¶1-2.) He was
first granted attending staff privileges in general and vascular surgery at Defendant Shore Medical
Center in 1978. (Id.)
Defendant Shore Medical Center (hereinafter “SMC”) is a hospital located in Somers Point,
New Jersey that serves Cape May County and parts of Atlantic County, New Jersey. (Second
Amended Complaint (“SAC”) ¶10.) The Medical Executive Committee (hereinafter “MEC”) of
Shore Medical Center, also named as Defendant in this case, is “[t]he executive committee of the
Medical Staff that has oversight over all Medical Staff Activities and is accountable to the Board
of Trustees.” (2014 Bylaws, Definitions.)1 The MEC is composed of approximately 24 individuals,
including officers of the Medical Staff, Department Chairs, at-large members of the Medical Staff,
and Chairs of other committees. (Id. at § 8.4.1.) Significantly for the purposes of this case, the
MEC makes recommendations about Medical Staff and clinical privileges to SMC’s governing
body. (Pl. CSOF ¶8.)
1
This Court previously held that the MEC is an independent legal entity that may be sued. See Nahas v. Shore Med.
Ctr., Civ. No. 13-6537, 2018 WL 1981474 (D.N.J. Apr. 27, 2018)
2
Defendant Steven P. Nachtigall, M.D., was a member of SMC’s medical staff from 1998
until June 2017, was an MEC member from 2007 to 2014, and served as MEC President from
2011 to 2012. (Pl. CSOF, ¶37-38.)
Defendant Peyton Dearborn, M.D., worked on SMC’s medical staff as an anesthesiologist
from 1994 to 2017, was Anesthesiology Division Director from 2002 to 2017, was a member of
the MEC from 1999 to 2017, and was Medical Staff President from 2009-2010. (Pl. CSOF, ¶ 1617.)
Defendant Leonard Galler, M.D. is a surgeon and member of SMC’s medical staff with
privileges in general, vascular, and endovascular surgery. He has been Chief of Surgery since
2000, a position in which he oversees the General Surgery and Vascular Division Directors. (Pl.
CSOF, ¶21.) Dr. Galler also co-owned the private practice “GFH Surgical Associates.” (Id. ¶1820.)
Defendant Jeffrey Gosin, M.D. has been a member of SMC’s medical staff since 1997,
with privileges in general and vascular surgery. (Pl. CSOF, ¶27.) Dr. Gosin has been SMC’s
Vascular Division Director and Medical Director of the CardioVascular Institute (“CVI”) since
2003. (Id. ¶29-30.) He also co-owns a private surgical practice, “Jersey Shore Surgical Group,”
with his father, Dr. Stephen Gosin. (Id. ¶30.)
Defendant Peter Jungblut, M.D., was SMC’s Vice-President of Medical Affairs from
March 2003 until December 2011, though he remained involved as interim Vice-President
afterwards. (Pl. CSOF, ¶31.) Dr. Jungblut oversaw the credentialing and re-credentialing process
and served as a non-voting member of the Credentials Committee. (Id.)
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B. Factual Background
Plaintiff was granted attending staff privileges at SMC in general and vascular surgery in
1978. (SAC ¶9.) He successfully renewed these privileges every two years until 2003, when he
pleaded guilty to criminal charges related to Medicare billing. (SAC ¶37.) Plaintiff’s conviction
resulted in a six-month suspension of his New Jersey medical license and caused SMC to suspend
his medical staff membership and clinical privileges for three years. (Id.).
The 2006 Application
The events at the heart of this litigation began in March 2006, when Plaintiff re-applied to
SMC for medical staff privileges and general, vascular, and endovascular surgical privileges. (SAC
¶61.) After several layers of an internal SMC review process, Plaintiff's 2006 application was
ultimately denied.2 In response to this denial, Plaintiff filed a complaint in May 2007 in the
Superior Court of New Jersey, Chancery Division, Docket No. Atl-C-69-07, seeking general,
vascular, and endovascular privileges. (Pl. SOF ¶10.) The Superior Court appointed an
independent special master, Dr. Jerome Vernick, who recommended that Plaintiff receive
privileges in general and vascular surgery and added that Plaintiff could receive endovascular
privileges after a period of proctoring. In March 2009, the state court accordingly ordered SMC to
grant Plaintiff privileges in general and vascular surgery, and instructed SMC to use a set of criteria
(the “2005 Criteria”) to evaluate Plaintiff’s request for endovascular privileges. (SAC ¶87.)
In July 2006, both SMC’s Credentials Committee and the MEC voted to deny Plaintiff’s application for privileges.
(Doc. 214-1, Plaintiff’s Statement of Undisputed Material Fact (“Pl. SOF”) ¶2-3.) Plaintiff appealed to a Fair Hearing
Panel (“FHP”) composed of three physicians, which in October 2006 found in favor of Plaintiff. The MEC then
appealed the FHP’s decision to the Appellate Review Panel; in January 2007, the Review Panel reversed the FHP’s
favorable recommendation, and instead recommended that an independent reviewer make a recommendation. (Pl.
SOF ¶7.) SMC’s Board of Trustees adopted this recommendation; however, since Plaintiff did not agree to SMC’s
condition that the outside reviewer’s determination would be binding, SMC terminated the 2006 application. (Pl. SOF
¶9.)
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4
The 2009 Application
In November 2009, believing he met the state court-ordered criteria, Plaintiff filed a
renewed application for endovascular privileges. This application similarly went through a series
of internal reviews and was ultimately denied by a Fair Hearing Officer in 2012.3 Plaintiff argues
emphatically and repeatedly that Defendants erred by applying “substitute criteria” in evaluating
his 2009 application; however, while substitute criteria were considered at different points in this
process, it is clear from the record that the ultimate denial of Plaintiff’s 2009 endovascular
application was based on the state court-ordered 2005 Criteria, and that there is no legitimate
dispute of material fact as to this issue.4 Plaintiff appealed the Fair Hearing Officer’s determination
to an Appellate Review Panel, which affirmed the Hearing Officer’s recommendation. (Pl. SOF
¶131.) In 2013, the Board of Trustees affirmed the Review Panel’s recommendation, and
Plaintiff’s 2009 Application for endovascular privileges was then conclusively denied. (Id. ¶133,
141.)
The 2011 Suspension
While Plaintiff’s 2009 application for endovascular privileges was under review, Plaintiff
was actively performing general and vascular procedures at SMC, as he had been granted
The Credentials Committee met in December 2009 to consider Plaintiff’s application, but because it could not
determine how many procedures he had completed, it recommended that the MEC or an outside party make a
determination. (Pl. SOF ¶64.) In May 2010, the MEC made an adverse recommendation on Plaintiff’s 2009
application. Plaintiff requested a fair hearing at which, under the SMC bylaws, a Fair Hearing Officer would determine
whether the MEC’s adverse recommendation was “arbitrary, capricious, or not supported by credible evidence.” (Pl.
SOF ¶76.) The August 27, 2012 decision of the Fair Hearing Officer held that Plaintiff did not meet the 2005 Criteria,
and accordingly, that the MEC’s adverse recommendation was not without merit.
3
Even in Plaintiff’s own Statement of Facts (Doc. 214-1), he admits, “the Hearing Officer unilaterally modified the
issue to be whether Dr. Nahas had satisfied the March 31, 2009 court-ordered criteria, notwithstanding that the
Medical Executive Committee had used different criteria.” (Pl. SOF ¶81.) Thus, regardless of what criteria had been
debated before, the effective denial of Plaintiff’s 2009 application by the Fair Hearing Officer was based on the state
court-ordered 2005 Criteria. This court previously made such a finding in Nahas v. Shore Med. Ctr., Civ. No. 136537, 2016 WL 1029362, at *9 (D.N.J. Mar. 15, 2016), and it remains consistent here.
4
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privileges to do so based on the state court’s 2009 order. In February 2011, Plaintiff received a
warning from Defendants for performing four unauthorized endovascular procedures while his
application for endovascular privileges was still pending, and for planning to perform a fifth
endovascular procedure. (Doc. 212-19, Defendant’s Statement of Material Facts (“Def. SOF”)
¶4.)5 The MEC conducted an investigation into the procedures, and in August 2011 determined
that it would be appropriate to: (1) refer Plaintiff to the Professional Assistance Program of NJ for
a mental and behavioral health examination, and (2) suspend Plaintiff’s clinical privileges for 14
days. Nahas v. Shore Memorial Hospital, Dkt. No. C-82-11 at 16 (Sup. Ct. N.J. May 7, 2015). The
MEC also let Plaintiff know that it would continue monitoring his procedures as a result of his
having performed unauthorized surgeries. Id.
