Ireland v. Bend Neurological Associates LLC et al
Filing
197
Opinion and Order signed on 3/31/2021 by Magistrate Judge Mustafa T. Kasubhai: Defendants' Motions for Summary Judgment (ECF Nos. 147 , 149 , 151 ) are GRANTED. Plaintiff's Amended Motion for Summary Judgment (ECF No. 153 ) is DENIED. (jk)
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
EUGENE DIVISION
STEPHEN IRELAND, M.D., an individual,
Plaintiff,
Case No. 6:16-cv-02054-MK
OPINION
AND ORDER
v.
BEND NEUROLOGICAL ASSOCIATES LLC,
an Oregon limited liability company;
BEND MEMORIAL CLINIC, P.C., an Oregon
professional corporation; MICHAEL BELL,
M.D., P.C., an Oregon professional
Corporation; MICHAEL BELL, M.D., an
individual; DAVID T. SCHLOESSER, M.D.,
P.C., a professional corporation; DAVID
SCHLOESSER, M.D., an individual; LAURA J.
SCHABEN, M.D., P.C., a professional
Corporation; LAURA SCHABEN, M.D., an
individual; FRANCENA ABENDROTH, M.D.,
an individual; CRAIGAN GRIFFIN, M.D., an
individual; GARY BUCHHOLZ, M.D., an
individual, and GARY D. BUCHOLZ, M.D.,
P.C., an Oregon professional corporation,
Defendants.
_________________________________________
KASUBHAI, United States Magistrate Judge:
Pro se Plaintiff Stephen Ireland filed this lawsuit against Defendants, asserting claims for
unlawful conspiracy in restraint of trade in violation of 15 U.S.C. § 1, and tortious intentional
1 — OPINION AND ORDER
interference with economic and business relationships in violation of Oregon common law.
Currently before the Court are Plaintiff’s Amended Motion for Partial Summary Judgment and
(ECF Nos. 153); Defendants Buchholz’s Motion for Summary Judgment (ECF No. 147);
Defendants BMC’s, Griffin’s, and Abendroth’s Motion for Summary Judgment (ECF Nos. 149);
and Defendants BNA’s, Bell’s, Schaben’s, and Schloesser’s Motion for Summary Judgment
(ECF No. 151). For the reasons set forth below, Defendants’ Motions for Summary Judgment
(ECF Nos. 147, 149, 151) are GRANTED; Plaintiff’s Amended Motion for Summary Judgment
(ECF No. 153) is DENIED.
BACKGROUND
Plaintiff and Defendants Schloesser, Bell, Buchholz, Schaben, Abendroth, and Griffin
(the “individual Defendants”) work as neurologists. Ireland Decl. ¶ 5, ECF No. 154. Prior to
September 2015, Plaintiff and the individual Defendants practiced in Bend, Oregon, with
hospital privileges at St. Charles Medical Center-Bend (“SCMC”). Id. ¶ 5. Insurance providers
“in the Bend service area require that physicians provide hospital coverage for their patients[.]”
Id. ¶ 49. Similarly, SCMC’s regulations require physicians to supply emergency call-coverage
for their patients. Id. ¶ 7. Emergency call-coverage in turn requires a physician to be within 40
minutes of travel distance to the hospital in the event their patients require immediate and inperson evaluation. Id. ¶¶ 42, 44. Failure to comply with SCMC’s call-coverage requirements
“can result in disciplinary action, including the loss of medical staff privileges.” Id. ¶ 46.
Plaintiff opened his own clinic, Neurology of Bend (“NOB”). Id. ¶ 4. At all relevant
times, Schloesser, Bell, and Schaben practiced for Bend Neurological Associates (“BNA”) while
Abendroth and Griffin were employed by Bend Memorial Clinic (“BMC”); Buchholz joined
BMC in April 2014, where he continued to practice until March 2016. Id. ¶¶ 35, 37, 40.
