Antitrust Law Daily Wrap Up, ANTITRUST—9th Cir.: Physicians denied preliminary injunction against medical center over patient records, (Dec 23, 2015)

By Linda O’Brien, J.D., LL.M.

A district court properly denied injunctive relief to a radiation oncology practice and its member physicians that sought to preclude a competing medical center from reviewing certain patient records during discovery, since the plaintiffs’ complaint did not contain allegations of improper review and use of confidential patient information, the U.S. Court of Appeals in San Francisco has held. Thus, the district court order was affirmed (Pacific Radiation Oncology, LLC v. The Queen’s Medical Center, December 22, 2015, Tallman, R.).

Pacific Radiation Oncology, LLC and PRO Associates, LLC (collectively, PRO) consists of a group of physicians who specialize in radiation oncology. PRO provided services to its patients at The Queen’s Medical Center (QMC) and one of its competitors, The Cancer Center of Hawaii (TCCH), in which some PRO members held a financial interest. In 2011, QMC transitioned to a “closed-facility” model under which PRO physicians could not practice at QMC unless they accepted exclusive employment with QMC and divested any interest held in TCCH.

In January 2012, PRO brought suit against QMC, alleging unfair, deceptive, and anticompetitive trade practices. In November 2014, the court declined to dismiss QMC’s counterclaim for “unfair methods of competition” (UMOC) under Hawaii’s unfair competition law. During discovery, PRO sought a preliminary injunction to preclude QMV’s review of records from TCCH pursuant to a subpoena as a violation of the Health Insurance Portability and Accountability Act (HIPPA) and the Hawaii Constitution. The court denied the injunction and PRO appealed.

The district court did not abuse its discretion in denying injunctive relief because the requested relief was based on claims that were not alleged in the complaint, the appellate court determined. In adopting the rule set forth in Devose v. Herrington, 42 F.3d 470 (1994), the appellate court found that “there must be a relationship between the injury claimed in the motion for injunctive relief and the conduct asserted in the underlying complaint.” PRO’s motion was based on potential misconduct that was entirely unrelated to its unfair trade practices claims asserted in the complaint. The complaint related only to the retention of hospital privileges and damages from unfair competition and contained no allegations of improper review and use of confidential patient information.

The appellate court found unpersuasive PRO’s reliance on general notice pleading requirements to justify how QMC’s privacy violations were relevant to its unfair trade practices claims. Furthermore, PRO conceded that its motion for injunctive relief was unrelated to the claims underlying its complaint. Since there was not a sufficient nexus between PRO’s claim of injury to patient privacy in its motion and the unfair trade practices claims in its underlying complaint, the district court properly denied the motion.

The case is No. 14-17050.

Attorneys: Clare E. Connors (Davis Levin Livingston Grande) for Pacific Radiation Oncology, LLC and PRO Associates, LLC. Paul Alston (Alston Hunt Floyd & Ing) for The Queen's Medical Center.

Companies: Pacific Radiation Oncology, LLC; PRO Associates, LLC; The Queen's Medical Center; Cancer Center of Hawaii, LLC

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