Plaintiff then brought a separate complaint in NJ state court, seeking injunctive relief to
halt SMC from suspending him for 14 days. (Def. SOF ¶33-35.) He was denied relief because the
state court found that the hospital’s suspension was reasonable and supported by reliable evidence.
(Id.)6
The 2011-2013 Investigation
Plaintiff alleges he was subject to “continuous investigation and heightened scrutiny” by
the MEC from 2011-2013. (Pl. CSOF ¶118.) During this time, the MEC decided to formally review
all of Plaintiff's lower extremity cases; this was based on its determination that Plaintiff had made
an error in medical judgement in two separate procedures that occurred between July 2011 and
February 2012. (Pl. CSOF ¶119–127.) Plaintiff requested a meeting with the MEC, but his request
5
Plaintiff argued that his performance of unauthorized procedures was inadvertent, as Defendants had not clearly
delineated between procedures considered vascular and those considered endovascular. (Def. SOF ¶7-9.)
6
The state court case in which Plaintiff brought the complaint about his 2011 suspension was consolidated into his
earlier state court action challenging the denial of his 2006 application. (Def. SOF ¶38-39.)
6
was denied. (Id. ¶131.) Plaintiff submitted a report from his expert, Dr. Veith, that defended his
medical record and decisions. (Id. ¶135.) Because of the investigation, the Credentials Committee
recommended that Plaintiff be required to apply for renewal of privileges annually, instead of
every two years as was typical for physicians. (Id. ¶134.) In August 2013, the MEC placed Plaintiff
on a Focused Professional Practice Evaluation; a physician at SMC, Dr. Herrington, was assigned
to this review, and ultimately determined that Plaintiff’s actions were appropriate. (Id. ¶139.)
The CVI Suite
Also in 2013, the heads of Divisions of Cardiology, Diagnostic Radiology, and Vascular
Surgery met and determined that access to the Cardiovascular Suite (CVI Suite) should be limited
to only physicians with endovascular privileges. (Def. SOF ¶111–116.) Because Plaintiff did not
have endovascular privileges, he was prohibited from accessing the CVI facility. Plaintiff argues
that this violated the SMC Bylaws because he was not afforded notice before being deprived of
access. (Pl. CSOF ¶145.)
The Incident with Dr. Tsyganov
In 2014, Plaintiff was performing a procedure in an operating room that Dr. Igor Tsyganov
was assigned to as anesthesiologist. (Pl. CSOF ¶147.) According to Plaintiff, Dr. Tsyganov
“suddenly and without warning…breached the sterile surgical area, and punched [Plaintiff] in the
arm.” (Id. ¶148.) When Plaintiff reported the incident to SMC, SMC reprimanded him for
“disruptive behavior”; shortly afterward, SMC fired a surgeon that corroborated Plaintiff's account
of events. (Id. ¶149–153).
Conclusion of the State Court Action; Initiation of the Current Action
In October 2013, while his state court case was still ongoing, Plaintiff filed this current
action, alleging violations of § 1 of the Sherman Act and 42 U.S.C. § 1981, as well as a bevy of
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state law claims.7 In May 2015, the NJ Superior Court dismissed Plaintiff’s remaining claims. (Pl.
SOF ¶136-138.) Plaintiff appealed to the New Jersey Appellate Division; its December 2016
decision affirmed the Superior Court’s dismissal. (Id.) The New Jersey Supreme Court denied
certification in March 2017. (Id. ¶140.)
This present federal court case has endured six years and several motions. Defendants now
move for summary judgment on all of Plaintiff’s claims; Plaintiff is moving for partial summary
judgment. The claims in the operative complaint, all of which Defendant seeks summary judgment
on, are as follows: (I) restraint of trade in violation of § 1 of the Sherman Act; (II) disparate
treatment, obstruction and interference with contract in violation of 42 U.S.C. § 1981; (III) breach
of contract; (IV) judicial review for fundamental fairness; (V) restraint of trade in violation of the
NJ Antitrust Act; (VI) intentional interference with prospective business advantage; (VII)
discrimination in violation of the NJLAD; and (VIII) retaliation and interference in violation of
the NJLAD. (Def. Mot.) Plaintiff moves for summary judgment specifically as to claim III (breach
of contract), seeks a finding that the state court’s 2009 order has preclusive effect here, and asks
this Court to strike Defendant’s affirmative defense of immunity under the Health Care Quality
Improvement Act (HCQIA). (Pl. Mot.)
II.
LEGAL STANDARD
The court should grant a motion for summary judgment when the moving party “shows
that there is no genuine dispute as to any material fact and that the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a). An issue is “material” to the dispute if it could alter the
outcome, and a dispute of a material fact is “genuine” if “a reasonable jury could return a verdict
Plaintiff’s original complaint contained additional claims, but those were dismissed by this court in Nahas v. Shore
Med. Ctr., Civ. No. 13-6537, 2016 WL 1029362 (D.N.J. Mar. 15, 2016). The list here contains the claims in the
operative complaint, Plaintiff’s Second Amended Complaint (Doc. 45, hereinafter “SAC”).
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for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); Matsushida
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (“Where the record taken
as a whole could not lead a rational trier of fact to find for the non-moving party, there is no
‘genuine issue for trial.’”) (quoting First National Bank of Arizona v. Cities Service Co., 391 U.S.
253, 289 (1968)). In deciding whether there is any genuine issue for trial, the court is not to weigh
evidence or decide issues of fact. Anderson, 477 U.S. at 248. Because fact and credibility
determinations are for the jury, the non-moving party’s evidence is to be believed and ambiguities
construed in his favor. Id. at 255; Matsushida, 475 U.S. at 587.
Although the movant bears the burden of demonstrating that there is no genuine issue of
material fact, the non-movant likewise must present more than mere allegations or denials to
successfully oppose summary judgment. Anderson, 477 U.S. at 256. The nonmoving party must
at least present probative evidence from which jury might return a verdict in his favor. Id. at 257.
The movant is entitled to summary judgment where the non-moving party fails to “make a showing
sufficient to establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
III.
DISCUSSION
Plaintiff’s Second Amended Complaint (Doc. 45) alleges only two federal claims and a
litany of state claims. As detailed below, this Court finds summary judgment is warranted for
Defendants on both federal claims. As jurisdiction in this case is based on those two federal claims,
this court declines to exercise supplemental jurisdiction over the state claims. Thus, the parties’
summary judgment arguments on Plaintiff’s state law claims are not discussed here.
Defendants move for summary judgment on several grounds: first, Defendants argue that
Plaintiff’s claims are barred by res judicata and claim preclusion, alleging that Plaintiff already
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litigated the same issues in state court.8 (Def. Mot. at 5.) Second, Defendants argue that the Health
Care Quality Improvement Act provides them with immunity from Plaintiff’s claims. (Id. at 11.)
Addressing the merits of Plaintiff’s claims, Defendants then argue that Plaintiff’s § 1981 claim of
racial discrimination is unsupported. (Id. at 26.) Finally, Defendants argue that Plaintiff’s § 1
Sherman Act claim fails because he lacks antitrust standing and cannot support his restraint of
trade claim. (Id. at 33.)
In moving for partial summary judgment, Plaintiff argues that a state court order entered
on March 31, 2009 should be considered preclusive by this Court, and attempts to strike
Defendants’ immunized defense under the Health Care Quality Improvement Act. (Pl. Mot. at 1.)
A. Defendants’ Immunity Under the Health Care Quality Improvement Act
Congress enacted the Health Care Quality Improvement Act in 1986 to “improve the
quality of medical care by restricting the ability of physicians who have been found to be
incompetent from repeating malpractice by moving from state to state without discovery of such
finding.” Gordon v. Lewistown Hosp., 423 F.3d 184, 201 (3d Cir. 2005). To enable hospitals and
doctors to engage in professional review absent fear of liability for actions taken, the HCQIA
immunizes from money damages persons participating in professional review activities or
providing information to professional review bodies. Id. (citing 42 U.S.C. § 11111(a)(1)-(2)). “At
its heart, the HCQIA was intended to deter antitrust suits by disciplined physicians.” Id. (citation
omitted).