2 — OPINION AND ORDER
Beginning in Spring 2013, Plaintiff, BNA, and BMC were recruiting neurologists for
their respective practices. Id. ¶ 13. Bell, Schaben, Schloesser, Griffin, and Abendroth sent
Plaintiff a letter in June 2013, informing him that, beginning July 1, 2013, they would no longer
call share with Plaintiff and his practice.1 Id. ¶ 51. Bell, Schaben, Schloesser, Griffin, and
Abendroth sent Plaintiff a second letter on June 12, 2013, reiterating their intent to end call
sharing and instructing Plaintiff to make alternative arrangements for call-coverage. Id. at ¶ 52.
In response to Plaintiff’s request for further clarification, Abendroth sent an email several days
later stating, in relevant part:
[T]he neurology call group comprised of Drs. Abendroth, Bell,
Griffin, Schaben and Schloesser will not be providing any call
coverage for your patients. You are responsible for covering your
patients 24/7 or arranging appropriate coverage in your absence,
which includes coverage for your patients if they present to the ER
or are admitted to the hospital and require, in person, neurological
care. If you, or an appropriate covering provider, are not available
to respond in a timely manner, the medical staff president will be
notified by the ER or admitting provider to request coverage of the
patient as an unassigned patient, and an EMS report filed.
Id. ¶ 53. Buchholz was not listed in this letter but joined the other individual Defendants in
terminating their call coverage arrangement with Plaintiff on July 1, 2013. Id. ¶ 56.
Plaintiff later accepted a job in Meridian, Idaho, where he could obtain call coverage. Id.
¶¶ 17, 112. However, Plaintiff could not afford to relocate without first “leasing or selling [his]
medical office building [and equipment].” Id. And due to “the real estate downturn in 2007[,]”
Plaintiff sold his medical building as “soon as possible and, ultimately, sold it at a significant
discount to its likely future value.” Id. Plaintiff closed NOB, “resigned [his] hospital privileges”
“Call schedules are created in six-month intervals, beginning on the first of the year [such that]
July 1, 2013 marked the first day of the new six-month call schedule.” Ireland v. Bend
Neurological Assocs. LLC, No. 6:16-cv-02054-JR, 2017 WL 3404970, at *2 n.1 (D. Or. May 23,
2017) (bracketing in original), adopted, 2017 WL 3401268 (D. Or. Aug. 8, 2017) (“Ireland I”).
1
3 — OPINION AND ORDER
at SCMC, “terminated [his] contractual relationships with health insurance providers,” and
relocated to Idaho in August 2015. Id. ¶¶ 17, 19. Plaintiff’s family, however, elected to stay in
Bend, resulting in “emotional pain, suffering and humiliation” for Plaintiff. Id. ¶ 118.
PROCEDURAL HISTORY
Plaintiff filed this action in October 2016. Compl., ECF No. 1. In November 2016,
Defendants Buchholz, BNA, and BMC filed Motions to Dismiss for Failure to State a Claim,
which this Court ultimately granted. See ECF Nos. 7, 31, 32, 62, 72. Plaintiff filed a Motion for
Leave to File an Amended Complaint and a Motion for Disqualification, both of which were
denied in December 2017. ECF Nos. 79, 81, 89, 91. Plaintiff filed a second Motion for Leave to
File an Amended Complaint which the Court dismissed with prejudice. ECF Nos. 92, 108.
Plaintiff subsequently appealed the Court’s dismissal to the Ninth Circuit in April 2018.
ECF No. 111. The Ninth Circuit affirmed the dismissal of a per se violation of the Sherman Act;
however, the court vacated and remanded Plaintiff’s “rule of reason” Sherman Act claim as well
as the IIER claim under Oregon law. ECF No. 112; Ireland v. Bend Neurological Assocs., LLC,
748 F. App’x 166, 167 (9th Cir. 2019) (“Liberally construed, the proposed second amended
complaint contains sufficient allegations that defendants’ decision to terminate call coverage for
Ireland’s patients was intended to restrain competition unreasonably and actually caused injury
to competition that harmed consumer welfare.”); id. (“Because we conclude that the district court
erred by dismissing the “rule of reason” Sherman Act claim, we conclude that the district court
erred by dismissing Ireland’s IIER claim.”). However, the Ninth Circuit limited the scope of
Plaintiff’s antitrust claim on remand to the “rule of reason” framework and considered relevant
whether the putative wrongdoing unreasonably restrains competition and thereby harms
consumer welfare. Id. As noted, the parties have cross-moved for summary judgment.
