Holland & Hart Healthcare Law Blog

“Barking” Radiologist Bites Hospital for $4 Million Dollars.

On March 4, 2008, this blog published a story about St. James Healthcare in Butte, Montana and its having obtained an injunction against a radiologist, Dr. Jesse Cole, enjoining him from allegedly threatening staff and contacting prospective radiologists being recruited to St. James. The article was entitled “Montana Court Muzzles Barking Radiologist.”  Well, the tide has turned and Dr. Cole has taken a bite out of the hospital and its parent company, the Sisters of Charity of Leavenworth Health System to the tune of $4 Million dollars.

 

MONOPOLY AND THE BIG BAT THEORY IN ANTITRUST LAW

It perhaps deserves repeating that it is not illegal to be a monopoly in this country. In the 2004 case of Verizon Communs., Inc. v. Law Offices of Curtis v. Trinko, LLP, 540 U.S. 398, 407 (2004), the United States Supreme Court reasserted the rule, 

The mere possession of monopoly power and the concomitant charging of monopoly prices is not only not unlawful;  an important element of the free-market system. The opportunity to charge monopoly prices - -at least for a short period-- is what attracts “business acumen” in the first place; it induces risk taking that produces innovation and economic growth. To safeguard the incentive to innovate the possession of monopoly power will not be found unless it is accompanied by an element of anticompetitive conduct.

In  a sense the achievement of a monopoly is the brass ring of business. It is the ultimate success of having whipped the competition and being the last man standing. Assuming that the monopoly is achieved by fair competition, innovation, superior products, business smarts or lucky accident there is nothing wrong with charging what the traffic will bear until such time as a competitive counterweight arrives in the market.

Physician Recruitment Mutual Mistake

This is an extension to our previous post on Physician Recruitment Fraud (January 24, 2007).  There is more and more litigation surfacing between hospitals and recruited physicians when hospitals lure physicians into a new startup practice in their market and the physician is unable to sustain a viable practice in the new community.  The physician is forced to move on to earn a livelihood and the hospital for regulatory reasons feels it is obligated to enforce its contractual obligation with the physician for the repayment of the money if the physician leaves before the forgiveness period (typically 3 years). The physician did not sign on for serving in an Americorp or Peace corps lifestyle and raises a number of defenses including fraud in the inducement and mutual mistake.

Referral Threat Exposes Cardiology Practice To Inference Claim by Surgeon

In Carl Warren Adams, M.D. v. Rapid City Regional Hospital, Inc., Cardiology Associates, P.C. et al.,  Civ.-04-5067-RHB (D. S. D. 2007), the Plaintiff, a Cardiac Surgeon from Colorado, brought a an action against Rapid City Regional Hospital, Inc.("RCRH") alleging breach of contract of employment and related claims resulting from his prolonged negotiations  with the hospital. RCRH moved for summary judgment on all claims and the District Court granted the dismissal of all claims based on the lack of mutual assent of the parties to all the major terms of the agreement.  Dr. Adams also sued Cardiac Associates, P.C., and some of its officers and physicians asserting interference with his relationship with RCRH and defamation.  The court granted dismissal of the defamation claim on the basis that Dr. Adams would not be able to show the defamation from hospital proceedings because of the bar to his access to peer review information under South Dakota law.  The Court, however, did hold that Dr. Adams had made a sufficient showing to proceed against the cardiologists under a theory of wrongful interference with prospective economic advantage.