The Court does not discuss the parties’ res judicata and collateral estoppel arguments here, as it is clear that summary
judgment is warranted for Defendants on other grounds. This case has been litigated piecemeal over the past 13 years
in both state and federal courts, and this Court finds it unnecessary to trace each relevant fact to the proceeding in
which it may or may not have been previously litigated when doing so will not affect the outcome of this case. As
Plaintiff’s federal claims fail on the merits, the Court will instead focus on that analysis. See e.g., Johnson v. City of
Philadephia, Civ. No. 07-3110, 2010 WL 3582517, at *3 (E.D. Pa. Sept. 10, 2010) (“Because the Court is satisfied
that Plaintiff's claims are clearly barred. . . it declines to waste precious judicial resources explaining to Plaintiff why
his claims would fail under many of the aforementioned theories.”).
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In order to qualify for immunity under the HCQIA, a professional review action must be
taken:
(1) in the reasonable belief that the action was in the furtherance of quality health
care,
(2) after a reasonable effort to obtain the facts of the matter,
(3) after adequate notice and hearing procedures are afforded to the physician
involved or after such other procedures as are fair to the physician under the
circumstances, and
(4) in the reasonable belief that the action was warranted by the facts known after
such reasonable effort to obtain facts and after meeting the requirement of
paragraph (3).
42 U.S.C. § 11112(a).
Courts presume that professional review actions satisfy these requirements unless the
plaintiff successfully rebuts the presumption by a preponderance of the evidence. 42 U.S.C.
§ 11112(a). This standard “places a high burden on physicians to demonstrate that a professional
review action should not be afforded immunity.” Gordon v. Lewistown Hosp., 423 F.3d 184, 202
(3d Cir. 2005). As the Third Circuit has noted, this provision implies “that plaintiffs bear the
burden of proving noncompliance with these standards.” Brader v. Allegheny General Hosp., 64
F.3d 869, 879 (3d Cir. 1995). Because the burden is on the plaintiff, the “standard for reviewing
summary judgment under the HCQIA is therefore unconventional: although the defendant is the
moving party, we must examine the record to determine whether the plaintiff satisfied his burden
of producing evidence that would allow a reasonable jury to conclude that the Hospital's peer
review disciplinary process failed to meet the standards of HCQIA.” Brader v. Allegheny General
Hosp., 167 F.3d 832, 839 (3d Cir. 1999).
As a preliminary matter, the Court notes that the HCQIA expressly exempts civil rights
violations from the statute’s immunity provision, 42 U.S.C. § 11111(a)(1)(D), and applies only to
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immunity from monetary damages. Therefore, Defendant's motion cannot apply to Plaintiff's claim
under 28 U.S.C. § 1981 or to any injunctive relief Plaintiff seeks.
Defendants claim that SMC, as a “health care entity,” is covered by § 11111(a)(1)(A), the
MEC is covered by § 11151(11), and the individual physician defendants are covered by
§§ 11111(a)(1)(B)-(D). (Def. Mot. at 14). The parties do not appear to dispute this; rather, their
main quarrel is whether Defendants’ actions constituted professional review “actions” or
professional review “activities.” The Third Circuit has held that “‘professional review activity’
refers to preliminary investigative measures taken in a reasonable effort to obtain the facts relevant
to a possible change in a physician’s privileges, while the term ‘professional review action’ refers
to the decision that results from a review of the facts obtained.” Mathews, 87 F.3d at 634.
Defendants claim that only the “Board’s denial of Plaintiff’s 2009 Application for
privileges in endovascular interventions is a peer review action under the Act,” and thus it is the
only one that must meet the Act’s requirements for immunity. (Def. Mot. at 17.) According to
Defendants, all other events that Plaintiff complains of, such as the 2011 suspension and the
investigation into Plaintiff’s surgeries, are professional review activities, and are thus subsumed
into the Board’s ultimate denial. (Id.) Defendants argue that Plaintiff cannot rebut the HCQIA’s
presumptive immunity for denial of endovascular privileges because it was based on Plaintiff’s
failure to meet the 2005 Criteria, which had been found in earlier proceedings to not be arbitrary
and capricious. (Id. at 22.) Defendants claim that the denial meets the HCQIA’s requirements
because it was motivated by a legitimate desire to further quality health care, and Plaintiff was
afforded fair process before the action was taken. (Id. at 25.)
Plaintiff argues in response that the HCQIA does not provide immunity in disputes about
credentialing criteria; rather, it provides immunity in cases where a physician is disciplined. (Pl.
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Resp. at 6.) Plaintiff argues that he was found competent by the Hearing Officer to perform
endovascular interventions, and denial of his 2009 application was not related to quality of patient
care – thus, he contends that HCQIA immunity is not applicable. (Id. at 6.) Plaintiff also contends
that there were three professional review actions at issue: the denial of his 2009 application, the
2011 suspension, and the 2013 restriction of his privileges to perform diagnostic arteriograms. (Id.
at 7.) Though maintaining that immunity does not apply, Plaintiff alternatively claims that even if
a presumption does apply he has rebutted it. (Id.) He argues that Defendants held secret meetings,
destroyed evidence of its decision-making record, and subjected him to unfair substitute criteria.
Finally, he argues that the Board’s decisions were not based on quality of health care. (Id. at 14.)
Monitoring of Plaintiff’s Surgeries and Restriction on Diagnostic Arteriograms
As to the monitoring of Plaintiff’s surgeries, this Court finds that this qualifies as a
professional review “activity.” See Mathews, 87 F.3d at 634 (“‘Professional review actions’ do not
include a decision or recommendation to monitor the standard of care provided by a physician or
factfinding to ascertain whether a physician has provided adequate care. These are ‘professional
review activities.’”). The restriction on diagnostic arteriograms was also not a professional review
action; Plaintiff was unable to perform these procedures because Defendants limited access to the
CVI Suite, where they needed to be performed, to only those with endovascular privileges. This
was a hospital-wide rule that was not targeted at Plaintiff; no “action” was taken against him.
The 2011 Suspension
This Court disagrees with Defendants’ characterization of the 2011 suspension as a
professional review activity, rather than a professional review action. As Plaintiff points out, a
suspension must meet the HCQIA’s listed requirements unless it lasts less than 14 days, during
which an “investigation is being conducted to determine the need for a professional review action.”
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42 U.S.C. § 11112(c)(1)(B). Here, the 14-day suspension was disciplinary in nature, and took place
after Defendants investigated the unauthorized surgeries Plaintiff performed. Thus, it does not fall
into the category in § 11112(c)(1)(B) that would exempt it from HCQIA requirements. While
Plaintiff is correct that this constitutes a professional review action, he is incorrect in his assertion
that he was entitled to a fair hearing before it took place. Section 11112(a)(3) states that, for a
professional review action to have presumptive immunity, it must be taken “after adequate notice
and hearing procedures are afforded to the physician involved or after such other procedures as
are fair to the physician under the circumstances.” 42 U.S.C. § 11112(a)(3) (emphasis added). In
this situation, Plaintiff performed four unauthorized endovascular procedures, and was planning
to perform a fifth when Defendants intervened to stop him. Plaintiff’s continuous unauthorized
conduct, and apparent plans to maintain this course of action, make this situation one in which
Defendants reasonably believed that immediate disciplinary suspension was warranted.
The other requirements for presumptive immunity are clearly met here: the suspension was
in the furtherance of quality health care, as it could be damaging to patient health for a physician
to perform unauthorized surgeries. Defendants reasonably attempted to obtain the facts of the
matter, and after doing so, believed that a suspension was warranted, as they explained to Plaintiff
in the letter detailing their action – a letter which Plaintiff himself attaches to his motion for partial
summary judgment. (Doc. 214-20.) Because the procedures used to suspend Plaintiff were fair
under the circumstances, and because the HCQIA’s other requirements were met, the 2011
suspension merits presumptive immunity under the HCQIA.