4 — OPINION AND ORDER
STANDARD OF REVIEW
Summary judgment is appropriate if the pleadings, depositions, answers to
interrogatories, affidavits, and admissions on file, if any, show “that there is no genuine dispute
as to any material fact and the [moving party] is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). Substantive law on an issue determines the materiality of a fact. T.W. Elec. Servs.,
Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). Whether the evidence is
such that a reasonable jury could return a verdict for the nonmoving party determines the
authenticity of the dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The moving party has the burden of establishing the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the
absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings
and identify facts which show a genuine issue for trial. Id. at 324.
Special rules of construction apply when evaluating a summary judgment motion: (1) all
reasonable doubts as to the existence of genuine issues of material fact should be resolved
against the moving party; and (2) all inferences to be drawn from the underlying facts must be
viewed in the light most favorable to the nonmoving party. T.W. Elec., 809 F.2d at 630.
Generally, summary judgment in antitrust cases is inappropriate because of their factual
complexity. See Rickards v. Canine Eye Registration Found., 783 F.2d 1329, 1332 (9th Cir.
1986). However, a district court may award summary judgment when appropriate. The Supreme
Court’s decision in Matsushita Elec. Indus. Co. v. Zenith Radio Corp. clarified the standards for
resolving summary judgment cases in antitrust cases. 475 U.S. 574, (1986); see also Bhan v.
NME Hosps., Inc., 929 F.2d 1404 (9th Cir. 1991) (affirming district court’s grant of summary
judgment in antitrust case).
5 — OPINION AND ORDER
DISCUSSION
I.
Sherman Act “Rule of Reason” Claim
Defendants assert that summary judgment is appropriate on Plaintiff’s § 1 Sherman Act
Claim. The Ninth Circuit has explained regarding Rule of Reason Claims:
Our traditional framework for analyzing a rule of reason claim
under section one of the Sherman Act is well settled and easily
summarized. A section one claimant must initially prove three
elements: (1) an agreement or conspiracy among two or more
persons or distinct business entities; (2) by which the persons or
entities intend to harm or restrain competition; and (3) which
actually injures competition.
After the claimant has proven that the conspiracy harmed
competition, the fact finder must balance the restraint and any
justifications or pro-competitive effects of the restraint in order to
determine whether the restraint is unreasonable. This balancing
process requires a thorough examination into all the surrounding
circumstances.
Oltz v. St. Peter’s Cmty. Hosp., 861 F.2d 1440, 1445 (9th Cir. 1988) (citations omitted); Austin v.
McNamara, 979 F.2d 728, 738–740 (9th Cir. 1992) (listing the elements required for Rule of
Reason claim and concluding that failure to establish anyone of the three elements is dispositive)
(citation omitted); see also Austin v. McNamara, 979 F.2d 728, 738 (9th Cir. 1992) (“refusals to
‘cover’ [even if] somehow intended to lead to a denial of staff privileges” must be analyzed
pursuant to the Rule of Reason). Here, as explained below, Plaintiff’s inability to establish the
second element is fatal to his Rule of Reason claim. However, even if he were able to establish a
prima facie case, his claim fails under the mandatory balancing inquiry.
Summary judgment for a defendant is appropriate on a Sherman antitrust claim where a
Plaintiff fails to present “evidence that the agreement. . .was motivated by a desire to curtail
competition.” Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., 833 F.2d 208, 211 (9th Cir.
1987). Significantly, beyond his purely speculative conclusions, Plaintiff has not presented any
6 — OPINION AND ORDER
admissible evidence that Defendants’ decision to no longer call share with Plaintiff was
motivated by a desire to curtail competition within the meaning of a Sherman antitrust claim.
