Antitrust Law Daily Wrap Up, TOP STORY—2nd Cir.: Antitrust claims based on “sham peer review” properly dismissed, (Jul 17, 2014)

By Jeffrey May, J.D.

Antitrust claims raised by an orthopedic surgeon whose privileges at a Middletown, New York, hospital were suspended were properly dismissed, the U.S. Court of Appeals in New York City has ruled in an unpublished opinion. However, the federal district court in White Plains, New York, was premature in dismissing the employment discrimination claims of the Asian Indian-American physician. Dismissal was affirmed in part and vacated in part, and the matter was remanded for further consideration (Bhanusali v. Orange Regional Medical Center, July 16, 2014, Per Curiam).

The physician had contended that Orange Regional Medical Center and Crystal Run Health Care LLP, as well as various doctors affiliated with those entities, conspired in a “sham peer review” to deny him promotion, advancement opportunities, medical privileges, and clinical contracts. On appeal, the complaining physician took issue with the district court’s holding that he lacked standing because he failed to allege an antitrust injury. The district court had found allegations that patient choice or quality of care was limited by the removal of this one orthopedic surgeon to be wholly conclusory.

The appellate court concluded that, even assuming that the complaining physician had antitrust standing under the Sherman Act, dismissal of the antitrust claim was appropriate. The district court properly held that his allegations of harm to the marketplace and the existence of a conspiracy to engage in an “unlawful group boycott” were conclusory and implausible.

Discrimination claim. The appellate court overturned dismissal of the discrimination claim. The plaintiff had alleged that he received peer reviews or was disciplined for surgeries that did not result in either patient complaints or negative patient outcomes, while younger, white physicians who engaged in conduct that caused significantly worse outcomes for patients, including death, avoided peer review or discipline. On a motion to dismiss, these allegations sufficed to plausibly support an inference of discrimination, according to the appellate court.

The case is 13-3426-cv.

Attorneys: Seth Marcus (Leffler Marcus & McCaffrey LLC) for Govindlal K. Bhanusali. Douglas P. Catalano (Fulbright & Jaworski LLP) for Orange Regional Medical Center. Michelle Eileen Phillips (Jackson Lewis PC) for Crystal Run Healthcare LLP.

Companies: Orange Regional Medical Center; Board of Directors of the Orange Regional Medical Center; Crystal Run Healthcare LLP

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