Plaintiff has attempted to rebut Defendants’ reasons for the suspension by alleging that the
action was motivated by anticompetitive conduct and racial bias. This is contra to Third Circuit
precedent, which holds that “a defendant's subjective bad faith is irrelevant under § 11112(a)” and
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a finding of immunity may be upheld “if, on the basis of the record, the court could conclude that
the professional review action would further quality health care.” Mathews, 87 F.3d at 635. The
subject of the inquiry for purposes of immunity is not whether Defendants were motivated to
suspend plaintiff because of anticompetitive or racialized reasons; rather, the inquiry is whether
suspending him or denying his application furthered quality health care. Id. Because suspending
Plaintiff for performing unauthorized surgeries on patients is clearly in the interest of furthering
quality health care, Plaintiff cannot rebut the Act’s immunity for the 2011 suspension.
The 2009 Application
Both parties agree that denial of Plaintiff’s 2009 application was a professional review
action and must meet the requirements under the HCQIA to enjoy immunity. Plaintiff argues that
immunity should not attach here; he argues that there was no question that he was competent to
perform endovascular procedures, whether or not he met the specifics of the 2005 Criteria, and
thus forcing him to meet the 2005 Criteria would not further quality of health care. (Pl. Resp. at
13.) This argument is unpersuasive. Requiring applicants for endovascular privileges to meet a
uniformly standard of competence as defined by the 2005 Criteria, rather than relying on an
applicant’s individualized assertion of competence, is intended to further quality of health care.
Plaintiff also argues that Defendants’ “conflicting reasons for denial” of his 2009
Application are further proof that the Board “disregarded quality health care” in its decision to
deny privileges, and thus he claims that any presumption of immunity should be rebutted. (Pl.
Resp. at 11, 14.) As noted above, “a defendant’s subjective bad faith is irrelevant under § 11112(a)”
and a finding of immunity may be upheld “if, on the basis of the record, the court could conclude
that the professional review action would further quality health care.” Mathews, 87 F.3d at 635.
The 2005 Criteria that Plaintiff was measured against here were upheld in the state court’s 2009
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order – an order which Plaintiff has actively sought to enforce. (Pl. Mot. at 4.) Regardless of
Defendants’ motive in denying Plaintiff’s application, it is apparent from the record that he did not
meet the applicable 2005 Criteria. Thus, the denial of Plaintiff’s application meets the requirements
for immunity under the HCQIA, because: denying the applications of surgeons who do not meet
required criteria is in furtherance of quality health care; Plaintiff went through a two-year process
of hearings and review of each level of decision-making on his application; and Defendants
reasonably obtained facts which they based their denial off of.
Plaintiff has offered no evidence in the record to rebut the finding that he did not meet the
2005 criteria, other reading different definitions into the criteria and suggesting ulterior motives
he believed Defendants had. (Pl. Mot. at 12-13.) Accordingly, Defendants are entitled to immunity
under the HCQIA for denial of Plaintiff’s 2009 application. Further, even if HCQIA immunity did
not apply to the relevant claims, Plaintiff’s federal claims would still fail on the merits, as discussed
below.
B. Sherman Act § 1 Claim
Plaintiff alleges that Defendants engaged in “restraint of trade in violation of section 1 of
the Sherman Act,” 15 U.S.C. § 1. (SAC ¶173.) Plaintiff claims that SMC and the individual
Defendants took concerted actions to exclude him “from the market for endovascular procedures,
and to damage his business with the intent of ultimately excluding him from the vascular surgery
market as well.” (SAC ¶176.) Plaintiff further “alleges that his competitors engaged in a group
boycott to exclude him from the market for endovascular surgery on the lower extremities,” which
they accomplished, “inter alia, by the misuse of a congressionally regulated peer review process.”
(Pl. Resp. at 16.) In moving for summary judgment, Defendants argue that Plaintiff lacks antitrust
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standing, and that even if he had standing, Plaintiff cannot meet the elements of a § 1 Sherman Act
claim.
i.
Antitrust Standing
A plaintiff must always meet the initial threshold requirement of standing. See Ethypharm
S.A. France v. Abbott Laboratories, 707 F.3d 223, 232 (3d Cir. 2013) (“Standing is a threshold
requirement in all actions in federal court.”). In antitrust actions particularly, a plaintiff must have
“antitrust standing;” a determination that a plaintiff does not have antitrust standing “does not
affect the subject matter jurisdiction of the court, as Article III standing does, but prevents a
plaintiff from recovering under the antitrust laws.” Ethypharm, 707 F.3d at 232. In determining
whether a plaintiff has antitrust standing, the Third Circuit uses a multi-factor test:
(1) the causal connection between the antitrust violation and the harm to the
plaintiff and the intent by the defendant to cause that harm, with neither factor alone
conferring standing; (2) whether the plaintiff's alleged injury is of the type for which
the antitrust laws were intended to provide redress; (3) the directness of the injury,
which addresses the concerns that liberal application of standing principles might
produce speculative claims; (4) the existence of more direct victims of the alleged
antitrust violations; and (5) the potential for duplicative recovery or complex
apportionment of damages.
Ethypharm, 707 F.3d at 232. The second factor in this analysis, antitrust injury, is the only
one debated by the parties here. (Def. Mot. at 34; Pl. Resp. at 18.)
Antitrust injury is “a necessary but insufficient condition of antitrust standing.” Ethypharm,
707 F.3d at 233 (internal citations omitted). Antitrust injury is defined as “injury of the type the
antitrust laws were intended to prevent and that flows from that which makes [the] defendants’ acts
unlawful.” Id. (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)).
The “class of plaintiffs capable of satisfying the antitrust-injury requirement is limited to consumers
and competitors in the restrained market, and to those whose injuries are the means by which
17
defendants seek to achieve their anticompetitive ends.” West Penn Allegheny Health System, Inc.
v. UPMC, 627 F.3d 85, 102 (3d Cir. 2010) (internal citations omitted).
Here, Plaintiff is alleging antitrust injury as a competitor. (Pl. Resp. at 19.) Defendants
contend that Plaintiff’s alleged injury, which they frame as “the denial of privileges due to a failure
to meet established requirements and an alleged loss of patients as a result of that conduct,” is “not
the type that the antitrust laws were enacted to prevent.” (Def. Mot. at 35.) Defendants argue that
competition has not been harmed, pointing out that endovascular interventions are not limited to
physicians at SMC, but are also performed by physicians at Atlantic Regional Medical Center, “a
hospital with full-scale facilities and campuses that are located approximately 10 miles and 13
miles from SMC.” (Def. Mot. at 35.) Plaintiff argues in response that the existence of other
hospitals in the area that perform endovascular interventions does not negate antitrust injury. (Pl.
Resp. at 20.) Plaintiff argues that despite his status as a competitor, the antitrust laws were
nonetheless still designed to protect him. (Id.)
While it is true that a showing of injury will not fail merely because the injured is a
competitor, this Court nonetheless finds that Plaintiff has not made a proper showing of antitrust
injury. This case is factually similar to several district court cases within the Third Circuit. See,
e.g. Untracht v. Fikri, 454 F.Supp.2d 289 (W.D. Pa. 2006); Mathews v. Lancaster General Hosp.,
883 F. Supp. 1016, 1038 (E.D. Pa. 1995), aff'd, 87 F.3d 624 (3d Cir. 1996); Huhta v. Children’s
Hosp. of Philadelphia, 1994 WL 245454 (E.D. Pa. 1994), aff'd, 52 F.3d 315 (3d Cir. 1995).
For example, in Untracht v. Fikri, the plaintiff, a doctor, brought a Sherman Act § 1 claim
against several area hospitals, arguing that the hospitals and individual doctors had conspired to
prevent him from competing in the market. Untracht, 454 F.Supp.2d at 309. The Untracht court
found that, even if the plaintiff had evidence of a conspiracy, he could not show that he had been
18
shut out of the market because he had voluntarily foreclosed his staff privileges at a separate
hospital he could have practiced at. Id. The court further determined that this distinguished the
plaintiff’s situation from Angelico v. Lehigh Valley Hosp., Inc., 184 F.3d 268 (3d Cir. 1999) and
Brader v. Allegheny Gen. Hosp., 64 F.3d 869 (3d Cir. 1995), both hospital antitrust cases in which
courts found antitrust injury because plaintiffs “had been completely shut out of the market by a
purported group boycott.” Id. (emphasis in original).
In another example, Mathews v. Lancaster General Hosp., the plaintiff doctor alleged
antitrust injury stemming from restriction of his hospital privileges. 883 F. Supp. 1016, 1038. The
court found that there was no antitrust injury; it reasoned that only some of the plaintiff’s privileges
were limited, since he could still perform other services at the defendant hospital, and he could
perform the surgery at issue at outside hospitals. Mathews, 883 F. Supp. 1016 at 1045.