This alone makes summary judgment appropriate.2
Even assuming arguendo that Plaintiff could establish Defendants engaged in “an
agreement, conspiracy, or combination among two or more persons or distinct business entities,
which was intended to harm or unreasonably restrain competition, and actually caused injury to
competition,” and after “a thorough examination into all the surrounding circumstances,”
pursuant to a Rule of Reason analysis compels the Court to conclude that Plaintiff’s claim fails.
Oltz, 861 F.2d at 1445. Under the Rule of Reason burden shifting scheme, after Plaintiff
establishes harm to market competition, “the burden then shifts to defendants to offer evidence
that a legitimate objective is served by the challenged behavior.” Tuolumne, 236 F.3d 1159.
Assuming without deciding that Defendants decision to terminate their call coverage
relationship with Plaintiff harmed the market, Defendants’ decision to do so to optimize patient
health was legitimate. Defendants testified that “[Plaintiff’s] relationship with each of the
2
As to the third element, Plaintiff has additionally failed to establish an actual injury to
competition. Although Plaintiff argues that Defendants’ coordinated exclusion from the call
group forced him to relocate his practice out of state the evidence in the record fails to support
the assertion. As Defendants correctly note, even after the new call group was formed,
“[Plaintiff] continued to practice in Bend and at St. Charles Medical Center-Bend for several
years after the split.” BNA Mot. Summ. J. at 17, ECF No. 151. Plaintiff’s own deposition
testimony demonstrates that he continued to treat patients even after the ending of call coverage
with Defendants, signifying lesser harm than what Plaintiff testifies. Ireland Dec. Ex 18 (11:1519). Critically, the Ninth Circuit “has held that the elimination of a single competitor, standing
alone, does not prove anticompetitive effect.” Cty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d
1148, 1158–59 (9th Cir. 2001) (“Tuolumne”) (emphasis in original) (citing Austin v. McNamara,
979 F.2d 728, 739 (9th Cir.1992); Kaplan v. Burroughs Corp., 611 F.2d 286, 291 (9th Cir. 1979)
(“Even if sufficient proof of intent and causation are introduced, the elimination of a single
competitor, standing alone, does not prove anticompetitive effect.”). Moreover, Plaintiff testified
that he was not aware of evidence that prices for neurological services were impacted by
Defendants’ conduct. Ireland Decl., Ex. 18 (188:15–18).
7 — OPINION AND ORDER
neurologists became strained to varying degrees.” Ireland Dec. Ex. 18. (146:9–24, 148:13,
152:1–153:13). Defendants testified that on several occasions “[they] expressed concerns that
poor communication with [Plaintiff] was disruptive and harmful to patients.” Schaben Dec. Ex.
23 (106:06–08); see also Schloesser Dec. Ex. 24 (149:04–22); Bell Dec. Ex. 20 (132:23–
133:14); Abendroth Dec. Ex. 19 (91:25–92:07); Griffin Dec. Ex. 22 (70:09–14). BNA
Defendants expressed that “[p]atients complained to defendants about [Plaintiff’s] abrasive
bedside manner, describing it as ‘callous’ and ‘dismissive’ of their concerns.” Bell Dec. Ex. 20
(84:17–25). BNA Defendants further recalled how “[p]atients and physicians reported multiple
instances where [Plaintiff] disparaged [Defendants’] clinical acumen, suggesting they were
inferior physicians with poor medical judgment. Ireland Dec. Ex. 18 (98:15–99:05); Bell Dec.
Ex. 20 (84:17–25).
Furthermore, “they were not willing to share assigned call coverage ‘because the
relationship had become non-collegial enough that it would be a problem . . . for patient care.”
BNA Mot. Summ. J. at 9 (citing Schaben Dec. Ex. 23 (106:06–08, 125:02–07); ECF No. 151.
Defendant Schloesser testified “he was no longer ‘comfortable’ sharing a call with [Plaintiff],”
while Defendant Bell expressed “that it was ‘potentially dangerous’ for his patients to share call
with [Plaintiff] because of [Plaintiff’s] hostility and aggression towards hospital staff and
neurologist peers.” Schloesser Dec. Ex. 24 (149:04-22); Bell Dec. Ex. 20 (132:23–133:14).
