Novak v. Somerset Hosp. – Aug. 2015 (Summary)

ANTITRUST

Novak v. Somerset Hosp., No. 14-4354 (3d Cir. Aug. 20, 2015)

The United States Court of Appeals for the Third Circuit affirmed an order of summary judgment in favor of a community hospital and its board members in a lawsuit brought by a general surgeon who alleged the hospital and board members conspired to terminate his privileges so the hospital could “reduce the likelihood that its patients could be treated at [a larger tertiary care hospital in the area],” illegally restraining trade in the area in violation of the Sherman Act and Clayton Act. The community hospital terminated the surgeon’s privileges after he performed two surgeries without proper authority. He still retained privileges at the tertiary care hospital and maintained a private office close to the community hospital. The court of appeals rejected the surgeon’s arguments related to antitrust standing and market definition. The district court found no rational basis for the surgeon’s argument that the surgical services performed at the community hospital were not interchangeable with the surgical services provided at the large tertiary care hospital, and were not adequate substitutes for each other. The court of appeals similarly rejected the surgeon’s argument that the community hospital “shut [him] out” of the relevant geographic market by terminating his privileges. The court held the surgeon’s definition of the relevant geographic market, the community hospital, was illogical based upon the surgeon’s expert’s own testimony: 32% of the patients at the community hospital were treated at other hospitals in the area.