Again in Novak v. Somerset Hosp., 625 F.App’x. 65, the plaintiff, a surgeon, sued under
§ 1 of the Sherman Act after his privileges were terminated by the defendant hospital. He argued
that the hospital board members conspired to terminate his privileges to reduce competition and
restrain patient choice. Id. at 66. The court found no antitrust violation, holding that the plaintiff
had not been shut out of the relevant product market because he could still perform surgeries at
another, albeit smaller and less comprehensive, hospital located roughly 32 miles away. Id.
Here, like the plaintiffs in Untracht and Mathews, Plaintiff has not been completely shut
out of the market, and he retains the ability to perform endovascular surgery at outside facilities.
Plaintiff admits he has unrestricted endovascular admitting privileges at Vascular Access Center,
and that he has not even applied for similar privileges at AtlantiCare, a nearby facility. (Def. Mot.
Exhibit I (“Pl. Dep.”) at 213-215.) Thus, in contradiction to his arguments, Plaintiff cannot show
“coercive activity that prevents its victims from making free choices between market alternatives,”
19
as patients are free to seek Plaintiff’s services at the Vascular Access Center, and potentially at
other facilities at which Plaintiff has not yet sought endovascular privileges. (Pl. Resp. at 18-19.)
Plaintiff has not presented any reason, such as insurance or distance, why these alternatives will
harm patient choice. Further, similar to Mathews, patients may still seek Plaintiff’s services for
general and vascular surgery at SMC, as he retains those privileges.
Because Plaintiff lacks antitrust standing, he may not bring a claim under § 1 of the
Sherman Act; accordingly, summary judgment is warranted in favor of Defendants on this claim.
ii.
Restraint of Trade in Violation of § 1 of the Sherman Act
Even if Plaintiff did have antitrust standing, summary judgment for Defendants would
nonetheless be appropriate because Plaintiff is unable to show the required elements of a Sherman
Act § 1 antitrust claim.
In antitrust cases involving a denial of hospital privileges, the plaintiff must prove “that the
challenged conduct suppresses or destroys competition rather than merely regulating and perhaps
thereby promoting competition.” Mathews, 883 F.Supp. at 1036. Rather than presuming that the
defendants’ conduct unreasonably restrains competition, “the defendants’ conduct is analyzed on
a case-by-case basis whereby the fact finder weighs all the circumstances in a case to determine
whether a particular practice amounts to an unreasonable restraint of trade.” InterVest, Inc. v.
Bloomberg, L.P., 340 F.3d 144, 159 (3d Cir. 2003).
To survive a motion for summary judgment under this analysis, the plaintiff must show
“(1) concerted action by the defendants; (2) that produced anti-competitive effects within the
relevant product and geographic markets; (3) that the concerted actions were illegal; and (4) that
it was injured as a proximate result of the concerted action.” Howard Hess Dental Laboratories
20
Inc. v. Dentsply Int’l, Inc., 602 F.3d 237, 253 (3d Cir.2010) (citing Gordon v. Lewistown Hosp.,
423 F.3d at 207).
a. Concerted Action
The first element that a plaintiff bringing a § 1 Sherman Act claim must show is concerted
action; the “existence of an agreement is the hallmark of a Section 1 claim.” In re Insurance
Brokerage Antitrust Litigation, 618 F.3d 300, 315 (3d Cir. 2010). The plaintiff must “submit
evidence that reasonably tends to prove that the defendants had a conscious commitment to a
common scheme designed to achieve an unlawful objective.” Mathews, 883 F.Supp. at 1036.
“Unilateral activity by a defendant, no matter the motivation, cannot give rise to a section 1
violation.” InterVest, 340 F.3d at 159. To “withstand a motion for summary judgment on the issue
of concerted action, a plaintiff need not establish an explicit agreement, nor must he produce direct
evidence of conspiracy. Rather, a plaintiff may rely on circumstantial evidence and the inferences
which may reasonably be drawn from that evidence.” Mathews, 883 F.Supp. at 1036.
However, “when a plaintiff relies solely on circumstantial evidence in an antitrust case,
[the court] must apply special considerations so that only reasonable inferences are drawn from
the evidence. This is because antitrust law limits the range of permissible inferences from
ambiguous evidence in a § 1 case.” InterVest, 340 F.3d at 160. One such limit is that evidence of
“conduct as consistent with permissible competition as with illegal conspiracy does not, standing
alone, support an inference of antitrust conspiracy.” InterVest, 340 F.3d at 160. “To survive a
motion for summary judgment, therefore, a plaintiff must present evidence that tends to exclude
the possibility that the alleged conspirators acted independently.” Id. (internal citations omitted).
Defendants argue that summary judgment on this claim is warranted because Plaintiff has
not presented evidence showing conspiracy between the hospital, the MEC, and the individually
21
named defendants. (Def. Mot. at 37.) Specifically, they argue that the hospital cannot legally
conspire with its medical staff, and that the hospital’s peer review process and ultimate decision
to deny endovascular privileges to Plaintiff is not enough to prove the existence of a conspiracy.
(Id.). Plaintiff argues in response that he has produced “written evidence of an agreement to
exclude competitors” in the form of the 2005 Criteria, “which are exclusionary on their face.” (Pl.
Resp. at 26.) He also argues that he has proof by way of Defendant’s prior 2008 settlement offer,
along with additional anticompetitive conduct alleged to have occurred over the years of this
litigation. (Pl. Resp. at 26.)
The 2005 Criteria
Plaintiff’s argument that the 2005 Criteria are evidence of concerted action is unpersuasive,
as the voluminous record in this case suggests otherwise. The 2005 Criteria were originally created
by Defendants months before Plaintiff first submitted his 2006 application for privileges at SMC.
In Defendant Gosin’s testimony at the fair hearing in 2011, he stated that he had no way of knowing
that Plaintiff would be applying for privileges within the next few months when the criteria were
created. (Def. Resp. Exhibit 1, “2011 Fair Hearing Tr.” at 90.) Rather, the 2005 Criteria were
created by Defendant Dr. Jeffrey Gosin and Dr. Lynn Helmer in accordance with standards set out
in the Journal of Vascular Surgery, and typed up by Defendant Dr. Peter Jungblut. (2011 Fair
Hearing Tr. At 70, 89.) These criteria were created to, as Defendant Gosin testified, apply equally
to everyone. (2011 Fair Hearing Tr. at 89.)
Plaintiff points out that Defendants Gosin and Jungblut developed the 2005 Criteria, and
that the MEC and Defendants Dearborn and Galler had to recommend that the Board approve the
Criteria; he takes these facts as evidence of concerted action amongst Gosin, Jungblut, Dearborn,
22
Galler, and the MEC. (Pl. CSOF ¶157-159.) He argues that the criteria were created to be
exclusionary, and constitute evidence of concerted action to restrain the endovascular market.
First, based on the undisputed record explaining the formation of the 2005 Criteria, this
Court finds that there is no evidence suggesting that creation of the 2005 Criteria was part of a
concerted action between Defendants to specifically exclude Plaintiff, who had not yet even
applied for privileges, from the market for endovascular surgery. Second, this Court finds no
evidence suggesting that the 2005 Criteria were designed to restrain trade in general.
Plaintiff’s argument that the 2005 Criteria were concerted action to restrain trade is
undermined by the fact that another endovascular surgeon, Dr. Herrington, was able to satisfy the
2005 Criteria and receive endovascular privileges. (2011 Fair Hearing Tr. at 89.) Plaintiff argues
that Dr. Herrington did not actually meet the 2005 Criteria because he was granted privileges prior
to fully meeting them. (Pl. Resp. at 26.) However, the approval of Dr. Herrington’s privileges was
predicated on the condition that he meet the remaining criteria in the last two months of his
fellowship – a feat that Defendants believed would be easily achievable based on his closeness to
completion and the time left in his fellowship. Further, the New Jersey Superior Court previously
found that Defendants’ processes for applying the Criteria to Plaintiff were “grounded in reason
and fairness, and that they are not arbitrary or capricious.” Nahas v. Shore Memorial Hospital,
Dkt. No. C-82-11 (Sup. Ct. N.J. May 7, 2015).
