Antitrust Law Daily Wrap Up, ANTITRUST—10th Cir.: Hospital entitled to attorney fees in defending physician’s “unreasonable” suit, (Apr 22, 2014)

By Jeffrey May, J.D.

The U.S. Court of Appeals in Denver has upheld an award of $732,558 in attorney fees under the Health Care Quality Improvement Act (HCQIA) to a Tulsa, Oklahoma-area hospital in an antitrust suit brought by a surgeon whose staff privileges were suspended. The district court’s award of attorney fees (2012-2 Trade Cases ¶78,109) was not an abuse of discretion (Cohlmia v. St. John Medical Center, April 21, 2014, Tymkovich, T.).

St. John Medical Center was a substantially prevailing party under the HCQIA in the suit brought by Dr. George Cohlmia that involved frivolous and unreasonable claims and conduct, the court held. The long-running action was sparked by the hospital’s termination of Cohlmia’s staff privileges and Cohlmia’s subsequent loss of credentials at other hospitals.

The St. John suspension came after a peer review proceeding determined that Cohlmia failed to follow proper medical protocols in performing two surgeries. The surgeries resulted in the death of one of the patients and the permanent disfigurement of the other.

In a 2012 decision (693 F.3d 1269, 2012-2 Trade Cases ¶78,052), the appellate court upheld summary judgment in favor of the hospital on the physician’s federal and state antitrust law claims. The decision was based in large part on the application of the HCQIA, which protects participants in a professional review action from antitrust liability. The HCQIA also provides for attorney fees for defendants who meet the statutory requirements for a professional review action, where the plaintiff’s claim or conduct during the litigation is “frivolous, unreasonable, without foundation, or in bad faith.”

The appellate court agreed with the district court’s conclusion that the suit was “at best—unreasonable and without foundation and—at worst—frivolous and asserted in bad faith.” Rejected was the physician’s argument that the district court should not have considered the strength or weakness of his entire suit but instead should have limited its review to whether the challenge to the hospital’s assertion of HCQIA immunity was unreasonable or without foundation. Cohlmia unsuccessfully argued that the statute permitted an award of attorney fees only if the challenge to HCQIA immunity was frivolous.

The district court had found that Cohlmia’s federal and state antitrust claims and tort claims were ultimately without foundation. Cohlmia had failed to rebut St. John’s assertion of HCQIA immunity or otherwise present evidence supporting the substantive elements of his claims. On appeal, the appellate court concluded that Cohlmia had not presented any evidence to suggest he suffered an antitrust injury or damages. Thus, the award of fees was appropriate.

The case is No. 12-5188.

Attorneys: Rabindranath Ramana (Calvert Law Firm) for George Cohlmia. William H. Spitler (Richards & Connor, PLLP) for St. John Medical Center.

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