Frederick Nahas v. Shore Medical Center ( 2020 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 19-3433
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FREDERICK NAHAS, M.D.,
Appellant
v.
SHORE MEDICAL CENTER; STEVEN P. NACHTIGALL;
JEFFREY GOSIN; PEYTON DEARBORN; PETER JUNGBLUT;
MEDICAL EXECUTIVE COMMITTEE; LEONARD GALLER
__________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 1-13-cv-06537)
Honorable Robert B. Kugler, U.S. District Judge
__________
Submitted Under Third Circuit L.A.R. 34.1(a)
on September 17, 2020
Before: KRAUSE, RESTREPO, and BIBAS, Circuit Judges
(Opinion filed: September 18, 2020)
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OPINION *
__________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
KRAUSE, Circuit Judge.
Frederick Nahas appeals the District Court’s summary judgment in favor of his
employer, Shore Medical Center, its Medical Executive Committee, and various medical
officers (collectively Shore Medical), on his claims under Section 1 of the Sherman
Antitrust Act, 15 U.S.C. § 1, and 42 U.S.C. § 1981, as well as the dismissal of his breach
of contract claim under state law. For the reasons that follow, we will affirm.
A. Discussion 1
On appeal, Nahas contends first, that the District Court erred in rejecting his
antitrust claim for lack of standing; second, that the denial of his privileges by Shore
Medical constituted race discrimination; and third, that the District Court erred in
dismissing his breach of contract claim for lack of subject matter jurisdiction. We address
each argument below. 2
1. Nahas’s Sherman Act Claim
Where a private plaintiff asserts an antitrust claim, we require that, in addition to
Article III standing, he demonstrate “antitrust standing” to sue. While not jurisdictional,
that inquiry “focus[es] on the nature of the plaintiff’s alleged injury” and asks “whether it
1
Because we write only for the parties, who are familiar with the background of this
case, we need not reiterate the factual or procedural history. The District Court had
jurisdiction under 28 U.S.C. § 1331, and we have jurisdiction under 28 U.S.C. § 1291. We
review de novo a district court’s grant of summary judgment under Rule 56. See Faush v.
Tuesday Morning, Inc., 808 F.3d 208, 215 (3d Cir. 2015); Fed. R. Civ. P. 56(a).
2
The Healthcare Quality Improvement Act (HCQIA) does not immunize officials
from civil rights claims, 42 U.S.C. § 11111(a)(1)(D), or actions seeking injunctive relief,
Gordon v. Lewistown Hosp., 423 F.3d 184, 191 n.1 (3d Cir. 2005). We therefore address
Nahas’s federal antitrust and race discrimination claims on the merits.
2
is of the type that the antitrust statute was intended to forestall.” Hartig Drug Co. v. Senju
Pharm. Co., 836 F.3d 261, 269 (3d Cir. 2016) (quoting Associated Gen. Contractors of
Cal. v. Cal. State Council of Carpenters, 459 U.S. 519, 538, 540 (1983)) (internal quotation
marks omitted); see Ethypharm S.A. Fr. v. Abbott Labs., 707 F.3d 223, 232 (3d Cir. 2013)
(citing City of Pittsburgh v. W. Penn. Power Co., 147 F.3d 256, 264 (3d Cir. 1998)).
To establish antitrust injury a plaintiff must show that the injury “reflect[s] the
anticompetitive effect either of the violation or of anticompetitive acts made possible by
the violation,” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977), or,
put differently, that the “challenged conduct affected the prices, quantity or quality of
goods or services” available or had a competition-reducing effect beyond the plaintiff’s
“own welfare.” Mathews v. Lancaster Gen. Hosp., 87 F.3d 624, 641 (3d Cir. 1996)
(quoting Tunis Bros. Co. v. Ford Motor Co., 952 F.2d 715, 728 (3d Cir. 1991)). In the
context of a denial of physician privileges, in particular, we have held that unless the
restriction significantly reduces the services available to patients in the area or “completely
extinguish[es] [the practitioner’s] ability to provide . . . services,” it does not constitute an
antitrust injury. Id.