Plaintiff also presents as evidence of concerted action the fact that the 2005 Criteria
grandfathered in surgeons who were already on the medical staff. (Pl. Resp. at 26.) He claims that
the Criteria were created to protect existing surgeons and insulate them from competition. (Id.).
Defendants justify the grandfathering clause by explaining that surgeons with existing
endovascular privileges are already subject to ongoing review of their performance; those newly
23
applying have not yet demonstrated competence at SMC, and thus the hospital needs an objective
metric to determine competence. (2011 Fair Hearing Tr. 96-97.)
As stated earlier, “antitrust law limits the range of permissible inferences from ambiguous
evidence in a § 1 case.” InterVest, 340 F.3d at 160. The law is clear that, “where defendants have
cited legitimate medical reasons for their conduct, the limitation of staff privileges, without more,
does not give rise to an inference of an antitrust conspiracy.” Mathews at 1040. As the state court
succinctly stated, “After plaintiff was convicted and served a prison term for obstructing a federal
Medicare fraud investigation, SMH acted responsibly in carefully scrutinizing his application to
restore his privileges and examining his clinical competency to perform endovascular surgery.”
Nahas v. Shore Memorial Hospital, Dkt. No. A-4638-14T2 (N.J. Sup. Ct. App. Div. Dec. 7, 2016).
The individual Defendants’ recommendation that Plaintiff’s application be denied does not
alone show concerted action. The Third Circuit has held that “a mere recommendation does not
prove concerted action.” McGary v. Williamsport Regional Medical Center, 775 Fed.Appx. 723,
728 (3d Cir. 2019). Rather, “in order to prove concerted action between a hospital and its staff,
there must be something such as a conscious commitment by the medical staff to coerce the
hospital into accepting its recommendation.” Id. (internal citations omitted). Plaintiff argues that
Defendants’ prospective economic gain, combined with their negative recommendation, is enough
to show concerted action; however, this Court disagrees. The situation here is highly similar to
that in Mathews, where the court stated:
“We agree with plaintiff that, viewed in its entirety and in the light most favorable
to him, the evidence of record supports a finding that each of the alleged
conspirators was a competitor of plaintiff and stood to gain economically from his
elimination from the market for orthopedic services. This alone, however, cannot
support a finding that defendants conspired to restrict plaintiff's privileges. . . At
most, plaintiff has shown that each defendant would have been pleased to eliminate
plaintiff from the market. He has not presented evidence which tends to suggest
that the defendants conspired to achieve this effect.”
24
Mathews, 883 F. Supp. at 1038.
The creation and implementation of the 2005 Criteria, and the determination that Dr. Nahas
failed to meet these criteria, are actions that just as easily serve a valid medical purpose as they do
support an inference of conspiracy. The fact that Defendants might compete with Plaintiff does
not automatically convert Defendants’ actions into legally defined “concerted action.” As such,
Defendants’ use of the 2005 Criteria and denial of Plaintiff’s 2009 Application cannot be viewed
as proof of concerted action.
The 2008 Settlement Letter
Plaintiff then turns from the 2005 Criteria to Defendants’ 2008 settlement offer. He claims
that in 2008, Defendants made a settlement offer that would grant Plaintiff bariatric surgical
privileges if he would agree to stop seeking privileges in general, vascular, and endovascular
surgery. (Pl. Resp. at 26.) He argues that this is evidence of intent to restrain the endovascular
surgical market and to allocate customers. (Id.).
Plaintiff’s use of a confidential settlement offer as evidence of concerted action is
troubling. Under Federal Rule of Evidence 408, compromise offers are inadmissible to prove the
validity of a disputed claim. Though Plaintiff argues that he is actually offering the settlement
statement to prove that Defendants are attempting to allocate customers in an illegal agreement,
the Court sees no evidence of this in the record. The settlement letter does not require Plaintiff to
stop performing general, vascular, or endovascular procedures. Accordingly, the 2008 Settlement
Letter may not be used to support a finding of concerted action.
The 2011 Suspension and Subsequent Investigations
Plaintiff argues that Defendants took concerted action in 2011, when he was suspended
after performing four unauthorized endovascular surgeries. Plaintiff claims that Defendants
25
refused to clarify which procedures were endovascular versus vascular, and that he believed the
four surgeries at issue were actually vascular. (Pl. CSOF ¶101.) The MEC was the entity that
investigated Plaintiff’s involvement in the surgeries. In 2011, individual Defendants Dearborn,
Galler, and Nachtigall were members of the MEC. (Id. ¶11.) Plaintiff argues that the presence of
these three defendants on the MEC shows that they had the opportunity to conspire; he claims this
is supported by his inability to obtain the MEC’s meeting minutes. (Id. ¶112.) Plaintiff argues that
the MEC’s decision to suspend him was not based on his completion of four unauthorized
surgeries, but was instead based on Defendants’ desire to exclude him from competition. (Id.)
Plaintiff makes similar claims regarding the investigation into two of his surgeries
performed between July 2011 and February 2012. (Pl. CSOF ¶119.) A February 2012 investigative
report determined that Plaintiff made an error in judgment in one of the surgeries; based on this,
in March 2012 the MEC, along with Defendants Nachtigall, Dearborn, and Jungblut voted to
“commence a retrospective investigation into all of Dr. Nahas’ 2011 vascular cases involving distal
lower extremity bypass.” (Id. ¶127.) Plaintiff adds that “Dr. Galler was aware of” this vote. (Id.)
In November 2012, the “Credentials Committee recommended that Dr. Nahas’ biannual
reappointment application be reduced to a one year appointment because Dr. Nahas was under
investigation.” (Pl. CSOF ¶134.) Defendant Jungblut was a non-voting member of the Credentials
Committee. (Id. ¶33.) In August 2013, the MEC voted to restrict Plaintiff’s privileges to perform
pre-operative arteriograms. The MEC members who participated were: Defendants Nachtigall and
Galler, Dr. Herrington, hospital CEO Ron Johnson, and Drs. May, Angelastro, Roche, and Rowe.
(Id. ¶137.)
In 2013, the heads of Divisions of Cardiology, Diagnostic Radiology, and Vascular Surgery
met and determined that access to the Cardiovascular Suite (CVI Suite) should be limited to only
26
physicians with endovascular privileges. (Def. SOF ¶111-116.) Plaintiff argues that this limitation
was specifically intended to apply to him; because pre-operative diagnostic arteriography was
required to be performed in the CVI suite, the denial of access meant that Plaintiff could no longer
perform any pre-operative diagnostic arteriography at SMC.
Overall, Plaintiff argues that the votes to investigate him, to limit his privileges, and to
exclude him from the CVI suite were the result not of a desire to further quality healthcare, but
rather were intended to exclude him from competition. (Pl. Dep.) This contention is insufficient as
a matter of law to support a showing of concerted action.
First, the record shows that the 2011 suspension was a response to Plaintiff’s performance
of four unauthorized surgeries, despite his allegations that the suspension was based on
Defendants’ desire to exclude him from the endovascular market. (Doc. 214-20.) In its 2016
decision, the state court noted, “Most troubling in this record is plaintiff's decision to perform four
endovascular surgical procedures after SMH had unequivocally denied his application for
privileges in that specialty.” Nahas v. Shore Memorial Hospital, Dkt. No. A-4638-14T2 (N.J. Sup.
Ct. App. Div. Dec. 7, 2016). This Court agrees with that framing. Regardless of whether Plaintiff
believed the four procedures were actually strictly vascular, as he alleges he did, it remains
undisputed that he performed procedures defined by SMC as endovascular, an area in which he
was aware he did not have privileges. Plaintiff argues that there is no clear medical definition of
vascular versus endovascular; however, as the state court noted, “when there isn’t a clear cut
standard in the community then the hospital has to decide that for themselves. And they made that
decision. And they had made a decision that. . . amply supports a finding that the plaintiff has in
the past performed procedures that are outside of his defined privileges.” (Def. SOF ¶37.) As stated
earlier, “where defendants have cited legitimate medical reasons for their conduct, the limitation
27
of staff privileges, without more, does not give rise to an inference of an antitrust conspiracy.”
Mathews, 883 F.Supp. at 1040. Ensuring that only authorized surgical procedures are performed
within the hospital is a legitimate medical reason; as such, Plaintiff’s 2011 suspension cannot
support a finding of concerted action.