In correspondence with a fellow neurologist, Plaintiff decried:
To be fair, I find [Defendant Griffin] and [Defendant Schaben] to
lack basic competence. So do [Defendants Bell and Schloesser].
[Defendant Bell] is dim-witted and arrogant; [Defendant
Schloesser] is dim-witted and unable to focus due to serious
psychodynamic conflicts. [Defendant Buchholz] combines a weird
inability to see the forrest [sic] for the trees with declining mental
acuity and dishonesty. Like [Defendant Bell], [Defendant
Buchholz] likes to prey on referring physicians by advancing
8 — OPINION AND ORDER
interesting, but preposterous, diagnoses. Have you read [Defendant
Buchholz’s] notes? You can tell [Defendant Buchholz is] not all
there.
Id. at 23 (citing Ex. 7), ECF No. 151. The evidence in the record reflects that each Defendant
suffered from a combative relationship with Plaintiff that harmed the quality of care that patients
received. The Ninth Circuit has held concerns for “optimizing patients’ health . . . certainly are
legitimate” and the Court finds no reasons to depart from that principle here. Tuolumne, 236 F.3d
at 1159. In other words, in “balanc[ing] the harms and benefits” of Defendants’ decision to
terminate their call coverage relationship with Plaintiff “to determine whether they are
reasonable, . . . any anticompetitive harm [was] offset by the procompetitive effects of
[Defendants’] effort to maintain the quality of patient care that it provides. Id.; see also Weiss v.
York Hosp., 745 F.2d 786, 820 (3rd Cir. 1984) (“One factor in the effective and efficient running
of a hospital is a medical staff that can work together and be courteous to patients and staff.
Doctors who have a history of trouble in interpersonal relations can legitimately be excluded
because, if admitted, they will reduce the effectiveness of the medical staff, thereby reducing the
ability of the hospital to provide top-flight service. In sum, doctors who have trouble getting
along with other people will reduce efficiency, thereby reducing the hospital’s competitive
position, and, therefore, exclusion of such doctors is pro-competitive and permissible under the
rule of reason.”).
As such, Plaintiff’s § 1 Sherman Act claim fails as a matter of law. Defendants motions
for summary judgment are GRANTED. Plaintiff’s motion is DENIED.
II.
Plaintiff’s State Law IIER Claim
Defendants next move for summary judgment on Plaintiff’s IIER claim. In order to
prevail on an IIER claim at trial, a plaintiff must prove the following six elements: (1) the
9 — OPINION AND ORDER
existence of a professional or business relationship; (2) intentional interference with that
relationship; (3) by a third party; (4) accomplished through improper means or for an improper
purpose; (5) a causal effect between the interference and damage to the economic relationship;
and (6) damages. McGanty v. Staudenraus, 321 Or. 532, 901 P.2d 841, 535 (1995). Because the
Court finds there is no genuine issue of material fact relating to the fourth element—whether an
“interference” was accomplished through improper means or for an improper purpose—and
because all elements must be established at trial if Plaintiff is to prevail, this failure is dispositive
and the Court need not address the remaining elements.
Defendants contend that because their decision to cease call coverage with Plaintiff was
not accomplished through improper means or for an improper purpose, Plaintiff’s IIER claim
fails. Buchholz Mot. Summ. J. at 26, ECF No. 147. Plaintiff contends that Defendants
intentionally interfered with Plaintiff’s business and contractual relations through the improper
means of combining to refuse to share call coverage with Plaintiff and his clinic. Ireland Decl. ¶¶
5, 71, ECF No. 154.
The Oregon Supreme Court has found that a defendant’s interference through improper
purpose or improper means is a necessary element of the plaintiff’s case. Straube v. Larson, 287
Or. 357, 374 (1979). To establish improper purpose, a plaintiff must prove that the defendant did
not have a legitimate purpose, shown with direct evidence, for actions which resulted in injury to
a plaintiff. Id. “Improper means” must be independently wrongful by reason of statutory or
common law, and include “violence, threats, intimidation, deceit, misrepresentation, bribery,
unfounded litigation, defamation and disparaging falsehood.” Conklin v. Karban Rock, Inc., 94
Or. App. 593, 601 (1989).