Applying these principles here, it is clear that Nahas failed to make the requisite
showing. Nahas argues that Shore Medical’s denial of his application prevented him from
participating in the relevant market, thereby placing him at a competitive disadvantage.
Specifically, he asserts that he was unable to provide certain services to his hospitalized
patients and that seeking privileges elsewhere would disrupt his patient referral patterns,
and he points us to expert reports finding that the economic reality of the market makes
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pursuing any alternatives potentially harmful to his practice. From this he suggests he
suffered “the type [of injury] that the antitrust statute was intended to forestall.” Hartig
Drug Co., 836 F.3d at 269.
We are not persuaded. Though he complains about the limitation placed by Shore
Medical on his ability to practice, that is not an injury that “affected the prices, quantity or
quality of goods or services” available to consumers or that had an anticompetitive effect
beyond Nahas’s “own welfare.” Mathews, 87 F.3d at 641. Not only does Nahas retain
general and vascular surgery privileges at Shore Medical, but he also has unrestricted
endovascular privileges at a nearby facility and is capable of applying for similar privileges
elsewhere. The restriction of Nahas’s endovascular privileges thus does not “completely
extinguish [his] ability to provide . . . services” and bar him from the relevant market, nor
does it deny patients access to services as consumers. Id.
Even drawing “[a]ll reasonable inferences . . . in favor of the nonmoving party,” as
we must on summary judgment, there was insufficient evidence of an antitrust injury.
Goldenstein v. Repossessors Inc., 815 F.3d 142, 146 (3d Cir. 2016) (internal quotation
marks omitted); see Fed. R. Civ. P. 56(a). The District Court therefore did not err in
concluding Shore Medical was entitled to judgment as a matter of law.
2. Nahas’s § 1981 Claim
We analyze Nahas’s § 1981 claim for race discrimination under the familiar burden-
shifting framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973): first,
the plaintiff must establish “a prima facie case of . . . discrimination,” id.; if he succeeds,
“[t]he burden then must shift to the employer to articulate some legitimate,
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nondiscriminatory reason for the employee’s rejection,” id.; and if the employer meets its
burden, the plaintiff must show that the “stated reason[s] for [his] rejection [were] in fact
pretext” for discrimination, id. at 804.
The dispute here centers on this third step.3 To establish pretext at summary
judgment, a plaintiff must provide evidence that “1) casts sufficient doubt upon . . . [the]
reasons proffered . . . so that a factfinder could reasonably conclude that each reason was
a fabrication” or “2) allows the factfinder to infer that discrimination was more likely than
not a motivating or determinative cause of the adverse employment action.” Fuentes v.
Perskie, 32 F.3d 759, 762 (3d Cir. 1994). Such evidence may include preferential treatment
of other employees who are similarly situated. See McDonnell Douglas, 411 U.S. at 804.
As evidence that Shore Medical’s proffered reasons satisfy these conditions, Nahas
asserts that the application criteria were applied unequally and that he was “objectively
more qualified” than the candidate conditionally approved. Appellant’s Br. 52. He
focuses, in particular, on the supervision requirement as “a classic post hoc fabrication”
applied strictly to him and not others, Appellant’s Br. 54, and while he does not dispute his
own failure to satisfy it, he takes issue with Shore Medical’s grant of privileges to a non-
Arab candidate who had not yet completed that requirement and who allegedly possessed
3
The District Court held that Nahas established a prima facie case and that certain
application criteria were contrived. Because Nahas does not dispute that Shore Medical
came forward with legitimate, non-discriminatory reasons and we can resolve this case at
step three of McDonnell Douglas, we need not address Shore Medical’s argument that
Nahas failed to establish a prima facie case at step one. See In re Tribune Media Co.,
902 F.3d 384, 402-03 (3d Cir. 2018) (resolving the employment discrimination claim at
step three despite the parties’ disagreement over the establishment of a prima facie case).
