EXCLUSIVE CONTRACT/ANTITRUST

Feather River Anesthesia Med. Group, Inc. v. Fremont-Rideout Med. Group, Inc., Nos. C049851, C050832 (Cal. Ct. App. Aug. 29, 2007)

The California Court of Appeal for the Third District held that a medical group had raised a triable issue of fact, which precluded the hospital's motion for summary judgment, as to the causes of action for antitrust, unfair competition, and interference with the right to practice a profession.

After the medical group ("original group") terminated its exclusive anesthesia contract with the hospital, the hospital entered into a new exclusive agreement with another group ("new group") of anesthesiologists and terminated the privileges of the physicians in the original group. The original group and its members sued the hospital and the new group, asserting claims for: (1) interference with prospective economic advantage, (2) antitrust, (3) unfair competition, (4) interference with the right to practice a profession, and (5) interference with a contract. As an element in some of the causes of action, the original group asserted that the hospital and the new group violated the ban on the corporate practice of medicine. The lower court granted the hospital and new group summary judgment based on its conclusion that a violation of the corporate practice of medicine had not occurred.

While the appeals court concluded summary judgment was proper as to the claims of interference with a prospective economic advantage and interference with a contract, the appeals court concluded that summary judgment was improper regarding the causes of action for antitrust, unfair competition, and interference with the right to practice a profession. The court found that there was evidence that the hospital and the new group sought to exclude the physicians in the original group from practicing in the market and that the resulting agreement harmed competition and resulted in higher medical costs. The court noted that "[w]e conclude summary judgment was improper as to these causes of action without reaching the issue of whether the alleged violation of the ban on corporate practice of medicine was also wrongful conduct supporting the causes of action."