Similarly, Plaintiff cannot show concerted action based on the CVI Suite being limited to
only those with endovascular privileges. This limitation, which applied to the entire hospital staff
and did not target Plaintiff, did not exclude all those except Defendants, as every surgeon with
endovascular privileges could still use the suite. (Pl. CSOF 141-142.) There is nothing more in the
record that would allow one to infer concerted action as a legal matter from this limitation.
Next, the continued investigation into Plaintiff also does not show concerted action. As
detailed above, the MEC and three individual Defendants – Nachtigall, Dearborn, and Jungblut –
voted in favor of investigating Plaintiff. Defendant Galler was merely “aware of” the vote. Courts
in this circuit have held that a Defendant’s “mere presence” at a board meeting “does not give rise
to an inference of an antitrust conspiracy.” Novak v. Somerset Hosp., 2014 WL 4925200 at *19
(W.D. Pa. 2014). Similarly, this Court finds that a Defendant’s mere awareness of a vote does not
imply concerted action. This same analysis applies to the Credentials Committee requirement that
Plaintiff renew his privileges annually: though Defendant Jungblut was present at that vote, he was
a non-voting member, and his mere presence is not sufficient to show concerted action.
As for the MEC and the three individual Defendants that did vote, this vote constituted a
professional review action that does not alone allow for an inference of conspiracy. In these
situations, the Third Circuit requires evidence of a “conscious commitment by the medical staff to
coerce the hospital.” McGary, 775 Fed.Appx. at 728. No such evidence is present here. Thus, as a
28
matter of law, Plaintiff cannot show that the investigation into his surgeries stemmed from
conspiracy, rather than from a desire to further quality healthcare.
As this Court stated in a prior decision, it is not enough that Plaintiff personally considers
the hospital decision “patently unfair and unjust.” Nahas v. Shore Med. Ctr., 2014 WL 4828155,
at *6 (D.N.J. Sept. 29, 2014). He must actually present evidence showing or implying concerted
action. Plaintiff has presented only evidence that just as easily supports a finding of quality health
care furtherance as it does an inference of conspiracy. Plaintiff has failed to “present evidence that
tends to exclude the possibility that the alleged conspirators acted independently.” InterVest, 340
F.3d at 160. Because Plaintiff has failed to make a showing of concerted action, he cannot bring a
Sherman Act § 1 claim. Accordingly, summary judgment is warranted for Defendant on this claim.
C. Plaintiff’s Discrimination Claim
In the operative complaint, Plaintiff alleges that Defendants engaged in “Disparate
treatment, obstruction and interference with contract in violation of 42 USC Section 1981” (SAC
¶203.) Plaintiff alleges that Defendants treated him differently than similarly situated non-minority
individuals because he is Arab. (Id.) In seeking summary judgment, Defendants argue that Plaintiff
“has failed to establish a prima facie case of racial discrimination under § 1981” and that, even if
he had established a prima facie case, he cannot rebut Defendants’ non-discriminatory reasons for
the actions at issue. (Def. Mot. at 26.)
Section 1981 “prohibits racial discrimination in the making of private and public
contracts.” Pamintuan v. Nanticoke Mem'l Hosp., 192 F.3d 378, 385 (3d Cir. 1999). Claims
brought under § 1981 are analyzed under the McDonnell-Douglas burden-shifting framework.
First, the plaintiff must make a prima facie showing of discrimination by demonstrating
that: “(1) she belongs to an identifiable class of persons who are subjected to intentional
29
discrimination solely because of their ancestry or ethnic characteristics; (2) defendant intended to
discriminate against her on that basis; and (3) defendant's racially discriminatory conduct abridged
a contract or rights enumerated in § 1981(a).” Pamintuan v. Nanticoke Mem'l Hosp., Inc., 1998
WL 743680, at *12 (D. Del. Oct. 15, 1998), aff'd sub nom. Pamintuan v. Nanticoke Mem'l Hosp.,
192 F.3d 378 (3d Cir. 1999).
If the plaintiff is able to establish a prima facie case, then “the burden of production shifts
to defendant to articulate a legitimate, nondiscriminatory reason for the adverse employment
decision.” Id. If the defendant successfully meets this burden, “the plaintiff must produce evidence
from which a reasonable factfinder could conclude either that the defendant's proffered
justifications are not worthy of credence or that the true reason for the employer’s act was
discrimination.” Bray v. Marriott Hotels, 110 F.3d 986, 990 (3d Cir.1997). Although “the burden
of production may shift, the ultimate burden of persuading the trier of fact that the defendant
intentionally discriminated against the plaintiff remains at all times with the plaintiff.” Jones v.
Sch. Dist. of Philadelphia, 198 F.3d 403, 410 (3d Cir. 1999).
Summary judgment is warranted for a defendant on a § 1981 claim “only if it can
demonstrate that: (1) the plaintiff is unable to establish a prima facie case of discrimination; or (2)
if the plaintiff can establish a prima facie case, the plaintiff cannot produce sufficient evidence
from which a factfinder reasonably could infer that the defendant's legitimate, nondiscriminatory
reason for discharging plaintiff was pretext.” Pamintuan, 1998 WL 743680 at *13.
Prima Facie Case
Defendants argue that Plaintiff cannot show the second or third prong required to show a
prima facie case because he cannot show that Defendants intended to discriminate against him
because he is Arab, and cannot show racially discriminatory conduct by Defendants that abridged
30
a contract or rights enumerated in § 1981(a). (Def. Mot. at 27.) Defendants contend that Plaintiff
admits he is only making a guess that he has been treated poorly on the basis of race, rather than
some other basis. (Id.)
In his response, Plaintiff misunderstands the requirements of showing a prima facie case.
In § 1981 claims, the Third Circuit has held that “the elements of a prima facie case depend on the
facts of the particular case.” Jones v. School Dist. of Philadelphia, 198 F.3d at 411. “Where, as
here, the plaintiff is a non-employee physician complaining of allegedly discriminatory acts of a
hospital with whom he is affiliated,” the prima facie elements laid out above are proper. Bhatt v.
Brownsville Gen. Hosp., 2006 WL 167955, at *17 (W.D. Pa. Jan. 20, 2006), aff’d, 236 F. App’x
764 (3d Cir. 2007). Instead of explaining how those elements are met, Plaintiff instead borrows
the prima facie test from employment discrimination cases, framing the elements as requiring him
to show “(i) that he belongs to a racial minority; (ii) that he applied and was qualified for a job for
which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected;
and (iv) that, after his rejection, ... the employer continued to seek applicants from persons of
complainant’s qualifications.” (Pl. Resp. at 38.)
If the employment discrimination test averred by Plaintiff were applicable, it is highly
likely that he would meet the elements: (i) he is Arab, (ii) he is a board-certified surgeon who
applied for surgical privileges, (iii) his application for privileges was denied, and (iv) Defendants
accepted other applications for privileges. However, this is not the prima facie test used in the
context of non-employee physicians whose applications for hospital privileges have been denied.
Bhatt, 2006 WL 167955 at *17.
Nonetheless, this Court finds that when the applicable test is applied, Plaintiff can make a
prima facie showing of racial discrimination under § 1981. It is undisputed that Plaintiff meets
31
factor (i) because he is Arab. (Pl. Resp. at 38); see Saint Francis College v. Al–Khazraji, 481 U.S.
604, 613, 107 S.Ct. 2022, 95 L.Ed.2d 582 (1987) (rejecting the argument that Arabs are Caucasians
for purposes of § 1981, as Arabs were not considered Caucasians when § 1981 was enacted in
1870).
Under factor (ii), Plaintiff has raised enough evidence to make a preliminary showing that
Defendants discriminated against him on that basis. The vast majority of the evidence Plaintiff
offers as showing discriminatory intent is circumstantial, rather than direct.9 The Supreme Court
has held that circumstantial evidence is permissible; for example, “departures from the normal
procedural sequence” may be used as evidence that “improper purposes are playing a role.” Village
of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 267, 97 S. Ct. 555, 564, 50 L. Ed.
2d 450 (1977). In rejecting an earlier motion to dismiss in this same case, this Court stated,
“Plaintiff has sufficiently pled facts to suggest that the procedures employed by SMC during his
application process for endovascular privileges were so irregular and prejudicial that they might
considered evidence of an intent to discriminate based on Plaintiff's Arab ancestry and ethnicity.”