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far less medical experience than Nahas. According to Nahas, that disparate treatment, in
“relax[ing] [the] qualifications for one candidate” by accepting that candidate prior to his
fulfillment of the supervision requirement, reveals pretext. Appellant’s Br. 53.
Disparate treatment is evidence of pretext, however, only if the candidates are also
similarly situated, McDonnell Douglas, 411 U.S. at 804; Fuentes, 32 F.3d at 765, and here
they are not. For one thing, the other applicant was only approved on the condition that he
complete his vascular fellowship with an endovascular component and meet the remaining
criteria. Nahas, on the other hand, had neither completed all the application criteria nor
demonstrated that he would be able to do so before beginning practice. To the contrary,
the surgeries he would have Shore Medical credit towards his completion of these criteria
were improperly performed without privileges or any supervision during a disciplinary
suspension, and therefore cannot be counted toward the requisite number of supervised
procedures. JA765-68, 778. In addition, the record reflects that the unsatisfied criteria
Nahas characterizes as “post hoc fabrication[s]” that “came late in the peer review
process,” Appellant’s Br. 54, were in fact well-established, “state court-ordered . . .
[c]riteria,” JA8, that were applied consistently to other applicants. In short, Nahas offered
nothing more than “conclusory, self-serving” speculation that Shore Medical’s reasons for
declining to grant him approval were pretextual. Gonzalez v. Sec’y of Dep’t of Homeland
Sec., 678 F.3d 254, 263 (3d Cir. 2012) (quoting Kirleis v. Dickie, McCamey & Chilcote,
P.C., 560 F.3d 156, 161 (3d Cir. 2009)).
Because Nahas failed to “cast[] sufficient doubt upon” Shore Medical’s proffered
justifications or provide evidence that would “allow[] the factfinder to infer that
6
discrimination was more likely than not a motivating or determinative cause” for the denial
of his privileges, Fuentes, 32 F.3d at 762, the District Court correctly determined his § 1981
claim could not survive summary judgment.
3. Nahas’s Breach of Contract Claim
Having reviewed Nahas’s federal claims, the District Court opted to decline
supplemental jurisdiction and dismissed Nahas’s state law claim for breach of contract.
We review that decision for abuse of discretion, see Maher Terminals, LLC v. Port Auth.
of N.Y. & N.J., 805 F.3d 98, 104 (3d Cir. 2015), and against the backdrop of our case law
holding that where all federal claims are dismissed before trial, a district court “must
decline to decide the pendent state claims” unless “considerations of judicial economy,
convenience, and fairness to the parties provide an affirmative justification for” ruling on
them, North Sound Capital LLC v. Merck & Co., 938 F.3d 482, 494 n.11 (3d Cir. 2019)
(quoting Hedges v. Musco, 204 F.3d 109, 123 (3d Cir. 2000)); 28 U.S.C. § 1367(c)(3).
Nahas does not dispute the Court’s consideration of judicial economy and
convenience. Instead, he reasserts the illegitimacy of the application criteria and contends
that he is entitled to judgment as a matter of law in light of the District Court’s finding at
step one of McDonnell Douglas that the supervision requirement was contrived.
Even if the application criteria and supervision requirement were contrived,
however, whether Nahas satisfied the written criteria under Section Two of the Bylaws is
only relevant to the alleged impairment of his contractual rights, see Frederico v. Home
Depot, 507 F.3d 188, 203 (3d Cir. 2007)—not to the question of whether the District Court
abused its discretion in declining to exercise supplemental jurisdiction. On that score, the
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District Court reasonably concluded, based on the parties’ extensive litigation experience
and familiarity with the state court system, that “state court presents a more appropriate
place for [Nahas] to bring these claims,” JA39. That determination was well within its
discretion, and we perceive no reason to disturb it. See Maher, 805 F.3d at 112.
B. Conclusion
For the foregoing reasons, we will affirm the judgment of the District Court.
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