Antitrust Law Daily Wrap Up, ANTITRUST—D. Ore.: Settlement enforced in physician’s peer review action against hospital, (Oct 7, 2015)

By Linda O’Brien, J.D., LL.M.

In an action by a physician against a hospital and several other physicians regarding the hospital peer review process that resulted in restrictions on his clinical privileges, the physician’s then-counsel was acting within the scope of his authority to extend a settlement offer, which was subsequently accepted by the defendants, the federal district court in Portland, Oregon has ruled. Thus, the defendants’ motion to enforce the settlement agreement was granted and the case dismissed with prejudice (Roberts v. Legacy Meridian Park Hospital, Inc., October 5, 2015, Simon, M.).

Dr. Warren Roberts was an African-American neurological surgeon who practiced medicine in Oregon and owned the Aspen Spine and Neurosurgery Center. In March 2011, Roberts obtained clinical privileges at Legacy Meridian Park Hospital. Drs. Francisco Soldevilla, Robert Tatsumi, and Timothy Keenan operated competing spine and neurosurgical practices, and were the only spine surgeons with clinical privileges at the hospital, other than Roberts. In October 2011, Legacy Meridian Park Hospital initiated a peer review of Roberts’ care of a specific surgical patient, which resulted in a precautionary suspension of his clinical privileges at the hospital and imposed restrictions on his ability to perform lumbar procedures.

In May 2013, Roberts filed suit against the hospital and physicians. In addition to the antitrust and unfair trade practices claims under Oregon’s Unlawful Trade Practices Act (UTPA), he alleged that the peer review, precautionary suspension, and restrictions on his clinical privileges were based on his race. In January 2014, the court denied the defendants’ moved to dismiss regarding the antitrust claims but dismissed the plaintiff’s UTPA and discrimination claims.

In March 2014, Roberts changed counsel. In October 2014, after discovery commenced, Roberts’ then-counsel informed Roberts of the firm’s intent to withdraw and recommended the possibility of settlement to resolve the litigation. After Roberts had settlement discussions with the president of Legacy, he notified his counsel of his agreement to dismiss the case without costs to either party. Roberts’ counsel extended the settlement offer to the defendants, which was accepted. Roberts again contacted his counsel and requested that the case not be dismissed until they could discuss it further. In November 2014, Roberts notified his counsel that he needed additional time to consider the case’s dismissal. After Roberts’ counsel withdrew from the case, the defendants jointly moved to enforce the settlement agreement. Roberts retained other counsel and opposed the motion.

The court found that the lawsuit had been fully settled by an agreement reached with the plaintiff through his then-counsel acting within the scope of his express authority. A motion to enforce a settlement agreement essentially is an action to specifically enforce a contract, the court explained.

Roberts’ contention that his former counsel lacked the authority to extend any settlement offer to the defendants was rejected. The court noted that, although Roberts notified his then-counsel in October 2014 that he did not want the case dismissed until they could discuss the matter further, he did not direct his counsel to rescind the settlement offer that he had authorized him to extend. It was not until November 2014 that Roberts told his counsel that he had changed his mind about the offer and no longer agreed to dismiss the suit.

Finally, there was no dispute that the offer and acceptance contained valid consideration and there was detrimental reliance on the part of the defendants. Therefore, the parties entered into a valid and enforceable settlement agreement to dismiss all claims without costs to either party, the court concluded.

The case is No. 3:13-cv-01136-SI.

Attorneys: Micah D. Fargey (Fargey Law PC) for Warren G. Roberts and Aspen Spine and Neurosurgery Center, P.C. Keith S. Dubanevich (Stoll Stoll Berne Lokting & Shlachter, P.C.) for Legacy Meridian Park Hospital, Inc. Robert D. Scholz (MacMillan Scholz & Marks, P.C.) for Northwest Neurological Associates, LLC and Francisco X. Soldevilla. Elizabeth E. Lampson (Davis Rothwell Earle & Xochichua, P.C.) for Pacific Spine Specialists, LLC. Karen M. O’Kasey (Hart Wagner, LLP) for Timothy L. Keenen. Jeffrey W. Hansen (Smith Freed & Eberhard, P.C.) for Robert L. Tatsumi.

Companies: Aspen Spine and Neurosurgery Center, P.C.; Legacy Meridian Park Hospital, Inc.; Northwest Neurological Associates, LLC; Pacific Spine Specialists, LLC

Cases: Antitrust OregonNews