Nahas v. Shore Med. Ctr., 2015 WL 3448021, at *6 (D.N.J. May 29, 2015). While this was based
on Plaintiff’s Complaint, and the Court is now examining the record, this statement remains
accurate here.
One example of irregular procedure in the record is the “supervision requirement” for the
2005 Criteria – Plaintiff argues that this requirement, which was not apparent on the face of the
2005 Criteria, was “contrived” so that he would not meet the required number of procedures. (Pl.
Resp. at 39.) Plaintiff also argues that Dr. Herrington, a non-Arab applicant, was given
9
The only direct evidence of racial discrimination is a statement allegedly made by Defendant Galler referring to
Plaintiff in his statement, “we got one Arab guy named Nahas, Lebanese guy.” (Pl. Dep. at 148.) While this shows
one individual defendant’s awareness of Plaintiff’s race and national origin, it is far from sufficient to show
discriminatory intent or motivation.
32
endovascular privileges despite not meeting 100% of the criteria. (Id.). Though Defendants can
explain a legitimate reason for these actions in the next step of the McDonnell-Douglas analysis,
Plaintiff has met his prima facie burden for element (ii).
Meeting factor (iii) then becomes simple: as this Court stated in 2015, “the Bylaws afforded
certain substantive and procedural rights to Plaintiff, and those rights were allegedly impaired by
Defendants. The Court considers this sufficient to state the existence of a contract defendant's
racially discriminatory conduct abridged a contract or rights enumerated in § 1981(a).” Nahas,
2015 WL 3448021 at *5.
Because Plaintiff can successfully make a prima facie case under 42 U.S.C. § 1981, the
burden then shifts to Defendants to offer a legitimate, non-discriminatory reason for their conduct.
Pretextual Evidence
Despite Plaintiff’s ability to make a prima facie showing, summary judgment is
nonetheless warranted for Defendants because Plaintiff cannot show that Defendants’ proffered
non-discriminatory reasons are pretextual.
Defendants offer numerous reasons for denial of Plaintiff’s 2009 Application for
endovascular privileges, the 2011 suspension and subsequent investigations, limitation of access
to the CVI suite, and the reaction to the incident with Dr. Tsyganov. Defendants can explain why
Dr. Herrington, a non-Arab doctor, was given privileges despite not meeting 100% of the criteria
at the time his application was approved. As detailed above, Dr. Herrington’s privileges were
conditioned on his meeting the full criteria during the last two months of his fellowship. When
Plaintiff applied, he was not in a similar position, and could not show that he would meet the full
criteria before beginning to practice at SMC. Defendants also have clear reasons for the 2011
suspension: Plaintiff performed four unauthorized endovascular surgeries, knowing that he did not
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have endovascular privileges. (Doc. 214-20.) Further, he was planning to perform a fifth
endovascular procedure at the time Defendants reprimanded him. As for the incident with Dr.
Tsyganov, Defendants contend that they responded appropriately, and point out that the New
Jersey Department of Health was itself concerned with “Plaintiff’s conduct in that matter.” (Def.
Reply at 13.)
Defendants have met their burden of offering non-discriminatory reasons for their action
at step two of the McDonnell-Douglas analysis; thus, the burden shifts back to Plaintiff to show
that the proffered reasons are actually pretext for discrimination. It is clear from Plaintiff’s
deposition that he cannot make this showing. In his deposition, Defendants asked Plaintiff, “do
you have any reason to believe that anyone on the board of trustees at the time that it rendered its
July 2013 decision on your 2009 application for privileges in endovascular interventions was
motivated by bias against individuals of Arab descent?” and Plaintiff answered, “I don’t have any
firm knowledge of that.” (Pl. Dep. at 57.) Plaintiff was also asked with respect to each individual
board member whether he had reason to believe that each member’s vote on his “2009 application
for privileges in endovascular interventions was motivated by anything other than. . .desire to
engage in furtherance of quality healthcare.” (Pl. Dep. at 56.) Each time the question was asked,
Plaintiff answered, “I believe if he voted against me, it was bias.” (Id.) To sum up Plaintiff’s
answers, Defendants asked, “if someone is on the board and votes against you, you view that as
evidence of bias; is that right?” (Id.) Plaintiff answered, “assuming they have read the
information.” (Id.) Plaintiff had the same answer regarding the 2011 suspension and the CVI suite
limitation. He stated that he had no reason to suspect that any member of the board of trustees
harbored bias against people of Arab descent, but if they did vote against him, it must mean that
they actually were biased against Arabs. (Pl. Dep. at 68.) At other points, Plaintiff states that a vote
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against him is evidence of anticompetitive conduct, alternatively or in addition to racial bias. (Pl.
Dep. at 82.) Finally, for the incident with Dr. Tsyganov, Plaintiff himself admits he either does not
believe or does not know that the response to this incident was based on his race. (Pl. Dep. at 7780.)
The law is clear that bare assertions not based on evidence cannot overcome a defendant’s
legitimate, non-discriminatory reason. The Third Circuit has held that “conclusory, self-serving
affidavits [and testimony] are insufficient to withstand a motion for summary judgment.” Gonzalez
v. Sec'y of Dep't of Homeland Sec., 678 F.3d 254, 263 (3d Cir. 2012). “[A] bare but sworn assertion
of a claimant’s lack of knowledge will not suffice to create a material dispute of fact where that
assertion is impeached by a well supported showing to the contrary.” Id. Here, Plaintiff has no
knowledge of whether Defendants harbor animus towards people of Arab descent. He merely has
“his own self-serving speculation” that a vote against him must be based off of his race, rather than
based off of the many non-discriminatory reasons that Defendants have given. Simon v. Shore Cab,
LLC, 2016 WL 1059267, at *6 (D.N.J. Mar. 17, 2016). Further, in his deposition, Plaintiff himself
is not even convinced by his bare assertions that any adverse vote is based on his race, repeatedly
stating that he does not believe certain board members harbor animus towards Arabs, and saying
that it may instead be anticompetitive conduct. (Pl. Dep. at 82, 85, 87, 109, 129, 146.)
To prevail on a § 1981 claim, it is not enough that a defendant took an adverse action
against a plaintiff. That action must have been actually motivated by racial discrimination. Ray v.
Pinnacle Health Hosps., Inc., 416 F. App'x 157, 163 (3d Cir. 2010) (holding that “an invidious
discriminatory reason” must be “more likely than not a motivating or determinative cause of the
employer's action”). In Plaintiff’s deposition, when asked if he believed a negative vote against
his 2009 Application was motivated by racial animus, Plaintiff responded, “if he reviewed the data
35
and saw the information and understood the information and still voted against it, then I think that,
to me, there’s bias or he didn’t understand it.” (Pl. Dep. at 146.) Plaintiff’s belief that he was
competent and should have received privileges is not proof of discrimination under § 1981. See
Ray, 416 F. App’x at 163 (finding that the plaintiff-doctor’s reliance “primarily upon evidence
which he insists shows that similarly situated Caucasian physicians were treated differently, that
the process was unfair, and that his professional expertise and judgment are good” was insufficient
to show racial animus and rebut Defendant’s proffered reasons under § 1981).
Because Defendants have met their burden, and because Plaintiff “cannot produce
sufficient evidence from which a factfinder reasonably could infer that the defendant's legitimate,
nondiscriminatory reason for discharging plaintiff was pretext,” summary judgment for
Defendants on this claim is appropriate. Pamintuan, 1998 WL 743680 at *13.
IV.
CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for Partial Summary Judgment is DENIED.
Defendants’ Motion for Summary Judgment is GRANTED as to Count I (Sherman Act § 1 claim)
and Count II (42. U.S.C. § 1981 claim). The Third Circuit has held that where all federal claims
are dismissed before trial, “the district court must decline to decide the pendent state claims unless
considerations of judicial economy, convenience, and fairness to the parties provide an affirmative
justification for doing so.” Hedges v. Musco, 204 F.3d 109, 123 (3d Cir. 2000) (citations
omitted).10 Thus, Plaintiff’s remaining state law claims (Counts III-VII) are DISMISSED
WITHOUT PREJUDICE pursuant to 28 U.S.C. § 1367(c)(3) for lack of subject matter
jurisdiction. An accompanying Order shall issue.
10
Having litigated this case in state court for approximately a decade, the parties are more than familiar with the state
court system. As this Court no longer has an independent basis for subject matter jurisdiction, the state court presents
a more appropriate place for Plaintiff to bring these claims.
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