10 — OPINION AND ORDER
In other words, the means must be wrongful in some manner other than simply causing
the damages claimed as a result of the conduct. Id.; see also Straube, 287 Or. 357 (1979) (finding
that the plaintiff’s conspiracy claim fails even where the defendants deprived the plaintiff of his
staff privileges in the hospital). To prevail, a plaintiff must establish “not only . . . that [a]
defendant intentionally interfered with his business relationship but also that [a] defendant had a
duty of non-interference, i.e., that [a defendant] interfered for an improper purpose rather than
for a legitimate one, or that [a] defendant used improper means which resulted in injury to [a]
plaintiff.” Straube, 287 Or. 357 (1979)
Here, Defendants assert that Plaintiff cannot demonstrate that Defendants acted with
improper purpose. Significantly, the record reflects no direct evidence that Defendants acted with
improper purpose. Defendants testified to ceasing call coverage for the legitimate purpose of
maintaining the quality of patient care. BNA Mot. Summ. J. at 9 (citing Schaben Dec. Ex. 23
(106:06–08, 125:02–07), ECF No. 151. Defendants repeatedly expressed “they were not willing
to share assigned call coverage ‘because the relationship had become non-collegial enough that it
would be a problem . . . for patient care.” Id.
Defendant Schloesser testified “he was no longer ‘comfortable’ sharing a call with
[Plaintiff],” while Defendant Bell expressed “that it was ‘potentially dangerous’ for his patients
to share call with [Plaintiff] because of [Plaintiff’s] hostility and aggression towards hospital
staff and neurologist peers.” Buchholz Mot. Summ. J. at 20, ECF No. 147; see also BMC Mot.
Summ. J. at 18, ECF No. 149; BNA Mot. Summ. J. at 27, ECF No. 151.
Defendants testified that they were not aware that Plaintiff intended to leave the Bend
market; instead, Defendants understood that Plaintiff was searching for another neurologist to
join his practice after the call-sharing agreement ended. Buchholz Mot. Summ. J. at 17, ECF No.
11 — OPINION AND ORDER
147. Plaintiff’s inability to find call coverage does not create a genuine dispute of material fact as
to whether Defendants’ purpose was improper because Oregon courts have flatly rejected that
argument. See, e.g., Empire Fire & Marine Ins. Co. v. Fremont Indem. Co., 90 Or. App. 56
(1988) (“even if [d]efendant knew that [plaintiff] could not [fulfill] its [contracts], that does not
raise a question of fact as to . . . [d]efendant’s [purpose].”). Furthermore, the Oregon Supreme
Court has previous found that “incidental interference” with a plaintiff’s ability to engage in
regular business relationships with its economic relationships is not actionable. Wampler v.
Palmerton, 250 Or. 65, 439 P.2d 601 (1968).
Accordingly, Plaintiff has failed to establish that Defendants acted with “improper means
or for an improper purpose” as a matter of law. McGanty, 321 Or. 532. As such, Defendants’
Motions for Summary Judgment as to Plaintiff’s IIER claim are GRANTED.
CONCLUSION
For the reasons above, Defendants’ Motions for Summary Judgment (ECF Nos. 147, 149,
151) are GRANTED. Plaintiff’s Amended Motion for Summary Judgment (ECF No. 153) is
DENIED.3
DATED this 31st day of March 2021.
s/ Mustafa T. Kasubhai
MUSTAFA T. KASUBHAI (He / Him)
United States Magistrate Judge
3
Because the Court finds granting Defendants’ Motions for Summary Judgment appropriate, it
need not resolve the following motions that are accordingly DENIED as moot: BMC’s Motion to
Strike and Limit Expert Testimony (ECF No. 150); Plaintiff’s Amended Motion for Partial
Summary Judgment (ECF No. 153); Plaintiff’s Motion to Recharacterize Srinagesh as Principal
Expert (ECF No. 159); Plaintiff’s Motion to Amend/Correct Declaration (ECF No. 175); and
Plaintiff’s Motion for Leave to File Surreply (ECF No. 193).
12 — OPINION AND ORDER
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