Antitrust Law Daily Wrap Up, ANTITRUST—NDOkla: Hospital Awarded Attorney Fees as Substantially Prevailing Party in Peer Review Dispute, (Oct 29, 2012)

By William Zale, J.D.

A Tulsa, Oklahoma-area hospital was awarded $732,558 in attorney fees under the Health Care Quality Improvement Act (HCQIA) as a substantially prevailing party in a suit brought by a cardiovascular and thoracic surgeon who asserted federal antitrust, Oklahoma antitrust, and other claims relating to peer review proceedings, the federal district court in Tulsa has ruled (Cohlmia v. St. John Medical Center, October 26, 2012, Frizzell, G.) The court concurred with a magistrate’s finding that the surgeon’s claims were “unreasonable and without foundation at the onset of the case, as discovery developed, and ultimately through granting of judgment on the merits four years later.”

The Tenth Circuit affirmed the district court’s grant of summary judgment on all claims, in Cohlmia v. St. John Medical Center, 2012-2 Trade Cases ¶78,052, (Sept. 7, 2012). In so ruling, the appellate court concluded that with respect to the HCQIA issue, the surgeon had not rebutted the presumption that a professional review action is presumed to have met standards for HCQIA immunity. Concerning the federal antitrust claims, the circuit court agreed that the surgeon had presented no evidence that his loss of privileges resulted in antitrust injury; that the surgeon had not demonstrated St. John had sufficient market power to control prices or exclude competition; and that the surgeon had failed to produce evidence of conspiracy. With respect to the state antitrust claims, the Tenth Circuit concurred with the district court’s finding that the surgeon had provided no evidence that St. John violated state antitrust law or specifically, the “essential facility doctrine,” the court said.

Congress enacted HCQIA to improve the quality of medical care by promoting effective professional peer review. The law protects participants in peer review activities from liability for damages stemming from a review, so long as the review satisfies standards set out in 42 U.S.C. § 11112. HCQIA provides that a substantially prevailing defendant is entitled to recover attorney fees. Prevailing defendants are entitled to an award of attorney fees in defending against an unsuccessful challenge to their HCQIA immunity if (1) they are among the persons covered by §11111; (2) the standards set forth in §11112(a) were followed; (3) they substantially prevailed; and (4) the plaintiff’s conduct during the litigation was frivolous, unreasonable, without foundation or in bad faith, the court observed, citing Meyers v. Columbia/HCA Healthcare Corp., 341 F.3d 461, 472-73 (6th Cir. 2003).

The court found that the first three requirements for an award of attorney fees clearly were satisfied. As to the fourth requirement, the court determined that the surgeon’s claims were—at best—unreasonable and without foundation and—at worst— frivolous and asserted in bad faith. Although the antitrust claims also survived the motion to dismiss, the court early on expressed skepticism of their viability based on the number of hospitals in the Tulsa area. The court rejected the argument that the claims were reasonable on the theory that only the hospital prevailed on the merits of his claims; the remaining defendants settled with him.

In challenging the reasonableness of the amount of the award, the surgeon argued, without authority, that the fee should be apportioned among specific claims, and no attorney fee should have been awarded for claims dismissed early and/or by stipulation of the parties. The court concurred in the amount of the award recommended by the magistrate.

The case is No. 05-CV-384-GKF-TLW.

Brad Roberson (Pignato Cooper Kolker & Roberson PC) for plaintiffs.

James W. Connor, Jr. (Richards & Connor) for defendants.

Cases: Antitrust OklahomaNews